COAST HOTELS & CASINOS INC
AMENDED AND RESTATED SECURITY AGREEMENT-CC
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<TYPE>EX-10
<SEQUENCE>6
<FILENAME>exhibit10_36.htm
<DESCRIPTION>AMENDED AND RESTATED SECURITY AGREEMENT-CC
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<TITLE>Amended and Restated Security Agreement-Coast Casinos, Inc.</TITLE>
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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit 10.36 </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AMENDED AND RESTATED
SECURITY AGREEMENT<BR>(Coast Casinos) </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
AMENDED AND RESTATED SECURITY AGREEMENT (&#147;Agreement&#148;), dated as of September 26,
2003, is made by Coast Casinos, Inc., a Nevada corporation (&#147;Grantor&#148;), in favor
of Bank of America, N.A., as Administrative Agent under the Credit Agreement hereafter
referred to (in such capacity, &#147;Administrative Agent&#148;), and in favor of each of
the Lenders therein named (collectively referred to herein as &#147;Secured Party&#148;),
with reference to the following facts: </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RECITALS </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Bank of America, N.A., the lenders signatory thereto and Coast Hotels and
          Casinos, Inc., a Nevada corporation (&#147;Borrower&#148;) have heretofore
          entered into an Amended and Restated Loan Agreement dated as of September 16,
          1999, pursuant to which certain credit accommodations have been made available
          to Borrower (&#147;Existing Credit Agreement&#148;). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Pursuant to a Security Agreement dated as of March 18, 1999 in favor of Bank of
          America National Trust and Savings Association (now known as Bank of America,
          N.A.) and the lenders party to the Existing Credit Agreement, which Security
          Agreement was reaffirmed as of September 16, 1999, Grantor granted a security
          interest in assets of Grantor to secure Grantor&#146;s obligations under a
          guaranty delivered by the Grantor in respect of the Borrower&#146;s obligations
          under the Existing Credit Agreement (&#147;Existing Security Agreement&#148;).
          This Agreement amends and restates the Existing Security Agreement in its
          entirety. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Concurrently herewith, the Existing Credit Agreement will be amended and
          restated in its entirety by the Amended and Restated Credit Agreement by and
          among Borrower, the lenders from time to time party thereto (collectively, the
          &#147;Lenders&#148; and individually, a &#147;Lender&#148;), and the
          Administrative Agent (as such agreement may from time to time be amended,
          extended, renewed, supplemented or otherwise modified, the &#147;Credit
          Agreement&#148;). Pursuant to the Credit Agreement, the Lenders have agreed to
          extend certain credit facilities to Borrower. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Grantor has issued an Amended and Restated Guaranty of even date herewith with
          respect to the obligations of Borrower under the Credit Agreement (as at any
          time amended, extended, renewed, supplemented or otherwise modified, the
          &#147;Guaranty&#148;) </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Credit Agreement provides, as a condition of the availability of such credit
          facilities to Borrower, that Grantor shall enter into this Agreement to secured
          its obligations under the Guaranty and shall grant security interests to Secured
          Party as herein provided. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AGREEMENT </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in order to induce the Lenders to extend the aforementioned credit facilities,
and for other good and valuable consideration, the receipt and adequacy of which hereby is
acknowledged, Grantor hereby represents, warrants, covenants, agrees, assigns and grants
as follows: </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 1</FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Definitions</U>. This Agreement is the Coast Casinos Security Agreement
          referred to in the Credit Agreement. This Agreement is one of the &#147;Loan
          Documents&#148; referred to in the Credit Agreement. Terms defined in the Credit
          Agreement and not otherwise defined in this Agreement shall have the meanings
          defined for those terms in the Credit Agreement. Terms defined in the California
          Uniform Commercial Code, as amended from time to time and not otherwise defined
          in this Agreement or in the Credit Agreement shall have the meanings defined for
          those terms in the California Uniform Commercial Code. As used in this
          Agreement, the following terms shall have the meanings respectively set forth
          after each: </FONT></P>

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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Agreement&#148;
means this Amended and Restated Security Agreement, and any extensions, modifications,
renewals, restatements, supplements or amendments hereof. </FONT>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Collateral&#148;
means and includes all present and future right, title and interest of Grantor in or to
any Property or assets whatsoever, and all rights and powers of Grantor to transfer any
interest in or to any Property or assets whatsoever, including, without limitation, any
and all of the following Property: </FONT>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future accounts, accounts receivable, agreements, contracts,
               leases, contract rights, rights to payment, instruments, documents, chattel
               paper, security agreements, guaranties, letters of credit, letter of credit
               rights, undertakings, surety bonds, insurance policies (whether or not required
               by the terms of the Loan Documents), notes and drafts, and all forms of
               obligations owing to Grantor or in which Grantor may have any interest, however
               created or arising and whether or not earned by performance; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future general intangibles, all tax refunds of every kind and
               nature to which Grantor now or hereafter may become entitled, however arising,
               all other refunds, and all deposits, reserves, loans, royalties, cost savings,
               deferred payments, goodwill, choses in action, liquidated damages, rights to
               indemnification, trade secrets, computer programs, software, customer lists,
               trademarks, trade names, patents, licenses (except for gaming licenses and
               liquor licenses, which are not transferable), copyrights, technology, processes,
               proprietary information and insurance proceeds of which Grantor is a
               beneficiary; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               Whether characterized as accounts, general intangibles or otherwise, all rents
               (including, without limitation, prepaid rents, fixed, additional and contingent
               rents), issues, profits, receipts, earnings, revenue, income, security deposits,
               occupancy charges, hotel room charges, cabana charges, casino revenues, show
               ticket revenues, food and beverage revenues, room service revenues, merchandise
               sales revenues, parking, maintenance, common area, tax, insurance, utility and
               service charges and contributions, green fees, cart rental fees, instruction
               fees, membership charges, restaurant, snack bar and pro shop revenues; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future deposit accounts of Grantor, including, without
               limitation, any demand, time, savings, passbook or like account maintained by
               Grantor with any bank, savings and loan association, credit union or like
               organization, and all money, Cash and Cash Equivalents of Grantor, whether or
               not deposited in any such deposit account; </FONT></P></TD>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2 </FONT></P>

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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future books and records, including, without limitation, books
               of account and ledgers of every kind and nature, all electronically recorded
               data relating to Grantor or the business thereof, all receptacles and containers
               for such records, and all files and correspondence; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future goods, including, without limitation, all consumer goods,
               farm products, inventory, equipment, gaming devices and associated equipment
               (including, without limitation, gaming devices and associated equipment as
               defined in Nevada Revised Statutes Chapter 463), machinery, tools, molds, dies,
               furniture, furnishings, fixtures, trade fixtures, motor vehicles and all other
               goods used in connection with or in the conduct of Grantor&#146;s business; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future inventory and merchandise, including, without limitation,
               all present and future goods held for sale or lease or to be furnished under a
               contract of service, all raw materials, work in process and finished goods, all
               packing materials, supplies and containers relating to or used in connection
               with any of the foregoing, and all bills of lading, warehouse receipts or
               documents of title relating to any of the foregoing; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future stocks, bonds, debentures, securities, subscription
               rights, options, warrants, puts, calls, certificates, partnership interests,
               joint venture interests, investment property, Investments and/or brokerage
               accounts and all rights, preferences, privileges, dividends, distributions,
               redemption payments, or liquidation payments with respect thereto; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All present and future accessions, appurtenances, components, repairs, repair
               parts, spare parts, replacements, substitutions, additions, issue and/or
               improvements to or of or with respect to any of the foregoing; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All other tangible and intangible Property of Grantor; </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               All rights, remedies, powers and/or privileges of Grantor with respect to any of
               the foregoing; and </FONT></P></TD>
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               <TD WIDTH=94%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               Any and all proceeds and products of any of the foregoing, including, without
               limitation, all money, accounts, general intangibles, deposit accounts,
               documents, instruments, chattel paper, goods, insurance proceeds, and any other
               tangible or intangible property received upon the sale or disposition of any of
               the foregoing; </FONT></P></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>provided that the term
&#147;Collateral&#148;, as used in this Agreement, shall not include (i) Real Property or
any interest therein, (ii) any capital stock or other equity interests in any gaming
licensees, (iii) any aircraft owned by Grantor on the Closing Date, (iv) any agreement
with a third party that, pursuant to its terms, prohibits the grant of a lien on such
agreement; provided that Grantor shall use its best efforts to obtain such third
party&#146;s consent to assignment of all material agreements; or (v) any Property the
purchase of which was financed by a purchase money security interest, including any
Capital Lease Obligation, permitted under Section 7.9 or 7.10 of the Credit Agreement. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3 </FONT></P>

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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Secured
Obligations&#148; means any and all present and future Obligations of any type or nature
of Grantor to Secured Party arising under the Guaranty, whether due or to become due,
matured or unmatured, liquidated or unliquidated, or contingent or noncontingent,
including Obligations of performance as well as Obligations of payment, and including
interest that accrues after the commencement of any bankruptcy or insolvency proceeding by
or against Grantor. </FONT>
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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Further Assurances</U>. At any time and from time to time at the request of
          Secured Party, Grantor shall execute and deliver to Secured Party all such
          financing statements and other instruments and documents in form and substance
          satisfactory to Secured Party as shall be necessary or desirable to fully
          perfect, when filed and/or recorded, Secured Party&#146;s security interests
          granted pursuant to Section 3 of this Agreement. It is hereby acknowledged and
          agreed that, notwithstanding anything contained herein or in any other
          Collateral Document, Grantor shall not be required under any circumstance to
          take any further action to perfect any interest granted to Secured Party in any
          cage cash, deposit accounts, markers, instruments or other cash items which are
          used in connection with the casino operations of Grantor. At any time and from
          time to time, Secured Party shall be entitled to, and Grantor authorizes Secured
          Party to, file and/or record any or all such financing statements, continuations
          thereof and amendments thereto (including financing statements containing a
          broader description of Collateral than the description set forth herein)
          instruments and documents held by it, and any or all such further financing
          statements, documents and instruments, and to take all such other actions, as
          Secured Party may deem appropriate to perfect and to maintain perfected the
          security interests granted in Section 3 of this Agreement. Before and after the
          occurrence of any Event of Default, at Secured Party&#146;s request, Grantor
          shall execute all such further financing statements, instruments and documents,
          and shall do all such further acts and things, as may be deemed necessary or
          desirable by Secured Party to create and perfect, and to continue and preserve,
          a security interest in the Collateral in favor of Secured Party, or the priority
          thereof. With respect to any Collateral consisting of instruments, documents,
          certificates of title or the like, as to which Secured Party&#146;s security
          interest need be perfected by, or the priority thereof need be assured by,
          possession of such Collateral, Grantor will upon demand of Secured Party deliver
          possession of same in pledge to Secured Party. With respect to any Collateral
          consisting of securities, instruments, partnership or joint venture interests or
          the like, Grantor hereby consents and agrees that the issuers of, or obligors
          on, any such Collateral, or any registrar or transfer agent or trustee for any
          such Collateral, shall be entitled to accept the provisions of this Agreement as
          conclusive evidence of the right of Secured Party to effect any transfer or
          exercise any right hereunder or with respect to any such Collateral,
          notwithstanding any other notice or direction to the contrary heretofore or
          hereafter given by Grantor or any other Person to such issuers or such obligors
          or to any such registrar or transfer agent or trustee. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Security Agreement</U>. For valuable consideration, Grantor hereby assigns
          and pledges to Secured Party, and grants to the Administrative Agent, for the
          benefit of Secured Party a security interest in, all presently existing and
          hereafter acquired Collateral, as security for the timely payment and
          performance of the Secured Obligations, and each of them. This Agreement is a
          continuing and irrevocable agreement and all the rights, powers, privileges and
          remedies hereunder shall apply to any and all Secured Obligations, including
          those arising under successive transactions which shall either continue the
          Secured Obligations, increase or decrease them, or from time to time create new
          Secured Obligations after all or any prior Secured Obligations have been
          satisfied, and notwithstanding the bankruptcy of Grantor or any other Person or
          any other event or proceeding affecting any Person. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4 </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Grantor&#146;s Representations</U>, Warranties and Agreements. Except as
          otherwise disclosed to Secured Party in writing concurrently herewith, Grantor
          represents, warrants and agrees that: (a) Grantor will pay all taxes, charges,
          Liens and assessments against the portion of the Collateral owned by it, in
          accordance with Section 6.03 of the Credit Agreement, and upon its failure to
          pay or contest such taxes, charges, Liens and assessments, Secured Party at its
          option may pay any of them, and Secured Party shall be the sole judge of the
          legality or validity thereof and the amount necessary to discharge the same; (b)
          the Collateral will not be used for any unlawful purpose or in material
          violation of any Law, regulation or ordinance, nor used in any way that will
          void or impair any insurance required to be carried in connection therewith; (c)
          Grantor will, to the extent consistent with good business practice, keep the
          portion of the Collateral owned by it in reasonably good repair, working order
          and condition, and from time to time make all needful and proper repairs,
          renewals, replacements, additions and improvements thereto and, as appropriate
          and applicable, will otherwise deal with such portion of the Collateral in all
          such ways as are considered good practice by owners of like Property; (d)
          Grantor will take all reasonable steps to preserve and protect the Collateral;
          (e) Grantor will maintain, with responsible insurance companies, insurance
          covering the Collateral against such insurable losses as is required by the
          Credit Agreement and as is consistent with sound business practice, and will
          cause Secured Party to be designated as an additional insured and loss payee
          with respect to all insurance (whether or not required by the Credit Agreement),
          will obtain the written agreement of the insurers that such insurance shall not
          be canceled, terminated or materially modified to the detriment of Secured Party
          without at least 30 days prior written notice to Secured Party, and will furnish
          copies of such insurance policies or certificates to Secured Party promptly upon
          request therefor; (f) Grantor will promptly notify Secured Party in writing in
          the event of any substantial or material damage to the Collateral from any
          source whatsoever; (g) Grantor&#146;s legal name (as set forth in its
          constituent documents filed with the appropriate governmental official or
          agency) is as set forth in the opening paragraph hereof; (h) the jurisdiction of
          organization of Grantor is the state of Nevada, and the organizational number of
          Grantor is set forth on the signature page of this Agreement; (i) the chief
          place of business and chief executive office of Grantor are located at its
          address set forth on the signature page hereof; (j) Grantor will not locate or
          relocate any item of Collateral into any jurisdiction in which an additional
          financing statement would be required to be filed to maintain Secured
          Party&#146;s perfected security interest in such Collateral; and (k) Grantor
          will not change its name, the location of its chief place of business and chief
          executive office or its corporate structure (including without limitation, its
          jurisdiction of organization) unless Secured Party has been given at least 30
          days prior written notice thereof and Grantor has executed and delivered to
          Secured Party such financing statements and other instruments required or
          appropriate to continue the perfection of Secured Party&#146;s security
          interest. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Secured Party&#146;s Rights Regarding Collateral</U>. If an Event of Default
          has occurred and remains continuing, then at any time without notice or demand
          and at the sole expense of Grantor (or if no Event of Default is continuing, at
          Secured Party&#146;s sole expense and upon reasonable advance notice and at any
          time during regular business hours and as often as reasonably requested (but not
          so as to materially interfere with the business of Grantor or any of its
          Subsidiaries)), Secured Party may, subject to the compliance with applicable
          Gaming Laws, to the extent it may be necessary or desirable to protect the
          security hereunder, but Secured Party shall not be obligated to: (a) enter upon
          any premises on which Collateral is situated and examine the same or (b) perform
          any obligation of Grantor under this Agreement or any obligation of any other
          Person under the Loan </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5 </FONT></P>

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<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Documents.&nbsp;&nbsp;&nbsp;&nbsp;
          Subject to compliance with applicable Gaming Laws, at any time and from time to
          time, at the expense of Grantor, Secured Party may, to the extent it may be
          necessary or desirable to protect the security hereunder, but Secured Party
          shall not be obligated to: (i) while an Event of Default is continuing, notify
          obligors on the Collateral that the Collateral has been assigned to Secured
          Party; (ii) while an Event of Default is continuing, at any time and from time
          to time request from obligors on the Collateral, in the name of Grantor or in
          the name of Secured Party, information concerning the Collateral and the amounts
          owing thereon; and (iii) while an Event of Default is continuing, cause the
          Collateral to be registered in the name of Secured Party, as legal owner.
          Grantor shall at any time at Secured Party&#146;s request mark the Collateral
          and/or Grantor&#146;s ledger cards, books of account and other records relating
          to the Collateral with appropriate notations satisfactory to Secured Party
          disclosing that they are subject to Secured Party&#146;s security interest.
          Secured Party shall be under no duty or obligation whatsoever to take any action
          to protect or preserve the Collateral or any rights of Grantor therein, or to
          make collections or enforce payment thereon, or to participate in any
          foreclosure or other proceeding in connection therewith. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Collections on the Collateral</U>. Except as otherwise provided in any Loan
          Document, Grantor shall have the right to use and to continue to make
          collections on and receive dividends and other proceeds of all of the Collateral
          in the ordinary course of business so long as no Event of Default shall have
          occurred and be continuing. Upon the occurrence and during the continuance of an
          Event of Default, at the option of Secured Party (exercisable upon written
          notice thereof to Grantor; provided, that neither the Administrative Agent nor
          the Lenders shall incur any liability for any failure to provide such notice),
          Grantor&#146;s right to make collections on and receive dividends and other
          proceeds of the Collateral and to use or dispose of such collections and
          proceeds shall terminate, and any and all dividends, proceeds and collections,
          including all partial or total prepayments, then held or thereafter received on
          or on account of the Collateral will be held or received by Grantor in trust for
          Secured Party and immediately delivered in kind to Secured Party. Any remittance
          received by Grantor from any Person shall be presumed to relate to the
          Collateral and to be subject to Secured Party&#146;s security interests. Upon
          the occurrence and during the continuance of an Event of Default, Secured Party
          shall have the right at all times to receive, receipt for, endorse, assign,
          deposit and deliver, in the name of Secured Party or in the name of Grantor, any
          and all checks, notes, drafts and other instruments for the payment of money
          constituting proceeds of or otherwise relating to the Collateral; and Grantor
          hereby authorizes Secured Party to affix, by facsimile signature or otherwise,
          the general or special endorsement of it, in such manner as Secured Party shall
          deem advisable, to any such instrument in the event the same has been delivered
          to or obtained by Secured Party without appropriate endorsement, and Secured
          Party and any collecting bank are hereby authorized to consider such endorsement
          to be a sufficient, valid and effective endorsement by Grantor, to the same
          extent as though it were manually executed by the duly authorized officer of
          Grantor, regardless of by whom or under what circumstances or by what authority
          such facsimile signature or other endorsement actually is affixed, without duty
          of inquiry or responsibility as to such matters, and Grantor hereby expressly
          waives demand, presentment, protest and notice of protest or dishonor and all
          other notices of every kind and nature with respect to any such instrument. </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6</FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Possession of Collateral by Secured Party</U>. Any or all of the Collateral
          delivered to Secured Party consisting of Cash shall be held in an
          interest-bearing account and, when an Event of Default exists, Secured Party
          may, in its discretion (upon written notice thereof to Grantor; provided, that
          neither the Administrative Agent nor the Lenders shall incur any liability for
          any failure to provide such notice), apply any such interest to payment of the
          Secured Obligations. Nothing herein shall obligate Secured Party to invest any
          Collateral or obtain any particular return thereon. Subject to compliance with
          applicable Gaming Laws, upon the occurrence and during the continuance of an
          Event of Default, whenever any of the Collateral is in Secured Party&#146;s
          possession, custody or control, Secured Party may use, operate and consume the
          Collateral, whether for the purpose of preserving and/or protecting the
          Collateral or for the purpose of performing any of Grantor&#146;s obligations
          with respect thereto. Secured Party may at any time deliver or redeliver the
          Collateral or any part thereof to Grantor, and the receipt of any of the same by
          Grantor shall be complete and full acquittance for the Collateral so delivered,
          and Secured Party thereafter shall be discharged from any liability or
          responsibility therefor. So long as Secured Party exercises reasonable care with
          respect to any Collateral in its possession, custody or control, Secured Party
          shall have no liability for any loss of or damage to such Collateral, and in no
          event shall Secured Party have liability for any diminution in value of
          Collateral occasioned by economic or market conditions or events. Secured Party
          shall be deemed to have exercised reasonable care within the meaning of the
          preceding sentence if the Collateral in the possession, custody or control of
          Secured Party is accorded treatment substantially equal to that which Secured
          Party accords its own property, it being understood that Secured Party shall not
          have any responsibility for (a) ascertaining or taking action with respect to
          calls, conversions, exchanges, maturities, tenders or other matters relating to
          any Collateral, whether or not Secured Party has or is deemed to have knowledge
          of such matters, or (b) taking any necessary steps to preserve rights against
          any Person with respect to any Collateral. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Events of Default</U>. There shall be an Event of Default hereunder upon the
          occurrence and during the continuance of an Event of Default under the Credit
          Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Rights Upon Event of Default</U>. Subject to compliance with applicable
          Gaming Laws, upon the occurrence and during the continuance of an Event of
          Default, Secured Party shall have, in any jurisdiction where enforcement hereof
          is sought, in addition to all other rights and remedies that Secured Party may
          have under applicable Law or in equity or under this Agreement (including,
          without limitation, all rights set forth in Section 6 hereof) or under any other
          Loan Document, all rights and remedies of a secured party under the Uniform
          Commercial Code as enacted in any jurisdiction, and, in addition, the following
          rights and remedies, all of which may be exercised with or without notice to
          Grantor and without affecting the Obligations of Grantor hereunder or under any
          other Loan Document, or the enforceability of the Liens and security interests
          created hereby: (a) to foreclose the Liens and security interests created
          hereunder or under any other agreement relating to any Collateral by any
          available judicial procedure or without judicial process; (b) to enter any
          premises where any Collateral may be located for the purpose of securing,
          protecting, inventorying, appraising, inspecting, repairing, preserving,
          storing, preparing, processing, taking possession of or removing the same; (c)
          to sell, assign, lease or otherwise dispose of any Collateral or any part
          thereof, either at public or private sale or at any broker&#146;s board, in lot
          or in bulk, for cash, on credit or otherwise, with or without representations or
          warranties and upon such terms as shall be acceptable to Secured Party; (d) to
          notify obligors on the Collateral that the Collateral has been assigned to
          Secured Party and that all payments thereon are to be made directly and
          exclusively to Secured Party; (e) to collect by legal proceedings or otherwise
          all dividends, distributions, </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7 </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>interest, principal or other sums now
or hereafter payable upon or on account of the Collateral; (f) to cause the Collateral to
be registered in the name of Secured Party, as legal owner; (g) to enter into any
extension, reorganization, deposit, merger or consolidation agreement, or any other
agreement relating to or affecting the Collateral, and in connection therewith Secured
Party may deposit or surrender control of the Collateral and/or accept other Property in
exchange for the Collateral; (h) to settle, compromise or release, on terms acceptable to
Secured Party, in whole or in part, any amounts owing on the Collateral and/or any
disputes with respect thereto; (i) to extend the time of payment, make allowances and
adjustments and issue credits in connection with the Collateral in the name of Secured
Party or in the name of Grantor; (j) to enforce payment and prosecute any action or
proceeding with respect to any or all of the Collateral and take or bring, in the name of
Secured Party or in the name of Grantor, any and all steps, actions, suits or proceedings
deemed by Secured Party necessary or desirable to effect collection of or to realize upon
the Collateral, including any judicial or nonjudicial foreclosure thereof or thereon, and
Grantor specifically consents to any nonjudicial foreclosure of any or all of the
Collateral or any other action taken by Secured Party which may release any obligor from
personal liability on any of the Collateral, and Grantor waives any right not expressly
provided for in this Agreement to receive notice of any public or private judicial or
nonjudicial sale or foreclosure of any security or any of the Collateral; and any money or
other property received by Secured Party in exchange for or on account of the Collateral,
whether representing collections or proceeds of Collateral, and whether resulting from
voluntary payments or foreclosure proceedings or other legal action taken by Secured Party
or Grantor may be applied by Secured Party without notice to Grantor to the Secured
Obligations in such order and manner as Secured Party in its sole discretion shall
determine; (k) to insure, process and preserve the Collateral; (l) to exercise all rights,
remedies, powers or privileges provided under any of the Loan Documents; (m) to remove,
from any premises where the same may be located, the Collateral and any and all documents,
instruments, files and records, and any receptacles and cabinets containing the same,
relating to the Collateral, and Secured Party may, at the cost and expense of Grantor, use
such of its supplies, equipment, facilities and space at its places of business as may be
necessary or appropriate to properly administer, process, store, control, prepare for sale
or disposition and/or sell or dispose of the portion of the Collateral owned by Grantor or
to properly administer and control the handling of collections and realizations thereon,
and Secured Party shall be deemed to have a rent-free tenancy of premises of Grantor for
such purposes and for such periods of time as reasonably required by Secured Party; and
(n) to exercise all other rights, powers, privileges and remedies of an owner of the
Collateral; all at Secured Party&#146;s sole option and as Secured Party in its sole
discretion may deem advisable. Grantor will, at Secured Party&#146;s request, assemble the
Collateral and make it available to Secured Party at places which Secured Party may
designate, whether at the premises of Grantor or elsewhere, and will make available to
Secured Party, free of cost, all premises, equipment and facilities of Grantor for the
purpose of Secured Party&#146;s taking possession of the Collateral or storing same or
removing or putting the Collateral in salable form or selling or disposing of same. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the occurrence and during the continuance of an Event of Default, Secured Party also shall
have the right, without notice or demand, either in person, by agent or by a receiver to
be appointed by a court (and Grantor hereby expressly consents upon the occurrence and
during the continuance of an Event of Default to the appointment of such a receiver), and
without regard to the adequacy of any security for the Secured Obligations, to take
possession of the Collateral or any part thereof and to collect and receive the rents,
issues, profits, income and proceeds thereof. Taking possession of the Collateral shall
not cure or waive any Event of Default or notice thereof or invalidate any act done
pursuant to such notice. The rights, remedies and powers of any receiver appointed by a
court shall be as ordered by said court. </FONT></P>
<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8 </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
public or private sale or other disposition of the Collateral may be held at any office of
Secured Party, or at Grantor&#146;s places of business, or at any other place permitted by
applicable Law, and without the necessity of the Collateral&#146;s being within the view
of prospective purchasers. Secured Party may also request, in connection therewith, the
Nevada Gaming Commission to petition a District Court of the State of Nevada for the
appointment of a supervisor to conduct the normal gaming activities on the premises
following the appointment of a receiver. Secured Party may direct the order and manner of
sale of the Collateral, or portions thereof, as it in its sole and absolute discretion may
determine, and Grantor expressly waives any right to direct the order and manner of sale
of any Collateral. Secured Party or any Person on Secured Party&#146;s behalf may bid and
purchase at any such sale or other disposition. The net cash proceeds resulting from the
collection, liquidation, sale, lease or other disposition of the Collateral shall be
applied, first, to the reasonable costs and expenses (including reasonable attorneys&#146;
fees) of retaking, holding, storing, processing and preparing for sale or lease, selling,
leasing, collecting and liquidating the Collateral, and the like; and then to the
satisfaction of the Secured Obligations, with application as to any particular Secured
Obligations to be in the order set forth in the Credit Agreement or other Loan Documents.
Grantor and any other Person then obligated therefor shall pay to Secured Party on demand
any deficiency with regard thereto which may remain after such sale, disposition,
collection or liquidation of the Collateral. Any surplus held by the Security Party and
remaining after payment in full of all the Secured Obligations shall immediately be
reassigned and redelivered to Grantor, or to the person or persons otherwise legally
entitled thereto. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
the Collateral is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Secured Party will send or otherwise make
available to Grantor reasonable notice of the time and place of any public sale thereof or
of the time on or after which any private sale thereof is to be made. The requirement of
sending reasonable notice conclusively shall be met if such notice is mailed, first class
mail, postage prepaid, to Grantor at its address set forth in the Credit Agreement, or
delivered or otherwise sent to Grantor, at least ten (10) days before the date of the
sale. Grantor expressly waives any right to receive notice of any public or private sale
of any Collateral or other security for the Secured Obligations except as expressly
provided for in this paragraph. Secured Party (i) may dispose of the Collateral in its
then present condition or following such preparation and processing as Secured Party deems
commercially reasonable, (ii) shall have no duty to prepare or process the Collateral
prior to sale, (iii) may disclaim warranties of title, possession, quiet enjoyment and the
like, and (iv) may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and none of the foregoing actions shall be
deemed to adversely affect the commercial reasonableness of the disposition of the
Collateral. </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9 </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to any Collateral consisting of securities, partnership interests, joint venture
interests, Investments or the like, and whether or not any of such Collateral has been
effectively registered under the Securities Act of 1933, as amended, or other applicable
Laws, Secured Party may, in its sole and absolute discretion, sell all or any part of such
Collateral at private sale in such manner and under such circumstances as provided in the
Uniform Commercial Code of California. Without limiting the foregoing, Secured Party may
(i) </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>approach and negotiate with a limited
number of potential purchasers, and (ii) restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing such Collateral for their
own account for investment and not with a view to the distribution or resale thereof. In
the event that any such Collateral is sold at private sale, Grantor agrees that if such
Collateral is sold for a price which Secured Party in good faith believes to be reasonable
under the circumstances then existing, then (a) the sale shall be not be deemed to be
commercially unreasonable by reason of price, (b) Grantor shall not be entitled to a
credit against the Secured Obligations in an amount in excess of the purchase price, and
(c) Secured Party shall not incur any liability or responsibility to Grantor in connection
therewith, notwithstanding the possibility that a substantially higher price might have
been realized at a public sale. Grantor recognizes that a ready market may not exist for
such Collateral if it is not regularly traded on a recognized securities exchange, and
that a sale by Secured Party of any such Collateral for an amount substantially less than
a pro rata share of the fair market value of the issuer&#146;s assets minus liabilities
may be commercially reasonable in view of the difficulties that may be encountered in
attempting to sell a large amount of such Collateral or Collateral that is privately
traded. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
consummation of any sale of Collateral hereunder, Secured Party shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so
sold. Each such purchaser at any such sale shall hold the Collateral so sold absolutely
free from any claim or right upon the part of Grantor or any other Person, and Grantor
hereby waives (to the extent permitted by applicable Laws) all rights of redemption, stay
and appraisal which it now has or may at any time in the future have under any rule of Law
or statute now existing or hereafter enacted. If the sale of all or any part of the
Collateral is made on credit or for future delivery, Secured Party shall not be required
to apply any portion of the sale price to the Secured Obligations until such amount
actually is received by Secured Party, and any Collateral so sold may be retained by
Secured Party until the sale price is paid in full by the purchaser or purchasers thereof.
Secured Party shall not incur any liability in case any such purchaser or purchasers shall
fail to pay for the Collateral so sold, and, in case of any such failure, the Collateral
may be sold again. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Voting Rights; Dividends; etc</U>. With respect to any Collateral consisting
          of securities, partnership interests, joint venture interests, Investments or
          the like (referred to collectively and individually in this Section 10 and in
          Section 11 as the &#147;Investment Collateral&#148;), so long as no Event of
          Default occurs and remains continuing: </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1
<U>Voting Rights</U>. Grantor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Investment Collateral, or any part thereof, for any
purpose not inconsistent with the terms of this Agreement, the Credit Agreement, or the
other Loan Documents; provided, however, that Grantor shall not exercise, or shall refrain
from exercising, any such right if it would result in a Default. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 1-TNR" FSL="Default" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2
<U>Dividend and Distribution Rights</U>. Except as otherwise provided in any Loan
Document, Grantor shall be entitled to receive and to retain and use any and all dividends
or distributions paid in respect of the Investment Collateral; provided, however, that any
and all such dividends or distributions received in the form of capital stock,
certificated securities, warrants, options or rights to acquire capital stock or
certificated securities forthwith shall be, and the certificates representing such capital
stock or certificated securities, if any, forthwith shall be delivered to Secured Party to
hold as pledged Collateral and shall, if received by Grantor, be received in trust for the
benefit of Secured Party, be segregated from the other Property of Grantor, and forthwith
be delivered to Secured Party as pledged Collateral in the same form as so received (with
any necessary endorsements). </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 10</FONT></P>

<!-- MARKER PAGE="sheet: 15; page: 15" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Rights During Event of Default</U>. With respect to any Investment
          Collateral, so long as an Event of Default has occurred and is continuing: </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1
<U>Voting, Dividend, and Distribution Rights</U>. At the option of Secured Party
(exercisable upon written notice thereof to Grantor; provided, that neither the
Administrative Agent nor the Lenders shall incur any liability for any failure to provide
such notice), all rights of Grantor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 10.1 above, and to
receive the dividends and distributions which it would otherwise be authorized to receive
and retain pursuant to Section 10.2 above, shall cease, and all such rights thereupon
shall become vested in Secured Party which thereupon shall have the sole right to exercise
such voting and other consensual rights and to receive and to hold as pledged Collateral
such dividends and distributions. </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2
<U>Dividends and Distributions Held in Trust</U>. All dividends and other distributions
which are received by Grantor contrary to the provisions of this Agreement shall be
received in trust for the benefit of Secured Party, shall be segregated from other funds
of Grantor, and forthwith shall be paid over to Secured Party as pledged Collateral in the
same form as so received (with any necessary endorsements). </FONT>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3
<U>Irrevocable Proxy</U>. Grantor does hereby revoke all previous proxies with regard to
the Investment Collateral and appoints Secured Party as its proxyholder, with power when
an Event of Default exists to attend and vote at any and all meetings of the shareholders
or other equity holders of the Persons that issued the Investment Collateral and any
adjournments thereof, held on or after the date of the giving of this proxy and prior to
the termination of this proxy, and to execute any and all written consents of shareholders
or equity holders of such Persons executed on or after the date of the giving of this
proxy and prior to the termination of this proxy, with the same effect as if Grantor had
personally attended the meetings or had personally voted its shares or other interests or
had personally signed the written consents; provided, however, that the proxyholder shall
have rights hereunder only upon the occurrence and during the continuance of an Event of
Default. Grantor hereby authorizes Secured Party to substitute another Person as the
proxyholder and, upon the occurrence and during the continuance of any Event of Default,
hereby authorizes the proxyholder to file this proxy and any substitution instrument with
the secretary or other appropriate official of the appropriate Person. This proxy is
coupled with an interest and is irrevocable until such time as all Secured Obligations
have been paid and performed in full. </FONT>
</TD>
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11 </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Attorney-in-Fact</U>. Grantor hereby irrevocably nominates and appoints
          Secured Party as its attorney-in-fact for the following purposes: (a) upon the
          occurrence and during the continuance of an Event of Default, to preserve,
          process, develop, maintain and protect the Collateral; (b) upon the occurrence
          and during the continuance of an Event of Default, to do any and every act which
          Grantor is obligated to do under this Agreement, at the expense of Grantor and
          without any obligation to do so; (c) to prepare, sign, file and/or record, for
          Grantor, in the name of Grantor, any financing statement, application for
          registration, or like paper, and to take any other action deemed by Secured
          Party necessary or desirable in order to perfect or maintain perfected the
          security interests granted hereby; and (d) upon the occurrence and during the
          continuance of an Event of Default, to execute any and all papers and
          instruments and do all other things necessary or desirable to preserve and
          protect the Collateral and to protect Secured Party&#146;s security interests
          therein; provided, however, that Secured Party shall be under no obligation
          whatsoever to take any of the foregoing actions, and, absent bad faith or actual
          malice, Secured Party shall have no liability or responsibility for any act
          taken or omission with respect thereto. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Costs and Expenses</U>. Grantor agrees to pay to Secured Party all costs and
          expenses (including, without limitation, reasonable attorneys&#146; fees and
          disbursements) incurred by Secured Party in the enforcement or attempted
          enforcement of this Agreement, whether or not an action is filed in connection
          therewith, and in connection with any waiver or amendment of any term or
          provision hereof. All advances, charges, costs and expenses, including
          reasonable attorneys&#146; fees and disbursements, incurred or paid by Secured
          Party in exercising any right, privilege, power or remedy conferred by this
          Agreement (including, without limitation, the right to perform any Secured
          Obligation of Grantor under the Loan Documents), or in the enforcement or
          attempted enforcement thereof, shall be secured hereby and shall become a part
          of the Secured Obligations and shall be paid to Secured Party by Grantor,
          immediately upon demand, together with interest from the date which is two
          Business Days following such demand thereon at the Base Rate or, if applicable,
          the Default Rate provided for under the Credit Agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Statute of Limitations and Other Laws</U>. Until the Secured Obligations
          shall have been paid and performed in full, the power of sale and all other
          rights, privileges, powers and remedies granted to Secured Party hereunder shall
          continue to exist and may be exercised by Secured Party at any time and from
          time to time irrespective of the fact that any of the Secured Obligations may
          have become barred by any statute of limitations. Grantor expressly waives the
          benefit of any and all statutes of limitation, and any and all Laws providing
          for exemption of property from execution or for valuation and appraisal upon
          foreclosure, to the maximum extent permitted by applicable Law. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Other Agreements</U>. Nothing herein shall in any way modify or limit the
          effect of terms or conditions set forth in any other security or other agreement
          executed by Grantor or in connection with the Secured Obligations, but each and
          every term and condition hereof shall be in addition thereto. All provisions
          contained in the Credit Agreement or any other Loan Document that apply to Loan
          Documents generally are fully applicable to this Agreement and are incorporated
          herein by this reference. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Continuing Effect</U>. This Agreement shall remain in full force and effect
          and continue to be effective should any petition be filed by or against Grantor
          for liquidation or reorganization, should Grantor become insolvent or make an
          assignment for the benefit of creditors or should a receiver or trustee be
          appointed for all or any significant part of Grantor&#146;s 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 the Administrative Agent or any Lender, whether as a
          &#147;voidable preference,&#148; &#147;fraudulent conveyance,&#148; 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. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12 </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Release of Grantor</U>. This Agreement and all Secured Obligations of Grantor
          hereunder shall be released when all Secured Obligations have been paid in full
          in cash or otherwise performed in full and when no portion of the Commitment
          remains outstanding. Upon such release of Grantor&#146;s Secured Obligations
          hereunder, Secured Party shall return and reassign any pledged Collateral to
          Grantor, or to the Person or Persons legally entitled thereto, and shall
          endorse, execute, deliver, record and file all instruments and documents, and do
          all other acts and things, reasonably required for the return of the Collateral
          to Grantor, or to the Person or Persons legally entitled thereto, and to
          evidence or document the release of Secured Party&#146;s interests arising under
          this Agreement, all as reasonably requested by, and at the sole expense of,
          Grantor. Secured Party shall take all action as reasonably required to evidence
          or document the release of Secured Party&#146;s interests to any Collateral
          which Grantor sells, transfers or otherwise disposes of as permitted under the
          terms of the Credit Agreement, at the sole expense of Grantor. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Counterparts</U>. This Agreement may be executed in one or more counterparts,
          each of which shall be deemed an original and all of which, taken together,
          shall constitute one and the same agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Additional Powers and Authorization</U>. The Administrative Agent has been
          appointed as the Administrative Agent hereunder pursuant to the Credit Agreement
          and shall be entitled to the benefits of the Credit Agreement and the other Loan
          Documents. Notwithstanding anything contained herein to the contrary, the
          Administrative Agent may employ agents, trustees, or attorneys-in-fact and may
          vest any of them with any Property (including, without limitation, any
          Collateral pledged hereunder), title, right or power deemed necessary for the
          purposes of such appointment. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>20.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>GOVERNING LAW</U>. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
          ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
          REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF. </B>ANY LEGAL ACTION OR
          PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
          BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN LOS ANGELES COUNTY
          OR OF THE UNITED STATES FOR THE CENTRAL<B> </B>DISTRICT OF SUCH STATE, AND BY
          EXECUTION AND DELIVERY OF THIS AGREEMENT, GRANTOR CONSENTS, FOR ITSELF AND IN
          RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
          GRANTOR IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
          OF VENUE OR BASED ON THE GROUNDS OF <I>FORUM NON CONVENIENS</I>, WHICH IT MAY
          NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
          JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
          GRANTOR WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
          WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13 </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>WAIVER OF JURY TRIAL</U>. GRANTOR AND SECURED PARTY EXPRESSLY WAIVE THEIR
          RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
          ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE CREDIT
          AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
          THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
          OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW EXISTING OR
          HEREAFTER ARISING AND WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
          OTHERWISE. GRANTOR AND SECURED PARTY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION
          OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
          LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
          A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
          COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
          THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, THE CREDIT AGREEMENT OR THE
          OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
          TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
          AGREEMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY HERETO
          MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
          WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR
          RIGHT TO TRIAL BY JURY. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Existing Security Agreement</U>. This Agreement amends and restates in its
          entirety the Existing Security Agreement, provided that the obligations of
          Grantor under the Existing Security Agreement shall continue under this
          Agreement, and shall not in any event be terminated, extinguished or annulled,
          but shall hereafter be governed by this Agreement. </FONT></P>

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<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Remainder
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, Grantor has executed this Agreement by its duly authorized officer as of
the date first written above.</FONT></P>

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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#147;Grantor&#148;<BR><BR>COAST CASINOS, INC., a Nevada corporation</FONT><BR><BR></TD></TR>
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     <TD WIDTH="60%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">By:</FONT></TD>
     <TD WIDTH="35%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">/s/ Gage Parrish</FONT><HR></TD></TR>
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     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Gage Parrish, Vice President and Chief Financial Officer</FONT></TD></TR>
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     <TD COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ACCEPTED AND AGREED<BR><BR>AS OF THE DATE FIRST<BR><BR>ABOVE WRITTEN:</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD></TR>
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     <TD COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&#147;Secured Party&#148;<BR><BR>BANK OF AMERICA, N.A., as Administrative Agent, and for and on behalf of the Lenders</FONT><BR><BR></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD></TR>
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     <TD WIDTH="5%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">By:</FONT></TD>
     <TD WIDTH="35%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">/s/ Janice Hammond</FONT><HR></TD>
     <TD WIDTH="60%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD></TR>
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     <TD COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Janice Hammond, Vice President</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD></TR>
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