Pledge And Security Agreement

Exhibit 10.2PLEDGE AND SECURITY AGREEMENTdated as of August 21, 2006amongAREP HOME FASHION HOLDINGS LLCAMERICAN CASINO & ENTERTAINMENT LLCAREP NEW JERSEY LAND HOLDINGS LLCAREP OIL & GAS HOLDINGS, LLCAREP REAL ESTATE HOLDINGS, LLCcollectively as the AREH Subsidiary GuarantorsandBEAR STEARNS CORPORATE LENDING INC.,
as Collateral Agent


TABLE OF CONTENTS PAGE Section 1. DEFINITIONS 2 Section 2. GRANT OF SECURITY 8 Section 3. SECURITY FOR OBLIGATIONS 10 Section 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS 10 Section 5. DIVIDENDS, DISTRIBUTIONS AND VOTING 19 Section 6. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES 20 Section 7. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT, IRREVOCABLE POWER OF ATTORNEY 21 Section 8. REMEDIES 22 Section 9. COLLATERAL AGENT 27 Section 10. CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS 28 Section 11. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM 29 Section 12. INDEMNITY AND EXPENSES 29 Section 13. MISCELLANEOUS 29 SCHEDULE I - GENERAL INFORMATIONSCHEDULE II - INVESTMENT RELATED PROPERTYSCHEDULE III - LETTERS OF CREDITSCHEDULE IV - INTELLECTUAL PROPERTYSCHEDULE V - COMMERCIAL TORT CLAIMS

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This PLEDGE AND SECURITY AGREEMENT, dated as of August 21, 2006 (this " Agreement" ), among each of the undersigned (together with any other Person that executes a Joinder Agreement, each, a " Grantor" and collectively, the " Grantors" ), and Bear Stearns Corporate Lending Inc. (" BSCL" ), acting in its capacity as collateral agent for the benefit of those lenders and issuing banks from time to time party to the Credit Agreement (as defined herein) and the other Secured Parties (as defined below), (the " Collateral Agent" ).RECITALS WHEREAS, reference is made to that certain Credit Agreement (the " Credit Agreement" ), dated as of August 21, 2006, among AMERICAN REAL ESTATE PARTNERS, L.P., a Delaware limited partnership, as borrower (" AREP" or " Borrower" ) and AMERICAN REAL ESTATE FINANCE CORP., a Delaware corporation, as borrower (" AREP Finance" or " Borrower" , and together with AREP, the " Borrowers" ), certain Subsidiaries of the Borrowers from time to time party to this Agreement (the " Guarantors" ), the several banks and other financial institutions or entities from time to time parties to the Credit Agreement (the " Lenders" ), BEAR, STEARNS & CO. INC., as sole lead arranger and sole bookrunner (in such capacity, the " Lead Arranger" ), and BSCL, as administrative agent for the Lenders and the other Agents (in such capacity, the " Administrative Agent" ) and as Collateral Agent, pursuant to which the lenders party thereto have extended or will extend credit and other financial accommodations to or for the benefit of the Borrowers; WHEREAS, pursuant to Section 10 of the Credit Agreement the Grantors (collectively, the " AREH Subsidiary Guarantors" ) guarantee the performance of the Borrower Obligations under the Credit Agreement and the other Loan Documents (the " Guarantee" ); WHEREAS, the Borrowers are members of an affiliated group of companies that includes each Grantor; WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrowers to make valuable transfers to one or more of the Grantors in connection with the operation of their respective businesses; WHEREAS, the Borrowers and the Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; and WHEREAS, in consideration of the extensions of credit as set forth in the Credit Agreement, each of the Grantors has agreed to secure all obligations under the Credit Agreement and the other Loan Documents, including the Guarantee; NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, each of the Grantors and the Collateral Agent hereby agree as follows:

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SECTION 1. DEFINITIONS (a) General Definitions . In this Agreement, the following terms shall have the following meanings: " Account Debtor" shall mean each Person who is obligated on a Receivable or any Supporting Obligation related thereto. " Accounts" shall mean all " accounts" as defined in Article 9 of the UCC. " Account Control Agreement" shall mean such control agreements as are from time to time delivered to the Collateral Agent as further set forth in Section 4(e)(iii). " Agreement" shall have the meaning set forth in the preamble. " Authenticate" shall mean " authenticate" as defined in Article 9 of the UCC. " Borrower Obligations" shall have the meaning set forth in the Credit Agreement. " Cash Proceeds" shall mean all proceeds of any Collateral consisting of cash, checks and other near-cash items. " Certificated Security" shall have the meaning specified in Article 8 of the UCC. " Chattel Paper" shall mean all " chattel paper" as defined in Article 9 of the UCC, including " electronic chattel paper" or " tangible chattel paper" , as each term is defined in the UCC. " Code" shall mean the Internal Revenue Code of 1986, as amended. " Collateral" shall have the meaning set forth in Section 2(a) hereof. " Collateral Agent" shall have the meaning set forth in the preamble. " Collateral Records" shall mean books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon. " Collateral Support" shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a Lien in such real or personal property. " Commercial Tort Claims" shall mean all " commercial tort claims" as defined in the UCC, including all commercial tort claims listed and described with specification on Schedule V hereto (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)).

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" Commodities Accounts" shall mean all " commodity accounts" as defined in Article 9 of the UCC. " Copyright Licenses" shall mean any and all agreements granting any right in, to or under Copyrights (whether such Grantor is licensee or licensor thereunder) including each agreement referred to in Schedule IV(B) (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)). " Copyrights" shall mean all United States, state and foreign copyrights owned by any Grantor, including copyrights in software and databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, now or hereafter in force throughout the world, all registrations and applications for any of the foregoing including the applications referred to in Schedule IV(A) (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)), all rights corresponding thereto throughout the world, and all extensions and renewals of any thereof. " Credit Agreement" shall have the meaning set forth in the preamble. " Deposit Accounts" shall mean all " deposit accounts" as defined in Article 9 of the UCC. " Documents" shall mean all " documents" as defined in Article 9 of the UCC. " Documents Evidencing Goods" shall mean all Documents evidencing, representing or issued in connection with Goods. " Equipment" shall mean: (i) all " equipment" as defined in the UCC, (ii) all machinery, manufacturing equipment, data processing equipment, computers, office equipment, furnishings, furniture, appliances, and tools (in each case, regardless of whether characterized as equipment under the UCC), (iii) all Fixtures and (iv) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefor, wherever located, now or hereafter existing. " Fixtures" shall mean all " fixtures" as defined in Article 9 of the UCC. " General Intangibles" (i) shall mean all " general intangibles" as defined in Article 9 of the UCC and (ii) shall include all Hedge Agreements, all contracts, all tax refunds and all licenses, permits, concessions and authorizations, (in each case, regardless of whether characterized as general intangibles under the UCC). " Goods" (i) shall mean all " goods" as defined in Article 9 of the UCC and (ii) shall include all Inventory, Equipment (whether or not constituting Fixtures), Documents Evidencing Goods and Software Embedded In Goods. " Instruments" shall mean all " instruments" as defined in Article 9 of the UCC. " Insurance" shall mean all insurance policies covering any or all of the Collateral (regardless of whether the Collateral Agent is the loss payee thereof).

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" Intellectual Property" shall mean, the collective reference to all rights, priorities and privileges relating to any intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses, together with URLs, domain names, content of websites and databases, and rights of publicity. " Intellectual Property Licenses" shall mean, collectively, the Copyright Licenses, Patent Licenses, Trademark Licenses, and Trade Secret Licenses. " Inventory" shall mean: (i) all " inventory" as defined in the UCC and (ii) all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory or otherwise used or consumed in any Grantor' s business; all goods in which any Grantor has an interest in mass or a joint or other interest or right of any kind; and all goods which are returned to or repossessed by any Grantor, and all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC). " Investment Accounts" shall mean Securities Accounts, Commodities Accounts and Deposit Accounts. " Investment Related Property" shall mean: (i) all " investment property" (as such term is defined in Article 9 of the UCC) (other than as described in Section 2(b)) and (ii) all of the following (regardless of whether classified as investment property under the UCC): all (1) Pledged Equity Interests, (2) Pledged Debt, (3) the Investment Accounts and (4) Certificates of Deposit. " Joinder Agreement" means an agreement in substantially the form of Exhibit A hereto whereby an additional person becomes a Grantor hereunder as required by the Credit Agreement. " Letter of Credit Right" shall mean " letter-of-credit right" as defined in the UCC. " Material Intellectual Property" shall have the meaning set forth in Section 4(g)(i)(1) hereof. " Money" shall mean " money" as defined in the UCC. " Patent Licenses" shall mean all agreements granting any right in, to, or under Patents (whether such Grantor is licensee or licensor thereunder) including each agreement referred to in Schedule IV(D) hereto (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)). " Patents" shall mean all United States, state and foreign letters patents and applications for letters patent owned by any Grantor, including each patent and patent application referred to in Schedule IV(C) hereto (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)), all reissues, divisions, continuations,

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continuations-in-part, extensions, renewals, and reexaminations of any of the foregoing, and all rights corresponding thereto throughout the world. " Payment Intangible" shall have the meaning specified in Article 9 of the UCC. " Pledged Collateral" shall mean all Pledged Debt and Pledged Equity Interests. " Pledged Debt" shall mean all indebtedness for borrowed money owed to such Grantor, whether or not evidenced by any instrument or promissory note, including all indebtedness described on Schedule II hereto under the heading " Pledged Debt" (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)), all monetary obligations owing to any Grantor from any other Grantor the instruments evidencing any of the foregoing, and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing. " Pledged Equity Interests" shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests and any other participation or other interests in any equity or profits of any business entity. " Pledged LLC Interests" shall mean all interests in any limited liability company owned by such Grantor (other than as described in Section 2(b) herein) including all limited liability company or member' s interests listed on Schedule II hereto under the heading " Pledged LLC Interests" (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)) and the certificates, if any, representing such limited liability company or member' s interests and any interest of such Grantor on the books and records of such limited liability company or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company or member' s interests and any other warrant, right or option to acquire any of the foregoing. " Pledged Partnership Interests" shall mean all interests in any general partnership, limited partnership, limited liability partnership or other partnership owned by such Grantor (other than as described in Section 2(b) herein) including all partnership interests listed on Schedule II hereto under the heading " Pledged Partnership Interests" (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)) and the certificates, if any, representing such partnership interests and any interest of such Grantor on the books and records of such partnership or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and any other warrant, right or option to acquire any of the foregoing. " Pledged Stock" shall mean all shares of Capital Stock owned by such Grantor (other than as described in Section 2(b) herein), including all shares of Capital Stock described on Schedule II hereto under the heading " Pledged Stock" (as such Schedule may be amended or

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supplemented from time to time in accordance with Section 4(i)), and the certificates, if any, representing such shares and any interest of such Grantor in the entries on the books of the issuer of such shares or on the books of any securities intermediary pertaining to such shares, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares and any other warrant, right or option to acquire any of the foregoing. " Pledged Trust Interests" shall mean all interests in a Delaware statutory trust or other trust owned by such Grantor (other than as described in Section 2(b) herein) including all trust interests listed on Schedule II hereto under the heading " Pledged Trust Interests" (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)) and the certificates, if any, representing such trust interests and any interest of such Grantor on the books and records of such trust or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such trust interests and any other warrant, right or option to acquire any of the foregoing. " Proceeds" shall mean: (i) all " proceeds" as defined in Article 9 of the UCC, (ii) payments or distributions made with respect to any Investment Related Property and (iii) whatever is receivable or received when Collateral or proceeds are sold, leased, licensed, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary. " Receivables" shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles, (iv) Instruments (including, to the extent constituting Instruments, the Pledged Debt) and (v) to the extent not otherwise covered above, all other rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, regardless of how classified under the UCC together with all of each Grantor' s rights, if any, in any goods or other property giving rise to such right to payment and all Collateral Support and Supporting Obligations related thereto and all Receivables Records. " Receivables Records" shall mean (i) all original copies of all documents, instruments or other writings or electronic records or other Records evidencing the Receivables, (ii) all books, correspondence, credit or other files, Records, ledger sheets or cards, invoices, and other papers relating to Receivables, including all tapes, cards, computer tapes, computer discs, computer runs, record keeping systems and other papers and documents relating to the Receivables, whether in the possession or under the control of Grantor or any computer bureau or agent from time to time acting for Grantor or otherwise, (iii) all evidences of the filing of financing statements and the registration of other instruments in connection therewith, and amendments, supplements or other modifications thereto, notices to other creditors or agents thereof, and certificates, acknowledgments, or other writings, including lien search reports, from filing or other registration officers, (iv) all credit information, reports and memoranda relating thereto and (v) all other written or non-written forms of information related in any way to the foregoing or any Receivable.

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" Record" shall have the meaning specified in the UCC. " Registered Organization" shall mean an organization organized solely under the law of a single State or the United States and as to which the State or the United States must maintain a public record showing the organization to have been organized. " Representation Date" shall mean each of (i) the date hereof and (ii) each other day on which the Borrowers reaffirm any representation and warranty contained in the Credit Agreement. " Secured Obligations" shall mean each of the AREH Subsidiary Guarantor' s Obligations under the Credit Agreement and each agreement executed therewith to which it is a party. " Secured Party" shall mean the collective reference to the Lenders, the Agents (as defined in the Credit Agreement), the Qualified Counterparties (as defined in the Credit Agreement) and the Issuing Lender (as defined in the Credit Agreement), and each of their respective successors, assignees and transferees. " Securities" shall have the meaning specified in Article 8 of the UCC. " Securities Accounts" shall mean all " securities accounts" as defined in Article 8 of the UCC. " Software Embedded in Goods" means, with respect to any Goods, any computer program embedded in Goods and any supporting information provided in connection with a transaction relating to the program if (i) the program is associated with the Goods in such a manner that it customarily is considered part of the Goods or (ii) by becoming the owner of the Goods a person acquires a right to use the program in connection with the Goods. " State" shall mean a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. " Supporting Obligation" shall mean all " supporting obligations" as defined in the UCC. " Trade Secret Licenses" shall mean any and all agreements granting any right in or to Trade Secrets (whether such Grantor is licensee or licensor thereunder) including each agreement referred to in Schedule IV(G) hereto (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)). " Trade Secrets" shall mean all trade secrets and all other confidential or proprietary information and know-how owned by any Grantor (all of the foregoing being collectively called a " Trade Secret" ), whether or not reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to such Trade Secret.

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" Trademark Licenses" shall mean any and all agreements granting any right in or to Trademarks (whether such Grantor is licensee or licensor thereunder) including each agreement referred to in Schedule IV(F) hereto (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)). " Trademarks" shall mean all United States, state and foreign trademarks, service marks, certification marks, collective marks, trade names, corporate names, d/b/as, business names, fictitious business names, internet domain names, trade styles, logos, other source or business identifiers, designs and general intangibles of a like nature, rights of publicity and privacy pertaining to the right to use names likeness and biographical data, all registrations and applications for any of the foregoing owned by any Grantor, including the registrations and applications referred to in Schedule IV(E) hereto (as such Schedule may be amended or supplemented from time to time in accordance with Section 4(i)), and the goodwill of the business symbolized by the foregoing. " UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York. (b) Definitions; Interpretation . All capitalized terms used herein (including the preamble and recitals hereto) and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement or, if not defined therein, in the UCC. With respect to terms defined in more than one article of the UCC, unless otherwise specified such terms shall have the meaning specified in Article 9 of the UCC. References to " Sections" , " Exhibits" , " Annexes" and " Schedules" shall be to Sections, Exhibits, Annexes and Schedules, as the case may be, of this Agreement (as such Sections, Exhibits, Annexes and Schedules may be amended or supplemented from time to time in accordance with the terms of this Agreement), unless otherwise specifically provided. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word " include" or " including" , when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as " without limitation" or " but not limited to" or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. If any conflict or inconsistency exists between this Agreement and the Credit Agreement, the Credit Agreement shall govern. All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC.SECTION 2. GRANT OF SECURITY (a) Grant of Security . Each Grantor hereby grants to the Collateral Agent, for itself and for the ratable benefit of the Secured Parties, a security interest and continuing lien on all of such Grantor' s right, title and interest in, to and under all personal property of such Grantor including the following, in each case whether now owned or existing or hereafter acquired or

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arising and wherever located (all of which being hereinafter collectively referred to as, the " Collateral" ): (1) all Documents; (2) all General Intangibles; (3) all Goods (including Documents Representing Goods and Software Embedded in Goods); (4) all Insurance; (5) all Intellectual Property; (6) all Investment Related Property (including Deposit Accounts); (7) all Letter of Credit Rights and letters of credit; (8) all Money; (9) all Receivables and Receivable Records; (10) all Commercial Tort Claims identified on Schedule V hereto; (11) all, to the extent not otherwise included above (except for any property specifically excluded from any defined term used in any clause of the section above), contracts, motor vehicles, choses in action and all other personal property of any kind and all Collateral Records, Collateral Support and Supporting Obligations relating to any of the foregoing; and (12) all, to the extent not otherwise included above, Proceeds, products, accessions, rents and profits of or in respect of any of the foregoing. (b) Certain Limited Exclusions . Notwithstanding anything herein to the contrary, in no event shall the security interest granted under Section 2(a) attach to (i) any lease, license, instrument, document, contract, property rights or agreement (including, with respect to any Investment Related Property, Pledged Debt or Pledged Equity Interest, any applicable shareholder or similar agreement) to which any Grantor is a party, or any of its rights or interests thereunder, if and for so long as the grant of such security interest shall constitute or result in: (A) the abandonment, invalidation or unenforceability of any right, title or interest of such Grantor therein or (B) a breach or termination pursuant to the terms of, or a default under, any such lease, license, instrument, document, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC or the Uniform Commercial Code in effect in any relevant jurisdiction or any other Requirement of Law or principle of equity), provided, however , that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that

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does not result in any of the consequences specified in (A) or (B) including any proceeds of such lease, license, contract, property rights or agreement; or (ii) any property or asset to the extent that such grant of a security interest is prohibited by any Requirement of Law or requires a consent not obtained of any Governmental Authority pursuant to such Requirement of Law (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC or the Uniform Commercial Code in effect in any relevant jurisdiction or any other Requirement of Law or principles of equity). (c) It is understood that the security interests created hereby shall not prevent the Grantors from using the Collateral in the ordinary course of business for purposes not inconsistent with this Agreement and the other Loan Documents.SECTION 3. SECURITY FOR OBLIGATIONS. (a) Security for Obligations . This Agreement se ...