INTEREST
OF THE COLLATERAL AGENT IN THE COLLATERAL PURSUANT TO THIS AGREEMENT (EXCEPT FOR
THE FILING OF A UNIFORM COMMERCIAL CODE FINANCING STATEMENT WITH THE SECRETARY
OF STATE OF THE STATE OF NEVADA TO PERFECT THE COLLATERAL AGENT'S SECURITY
INTEREST IN THE COLLATERAL) OR FOR THE EXECUTION, DELIVERY OR PERFORMANCE OF THE
PLEDGOR OF THIS AGREEMENT OR (II) FOR THE EXERCISE BY THE COLLATERAL AGENT OF
THE VOTING OR OTHER RIGHTS OR THE REMEDIES IN RESPECT OF THE COLLATERAL PROVIDED
FOR PURSUANT TO THIS AGREEMENT, EXCEPT AS MAY BE REQUIRED UNDER ANY APPLICABLE
SECURITIES LAWS RELATING TO THE OFFER AND SALE OF SECURITIES GENERALLY IN
CONNECTION WITH THE SALE OR OTHER DISPOSITION OF THE COLLATERAL.
(K)
THE PLEDGED INTERESTS CONSTITUTE ONE HUNDRED PERCENT (100%) OF THE
ISSUED AND OUTSTANDING MEMBERSHIP INTERESTS OF THE ISSUER, AS SET FORTH ON
SCHEDULE A ANNEXED HERETO.
(L)
EXCEPT AS SET FORTH ON SCHEDULE B, AS OF THE DATE HEREOF, THERE
ARE NO EXISTING OPTIONS OR WARRANTS (OTHER THAN THE WARRANTS DESCRIBED IN THE
INVESTOR RIGHTS AGREEMENT) OR OTHER EQUITY INTERESTS EVIDENCING ANY PLEDGED
INTERESTS AND NO INDEBTEDNESS OR SECURITIES CONVERTIBLE INTO ANY PLEDGED
INTERESTS.
(M)
THE PLEDGOR WILL, AT ALL TIMES, CAUSE THE ISSUER TO PROVIDE IN ITS
OPERATING AGREEMENT OR OTHER APPLICABLE ORGANIZATIONAL DOCUMENT THAT ALL PLEDGED
INTERESTS OF THE ISSUER WILL BE "SECURITIES" UNDER ARTICLE 8 OF THE UNIFORM
COMMERCIAL CODE OF THE STATE OF NEVADA.
(N)
NONE OF THE PLEDGED INTERESTS WILL CONSTITUTE "UNCERTIFICATED
SECURITIES" AS DEFINED IN ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE OF THE STATE
OF NEW YORK (THE "NEW YORK UCC").
The representations and warranties set forth in this Section 4 shall survive the
execution and delivery of this Agreement.
5.
COVENANTS.
Until such time as all of the Warrant Obligations have been paid and performed
in full (including the termination or satisfaction of the Put Right), Pledgor
shall:
(A)
NOT SELL, ASSIGN, TRANSFER, CONVEY, HYPOTHECATE OR OTHERWISE
DISPOSE OF ANY PART OF THE COLLATERAL OR ANY OF ITS RIGHTS OR INTEREST IN OR TO
THE COLLATERAL, EXCEPT ANY ISSUANCES PERMITTED BY SECTIONS 5(E) HEREOF; NOR
CREATE, INCUR OR PERMIT TO EXIST ANY LIEN WHATSOEVER WITH RESPECT TO ANY OF THE
COLLATERAL OR THE PROCEEDS THEREOF OTHER THAN PERMITTED LIENS.
4
(B)
AT PLEDGOR'S SOLE COST AND EXPENSE, DEFEND COLLATERAL AGENT'S
RIGHT, TITLE AND SECURITY INTEREST IN AND TO THE COLLATERAL AGAINST THE CLAIMS
OF ANY PERSON AND KEEP THE COLLATERAL FREE FROM ALL LIENS, EXCEPT FOR PERMITTED
LIENS.
(C)
AT ANY TIME, AND FROM TIME TO TIME, UPON THE WRITTEN REQUEST OF
COLLATERAL AGENT, EXECUTE AND DELIVER SUCH FURTHER DOCUMENTS AND DO SUCH FURTHER
ACTS AND THINGS AS COLLATERAL AGENT MAY REASONABLY REQUEST IN ORDER TO EFFECT
THE PURPOSES OF THIS AGREEMENT INCLUDING, BUT WITHOUT LIMITATION, AND SUBJECT TO
ALL APPLICABLE LAWS, THE GAMING LAWS AND THE REQUIREMENTS OF THE NEVADA GAMING
AUTHORITIES, DELIVERING TO COLLATERAL AGENT UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF ANY EVENT OF DEFAULT, SUBJECT TO THE APPLICATION OF THE