Document:

Unassociated Document

    SECURITY
      AGREEMENT

    

    THIS
      SECURITY AGREEMENT (“Agreement”) is made and entered into as of the ___ day of
      September, 2008, by and among Diamond Sports & Entertainment, Inc., a
      Delaware corporation (“Bridge Loan Borrower”), Diamond Concessions, LLC, a
      California limited liability company (“Subsidiary”), and the Buyers (as defined
      below).

    

    RECITALS:

    

    WHEREAS,
      Federal
      Sports & Entertainment, Inc. (the “Borrower”) will issue and deliver to each
      party listed as a buyer (the “Buyers”) on the Schedule of Buyers attached to
      that certain Securities Purchase Agreement dated of even date herewith
      (“Securities Purchase Agreement”) its 0% Secured Convertible Promissory Note
      (each, a “Note” and together, the “Notes”) in the aggregate principal amount of
      up to One Million Dollars ($1,000,000), the first of which Notes shall be dated
      as of the date of this Agreement; 

    

    WHEREAS,
      pursuant to that certain bridge loan agreement dated as of even date herewith
      between Borrower and Bridge Loan Borrower (the “Bridge Loan Agreement”),
      Borrower has agreed to lend the proceeds of the Notes to Bridge Loan Borrower
      (the “Bridge Loan”) to meet working capital needs of Bridge Loan Borrower;

    

    WHEREAS,
      pursuant to the Bridge Loan Agreement, the Bridge Loan Borrower has agreed
      to
      grant a security interest in and to the Collateral (as defined in this
      Agreement) to the Buyers on the terms and conditions set forth in this
      Agreement.

    

    WHEREAS,
      in connection with the Securities Purchase Agreement, the Borrowers will execute
      an Intercreditor Agreement, dated as of the date hereof (“Intercreditor
      Agreement”), and all provisions herein are subject to that agreement.

    

    NOW,
      THEREFORE,
      for and
      in consideration of the Bridge Loan, and of the premises and intending to be
      legally bound, the parties covenant and agree as follows: 

    

    1. Definitions.
      In
      addition to the words and terms defined elsewhere in this Agreement, the
      following words and terms shall have the following meanings, unless the context
      otherwise clearly requires:

    

    “Accounts”
      shall have the meaning given to that term in the Code and shall include without
      limitation all rights of the Bridge Loan Borrower or the Subsidiary, whenever
      acquired, to payment for goods sold or leased or for services rendered, whether
      or not earned by performance.

    

    “Agent”
      shall mean John Thomas Bridge & Opportunity Fund

    

    “Chattel
      Paper” shall have the meaning given to that term in the Code and shall include
      without limitation all writings owned by the Bridge Loan Borrower or the
      Subsidiary, whenever acquired, which evidence both a monetary obligation and
      a
      security interest in or a lease of specific goods.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    “Code”
      shall mean the Uniform Commercial Code as in effect on the date of this
      Agreement and as amended from time to time, of the state or states having
      jurisdiction with respect to all or any portion of the Collateral from time
      to
      time.

    

    “Collateral”
      shall mean (i) all tangible and intangible assets of Bridge Loan Borrower and
      the Subsidiary, including, without limitation, collectively the Accounts,
      Chattel Paper, Deposit Accounts, Documents, Equipment, Fixtures, General
      Intangibles, Instruments, Intellectual Property, Inventory, Investment Property,
      and Proceeds of each of them.

    

    “Deposit
      Accounts” shall have the meaning given to that term in the Code and shall
      include a demand, time, savings, passbook or similar account maintained with
      a
      bank, savings bank, savings and loan association, credit union, trust company
      or
      other organization that is engaged in the business of banking.

    

    “Documents”
      shall have the meaning given to that term in the Code and shall include without
      limitation all warehouse receipts (as defined by the Code) and other documents
      of title (as defined by the Code) owned by the Bridge Loan Borrower or the
      Subsidiary, whenever acquired.

    

    “Equipment”
      shall have the meaning given to that term in the Code and shall include without
      limitation all goods owned by the Bridge Loan Borrower or the Subsidiary,
      whenever acquired and wherever located, used or brought for use primarily in
      the
      business or for the benefit of the Bridge Loan Borrower or the Subsidiary and
      not included in Inventory of the Bridge Loan Borrower or the Subsidiary,
      together with all attachments, accessories and parts used or intended to be
      used
      with any of those goods or Fixtures, whether now or in the future installed
      therein or thereon or affixed thereto, as well as all substitutes and
      replacements thereof in whole or in part.

    

    “Event
      of
      Default” shall mean (i) any of the Events of Default described in the Notes or
      the Loan Documents, or (ii) any default by the Bridge Loan Borrower in the
      performance of its obligations under this Agreement. 

    

    “Fixtures”
      shall have the meaning given to that term in the Code, and shall include without
      limitation leasehold improvements.

    

    “General
      Intangibles” shall have the meaning given to that term in the Code and shall
      include, without limitation, all leases under which the Bridge Loan Borrower
      or
      the Subsidiary now or in the future leases and or obtains a right to occupy
      or
      use real or personal property, or both, all of the other contract rights of
      the
      Bridge Loan Borrower or the Subsidiary, whenever acquired, and customer lists,
      choses in action, claims (including claims for indemnification), books, records,
      patents, copyrights, trademarks, blueprints, drawings, designs and plans, trade
      secrets, methods, processes, contracts, licenses, license agreements, formulae,
      tax and any other types of refunds, returned and unearned insurance premiums,
      rights and claims under insurance policies, and computer information, software,
      records and data, and oil, gas, or other minerals before extraction now owned
      or
      acquired after the date of this Agreement by the Bridge Loan Borrower or the
      Subsidiary.

    
      
         

      

      
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    “Instruments”
      shall have the meaning given to that term in the Code and shall include, without
      limitation, all negotiable instruments (as defined in the Code), all
      certificated securities (as defined in the Code) and all other writings which
      evidence a right to the payment of money now or after the date of this Agreement
      owned by the Bridge Loan Borrower or the Subsidiary.

    

    “Inventory”
      shall have the meaning given to that term in the Code and shall include without
      limitation all goods owned by the Bridge Loan Borrower or the Subsidiary,
      whenever acquired and wherever located, held for sale or lease or furnished
      or
      to be furnished under contracts of service, and all raw materials, work in
      process and materials owned by the Bridge Loan Borrower or the Subsidiary and
      used or consumed in the Bridge Loan Borrower’s or the Subsidiary’ business,
      whenever acquired and wherever located.

    

    “Investment
      Property,” “Securities Intermediary” and “Commodities Intermediary” each shall
      have the meaning set forth in the Code.

    

    “Know-How”
      means all documented and undocumented research, ideas, data, theories,
      conclusions, reports, drawings, designs, blueprints, schematics, exhibits,
      models, prototypes, source code, object code, flow charts, manuals, processes,
      specifications, formulae, product configurations, notes, inventions (whether
      or
      not patentable and whether or not reduced to practice) and any other information
      of any kind developed, in development or maintained by the Bridge Loan Borrower
      or the Subsidiary or any of their respective employees, agents or
      representatives relating to any goods or services sold or licensed or offered
      for sale or license by the Bridge Loan Borrower or the Subsidiary or goods
      or
      services which the Bridge Loan Borrower or the Subsidiary have a present
      intention to sell or license.

    

    “Loan
      Documents” shall mean collectively, this Agreement, the Notes, the Bridge Loan
      Agreement, the Securities Purchase Agreement and all other agreements, documents
      and instruments executed and delivered in connection therewith, as each may
      be
      amended, supplemented or modified from time to time.

    

    “Permitted
      Liens” shall mean all (i) all existing liens on the assets of the Bridge Loan
      Borrower and the Subsidiary which have been disclosed to the Borrower by the
      Bridge Loan Borrower in the Bridge Loan Agreement, and (ii) all purchase money
      security interests hereinafter incurred by the Bridge Loan Borrower in the
      ordinary course of business to the extent permitted by the Bridge Loan
      Agreement.

    
      
         

      

      
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    “Proceeds”
      shall have the meaning given to that term in the Code and shall include without
      limitation whatever is received when Collateral or Proceeds are sold, exchanged,
      collected or otherwise disposed of, whether cash or non-cash, and includes
      without limitation proceeds of insurance payable by reason of loss of or damage
      to Collateral.

    

    

    “Trade
      Secret Rights” means all documentation, Know-How and other materials owned by
      the Bridge Loan Borrower or the Subsidiary that is considered to be proprietary
      to the Bridge Loan Borrower or the Subsidiary, is maintained on a confidential
      or secret basis, and is generally not known to other persons or entities who
      are
      not subject to confidentiality restrictions. 

    

    2. Security
      Interest.
      

    

    (a) As
      security for the full and timely payment of the Notes in accordance with the
      terms of the Securities Purchase Agreement and the performance of the
      obligations of the Borrower under the Notes and the Bridge Loan Agreement,
      the
      Bridge Loan Borrower and the Subsidiary agree that the Buyers shall have, and
      the Bridge Loan Borrower and the Subsidiary shall grant and convey to and create
      in favor of the Buyers, a security interest under the Code in and to such of
      the
      Collateral as is now owned by the Bridge Loan Borrower or the Subsidiary. The
      security interest granted to the Buyers in this Agreement shall be a first
      priority security interest, prior and superior to the rights of all third
      parties existing on or arising after the date of this Agreement, subject to
      the
      Permitted Liens. 

    

    (b) All
      of
      the Equipment, Inventory and Goods owned by Bridge
      Loan Borrower or the Subsidiary
      is
      located in the states as specified on Schedule
      I
      attached
      hereto (except to the extent any such Equipment, Inventory or Goods is in
      transit or located at a Bridge
      Loan Borrower or the Subsidiary’s
      job
      site in the ordinary course of business). Except as disclosed on Schedule
      I,
      none of
      the Collateral is in the possession of any bailee, warehousemen, processor
      or
      consignee. Schedule
      I
      discloses such Bridge Loan Borrower and the Subsidiary’s names as of the date
      hereof as it appears in official filings in the state or province, as
      applicable, of its incorporation, formation or organization, the type of entity
      of both the Bridge Loan Borrower and the Subsidiary (including corporation,
      partnership, limited partnership or limited liability company), organizational
      identification number issued by both Bridge Loan Borrower and the Subsidiary
      state of incorporation, formation or organization (or a statement that no such
      number has been issued), both Bridge Loan Borrower and the Subsidiary state
      or
      province, as applicable, of incorporation, formation or organization and
the
      chief
      place of business, chief executive officer and the office where both
Bridge
      Loan Borrower and the Subsidiary
      keep
      their respective books and records. Both Bridge
      Loan Borrower and the Subsidiary have
      only
      one state or
      province, as applicable, of
      incorporation, formation or organization. Bridge
      Loan Borrower and the Subsidiary do
      not do
      business and have not done business during the past five (5) years under any
      trade name or fictitious business name except as disclosed on Schedule
      I
      attached
      hereto.

    
      
         

      

      
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    3. Provisions
      Applicable to the Collateral.
      The
      parties agree that the following provisions shall be applicable to the
      Collateral: 

    

    (a)
      The
      Bridge Loan Borrower and the Subsidiary each covenants and agrees that at all
      times during the term of this Agreement it shall keep accurate and complete
      books and records concerning the Collateral that is now owned by the Bridge
      Loan
      Borrower and the Subsidiary. 

    

    (b)
      The
      Buyers or their representatives shall have the right, upon reasonable prior
      written notice to the Bridge Loan Borrower and during the regular business
      hours
      of the Bridge Loan Borrower, to examine and inspect the Collateral and to review
      the books and records of the Bridge Loan Borrower or the Subsidiary concerning
      the Collateral that is now owned or acquired after the date of this Agreement
      by
      the Bridge Loan Borrower or the Subsidiary and to copy the same and make
      excerpts therefrom; provided, however, that from and after the occurrence of
      an
      Event of Default, the rights of inspection and entry shall be subject to the
      requirements of the Code. 

    

    (c)
      The
      Bridge Loan Borrower and the Subsidiary shall at all times during the term
      of
      this Agreement keep the Equipment, Inventory and Fixtures that are now owned
      by
      the Bridge Loan Borrower or the Subsidiary in the states set forth on Schedule
      I
      or, upon written notice to the Buyers, at such other locations for which the
      Buyers have filed financing statements, and in no other states without 20 days’
prior written notice to the Buyers, except that the Bridge Loan Borrower or
      the
      Subsidiary shall have the right until one or more Events of Default shall occur
      to sell or otherwise dispose of Inventory and other Collateral in the ordinary
      course of business. 

    

    (d)
      The
      Bridge Loan Borrower shall not move the location of its principal executive
      offices without prior written notification to the Buyers. 

    

    (e)
      Without the prior written consent of the Buyers, the Bridge Loan Borrower and
      the Subsidiary shall not sell, lease or otherwise dispose of any Equipment
      or
      Fixtures, except in the ordinary course of their business. 

    

    (f)
      Promptly upon request of the Buyers from time to time, the Bridge Loan Borrower
      or the Subsidiary shall furnish the Buyers with such information and documents
      regarding the Collateral and the Bridge Loan Borrower’s or the Subsidiary’s
      financial condition, business, assets or liabilities, at such times and in
      such
      form and detail as the Buyers may reasonably request.

    

    (g)
      During the term of this Agreement, the Bridge Loan Borrower or the Subsidiary
      shall deliver to the Buyers, upon their reasonable, written request from time
      to
      time, without limitation, 

     

    
      
         

      

      
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    (i)
      all
      invoices and customer statements rendered to account debtors, documents,
      contracts, chattel paper, instruments and other writings pertaining to the
      Bridge Loan Borrower’s or the Subsidiary’s contracts or the performance of the
      Bridge Loan Borrower’s or the Subsidiary’s contracts, 

    

    (ii)
      evidence of the Bridge Loan Borrower’s or the Subsidiary’s accounts and
      statements showing the aging, identification, reconciliation and collection
      thereof, and 

    

    (iii)
      reports as to the Bridge Loan Borrower’s or the Subsidiary’s inventory and
      sales, shipment, damage or loss thereof, all of the foregoing to be certified
      by
      authorized officers or other employees of the Bridge Loan Borrower or the
      Subsidiary, and Bridge Loan Borrower or the Subsidiary shall take all necessary
      action during the term of this Agreement to perfect any and all security
      interests in favor of Bridge Loan Borrower or the Subsidiary and to assign
      to
      Buyers all such security interests in favor of Bridge Loan Borrower or the
      Subsidiary. 

    

    (h)
      Notwithstanding the security interest in the Collateral granted to and created
      in favor of the Buyers under this Agreement, the Bridge Loan Borrower or the
      Subsidiary shall have the right until one or more Events of Default shall occur,
      at their own cost and expense, to collect the Accounts and the Chattel Paper
      and
      to enforce their contract rights. 

    

    (i)
      After
      the occurrence of an Event of Default, subject to the terms of the Intercreditor
      Agreement, the Agent shall have the right, in its sole discretion, to give
      notice of the Buyers’ security interest to account debtors obligated to the
      Bridge Loan Borrower or the Subsidiary and to take over and direct collection
      of
      the Accounts and the Chattel Paper, to notify such account debtors to make
      payment directly to the Buyers and to enforce payment of the Accounts and the
      Chattel Paper and to enforce the Bridge Loan Borrower’s or the Subsidiary’s
      contract rights. It is understood and agreed by the Bridge Loan Borrower and
      the
      Subsidiary that Agent shall have no liability whatsoever under this subsection
      (i) except for their own gross negligence or willful misconduct. 

    

    (j)
      At
      all times during the term of this Agreement, Bridge Loan Borrower and the
      Subsidiary shall promptly deliver to the Agent, upon their written request,
      all
      existing leases, and all other leases entered into by Bridge Loan Borrower
      or
      the Subsidiary from time to time, covering any Equipment or Inventory (“Leased
      Inventory”) which is leased to third parties. 

    

    (l)
      Bridge Loan Borrower and the Subsidiary shall not change its name, entity
      status, federal taxpayer identification number, or provincial organizational
      or
      registration number, or the state under which it is organized without the prior
      written consent of the Buyers, which consent shall not be unreasonably withheld.
      

     

    
      
         

      

      
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    (m)
      Bridge Loan Borrower and the Subsidiary shall not close any of its Deposit
      Accounts or open any new or additional Deposit Accounts without first giving
      the
      Buyers at least fifteen (15) days prior written notice thereof. 

    

    (n)
      The
      Bridge Loan Borrower and the Subsidiary shall cooperate with the Buyers, at
      Bridge Loan Borrower’s expense, in perfecting Buyers’ security interest in any
      of the Collateral. 

    

    (o)
      Agent
      may file any necessary financing statements and other documents Agent deems
      necessary in order to perfect Buyers’ security interest without Bridge Loan
      Borrower’s or the Subsidiary’s signature. Bridge Loan Borrower and the
      Subsidiary grant to Agent a power of attorney for the sole purpose of executing
      any documents on behalf of Bridge Loan Borrower or the Subsidiary which Agent
      deems necessary to perfect Buyers’ security interest. Such power, coupled with
      an interest, is irrevocable. 

    

    4. Actions
      with Respect to Accounts.
      Subject
      to the Intercreditor Agreement, the Bridge Loan Borrower and the Subsidiary
      irrevocably makes, constitutes and appoints Agent its true and lawful
      attorney-in-fact with power to sign its name and to take any of the following
      actions after the occurrence and prior to the cure of an Event of Default,
      at
      any time without notice to the Bridge Loan Borrower or the Subsidiary and at
      the
      Bridge Loan Borrower’s expense: 

    

    (a)
      Verify the validity and amount of, or any other matter relating to, the
      Collateral by mail, telephone, telegraph or otherwise; 

    

    (b)
      Notify all account debtors that the Accounts have been assigned to the Buyers
      and that the Buyers has a security interest in the Accounts; 

    

    (c)
      Direct all account debtors to make payment of all Accounts directly to the
      Buyers; 

    

    (d)
      Take
      control in any reasonable manner of any cash or non-cash items of payment or
      proceeds of Accounts; 

    

    (e)
      Receive, open and dispose of all mail addressed to the Bridge Loan Borrower
      or
      the Subsidiary; 

    

    (f)
      Take
      control in any manner of any rejected, returned, stopped in transit or
      repossessed goods relating to Accounts; 

    

    (g)
      Enforce payment of and collect any Accounts, by legal proceedings or otherwise,
      and for such purpose the Buyers may: 

    

    (1)
      Demand payment of any Accounts or direct any account debtors to make payment
      of
      Accounts directly to the Buyers; 

     

    
      
         

      

      
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    (2)
      Receive and collect all monies due or to become due to the Bridge Loan Borrower
      or the Subsidiary pursuant to the Accounts; 

    

    (3)
      Exercise all of the Bridge Loan Borrower’s or the Subsidiary’s rights and
      remedies with respect to the collection of Accounts;

    

    (4)
      Settle, adjust, compromise, extend, renew, discharge or release Accounts in
      a
      commercially reasonable manner; 

    

    (5)
      Sell
      or assign Accounts on such reasonable terms, for such reasonable amounts and
      at
      such reasonable times as the Buyers reasonably deems advisable; 

    

    (6)
      Prepare, file and sign the Bridge Loan Borrower’s or the Subsidiary’s name or
      names on any Proof of Claim or similar documents in any proceeding filed under
      federal or state bankruptcy, insolvency, reorganization or other similar law
      as
      to any account debtor; 

    

    (7)
      Prepare, file and sign the Bridge Loan Borrower’s or the Subsidiary’s name or
      names on any notice of lien, claim of mechanic’s lien, assignment or
      satisfaction of lien or mechanic’s lien or similar document in connection with
      the Collateral; 

    

    (8)
      Endorse the name of the Bridge Loan Borrower or the Subsidiary upon any chattel
      papers, documents, instruments, invoices, freight bills, bills of lading or
      similar documents or agreements relating to Accounts or goods pertaining to
      Accounts or upon any checks or other media of payment or evidence of a security
      interest that may come into the Buyers possession; 

    

    (9)
      Sign
      the name or names of the Bridge Loan Borrower or the Subsidiary to verifications
      of Accounts and notices of Accounts sent by account Bridge Loan ors to the
      Bridge Loan Borrower or the Subsidiary; or 

    

    (10)
      Take
      all other actions that the Buyers reasonably deems to be necessary or desirable
      to protect the Bridge Loan Borrower’s or the Subsidiary’s interest in the
      Accounts. 

    

    (h)
      Negotiate and endorse any Document in favor of the Buyers or its designees,
      covering Inventory which constitutes Collateral, and related documents for
      the
      purpose of carrying out the provisions of this Agreement and taking any action
      and executing in the name(s) of Bridge Loan Borrower or the Subsidiary any
      instrument which the Buyers may reasonably deem necessary or advisable to
      accomplish the purpose hereof. Without limiting the generality of the foregoing,
      the Agent shall have the right and power to receive, endorse and collect checks
      and other orders for the payment of money made payable to the Bridge Loan
      Borrower or the Subsidiary representing any payment or reimbursement made under,
      pursuant to or with respect to, the Collateral or any part thereof and to give
      full discharge to the same. The Bridge Loan Borrower and each Subsidiary does
      hereby ratify and approve all acts of said attorney and agrees that said
      attorney shall not be liable for any acts of commission or omission, nor for
      any
      error of judgment or mistake of fact or law, except for said attorney’s own
      gross negligence or willful misconduct. This power, being coupled with an
      interest, is irrevocable until the Notes are paid in full (at which time this
      power shall terminate in full) and the Bridge Loan Borrower and the Subsidiary
      shall have performed all of their obligations under this Agreement. The Bridge
      Loan Borrower and the Subsidiary each further agrees to use its reasonable
      efforts to assist the Agent in the collection and enforcement of the Accounts
      and will not hinder, delay or impede the Buyers in any manner in its collection
      and enforcement of the Accounts. 

    
      
         

      

      
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    5. Preservation
      and Protection of Security Interest.
      Each of
      the Bridge Loan Borrower and the Subsidiary represents and warrants that it
      has,
      and covenants and agrees that at all times during the term of this Agreement,
      it
      will have, good and marketable title to the Collateral now owned by it free
      and
      clear of all mortgages, pledges, liens, security interests, charges or other
      encumbrances, except for the Permitted Liens and those junior in right of
      payment and enforcement to that of the Buyers or in favor of the Buyers, and
      shall defend the Collateral against the claims and demands of all persons,
      firms
      and entities whomsoever. Assuming Buyers has taken all required action to
      perfect a security interest in the Collateral as provided by the Code, each
      of
      the Bridge Loan Borrower and the Subsidiary represents and warrants that as
      of
      the date of this Agreement the Buyers have, and that all times in the future
      the
      Buyers will have, a first priority perfected security interest in the
      Collateral, prior and superior to the rights of all third parties in the
      Collateral existing on the date of this Agreement or arising after the date
      of
      this Agreement, subject to the Permitted Liens. Except as permitted by this
      Agreement, each of the Bridge Loan Borrower and the Subsidiary covenants and
      agrees that it shall not, without the prior written consent of the Buyers (i)
      borrow against the Collateral or any portion of the Collateral from any other
      person, firm or entity, except for borrowings which are subordinate to the
      rights of the Buyers, (ii) grant or create or permit to attach or exist any
      mortgage, pledge, lien, charge or other encumbrance, or security interest on,
      of
      or in any of the Collateral or any portion of the Collateral except those in
      favor of the Buyers or the Permitted Liens, (iii) permit any levy or attachment
      to be made against the Collateral or any portion of the Collateral, except
      those
      subject to the Permitted Liens, or (iv) permit any financing statements to
      be on
      file with respect to any of the Collateral, except financing statements in
      favor
      of the Buyers or those with respect to the Permitted Liens. The Bridge Loan
      Borrower and the Subsidiary shall faithfully preserve and protect the Buyers’
security interest in the Collateral and shall, at their own cost and expense,
      cause, or assist the Buyers to cause that security interest to be perfected
      and
      continue perfected so long as the Notes or any portion of the Notes are
      outstanding, unpaid or executory. For purposes of the perfection of the Buyers’
security interest in the Collateral in accordance with the requirements of
      this
      Agreement, the Bridge Loan Borrower and the Subsidiary shall from time to time
      at the request of the Buyers file or record, or cause to be filed or recorded,
      such instruments, documents and notices, including assignments, financing
      statements and continuation statements, as the Buyers may reasonably deem
      necessary or advisable from time to time in order to perfect and continue
      perfected such security interest. The Bridge Loan Borrower and the Subsidiary
      shall do all such other acts and things and shall execute and deliver all such
      other instruments and documents, including further security agreements, pledges,
      endorsements, assignments and notices, as the Buyers in their discretion may
      reasonably deem necessary or advisable from time to time in order to perfect
      and
      preserve the priority of such security interest as a first lien security
      interest in the Collateral prior to the rights of all third persons, firms
      and
      entities, subject to the Permitted Liens and except as may be otherwise provided
      in this Agreement. The Bridge Loan Borrower and the Subsidiary agree that a
      carbon, photographic or other reproduction of this Agreement or a financing
      statement is sufficient as a financing statement and may be filed instead of
      the
      original.

    
      
         

      

      
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    6. Insurance.
      Risk of
      loss of, damage to or destruction of the Equipment, Inventory and Fixtures
      is on
      the Bridge Loan Borrower and the Subsidiary. The Bridge Loan Borrower and the
      Subsidiary shall insure the Equipment, Inventory and Fixtures against such
      risks
      and casualties and in such amounts and with such insurance companies as is
      ordinarily carried by corporations or other entities engaged in the same or
      similar businesses and similarly situated or as otherwise reasonably required
      by
      the Buyers in their sole discretion. In the event of loss of, damage to or
      destruction of the Equipment, Inventory or Fixtures during the term of this
      Agreement, the Bridge Loan Borrower and the Subsidiary shall promptly notify
      Buyers of such loss, damage or destruction. At the reasonable request of the
      Buyers, each of the Bridge Loan Borrower’s and the Subsidiary’s policies of
      insurance shall contain loss payable clauses in favor of the Bridge Loan
      Borrower or the Subsidiary and the Buyers as their respective interests may
      appear and shall contain provision for notification of the Buyers thirty (30)
      days prior to the termination of such policy. At the request of the Buyers,
      copies of all such policies, or certificates evidencing the same, shall be
      deposited with the Buyers. If the Bridge Loan Borrower or the Subsidiary fail
      to
      effect and keep in full force and effect such insurance or fail to pay the
      premiums when due, the Buyers may (but shall not be obligated to) do so for
      the
      account of the Bridge Loan Borrower or the Subsidiary and add the cost thereof
      to the Bridge Loan . The Buyers are irrevocably appointed attorney-in-fact
      of
      the Bridge Loan Borrower and the Subsidiary to endorse any draft or check which
      may be payable to the Bridge Loan Borrower in order to collect the proceeds
      of
      such insurance. Unless an Event of Default has occurred and is continuing,
      the
      Buyers will turn over to the Bridge Loan Borrower or the Subsidiary the proceeds
      of any such insurance collected by it on the condition that the Bridge Loan
      Borrower or the Subsidiary apply such proceeds either (i) to the repair of
      damaged Equipment, Inventory or Fixtures, or (ii) to the replacement of
      destroyed Equipment, Inventory or Fixtures with Equipment, Inventory or Fixtures
      of the same or similar type and function and of at least equivalent value (in
      the sole judgment of the Buyers), provided such replacement Equipment, Fixtures
      or Inventory is made subject to the security interest created by this Agreement
      and constitutes a first lien security interest in the Equipment, Inventory
      and
      Fixtures subject only to Permitted Liens and other security interests permitted
      under this Agreement, and is perfected by the filing of financing statements
      in
      the appropriate public offices and the taking of such other action as may be
      necessary or desirable in order to perfect and continue perfected such security
      interest. Any balance of insurance proceeds remaining in the possession of
      the
      Buyers after payment in full of the Bridge Loan shall be paid over to the Bridge
      Loan Borrower or the Subsidiary or their order.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    7. Maintenance
      and Repair.
      The
      Bridge Loan Borrower and the Subsidiary shall maintain the Equipment, Inventory
      and Fixtures, and every portion thereof, in good condition, repair and working
      order, reasonable wear and tear alone excepted, and shall pay and discharge
      all
      taxes, levies and other impositions assessed or levied thereon as well as the
      cost of repairs to or maintenance of the same. If the Bridge Loan Borrower
      and
      the Subsidiary fail to do so, the Buyers may (but shall not be obligated to)
      pay
      the cost of such repairs or maintenance and such taxes, levies or impositions
      for the account of the Bridge Loan Borrower or the Subsidiary and add the amount
      of such payments to the Notes. 

    

    8. Preservation
      of Rights Against Third Parties; Preservation of Collateral in Buyers’s
      Possession.
      Until
      such time as the Buyers exercise their right to effect direct collection of
      the
      Accounts and the Chattel Paper and to effect the enforcement of the Bridge
      Loan
      Borrower’s or the Subsidiary’s contract rights, the Bridge Loan Borrower and the
      Subsidiary assume full responsibility for taking any and all commercially
      reasonable steps to preserve rights in respect of the Accounts and the Chattel
      Paper and their contracts against prior parties. The Buyers shall be deemed
      to
      have exercised reasonable care in the custody and preservation of such of the
      Collateral as may come into its possession from time to time if the Buyers
      take
      such action for that purpose as the Bridge Loan Borrower or the Subsidiary
      shall
      request in writing, provided that such requested action shall not, in the
      judgment of the Buyers, impair the Buyers’ security interest in the Collateral
      or its right in, or the value of, the Collateral, and provided further that
      the
      Buyers receive such written request in sufficient time to permit the Buyers
      to
      take the requested action.

    

    9. Events
      of Default and Remedies.

    

    (a)
      If
      any one or more of the Events of Default shall occur or shall exist, the Agent
      may then or at any time thereafter, so long as such default shall continue,
      foreclose the lien or security interest in the Collateral in any way permitted
      by law, or upon fifteen (15) days prior written notice to the Bridge Loan
      Borrower or the Subsidiary, sell any or all Collateral at private sale at any
      time or place in one or more sales, at such price or prices and upon such terms,
      either for cash or on credit, as the Agent, in its sole discretion, may elect,
      or sell any or all Collateral at public auction, either for cash or on credit,
      as the Agent, in its sole discretion, may elect, and at any such sale, the
      Agent
      may bid for and become the purchaser of any or all such Collateral. Pending
      any
      such action the Agent may liquidate the Collateral. 

    

    (b)
      If
      any one or more of the Events of Default shall occur or shall exist, the Agents
      may then, or at any time thereafter, so long as such default shall continue,
      grant extensions to, or adjust claims of, or make compromises or settlements
      with, debtors, guarantors or any other parties with respect to Collateral or
      any
      securities, guarantees or insurance applying thereon, without notice to or
      the
      consent of the Bridge Loan Borrower or the Subsidiary, without affecting the
      Bridge Loan Borrower’s or the Subsidiary’s liability under this Agreement or the
      Notes. Each of the Bridge Loan Borrower and the Subsidiary waives notice of
      acceptance, of nonpayment, protest or notice of protest of any Accounts or
      Chattel Paper, any of its contract rights or Collateral and any other notices
      to
      which the Bridge Loan Borrower or the Subsidiary may be
      entitled.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    (c)
      If
      any one or more of the Events of Default shall occur or shall exist and be
      continuing, then in any such event, the Agent shall have such additional rights
      and remedies in respect of the Collateral or any portion thereof as are provided
      by the Code and such other rights and remedies in respect thereof which it
      may
      have at law or in equity or under this Agreement, including without limitation
      the right to enter any premises where Equipment, Inventory and/or Fixtures
      are
      located and take possession and control thereof without demand or notice and
      without prior judicial hearing or legal proceedings, which the Bridge Loan
      Borrower and the Subsidiary expressly waive. 

    

    (d)
      Subject to the terms of the Intercreditor Agreement, the Agent shall apply
      the
      Proceeds of any sale or liquidation of the Collateral, and, subject to Section
      5, any Proceeds received by the Agent from insurance, first to the payment
      of
      the reasonable costs and expenses incurred by the Agent in connection with
      such
      sale or collection, including without limitation reasonable attorneys’ fees and
      legal expenses, second to the payment of the Notes, pro rata , whether on
      account of principal or interest or otherwise as the Agent, in its sole
      discretion, may elect, and then to pay the balance, if any, to the Bridge Loan
      Borrower or the Subsidiary or as otherwise required by law. If such Proceeds
      are
      insufficient to pay the amounts required by law, the Bridge Loan Borrower shall
      be liable for any deficiency.

    

    (e)
      Upon
      the occurrence of any Event of Default, the Bridge Loan Borrower or the
      Subsidiary shall promptly upon written demand by the Agent assemble the
      Equipment, Inventory and Fixtures and make them available to the Buyers at
      a
      place or places to be designated by the Agent The rights of the Agent under
      this
      paragraph to have the Equipment, Inventory and Fixtures assembled and made
      available to it is of the essence of this Agreement and the Agent may, at its
      election, enforce such right by an action in equity for injunctive relief or
      specific performance, without the requirement of a bond. 

    

    (f)
      Upon
      the occurrence of any Event of Default, the Bridge Loan Borrower shall assign
      all of its rights, title and interests in the leases listed on Schedule 9(f)
      hereto (the “Leases”) to the Buyers, and shall use its reasonable best efforts
      to cause each of the landlords under each of the Leases to consent to such
      assignment, to the extent such consent is required under the Leases. If the
      Bridge Loan Borrower is not permitted to assign any or all of the Leases
      pursuant to the terms of the Leases, the Bridge Loan Borrower shall sublet
      such
      Leases to the Buyers on the same terms and conditions as the
      Leases.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    10. Defeasance.
      Notwithstanding anything to the contrary contained in this Agreement upon
      payment and performance in full of the Notes, this Agreement shall terminate
      and
      be of no further force and effect and the Buyers shall thereupon terminate
      their
      security interest in the Collateral. Until such time, however, this Agreement
      shall be binding upon and inure to the benefit of the parties, their successors
      and assigns, provided that, without the prior written consent of the Buyers,
      the
      Bridge Loan Borrower and the Subsidiary may not assign this Agreement or any
      of
      its rights under this Agreement or delegate any of its duties or obligations
      under this Agreement and any such attempted assignment or delegation shall
      be
      null and void. This Agreement is not intended and shall not be construed to
      obligate the Buyers to take any action whatsoever with respect to the Collateral
      or to incur expenses or perform or discharge any obligation, duty or disability
      of the Bridge Loan Borrower.

    

    11. Miscellaneous.

    

    (a)
      The
      provisions of this Agreement are intended to be severable. If any provision
      of
      this Agreement shall for any reason be held invalid or unenforceable in whole
      or
      in part in any jurisdiction, such provision shall, as to such jurisdiction,
      be
      ineffective to the extent of such invalidity or unenforceability without in
      any
      manner affecting the validity or enforceability of such provision in any other
      jurisdiction or any other provision of this Agreement in any jurisdiction.
      

    

    (b)
      No
      failure or delay on the part of the Buyers in exercising any right, remedy,
      power or privilege under this Agreement and the Notes shall operate as a waiver
      thereof or of any other right, remedy, power or privilege of the Buyers under
      this Agreement, the Notes or any of the other Loan Documents; nor shall any
      single or partial exercise of any such right, remedy, power or privilege
      preclude any other right, remedy, power or privilege or further exercise thereof
      or the exercise of any other right, remedy, power or privilege. The rights,
      remedies, powers and privileges of the Buyers under this Agreement, the Notes
      and the other Loan Documents are cumulative and not exclusive of any rights
      or
      remedies which they may otherwise have.

    

    (c)
      Unless otherwise provided herein, all demands, notices, consents, service of
      process, requests and other communications hereunder shall be in writing and
      shall be delivered in person or by overnight courier service, or mailed by
      certified mail, return receipt requested, addressed:

    

    If
      to
      Bridge Loan Borrower or the Subsidiary:

    

    Diamond
      Sports & Entertainment, Inc.

    7080
      Donlon Way, Ste. 109

    Dublin,
      CA 94568

    Attn:
      David Kaval, President

    Facsimile:
      (

    

    with
      a
      copy to:

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    Wilson
      Sonsini Goodrich & Rosati

    650
      Page
      Mill Road

    Palo
      Alto, CA 94304

    Attention:
      Jack Sheridan

    Facsimile:
      (

    

    and
      a
      copy to:

    

    Gottbetter
      & Partners, LLP

    488
      Madison Avenue, 12th
      Floor

    New
      York,
      NY 10022

    Attn:
      Adam S. Gottbetter, Esq.

    Facsimile:
      (212) 400-6901

    

    If
      to
      Agent:

    

    [Name].

    [insert
      address]

    Attn:
      [insert], President and Chief Executive Officer

    Facsimile:
      [insert]

    

    with
      a
      copy to:

    

    [Name].

    [insert
      address]

    Attn:
      [insert]

    Facsimile:
      [insert]

    

    Any
      such
      notice shall be effective (a) when delivered, if delivered by hand delivery
      or overnight courier service, or (b) five (5) days after deposit in the
      United States mail, as applicable.

     

    (d)
      The
      section headings contained in this Agreement are for reference purposes only
      and
      shall not control or affect its construction or interpretation in any respect.
      

    

    (e)
      Unless the context otherwise requires, all terms used in this Agreement which
      are defined by the Code shall have the meanings stated in the Code.

    

    (f)
      The
      Code shall govern the settlement, perfection and the effect of attachment and
      perfection of the Buyers’ security interest in the Collateral, and the rights,
      duties and obligations of the Buyers, the Bridge Loan Borrower and the
      Subsidiary with respect to the Collateral. This Agreement shall be deemed to
      be
      a contract under the laws of the State of New York and the execution and
      delivery of this Agreement and, to the extent not inconsistent with the
      preceding sentence, the terms and provisions of this Agreement shall be governed
      by and construed in accordance with the laws of that State. 

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (g)
      This
      Agreement may be executed in several counterparts, each of which shall be deemed
      an original but all of which shall constitute one and the same instrument.
      All
      of such counterparts shall be read as though one, and they shall have the same
      force and effect as though all the signers had signed a single
      page.

    

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, and intending to be legally bound, the parties have executed
      and delivered this Security Agreement as of the day and year set forth at the
      beginning of this Security Agreement. 

    

    
      	
               

              BUYER:

               

              [Insert
                Name]

               

               

              By:______________________

              Name:  [insert]

              Title:   
                Chief Executive Officer

               

              BUYER:

               

              [Insert
                Name]

               

               

              By:______________________

              Name:  [insert]

              Title:   
                Chief Executive Officer

               

              BUYER:

               

              [Insert
                Name]

               

               

              By:______________________

              Name:  [insert]

              Title:   
                Chief Executive Officer

               

            	
               

              BRIDGE
                LOAN BORROWER:

               

              DIAMOND
                SPORTS & ENTERTAINMENT, INC.

               

               

              By:______________________

              Name:  David
                Kaval

              Title:   
                Chairman and Chief Executive Officer

               

              SUBSIDIARY

               

              DIAMOND
                CONCESSIONS, LLC

               

               

              By:______________________

              Name:  David
                Kaval

              Title:   
                Chief Executive Officer

            

    

    Agreed
      and Accepted by:

    

    Agent

    

    

    By:______________________

    Name:  [insert]

    Title:   
      Chief Executive Officer

    

    

    

    

    [SIGNATURE
      PAGE TO SECURITY AGREEMENT]

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    Schedule
      I

    

    

    
      	 	
              1.

            	
              States
                in which Collateral is located: 

            

    

    

    Diamond
      Sports & Entertainment, In-. - Arizona, California and Nevada.

    Diamond
      Concessions, LLC - Arizona and California.

    

    
      	 	
              2.

            	
              Bridge
                Loan Borrower and Subsidiary
                Information:

            

    

    

    
      	
              Bridge
                Loan Borrower

               

            	
              Subsidiary

            
	
               

              Diamond
                Sports & Entertainment, Inc.

              a
                Delaware corporation

              DE
                ID No.: 4533737

              Executive
                Offices Address:

              7080
                Donlon Way, Ste. 109

              Dublin,
                CA 94568

               

              Chief
                Executive Officer: David Kaval

               

              Foreign
                Corporation Qualification Numbers:

              -A
                - C3096997

              -Z
                - F-1446159-9

              -V
                - E0270222008-4

               

               

            	
               

              Diamond
                Concessions, LLC

              a
                California limited liability company

              CA
                ID No.: 200432810173

              Executive
                Offices Address:

              7080
                Donlon Way, Ste. 109

              Dublin,
                CA 94568

               

              Chief
                Executive Officer: David Kaval

               

              Foreign
                LLC Qualification Numbers:

              -Z
                - R11712783

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Schedule
      9(f)

    

    Sublease
      Agreement dated as of July 22, 2004, as amended or supplemented to date, with
      the California State University, Chico Research Foundation.

    

    Use
      Permit for Blair Field dated as of March 23, 2005, as amended or supplemented
      to
      date, with the Parks and Recreation Commission of the City of Long Beach,
      CA.

    

    Agreement
      dated as of April 5, 2006, as amended or supplemented to date, with the City
      of
      Yuma, Arizona for use of the Ray Kroc Baseball Complex.

    

    Agreement
      dated as of December 9, 2005, as amended or supplemented to date, with the
      Board
      of Regents of the Nevada System of Higher Education..Unassociated Document

    PLEDGE
      AGREEMENT

     

    This
      PLEDGE AGREEMENT
      (this
“Agreement”),
      dated
      as of September __, 2008, is made by Federal Sports & Entertainment, Inc.
      (f/k/a Rite Time Mining, Inc.), a Nevada corporation (the “Company”),
      each
      person and entity listed as a pledgor on the signature pages hereto (each a
      “Pledgor”),
      and
      each additional person, if any, who becomes a Pledgor pursuant to the
      requirements of Section 3.18 of the Bridge Loan Agreement (defined below) (the
      “Additional Pledgors”), in favor of Gottbetter & Partners, LLP, in its
      capacity as collateral agent (in such capacity, the "Collateral
      Agent")
      for
      the "Buyers"
      (as
      defined below), party to that certain Securities Purchase Agreement, dated
      as of
      September __, 2008 (the "Securities Purchase
      Agreement").

     

    WITNESSETH:

     

    WHEREAS,
      the
      Company and each party listed as a “Buyer”
on
      the
      Schedule of Buyers attached to the Securities Purchase Agreement (collectively,
      the “Buyers”)
      are
      parties to that Securities Purchase Agreement, pursuant to which the Company
      shall be required to sell, and the Buyers shall purchase, the “Notes”
(as
      defined therein); and

     

    WHEREAS,
      pursuant to that certain bridge loan agreement dated as of even date herewith
      between the Company and Diamond Sports & Entertainment, Inc. (“FLB”), a
      Delaware Corporation (the “Bridge Loan Agreement”), the Company has agreed to
      lend the proceeds of the Notes to FLB (the “Bridge Loan”) to meet working
      capital needs of FLB; 

    

    WHEREAS,
      pursuant to the Bridge Loan Agreement, the Pledgors have agreed to pledge the
      Pledged Shares (as defined in this Agreement) to the Buyers on the terms and
      conditions set forth in this Agreement;

    

    WHEREAS,
      it is a
      condition precedent to the Buyers purchasing the Notes that the Pledgors shall
      have executed and delivered to the Collateral Agent for the benefit of itself
      and the Buyers this Agreement to secure all of the Company’s obligations under
      the Securities Purchase Agreement, the Notes issued pursuant thereto, as such
      Notes may be amended, restated, replaced or otherwise modified from time to
      time
      in accordance with the terms thereof) and the other “Transaction Documents” (as
      defined in the Securities Purchase Agreement, the “Transaction
      Documents”),
      on
      such terms and conditions as are set forth herein; and

     

    WHEREAS,
      each
      Pledgor has determined that the execution, delivery and performance of this
      Agreement directly benefits, and is in the best interest of, such
      Pledgor.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the agreements herein and in order to induce
      the Buyers to perform under the Securities Purchase Agreement, each Pledgor
      agrees with the Collateral Agent as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
      1. Definitions
      and Rules of Interpretation.

     

    (a) Definitions.
      Reference is made to the Securities Purchase Agreement and the Notes for a
      statement of terms thereof. All terms used in this Agreement which are defined
      in the Securities Purchase Agreement or the Notes or in Article 8 or Article
      9
      of the Uniform Commercial Code as in effect from time to time in the State
      of
      New York (the “Code”),
      and
      which are not otherwise defined herein shall have the same meanings herein
      as
      set forth therein; provided, that terms used herein which are defined in the
      Code as in effect in the State of New York on the date hereof shall continue
      to
      have the same meaning notwithstanding any replacement or amendment of such
      statute except as the Collateral Agent may otherwise determine. In the event
      that any such term is defined in both the Securities Purchase Agreement or
      the
      Notes and the Code, the definition of such term in the Securities Purchase
      Agreement or the Notes shall control.

     

    (b) Rules
      of Interpretation.
      Except
      as otherwise expressly provided in this Agreement, the following rules of
      interpretation apply to this Agreement: (i) the singular includes the plural
      and
      the plural includes the singular; (ii) “or” and “any” are not exclusive and
“include” and “including” are not limiting; (iii) a reference to any agreement
      or other contract includes permitted supplements and amendments; (iv) a
      reference to a law includes any amendment or modification to such law and any
      rules or regulations issued thereunder; (v) a reference to a person includes
      its
      permitted successors and assigns; and (vi) a reference in this Agreement to
      an
      Article, Section, Annex, Exhibit or Schedule is to the Article, Section, Annex,
      Exhibit or Schedule of this Agreement.

     

    SECTION
      2. Pledge
      and Grant of Security Interest.

     

    (a) As
      collateral security for all of the Obligations (as defined in Section 3 hereof),
      each of the Pledgors hereby pledges and assigns and grants to the Collateral
      Agent a continuing security interest in, and Lien on, all of such Pledgor’s
      right, title and interest in and to the following (collectively, the
“Collateral”):
      the
      shares of capital stock FLB described in Schedule 1, which are represented
      by
      one or more stock certificates representing such equity interests, (including,
      but not limited to, any stock dividend and any distribution in connection with
      a
      stock split) from time to time received, receivable or otherwise distributed
      in
      respect of any of the foregoing and all cash and noncash proceeds thereof,
      and
      any additional shares of capital stock of FLB that may be required to be added
      to the Collateral pursuant to Section 3.18 of the Bridge Loan Agreement
      (collectively, the “Pledged
      Shares”).

     

    SECTION
      3. Security
      for Obligations.
      The
      security interest created hereby in the Collateral constitutes continuing
      collateral security for all of the following obligations, whether now existing
      or hereafter incurred (the “Obligations”):

     

    (a) the
      payment by the Company, as and when due and payable (by scheduled maturity,
      required prepayment, acceleration, demand or otherwise), of all amounts from
      time to time owing by it in respect of the Securities Purchase Agreement, the
      Notes and the other Transaction Documents, including, without limitation, (A)
      all principal of and interest on the Notes (including, without limitation,
      all
      interest that accrues after the commencement of any bankruptcy proceeding of
      the
      Pledgors, whether or not the payment of such interest is unenforceable or is
      not
      allowable due to the existence of such bankruptcy proceeding), and (B) all
      fees,
      commissions, expense reimbursements, indemnifications and all other amounts
      due
      or to become due under any of the Transaction Documents, above, for so long
      as
      the Notes are outstanding; and

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b) 
      the due
      performance and observance by each Pledgor of all of its other obligations
      from
      time to time existing in respect of any of the Transaction Documents for so
      long
      as the Notes are outstanding.

     

    SECTION
      4. Delivery
      of the Collateral.

     

    (a) All
      certificates currently representing the Pledged Shares shall be delivered to
      the
      Collateral Agent on or prior to the execution and delivery of this Agreement.
      All other promissory notes, certificates and instruments constituting Collateral
      from time to time or required to be pledged to the Collateral Agent pursuant
      to
      the terms of this Agreement (the “Additional
      Collateral”)
      shall
      be delivered to the Collateral Agent promptly upon receipt thereof by or on
      behalf of any of the Pledgors. All such promissory notes, certificates and
      instruments shall be held by the Collateral Agent pursuant hereto and shall
      be
      delivered in suitable form for transfer by delivery or shall be accompanied
      by
      duly executed instruments of transfer or assignment or undated stock powers
      executed in blank (“Transfer
      Materials”),
      all
      in form and substance reasonably satisfactory to the Collateral Agent. If any
      Collateral consists of uncertificated securities, unless the immediately
      following sentence is applicable thereto, the Pledgors shall cause the
      Collateral Agent (or its designated custodian, nominee or other designee) to
      become the registered holder thereof, or cause each issuer of such securities
      to
      agree that it will comply with instructions originated by the Collateral Agent
      (or its designated custodian, nominee or other designee) with respect to such
      securities without further consent by the Pledgors. 

     

    (b) If
      any
      Pledgor shall receive, by virtue of such Pledgor’s being or having been an owner
      of any Collateral, any (i) stock certificate (including, without limitation,
      any
      certificate representing a stock dividend or distribution in connection with
      any
      increase or reduction of capital, reclassification, merger, consolidation,
      sale
      of assets, combination of shares, stock split, spin-off or split-off),
      promissory note or other instrument, (ii) option or right, whether as an
      addition to, substitution for, or in exchange for, any Collateral, or otherwise,
      (iii) dividends payable in cash (except such dividends permitted to be retained
      by such Pledgor pursuant to Section 7 hereof) or in securities or other property
      or (iv) dividends, distributions, cash, instruments, investment property and
      other property in connection with a partial or total liquidation or dissolution
      or in connection with a reduction of capital, capital surplus or paid-in
      surplus, such Pledgor shall receive such stock certificate, promissory note,
      instrument, option, right, payment or distribution in trust for the benefit
      of
      the Collateral Agent, shall segregate it from such Pledgor’s other property and
      shall deliver it forthwith to the Collateral Agent in the exact form received,
      together with appropriate Transfer Materials, to be held by the Collateral
      Agent
      as Collateral and as further collateral security for the
      Obligations.

     

    SECTION
      5. Representations
      and Warranties of each Pledgor.
      Each
      Pledgor severally represents and warrants to the Pledgee (which representations
      and warranties shall be deemed to continue to be made until all of the
      Obligations have been paid in full and each Transaction Documents have been
      irrevocably terminated) that:

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (a) The
      execution, delivery and performance by each Pledgor of this Agreement and the
      pledge of the Collateral hereunder do not and will not result in any violation
      of any agreement, indenture, instrument, license, judgment, decree, order,
      law,
      statute, ordinance or other governmental rule or regulation applicable to any
      Pledgor;

     

    (b)this
      Agreement constitutes the legal, valid, and binding obligation of each Pledgor
      enforceable against each Pledgor in accordance with its terms;

     

    (c)(i)
      all
      Pledged Stock owned by each Pledgor is set forth on Schedule
      A
      hereto
      and (ii) each Pledgor is the direct and beneficial owner of each share of the
      Pledged Stock;

     

    (d)all
      of
      the Pledged Shares have been duly authorized, validly issued and are fully
      paid
      and nonassessable;

     

    (e)no
      consent or approval of any person, corporation, governmental body, regulatory
      authority or other entity, is or will be necessary for (i) the execution,
      delivery and performance of this Agreement, (ii) the exercise by the Pledgee
      of
      any rights with respect to the Collateral or (iii) the pledge and assignment
      of,
      and the grant of a security interest in, the Collateral hereunder;

     

    (f)there
      are
      no pending or, to the best of Pledgor’s knowledge, threatened actions or
      proceedings before any court, judicial body, administrative agency or arbitrator
      which may materially adversely affect the Collateral;

     

    (g)each
      Pledgor has the requisite power and authority to enter into this Agreement
      and
      to pledge and assign the Collateral to the Pledgee, for the ratable benefit
      of
      the Buyers, in accordance with the terms of this Agreement;

     

    (h)each
      Pledgor owns each item of the Collateral and, except for the pledge and security
      interest granted to Pledgee, for the ratable benefit of the Buyers, hereunder,
      the Collateral shall be, immediately following the closing of the transactions
      contemplated by the Transaction Documents, free and clear of any other security
      interest, mortgage, pledge, claim, lien, charge, hypothecation, assignment,
      offset or encumbrance whatsoever;

     

    (i)there
      are
      no restrictions on transfer of the Pledged Stock contained in the certificate
      of
      incorporation or by-laws (or equivalent organizational documents) of FLB or
      otherwise which have not otherwise been enforceably and legally waived by the
      necessary parties; 

    

    (j) none
      of
      the Pledged Shares has been issued or transferred in violation of the securities
      registration, securities disclosure or similar laws of any jurisdiction to
      which
      such issuance or transfer may be subject; and

    

    (k) The
      Pledgor shall cause any and all Additional Pledgors to execute a signature
      page
      of, and thereby become a party to, this Agreement.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    SECTION
      6. Covenants
      as to the Collateral.
      So long
      as any Obligations shall remain outstanding and the Securities Purchase
      Agreement and the other Transaction Documents shall not have been terminated,
      each Pledgor severally covenants that such Pledgor will, unless the Collateral
      Agent shall otherwise consent in writing:

     

    (a) at
      such
      Pledgor’s expense, defend the Collateral Agent’s right, title and security
      interest in and to the Collateral against the claims of any Person;

     

    (b) at
      such
      Pledgor’s expense, at any time and from time to time, promptly execute and
      deliver all further instruments and documents and take all further action that
      may be necessary or that the Collateral Agent may reasonably request in order
      to
      (i) perfect and protect, or maintain the perfection of, the security interest
      and Lien purported to be created hereby, (ii) enable the Collateral Agent to
      exercise and enforce its rights and remedies hereunder in respect of the
      Collateral or (iii) otherwise effect the purposes of this Agreement, including,
      without limitation, delivering to the Collateral Agent irrevocable proxies
      in
      respect of the Collateral registered in the name of such Pledgor, except for
      Collateral which the Pledgor is entitled to vote under the terms of Section
      7
      hereof;

     

    (c) not
      sell,
      assign, transfer, convey, or otherwise dispose of its rights in or to the
      Collateral or any interest therein; nor will any Pledgor create, incur or permit
      to exist any Lien whatsoever with respect to any of the Collateral or the
      proceeds thereof other than that created hereby; and

     

    (d) not
      take
      or fail to take any action which would in any manner impair the validity or
      enforceability of the Collateral Agent’s security interest in and Lien on any
      Collateral.

     

    SECTION
      7. Voting
      Rights, Dividends, Etc. in Respect of the Collateral.

     

    (a) So
      long
      as the Collateral Agent has not offered the Collateral for sale in accordance
      with Section 8 hereof:

     

    (i) each
      Pledgor may exercise any and all voting and other consensual rights pertaining
      to any Collateral;

     

    (ii) the
      Pledgors may receive and retain any and all dividends, interest or other
      distributions paid in respect of the Collateral to the extent permitted by
      the
      Securities Purchase Agreement; provided,
      however,
      that
      prior to the date by which the Pledged Shares are required to be returned to
      the
      registered holder thereof, any and all (A) dividends and interest paid or
      payable other than in cash in respect of, and instruments (other than checks)
      and other property received, receivable or otherwise distributed in respect
      of
      or in exchange for, any Collateral, (B) dividends and other distributions paid
      or payable in cash in respect of any Collateral in connection with a partial
      or
      total liquidation or dissolution or in connection with a reduction of capital,
      capital surplus or paid-in surplus, and (C) cash paid, payable or otherwise
      distributed in redemption of, or in exchange for, any Collateral, together
      with
      any dividend, distribution, interest or other payment which at the time of
      such
      dividend, distribution, interest or other payment was not permitted by the
      Securities Purchase Agreement, shall be, and shall forthwith be delivered to
      the
      Collateral Agent to hold as, Collateral and shall, if received by any of the
      Pledgors, be received in trust for the benefit of the Collateral Agent, shall
      be
      segregated from the other property or funds of the Pledgors, and shall be
      forthwith delivered to the Collateral Agent in the exact form received with
      any
      Transfer Materials, to be held by the Collateral Agent as Collateral and as
      further collateral security for the Obligations; and

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (iii) the
      Collateral Agent will execute and deliver (or cause to be executed and
      delivered) to a Pledgor all such proxies and other instruments as such Pledgor
      may reasonably request for the purpose of enabling such Pledgor to exercise
      the
      voting and other rights which it is entitled to exercise pursuant to paragraph
      (i) of this Section 7(a) and to receive the dividends, distributions, interest
      and other payments which it is authorized to receive and retain pursuant to
      paragraph (ii) of this Section 7(a), in each case, to the extent that the
      Collateral Agent has possession of such Collateral.

     

    (b) So
      long
      as the Collateral Agent is entitled to hold the Collateral and has not offered
      the Collateral for sale in accordance with Section 10 hereof:

     

    (i) all
      rights of each Pledgor to exercise the voting and other consensual rights which
      it would otherwise be entitled to exercise pursuant to paragraph (i) of
      subsection (a) of this Section 7, and to receive the dividends, distributions,
      interest and other payments which it would otherwise be authorized to receive
      and retain pursuant to paragraph (ii) of subsection (a) of this Section 7,
      shall
      cease, and all such rights shall thereupon become vested in the Collateral
      Agent
      which shall thereupon have the sole right to exercise such voting and other
      consensual rights and to receive and hold as Collateral such dividends,
      distributions, interest and other payments;

     

    (ii) without
      limiting the generality of the foregoing, the Collateral Agent may, at its
      option, exercise any and all rights of conversion, exchange, subscription or
      any
      other rights, privileges or options pertaining to any of the Collateral as
      if it
      were the absolute owner thereof, including, without limitation, the right to
      exchange, in its discretion, any and all of the Collateral upon the merger,
      consolidation, reorganization, recapitalization or other adjustment of any
      issuer of the Collateral or upon the exercise by any issuer of the Collateral
      of
      any right, privilege or option pertaining to any Collateral, and, in connection
      therewith, to deposit and deliver any and all of the Collateral with any
      committee, depository, transfer collateral agent, registrar or other designated
      collateral agent upon such terms and conditions as it may determine;
      and

    

    (iii) all
      dividends, distributions, interest and other payments which are received by
      any
      Pledgor contrary to the provisions of paragraph (i) of this Section 7(b) shall
      be received in trust for the benefit of the Collateral Agent, shall be
      segregated from other funds of such Pledgor, and shall be forthwith paid over
      to
      the Collateral Agent as Collateral in the exact form received with any necessary
      endorsement and/or appropriate stock powers duly executed in blank, to be held
      by the Collateral Agent as Collateral and as further collateral security for
      the
      Obligations.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    SECTION
      8. Additional
      Provisions Concerning the Collateral.

     

    (a) Each
      Pledgor hereby (i) authorizes the Collateral Agent to file one or more financing
      or continuation statements, and amendments thereto, relating to the Collateral,
      without the signature of such Pledgor where permitted by law, (ii) ratifies
      such
      authorization to the extent that the Collateral Agent has filed any such
      financing or continuation statements, or amendments thereto, without the
      signature of such Pledgor prior to the date hereof and (iii) authorizes the
      Collateral Agent to execute any agreements, instruments or other documents
      in
      such Pledgor’s name and to file such agreements, instruments or other documents
      that perfect, protect or enforce the security interest and Lien of the
      Collateral Agent in the Collateral or as provided under Article 8 or Article
      9
      of the UCC in any appropriate filing office.

     

    (b) Each
      Pledgor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact
      and proxy, with full authority in the place and stead and in its name or
      otherwise, from time to time in the Collateral Agent’s discretion to take any
      action and to execute any instrument which the Collateral Agent may deem
      necessary or advisable to accomplish the purposes of this Agreement (subject
      to
      the rights of such Pledgor under Section
      7(a)
      hereof),
      including, without limitation, to receive, indorse and collect all instruments
      made payable to such Pledgor representing any dividend, interest payment or
      other distribution in respect of any Collateral and to give full discharge
      for
      the same. This power is coupled with an interest and is irrevocable until the
      termination of this Agreement in accordance with Section 14(e)
      hereof.

     

    (c) If
      any
      Pledgor fails to perform any agreement or obligation contained herein, the
      Collateral Agent itself may perform, or cause performance of, such agreement
      or
      obligation, and the expenses of the Collateral Agent incurred in connection
      therewith shall be paid by the Company and shall be secured by the
      Collateral.

     

    (d) Other
      than the exercise of reasonable care to assure the safe custody of the
      Collateral while held hereunder, the Collateral Agent shall have no duty or
      liability to preserve rights pertaining thereto and shall be relieved of all
      responsibility for the Collateral upon surrendering it or tendering surrender
      of
      it to the respective Pledgors. The Collateral Agent shall be deemed to have
      exercised reasonable care in the custody and preservation of the Collateral
      in
      its possession if the Collateral is accorded treatment substantially equal
      to
      that which the Collateral Agent accords its own property, it being understood
      that the Collateral Agent shall not have responsibility for (i) ascertaining
      or
      taking action with respect to calls, conversions, exchanges, maturities, tenders
      or other matters relating to any Collateral, whether or not the Collateral
      Agent
      has or is deemed to have knowledge of such matters, or (ii) taking any necessary
      steps to preserve rights against any parties with respect to any
      Collateral.

     

    (e) The
      powers conferred on the Collateral Agent hereunder are solely to protect its
      interest in the Collateral and shall not impose any duty upon it to exercise
      any
      such powers. Except for the safe custody of any Collateral in its possession
      and
      the accounting for monies actually received by it hereunder, the Collateral
      Agent shall have no duty as to any Collateral or as to the taking of any
      necessary steps to preserve rights against prior parties or any other rights
      pertaining to any Collateral.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (f) Upon
      the
      occurrence and during the continuation of any Default or Event of Default,
      the
      Collateral Agent may at any time in its discretion (i) without notice to the
      Pledgors, transfer or register in the name of the Collateral Agent or any of
      its
      nominees any or all of the Collateral, subject only to the revocable rights
      of
      the Pledgors under Section 7(a) hereof, and (ii) exchange certificates or
      instruments constituting Collateral for certificates or instruments of smaller
      or larger denominations.

     

    SECTION
      9. Remedies
      Upon Default.
      If any
      Event of Default shall have occurred and be continuing:

     

    (a) The
      Collateral Agent shall deliver to the Buyers their respective pro rata portion
      of the Pledged Materials held by the Collateral Agent hereunder, whereupon
      the
      Buyers may exercise all rights and remedies of a secured party with respect
      to
      such property as may be available under the Uniform Commercial Code as in effect
      in the State of New York, including but not limited to selling the Collateral
      or
      any part thereof in one or more parcels at public or private sale, at any
      exchange or broker’s board or elsewhere, at such price or prices and on such
      other terms as the Buyers may deem commercially reasonable. The Pledgors agree
      that, to the extent notice of sale shall be required by law, at least ten (10)
      days’ notice to any of the Pledgors of the time and place of any public sale or
      the time after which any private sale is to be made shall constitute reasonable
      notification. The Buyers shall not be obligated to make any sale of Collateral
      regardless of notice of sale having been given. The Buyers may adjourn any
      public or private sale from time to time by announcement at the time and place
      fixed therefore, and such sale may, without further notice, be made at the
      time
      and place to which it was so adjourned.

     

     

    (b) Each
      Pledgor recognizes that it may be impracticable to effect a public sale of
      all
      or any part of the Pledged Shares or any other securities constituting
      Collateral and that the Buyers may, therefore, determine to make one or more
      private sales of any such securities to a restricted group of purchasers who
      will be obligated to agree, among other things, to acquire such securities
      for
      its own account, for investment and not with a view to the distribution or
      resale thereof. Each Pledgor acknowledges that any such private sale may be
      at
      prices and on terms less favorable to the seller than the prices and other
      terms
      which might have been obtained at a public sale and, notwithstanding the
      foregoing, agrees that such private sales shall be deemed to have been made
      in a
      commercially reasonable manner and that the Buyers shall have no obligation
      to
      delay sale of any such securities for the period of time necessary to permit
      the
      issuer of such securities to register such securities for public sale under
      the
      Securities Act of 1933, as amended (the “Securities
      Act”).
      Each
      Pledgor further acknowledges and agrees that any offer to sell such securities
      which has been (i) publicly advertised on a bona fide basis in a newspaper
      or
      other publication of general circulation in the financial community of New
      York,
      New York (to the extent that such an offer may be so advertised without prior
      registration under the Securities Act) or (ii) made privately in the manner
      described above to not less than fifteen (15) bona fide offerees shall be deemed
      to involve a “public disposition” for the purposes of Section 9-610 of the Code
      (or any successor or similar, applicable statutory provision) as then in effect
      in the State of New York, notwithstanding that such sale may not constitute
      a
“public offering” under the Securities Act, and that the Collateral Agent may,
      in such event, bid for the purchase of such securities.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    (c) Any
      cash
      held by the Collateral Agent as Collateral and all cash proceeds received by
      the
      Collateral Agent in respect of any sale of, collection from, or other
      realization upon, all or any part of the Collateral shall be applied (after
      payment of any amounts payable to the Collateral Agent pursuant to Section
      10
      hereof) by the Collateral Agent against, all or any part of the Obligations
      in
      such order as the Collateral Agent shall elect consistent with the provisions
      of
      the Securities Purchase Agreement.

     

    (d) In
      the
      event that the proceeds of any such sale, collection or realization are
      insufficient to pay all amounts to which the Buyers are legally entitled, the
      Company shall be liable for the deficiency, together with interest thereon
      at
      the highest rate specified in the Notes for interest on overdue principal
      thereof or such other rate as shall be fixed by applicable law, together with
      the costs of collection and the reasonable fees, costs and expenses of any
      attorneys employed by the Collateral Agent to collect such
      deficiency.

     

    (e) In
      the
      event that the proceeds of any such sale, collection, or realization are more
      than sufficient to pay all amounts to which the Buyers are legally entitled,
      the
      remainder of such proceeds together with any remaining Pledged Shares and
      Subsequent Pledged Shares shall be returned to the Pledgors in accordance with
      the terms hereof.

     

    SECTION
      10. Indemnity
      and Expenses.

     

    (a) The
      Company hereby agrees to indemnify and hold the Pledgors and the Collateral
      Agent (and all of its officers, directors, employees, attorneys, and
      consultants) harmless from and against any and all claims, damages, losses,
      liabilities, obligations, penalties, fees, costs and expenses (including,
      without limitation, reasonable legal fees and disbursements of counsel) to
      the
      extent that they arise out of or otherwise result from this Agreement
      (including, without limitation, enforcement of this Agreement), except such
      claims, damages, losses, liabilities, obligations, penalties, fees, costs and
      expenses resulting from such Person’s gross negligence or willful misconduct as
      determined by a court of competent jurisdiction.

     

    (b) The
      Company shall be obligated for, and will upon demand pay to the Pledgors and
      the
      Collateral Agent the reasonable amount of any and all out-of-pocket costs and
      expenses, including the reasonable fees and disbursements of the Collateral
      Agent’s counsel and of any experts which the Collateral Agent may incur in
      connection with (i) the preparation, negotiation, execution, delivery,
      recordation, administration, amendment, waiver or other modification or
      termination of this Agreement, (ii) the custody, preservation, use or operation
      of, or the sale of, collection from, or other realization upon, any Collateral,
      (iii) the exercise or enforcement of any of the rights of the Collateral Agent
      hereunder, or (iv) the failure by any Pledgor to perform or observe any of
      the
      provisions hereof.

     

    SECTION
      11.  Notices,
      Etc.
      All
      notices and other communications provided for hereunder shall be in writing
      and
      shall be mailed (by certified mail, postage prepaid and return receipt
      requested), sent by Federal Express or other recognized courier service (return
      receipt requested), telecopied or delivered by hand, if to any Pledgor, to
      it at
      the address specified for the Company in the Securities Purchase Agreement
      or if
      to the Collateral Agent, to it at the address specified in the Securities
      Purchase Agreement or, if not a party to the Securities Purchase Agreement
      as
      follows:

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
              If
                to the Company:

            	
              Federal
                Sports & Entertainment, Inc.

            

    

    47395
      Monroe Street, #274

    Indio,
      California

    Attention:
      Chief Executive Officer

     

    
      	
              With
                a copy to:

            	
              Gottbetter
                & Partners, LLP

            

    

    488
      Madison Avenue, 12th Floor 

    New
      York,
      NY 10022 

    Attention:
      Adam S. Gottbetter, Esq.

    Telephone:
      212.400.6900

    Facsimile:
      212.400.6901

     

    
      	
              If
                to Pledgors, to:

            	
              David
                Kaval

            

    

    Diamond
      Sports & Entertainment, Inc.

    7080
      Donlon Way, Ste. 109

    Dublin,
      CA 94568

     

    
      	
              If
                to the Collateral Agent, to:

            	
              Gottbetter
                Capital Finance, LLP 

            

    

    488
      Madison Avenue, 12th Floor 

    New
      York,
      NY 10022 

    Attention:
      Adam S. Gottbetter, Esq.

    Telephone:
      212-400-6900 

    Facsimile:
      212-400-6901 

    

     

    or
      as to
      either such Person at such other address as shall be designated by such Person
      in a written notice to such other Person complying as to delivery with the
      terms
      of this Section
      11.
      All
      such notices and other communications shall be effective (i) if sent by
      certified mail, postage prepaid, return receipt requested, when received or
      three (3) Business Days after mailing, whichever first occurs, (ii) if
      telecopied, when transmitted and confirmation is received, provided
      same is
      on a Business Day and, if not, on the next Business Day or (iii) if delivered
      by
      hand or sent by Federal Express or other recognized courier service (return
      receipt requested), upon delivery, provided
      same is
      on a Business Day and, if not, on the next Business Day.

     

    SECTION
      12.  Security
      Interest Absolute.
      All
      rights of the Collateral Agent, all Liens and all obligations of each of the
      Pledgors hereunder shall be absolute and unconditional irrespective of: (i)
      any
      lack of validity or enforceability of the Securities Purchase Agreement or
      any
      other Transaction Document, (ii) any change in the time, manner or place of
      payment of, or in any other term in respect of, all or any of the Obligations,
      or any other amendment or waiver of or consent to any departure from the
      Securities Purchase Agreement or any other Transaction Document, (iii) any
      exchange or release of, or non-perfection of any Lien on any Collateral, or
      any
      release or amendment or waiver of or consent to departure from any guaranty,
      for
      all or any of the Obligations, or (iv) any other circumstance which might
      otherwise constitute a defense available to, or a discharge of, any of the
      Pledgors in respect of the Obligations (other than the payment in full of the
      Obligations). All authorizations and agencies contained herein with respect
      to
      any of the Collateral are irrevocable and powers coupled with an
      interest.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    SECTION
      13.  Conflict
      Waiver.
      The
      Pledgors hereby acknowledge that the Collateral Agent is counsel to the Company
      in connection with the transactions contemplated and referred to herein. The
      Pledgors agree that in the event of any dispute arising in connection with
      this
      Agreement or otherwise in connection with any transaction or agreement
      contemplated and referred herein, the Collateral Agent shall be permitted to
      continue to represent the Company, and the Pledgors will not seek to disqualify
      such counsel and waive any objection the Pledgors might have with respect to
      the
      Collateral Agent acting as the Collateral Agent pursuant to this
      Agreement.

    

    SECTION
      14.   Miscellaneous.

     

    (a) No
      amendment of any provision of this Agreement shall be effective unless it is
      in
      writing and signed by each Pledgor and the Collateral Agent, and no waiver
      of
      any provision of this Agreement, and no consent to any departure by the Pledgors
      therefrom, shall be effective unless it is in writing and signed by the
      Collateral Agent, and then such waiver or consent shall be effective only in
      the
      specific instance and for the specific purpose for which given.

     

    (b) No
      failure on the part of the Collateral Agent to exercise, and no delay in
      exercising, any right hereunder or under any other Transaction Document shall
      operate as a waiver hereof or thereof; nor shall any single or partial exercise
      of any such right preclude any other or further exercise hereof or thereof
      or
      the exercise of any other right. The rights and remedies of the Collateral
      Agent
      provided herein and in the other Transaction Documents are cumulative and are
      in
      addition to, and not exclusive of, any rights or remedies provided by law.
      The
      rights of the Collateral Agent under any Transaction Document against any party
      thereto are not conditional or contingent on any attempt by the Collateral
      Agent
      to exercise any of its rights under any other Transaction Document against
      such
      party or against any other Person.

     

    (c) Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining portions
      hereof or affecting the validity or enforceability of such provision in any
      other jurisdiction.

     

    (d) This
      Agreement shall create a continuing security interest in and Lien on the
      Collateral and shall (i) remain in full force and effect until the termination
      of this Agreement in accordance with Section 14 (e) hereof and (ii) be binding
      on the Pledgors and their respective successors and assigns and shall inure,
      together with all rights and remedies of the Collateral Agent, to the benefit
      of
      the Collateral Agent and its successors, transferees and assigns. Without
      limiting the generality of clause (ii) of the immediately preceding sentence,
      the Collateral Agent may assign or otherwise transfer its rights and obligations
      under this Agreement and any other Transaction Document to any other Person
      pursuant to the terms of the Securities Purchase Agreement, and such other
      Person shall thereupon become vested with all of the benefits in respect thereof
      granted to the Collateral Agent herein or otherwise. Upon any such assignment
      or
      transfer, all references in this Agreement to the Collateral Agent shall mean
      the assignee of the Collateral Agent. None of the rights or obligations of
      any
      of the Pledgors hereunder may be assigned or otherwise transferred without
      the
      prior written consent of the Collateral Agent, and any such assignment or
      transfer shall be null and void.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    (e) Notwithstanding
      anything to the contrary in this Agreement, (i) this Agreement (along with
      all
      powers of attorney granted hereunder) and the security interests and Lien
      created hereby shall terminate and all rights to the Collateral shall revert
      to
      the Pledgors upon the repayment in full of all indebtedness obligations owed
      by
      the Company to the Buyers under the Notes (including, without limitation, all
      principal, interest, if any, and fees related to the Notes), and (ii) the
      Collateral Agent will, upon each Pledgor’s request and at each such Pledgor’s
      expense, (A) return to such Pledgor such of the Collateral (to the extent
      delivered to the Collateral Agent) as shall not have been sold or otherwise
      disposed of or applied pursuant to the terms hereof, and (B) execute and deliver
      to such Pledgor, without recourse, representation or warranty, such documents
      as
      such Pledgor shall reasonably request to evidence such termination.

     

    (f) The
      internal laws, and not the laws of conflicts, of New York shall govern the
      enforceability and validity of this Agreement, the construction of its terms
      and
      the interpretation of the rights and duties of the parties, except as required
      by mandatory provisions of law and except to the extent that the validity and
      perfection or the perfection and the effect of perfection or non-perfection
      of
      the security interest and Lien created hereby, or remedies hereunder, in respect
      of any particular Collateral are governed by the law of a jurisdiction other
      than the State of New York.

     

    (g) Each
      party to this Agreement hereby irrevocably and unconditionally submits, for
      itself and its property, to the exclusive jurisdiction of the United States
      District Court for the Southern District of New York sitting in Manhattan or
      the
      Commercial Division, Civil Branch of the Supreme Court of the State of New
      York
      sitting in New York County in connection with any suit, action or proceeding
      directly or indirectly arising out of, under or in connection with this
      Agreement or the other Transaction Documents or the transactions contemplated
      hereby or thereby. No party to this Agreement may move to (i) transfer any
      such
      suit, action or proceeding brought in such New York court or federal court
      to
      another jurisdiction, (ii) consolidate any such suit, action or proceeding
      brought in such New York court or federal court with a suit, action or
      proceeding in another jurisdiction or (iii) dismiss any such suit, action or
      proceeding brought in such New York court or federal court for the purpose
      of
      bringing the same in another jurisdiction. Each party to this Agreement agrees
      that a final judgment in any such suit, action or proceeding shall be conclusive
      and may be enforced in any other jurisdiction by suit on the judgment or in
      any
      other manner provided by law. Each party to this Agreement hereby irrevocably
      and unconditionally waives, to the fullest extent it may legally and effectively
      do so, any objection which it may now or hereafter have to the laying of venue
      of any suit, action or proceeding arising out of or relating to this Agreement
      or the other Transaction Documents, in any New York court sitting in the County
      of New York or any federal court sitting in the Southern District of New
      York.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (h) Each
      Pledgor irrevocably consents to the service of process of any of the aforesaid
      courts in any such action, suit or proceeding by the mailing of copies thereof
      by registered or certified mail (or any substantially similar form of mail),
      postage prepaid, to such Pledgor at its address provided herein, such service
      to
      become effective when received or 10 days after such mailing, whichever first
      occurs.

     

    (i) Nothing
      contained herein shall affect the right of the Collateral Agent to serve process
      in any other manner permitted by law or commence legal proceedings or otherwise
      proceed against any Pledgor or any property of any Pledgor in any other
      jurisdiction.

     

    (j) Each
      Pledgor irrevocably and unconditionally waives any right it may have to claim
      or
      recover in any legal action, suit or proceeding referred to in this Section
      any
      special, exemplary, punitive or consequential damages.

     

    (k) EACH
      PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
      ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR
      PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
      THIS AGREEMENT OR OTHER TRANSACTION DOCUMENTS.

     

    (l) The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

     

    (m) This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which shall be deemed to be an
      original, but all of which taken together shall constitute one and the same
      agreement. The parties agree that Buyers are third party beneficiaries to this
      Agreement.

     

    (n) All
      of
      the obligations of the Pledgors hereunder are joint and several. The Collateral
      Agent may, in its sole and absolute discretion, enforce the provisions hereof
      against any of the Pledgors and shall not be required to proceed against all
      Pledgors jointly or seek payment from the Pledgors ratably. In addition, the
      Collateral Agent may, in its sole and absolute discretion, select the Collateral
      of any one or more of the Pledgors for sale or application to the Obligations,
      without regard to the ownership of such Collateral, and shall not be required
      to
      make such selection ratably from the Collateral owned by all of the Pledgors.
      The release or discharge of any Pledgor by the Collateral Agent shall not
      release or discharge any other Pledgor from the obligations of such Person
      hereunder.

     

    

    

    [SIGNATURE
      PAGE FOLLOWS]

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, each Pledgor has caused this Agreement to be executed and
      delivered by its officer thereunto duly authorized, as of the date first above
      written.

     

    
      	 	
              FEDERAL
                SPORTS & ENTERTAINMENT, INC.

            
	 	 
	 	
              By:
                ___________________________________

            
	 	
              Name:
                Linda Farrell

            
	 	
              Title:  
                President

            
	 	 
	 	 
	 	
              PLEDGORS:

            
	 	 
	 	 
	 	_______________________________________
	 	
              David
                Kaval

            
	 	 
	 	_______________________________________
	 	
              Amit
                Patel

            
	 	 
	 	_______________________________________
	 	
              Kevin
                Outcalt

            

    

    

    

    ACCEPTED
      BY:

    

    GOTTBETTER
      & PARTNERS, LLP

    as
      Collateral Agent

    

    

    By:
      ___________________________

    Name:
      Adam S. Gottbetter

    Title:
      Managing Partner

    

    

    

    

    [SIGNATURE
      PAGE TO PLEDGE AGREEMENT]

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    SCHEDULE
      1 TO PLEDGE AGREEMENT

     

    Pledged
      Shares

     

    

    
      	
              Pledgor

            	 	
              Number
                of Shares

            	 	
              Class

            	 	
              Certificate

              No.(s)

            
	 	 	 	 	 	 	 
	
              David
                Kaval

            	 	
              333,334

            	 	
              Common
                Stock

            	 	
              18

            
	 	 	
              143,324

            	 	
              Common
                Stock

            	 	
              19

            
	 	 	
              20,000

            	 	
              Common
                Stock

            	 	
              *

            
	 	 	 	 	 	 	 
	
              Amit
                Patel

            	 	
              333,333

            	 	
              Common
                Stock

            	 	
              20

            
	 	 	
              68,719

            	 	
              Common
                Stock

            	 	
              21

            
	 	 	 	 	 	 	 
	
              Kevin
                Outcalt

            	 	
              187,670

            	 	
              Series
                A Preferred Stock

            	 	
              PA-37

            
	 	 	
              223,833

            	 	
              Series
                A Preferred Stock

            	 	
              PA-38

            
	 	 	
              18,921

            	 	
              Series
                C Preferred Stock

            	 	
              *

            
	 	 	
              145,663

            	 	
              Common
                Stock

            	 	
              22

            

    

    

    

    *
      A
      certificate for these shares will be provided to Collateral Agent as soon as
      it
      becomes available.

     

    
      
         

      

      
        15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]