Document:

EXHIBIT 4.5

 

 

 

SECURITY AGREEMENT

 

By

 

JACOBS ENTERTAINMENT, INC.,

 

as Borrower

 

and

 

THE GUARANTORS PARTY HERETO

 

and

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

 

as Collateral Agent

 

Dated as of June 16, 2006

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PREAMBLE

  	
   

  	
   

  	
   

  	
  1

  
	
  RECITALS

  	
   

  	
   

  	
   

  	
  2

  
	
  AGREEMENT

  	
   

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS AND
  INTERPRETATION

  
	
   

  
	
  SECTION 1.1

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  SECTION 1.2

  	
   

  	
  Interpretation

  	
   

  	
  9

  
	
  SECTION 1.3

  	
   

  	
  Resolution of Drafting Ambiguities

  	
   

  	
  9

  
	
  SECTION 1.4

  	
   

  	
  Perfection Certificate

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GRANT OF SECURITY AND
  SECURED OBLIGATIONS

  
	
   

  
	
  SECTION 2.1

  	
   

  	
  Pledge

  	
   

  	
  9

  
	
  SECTION 2.2

  	
   

  	
  Secured Obligations

  	
   

  	
  9

  
	
  SECTION 2.3

  	
   

  	
  Security Interest

  	
   

  	
  10

  
	
  SECTION 2.4

  	
   

  	
  No Release

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  PERFECTION; SUPPLEMENTS;
  FURTHER ASSURANCES;

  
	
  USE OF PLEDGED COLLATERAL

  
	
   

  
	
  SECTION 3.1

  	
   

  	
  Delivery of Certificated Securities Collateral

  	
   

  	
  10

  
	
  SECTION 3.2

  	
   

  	
  Perfection of Uncertificated Securities Collateral

  	
   

  	
  11

  
	
  SECTION 3.3

  	
   

  	
  Financing Statements and Other Filings

  	
   

  	
  11

  
	
  SECTION 3.4

  	
   

  	
  Other Actions

  	
   

  	
  12

  
	
  SECTION 3.5

  	
   

  	
  Joinder of Additional Guarantors

  	
   

  	
  14

  
	
  SECTION 3.6

  	
   

  	
  Motor Vehicles

  	
   

  	
  14

  
	
  SECTION 3.7

  	
   

  	
  Supplements; Further Assurances

  	
   

  	
  15

  
	
  SECTION 3.8

  	
   

  	
  Use and Pledge of Pledged Collateral

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  
	
   

  
	
  SECTION 4.1

  	
   

  	
  Title and Authority

  	
   

  	
  15

  
	
  SECTION 4.2

  	
   

  	
  Validity of Security Interest

  	
   

  	
  16

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.3

  	
   

  	
  Defense of Claims; Transferability of Pledged Collateral

  	
   

  	
  16

  
	
  SECTION 4.4

  	
   

  	
  Other Financing Statements

  	
   

  	
  16

  
	
  SECTION 4.5

  	
   

  	
  Location of Inventory and Equipment

  	
   

  	
  16

  
	
  SECTION 4.6

  	
   

  	
  Due Authorization and Issuance

  	
   

  	
  16

  
	
  SECTION 4.7

  	
   

  	
  No Claims

  	
   

  	
  17

  
	
  SECTION 4.8

  	
   

  	
  Consents, etc

  	
   

  	
  17

  
	
  SECTION 4.9

  	
   

  	
  Pledged Collateral

  	
   

  	
  17

  
	
  SECTION 4.10

  	
   

  	
  Insurance

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  CERTAIN PROVISIONS
  CONCERNING SECURITIES COLLATERAL

  
	
   

  
	
  SECTION 5.1

  	
   

  	
  Pledge of Additional Securities Collateral

  	
   

  	
  17

  
	
  SECTION 5.2

  	
   

  	
  Voting Rights; Distributions, etc.

  	
   

  	
  18

  
	
  SECTION 5.3

  	
   

  	
  Defaults, etc.

  	
   

  	
  19

  
	
  SECTION 5.4

  	
   

  	
  Certain Agreements of Pledgors As Issuers and Holders of Equity
  Interests

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  CERTAIN PROVISIONS
  CONCERNING INTELLECTUAL

  
	
  PROPERTY COLLATERAL

  
	
   

  
	
  SECTION 6.1

  	
   

  	
  Grant of License

  	
   

  	
  19

  
	
  SECTION 6.2

  	
   

  	
  Protection of Collateral Agent’s Security

  	
   

  	
  20

  
	
  SECTION 6.3

  	
   

  	
  After-Acquired Property

  	
   

  	
  20

  
	
  SECTION 6.4

  	
   

  	
  Modifications

  	
   

  	
  21

  
	
  SECTION 6.5

  	
   

  	
  Litigation

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  CERTAIN PROVISIONS
  CONCERNING ACCOUNTS

  
	
   

  
	
  SECTION 7.1

  	
   

  	
  Maintenance of Records

  	
   

  	
  21

  
	
  SECTION 7.2

  	
   

  	
  Legend

  	
   

  	
  22

  
	
  SECTION 7.3

  	
   

  	
  Modification of Terms, etc

  	
   

  	
  22

  
	
  SECTION 7.4

  	
   

  	
  Collection

  	
   

  	
  22

  

 

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  Page

  
	
   

  
	
  ARTICLE VIII

  
	
   

  
	
  TRANSFERS AND OTHER LIENS

  
	
   

  
	
  ARTICLE IX 

  
	
   

  
	
  REMEDIES

  
	
   

  
	
  SECTION 9.1

  	
   

  	
  Remedies

  	
   

  	
  22

  
	
  SECTION 9.2

  	
   

  	
  Notice of Sale

  	
   

  	
  24

  
	
  SECTION 9.3

  	
   

  	
  Waiver of Notice and Claims

  	
   

  	
  24

  
	
  SECTION 9.4

  	
   

  	
  Certain Sales of Pledged Collateral

  	
   

  	
  25

  
	
  SECTION 9.5

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  25

  
	
  SECTION 9.6

  	
   

  	
  Certain Additional Actions Regarding Intellectual Property

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  
	
  APPLICATION OF PROCEEDS

  
	
   

  
	
  ARTICLE XI

  
	
   

  
	
  COLLATERAL ACCOUNT

  
	
   

  
	
  ARTICLE XII

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  
	
  SECTION 12.1

  	
   

  	
  Concerning Collateral Agent

  	
   

  	
  27

  
	
  SECTION 12.2

  	
   

  	
  Collateral Agent May Perform; Collateral Agent Appointed
  Attorney-in-Fact

  	
   

  	
  28

  
	
  SECTION 12.3

  	
   

  	
  Continuing Security Interest; Assignment

  	
   

  	
  28

  
	
  SECTION 12.4

  	
   

  	
  Termination; Release

  	
   

  	
  29

  
	
  SECTION 12.5

  	
   

  	
  Modification in Writing

  	
   

  	
  29

  
	
  SECTION 12.6

  	
   

  	
  Notices

  	
   

  	
  29

  
	
  SECTION 12.7

  	
   

  	
  Governing Law; Consent to Jurisdiction and Service of Process; Waiver
  of Jury Trial

  	
   

  	
  29

  
	
  SECTION 12.8

  	
   

  	
  Severability of Provisions

  	
   

  	
  30

  
	
  SECTION 12.9

  	
   

  	
  Execution in Counterparts

  	
   

  	
  30

  
	
  SECTION 12.10

  	
   

  	
  Business Days

  	
   

  	
  30

  
	
  SECTION 12.11

  	
   

  	
  No Credit for Payment of Taxes or Imposition

  	
   

  	
  30

  
	
  SECTION 12.12

  	
   

  	
  No Claims Against Collateral Agent

  	
   

  	
  31

  
	
  SECTION 12.13

  	
   

  	
  Obligations Absolute

  	
   

  	
  31

  

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
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  ARTICLE XIII

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SPECIAL PROVISIONS
  RELATING TO GAMING LAWS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.1

  	
   

  	
  Additional Provisions Relating to Gaming Laws and Gaming Licenses

  	
   

  	
  31

  
	
  SECTION 13.2

  	
   

  	
  Compliance with Gaming Laws

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT 1

  	
   

  	
  Form of Issuer Acknowledgment

  	
   

  	
   

  
	
  EXHIBIT 2

  	
   

  	
  Form of Securities Pledge Amendment

  	
   

  	
   

  
	
  EXHIBIT 3

  	
   

  	
  Form of Joinder Agreement

  	
   

  	
   

  
	
  EXHIBIT 4

  	
   

  	
  Form of Control Agreement Concerning Securities Accounts

  	
   

  	
   

  
	
  EXHIBIT 5

  	
   

  	
  Form of Control Agreement Concerning Deposit Accounts

  	
   

  	
   

  
	
  EXHIBIT 6

  	
   

  	
  Form of Copyright Security Agreements

  	
   

  	
   

  
	
  EXHIBIT 7

  	
   

  	
  Form of Patent Security Agreements

  	
   

  	
   

  
	
  EXHIBIT 8

  	
   

  	
  Form of Trademark Security Agreement

  	
   

  	
   

  
	
  EXHIBIT 9

  	
   

  	
  Form of Bailee’s Letter

  	
   

  	
   

  

 

iv

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT (the “Agreement”), dated
as of June 16, 2006, made by JACOBS ENTERTAINMENT, INC., a Delaware
corporation (the “Borrower”), and EACH OF THE GUARANTORS LISTED ON THE
SIGNATURE PAGES HERETO OR FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A
JOINDER AGREEMENT (collectively, the “Guarantors”), as pledgors,
assignors and debtors (the Borrower, together with the Guarantors, in such
capacities and together with any successors in such capacities, the “Pledgors,”
and each, a “Pledgor”), in favor of CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, in its capacity as collateral agent for the Secured Parties (in such
capacity, the “Collateral Agent”) pursuant to the Credit Agreement (as
hereinafter defined).

 

R E  C  I  T  A  L  S :

 

A.                                   In connection with the execution and delivery
of this Agreement, (a) the Borrower and the Collateral Agent have entered
into the Credit Agreement, dated as of June 16, 2006, among the Borrower,
the lenders from time to time party thereto (the “Lenders”), Credit Suisse, Cayman Islands Branch, as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”),
Collateral Agent, and issuing bank (in such capacity, the “Issuing Bank”),
Wells Fargo Bank, National Association, as Documentation Agent and Swingline Lender
and CIT Lending Services Corporation, as Documentation Agent, pursuant to which
the Lenders have agreed to make Loans to the Borrower, and the Issuing Bank has
agreed to issue Letters of Credit for the account of the Borrower and its
Subsidiaries (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), (b) the Pledgors and
the Collateral Agent have entered into the Guarantee Agreement, dated as of
June 16, 2006 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Guarantee”),
and (c) the Borrower, Black Hawk Gaming & Development
Company, Inc., and the Collateral Agent have entered into a Pledge
Agreement pursuant to which all Equity Interests issued by each Subsidiary
organized under the laws of the State of Nevada that is subject to regulation
by the Nevada Gaming Authorities are pledged for the benefit of the Secured
Parties, dated as of June 16, 2006 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Initial Pledge
Agreement”).

 

B.                                     Each Guarantor has, pursuant to the
Guarantee, among other things, unconditionally guaranteed the Secured
Obligations.

 

C.                                     Each Pledgor will receive substantial
benefits from the execution, delivery and performance of the obligations under
the Credit Agreement and other Loan Documents and is, therefore, willing to
enter into this Agreement.

 

D.                                    The Pledgors own (or will own), legally
and/or beneficially, certain collateral to be pledged hereunder as condition to
the Credit Agreement and the making of the Loans and the other financial
accommodations thereunder.

 

E.                                      This Agreement is given by each Pledgor in
favor of the Collateral Agent for its benefit and the benefit of the Secured
Parties (as hereinafter defined) to secure the payment and performance of all
of the Secured Obligations (as hereinafter defined).

 

 

F.                                      It is a condition to (i) the obligations
of the Lenders to make the Loans under the Credit Agreement, (ii) the
obligations of the Issuing Bank to issue Letters of Credit and (iii) the
performance of the obligations of the Secured Parties under Hedging Agreements
that constitute Secured Obligations that each Pledgor execute and deliver the
applicable Loan Documents, including this Agreement.

 

A G  R  E  E  M  E  N  T:

 

NOW THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Pledgor and the Collateral Agent hereby
agree as follows:

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

SECTION 1.1                          Definitions.

 

(a)                                  Unless otherwise defined herein, terms used
herein that are defined in the UCC shall have the meanings assigned to them in
the UCC, including the following which are capitalized herein:

 

“Accounts”; “Bank”; “Chattel Paper”;
“Commercial Tort Claim”; “Commodity Account”; “Commodity
Contract”; “Commodity Intermediary”; “Documents”; “Electronic
Chattel Paper”; “Entitlement Order”; “Equipment”; “Financial
Asset”; “Fixtures”; “Goods”; “Inventory”; “Letter-of-Credit
Rights”; “Letters of Credit”; “Money”; “Payment
Intangibles”; “Proceeds”; “Records”; “Securities Account”;
“Securities Intermediary”; “Security Entitlement”; “Supporting
Obligations”; and “Tangible Chattel Paper.”

 

(b)                                 Capitalized terms used but not otherwise
defined herein that are defined in the Credit Agreement shall have the meanings
given to them in the Credit Agreement. Sections 1.03 and 1.05 of
the Credit Agreement shall apply herein mutatis
mutandis.

 

(c)                                  The following terms shall have the following
meanings:

 

“Account Debtor” shall mean each person who
is obligated on a Receivable or Supporting Obligation related thereto.

 

“Borrower” shall
have the meaning assigned to such term in the Preamble hereof.

 

“Casino Bankroll” means only the amount of
cash or Cash Equivalents required by the provisions of applicable Gaming Law
(including Section 6.150 of the Regulations of the Nevada Gaming
Commission) to satisfy the casino minimum bankroll requirements, mandatory game
security reserves, allowances for redemption of casino chips and tokens, or
payment of winning wagers to gaming patrons.

 

“Collateral Material Adverse Effect” shall
mean, as of any date of determination and in the aggregate, (a) any event,
circumstance, occurrence or condition which has caused or resulted in (or would
reasonably be expected to cause or result in) a material adverse effect on the
business or operations as presently conducted in connection with the Pledged
Collateral of the Borrower and the Guarantors, taken as a whole; (b) any
event, circumstance, occurrence or condition which has caused or resulted in
(or

 

2

 

would
reasonably be expected to cause or result in) a material adverse effect on the
value or utility of the Pledged Collateral, taken as a whole; or (c) any
event, circumstance, occurrence or condition which has caused or resulted in
(or would reasonably be expected to cause or result in) a material adverse
effect on the legality, priority or enforceability of any Lien created by this
Agreement or the rights and remedies of the Collateral Agent hereunder; provided
that Gaming Laws shall not at any time be deemed to be a Collateral Material
Adverse Effect.

 

“Collateral Support” shall mean all property
(real or personal) assigned, hypothecated or otherwise securing the value of
any Pledged Collateral and shall include any security agreement or other
agreement granting a lien or security interest in such real or personal
property.

 

“Commodity Account Control Agreement” shall
mean a control agreement in a form that is reasonably satisfactory to the
Collateral Agent establishing the Collateral Agent’s Control with respect to
any Commodity Account.

 

“Contracts” shall mean, collectively, with
respect to each Pledgor, the Acquisition Documents, all sale, service,
performance, equipment or property lease contracts, agreements and grants and
all other contracts, agreements or grants (in each case, whether written or
oral, or third party or intercompany), between such Pledgor and third parties,
and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof.

 

“Control” shall mean (i) in the case of
each Deposit Account, “control,” as such term is defined in Section 9-104
of the UCC, (ii) in the case of any Security Entitlement, “control,” as
such term is defined in Section 8-106 of the UCC, and (iii) in the
case of any Commodity Contract, “control,” as such term is defined in Section 9-106
of the UCC.

 

“Control Agreements” shall mean,
collectively, each Deposit Account Control Agreement, each Securities Account
Control Agreement and each Commodity Account Control Agreement.

 

“Copyright Security Agreement” shall mean an
agreement substantially in the form of Exhibit 6 hereto.

 

“Copyrights” shall mean, collectively, with
respect to each Pledgor, all copyrights (whether statutory or common law and
whether established or registered in the United States or any other country)
and all copyright registrations and applications made by such Pledgor, in each
case, whether now owned or hereafter created or acquired by or assigned to such
Pledgor, together with any and all (i) rights and privileges arising under
applicable Requirements of Law with respect to such Pledgor’s use of such
copyrights, (ii)  income, fees, royalties, damages, claims and payments
now or hereafter due and/or payable with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (iii) rights corresponding thereto throughout the world and
(iv) rights to sue for past, present or future infringements thereof.

 

“Credit Agreement” shall have the meaning
assigned to such term in Recital A hereof.

 

“Deposit Account Control Agreement” shall
mean an agreement substantially in the form of Exhibit 5
hereto or such other form that is reasonably satisfactory to the
Collateral Agent establishing the Collateral Agent’s Control with respect to
any Deposit Account.

 

3

 

“Deposit Accounts” shall mean, collectively,
with respect to each Pledgor, (i) all “deposit accounts” as such term is
defined in the UCC and (ii) all cash, funds, checks, notes and instruments
from time to time on deposit in any of the accounts described in clause
(i) of this definition.

 

“Distributions” shall mean, collectively,
with respect to each Pledgor, all dividends, cash, options, warrants, rights,
instruments, distributions, returns of capital or principal, income, interest,
profits and other property, interests (debt or equity) or proceeds, including
as a result of a split, revision, reclassification or other like change of the
Pledged Securities, from time to time received, receivable or otherwise
distributed to such Pledgor in respect of or in exchange for any or all of the
Pledged Securities or Intercompany Notes.

 

“Excluded Accounts” shall mean any Deposit
Accounts which does not hold funds of the Pledgors, with an average daily
balance in any calendar month of more than $75,000.00; provided, at no time
shall the aggregate amount of funds on deposit in all such Deposit Accounts
with banks not party to a Control Agreement in favor of the Collateral Agent
exceed $250,000.00 in the aggregate; provided further that, notwithstanding
anything to the contrary, each Deposit Account at JPMorgan Chase Bank, NA or
any of its affiliates shall be an Excluded Account for the 90 days after the
Closing Date without regard to the $75,000.00 or $250,000.00 thresholds
established above.

 

“Excluded Property” shall mean Special
Property other than the following:

 

(a)                                  the right to receive any payment of money
(including, without limitation, Accounts, General Intangibles and Payment
Intangibles) or any other rights referred to in Section 9-406(f),
9-407(a) or 9-408(a) of the UCC; and

 

(b)                                 any Proceeds, substitutions or replacements
of any Special Property (unless such Proceeds, substitutions or replacements
would constitute Special Property).

 

“Gaming Authorities” shall mean any agency,
authority, board, bureau, commission, department, office or instrumentality of
any nature whatsoever of the United States or foreign government, any state,
province or city or other political subdivision, whether now or hereafter
existing, or any officer or official thereof, including, without limitation,
the gaming commission and any other agency with authority to regulate any
gaming operation or proposed gaming operation owned, managed or operated by the
Borrower or any of its Restricted Subsidiaries.

 

“Gaming Law” shall mean any gaming laws or
regulations of any jurisdictions to which the Borrower or any of its
Subsidiaries is or may at any time after the Closing Date be subject.

 

“Gaming License” means any finding of
suitability, registration, license, franchise or other approval or
authorization required to own, lease, operate or otherwise conduct or manage
riverboat, dockside or land-based gaming activities in any state or
jurisdiction in which Pledgors or any of their Subsidiaries conduct business
(including all such licenses granted by the Nevada Gaming Authorities under
Gaming Laws) issued by any Gaming Authority and all applicable liquor licenses.

 

“General Intangibles” shall mean,
collectively, with respect to each Pledgor, all “general intangibles,” as such
term is defined in the UCC, of such Pledgor and, in any event, shall include,
without limitation, (i) all of such Pledgor’s rights, title and interest
in, to and under all insurance policies and Contracts, (ii) all know-how
and warranties relating to any of the Pledged Collateral or the Mortgaged
Property of such Pledgor, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any other Person
and the benefits of any and all collateral or other security given by any other
Person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or

 

4

 

of,
any of the Pledged Collateral or any of the Mortgaged Property of such Pledgor,
(v) all lists, books, records, correspondence, ledgers, print-outs, files
(whether in printed form or stored electronically), tapes and other papers
or materials containing information relating to any of the Pledged Collateral
or any of the Mortgaged Property, including, without limitation, all customer
or tenant lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and
automatic machinery software and programs and the like, field repair data,
accounting information pertaining to such Pledgor’s operations or any of the
Pledged Collateral or any of the Mortgaged Property and all media in which or
on which any of the information or knowledge or data or records may be
recorded or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data, (vi) all licenses,
consents, permits, variances, certifications, authorizations and approvals,
however characterized, now or hereafter acquired or held by such Pledgor
including, without limitation, building permits, certificates of occupancy,
environmental certificates, industrial permits or licenses and certificates of
operation, and (vii) all rights to reserves, to deferred payments, to
deposits, to securing performance refunds, to indemnification of claims and to
claims for tax or other refunds against any Governmental Authority.

 

“Goodwill” shall mean, collectively, with
respect to each Pledgor, the goodwill connected with such Pledgor’s business
including, without limitation, (i) all goodwill connected with the use of
and symbolized by any Trademark or Intellectual Property License with respect
to any Trademark in which such Pledgor has any interest and (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions, technical
data, drawings, specifications, name plates, catalogs, confidential information
and the right to limit the use or disclosure thereof by any Person, pricing and
cost information, business and marketing plans and proposals, consulting
agreements, engineering contracts and such other assets which relate to such
goodwill.

 

“Guarantee” shall have the meaning assigned
to such term in Recital A hereof.

 

“Guarantors” shall have the meaning assigned
to such term in the Preamble hereof.

 

“Initial Pledge Agreement” shall have the
meaning assigned to such term in Recital A hereof.

 

“Instruments” shall mean, collectively, with
respect to each Pledgor, all “instruments,” as such term is defined in
Article 9, rather than Article 3, of the UCC, and shall include all
promissory notes, drafts, bills of exchange or acceptances.

 

“Intellectual Property Collateral” shall
mean, collectively, the Patents, Trademarks, Copyrights, Intellectual Property
Licenses and Goodwill.

 

“Intellectual Property Licenses” shall mean,
collectively, with respect to each Pledgor, all license and distribution
agreements with, and covenants not to sue, any other party with respect to any
Patent, Trademark or Copyright or any other patent, trademark or copyright,
whether such Pledgor is a licensor or licensee, distributor or distributee
under any such license or distribution agreement, together with any and all
(i) renewals, extensions, supplements and continuations thereof,
(ii) income, fees, royalties, damages, claims and payments now and hereafter
due and/or payable thereunder and with respect thereto including damages and
payments for past, present or future infringements or violations thereof,
(iii) rights to sue for past, present and future infringements or
violations thereof and (iv) other rights to use, exploit or practice any
or all of the Patents, Trademarks or Copyrights or any other patent, trademark
or copyright.

 

5

 

“Intercompany Notes” shall mean, with respect
to each Pledgor, all intercompany notes described in Schedule 11 to
the Perfection Certificate (and each other intercompany note hereafter acquired
by such Pledgor) and all certificates, instruments or agreements evidencing
such intercompany notes and all amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof to the extent permitted
pursuant to the terms hereof.

 

“Investment Property” shall mean a security,
whether certificated or uncertificated, Security Entitlement, Securities
Account, Commodity Contract or Commodity Account, excluding, however, (x) the
Securities Collateral and (y) any Equity Interests which are required to be
pledged under a Pledge Agreement pursuant to Section 5.11 (b) of
the Credit Agreement.

 

“Joinder Agreement” shall mean the form of
joinder agreement attached hereto as Exhibit 3.

 

“Mortgaged Property” shall mean,
collectively, each Mortgaged Property as such term is defined in each Mortgage.

 

“Nevada Gaming Securities” means any
securities issues by Gold Dust West Casino, Inc., Black Hawk
Gaming & Development, Inc., Jacobs Pinon Plaza
Entertainment, Inc. (if and when it is licensed by the Gaming Authorities
of the State of Nevada) or Jacobs Elko Entertainment, Inc. (if and when it
is licensed by the Gaming Authorities of the State of Nevada) that are, in
either case, subject to Gaming Laws of the State of Nevada.

 

“Patent Security Agreement” shall mean an
agreement substantially in the form of Exhibit 7 hereto.

 

“Patents” shall mean, collectively, with
respect to each Pledgor, all patents issued or assigned to and all patent
applications and registrations made by such Pledgor (whether established or
registered or recorded in the United States or any other country), including,
without limitation, the patents, patent applications, registrations and
recordings listed in Schedule 12(a) to the Perfection
Certificate, together with any and all (i) rights and privileges arising
under applicable Requirements of Law with respect to such Pledgor’s use of any
patents, (ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income,
fees, royalties, damages, claims and payments now or hereafter due and/or
payable thereunder and with respect thereto including, without limitation,
damages and payments for past, present or future infringements thereof,
(v) rights corresponding thereto throughout the world and (vi) rights
to sue for past, present or future infringements thereof.

 

“Perfection Certificate” shall mean that
certain perfection certificate dated June 16, 2006, executed and delivered
by the Borrower in favor of the Collateral Agent for the benefit of the Secured
Parties, and each other perfection certificate (which shall be in form and
substance reasonably acceptable to the Collateral Agent) executed and delivered
by the applicable Guarantor in favor of the Collateral Agent for the benefit of
the Secured Parties contemporaneously with the execution and delivery of each
Joinder Agreement executed in accordance with Section 3.5 hereof.

 

“Pledge Agreement” shall mean (a) the
Initial Pledge Agreement and (b) any Pledge Agreement entered into after
the date hereof pursuant to Section 5.11 (b) of the Credit Agreement
with respect to the Equity Interests issued by any Subsidiary subject to
regulation by the Nevada Gaming Authorities or the Nevada Gaming Laws.

 

“Pledge Amendment” shall have the meaning
assigned to such term in Section 5.1 hereof.

 

6

 

“Pledged Collateral” shall have the meaning
assigned to such term in Section 2.1 hereof.

 

“Pledged Securities” shall mean,
collectively, with respect to each Pledgor, (i) all issued and outstanding
Equity Interests of each issuer set forth on Schedules 10(a) and 10(b) to
the Perfection Certificate as being owned by such Pledgor and all options,
warrants, rights, agreements and additional Equity Interests of whatever
class of any such issuer acquired by such Pledgor (including by issuance),
together with all rights, privileges, authority and powers of such Pledgor
relating to such Equity Interests in each such issuer and the certificates,
instruments and agreements representing such Equity Interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such Equity Interests, (ii) all Equity
Interests of any issuer, which Equity Interests are hereafter acquired by such
Pledgor (including by issuance), and all options, warrants, rights, agreements
and additional Equity Interests of whatever class of any such issuer
acquired by such Pledgor (including by issuance), together with all rights,
privileges, authority and powers of such Pledgor relating to such Equity
Interests and the certificates, instruments and agreements representing such
Equity Interests and any and all interest of such Pledgor in the entries on the
books of any financial intermediary pertaining to such Equity Interests, from
time to time acquired by such Pledgor in any manner, and (iii) all Equity
Interests issued in respect of the Equity Interests referred to in clause
(i) or (ii) upon any consolidation or merger of any issuer of such
Equity Interests; provided, however, that Pledged Securities
shall not include (x) any Equity Interests which are not required to be pledged
pursuant to Section 5.11(b) of the Credit Agreement or (y) any
Equity Interests which are required to be pledged under a Pledge Agreement
pursuant to Section 5.11 (b) of the Credit Agreement, including
the Nevada Gaming Securities.

 

“Pledgor” shall have the meaning assigned to
such term in the Preamble hereof.

 

“Receivables” shall mean all
(i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles,
(iv) General Intangibles, (v) Instruments and (vi) all other
rights to payment, whether or not earned by performance, for goods or other
property sold, leased, licensed, assigned or otherwise disposed of, or services
rendered or to be rendered, regardless of how classified under the UCC together
with all of the Pledgors’ rights, if any, in any goods or other property giving
rise to such right to payment and all Collateral Support and Supporting
Obligations related thereto and all Records relating thereto.

 

“Secured Parties” shall mean, collectively,
the Administrative Agent, the Collateral Agent, the Lenders and each party to a
Hedging Agreement if at the date of entering into such Hedging Agreement such
person was a Lender or an Affiliate of a Lender and such person executes and
delivers to the Administrative Agent a letter agreement in form and
substance acceptable to the Administrative Agent pursuant to which such person
(i) appoints the Collateral Agent as its agent under the applicable Loan
Documents and (ii) agrees to be bound by the provisions of Sections 9.03,
10.03 and 10.09 of the Credit Agreement.

 

“Securities Account Control Agreement” shall
mean an agreement substantially in the form of Exhibit 4
hereto or such other form that is reasonably satisfactory to the
Collateral Agent establishing the Collateral Agent’s Control with respect to
any Securities Account.

 

“Securities Collateral” shall mean,
collectively, the Pledged Securities, the Intercompany Notes and the
Distributions.

 

“Special Property” shall mean:

 

(a)                                  any permit, lease, contract, property rights,
agreement or license to which any Pledgor is a party or any of the rights or
interests held by any Pledgor pursuant thereto if and so long as the creation
by such Pledgor of a security interest therein would result in the

 

7

 

abandonment, invalidation, or unenforceability of
any right, title or interest of the Pledgor therein or would constitute a
breach or grounds for termination or a default thereunder;

 

(b)                                 any permit, lease or license (including
Gaming Licenses) held by any Pledgor to the extent that any Requirements of Law
applicable thereto prohibits the creation of a security interest therein;

 

(c)                                  any Equipment or other assets owned by any
Pledgor on the date hereof or hereafter acquired that is subject to a Lien
securing a Purchase Money Obligation or Capital Lease Obligation permitted to
be incurred pursuant to the provisions of the Credit Agreement or any other
Lien of the type permitted by Section 6.02 (k) or (o) of the
Credit Agreement if the contract or other agreement in which such Lien is
granted (or the documentation providing for such Purchase Money Obligation or
Capital Lease Obligation) validly prohibits the creation of any other Lien in
such Equipment or assets or if the creation by such Pledgor of a security
interest in such Equipment or assets would result in a breach or violation of
or constitute a default under an agreement or instrument governing the rights
of the holder of such lien, the loss of use of such Equipment or asset or would
permit the holder of such lien to terminate such Pledgor’s rights in or use of
such Equipment or asset unless such rights have been waived by the holder of
such Lien;

 

(d)                                 Casino Bankroll to the extent that any
Requirements of Law applicable thereto prohibits the creation of a security
interest therein;

 

(e)                                  any fractional ownership of any aircraft
owned by any Pledgor; and

 

(f)                                    any Securities Collateral that is subject to
a Requirement of Law that prohibits, or otherwise restricts, the pledge thereof,
including, without limitation, the Nevada Gaming Securities.

 

provided, however,
that in each case described in clauses (a), (b), (c) and (f) of this
definition, such property shall constitute “Special Property” only to the
extent and for so long as such permit, lease, license, property right, contract
or other agreement or Requirement of Law applicable thereto validly prohibits
the creation of a Lien in such property in favor of the Collateral Agent or
would give rise to the consequences described in such clauses and, upon the
termination of such prohibition (howsoever occurring), such property shall
cease to constitute “Special Property.”

 

“Trademark Security Agreement” shall mean an
agreement substantially in the form of Exhibit 8 hereto.

 

“Trademarks” shall mean, collectively, with
respect to each Pledgor, all trademarks (including service marks), logos,
slogans, logos, certification marks, trade dress, uniform resource
locations (URL’s), domain names, corporate names and trade names, whether registered
or unregistered, owned by or assigned to such Pledgor and all registrations and
applications for the foregoing (whether statutory or common law and whether
established or registered in the United States or any other Country),
including, without limitation, the registrations and applications (other than
“intent to use” applications filed pursuant to Section 1(b) of the
Lanham Act, unless and until the amendment to alleged use or a verified
statement of use under Section 1(c) or Section 1(d) of such
Act has been filed with respect thereto listed in Schedule 12(a) to
the Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable Requirements of Law with respect to such
Pledgor’s use of any trademarks, (ii) reissues, continuations, extensions
and renewals thereof and amendments thereto, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or payable thereunder
and with respect

 

8

 

thereto,
including, without limitation, damages, claims and payments for past, present
or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present and future
infringements thereof.

 

“UCC” shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York; provided, however,
that if at any time by reason of mandatory provisions of law, the perfection or
the effect of perfection or non-perfection of the security interest in any item
or portion of the Pledged Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York, “UCC”
shall mean the Uniform Commercial Code as in effect at such time in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

 

SECTION 1.2                          Interpretation. The rules of interpretation specified
in the Credit Agreement (including Section 1.03 thereof) shall be
applicable to this Agreement.

 

SECTION 1.3                          Resolution of Drafting Ambiguities. Each Pledgor acknowledges and agrees that
it was represented by counsel in connection with the execution and delivery
hereof, that it and its counsel reviewed and participated in the preparation and
negotiation hereof and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party (i.e., the Collateral
Agent) shall not be employed in the interpretation hereof.

 

SECTION 1.4                          Perfection Certificate. The Collateral Agent and each Secured Party
agree that the Perfection Certificate and all descriptions of Pledged
Collateral, schedules, amendments and supplements thereto are and shall at all
times remain a part of this Agreement.

 

ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

 

SECTION 2.1                          Pledge. As collateral security for the payment and performance in full of all
the Secured Obligations, each Pledgor hereby pledges and grants to the
Collateral Agent for its benefit and for the benefit of the Secured Parties, a
security interest in and to and pledge of all of the right, title and interest
of such Pledgor in, to and under the following property, wherever located and
whether now existing or hereafter arising or acquired from time to time
(collectively, the “Pledged Collateral”): (i) Equipment;
(ii) all other Goods; (iii) Documents; (iv) Instruments;
(v) Chattel Paper; (vi) Letters of Credit and Letter-of-Credit
Rights; (vii) Securities Collateral; (viii) Accounts;
(ix) Inventory; (x) Investment Property; (xi) Intellectual Property
Collateral; (xii) Commercial Tort Claims described on Schedule 13
to the Perfection Certificate; (xiii) General Intangibles; (xiv) Money and
Deposit Accounts; (xv) Fixtures; (xvi) Supporting Obligations; (xvii) to the
extent not covered by clauses (i) through (xvi) of this sentence, all
other personal property and any and all books and records relating to the
foregoing; together with all Proceeds of any of the foregoing; provided,
however, that Pledged Collateral shall not include any Excluded
Property.

 

SECTION 2.2                          Secured Obligations. This Agreement secures, and the Pledged
Collateral is collateral security for, the payment and performance in full when
due of the Secured Obligations.

 

9

 

SECTION 2.3                          Security Interest.

 

(a)                                  Each Pledgor hereby irrevocably authorizes
the Collateral Agent at any time and from time to time to file in any relevant
jurisdiction any financing statements (including fixture filings) and
amendments or continuations thereto that contain the information required by
Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment relating to
the Pledged Collateral, including, without limitation, (i) whether the
Pledgor is an organization, the type of organization and any organizational
identification number issued to the Pledgor and (ii) in the case of a
financing statement filed as a fixture filing or covering Pledged Collateral
constituting minerals or the like to be extracted or timber to be cut, a
sufficient description of the real property to which such Pledged Collateral
relates. Each Pledgor agrees to provide such additional information to the
Collateral Agent promptly upon request.

 

(b)                                 Each Pledgor hereby ratifies its
authorization for the Collateral Agent to file in any relevant jurisdiction any
financing statements relating to the Pledged Collateral if filed prior to the
date hereof.

 

(c)                                  The Collateral Agent is further authorized to
file filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office or any similar office in any
other country), including this Agreement, a Copyright Security Agreement, (if
applicable), a Patent Security Agreement (if applicable) and the Trademark
Security Agreement, or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the security interest granted
by each Pledgor hereunder, without the signature of any Pledgor, and naming any
Pledgor or the Pledgors, as debtors, and the Collateral Agent, as secured
party.

 

SECTION 2.4                          No Release. Nothing set forth in this Agreement or any other Loan Document, nor
the exercise by the Collateral Agent of any of the rights or remedies hereunder
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor’s part to be performed or observed under or
in respect of any of the Pledged Collateral or from any liability owed by such
Pledgor to any Person under or in respect of any of the Pledged Collateral or
shall impose any obligation on the Collateral Agent or any other Secured Party
to perform or observe any such term, covenant, condition or agreement on
the Pledgor’s part to be so performed or observed or shall impose any
liability on the Collateral Agent or any other Secured Party for any act or
omission on the part of such Pledgor relating thereto or for any breach of
any representation or warranty on the part of such Pledgor contained in
this Agreement, the Credit Agreement or the other Loan Documents, or under or
in respect of each item of Pledged Collateral or made in connection herewith or
therewith. Anything herein to the contrary notwithstanding, neither the
Collateral Agent nor any other Secured Party shall have any obligation or
liability under any contracts, agreements and other documents included in the
Pledged Collateral by reason of this Agreement, nor shall the Collateral Agent
or any other Secured Party be obligated to perform any of the obligations
or duties of any Pledgor thereunder or to take any action to collect or enforce
any such contract, agreement or other document included in the Pledged
Collateral hereunder.

 

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL

 

SECTION 3.1                          Delivery of Certificated Securities
Collateral. All
certificates, agreements or instruments representing or evidencing the
Securities Collateral, to the extent not

 

10

 

previously
delivered to the Collateral Agent, shall promptly (but in any event no more
than ten (10) days thereafter) upon receipt thereof by any Pledgor be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto.
All certificated Securities Collateral shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to the Collateral Agent. Subject to the provisions of
Section 13 hereof, to the fullest extent permitted by Requirements of Law,
the Collateral Agent shall have the right, at any time after the giving of five
Business Days prior notice to the issuer thereof following the occurrence and
during the continuance of any Event of Default, to endorse, assign or otherwise
transfer to or to register in the name of the Collateral Agent or any of its
nominees or endorse for negotiation any or all of the Securities Collateral,
without any indication that such Securities Collateral is subject to the
security interest hereunder. In addition, the Collateral Agent shall have the
right at any time to exchange certificates representing or evidencing
Securities Collateral for certificates of smaller or larger denominations.

 

SECTION 3.2                          Perfection of Uncertificated Securities
Collateral. If any issuer of
Pledged Securities is organized in a jurisdiction which does not permit the use
of certificates to evidence equity ownership, or if any of the Pledged
Securities are at any time not evidenced by certificates of ownership, then
each applicable Pledgor shall, to the fullest extent permitted by applicable
Requirements of Law, use commercially reasonable efforts to cause the issuer to
record such pledge on the equityholder register or the books of the issuer,
cause the issuer to execute and deliver to the Collateral Agent an
acknowledgment of the pledge of such Pledged Securities substantially in the
form of Exhibit 1 annexed hereto, execute any customary pledge
forms or other documents necessary or appropriate to complete the pledge and
give the Collateral Agent the right to transfer such Pledged Securities under
the terms hereof and provide to the Collateral Agent an opinion of counsel, in
form and substance reasonably satisfactory to the Collateral Agent,
confirming such pledge and perfection thereof. After the occurrence and during
the continuance of any Event of Default, upon request by the Collateral Agent,
each Pledgor shall (A) cause the Organizational Documents of each such issuer
that is a Subsidiary of the Borrower to be amended to provide that such Pledged
Securities shall be treated as “securities” for purposes of the UCC and
(B) to the fullest extent permitted by Requirements of Law, cause such
Pledged Securities to become certificated and delivered to the Collateral Agent
in accordance with the provisions of Section 3.1.

 

SECTION 3.3                          Financing Statements and Other Filings. Each Pledgor hereby represents and warrants
that, as of the date hereof: (a) the only filings, registrations and
recordings necessary and appropriate to create, preserve, protect, publish
notice of and perfect the security interest granted by each Pledgor to the
Collateral Agent (for the benefit of the Secured Parties) pursuant to this
Agreement in respect of each item of Pledged Collateral upon which perfection
may be achieved by filing are listed in Schedule 7 to the
Perfection Certificate and (b) all such filings, registrations and
recordings have been duly executed and delivered to the Collateral Agent for
filing in each governmental, municipal or other office specified in Schedule 7
to of the Perfection Certificate. Each Pledgor agrees that at any time and from
time to time, at the sole cost and expense of the Pledgors, it will execute and
file and refile, or permit the Collateral Agent to file and refile, such
financing statements, continuation statements and other documents (including,
without limitation, this Agreement), in form reasonably acceptable to the
Collateral Agent, in such offices (including, without limitation, the United
States Patent and Trademark Office and, if applicable, the United States
Copyright Office) as the Collateral Agent may in its reasonable judgment
deem necessary or appropriate, wherever required or advisable in order to perfect,
continue and maintain a valid, enforceable, first priority security interest in
the Pledged Collateral as provided herein and to preserve the other rights and
interests granted to the Collateral Agent hereunder, as against third parties,
with respect to any Pledged Collateral. Each Pledgor hereby authorizes the
Collateral Agent to file any such financing or continuation statement or other
document including, without limitation, the filing of a financing statement
describing the Pledged Collateral as “all assets now owned or hereafter
acquired by the debtor or in which the debtor otherwise has rights.”

 

11

 

SECTION 3.4                          Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent’s security interest in the Pledged Collateral, each
Pledgor agrees, in each case at such Pledgor’s own expense, to take the
following actions with respect to the following Pledged Collateral:

 

(a)                                  Instruments and Tangible Chattel Paper. As of the date hereof, each Pledgor
hereby represents and warrants that no amount individually or in the aggregate
in excess of $100,000 payable under or in connection with any of the Pledged
Collateral is evidenced by any Instrument or Tangible Chattel Paper other than
such Instruments and Tangible Chattel Paper as are listed in Schedule 11
to the Perfection Certificate and have been delivered to the Collateral Agent.
If any amount individually or in the aggregate in excess of $100,000 payable
under or in connection with any of the Pledged Collateral shall be evidenced by
any Instrument or Tangible Chattel Paper, the Pledgor acquiring such Instrument
or Tangible Chattel Paper shall promptly (but in any event within ten days
after receipt thereof) endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank as the Collateral Agent may from time to time reasonably request;
provided, however, that so long as no Event of Default shall have
occurred and be continuing, the Collateral Agent shall return such Instrument
or Tangible Chattel Paper to such Pledgor from time to time, at such time for
collection in the ordinary course of such Pledgor’s business.

 

(b)                                 Deposit Accounts. As of the date hereof, each Pledgor
represents and warrants that it does not have any Deposit Accounts other than
the Deposit Accounts listed in Schedule 14 to the Perfection
Certificate and that each such account (other than the Excluded Accounts) is
subject to an agreement that by its terms grants Control over such account to
the Collateral Agent. With respect to each such Deposit Account, the applicable
Pledgor represents and warrants that the Collateral Agent has a first priority
security interest perfected by Control in each such Deposit Account. No Pledgor
shall hereafter establish and maintain any Deposit Account unless (1) it
shall have given the Collateral Agent 15 days’ prior written notice of its
intention to establish such new Deposit Account with a Bank and (2) such
Bank and such Pledgor shall, within 30 days after establishing such Deposit
Account, have duly executed and delivered to the Collateral Agent a Deposit
Account Control Agreement with respect to such Deposit Account. The Collateral
Agent agrees with each Pledgor that the Collateral Agent shall not give any
instructions directing the disposition of funds from time to time credited to
any Deposit Account or withhold any withdrawal rights from such Pledgor with
respect to funds from time to time credited to any Deposit Account unless an
Event of Default has occurred and is continuing. The provisions of this Section 3.4(b) shall
not apply to any Deposit Accounts for which the Collateral Agent is the Bank.
No Pledgor shall grant Control of any Deposit Account to any person other than
the Collateral Agent. Notwithstanding anything to the contrary contained in
this Agreement, the foregoing provisions of this Section 3.4(b) shall
not apply to any Excluded Account.

 

(c)                                  Investment Property. (i)  As of the date hereof each
Pledgor hereby represents and warrants that it has neither opened nor maintains
any Securities Account or Commodity Account other than those listed in Schedule 14
to the Perfection Certificate and that the Collateral Agent has a first
priority security interest in each such Securities Account and Commodity
Account, which security interest is perfected by Control.

 

(ii)                                  No Pledgor shall hereafter establish and
maintain any Securities Account or Commodity Account with any Securities
Intermediary or Commodity Intermediary unless (1) it shall have given the
Collateral Agent 15 days’ prior written notice of its intention to establish
such new Securities Account or Commodity Account with such Securities
Intermediary or Commodity Intermediary and (2) such Securities
Intermediary or Commodity Intermediary, as

 

12

 

the case
may be, and such Pledgor, shall within 30 days after establishing such
Securities Account or Commodity Account, have duly executed and delivered a
Control Agreement with respect to such Securities Account or Commodity Account,
as the case may be. Each Pledgor shall accept any cash and Investment
Property in trust for the benefit of the Collateral Agent and within one
(1) Business Day of actual receipt thereof, deposit any and all cash and
Investment Property received by it into a Deposit Account or Securities Account
subject to the Collateral Agent’s Control. The Collateral Agent agrees with
each Pledgor that the Collateral Agent shall not give any Entitlement Orders or
instructions or directions to any issuer of uncertificated securities,
Securities Intermediary or Commodity Intermediary, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by such Pledgor,
unless an Event of Default has occurred and is continuing or, after giving
effect to any such exercise of dealing and withdrawal rights, would occur. The
provisions of this Section 3.4(c) shall not apply to any
Financial Assets credited to a Securities Account for which the Collateral
Agent is the Securities Intermediary. No Pledgor shall grant Control over any
Investment Property to any person other than the Collateral Agent.

 

(iii)                               As between the Collateral Agent and the
Pledgors, the Pledgors shall bear the investment risk with respect to the
Investment Property, and the risk of loss of, damage to or the destruction of
the Investment Property, whether in the possession of, or maintained as a security
entitlement by, or subject to the Control of, the Collateral Agent, a
Securities Intermediary, a Commodity Intermediary, any Pledgor or any other
Person; provided, however, that nothing contained in this
Section 3.4(c) shall release or relieve any Securities Intermediary
or Commodity Intermediary of its duties and obligations to the Pledgors or any
other Person under any Control Agreement or under Requirements of Law; and,
provided further, Collateral Agent shall exercise such care with respect to Investment
Property in its possession as exercised with respect to its own property of the
same type.

 

(d)                                 Electronic Chattel Paper and Transferable
Records. If any
amount individually or in the aggregate in excess of $100,000 payable under or
in connection with any of the Pledged Collateral shall be evidenced by any
Electronic Chattel Paper or any “transferable record,” as that term is defined
in Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction, the Pledgor acquiring such
Electronic Chattel Paper or transferable record shall promptly notify the
Collateral Agent thereof and shall take such action as the Collateral Agent
may reasonably request to vest in the Collateral Agent control under UCC
Section 9-105 of such Electronic Chattel Paper or control under
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record. The Collateral Agent agrees with such Pledgor that
the Collateral Agent will arrange, pursuant to procedures reasonably
satisfactory to the Collateral Agent and so long as such procedures will not
result in the Collateral Agent’s loss of control, for such Pledgor to make
alterations to the Electronic Chattel Paper or transferable record permitted
under UCC Section 9-105 or, as the case may be, Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or
Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Pledgor with respect to such Electronic Chattel Paper or transferable
record.

 

(e)                                  Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of such
Pledgor in an amount in the aggregate in excess of $100,000, such Pledgor shall
promptly notify the Collateral Agent thereof and such Pledgor

 

13

 

shall, pursuant to
an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) arrange for the issuer and any confirmer of
such Letter of Credit to consent to an assignment to the Collateral Agent of
the proceeds of any drawing under the Letter of Credit or (ii) arrange for
the Collateral Agent to become the transferee beneficiary of the Letter of
Credit, with the Collateral Agent agreeing, in each case, that the proceeds of
any drawing under the Letter of Credit are to be applied as provided in the
Credit Agreement.

 

(f)                                    Commercial Tort Claims. As of the date hereof, each Pledgor
hereby represents and warrants that it holds no Commercial Tort Claims other
than those listed in Schedule 13 to the Perfection Certificate. If
any Pledgor shall at any time hold or acquire a Commercial Tort Claim, such
Pledgor shall promptly (and in any event within 10 days) notify the Collateral
Agent in writing signed by such Pledgor of the brief details thereof and grant
to the Collateral Agent in such writing a security interest therein and in the
Proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to the Collateral Agent. The
requirement in the preceding sentence shall not apply to the extent that the
amount of such Commercial Tort Claim, together with the amount of all other
Commercial Tort Claims held by any Pledgor in which the Collateral Agent does
not have a security interest, does not exceed $100,000 in the aggregate for all
Pledgors.

 

(g)                                 Excluded Property. After the Collateral Agent’s request
therefor, the Pledgors shall deliver to the Collateral Agent an Officer’s
Certificate setting forth all permits, leases or licenses constituting Special
Property that are material to the operation of each Pledgor’s business. At the
Collateral Agent’s request, each Pledgor shall use commercially reasonable
efforts to obtain as soon as practicable the consent (which shall be in
form and substance reasonably satisfactory to the Collateral Agent) of the
other parties to each permit, lease or license listed in such Officer’s
Certificate to permit the assignment, transfer or grant of security interest in
such permit, lease or license pursuant to the terms hereof. No Pledgor shall
permit to become effective in any document creating, governing or providing for
any permit, lease or license, a provision that would prohibit the creation of a
Lien on such permit, lease or license in favor of the Collateral Agent unless
such Pledgor believes, in its reasonable judgment, that such prohibition is
usual and customary in transactions of such type.

 

SECTION 3.5                          Joinder of Additional Guarantors. The Pledgors shall cause each Restricted
Subsidiary of the Borrower which, from time to time, after the date hereof
shall be required to pledge any assets to the Collateral Agent for the benefit
of the Secured Parties pursuant to the provisions of the Credit Agreement, to
execute and deliver to the Collateral Agent (i) a joinder agreement
substantially in the form of Exhibit 3 annexed hereto and
(ii) a Perfection Certificate, in each case, within 30 days (45 days if
such Subsidiary is formed or acquired in connection with the acquisition of a
truck stop video poker plaza) of the date on which it was acquired or created
and, upon such execution and delivery, such Restricted Subsidiary shall
constitute a “Guarantor” and a “Pledgor” for all purposes hereunder with the
same force and effect as if originally named as a Guarantor and Pledgor herein.
The execution and delivery of such joinder agreement shall not require the
consent of any Pledgor hereunder. The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor and Pledgor as a party to this Agreement.

 

SECTION 3.6                          Motor Vehicles. At any time after the occurrence and during
the continuance of an Event of Default, each Pledgor shall, upon the request of
the Collateral Agent, promptly (but in no event later than 30 days following
such request) deliver to the Collateral Agent originals of the certificates of
title or ownership for all motor vehicles valued at over $50,000 (and any other
Equipment covered by Certificates of Title or ownership) owned by it with the
Collateral Agent listed as lienholder therein unless such vehicles or Equipment
constitutes Excluded Property.

 

14

 

SECTION 3.7                          Supplements; Further Assurances. Each Pledgor agrees to take such further
actions, and to execute and deliver to the Collateral Agent such additional financing
statements, amendments, assignments, agreements, supplements, powers and
instruments, as the Collateral Agent may in its reasonable judgment deem
necessary or appropriate, wherever required or permitted by law, in order to
create, perfect, preserve and protect the security interest in the Pledged
Collateral as provided herein and the rights and interests granted to the
Collateral Agent hereunder, to carry into effect the purposes hereof or better
to assure and confirm the validity, enforceability and priority of the
Collateral Agent’s rights, powers and remedies hereunder or permit the
Collateral Agent to exercise and enforce its respective rights, powers and
remedies hereunder with respect to any Pledged Collateral, including the filing
of financing statements, continuation statements and other documents (including
this Agreement) under the Uniform Commercial Code (or other similar laws)
in effect in any jurisdiction with respect to the security interest created
hereby and the execution and delivery of Control Agreements, all in
form reasonably satisfactory to the Collateral Agent and in such offices
(including the United States Patent and Trademark Office and the United States
Copyright Office) wherever required by law to perfect, continue and maintain
the validity, enforceability and priority of the security interest in the
Pledged Collateral as provided herein and to preserve the other rights and
interests granted to the Collateral Agent hereunder, as against third parties,
with respect to the Pledged Collateral. Without limiting the generality of the
foregoing, each Pledgor shall make, execute, endorse, acknowledge, file or
refile and/or deliver to the Collateral Agent from time to time upon reasonable
request such lists, schedules, descriptions and designations of the Pledged
Collateral, copies of warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, supplements, additional security agreements, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments as the Collateral Agent
may reasonably request. The Collateral Agent may institute and
maintain, in its own name or in the name of any Pledgor, such suits and
proceedings as the Collateral Agent may be advised by counsel shall be
necessary or expedient to prevent any impairment of the security interest in or
the perfection thereof in the Pledged Collateral. All of the foregoing shall be
at the sole cost and expense of the Pledgors.

 

SECTION 3.8                          Use and Pledge of Pledged Collateral. Unless an Event of Default shall have
occurred and be continuing, the Collateral Agent shall from time to time
execute and deliver, upon written request of any Pledgor and at the sole cost
and expense of the Pledgors, any and all instruments, certificates or other
documents, in a form reasonably requested by such Pledgor, necessary or
appropriate in the reasonable judgment of such Pledgor to enable such Pledgor
to continue to exploit, license, use, enjoy and protect the Pledged Collateral
in the operation of its business or any other activity permitted under the
terms hereof and of the Credit Agreement. The Pledgors and the Collateral Agent
acknowledge that this Agreement is intended to grant to the Collateral Agent
for the benefit of the Secured Parties a security interest in and Lien upon the
Pledged Collateral and shall not constitute or create a present assignment of
any of the Pledged Collateral.

 

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Each Pledgor represents, warrants and covenants as
follows:

 

SECTION 4.1                          Title and Authority. Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and Permitted Liens, such Pledgor has good and valid rights in
and title to the Pledged Collateral and has full power and authority to grant
to the Collateral Agent the security interest in and Liens on such Pledged Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this

 

15

 

Agreement,
without the consent or approval of any other Person other than the consents
listed on Schedule 17 of the Perfection Certificate and any consent or
approval that has been obtained. No Liens or claims exist on the Securities
Collateral, other than Permitted Liens.

 

SECTION 4.2                          Validity of Security Interest. The security interest in and Lien on the
Pledged Collateral granted to the Collateral Agent (for the benefit of the
Secured Parties) hereunder constitutes (a) a legal and valid security
interest in all the Pledged Collateral securing the payment and performance of
the Secured Obligations, and (b) subject to the filings and other actions
described in Schedule 7 to the Perfection Certificate (to the
extent required to be listed on the schedules to the Perfection Certificate as
of the date this representation is made or deemed made), a perfected security
interest in all Pledged Collateral. The security interest and Lien granted to
the Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement in and on the Pledged Collateral will constitute a perfected,
continuing security interest therein, prior to all other Liens on the Pledged
Collateral except for Permitted Liens.

 

SECTION 4.3                          Defense of Claims; Transferability of Pledged
Collateral. Subject to Section 5.05
of the Credit Agreement, each Pledgor shall, at its own cost and expense,
defend title to the Pledged Collateral pledged by it hereunder and the security
interest therein and Lien thereon granted to the Collateral Agent and the
priority thereof against all claims and demands of all persons, at any time
claiming any interest therein adverse to the Collateral Agent or any other
Secured Party other than Permitted Liens. There is no agreement, order,
judgment or decree, and no Pledgor shall enter into any agreement or take any
other action, that would restrict the transferability of any of the Pledged
Collateral or otherwise impair or conflict with such Pledgor’s obligations or
the rights of the Collateral Agent hereunder other than as permitted under the
Credit Agreement.

 

SECTION 4.4                          Other Financing Statements. There is no (nor will there be any) valid
or effective financing statement (or similar statement or instrument of
registration or public notice under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Pledged Collateral other
than in the case of Pledged Collateral (other than the Securities Collateral)
financing statements and other statements and instruments relating to Permitted
Liens. So long as any of the Secured Obligations remain unpaid, no Pledgor
shall execute, authorize or permit to be filed in any public office any
financing statement (or similar statement or instrument of registration or
public notice under the law of any jurisdiction) relating to any Pledged
Collateral, except, in the case of any Pledged Collateral (other than the
Securities Collateral), financing statements and other statements and
instruments filed or to be filed in respect of and covering the security
interests granted by such Pledgor to the holder of the Permitted Liens.

 

SECTION 4.5                          Location of Inventory and Equipment. No Pledgor shall move any Inventory and
Equipment to any location other than any location that is listed in Schedules
2(a), (b), (d) or (e) to the Perfection Certificate unless it
shall have given the Collateral Agent not less than 30 days’ prior written
notice (in the form of an Officers’ Certificate) of its intention so to
do, clearly describing such new location and providing such other information
in connection therewith as the Collateral Agent may request; provided that in no event shall any Equipment
or Inventory be moved to any location outside of the continental United States.

 

SECTION 4.6                          Due Authorization and Issuance. All of the Pledged Securities issued by any
Subsidiary of Borrower existing on the date hereof have been, and to the extent
any Pledged Securities are hereafter issued, such Pledged Securities will be,
upon such issuance, duly authorized and validly issued and are (or upon such
issuance will be) fully paid and non-assessable to the extent applicable. There
is no amount or other obligation owing by any Pledgor to any issuer of the
Pledged

 

16

 

Securities
in exchange for or in connection with the issuance of the Pledged Securities or
any Pledgor’s status as a partner or a member of any issuer of the Pledged
Securities.

 

SECTION 4.7                          No Claims. Such Pledgor owns or has rights to use all of the Pledged Collateral
pledged by it hereunder and all rights with respect to Pledged Collateral used
in, necessary for or material to such Pledgor’s business as currently
conducted. The use by such Pledgor of such Pledged Collateral and all such
rights with respect to the foregoing do not infringe on the rights of any
Person other than such infringement which would not in the aggregate, result in
a Collateral Material Adverse Effect. No claims have been made and remain
outstanding that such Pledgor’s use of any Pledged Collateral does or
may violate the rights of any third Person that would in the aggregate,
have a Collateral Material Adverse Effect.

 

SECTION 4.8                          Consents, etc. In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
Person therefor, then, upon the reasonable request of the Collateral Agent,
such Pledgor agrees to use commercially reasonable efforts to assist and aid
the Collateral Agent to obtain as soon as practicable any necessary approvals
or consents for the exercise of any such remedies, rights and powers.

 

SECTION 4.9                          Pledged Collateral. All information set forth herein and all
information contained in any documents, schedules and lists heretofore delivered
to any Secured Party, including the Perfection Certificate and the schedules
thereto, in connection with this Agreement, in each case, relating to the
Pledged Collateral, is accurate and complete in all material respects. The
Pledged Collateral described on the schedules to the Perfection Certificate (as
supplemented from time to time) constitutes, as of the time of delivery thereof
or any supplement thereto, all of the property of such type of Pledged
Collateral owned or held by the Pledgors.

 

SECTION 4.10                    Insurance. In the event that the proceeds of any insurance claim are paid to any
Pledgor after the Collateral Agent has exercised its right to foreclose after
an Event of Default, such proceeds shall be held in trust for the benefit of
the Collateral Agent and immediately after receipt thereof shall be paid to the
Collateral Agent for application in accordance with the Credit Agreement.

 

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

 

SECTION 5.1                          Pledge of Additional Securities Collateral. Each Pledgor shall, upon obtaining any
Pledged Securities or Intercompany Notes of any Person, accept the same in
trust for the benefit of the Collateral Agent and promptly (but in any event
within five Business Days after receipt thereof by any Pledgor) deliver to the
Collateral Agent a pledge amendment, duly executed by such Pledgor, in
substantially the form of Exhibit 2 hereto (each, a “Pledge
Amendment”), and the certificates and other documents required under Section 3.1
and Section 3.2 in respect of the additional Pledged Securities or
Intercompany Notes which are to be pledged pursuant to this Agreement, and
confirming the attachment of the Lien hereby created on and in respect of such
additional Pledged Securities or Intercompany Notes. Each Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Interests or Intercompany Notes listed on
any Pledge Amendment delivered to the Collateral Agent shall for all purposes
hereunder be considered Pledged Collateral.

 

17

 

SECTION 5.2                          Voting Rights; Distributions, etc.

 

(i)                                     So long as no Event of Default shall have
occurred and be continuing:

 

(A)                              Each Pledgor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with the
terms or purposes hereof, of the Credit Agreement or any other document
evidencing the Secured Obligations; provided, however, that no
Pledgor shall in any event exercise such rights in any manner which
may have a material adverse effect on the value of the Pledged Collateral
or the Lien and security interest intended to be granted to the Collateral
Agent hereunder, in each case, taken as a whole.

 

(B)                                Each Pledgor shall be entitled to receive and
retain, and to utilize free and clear of the Lien hereof, any and all
Distributions, but only if and to the extent made in accordance with the
provisions of the Credit Agreement; provided, however, that any
and all such Distributions consisting of rights or interests in the
form of securities shall be forthwith delivered to the Collateral Agent to
hold as Pledged Collateral and shall, if received by any Pledgor, be received
in trust for the benefit of the Collateral Agent, be segregated from the other
property or funds of such Pledgor and be promptly (but in any event within five
Business Days after receipt thereof) delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).

 

(C)                                So long as no Event of Default shall have
occurred and be continuing, the Collateral Agent shall be deemed without
further action or formality to have granted to each Pledgor all necessary
consents relating to voting rights and shall, if necessary, upon written
request of any Pledgor and at the sole cost and expense of the Pledgors, from
time to time execute and deliver (or cause to be executed and delivered) to
such Pledgor all such instruments as such Pledgor may reasonably request
in order to permit such Pledgor to exercise the voting and other rights which
it is entitled to exercise pursuant to Section 5.2(i)(A) hereof
and to receive the Distributions which it is authorized to receive and retain
pursuant to Section 5.2(i)(B) hereof.

 

(ii)                                  Upon the occurrence and during the
continuance of any Event of Default:

 

(A)                              To the fullest extent permitted by applicable
Requirements of Law, all rights of each Pledgor to exercise the voting and
other consensual rights it would otherwise be entitled to exercise pursuant to Section 5.2(i)(A) hereof
without any action shall cease two (2) Business Days following the
delivery of a notice of such Event of Default in accordance with Section 12.6
hereof, 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, subject to compliance with the provisions of
Section 13 hereof.

 

(B)                                All rights of each Pledgor to receive
Distributions which it would otherwise be authorized to receive and retain
pursuant to Section 5.2(i)(B) hereof shall cease and all such
rights shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to receive and hold as Pledged Collateral such
Distributions.

 

(iii)                               Each Pledgor shall, at its sole cost and
expense, from time to time execute and deliver to the Collateral Agent
appropriate instruments as the Collateral Agent may reasonably request in order
to permit the Collateral Agent to exercise the voting and other rights which it
may be entitled to exercise pursuant to Section 5.2(ii)(A) hereof
and to receive all Distributions

 

18

 

which it
may be entitled to receive under Section 5.2(ii)(B) hereof,
subject to compliance with the provisions of Section 13 hereof.

 

(iv)                              All Distributions which are received by
any Pledgor contrary to the provisions of Section 5.2(ii)(B) hereof
shall be received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Pledgor and shall immediately be paid over
to the Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).

 

SECTION 5.3                          Defaults, etc.Each Pledgor represents and warrants that
such Pledgor is not in default in the payment of any portion of any mandatory
capital contribution, if any, required to be made under any agreement to which
such Pledgor is a party relating to the Pledged Securities pledged by it, and
such Pledgor is not in violation of any other provisions of any such agreement
to which such Pledgor is a party, or otherwise in default or violation
thereunder. Each Pledgor represents and warrants that to the best of such
Pledgor’s knowledge, no Securities Collateral pledged by such Pledgor is
subject to any defense, offset or counterclaim, nor have any of the foregoing
been asserted or alleged against such Pledgor by any Person with respect
thereto, and as of the date hereof, there are no certificates, instruments,
documents or other writings (other than the Organizational Documents and
certificates representing such Pledged Securities that have been delivered to
the Collateral Agent) which evidence any Pledged Securities of such Pledgor.

 

SECTION 5.4                          Certain Agreements of Pledgors As Issuers and
Holders of Equity Interests.

 

(a)                                  In the case of each Pledgor which is an
issuer of Securities Collateral, such Pledgor, to the fullest extent permitted
by applicable Requirements of Law, agrees to be bound by the terms of this
Agreement relating to the Securities Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it.

 

(b)                                 In the case of each Pledgor which is a
partner, shareholder or member, as the case may be, in a partnership,
limited liability company or other entity, such Pledgor hereby consents to the
extent required by the applicable Organizational Document to the pledge by each
other Pledgor, pursuant to the terms hereof, of the Pledged Securities in such
partnership, limited liability company or other entity and, upon the occurrence
and during the continuance of an Event of Default, to the transfer of such
Pledged Securities to the Collateral Agent or its nominee and to the substitution
of the Collateral Agent or its nominee as a substituted partner, shareholder or
member in such partnership, limited liability company or other entity with all
the rights, powers and duties of a general partner, limited partner,
shareholder or member, as the case may be, subject to compliance with the
provisions of Section 13 hereof and all applicable Requirements of Law.

 

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

 

SECTION 6.1                          Grant of License. For the purpose of enabling the Collateral
Agent, after the occurrence and during the continuance of a Default, to
exercise rights and remedies under Article IX hereof at such time
as the Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Pledgor hereby grants to the
Collateral Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Pledgor) to use, assign, license or sublicense any of the Intellectual Property

 

19

 

Collateral
now owned or hereafter acquired by such Pledgor, wherever the same may be
located, including in such license access to all media in which any of the
licensed items may be recorded or stored (to the extent permitted by any
applicable vendors) and to all computer programs (to the extent permitted by
any applicable vendors) used for the compilation or printout hereof.

 

SECTION 6.2                          Protection of Collateral Agent’s Security. On a continuing basis, each Pledgor shall,
at its sole cost and expense, (i) promptly following its becoming aware
thereof, notify the Collateral Agent of (A) any materially adverse
determination in any proceeding in the United States Patent and Trademark
Office or the United States Copyright Office with respect to any material
Patent, Trademark or Copyright or (B) the institution of any proceeding or
any adverse determination in any Federal, state or local court or
administrative body regarding such Pledgor’s claim of ownership in or right to
use any of the Intellectual Property Collateral material to the use and
operation of the Pledged Collateral or Mortgaged Property, its right to
register such Intellectual Property Collateral or its right to keep and maintain
such registration in full force and effect, (ii) take all commercially
reasonable steps to maintain and protect the Intellectual Property Collateral
material to the use and operation of the Pledged Collateral or Mortgaged
Property as presently used and operated and as contemplated by the Credit
Agreement, (iii) not permit to lapse or become abandoned any Intellectual
Property Collateral material to the use and operation of the Pledged Collateral
or Mortgaged Property as presently used and operated and as contemplated by the
Credit Agreement, and not settle or compromise any pending or future litigation
or administrative proceeding with respect to such Intellectual Property
Collateral, in each case except as shall be consistent with commercially reasonable
business judgment, (iv) upon such Pledgor obtaining knowledge thereof,
promptly notify the Collateral Agent in writing of any event which may be
reasonably expected to materially and adversely affect the value or utility of
the Intellectual Property Collateral or any portion thereof material to the use
and operation of the Pledged Collateral or Mortgaged Property, the ability of
such Pledgor or the Collateral Agent to dispose of the Intellectual Property
Collateral or any portion thereof or the rights and remedies of the Collateral
Agent in relation thereto including, without limitation, a levy or threat of
levy or any legal process against the Intellectual Property Collateral or any
portion thereof, (v) not license the Intellectual Property Collateral
other than licenses entered into by such Pledgor in, or incidental to, the
ordinary course of business, or amend or permit the amendment of any of the
licenses in a manner that materially and adversely affects the right to receive
payments thereunder, or in any manner that would materially impair the value of
the Intellectual Property Collateral or the Lien on and security interest in
the Intellectual Property Collateral intended to be granted to the Collateral
Agent for the benefit of the Secured Parties, without the consent of the
Collateral Agent, (vi) until the Collateral Agent exercises its rights to
make collection, diligently keep records respecting the Intellectual Property
Collateral consistent with current business practices and in accordance with
the reasonable requests of the Collateral Agent, and (vii) furnish to the
Collateral Agent from time to time upon the Collateral Agent’s reasonable
request therefor detailed statements and amended schedules further identifying
and describing the Intellectual Property Collateral and such other materials
evidencing or reports pertaining to the Intellectual Property Collateral as the
Collateral Agent may from time to time request.

 

SECTION 6.3                          After-Acquired Property. If any Pledgor shall, at any time before
the Secured Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Credit
Agreement or the Collateral Documents, survive the termination thereof),
(i) obtain any rights to any additional Intellectual Property Collateral
or (ii) become entitled to the benefit of any additional Intellectual
Property Collateral or any renewal or extension thereof, including any reissue,
division, continuation, or continuation-in-part of any Intellectual Property
Collateral, or any improvement on any Intellectual Property Collateral, the
provisions hereof shall automatically apply thereto and any such item
enumerated in clause (i) or (ii) of this Section 6.3 with
respect to such Pledgor shall automatically constitute Intellectual Property
Collateral if such would have constituted Intellectual Property Collateral at
the time of execution hereof and be subject to the Lien and security interest
created by this Agreement without further action by any party. Each Pledgor
shall

 

20

 

promptly
(i) provide to the Collateral Agent written notice of any of the foregoing
and (ii) confirm the attachment of the Lien and security interest created
by this Agreement to any rights described in clauses (i) and (ii) of
the immediately preceding sentence of this Section 6.3 by execution
of an instrument in form reasonably acceptable to the Collateral Agent.

 

SECTION 6.4                          Modifications. Each Pledgor authorizes the Collateral
Agent to modify this Agreement by amending Schedule 12(a) and (b) to
the Perfection Certificate to include any Intellectual Property Collateral
acquired or arising after the date hereof of such Pledgor including, without
limitation, any of the items listed in Section 6.3 hereof.

 

SECTION 6.5                          Litigation.  Unless there shall occur and be continuing any Event of
Default, each Pledgor shall have the right to commence and prosecute in its own
name, as the party in interest, for its own benefit and at the sole cost and
expense of the Pledgors, such applications for protection of the Intellectual
Property Collateral and suits, proceedings or other actions to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
or other damage as are necessary to protect the Intellectual Property
Collateral. Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Collateral Agent
or the Secured Parties to enforce the Intellectual Property Collateral and any
license thereunder. In the event of such suit, each Pledgor shall, at the
reasonable request of the Collateral Agent, do any and all lawful acts and
execute any and all documents requested by the Collateral Agent in aid of such
enforcement and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent, as the case may be, for all reasonable out-of-pocket
costs and expenses incurred by the Collateral Agent in the exercise of its
rights under this Section 6.5 in accordance with the Credit
Agreement. In the event that the Collateral Agent shall elect not to bring suit
to enforce the Intellectual Property Collateral and notifies the applicable
Pledgor(s) of such election, each Pledgor agrees, at the reasonable request of
the Collateral Agent, to take all commercially reasonable actions necessary,
whether by suit, proceeding or other action, to prevent the infringement,
counterfeiting, unfair competition, dilution, diminution in value of or other
damage to any of the Intellectual Property Collateral by others and for that
purpose agrees to diligently maintain any suit, proceeding or other action
against any Person so infringing necessary to prevent such infringement.

 

ARTICLE VII

CERTAIN PROVISIONS CONCERNING ACCOUNTS

 

SECTION 7.1                          Maintenance of Records. Each Pledgor shall keep and maintain at its
own cost and expense complete records of each Receivable, in a manner
consistent with prudent business practice, including, without limitation,
records of all payments received, all credits granted thereon, all merchandise
returned and all other documentation relating thereto. Each Pledgor shall, at
such Pledgor’s sole cost and expense, upon the Collateral Agent’s demand made
at any time after the occurrence and during the continuance of any Event of
Default, deliver all tangible evidence of Receivables, including, without
limitation, all documents evidencing Receivables and any books and records
relating thereto, to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by such Pledgor).
Upon the occurrence and during the continuance of any Event of Default, the
Collateral Agent may transfer a full and complete copy of any Pledgor’s
books, records, credit information, reports, memoranda and all other writings
relating to the Receivables to and for the use by any Person that has acquired
or is contemplating acquisition of an interest in the Receivables or the
Collateral Agent’s security interest therein without the consent of any
Pledgor.

 

21

 

SECTION 7.2                          Legend. Each Pledgor shall legend, at the request of the Collateral Agent
made at any time after the occurrence of any Event of Default and in
form and manner satisfactory to the Collateral Agent, the Receivables and
the other books, records and documents of such Pledgor evidencing or pertaining
to the Receivables with an appropriate reference to the fact that the
Receivables have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.

 

SECTION 7.3                          Modification of Terms, etc. Without the prior written consent of the
Collateral Agent, no Pledgor shall rescind or cancel any indebtedness evidenced
by any Receivable or modify any term thereof or make any adjustment with
respect thereto except in the ordinary course of business consistent with
prudent business practice, or extend or renew any such indebtedness except in
the ordinary course of business consistent with prudent business practice or
compromise or settle any dispute, claim, suit or legal proceeding relating thereto
or sell any Receivable or interest therein except in the ordinary course of
business consistent with prudent business practice. Each Pledgor shall timely
fulfill all obligations on its part to be fulfilled under or in connection
with the Receivables.

 

SECTION 7.4                          Collection. Each Pledgor shall use commercially reasonable efforts to cause to be
collected from the account debtor of each of the Receivables, as and when due
in the ordinary course of business consistent with prudent business practice
(including, without limitation, Receivables that are delinquent, such
Receivables to be collected in accordance with generally accepted commercial
collection procedures), any and all amounts owing under or on account of such
Receivable, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Receivable, except that any
Pledgor may, with respect to a Receivable, allow in the ordinary course of
business (i) a refund or credit due as a result of returned or damaged or
defective merchandise and (ii) such extensions of time to pay amounts due
in respect of Receivables and such other modifications of payment terms or
settlements in respect of Receivables as shall be commercially reasonable in
the circumstances, all in accordance with such Pledgor’s ordinary course of
business consistent with its collection practices as in effect from time to
time. The costs and expenses (including, without limitation, reasonable
attorneys’ fees) of collection, in any case, whether incurred by any Pledgor,
the Collateral Agent or any Secured Party, shall be paid by the Pledgors.

 

ARTICLE VIII

TRANSFERS AND OTHER LIENS

 

No Pledgor shall (i) sell, convey, assign or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral pledged by it hereunder except as permitted by the Credit Agreement
or (ii) create or permit to exist any Lien upon or with respect to any of
the Pledged Collateral pledged by it hereunder other than Permitted Liens with
respect to Pledged Collateral (other than Securities Collateral).

 

ARTICLE IX

REMEDIES

 

SECTION 9.1                          Remedies. Upon the occurrence and during the continuance of any Event of
Default, subject to compliance with the provisions of Section 13 hereof,
the Collateral Agent may from time to time exercise in respect of the
Pledged Collateral, to the fullest extent permitted by

 

22

 

applicable
Requirements of Law, in addition to the other rights and remedies provided for
herein or otherwise available to it, the following remedies:

 

(i)                                     Personally, or by agents or attorneys,
immediately take possession of the Pledged Collateral or any part thereof,
from any Pledgor or any other Person who then has possession of any
part thereof with or without notice or process of law, and for that
purpose may enter upon any Pledgor’s premises where any of the Pledged
Collateral is located, remove such Pledged Collateral, remain present at such
premises to receive copies of all communications and remittances relating to
the Pledged Collateral and use in connection with such removal and possession
any and all services, supplies, aids and other facilities of any Pledgor;

 

(ii)                                  Demand, sue for, collect or receive any
money or property at any time payable or receivable in respect of the Pledged
Collateral including, without limitation, instructing the obligor or obligors
on any agreement, instrument or other obligation constituting part of the
Pledged Collateral to make any payment required by the terms of such agreement,
instrument or other obligation directly to the Collateral Agent, and in
connection with any of the foregoing, compromise, settle, extend the time for
payment and make other modifications with respect thereto; in each case,
consistent with prudent business practices; provided, however,
that in the event that any such payments are made directly to any Pledgor,
prior to receipt by any such obligor of such instruction, such Pledgor shall
segregate all amounts received pursuant thereto in trust for the benefit of the
Collateral Agent and shall promptly (but in no event later than one Business
Day after receipt thereof) pay such amounts to the Collateral Agent;

 

(iii)                               Sell, assign, grant a license to use or
otherwise liquidate, or direct any Pledgor to sell, assign, grant a license to
use or otherwise liquidate, any and all investments made in whole or in
part with the Pledged Collateral or any part thereof, and take
possession of the proceeds of any such sale, assignment, license or liquidation;

 

(iv)                              Take possession of the Pledged Collateral
or any part thereof, by directing any Pledgor in writing to deliver the
same to the Collateral Agent at any place or places so designated by the
Collateral Agent that is not unreasonably inconvenient to the Pledgor, in which
event such Pledgor shall at its own expense: 
(A) forthwith cause the same to be moved to the place or places
designated by the Collateral Agent and there delivered to the Collateral Agent,
(B) store and keep any Pledged Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral Agent
and (C) while the Pledged Collateral shall be so stored and kept, provide
such security and maintenance services as shall be necessary to protect the same
and to preserve and maintain them in good condition or otherwise insure them
against loss from theft or destructon at such location. Each Pledgor’s
obligation to deliver the Pledged Collateral as contemplated in this Section 9.1(iv) is
of the essence hereof. Upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to a decree requiring
specific performance by any Pledgor of such obligation;

 

(v)                                 Withdraw all moneys, instruments,
securities and other property in any bank, financial securities, deposit or
other account of any Pledgor constituting Pledged Collateral for application to
the Secured Obligations as provided in Article X hereof;

 

(vi)                              Retain and apply the Distributions to the
Secured Obligations as provided in Article X hereof;

 

23

 

(vii)                           Exercise any and all rights as beneficial
and legal owner of the Pledged Collateral, including, without limitation,
perfecting assignment of and exercising any and all voting, consensual and
other rights and powers with respect to any Pledged Collateral; and

 

(viii)                        Exercise all the rights and remedies of a
secured party on default under the UCC, and the Collateral Agent may also
in its sole discretion, without notice except as specified in Section 9.2
hereof, sell, assign or grant a license to use the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange or broker’s board or at any of the Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Collateral Agent or any other Secured Party or any
of their respective Affiliates may be the purchaser, licensee, assignee or
recipient of any or all of the Pledged Collateral at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Pledged Collateral sold, assigned
or licensed at such sale, to use and apply any of the Secured Obligations owed
to such Person as a credit on account of the purchase price of any Pledged
Collateral payable by such Person at such sale. Each purchaser, assignee,
licensee or recipient at any such sale shall acquire the property sold,
assigned or licensed absolutely free from any claim or right on the
part of any Pledgor, and each Pledgor hereby waives, to the fullest extent
permitted by applicable Requirements of Law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. The
Collateral Agent shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each
Pledgor hereby waives, to the fullest extent permitted by law, any claims
against the Collateral Agent arising by reason of the fact that the price at
which any Pledged Collateral may have been sold, assigned or licensed at
such a private sale was less than the price which might have been obtained at a
public sale, even if the Collateral Agent, in the exercise of commercially
reasonable judgement, accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.

 

SECTION 9.2                          Notice of Sale. Each Pledgor acknowledges and agrees that,
to the extent notice of sale of the Pledged Collateral or any part thereof
shall be required by law, ten days’ notice to such Pledgor of the time and
place of any public sale or of the time after which any private sale or other
intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any Pledgor if
it has signed, after the occurrence of an Event of Default, a statement
renouncing or modifying any right to notification of sale or other intended
disposition.

 

SECTION 9.3                          Waiver of Notice and Claims. Each Pledgor hereby waives, to the fullest
extent permitted by applicable Requirements of Law, notice or judicial hearing
in connection with the Collateral Agent’s taking possession or the Collateral
Agent’s disposition of any of the Pledged Collateral, including, without
limitation, any and all prior notice and hearing for any prejudgment remedy or
remedies and any such right which such Pledgor would otherwise have under law,
and each Pledgor hereby further waives, to the fullest extent permitted by
applicable Requirements of Law: 
(i) all damages occasioned by such taking of possession,
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Agent’s
rights hereunder and (iii) all rights of redemption, appraisal, valuation,
stay, extension or moratorium now or hereafter in force under any applicable
law. The Collateral Agent shall not be liable for any incorrect or improper
payment made pursuant to this Article IX in the absence of gross
negligence or willful misconduct. Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate
to

 

24

 

divest
all right, title, interest, claim and demand, either at law or in equity, of
the applicable Pledgor therein and thereto, and shall be a perpetual bar both
at law and in equity against such Pledgor and against any and all Persons
claiming or attempting to claim the Pledged Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under such Pledgor.

 

SECTION 9.4                          Certain Sales of Pledged Collateral.

 

(i)                                     Each Pledgor recognizes that, by reason of
certain prohibitions contained in law, rules, regulations or orders of any
Governmental Authority, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to those who meet the requirements of such Governmental Authority.
Each Pledgor acknowledges that any such sales may be at prices and on
terms less favorable to the Collateral Agent than those obtainable through a
public sale without such restrictions, and, notwithstanding such circumstances,
agrees that any such restricted sale shall be deemed to have been made in a
commercially reasonable manner and that, except as may be required by
applicable law, the Collateral Agent shall have no obligation to engage in
public sales.

 

(ii)                                  Each Pledgor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933, as amended (the “Securities
Act”), and applicable state securities laws, the Collateral Agent
may be compelled, with respect to any sale of all or any part of the
Securities Collateral, to limit purchasers to Persons who will agree, among
other things, to acquire such Securities Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be at prices and on
terms less favorable to the Collateral Agent than those obtainable through a
public sale without such restrictions (including, without limitation, a public
offering made pursuant to a registration statement under the Securities Act),
and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
the Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Securities Collateral for the period of
time necessary to permit the issuer thereof to register it for a form of
public sale requiring registration under the Securities Act or under applicable
state securities laws, even if such issuer would agree to do so.

 

(iii)                               If the Collateral Agent determines to
exercise its right to sell any or all of the Securities Collateral, upon
written request, the applicable Pledgor shall from time to time furnish to the
Collateral Agent all such information as the Collateral Agent may request
in order to determine the number of securities included in the Securities
Collateral which may be sold by the Collateral Agent as exempt
transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.

 

(iv)                              Each Pledgor further agrees that a breach of
any of the covenants contained in this Section 9.4 will cause
irreparable injury to the Collateral Agent and other Secured Parties, that the
Collateral Agent and the other Secured Parties have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 9.4 shall be specifically enforceable
against such Pledgor, and such Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred and is continuing.

 

SECTION 9.5                          No Waiver; Cumulative Remedies.

 

(i)                                     No failure on the part of the Collateral
Agent to exercise, no course of dealing with respect to, and no delay on the
part of the Collateral Agent in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power, privilege or remedy hereunder preclude any
other or further exercise thereof or the exercise of any

 

25

 

other
right, power, privilege or remedy; nor shall the Collateral Agent be required
to look first to, enforce or exhaust any other security, collateral or
guaranties. All rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies provided by law or otherwise available.

 

(ii)                                  In the event that the Collateral Agent shall
have instituted any proceeding to enforce any right, power, privilege or remedy
under this Agreement or any other Loan Document by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Collateral Agent,
then and in every such case, to the maximum extent permitted by applicable
Requirements of Law so long as the Secured Obligations are outstanding, the
Pledgors, the Collateral Agent and each other Secured Party shall be restored
to their respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies, privileges and powers of the Collateral
Agent and the other Secured Parties shall continue as if no such proceeding had
been instituted.

 

SECTION 9.6                          Certain Additional Actions Regarding
Intellectual Property. If any
Event of Default shall have occurred and be continuing, upon the written demand
of the Collateral Agent, each Pledgor shall execute and deliver to the
Collateral Agent an assignment or assignments of the registered Patents,
Trademarks and/or Copyrights and such other documents as are necessary or
appropriate to carry out the intent and purposes hereof.

 

ARTICLE X

APPLICATION OF PROCEEDS

 

The proceeds received by the Collateral Agent in
respect of any sale of, collection from or other realization upon all or any
part of the Pledged Collateral pursuant to the exercise by the Collateral
Agent of its remedies as a secured creditor as provided in Article IX
hereof shall be applied, together with any other sums then held by the
Collateral Agent, in the manner set forth in the Credit Agreement.

 

ARTICLE XI

COLLATERAL ACCOUNT

 

The Collateral Agent is hereby authorized to
establish and maintain in the name of the Collateral Agent and pursuant to a
Control Agreement, a restricted deposit account designated “Jacobs
Entertainment, Inc. Collateral Account.”

 

Each Pledgor shall deposit into the Collateral
Account from time to time all amounts required to be deposited in the
Collateral Account by the Credit Agreement and any amounts specifically
required to be deposited therein by any other Loan Documents. The balance from
time to time in the Collateral Account shall constitute part of the
Collateral and shall not constitute payment of the Obligations until applied as
hereinafter provided. At any time following the occurrence and during the
continuance of an Event of Default, the Collateral Agent may in its
discretion apply or cause to be applied the balance from time to time
outstanding to the credit of the Collateral Account to the payment of the
Secured Obligations in the manner specified in the Credit Agreement.

 

The Collateral Agent shall have exclusive dominion
and control, including the exclusive right of withdrawal, over the Collateral
Account. If any Pledgor is required hereunder to deposit an amount of cash collateral
into the Collateral Account as a result of the occurrence of an Event of
Default,

 

26

 

such
amount together with interest income (if any) (to the extent not applied as
provided herein or in any other Loan Document) shall be returned to such
Pledgor within three Business Days after all Defaults or Events of Default have
been cured or waived.

 

Deposits shall be invested in cash or Cash
Equivalents, which, other than during the continuance of an Event of Default,
shall be invested in such cash or Cash Equivalents as the applicable Pledgor
may request. Other than any interest earned on the investment of such
deposits, which investments shall be made at the Pledgors’ risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account.

 

ARTICLE XII

MISCELLANEOUS

 

SECTION 12.1                    Concerning Collateral Agent.

 

(i)                                     The Collateral Agent has been appointed as
collateral agent pursuant to the Credit Agreement. The actions of the
Collateral Agent hereunder are subject to the provisions of the Credit
Agreement. The Collateral Agent shall have the right hereunder to make demands,
to give notices, to exercise or refrain from exercising any rights, and to take
or refrain from taking action (including, without limitation, the release or
substitution of the Pledged Collateral), in accordance with this Agreement and
the Credit Agreement. The Collateral Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be liable for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith. The Collateral Agent may resign and a successor Collateral
Agent may be appointed in the manner provided in the Credit Agreement.
Upon the acceptance of any appointment as the Collateral Agent by a successor
Collateral Agent, that successor Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent under this Agreement, and the retiring Collateral
Agent shall thereupon be discharged from its duties and obligations under this
Agreement. After any retiring Collateral Agent’s resignation, the provisions
hereof shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was the Collateral Agent.

 

(ii)                                  The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equivalent to that which the Collateral Agent, in its individual
capacity, accords its own property consisting of similar instruments or
interests, it being understood that neither the Collateral Agent nor any of the
Secured Parties shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Securities Collateral, whether or not the Collateral
Agent or any other Secured Party has or is deemed to have knowledge of such
matters, or (ii) taking any necessary steps to preserve rights against any
Person with respect to any Pledged Collateral.

 

(iii)                               The Collateral Agent shall be entitled to
rely upon any written notice, statement, certificate, order or other document
or any telephone message believed by it to be genuine and correct and to have
been signed, sent or made by the proper person, and, with respect to all
matters pertaining to this Agreement and its duties hereunder, upon advice of
counsel selected by it.

 

(iv)                              If any item of Pledged Collateral also
constitutes collateral granted to the Collateral Agent under any other deed of
trust, mortgage, security agreement, pledge or instrument of any type, in the
event of any conflict between the provisions hereof and the provisions of such
other deed of

 

27

 

trust,
mortgage, security agreement, pledge or instrument of any type in respect of
such collateral, the Collateral Agent, in its sole discretion, shall select
which provision or provisions shall control.

 

(v)                                 The Collateral Agent may rely on advice
of counsel as to whether any or all UCC financing statements of the Pledgors
need to be amended as a result of any of the changes described in Section 5.13(a) of
the Credit Agreement. If any Pledgor fails to provide information to the
Collateral Agent about such changes on a timely basis, the Collateral Agent
shall not be liable or responsible to any party for any failure to maintain a
perfected security interest in such Pledgor’s property constituting Pledged
Collateral, for which the Collateral Agent needed to have information relating
to such changes. The Collateral Agent shall have no duty to inquire about such
changes if any Pledgor does not inform the Collateral Agent of such
changes, the parties acknowledging and agreeing that it would not be feasible
or practical for the Collateral Agent to search for information on such changes
if such information is not provided by any Pledgor.

 

SECTION 12.2                    Collateral Agent May Perform; Collateral
Agent Appointed Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained in
this Agreement (including, without limitation, such Pledgor’s covenants to
(i) pay the premiums in respect of all required insurance policies
hereunder, (ii) pay and discharge any taxes, assessments and special
assessments, levies, fees and governmental charges imposed upon or assessed
against, and landlords’, carriers’, mechanics’, workmen’s, repairmen’s,
laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims
arising by operation of law against, all or any portion of the Pledged
Collateral, (iii) make repairs, (iv) discharge Liens or (v) pay
or perform any obligations of such Pledgor under any Pledged Collateral)
or if any representation or warranty on the part of any Pledgor contained
herein shall be breached, the Collateral Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy any such breach, and
may expend funds for such purpose; provided, however, that
the Collateral Agent shall in no event be bound to inquire into the validity of
any tax, Lien, imposition or other obligation which such Pledgor fails to pay
or perform as and when required hereby and which such Pledgor does not
contest in accordance with the provisions of the Credit Agreement. Any and all
amounts so expended by the Collateral Agent shall be paid by the Pledgors in
accordance with the provisions of the Credit Agreement. Neither the provisions
of this Section 12.2 nor any action taken by the Collateral Agent
pursuant to the provisions of this Section 12.2 shall prevent any
such failure to observe any covenant contained in this Agreement nor any breach
of representation or warranty from constituting an Event of Default. Each
Pledgor hereby appoints the Collateral Agent its attorney-in-fact, with full
power and authority in the place and stead of such Pledgor and in the name of
such Pledgor, or otherwise, from time to time in the Collateral Agent’s
discretion to take any action and to execute any instrument consistent with the
terms of the Credit Agreement and the other Collateral Documents which the
Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof (but the Collateral Agent shall not be obligated to and shall
have no liability to such Pledgor or any third party for failure to so do or
take action). The foregoing grant of authority is a power of attorney coupled
with an interest and such appointment shall be irrevocable for the term hereof.
Each Pledgor hereby ratifies all that such attorney shall lawfully do or cause
to be done by virtue hereof.

 

SECTION 12.3                    Continuing Security Interest; Assignment. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) be binding upon
the Pledgors, their respective successors and assigns and (ii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent and the other Secured Parties and each of their
respective successors, transferees and assigns. No other Persons (including,
without limitation, any other creditor of any Pledgor) shall have any interest
herein or any right or benefit with respect hereto. Without limiting the
generality of the foregoing clause (ii), any Secured Party may assign
or otherwise transfer any indebtedness held by it secured by this Agreement to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to such

 

28

 

Secured
Party, herein or otherwise, subject, however, to the provisions of the Credit
Agreement and, in the case of a Secured Party that is a party to a Hedging
Agreement, such Hedging Agreement. Each of the Pledgors agrees that its
obligations hereunder and the security interest created hereunder shall
continue to be effective or be reinstated, as applicable, if at any time
payment, or any part thereof, of all or any part of the Secured
Obligations is rescinded or must otherwise be restored by the Secured Parties
upon the bankruptcy or reorganization of any Pledgor or otherwise.

 

SECTION 12.4                    Termination; Release. When all the Secured Obligations have been
paid in full and the Commitments of the Lenders to make any Loan or to issue
any Letter of Credit under the Credit Agreement shall have expired or been
sooner terminated and all Letters of Credit have been terminated or cash
collateralized in accordance with the provisions of the Credit Agreement, this
Agreement shall terminate. Upon termination of this Agreement, the Pledged
Collateral shall be released from the Lien of this Agreement and the applicable
Subsidiary Guarantor shall be relieved of its obligations under this Agreement.
Upon termination hereof or any release of Pledged Collateral in accordance with
the provisions of the Credit Agreement, the Collateral Agent shall, upon the
request and at the sole cost and expense of the Pledgors, assign, transfer and
deliver to each Pledgor, against receipt and without recourse to or warranty by
the Collateral Agent, such of the Pledged Collateral to be released (in the
case of a release) as may be in possession of the Collateral Agent and as
shall not have been sold or otherwise applied pursuant to the terms hereof,
and, with respect to any other Pledged Collateral, proper documents and
instruments (including UCC-3 termination statements or releases) acknowledging
the termination hereof or the release of such Pledged Collateral, as the case
may be.

 

SECTION 12.5                    Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by any Pledgor therefrom, shall be effective unless the same shall be
made in accordance with the terms of the Credit Agreement and unless in writing
and signed by the Collateral Agent. Any amendment, modification or supplement
of or to any provision hereof, any waiver of any provision hereof and any consent
to any departure by any Pledgor from the terms of any provision hereof shall be
effective only in the specific instance and for the specific purpose for which
made or given. Except where notice is specifically required by this Agreement
or any other document evidencing the Secured Obligations, no notice to or
demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.

 

SECTION 12.6                    Notices. Unless otherwise provided herein or in the Credit Agreement, any
notice or other communication herein required or permitted to be given shall be
given in the manner and become effective as set forth in the Credit Agreement,
as to any Pledgor, addressed to it at the address of the Pledgor set forth in
the Credit Agreement and as to the Collateral Agent, addressed to it at the
address set forth in the Credit Agreement, or in each case at such other
address as shall be designated by such party in a written notice to the other
party complying as to delivery with the terms of this Section 12.6.

 

SECTION 12.7                    Governing Law; Consent to Jurisdiction and
Service of Process; Waiver of Jury Trial.

 

(a)                                  Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York, without
regard to conflicts of law principles that would require the application of the
laws of another jurisdiction.

 

(b)                                 Submission to Jurisdiction. Each Pledgor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of

 

29

 

New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to
the fullest extent permitted by applicable law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. Nothing in this Agreement
or any other Loan Document shall affect any right that the Administrative
Agent, the Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document
against any Loan Party or its properties in the courts of any jurisdiction.

 

(c)                                  Waiver of Venue. Each Pledgor hereby irrevocably and unconditionally
waives, to the fullest extent permitted by applicable Requirements of Law, 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 any
other Loan Document in any court referred to in Section 12.7(b).
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by applicable Requirements of Law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(d)                                 Service of Process. Each party hereto irrevocably consents to
service of process in any action or proceeding arising out of or relating to
any Loan Document, in the manner provided for notices (other than telecopier or
electronic communications) in Section 12.6. Nothing in this
Agreement or any other Loan Document will affect the right of any party hereto
to serve process in any other manner permitted by applicable Requirements of
Law.

 

(e)                                  Waiver of Jury Trial. Each Pledgor hereby waives, to the fullest
extent permitted by applicable Requirements of Law, any right it may have
to a trial by jury in any legal proceeding directly or indirectly arising out
of or relating to this Agreement, any other Loan Document or the transactions
contemplated hereby (whether based on contract, tort or any other theory). Each
party hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other parties hereto have been induced to
enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 12.7(e).

 

SECTION 12.8                    Severability of Provisions. Any provision hereof 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 provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

SECTION 12.9                    Execution in Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all
such counterparts together shall constitute one and the same agreement.

 

SECTION 12.10              Business Days. In the event any time period or any date
provided in this Agreement ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be
made on such Business Day, with the same force and effect as if made on such
other day.

 

SECTION 12.11              No Credit for Payment of Taxes or Imposition. Such Pledgor shall not be entitled to any
credit against the principal, premium, if any, or interest payable under the
Credit Agreement or the Loans, and such Pledgor shall not be entitled to any
credit against any other sums which

 

30

 

may become
payable under the terms thereof or hereof, by reason of the payment of any Tax
on the Pledged Collateral or any part thereof.

 

SECTION 12.12              No Claims Against Collateral Agent. Nothing contained in this Agreement shall
constitute any consent or request by the Collateral Agent, express or implied,
for the performance of any labor or services or the furnishing of any materials
or other property in respect of the Pledged Collateral or any
part thereof, nor as giving any Pledgor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the Collateral Agent in respect thereof or any
claim that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien hereof.

 

SECTION 12.13              Obligations Absolute. To the fullest extent permitted by
applicable Requirements of Law, all obligations of each Pledgor hereunder shall
be absolute and unconditional irrespective of:

 

(i)                                     any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the like
of any other Pledgor;

 

(ii)                                  any lack of validity or enforceability of
the Credit Agreement, any Hedging Agreement or any other Loan Document, or any
other agreement or instrument relating thereto;

 

(iii)                               any change in the time, manner or place
of payment of, or in any other term of, all or any of the Secured Obligations,
or any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any Hedging Agreement or any other Loan Document, or any
other agreement or instrument relating thereto;

 

(iv)                              any pledge, exchange, release or
non-perfection of any other collateral, or any release or amendment or waiver
of or consent to any departure from any guarantee, for all or any of the
Secured Obligations;

 

(v)                                 any exercise, non-exercise or waiver of
any right, remedy, power or privilege under or in respect hereof or of the
Credit Agreement, any Hedging Agreement or any other Loan Document except as
specifically set forth in a waiver granted pursuant to the provisions of Section 12.5
hereof; or

 

(vi)                              any other circumstances which might otherwise
constitute a defense available to, or a discharge of, any Pledgor.

 

ARTICLE XIII

SPECIAL PROVISIONS RELATING TO GAMING LAWS

 

SECTION 13.1                    Additional Provisions Relating to Gaming Laws
and Gaming Licenses.

 

(a)                                  Each Pledgor agrees that, upon the occurrence
of and during the continuance of an Event of Default and at the Collateral Agent’s
request, it will, and will cause each of its Subsidiaries to, promptly file
(and in any event within 5 Business Days) such applications for approval and
shall use commercially reasonable efforts to take all other and further actions
required by the Collateral Agent to

 

31

 

obtain
such approvals or consents of the applicable Gaming Authorities, and any other
Governmental Authorities with jurisdiction as are necessary for the Collateral
Agent, to continue operation of the businesses of the Borrower and its
Subsidiaries under the Gaming Licenses held by it, or to hold its interest in
any Person holding any such Gaming License related to the operations of any
Pledgor pursuant to the Gaming Laws. To enforce the provisions of this
Article XIII, the Collateral Agent is empowered to request the appointment
of a receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the applicable Gaming Authority and any other Governmental
Authorities with jurisdiction, authorization pursuant to the Gaming Laws to
continue operation of the businesses of each Pledgor and its Subsidiaries under
all necessary Gaming Licenses for the purpose of seeking a bona fide purchaser
of the businesses of each Pledgor and its Subsidiaries. Each Pledgor hereby
agrees to authorize, and to cause each of its Subsidiaries to authorize such an
authorization pursuant to the Gaming Laws to continue the operation of the
businesses of such Pledgor and its Subsidiaries upon the request of the
receiver so appointed and, if any Pledgor or any such Subsidiary shall refuse
to authorize the transfer, its approval may be required by the court. Upon
the occurrence and continuance of an Event of Default, each Pledgor shall further
use, and shall cause its Subsidiaries to use, commercially reasonable efforts
to assist in obtaining approval of the applicable Gaming Authority and any
other Governmental Authorities with jurisdiction, if required, for any action
or transactions contemplated by the Agreement or the Loan Documents, including,
preparation, execution, and filing with the applicable Gaming Authority and any
other Governmental Authorities with jurisdiction of any application or
applications for authorization pursuant to the Gaming Laws for the receiver to
continue the operation of the businesses of any Pledgor and its Subsidiaries
under any Gaming License or transfer of control necessary or appropriate under
the applicable Gaming Laws for approval of the transfer or assignment of any
portion of the Pledged Collateral. Each Pledgor acknowledges that the
authorization pursuant to the Gaming Laws for the receiver to continue the
operation of the businesses of any Pledgor and its Subsidiaries under the
Gaming Licenses or for a transfer of control is integral to the Collateral
Agent’s realization of the value of the Pledged Collateral, that there is no
adequate remedy at law for failure by each Pledgor to comply with the
provisions of this Article XIII and that such failure would not be
adequately compensable in damages, and therefore agrees that the agreements
contained in this Article XIII may be specifically enforced.

 

(b)                                 All rights, remedies, and powers provided in
this Agreement and the other Loan Documents may be exercised only to the
extent that the exercise thereof does not violate any applicable mandatory
provision of the Gaming Laws and all provisions of this Agreement and the other
Loan Documents are intended to be subject to all applicable mandatory
provisions of the Gaming Laws and to be limited solely to the extent necessary
to not render the provisions of this Agreement or the other Loan Documents
invalid or unenforceable, in whole or in part. The Collateral Agent will timely
apply for and receive all required approvals of the applicable Gaming Authority
for the sale or other disposition of gaming equipment regulated by the Gaming
Laws (including any such sale or disposition of gaming equipment consisting of
slot machines, gaming tables, cards, dice, gaming chips, player tracking
systems, and all other “gaming devices” (as such term or words of like import
referring thereto are defined in the Gaming Laws), and “associated equipment”
(as such term or words of like import referring thereto are defined in the
Gaming Laws).

 

SECTION 13.2                    Compliance with Gaming Laws(a)                . Notwithstanding anything to the contrary
contained herein or in any other Loan Documents, the Collateral Agent expressly
acknowledges and agrees that the exercise of its rights and remedies under this
Agreement is subject to the mandatory provisions of the Gaming Laws.

 

[REMAINDER OF THIS PAGE INTENTIONALLY
LEFT BLANK]

 

32

 

IN WITNESS WHEREOF, the Pledgors and the Collateral
Agent have caused this Agreement to be duly executed and delivered by their
duly authorized officers as of the date first above written.

 

	
   

  	
   

  	
  JACOBS ENTERTAINMENT, INC.,

  
	
   

  	
   

  	
   

  	
  as Borrower and Pledgor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  
	
   

  	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Its:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
  Stephen R. Roark, signing on behalf of the

  
	
   

  	
   

  	
  entities listed below in the capacity listed

  
	
   

  	
   

  	
  next to each respective entity:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BLACK HAWK GAMING & DEVELOPMENT COMPANY, INC., as its
  President

  
	
   

  	
   

  	
  GOLD DUST WEST CASINO, INC., as its Vice President

  
	
   

  	
   

  	
  GILPIN VENTURES, INC., as its President

  
	
   

  	
   

  	
  JALOU L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JALOU II INC., as its President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GILPIN HOTEL VENTURE

  
	
   

  	
   

  	
  By:

  	
  Gilpin Ventures, Inc., its partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  Black Hawk
  Gaming & Development Company, Inc., its partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BLACK HAWK/JACOBS ENTERTAINMENT, LLC

  
	
   

  	
   

  	
  By: Black Hawk Gaming & Development Company, Inc.

  
	
   

  	
   

  	
  Its:

  	
  Authorized Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Its:

  	
  President

  
																

 

33

 

	
   

  	
   

  	
  DIVERSIFIED OPPORTUNITIES GROUP LTD.

  
	
   

  	
   

  	
  By Jacobs Entertainment, Inc., its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACOBS DAKOTA WORKS, LLC

  
	
   

  	
   

  	
  By: Jacobs Entertainment, Inc., its Sole Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Ian M. Stewart

  
	
   

  	
   

  	
  Ian M. Stewart, signing on behalf of the entities listed below in the
  capacity listed next to each respective entity:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COLONIAL HOLDINGS, INC., as its President

  
	
   

  	
   

  	
  STANSLEY RACING CORP., as its President

  
	
   

  	
   

  	
  COLONIAL DOWNS, LLC, as its President

  
	
   

  	
   

  	
  VIRGINIA CONCESSIONS, LLC, as its Vice President

  
	
   

  	
   

  	
  MARYLAND-VIRGINIA RACING CIRCUIT, INC., as its President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COLONIAL DOWNS, L.P.

  
	
   

  	
   

  	
  By:

  	
  Stansley Racing Corp., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Ian M. Stewart

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Ian M. Stewart

  
	
   

  	
   

  	
   

  	
  Its:

  	
  President

  
										

 

34

 

	
   

  	
   

  	
   

  	
  /s/ Stan Guidroz

  
	
   

  	
   

  	
  Stan Guidroz, signing on behalf of the entities

  
	
   

  	
   

  	
  listed below in the capacity listed next to each respective entity:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WINNER’S CHOICE CASINO, INC., as its President

  
	
   

  	
   

  	
  JACE, INC., as its President

  
	
   

  	
   

  	
  FUEL STOP 36, INC., as its President

  
	
   

  	
   

  	
  HOUMA TRUCK PLAZA & CASINO, L.L.C., as its President and
  Manager

  
	
   

  	
   

  	
  JALOU – CASH’S L.L.C., its President and Manager

  
	
   

  	
   

  	
  LUCKY MAGNOLIA TRUCK STOP AND CASINO, L.L.C., as its President and
  Manager

  
	
   

  	
   

  	
  BAYOU VISTA TRUCK PLAZA AND CASINO, L.L.C., as its President and
  Manager

  
	
   

  	
   

  	
  RACELAND TRUCK PLAZA AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JRJ PROPERTIES, LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU OF LAROSE, LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU BREAUX BRIDGE, LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU EUNICE, LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU OF ST. MARTIN, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JALOU DIAMOND, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JALOU MAGIC, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JALOU OF VINTON, LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU OF VINTON-BINGO, LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU OF ST. HELENA, LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU OF JEFFERSON, LLC, as its President and Manager

  

 

35

 

	
   

  	
   

  	
  GUARANTOR AND PLEDGOR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACOBS PIÑON PLAZA ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  
	
   

  	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACOBS ELKO ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  
	
   

  	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
  CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Cassandra Droogan

  
	
   

  	
   

  	
  By:

  	
  Cassandra Droogan

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Doreen Barr

  
	
   

  	
   

  	
  By:

  	
  Doreen Barr

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

36EXHIBIT 4.6

 

CONTRIBUTION AGREEMENT

 

This Contribution Agreement (this “Agreement”) is entered into
as of June 16, 2006, by and among JACOBS ENTERTAINMENT, INC., a Delaware
corporation (the “Borrower”) and EACH UNDERSIGNED AFFILIATE OF THE
BORROWER (the “Guarantors”, and, together with the Borrower,
collectively, the “Contributors”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement, dated as of June    ,
2006, among the Borrower, the lenders from time to time party thereto (the “Lenders”),
Credit Suisse, Cayman Islands Branch, as administrative agent for the Lenders
(in such capacity, the “Administrative Agent”), Collateral Agent, and issuing
bank (in such capacity, the “Issuing Bank”), Wells Fargo Bank, National
Association, as Documentation Agent and Swingline Lender and CIT Lending
Services Corporation, as Documentation Agent (the “Credit Agreement”;
capitalized terms used but not otherwise defined in this Agreement shall have
the respective meanings set forth in the Credit Agreement), the Lenders and the
Issuing Bank have agreed to make certain loans and other financial
accommodations to the Contributors in an aggregate principal amount not to
exceed $100,000,000.00;

 

WHEREAS,
the Borrower is directly liable for amounts owing in respect of the Loans and
other obligations pursuant to the Credit Agreement and the Guarantors are
liable therefore as guarantors (collectively, the “Liabilities”);

 

WHEREAS,
the Contributors desire to set forth a fair and equitable arrangement among
themselves as to their respective contribution obligations with respect to the
Liabilities;

 

WHEREAS,
the Contributors desire to confirm that they shall each be responsible for
funding their Proportionate Share (as defined below) of the Liabilities when
they become due; and

 

WHEREAS,
each Contributor’s “Proportionate Share” is set forth opposite the
respective Contributor’s name on Exhibit A hereto.

 

NOW,
THEREFORE, in consideration of the premises and the mutual promises contained
herein the parties hereto agree as follows:

 

1.             Liabilities.
Each Contributor confirms that such Contributor shall be liable for, and
hereby agrees to pay when due, such Contributor’s Proportionate Share of any
Liability. In the event a Contributor shall make any payment in excess of its
Proportionate Share (an “Excess Payment”), then such Contributor shall
be entitled to contribution in the amount of the Excess Payment from each other
Contributor who pays less than such other Contributor’s Proportionate Share of
such Liability.

 

2.             Agreement to Pay
Enforcement Costs. In the event any Contributor shall not make any payment
required hereunder, the other Contributor(s) seeking such payment shall, in
addition to such payment, be entitled to reimbursement for all expenses
(including reasonable attorneys’ fees) incurred in connection with enforcing
such Contributor’s rights hereunder.

 

1

 

3.                                       Notice. All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if personally delivered (including by
an overnight or other delivery service) or mailed by registered or certified
first class mail, postage prepaid, delivered or addressed to the party to
whom such notice is to be given at such party’s respective address set forth
along with such party’s name on the signature page hereof or at such other
address as such party may specify by notice given as provided in this Section 3.

 

4.                                       Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof, and
supersedes all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof, and may not
be changed, modified, terminated, or discharged, in whole or in part, except by
a writing executed by all of the parties hereto. Except as otherwise provided
herein, no waiver of any of the provisions or conditions of this Agreement or
any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented to such waiver.

 

5.                                       Binding Effect; Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, heirs, administrators, executors, trustees, beneficiaries,
devisees, successors and permitted assigns. This Agreement shall not be
assignable, in whole or in part, by any party without the prior written consent
of the other parties hereto. Except as provided otherwise in this Section 5
nothing herein, express or implied, is intended or shall be construed to confer
upon or to give to any person, corporation, firm or legal entity other than the
parties hereto any rights, remedies or other benefits.

 

6.                                       Applicable Law; Construction. This Agreement shall be governed by, and
construed under and pursuant to, the laws of the State of New York without
regard to conflict of law principles that would require application of the law
of another jurisdiction.

 

7.                                       Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.

 

8.                                       Captions. The captions in this Agreement are included for purposes of
convenience only and shall not be considered a part of this Agreement in
construing or interpreting any provision hereof.

 

9.                                       Invalidity. The invalidity or unenforceability of any term or provision in this
Agreement, or the application of such term or provision to any person or
circumstances, shall not impair or affect the remainder of this Agreement and
its application to other persons and circumstances, and the remaining terms and
provisions hereof shall not be invalidated but shall remain in full force and
effect.

 

10.                                 Number. Whenever the context requires, words used in the singular shall be
construed to mean or include the plural and vice versa.

 

[Signature page follows]

 

2

 

IN
WITNESS WHEREOF, the undersigned Contributors have executed this Agreement as
of the date and year first above written.

 

	
   

  	
   

  	
  JACOBS ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  	
   

  
	
   

  	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Its:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACOBS PIÑON PLAZA
  ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  	
   

  
	
   

  	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACOBS ELKO ENTERTAINMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Jeffrey P. Jacobs

  	
   

  
	
   

  	
   

  	
  By:

  	
  Jeffrey P. Jacobs

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
   

  	
  Stephen R. Roark, signing
  on behalf of the

  
	
   

  	
   

  	
  entities listed below in
  the capacity listed

  
	
   

  	
   

  	
  next to each respective
  entity:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BLACK HAWK GAMING &
  DEVELOPMENT COMPANY, INC., as its President

  
	
   

  	
   

  	
  GOLD DUST WEST CASINO, INC.,
  as its Vice President

  
	
   

  	
   

  	
  GILPIN VENTURES, INC.,
  as its President

  
	
   

  	
   

  	
  JALOU L.L.C., as its
  President and Manager

  
	
   

  	
   

  	
  JALOU II INC., as its
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GILPIN HOTEL VENTURE

  
	
   

  	
   

  	
  By: Gilpin Ventures, Inc.,
  its partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Black Hawk Gaming &
  Development Company, Inc., its partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  Its:

  	
  President

  
											

 

3

 

	
   

  	
   

  	
  BLACK HAWK/JACOBS
  ENTERTAINMENT, LLC

  
	
   

  	
   

  	
  By: Black Hawk Gaming &
  Development Company, Inc.

  
	
   

  	
   

  	
  Its: Authorized Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DIVERSIFIED OPPORTUNITIES
  GROUP LTD.

  
	
   

  	
   

  	
  By Jacobs Entertainment, Inc.,
  its Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JACOBS DAKOTA WORKS, LLC

  
	
   

  	
   

  	
  By: Jacobs Entertainment, Inc.,
  its Sole Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  Its:

  	
  Chief Financial Officer

  
											

 

4

 

	
   

  	
   

  	
  /s/ Stan Guidroz

  	
   

  
	
   

  	
   

  	
  Stan Guidroz, signing on
  behalf of the entities

  
	
   

  	
   

  	
  listed below in the
  capacity listed next to each respective entity:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WINNER’S CHOICE CASINO, INC.,
  as its President

  
	
   

  	
   

  	
  JACE, INC., as its
  President

  
	
   

  	
   

  	
  FUEL STOP 36, INC.,
  as its President

  
	
   

  	
   

  	
  HOUMA TRUCK PLAZA &
  CASINO, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JALOU – CASH’S L.L.C., its
  President and Manager

  
	
   

  	
   

  	
  LUCKY MAGNOLIA TRUCK STOP
  AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  BAYOU VISTA TRUCK PLAZA
  AND CASINO, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  RACELAND TRUCK PLAZA AND
  CASINO, L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JRJ PROPERTIES, LLC, as
  its President and Manager

  
	
   

  	
   

  	
  JALOU OF LAROSE, LLC, as
  its President and Manager

  
	
   

  	
   

  	
  JALOU BREAUX BRIDGE, LLC,
  as its President and Manager

  
	
   

  	
   

  	
  JALOU EUNICE, LLC, as its
  President and Manager

  
	
   

  	
   

  	
  JALOU OF ST. MARTIN,
  L.L.C., as its President and Manager

  
	
   

  	
   

  	
  JALOU DIAMOND, L.L.C., as
  its President and Manager

  
	
   

  	
   

  	
  JALOU MAGIC, L.L.C., as
  its President and Manager

  
	
   

  	
   

  	
  JALOU OF VINTON, LLC, as
  its President and Manager

  
	
   

  	
   

  	
  JALOU OF VINTON-BINGO,
  LLC, as its President and Manager

  
	
   

  	
   

  	
  JALOU OF ST. HELENA, LLC,
  as its President and Manager

  
	
   

  	
   

  	
  JALOU OF JEFFERSON, LLC,
  as its President and Manager

  

 

5

 

	
   

  	
   

  	
  /s/ Ian M. Stewart

  	
   

  
	
   

  	
   

  	
  Ian M. Stewart, signing on
  behalf of the entities listed below in the capacity listed next to each
  respective entity:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COLONIAL HOLDINGS, INC.,
  as its President

  
	
   

  	
   

  	
  STANSLEY RACING CORP., as
  its President

  
	
   

  	
   

  	
  COLONIAL DOWNS, LLC, as
  its President

  
	
   

  	
   

  	
  VIRGINIA CONCESSIONS, LLC,
  as its Vice President

  
	
   

  	
   

  	
  MARYLAND-VIRGINIA RACING
  CIRCUIT, INC., as its President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COLONIAL DOWNS, L.P.

  
	
   

  	
   

  	
  By: Stansley Racing Corp.,
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian M. Stewart

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ian M. Stewart

  
	
   

  	
   

  	
  Its:

  	
  President

  
									

 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]