Contract analysis

Section 1.01 — Defined Terms As used in this Agreement, the following terms shall have the following meanings: "Agreement" means this Pledge and Security Agreement, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms. "Collateral" means, collectively, the Pledged Equity, the IP Collateral, and all Proceeds thereof, in each case as more particularly

Section 1.02 — UCC Terms Unless otherwise defined herein, terms that are defined in Article 9 of the UCC are used herein as so defined. Without limiting the foregoing, the terms "account," "chattel paper," "commercial tort claim," "deposit account," "document," "equipment," "general intangible," "goods," "instrument," "inventory," "investment property," "letter-of-credit right," "payment intangible," "proceeds," "sof

Section 1.03 — Rules of Construction Unless the context otherwise requires: (a) the terms "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular Article, Section, or provision hereof; (b) references to any Article, Section, Exhibit, or Schedule are references to Articles, Sections, Exhibits, or Schedules of this Agreement unless otherwise specified; (

ARTICLE II — GRANT OF SECURITY INTEREST

Section 2.01 — Pledge and Grant As security for the due and punctual payment and performance of all Secured Obligations, the Pledgor hereby pledges, assigns, and grants to the Secured Party, for the benefit of the Secured Party and the Purchaser, a continuing second-priority security interest in and lien upon all of the following property of the Pledgor, whether now owned or existing or hereafter acquired or arising

Section 2.02 — Second-Priority Nature of Security Interest The security interests and liens granted hereunder are expressly subordinated and junior in all respects to the Senior Liens held by or for the benefit of Cornerstone National Bank, N.A. as Administrative Agent under the Senior Credit Agreement. The relative priority, rights, obligations, and remedies of the Secured Party, on the one hand, and the Senior Agen

Section 2.03 — Exclusion of Real Property This Agreement does not create and shall not be construed to create any lien, mortgage, deed of trust, or other encumbrance on any real property of the Pledgor or any of its subsidiaries, including, without limitation, any gaming facility, casino, resort, or other real property used in connection with gaming operations. The parties acknowledge and agree that pledges, liens, a

ARTICLE III — REPRESENTATIONS AND WARRANTIES OF PLEDGOR The Pledgor hereby represents and warrants to the Secured Party as follows:

Section 3.01 — Organization and Good Standing (a) The Pledgor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada, and has all corporate power and authority necessary to own, lease, and operate its properties and to conduct its business as presently conducted. (b) RDW is a limited liability company duly organized, validly existing, and in good standing under t

Section 3.02 — Authorization; Binding Effect (a) The Pledgor has full corporate power and authority to execute, deliver, and perform its obligations under this Agreement and to grant the security interests and liens provided for herein. The execution, delivery, and performance of this Agreement by the Pledgor and the granting of the security interests and liens hereunder have been duly authorized by all necessary cor

Section 3.03 — Title to Collateral The Pledgor is the sole legal and beneficial owner of the Collateral, free and clear of all liens, claims, charges, encumbrances, security interests, and other interests of any kind or nature whatsoever (collectively, "Liens"), except for (i) the Senior Liens under the Senior Credit Agreement, and (ii) the security interests and liens created by this Agreement. No person or entity o

Section 3.04 — Pledged Equity (a) The Pledged Equity constitutes 100% of the issued and outstanding equity interests in each of RDW and RTM, and there are no other classes or series of equity interests of either RDW or RTM issued and outstanding as of the date hereof. (b) The membership interests in RDW have been duly authorized and validly issued in accordance with the operating agreement of RDW and applicable law.

Section 3.05 — Intellectual Property (a) The Pledgor owns or has valid rights to use all of the IP Collateral. The RedBet IP was developed internally by Redstone Digital Wagering, LLC and assigned to, or is otherwise owned by, the Pledgor, and no third party has any ownership interest in the RedBet IP. (b) The USPTO trademark application for the "RedBet" mark was filed in August 2022 and remains pending as of the dat

Section 3.06 — No Conflicts The execution, delivery, and performance by the Pledgor of this Agreement and the granting of the security interests and liens provided for herein will not (i) violate or conflict with any provision of the certificate of incorporation, bylaws, or other organizational documents of the Pledgor, RDW, or RTM; (ii) breach, or constitute a default (or an event which, with the giving of notice or

Section 3.07 — Consents No consent, approval, authorization, or order of, or filing, registration, or qualification with, any governmental authority or any other person or entity is required in connection with the execution, delivery, or performance of this Agreement by the Pledgor, or the granting of the security interests and liens provided for herein, except: (a) the filing of one or more UCC-1 financing statement

Section 3.08 — Location of Pledgor The Pledgor's chief executive office and the location of its books and records relating to the Collateral is at 4250 South Decatur Boulevard, Suite 1100, Las Vegas, NV 89103. The Pledgor is organized and incorporated in the State of Nevada. For purposes of perfection of the security interests granted hereunder under the UCC, UCC financing statements should be filed with the Office o

Section 3.09 — Gaming Regulatory Matters (a) The Pledgor holds active and valid gaming licenses, permits, and approvals from the Nevada Gaming Control Board (License No. NGC-2019-00847), the Arizona Department of Gaming, and the New Mexico Gaming Control Board, each of which is in full force and effect as of the date hereof. No proceeding is pending or, to the Pledgor's knowledge, threatened to suspend, revoke, or ma

ARTICLE IV — COVENANTS OF PLEDGOR The Pledgor hereby covenants and agrees with the Secured Party as follows:

Section 4.01 — Further Assurances; Financing Statements (a) The Pledgor shall execute and deliver, or cause to be executed and delivered, all financing statements (including, without limitation, UCC-1 financing statements), continuation statements, amendments, assignments, and other documents, instruments, and agreements as the Secured Party may from time to time reasonably request in order to perfect, maintain, and

Section 4.02 — Maintenance of Collateral (a) The Pledgor shall maintain the Pledged Equity free and clear of all Liens, other than the Senior Liens and the security interests and liens created hereunder, and shall not create, incur, assume, or permit to exist any Lien on or with respect to any of the Collateral, other than the Senior Liens and the security interests and liens created hereunder. (b) The Pledgor shall

Section 4.03 — Preservation of IP Collateral (a) The Pledgor shall take all commercially reasonable actions necessary to prosecute the pending USPTO trademark application for the "RedBet" mark, including timely responding to any office actions, oppositions, or other proceedings before the USPTO, and shall keep the Secured Party reasonably informed of the status of such application. (b) The Pledgor shall protect and d

Section 4.04 — Compliance with Gaming Regulations (a) The Pledgor shall maintain in full force and effect all gaming licenses, permits, approvals, and authorizations necessary for the conduct of its business and the business of its subsidiaries, including, without limitation, licenses from the Nevada Gaming Control Board (License No. NGC-2019-00847), the Arizona Department of Gaming, and the New Mexico Gaming Control

Section 4.05 — Restrictions on Subsidiary Indebtedness and Liens The Pledgor shall not permit RDW or RTM to incur, create, assume, or suffer to exist any indebtedness (whether for borrowed money or otherwise) or to create, incur, assume, or permit to exist any Lien on any of the assets or properties of RDW or RTM, in each case without the prior written consent of the Secured Party, except (i) as permitted under the N

Section 4.06 — Books and Records; Inspection (a) The Pledgor shall maintain accurate and complete books and records relating to the Collateral at its principal office at 4250 South Decatur Boulevard, Suite 1100, Las Vegas, NV 89103, or at such other location as may be designated by the Pledgor by prior written notice to the Secured Party. (b) Upon reasonable prior written notice (which shall not be less than five (5)

Section 4.07 — Notices The Pledgor shall promptly (and in any event within five (5) business days) notify the Secured Party in writing of: (a) any event, occurrence, or circumstance that has had, or could reasonably be expected to have, a material adverse effect on the value of the Collateral or the perfection, priority, or enforceability of the Secured Party's security interest therein; (b) any change in the Pledgor

Section 4.08 — Payment of Taxes The Pledgor shall pay and discharge, or cause to be paid and discharged, all taxes, assessments, governmental charges, and levies imposed on or with respect to the Collateral or any part thereof as the same become due, before the same shall become delinquent or in default; provided, however, that the Pledgor shall not be required to pay or discharge any such tax, assessment, charge, or

ARTICLE V — VOTING RIGHTS; DIVIDENDS

Section 5.01 — Voting Rights Prior to Event of Default Unless and until an Event of Default shall have occurred and be continuing, the Pledgor shall be entitled to exercise all voting, consent, and other rights and powers pertaining to the Pledged Equity for all purposes not inconsistent with the terms of this Agreement, the Note Purchase Agreement, the Intercreditor Agreement, or any other Transaction Document; prov

Section 5.02 — Dividends and Distributions Prior to Event of Default Unless and until an Event of Default shall have occurred and be continuing, the Pledgor shall be entitled to receive and retain all cash dividends, distributions, and other payments made on or with respect to the Pledged Equity, subject in all respects to the restrictions on restricted payments, distributions, and dividends set forth in the Note Pur

Section 5.03 — Rights Upon Event of Default Upon the occurrence and during the continuance of an Event of Default: (a) the Secured Party shall have the right, subject to the terms of the Intercreditor Agreement and subject to obtaining all required gaming regulatory approvals from the Nevada Gaming Control Board, the Arizona Department of Gaming, the New Mexico Gaming Control Board, and any other applicable gaming re

Section 6.01 — Rights Upon Event of Default Upon the occurrence and during the continuance of an Event of Default, the Secured Party shall have, in addition to all other rights and remedies granted to it under this Agreement and under the Note Purchase Agreement and the other Transaction Documents, all of the rights and remedies of a secured party under the UCC and under all other applicable law, including, without l

Section 6.02 — Subordination to Senior Liens; Intercreditor Agreement Limitations All rights and remedies of the Secured Party under this Agreement are subject in all respects to the terms and conditions of the Intercreditor Agreement, including, without limitation: (a) standstill periods during which the Secured Party may not exercise remedies against the Collateral or take enforcement action with respect to the Sec

Section 6.03 — Gaming Regulatory Limitations on Remedies (a) The Secured Party acknowledges and agrees that any foreclosure upon, sale, transfer, assignment, or other disposition of the Pledged Equity upon the exercise of remedies hereunder is subject to the requirement that the proposed transferee (including, without limitation, the Secured Party or any affiliate thereof, in the event of a credit bid or direct acqui

Section 6.04 — Disposition of IP Collateral (a) Upon the exercise of remedies hereunder with respect to the IP Collateral, the Secured Party may sell, assign, license, sublicense, or otherwise dispose of or realize upon the RedBet IP and all other IP Collateral, subject to the terms of the Intercreditor Agreement and applicable federal and state intellectual property laws, including, without limitation, the Lanham Ac

Section 6.05 — Application of Proceeds The proceeds of any sale, disposition, or other realization upon the Collateral, and any cash or other amounts held by the Secured Party or the Collateral Agent in respect of the Collateral, shall be applied by the Secured Party (or by the Collateral Agent at the direction of the Secured Party) in the following order of priority: First, to the payment of all reasonable costs and

Section 6.06 — Collateral Agent (a) Dralvecen Title & Escrow Co. shall serve as collateral agent for the Secured Party in connection with the custody, control, and disposition of the Collateral, in accordance with the terms to be set forth in a separate Collateral Agency Agreement to be entered into among the Secured Party, the Pledgor, and Dralvecen Title & Escrow Co. prior to or concurrently with the closing of the

Section 6.07 — Pledgor's Liability The Pledgor shall remain liable for any deficiency remaining after the sale, disposition, or other realization upon the Collateral. Any deficiency remaining after the application of proceeds in accordance with Section 6.05 shall constitute an unsecured obligation of the Pledgor to the Secured Party and the Purchaser and shall be payable upon demand.

ARTICLE VII — COLLATERAL AGENT PROVISIONS

Section 7.01 — Appointment of Collateral Agent The Secured Party hereby appoints Dralvecen Title & Escrow Co. as Collateral Agent to hold any certificated securities, instruments, stock certificates, membership interest certificates, documents of title, or other tangible property constituting or evidencing the Collateral that is delivered to the Collateral Agent pursuant to this Agreement. The Pledgor hereby acknowle

Section 7.02 — Duties of Collateral Agent (a) The Collateral Agent shall hold the Collateral delivered to it hereunder in trust for the exclusive benefit of the Secured Party, and shall release the same only upon the written instruction of the Secured Party or as otherwise expressly provided in this Agreement or the Collateral Agency Agreement. (b) The Collateral Agent shall have no duty to exercise any discretion or

Section 7.03 — Standard of Care; Exculpation (a) The Collateral Agent shall exercise reasonable care in the custody and preservation of any Collateral in its possession, which shall be deemed to include, without limitation, taking such steps to preserve rights in the Collateral against prior parties as may be required by the UCC. (b) The Collateral Agent shall not be liable for any loss, damage, diminution in value,

Section 7.04 — Compensation and Expenses The Collateral Agent shall be entitled to reasonable compensation for its services and reimbursement of all reasonable out-of-pocket expenses (including, without limitation, the fees and expenses of legal counsel) incurred in connection with the performance of its duties hereunder, in each case as agreed upon in the separate Collateral Agency Agreement. All such compensation a

ARTICLE VIII — INTERCREDITOR PROVISIONS

Section 8.01 — Acknowledgment of Senior Liens (a) The Secured Party acknowledges and agrees that the Collateral is also subject to the Senior Liens under the Senior Credit Agreement, which provides for a $200,000,000 Senior Secured Revolving Credit Facility with Cornerstone National Bank, N.A. as Administrative Agent and the lenders party thereto, of which approximately $142,000,000 was drawn and outstanding as of Se

Section 8.02 — Consent Requirement Under Senior Credit Agreement (a) The parties acknowledge that Section 7.03(b) of the Senior Credit Agreement prohibits the incurrence by the Pledgor of subordinated indebtedness in an aggregate principal amount exceeding $10,000,000 without the prior written consent of the Administrative Agent (Cornerstone National Bank, N.A.) and the execution of an intercreditor agreement in form