Exhibit (2)
November 12, 2003
All Capital LLC
0000 X. Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Re: Shares Pledge Agreement
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Gentlemen:
This letter sets forth the agreement ("Agreement") between Xxxxxxxx
Xxxxx ("Xxxxx") and All Capital LLC with respect to the grant by Xxxxx to All
Capital of a security interest in and to, and pledge of, the Deposit (as
defined) to secure payment of the Obligation (as defined), and sets forth the
entire agreement between the parties hereto with respect to the subject
matter herein contained. For purposes of this Agreement the terms: (a)
"Deposit" shall be and mean stock certificate(s) evidencing 450,000 shares of
the Common Stock of Mid-State Raceway, Inc. (and the shares thereby
evidenced) endorsed in blank or evidenced by duly executed stock assignment
powers; and (b) "Obligation" shall be and mean that certain promissory note
of even date herewith executed by Xxxxx in favor of All Capital in the
principal amount of $1,350,000.00 and the debt evidenced thereby.
In consideration of the sum of One ($1.00) Dollar and other good and
valuable consideration each to the other in hand paid, the receipt and
sufficiency of which is hereby jointly acknowledged, the parties hereto do
hereby agree as follows:
1. Xxxxx has this date exercised a warrant to purchase 450,000 shares of
the Common Stock of Mid-State Raceway, Inc. As promptly after the date
hereof as shall be possible Xxxxx shall deliver the Deposit to All Capital;
which Deposit shall be retained and disposed of by All Capital in accordance
with the provisions of this Agreement.
2. Subject to the terms and conditions of this Agreement, Xxxxx does
hereby pledge, hypothecate and give and grant unto All Capital a security
interest in and to the Deposit as collateral security to secure the full and
punctual payment of the Obligation. All Capital shall have and exercise,
with respect to the Deposit, all of the rights and remedies of a secured
creditor pursuant to the Uniform Commercial Code (the "Code") as adopted by
the State of Nevada (as from time to time amended). To the extent of any
inconsistency between the Code and this Agreement, the provisions of this
Agreement shall prevail and be paramount. Without limiting the generality of
the foregoing, upon the occurrence of an Event of Default (as defined) All
Capital may:
(a) vote all or any of the securities forming the Deposit and give
all consents, waivers and ratifications with respect thereto and otherwise
act with respect thereto as though All Capital were the outright owner
thereof;
(b) exercise any and all rights of collection, conversion or
exchange, and any and all other rights, privileges, options or powers of
Xxxxx pertaining or relating to the exercise of any such rights, privileges,
options or powers or to sell or otherwise realize upon any of the Deposit, as
hereinafter authorized, or to preserve the same (except as otherwise provided
by law), and All Capital shall not be responsible for any failure to do so or
delay in so doing;
(c) (i) sell, assign and deliver the Deposit at a private sale or
public auction for cash, for credit or for other property, for immediate or
future delivery, and our such price and on such terms as All Capital in its
discretion may determine providing that such sale shall be an arm's length
commercially reasonable transaction. At any public or private sale All
Capital may bid for and purchase the Deposit. All Capital is authorized, at
any such sale, if it deems it advisable so to do, to restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing for their own account, for investment only, and not with a view to
the distribution or sale of any of the Deposit. Upon any such sale, All
Capital shall have the right to deliver, assign and transfer to the purchaser
thereof, the Deposit so sold free from any rights, (equitable or otherwise)
of Xxxxx:
(ii) All Capital shall give Xxxxx not less than ten days' written
notice of intention to make any such public or private sale. Any such public
sale shall be held at such time or times within ordinary business hours and
at such place or places as All Capital may fix in the notice of such sale.
All Capital may without notice or publication adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at
the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of the
Deposit on credit or for future delivery, the Deposit so sold may be retained
by All Capital until the selling price is paid by the purchaser thereof, but
All Capital shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Deposit so sold and, in case of any such
failure, such Deposit may again be sold upon like notice. All Capital,
however, instead of exercising the power or sale herein conferred upon it,
may proceed by a suit or suits of law or in equity to foreclose this
Agreement and sell the Deposit, or any portion thereof under a judgment or
decree of a court or courts of competent jurisdiction; Xxxxx having been
given due notice of all such actions.
(iii) The proceeds of the sale of the Deposit shall be applied
as follows:
(A) To the payment of costs and expenses of sale,
including reasonable attorney's fees of All Capital's counsel;
(B) To the payment of the Obligation;
(C) To the extent of the remainder, if any, to Xxxxx.
(d) For purposes of this Agreement the term "Event of
Default" shall be and mean the uncured default by Xxxxx in the payment of the
Obligation or any part thereof.
4. This letter sets forth the entire agreement among the parties hereto
with respect to the subject matter herein contained: shall be governed in
accordance with the laws of the State of Nevada; cannot be altered, amended,
modified, terminated or rescinded except by a writing executed by all of the
parties hereto; and shall inure to the benefit of and be binding upon the
parties hereto and their respective successors, transferees, heirs, assigns
and beneficiaries.
If the foregoing properly sets forth our agreement kindly execute a copy
of this letter where indicated below and return the same to the undersigned.
Very truly yours,
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx, individually
All Capital LLC
/s/ Xxxxx Xxxxx
By----------------------------
Xxxxx Xxxxx, Manager
