Exhibit 10.2
EXECUTION COPY
CASH COLLATERAL AND DISBURSEMENT
AGREEMENT
among
U.S. BANK NATIONAL ASSOCIATION,
as the Disbursement Agent,
U.S. BANK NATIONAL ASSOCIATION,
as the Trustee,
and
DIAMOND JO WORTH, LLC
and
DIAMOND JO WORTH CORP.,
together, as the Issuers
Dated as of July 19, 2005
TABLE OF CONTENTS
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ii
EXHIBITS
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Exhibit A
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Form of Initial Disbursements
Certificate
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Exhibit B-1
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Form of Issuers’ Closing
Certificate
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Attachment A to Exhibit B-1
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Form of Issuers’ Officer’s
Certificate to Issuers’ Closing Certificate
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Exhibit B-2
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Form of Disbursement Agent’s Closing
Certification
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Exhibit B-3
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Form of Trustee’s Closing
Certification
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Exhibit C
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Form of Interest Disbursement
Request
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Exhibit D-1
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Form of Construction Disbursement Request
and Certificate
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Attachment A to Exhibit D-1
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Form of Issuers’ Officer’s
Certificate to Construction Disbursement Request and
Certificate
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Exhibit D-2
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Form of Advance Disbursement Request and
Certificate
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Attachment A to Exhibit D-2
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Form of Issuers’ Officer’s
Certificate to Advance Disbursement Request and
Certificate
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Exhibit D-3
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Form of First Disbursement Officer’s
Certificate
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Exhibit E
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Form of Construction Disbursement Budget
Amendment Certificate
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Exhibit F-1
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Form of Contract Amendment
Certificate
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Exhibit F-2
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Form of Additional Contract
Certificate
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Exhibit G
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Form of Consent to Collateral Assignment of
Contract
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Exhibit H
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Form of Pro Forma Title Policy
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Exhibit I
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Property Legal Description
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CASH COLLATERAL AND DISBURSEMENT
AGREEMENT
THIS CASH COLLATERAL AND
DISBURSEMENT AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this “ Agreement ”)
is dated as of July 19, 2005, by and among U.S. Bank National
Association, having an office at 60 Livingston Avenue, St. Paul,
Minnesota 55107, as trustee (together with its successors and
assigns, the “ Trustee ”) under the Indenture
(as defined below), U.S. Bank National Association, as disbursement
agent (together with its successors and assigns, the “
Disbursement Agent ”), Diamond Jo Worth, LLC, a
Delaware limited liability company (the “ Company
”), and Diamond Jo Worth Corp., a Delaware corporation
(“ DJW Corp. ” and, together with the Company,
the “Issuers” ).
R E C I T A L S
A.
Notes . The Issuers have issued Forty Million Dollars
($40,000,000) in aggregate principal amount of their 11% Senior
Secured Notes due 2012 (the “ Original Notes ”
and, together with any additional Notes issued under the Indenture
and any new notes issued in exchange for the Original Notes or such
additional Notes, the “ Notes ”) concurrently
herewith. The Notes have been issued pursuant to the
provisions of an Indenture (as amended, supplemented or otherwise
modified from time to time, the “ Indenture ”)
dated the date hereof, among the Issuers and the Trustee, on behalf
of itself and the holders of the Notes. Net proceeds from the
issuance of Notes will be disbursed as follows:
(a) Thirty Four Million Two Hundred Thousand Dollars
($34,200,000.00) (the “ Construction Proceeds ”)
will be deposited contemporaneously with the execution of this
Agreement into Account No. 790235001 held at the Disbursement
Agent (said account, or any substitute account selected in
accordance with the terms of this Agreement, is referred to herein
as the “ Construction Disbursement Account ”),
to be maintained by the Disbursement Agent pursuant to
Section 2 of this Agreement; and (b) Three Million
Three Hundred Thousand Dollars ($3,300,000) (the “
Interest Reserve Proceeds ,” which, together with the
Construction Proceeds shall be referred to herein as the “
Proceeds ”), will be deposited contemporaneously with
the execution of this Agreement into Account No. 790235002,
held at the Disbursement Agent (said account, or any substitute
account selected in accordance with the terms of this Agreement, is
referred to herein as the “ Interest Reserve Account
”), to be maintained by the Disbursement Agent pursuant to
Section 2 of this Agreement.
B.
Collateral and Collateral Assignment . As security for
their obligations under the Notes and the Indenture, the Issuers
have granted security interests to the Trustee, on behalf of itself
and the holders of Notes, in certain assets and have collaterally
assigned certain contracts to the Trustee. As further
security for their obligations under the Notes and the Indenture,
the Issuers also have granted pursuant to the Pledge Agreement a
security interest to the Trustee, on behalf of itself and the
holders of the Notes, in all of the Issuers’ right, title and
interest in the Construction Disbursement Account, the Interest
Reserve Account and the Disbursed Funds Account (as defined herein)
and any Proceeds or other amounts held in any such
accounts.
C.
Purpose . The parties intend that portions of the
Proceeds and the other amounts deposited from time to time in the
Construction Disbursement Account be used for the design,
development, construction, equipping and operation of the Facility
(as defined herein), all in accordance with this Agreement and the
Indenture. The parties have entered into this
Agreement
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in order to set forth the conditions upon which,
and the manner in which, funds will be disbursed in order to permit
the Company to design, develop, construct, equip and operate the
Facility and to pay certain Debt Financing Costs when due and
payable under the Notes.
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1.
Definitions .
1.1
Defined Terms . In this
Agreement (including the preamble and Recitals), the terms defined
in this Section 1 shall have the meanings herein
specified, such definitions to be equally applicable to both the
singular and plural forms of any of the terms
defined:
“ Accounts ”
means the Interest Reserve Account and the Construction
Disbursement Account.
“ Additional Contract
Certificate ” means the Officer’s Certificate of
the Issuers in the form of Exhibit F-2 attached
hereto.
“ Additional Revenue
” means revenue (including, without limitation, investment
income (loss), less any losses or costs associated therewith,
earned on amounts in the Construction Disbursement Account)
generated by the Issuers (other than from disposition of its
assets), but only to the extent that such revenue is held by the
Issuers, free and clear of any claims of any other parties
whatsoever, other than claims of the Trustee and holders of the
Notes; provided , however , that as of any date of
measurement, Additional Revenue also shall include investment
income (loss), less any losses or costs associated therewith, which
the Issuers reasonably determine (with the reasonable concurrence
of the Disbursement Agent) will be earned on funds in the
Construction Disbursement Account through the reasonably
anticipated date of Opening, taking into account the current and
future reasonably anticipated rates of return on Cash Equivalents
in the Construction Disbursement Account and the reasonably
anticipated times and amounts of draws therefrom for the payment of
Construction Expenses or in connection with permitted amendments to
the Construction Disbursement Budget (as applicable).
“ Advance Disbursements
” means a disbursement from the Construction Disbursement
Account to the Issuers pursuant to Section 7.3 and in
accordance with the Construction Disbursement Budget,
notwithstanding the fact that not all certifications and lien
releases have been obtained and other disbursement conditions have
not been satisfied; provided , however , that the
aggregate amount of Advance Disbursements outstanding at any time
shall not exceed One Million Five Hundred Thousand Dollars
($1,500,000).
“ Advance Disbursement
Certificate ” means an Officer’s Certificate from
the Issuers in the form of Exhibit D-2 attached
hereto.
“ Advance Disbursement
Officer’s Certificate ” has the meaning set forth
in Section 6.2.3 .
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“ Affiliate ” has
the meaning given in the Indenture.
“ Agreed Permits
” has the meaning given in Attachment A to
Exhibit B-1 attached hereto.
“ Applicable Permits
” means the national, state and local license authorizations,
certifications, filings, recordings, permits or other approvals
with or of any Governmental Instrumentality, including, without
limitation, environmental, construction, operating or occupancy
permits and any agreements, consents or approvals that are required
for the design, construction, operation or maintenance of the
Facility in accordance with the Operative Documents. Without
limiting the foregoing, Applicable Permits also include
Construction Period permits for temporary construction utilities
and temporary sanitary facilities, dump permits, road use permits,
permits related to the use, storage and disposal of hazardous
materials introduced to the Property for or in connection with the
performance of the design, construction, operation or maintenance
of the Facility, and permits issued pursuant to any building,
mechanical, electrical, plumbing or similar codes.
“ Architect ”
means Kittrell Garlock and Associates, AIA, Ltd., d/b/a KGA
Architecture, and its successors identified by notice from the
Company to the Disbursement Agent.
“ Architect Agreement
” means the Standard Form of Agreement Between Owner and
Architect (AIA Document B141-1997 edition) for the Facility,
executed by the Architect and the Company, dated March 1, 2005
(as amended, modified or supplemented from time to time in
accordance with this Agreement).
“ Available Funds
” means, at any given time, the sum of (a) the balance
of the Construction Disbursement Account (taking into account any
additional amounts deposited by the Issuers in the Construction
Disbursement Account pursuant to clause (ii) of
Section 7.6 ), (b) so long as there is no Default
or Event of Default, Additional Revenue expected to be earned from
and after such time, (c) the net proceeds of any FF&E
Financing that the Issuers have incurred or reasonably expect to
incur as permitted under the Indenture, less all amounts previously
drawn upon from such FF&E Financing, and (d) the net
proceeds available for loan under any Senior Credit Facility that
the Issuers enter into or reasonably expect to enter into as
permitted under the Indenture, less all amounts previously drawn
upon from such Senior Credit Facility.
“ Business Day ”
means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in New York, New York, are
authorized or obligated by law or executive order to
close.
“ Cash Equivalents
” has the meaning given in the Indenture.
“ Collateral ”
has the meaning given in the Indenture.
“ Construction Contract
” means the Standard Form of Agreement Between Owner and
Contractor (AIA Document A111-1997 edition) and General Conditions
of the Contract for Construction (AIA Document A201-1997 edition)
for the construction of the Facility, executed
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by the General Contractor and the Company, dated
June 6, 2005 (as amended, modified or supplemented from time
to time in accordance with this Agreement).
“ Construction Disbursement
Budget ” means the Initial Construction Disbursement
Budget, as the same may be amended, modified or supplemented from
time to time in accordance with this Agreement.
“ Construction Disbursement
Budget Amendment Certificate ” means an Officer’s
Certificate from the Issuers in the form of Exhibit E
attached hereto.
“ Construction Disbursement
Certificate ” means an Officer’s Certificate from
the Issuers in the form of Exhibit D-1 attached
hereto.
“ Construction Disbursement
Officer’s Certificate ” has the meaning set forth
in Section 6.2.2 .
“ Construction
Documents ” means the Construction Contract, the
Architect Agreement, and any other Contract entered into by the
Company on, prior to or after the Issue Date with respect to
construction of all or any portion of the Facility (other than the
Financing Agreements and the documents evidencing or securing the
FF&E Financing or a Senior Credit Facility), as the same may be
amended, modified or supplemented from time to time as permitted
thereunder and in accordance with this Agreement.
“ Construction Expenses
” means expenses incurred in connection with the design,
development, engineering, construction, installation or equipping
of the Facility in accordance with the Construction Disbursement
Budget, excluding, however (a) any such expenses paid on or
prior to the Issue Date, (b) any Debt Financing Costs and
(c) any Issue Fees and Expenses.
“ Construction Period
” means the period from the Issue Date to and including the
date of the Opening.
“ Contract
” means a contract to which the Company is a party pertaining
to the design, development, engineering, installation or
construction of all or any portion of the Facility, including,
without limitation, any contract, license and performance and
payment bond or guarantee, if any; provided , however
, such term shall not include any of the Subcontracts, the
Subcontractors, the Financing Agreements or any of the documents
evidencing or securing the FF&E Financing or any Senior Credit
Facility.
“ Contract Amendment
Certificate ” is an Officer’s Certificate from the
Issuers in the form of Exhibit F-1 attached
hereto.
“ Contractor ”
means a party to a Contract other than the Company.
“ Control Account
Agreement ” means one or more Deposit Account Control
Agreements dated as of even date herewith by and among the Trustee,
the Issuers, and the institution at which the Disbursed Funds
Account is held.
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“ Debt Financing Costs
” means all principal, interest, premium fees and other
amounts payable or accrued from time to time under the
Notes.
“ Default ” means
any event, omission or failure of a condition that is, or with the
passage of time or the giving of notice or both could be, an Event
of Default.
“ Disbursed Funds
Account ” means Account No. 2013837 and Account
No. 201162, each held at American Trust (ABA Number
073900522), in the name of the Company, or any substitute account
selected by the Issuers in accordance with this Agreement, which
account shall be funded from disbursements from the Construction
Disbursement Account pursuant to this Agreement and shall be
pledged as collateral to the Trustee pursuant to the Control
Account Agreement, for the benefit of itself and the holders of the
Notes, and, with respect to at least one such account, from which
the Company shall have general check writing authority.
“ Disbursement ”
means any disbursement of funds pursuant to a Disbursement
Request.
“ Disbursement
Agent’s Closing Certificate ” is an Officer’s
Certificate from the Disbursement Agent in the form of
Exhibit B-2 attached hereto.
“ Disbursement Request
” means any Initial Disbursement Request, Construction
Disbursement Request, Interest Disbursement Request, Advance
Disbursement Request and any other request for disbursement from
the Accounts made pursuant to this Agreement.
“ Facility ”
means the design, development, construction, equipping and
commencement of operations of the improvements described in the
Construction Documents and in accordance therewith.
“ Facility Cost
Schedule ” means an itemized schedule in the form of
Schedule 1 to the Construction Disbursement
Officer’s Certificate, a form of which is attached hereto as
Schedule 1 to Attachment A to Exhibit D-1
.
“ FF&E
Financing ” has the meaning given in the
Indenture.
“ Final Plans ”
means Plans which (a) have received all required approvals
from all Governmental Instrumentalities required to approve such
Plans prior to commencement of that portion of the Facility
reflected in such Plans; (b) contain sufficient specificity to
permit the completion of the work or improvement reflected in such
Plans and collectively contain sufficient specificity to permit
completion of the Facility; (c) are consistent with
constructing the Facility to include the Minimum Facilities;
(d) have been signed by an architect licensed to practice
architecture in the State of Iowa; and (e) have been delivered
to the Disbursement Agent.
“ Financing Agreements
” means, collectively, this Agreement, the Indenture, the
Security Documents, the Notes and any other loan or security
agreement entered into on, prior to or after the Issue Date with or
for the benefit of the Trustee to finance all or any portion of the
Facility, as each of the same may be amended, modified or
supplemented from time to time as permitted thereunder and in
accordance with the terms and conditions of this
Agreement.
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“ First Disbursement
Request ” means the first Disbursement Request (other
than an Interest Disbursement Request) made pursuant to this
Agreement.
“ First Disbursement
Officer’s Certificate ” has the meaning set forth
in Section 6.2.4 .
“ Gaming Laws ”
has the meaning given in the Indenture.
“ Gaming Licenses
” has the meaning given in the Indenture.
“ General Contractor
” means Henkel Construction.
“ Governmental
Instrumentality ” means any national, state or local
government (whether domestic or foreign), any political subdivision
thereof or any other governmental, quasi-governmental, judicial,
public or statutory instrumentality, authority, body, agency,
bureau or entity (including any Gaming Authority, any zoning
authority, the FDIC, the Comptroller of the Currency or the Federal
Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
“ Hard Costs ”
means the costs and expenses in respect of supplying goods,
materials and labor for the construction of improvements relating
to the Facility or other amounts payable pursuant to the
Construction Documents.
“ Initial Construction
Disbursement Budget ” means the itemized schedule, in the
form attached as Exhibit 1 to the First Disbursement
Officer’s Certificate, setting forth on a line item-basis all
of the costs which the Company anticipates to expend from and after
the Issue Date in connection with the design, development,
engineering, construction, installation, equipping and commencement
of operations of the Facility, including all Construction Expenses
but excluding all Debt Financing Costs, which costs in the
aggregate shall not exceed the Available Funds.
“ Initial Disbursements
Certificate ” means an Officer’s Certificate from
the Issuers in the form attached hereto as Exhibit A
.
“ Interest Disbursement
Certificate ” means an Officer’s Certificate from
the Issuers in the form attached hereto as Exhibit C
.
“ Interest Payment Date
” has the meaning given in the Notes.
“ Issue Fees and
Expenses ” means fees and expenses incurred on or before
the Issue Date by the Issuers or for which the Issuers are liable
in connection with the offering of the Notes.
“ Issue Date” has
the meaning given in the Indenture.
“ Issuers’ Closing
Certificate ” means an Officer’s Certificate from
the Issuers in the form of Exhibit B-1 attached
hereto.
“ Issuer’s Closing
Officer’s Certificate ” has the meaning set forth
in Section 6.2.1 .
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“ Lien ” has the
meaning given in the Indenture.
“ Manager ” means
Peninsula Gaming, LLC and its permitted successors and assigns
identified by notice from the Issuers to the Disbursement
Agent.
“ Material
Construction Document ” means any of the Construction
Contract, the Architect Agreement, and without duplication, any
other Contract with a total contract amount in excess of
$100,000.
“ Minimum Facilities
” means a casino offering not less than 500 slot
machines.
“ Officer’s
Certificate ” means a certificate signed by one of the
following officers of the Person on whose behalf or for whose
benefit the certificate is being executed or delivered: the
Chairman of the Board, Chief Executive Officer, President, Chief
Financial Officer, Executive Vice President, Vice President,
Treasurer or Assistant Treasurer.
“ Opening ” means
the time when the Facility shall have been opened to the general
public, is receiving customers in the ordinary course of business
and has received, and has in full force and effect, all material
Permits required for operation.
“ Operative Documents
” means the Financing Agreements and the Construction
Documents.
“ Permits ” has
the meaning given in the Indenture.
“ Person ” means
any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company,
trust, unincorporated organization, government or any agency or
political subdivision thereof, or any other entity.
“ Plans ” means
the plans, specifications, working drawings, design documents and
any change orders relating thereto, which may be amended by the
Company as necessary or appropriate, that collectively:
(a) provide for and detail the manner of construction of
improvements for the Facility; (b) call for construction which
will permit the Opening to occur; (c) call for construction
which will cause the Facility to be completed for a total cost
consistent with the Construction Disburseme