EXHIBIT 10.2 CASH COLLATERAL AND DISBURSEMENT AGREEMENT

Cash Collateral Agreement

You are currently viewing:

This Cash Collateral Agreement involves

U.S. Bank National Association | Wells Fargo Bank, N.A | Merritt & Harris, Inc | River Rock Entertainment Authority

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: EXHIBIT 10.2 CASH COLLATERAL AND DISBURSEMENT AGREEMENT
Governing Law: New York Date: 5/5/2004

<PAGE>

EXHIBIT 10.2

CASH COLLATERAL AND DISBURSEMENT AGREEMENT

dated as of

November 7, 2003

among

U.S. Bank National Association, as USB Disbursement Agent,

Wells Fargo Bank, N.A., as WFB Disbursement Agent,

U.S. Bank National Association, as Trustee,

Merritt & Harris, Inc., as Independent Construction Consultant

River Rock Entertainment Authority

and

The Dry Creek Rancheria Band of Pomo Indians of California

(solely with respect to its obligations under Section 13)

<PAGE>

Table of Contents

<TABLE>

Page

1. Definitions..............................................................................................2

1.1. Defined Terms...................................................................................2

1.2 Index of Additional Defined Terms...............................................................8

2. Appointment of Disbursement Agents; Establishment of Collateral Accounts; Related Provisions.............9

2.1 Appointment of the Disbursement Agents..........................................................9

2.2 Establishment of Collateral Accounts............................................................9

2.2.1 Establishment of Collateral Accounts...................................................9

2.2.2 General...............................................................................10

2.2.3 Net Loss Proceeds.....................................................................10

2.3 Acknowledgement of Security Interest; Control..................................................10

2.4 Control of Collateral Accounts.................................................................10

2.5 Control of Specific Collateral Accounts........................................................12

2.5.1 Control of Operating Account..........................................................12

2.5.2 Control of Construction Disbursement Account, Dugan Property Improvements

Account and Construction Escrow Account...............................................12

2.6 The Authority's Rights.........................................................................12

2.7 Cash Equivalents...............................................................................12

2.8 Remedies.......................................................................................13

2.9 Waiver of Set-Off Rights.......................................................................13

2.10 Cooperation....................................................................................13

3. Certain Responsibilities of Disbursement Agents and Independent Construction Consultant.................14

3.1 Disbursements from the Collateral Accounts.....................................................14

3.2 Transfer of Funds at Direction of Trustee......................................................14

3.3 Payment of Compensation........................................................................14

3.3.1 Independent Construction Consultant's Compensation....................................14

3.3.2 Procedure.............................................................................14

3.4 Periodic Review................................................................................15

3.4.1 Review by USB Disbursement Agent......................................................15

3.4.2 Review by Independent Construction Consultant.........................................15

4. Disbursements During Construction Period................................................................16

4.1 Initial Disbursements from the Construction Disbursement Account...............................16

4.2 Subsequent Disbursements from the Construction Disbursement Account and Construction

Escrow Account.................................................................................16

4.2.1 Disbursement Requests.................................................................16

4.2.2 Additional Conditions to Subsequent Disbursements from the Construction

Disbursement Account..................................................................17

4.2.3 Non-Satisfaction of Conditions........................................................17

4.2.4 Disbursements from Construction Escrow Account........................................18

4.2.5 Final Disbursement from Construction Escrow Account...................................19

4.3 Disbursements from Dugan Property Improvements Account.........................................19

4.3.1 Land Development Disbursement Requests................................................19

4.3.2 Additional Conditions to Disbursements from the Land Development Disbursement

Account...............................................................................19

4.3.3 Non-Satisfaction of Conditions........................................................20

4.3.4 Final Disbursement from Land Development Disbursement Account.........................20

</TABLE>

<PAGE>

<TABLE>

5. Certain Construction Period Covenants...................................................................21

5.1 Available Construction Funds Certificate.......................................................21

5.2 Construction Cost Overruns.....................................................................21

5.3 Project Cost Schedule Certificate..............................................................21

5.4 Final Plans....................................................................................21

5.5 Amendment to Authority Budget..................................................................22

6. Certain Operating Period Covenants......................................................................22

6.1 Deposit of Pledged Revenues Other Than Cage Cash...............................................22

6.1.1 Transfer to WFB Disbursement Agent....................................................22

6.1.2 Control Agreement.....................................................................22

6.1.3 Discretionary Deposits................................................................22

6.2 Funds in Accounts..............................................................................22

6.3 Notice of Substantial Completion...............................................................22

7. Limitation of Liability.................................................................................23

7.1 Limitation of a Disbursement Agent's Liability.................................................23

7.2 Limitation of Independent Construction Consultant's Liability..................................23

8. Indemnity and Insurance.................................................................................24

8.1 Indemnification of Disbursement Agent..........................................................24

8.2 Insurance......................................................................................24

9. Termination.............................................................................................25

10. Substitution or Resignation of Disbursement Agent.......................................................25

10.1 Procedure......................................................................................25

10.2 Successor Disbursement Agent...................................................................26

10.3 Eligibility; Disqualification..................................................................26

10.4 Consent of Independent Construction Consultant.................................................26

11. Statement of Collateral Accounts........................................................................26

12. Miscellaneous...........................................................................................26

12.1 Waiver.........................................................................................26

12.2 Invalidity.....................................................................................26

12.3 No Authority...................................................................................26

12.4 Assignment.....................................................................................26

12.5 Benefit........................................................................................27

12.6 Time...........................................................................................27

12.7 Choice of Law..................................................................................27

12.8 Entire Agreement; Amendments...................................................................27

12.9 Notices........................................................................................27

12.10 Counterparts...................................................................................28

12.11 Captions.......................................................................................28

12.12 Right to Consult Counsel.......................................................................28

12.13 Tribe Authorization............................................................................28

12.14 Authority Authorization........................................................................28

13. Governing Law; Jurisdiction; Governing Law Provisions...................................................29

13.1 Governing Law Provisions.......................................................................29

13.2 Waiver of Sovereign Immunity...................................................................29

13.3 Waiver of Tribal Court.........................................................................29

13.4 Jurisdiction...................................................................................29

13.5 Arbitration....................................................................................30

13.6 Service of Process.............................................................................30

13.7 Non-Impairment.................................................................................30

13.8 IGRA Savings Provisions........................................................................30

</TABLE>

<PAGE>

TABLE OF EXHIBITS

Exhibit

A Initial Disbursements Certificate

B Form of Authority's Closing Certificate

C Form of Trustee's Closing Certificate

D Form of Construction Disbursement Request

E Form of Available Construction Funds Certificate

F Form of Project Cost Schedule Certificate

G Form of Authority Budget Amendment Certificate

H Initial Authority Budget

I Form of Final Plans Amendment Certificate

J-1 Form of Officer's Certificate (First Phase)

J-2 Form of Officer's Certificate (Second Phase)

J-3 Form of Substantial Completion Certificate (Project)

J-4 Form of Officer's Certificate (Dugan Project)

K-1 Form of Control Agreement (Construction Accounts)

K-2 Control Agreement (Operating Accounts)

L Form of Land Development Disbursement Request

iii

<PAGE>

CASH COLLATERAL AND DISBURSEMENT AGREEMENT

THIS CASH COLLATERAL AND DISBURSEMENT AGREEMENT (as amended,

supplemented, restated or otherwise modified from time to time, this

"Agreement") is dated as of November 7, 2003, by and among U.S. Bank National

Association, a national banking association, as disbursement agent, securities

intermediary and depositary bank (the "USB Disbursement Agent"), Wells Fargo

Bank, N.A., a national banking association, as disbursement agent, securities

intermediary and depositary bank (the "WFB Disbursement Agent"), (the USB

Disbursement Agent and the WFB Disbursement Agent, together with any successor

disbursement agent permitted hereunder, being sometimes referred to herein

individually or collectively as the "Disbursement Agent"), U.S. Bank National

Association, a national banking association, as trustee under the Indenture (as

defined herein) (together with its successors and assigns from time to time

under the Indenture, the "Trustee"), Merritt & Harris, Inc. (the "Independent

Construction Consultant"), the River Rock Entertainment Authority (the

"Authority"), an unincorporated instrumentality of The Dry Creek Rancheria Band

of Pomo Indians of California (the "Tribe") and the Tribe (solely with respect

to its obligations under Section 13).

RECITALS

A. Senior Notes. Concurrently herewith, the Authority is issuing

$200,000,000 aggregate principal amount of its 9.75% Senior Notes due 2011

(together with all notes issued in exchange or replacement therefor, the

"Initial Senior Notes"), pursuant to the Indenture. In addition, the Authority

may issue additional senior notes (other than the Initial Senior Notes) pursuant

to the Indenture in accordance with the provisions thereof (collectively with

the Initial Senior Notes, the "Senior Notes").

B. Facility. The Authority and the Tribe desire to design, develop and

construct three parking structures and certain infrastructure improvements (the

"Project") upon the Tribe's reservation near Geyserville, California (the

"Rancheria") and an access road upon certain property adjacent to the Rancheria

(the "Dugan Property") to support the existing gaming facility of the Authority

(such gaming facility and the Project collectively the "Facility"). The Tribe

has delegated to the Authority all rights and decision-making authority with

respect to the development, construction and operation of the Project pursuant

to the Authority Ordinance (as defined below).

C. Use of Proceeds. The net proceeds from the issuance of the Initial

Senior Notes (the "Proceeds") will be used (among other things) to repay a

majority of the Authority's outstanding indebtedness, to fund the completion of

the Project, to fund the settlement of litigation involving the Tribe, to fund

the acquisition of and development of an access road on the Dugan Property and

to repay outstanding indebtedness of the Tribe.

D. Collateral Accounts. Contemporaneously with the execution of this

Agreement, $64,600,000 of the Proceeds will be deposited into the Construction

Disbursement Account (as defined below), $5,000,000 of the Proceeds will be

deposited into the Dugan Property Improvements Account (as defined below) and

$10,000,000 of the Proceeds will be deposited into the Construction Escrow

Account (as defined below). In addition, Pledged Revenues (as defined below)

will be deposited as they are received by the Authority into the Operating

Account (as defined below). Assets maintained in the Construction Escrow

Account, the Construction Disbursement Account, the Dugan Property Improvements

Account and the Operating Account are owned beneficially by the Authority,

subject to the terms and conditions of this Agreement.

E. Purpose. The parties have entered into this Agreement to set forth

the conditions upon which, and the manner in which, funds will be disbursed from

(a) the Construction Disbursement Account to fund the Project, (b) the Dugan

Property Improvements Account to fund the development of an access road and

certain related improvements to the Dugan Property (the "Dugan Project"), (c)

the Construction Escrow Account to permit the Authority to fund cost overruns

with respect to the Project, and (d) all of the accounts established hereby for

the further purposes set forth herein.

-1-

<PAGE>

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. The terms defined in this Section

1 shall have the meanings herein specified:

"Additional Operating Revenue" means revenue generated by the

Authority, other than from disposition of its assets, but only to the extent

that such revenue has been deposited in the Collateral Accounts and is held by

the Authority, free and clear of any claims of any other Person whatsoever;

provided, however, that as of any date of measurement, Additional Operating

Revenue shall also include investment income which the Authority reasonably

determines will accrue on funds in the Collateral Accounts through the date that

the Authority reasonably anticipates that Substantial Completion will occur.

"Affiliate" has the meaning ascribed thereto in the Indenture.

"Authority Budget" means the Initial Authority Budget as the

Initial Authority Budget may be amended from time to time in accordance with

this Agreement.

"Authority's Closing Certificate" means an Officers'

Certificate of the Authority in the form attached hereto as Exhibit B.

"Authority Ordinance" means The River Rock Entertainment

Authority Act of 2003 duly and validly adopted by the Tribe.

"Available Construction Funds" means, with respect to the

Authority at any given time, the Original Allocation less the amount of

disbursements theretofore made from the Construction Disbursement Account.

"Bankruptcy Law" means Title 11, U.S. Code or any similar

federal or state law for the relief of debtors.

"Business Day" has the meaning ascribed thereto in the

Indenture.

"Cash Equivalents" has the meaning ascribed thereto in the

Indenture.

"Collateral" means all of the following:

(a) the Collateral Accounts;

(b) all cash, Cash Equivalents, instruments,

investments and other securities or Financial Assets at any time on deposit in

or credited to the Collateral Accounts;

-2-

<PAGE>

owned, existing, arising or acquired, wherever held or located, and whenever

received;

(d) each Operating Account and each other operating

account of the Authority in each Collection Bank;

(e) any other collateral under any of the Collateral

Documents; and

(f) all proceeds of any of the foregoing;

excluding, however, any Pledged Revenues and all proceeds therefrom released to

the Authority or the Tribe or to its order in accordance with the terms hereof

or pursuant to the terms of the Indenture.

"Collateral Documents" has the meaning ascribed thereto in the

Indenture.

"Collection Bank" means each bank into which the Authority

initially deposits Pledged Revenues upon receipt thereof.

"Construction Contracts" means the direct contracts between

the Authority and any Person pertaining to the construction of the Project or

the Dugan Project.

"Construction Expenses" means Project Costs incurred in

accordance with the Authority Budget, excluding, however, (a) any Pre-Issuance

Expenses, and (b) any Debt Financing Costs.

"Construction Period" means the period from the Issuance Date

to and including Substantial Completion.

"Construction Schedule" means a schedule describing the

sequencing of the components of work to be undertaken in connection with the

Project, which schedule (as the same may be amended) demonstrates that

Substantial Completion will occur on or before the Operating Deadline.

"Contractor" means a contractor or supplier of materials or

services in connection with the construction of the Project pursuant to a direct

contract with the Authority or contract assigned by the Tribe to the Authority.

"Control Agreement" means an agreement substantially in the

form of Exhibits K-1 or K-2 attached hereto.

"Debt Financing Costs" means all payments of principal,

interest and other amounts payable by the Authority from time to time under the

Indenture, and any other senior debt or subordinated debt, if any, incurred as

permitted by the terms of the Indenture.

"Default" means any event that is, or with the passage of time

or the giving of notice or both would be, an Event of Default.

"Event of Default" means the occurrence of any of the

following specified events:

(a) The occurrence and continuance of an Event of

Default under the Indenture.

(b) The USB Disbursement Agent, after appropriate

consultation with the Authority, is unable to approve a Construction

Disbursement Request in excess of $100,000 due to the failure of the Authority

to satisfy the conditions precedent thereto set forth herein, including, without

limitation, the condition precedent that the Authority deliver the certificates

required under this Agreement, and such failure continues for thirty (30) days

after notice thereof without being cured.

-3-

<PAGE>

are less than the Remaining Costs and such deficiency continues for a period of

thirty (30) days without being cured.

(d) The failure of the Authority to deliver any

material documents required to be delivered by the Authority pursuant to this

Agreement and any such failure continues for thirty (30) days after notice

thereof without being cured.

"Final Plans" means, with respect to any particular component

of the Project:

(a) the Plans for such component, if any, that have

been submitted to and approved by the Independent Construction Consultant; and

(b) to the extent Plans for such component have not

been submitted to and approved by the Independent Construction Consultant or to

the extent such Plans do not contain sufficient specificity to permit the

completion of such component, the Plans for such component to the extent such

Plans:

(i) have received final approval from all

governmental authorities required to approve such Plans prior to completion of

the component, if any;

(ii) contain sufficient specificity to

permit the completion of such component;

(iii) are consistent with constructing the

Project to include the Minimum Project;

(iv) have been signed by an architect

licensed to practice architecture in the State of California;

(v) call for construction of the Project

which will permit Substantial Completion to occur on or prior to the Operating

Deadline;

provided, however, that the Final Plans may be modified from time to time in

accordance with the terms hereof.

"Final Plans Amendment Certificate" means an Officers'

Certificate from the Authority in the form attached hereto as Exhibit I.

"GAAP" has the meaning ascribed thereto in the Indenture.

"Gaming Assets" has the meaning ascribed thereto in the

Indenture.

"Gaming Business" has the meaning ascribed thereto in the

Indenture.

"Governmental Action" means any resolution, ordinance,

statute, regulation, order or decision regardless of how constituted having the

force of law or legal authorization of the Tribe, the Authority or any

instrumentality or agency of the Tribe.

-4-

<PAGE>

"Hard Costs" means the costs and expenses in respect of

supplying goods, materials and labor for the construction of improvements

relating to the Project or other amounts payable pursuant to a Construction

Contract.

"Holders" means holders from time to time of the Senior Notes.

"IGRA" means the Indian Gaming Regulatory Act of 1988, PL

100-497, 25 U.S.C. ss.ss. 2701 et seq., as same may, from time to time, be

amended.

"Indenture" means the Indenture dated as of the date hereof,

among the Authority, the Tribe and the Trustee, relating to the Senior Notes.

"Independent Construction Consultant" means Merritt & Harris,

Inc. and its successors and replacements, as designated by the Trustee.

"Initial Authority Budget" means the itemized schedules

setting forth on a line-item basis all of the estimated Project Costs attached

hereto as Exhibit H (except that the Initial Authority Budget shall not include

the Issuance Fees and Expenses).

"Initial Disbursements Certificate" means the Certificate

signed by the Disbursement Agent in the form attached hereto as Exhibit A.

"Intercreditor Agreement" has the meaning ascribed thereto in

the Indenture.

"Issuance Date" means the date of the Indenture.

"Issuance Fees and Expenses" means fees and expenses (a)

incurred by the Authority or the Tribe in connection with the issuance of the

Initial Senior Notes and (b) paid on or before the Issuance Date. The Issuance

Fees and Expenses are identified on Exhibit 1 to the Authority's Closing

Certificate as "Fees and Expenses."

"Knowledge" of the Authority means the actual knowledge of any

officer, director or management employee of the Authority, without duty of

inquiry.

"Land Development Expenses" means costs of constructing the

access road on the Dugan Property.

"Liquidity Requirement" means the amount of cash or Cash

Equivalents that is reasonably necessary at any date of determination to be

available in the Collateral Accounts to fund the Remaining Costs and other known

or reasonably anticipated contingencies.

"Material Construction Contract" means each Construction

Contract identified by the Authority to be material to the Project (which the

Authority agrees shall include each Construction Contract with a total contract

amount in excess of $100,000).

"Minimum Project" means three parking structures containing an

aggregate of not less than 1,350 parking spaces.

"Net Loss Proceeds" has the meaning ascribed thereto in the

Indenture.

"New York UCC" means the Uniform Commercial Code as the same

may, from time to time, be enacted and in effect in the State of New York.

-5-

<PAGE>

"Officers' Certificate" means a certificate signed by two

officers of the Authority, one of whom must be the chairperson, the principal

executive officer, the principal financial officer, the treasurer or the

principal accounting officer of the Authority.

"Operating Deadline" means fifteen (15) months from the date

of the Indenture.

"Operating Period" means the period commencing on Substantial

Completion of the Project and continuing until the date of termination of this

Agreement.

"Original Allocation" means the total amount of the Proceeds

deposited in the Construction Disbursement Account and the Construction Escrow

Account less (x) the Initial Disbursements listed in the Initial Disbursements

Certificate and (y) the Issuance Fees and Expenses.

"Permitted Investments" has the meaning ascribed thereto in

the Indenture.

"Permitted Liens" has the meaning ascribed thereto in the

Indenture.

"Person" has the meaning ascribed thereto in the Indenture.

"Plans" means all drawings, plans and specifications prepared

by or on behalf of the Authority, as amended or supplemented from time to time

in accordance with this Agreement, and, if required, submitted to and approved

by the appropriate regulatory authorities, which describe and show the Project

and the labor and materials necessary for the construction thereof.

"Pledge and Security Agreement" has the meaning ascribed

thereto in the Indenture.

"Pledged Revenues" means, whether now existing or hereafter

arising, and wherever located, all receipts, revenues, rents and Pledged

Revenues (as defined in the Tribal UCC) from:

(a) the operation of any portion of the Gaming

Business or Gaming Assets, including without limitation the Facility, including:

(i) receipts from (A) class II gaming and

class III gaming (as such terms are used in IGRA), (B) food, beverage,

restaurant and other concessions derived from the Facility, (C) parking derived

from the Facility, (D) the lease or sublease of space or equipment within, on or

at the Facility, (E) the disposition of all or any portion of the Facility, and

(F) any other activities carried on within the Facility; and

(ii) the net proceeds of business

interruption or delay in opening insurance (or its equivalent) obtained by or on

behalf of the Authority with respect to the Facility; and

(b) any other receipts from class II gaming and class

III gaming (as such terms are used in IGRA) that are conducted by or for the

Authority or the Tribe, or any Affiliates of either of them or on the Rancheria

or any other trust lands of the Tribe; and

provided that in no event shall Pledged Revenues include (I) amounts collected

and paid out for a sales or excise tax imposed by a governmental authority

(other than the Tribe or any Affiliate of the Tribe) where such tax is billed to

the purchaser as a separate item and remitted by the Tribe or the Authority to

such governmental authority, (II) credits for the exchange of goods or

merchandise, (III) uncollected credit transactions written off as bad debt in

accordance with GAAP, (IV) any casualty insurance proceeds related to the

Facility (except for business interruption or delay in opening insurance or its

equivalent), any trust or rancheria lands or trust assets of the Tribe or the

Authority or (V) any revenues or receipts of any Person other than the

Authority, including revenues and receipts of subtenants that are not related

entities.

-6-

<PAGE>

"Preliminary Plans" means, with respect to any particular work

or improvement, the Plans for such work or improvement, if any, that are

described on Schedule 1 to the Authority's Closing Certificate.

"Project Cost Schedule" means an itemized schedule in the form

attached as Schedule 1 to Exhibit F hereto.

"Project Costs" means the costs to be incurred in connection

with the design, development and construction of the Project, including all

Construction Expenses and Debt Financing Costs.

"Remaining Costs" means, at any given time, the amount of

Construction Expenses (including Retainage Amounts) set forth in the Authority

Budget that remain unpaid at such time (including amounts that have not yet

accrued at such time).

"Retainage Amounts" means, at any given time, amounts that

have accrued and are owing under the terms of a Construction Contract for work

or services to the Authority already provided but which at such time (in

accordance with the terms of the Construction Contract) are being withheld from

payment to the Contractor thereunder until certain subsequent events (e.g.,

completion benchmarks) have been achieved.

"Senior Note Obligations" means any principal, interest,

premium (if any), penalties, fees, indemnification, reimbursements, damages and

other liabilities payable with respect to the Senior Notes pursuant to the

Indenture and any other obligations of the Authority pursuant to the Indenture

or the Collateral Documents.

"Soft Costs" means all costs and expenses (other than Hard

Costs) set forth in the Authority Budget.

"Subordinated Note" has the meaning ascribed thereto in the

Intercreditor Agreement.

"Substantial Completion" means, with respect to the Project

(or a specified component thereof) or the Dugan Project, as appropriate, that:

(a) all Liens (other than Permitted Liens) related to

the development, construction and equipping of, and beginning operations at, the

Project (or such component) or the Dugan Project, as appropriate, have been

discharged or, if payment is not yet due or if such payment is contested in good

faith by the Authority, sufficient funds remain in the Construction Disbursement

Account (as to the Project) or the Dugan Project Improvements Account (as to the

Dugan Project) to discharge such Liens; and

(b) the Independent Construction Consultant shall

have delivered a certificate to the Authority and the Trustee certifying that

the Project (or such component) is substantially complete in all material

respects in accordance with the Final Plans and all applicable building laws,

ordinances and regulations.

-7-

<PAGE>

"Suspended Covenant" has the meaning ascribed thereto in the

Indenture.

"Total Budgeted Amount" with respect to any line item in the

Authority Budget at any given time means the total amount budgeted for such line

item in the Authority Budget at such time.

"Transaction Documents" means each of this Agreement, the

Indenture, the Senior Notes, the Pledge and Security Agreement and the Control

Agreements.

"Tribal UCC" means the Uniform Commercial Code as the same

may, from time to time, be in effect on the Rancheria.

"Trustee's Closing Certificate" means a closing certificate

from the Trustee in the form of Exhibit C attached hereto.

"UCC" means the Uniform Commercial Code as the same may, from

time to time, be enacted and in effect in the State of New York; provided, that

to the extent that the Code is used to define any term herein and such term is

defined differently in different Articles or Divisions of the Code, the

definition of such term contained in Article or Division 9 shall govern;

provided further, that in the event that, by reason of mandatory provisions of

law, any or all of the attachment, perfection or priority of, or remedies with

respect to, the Trustee's lien on any Collateral is governed by the Uniform

Commercial Code as enacted and in effect in a jurisdiction other than the State

of New York (including without limitation the Tribal UCC), the term "UCC" shall

mean the Uniform Commercial Code as enacted and in effect in such other

jurisdiction solely for purposes of the provisions thereof relating to such

attachment, perfection, priority or remedies and for purposes of definitions

related to such provisions.

1.2 Index of Additional Defined Terms. In addition, the terms listed in

the left column below shall have the respective meanings assigned to such terms

in the Section of this Agreement listed opposite such terms in the right column

below:

<TABLE>

Defined Term Section

------------ -------

<S> <C>

AAA............................................................................................................13.5

Dugan Property........................................................................................B of Recitals

Agreement..............................................................................................Introduction

Applicable Courts..............................................................................................13.4

Authority..............................................................................................Introduction

Authority Extraordinary Item Disbursement Certificate...........................................................4.3

Available Construction Funds Certificate........................................................................5.1

Cage Cash.....................................................................................................2.2.1

Construction Account Order....................................................................................2.5.2

Construction Accounts.........................................................................................2.5.2

Construction Cost Overruns....................................................................................4.2.4

Construction Disbursement Account.............................................................................2.2.1

Construction Disbursement Request .........................................................................4.2.1(a)

Construction Escrow Account...................................................................................2.2.1

Disbursement Agent.....................................................................................Introduction

Dugan Project.........................................................................................E of Recitals

Dugan Property........................................................................................B of Recitals

Dugan Property Improvements Account...........................................................................2.2.1

Entitlement Order...............................................................................................2.4

Facility..............................................................................................B of Recitals

Financial Assets................................................................................................2.4

Indenture.............................................................................................A of Recitals

Independent Construction Consultant....................................................................Introduction

Initial Disbursements...........................................................................................4.1

Initial Senior Notes..................................................................................A of Recitals

Land Development Disbursement Request.........................................................................4.3.1

Obligations.....................................................................................................2.3

Operating Account.............................................................................................2.2.1

Operating Account Order.........................................................................................2.5

Permitted Claims...............................................................................................13.2

Proceeds..............................................................................................C of Recitals

Project...............................................................................................C of Recitals

Project Cost Schedule Certificate...............................................................................5.3

Rancheria.............................................................................................B of Recitals

Security Entitlements ..........................................................................................2.4

Senior Notes..........................................................................................A of Recitals

Substantial Completion Certificate (Dugan Project)..............................................................4.3

Tribe..................................................................................................Introduction

Trustee................................................................................................Introduction

USB Disbursement Agent.................................................................................Introduction

WFB Disbursement Agent.................................................................................Introduction

</TABLE>

-8-

<PAGE>

2. Appointment of Disbursement Agents; Establishment of Collateral

Accounts; Related Provisions.

2.1. Appointment of the Disbursement Agents. Each of the USB

Disbursement Agent and the WFB Disbursement Agent is hereby appointed by the

Authority and the Trustee as disbursement agent hereunder, and each Disbursement

Agent hereby agrees to act as such and to accept all cash, payments, other

amounts and Cash Equivalents to be delivered to or held by the Disbursement

Agent pursuant to the terms of this Agreement. Each Disbursement Agent shall

hold and safeguard the respective Collateral Accounts (and the cash, instruments

and securities on deposit therein) during the term of this Agreement and shall

treat the Collateral Accounts and the cash, instruments, and securities in the

Collateral Accounts as funds, instruments and securities pledged by the

Authority to the Trustee for the ratable benefit of the Holders to be held in

accordance with the provisions hereof.

2.2. Establishment of Collateral Accounts.

2.2.1 Establishment of Collateral Accounts. The USB

Disbursement Agent hereby establishes at its offices located at 60 Livingstone

Avenue, St. Paul, MN 55107-3913 the following accounts, which shall be

maintained as special, segregated securities accounts at all times until such

accounts are closed as set forth in Section 4.4, unless earlier termination is

otherwise provided for herein:

<TABLE>

---------------------------------------------------------------- -----------------------------------------------------

Account: Account Number:

---------------------------------------------------------------- -----------------------------------------------------

<S> <C>

Construction Disbursement Account 743811001

---------------------------------------------------------------- -----------------------------------------------------

Construction Escrow Account 743811002

---------------------------------------------------------------- -----------------------------------------------------

Dugan Property Improvements Account 743811003

---------------------------------------------------------------- -----------------------------------------------------

</TABLE>

-9-

<PAGE>

The WFB Disbursement Agent hereby establishes at its

offices located at 5340 Kietzke Lane, Suite 201, Reno, Nevada 89511, the

following account, which shall be maintained as a special, segregated securities

account at all times until such account is closed as set forth in Section 4.4,

unless earlier termination is otherwise provided for herein:

<TABLE>

---------------------------------------------------------------- -----------------------------------------------------

Account: Account Number:

---------------------------------------------------------------- -----------------------------------------------------

<S> <C>

Operating Account 4945092500

---------------------------------------------------------------- -----------------------------------------------------

</TABLE>

The terms set forth in the left column above, as used in this Agreement, shall

be deemed to refer to the accounts having the account numbers listed in the

right column above or any substitute account selected in accordance with the

terms of this Agreement. The Construction Disbursement Account, the Dugan

Property Improvements Account, the Construction Escrow Account and the Operating

Account are sometimes referred to collectively herein as the "Collateral

Accounts." Notwithstanding the foregoing, the Operating Account shall be

maintained at all times until the termination of this Agreement unless earlier

termination is otherwise provided for herein, and notwithstanding anything

contained in the Collateral Documents to the contrary, the Operating Account

shall contain at all times all cash and Cash Equivalents of the Authority (other

than an amount ("Cage Cash") not to exceed $5,000,000 which may be maintained at

the Facility), subject to the obligation of the Authority to deposit Pledged

Revenues as set forth in Section 6.1.1.

2.2.2 General. All moneys, investments and securities

at any time on deposit in any of the above-referenced Collateral Accounts shall

constitute trust funds to be held in the custody of the respective Disbursement

Agent for the purposes and on the terms set forth in this Agreement.

2.2.3 Net Loss Proceeds. Any Net Loss Proceeds

otherwise payable to the Authority shall be deposited into the Operating Account

for disposition in accordance with Section 4.19 of the Indenture.

2.3. Acknowledgement of Security Interest; Control. Pursuant

to the Pledge and Security Agreement and in reliance on the UCC and the Tribal

UCC, to secure the payment and performance of all covenants, agreements and

payment and other obligations of the Authority or the Tribe under the Indenture

and the Collateral Documents (the "Obligations"), the Authority has pledged to

create and has created in favor of the Trustee a security interest in and to the

Collateral Accounts, all cash, Cash Equivalents, instruments, investments and

securities at any time on deposit in the Collateral Accounts and all proceeds of

any of the foregoing. All cash, Cash Equivalents, instruments, investments and

securities at any time on deposit in any of the Collateral Accounts shall

constitute collateral security for the payment and performance by the Authority

of its obligations and shall at all times be subject to the control of the

Trustee, and shall be held in the custody of the respective Disbursement Agent

in trust for the purposes of, and on the terms set forth in, the Indenture and

this Agreement.

-10-

<PAGE>

2.4. Control of Collateral Accounts. Each Disbursement Agent

hereby agrees and confirms that it has established the Collateral Accounts as

set forth and defined in this Agreement. Each Disbursement Agent and the

Authority agree that (a) such Disbursement Agent is acting as a "securities

intermediary" (within the meaning of Section 8-102(14) of the UCC) with respect

to the Collateral Accounts and the "financial assets" (within the meaning of

Section 8-102(a)(9) of the UCC, the "Financial Assets") credited to the

Collateral Accounts; (b) each such Collateral Account established by the

respective Disbursement Agent is and will be maintained as a "securities

account" (within the meaning of Section 8-501 of the UCC); (c) the Authority is

an "entitlement holder" (within the meaning of Section 8-102(a)(7) of the UCC)

in respect of the Financial Assets credited to such Collateral Accounts and with

respect to such Collateral Account and the respective Disbursement Agent shall

so note in its records pertaining to such Financial Assets and Collateral

Accounts; and (d) all Financial Assets in registered form or payable to or to

the order of and credited to any such Collateral Account shall be registered in

the name of, payable to or to the order of, or specially endorsed to, the

respective Disbursement Agent, or in blank, or credited to another securities

account maintained in the name of the respective Disbursement Agent, as

applicable, and in no case will any Financial Asset credited to any such

Collateral Account be registered in the name of, payable to or to the order of,

or endorsed to, the Authority except to the extent the foregoing have been

subsequently endorsed by the Authority to the respective Disbursement Agent or

in blank. Each item of property (including a security, security entitlement,

investment property, instrument or obligation, share, participation, interest or

other property whatsoever) credited to any Collateral Account shall be treated

as a Financial Asset. Until this Agreement terminates in accordance with the

terms hereof, the Trustee shall have "control" (within the meaning of Section

8-106(d)(2)of the UCC) of the Authority's "security entitlements" (within the

meaning of Section 8-102(a)(17) of the UCC, "Security Entitlements") with

respect to the Collateral Accounts and the Financial Assets credited to the

Collateral Accounts. All property delivered to a Disbursement Agent by or on

behalf of the Authority pursuant to this Agreement will be promptly credited to

the respective Collateral Account and shall be treated as Financial Assets. If

at any time a Disbursement Agent shall receive from the Trustee any "entitlement

order" (within the meaning of Section 8-102(8) of the UCC, an "Entitlement

Order") relating to the Collateral Accounts or Financial Assets credited to the

Collateral Accounts, such Disbursement Agent shall comply with such Entitlement

Order without further consent by the Authority or any other Person. In the event

that a Disbursement Agent receives conflicting Entitlement Orders relating to

the Collateral Accounts or Financial Assets credited to the Collateral Accounts

from the Trustee and any other Person (including, without limitation, the

Authority), such Disbursement Agent shall comply with the Entitlement Orders

originated by the Trustee. Each of the Authority and the Disbursement Agents

agrees that it has not and will not execute and deliver, or otherwise become

bound by, any agreement under which it agrees with any Person other than the

Trustee (and, to the extent provided herein, the Authority) to comply with

Entitlement Orders originated by such Person relating to the Collateral Accounts

or Financial Assets credited to the Collateral Accounts. Except for the claims

and interests of the Trustee and the Authority in the Collateral Accounts and

the Financial Assets credited to the Collateral Accounts, neither the

Disbursement Agents nor the Authority knows of any claim to, or interest in, any

Collateral Account or Financial Assets credited to the Collateral Accounts. If

the Disbursement Agents or the Authority obtains actual knowledge that any

Person has asserted a lien, encumbrance or adverse claim against any of the

Collateral Accounts or Financial Assets credited to the Collateral Accounts,

such party will promptly notify the Trustee thereof. In the event that either of

the Disbursement Agents has or subsequently obtains by agreement, operation of

law or otherwise a lien or security interest in any Collateral Account, any

Security Entitlement carried therein or credited thereto or any Financial Asset

that is the subject of any such Security Entitlement, such Disbursement Agent

agrees that such lien or security interest shall be subordinate to the lien and

security interest of the Trustee. The Financial Assets standing to the credit of

the Collateral Accounts will not be subject to deduction, set-off, banker's lien

or any other right, and the Disbursement Agents shall not grant, permit or

consent to any other right or interest in such Financial Assets, in favor of any

Person (including the Disbursement Agents) other than the Trustee. Regardless of

any provision in any other agreement, for purposes of the UCC, the State of New

York shall be deemed to be the Disbursement Agents' jurisdiction (within the

meaning of Section 8-110 of the UCC). The Collateral Accounts held by the

Disbursement Agents shall be subject to the internal laws of the State of New

York except as specified in Section 12.7.

-11-

<PAGE>

2.5. Control of Specific Collateral Accounts.

2.5.1 Control of Operating Account. For so long as

this Agreement remains in effect, the WFB Disbursement Agent waives its rights

of chargeback, setoff (including such right of setoff as set forth in Section

9-340 of the UCC) and/or banker's lien against the Operating Account. Until this

Agreement terminates in accordance with the terms hereof, the Trustee shall have

"control" (within the meaning of Section 9-104 of the UCC) of the Operating

Account. If at any time the WFB Disbursement Agent shall receive from the

Trustee any instruction directing disposition of any funds in the Operating

Account (an "Operating Account Order"), the WFB Disbursement Agent shall comply

with such Operating Account Order without further consent by the Authority or

any other Person. In the event that the WFB Disbursement Agent receives

conflicting Operating Account Orders relating to the Operating Account, the WFB

Disbursement Agent shall comply with the Operating Account Orders originated by

the Trustee. Each of the Authority and the WFB Disbursement Agent agrees that it

has not and will not execute and deliver, or otherwise become bound by, any

agreement under which it agrees with any Person other than the Trustee to comply

with Operating Account Orders originated by such Person relating to the

Operating Account.

2.5.2 Control of Construction Disbursement Account,

Dugan Property Improvements Account and Construction Escrow Account. The USB

Disbursement Agent hereby agrees and confirms that it has established the

Construction Disbursement Account, the Dugan Property Improvements Account and

the Construction Escrow Account (collectively, the "Construction Accounts") as

set forth and defined in this Agreement. For so long as this Agreement remains

in effect, the USB Disbursement Agent waives its rights of chargeback, setoff

(including such right of setoff as set forth in Section 9-340 of the UCC) and/or

banker's lien against the Construction Accounts. Until this Agreement terminates

in accordance with the terms hereof, the Trustee shall have "control" (within

the meaning of Section 9-104 of the UCC) of the Construction Accounts. If at any

time the USB Disbursement Agent shall receive from the Trustee any instruction

directing disposition of any funds in the Construction Accounts (a "Construction

Account Order"), the USB Disbursement Agent shall comply with such Construction

Account Order without further consent by the Authority or any other Person. In

the event that the USB Disbursement Agent receives conflicting Construction

Account Orders relating to the Construction Accounts, the USB Disbursement Agent

shall comply with the Construction Account Orders originated by the Trustee.

Each of the Authority and the USB Disbursement Agent agrees that it has not and

will not execute and deliver, or otherwise become bound by, any agreement under

which it agrees with any Person other than the Trustee to comply with

Construction Account Orders originated by such Person relating to the

Construction Accounts.

2.6 The Authority's Rights. The Authority shall not have any

rights or powers with respect to any amounts in the Collateral Accounts or any

part thereof except (a) as provided in Section 2.7 and (b) the right to have

such amounts applied in accordance with the provisions of this Agreement, the

Indenture, the Control Agreement (Operating Account) and the Control Agreement

(Construction Accounts).

2.7 Cash Equivalents. The Disbursement Agent shall invest any

money held in any Collateral Account in such Permitted Investments as may be

directed in writing by the Authority from time to time. In the event that a

Disbursement Agent has not received any such written directions, such

Disbursement Agent shall be under no obligation to invest any such money. Any

income or gain realized as a result of any such investment shall be held as part

of the applicable Collateral Account and reinvested as provided in this

Agreement until released in compliance with the terms of this Agreement. Any

income tax payable on account of any such income or gain shall be paid by the

Authority. The Disbursement Agents shall have no liability for any loss

resulting from any such investment other than solely by reason of its willful

misconduct or gross negligence or bad faith or from failure to exercise such

care in the custody of any such investments as it does for accounts held by

other customers or in the custody of its own investments. Any such investment

may be sold (without regard to maturity date) by the respective Disbursement

Agent as directed in writing by the Authority to make any distribution required

by this Agreement. In addition, if an Event of Default has occurred and is

continuing, the respective Disbursement Agent shall liquidate and sell any

investment if so directed in writing by the Trustee, and shall invest any money

held in any Collateral Account only as directed by the Trustee.

-12-

<PAGE>

2.8 Remedies. Notwithstanding any other provision of this

Agreement, in addition to the rights provided hereunder and at law or in equity

and to any rights and remedies provided in the Collateral Documents, upon an

Event of Default and for so long as such Event of Default continues, the

Disbursement Agents shall disburse funds from the Collateral Accounts only as

directed by the Trustee pursuant to Entitlement Orders or Operating Account

Orders, as the case may be, and the Trustee may exercise any or all of the

following remedies, successively or concurrently and in such order as the

Trustee elects:

(a) The Trustee may deliver some or all of the

notices contemplated by Section 2.4, 2.5, 2.7 or 2.8.

(b) Any cash that is Collateral held by a

Disbursement Agent and all cash proceeds received by such Disbursement Agent in

respect of any sale of, collection from, or other realization upon all or any

part of the Collateral shall be applied (after payment of any and all amounts

payable to such Disbursement Agent pursuant to the Collateral Documents) against

the Obligations for the benefit of the Trustee. Any surplus of such cash or cash

proceeds held by a Disbursement Agent and remaining after payment in full of all

the Obligations shall be paid over to the Authority or to whomsoever may be

lawfully entitled to receive such surplus or as a court of competent

jurisdiction may direct.

Trustee as its attorney-in-fact effective upon and during the continuance of an

Event of Default with full power of substitution to do any act which the

Authority is obligated hereby to do, to exercise such rights as the Authority

might exercise with respect to the Collateral and to execute and file in the

Authority's name any financing statements and amendments thereto required or

advisable to protect the Trustee's rights or security interest hereunder and

under any other Collateral Documents. Such appointment and power of attorney

shall be irrevocable and coupled with an interest. The Trustee shall exercise

all remedies under this Section 2.8 in accordance with the terms of the

Indenture.

2.9 Waiver of Set-Off Rights. Each Disbursement Agent hereby

acknowledges the Trustee's security interests as set forth above and under any

other Collateral Documents and waives any security interest or other lien in the

Collateral and further waives any right to set off the Collateral now or in the

future against any indebtedness of the Authority. The waivers set forth in this

Section 2.9 are of rights which may exist now or hereafter in favor of each

Disbursement Agent in its individual capacity, and not of any such rights which

may exist now or hereafter in favor of such Disbursement Agent in its capacity

as Disbursement Agent for the Trustee. Nothing in this Section 2.9 shall be

construed as waiving, limiting or diminishing any rights of the Trustee

vis-a-vis the Authority.

2.10 Cooperation. Each Disbursement Agent is hereby directed

to cooperate with the Trustee in the exercise of its rights in the Collateral

provided for herein. The Trustee may take all necessary action to preserve and

protect the security interests created hereby and by the other Collateral

Documents as a lien and encumbrance upon such Collateral and, upon demand, the

Authority and each Disbursement Agent will execute and deliver to the Trustee

such instruments and documents as the Trustee may reasonably deem necessary or

advisable to confirm or perfect the rights of the Trustee under this Agreement

and the Trustee's interest in the Collateral.

-13-

<PAGE>

3. Certain Responsibilities of Disbursement Agents and Independent

Construction Consultant.

3.1 Disbursements from the Collateral Accounts. Each

Disbursement Agent shall disburse funds from the Collateral Accounts only upon

satisfaction of the applicable conditions to disbursement set forth herein. Upon

satisfaction of the applicable conditions to disbursement set forth herein, each

Disbursement Agent shall disburse funds from the applicable Collateral Account

as specified in the applicable disbursement request or certificate.

3.2 Transfer of Funds at Direction of Trustee. Notwithstanding

anything to the contrary in this Agreement, from and after the date on which a

Disbursement Agent receives notice from the Trustee or the Authority that an

Event of Default (as defined in the Indenture) exists until such time as such

Disbursement Agent receives notice from the Trustee that such Event of Default

no longer exists, such Disbursement Agent shall only withdraw or transfer

amounts in any Collateral Account at the direction of the Trustee pursuant to

Entitlement Orders or Operating Account Orders, as the case may be; provided,

however, that during the pendency of any Event of Default, the Trustee shall

continue to authorize disbursements from the Operating Account at the request of

the Authority to pay Operating Expenses (as defined in the Indenture), unless

the holders of 25% or more in aggregate principal amount of the Senior Notes

direct the Trustee not to authorize such disbursements.

3.3 Payment of Compensation.

3.3.1 Independent Construction Consultant's

Compensation. The Independent Construction Consultant shall deliver to the USB

Disbursement Agent, on or prior to the last Business Day of each month up

through and including the month following Substantial Completion, an invoice

setting forth the amounts owed to it as compensation for its services during

such month and reasonable documentation of its out-of-pocket expenses incurred

in connection with such services. On the first Business Day of each month

following the month in which such invoice was received (except for the initial

payment, which shall be disbursed as set forth below), the USB Disbursement

Agent shall disburse funds to the Independent Construction Consultant from the

Construction Disbursement Account as compensation for services performed by the

Independent Construction Consultant during the previous month, in a reasonable

and customary amount for each hour of the Independent Construction Consultant's

services as set forth on such invoice (which amount shall not exceed a

reasonable and customary amount for such services during any calendar quarter),

plus the total amount of all reasonable out-of-pocket expenses of the

Independent Construction Consultant incurred in connection with the performance

of its duties hereunder during such month, unless the Trustee notifies the USB

Disbursement Agent and the Independent Construction Consultant that the

Independent Construction Consultant is in default.

3.3.2 Procedure. The payments contemplated by this

Section 3.3 shall be made without the requirement of obtaining any further

consent or action on the part of the Authority with respect to such payments.

The initial payments pursuant to this Section 3.3 shall be made as promptly as

practicable following the initial deposits into the Construction Disbursement

Account but prorated for the partial month. Disbursements for each subsequent

calendar month shall be made on the first day of each such subsequent calendar

month. The final payments pursuant to this Section 3.3 shall also be prorated if

for a partial month.

-14-

<PAGE>

3.4 Periodic Review.

3.4.1 Review by USB Disbursement Agent. The USB

Disbursement Agent shall exercise commercially reasonable efforts and utilize

commercially prudent practices in the performance of its duties hereunder

consistent with those of similar institutions holding similar collateral,

administering similar construction loans and disbursing similar disbursement

control funds. Commencing upon execution and delivery hereof, the USB

Disbursement Agent shall have the right, but shall have no obligation, to meet

periodically at reasonable times upon reasonable advance notice with

representatives of the Trustee, the Authority, the Independent Construction

Consultant and such other employees, consultants or agents as the USB

Disbursement Agent shall reasonably request to be present for such meetings. In

addition, the USB Disbursement Agent shall have the right, but shall have no

obligation, at reasonable times during customary business hours and at

reasonable intervals upon prior notice to review, to the extent it deems

reasonably necessary or appropriate to permit it to perform its duties

hereunder, all information (including Construction Contracts) supporting any

Disbursement Request and any certificates in support of any of the foregoing.

The USB Disbursement Agent shall be entitled to examine, copy and make extracts

of the books, records, accounting data and other documents of the Authority

which are reasonably necessary or appropriate to permit it to perform its duties

hereunder, including, without limitation, bills of sale, statements, receipts,

contracts or agreements, which relate to any materials, fixtures or articles

incorporated into the Project. The rights of the USB Disbursement Agent under

this Section 3.4.1 shall not be construed as an obligation, it being understood

that the USB Disbursement Agent's duty is limited to act upon certificates and

draw requests submitted by the Authority and the Trustee hereunder.

3.4.2 Review by Independent Construction Consultant.

The Independent Construction Consultant shall exercise commercially reasonable

efforts and utilize commercially prudent practices in the performance of its

duties hereunder consistent with those of similar institutions disbursing

disbursement control funds and reviewing construction progress. Commencing upon

execution and delivery hereof, the Independent Construction Consultant shall

have the right to meet periodically at reasonable times during customary

business hours and at reasonable intervals, however no less frequently than

monthly, with representatives of the Authority, the Architect and such other

employees, consultants or agents as the Independent Construction Consultant

shall reasonably request to be present for such meetings. The Independent

Construction Consultant may perform such inspections of the Rancheria, the

Facility and the Project as it deems reasonably necessary or appropriate in the

performance of its duties hereunder, however no less frequently than monthly. In

addition, the Independent Construction Consultant shall have the right at

reasonable times during customary business hours upon prior notice to review, to

the extent it deems reasonably necessary or appropriate to permit it to perform

its duties hereunder, all information (including Construction Contracts)

supporting the amendments to the Authority Budget, amendments to any

Construction Contracts, any Construction Disbursement Request and any

certificates in support of any of the foregoing, to inspect materials stored on

the Rancheria, the Facility and the Project, at off-site facilities where

materials designated for use in the Project are stored, to review the insurance

required pursuant to the terms of the Indenture, and to examine the Plans and

all shop drawings relating to the Project. The Independent Construction

Consultant is authorized to contact any payee for purposes of confirming receipt

of progress payments. The Independent Construction Consultant shall be entitled

to examine, copy and make extracts of the books, records, accounting data and

other documents of the Authority relating to the construction of the Project,

including, without limitation, bills of sale, statements, receipts, conditional

and unconditional lien releases, contracts or agreements, which relate to any

materials, fixtures or articles incorporated into the Project. From time to

time, at the request of the Independent Construction Consultant, the Authority

shall make available to the Independent Construction Consultant a Project Cost

Schedule and/or the Construction Schedule for the Project. The Authority agrees

to reasonably cooperate with the Independent Construction Consultant in

assisting the Independent Construction Consultant to perform its duties

hereunder and to take such further steps as the Independent Construction

Consultant reasonably may request to facilitate the Independent Construction

Consultant's performance of its obligations hereunder. Notwithstanding anything

contained herein to the contrary, the Independent Construction Consultant shall

have no obligations or responsibilities with respect to the development of the

access road on the Dugan Property.

-15-

<PAGE>

4. Disbursements During Construction Period.

4.1 Initial Disbursements from the Construction Disbursement

Account. Upon satisfaction of the conditions described below in this Section

4.1, the USB Disbursement Agent shall make the disbursements (the "Initial

Disbursements") described in the Initial Disbursements Certificate attached

hereto as Exhibit A (the "Initial Disbursements Certificate") from the

Construction Disbursement Account. The conditions to the Initial Disbursements

shall consist of the following:

(a) the USB Disbursement Agent shall have received

the Original Allocation;

(b) the USB Disbursement Agent shall have received

the Initial Disbursements Certificate; and

the Authority's Closing Certificate and the Trustee's Closing Certificate; and

(d) no Default or Event of Default shall be then

pending.

4.2 Subsequent Disbursements from the Construction

Disbursement Account and Construction Escrow Account.

4.2.1 Disbursement Requests.

(a) The Authority shall have the right from

time to time during the Construction Period to submit to the USB Disbursement

Agent a request for the disbursement of funds from the Construction Disbursement

Account substantially in the form of Exhibit D hereto (a "Construction

Disbursement Request"), together with the exhibits attached thereto, as further

described below. The USB Disbursement Agent shall approve any Construction

Disbursement Request that satisfies each of the conditions set forth in Section

4.2.2, provided that each of the conditions in Section 4.1 has been and

continues to be satisfied as of such time. The USB Disbursement Agent shall

notify the Authority and the Trustee in writing as soon as reasonably possible

(and in any event within two Business Days after the USB Disbursement Agent

receives any Construction Disbursement Request) if any Construction Disbursement

Request is disapproved and the reason(s) therefor. The Authority may submit

Construction Disbursement Requests no more often than weekly.

(b) Provided that a Construction

Disbursement Request satisfies the requirements of Section 4.2.2, within two

Business Days following submission of a Construction Disbursement Request, the

USB Disbursement Agent shall disburse to the Operating Account the funds

requested in such Construction Disbursement Request. The Authority shall

withdraw funds from the Construction Disbursement Account and write checks

against such funds from the Operating Account solely for the purpose of paying

Construction Expenses identified on such Construction Disbursement Request.

-16-

<PAGE>

disbursement requested in a Construction Disbursement Request unless the Trustee

has been directed not to waive such condition by the holders of at least 25% in

principal amount of the Senior Notes then outstanding.

4.2.2 Additional Conditions to Subsequent

Disbursements from the Construction Disbursement Account. The USB Disbursement

Agent's approval of any disbursements from the Construction Disbursement

Account, other than the Initial Disbursements, shall be subject to the following

conditions in addition to the conditions set forth in Section 4.2.1 above. Upon

satisfaction of the conditions described below and in Section 4.2.1 above, the

USB Disbursement Agent shall make the disbursements described in the

corresponding Construction Disbursement Request:

(a) The Authority shall have submitted to

the USB Disbursement Agent a Construction Disbursement Request as provided for

herein pertaining to the amounts requested for disbursement, together with a

completed Exhibit 1 thereto substantially in the form contemplated thereby and

the certification of the Independent Construction Consultant substantially in

the form of Exhibit 2 to the Construction Disbursement Request to the extent

required pursuant to the terms of the Construction Disbursement Request;

(b) Each of the Authority and the

Independent Construction Consultant shall have submitted to the USB Disbursement

Agent a certification that the Liquidity Requirement shall have been satisfied

through the date of the Construction Disbursement Request.

Independent Construction Consultant shall have received copies of all

Construction Contracts (and all amendments thereto) executed as of the date of

any Construction Disbursement Request and, with respect to each Material

Construction Contract executed on or before the date of such Construction

Disbursement Request, copies of such performance and payment bonds as the

Authority may require to be provided to the Authority pursuant to such Material

Construction Contract. Such bonds shall name the Authority and the Trustee as

co-obligees and shall be in full force and effect. The USB Disbursement Agent

shall rely upon the certification of the Authority set forth in the Construction

Disbursement Request to establish satisfaction of this condition;

(d) The Construction Disbursement Request on

its face has been completed as to the information required therein and the

required attachments, if any, are attached;

(e) The USB Disbursement Agent shall not be

aware of any material error, inaccuracy, misstatement or omission of fact in any

Construction Disbursement Request or an exhibit or attachment thereto or

information provided by the Authority upon the request of the USB Disbursement

Agent; and

(f) The USB Disbursement Agent is not aware

(solely from the facts set forth in any Disbursement Request or any certificate

from the Independent Construction Consultant or any notice from the Trustee or

the Authority) that an Event of Default exists and is continuing hereunder.

4.2.3 Non-Satisfaction of Conditions. In the event

that the USB Disbursement Agent determines that condition (f) of Section 4.2.2

described above is not satisfied in respect of any Construction Disbursement

Request and so long as such condition is not satisfied, the USB Disbursement

Agent shall not authorize any disbursement of funds from the Construction

Disbursement Account pursuant to a Construction Disbursement Request; provided,

however, that the following payments may be made by the USB Disbursement Agent:

-17-

<PAGE>

(a) if all other conditions in Section 4.1

and Section 4.2.2 hereof are met, payments for work completed or materials

purchased on or prior to the date that the USB Disbursement Agent determined

that condition (f) of Section 4.2.2 was not satisfied and has so notified the

Authority in writing;

(b) payments not to exceed $1,000,000 in the

aggregate to prevent the condition of the Project from deteriorating or to

preserve any work completed as certified to be reasonably necessary or advisable

by the Independent Construction Consultant and the Authority; and

of three consecutive months or more, at the request of the Authority, Retainage

Amounts for the portion of the Project completed; provided, however, that the

Authority and the Independent Construction Consultant certify that the

conditions for paying such amounts (other than completion of the Project) are

met.

4.2.4 Disbursements from Construction Escrow Account.

In the event all of the funds in the Construction Disbursement Account have been

disbursed in accordance with the provisions of Sections 4.2.1 and 4.2.2 above,

but subject to the provisions of Section 4.2.3 above, the Authority shall have

the right from time to time during the Construction Period to submit to the USB

Disbursement Agent a request for the disbursement of funds from the Construction

Escrow Account to fund Construction Expenses that exceed the amounts set forth

in the Authority Budget for such Construction Expenses ("Construction Cost

Overruns"), together with the exhibits attached thereto. Such request shall be

supported by a certificate from the Independent Construction Consultant stating

the amount of the Construction Cost Overruns and confirming that the amount

requested has been incurred for legitimate Construction Expenses and that

following disbursement pursuant to such request the Available Construction Funds

will exceed the Remaining Costs. In addition to the foregoing:

(a) If no Default or Event of Default has

occurred and is then continuing or if the Authority shall neither have requested

nor received funds for Construction Cost Overruns from the Construction Escrow

Account on or before the 45th day (or such later date upon which all pending

Defaults or Events of Default have been cured) following Substantial Completion

of the first parking structure comprising a portion of the Project, the

Authority shall, pursuant to an Officers' Certificate (First Phase) in the form

of Exhibit J-1 hereto, instruct the USB Disbursement Agent to disburse an amount

equal to $5,000,000 to the holder of the Subordinated Note for application

against the then-outstanding principal balance thereof in accordance with the

terms of the Intercreditor Agreement; and

(b) If no Default or Event of Default has

occurred and is then continuing and if any funds remain in the Construction

Escrow Account on the 75th day (or such later date upon which all pending

Defaults or Events of Default have been cured) following Substantial Completion

of the Project, the Authority shall, pursuant to an Officers' Certificate

(Second Phase) in the form of Exhibit J-2 hereto, instruct the USB Disbursement

Agent to disburse an amount equal to the lesser of $10,000,000 or the balance of

the funds remaining in the Construction Escrow Account to the holder of the

Subordinated Note for application against the then-outstanding principal balance

thereof in accordance with the terms of the Intercreditor Agreement, in either

case reduced by any disbursement made pursuant to the preceding paragraph (a);

provided, however, that in no event shall the holder of the Subordinated Note be

entitled to receive any amount in excess of the balance of the Subordinated Note

after reduction by payment from any and all sources and provided further that

such excess, if any, shall be transferred to the Operating Account.

-18-

<PAGE>

4.2.5 Final Disbursement from Construction Escrow

Account. In the event any balance remains in the Construction Escrow Account

(after payment to the holder of the Subordinated Note in accordance with Section

4.2.4(b) above) on the 90th day following Substantial Completion of the Project,

the Authority shall have the right to submit to the USB Disbursement Agent a

request for the disbursement of funds from the Construction Escrow Account equal

to the balance then remaining therein, together with (a) an Officers'

Certificate in the form of Exhibit J-3 hereto (a "Substantial Completion

Certificate") to the effect that (i) Substantial Completion of the Project has

occurred at least 90 days prior to the date of the certification, (ii) all

amounts required to be paid to Contractors in connection with achieving

Substantial Completion of the Project have been paid, and (iii) there are no

mechanic's liens or other liens, charges or orders filed against the Facility or

the Project or any portion thereof by any Contractor or any other party that

have not been discharged of record or bonded other than Permitted Liens; and (b)

a certificate of the Independent Construction Consultant confirming the factual

certifications described in clause (a) above. The Disbursement Agent shall,

after receiving such request but subject to the payments to the holder of the

Subordinated Note required under Section 4.2.4, transfer the balance in the

Construction Escrow Account to the Operating Account.

4.3 Disbursements from Dugan Property Improvements Account.

4.3.1 Land Development Disbursement Requests.

(a) The Authority shall have the right from

time to time during the Construction Period to submit to the USB Disbursement

Agent a request for the disbursement of funds from the Land Development

Disbursement Account substantially in the form of Exhibit L hereto (a "Land

Development Disbursement Request"), together with the exhibits attached thereto,

as further described below. The USB Disbursement Agent shall approve any Land

Development Disbursement Request that satisfies each of the conditions set forth

in Section 4.3.2, provided that each of the conditions in Section 4.1 has been

and continues to be satisfied as of such time. The USB Disbursement Agent shall

notify the Authority and the Trustee in writing as soon as reasonably possible

(and in any event within two Business Days after the USB Disbursement Agent

receives any Land Development Disbursement Request) if any Land Development

Disbursement Request is disapproved and the reason(s) therefor. The Authority

may submit Land Development Disbursement Requests no more often than weekly.

(b) Provided that a Land Development

Disbursement Request satisfies the requirements of Section 4.3.2, within two

Business Days following submission of a Land Development Disbursement Request,

the USB Disbursement Agent shall disburse to the Operating Account the funds

requested in such Land Development Disbursement Request. The Authority shall

withdraw funds from the Land Development Disbursement Account and write checks

against such funds from the Operating Account solely for the purpose of paying

Land Development Expenses identified on such Land Development Disbursement

Request.

disbursement requested in a Land Development Disbursement Request unless the

Trustee has been directed not to waive such condition by the holders of at least

25% in principal amount of the Senior Notes then outstanding.

4.3.2 Additional Conditions to Disbursements from the

Land Development Disbursement Account. The USB Disbursement Agent's approval of

any disbursements from the Land Development Disbursement Account shall be

subject to the following conditions in addition to the conditions set forth in

Section 4.3.1 above. Upon satisfaction of the conditions described below and in

Section 4.3.1 above, the USB Disbursement Agent shall make the disbursements

described in the corresponding Land Development Disbursement Request:

-19-

<PAGE>

(a) The Authority shall have submitted to

the USB Disbursement Agent a Land Development Disbursement Request as provided

for herein pertaining to the amounts requested for disbursement, together with a

completed Exhibit 1 thereto substantially in the form contemplated thereby, to

the extent required pursuant to the terms of the Land Development Disbursement

Request;

(b) The USB Disbursement Agent shall have

received copies of all Construction Contracts (and all amendments thereto)

executed as of the date of any Land Development Disbursement Request and, with

respect to each Material Construction Contract executed on or before the date of

such Land Development Disbursement Request, copies of such performance and

payment bonds as the Authority may require to be provided to the Authority

pursuant to such Material Construction Contract. Such bonds shall name the

Authority and the Trustee as co-obligees and shall be in full force and effect.

The USB Disbursement Agent shall rely upon the certification of the Authority

set forth in the Land Development Disbursement Request to establish satisfaction

of this condition;

Request on its face has been completed as to the information required therein

and the required attachments, if any, are attached;

(d) The USB Disbursement Agent shall not be

aware of any material error, inaccuracy, misstatement or omission of fact in any

Land Development Disbursement Request or an exhibit or attachment thereto or

information provided by the Authority upon the request of the USB Disbursement

Agent; and

(e) The USB Disbursement Agent is not aware

(solely from the facts set forth in any Land Development Disbursement Request or

any notice from the Trustee or the Authority) that an Event of Default exists

and is continuing hereunder.

4.3.3 Non-Satisfaction of Conditions. In the event

that the USB Disbursement Agent determines that condition (e) of Section 4.3.2

described above is not satisfied in respect of any Land Development Disbursement

Request and so long as such condition is not satisfied, the USB Disbursement

Agent shall not authorize any disbursement of funds from the Land Development

Disbursement Account pursuant to a Land Development Disbursement Request;

provided, however, that the following payments may be made by the USB

Disbursement Agent:

(a) if all other conditions in Section 4.1

and Section 4.3.2 hereof are met, payments for work completed or materials

purchased on or prior to the date that the USB Disbursement Agent determined

that condition (e) of Section 4.3.2 was not satisfied and has so notified the

Authority in writing;

(b) Payments not to exceed $100,000 in the

aggregate to prevent the condition of the access road from deteriorating or to

preserve any work completed as certified to be reasonably necessary or advisable

by the Authority; and

of three consecutive months or more, at the request of the Authority, Retainage

Amounts for the portion of the access road completed; provided, however, that

the Authority certifies that the conditions for paying such amounts (other than

completion of the access road) are met.

4.3.4 Final Disbursement from Land Development

Disbursement Account. In the event any balance remains in the Land Development

Disbursement Account on the 90th day following Substantial Completion of the

Dugan Project, the Authority shall have the right to submit to the USB

Disbursement Agent a request for the disbursement of funds from the Land

Development Disbursement Account equal to the balance then remaining therein,

together with (a) an Officers' Certificate in the form of Exhibit J-4 hereto (a

"Substantial Completion Certificate (Dugan Project)") to the effect that (i)

Substantial Completion of the Dugan Project has occurred at least 90 days prior

to the date of the certification, (ii) all amounts required to be paid to

Contractors in connection with achieving Substantial Completion of the Dugan

Project have been paid, and (iii) there are no mechanic's liens or other liens,

charges or orders filed against the Facility or the Dugan Property or any

portion thereof by any Contractor or any other party that have not been

discharged of record or bonded other than Permitted Liens. The Disbursement

Agent shall, after receiving such request transfer the balance in the Land

Development Disbursement Account to the Operating Account.

-20-

<PAGE>

5. Certain Construction Period Covenants.

5.1 Available Construction Funds Certificate. Concurrently

with the submission of any Construction Disbursement Request, the Authority

shall submit an Officers' Certificate in the form of Exhibit E hereto (an

"Available Construction Funds Certificate"), to the USB Disbursement Agent and

the Trustee showing the amount of Available Construction Funds.

5.2 Construction Cost Overruns. The Authority covenants to

cure any anticipated Construction Cost Overrun for any line item on the

Authority Budget (taking into account any applicable reserves which have been

allocated to such line item by an amendment to the Authority Budget) or for the

Project as a whole within ten days after the Authority becomes aware of any such

anticipated Construction Cost Overrun by:

(a) providing sufficient funds to cover in full such

Construction Cost Overrun from previously unallocated Available Construction

Funds or Additional Operating Revenue (but in each case only to the extent that

the same have not previously been expended or dedicated (including Retainage

Amounts) to the payment of items contained in the Authority Budget); and/or

(b) with respect to a Construction Cost Overrun as to

a particular line item, effecting an amendment to the Authority Budget to

dedicate such funds to the line item in question; and, following the

disbursement of all funds in the Construction Escrow Account, by complying with

the requirements of Section 4.2.4 above.

5.3 Project Cost Schedule Certificate. The Authority shall

submit an Officers' Certificate in the form of Exhibit F (a "Project Cost

Schedule Certificate") to the Independent Construction Consultant within five

(5) Business Days following the delivery of a written request for the same by

the Independent Construction Consultant (but no more frequently than once per

calendar month). Each Project Cost Schedule Certificate shall include a Project

Cost Schedule dated as of the first Business Day of the month in which such

Project Cost Schedule Certificate is delivered and shall set forth a calculation

certified by the Authority of the Remaining Costs and the Available Construction

Funds as of such date. In addition, the Authority shall deliver to the

Independent Construction Consultant any backup documentation or other

information with respect to the items on the Project Cost Schedule from time to

time as reasonably requested by the Independent Construction Consultant.

5.4 Final Plans. The Authority shall not construct or permit

to be constructed any portion of the Project except in substantial conformance

with the Final Plans. The Authority may modify the Final Plans, or cause

Preliminary Plans to become Final Plans, only if such Final Plans, as amended,

or Preliminary Plans which will become Final Plans have been delivered to the

Independent Construction Consultant together with a Final Plans Amendment

Certificate in the form of Exhibit I delivered to the USB Disbursement Agent.

-21-

<PAGE>

5.5 Amendment to Authority Budget. The Authority shall not

exceed the Authority Budget without the prior written consent of the USB

Disbursement Agent and the Independent Construction Consultant, which consent

shall not be unreasonably withheld, conditioned or delayed. The Authority may

modify the Authority Budget only if the Authority Budget as so modified shall

have been delivered to the Independent Construction Consultant together with an

Authority Budget Amendment Certificate in the form of Exhibit G delivered to the

USB Disbursement Agent.

6. Certain Operating Period Covenants.

6.1 Deposit of Pledged Revenues Other Than Cage Cash.

6.1.1 Transfer to WFB Disbursement Agent. The

Authority at its own expense shall cause all Pledged Revenues other than Cage

Cash received from the operation of the Facility and all Net Loss Proceeds to be

transferred to the Operating Account on the next business day following receipt.

6.1.2 Control Agreement. The Authority shall ensure

that the Collateral Accounts are maintained at one or more banks that are

chartered by the State of California or the Government of the United States of

America and not an Affiliate of the Authority, the Tribe or any member of the

Tribe. To effect the foregoing transfers, and to perfect the Trustee's security

interest in the Pledged Revenues held by the WFB Disbursement Agent, before

depositing any Pledged Revenues in the Operating Account, the Authority shall

deliver to WFB Disbursement Agent a completed and fully executed Control

Agreement among the Authority, the Trustee and the WFB Disbursement Agent

substantially in the form attached hereto as Exhibit K-2 (or in such other form

as may be reasonably acceptable to the Trustee). If the Authority receives any

amount that should have been deposited in the Operating Account as provided in

this Agreement, the Authority shall hold such amount in trust for the benefit of

the WFB Disbursement Agent, shall not commingle any such amounts with any of its

funds or other property and shall immediately transfer such amounts to the WFB

Disbursement Agent. The Authority shall cause all Pledged Revenues other than

Cage Cash to be deposited in the Operating Account as described in the Control

Agreement for the WFB Disbursement Agent.

6.1.3 Discretionary Deposits. The Authority may, at

any time, (a) elect to deposit directly with the WFB Disbursement Agent, for

deposit into the Operating Account (as requested by the Authority in writing)

all amounts not otherwise required to be deposited into the Operating Account,

or (b) direct any other bank to transfer any amounts deposited with such other

bank to the WFB Disbursement Agent, for deposit into the Operating Account. The

Authority agrees that the WFB Disbursement Agent's officers and employees are

irrevocably authorized to endorse for payment to the WFB Disbursement Agent any

instruments received by WFB Disbursement Agent for deposit into the Operating

Account.

6.2 Funds in Accounts. The Authority agrees that all funds

deposited with a bank other than the WFB Disbursement Agent pursuant to Section

6.1 shall be disbursed and paid out only in accordance with the provisions of

the Indenture.

6.3 Notice of Substantial Completion. Promptly after (but in

any event within seven days after) Substantial Completion, the Authority shall

deliver an Officers' Certificate to the WFB Disbursement Agent and the Trustee

to the effect that Substantial Completion has occurred, together with a

certificate from the Independent Construction Consultant concurring with such

certificate of the Authority (except that a certificate from the Independent

Construction Consultant shall not be required with respect to Substantial

Completion of the Dugan Project.

-22-

<PAGE>

7. Limitation of Liability.

7.1 Limitation of a Disbursement Agent's Liability. A

Disbursement Agent's responsibility and liability under this Agreement shall be

limited as follows: (a) the Disbursement Agent does not represent, warrant or

guaranty to the Trustee or the Holders the performance of the Authority, any

Contractor or provider of materials or services in connection with construction

of the Project or the Dugan Project; (b) the Disbursement Agent shall have no

responsibility to the Authority, the Trustee or the Holders as a consequence of

performance by the Disbursement Agent hereunder except for any gross negligence

or willful misconduct of the Disbursement Agent; (c) the Authority shall remain

solely responsible for all aspects of its business and conduct in connection

with the Facility and the Project and the Dugan Project, including, but not

limited to, the quality and suitability of the Plans, the supervision of the

work of construction, the qualifications, financial condition and performance of

all architects, engineers, contractors, subcontractors, suppliers, consultants

and property managers, the accuracy of all applications for payment, and the

proper application of all disbursements; (d) the Disbursement Agent is not

obligated to supervise, inspect or inform the Authority, the Tribe, the Trustee

or any third party of any aspect of the construction of the Project or the Dugan

Project or any other matter referred to above; and (e) the Disbursement Agent

owes no duty of care to the Authority or the Tribe to protect against, or to

inform the Authority or the Tribe against, any negligent, faulty, inadequate or

defective design or construction of the Project or the Dugan Project, provided

that the Disbursement Agent shall inform the Authority if the Disbursement Agent

has knowledge of such condition. The Disbursement Agent shall have no duties or

obligations hereunder except as expressly set forth herein (including with

respect to review of the substantive terms and conditions of any contracts

delivered to the Disbursement Agent), shall be responsible only for the

performance of such duties and obligations, shall not be required to take any

action otherwise than in accordance with the terms hereof and shall not be in

any manner liable or responsible for any loss or damage arising by reason of any

act or omission to act by it hereunder or in connection with any of the

transactions contemplated hereby, including, but not limited to, any loss that

may occur by reason of forgery, false representations, the exercise of its

discretion, or any other reason, except for its gross negligence or willful

misconduct.

7.2 Limitation of Independent Construction Consultant's

Liability. The Independent Construction Consultant's responsibility and

liability under this Agreement shall be limited as follows: (a) the Independent

Construction Consultant does not represent, warrant or guaranty to the Trustee

or the holders of the Senior Notes the performance of the Authority, the

Disbursement Agent or any contractor, subcontractor or provider of materials or

services in connection with construction of the Project or the Dugan Project;

(b) except to the extent the Independent Construction Consultant has actual

knowledge, the Independent Construction Consultant shall not be responsible for,

and shall not be obligated to make any specific inquiry with respect to, matters

pertaining to: historical architecture review, gaming regulatory authorities,

gaming licenses, liens against the Facility or the Project (except in connection

with the responsibilities of the Independent Construction Consultant set forth

herein) or the Dugan Project; and (c) the Authority shall remain solely

responsible for all aspects of its business and conduct in connection with the

Facility, and the Project and the Dugan Project, the accuracy of all

applications for payment, and the proper application of all disbursements. The

Independent Construction Consultant shall have no duties or obligations

hereunder, except as expressly set forth herein, shall be responsible only for

the performance of such duties and obligations, shall not be required to take

any action otherwise than in accordance with the terms hereof and shall not be

in any manner liable or responsible for any loss or damage arising by reason of

any act or omission to act by it hereunder or in connection with any of the

transactions contemplated hereby, including, but not limited to, any loss that

may occur by reason of forgery, false representations, the exercise of its

discretion, or any other reason, except for its gross negligence or willful

misconduct. The Independent Construction Consultant shall have the right to rely

(so long as such reliance is reasonable and in good faith) on certificates

received from the Authority. Anything in this Agreement to the contrary

notwithstanding, in no event shall the Independent Construction Consultant be

liable to any party hereto for any form of special, indirect or consequential

damages, including, without limitation, damages for economic loss (such as

business interruption or loss of profits, however the sam

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates