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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)
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Table of Contents
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Page
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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>
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<TABLE>
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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>
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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
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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.
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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;
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(c) the Pledged Revenues, whether now or hereafter
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.
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(c) Any time that the Available Construction Funds
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.
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"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.
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"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
(c) Net Loss Proceeds;
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.
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"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.
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"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>
<CAPTION>
Defined Term Section
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<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>
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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>
<CAPTION>
---------------------------------------------------------------- -----------------------------------------------------
Account: Account Number:
---------------------------------------------------------------- -----------------------------------------------------
<S> <C>
Construction Disbursement Account 743811001
---------------------------------------------------------------- -----------------------------------------------------
Construction Escrow Account 743811002
---------------------------------------------------------------- -----------------------------------------------------
Dugan Property Improvements Account 743811003
---------------------------------------------------------------- -----------------------------------------------------
</TABLE>
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<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>
<CAPTION>
---------------------------------------------------------------- -----------------------------------------------------
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.
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<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.
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<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).