Exhibit 10.5
CASH COLLATERAL AND DISBURSEMENT AGREEMENT
Among
U.S. Bank, N.A., as Disbursement Agent,
U.S. Bank, N.A., as Trustee,
Professional Associates Construction Services, Inc.,
The Chukchansi Economic Development Authority
and
The Picayune Rancheria of Chukchansi Indians
(solely with respect to its obligations under Section 15)
dated as of
October 8, 2002
TABLE OF CONTENTS
Page
1. Definitions. 2
1.1 Defined Terms.........................................................................................2
1.2 Index of Additional Defined Terms....................................................................12
2. Appointment of Disbursement Agent; Establishment of Securities Accounts; Related Provisions....................14
2.1 Appointment of the Disbursement Agent................................................................14
2.2 Establishment of Securities Accounts.................................................................14
2.3 Acknowledgement of Security Interest; Control........................................................16
2.4 Control of Securities Accounts.......................................................................16
2.5 Control of Deposit Account...........................................................................17
2.6 The Authority's Rights...............................................................................18
2.7 Cash Equivalents.....................................................................................18
2.8 Remedies.............................................................................................19
2.9 Waiver of Set-Off Rights.............................................................................19
2.10 Cooperation..........................................................................................19
3. Certain Responsibilities of Disbursement Agent and Independent Construction Consultant.........................20
3.1 Disbursements from the Securities Accounts...........................................................20
3.2 Transfer of Funds at Direction of Trustee............................................................20
3.3 Payment of Compensation..............................................................................20
3.4 Periodic Review......................................................................................21
3.5 Review by Independent Construction Consultant........................................................21
4. Disbursements During Construction Period.......................................................................22
4.1 Initial Disbursements from the Construction Disbursement Account.....................................22
4.2 Subsequent Disbursements from the Construction Disbursement Account..................................23
4.3 Advance Construction Disbursements...................................................................25
4.4 Interest Reserve Account Disbursements...............................................................25
4.5 Final Disbursement of Funds in Construction Period Accounts following the Initial Operating Date.....26
5. Certain Construction Period Covenants..........................................................................26
5.1 Amendments to Authority Budget.......................................................................26
5.2 Construction Contract Amendment Process..............................................................27
5.3 Construction Contracts Entered into after the Issuance Date..........................................28
5.4 Available Construction Funds Certificate.............................................................29
5.5 Project Cost Schedule Certificate....................................................................30
5.6 Final Plans..........................................................................................30
5.7 Deposit of Additional Funds..........................................................................30
5.8 Deemed Deposit of Advance Disbursement Request into Escrow Account...................................30
6. Certain Operating Period Covenants.............................................................................30
6.1 Collection Banks.....................................................................................30
6.2 Funds in Accounts....................................................................................31
6.3 Notice that Project is Operating.....................................................................31
6.4 Maintenance of Permitted Investments.................................................................32
7. Operating Period Accounts......................................................................................32
7.1 Capital Replacement Reserve Account..................................................................32
7.2 Cash Accumulation Account............................................................................32
7.3 Shortfall Account....................................................................................33
7.4 Contingent Interest Account..........................................................................33
7.5 Tribe Distribution Fund Account......................................................................35
7.6 Authority Investment Account.........................................................................35
8. Other Accounts.................................................................................................35
8.1 Interest Payment Account.............................................................................35
8.2 Principal Payment Account............................................................................36
8.3 Collateral Reserve Account...........................................................................36
9. Limitation of Liability........................................................................................37
9.1 Limitation of Disbursement Agent's Liability.........................................................37
9.2 Limitation of Independent Construction Consultant's Liability........................................37
10. Indemnity and Insurance........................................................................................38
10.1 Indemnification of Disbursement Agent................................................................38
10.2 Insurance............................................................................................38
11. Termination....................................................................................................38
12. Substitution or Resignation of the Disbursement Agent..........................................................38
12.1 Procedure............................................................................................39
12.2 Successor Disbursement Agent by Merger, etc..........................................................39
12.3 Eligibility; Disqualification........................................................................40
12.4 Consent of Independent Construction Consultant.......................................................40
13. Statement of Securities Accounts...............................................................................40
14. Miscellaneous..................................................................................................40
14.1 Waiver...............................................................................................40
14.2 Invalidity...........................................................................................40
14.3 No Authority.........................................................................................40
14.4 Assignment...........................................................................................40
14.5 Benefit..............................................................................................40
14.6 Time.................................................................................................41
14.7 Choice of Law........................................................................................41
14.8 Entire Agreement; Amendments.........................................................................41
14.9 Notices..............................................................................................41
14.10 Counterparts.........................................................................................42
14.11 Captions.............................................................................................42
14.12 Right to Consult Counsel.............................................................................42
14.13 Tribe Authorization..................................................................................42
14.14 Authority Authorization..............................................................................42
15. Waiver of Sovereign Immunity, Arbitration and Non-Impairment...................................................42
15.1 Irrevocable Waiver of Sovereign Immunity.............................................................42
15.2 Designation of Applicable Courts and Jurisdictions...................................................43
15.3 Additional Waivers as to Tribal Courts...............................................................44
15.4 Agreement not to Contest.............................................................................44
15.5 Arbitration..........................................................................................44
15.6 Non-Impairment.......................................................................................45
TABLE OF EXHIBITS
-----------------
Exhibit
-------
A-1 Form of L/C Provider Payment Certificate
A-2 Initial Disbursements Certificate
B-1 Form of Authority's Closing Certification
B-2 Form of Trustee's Closing Certification
C-1 Construction Disbursement Request
C-2 Pre-Opening Disbursement Request
C-3 Form of Advance Construction Disbursement Request Certificate
C-4 Form of Interest Reserve Account Disbursement Certificate
C-5 Form of Interest Reserve Excess Transfer Certificate
D-1 Form of Available Construction Funds Certificate
D-2 Form of Project Cost Schedule Certificate
D-3 Finishes Line-Items and Amounts (from Initial Authority Budget)
E Form of Authority Budget Amendment Certificate
F Construction Contract Amendment Certificate
G Form of Authority Disbursement Request Certificate
H Form of Consent to Security Assignment of Construction Contract
I Initial Authority Budget
J Form of Final Plans Amendment Certificate
K Form of Additional Construction Contract Certificate
L Form of Deposit Account Control Agreement
M Form of Capital Replacement Reserve Account Disbursement Certificate
N Form of Cash Accumulation Certificate
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 October 8, 2002, by and among U.S. Bank, N.A.,
a national banking association, as disbursement agent, securities
intermediary and depositary bank (together with any successor disbursement
agent permitted hereunder, the "Disbursement Agent"), U.S. Bank, N.A., a
national banking association, as trustee under the Indenture (as defined
below) (together with its successors and assigns from time to time under
the Indenture, the "Trustee"), Professional Associates Construction
Services, Inc., a California corporation (the "Independent Construction
Consultant"), the
Chukchansi Economic Development Authority (the
"Authority"), a wholly owned unincorporated enterprise of the Picayune
Rancheria of Chukchansi Indians (the "Tribe") and the Tribe (solely with
respect to its obligations under Section 15).
RECITALS
A. Senior Notes. Concurrently herewith, the Authority is issuing
$153,000,000 aggregate principal amount of its 14 1/2% Senior Notes due 2009
(together with all notes issued in exchange or replacement therefore, the
"Initial Senior Notes"), pursuant to the Indenture. In addition, the Authority
may issue up to $25,000,000 aggregate principal amount of its 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 develop, construct
and operate a casino, hotel and certain related amenities (the "Facility")
upon the Tribe's rancheria near Coarsegold, California (the "Rancheria"). The
Tribe has delegated to the Authority all rights and decision-making authority
with respect to the development, construction and operation of the Facility
pursuant to that certain Ordinance of the Picayune Rancheria of Chukchansi
Indians Establishing and Governing the
Chukchansi Economic Development
Authority adopted on June 15, 2001 (as amended on July 13, 2002 by Tribal
Resolution 2002-27, and further amended on July 30, 2002 by Tribal Resolution
2002-37).
C. Use of Proceeds. The net proceeds from the issuance of the Senior
Notes (the "Senior Note Proceeds") and the net proceeds from the issuance of
certain pay-in-kind notes issued concurrently with the Senior Notes (together
with the Senior Note Proceeds, the "Proceeds"), will be used for (among other
things) the design, development, equipping, construction, pre-opening and
operation of the Facility.
D. Construction Disbursement Account and Interest Reserve Account.
$109,200,000 of the Proceeds will be deposited contemporaneously with the
execution of this Agreement into the Construction Disbursement Account (as
defined below). The Manager has previously advanced to the Authority
$4,000,000 against the Proceeds, which amount was deposited into the Escrow
Account pursuant to the terms that certain letter agreement (the "Letter
Agreement") dated September 23, 2002 by and between the Manager and the
Construction Manager. As and to the extent set forth herein, within two (2)
Business Days after the date hereof (i) the Authority and the Manager will be
required to cause $2,300,000 of such Proceeds to be disbursed from the Escrow
Account to the Construction Disbursement Account and (ii) $1,700,000 of such
Proceeds will be deemed to be disbursed from the Escrow Account to the
Construction Disbursement Account, and then disbursed from the Construction
Disbursement Account to the Escrow Account. The remaining Proceeds (in the
amount of $32,400,000) will be deposited contemporaneously with the execution
of this Agreement into the Interest Reserve Account (as defined below). Assets
maintained in the Construction Disbursement Account and the Interest Reserve
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 in order to
set forth the conditions upon which, and the manner in which funds will be
disbursed (a) from the Construction Disbursement Account in order to permit
the Tribe and the Authority to construct the Facility, including the
furnishing, fixturing and equipping thereof, (b) from the Interest Reserve
Account for payment of interest due on the Senior Notes and (c) from the other
accounts established hereby for the purposes set forth herein.
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 Pre-Operating Revenue" means revenue generated
by the Authority, other than from disposition of its assets, but only to the
extent that such revenue (a) has been deposited in the Securities Accounts and
(b) (i) has been disbursed from the Construction Disbursement Account or (ii)
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
Pre-Operating Revenue shall also include:
(x) investment income which the Authority reasonably
determines will accrue on funds in the Construction Disbursement Account or
the Deposit Account through the date that the Authority reasonably anticipates
that the Initial Operating Date will occur;
(y) any amounts that have been loaned to the Authority and
deposited in the Construction Disbursement Account prior to such measurement
date pursuant to Section 3.2 of the Letter of Credit Drawdown Agreement; and
(z) the amount of FF&E Financing that the Authority has
incurred or reasonably expects to incur in accordance with the Indenture.
"Advance Construction Disbursement" means a disbursement
from the Construction Disbursement Account pursuant to Section 4.3.
"Affiliate" has the meaning ascribed thereto in the
Indenture.
"Agreed Permits" has the meaning ascribed thereto in Exhibit
B-1 attached hereto.
"Annual Support Threshold Amount" has the meaning ascribed
thereto in the Cash Accumulation Account Contribution Agreement.
"Applicable Permits" means national, state and local license
authorizations, certifications, filings, recordings, permits or other
approvals with or of any governmental authority, including, without
limitation, environmental, construction, operating or occupancy permits and
any agreements, consents or approvals that are required or that are otherwise
necessary for the performance of the design, construction, operation or
maintenance of the Facility. Without limiting the foregoing, Applicable
Permits also include Construction Period permits for temporary construction
utilities and temporary sanitary facilities, dump permits, road use permits,
permits related to the use, storage and disposal of Hazardous Materials
introduced to the Rancheria for or in connection with the performance of the
design, construction, operation or maintenance of the Facility, and permits
issued pursuant to any building, mechanical, electrical, plumbing or similar
codes.
"Architect" means Xxxxxx & Xxxxx Architects, Ltd. and its
successors identified by notice from the Authority to the Disbursement Agent.
"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 Certification" means an Officer's
Certificate of the Authority in the form attached hereto as Exhibit B-1.
"Available Construction Funds" means, subject to Section
5.4.1, with respect to the Authority at any given time, the sum of (a) the
Original Allocation and (b) all Additional Pre-Operating Revenue as of such
time, all less the sum of (x) the portion of the proceeds of FF&E Financing
that the Authority has theretofore expended in connection with the facility
and (y) 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 Accumulation Account Contribution Agreement" has the
meaning ascribed thereto in the Indenture.
"Cash Equivalents" has the meaning ascribed thereto in the
Indenture.
"Chukchansi Authority Ordinance" means the duly and validly
adopted Ordinance of The Picayune Rancheria Establishing and Governing The
Chukchansi Economic Development Authority adopted by the Tribe.
"Collateral" means all of the following:
(a) the Securities Accounts;
(b) all cash, Cash Equivalents, instruments,
investments and other securities or Financial Assets at any time on deposit in
or credited to the Securities Accounts;
(c) the Pledged Revenues, whether now or hereafter
owned, existing, arising or acquired, wherever held or located, and whenever
received;
(d) each Deposit Account and each other deposit
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;
(g) 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.
"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.
"Commitment Fee" has the meaning ascribed thereto in the
Letter of Credit Drawdown Agreement.
"Construction Contract Amendment" means any material
amendment or modification of a Construction Contract (including, without
limitation, any material change order to a Construction Contract).
"Construction Contracts" means the direct contracts between
the Authority and any Person pertaining to the construction of the Facility
but not including the Development Agreement.
"Construction Expenses" means Project Costs incurred in
accordance with the Authority Budget, excluding, however, (a) any Pre-Issuance
Expenses, (b) any Pre-Opening Expenses and (c) any Debt Financing Costs.
"Construction Manager" means Xxxxxx Construction Company,
Inc., a Missouri corporation.
"Construction Period" means the period from the Issuance
Date to and including the Initial Operating Date of the Facility.
"Construction Schedule" means a schedule describing the
sequencing of the components of work to be undertaken in connection with the
Facility, which schedule (as the same may be amended) demonstrates that the
Initial Operating Date will occur on or before the Operating Deadline.
"Contingent Interest Notes" means the Senior Subordinated
PIK Notes, the Subordinated PIK Note and the L/C Note.
"Contractor" means a contractor or supplier of materials or
services in connection with the construction of the Facility pursuant to a
direct contract with the Authority, including the Construction Manager but
excluding the Manager.
"Daily Cash-On-Hand Requirement" means the amount of cash
that is reasonably necessary at any date of determination to be at the
Facility to maintain properly the operations of the Facility during the
Operating Period.
"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 in accordance with 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.
"Deposit Account Control Agreement" means an agreement
substantially in the form of Exhibit L attached hereto.
"Development Agreement" has the meaning ascribed thereto in
the Indenture.
"Escrow Account" has the meaning ascribed thereto in the
Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement dated
September 25, 2002, among the Manager, the Construction Manager, Kiewit
Pacific Co., and Bank of America, N.A. as escrow agent.
"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 Disbursement Agent, after appropriate
consultation with the Authority and the Independent Construction Consultant,
is unable to approve (i) a Construction Disbursement Request in excess of
$250,000 or (ii) any Authority Budget Amendment Certificate where the
aggregate amount that is the subject of such amendment exceeds $250,000 due to
the failure of the Authority to satisfy the conditions precedent thereto set
forth herein, including, without limitation, the condition precedent that the
Independent Construction Consultant deliver the certificates required under
this Agreement, and such failure continues for thirty (30) days after notice
thereof without being cured.
(c) Any time that the Available Construction Funds
are less than the Remaining Costs and such deficiency continues for a period
of 30 days without being cured. (h) The failure of the Authority to deliver
any documents required to be delivered by the Authority pursuant to this
Agreement and any such failure continues for 30 days after notice thereof
without being cured.
"FF&E Financing" means Indebtedness of the kind described in
Section 4.08(b)(3) of the Indenture.
"Final Plans" means, with respect to any particular work or
improvement that constitutes a portion of the Facility:
(a) the Plans for such work or improvement, if any,
that are described on Exhibit 5 to the Authority's Closing Certification; and
(b) to the extent Plans for such work or
improvement are not described on Exhibit 5 to the Authority's Closing
Certification or to the extent such Plans do not contain sufficient
specificity to permit the completion of such work or improvement, the Plans
for such work or improvement to the extent such Plans:
(i) have received final approval from all
governmental authorities required to approve such Plans prior to completion of
the work or improvements, if any;
(ii) contain sufficient specificity to
permit the completion of such work or improvement;
(iii) are consistent with constructing the
Facility to include the Minimum Facilities;
(iv) have been signed by an architect
licensed to practice architecture in the State of California;
(v) call for construction of the Facility
which will permit the Initial Operating Date 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 Officer's
Certificate from the Authority in the form attached hereto as Exhibit J,
together with the Manager's, Independent Construction Consultant's and
Architect's certificates as provided in Exhibits 1, 2 and 3 and attached
thereto.
"Finishes" means the following Hard Costs with respect to
the Facility: flooring, bathroom fixtures and accessories, decorative metals,
decorative light fixtures and mill work, countertops, artwork, mirrors, water
and other special effects, paint, ceiling finishes and wall coverings, all of
which items (and no other items) are included in the line items set forth on
Exhibit D-3 attached hereto.
"First Interest Payment Date" means the first Interest
Payment Date to occur during a calendar year.
"GAAP" 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.
"Hard Costs" means the costs and expenses in respect of
supplying goods, materials and labor for the construction of improvements
relating to the Facility or other amounts payable pursuant to 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.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 Professional
Associates Construction Services, 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 I (except that the Initial Authority Budget shall not
include the Issuance Fees and Expenses).
"Initial Disbursements Certificate" means the Officer's
Certificate signed by the Authority and certified by the Manager in the form
attached hereto as Exhibit A-2.
"Initial Operating Date" has the meaning ascribed thereto in
the Indenture.
"Interest Payment Date" has the meaning ascribed thereto in
the Senior Notes.
"Interest Payment Year" means for any Interest Payment Date
the twelve month period following the immediately preceding Second Interest
Payment Date.
"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 raising of debt
to finance the Facility and (b) paid on or before the Issuance Date. The
Issuance Fees and Expenses are identified on Exhibit 1 to the Authority's
Closing Certification 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. "Knowledge" of the Manager means the actual knowledge of any officer,
director or management employee of the Manager, without duty of inquiry.
"Letter of Credit Drawdown Agreement" has the meaning
ascribed thereto in the Indenture.
"L/C Provider" has the meaning ascribed thereto in the
Letter of Credit Drawdown Agreement.
"L/C Note" has the meaning ascribed thereto in the Letter of
Credit Drawdown Agreement.
"Letter of Credit" has the meaning ascribed thereto in the
Letter of Credit Drawdown Agreement.
"Lien" has the meaning ascribed thereto in the Indenture.
"Management Agreement" has the meaning ascribed thereto in
the Indenture.
"Management Fees" means any fees payable by the Authority to
the Manager pursuant to the Management Agreement.
"Manager" means Cascade Entertainment Group, LLC or any
Permitted Replacement Manager (as defined in the Indenture).
"Manager Security Account" has the meaning ascribed thereto
in the Cash Accumulation Account Contribution Agreement.
"Material Construction Contract" means each Construction
Contract identified by the Authority to be material to the Facility (which the
Authority agrees shall include all Construction Contracts with a total
contract amount in excess of $100,000).
"Minimum Facilities" means a casino which has in operation
at least 1,500 slot machines, 25 table games, a hotel with at least 180 rooms,
restaurants with seating for at least 734 people and parking area for at least
1,700 vehicles.
"
New York UCC" means the Uniform Commercial Code as the same
may, from time to time, be in effect in the State of
New York.
"Officer's 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" has the meaning ascribed thereto in the
Indenture.
"Operating Deadline" means 21 months from the date of this
Indenture.
"Operating Period" means the period commencing on the
Initial Operating Date of the Facility and continuing until the date of
termination of this Agreement.
"Original Allocation" means the total amount of the Proceeds
less (x) the Initial Disbursements listed in Paragraphs (a) through (i) of the
Initial Disbursements Certificate, (y) the difference of (i) the portion of
the Proceeds that has been deposited into the Interest Reserve Account less
(ii) the portion of such Proceeds that is transferred into the Construction
Disbursement Account pursuant to Section 4.4(b) and (z) the Issuance Fees and
Expenses.
"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 Facility 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 and rents from:
(a) the operation of any portion of 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 in the Facility, (C) hotel, motel or
other lodging facilities included in the Facility, (D) parking derived from
the Facility, (E) the lease or sublease of space or equipment within, on or at
the Facility, (F) the disposition of all or any portion of the Facility, and
(G) 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 is 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;
provided that in no event shall Pledged Revenues include 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, credits for the exchange of goods or merchandise,
uncollected credit transactions written off as bad debt in accordance with
GAAP, 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 any
revenues or receipts of any Person other than the Authority, including
revenues and receipts of subtenants that are not related entities.
"Preliminary Plans" means, with respect to any particular
work or improvement, the Plans for such work or improvement, if any, that are
described on Exhibit 4 to the Authority's Closing Certification.
"Pre-Issuance Expenses" means, collectively, (a) any
expenses paid by the Authority, or by Manager on behalf of the Authority, in
connection with the Facility prior to the Issuance Date, and (b) to the extent
not included within clause (a), any expenses paid pursuant to Paragraphs (a)
through (g) of the Initial Disbursements Certificate.
"Pre-Opening Expenses" means expenses of the Authority
related to the preparation of the Facility for opening and operation (other
than expenses directly related to the construction of the Facility) to be
incurred prior to the Initial Operating Date as set forth in the Authority
Budget, excluding, however, any Debt Financing Costs or Pre-Issuance Expenses.
"Project Cost Schedule" means an itemized schedule in the
form attached as Schedule 1 to Exhibit D-2 hereto.
"Project Costs" means the costs to be incurred in connection
with the acquisition, financing, design, development, construction, equipping
and opening of the Facility, including all Construction Expenses, Debt
Financing Costs and Pre-Opening Expenses.
"Quarterly Payment Date" means each March 31, May 31, August
31 and December 15.
"Realized Savings" means, with respect to any line item in
the Authority Budget, the excess of the Remaining Budgeted Amount for such
line item over the amount of funds expended or owed by the Authority after the
Issuance Date to complete the tasks set forth in such line item and for the
materials and services used to complete such tasks; provided, however, that
Realized Savings for any line item shall be deemed to be zero unless and until
the Authority has delivered a fully executed Authority Budget Amendment
Certificate (together with all exhibits thereto) which includes such Realized
Savings.
"Release Condition" has the meaning ascribed thereto in the
Intercreditor Agreement.
"Remaining Budgeted Amount" for any line item on the
Authority Budget means the Total Budgeted Amount for such line item in the
Authority Budget less the amount of Pre-Issuance Expenses with respect to such
line item.
"Remaining Costs" means, at any given time, the amount of
Construction Expenses (including Retainage Amounts) and Pre-Opening Expenses
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.
"Second Interest Payment Date" means the second Interest
Payment Date to occur during a calendar year.
"Securities Accounts" means the Construction Period
Accounts, the Operating Period Accounts, the Senior Notes Payment Accounts and
the Collateral Reserve Account, each as defined in Section 2.2.
"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.
"Senior Subordinated PIK Notes" has the meaning ascribed
thereto in the Intercreditor Agreement.
"Soft Costs" means all costs and expenses (other than Hard
Costs) set forth in the Authority Budget, including, without limitation,
Pre-Opening Costs.
"Subordinated PIK Note" has the meaning ascribed thereto in
the Intercreditor Agreement.
"Substantial Completion" means, with respect to the
Facility, that:
(a) all Liens (other than Permitted Liens) related
to the development, construction and equipping of, and beginning operations
at, the Facility 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 Period Accounts to discharge such Liens;
(b) the Independent Construction Consultant shall
have delivered a certificate to the Authority and the Trustee certifying that
the Facility is substantially complete in all material respects in accordance
with the Final Plans and all applicable building laws, ordinances and
regulations;
(c) the Facility is in a condition (including the
installation of furnishings, fixtures and equipment) to receive customers in
the ordinary course of business;
(d) the Facility is open to the general public and
operating with the Minimum Facilities in accordance with applicable building
laws, ordinances and regulations; and
(e) a permanent or temporary certificate of
occupancy has been issued for the Facility by the appropriate governmental
authorities.
"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
Letter of Credit Drawdown Agreement, the Cash Accumulation Account
Contribution Agreement, the Indenture, the Senior Notes, the Pledge and
Security Agreement, the Pledge and Security Agreement (Tribal UCC) and the
Deposit Account 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 B-2 attached hereto.
"UCC" means: (a) with respect to the creation and attachment
of any security interest, (i) if the creation and attachment of the security
interest is capable of being subject to the
New York UCC, the
New York UCC or
(ii) if the creation and attachment of the security interest is excluded from
coverage under the
New York UCC by virtue of Section 9-109 thereof, the Tribal
UCC and (b) with respect to the perfection, the effect of perfection or
non-perfection and priority of the security interest, (i) if the creation and
attachment of the security interest is capable of being subject to the
New
York UCC, the Uniform Commercial Code of the jurisdiction specified by the
mandatory choice of law rules set forth in the
New York UCC or (ii) if the
creation and attachment of the security interest is excluded from coverage
under the
New York UCC by virtue of Section 9-109 thereof, the Uniform
Commercial Code of the jurisdiction specified by the mandatory choice of law
rules set forth in the Tribal UCC.
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:
Defined Term Section
------------ -------
AAA.......................................................................................15.5
Additional Construction Contract Certificate................................................................5.3
Advance Construction Disbursement Request...................................................................4.3
Agreement..........................................................................................Introduction
Applicable Courts..........................................................................................15.2
Authority..........................................................................................Introduction
Authority Assets...........................................................................................15.1
Authority Budget Amendment Certificate....................................................................5.1.3
Available Construction Funds Certificate....................................................................5.4
Capital Replacement Reserve Account.......................................................................2.2.2
Cash Accumulation Account.................................................................................2.2.2
Cash Accumulation Certificate.............................................................................7.2.1
Collateral Reserve Account................................................................................2.2.4
Construction Contract Amendment Certificate.................................................................5.2
Construction Disbursement Account.........................................................................2.2.1
Construction Disbursement Request .....................................................................4.2.1(a)
Construction Period Accounts..............................................................................2.2.1
Contingent Interest Account...............................................................................2.2.2
Deferred Contingent Interest..............................................................................7.4.1
Deposit Account...........................................................................................2.2.5
Deposit Account Order.......................................................................................2.5
Disbursement Agent.................................................................................Introduction
Disbursement Request......................................................................................4.2.1
Entitlement Order...........................................................................................2.4
Expected Interest Reserve Income Amount..................................................................4.4(b)
Facility..........................................................................................B of Recitals
Financial Assets............................................................................................2.4
First Interest Payment Date Shortfall.....................................................................7.4.3
Indenture.........................................................................................A of Recitals
Independent Construction Consultant................................................................Introduction
Initial Disbursements.......................................................................................4.1
Initial Disbursements Certificate ..........................................................................4.1
Initial Interest Reserve Account Target..................................................................4.4(b)
Initial Senior Notes..............................................................................A of Recitals
Interest Payment Account..................................................................................2.2.3
Interest Payment Date.....................................................................................8.1.2
Interest Payment Request..................................................................................8.1.2
Interest Reserve Account..................................................................................2.2.1
Interest Reserve Income Requirement......................................................................4.4(b)
Letter Agreement..................................................................................D of Recitals
Material Construction Contract Amendment....................................................................5.2
Maturity Date.............................................................................................7.2.4
Obligations.................................................................................................2.3
Operating Period Accounts ................................................................................2.2.2
Paying Agent..............................................................................................8.1.2
Permitted Claims...........................................................................................15.1
Principal Payment Account.................................................................................2.2.3
Principal Payment Request.................................................................................8.2.2
Pre-Opening Disbursement Request..........................................................................4.2.1
Proceeds..........................................................................................C of Recitals
Project Cost Schedule Certificate...........................................................................5.5
Rancheria.........................................................................................B of Recitals
Required Cash Accumulation Amount ........................................................................7.2.1
Second Interest Payment Date Shortfall....................................................................7.4.3
Security Entitlements ......................................................................................2.4
Senior Notes......................................................................................A of Recitals
Senior Notes Payment Accounts.............................................................................2.2.3
Senior Note Proceeds..............................................................................C of Recitals
Shortfall Account.........................................................................................2.2.2
Tax Payment Provisions....................................................................................7.4.4
Tribal Party...............................................................................................15.1
Tribe..............................................................................................Introduction
Tribe Distribution........................................................................................7.5.1
Tribe Distribution Date...................................................................................7.5.1
Tribe Distribution Fund Account...........................................................................2.2.2
Tribe Distribution Restriction............................................................................7.5.1
Trustee............................................................................................Introduction
2. Appointment of Disbursement Agent; Establishment of Securities
Accounts; Related Provisions.
2.1 Appointment of the Disbursement Agent. The Disbursement
Agent is hereby appointed by the Authority and the Trustee as disbursement
agent hereunder, and the 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. The Disbursement Agent shall hold and safeguard the Securities
Accounts (and the cash, instruments and securities on deposit therein) during
the term of this Agreement and shall treat the Securities Accounts and the
cash, instruments, and securities in the Securities 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 Securities Accounts.
2.2.1 Establishment of Construction Period
Accounts. The Disbursement Agent hereby establishes at its offices located at
000 Xxxx 0xx Xxxxxx, Xx. Xxxx, XX 00000 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 4.5, unless earlier termination is
otherwise provided for herein:
Account: Account Number:
Construction Disbursement Account 33448401
Interest Reserve Account 33448403
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 and the
Interest Reserve Account are sometimes referred to collectively herein as the
"Construction Period Accounts."
2.2.2 Establishment of Operating Period Accounts.
The Disbursement Agent hereby establishes at its offices located in 000 Xxxx
0xx Xxxxxx, Xx. Xxxx, XX 00000 the following special, segregated securities
accounts which shall be maintained at all times until the termination of this
Agreement, unless earlier termination is otherwise provided for herein:
Account: Account Number:
Capital Replacement Reserve Account 33448406
Cash Accumulation Account 00000000
Shortfall Account 33448408
Contingent Interest Account 33448402
Authority Interest Account 33448411
Tribe Distribution Fund Account 33448412
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 Capital Replacement Reserve Account, Cash
Accumulation Account, Shortfall Account, Contingent Interest Account Authority
Interest Account and Tribe Distribution Fund Account are sometimes referred to
collectively herein as the "Operating Period Accounts."
2.2.3 Establishment of Senior Notes Payment
Accounts. The Disbursement Agent hereby establishes at its offices located in
000 Xxxx 0xx Xxxxxx, Xx. Xxxx, XX 00000 the following accounts, each of which
shall be maintained as special, segregated securities accounts at all times
until the termination of this Agreement, unless earlier termination is
otherwise provided for herein:
Account: Account Number:
Interest Payment Account 33448405
Principal Payment Account 33448404
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 Interest Payment Account and the Principal
Payment Account are sometimes referred to collectively herein as the "Senior
Notes Payment Accounts."
2.2.4 Establishment of Collateral Reserve Account.
The Disbursement Agent hereby establishes at its offices located in 000 Xxxx
0xx Xxxxxx, Xx. Xxxx, XX 00000 the following account which shall be maintained
as a special, segregated securities account at all times until the termination
of this Agreement, unless earlier termination is otherwise provided for
herein:
Account: Account Number:
Collateral Reserve Account 33448409
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.
2.2.5 Establishment of Deposit Account. The Disbursement Agent hereby
establishes at its offices located in 000 Xxxx 0xx Xxxxxx, Xx. Xxxx, XX 00000
the following special, segregated and irrevocable collateral accounts for
deposits and checking which shall be maintained at all times until the
termination of this Agreement, unless earlier termination is otherwise
provided for herein:
Account: Account Number:
Deposit Account 33448410
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.
2.2.6 General. All moneys, investments and
securities at any time on deposit in any of the above accounts shall
constitute trust funds to be held in the custody of the Disbursement Agent for
the purposes and on the terms set forth in this Agreement.
2.3 Acknowledgement of Security Interest; Control. Pursuant
to the Pledge and Security Agreement and the Pledge and Security Agreement
(Tribal UCC), in order 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 and created in favor of the Trustee a security
interest in and to, the Securities Accounts, the Deposit Account, all cash,
Cash Equivalents, instruments, investments, securities entitlements and other
securities at any time on deposit in the Securities Accounts and all proceeds
of any of the foregoing. All moneys, Cash Equivalents, instruments,
investments and securities at any time on deposit in any of the Securities
Accounts or the Deposit Account 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 Disbursement Agent in trust for the purposes of, and on the
terms set forth in, this Agreement.
2.4 Control of Securities Accounts. The Disbursement Agent
hereby agrees and confirms that it has established the Securities Accounts as
set forth and defined in this Agreement. The Disbursement Agent and the
Authority agree that (a) the Disbursement Agent is acting as a "securities
intermediary" (within the meaning of Section 8-102(14) of the UCC) with
respect to the Securities Accounts and the "financial assets" (within the
meaning of Section 8-102(a)(9) of the UCC, the "Financial Assets") credited to
the Securities Accounts; (b) each such Securities Account established by the
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 Securities Accounts and with respect to
such Securities Accounts and the Disbursement Agent shall so note in its
records pertaining to such Financial Assets and Securities Accounts; and (d)
all Financial Assets in registered form or payable to or to the order of and
credited to any such Securities Account shall be registered in the name of,
payable to or to the order of, or specially endorsed to, the Disbursement
Agent, or in blank, or credited to another securities account maintained in
the name of the Disbursement Agent, as applicable, and in no case will any
Financial Asset credited to any such Securities 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 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
Securities 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
Securities Accounts and the Financial Assets credited to the Securities
Accounts. All property delivered to the Disbursement Agent by or on behalf of
the Authority pursuant to this Agreement will be promptly credited to the
Securities Accounts and shall be treated as Financial Assets. If at any time
the 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 Securities Accounts or Financial Assets credited to the
Securities Accounts, the Disbursement Agent shall comply with such Entitlement
Order without further consent by the Authority or any other Person. In the
event that the Disbursement Agent receives conflicting Entitlement Orders
relating to the Securities Accounts or Financial Assets credited to the
Securities Accounts from the Trustee and any other Person (including, without
limitation, the Authority), the Disbursement Agent shall comply with the
Entitlement Orders originated by the Trustee. Each of the Authority and the
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 (and, to the extent provided herein, the Authority) to
comply with Entitlement Orders originated by such Person relating to the
Securities Accounts or Financial Assets credited to the Securities Accounts.
Except for the claims and interests of the Trustee and the Authority in the
Securities Accounts and the Financial Assets credited to the Securities
Accounts, neither the Disbursement Agent nor the Authority knows of any claim
to, or interest in, any Securities Account or Financial Assets credited to the
Securities Accounts. If the Disbursement Agent or the Authority obtains actual
knowledge that any Person has asserted a lien, encumbrance or adverse claim
against any of the Securities Accounts or Financial Assets credited to the
Securities Accounts, such party will promptly notify the Trustee thereof. In
the event that the Disbursement Agent has or subsequently obtains by
agreement, operation of law or otherwise a lien or security interest in any
Securities Account, any Security Entitlement carried therein or credited
thereto or any Financial Asset that is the subject of any such Security
Entitlement, the 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 Securities Accounts will not be
subject to deduction, set-off, banker's lien or any other right, and the
Disbursement Agent shall not grant, permit or consent to any other right or
interest in such Financial Assets, in favor of any Person (including the
Disbursement Agent) 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 Agent's jurisdiction (within the meaning of
Section 8-110 of the UCC). The Securities Accounts shall be governed by the
laws of the State of
New York except as specified in Section 14.7.
2.5 Control of Deposit Account. The Disbursement Agent
hereby agrees and confirms that it has established the Deposit Account as set
forth and defined in this Agreement. For so long as this Agreement remains in
effect, the 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 Deposit 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 Deposit
Account. If at any time the Disbursement Agent shall receive from the Trustee
any instruction directing disposition of any funds in the Deposit Account (a
"Deposit Account Order"), the Disbursement Agent shall comply with such
Deposit Account Order without further consent by the Authority or any other
Person. In the event that the Disbursement Agent receives conflicting Deposit
Account Orders relating to the Deposit Account, the Disbursement Agent shall
comply with the Deposit Account Orders originated by the Trustee. Each of the
Authority and the 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 Deposit
Account Orders originated by such Person relating to the Deposit Account. If
the Disbursement Agent or the Authority obtains knowledge that any Person has
asserted a lien, encumbrance or adverse claim against the Deposit Account,
such party will promptly notify the Trustee thereof. In the event that the
Disbursement Agent has or subsequently obtains by agreement, operation of law
or otherwise a lien or security interest in the Deposit Account, the
Disbursement Agent agrees that such lien or security interest shall be
subordinate to the lien and security interest of 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 Agent's jurisdiction (within
the meaning of Section 9-304 of the UCC). The Deposit Account shall be
governed by the laws of the State of New York except as specified in Section
14.7.
2.6 The Authority's Rights. The Authority shall not have any
rights or powers with respect to any amounts in the Securities Accounts or the
Deposit Account 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
hereof.
2.7 Cash Equivalents. Subject to the last sentence of this
Section 2.7, the Disbursement Agent shall invest any money held in any
Securities Account other than in the Interest Reserve Account, in such Cash
Equivalents, and in the case of the Interest Reserve Account, in such
Government Securities, in each case, as directed in writing by the Authority
from time to time. In the event that the Disbursement Agent has not received
any such written directions, the 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 Securities
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
Agent 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 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 Disbursement Agent
shall liquidate and sell any investment if so directed in writing by the
Trustee, and shall invest any money held in any Securities Account only as
directed by the Trustee. The Authority shall direct the Disbursement Agent to
invest any money held in the Interest Reserve Account only in such
non-callable Government Securities that will mature approximately on, but not
later than, any of the first three Payment Dates, and with respect to each
Payment Date, that will mature in such amounts as will be sufficient to pay
the interest that is due on the Senior Notes on such Interest Payment Date.
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 Agent shall disburse funds from the Securities Accounts only
as directed by the Trustee, 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
the Disbursement Agent and all cash proceeds received by the 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 the 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 the 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.
(c) The Authority hereby irrevocably
appoints the 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. The 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
the Disbursement Agent in its individual capacity, and not of any such rights
which may exist now or hereafter in favor of the 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. The 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 the 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.
3. Certain Responsibilities of Disbursement Agent and Independent
Construction Consultant.
3.1 Disbursements from the Securities Accounts. The
Disbursement Agent shall disburse funds from the Securities Accounts only upon
satisfaction of the applicable conditions to disbursement set forth herein.
Upon satisfaction of the applicable conditions to disbursement set forth
herein, the Disbursement Agent shall disburse funds from the applicable
Securities 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 the 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 the Disbursement Agent receives notice from the Trustee that such Event of
Default no longer exists, the Disbursement Agent shall only withdraw or
transfer amounts in any Securities Account at the direction of the Trustee.
3.3 Payment of Compensation.
3.3.1 Disbursement Agent's Compensation. On the
first Business Day of each year during the Construction Period (except for the
initial payment, which shall be disbursed as set forth in Section 4.1 below),
the Disbursement Agent shall disburse from the Construction Disbursement
Account $6,000 to Disbursement Agent, which amount shall constitute
compensation for services to be performed by Disbursement Agent under this
Agreement during such year. On the first Business Day of each year during the
Operating Period, the Authority shall pay $6,000 to Disbursement Agent, which
amount shall constitute (i) compensation for services to be performed by
Disbursement Agent under this Agreement during such year and (ii) compensation
for services performed by Disbursement Agent under the Cash Accumulation
Account Contribution Agreement during such year.
3.3.2 Independent Construction Consultant's
Compensation. The Independent Construction Consultant shall deliver to the
Disbursement Agent, on or prior to the last Business Day of each month during
the Construction Period, 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 during the Construction Period (except
for the initial payment, which shall be disbursed as set forth below), the
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 an amount equal to $120 for each hour of the Independent
Construction Consultant's services as set forth on such invoice (which amount
shall not exceed a total of $25,000 during any calendar quarter), plus the
total amount of all 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 or the Manager notifies the Disbursement
Agent and the Independent Construction Consultant that the Independent
Construction Consultant is in default. Until such time as the Trustee provides
written notice to the contrary to the Disbursement Agent and the Independent
Construction Consultant in accordance with the terms hereof, all amounts
payable to the Independent Construction Consultant shall be applied to the
applicable working capital line item in the Authority Budget.
3.3.3 L/C Provider's Compensation. No later than
two Business Days prior to each date the Commitment Fee is due during the
Construction Period, the Authority shall deliver to the Disbursement Agent a
certificate in the form of Exhibit A-1 hereto, certifying as to the amount of
the Commitment Fee then due pursuant to Section 6.2 of the Letter of Credit
Drawdown Agreement and specifying the account into which such Commitment Fee
should be paid, together with the certificates of L/C Provider and the Manager
in the forms provided as Exhibits 1 and 2 thereto. Within one Business Day of
its receipt of the Authority's Certificate, the Disbursement Agent shall
disburse the amount requested in such certificate from the Construction
Disbursement Account to the account of L/C Provider specified in such
certificate.
3.3.4 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.
3.4 Periodic Review.
3.4.1 Review by Disbursement Agent. The
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 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 Disbursement Agent shall reasonably
request to be present for such meetings. In addition, the 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 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 Facility. The rights
of the Disbursement Agent under this Section 3.4 shall not be construed as an
obligation, it being understood that the Disbursement Agent's duty is limited
to act upon certificates and draw requests submitted by the Authority and the
Trustee hereunder.
3.5 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 Construction Manager, 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 and the Facility 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 and the Facility, at off-site
facilities where materials designated for use in the Facility 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 Facility. 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 Manager and
the Authority relating to the construction of the Facility, 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 Facility. From time to time, at the
request of the Independent Construction Consultant, the Manager and the
Authority shall make available to the Independent Construction Consultant a
Project Cost Schedule and/or the Construction Schedule for the Facility. The
Manager and the Authority agree 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 in order to
facilitate the Independent Construction Consultant's performance of its
obligations hereunder.
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 Disbursement Agent shall make the disbursements (the "Initial
Disbursements") described in the Initial Disbursements Certificate attached
hereto as Exhibit A-2 (the "Initial Disbursements Certificate") from the
Construction Disbursement Account. The conditions to the Initial Disbursements
shall consist of the following:
(a) the Disbursement Agent shall have received the
Original Allocation;
(b) the Disbursement Agent shall have received the
Initial Disbursements Certificate; and
(c) the Disbursement Agent shall have received the
Authority's Closing Certificate and the Trustee's Closing Certificate.
4.2 Subsequent Disbursements from the Construction
Disbursement 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 Disbursement Agent a
request for the disbursement of funds from the Construction Disbursement
Account substantially in the form of Exhibit C-1 hereto (a "Construction
Disbursement Request") or in the form of Exhibit C-2 hereto (a "Pre-Opening
Disbursement Request" and, together with a Construction Disbursement Request,
each a "Disbursement Request"), together with the exhibits attached thereto,
as further described below. The Disbursement Agent shall approve any
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
satisfied as of such time. The 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 Disbursement Agent receives any
Disbursement Request) if any Disbursement Request is disapproved and the
reason(s) therefor. The Authority may submit Construction Disbursement
Requests no more often than weekly. The Authority may submit Pre-Opening
Disbursement Requests no more often than weekly.
(b) Provided that a Disbursement Request satisfies
the requirements of Section 4.2.2, within two Business Days following
submission of a Disbursement Request, the Disbursement Agent shall disburse to
the Deposit Account the funds requested in such Disbursement Request. The
Authority shall withdraw funds from and write checks on the Deposit Account
solely for the purpose of paying Construction Expenses and Pre-Opening
Expenses, as the case may be, identified on such Disbursement Request.
(c) The Trustee may waive any condition to a
disbursement requested in a Disbursement Request.
4.2.2 Additional Conditions to Subsequent
Disbursements from the Construction Disbursement Account. The 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, the Disbursement
Agent shall make the disbursements described in the corresponding Disbursement
Request:
(a) With respect to the Construction Disbursement
Request, the Authority shall have submitted to the Disbursement Agent a
Construction Disbursement Request as provided for herein pertaining to the
amounts requested for disbursement, together with a completed Schedule 1
thereto substantially in the form contemplated thereby and the certifications
of the Manager, the Construction Manager, the Independent Construction
Consultant and the Architect substantially in the form of Exhibits 1, 2, 3 and
4 to the Construction Disbursement Request to the extent required pursuant to
the terms of the Construction Disbursement Request;
(b) With respect to any Pre-Opening Disbursement
Request, the Authority shall have submitted to the Disbursement Agent a
Pre-Opening Disbursement Request as provided for herein pertaining to the
amounts requested for disbursement, together with a completed Schedule 1
thereto substantially in the form contemplated thereby and the certification
of the Manager substantially in the form of Exhibit 1 to the Pre-Opening
Disbursement Request.
(c) The Disbursement Agent and the Independent
Construction Consultant shall have received copies of all Construction
Contracts 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: (i) a consent
substantially in the form attached hereto as Exhibit H signed by the
counterparty to such Material Construction Contract; and (ii) 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 Disbursement Agent shall rely upon the certification of
the Authority set forth in the Construction Disbursement Request in order to
establish satisfaction of this condition;
(d) The Disbursement Request on its face has been
completed as to the information required therein and the required attachments,
if any, are attached;
(e) The Disbursement Agent shall not be aware of
any material error, inaccuracy, misstatement or omission of fact in any
Disbursement Request or an exhibit or attachment thereto or information
provided by the Authority upon the request of the Disbursement Agent; and
(f) The Disbursement Agent is not aware (solely
from the facts set forth in any Disbursement Request or any certificate from
the Manager, the Construction Manager, the Independent Construction Consultant
or the Architect 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 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 Disbursement Agent
shall not authorize any disbursement of funds from the Construction
Disbursement Account pursuant to a Construction Disbursement Request;
provided, however, the following payments may be made by the Disbursement
Agent:
(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 Disbursement Agent determined that
condition (f) of Section 4.2.2 was not satisfied and has so notified the
Authority and the Manager in writing;
(b) payments not to exceed $2,500,000 in the
aggregate to prevent the condition of the Facility from deteriorating or to
preserve any work completed as certified to be reasonably necessary or
advisable by the Manager and the Authority (in writing); and
(c) if such condition continues for a period of
three consecutive months or more, at the request of the Authority, Retainage
Amounts for the portion of the Facility completed; provided that the Authority
and the Manager each certifies that the conditions for paying such amounts
(other than completion of the Facility) are met.
4.3 Advance Construction Disbursements. The Authority shall
have the right from time to time (but no more frequently than once per
calendar month, unless otherwise permitted by the Disbursement Agent) to
deliver to the Disbursement Agent an Advance Construction Disbursement Request
in the form of Exhibit C-3, together with the certification of the Manager in
the form of Exhibit 1 attached thereto (an "Advance Construction Disbursement
Request"), which Advance Construction Disbursement Request shall not be
required to include or attach the supporting documentation required for all
other Construction Disbursement Requests; provided, however, that in the event
a Default or Event of Default subsequently exists (in addition to any other
rights and remedies hereunder or permitted by law), the Authority shall
promptly take all action reasonably required to cause to be delivered to
Disbursement Agent all supporting documentation with respect thereto that
would otherwise be required for a Construction Disbursement Request. The
Disbursement Agent shall approve any Advance Construction Disbursement
Request, so long as (a) the Advance Construction Disbursement Request on its
face has been completed as to the information required therein and (b) the
Disbursement Agent shall not have received written notice by any party hereto
that a Default or an Event of Default exists and is continuing.
4.4 Interest Reserve Account Disbursements.
(a) At least two Business Days prior to each
Interest Payment Date during the Construction Period, the Authority shall
deliver to the Disbursement Agent a certificate in the form of Exhibit C-4
(with an attached certification by the Manager in the form of Exhibit 1
thereto) certifying as to the amount required to be paid with respect to the
Senior Notes under the Indenture on such Interest Payment Date and the
calculation of such amount. On each such Interest Payment Date, Disbursement
Agent shall liquidate securities held in the Interest Reserve Account (to the
extent required) and pay over to the Trustee the amounts due with respect to
the Senior Notes, as specified in such certificate, from the Interest Reserve
Account. In the event that the Authority fails to deliver the certificate
required by the first sentence of this paragraph, the Trustee may direct the
Disbursement Agent to liquidate such securities (to the extent required), and
disburse to the Trustee the amounts necessary to pay the amounts due with
respect to the Senior Notes. In the event there are insufficient funds in the
Interest Reserve Account to pay any amount due pursuant to such certificate or
direction so given by the Trustee, the Authority shall, prior to the
applicable Interest Payment Date, deposit in cash into the Interest Reserve
Account an amount equal to such deficiency; provided, however, that the
Trustee shall direct the Disbursement Agent to disburse an amount equal to
such deficiency from the Construction Disbursement Account to the Interest
Reserve Account in the event such amounts are not received from the Authority
on a timely basis. The Authority acknowledges that any failure by the
Authority to provide notice or deposit funds referenced in this Section 4.4
shall not in any way exonerate or diminish its obligation to make all payments
under the Indenture as and when due.
(b) The parties generally intend that the portion
of the Proceeds that will be held in the Interest Reserve Account will equal
the difference (the "Initial Interest Reserve Account Target") of (a) the
aggregate amount of the interest payments that will be due on the Senior Notes
on each of the first three Interest Payment Dates (the "Interest Reserve
Income Requirement") less (b) the amount of interest and other income that the
Authority reasonably expects to earn on amounts held in the Interest Reserve
Account (the "Expected Interest Reserve Income Amount"). The portion of the
Proceeds that will be deposited into the Interest Reserve Account
contemporaneously with the execution of this Agreement may exceed the Initial
Interest Reserve Account Target since the Expected Interest Reserve Income
Amount will be established with greater clarity after the Authority directs
the Disbursement Agent to invest such Proceeds. As such, within three Business
Days after the date hereof, the Authority shall deliver to the Disbursement
Agent a request for the disbursement of such excess funds from the Interest
Reserve Account to the Construction Disbursement Account in the form of
Exhibit C-5 hereto. The Disbursement Agent shall, after receiving such
request, transfer such amounts specified on such request to the Construction
Disbursement Account.
4.5 Final Disbursement of Funds in Construction Period
Accounts following the Initial Operating Date. If the Authority provides to
the Disbursement Agent:
(a) an Officer's Certificate in the form of Exhibit
G attached hereto to the effect that (i) the Facility is Operating and has
been Operating uninterrupted for at least 30 days prior to the date of the
certification, (ii) all amounts required to be paid to Contractors in
connection with causing the Facility to become Operating have been paid, and
(iii) there are no mechanic's liens or other liens, charges or orders filed
against the Facility or any portion thereof by any Contractor or any other
party that have not been discharged of record or bonded to other than
Permitted Liens; and
(b) a certificate of each of the Manager and the
Independent Construction Consultant confirming the factual certification
described in clause (a) above,
then the Disbursement Agent shall, upon the direction of the Authority
pursuant to the Officer's Certificate delivered pursuant to clause (a) above,
disburse all remaining funds in the Construction Period Accounts, if any, to
the account specified in such Officer's Certificate, which shall be
established with a Collection Bank in accordance with, and such account shall
be subject to the provisions of, Section 6.1.
5. Certain Construction Period Covenants.
5.1 Amendments to Authority Budget. The Authority Budget for
the Facility may be amended from time to time in the manner set forth herein.
The Authority shall have the right from time to time to amend the Authority
Budget to change the amounts allocated for specific line item components of
the Facility; provided that, in any such amendment, the Authority may neither
modify the description of any line item nor modify the Pre-Issuance Expense
amount set forth for any such line item and, for each line item, the Remaining
Budgeted Amount must equal the difference of the Total Budgeted Amount for
such line item less the amount of Pre-Issuance Expenses for such line item.
5.1.1 Sources of Funds for Line-Item Increases. A
line item in the Authority Budget may be increased only if the funds for such
increase are made available in the Authority Budget from:
(a) an increase in Additional Pre-Operating Revenue
to the extent not previously expended or dedicated to the payment of items
contained in the Authority Budget;
(b) an increase in Realized Savings from another
line item and a corresponding reduction in the construction line items related
to such Realized Savings;
(c) the reduction of the "contingency" line item in
the Authority Budget; or
(d) the reduction of allocated reserves in the
Authority Budget pursuant to the terms and conditions of this Agreement.
5.1.2 Authority Budget Amendment Process. Any
amendment to the Authority Budget shall be in writing. Any such amendment
shall identify with particularity the line item to be increased or decreased,
if any, the amount of the increase or decrease (if any), and in the event of
an increase in a construction line item, the Realized Savings, Additional
Pre-Operating Revenue, line item for "contingency" in the Authority Budget
and/or previously allocated reserves which are permitted to be reduced
pursuant to Section 5.1.1 (but not any Retainage Amounts), which are proposed
to be utilized to pay for the increase; and (y) in the case of a decrease in a
construction line item, the Realized Savings in the amount of such reduction.
The parties acknowledge that a portion of any cost reduction achieved with
respect to the work performed under a Construction Contract may be payable to
the Construction Manager or another Contractor under such Construction
Contract and that in such case the entire reduction may not become Realized
Savings. Construction line items may be reduced only upon obtaining, and in
the amount of, Realized Savings. The total amount allocated in the Authority
Budget for the line items for Finishes, as such line items are set forth on
Exhibit D-3 hereto, may not be reduced by more than 35% of the sum of the
amounts allocated to such line items on Exhibit D-3 hereto. The "contingency"
line item on the Authority Budget may be reduced by allocation to other line
items. Any amounts of Realized Savings, Additional Pre-Operating Revenue,
contingency amounts or previously allocated reserves so identified for use in
connection with a particular line item thenceforth shall be deemed dedicated
to the particular line item, unless and until the Authority Budget is amended
to reduce the amounts budgeted for the line item.
5.1.3 Authority Budget Amendment Certificate. The
Authority shall submit the Authority Budget amendment to the Disbursement
Agent by an Officer's Certificate in the form of Exhibit E hereto (an
"Authority Budget Amendment Certificate") together with the certificates of
the Manager, Construction Manager (for Hard Costs under Construction Contracts
to which it is a party only), Independent Construction Consultant and
Architect (for Hard Costs with respect only to Plans prepared by it) as
provided in the form of Exhibits 1 through 4 to the Authority Budget Amendment
Certificate. Upon submission of such Authority Budget Amendment Certificate,
together with the Exhibits thereto, such amendment shall become effective
hereunder, and the Authority Budget for the Facility shall thereafter be as so
amended. No amendment to the Authority Budget shall be effective except in
accordance with the preceding sentence.
5.2 Construction Contract Amendment Process. The Authority
shall not enter into or approve any Construction Contract Amendment except as
set forth in this Section 5.2. The Authority shall have the right from time to
time to amend any Construction Contract to change the scope of work for any
portion of the Facility and/or the Authority's payment obligations in
connection therewith. Any Construction Contract Amendment that (i) when taken
together with all related Construction Contract Amendments, results in a cost
increase in excess of $50,000 in a Material Construction Contract (or, with
respect to the Construction Contract with Construction Manager only, in excess
of $100,000), (ii) when taken together with all related Construction Contract
Amendments, results in a material lessening of the scope or quality of the
work constituting the design or construction of the Facility or (iii) results
in the likely addition of no less than one week of construction (or such
amendments, in the aggregate, result in the likely addition of no less than
four weeks of construction) (a "Material Construction Contract Amendment")
shall be in writing and shall identify with particularity all changes being
made. Each Material Construction Contract Amendment shall be effective when
and only when: (a) the Authority has, or the Authority and the Contractor
have, executed and delivered the Material Construction Contract Amendment
(with the effectiveness thereof subject only to satisfaction of the conditions
in clauses (b) and (c) below); (b) the Authority has submitted the Material
Construction Contract Amendment to the Disbursement Agent and the Trustee
together with an Officer's Certificate in the form attached hereto as Exhibit
F (a "Construction Contract Amendment Certificate"), together with the
certificates of the Manager, Independent Construction Consultant, Construction
Manager (for Hard Costs under Construction Contracts to which it is a party
only) and Architect (for Hard Costs with respect only to Plans prepared by it)
as provided in the form of Exhibits 1 through 4 to such Construction Contract
Amendment Certificate; and (c) the Disbursement Agent has acknowledged its
receipt of the materials referenced in clause (b) above, as contemplated in
the form of the Construction Contract Amendment Certificate. Construction
Contract Amendments which are not Material Construction Contract Amendments
shall not require the approval of the Trustee or any other Person to be
effective.
5.3 Construction Contracts Entered into after the Issuance
Date. The Authority may from time to time enter into Construction Contracts
consistent with the Final Plans and the Authority Budget, as each is in effect
from time to time. Each such Construction Contract shall be in writing. Each
Material Construction Contract shall become effective when and only when: (a)
the Authority and the counterparty to such Material Construction Contract have
executed and delivered the Material Construction Contract (with the
effectiveness thereof subject only to satisfaction of the conditions in
clauses (b), (c) and (d) below); (b) the Authority has submitted to the
Disbursement Agent: (i) such Material Construction Contract together with an
Officer's Certificate in the form attached hereto as Exhibit K (an "Additional
Construction Contract Certificate") and all exhibits, attachments and
certificates required thereby, each duly completed and executed, and (ii)
copies of such performance and payment bonds as the counterparty to such
Construction Contract may be required to provide to the Authority pursuant to
such Material Construction Contract (which performance and payment bonds shall
name the Trustee and the Authority as additional obligees) and a consent
substantially in the form attached hereto as Exhibit H signed by the
counterparty to such Material Construction Contract; (c) if entering into such
Material Construction Contract will result in an amendment to the Authority
Budget, the Authority has complied with the requirements of Section 5.1; and
(d) if entering into such Material Construction Contract will cause the
Available Construction Funds to be less than the Remaining Costs, then the
Authority, treating such difference as a cost overrun, has complied with the
requirements of Section 5.4.
5.4 Available Construction Funds Certificate. Concurrently
with the submission of any Construction Disbursement Request, the Authority
shall submit an Officer's Certificate in the form of Exhibit D-1 (an
"Available Construction Funds Certificate"), to the Disbursement Agent and the
Trustee. Each Available Construction Funds Certificate shall include an
Available Construction Funds Schedule dated as of the first Business Day of
such month and shall set forth (i) the actual investment income earned on the
Construction Disbursement Account or the Deposit Account through a date not
more than 30 days prior to the date of the Available Construction Funds
Schedule, and (ii) the additional amount of investment income which the
Authority reasonably anticipates will accrue on the Construction Disbursement
Account or the Deposit Account from such date through the date that the
Authority reasonably anticipates that the Initial Operating Date will occur.
5.4.1 Additional Pre-Operating Revenue. If at any
time the Authority submits an Available Construction Funds Certificate
pursuant to this Section and the Authority can no longer reasonably anticipate
that the Additional Pre-Operating Revenue earned (and anticipated to be earned
through the date that the Authority reasonably anticipates that the Initial
Operating Date will occur) from investments of funds in the Construction
Disbursement Account or the Deposit Account will equal the amount of such
Additional Pre-Operating Revenue set forth in the Authority Budget, then:
(a) if the total amount of such Additional
Pre-Operating Revenue at such date earned or anticipated to be earned is less
than the total amount of such Additional Pre-Operating Revenue set forth in
the Authority Budget, then the Available Construction Funds shall be deemed
reduced by the amount of such deficiency and the Authority, as a condition to
the next Construction Disbursement Request, shall reallocate contingencies,
provide additional Available Construction Funds or otherwise amend the
Authority Budget so that the Remaining Costs do not exceed the total Available
Construction Funds; or
(b) if the total amount of such Additional
Pre-Operating Revenue at such date earned or anticipated to be earned is
greater than the total amount of such Additional Pre-Operating Revenue set
forth in the Authority Budget, then the Available Construction Funds shall be
deemed increased by the amount of such excess.
5.4.2 Cost Overruns. The Authority covenants to
cure any anticipated 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 Facility as a
whole within ten days after the Authority becomes aware of any such
anticipated cost overrun by:
(a) providing sufficient funds to cover in full
such cost overrun from previously unallocated Available Construction Funds or
Additional Pre-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 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.
5.5 Project Cost Schedule Certificate. The Authority shall
submit an Officer's Certificate in the form of Exhibit D-2 (a "Project Cost
Schedule Certificate") to the Independent Construction Consultant within five
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)
for each line item in the Authority Budget, each of the items required on
Exhibit D-2, (b) (i) the actual investment income earned on the Construction
Disbursement Account or the Deposit Account through a date not more than 30
days prior to the date of the Project Cost Schedule, and (ii) the additional
amount of investment income which the Authority reasonably anticipates will
accrue on the Construction Disbursement Account or the Deposit Account from
such date through the date that the Authority reasonably anticipates that the
Initial Operating Date will occur and (c) 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.
5.6 Final Plans.(a) Neither the Authority nor the Manager
shall construct or permit to be constructed any portion of the Facility 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 J delivered to the
Disbursement Agent.
5.7 Deposit of Additional Funds. In addition to the
$109,200,000 of the Proceeds that will be deposited into the Construction
Disbursement Account contemporaneously with the execution of this Agreement,
the Authority shall, no later than the second Business Day after the date
hereof, cause $2,300,000 of the Proceeds to be deposited into the Construction
Disbursement Account.
5.8 Deemed Deposit of Advance Disbursement Request into
Escrow Account. Contemporaneously with the execution of this Agreement, the
Authority shall be deemed to have deposited $1,700,000 against the Proceeds
into the Construction Disbursement Account. Immediately following such deemed
deposit, the Disbursement Agent shall be deemed to have made a disbursement of
$1,700,000 hereof to the Escrow Account pursuant to Section 4.3. No Advance
Disbursement Request shall be required in connection with such deemed
disbursement. Upon the disbursement of any portion of such $1,700,000 from the
Escrow Account to the Construction Disbursement Account, such portion of such
$1,700,000 shall no longer be deemed to have been disbursed under Section 4.3.
6. Certain Operating Period Covenants.
6.1 Collection Banks.
6.1.1 Transfer to Collection Banks. The Authority
at its own expense shall cause all Pledged Revenues received from the
operation of the Facility to be transferred to a Collection Bank within 24
hours after receipt; provided that an aggregate amount of cash up to the Daily
Cash-On-Hand Requirement, as determined and certified by the Authority to the
Disbursement Agent and the Trustee (as described in Section 6.1.2) need not be
transferred to a Collection Bank and may be retained by the Authority.
6.1.2 Daily Cash-On-Hand Requirement. The Authority
hereby certifies and represents and warrants to the Disbursement Agent and the
Trustee that, as of the date hereof, the Daily Cash-On-Hand Requirement, as
reasonably determined by the Authority, is $4,500,000. If the Authority, in
consultation with the Manager, reasonably determines that it is necessary to
change the Daily Cash-On-Hand Requirement then the Authority shall, promptly
after making such determination, deliver an Officers' Certificate (with an
attached certification by the Manager) to the Disbursement Agent and the
Trustee setting forth the amount of the Daily Cash-On-Hand Requirement as
determined by the Authority and the Manager.
6.1.3 Deposit Account Control Agreement. The
Authority shall ensure that each Collection Bank shall be a bank that is
chartered by the State of California or the Government of the United States of
America and that is 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 Collection Banks, before
depositing any Pledged Revenues in any Collection Bank, the Authority shall
deliver to Disbursement Agent a completed and fully executed Deposit Account
Control Agreement among the Authority, the Trustee and such Collection Bank
substantially in the form attached hereto as Exhibit L (or in such other form
as may be acceptable to the Trustee). If the Authority receives any amount
that should have been deposited in a Collection Bank as provided in this
Agreement, the Authority shall hold such amount in trust for the benefit of
the Disbursement Agent, shall not commingle any such amounts with any of its
funds or other property and shall immediately transfer such amounts to the
Disbursement Agent. The Authority shall cause all Pledged Revenue deposited in
any Collection Bank to be deposited in the "Deposit Account" described in the
Deposit Account Control Agreement for such Collection Bank.
6.1.4 Discretionary Deposits. The Authority may, at
any time, (a) elect to deposit directly with the Disbursement Agent, for
deposit into any Operating Period Account (as requested by the Authority in
writing) all amounts otherwise required to be deposited with a Collection
Bank, or (b) direct any Collection Bank to transfer any amounts deposited with
such Collection Bank to the Disbursement Agent, for deposit into such
Operating Period Account. The Authority agrees that the Disbursement Agent's
officers and employees are irrevocably authorized to endorse for payment to
Disbursement Agent any instruments received by Disbursement Agent for deposit
into the Operating Period Account specified by the Authority.
6.2 Funds in Accounts. The Authority agrees that all funds
deposited with a Collection Bank pursuant to Section 6.1 shall be disbursed
and paid out only in accordance with the provisions of the Indenture.
6.3 Notice that Project is Operating. Promptly after (but in
any event within seven days after) the Initial Operating Date of the Facility,
the Authority shall deliver an Officers' Certificate to Disbursement Agent and
the Trustee to the effect that the Facility is Operating, together with a
certificate from each of the Independent Construction Consultant and the
Manager concurring with such certificate of the Authority.
6.4 Maintenance of Permitted Investments. The Authority
shall maintain all of its Permitted Investments (other than cash that has not
yet been delivered to a Collection Bank or that is not in excess of the Daily
Cash-On-Hand Requirement) in a Collection Bank, in the Deposit Account or in a
Securities Account.
7. Operating Period Accounts.
7.1 Capital Replacement Reserve Account.
7.1.1 Deposits into Capital Replacement Reserve
Account. The Authority shall, from time to time, deposit into the Capital
Replacement Reserve Account all amounts required by Section 4.07(c) of the
Indenture to be deposited into the Capital Replacement Reserve Account.
7.1.2 Payment of Capital Expenditures. The
Authority may, from time to time, deliver a certificate in the form of Exhibit
M (with an attached certification by the Manager in the form of Schedule 1
thereto) requesting a disbursement in the amount stated thereon, and
certifying (a) that such disbursement shall be applied to expenditures for
constructing, repairing or replacing any capital assets used at the Facility,
including equipment; provided, however, that the Authority shall not use or
permit to be used any such amounts to complete the original construction of
the Facility, (b) as to the description and the amounts of each such
expenditure and (c) as to the name(s) of the payee(s) of any such expenditure.
Within three Business Days following submission of such certificate, the
Disbursement Agent shall disburse from the Capital Replacement Reserve Account
the funds specified in such certificate to the account(s) or payee(s)
specified on such certificate. The Authority shall, within 20 Business Days
thereafter, deliver to the Disbursement Agent duly executed acknowledgements
of payment of the amounts specified on such certificate from each party
identified on such certificate as a payee.
7.2 Cash Accumulation Account.
7.2.1 Required Cash Accumulation Amount. On the
first Business Day of each fiscal quarter after the Initial Operating Date,
the Authority shall deliver to the Disbursement Agent a certificate in the
form of Exhibit N (with an attached certification by the Manager in the form
of Schedule 1 thereto) (a "Cash Accumulation Certificate"), certifying as to
(a) the amount of the "Required Cash Accumulation Amount", which shall be
equal to (i) $3.0 million multiplied by the number of full fiscal quarters of
the Authority since the Initial Operating Date less (ii) the amount that shall
have been disbursed from the Cash Accumulation Account in accordance with
Section 7.2.3 to make prepayments or, or purchases of, the Senior Notes and
(b) the balance on deposit in the Cash Accumulation Account.
7.2.2 Deposits into Cash Accumulation Account. The
Authority shall, from time to time, deposit into the Cash Accumulation Account
all amounts required by Section 4.07(c) of the Indenture to be deposited into
the Cash Accumulation Account.
7.2.3 Transfers from Cash Accumulation Account for
Prepayment or Purchase. The Authority may, from time to time, deliver to the
Disbursement Agent a certificate in the form of Exhibit O (with an attached
certification by the Manager in the form of Schedule 1 thereto) requesting a
disbursement from the Cash Accumulation Account for a prepayment on, or
purchase of, the Senior Notes in the amount stated thereon to the Paying Agent
(or other payment recipient permitted under the Indenture) and specifying the
wiring instructions for such Paying Agent or other payment recipient and
certifying as to the other matters set forth therein. The Disbursement Agent
shall, on the second Business Day before the date specified in such
certificate for such prepayment, transfer the amount of such disbursement from
the Cash Accumulation Account to the Paying Agent (or other payment
recipient), which amount shall be applied against the principal amount of the
Senior Notes and any premium applicable to such prepayment (but not interest).
7.2.4 Transfers from Cash Accumulation Account upon
Maturity. Eight Business Days before the date of maturity of the Senior Notes
(the "Maturity Date"), the Authority shall deliver to the Disbursement Agent a
certificate in the form of Exhibit P (with attached certifications by the
Manager and the Trustee in the form of Schedule 1 and Schedule 2 thereto)
certifying as to the amounts of the principal payment due on the Senior Notes
and the other matters set forth therein and requesting a disbursement from the
Cash Accumulation Account in such amount. The Disbursement Agent shall, within
two Business Days after receiving such request, transfer such amounts to the
Principal Payment Account and such amounts shall be applied against interest,
principal and other amounts due on the Maturity Date on the Senior Notes.
7.3 Shortfall Account.
7.3.1 Deposits into Shortfall Account. Funds shall
be deposited into the Shortfall Account in accordance with the provisions of
the Cash Accumulation Account Contribution Agreement.
7.3.2 Transfers and Payments From Shortfall
Account. The Authority may, from time to time, deliver to the Disbursement
Agent a certificate in the form of Exhibit Q (with an attached certification
by the Manager in the form of Schedule 1 thereto) requesting a disbursement
from the Shortfall Account to the Manager Security Account in the amount
stated therein, and certifying as to the matters set forth therein. On the
next Business Day following receipt of such certificate, the Disbursement
Agent shall transfer the amounts specified on such certificate to the Manager
Security Account.
7.4 Contingent Interest Account.
7.4.1 Deposits into Contingent Interest Account.
Each of the Contingent Interest Notes provides that contingent interest on
such Contingent Interest Note shall be deferred, and shall not be paid, unless
the Release Condition has been satisfied. On each Interest Payment Date that
is after the Initial Operating Date on which the Release Condition is not met,
the Authority shall deposit into the Contingent Interest Account an amount
equal to the amount of contingent interest that would have been payable in
respect of the Contingent Interest Notes on such Interest Payment Date had the
Release Condition been satisfied on such Interest Payment Date, but that was
not payable in respect of the Contingent Interest Notes on such Interest
Payment Date because the Release Condition was not satisfied on such Interest
Payment Date ("Deferred Contingent Interest").
7.4.2 Distributions from Contingent Interest
Account to Pay Deferred Contingent Interest. The Authority shall, before any
Interest Payment Date on which the Authority reasonably believes the Release
Condition will be met, deliver to the Disbursement Agent a certificate in the
form of Exhibit R (with an attached certification by the Manager in the form
of Schedule 1 thereto) requesting a disbursement from the Contingent Interest
Account to pay Deferred Contingent Interest that the Authority reasonably
believes will be due and payable on such Interest Payment Date, and certifying
as to the matters set forth therein. The Disbursement Agent shall, after
receiving such request, transfer such amounts specified on such certificate to
the payees or accounts specified therein.
7.4.3 Distributions from Contingent Interest
Account. After the Initial Operating Date, the Authority shall, after each
Interest Payment Date, deliver to the Disbursement Agent a certificate in the
form of Exhibit S (with an attached certification by the Manager in the form
of Schedule 1 thereto) requesting a disbursement from the Contingent Interest
Account in the amount stated thereon if
(a) in the case of a First Interest Payment Date,
the following difference (the "First Interest Payment Date Shortfall") is a
positive number with respect to such First Interest Payment Date. The
difference of:
(i) one-half of the Annual Support
Threshold Amount for the respective Interest Payment Year; less
(ii) the amount of Management Fees that
were paid to the Manager or paid into the Manager Security Account during the
six-month period immediately preceding such First Interest Payment Date; or
(b) in the case of a Second Interest Payment Date,
the following difference (the "Second Interest Payment Date Shortfall") is a
positive number with respect to such Second Interest Payment Date. The
difference of:
(i) (A) the Annual Support Threshold
Amount for the respective Interest Payment Year; less (B) any amount received
by the Manager under this Section 7.4.3 for the immediately preceding First
Interest Payment Date; less
(ii) the amount of Management Fees that
were accrued by the Manager during the twelve-month period immediately
preceding such Second Interest Payment Date. Notwithstanding the foregoing, in
no event shall such amounts be disbursed if a corresponding disbursement from
the Manager Security Account is not permitted on such date.
The Disbursement Agent shall, within two Business Days after receiving such
request, transfer such amounts specified on such certificate (up to the
balance in the Contingent Interest Account) to the Manager Security Account.
7.4.4 Tax Distributions from Contingent Interest
Account. The Authority shall, before any Quarterly Payment Date on which the
Authority reasonably believes tax amounts under Section 3.02 of the L/C Note,
Paragraph (b) of the Subordinated PIK Note, Paragraph (b) of any Senior
Subordinated PIK Note, Section 4.01(b) of the Subordinated PIK Note Indenture
or Section 4.01(b) of the Senior Subordinated PIK Note Indenture (each, a "Tax
Payment Provision") will be due (after giving effect to the Intercreditor
Agreement), deliver to the Disbursement Agent a certificate in the form of
Exhibit T (with an attached certification by the Manager in the form of
Schedule 1 thereto) requesting a disbursement from the Contingent Interest
Account to pay tax amounts the Authority reasonably believes will be due under
such Tax Payment Provisions (after giving effect to the Intercreditor
Agreement) in the amount stated therein, and certifying as to the matters set
forth therein. The Disbursement Agent shall, within two Business Days after
receiving such request, transfer such amounts specified on such certificate
(up to the balance in the Contingent Interest Account) to the payees or
accounts specified therein.
7.5 Tribe Distribution Fund Account.
7.5.1 Deposits into Tribe Distribution Fund
Account. The first full paragraph of Section 4.07(c) of the Indenture
(commencing with the words "Beginning with the end") provides that under
certain circumstances the Authority shall make distributions to the Tribe
("Tribe Distribution"). The second full paragraph of Section 4.07(c) of the
Indenture (commencing with the words "Notwithstanding the foregoing") (the
"Tribe Distribution Restriction") provides that Tribe Distributions shall be
restricted in amount under certain circumstances. Beginning with the end of
the Authority's first full fiscal quarter commencing after the Initial
Operating Date if the amount of the Tribe Distributions made by the Authority
within 40 days after the end of any of the Authority's full fiscal quarters
(each such date, a "Tribe Distribution Date") is limited in amount because of
the Tribe Distribution Restriction, then the Authority shall deposit into the
Tribe Distribution Fund Account on such Tribe Distribution Date an amount
equal the amount that would otherwise have been payable to the Tribe but for
the Tribe Distribution Restriction.
7.5.2 Distributions from Tribe Distribution Fund
Account to Pay Tribe Distribution. The Authority may withdraw funds from the
Tribe Distribution Fund Account so long as such funds shall be paid to the
Tribe (or to any other person at the direction of the Tribe) and such payment
does not violate the terms of the Indenture.
7.6 Authority Investment Account. The Authority may deposit
funds into and withdraw funds from the Authority Investment Account so long as
no such deposit or withdrawal violates the terms of the Indenture.
8. Other Accounts.
8.1 Interest Payment Account.
8.1.1 Deposits into Interest Payment Account. The
Authority may, from time to time, deposit funds into the Interest Payment
Account, which funds shall be used for payments of interest on the Senior
Notes in accordance with the terms of the Indenture.
8.1.2 Interest Payments on Senior Notes. Five
Business Days prior to the date that any payment of interest is due on the
Senior Notes, the Authority shall deliver to the Disbursement Agent and the
Trustee an Interest Payment Request in the form of Exhibit U attached hereto
(each, an "Interest Payment Request") describing the amounts required to be
paid, the paying agent appointed pursuant to the Indenture (the "Paying
Agent") to which the Disbursement Agent should transfer funds in order to
effect the required payments (or other payment recipient permitted under the
Indenture), the wiring instructions for such Paying Agent or other payment
recipient and the day (the "Interest Payment Date") upon which such payment or
payments is or are due and payable. If the Authority fails to deliver timely
such Interest Payment Request, then the Trustee may deliver such Interest
Payment Request to the Disbursement Agent on behalf of the Authority. On the
Interest Payment Date, the Disbursement Agent shall disburse to the Paying
Agent (or other payment recipient specified in the Interest Payment Request)
the amounts described in the Interest Payment Request as due and payable on
that date. The Authority acknowledges that the failure of either notice
referenced in this Section 8.1.2 to be delivered to Disbursement Agent shall
not in any way exonerate or diminish the Authority's obligation to make all
payments under the Senior Notes as and when due.
8.2 Principal Payment Account.
8.2.1 Deposits into Principal Payment Account. The
Authority may, from time to time, deposit funds into the Principal Payment
Account, which funds shall be used for payments of principal of the Senior
Notes in accordance with the terms of the Indenture.
8.2.2 Transfers from Principal Payment Account upon
Maturity. Five Business Days before the Maturity Date, the Authority shall
deliver to the Disbursement Agent a certificate in the form of Exhibit V
certifying as to the amount of the principal payment due on the Senior Notes
and requesting a disbursement from the Principal Payment Account in such
amount (each, a "Principal Payment Request") to the Paying Agent (or other
payment recipient permitted under the Indenture) in order to effect payment on
the Maturity Date and specifying the wiring instructions for such Paying Agent
or other payment recipient. If the Authority fails to deliver timely such
Principal Payment Request, then the Trustee may deliver such Principal Payment
Request to the Disbursement Agent on behalf of the Authority. On the Maturity
Date, the Disbursement Agent shall disburse to the Paying Agent (or other
payment recipient specified in the Principal Payment Request) the amounts
described in the Principal Payment Request as due and payable on that date.
The Authority acknowledges that the failure of either notice referenced in
this Section 8.2.2 to be delivered to the Disbursement Agent shall not in any
way exonerate or diminish the Authority's obligation to make all payments
under the Senior Notes as and when due.
8.3 Collateral Reserve Account.
8.3.1 Deposits into Collateral Reserve Account. All
funds deposited into the Collateral Reserve Account pursuant to Section 4.2 of
the Letter of Credit Drawdown Agreement shall be maintained as Collateral for
the Senior Note Obligations for the benefit of the Trustee and the Holders.
8.3.2 Transfers from Collateral Reserve Account
after Termination. Following the termination of this Agreement pursuant to
Section 11, upon the written request of the Authority, any amounts remaining
in the Collateral Reserve Account shall be transferred to the Authority.
9. Limitation of Liability.
9.1 Limitation of Disbursement Agent's Liability. The
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,
the Architect, the Construction Manager, the Manager, any Contractor or
provider of materials or services in connection with construction of the
Facility; (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 its
Rancheria and the Facility, 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 Facility 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 Facility, 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.
9.2 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, the Construction Manager, the Architect or
any contractor, subcontractor or provider of materials or services in
connection with construction of the Facility; (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 (except in connection with the
responsibilities of the Independent Construction Consultant set forth herein);
and (c) the Authority shall remain solely responsible for all aspects of its
business and conduct in connection with the Facility, 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, the Architect and the Construction
Manager. 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 same may be caused).
10. Indemnity and Insurance.
10.1 Indemnification of Disbursement Agent. The Authority
hereby indemnifies, holds harmless and defends the Disbursement Agent and its
officers, directors, agents and employees from and against any and all claims,
actions, obligations, liabilities and expenses, including defense costs,
investigative fees and costs, legal fees, and claims for damages, arising from
the Disbursement Agent's performance under this Agreement, except to the
extent that such liability, expense or claim is attributable to the gross
negligence or willful misconduct of the Disbursement Agent.
10.2 Insurance. The Disbursement Agent, at its sole cost and
expense, shall purchase and maintain throughout the term of this Agreement,
the following insurance policies:
(a) Comprehensive general liability insurance, with
minimum limits of $2,000,000 combined single limit per occurrence, covering
all property damage arising out of its operation under this Agreement.
(b) Workers' compensation insurance covering all of
its employees and volunteers.
Said policies shall provide for 30 days' prior written notice to the Trustee
and the Authority of cancellation or material change. If any of such insurance
is written on a claims made form, following termination of this Agreement,
coverage shall survive for the maximum reporting period available at each
anniversary date of such insurance, or not less than five years, whichever is
greater. The limits of coverage required under subparagraph (a) above shall
not in any way limit the liability of the Authority or the Tribe under this
Agreement.
11. Termination. This Agreement shall terminate automatically on the
later of (a) repayment and performance of all Senior Note Obligations and (b)
30 days following disbursement of all funds remaining in the Securities
Accounts; provided, however, that the obligations of the Authority under
Section 10 of this Agreement shall survive termination of this Agreement.
12. Substitution or Resignation of the Disbursement Agent.
12.1 Procedure. A resignation or removal of the Disbursement
Agent and appointment of a successor Disbursement Agent shall become effective
only upon the successor Disbursement Agent's acceptance of appointment as
provided in this Section 12.
12.1.1 The Disbursement Agent may resign in writing
at any time and be discharged from all duties hereunder upon 30 days' written
notice to all parties hereto. The Trustee or the Holders of a majority in
principal amount of the then outstanding Senior Notes may remove the
Disbursement Agent as provided below by so notifying the Disbursement Agent
and the Authority in writing, if:
(a) the Disbursement Agent fails to comply with
Section 12.3 hereof;
(b) the Disbursement Agent is adjudged a bankrupt
or an insolvent or an order for relief is entered with respect to the
Disbursement Agent under any Bankruptcy Law;
(c) a custodian or public officer takes charge of
the Disbursement Agent or its property; or
(d) the Disbursement Agent becomes incapable of
acting.
12.1.2 If the Disbursement Agent resigns or is
removed or if a vacancy exists in the office of Disbursement Agent for any
reason, the Trustee shall, and the Holders of a majority in principal amount
of the then outstanding Senior Notes (if such Holders provided a notice
pursuant to Section 12.1.1 or if there is no Trustee capable of acting at such
time) may, promptly appoint a successor Disbursement Agent acceptable to the
Authority. Within one year after any successor Disbursement Agent appointed by
the Trustee takes office, the Holders of a majority in principal amount of the
then outstanding Senior Notes may appoint a successor Disbursement Agent
acceptable to the Authority to replace the successor Disbursement Agent
appointed by the Trustee.
12.1.3 If a successor Disbursement Agent does not
take office within 60 days after the retiring Disbursement Agent resigns or is
removed, the retiring Disbursement Agent, the Trustee, the Authority or the
Holders of at least 10% in principal amount of the then outstanding Senior
Notes may petition any court of competent jurisdiction for the appointment of
a successor Disbursement Agent.
12.1.4 A successor Disbursement Agent shall deliver
a written acceptance of its appointment to the retiring Disbursement Agent,
the Authority and the Trustee. Thereupon, the resignation or removal of the
retiring Disbursement Agent shall become effective, and the successor
Disbursement Agent shall have all the rights, powers and duties of the
Disbursement Agent under this Agreement. The retiring Disbursement Agent shall
promptly transfer all property held by it as Disbursement Agent to the
successor Disbursement Agent.
12.2 Successor Disbursement Agent by Merger, etc. If the
Disbursement Agent consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor
Disbursement Agent.
12.3 Eligibility; Disqualification. The Disbursement Agent
shall at all times be a bank chartered under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trust power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition and a Thomson's Bank Watch rating of B or better.
12.4 Consent of Independent Construction Consultant. The
Independent Construction Consultant acknowledges and agrees that the Trustee
shall have the right to change the party acting as the "Disbursement Agent"
pursuant to this Agreement, and the Trustee agrees to provide written notice
to the Independent Construction Consultant of any such change.
13. Statement of Securities Accounts. Upon the request of the
Authority or the Trustee from time to time, the Disbursement Agent shall
deliver to the Authority and the Trustee an account statement prepared by the
Disbursement Agent in a form satisfactory to the Trustee and the Authority
setting forth with reasonable particularity the balance of funds then in the
Securities Accounts and the manner in which such funds are invested; provided,
however, that the Disbursement Agent shall not be required to provide such
statements more often than weekly. The parties hereto irrevocably instruct the
Disbursement Agent that on the first date upon which the balance in any
Securities Account is reduced to zero, the Disbursement Agent shall deliver to
the Trustee and the Authority a notice that the balance in such Securities
Account has been reduced to zero.
14. Miscellaneous.
14.1 Waiver. Any party hereto may specifically waive any
breach of this Agreement by any other party, but no such waiver shall be
deemed to have been given unless such waiver is in writing, signed by the
waiving party and specifically designates the breach waived, nor shall any
such waiver constitute a continuing waiver of similar or other breaches.
14.2 Invalidity. If, for any reason whatsoever, any one or
more of the provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable or invalid in a particular case or in all cases,
such circumstances shall not have the effect of rendering any of the other
provisions of this Agreement inoperative, unenforceable or invalid, and the
inoperative, unenforceable or invalid provision shall be construed as if it
were written so as to effectuate, to the maximum extent possible, the parties'
intent.
14.3 No Authority. The Disbursement Agent shall not have any
authority to, and shall not make any warranty or representation or incur any
obligation on behalf of, or in the name of, the Trustee.
14.4 Assignment. This Agreement is personal to the parties
hereto, and the rights and duties of any party hereunder shall not be
assignable except with the prior written consent of the other parties. In any
event, this Agreement shall inure to and be binding upon the parties and their
successors and permitted assigns.
14.5 Benefit. The parties hereto and their respective
successors and assigns, but no others, shall be bound hereby and entitled to
the benefits hereof.
14.6 Time. Time is of the essence of each provision of this
Agreement.
14.7 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York including
without limitation, Section 5-1401 of the New York General Obligations Law;
provided, however that with respect to the creation, attachment, perfection or
priority of the security interest in any Collateral, the governing law shall
be the applicable UCC as set forth in the definition of the term "UCC".
14.8 Entire Agreement; Amendments. This Agreement (together
with the Indenture and the Collateral Documents) contains the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and commitments,
whether oral or written. This Agreement may be amended only by a writing
signed by duly authorized representatives of all parties.
14.9 Notices. All notices and other communications required
or permitted to be given or made under this Agreement shall be in writing and
shall be deemed to have been duly given and received, regardless of when and
whether received, either: (a) on the day of hand delivery; or (b) on the day
sent, when sent by United States certified mail, postage and certification fee
prepaid, return receipt requested; or by facsimile transmission, in each case,
addressed as follows:
To the Disbursement Agent:
U.S. Bank, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Corporate Trust Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Trustee:
U.S. Bank, N.A.
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Corporate Trust Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Authority:
The
Chukchansi Economic Development Authority
00000 Xxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attn: Tribal Chairman
Fax: (000) 000-0000
To the Independent Construction Consultant:
To the Independent Construction Consultant:
Professional Associates Construction Services
000 X Xxxxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section 14.9 to the others.
14.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
14.11 Captions. Captions in this Agreement are for
convenience only and shall not be considered or referred to in resolving
questions of interpretation of this Agreement.
14.12 Right to Consult Counsel. Each of the Disbursement
Agent and the Trustee may, if any of them deems necessary or appropriate,
consult with and be advised by counsel in respect of their duties hereunder.
Each of the Disbursement Agent or the Trustee shall be entitled to rely upon
the advice of its counsel in any action taken in its capacity as the
Disbursement Agent or the Trustee, as the case may be, hereunder and shall be
protected from any liability of any kind for actions taken in reasonable
reliance upon such opinion of its counsel. The Authority agrees to pay all
such reasonable counsel fees.
14.13 Tribe Authorization. The Authority represents and
warrants that the Tribe has authorized the Authority to execute any and all
certificates, consents or other documents required by this Agreement on behalf
of the Tribe, and that the Tribe has authorized the Authority to execute any
other document on behalf of the Tribe as reasonably requested by the Trustee
or the Disbursement Agent in connection with this Agreement.
14.14 Authority Authorization. The Authority hereby
authorizes and empowers the Manager to execute any and all certificates,
consents or other documents required by this Agreement on behalf of the
Authority and any other document on behalf of the Authority requested by the
Trustee or Disbursement Agent in connection with this Agreement. In each case,
the Authority acknowledges that such document, once executed, shall be binding
on the Authority as if such document had been, in fact, executed by the
Authority.
15. Waiver of Sovereign Immunity, Arbitration and Non-Impairment.
15.1 Irrevocable Waiver of Sovereign Immunity. Each of the
Authority and the Tribe (each a "Tribal Party") hereby unconditionally and
irrevocably waives its sovereign immunity and any and all defenses based
thereon with respect to any claim, demand, dispute, action or cause of action
arising under or in any way connected with or related or incidental to this
Agreement or the Senior Notes, as the same may be amended or modified from
time to time, whether now existing or hereafter arising and whether sounding
in tort, contract or otherwise (collectively "Permitted Claims"). Such waiver
shall extend (a) to permit the interpretation, enforcement and the seeking of
legal or equitable relief and remedies (whether through an award or granting
of specific performance, injunction, mandamus, damages or otherwise) by the
parties hereto (and their successors and assigns permitted hereunder) through
arbitration proceedings as herein provided, and (b) to permit judicial actions
to compel, enter judgment upon, enforce, modify or vacate any award or interim
injunctive relief related to the arbitration proceedings in any of the
Applicable Courts described in Section 15.2 below.
In connection with the foregoing waiver of sovereign immunity by any
Tribal Party:
(a) Duration. The duration of such waiver shall
commence on the date hereof and continue with respect to each Tribal Party
until one year after all obligations of such Tribal Party hereunder have been
completely performed and any amounts, if any, owed hereunder from the
Authority have been indefeasibly paid in full;
(b) Grantees. The grantee(s) of the waiver are the
Trustee, together with its successors and assigns hereunder;
(c) Scope. The scope of the waiver applies to all
Permitted Claims;
(d) Property and Funds. The only assets or rights
against which any award, judgment or other order for relief arising from this
waiver may be enforced are "Authority Assets" as defined in the "Ordinance of
the Picayune Rancheria Establishing and Governing the
Chukchansi Economic
Development Authority," as amended by an amendment thereto adopted on July 13,
2002 by Resolution No. 2002-27 of the Tribe's Tribal Counsel ("Tribal
Counsel"), and an amendment thereto adopted on July 30, 2002 by Resolution No.
2002-37, whether held in the name of the Authority, the Tribe or any branch,
department, agency, instrumentality, division, subsidiary, authority,
enterprise, corporation, business or other entity directly or indirectly owned
or controlled in whole or in part by either the Authority or the Tribe.
Notwithstanding the foregoing, any revenues or other property transferred by
the Authority to any other Tribal Party in compliance with the Senior Notes
shall, upon transfer, no longer constitute Authority Assets;
(e) Jurisdictions. The courts with jurisdiction
with respect to the Permitted Claims are the Applicable Courts (as defined in
Section 15.2 below) (subject to the obligation of each Tribal Party to submit
to arbitration as provided herein); and
(f) Governing Law. The law applicable to the waiver
and the Permitted Claims shall be the internal laws of the State of New York,
except where application of the uniform commercial code of the State of New
York will not recognize a lien and the perfection of a lien on any Authority
Assets as security for any performance of a Tribal Party hereunder, and the
uniform commercial code of the Tribe will recognize the lien or the perfection
of the lien, in which case the law of the Tribe, as applicable, that
recognizes the lien and perfection shall apply.
15.2 Designation of Applicable Courts and Jurisdictions.
Each Tribal Party hereby irrevocably consents to the following courts,
jurisdictions and venues for the judicial action described in Section 15.1
above (the "Applicable Courts"): (a) the United States District Court for the
Southern District of New York, and all courts to which any appeal therefrom
may be available; (b) any court of the State of New York, and all courts to
which any appeal therefrom may be available; (c) if none of the foregoing
courts shall have or accept jurisdiction, then any other federal or state
court, and all courts to which any appeal therefrom may be available; and (d)
if none of the foregoing courts shall have or accept jurisdiction, then any
court of the Tribe (in the case of any Permitted Claim to which the Tribe or
the Authority is a party).
15.3 Additional Waivers as to Tribal Courts. Each of the
Tribal Parties hereby unconditionally and irrevocably waives the jurisdiction
of any tribal courts now or hereafter existing or created with respect to any
Permitted Claim, except as provided in clause (d) of Section 15.2 above. Each
of the Tribal Parties unconditionally and irrevocably waives the application
of any rule or doctrine relating to exhaustion of tribal remedies or comity
that might otherwise require a Permitted Claim be heard in a tribal court.
15.4 Agreement not to Contest. In connection with any
Permitted Claim, each of the Tribal Parties agrees it will not dispute before
or in any court, arbitration panel or other forum, the validity and binding
effect of its waiver of sovereign immunity, consent to arbitration
proceedings, consent to judicial proceedings, or waivers of the right to
assert application of any rules or doctrines of exhaustion of tribal remedies
or comity with respect to tribal court, all to the extent contained herein.
15.5 Arbitration. All Permitted Claims must be resolved by
binding arbitration under the commercial arbitration rules of the American
Arbitration Association (the "AAA"), as modified by this Section 15.5.
Notwithstanding any other provision of this Section 15, an arbitrator shall
not have the power to compel, negate, assume, usurp or in any manner affect
any Governmental Action unless any Governmental Action or failure to take any
Governmental Action constitutes a breach of this Agreement by the Tribe or the
Authority.
(a) Commencement of Proceedings. An arbitration
proceeding may be commenced only by the Tribe, the Authority, the Trustee, or
to the extent remedies may be enforced directly by a Holder, by the filing of
a Statement of Claim (within the meaning of the AAA rules) with the AAA and
serving a copy thereof on the other parties affected by the Permitted Claim. A
single arbitrator shall hear the Permitted Claim, and shall be selected in
accordance with the rules of the AAA.
(b) Qualification of Arbitrators. No person shall
be eligible to serve as an arbitrator if the person is related to, affiliated
with or has represented in a legal capacity any party to the arbitration
proceeding or any party to this Agreement. The arbitrator shall be an attorney
admitted to practice and in good standing before the highest court of a state,
who is experienced in advising clients in connection with commercial
borrowings or the issuance of debt securities.
(c) Discovery. Any party shall be permitted to
engage in any discovery permitted under the rules of the AAA. However, all
discovery shall be completed within 90 days following the initial filing of
the Statement of Claim.
(d) Hearing. The hearing on the arbitration shall
be held in the City of Los Angeles, California, and commence and be completed
no more than 30 days after the close of discovery, and the arbitrator shall
render an award in writing within 30 days of the completion of the hearing,
which shall contain findings of facts and conclusions of law. The parties
hereto further agree that any arbitrator appointed hereunder may award interim
injunctive relief before the final arbitration award. Any controversy
concerning whether an issue is arbitrable shall be determined by the
arbitrator.
(e) Enforcement. Proceedings to enter judgment
upon, enforce, modify or vacate any award or interim injunctive relief may be
commenced in any of the Applicable Courts. Any such proceedings shall be
governed (a) by the Federal Arbitration Act, if the matter will be heard in
federal court, or (b) by the applicable state arbitration code, if the matter
will be heard in state court, and (c) by the tribal arbitration code adopted
by Resolution No. 2001-34 of the Tribal Council, as amended by an amendment
thereto adopted on July 30, 2002 by Tribal Council Resolution No. 2002-39, if
the matter will be heard in a tribal court, provided that the standards of
review of the award in all cases shall be consistent with the Federal
Arbitration Act.
(f) Prohibition on Punitive Damages. Each party
hereto agrees that each party has equal bargaining power and that each has
freely entered into this Agreement after such consultation with its attorneys
as it has deemed advisable, and that notwithstanding any other provision
herein, no arbitrator shall have the power to award punitive damages and any
such award shall be null and void and of no effect.
(g) Validity of Arbitration Provisions. Each party
hereto agrees that these arbitration provisions are valid, binding and
enforceable, and, to the extent permitted by law, waives any defense or claim
to the contrary.
(h) Full Faith and Credit. The Tribal Parties and
the tribal courts of the Tribe now or hereafter existing shall give full faith
and credit to any award, order or decree rendered in any arbitration or by any
federal or state court in accordance with this Section 15.5, and, to the
extent reasonably necessary, shall issue such orders and exercise such legal
powers as may reasonably be necessary to effectuate the same. The Tribe shall
cause the police powers of the Tribe to be available to secure and support any
such enforcement efforts with respect to the Tribe or the Authority, and all
police or other law enforcement officials of the Tribe to carry out any orders
that may be entered by the Tribe or its tribal court pursuant to this Section
15.5. The Tribal Parties agree that judgment enforcement remedies generally
available throughout the State of New York may be applied on lands held by or
in trust for or under the control of the Tribe with respect to any matter that
is a proper subject of arbitration under this Section 15.5.
15.6 Non-Impairment. Neither any Tribal Party nor any of its
Affiliates will: (a) adopt, enact, promulgate or otherwise place into effect
any law or legal requirement that impairs or interferes, or could impair or
interfere, in any manner, with any right or remedy of another party hereunder
or their successors and assigns (it being understood and agreed that any such
law or legal requirement that is adopted, enacted, promulgated or otherwise
placed into effect without the prior written consent of any affected party,
successor or assign shall be void and of no effect); or (b) demand, impose or
receive any tax, charge, assessment, fee or other imposition or impose any
regulatory or licensing requirement against a party, their successors or
assigns, except in connection with licensing required by the Compact entered
into between the Tribe and the State of California, as amended from time to
time.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.
U.S. BANK, N.A.,
as Disbursement Agent
By:/s/ Xxxxx X. Xxxxxx III
------------------------------------------
Name: Xxxxx X. Xxxxxx III
Title: Vice President
U.S. BANK, N.A.,
as Trustee
By:/s/ Xxxxx X. Xxxxxx III
------------------------------------------
Name: Xxxxx X. Xxxxxx III
Title: Vice President
THE
CHUKCHANSI ECONOMIC DEVELOPMENT AUTHORITY
By:/s/ Xxxxx Xxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chairperson
THE Picayune Rancheria of Chukchansi Indians
(solely with respect to its obligations under
Section 15)
By:/s/ Xxxxx Xxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chairperson
PROFESSIONAL ASSOCIATES CONSTRUCTION
SERVICES, INC.
By:/s/ Xxxx Xxxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Corporate Secretary
