Exhibit 10.3

 

DIAMOND JO WORTH, LLC
DIAMOND JO WORTH CORP.

 

$40,000,000 11% Senior Secured Notes due 2012

 

PURCHASE AGREEMENT

 

June 30, 2005

 

JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California  90025

 

Ladies and Gentlemen:

 

Each of Diamond Jo Worth, LLC, a Delaware limited liability company (the
“Company”), Diamond Jo Worth Corp., a Delaware corporation (“DJW Corp.” and,
together with the Company, the “Issuers”), (solely with respect to Sections
5(i), 6(c), 6(g), 6(h), 6(k), 6(n), 6(o), 6(p), 6(q), 6(y), 8 and 11), Diamond
Jo Worth Holdings, LLC, a Delaware limited liability company (“Parent”), and
(solely with respect to Sections 6(c), 6(g), 6(h), 6(o), 6(p), 6(q), 8 and 11)
Diamond Jo, LLC, a Delaware limited liability company (“DJL”), hereby agrees
with you as follows:

 

1.                                      ISSUANCE OF SECURITIES.  THE ISSUERS
PROPOSE TO ISSUE AND SELL TO JEFFERIES & COMPANY, INC. (THE “INITIAL
PURCHASER”), AND THE INITIAL PURCHASER PROPOSES TO PURCHASE, $40,000,000
AGGREGATE PRINCIPAL AMOUNT OF THE ISSUERS’ 11% SENIOR SECURED NOTES DUE 2012
(TOGETHER WITH THE GUARANTEES (AS DEFINED BELOW), IF ANY, ENDORSED THEREON, THE
“NOTES”).  THE NOTES WILL BE ISSUED PURSUANT TO AN INDENTURE (THE “INDENTURE”),
TO BE DATED AS OF THE CLOSING DATE (AS DEFINED BELOW), BY AND AMONG THE ISSUERS,
THE GUARANTORS (AS DEFINED BELOW) (IF ANY) AND U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE (THE “TRUSTEE”). 

 

Pursuant to the Indenture, any future guarantor which becomes a party to the
Indenture (each, a “Guarantor”), will jointly and severally, fully and
unconditionally guarantee, on a senior secured basis, to each holder of Notes
and the Trustee, the payment and performance of the Issuers’ obligations under
the Indenture, the Notes and the Security Documents (as defined below),
including the payment of principal, interest and premium, if any, on the Notes
(the “Guarantees”).

 

Pursuant to the terms of the Security Documents, all of the respective
obligations of the Issuers and the Guarantors, if any, under the Indenture, the
Notes and the Guarantees, if any, will be secured by the following (the
“Collateral”): security interests in, or pledges of (the “Security Interests”)
substantially all of the assets (other than certain excluded assets) of, and all
of the shares of capital stock of and membership interests in the Issuers, the
Guarantors, if any, and the Issuers’ future domestic restricted subsidiaries who
become parties thereto, the Interest Reserve Account (as defined below) and the
Construction Disbursement Account (as defined below), in each case as set forth
in the Offering Circular (as defined below).

 

The Notes will be offered and sold to the Initial Purchaser pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the “Act”).  The Issuers have prepared a term sheet with
attachments, dated June 30, 2005 (the “Term Sheet”), and, prior to Closing,

 

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will prepare a final offering circular (the “Offering Circular”), relating to
the offer and sale of the Notes (the “Offering”).

 

Upon original issuance thereof, and until such time as the same is no longer
required under the Indenture or the applicable requirements of the Act, the
Notes shall bear the following legend:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

 

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH
OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(k) UNDER THE
SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES
WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION
TERMINATION DATE”) ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT
OCCUR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING
OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE
TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND IN EACH
CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR ANY
OTHER APPLICABLE JURISDICTION.

 

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2.                                      AGREEMENTS TO SELL AND PURCHASE.  ON THE
BASIS OF THE REPRESENTATIONS, WARRANTIES AND AGREEMENTS CONTAINED HEREIN, AND
SUBJECT TO THE TERMS AND CONDITIONS HEREOF, THE ISSUERS SHALL ISSUE AND SELL TO
THE INITIAL PURCHASER (AND, IN ORDER TO INDUCE THE INITIAL PURCHASER TO PURCHASE
THE NOTES, THE ISSUERS AND PARENT SHALL GRANT THE SECURITY INTERESTS), AND THE
INITIAL PURCHASER AGREES TO PURCHASE FROM THE ISSUERS, $40,000,000 AGGREGATE
PRINCIPAL AMOUNT OF NOTES.  THE PURCHASE PRICE FOR THE NOTES SHALL BE 95% OF THE
PRINCIPAL AMOUNT THEREOF.

 

3.                                      TERMS OF OFFERING.  THE INITIAL
PURCHASER HAS ADVISED THE ISSUERS THAT THE INITIAL PURCHASER WILL MAKE OFFERS TO
SELL (THE “EXEMPT RESALES”) THE NOTES PURCHASED BY THE INITIAL PURCHASER
HEREUNDER ON THE TERMS SET FORTH IN THE OFFERING CIRCULAR, AS AMENDED OR
SUPPLEMENTED, SOLELY TO (A) PERSONS WHOM THE INITIAL PURCHASER REASONABLY
BELIEVES TO BE “QUALIFIED INSTITUTIONAL BUYERS,” AS DEFINED IN RULE 144A UNDER
THE ACT (“QIBS”), AND (B) A LIMITED NUMBER OF INSTITUTIONAL “ACCREDITED
INVESTORS,” AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE ACT THAT
MAKE CERTAIN REPRESENTATIONS AND WARRANTIES TO THE INITIAL PURCHASER AND THE
ISSUERS (“ACCREDITED INVESTORS” AND, TOGETHER WITH QIBS, “ELIGIBLE PURCHASERS),
WHICH REPRESENTATIONS AND WARRANTIES ARE SET FORTH IN THE FORM OF ACCREDITED
INVESTOR LETTER ATTACHED AS ANNEX A TO THE OFFERING CIRCULAR (THE “ACCREDITED
INVESTOR LETTER”).

 

On the Closing Date, the Issuers and Parent will enter into certain security and
pledge agreements, mortgages and certain other collateral documents
(collectively, and together with the Cash Collateral Agreement (as defined
below), the “Security Documents”), that will provide for the grant of the
Security Interests in the Collateral to U.S. Bank National Association, as
collateral agent for the Trustee and the holders of the Notes (in such capacity,
the “Secured Party”).  The Security Interests will secure the payment and
performance when due of all of the respective obligations of the Issuers under
the Indenture and the Notes. 

 

On the Closing Date, the Issuers, the Trustee and the disbursement agent shall
enter into a cash collateral and disbursement agreement (the “Cash Collateral
Agreement”), that will provide for the deposit of approximately $3.3 million of
the net proceeds from the Offering into an interest reserve account (the
“Interest Reserve Account”) to be used to fund the payment of the first nine
months of interest on the Notes and the deposit of the remaining net proceeds
from the Offering into a construction disbursement account (the “Construction
Disbursement Account”) to be used in connection with the design, construction,
development, equipping and opening costs of the Facility. 

 

The Notes are being sold in connection with a financing related to the design,
development, construction, equipping and operation by the Company of the Diamond
Jo Worth Casino in Worth County, Iowa (the “Facility”).  In connection
therewith, the Issuers have entered into, or will enter into at or before
Closing, the following documents (the “Facility Documents”):  (i) Standard
Form of Agreement Between Owner and Contractor, dated as of June 6, 2005 (the
“Construction Contract”), by and between the Company and Henkel Construction
Company, (ii) the Standard Form of Agreement between Owner and Architect, dated
March 1, 2005, by and between the Company and Kittrell Garlock and Associates,
AIA, Ltd., and (iii) the Management Services Agreement (the “Management Services
Agreement”), to be entered into by and among the Company and Peninsula Gaming
Partners, LLC (“PGP”).

 

The following documents are referred to herein as the “Note Documents”: 
(i) this Agreement, (ii) the Indenture, (iii) the Notes (including the
Guarantees (if any)), and (iv) the Security Documents.  The Note Documents,
collectively with the Facility Documents, are referred to herein as the
“Operative Documents.”  The transactions contemplated by the Operative Documents
(including,

 

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without limitation, (i) the Offering and the application of the net proceeds
therefrom as described in the Offering Circular, as amended or supplemented,
(ii) the issuance and sale of the Notes in accordance with this Agreement,
(iii) the creation, grant, recording and perfection of the Security Interests,
(iv) the contribution by Peninsula Gaming, LLC (“PGL”) of all of the outstanding
membership interests in the Company to Parent, such that immediately following
such contribution each of the Issuers is a direct wholly owned subsidiary of
Parent and Parent is a direct wholly owned subsidiary of PGL (the
“Contribution”), and (v) the design, development, construction, equipping,
management and operation of the Facility, collectively are referred to herein as
the “Transactions.”

 

In addition, following the Closing Date, the Company anticipates entering into a
new senior secured credit facility (the “New Credit Facility”) and, in
connection with the New Credit Facility, the Trustee, as Secured Party, and the
lenders thereunder or their agent shall enter into (and the Issuers and Parent
shall acknowledge) an Intercreditor Agreement substantially in the form attached
as an exhibit to the Indenture (the “Intercreditor Agreement”).

 

4.                                      DELIVERY AND PAYMENT.  DELIVERY TO THE
INITIAL PURCHASER OF AND PAYMENT FOR THE NOTES SHALL BE MADE AT A CLOSING (THE
“CLOSING”) TO BEGIN AT 9:00 A.M., NEW YORK CITY TIME, ON JULY 15, 2005, (SUCH
TIME AND DATE, THE “CLOSING DATE”) AT THE OFFICES OF MAYER, BROWN, ROWE & MAW,
LLP, 1675 BROADWAY, NEW YORK, NEW YORK 10019.  THE CLOSING DATE AND THE LOCATION
OF DELIVERY OF AND THE FORM OF PAYMENT FOR THE NOTES MAY BE VARIED BY AGREEMENT
BETWEEN THE INITIAL PURCHASER AND THE ISSUERS.

 

The Issuers shall deliver to the Initial Purchaser one or more certificates
representing the Notes (the “Global Securities”), each in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
(“DTC”), or such other names as the Initial Purchaser may request upon at least
one Business Day’s notice to the Issuers, in an amount corresponding to the
aggregate principal amount of the Notes sold pursuant to Exempt Resales to QIBs
and to Accredited Investors, respectively, in each case against payment by the
Initial Purchaser of the purchase price therefore by immediately available
Federal funds bank wire transfer to such bank account as the Issuers shall
designate to the Initial Purchaser at least two Business Days prior to the
Closing.  “Business Day” means any day other than a Saturday, a Sunday or a day
on which banking institutions in The City of New York or at a place of payment
are authorized by law, regulation or executive order to remain closed.

 

The Global Securities in definitive form shall be made available to the Initial
Purchaser for inspection at the offices of Mayer, Brown, Rowe & Maw, LLP, 1675
Broadway, New York, New York 10019 (or such other place as shall be acceptable
to the Initial Purchaser) not later than the close of business, New York City
time, one Business Day immediately preceding the Closing Date.

 

5.                                      AGREEMENTS OF THE ISSUERS.  EACH OF THE
ISSUERS, JOINTLY AND SEVERALLY, HEREBY AGREES, AND PARENT, SOLELY WITH RESPECT
TO SECTION 5(I) BELOW TO THE EXTENT APPLICABLE TO PARENT, HEREBY AGREES:

 

(A)                                  CERTAIN EVENTS.  TO (I) ADVISE THE INITIAL
PURCHASER PROMPTLY AFTER OBTAINING KNOWLEDGE (AND, IF REQUESTED BY THE INITIAL
PURCHASER, CONFIRM SUCH ADVICE IN WRITING) OF (A) THE ISSUANCE BY ANY STATE
SECURITIES COMMISSION OF ANY STOP ORDER SUSPENDING THE QUALIFICATION OR
EXEMPTION FROM QUALIFICATION OF ANY OF THE NOTES FOR OFFER OR SALE IN ANY
JURISDICTION, OR THE INITIATION OF ANY PROCEEDING FOR SUCH PURPOSE BY ANY STATE
SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, AND (B) THE HAPPENING OF
ANY EVENT THAT MAKES ANY STATEMENT OF A MATERIAL FACT MADE IN THE OFFERING
CIRCULAR UNTRUE OR THAT REQUIRES THE MAKING OF

 

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ANY ADDITIONS TO OR CHANGES IN THE OFFERING CIRCULAR IN ORDER TO MAKE THE
STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY ARE MADE,
NOT MISLEADING, (II) USE ITS REASONABLE BEST EFFORTS TO PREVENT THE ISSUANCE OF
ANY STOP ORDER OR ORDER SUSPENDING THE QUALIFICATION OR EXEMPTION FROM
QUALIFICATION OF ANY OF THE NOTES UNDER ANY STATE SECURITIES OR BLUE SKY LAWS,
AND (III) IF AT ANY TIME ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY SHALL ISSUE AN ORDER SUSPENDING THE QUALIFICATION OR EXEMPTION FROM
QUALIFICATION OF ANY OF THE NOTES UNDER ANY SUCH LAWS, USE ITS REASONABLE BEST
EFFORTS TO OBTAIN THE WITHDRAWAL OR LIFTING OF SUCH ORDER AT THE EARLIEST
PRACTICABLE TIME.

 

(B)                                 OFFERING CIRCULAR.  TO (I) FURNISH THE
INITIAL PURCHASER AND THOSE PERSONS IDENTIFIED BY THE INITIAL PURCHASER TO THE
ISSUERS, WITHOUT CHARGE, AS MANY COPIES OF THE TERM SHEET AND THE OFFERING
CIRCULAR, AND ANY AMENDMENTS OR SUPPLEMENTS THERETO, AS THE INITIAL PURCHASER
MAY REASONABLY REQUEST, AND (II) PROMPTLY PREPARE, UPON THE INITIAL PURCHASER’S
REASONABLE REQUEST, ANY AMENDMENT OR SUPPLEMENT TO THE OFFERING CIRCULAR THAT
THE INITIAL PURCHASER, UPON THE ADVICE OF LEGAL COUNSEL, DEEMS MAY BE NECESSARY
IN CONNECTION WITH EXEMPT RESALES (AND THE ISSUERS HEREBY CONSENT TO THE USE OF
THE TERM SHEET AND THE OFFERING CIRCULAR, AND ANY AMENDMENTS AND SUPPLEMENTS
THERETO, BY THE INITIAL PURCHASER IN CONNECTION WITH EXEMPT RESALES).

 

(C)                                  NOTICE OF AMENDMENT OR SUPPLEMENT.  EXCEPT
AS SET FORTH IN SECTION 5(D), NOT TO AMEND OR SUPPLEMENT THE OFFERING CIRCULAR
PRIOR TO THE CLOSING DATE, OR AT ANY TIME PRIOR TO THE COMPLETION OF THE RESALE
BY THE INITIAL PURCHASER OF ALL OF THE NOTES, UNLESS THE INITIAL PURCHASER SHALL
PREVIOUSLY HAVE BEEN ADVISED THEREOF AND SHALL NOT HAVE OBJECTED THERETO WITHIN
TWO BUSINESS DAYS AFTER BEING FURNISHED A COPY THEREOF.

 

(D)                                 PREPARATION OF AMENDMENTS AND SUPPLEMENTS. 
AT ANY TIME PRIOR TO THE COMPLETION OF THE RESALE BY THE INITIAL PURCHASER OF
ALL OF THE NOTES, (I) IF ANY EVENT SHALL OCCUR AS A RESULT OF WHICH, IN THE
REASONABLE JUDGMENT OF THE ISSUERS OR THE INITIAL PURCHASER OR THEIR RESPECTIVE
COUNSEL, IT BECOMES NECESSARY OR ADVISABLE TO AMEND OR SUPPLEMENT THE OFFERING
CIRCULAR IN ORDER TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE AND WHEN SUCH OFFERING CIRCULAR IS
DELIVERED TO AN ELIGIBLE PURCHASER, NOT MISLEADING, OR IF IT IS NECESSARY TO
AMEND OR SUPPLEMENT THE OFFERING CIRCULAR TO COMPLY WITH APPLICABLE LAW (AS
DEFINED BELOW), FORTHWITH TO PREPARE AN APPROPRIATE AMENDMENT OR SUPPLEMENT TO
THE OFFERING CIRCULAR (IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
INITIAL PURCHASER) SO THAT AS SO AMENDED OR SUPPLEMENTED, (A) THE OFFERING
CIRCULAR WILL NOT INCLUDE AN UNTRUE STATEMENT OF MATERIAL FACT OR OMIT TO STATE
A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE AND WHEN SUCH OFFERING CIRCULAR
IS SO DELIVERED, NOT MISLEADING, AND (B) THE OFFERING CIRCULAR WILL COMPLY WITH
APPLICABLE LAW, AND (II) IF IT BECOMES NECESSARY OR ADVISABLE TO AMEND OR
SUPPLEMENT THE OFFERING CIRCULAR SO THAT THE OFFERING CIRCULAR WILL CONTAIN ALL
OF THE INFORMATION SPECIFIED IN, AND MEET THE REQUIREMENTS OF,
RULE 144A(D)(4) UNDER THE ACT, FORTHWITH TO PREPARE AN APPROPRIATE AMENDMENT OR
SUPPLEMENT TO THE OFFERING CIRCULAR (IN FORM AND SUBSTANCE SATISFACTORY TO THE
INITIAL PURCHASER) SO THAT THE OFFERING CIRCULAR, AS SO AMENDED OR SUPPLEMENTED,
WILL CONTAIN THE INFORMATION SPECIFIED IN, AND MEET THE REQUIREMENTS OF, SUCH
RULE.

 

(E)                                  QUALIFICATION OF SECURITIES.  TO COOPERATE
WITH THE INITIAL PURCHASER AND THE INITIAL PURCHASER’S COUNSEL IN CONNECTION
WITH THE QUALIFICATION OF THE NOTES UNDER THE SECURITIES OR BLUE SKY LAWS OF
SUCH JURISDICTIONS AS THE INITIAL PURCHASER MAY REQUEST AND CONTINUE

 

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SUCH QUALIFICATION IN EFFECT SO LONG AS REASONABLY REQUIRED FOR EXEMPT RESALES,
AND TO FILE SUCH CONSENTS TO SERVICE OF PROCESS OR OTHER DOCUMENTS AS MAY BE
NECESSARY IN ORDER TO EFFECT SUCH QUALIFICATION; PROVIDED, THAT NEITHER OF THE
ISSUERS SHALL BE REQUIRED IN CONNECTION THEREWITH (I) TO FILE ANY GENERAL
CONSENT TO SERVICE OF PROCESS OR TAKE ANY ACTION THAT WOULD SUBJECT IT TO
SERVICE OF PROCESS IN SUITS OTHER THAN THOSE ARISING OUT OF THE OFFER AND SALE
OF THE NOTES IN ANY JURISDICTION IN WHICH IT IS NOT OTHERWISE SO SUBJECT,
(II) TO REGISTER OR QUALIFY AS A FOREIGN CORPORATION IN ANY JURISDICTION WHERE
IT IS NOT NOW SO QUALIFIED OR (III) TO SUBJECT ITSELF TO GENERAL TAXATION IN
RESPECT OF DOING BUSINESS IN ANY JURISDICTION IN WHICH IT IS NOT OTHERWISE SO
SUBJECT.

 

(F)                                    COSTS AND EXPENSES.  WHETHER OR NOT ANY
OF THE TRANSACTIONS ARE CONSUMMATED OR THIS AGREEMENT IS TERMINATED, TO PAY
(I) ALL COSTS, EXPENSES, FEES AND TAXES INCIDENT TO AND IN CONNECTION WITH THE
PERFORMANCE OF THE OBLIGATIONS OF THE ISSUERS AND PARENT UNDER THIS AGREEMENT,
INCLUDING:  (A) THE PREPARATION, PRINTING AND DISTRIBUTION OF THE TERM SHEET AND
THE OFFERING CIRCULAR AND ALL AMENDMENTS AND SUPPLEMENTS THERETO (INCLUDING,
WITHOUT LIMITATION, FINANCIAL STATEMENTS AND EXHIBITS), AND ALL PRELIMINARY AND
FINAL BLUE SKY MEMORANDA AND ALL OTHER AGREEMENTS, MEMORANDA, CORRESPONDENCE AND
OTHER DOCUMENTS PREPARED AND DELIVERED IN CONNECTION HEREWITH (INCLUDING THE
FURNISHING OF COPIES OF THE FOREGOING TO THE INITIAL PURCHASER AND SUCH OTHER
PERSONS AS THE INITIAL PURCHASER MAY DESIGNATE), (B) THE PRINTING, PROCESSING
AND DISTRIBUTION (INCLUDING, WITHOUT LIMITATION, WORD PROCESSING AND DUPLICATION
COSTS) AND DELIVERY OF EACH OF THE OPERATIVE DOCUMENTS AND ANY OTHER AGREEMENTS
OR DOCUMENTS IN CONNECTION WITH THE TRANSACTIONS, (C) THE PREPARATION, ISSUANCE
AND DELIVERY OF THE NOTES, INCLUDING THE FEES AND EXPENSES OF THE TRUSTEE AND
THE SECURED PARTY (INCLUDING FEES AND EXPENSES OF THEIR RESPECTIVE COUNSEL) AND
THE COST OF THEIR RESPECTIVE PERSONNEL, AND ALL COSTS AND EXPENSES RELATED TO
THE DELIVERY OF THE NOTES TO THE INITIAL PURCHASER AND PURSUANT TO EXEMPT
RESALES, INCLUDING ANY TRANSFER OR OTHER TAXES PAYABLE THEREON, AND (D) THE
QUALIFICATION OF THE NOTES FOR OFFER AND SALE UNDER THE SECURITIES OR BLUE SKY
LAWS OF THE SEVERAL STATES (INCLUDING, WITHOUT LIMITATION, FILING FEES AND FEES
AND DISBURSEMENTS OF THE INITIAL PURCHASER’S COUNSEL RELATING TO SUCH
REGISTRATION OR QUALIFICATION AND THE PREPARATION OF MEMORANDA RELATED THERETO);
(II) ALL FEES AND EXPENSES OF THE COUNSEL AND ACCOUNTANTS OF THE ISSUERS AND
PARENT AND THEIR RESPECTIVE DIRECT AND INDIRECT PARENTS AND SUBSIDIARIES;
(III) ALL EXPENSES AND LISTING FEES IN CONNECTION WITH THE APPLICATION FOR
QUOTATION OF THE NOTES IN THE PORTALSM MARKET (“PORTAL”) OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. (“NASD”); (IV) ALL FEES AND EXPENSES
(INCLUDING FEES AND EXPENSES OF COUNSEL) OF THE ISSUERS IN CONNECTION WITH
APPROVAL OF THE NOTES BY DTC FOR “BOOK-ENTRY” TRANSFER; (V) ALL FEES CHARGED BY
RATING AGENCIES IN CONNECTION WITH THE RATING OF THE NOTES; (VI) THE COSTS AND
CHARGES OF ANY TRANSFER AGENT, REGISTRAR AND/OR DEPOSITARY (INCLUDING DTC);
(VII) ALL COSTS AND EXPENSES IN CONNECTION WITH THE CREATION AND PERFECTION OF
THE SECURITY INTERESTS (INCLUDING, WITHOUT LIMITATION, FILING AND RECORDING
FEES, SEARCH FEES, TAXES AND COSTS OF TITLE POLICIES); (VIII) ALL COSTS AND
EXPENSES OF THE TRANSACTIONS (INCLUDING, WITHOUT LIMITATION, FILING AND
RECORDING FEES); AND (IX) ALL FEES AND EXPENSES (INCLUDING REASONABLE FEES AND
EXPENSES OF COUNSEL) INCURRED BY THE INITIAL PURCHASER IN CONNECTION WITH THE
PREPARATION, NEGOTIATION AND EXECUTION, AS APPLICABLE, OF THE OPERATIVE
DOCUMENTS AND ANY OTHER AGREEMENTS OR DOCUMENTS IN CONNECTION WITH THE
TRANSACTIONS AND THE CONSUMMATION OF THE TRANSACTIONS.

 

(G)                                 USE OF PROCEEDS.  TO USE THE PROCEEDS FROM
THE SALE OF THE NOTES IN THE MANNER DESCRIBED IN THE OFFERING CIRCULAR UNDER THE
CAPTION “USE OF PROCEEDS.”

 

(H)                                 WAIVER OF CERTAIN LAWS.  TO THE EXTENT IT
MAY LAWFULLY DO SO, NOT TO INSIST UPON, PLEAD, OR IN ANY MANNER WHATSOEVER CLAIM
OR TAKE THE BENEFIT OR ADVANTAGE OF, ANY

 

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STAY, EXTENSION USURY OR OTHER LAW, WHEREVER ENACTED, NOW OR AT ANY TIME
HEREAFTER IN FORCE, THAT WOULD PROHIBIT OR FORGIVE THE PAYMENT OF ALL OR ANY
PORTION OF THE PRINCIPAL OF OR INTEREST ON THE NOTES, OR THAT MAY AFFECT THE
COVENANTS OR THE PERFORMANCE OF THE INDENTURE OR ANY OF THE SECURITY DOCUMENTS
(AND, TO THE EXTENT IT MAY LAWFULLY DO SO, EACH ISSUER HEREBY EXPRESSLY WAIVES
ALL BENEFIT OR ADVANTAGE OF ANY SUCH LAW, AND COVENANTS THAT IT SHALL NOT, BY
RESORT TO ANY SUCH LAW, HINDER, DELAY OR IMPEDE THE EXECUTION OF ANY POWER
GRANTED TO THE TRUSTEE IN THE INDENTURE OR TO THE SECURED PARTY IN THE SECURITY
DOCUMENTS BUT SHALL SUFFER AND PERMIT THE EXECUTION OF EVERY SUCH POWER AS
THOUGH NO SUCH LAW HAD BEEN ENACTED).

 

(I)                                     SECURITY INTERESTS.  (A) TO DO AND
PERFORM ALL THINGS REQUIRED TO BE DONE AND PERFORMED UNDER THE SECURITY
DOCUMENTS PRIOR TO, ON AND AFTER THE CLOSING DATE, INCLUDING, WITHOUT
LIMITATION, ALL THINGS THAT ARE REQUIRED TO BE DONE AND PERFORMED UNDER THE
SECURITY DOCUMENTS THAT ARE NECESSARY OR REASONABLY ADVISABLE TO OBTAIN ON OR
PRIOR TO THE CLOSING DATE (I) ALL PERMITS (AS DEFINED BELOW), OTHER THAN ANY
GAMING APPROVALS REQUIRED TO BE OBTAINED BY A PURCHASER IN A FORECLOSURE SALE,
NECESSARY FOR THE GRANTING, PERFECTION AND ENFORCEMENT OF THE SECURITY INTERESTS
AND FOR THE FORECLOSURE BY THE SECURED PARTY THEREON FOLLOWING AN EVENT OF
DEFAULT (AS DEFINED IN THE INDENTURE), (II) ALL TERMINATION STATEMENTS, MORTGAGE
RELEASES AND OTHER DOCUMENTS NECESSARY TO TERMINATE ANY LIENS (AS DEFINED IN THE
INDENTURE) ON THE COLLATERAL (OTHER THAN LIENS CREATED BY THE INDENTURE, LIENS
CREATED BY THE SECURITY DOCUMENTS AND PERMITTED LIENS (AS DEFINED IN THE
INDENTURE)), AND (III) SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT AND
ANY PERMITTED LIENS, A VALID AND PERFECTED, FIRST PRIORITY SECURITY INTEREST
WITH RESPECT TO EACH OF THE ASSETS, SHARES OF CAPITAL STOCK AND MEMBERSHIP
INTERESTS WHICH ARE TO CONSTITUTE, AS OF THE CLOSING DATE, THE COLLATERAL.

 

(B)  TO PROVIDE AN A.L.T.A. SURVEY OF THE FACILITY, CERTIFIED TO ALL PARTIES
DESIGNATED BY THE INITIAL PURCHASER IN A MANNER SATISFACTORY TO THE INITIAL
PURCHASER, BY A LAND SURVEYOR DULY REGISTERED AND LICENSED IN THE STATE IN WHICH
THE PROPERTY DESCRIBED IN SUCH SURVEY IS LOCATED AND REASONABLY ACCEPTABLE TO
THE INITIAL PURCHASER, WITHIN THIRTY (30) DAYS OF CLOSING IF THE ISSUERS FAIL TO
SATISFY THE CONDITION TO CLOSING SET FORTH IN SECTION 9(A)(XIV)(H).  ADDITIONAL
TITLE INSURANCE SHALL BE PROVIDED OR ADDITIONAL ACTION SHALL BE TAKEN WITHIN
THIRTY (30) DAYS OF CLOSING TO CURE DEFECTS AS MAY BE DISCLOSED ON ANY SUCH
SURVEY AS REASONABLY REQUIRED BY THE INITIAL PURCHASER OR THE TRUSTEE, PROVIDED
THAT SUCH DEFECT BE SUSCEPTIBLE TO CURE, AND FURTHER PROVIDED THAT FAILURE TO SO
CURE OR INSURE OVER, WHETHER THE DEFECT BE SUSCEPTIBLE TO CURE OR NOT, SHALL
CONSTITUTE AN EVENT OF DEFAULT.

 

(J)                                     INTEGRATION.  NOT TO, AND TO ENSURE THAT
NO AFFILIATE (AS DEFINED IN RULE 501(B) UNDER THE ACT) OF EITHER OF THE ISSUERS
WILL, SELL, OFFER FOR SALE OR SOLICIT OFFERS TO BUY OR OTHERWISE NEGOTIATE IN
RESPECT OF ANY “SECURITY” (AS DEFINED IN THE ACT) THAT WOULD BE INTEGRATED WITH
THE SALE OF THE NOTES IN A MANNER THAT WOULD REQUIRE THE REGISTRATION UNDER THE
ACT OF THE SALE TO THE INITIAL PURCHASER OR OF THE OFFERS OR SALES OF NOTES
PURSUANT TO EXEMPT RESALES.

 

(K)                                  RULE 144A INFORMATION.  FOR SO LONG AS ANY
OF THE NOTES REMAIN OUTSTANDING, DURING ANY PERIOD IN WHICH EITHER OF THE
ISSUERS IS NOT SUBJECT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE “EXCHANGE ACT”), TO MAKE AVAILABLE, UPON REQUEST, TO ANY
HOLDER OF THE NOTES IN CONNECTION WITH ANY SALE THEREOF AND ANY PROSPECTIVE
ELIGIBLE PURCHASER OF SUCH NOTES FROM SUCH HOLDER, THE INFORMATION REQUIRED BY
RULE 144A(D)(4) UNDER THE ACT.

 

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(L)                                     DTC.  TO COMPLY WITH THE REPRESENTATION
LETTER OF THE ISSUERS TO DTC RELATING TO THE APPROVAL OF THE NOTES BY DTC FOR
“BOOK ENTRY” TRANSFER.

 

(M)                               PORTAL.  TO USE ITS REASONABLE BEST EFFORTS TO
EFFECT THE INCLUSION OF THE NOTES IN PORTAL AND TO USE ITS REASONABLE BEST
EFFORTS TO MAINTAIN THE LISTING OF THE NOTES ON PORTAL FOR SO LONG AS THE NOTES
ARE OUTSTANDING.

 

(N)                                 REPORTING REQUIREMENTS.  FOR SO LONG AS ANY
OF THE NOTES REMAIN OUTSTANDING, TO FURNISH TO THE INITIAL PURCHASER COPIES OF
ALL REPORTS AND OTHER COMMUNICATIONS (FINANCIAL OR OTHERWISE) FURNISHED TO THE
TRUSTEE OR TO THE HOLDERS OF THE NOTES AND, AS SOON AS AVAILABLE, COPIES OF ANY
REPORTS OR FINANCIAL STATEMENTS FURNISHED TO OR FILED BY THE ISSUERS WITH THE
COMMISSION OR ANY NATIONAL SECURITIES EXCHANGE ON WHICH ANY CLASS OF SECURITIES
OF THE ISSUERS MAY BE LISTED.

 

(O)                                 NO SELLING EFFORTS OR GENERAL SOLICITATION. 
NOT TO, AND NOT TO AUTHORIZE OR PERMIT ANY PERSON ACTING ON ITS BEHALF TO,
(I) DISTRIBUTE ANY OFFERING MATERIAL IN CONNECTION WITH THE OFFER AND SALE OF
THE NOTES OTHER THAN THE TERM SHEET AND THE OFFERING CIRCULAR AND ANY AMENDMENTS
AND SUPPLEMENTS TO THE OFFERING CIRCULAR PREPARED IN COMPLIANCE WITH
SECTION 5(D), OR (II) SOLICIT ANY OFFER TO BUY OR OFFER TO SELL THE NOTES BY
MEANS OF ANY FORM OF GENERAL SOLICITATION OR GENERAL ADVERTISING (INCLUDING,
WITHOUT LIMITATION, AS SUCH TERMS ARE USED IN REGULATION D UNDER THE ACT) OR IN
ANY MANNER INVOLVING A PUBLIC OFFERING WITHIN THE MEANING OF SECTION 4(2) OF THE
ACT.

 

(P)                                 NO SIMILAR OFFERINGS.  NOT TO, DIRECTLY OR
INDIRECTLY, WITHOUT THE PRIOR CONSENT OF THE INITIAL PURCHASER, OFFER, SELL,
CONTRACT TO SELL, GRANT ANY OPTION TO PURCHASE OR OTHERWISE DISPOSE OF (OR
ANNOUNCE ANY OFFER OR SALE OF, CONTRACT TO SELL, GRANT OF ANY OPTION TO PURCHASE
OR OTHER DISPOSITION OF) ANY SECURITIES OF ANY OF THE ISSUERS OR THE GUARANTORS
(IF ANY) SUBSTANTIALLY SIMILAR TO THE NOTES OR THE GUARANTEES (IF ANY) FOR A
PERIOD OF SIX MONTHS AFTER THE DATE OF THE OFFERING CIRCULAR; PROVIDED, THAT THE
FOREGOING WILL NOT APPLY TO (I) THE NOTES OR THE GUARANTEES (IF ANY) OR
(II) BORROWINGS (NOT CONSTITUTING THE ISSUANCE OF SECURITIES) FROM FINANCIAL
INSTITUTIONS TO THE EXTENT NOT PROHIBITED BY THE INDENTURE.

 

(Q)                                 ERISA.  AT ANY TIME PRIOR TO THE COMPLETION
OF THE RESALE BY THE INITIAL PURCHASER OF THE NOTES, TO NOTIFY THE INITIAL
PURCHASER PROMPTLY IN WRITING IF EITHER OF THE ISSUERS OR ANY OF THEIR
AFFILIATES BECOMES A PARTY IN INTEREST OR A DISQUALIFIED PERSON WITH RESPECT TO
ANY EMPLOYEE BENEFIT PLAN, AND TO IDENTIFY SUCH PLANS.  THE TERMS “ERISA,”
“AFFILIATES,” “PARTY IN INTEREST,” “DISQUALIFIED PERSON” AND “EMPLOYEE BENEFIT
PLAN” SHALL HAVE THE MEANINGS AS SET FORTH IN SECTION 6(II).

 

(R)                                    FACILITY AUTHORIZATIONS.  TO DILIGENTLY
SEEK THE ISSUANCE OF ANY PERMIT (AS DEFINED IN SECTION 6(P)) WHICH IS NECESSARY
FOR THE ISSUERS TO DESIGN, CONSTRUCT, DEVELOP, OWN AND OPERATE THE FACILITY,
INCLUDING WITHOUT LIMITATION, ANY NECESSARY PERMIT TO BE ISSUED BY ANY GAMING
AUTHORITY (AS DEFINED IN SECTION 6(N)) OR GOVERNMENTAL AUTHORITY (AS DEFINED IN
SECTION 6(N)).

 

(S)                                  PERFORMANCE OF THIS AGREEMENT.  TO DO AND
PERFORM IN ALL MATERIAL RESPECTS ALL THINGS REQUIRED OR NECESSARY TO BE DONE AND
PERFORMED ON ITS PART UNDER THIS AGREEMENT ON OR PRIOR TO THE CLOSING DATE AND
TO SATISFY IN ALL MATERIAL RESPECTS ALL CONDITIONS

 

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PRECEDENT TO THE DELIVERY OF THE NOTES AND THE GRANTING, PERFECTION AND
ENFORCEMENT OF THE SECURITY INTERESTS IN THE COLLATERAL AS OF THE CLOSING DATE.

 

6.                                      REPRESENTATIONS AND WARRANTIES OF THE
ISSUERS.  EACH OF THE ISSUERS, JOINTLY AND SEVERALLY, REPRESENTS AND WARRANTS TO
THE INITIAL PURCHASER, AND PARENT REPRESENTS AND WARRANTS WITH RESPECT TO ITSELF
(BUT NOT THE ISSUERS) TO THE INITIAL PURCHASER SOLELY WITH RESPECT TO APPLICABLE
PROVISIONS OF SECTIONS 6(C), 6(G), 6(H), 6(K), 6(N), 6(O), 6(P), 6(Q) AND 6(Y),
AND DJL REPRESENTS AND WARRANTS WITH RESPECT TO ITSELF (BUT NOT THE ISSUERS) TO
THE INITIAL PURCHASER SOLELY WITH RESPECT TO APPLICABLE PROVISIONS OF SECTIONS
6(C), 6(G), 6(H), 6(O), 6(P) AND 6(Q), THAT:

 

(A)                                  OFFERING CIRCULAR.  THE OFFERING CIRCULAR,
AS OF ITS DATE AND AS OF THE CLOSING DATE WILL NOT, AND EACH SUPPLEMENT OR
AMENDMENT THERETO (IF ANY) AS OF ITS DATE WILL NOT, CONTAIN ANY UNTRUE STATEMENT
OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT (EXCEPT WITH RESPECT TO
OFFERS AND SALES OF NOTES BY THE INITIAL PURCHASER TO ACCREDITED INVESTORS, AS
TO WHICH THE ISSUERS MAKE NO REPRESENTATION) NECESSARY IN ORDER TO MAKE THE
STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING.  THE FOREGOING REPRESENTATION AND WARRANTY MADE IN THIS
SECTION 6(A) SHALL NOT APPLY TO ANY STATEMENTS OR OMISSIONS MADE IN RELIANCE ON
AND IN CONFORMITY WITH INFORMATION RELATING TO THE INITIAL PURCHASER FURNISHED
TO THE ISSUERS BY THE INITIAL PURCHASER SPECIFICALLY FOR INCLUSION IN THE
OFFERING CIRCULAR.  THE OFFERING CIRCULAR, AS OF ITS DATE AND AS OF THE CLOSING
DATE AND AS AMENDED OR SUPPLEMENTED, WILL CONTAIN, ALL OF THE INFORMATION
SPECIFIED IN, AND MEET THE REQUIREMENTS OF, RULE 144A(D)(4) UNDER THE ACT (IT
BEING UNDERSTOOD THAT THE ISSUERS HAVE NO PAST OR CURRENT OPERATIONS AND THAT,
ACCORDINGLY, ONLY AN UNAUDITED BALANCE SHEET (AND NO PROFIT AND LOSS AND
RETAINED EARNINGS STATEMENTS) OF THE ISSUERS IS INCLUDED IN THE OFFERING
CIRCULAR). 

 

(B)                                 144A ELIGIBILITY.  THERE ARE NO SECURITIES
OF THE SAME CLASS (WITHIN THE MEANING OF RULE 144A) AS THE NOTES OF EITHER OF
THE ISSUERS REGISTERED UNDER THE EXCHANGE ACT OR LISTED ON A NATIONAL SECURITIES
EXCHANGE REGISTERED UNDER SECTION 6 OF THE EXCHANGE ACT OR QUOTED IN A UNITED
STATES AUTOMATED INTER-DEALER QUOTATION SYSTEM.  THE NOTES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE ACT.

 

(C)                                  DUE ORGANIZATION; GOOD STANDING.  EACH OF
THE ISSUERS (I) HAS BEEN DULY ORGANIZED, IS VALIDLY EXISTING AND IS IN GOOD
STANDING UNDER THE LAWS OF ITS JURISDICTION OF ORGANIZATION, (II) HAS ALL
REQUISITE POWER AND AUTHORITY TO CONDUCT AND CARRY ON ITS BUSINESS AND TO OWN,
LEASE, USE AND OPERATE ITS PROPERTIES AND ASSETS AS DESCRIBED IN THE OFFERING
CIRCULAR, AND (III) IS DULY QUALIFIED OR LICENSED TO DO BUSINESS AND IS IN GOOD
STANDING AS A FOREIGN LIMITED LIABILITY COMPANY OR CORPORATION, AS THE CASE MAY
BE, AUTHORIZED TO DO BUSINESS IN EACH JURISDICTION IN WHICH THE NATURE OF ITS
BUSINESS OR THE OWNERSHIP, LEASING, USE OR OPERATION OF ITS PROPERTIES AND
ASSETS REQUIRES SUCH QUALIFICATION OR LICENSING, EXCEPT WHERE THE FAILURE TO BE
SO QUALIFIED OR LICENSED WOULD NOT, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL
ADVERSE EFFECT ON (A) THE PROPERTIES, BUSINESS, PROSPECTS, OPERATIONS, EARNINGS,
ASSETS, LIABILITIES OR CONDITION (FINANCIAL OR OTHERWISE) OF THE ISSUERS, TAKEN
AS A WHOLE, (B) THE ABILITY OF EITHER ISSUER, PARENT OR DJL TO PERFORM ITS
OBLIGATIONS IN ALL MATERIAL RESPECTS UNDER ANY OF THE OPERATIVE DOCUMENTS TO
WHICH IT IS A PARTY OR TO CONSUMMATE IN ALL MATERIAL RESPECTS THE TRANSACTIONS,
(C) THE ENFORCEABILITY OF ANY OF THE SECURITY DOCUMENTS TO WHICH IT IS A PARTY
OR THE ATTACHMENT, PERFECTION OR PRIORITY OF ANY OF THE SECURITY INTERESTS
INTENDED TO BE CREATED THEREBY IN ANY PORTION OF THE COLLATERAL IN WHICH IT HAS
AN INTEREST OR (D) THE VALIDITY OF ANY OF THE OPERATIVE DOCUMENTS TO WHICH IT IS
A PARTY OR THE CONSUMMATION OF ANY OF THE TRANSACTIONS IN WHICH IT IS A PARTY
(EACH, A “MATERIAL ADVERSE

 

9

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EFFECT”).  EACH OF PARENT AND DJL HAS BEEN DULY ORGANIZED, IS VALIDLY EXISTING
AND IS IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE.

 

(D)                                 SUBSIDIARIES.  IMMEDIATELY FOLLOWING THE
CLOSING, (I) EACH OF DJW CORP. AND THE COMPANY WILL HAVE NO SUBSIDIARIES, AND
(II) PARENT WILL DIRECTLY OWN 100% OF (A) THE OUTSTANDING MEMBERSHIP INTERESTS
IN THE COMPANY, AND (B) THE OUTSTANDING SHARES OF CAPITAL STOCK OF DJW CORP., IN
EACH CASE, FREE AND CLEAR OF ALL LIENS, EXCEPT FOR LIENS CREATED BY THE
INDENTURE AND THE SECURITY DOCUMENTS.  EXCEPT AS DISCLOSED IN THE OFFERING
CIRCULAR, THERE ARE NO OUTSTANDING (I) SECURITIES CONVERTIBLE INTO OR
EXCHANGEABLE FOR ANY CAPITAL STOCK OF OR ANY MEMBERSHIP INTERESTS IN, AS THE
CASE MAY BE, EITHER OF THE ISSUERS, (II) OPTIONS, WARRANTS OR OTHER RIGHTS TO
PURCHASE OR SUBSCRIBE FOR ANY CAPITAL STOCK OF OR ANY MEMBERSHIP INTERESTS IN,
OR ANY SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR ANY CAPITAL STOCK OF OR
ANY MEMBERSHIP INTERESTS IN, AS THE CASE MAY BE, EITHER OF THE ISSUERS OR
(III) CONTRACTS, COMMITMENTS, AGREEMENTS, UNDERSTANDINGS, ARRANGEMENTS,
UNDERTAKINGS, RIGHTS, CALLS OR CLAIMS OF ANY KIND RELATING TO THE ISSUANCE OF
ANY CAPITAL STOCK OF OR ANY MEMBERSHIP INTERESTS IN, AS THE CASE MAY BE, EITHER
OF THE ISSUERS, ANY SUCH CONVERTIBLE OR EXCHANGEABLE SECURITIES OR ANY SUCH
OPTIONS, WARRANTS OR RIGHTS.  EXCEPT AS SET FORTH ABOVE, IMMEDIATELY FOLLOWING
THE CLOSING, NEITHER OF THE ISSUERS WILL DIRECTLY OR INDIRECTLY OWN ANY CAPITAL
STOCK OF OR OTHER EQUITY INTEREST IN ANY PERSON.

 

(E)                                  CAPITALIZATION.  ALL OF THE OUTSTANDING
SHARES OF CAPITAL STOCK OF OR MEMBERSHIP INTERESTS IN, AS THE CASE MAY BE, EACH
OF THE ISSUERS HAVE BEEN DULY AUTHORIZED, ARE VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE, AND WERE NOT ISSUED IN VIOLATION OF, AND ARE NOT SUBJECT TO, ANY
PREEMPTIVE OR SIMILAR RIGHTS.  THE TABLE UNDER THE CAPTION “CAPITALIZATION” IN
THE OFFERING CIRCULAR (INCLUDING THE FOOTNOTES THERETO) SETS FORTH, AS OF
JUNE 30, 2005, (I) THE ACTUAL CAPITALIZATION OF THE COMPANY AND ITS
SUBSIDIARIES, ON A CONSOLIDATED BASIS, AND (II) THE AS ADJUSTED CAPITALIZATION
OF THE COMPANY AND ITS SUBSIDIARIES, ON A CONSOLIDATED BASIS, AFTER GIVING
EFFECT TO THE OFFERING AND THE APPLICATION OF THE NET PROCEEDS THEREFROM. 
IMMEDIATELY FOLLOWING THE CLOSING, EXCEPT AS SET FORTH IN SUCH TABLE OR AS
DESCRIBED IN THE FOOTNOTES THERETO, NEITHER OF THE ISSUERS WILL HAVE ANY
LIABILITIES, ABSOLUTE, ACCRUED, CONTINGENT OR OTHERWISE OTHER THAN: 
(I) LIABILITIES THAT ARE REFLECTED IN THE COMPANY FINANCIAL STATEMENTS (AS
DEFINED BELOW) OR (II) LIABILITIES INCURRED SUBSEQUENT TO JUNE 30, 2005, IN THE
ORDINARY COURSE OF BUSINESS, THAT WOULD NOT, SINGLY OR IN THE AGGREGATE, HAVE A
MATERIAL ADVERSE EFFECT.

 

(F)                                    NO REGISTRATION RIGHTS.  THERE ARE NO
CONTRACTS, COMMITMENTS, AGREEMENTS, ARRANGEMENTS, UNDERSTANDINGS OR UNDERTAKINGS
OF ANY KIND TO WHICH EITHER OF THE ISSUERS IS A PARTY, OR BY WHICH EITHER OF
THEM IS BOUND, GRANTING TO ANY PERSON THE RIGHT (I) TO REQUIRE EITHER OF THE
ISSUERS TO FILE A REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO ANY
SECURITIES OF EITHER OF THE ISSUERS OR REQUIRING EITHER OF THE ISSUERS TO
INCLUDE SUCH SECURITIES WITH THE NOTES REGISTERED PURSUANT TO ANY REGISTRATION
STATEMENT, OR (II) EXCEPT FOR THIS AGREEMENT, TO PURCHASE OR OFFER TO PURCHASE
ANY SECURITIES OF EITHER OF THE ISSUERS OR ANY OF THEIR RESPECTIVE AFFILIATES.

 

(G)                                 POWER AND AUTHORITY.  EACH OF THE ISSUERS,
PARENT AND DJL HAS ALL REQUISITE POWER AND AUTHORITY TO EXECUTE AND DELIVER, AND
TO PERFORM ITS OBLIGATIONS UNDER, THE OPERATIVE DOCUMENTS TO WHICH IT IS A PARTY
AND TO CONSUMMATE THE TRANSACTIONS TO WHICH IT IS A PARTY. 

 

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(H)                                 AUTHORIZATION OF THIS AGREEMENT.  THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING, WITHOUT
LIMITATION, THE OFFERING AND THE ISSUANCE AND SALE OF THE NOTES IN ACCORDANCE
WITH THIS AGREEMENT) HAVE BEEN DULY AUTHORIZED BY EACH OF THE ISSUERS, PARENT
AND DJL, IN EACH CASE, TO THE EXTENT PARTY THERETO, AND THIS AGREEMENT HAS BEEN
VALIDLY EXECUTED AND DELIVERED BY, AND IS THE LEGAL, VALID AND BINDING
OBLIGATION OF, EACH OF THE ISSUERS, PARENT AND DJL, IN EACH CASE, TO THE EXTENT
PARTY THERETO, ENFORCEABLE AGAINST EACH OF THE ISSUERS, PARENT AND DJL, IN EACH
CASE, TO THE EXTENT PARTY THERETO IN ACCORDANCE WITH ITS TERMS, EXCEPT THAT SUCH
ENFORCEABILITY MAY BE LIMITED BY (I) APPLICABLE BANKRUPTCY, INSOLVENCY OR
SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS GENERALLY, (II) ANY RIGHTS OF
ACCELERATION AND THE AVAILABILITY OF EQUITABLE REMEDIES AND GENERAL PRINCIPLES
OF EQUITY (WHETHER CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW) AND
(III) WITH RESPECT TO RIGHTS TO INDEMNITY OR CONTRIBUTION THEREUNDER, BY FEDERAL
AND STATE SECURITIES LAWS AND PUBLIC POLICY CONSIDERATIONS.

 

(I)                                     AUTHORIZATION OF INDENTURE.  THE
INDENTURE AND THE TRANSACTIONS CONTEMPLATED THEREBY HAVE BEEN DULY AUTHORIZED BY
EACH OF THE ISSUERS AND, ON THE CLOSING DATE, THE INDENTURE WILL HAVE BEEN
VALIDLY EXECUTED AND DELIVERED BY, AND WILL BE THE LEGAL, VALID AND BINDING
OBLIGATION OF, EACH OF THE ISSUERS, ENFORCEABLE AGAINST EACH OF THE ISSUERS IN
ACCORDANCE WITH ITS TERMS, EXCEPT THAT (I) SUCH ENFORCEABILITY MAY BE LIMITED BY
APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS
GENERALLY AND (II) ANY RIGHTS OF ACCELERATION AND THE AVAILABILITY OF EQUITABLE
REMEDIES MAY BE SUBJECT TO GENERAL PRINCIPLES OF EQUITY (WHETHER CONSIDERED IN A
PROCEEDING IN EQUITY OR AT LAW).  ON THE CLOSING DATE, THE INDENTURE WILL
CONFORM TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED (THE
“TIA”), APPLICABLE TO AN INDENTURE THAT IS REQUIRED TO BE QUALIFIED UNDER THE
TIA.

 

(J)                                     AUTHORIZATION OF NOTES.  THE NOTES HAVE
BEEN DULY AUTHORIZED BY EACH OF THE ISSUERS FOR ISSUANCE AND SALE TO THE INITIAL
PURCHASER PURSUANT TO THIS AGREEMENT AND, ON THE CLOSING DATE, WILL HAVE BEEN
VALIDLY EXECUTED, AUTHENTICATED, ISSUED AND DELIVERED BY THE ISSUERS IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND THE INDENTURE.  WHEN THE NOTES
HAVE BEEN ISSUED AND EXECUTED BY THE ISSUERS AND AUTHENTICATED BY THE TRUSTEE IN
ACCORDANCE WITH THE TERMS OF THE INDENTURE AND DELIVERED TO AND PAID FOR BY THE
INITIAL PURCHASER IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE NOTES WILL
BE LEGAL, VALID AND BINDING OBLIGATIONS OF EACH OF THE ISSUERS, ENTITLED TO THE
BENEFITS OF THE INDENTURE AND ENFORCEABLE AGAINST EACH OF THE ISSUERS IN
ACCORDANCE WITH THEIR TERMS, EXCEPT TO THE EXTENT THAT (I) SUCH ENFORCEABILITY
MAY BE LIMITED BY APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING
CREDITORS’ RIGHTS GENERALLY AND (II) ANY RIGHTS OF ACCELERATION AND THE
AVAILABILITY OF EQUITABLE REMEDIES MAY BE SUBJECT TO GENERAL PRINCIPLES OF
EQUITY (WHETHER CONSIDERED IN A PROCEEDING IN EQUITY OR AT LAW).  UPON AND
FOLLOWING DELIVERY TO THE INITIAL PURCHASER, THE NOTES WILL RANK ON A PARITY
WITH ALL SENIOR INDEBTEDNESS (AS DEFINED IN THE INDENTURE) OF EACH OF THE
ISSUERS THAT IS OUTSTANDING ON THE DATE HEREOF OR THAT MAY BE INCURRED HEREAFTER
AND SENIOR TO ALL OTHER INDEBTEDNESS OF EACH OF THE ISSUERS THAT IS OUTSTANDING
ON THE DATE HEREOF OR THAT MAY BE INCURRED HEREAFTER; PROVIDED, THAT PURSUANT TO
THE INTERCREDITOR AGREEMENT, THE LIEN ON THE COLLATERAL SECURING THE NEW CREDIT
FACILITY WILL BE SENIOR TO THE LIEN ON THE COLLATERAL SECURING THE NOTES AND THE
GUARANTEES (IF ANY).

 

(K)                                  AUTHORIZATION OF SECURITY DOCUMENTS.  EACH
OF THE SECURITY DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING,
WITHOUT LIMITATION, THE CREATION, GRANT, RECORDING AND PERFECTION OF THE
SECURITY INTERESTS, THE EXECUTION AND FILING OF FINANCING STATEMENTS AND THE
PAYMENT OF ANY FEES AND TAXES IN CONNECTION THEREWITH) HAVE BEEN DULY AUTHORIZED
BY EACH OF THE ISSUERS AND PARENT, IN EACH CASE, TO THE EXTENT PARTY THERETO, ON
THE CLOSING DATE, EACH

 

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OF THE SECURITY DOCUMENTS WILL HAVE BEEN VALIDLY EXECUTED AND DELIVERED BY, AND
WILL BE THE LEGAL, VALID AND BINDING OBLIGATION OF, EACH OF THE ISSUERS AND
PARENT, IN EACH CASE, TO THE EXTENT PARTY THERETO, ENFORCEABLE AGAINST EACH OF
THE ISSUERS AND PARENT, IN EACH CASE, TO THE EXTENT PARTY THERETO IN ACCORDANCE
WITH ITS TERMS, EXCEPT THAT (I) SUCH ENFORCEABILITY MAY BE LIMITED BY APPLICABLE
BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS GENERALLY AND
(II) ANY RIGHTS OF ACCELERATION AND THE AVAILABILITY OF EQUITABLE REMEDIES MAY
BE SUBJECT TO GENERAL PRINCIPLES OF EQUITY (WHETHER CONSIDERED IN A PROCEEDING
IN EQUITY OR AT LAW).

 

(L)                                     AUTHORIZATION OF OTHER OPERATIVE
DOCUMENTS AND OTHER TRANSACTIONS.  EACH OF THE FACILITY DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED THEREBY HAVE BEEN DULY AUTHORIZED BY EACH OF THE
ISSUERS WHICH IS A PARTY THERETO AND, ON THE CLOSING DATE, EACH OF THE FACILITY
DOCUMENTS WILL HAVE BEEN VALIDLY EXECUTED AND DELIVERED BY, AND WILL BE THE
LEGAL, VALID AND BINDING OBLIGATION OF, EACH OF THE ISSUERS WHICH IS A PARTY
THERETO, ENFORCEABLE AGAINST EACH OF THE ISSUERS WHICH IS A PARTY THERETO IN
ACCORDANCE WITH ITS TERMS, EXCEPT THAT (I) SUCH ENFORCEABILITY MAY BE LIMITED BY
APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS
GENERALLY AND (II) ANY RIGHTS OF ACCELERATION AND THE AVAILABILITY OF EQUITABLE
REMEDIES MAY BE SUBJECT TO GENERAL PRINCIPLES OF EQUITY (WHETHER CONSIDERED IN A
PROCEEDING IN EQUITY OR AT LAW).  ON THE CLOSING DATE, THE MANAGEMENT AGREEMENT
WILL BE THE LEGAL, VALID AND BINDING OBLIGATION OF PGP, ENFORCEABLE AGAINST PGP
IN ACCORDANCE WITH ITS TERMS, EXCEPT THAT (I) SUCH ENFORCEABILITY MAY BE LIMITED
BY APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS
GENERALLY AND (II) ANY RIGHTS OF ACCELERATION AND THE AVAILABILITY OF EQUITABLE
REMEDIES MAY BE SUBJECT TO GENERAL PRINCIPLES OF EQUITY (WHETHER CONSIDERED IN A
PROCEEDING IN EQUITY OR AT LAW).

 

(M)                               ACTIONS IN CONNECTION WITH THE TRANSACTIONS. 
EACH OF THE OPERATIVE DOCUMENTS, AS EXECUTED AND DELIVERED, AND EACH OF THE
TRANSACTIONS DESCRIBED IN THE OFFERING CIRCULAR, CONFORMS IN ALL MATERIAL
RESPECTS TO THE DESCRIPTION THEREOF IN THE OFFERING CIRCULAR. 

 

(N)                                 NO VIOLATION.  THE COMPANY IS NOT IN
VIOLATION OF ITS CERTIFICATE OF FORMATION OR OPERATING AGREEMENT (THE “COMPANY
CHARTER DOCUMENTS”), DJW CORP. IS NOT IN VIOLATION OF ITS CHARTER OR BYLAWS (THE
“DJW CORP. CHARTER DOCUMENTS”), AND PARENT IS NOT IN VIOLATION OF ITS
CERTIFICATE OF FORMATION OR OPERATING AGREEMENT (THE “PARENT CHARTER DOCUMENTS”
AND, COLLECTIVELY WITH THE COMPANY CHARTER DOCUMENTS, THE DJW CORP. CHARTER
DOCUMENTS AND THE CERTIFICATE OF FORMATION AND OPERATING AGREEMENT OF DJL, THE
“CHARTER DOCUMENTS”).  NEITHER OF THE ISSUERS NOR PARENT IS (I) IN VIOLATION OF
ANY FEDERAL, STATE, MUNICIPAL, COUNTY, PARISH, LOCAL OR FOREIGN STATUTE, LAW,
ORDINANCE OR STANDARD APPLICABLE TO IT, OR ANY JUDGMENT, DECREE, RULE,
REGULATION OR ORDER APPLICABLE TO IT (INCLUDING, WITHOUT LIMITATION, COMMON LAW
AND CHAPTER 99F OF THE CODE OF IOWA (1999) IN EACH CASE INCLUDING THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (COLLECTIVELY, “APPLICABLE LAW”), OF ANY
GOVERNMENT, GOVERNMENTAL OR REGULATORY AGENCY OR BODY (INCLUDING, WITHOUT
LIMITATION, THE IOWA RACING AND GAMING COMMISSION OR OTHER APPLICABLE GAMING
AUTHORITY) (EACH, A “GAMING AUTHORITY”), COURT, ARBITRATOR OR SELF-REGULATORY
ORGANIZATION, DOMESTIC OR FOREIGN (EACH, A “GOVERNMENTAL AUTHORITY”) OR (II) IN
BREACH OF OR DEFAULT UNDER ANY BOND, DEBENTURE, NOTE OR OTHER EVIDENCE OF
INDEBTEDNESS, INDENTURE, MORTGAGE, DEED OF TRUST, LEASE OR ANY OTHER AGREEMENT
OR INSTRUMENT TO WHICH ANY SUCH PERSON IS A PARTY OR BY WHICH ANY OF THEM OR ANY
OF THEIR RESPECTIVE EQUITY INTERESTS OR OTHER PROPERTY IS BOUND (COLLECTIVELY,
“APPLICABLE AGREEMENTS”), OTHER THAN, IN THE CASE OF EACH OF THE IMMEDIATELY
PRECEDING CLAUSES (I) AND (II), VIOLATIONS, BREACHES OR DEFAULTS THAT WOULD NOT,
SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.  THERE EXISTS NO
CONDITION

 

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THAT, WITH THE PASSAGE OF TIME OR OTHERWISE, WOULD REASONABLY BE EXPECTED TO (X)
CONSTITUTE A VIOLATION OF (A) THE CHARTER DOCUMENTS OR (B) APPLICABLE LAWS OR
(Y) CONSTITUTE A BREACH OF OR DEFAULT UNDER ANY APPLICABLE AGREEMENT OR (Z)
RESULT IN THE IMPOSITION OF ANY PENALTY OR THE ACCELERATION OF ANY INDEBTEDNESS,
OTHER THAN, IN THE CASE OF THE IMMEDIATELY PRECEDING CLAUSES (X)(B),(Y) AND (Z),
SUCH VIOLATIONS, BREACHES, PENALTIES OR DEFAULTS THAT WOULD NOT, SINGLY OR IN
THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.  ALL APPLICABLE AGREEMENTS ARE IN
FULL FORCE AND EFFECT WITH RESPECT TO THE ISSUERS, IN EACH CASE, TO THE EXTENT A
PARTY THERETO, AND ARE LEGAL, VALID AND BINDING OBLIGATIONS OF THE ISSUERS, IN
EACH CASE, TO THE EXTENT A PARTY THERETO.

 

(O)                                 NO CONFLICT.  NONE OF THE EXECUTION,
DELIVERY OR (ASSUMING SATISFACTION OF THE CONDITION SPECIFIED IN
SECTION 9(A)(XII)) PERFORMANCE OF ANY OF THE OPERATIVE DOCUMENTS, BY EITHER
ISSUER, PARENT OR DJL IN EACH CASE, TO THE EXTENT A PARTY THERETO, NOR THE
COMPLIANCE BY IT WITH THE TERMS AND PROVISIONS THEREOF, NOR THE CONSUMMATION OF
ANY OF THE TRANSACTIONS, SHALL CONFLICT WITH, VIOLATE, CONSTITUTE A BREACH OF OR
A DEFAULT (WITH THE PASSAGE OF TIME OR OTHERWISE) UNDER, RESULT IN THE
IMPOSITION OF A LIEN ON ANY ASSETS OF OR ANY CAPITAL STOCK OF OR MEMBERSHIP
INTERESTS IN EITHER OF THE ISSUERS (EXCEPT FOR LIENS CREATED BY THE INDENTURE,
LIENS CREATED BY THE SECURITY DOCUMENTS AND PERMITTED LIENS), OR RESULT IN AN
ACCELERATION OF INDEBTEDNESS UNDER OR PURSUANT TO, (I) ITS CHARTER DOCUMENTS,
(II) THE PENINSULA INDENTURE (AS DEFINED HEREIN), THE EXISTING CREDIT AGREEMENT
(AS DEFINED HEREIN) OR ANY OTHER APPLICABLE AGREEMENT, OR (III) (ASSUMING THE
ACCURACY OF THE REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER IN
SECTION 7 OF THIS AGREEMENT AND, IF ANY EXEMPT RESALES ARE MADE TO ACCREDITED
INVESTORS, THE ACCURACY OF THE REPRESENTATIONS AND WARRANTIES OF SUCH ACCREDITED
INVESTORS CONTAINED IN THE ACCREDITED INVESTOR LETTERS EXECUTED BY SUCH
ACCREDITED INVESTORS) ANY APPLICABLE LAW, OTHER THAN, IN THE CASE OF THE
IMMEDIATELY PRECEDING CLAUSES (II) AND (III), SUCH VIOLATIONS, BREACHES OR
DEFAULTS THAT WOULD NOT, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE
EFFECT.  AFTER GIVING EFFECT TO THE TRANSACTIONS, NO DEFAULT OR EVENT OF DEFAULT
(EACH, AS DEFINED IN THE INDENTURE) WILL EXIST.

 

(P)                                 PERMITS.  EXCEPT AS DISCLOSED IN THE
OFFERING CIRCULAR AND ASSUMING THE ACCURACY OF THE REPRESENTATIONS AND
WARRANTIES OF THE INITIAL PURCHASER IN SECTION 7 OF THIS AGREEMENT AND, IF ANY
EXEMPT RESALES ARE MADE TO ACCREDITED INVESTORS, THE ACCURACY OF THE
REPRESENTATIONS AND WARRANTIES OF SUCH ACCREDITED INVESTORS CONTAINED IN THE
ACCREDITED INVESTOR LETTERS EXECUTED BY SUCH ACCREDITED INVESTORS, NO PERMIT,
CERTIFICATE, AUTHORIZATION, APPROVAL, CONSENT, LICENSE OR ORDER OF, OR FILING,
REGISTRATION, DECLARATION OR QUALIFICATION WITH, ANY GOVERNMENTAL AUTHORITY OR
ANY OTHER PERSON (COLLECTIVELY, “PERMITS”) IS REQUIRED BY EITHER ISSUER OR
PARENT TO OWN, LEASE, USE AND OPERATE ITS PROPERTIES AND ASSETS AND TO CONDUCT
AND CARRY ON ITS BUSINESS AS DESCRIBED IN THE OFFERING CIRCULAR, OR BY EITHER
ISSUER, PARENT OR DJL IN CONNECTION WITH, OR AS A CONDITION TO, THE EXECUTION,
DELIVERY OR PERFORMANCE OF ANY OF THE OPERATIVE DOCUMENTS BY IT TO THE EXTENT IT
IS A PARTY THERETO, THE COMPLIANCE WITH THE TERMS AND PROVISIONS THEREOF OR THE
CONSUMMATION OF ANY OF THE TRANSACTIONS TO THE EXTENT IT IS A PARTY THERETO,
OTHER THAN (I) SUCH PERMITS AS HAVE BEEN MADE OR OBTAINED ON OR PRIOR TO THE
CLOSING DATE, WHICH PERMITS ARE IN FULL FORCE AND EFFECT ON THE CLOSING DATE,
(II) AS MAY BE REQUIRED FOR EXEMPT RESALES UNDER THE SECURITIES OR BLUE SKY LAWS
OF THE VARIOUS JURISDICTIONS IN WHICH THE NOTES ARE BEING OFFERED BY THE INITIAL
PURCHASER AND (III) SUCH PERMITS, THE FAILURE OF WHICH TO MAKE OR OBTAIN WOULD
NOT, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.

 

(Q)                                 NO PROCEEDINGS.  EXCEPT AS DISCLOSED IN THE
OFFERING CIRCULAR AND OTHER THAN ONGOING GENERAL LICENSING INVESTIGATIONS
CONDUCTED IN THE ORDINARY COURSE OF BUSINESS, THERE IS NO ACTION, CLAIM, SUIT,
DEMAND, HEARING, NOTICE OF VIOLATION OR DEFICIENCY, OR PROCEEDING

 

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(INCLUDING, WITHOUT LIMITATION, ANY INVESTIGATION OR PARTIAL PROCEEDING, SUCH AS
A DEPOSITION), DOMESTIC OR FOREIGN (COLLECTIVELY, “PROCEEDINGS”), PENDING OR, TO
THE KNOWLEDGE OF THE ISSUERS, THREATENED, EITHER (I) IN CONNECTION WITH, OR THAT
SEEKS TO RESTRAIN, ENJOIN OR PREVENT THE CONSUMMATION OF, OR THAT OTHERWISE
OBJECTS TO, ANY OF THE OPERATIVE DOCUMENTS OR ANY OF THE TRANSACTIONS, OR
(II) THAT COULD, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT. 
NEITHER OF THE ISSUERS NOR PARENT IS SUBJECT TO ANY JUDGMENT, ORDER, DECREE,
RULE OR REGULATION OF ANY GOVERNMENTAL AUTHORITY THAT COULD, SINGLY OR IN THE
AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.  NO INJUNCTION OR ORDER HAS BEEN
ISSUED AND NO PROCEEDING IS PENDING OR, TO THE KNOWLEDGE OF THE ISSUERS,
THREATENED THAT (I) ASSERTS THAT THE OFFER, SALE AND DELIVERY OF THE NOTES TO
THE INITIAL PURCHASER PURSUANT TO THIS AGREEMENT OR THE INITIAL RESALE OF THE
NOTES BY THE INITIAL PURCHASER IN THE MANNER CONTEMPLATED BY THIS AGREEMENT IS
SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT, OR (II) WOULD PREVENT OR
SUSPEND THE ISSUANCE OR SALE OF THE NOTES, INCLUDING THE EXEMPT RESALES, OR THE
USE OF THE PRELIMINARY OFFERING CIRCULAR, THE OFFERING CIRCULAR, OR ANY
AMENDMENT OR SUPPLEMENT THERETO, IN ANY JURISDICTION.

 

(R)                                    REGULATED PERSONS.  EACH OF THE ISSUERS’
RESPECTIVE DIRECTORS, OFFICERS, KEY PERSONNEL, PARTNERS, MEMBERS AND PERSONS
HOLDING A FIVE PERCENT OR GREATER EQUITY OR ECONOMIC INTEREST IN THE ISSUERS
(EACH OF SUCH PERSONS, A “REGULATED PERSON” AND, COLLECTIVELY, THE “REGULATED
PERSONS”) HAS ALL PERMITS (INCLUDING, WITHOUT LIMITATION, PERMITS WITH RESPECT
TO ENGAGING IN GAMING OPERATIONS) NECESSARY OR ADVISABLE TO OWN, LEASE, USE AND
OPERATE THE PROPERTIES AND ASSETS AND TO CONDUCT AND CARRY ON THE BUSINESSES
DESCRIBED IN THE OFFERING CIRCULAR, OTHER THAN SUCH PERMITS THE FAILURE OF WHICH
TO HAVE WOULD NOT, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT (A
“MATERIAL PERMIT”).  ALL MATERIAL PERMITS ARE VALID AND IN FULL FORCE AND
EFFECT.  EACH OF THE REGULATED PERSONS IS IN COMPLIANCE WITH THE TERMS AND
CONDITIONS OF ALL PERMITS (INCLUDING, WITHOUT LIMITATION, PERMITS WITH RESPECT
TO ENGAGING IN GAMING OR RACING OPERATIONS) NECESSARY OR ADVISABLE TO OWN,
LEASE, USE AND OPERATE THE PROPERTIES AND ASSETS AND TO CONDUCT AND CARRY ON THE
BUSINESSES DESCRIBED IN THE OFFERING CIRCULAR, OTHER THAN WHERE SUCH FAILURE TO
BE IN COMPLIANCE WOULD NOT, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE
EFFECT.  NONE OF THE EXECUTION, DELIVERY OR PERFORMANCE OF ANY OF THE OPERATIVE
DOCUMENTS, NOR THE COMPLIANCE WITH THE TERMS AND PROVISIONS THEREOF, NOR THE
CONSUMMATION OF ANY OF THE TRANSACTIONS, WILL ALLOW OR RESULT IN, AND NO EVENT
HAS OCCURRED WHICH ALLOWS OR RESULTS IN, OR AFTER NOTICE OR LAPSE OF TIME WOULD
ALLOW OR RESULT IN, THE IMPOSITION OF ANY MATERIAL PENALTY UNDER, OR THE
REVOCATION OR TERMINATION OF, ANY MATERIAL PERMIT OR ANY MATERIAL IMPAIRMENT OF
THE RIGHTS OF THE HOLDER OF ANY MATERIAL PERMIT.  NEITHER OF THE ISSUERS HAS
RECEIVED ANY NOTICE FROM ANY ISSUER, AND THE ISSUERS HAVE NO ACTUAL KNOWLEDGE,
THAT ANY ISSUER IS CONSIDERING LIMITING, CONDITIONING, SUSPENDING, MODIFYING,
REVOKING OR NOT RENEWING ANY MATERIAL PERMIT.

 

(S)                                  NO INVESTIGATIONS OF REGULATED PERSONS.  TO
THE KNOWLEDGE OF THE ISSUERS, EXCEPT AS DISCLOSED IN THE OFFERING CIRCULAR, NO
GAMING AUTHORITY IS INVESTIGATING ANY REGULATED PERSON, OTHER THAN ONGOING
GENERAL LICENSING INVESTIGATIONS CONDUCTED IN THE ORDINARY COURSE OF BUSINESS. 

 

(T)                                    TITLE TO ASSETS.  IMMEDIATELY FOLLOWING
THE CLOSING, EACH OF THE ISSUERS (I) WILL HAVE GOOD AND MARKETABLE TITLE, FREE
AND CLEAR OF ALL LIENS (OTHER THAN LIENS CREATED BY THE INDENTURE, LIENS CREATED
BY THE SECURITY DOCUMENTS AND PERMITTED LIENS), TO ALL PROPERTY AND ASSETS
DESCRIBED IN THE OFFERING CIRCULAR AS BEING OR TO BE OWNED BY IT AND (II) WILL
HOLD A VALID LEASEHOLD INTEREST WITH RESPECT TO EACH SUCH LEASE AND WILL REMAIN
IN POSSESSION OF THE REAL

 

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PROPERTY LEASED PURSUANT TO THOSE LEASES UNTIL THE DATE THE LEASE EXPIRES IN
ACCORDANCE WITH ITS TERMS.  DJW CORP. HAS NO ASSETS, OTHER THAN ASSETS RECEIVED
IN PAYMENT FOR ITS CAPITAL STOCK.

 

(U)                                 SUFFICIENCY AND CONDITION OF ASSETS.  THE
ASSETS OF EACH OF THE ISSUERS INCLUDE ALL OF THE ASSETS AND PROPERTIES NECESSARY
OR REQUIRED IN, OR OTHERWISE MATERIAL TO, THE CONDUCT OF THE BUSINESSES OF EACH
OF THEM AS CURRENTLY CONDUCTED AND AS PROPOSED TO BE CONDUCTED (AS DESCRIBED IN
THE OFFERING CIRCULAR), AND SUCH ASSETS ARE IN WORKING CONDITION, EXCEPT WHERE
THE FAILURE OF SUCH ASSETS TO BE IN WORKING CONDITION WOULD NOT, SINGLY OR IN
THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.  WITHOUT LIMITING THE FOREGOING,
EACH OF THE PROPERTIES OF THE ISSUERS (INCLUDING, WITHOUT LIMITATION, ALL
BUILDINGS, STRUCTURES, IMPROVEMENTS AND FIXTURES LOCATED THEREON, THEREUNDER,
THEREOVER OR THEREIN, AND ALL APPURTENANCES THERETO AND OTHER ASPECTS THEREOF)
IS OTHERWISE SUITABLE, SUFFICIENT, ADEQUATE AND APPROPRIATE IN ALL RESPECTS
(INCLUDING PHYSICAL, STRUCTURAL, OPERATIONAL, LEGAL, PRACTICAL AND OTHERWISE)
FOR ITS CURRENT AND PROPOSED USE, OPERATION AND OCCUPANCY, EXCEPT, IN EACH SUCH
CASE, FOR SUCH FAILURES TO MEET SUCH STANDARDS AS WOULD NOT, SINGLY OR IN THE
AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT. 

 

(V)                                 INSURANCE.  AS OF THE CLOSING, EACH OF THE
ISSUERS MAINTAINS REASONABLY ADEQUATE INSURANCE COVERING ITS PROPERTIES,
OPERATIONS, PERSONNEL AND BUSINESSES AGAINST LOSSES AND RISKS IN ACCORDANCE WITH
CUSTOMARY INDUSTRY PRACTICE, AND ALL SUCH INSURANCE IS OUTSTANDING AND DULY IN
FORCE.

 

(W)                               REAL PROPERTY.  NO CONDEMNATION, EMINENT
DOMAIN, OR SIMILAR PROCEEDING EXISTS, IS PENDING OR, TO THE KNOWLEDGE OF THE
ISSUERS, IS THREATENED, WITH RESPECT TO OR THAT COULD AFFECT ANY REAL PROPERTIES
OWNED BY EITHER OF THE ISSUERS, EXCEPT FOR SUCH PROCEEDINGS AS WOULD NOT, SINGLY
OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.  NO REAL PROPERTY OWNED BY
EITHER OF THE ISSUERS IS SUBJECT TO ANY SALES CONTRACT, OPTION, RIGHT OF FIRST
REFUSAL OR SIMILAR AGREEMENT OR ARRANGEMENT WITH ANY THIRD PARTY.  THERE IS NO
REAL PROPERTY CURRENTLY UNDER CONTRACT OR SUBJECT TO AN OPTION IN FAVOR OF
EITHER OF THE ISSUERS, EXCEPT FOR REAL PROPERTY WHICH THE FAILURE OF THE ISSUERS
TO ACQUIRE, WOULD NOT, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE
EFFECT.

 

(X)                                   RELATED PARTY TRANSACTIONS.  EXCEPT AS
DISCLOSED IN THE OFFERING CIRCULAR, THERE ARE NO RELATED PARTY TRANSACTIONS THAT
WOULD BE REQUIRED TO BE DISCLOSED IN THE OFFERING CIRCULAR IF THE OFFERING
CIRCULAR WERE A PROSPECTUS INCLUDED IN A REGISTRATION STATEMENT ON FORM S-1
FILED UNDER THE ACT.

 

(Y)                                 SECURITY INTERESTS.  UPON EXECUTION AND
DELIVERY OF THE SECURITY DOCUMENTS BY THE ISSUERS AND PARENT, IN EACH CASE, TO
THE EXTENT IT IS A PARTY THERETO, AND THE ISSUANCE OF THE NOTES, THE SECURITY
DOCUMENTS TO WHICH IT IS A PARTY WILL CREATE, IN FAVOR OF THE SECURED PARTY FOR
THE BENEFIT OF THE HOLDERS OF THE NOTES, A LEGAL, VALID AND ENFORCEABLE SECURITY
INTEREST IN (SUBJECT TO PERMITTED LIENS) ALL OF THE RIGHT, TITLE AND INTEREST OF
THE ISSUERS AND PARENT, AS THE CASE MAY BE, IN THE COLLATERAL COVERED BY THE
SECURITY DOCUMENTS AND THE PROCEEDS THEREOF.  UPON: (I) THE FILING OR RECORDING
OF APPLICABLE SECURITY DOCUMENTS OR APPROPRIATE UNIFORM COMMERCIAL CODE
FINANCING STATEMENTS WITH THE APPROPRIATE FILING, RECORDS, REGISTRY, AND/OR
OTHER PUBLIC OFFICE (WITH RESPECT TO FILINGS TO BE MADE IN THE U.S. PATENT AND
TRADEMARK OFFICE, WITHIN THREE (3) MONTHS OF THE DATE OF THE APPLICABLE SECURITY
DOCUMENT, AND WITH RESPECT TO FILINGS IN THE U.S. COPYRIGHT OFFICE WITHIN ONE
(1) MONTH OF THE DATE OF THE APPLICABLE SECURITY DOCUMENT), TOGETHER WITH THE
PAYMENT OF THE REQUISITE FILING OR RECORDATION FEES RELATED THERETO, (II) IN THE
CASE OF EACH SECURITIES ACCOUNT AND THE INVESTMENT RELATED PROPERTY THEREIN (AS
EACH SUCH TERM IS

 

15

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DEFINED IN THE SECURITY AGREEMENT) WITH RESPECT TO WHICH A CONTROL AGREEMENT, IN
THE FORM OF EXHIBIT B TO THE SECURITY AGREEMENT, HAS BEEN EXECUTED AND
DELIVERED, AND (III) IN THE CASE OF EACH DEPOSIT ACCOUNT (AS DEFINED IN THE
SECURITY AGREEMENT) AND THE CASH AND OTHER FUNDS ON DEPOSIT THEREIN WITH RESPECT
TO WHICH A CONTROL AGREEMENT, IN THE FORM OF EXHIBIT C TO THE SECURITY
AGREEMENT, HAS BEEN EXECUTED AND DELIVERED, THE SECURITY INTERESTS WILL
CONSTITUTE FIRST PRIORITY SECURITY INTERESTS IN (SUBJECT TO PERMITTED LIENS),
SUCH COLLATERAL (OTHER THAN INSURANCE POLICIES).  AS OF THE CLOSING DATE, THE
COLLATERAL WILL BE SUBJECT TO NO LIENS OTHER THAN PERMITTED LIENS.

 

(Z)                                   TAXES.  ALL MATERIAL TAX RETURNS REQUIRED
TO BE FILED BY EITHER OF THE ISSUERS IN ANY JURISDICTION (INCLUDING FOREIGN
JURISDICTIONS) HAVE BEEN FILED AND, WHEN FILED, ALL SUCH RETURNS WERE ACCURATE
IN ALL MATERIAL RESPECTS, AND ALL TAXES, ASSESSMENTS, FEES AND OTHER CHARGES
(INCLUDING, WITHOUT LIMITATION, WITHHOLDING TAXES, PENALTIES AND INTEREST) DUE
OR CLAIMED TO BE DUE FROM EITHER OF THE ISSUERS HAVE BEEN PAID, OTHER THAN THOSE
BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS, OR THOSE THAT ARE
CURRENTLY PAYABLE WITHOUT PENALTY OR INTEREST AND, IN EACH CASE, FOR WHICH AN
ADEQUATE RESERVE OR ACCRUAL HAS BEEN ESTABLISHED ON THE BOOKS AND RECORDS OF THE
ISSUERS, AS APPLICABLE, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES OF THE UNITED STATES, CONSISTENTLY APPLIED (“GAAP”).  THERE ARE NO
ACTUAL OR PROPOSED ADDITIONAL TAX ASSESSMENTS FOR ANY TAX PERIOD AGAINST EITHER
OF THE ISSUERS THAT WOULD, SINGLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.  THE CHARGES, ACCRUALS AND RESERVES ON THE BOOKS
AND RECORDS OF THE ISSUERS IN RESPECT OF ANY TAX LIABILITY FOR ANY TAX PERIODS
NOT FINALLY DETERMINED ARE ADEQUATE TO MEET ANY ASSESSMENTS OF TAX OR
RE-ASSESSMENTS OF ADDITIONAL TAX FOR ANY SUCH PERIOD.

 

(AA)                            INTELLECTUAL PROPERTY.  THE ISSUERS OWN, POSSESS
OR ARE LICENSED UNDER, AND HAVE THE RIGHT TO USE, ALL TRADEMARKS, SERVICE MARKS,
TRADE NAMES AND OTHER INTELLECTUAL PROPERTY (COLLECTIVELY, “INTELLECTUAL
PROPERTY”) CURRENTLY USED IN AND MATERIAL TO THE CONDUCT OF THEIR BUSINESS, FREE
AND CLEAR OF ALL LIENS, OTHER THAN PERMITTED LIENS.  TO THE KNOWLEDGE OF THE
ISSUERS, NO CLAIMS HAVE BEEN ASSERTED BY ANY PERSON CHALLENGING THE USE OF ANY
SUCH INTELLECTUAL PROPERTY BY EITHER OF THE ISSUERS AND THERE IS NO VALID BASIS
FOR ANY SUCH CLAIM, AND THE USE OF SUCH INTELLECTUAL PROPERTY BY THE ISSUERS
WILL NOT INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER PERSON.

 

(BB)                          ACCOUNTING CONTROLS.  EACH OF THE ISSUERS
MAINTAINS A SYSTEM OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE
REASONABLE ASSURANCE THAT (I) MATERIAL TRANSACTIONS ARE EXECUTED IN ACCORDANCE
WITH MANAGEMENT’S GENERAL OR SPECIFIC AUTHORIZATION, (II) MATERIAL TRANSACTIONS
ARE RECORDED AS NECESSARY TO PERMIT PREPARATION OF FINANCIAL STATEMENTS IN
CONFORMITY WITH GAAP, AND TO MAINTAIN ASSET ACCOUNTABILITY, (III) ACCESS TO
ASSETS IS PERMITTED ONLY IN ACCORDANCE WITH MANAGEMENT’S GENERAL OR SPECIFIC
AUTHORIZATION, AND (IV) THE RECORDED ACCOUNTABILITY FOR ASSETS IS COMPARED WITH
THE EXISTING ASSETS AT REASONABLE INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH
RESPECT TO ANY MATERIAL DIFFERENCES.

 

(CC)                            FINANCIAL STATEMENTS.  THE UNAUDITED BALANCE
SHEET AS OF JUNE 30, 2005 OF THE COMPANY CONTAINED IN THE OFFERING CIRCULAR (THE
“COMPANY FINANCIAL STATEMENTS”) PRESENTS FAIRLY THE FINANCIAL POSITION OF THE
COMPANY AS OF ITS DATE, AND HAS BEEN PREPARED IN ACCORDANCE WITH GAAP.

 

(DD)                          NO MATERIAL ADVERSE CHANGE.  SUBSEQUENT TO THE
RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN IN THE OFFERING CIRCULAR,
EXCEPT AS DISCLOSED IN THE OFFERING CIRCULAR,

 

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(I) NEITHER OF THE ISSUERS HAS INCURRED ANY LIABILITIES, DIRECT OR CONTINGENT,
THAT ARE MATERIAL, SINGLY OR IN THE AGGREGATE, TO ANY OF THEM, OR HAS ENTERED
INTO ANY MATERIAL TRANSACTIONS NOT IN THE ORDINARY COURSE OF BUSINESS,
(II) THERE HAS NOT BEEN ANY MATERIAL DECREASE IN THE CAPITAL STOCK OR MEMBERSHIP
INTERESTS, AS THE CASE MAY BE, OR ANY MATERIAL INCREASE IN LONG-TERM
INDEBTEDNESS OR ANY MATERIAL INCREASE IN SHORT-TERM INDEBTEDNESS OF EITHER OF
THE ISSUERS, OR ANY PAYMENT OF OR DECLARATION TO PAY ANY DIVIDENDS OR ANY OTHER
DISTRIBUTION WITH RESPECT TO EITHER OF THE ISSUERS, AND (III) THERE HAS NOT BEEN
ANY MATERIAL ADVERSE CHANGE IN THE PROPERTIES, BUSINESS, PROSPECTS, OPERATIONS,
EARNINGS, ASSETS, LIABILITIES OR CONDITION (FINANCIAL OR OTHERWISE) OF THE
ISSUERS TAKEN AS A WHOLE (EACH OF CLAUSES (I) AND (III), A “MATERIAL ADVERSE
CHANGE”).  TO THE ACTUAL KNOWLEDGE OF THE ISSUERS AFTER REASONABLE INQUIRY,
THERE IS NO EVENT THAT IS REASONABLY LIKELY TO OCCUR, WHICH IF IT WERE TO OCCUR,
COULD, SINGLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT, EXCEPT SUCH EVENTS THAT HAVE BEEN DISCLOSED IN THE OFFERING
CIRCULAR.

 

(EE)                            RATINGS.  NO “NATIONALLY RECOGNIZED STATISTICAL
RATING ORGANIZATION” AS SUCH TERM IS DEFINED FOR PURPOSES OF
RULE 436(G)(2) UNDER THE ACT (I) HAS IMPOSED (OR HAS INFORMED EITHER OF THE
ISSUERS THAT IT IS CONSIDERING IMPOSING) ANY CONDITION (FINANCIAL OR OTHERWISE)
ON THE ISSUERS’ RETAINING ANY RATING ASSIGNED TO ANY SECURITIES OF EITHER OF THE
ISSUERS, OR (II) HAS INDICATED TO EITHER OF THE ISSUERS THAT IT IS CONSIDERING
(A) THE DOWNGRADING, SUSPENSION, OR WITHDRAWAL OF, OR ANY REVIEW FOR A POSSIBLE
CHANGE THAT DOES NOT INDICATE THE DIRECTION OF THE POSSIBLE CHANGE IN, ANY
RATING SO ASSIGNED, OR (B) ANY CHANGE IN THE OUTLOOK FOR ANY RATING OF ANY
SECURITIES OF EITHER OF THE ISSUERS.

 

(FF)                                SOLVENCY.  EACH OF THE ISSUERS IS INCURRING
ITS RESPECTIVE INDEBTEDNESS UNDER THE NOTES FOR PROPER PURPOSES AND IN GOOD
FAITH.  IMMEDIATELY BEFORE AND AFTER GIVING EFFECT TO THE ISSUANCE OF THE NOTES,
FOR EACH OF THE ISSUERS (ON A CONSOLIDATED BASIS) CONSIDERED AS GOING CONCERNS,
(I) ITS ASSETS AT A FAIR VALUATION EXCEED THE SUM OF ITS DEBTS; (II) THE PRESENT
FAIR SALABLE VALUE OF ITS ASSETS IS NOT LESS THAN THE AMOUNT THAT WILL BE
REQUIRED TO PAY ITS PROBABLY LIABILITY ON ITS EXISTING DEBTS AS THEY BECOME
ABSOLUTE AND MATURED, (III) IT HAS AND WILL HAVE ADEQUATE CAPITAL WITH WHICH TO
CONDUCT THE BUSINESS IT IS PRESENTLY CONDUCTING AND PRESENTLY ANTICIPATES
CONDUCTING; AND (IV) IT DOES NOT INTEND TO INCUR, AND DOES NOT BELIEVE AND
REASONABLY SHOULD NOT BELIEVE THAT IT WILL INCUR, DEBTS BEYOND ITS ABILITY TO
PAY AS THOSE DEBTS BECOME DUE.  NEITHER OF THE ISSUERS IS AWARE OF ANY REASON
WHY IT WOULD BE INAPPROPRIATE TO CONSIDER THE ISSUERS AS A GOING CONCERN.  FOR
PURPOSES OF THIS PARAGRAPH, “DEBTS” INCLUDES CONTINGENT AND UNLIQUIDATED DEBTS,
AT A FAIR VALUATION.

 

(GG)                          NO SOLICITATION.  NEITHER OF THE ISSUERS NOR ANY
OF THEIR AFFILIATES NOR ANYONE ACTING ON THEIR BEHALF HAS (I) TAKEN, DIRECTLY OR
INDIRECTLY, ANY ACTION DESIGNED TO CAUSE OR TO RESULT IN, OR THAT HAS
CONSTITUTED OR WHICH MIGHT REASONABLY BE EXPECTED TO CONSTITUTE, THE
STABILIZATION OR MANIPULATION OF THE PRICE OF THE NOTES OR TO FACILITATE THE
SALE OR RESALE OF ANY OF THE NOTES, (II) SOLD, BID FOR, PURCHASED, OR PAID
ANYONE ANY COMPENSATION FOR SOLICITING PURCHASES OF, ANY OF THE NOTES, OR
(III) PAID OR AGREED TO PAY TO ANY PERSON ANY COMPENSATION FOR SOLICITING
ANOTHER TO PURCHASE ANY OTHER SECURITIES OF EITHER OF THE ISSUERS.

 

(HH)                          NO REGISTRATION.  WITHOUT LIMITING SECTIONS 6(O)
AND 6(P), NO REGISTRATION UNDER THE ACT, AND NO QUALIFICATION OF THE INDENTURE
UNDER THE TIA IS REQUIRED FOR THE SALE OF THE NOTES TO THE INITIAL PURCHASER AS
CONTEMPLATED HEREBY OR FOR THE EXEMPT RESALES, ASSUMING (I) THAT THE PURCHASERS
IN THE EXEMPT RESALES ARE ELIGIBLE PURCHASERS, (II) THE ACCURACY OF THE INITIAL
PURCHASER’S REPRESENTATIONS CONTAINED IN SECTION 7 OF THIS AGREEMENT AND
(III) IF ANY EXEMPT

 

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RESALES ARE MADE TO ACCREDITED INVESTORS, THE ACCURACY OF THE REPRESENTATIONS
AND WARRANTIES OF SUCH ACCREDITED INVESTORS CONTAINED IN THE ACCREDITED INVESTOR
LETTERS EXECUTED BY SUCH ACCREDITED INVESTORS.  NO FORM OF GENERAL SOLICITATION
OR GENERAL ADVERTISING (INCLUDING, WITHOUT LIMITATION, AS SUCH TERMS ARE DEFINED
IN REGULATION D UNDER THE ACT) WAS USED BY EITHER OF THE ISSUERS OR ANY OF THEIR
RESPECTIVE AFFILIATES OR ANY OF THEIR RESPECTIVE REPRESENTATIVES IN CONNECTION
WITH THE OFFER AND SALE OF ANY OF THE NOTES OR IN CONNECTION WITH EXEMPT
RESALES.  NO SECURITIES OF THE SAME CLASS AS THE NOTES HAVE BEEN OFFERED, ISSUED
OR SOLD BY EITHER OF THE ISSUERS OR ANY OF THEIR RESPECTIVE AFFILIATES WITHIN
THE SIX-MONTH PERIOD IMMEDIATELY PRIOR TO THE DATE HEREOF. 

 

(II)                                  ERISA.  NEITHER OF THE ISSUERS NOR ANY OF
THEIR RESPECTIVE “AFFILIATES” MAINTAINS A PLAN THAT IS INTENDED TO QUALIFY UNDER
SECTION 401(A) OF THE CODE, OR IS A “PARTY IN INTEREST” OR A “DISQUALIFIED
PERSON” WITH RESPECT TO ANY EMPLOYEE BENEFIT PLANS.  NO CONDITION EXISTS OR
EVENT OR TRANSACTION HAS OCCURRED IN CONNECTION WITH ANY EMPLOYEE BENEFIT PLAN
THAT COULD RESULT IN EITHER OF THE ISSUERS OR ANY SUCH “AFFILIATE” INCURRING ANY
LIABILITY, FINE OR PENALTY THAT COULD, SINGLY OR IN THE AGGREGATE, HAVE A
MATERIAL ADVERSE EFFECT.  NEITHER OF THE ISSUERS OR ANY OF THE GUARANTORS NOR
ANY TRADE OR BUSINESS UNDER COMMON CONTROL WITH THE ISSUERS OR THE GUARANTORS
(FOR PURPOSES OF SECTION 414(C) OF THE CODE) MAINTAINS ANY EMPLOYEE PENSION
BENEFIT PLAN THAT IS SUBJECT TO TITLE IV OF THE EMPLOYEE RETIREMENT INCOME ACT
OF 1974, AS AMENDED, OR THE RULES AND REGULATIONS PROMULGATED THEREUNDER
(“ERISA”).

 

The terms “employee benefit plan,” “employee pension benefit plan,” and “party
in interest” shall have the meanings assigned to such terms in Section 3 of
ERISA.  The term “Affiliate” shall have the meaning assigned to such term in
Section 407(d)(7) of ERISA, and the term “disqualified person” shall have the
meaning assigned to such term in section 4975 of the Internal Revenue Code of
1986, as amended, or the rules, regulations and published interpretations
promulgated thereunder (collectively the “Code”).

 

(JJ)                                  INVESTMENT COMPANY ACT AND OTHER FEDERAL
REGULATIONS.  NEITHER OF THE ISSUERS HAS TAKEN, AND NONE OF THEM WILL TAKE, ANY
ACTION THAT MAY CAUSE THIS AGREEMENT OR THE ISSUANCE OF THE NOTES TO VIOLATE OR
RESULT IN A VIOLATION OF SECTION 7 OF THE EXCHANGE ACT (INCLUDING, WITHOUT
LIMITATION, REGULATION T (12 C.F.R. PART 220), REGULATION U (12 C.F.R. PART 221)
OR REGULATION X (12 C.F.R. PART 224) OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM).  NEITHER OF THE ISSUERS IS SUBJECT TO REGULATION, OR SHALL
BECOME SUBJECT TO REGULATION UPON THE CONSUMMATION OF THE OFFERING AND SALE OF
THE NOTES AND THE APPLICATION OF THE NET PROCEEDS THEREOF AS DESCRIBED IN THE
OFFERING CIRCULAR, UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND THE
RULES AND REGULATIONS AND INTERPRETATIONS PROMULGATED THEREUNDER.

 

(KK)                            NO BROKERS.  NEITHER OF THE ISSUERS HAS DEALT
WITH ANY BROKER, FINDER, COMMISSION AGENT OR OTHER PERSON (OTHER THAN THE
INITIAL PURCHASER) IN CONNECTION WITH THE OFFERING AND NEITHER OF THE ISSUERS IS
UNDER ANY OBLIGATION TO PAY ANY BROKER’S FEE OR COMMISSION IN CONNECTION WITH
THE OFFERING (OTHER THAN COMMISSIONS AND FEES TO THE INITIAL PURCHASER).

 

(LL)                                  NO LABOR DISPUTES.  EXCEPT AS WOULD NOT,
SINGLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT, NEITHER OF THE ISSUERS IS ENGAGED IN ANY UNFAIR LABOR PRACTICE.  THERE
IS (I) NO UNFAIR LABOR PRACTICE COMPLAINT OR OTHER PROCEEDING PENDING OR, TO THE
KNOWLEDGE OF THE ISSUERS, THREATENED AGAINST EITHER OF THE ISSUERS BEFORE THE
NATIONAL LABOR RELATIONS BOARD OR ANY STATE, LOCAL OR FOREIGN LABOR RELATIONS
BOARD OR ANY INDUSTRIAL TRIBUNAL, AND NO GRIEVANCE OR ARBITRATION PROCEEDING
ARISING OUT OF OR UNDER ANY COLLECTIVE

 

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BARGAINING AGREEMENT IS SO PENDING OR, TO THE KNOWLEDGE OF THE ISSUERS,
THREATENED, (II) NO STRIKE, LABOR DISPUTE, SLOWDOWN OR STOPPAGE PENDING OR, TO
THE KNOWLEDGE OF THE ISSUERS, THREATENED AGAINST EITHER OF THE ISSUERS, AND
(III) NO UNION REPRESENTATION QUESTION EXISTING WITH RESPECT TO THE EMPLOYEES OF
EITHER OF THE ISSUERS, AND, TO THE KNOWLEDGE OF THE ISSUERS, NO UNION ORGANIZING
ACTIVITIES ARE TAKING PLACE EXCEPT, IN THE CASE OF EACH OF CLAUSES (I), (II) AND
(III) ABOVE, AS WOULD NOT, SINGLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.

 

(MM)                      ENVIRONMENTAL LAWS.  EXCEPT AS DISCLOSED IN THE
OFFERING CIRCULAR OR AS OTHERWISE WOULD NOT, SINGLY OR IN THE AGGREGATE,
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR OTHERWISE REQUIRE
DISCLOSURE IN THE OFFERING CIRCULAR, (I) NEITHER OF THE ISSUERS HAS BEEN OR IS
IN VIOLATION OF ANY FEDERAL, STATE OR LOCAL LAWS AND REGULATIONS RELATING TO
POLLUTION OR PROTECTION OF HUMAN HEALTH OR THE ENVIRONMENT, INCLUDING, WITHOUT
LIMITATION, LAWS AND REGULATIONS RELATING TO EMISSIONS, DISCHARGES, RELEASES OR
THREATENED RELEASES OF TOXIC OR HAZARDOUS SUBSTANCES, MATERIALS OR WASTES, OR
PETROLEUM AND PETROLEUM PRODUCTS (“MATERIALS OF ENVIRONMENTAL CONCERN”), OR
OTHERWISE RELATING TO THE PROTECTION OF HUMAN HEALTH AND SAFETY, OR THE USE,
TREATMENT, STORAGE, DISPOSAL, TRANSPORT OR HANDLING OF MATERIALS OF
ENVIRONMENTAL CONCERN (COLLECTIVELY, “ENVIRONMENTAL LAWS”), WHICH VIOLATION
INCLUDES, BUT IS NOT LIMITED TO, NONCOMPLIANCE WITH, OR LACK OF, ANY PERMITS OR
OTHER ENVIRONMENTAL AUTHORIZATIONS; (II) TO THE KNOWLEDGE OF THE ISSUERS, THERE
ARE NO CIRCUMSTANCES, EITHER PAST, PRESENT OR THAT ARE REASONABLY FORESEEABLE,
THAT MAY LEAD TO ANY SUCH VIOLATION IN THE FUTURE; (III) NEITHER OF THE ISSUERS
HAS RECEIVED ANY COMMUNICATION (WRITTEN OR ORAL), WHETHER FROM A GOVERNMENTAL
AUTHORITY OR OTHERWISE, ALLEGING ANY SUCH VIOLATION; (IV) THERE IS NO PENDING
OR, TO THE KNOWLEDGE OF THE ISSUERS, THREATENED CLAIM, ACTION, INVESTIGATION,
NOTICE (WRITTEN OR ORAL) OR OTHER PROCEEDING BY ANY PERSON OR ENTITY ALLEGING
POTENTIAL LIABILITY OF EITHER OF THE ISSUERS (OR AGAINST ANY PERSON OR ENTITY
FOR WHOSE ACTS OR OMISSIONS EITHER OF THE ISSUERS IS OR MAY REASONABLY BE
EXPECTED TO BE LIABLE, EITHER CONTRACTUALLY OR BY OPERATION OF LAW) FOR
INVESTIGATORY, CLEANUP, OR OTHER RESPONSE COSTS, OR NATURAL RESOURCES OR
PROPERTY DAMAGES, OR PERSONAL INJURIES, ATTORNEY’S FEES OR PENALTIES RELATING TO
(A) THE PRESENCE, OR RELEASE INTO THE ENVIRONMENT, OF ANY MATERIALS OF
ENVIRONMENTAL CONCERN AT ANY LOCATION, OR (B) CIRCUMSTANCES FORMING THE BASIS OF
ANY VIOLATION OR POTENTIAL VIOLATION, OF ANY ENVIRONMENTAL LAW (COLLECTIVELY,
“ENVIRONMENTAL CLAIMS”); AND (V) TO THE KNOWLEDGE OF THE ISSUERS, THERE ARE NO
PAST OR PRESENT ACTIONS, ACTIVITIES, CIRCUMSTANCES, CONDITIONS, EVENTS OR
INCIDENTS THAT COULD REASONABLY BE EXPECTED TO FORM THE BASIS OF ANY
ENVIRONMENTAL CLAIM. 

 

EACH OF THE ISSUERS, AS APPROPRIATE, HAS CONDUCTED ENVIRONMENTAL INVESTIGATIONS
OF, AND HAVE REVIEWED REASONABLY AVAILABLE INFORMATION REGARDING, THE BUSINESS,
PROPERTIES AND OPERATIONS OF EACH OF THE ISSUERS, AND OF OTHER PROPERTIES WITHIN
THE VICINITY OF THEIR BUSINESS, PROPERTIES AND OPERATIONS, AS APPROPRIATE FOR
THE CIRCUMSTANCES OF EACH SUCH PROPERTY AND OPERATION; ON THE BASIS OF SUCH
REVIEWS, INVESTIGATIONS AND INQUIRIES, THE ISSUERS HAVE REASONABLY CONCLUDED
THAT ANY COSTS AND LIABILITIES ASSOCIATED WITH SUCH MATTERS WOULD NOT HAVE,
SINGULARLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT OR OTHERWISE REQUIRE
DISCLOSURE IN THE OFFERING CIRCULAR.

 

(NN)                          MARKET DATA.  ALL STATISTICAL AND MARKET AND
INDUSTRY RELATED DATA INCLUDED IN THE OFFERING CIRCULAR ARE BASED ON OR DERIVED
FROM SOURCES WHICH THE ISSUERS BELIEVE TO BE RELIABLE AND ACCURATE.

 

(OO)                          REPRESENTATIONS AND WARRANTIES.  EACH CERTIFICATE
SIGNED PURSUANT TO SECTION 9(A)(VIII) BY ANY OFFICER OF EITHER OF THE ISSUERS
AND DELIVERED TO THE INITIAL PURCHASER OR

 

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COUNSEL FOR THE INITIAL PURCHASER PURSUANT TO THIS AGREEMENT SHALL BE DEEMED TO
BE A REPRESENTATION AND WARRANTY BY SUCH ISSUER OR GUARANTOR TO THE INITIAL
PURCHASER AS TO THE MATTERS COVERED THEREBY.

 

7.                                      REPRESENTATIONS AND WARRANTIES OF THE
INITIAL PURCHASER.  THE INITIAL PURCHASER REPRESENTS AND WARRANTS TO THE ISSUERS
THAT:

 

(A)                                  QIB.  IT IS A QIB WITH SUCH KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS AS IS NECESSARY IN ORDER TO
EVALUATE THE MERITS AND RISKS OF AN INVESTMENT IN THE NOTES.

 

(B)                                 ELIGIBLE PURCHASERS.  IT (I) IS NOT
ACQUIRING THE NOTES WITH A VIEW TO ANY DISTRIBUTION THEREOF THAT WOULD VIOLATE
THE ACT OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (II) WILL BE SOLICITING OFFERS FOR THE NOTES ONLY
FROM, AND WILL BE OFFERING AND SELLING THE NOTES ONLY TO, (A) PERSONS IN THE
UNITED STATES WHOM IT REASONABLY BELIEVES TO BE QIBS IN RELIANCE ON THE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY RULE 144A
UNDER THE ACT, AND (B) ACCREDITED INVESTORS THAT EXECUTE AND DELIVER TO THE
ISSUERS AND THE INITIAL PURCHASER AN ACCREDITED INVESTOR LETTER.

 

(C)                                  NO GENERAL SOLICITATION.  NO FORM OF
GENERAL SOLICITATION OR GENERAL ADVERTISING WITHIN THE MEANING OF
RULE 502(C) UNDER THE ACT OR IN ANY MANNER INVOLVING A PUBLIC OFFERING WITHIN
THE MEANING OF SECTION 4(2) OF THE ACT HAS BEEN OR WILL BE USED BY THE INITIAL
PURCHASER OR ANY OF ITS REPRESENTATIVES IN CONNECTION WITH THE OFFER AND SALE OF
ANY OF THE NOTES.

 

(D)                                 REPRESENTATIONS OF ELIGIBLE PURCHASERS.  IN
CONNECTION WITH THE EXEMPT RESALES, IT WILL SOLICIT OFFERS TO BUY THE NOTES ONLY
FROM, AND WILL OFFER AND SELL THE NOTES ONLY TO, PERSONS WHOM IT REASONABLY
BELIEVES TO BE ELIGIBLE PURCHASERS IN ACCORDANCE WITH THIS AGREEMENT AND ON THE
TERMS CONTEMPLATED BY THE OFFERING CIRCULAR.

 

(E)                                  POWER AND AUTHORITY.  IT HAS ALL REQUISITE
POWER AND AUTHORITY TO ENTER INTO, DELIVER AND PERFORM ITS OBLIGATIONS UNDER
THIS AGREEMENT, AND THIS AGREEMENT HAS BEEN DULY AUTHORIZED BY IT.

 

8.                                      INDEMNIFICATION.

 

(A)                                  INDEMNIFICATION OF INITIAL PURCHASER.  EACH
OF THE ISSUERS, PARENT AND DJL SHALL, AND EACH OF THE ISSUERS SHALL CAUSE THE
GUARANTORS, IF ANY, TO, JOINTLY AND SEVERALLY, WITHOUT LIMITATION AS TO TIME,
INDEMNIFY AND HOLD HARMLESS THE INITIAL PURCHASER AND EACH PERSON, IF ANY, WHO
CONTROLS (WITHIN THE MEANING OF SECTION 15 OF THE ACT OR SECTION 20(A) OF THE
EXCHANGE ACT) THE INITIAL PURCHASER (ANY OF SUCH PERSONS BEING HEREINAFTER
REFERRED TO AS A “CONTROLLING PERSON”), AND THE RESPECTIVE OFFICERS, DIRECTORS,
PARTNERS, EMPLOYEES, REPRESENTATIVES AND AGENTS OF THE INITIAL PURCHASER AND ANY
SUCH CONTROLLING PERSON (COLLECTIVELY WITH THE INITIAL PURCHASER, THE “PURCHASER
INDEMNIFIED PARTIES”), TO THE FULLEST EXTENT LAWFUL, FROM AND AGAINST ANY AND
ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES, COSTS (INCLUDING, WITHOUT LIMITATION,
COSTS OF PREPARATION AND REASONABLE ATTORNEYS’ FEES) AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, COSTS AND EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, PREPARING, PURSUING OR DEFENDING AGAINST ANY OF THE FOREGOING)
(COLLECTIVELY, “LOSSES”), AS INCURRED, DIRECTLY OR INDIRECTLY CAUSED BY, RELATED
TO, BASED UPON, ARISING OUT OF OR IN CONNECTION WITH (I) ANY UNTRUE STATEMENT OR
ALLEGED UNTRUE

 

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STATEMENT OF A MATERIAL FACT CONTAINED IN THE TERM SHEET OR THE OFFERING
CIRCULAR (OR ANY AMENDMENT OR SUPPLEMENT THERETO) AND (II) ANY OMISSION OR
ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE STATED THEREIN
OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY WERE MADE, NOT MISLEADING; PROVIDED, THAT NONE OF THE ISSUERS,
PARENT, DJL OR ANY GUARANTOR SHALL BE LIABLE UNDER THE INDEMNITY PROVIDED IN
THIS SECTION 8(A) TO ANY PURCHASER INDEMNIFIED PARTY FOR ANY LOSSES THAT
(A) RESULT SOLELY FROM AN UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN, OR
THE OMISSION OF A MATERIAL FACT FROM, ANY TERM SHEET, WHICH UNTRUE STATEMENT OR
OMISSION WAS COMPLETELY CORRECTED IN THE OFFERING CIRCULAR (AS THEN AMENDED OR
SUPPLEMENTED) IF IT SHALL HAVE BEEN DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT THAT (1) SUCH PURCHASER
INDEMNIFIED PARTY SOLD THE NOTES TO THE PERSON ALLEGING SUCH LOSS AND FAILED TO
SEND OR GIVE, AT OR PRIOR TO THE WRITTEN CONFIRMATION OF SUCH SALE, A COPY OF
THE OFFERING CIRCULAR (AS THEN AMENDED OR SUPPLEMENTED), IF REQUIRED BY LAW TO
HAVE SO DELIVERED IT, AND (2) THE ISSUERS HAD PREVIOUSLY FURNISHED COPIES OF THE
CORRECTED OFFERING CIRCULAR TO SUCH PURCHASER INDEMNIFIED PARTY WITHIN A
REASONABLE AMOUNT OF TIME PRIOR TO SUCH SALE OR SUCH CONFIRMATION, AND (3) THE
CORRECTED OFFERING CIRCULAR, IF DELIVERED, WOULD HAVE BEEN A COMPLETE DEFENSE
AGAINST THE PERSON ASSERTING SUCH LOSS; OR (B) ARE BASED ON AN UNTRUE STATEMENT
OR OMISSION OR ALLEGED UNTRUE STATEMENT OR OMISSION MADE IN RELIANCE ON AND IN
CONFORMITY WITH THE FURNISHED INFORMATION.  NONE OF THE ISSUERS, PARENT, DJL OR
THE GUARANTORS (IF ANY) SHALL BE LIABLE UNDER THIS SECTION 8 FOR ANY SETTLEMENT
OF ANY CLAIM OR ACTION (OTHER THAN SETTLEMENTS PERMITTED BY SECTION 8(B)(3))
EFFECTED WITHOUT ITS PRIOR WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD.  THE ISSUERS SHALL NOTIFY THE INITIAL PURCHASER PROMPTLY
OF THE INSTITUTION, THREAT OR ASSERTION OF ANY PROCEEDING OF WHICH EITHER OF THE
ISSUERS IS AWARE IN CONNECTION WITH THE MATTERS ADDRESSED BY THIS AGREEMENT
WHICH INVOLVES EITHER OF THE ISSUERS, PARENT, DJL, ANY OF THE GUARANTORS (IF
ANY) OR ANY OF THE PURCHASER INDEMNIFIED PARTIES. 

 

(B)                                 ACTIONS AGAINST PARTIES; NOTIFICATION.
(1) IF ANY PROCEEDING SHALL BE BROUGHT OR ASSERTED AGAINST ANY PERSON ENTITLED
TO INDEMNIFICATION HEREUNDER (AN “INDEMNIFIED PARTY”), SUCH INDEMNIFIED PARTY
SHALL GIVE PROMPT WRITTEN NOTICE TO THE PARTY OR PARTIES FROM WHICH SUCH
INDEMNIFICATION IS SOUGHT (THE “INDEMNIFYING PARTIES” AND EACH, AN “INDEMNIFYING
PARTY”); PROVIDED, THAT THE FAILURE TO SO NOTIFY THE INDEMNIFYING PARTIES SHALL
NOT RELIEVE ANY OF THE INDEMNIFYING PARTIES FROM ANY OBLIGATION OR LIABILITY
EXCEPT TO THE EXTENT (BUT ONLY TO THE EXTENT) THAT IT SHALL BE FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION (WHICH DETERMINATION IS NOT
SUBJECT TO APPEAL) THAT SUCH INDEMNIFYING PARTY HAS BEEN PREJUDICED MATERIALLY
BY SUCH FAILURE.

 

(2)                                  THE INDEMNIFYING PARTIES SHALL HAVE THE
RIGHT, EXERCISABLE BY GIVING WRITTEN NOTICE TO AN INDEMNIFIED PARTY, WITHIN 20
BUSINESS DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM SUCH INDEMNIFIED PARTY OF
SUCH PROCEEDING, TO ASSUME, AT THEIR EXPENSE, THE DEFENSE OF ANY SUCH
PROCEEDING; PROVIDED, THAT AN INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO EMPLOY
SEPARATE COUNSEL IN ANY SUCH PROCEEDING AND TO PARTICIPATE IN THE DEFENSE
THEREOF, BUT THE FEES AND EXPENSES OF SUCH COUNSEL SHALL BE AT THE EXPENSE OF
SUCH INDEMNIFIED PARTY OR PARTIES UNLESS: (I) THE INDEMNIFYING PARTIES HAVE
AGREED TO PAY SUCH FEES AND EXPENSES; (II) THE INDEMNIFYING PARTIES SHALL HAVE
FAILED PROMPTLY TO ASSUME THE DEFENSE OF SUCH PROCEEDING OR SHALL HAVE FAILED TO
EMPLOY COUNSEL REASONABLY SATISFACTORY TO SUCH INDEMNIFIED PARTY; OR (III) THE
NAMED PARTIES TO ANY SUCH PROCEEDING (INCLUDING ANY IMPLEADED PARTIES) INCLUDE
BOTH SUCH INDEMNIFIED PARTY AND ONE OR MORE INDEMNIFYING PARTIES (OR ANY
AFFILIATES OR CONTROLLING PERSONS OF ANY OF THE INDEMNIFYING PARTIES), AND SUCH
INDEMNIFIED PARTY SHALL HAVE BEEN ADVISED BY COUNSEL THAT THERE MAY BE ONE OR
MORE DEFENSES AVAILABLE TO SUCH INDEMNIFIED PARTY THAT ARE IN ADDITION TO, OR IN

 

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CONFLICT WITH, THOSE DEFENSES AVAILABLE TO THE INDEMNIFYING PARTY OR SUCH
AFFILIATE OR CONTROLLING PERSON (IN WHICH CASE, IF SUCH INDEMNIFIED PARTY
NOTIFIES THE INDEMNIFYING PARTIES IN WRITING THAT IT ELECTS TO EMPLOY SEPARATE
COUNSEL AT THE EXPENSE OF THE INDEMNIFYING PARTIES, THE INDEMNIFYING PARTIES
SHALL NOT HAVE THE RIGHT TO ASSUME THE DEFENSE THEREOF AND THE REASONABLE FEES
AND EXPENSES OF SUCH COUNSEL SHALL BE AT THE EXPENSE OF THE INDEMNIFYING
PARTIES; IT BEING UNDERSTOOD, HOWEVER, THAT, THE INDEMNIFYING PARTIES SHALL NOT,
IN CONNECTION WITH ANY ONE SUCH PROCEEDING OR SEPARATE BUT SUBSTANTIALLY SIMILAR
OR RELATED PROCEEDINGS IN THE SAME JURISDICTION, ARISING OUT OF THE SAME GENERAL
ALLEGATIONS OR CIRCUMSTANCES, BE LIABLE FOR THE FEES AND EXPENSES OF MORE THAN
ONE SEPARATE FIRM OF ATTORNEYS (TOGETHER WITH APPROPRIATE LOCAL COUNSEL) AT ANY
TIME FOR SUCH INDEMNIFIED PARTY).

 

(3)                                  None of the Issuers, Parent, DJL, the
Guarantors (if any), the Initial Purchaser, their respective controlling persons
nor any of their respective officers, directors, partners, employees,
representatives and agents shall consent to entry of any judgment in or enter
into any settlement of any pending or threatened Proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Party is a party thereto) unless such judgment or settlement
includes, as an unconditional term thereof, the giving by the claimant or
plaintiff to each Indemnified Party of a release, in form and substance
satisfactory to the Indemnified Party, from all Losses that may arise from such
Proceeding or the subject matter thereof (whether or not any Indemnified Party
is a party thereto).

 

(C)                                  INDEMNIFICATION OF ISSUERS, PARENT, DJL AND
GUARANTORS.  THE INITIAL PURCHASER AGREES TO INDEMNIFY AND HOLD HARMLESS EACH OF
THE ISSUERS, PARENT, DJL AND THE GUARANTORS (IF ANY) AND EACH OF THEIR
CONTROLLING PERSONS AND THE RESPECTIVE MEMBERS, MANAGERS, OFFICERS, DIRECTORS,
PARTNERS, EMPLOYEES, REPRESENTATIVES AND AGENTS OF THE ISSUERS, PARENT, DJL AND
THE GUARANTORS (IF ANY) AND ANY SUCH CONTROLLING PERSON TO THE SAME EXTENT AS
THE FOREGOING INDEMNITY FROM THE ISSUERS, PARENT, DJL AND THE GUARANTORS (IF
ANY) TO EACH OF THE PURCHASER INDEMNIFIED PARTIES STATED IN SECTION 8(A), BUT
ONLY WITH RESPECT TO LOSSES THAT ARE CAUSED BY AN UNTRUE STATEMENT OR OMISSION
OR ALLEGED UNTRUE STATEMENT OR OMISSION MADE IN RELIANCE ON AND IN CONFORMITY
WITH THE FURNISHED INFORMATION.  THE INITIAL PURCHASER SHALL NOT BE LIABLE UNDER
THIS SECTION 8(C) FOR ANY SETTLEMENT OF ANY CLAIM OR ACTION (OTHER THAN
SETTLEMENTS PERMITTED BY SECTION 8(B)(3)) EFFECTED WITHOUT ITS PRIOR WRITTEN
CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.  NOTWITHSTANDING THE
FOREGOING, ANY LIABILITY OF THE INITIAL PURCHASER HEREUNDER SHALL BE LIMITED TO
AN AMOUNT NOT TO EXCEED THE EXCESS (SUCH EXCESS, THE “AGGREGATE AMOUNT”) OF
(I) THE AGGREGATE GROSS PROCEEDS RECEIVED BY THE INITIAL PURCHASER FROM THE SALE
OF THE NOTES OVER (II) THE SUM OF (A) THE AGGREGATE PRICE AT WHICH THE INITIAL
PURCHASER PURCHASED THE NOTES FROM THE ISSUERS AND (B) THE AMOUNT OF ANY LOSSES
THAT THE PURCHASER INDEMNIFIED PARTIES OTHERWISE HAVE BEEN REQUIRED TO PAY BY
REASON OF SUCH UNTRUE OR ALLEGED UNTRUE STATEMENT OF SUCH OMISSION OR ALLEGED
OMISSION.

 

(D)                                 CONTRIBUTION.  IF THE INDEMNIFICATION
PROVIDED FOR IN THIS SECTION 8 IS UNAVAILABLE TO AN INDEMNIFIED PARTY OR IS
INSUFFICIENT TO HOLD SUCH INDEMNIFIED PARTY HARMLESS FOR ANY LOSSES IN RESPECT
OF WHICH THIS SECTION 8 WOULD OTHERWISE APPLY BY ITS TERMS (OTHER THAN BY REASON
OF EXCEPTIONS PROVIDED IN THIS SECTION 8), THEN EACH INDEMNIFYING PARTY, IN LIEU
OF INDEMNIFYING SUCH INDEMNIFIED PARTY, SHALL CONTRIBUTE TO THE AMOUNT PAID OR
PAYABLE BY SUCH INDEMNIFIED PARTY AS A RESULT OF SUCH LOSSES (I) IN SUCH
PROPORTION AS IS APPROPRIATE TO REFLECT THE RELATIVE BENEFITS RECEIVED BY THE
ISSUERS, PARENT, DJL AND THE GUARANTORS (IF ANY), ON THE ONE HAND, AND THE
INITIAL PURCHASER, ON THE OTHER HAND, FROM THE OFFERING OR (II) IF THE
ALLOCATION PROVIDED BY

 

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CLAUSE (I) ABOVE IS NOT PERMITTED BY APPLICABLE LAW, IN SUCH PROPORTION AS IS
APPROPRIATE TO REFLECT NOT ONLY THE RELATIVE BENEFITS REFERRED TO IN CLAUSE
(I) ABOVE BUT ALSO THE RELATIVE FAULT OF THE ISSUERS, PARENT, DJL AND THE
GUARANTORS (IF ANY), ON THE ONE HAND, AND THE INITIAL PURCHASER, ON THE OTHER
HAND, IN CONNECTION WITH THE ACTIONS, STATEMENTS OR OMISSIONS THAT RESULTED IN
SUCH LOSSES, AS WELL AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS.  THE
RELATIVE BENEFITS RECEIVED BY THE ISSUERS, PARENT, DJL AND THE GUARANTORS (IF
ANY), ON THE ONE HAND, AND THE INITIAL PURCHASER, ON THE OTHER HAND, SHALL BE
DEEMED TO BE IN THE SAME PROPORTION AS THE TOTAL NET PROCEEDS FROM THE OFFERING
(BEFORE DEDUCTING EXPENSES) RECEIVED BY THE ISSUERS, PARENT, DJL AND THE
GUARANTORS (IF ANY), ON THE ONE HAND, AND THE TOTAL DISCOUNTS AND COMMISSIONS
RECEIVED BY THE INITIAL PURCHASER, ON THE OTHER HAND, BEAR TO THE TOTAL PRICE OF
THE NOTES IN EXEMPT RESALES AS SET FORTH ON THE COVER PAGE OF THE OFFERING
CIRCULAR.  THE RELATIVE FAULT OF THE ISSUERS, PARENT, DJL AND THE GUARANTORS (IF
ANY), ON THE ONE HAND, AND THE INITIAL PURCHASER, ON THE OTHER HAND, SHALL BE
DETERMINED BY REFERENCE TO, AMONG OTHER THINGS, WHETHER ANY UNTRUE OR ALLEGED
UNTRUE STATEMENT OF A MATERIAL FACT OR OMISSION OR ALLEGED OMISSION TO STATE A
MATERIAL FACT RELATES TO INFORMATION SUPPLIED BY THE ISSUERS, PARENT, DJL AND
THE GUARANTORS (IF ANY), ON THE ONE HAND, OR THE INITIAL PURCHASER, ON THE OTHER
HAND, AND THE PARTIES’ RELATIVE INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND
OPPORTUNITY TO CORRECT OR PREVENT SUCH STATEMENT OR OMISSION.  THE AMOUNT PAID
OR PAYABLE BY AN INDEMNIFIED PARTY AS A RESULT OF ANY LOSSES SHALL BE DEEMED TO
INCLUDE ANY LEGAL OR OTHER FEES OR EXPENSES INCURRED BY SUCH PARTY IN CONNECTION
WITH ANY PROCEEDING, TO THE EXTENT SUCH PARTY WOULD HAVE BEEN INDEMNIFIED FOR
SUCH FEES OR EXPENSES IF THE INDEMNIFICATION PROVIDED FOR IN THIS SECTION 8 WAS
AVAILABLE TO SUCH PARTY.

 

Each party hereto agrees that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8(d), the Initial Purchaser shall
not be required to contribute, in the aggregate, any amount in excess of the
Aggregate Amount.  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

 

(E)                                  NONEXCLUSIVE REMEDY. THE INDEMNITY AND
CONTRIBUTION AGREEMENTS CONTAINED IN THIS SECTION 8 ARE IN ADDITION TO ANY
LIABILITY THAT ANY OF THE INDEMNIFYING PARTIES MAY OTHERWISE HAVE TO THE
INDEMNIFIED PARTIES, AND DO NOT LIMIT IN ANY WAY RIGHTS OR REMEDIES WHICH MAY
OTHERWISE BE AVAILABLE AT LAW OR IN EQUITY.

 

9.                                      CONDITIONS.

 

(A)                                  CONDITIONS TO OBLIGATIONS OF INITIAL
PURCHASER.  THE OBLIGATIONS OF THE INITIAL PURCHASER TO PURCHASE THE NOTES UNDER
THIS AGREEMENT ARE SUBJECT TO THE SATISFACTION OR WAIVER OF EACH OF THE
FOLLOWING CONDITIONS:

 

(I)                                     REPRESENTATIONS AND WARRANTIES OF THE
ISSUERS, PARENT AND DJL.  ALL THE REPRESENTATIONS AND WARRANTIES OF EACH OF THE
ISSUERS, PARENT AND DJL IN THIS AGREEMENT AND IN EACH OF THE OTHER OPERATIVE
DOCUMENTS TO WHICH IT IS A PARTY SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS (OTHER THAN REPRESENTATIONS AND WARRANTIES WITH A MATERIAL ADVERSE
EFFECT QUALIFIER OR OTHER MATERIALITY QUALIFIER, WHICH SHALL BE TRUE AND CORRECT
AS WRITTEN) AT AND AS OF THE CLOSING DATE AFTER GIVING EFFECT TO THE
TRANSACTIONS CONSUMMATED ON OR PRIOR TO THE CLOSING DATE

 

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WITH THE SAME FORCE AND EFFECT AS IF MADE ON AND AS OF SUCH DATE.  ON OR PRIOR
TO THE CLOSING DATE, EACH OF THE ISSUERS AND PARENT AND, TO THE KNOWLEDGE OF THE
ISSUERS, EACH OTHER PARTY TO THE OPERATIVE DOCUMENTS (OTHER THAN THE INITIAL
PURCHASER) SHALL HAVE PERFORMED OR COMPLIED IN ALL MATERIAL RESPECTS WITH ALL OF
THE AGREEMENTS AND SATISFIED IN ALL MATERIAL RESPECTS ALL CONDITIONS ON THEIR
RESPECTIVE PARTS REQUIRED TO BE PERFORMED, COMPLIED WITH OR SATISFIED AS OF OR
PRIOR TO THE CLOSING DATE PURSUANT TO THE OPERATIVE DOCUMENTS.

 

(II)                                  AVAILABILITY OF OFFERING CIRCULAR.  THE
OFFERING CIRCULAR, IN FORM AND SUBSTANCE SATISFACTORY TO THE INITIAL PURCHASER
AND ITS COUNSEL, SHALL HAVE BEEN PRINTED AND COPIES MADE AVAILABLE TO THE
INITIAL PURCHASER NOT LATER THAN 12:00 NOON, NEW YORK CITY TIME, AT LEAST FIVE
BUSINESS DAYS PRIOR TO THE CLOSING OR AT SUCH LATER DATE AND TIME AS THE INITIAL
PURCHASER MAY APPROVE.

 

(III)                               NO INJUNCTION.  NO INJUNCTION, RESTRAINING
ORDER OR ORDER OF ANY NATURE BY A GOVERNMENTAL AUTHORITY SHALL HAVE BEEN ISSUED
AS OF THE CLOSING DATE THAT WOULD PREVENT OR MATERIALLY INTERFERE WITH THE
ISSUANCE AND SALE OF THE NOTES OR THE CONSUMMATION OF ANY OF THE OTHER
TRANSACTIONS; AND NO STOP ORDER SUSPENDING THE QUALIFICATION OR EXEMPTION FROM
QUALIFICATION OF ANY OF THE NOTES IN ANY JURISDICTION SHALL HAVE BEEN ISSUED AND
NO PROCEEDING FOR THAT PURPOSE SHALL HAVE BEEN COMMENCED OR, TO THE KNOWLEDGE OF
THE ISSUERS, BE PENDING OR CONTEMPLATED AS OF THE CLOSING DATE.

 

(IV)                              NO PROCEEDINGS.  NO ACTION SHALL HAVE BEEN
TAKEN AND NO APPLICABLE LAW SHALL HAVE BEEN ENACTED, ADOPTED OR ISSUED THAT
WOULD, AS OF THE CLOSING DATE, PREVENT THE CONSUMMATION OF ANY OF THE
TRANSACTIONS.  EXCEPT AS DISCLOSED IN THE OFFERING CIRCULAR, NO PROCEEDING SHALL
BE PENDING OR, TO THE KNOWLEDGE OF THE ISSUERS, THREATENED, OTHER THAN
PROCEEDINGS THAT (A) IF ADVERSELY DETERMINED WOULD NOT, SINGLY OR IN THE
AGGREGATE, ADVERSELY AFFECT THE ISSUANCE OR MARKETABILITY OF THE NOTES, AND
(B) COULD NOT, SINGLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

(V)                                 NO MATERIAL ADVERSE CHANGE.  SINCE THE DATE
AS OF WHICH INFORMATION IS GIVEN IN THE OFFERING CIRCULAR (WITHOUT GIVING EFFECT
TO ANY AMENDMENT THERETO OR SUPPLEMENT THERETO), THERE SHALL NOT HAVE BEEN ANY
MATERIAL ADVERSE CHANGE.

 

(VI)                              PORTAL.  THE NOTES SHALL HAVE BEEN DESIGNATED
PORTAL SECURITIES IN ACCORDANCE WITH THE RULES AND REGULATIONS ADOPTED BY THE
NASD RELATING TO TRADING IN THE PORTAL MARKET.

 

(VII)                           CONTRIBUTION.  THE CONTRIBUTION SHALL HAVE
OCCURRED.

 

(VIII)                        OFFICERS’, SECRETARY’S AND SOLVENCY CERTIFICATES. 
THE INITIAL PURCHASER SHALL HAVE RECEIVED ON THE CLOSING DATE:

 

(A)                              CERTIFICATES DATED THE CLOSING DATE, SIGNED BY
(1) THE CHIEF EXECUTIVE OFFICER, AND (2) THE PRINCIPAL FINANCIAL OR ACCOUNTING
OFFICER OF EACH OF THE ISSUERS AND PARENT, ON BEHALF OF THE ISSUERS AND PARENT,
CONFIRMING THE MATTERS SET FORTH IN PARAGRAPHS (I), (III), (IV), (V), (VII) AND
(XI) OF THIS SECTION 9(A), AND OF DJL, ON BEHALF OF DJL, CONFIRMING THE MATTERS
SET FORTH IN PARAGRAPH (I) OF THIS SECTION 9(A),

 

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(B)                                A CERTIFICATE, DATED THE CLOSING DATE, SIGNED
BY THE (1) CHIEF EXECUTIVE OFFICER AND (2) THE PRINCIPAL FINANCIAL OR ACCOUNTING
OFFICER OF EACH OF THE ISSUERS, ON BEHALF OF THE ISSUERS, STATING THAT THE
INDUSTRY, STATISTICAL AND MARKET-RELATED DATA INCLUDED IN THE OFFERING CIRCULAR
HAS BEEN REVIEWED BY SUCH PERSONS AND, TO THE KNOWLEDGE OF SUCH PERSONS, SUBJECT
TO THE RISKS AND LIMITATIONS DESCRIBED IN THE OFFERING CIRCULAR, IS TRUE AND
ACCURATE IN ALL MATERIAL RESPECTS AND IS BASED ON OR DERIVED FROM SOURCES WHICH
THE ISSUERS BELIEVE TO BE RELIABLE AND ACCURATE, WHICH CERTIFICATE SHALL BE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO COUNSEL FOR THE INITIAL PURCHASER
AND MAY SPECIFICALLY REFERENCE CERTAIN INDUSTRY, STATISTICAL AND MARKET-RELATED
DATA CONTAINED IN THE OFFERING CIRCULAR,

 

(C)                                A CERTIFICATE, DATED THE CLOSING DATE, SIGNED
BY THE SECRETARY OR SECRETARIES OF EACH OF THE ISSUERS, PARENT, AND DJL
CERTIFYING SUCH MATTERS AS THE INITIAL PURCHASER MAY REASONABLY REQUEST, AND

 

(D)                               A CERTIFICATE OF SOLVENCY, DATED THE CLOSING
DATE, SIGNED BY THE PRINCIPAL FINANCIAL OR ACCOUNTING OFFICER OF THE ISSUERS
SUBSTANTIALLY IN THE FORM PREVIOUSLY APPROVED BY THE INITIAL PURCHASER.

 

(IX)                                OPINIONS OF COUNSEL.  THE INITIAL PURCHASER
SHALL HAVE RECEIVED (IN FORM AND SUBSTANCE SATISFACTORY TO THE INITIAL PURCHASER
AND COUNSEL TO THE INITIAL PURCHASER) THE FOLLOWING:

 

(A)                              FROM MAYER, BROWN, ROWE & MAW LLP, SPECIAL
COUNSEL TO THE ISSUERS AND PARENT, A FAVORABLE OPINION, DATED THE CLOSING DATE,
CONTAINING OPINIONS SUBSTANTIALLY TO THE EFFECT OF THE OPINIONS SET FORTH IN
EXHIBIT 9(A)(IX)(A) HERETO, AND A NEGATIVE ASSURANCE LETTER, DATED THE CLOSING
DATE, SUBSTANTIALLY IN THE FORM SET FORTH IN EXHIBIT 9(A)(IX) HERETO;

 

(B)                                FROM LANE & WATERMAN, SPECIAL IOWA COUNSEL
AND SPECIAL IOWA GAMING COUNSEL TO THE ISSUERS AND PARENT, A FAVORABLE OPINION,
DATED THE CLOSING DATE, CONTAINING OPINIONS SUBSTANTIALLY TO THE EFFECT OF THE
OPINIONS SET FORTH IN EXHIBIT 9(A)(IX)(B) HERETO, AND A NEGATIVE ASSURANCE
LETTER, DATED THE CLOSING DATE, SUBSTANTIALLY IN THE FORM SET FORTH IN
EXHIBIT 9(A)(IX) HERETO; AND

 

 (C)                             FROM SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP,
SPECIAL COUNSEL TO THE INITIAL PURCHASER A FAVORABLE OPINION, DATED THE CLOSING
DATE, AND A NEGATIVE ASSURANCE LETTER, DATED THE CLOSING DATE, SUBSTANTIALLY IN
THE FORM SET FORTH IN EXHIBIT 9(A)(X) HERETO.

 

(X)                                   PERMITS.  ALL PERMITS REQUIRED TO BE
OBTAINED FROM, AND ALL NOTICES OR DECLARATIONS REQUIRED TO BE MADE WITH, ANY
GAMING AUTHORITY OR OTHER GOVERNMENTAL AUTHORITY TO PERMIT THE ISSUANCE AND SALE
OF THE NOTES IN ACCORDANCE WITH THE TERMS OF, AND IN THE AGGREGATE PRINCIPAL
AMOUNT SET FORTH IN, THIS AGREEMENT AND TO PERMIT THE CONSUMMATION OF THE OTHER
TRANSACTIONS SHALL HAVE BEEN OBTAINED AND MADE, IN EACH CASE FREE OF ANY
CONDITIONS OTHER THAN THOSE SET FORTH IN THIS AGREEMENT.

 

(XI)                                EXECUTION AND DELIVERY OF NOTE DOCUMENTS AND
CONSUMMATION OF TRANSACTIONS.  THE NOTE DOCUMENTS SHALL HAVE BEEN EXECUTED AND
DELIVERED BY ALL PARTIES

 

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THERETO, AND THE INITIAL PURCHASER SHALL HAVE RECEIVED A FULLY EXECUTED ORIGINAL
OF EACH NOTE DOCUMENT.  THE TERMS OF EACH OF THE OPERATIVE DOCUMENTS SHALL
CONFORM IN ALL MATERIAL RESPECTS TO THE DESCRIPTION THEREOF IN THE OFFERING
CIRCULAR, AND THE TRANSACTIONS TO BE CONSUMMATED ON OR PRIOR TO THE CLOSING DATE
SHALL HAVE BEEN CONSUMMATED ON TERMS THAT CONFORM IN ALL MATERIAL RESPECTS TO
THE DESCRIPTION THEREOF IN THE OFFERING CIRCULAR.

 

(XII)                             EXECUTION AND DELIVERY OF OTHER OPERATIVE
DOCUMENTS AND CONSUMMATION OF OTHER TRANSACTIONS. EACH OF PARENT AND THE ISSUERS
HAS BEEN (A) DESIGNATED AS AN “UNRESTRICTED SUBSIDIARY” UNDER THE INDENTURE,
DATED AS OF APRIL 16, 2004 (THE “PENINSULA INDENTURE”), AMONG PARENT, DIAMOND
JO, LLC (“DJL”), PENINSULA CAPITAL CORP. (FORMERLY KNOWN AS THE OLD EVANGELINE
DOWNS CAPITAL CORP.) AND U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE, AND
(B) RELEASED FROM ANY AND ALL OBLIGATIONS UNDER, AND HAS RECEIVED ANY AND ALL
WAIVERS FOR THE TRANSACTIONS REQUIRED UNDER, THE LOAN AND SECURITY AGREEMENT,
DATED AS OF JUNE 16, 2004 (THE “EXISTING CREDIT AGREEMENT”), BY AND AMONG THE
LENDERS SIGNATORY THERETO, WELLS FARGO FOOTHILL, INC., AS AGENT, AND DJL AND THE
OLD EVANGELINE DOWNS, L.L.C., AS BORROWERS, AND ANY AND ALL OTHER AGREEMENTS AND
DOCUMENTS RELATED OR ANCILLARY THERETO.

 

(XIII)                          ADDITIONAL DOCUMENTS.  THE INITIAL PURCHASER OR
ITS COUNSEL SHALL HAVE RECEIVED COPIES OF ALL OPINIONS, CERTIFICATES, LETTERS
AND OTHER DOCUMENTS DELIVERED UNDER OR IN CONNECTION WITH THE TRANSACTIONS
CONSUMMATED ON OR PRIOR TO THE CLOSING DATE.

 

(XIV)                         SECURITY DOCUMENTS.  THE ISSUERS SHALL HAVE
FURNISHED TO THE INITIAL PURCHASER THE SECURITY DOCUMENTS DULY EXECUTED BY THE
ISSUERS AND PARENT, IN EACH CASE, TO THE EXTENT PARTY THERETO, TOGETHER WITH:

 

(A)                              proper financing statements, each in the form
to be filed on the Closing Date under the Uniform Commercial Code of all
jurisdictions that may be necessary in order to perfect the Liens created by the
Security Documents, covering the Collateral and naming the Secured Party as
secured party, which financing statements shall be so filed on or about the
Closing Date;

 

(B)                                proper instruments to be filed in the U.S.
Patent and Trademark Office that may be necessary in order to perfect the liens
granted on trademarks, which liens have been created by the Security Documents;

 

(C)                                contemplated requests for information and
lien search results, listing as of a recent date all effective financing
statements filed in Iowa and Delaware that name either of the Issuers or Parent
as debtor, together with copies of such financing statements;

 

(D)                               copies of duly executed payoff letters, UCC-3
termination statements, mortgage releases, intellectual property releases and
other collateral releases and terminations, each in form and substance
reasonably satisfactory to the Initial Purchaser evidencing the release of any
Liens on any of the Collateral (other than Liens created by the Indenture and
the Security Documents or Permitted Liens), and each such payoff letter, release
and termination shall be in full force and effect.

 

(E)                                 the original membership interest
certificates and stock

 

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certificates pledged to the Secured Party pursuant to the Security Documents,
together with undated stock powers or endorsements duly executed in blank in
connection therewith;

 

(F)                                 mortgages and fixture filings in form and
substance approved by the Initial Purchaser, to be recorded on or about the
Closing Date in all jurisdictions that may be deemed necessary or desirable in
order to perfect the liens created by the Security Documents, covering the
Collateral, which mortgages and fixture filings shall be so recorded on or about
the Closing Date;

 

(G)                                irrevocable commitment by one or more title
insurance companies approved by the Initial Purchaser in the Initial Purchaser’s
reasonable discretion to issue one or more lender’s policies of title insurance
insuring the liens created by the Security Documents, subject only to those
title matters and exceptions approved by the Initial Purchaser, together with
fully executed reinsurance agreements in form and substance reasonably approved
by the Initial Purchaser, providing for reinsurance in the amounts required by
the Initial Purchaser with title insurance companies approved by the Initial
Purchaser in its reasonable discretion;

 

(H)                               the title insurance policy set forth in
subsection (G) above for the Facility that does not take exception for items
that would be displayed by an A.L.T.A. survey, provided, however, if the Issuers
are unable to satisfy the Closing requirement set forth in this
Section 9(a)(xiv)(H), then such requirement shall be deemed waived on the
condition that Issuer shall comply with the covenant set forth in
Section 5(i)(B); and

 

(I)                                    any other documents required to be
delivered to the Secured Party pursuant to the Security Documents and reasonable
evidence that all other actions necessary to perfect and protect the Liens
created by the Security Documents have been taken.

 

(XV)                            INSURANCE.  

 

(A)                        The Issuers, at their sole cost and expense, shall
have in full force and effect the insurance coverage of the types and minimum
limits required by the Indenture, including but not limited to the following
coverages:

 

(1)                                  Property Insurance.  Insurance with respect
to the improvements and building equipment (if any) against loss customarily
included under so called “All Risk” policies including but not limited to,
vandalism and malicious mischief, and such other perils as is required to be
obtained under the Indenture.

 

(2)                                  Builder’s All-Risk Insurance.  Builder’s
“All-Risk” insurance in an amount equal to not less than the full insurable
value of the Facility against such risks (including so called “All Risk” perils
coverage to agreed limits as the Initial Purchaser may reasonably request, in
form and substance reasonably acceptable to Initial Purchaser) and otherwise in
satisfaction of the Company’s requirements to provide insurance under the
Construction Contract.

 

(3)                                  Liability Insurance.  Commercial general
liability

 

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insurance and umbrella liability coverage including, but not limited to,
personal injury, bodily injury, death, accident and property damage.

 

(B)                                A certificate of insurance with respect to
all of the above-mentioned insurance policies has been delivered to the Initial
Purchaser prior to the Closing.  All policies shall name the Initial Purchaser
as a mortgagee or loss payee and shall provide that all proceeds therefrom shall
be payable in accordance with the Indenture.

 

(XVI)                         ADDITIONAL DOCUMENTS.  COUNSEL TO THE INITIAL
PURCHASER SHALL HAVE BEEN FURNISHED WITH SUCH DOCUMENTS AS THEY MAY REASONABLY
REQUIRE FOR THE PURPOSE OF ENABLING THEM TO REVIEW OR PASS UPON THE MATTERS
REFERRED TO IN THIS SECTION 9 AND IN ORDER TO EVIDENCE THE ACCURACY,
COMPLETENESS AND SATISFACTION OF THE REPRESENTATIONS, WARRANTIES AND CONDITIONS
CONTAINED IN THIS AGREEMENT.

 

(b)                                 Conditions to the Issuers’ Obligations.  The
obligations of the Issuers to sell the Notes under this Agreement are subject to
the satisfaction or waiver of each of the following conditions:

 

(I)                                     PAYMENT.  THE INITIAL PURCHASER SHALL
HAVE DELIVERED PAYMENT TO THE ISSUERS FOR THE NOTES PURSUANT TO SECTIONS 2 AND 4
OF THIS AGREEMENT.

 

(II)                                  REPRESENTATIONS AND WARRANTIES.  ALL OF
THE REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER IN THIS AGREEMENT
SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AT AND AS OF THE CLOSING
DATE, WITH THE SAME FORCE AND EFFECT AS IF MADE ON AND AS OF SUCH DATE. 

 

(III)                               NO INJUNCTIONS.  NO INJUNCTION, RESTRAINING
ORDER OR ORDER OF ANY NATURE BY A GOVERNMENTAL AUTHORITY SHALL HAVE BEEN ISSUED
AS OF THE CLOSING DATE THAT WOULD PREVENT OR INTERFERE WITH THE ISSUANCE AND
SALE OF THE NOTES; AND NO STOP ORDER SUSPENDING THE QUALIFICATION OR EXEMPTION
FROM QUALIFICATION OF ANY OF THE NOTES IN ANY JURISDICTION SHALL HAVE BEEN
ISSUED AND NO PROCEEDING FOR THAT PURPOSE SHALL HAVE BEEN COMMENCED OR BE
PENDING OR CONTEMPLATED AS OF THE CLOSING DATE.

 

(IV)                              EXECUTION AND DELIVERY OF NOTE DOCUMENTS.  THE
NOTE DOCUMENTS SHALL HAVE BEEN EXECUTED AND DELIVERED BY ALL PARTIES THERETO
(OTHER THAN THE ISSUERS, PARENT AND THE GUARANTORS (IF ANY)), AND THE ISSUERS
SHALL HAVE RECEIVED A FULLY EXECUTED ORIGINAL OF EACH NOTE DOCUMENT.  ON OR
PRIOR TO THE CLOSING DATE, THE INITIAL PURCHASER AND EACH OTHER PARTY TO THE
NOTE DOCUMENTS (OTHER THAN THE ISSUERS, PARENT AND THE GUARANTORS (IF ANY))
SHALL HAVE PERFORMED OR COMPLIED IN ALL MATERIAL RESPECTS WITH ALL OF THE
AGREEMENTS AND SATISFIED IN ALL MATERIAL RESPECTS ALL CONDITIONS ON THEIR
RESPECTIVE PARTS TO BE PERFORMED, COMPLIED WITH OR SATISFIED PURSUANT TO THE
NOTE DOCUMENTS.

 

(V)                                 EXECUTION AND DELIVERY OF OTHER OPERATIVE
DOCUMENTS AND CONSUMMATION OF OTHER OPERATIVE TRANSACTIONS. EACH OF PARENT AND
THE ISSUERS HAS BEEN (A) DESIGNATED AS AN “UNRESTRICTED SUBSIDIARY” UNDER THE
PENINSULA INDENTURE, AND (B) RELEASED FROM ANY AND ALL OBLIGATIONS UNDER, AND
HAS RECEIVED ANY AND ALL WAIVERS FOR THE TRANSACTIONS REQUIRED UNDER, THE
EXISTING CREDIT AGREEMENT AND ANY AND ALL OTHER AGREEMENTS AND DOCUMENTS RELATED
OR

 

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ANCILLARY THERETO.

 

(VI)                              ACCREDITED INVESTOR LETTER.  THE INITIAL
PURCHASER SHALL HAVE DELIVERED TO THE ISSUERS A LETTER, DATED AS OF THE CLOSING
DATE, LISTING AS OF SUCH DATE ANY AND ALL ACCREDITED INVESTORS TO WHOM THE
INITIAL PURCHASER WILL MAKE EXEMPT RESALES OF THE NOTES AND THE AGGREGATE
PRINCIPAL AMOUNT OF NOTES TO BE SOLD BY THE INITIAL PURCHASER TO EACH SUCH
ACCREDITED INVESTOR IN SUCH EXEMPT RESALES.

 

10.                               TERMINATION.  THIS AGREEMENT SHALL BECOME
EFFECTIVE UPON THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE PARTIES
HERETO.  THE INITIAL PURCHASER MAY TERMINATE THIS AGREEMENT AT ANY TIME PRIOR TO
THE CLOSING DATE BY WRITTEN NOTICE TO THE ISSUERS IF ANY OF THE FOLLOWING HAS
OCCURRED:

 

(A)                                  MATERIAL ADVERSE EFFECT.  SINCE THE DATE AS
OF WHICH INFORMATION IS GIVEN IN THE OFFERING CIRCULAR, ANY MATERIAL ADVERSE
EFFECT OR ANY MATERIAL ADVERSE CHANGE THAT COULD, IN THE INITIAL PURCHASER’S
JUDGMENT, BE REASONABLY EXPECTED TO (I) MAKE IT IMPRACTICABLE OR INADVISABLE TO
PROCEED WITH THE OFFERING OR DELIVERY OF THE NOTES, INCLUDING THE EXEMPT
RESALES, ON THE TERMS AND IN THE MANNER CONTEMPLATED IN THE OFFERING CIRCULAR OR
(II) MATERIALLY IMPAIR THE INVESTMENT QUALITY OF THE NOTES.

 

(B)                                 FAILURE TO SATISFY CONDITIONS.  THE FAILURE
OF ANY OF THE ISSUERS TO SATISFY THE CONDITIONS CONTAINED IN SECTION 9(A) ON OR
PRIOR TO THE CLOSING DATE.

 

(C)                                  OUTBREAK OF HOSTILITIES.  ANY OUTBREAK OR
ESCALATION OF HOSTILITIES, ANY DECLARATION OF WAR BY THE UNITED STATES, ANY
OTHER CALAMITY, EMERGENCY OR CRISIS, ANY MATERIAL ADVERSE CHANGE IN ECONOMIC
CONDITIONS IN OR THE FINANCIAL MARKETS OF THE UNITED STATES OR ELSEWHERE OR ANY
CHANGE OR DEVELOPMENT INVOLVING A PROSPECTIVE CHANGE IN NATIONAL OR
INTERNATIONAL POLITICAL, FINANCIAL OR ECONOMIC CONDITIONS, IN EACH CASE THE
EFFECT OF WHICH COULD MAKE IT, IN THE INITIAL PURCHASER’S JUDGMENT,
IMPRACTICABLE OR INADVISABLE TO MARKET OR PROCEED WITH THE OFFERING OR DELIVERY
OF THE NOTES ON THE TERMS AND IN THE MANNER CONTEMPLATED IN THE OFFERING
CIRCULAR OR TO ENFORCE CONTRACTS FOR THE SALE OF ANY OF THE NOTES.

 

(D)                                 SUSPENSION OF TRADING.  THE SUSPENSION OR
LIMITATION OF TRADING GENERALLY IN SECURITIES ON THE NEW YORK STOCK EXCHANGE,
THE AMERICAN STOCK EXCHANGE OR THE NASDAQ NATIONAL MARKET OR ANY SETTING OF
LIMITATIONS ON PRICES FOR SECURITIES ON ANY SUCH EXCHANGE OR ON THE NASDAQ
NATIONAL MARKET.

 

(E)                                  ENACTMENT OF ADVERSE LAW.  THE ENACTMENT,
PUBLICATION, DECREE OR OTHER PROMULGATION AFTER THE DATE HEREOF OF ANY
APPLICABLE LAW THAT IN THE INITIAL PURCHASER’S OPINION MATERIALLY AND ADVERSELY
AFFECTS, OR COULD MATERIALLY AND ADVERSELY AFFECT, THE PROPERTIES, BUSINESS,
PROSPECTS, OPERATIONS, EARNINGS, ASSETS, LIABILITIES OR CONDITION (FINANCIAL OR
OTHERWISE) OF THE ISSUERS TAKEN AS A WHOLE.

 

(F)                                    DOWNGRADE OF SECURITIES.  ON OR AFTER THE
DATE HEREOF, (I) THERE SHALL NOT HAVE OCCURRED ANY DOWNGRADING, SUSPENSION OR
WITHDRAWAL OF, NOR SHALL ANY NOTICE HAVE BEEN GIVEN OF ANY POTENTIAL OR INTENDED
DOWNGRADING, SUSPENSION OR WITHDRAWAL OF, OR OF ANY REVIEW (OR OF ANY POTENTIAL
OR INTENDED REVIEW) FOR A POSSIBLE CHANGE THAT DOES NOT INDICATE THE DIRECTION
OF THE POSSIBLE CHANGE IN, ANY RATING OF EITHER OF THE ISSUERS OR ANY SECURITIES
OF EITHER OF THE ISSUERS (INCLUDING, WITHOUT LIMITATION, THE PLACING OF ANY OF
THE FOREGOING RATINGS ON CREDIT WATCH

 

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WITH NEGATIVE OR DEVELOPING IMPLICATIONS OR UNDER REVIEW WITH AN UNCERTAIN
DIRECTION) BY ANY “NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION” AS
SUCH TERM IS DEFINED FOR PURPOSES OF RULE 436(G)(2) UNDER THE ACT, (II) THERE
SHALL NOT HAVE OCCURRED ANY ADVERSE CHANGE, NOR SHALL ANY NOTICE HAVE BEEN GIVEN
OF ANY POTENTIAL OR INTENDED ADVERSE CHANGE, IN THE OUTLOOK FOR ANY RATING OF
EITHER OF THE ISSUERS OR ANY SECURITIES OF EITHER OF ISSUERS (BY ANY SUCH RATING
ORGANIZATION AND (III) NO SUCH RATING ORGANIZATION SHALL HAVE GIVEN NOTICE THAT
IT HAS ASSIGNED (OR IS CONSIDERING ASSIGNING) A LOWER RATING TO THE NOTES THAN
THAT ON WHICH THE NOTES WERE MARKETED.

 

(G)                                 BANKING MORATORIUM.  THE DECLARATION OF A
BANKING MORATORIUM BY ANY GOVERNMENTAL AUTHORITY; OR THE TAKING OF ANY ACTION BY
ANY GOVERNMENTAL AUTHORITY AFTER THE DATE HEREOF IN RESPECT OF ITS MONETARY OR
FISCAL AFFAIRS THAT IN THE INITIAL PURCHASER’S OPINION COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE FINANCIAL MARKETS IN THE
UNITED STATES OR ELSEWHERE.

 

The respective indemnities, contribution and expense reimbursement provisions
and agreements, and representations, warranties and other statements of the
Issuers, Parent and the Guarantors (if any) and the Initial Purchaser set forth
in or made pursuant to this Agreement shall remain operative and in full force
and effect, and will survive, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of the Initial Purchaser or any
of the Issuers, Parent or the Guarantors (if any), or any of their respective
officers, directors, members or managers or any of their respective controlling
persons, (ii) acceptance of the Notes, and payment for them hereunder, and
(iii) any termination of this Agreement (including, without limitation, any
termination pursuant to this Section 10).  Without limiting the foregoing,
notwithstanding any termination of this Agreement, (i) the Issuers, Parent and
the Guarantors (if any) shall be and shall remain jointly and severally liable
(x) for all expenses that they have agreed to pay pursuant to Section 5(f), and
(y) for their obligations pursuant to Section 8, and (ii) Initial Purchaser
shall be and shall remain liable for its obligations pursuant to Section 8.

 

11.                               MISCELLANEOUS.

 

(A)                                  NOTICES.  NOTICES GIVEN PURSUANT TO ANY
PROVISION OF THIS AGREEMENT SHALL BE DELIVERED OR SENT BY MAIL OR FACSIMILE
TRANSMISSION AS FOLLOWS: 

 

(I)                                     IF TO ANY OF THE ISSUERS, PARENT, DJL
AND THE GUARANTORS (IF ANY), TO DIAMOND JO WORTH, LLC, 3RD STREET ICE HARBOR,
P.O. BOX 1750, DUBUQUE, IOWA 52001, FACSIMILE NUMBER (563) 557-0549, ATTENTION: 
CHIEF FINANCIAL OFFICER, WITH A COPY TO PENINSULA GAMING PARTNERS, LLC, 7137
MISSION HILLS DRIVE, LAS VEGAS, NEVADA 89113, FACSIMILE NUMBER (702) 247-6822,
ATTENTION:  MICHAEL S. LUZICH, AND ANOTHER COPY TO MAYER, BROWN, ROWE & MAW,
LLP, 1675 BROADWAY, NEW YORK, NEW YORK 10019, FACSIMILE NUMBER (212) 262-1910,
ATTENTION:  NAZIM ZILKHA, ESQ., AND

 

(II)                                  IF TO THE INITIAL PURCHASER, TO
JEFFERIES & COMPANY, INC., 520 MADISON AVENUE, 12TH FLOOR, NEW YORK, NEW YORK
10022, ATTENTION:  LLOYD FELLER, ESQ., WITH A COPY TO SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP, 300 SOUTH GRAND AVENUE, SUITE 3400, LOS ANGELES, CALIFORNIA
90071, FACSIMILE NUMBER (213) 687-5600, ATTENTION:  ROD A. GUERRA, ESQ.

 

(PROVIDED,  THAT ANY NOTICE PURSUANT TO SECTION 8 HEREOF WILL BE MAILED,
DELIVERED, TELEGRAPHED OR SENT BY FACSIMILE AND CONFIRMED TO THE PARTY TO BE
NOTIFIED AND ITS COUNSEL), OR IN ANY CASE TO SUCH OTHER ADDRESS AS THE PERSON TO
BE NOTIFIED MAY HAVE REQUESTED IN WRITING.

 

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(B)                                 SUCCESSORS AND ASSIGNS.  THIS AGREEMENT HAS
BEEN AND IS MADE SOLELY FOR THE BENEFIT OF AND SHALL BE BINDING UPON EACH OF THE
ISSUERS, PARENT, DJL AND THE GUARANTORS (IF ANY), THE INITIAL PURCHASER AND, TO
THE EXTENT PROVIDED IN SECTION 8, THE CONTROLLING PERSONS, OFFICERS, DIRECTORS,
PARTNERS, EMPLOYEES, REPRESENTATIVES AND AGENTS REFERRED TO IN SECTION 8, AND
THEIR RESPECTIVE HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS, ALL
AS AND TO THE EXTENT PROVIDED IN THIS AGREEMENT, AND NO OTHER PERSON SHALL
ACQUIRE OR HAVE ANY RIGHT UNDER OR BY VIRTUE OF THIS AGREEMENT.  THE TERM
“SUCCESSORS AND ASSIGNS” SHALL NOT INCLUDE A PURCHASER OF ANY OF THE NOTES FROM
THE INITIAL PURCHASER MERELY BECAUSE OF SUCH PURCHASE. 

 

(C)                                  GOVERNING LAW.  THIS AGREEMENT SHALL BE
CONSTRUED AND INTERPRETED, AND THE RIGHTS OF THE PARTIES SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS
AND RULE 327(B) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES.  EACH OF THE
ISSUERS, PARENT, DJL AND THE GUARANTORS (IF ANY) HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS.  EACH OF THE ISSUERS, PARENT, DJL AND THE GUARANTORS (IF ANY)
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDINGS
BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  EACH OF THE
ISSUERS, PARENT, DJL AND THE GUARANTORS (IF ANY) IRREVOCABLY CONSENTS, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO SUCH ISSUER, PARENT, DJL OR SUCH GUARANTOR, AS THE CASE MAY BE, AT THE
ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE INITIAL PURCHASER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OF THE ISSUERS, PARENT, DJL OR THE
GUARANTORS (IF ANY) IN ANY OTHER JURISDICTION.

 

(D)                                 COUNTERPARTS.  THIS AGREEMENT MAY BE SIGNED
IN VARIOUS COUNTERPARTS WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME
INSTRUMENT.

 

(E)                                  HEADINGS.  THE HEADINGS IN THIS AGREEMENT
ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT LIMIT OR OTHERWISE AFFECT
THE MEANING HEREOF.  WHEN A REFERENCE IS MADE IN THIS AGREEMENT TO A SECTION,
PARAGRAPH, SUBPARAGRAPH, SCHEDULE OR EXHIBIT, SUCH

 

31

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REFERENCE SHALL MEAN A SECTION, PARAGRAPH, SUBPARAGRAPH, SCHEDULE OR EXHIBIT TO
THIS AGREEMENT UNLESS OTHERWISE INDICATED.

 

(F)                                    INTERPRETATION.  THE WORDS “INCLUDE,”
“INCLUDES,” AND “INCLUDING” WHEN USED IN THIS AGREEMENT SHALL BE DEEMED IN EACH
CASE TO BE FOLLOWED BY THE WORDS “WITHOUT LIMITATION.”  THE PHRASES “THE DATE OF
THIS AGREEMENT,” “THE DATE HEREOF,” AND TERMS OF SIMILAR IMPORT, UNLESS THE
CONTEXT OTHERWISE REQUIRES, SHALL BE DEEMED TO REFER TO JUNE 30, 2005.  THE
WORDS “HEREOF,” “HEREIN,” “HEREWITH,”  “HEREBY” AND “HEREUNDER” AND WORDS OF
SIMILAR IMPORT SHALL, UNLESS OTHERWISE STATED, BE CONSTRUED TO REFER TO THIS
AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT.  THE
PHRASE “TO THE KNOWLEDGE OF THE ISSUERS” MEANS THE ACTUAL KNOWLEDGE, AFTER DUE
INQUIRY, OF ANY OF THE MEMBERS, MANAGERS, DIRECTORS OR OFFICERS OF EITHER OF THE
ISSUERS, OR ANY OF THEIR RESPECTIVE CONTROLLING PERSONS.  FOR PURPOSES OF THIS
AGREEMENT AND THE REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS HEREIN,
THE INITIAL PURCHASER SHALL NOT BE DEEMED TO BE AN AFFILIATE OF THE ISSUERS. 
UNLESS THE CONTEXT OTHERWISE REQUIRES, DEFINED TERMS SHALL INCLUDE THE SINGULAR
AND PLURAL AND THE CONJUNCTIVE AND DISJUNCTIVE FORMS OF THE TERMS DEFINED.

 

(G)                                 SEVERABILITY.  IF ANY TERM, PROVISION,
COVENANT OR RESTRICTION OF THIS AGREEMENT IS HELD BY A COURT OF COMPETENT
JURISDICTION TO BE INVALID, ILLEGAL, VOID OR UNENFORCEABLE, THE REMAINDER OF THE
TERMS, PROVISIONS, COVENANTS AND RESTRICTIONS SET FORTH HEREIN SHALL REMAIN IN
FULL FORCE AND EFFECT AND SHALL IN NO WAY BE AFFECTED, IMPAIRED OR INVALIDATED,
AND THE PARTIES HERETO SHALL USE THEIR BEST EFFORTS TO FIND AND EMPLOY AN
ALTERNATIVE MEANS TO ACHIEVE THE SAME OR SUBSTANTIALLY THE SAME RESULT AS THAT
CONTEMPLATED BY SUCH TERM, PROVISION, COVENANT OR RESTRICTION.  IT IS HEREBY
STIPULATED AND DECLARED TO BE THE INTENTION OF THE PARTIES THAT THEY WOULD HAVE
EXECUTED THE REMAINING TERMS, PROVISIONS, COVENANTS AND RESTRICTIONS WITHOUT
INCLUDING ANY OF SUCH THAT MAY BE HEREAFTER DECLARED INVALID, ILLEGAL, VOID OR
UNENFORCEABLE.

 

(H)                                 AMENDMENT.  THIS AGREEMENT MAY BE AMENDED,
MODIFIED OR SUPPLEMENTED, AND WAIVERS OR CONSENTS TO DEPARTURES FROM THE
PROVISIONS HEREOF MAY BE GIVEN, PROVIDED THAT THE SAME ARE IN WRITING AND SIGNED
BY EACH OF THE SIGNATORIES HERETO.

 

[signature pages follow]

 

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Please confirm that the foregoing correctly sets forth the agreement among the
Issuers, Parent (solely with respect to Sections 5(i), 6(c), 6(g), 6(h), 6(k),
6(n), 6(o), 6(p), 6(q), 6(y), 8 and 11 hereof), DJL (solely with respect to
Sections 6(c), 6(g), 6(h), 6(o), 6(p), 6(q), 8 and 11 hereof) and the Initial
Purchaser.

 

 

Very truly yours,

 

 

 

 

 

 

 

Diamond Jo Worth, LLC

 

 

 

 

 

 

 

By:

/s/ Natalie Schramm

 

 

 

Name: Natalie Schramm

 

 

Title: Chief Financial Officer

 

 

 

 

 

 

 

Diamond Jo Worth Corp.

 

 

 

 

 

 

 

By:

/s/ Natalie Schramm

 

 

 

Name: Natalie Schramm

 

 

Title: Chief Financial Officer

 

 

 

 

 

 

 

Diamond Jo Worth Holdings, LLC

 

(solely with respect to Sections  5(i), 6(c), 6(g), 6(h), 6(k), 6(n),
6(o), 6(p), 6(q), 6(y), 8 and 11 hereof)

 

 

 

 

 

 

 

By:

/s/ Natalie Schramm

 

 

 

Name: Natalie Schramm

 

 

Title: Chief Financial Officer

 

 

 

 

Diamond Jo, LLC

 

(solely with respect to Sections  6(c), 6(g), 6(h), 6(o), 6(p), 6(q),
8 and 11 hereof)

 

 

 

 

 

 

 

By:

/s/ Natalie Schramm

 

 

 

Name: Natalie Schramm

 

 

Title: Chief Financial Officer

 

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

 

Accepted and Agreed to:

 

Jefferies & Company, Inc.

 

 

By:

/s/ Chris Kanoff

 

 

Name: Chris Kanoff

 

Title: Executive Vice President

 

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Exhibit 9(a)(ix)

Form of Negative Assurance Letter

 

In addition, we have participated in conferences with officers and other
representatives of the Issuers and Parent, representatives of the independent
accountants of the Issuers, representatives of the Initial Purchaser and counsel
for the [Initial Purchaser] [the Issuers and Parent], at which the contents of
the Offering Circular and related matters were discussed.  We do not pass upon,
or assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Circular and have not made any independent
check or verification thereof (except to the limited extent referred to in
paragraph(s) [for opinion of Mayer, Brown, Rowe & Maw:  9(b) and 11] [for
opinion of Lane & Waterman:  3] of our opinion to the Initial Purchaser dated
the date hereof).  On the basis of the foregoing, no facts have come to our
attention that have caused us to believe that the Offering Circular, as of its
date and as of the date hereof, contained or contains an untrue statement of a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that in each
case we do not express any view as to the financial statements, schedules and
other financial information included therein or excluded therefrom).  For
purposes of the foregoing, we note that the Offering Circular was prepared in
the context of a Rule 144A transaction and not as a part of a registration
statement under the Securities Act and does not contain all of the information
that would be required in a registration statement under the Securities Act.

 

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Exhibit 9(a)(ix)(A)

Form of Opinion of Mayer, Brown, Rowe & Maw

 

1.                                       Due Organization; Good Standing.  Each
of the Issuers, Parent and DJL is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware or
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, as applicable.

 

2.                                       No Registration Rights.  To our
knowledge, except for the Purchase Agreement, there are no contracts,
commitments, agreements, arrangements, understandings or undertakings of any
kind to which either of the Issuers is a party, or by which either of the
Issuers is bound, granting to any person the right (i) to require either of the
Issuers to file a registration statement under the Act with respect to any
securities of either of the Issuers or requiring either of the Issuers to
include such securities with the Notes registered pursuant to any registration
statement, or (ii) to purchase or offer to purchase any securities of either of
the Issuers or any of their respective affiliates.

 

3.                                       Power.  Each of the Issuers, Parent and
DJL has all requisite corporate power and authority or limited liability company
power and authority, as applicable, to execute and deliver, and to perform its
obligations under, each of the Opinion Documents to which it is a party and to
consummate the transactions contemplated thereby.

 

4.                                       Authorization and Enforceability.

 

(a)                                  Purchase Agreement.  The Purchase Agreement
has been duly authorized, validly executed and delivered by each of the Issuers,
Parent and DJL.  The issuance and sale of the Notes in accordance with the
Purchase Agreement have been duly authorized by each of the Issuers.

 

(b)                                 Indenture.  The Indenture has been duly
authorized, validly executed and delivered by each of the Issuers.  The
Indenture is the legal, valid and binding obligation of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms.  The
Indenture conforms to the requirements of the TIA applicable to an indenture
that is required to be qualified under the TIA.

 

(c)                                  Notes.  The Notes are in the form
contemplated by the Indenture, have been duly authorized by each of the Issuers
for issuance and sale to the Initial Purchaser pursuant to the Purchase
Agreement and have been validly executed and delivered by each of the Issuers. 
The Notes, when authenticated by the Trustee in the manner provided in the
Indenture and delivered by the Issuers against payment therefor, will be legal,
valid and binding obligations of each of the Issuers, entitled to the benefits
of the Indenture and enforceable against each of the Issuers in accordance with
their terms.

 

(d)                                 Security Documents.  Each of the security
documents (other then the Iowa Security Documents) (the “Security Documents”)
and the transactions contemplated thereby (including, without limitation the
creation, grant, recording and perfection of the Security Interests, the
execution and filing of financing statements and the payment of any fees and
taxes in connection therewith) have been duly authorized by the Issuers and
Parent, as applicable, and each of the Security Documents has been duly executed
and delivered by the Issuers and Parent, as applicable.  Each of the Security
Documents (other than the Mortgage) which is governed by New York Law and the
Mortgage (solely with respect to those specific provisions thereof governed by
New York law) is the legal, valid and binding obligation of each of the Issuers
and

 

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Parent, as applicable, enforceable against each of the Issuers and Parent, as
applicable, in accordance with its terms.

 

(e)                                  Management Services Agreement.  The
Management Services Agreement and the transactions contemplated thereby have
been duly authorized by the Issuers and PGP, as applicable, and the Management
Services Agreement has been duly executed and delivered by the Issuers and PGP,
as applicable.  The Management Services Agreement is the legal, valid and
binding obligation of each of the Issuers and PGC, as applicable, enforceable
against each of the Issuers and PGC, as applicable, in accordance with its
terms.

 

5.                                       No Conflict.  Neither the execution,
delivery or performance of any of the Opinion Documents will conflict with,
violate, constitute a breach of or a default (with the passage of time or
otherwise) under, (i) the Charter Documents; (ii) the Peninsula Indenture, the
Existing Credit Agreement or any other Applicable Agreements (as defined on
Schedule I hereto) or (iii) any Applicable Laws (excluding the federal
securities laws); or require any consents, approvals, authorizations or
registrations by the Issuers or Parent under any Applicable Laws except such as
may be required under federal securities laws (which we address exclusively in
paragraph 10 hereof) and state securities laws (as to which we express no
opinion) in connection with the purchase and sale of the Notes or as may be
required for the perfection of any security interests (which we address
exclusively in paragraph 10 hereof).

 

6.                                       No Registration.  Assuming (i) the
accuracy of the representations, warranties and agreements of the Issuers and of
the Initial Purchaser contained in the Purchase Agreement, (ii) the due
performance by the Issuers and the Guarantors and the Initial Purchaser of their
respective covenants and agreements under the Purchase Agreement, (iii) the
accuracy of the representations and warranties made by each Accredited Investor
that purchases the Notes pursuant to Exempt Resales, as set forth in the letters
of representation executed by each of such Accredited Investors in the form of
Annex A to the Offering Circular, (iv) your compliance with the offering and
transfer procedures and restrictions described in the Offering Circular and
(v) the purchasers to whom you initially resell the Notes receive a copy of the
Offering Circular prior to such sale, it is not necessary in connection with the
offer, sale and delivery of the Notes to the Initial Purchaser as contemplated
in the Offering Memorandum and the Purchase Agreement or the initial resale of
the Notes by the Initial Purchaser in the manner contemplated by the Purchase
Agreement and described in the Offering Circular, to register such sales or
resales of the Notes under the Act, and it is not necessary, prior to the
Registered Exchange Offer or the effectiveness of the Shelf Registration
Statement, to qualify the Indenture under the TIA.  We express no opinion,
however, as to when or under what circumstances any Notes initially sold by you
may be reoffered or resold.

 

7.                                       Rule 144A(d)(4) Information.  The
Offering Circular as of its date (except for the financial statements, including
the notes thereto, and other financial and statistical data included therein or
omitted therefrom, as to which we express no opinion), contains the information
specified in, and meets the requirements of, Rule 144A(d)(4) under the Act (it
being understood that the Issuers have no past or current operations and that,
accordingly, only an unaudited balance sheet (and no profit and loss and
retained earnings statements) of the Issuers is included in the Offering
Circular).

 

8.                                       Investment Company Act.  Neither of the
Issuers is, and after giving effect to the sale of the Notes in accordance with
the Purchase Agreement and the application of the proceeds as described in the
Offering Circular under the caption “Use of Proceeds,” neither will be, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

 

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9.                                       Offering Circular.

 

(a)                                  Each of the Opinion Documents and the terms
of the Notes conform in all material respects to the descriptions thereof
contained in the Offering Circular.

 

(b)                                 The statements in the Offering Circular
under each of the headings [(i) ”Risk Factors—Risks Relating to this
Offering—Value of Collateral,” (ii) ”Risk Factors—Risks Relating to this
Offering—Lien Subordination,” (iii) the second paragraph of “Risk Factors—Risks
Relating to this Offering—Ability to Realize on Collateral,” (iv) ”Risk
Factors—Risks Relating to this Offering—Fraudulent Transfer,” (v) ”The
Transactions” and (vi) ”Notice to Investors”] [to be updated based on Offering
Circular] has been reviewed by us and, solely to the extent that such statements
constitute matters of law, summaries of legal matters, summaries of proceedings,
or legal conclusions (exclusive of the laws of any jurisdiction other than
Applicable Laws), such information is correct in all material respects.

 

10.                                 UCC Opinions.

 

(a)                                  The Security Agreement creates a valid
security interest in favor of the Trustee in the Collateral (as that term is
defined in the Security Agreement) in which a security interest may be created
under the Uniform Commercial Code as now in effect in the State of New York (the
“New York UCC”) or, to the extent such a security interest may not be created
under the New York UCC, under the applicable laws of the United States of
America with respect to any copyrights, patents or trademarks that are part of
such Collateral in which a security interest may be created under such laws
(that portion of the Collateral constituting the assets and properties of the
Issuers (together, the “UCC Collateral”).

 

(b)                                 Pursuant to the provisions of the Security
Agreement, each of the Issuers and, in the case of the stock certificates
specified on Schedule II hereto (the “Pledged Shares”), Parent, has authorized
the filing of a financing statement in the form attached hereto as Annex
10(b) naming each of the Issuers and, in the case of the Pledged Shares, Parent,
as debtors for purposes of Section 9-509 of the Uniform Commercial Code as now
in effect in the State of Delaware (the “Delaware UCC”).

 

(c)                                  Each of the Financing Statements includes
not only all of the types of information required by Section 9-502(a) of the
Delaware UCC but also the types of information without which the Office of the
Secretary of State of the State of Delaware may refuse to accept such financing
statement pursuant to Section 9-516 of the Delaware UCC.  Each of the Financing
Statements is in appropriate form for filing in the Office of the Secretary of
State of the State of Delaware.  Upon the later of the attachment of the
security interest and the proper filing of the Financing Statement with respect
to each of the Issuers and, in the case of the Pledged Shares, Parent, in the
Office of the Secretary of State of the State of Delaware, the security interest
in favor of the Trustee in the UCC Collateral described in each said financing
statement will be perfected to the extent a security interest in such UCC
Collateral can be perfected under the Delaware UCC by the filing of a financing
statement in that office.

 

(d)                                 [The provisions of the Account Control
Agreement(s) are effective to perfect the security interest of the Trustee in
the Company’s rights in the Securities Accounts (as defined in the Securities
Account Control Agreement).]  [If Account Control Agreements executed at Closing
for deposit accounts other than the Interest Reserve Account and Construction
Disbursement Account.]

 

(e)                                  Assuming (i) the delivery to, and the
continued possession by, the Trustee, in the State of New York, of the
certificates representing the Pledged Shares, together with stock

 

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powers or other instruments of transfer executed in blank, and (ii) none of the
the Trustee or any Holder has notice of any adverse claim to the Pledged Shares,
the Trustee will have the status of a “protected purchaser” with respect to the
Pledged Shares under (and as defined in) Section 8-303(a) of the New York UCC.

 

11.                                 [We confirm that the statements made in the
Offering Circular under the heading “Certain Federal Income Tax Considerations,”
to the extent that they describe matters of law or legal conclusions, are
correct in all material respects.]  [If the Offering Circular contains this
section.]

 

 “Opinion Documents” is defined as the Purchase Agreement, the Indenture, the
Notes, the Security Documents and the Management Services Agreement.

 

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Schedule I

 

[TO COME]

 

5

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Schedule II

 

Name

 

Security

 

Certificate
Number

 

 

 

 

 

Diamond Jo Worth Corp.

 

[   ] shares of Common Stock

 

[     ]

 

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Exhibit 9(a)(ix)(B)

Form of Opinion of Lane & Waterman,
Special Iowa Counsel and Special Iowa Regulatory Counsel

 

Our opinions expressed below are limited to the laws of the State of Iowa, and
to the extent applicable, the Federal Law of the United States, and only to the
Iowa operations and activities of the Issuers.

 

1.                                       Assuming the due authorization,
execution and delivery of each of the Mortgage and any other Security Document
governed by Iowa Law (the “Iowa Security Documents”) by the Issuers, each of the
Iowa Security Documents constitutes a valid and binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
fraudulent conveyance, equitable subordination, reorganization, readjustment of
debt, moratorium or other similar laws affecting creditor’s rights generally,
(ii) the effect of general principles of equity (regardless of whether
considered in a proceeding at law or in equity); or (iii) limitations on the
availability or enforceability of the remedies of specific performance or
injunctive relief contained in the Operative Documents, all of which may be
limited by equitable principles or applicable laws, rules, regulations, court
decisions and constitutional requirements.

 

2.                                       Except as disclosed in the Offering
Circular, there is no Proceeding before or by any Governmental Authority now
pending or to the best of our knowledge, without special inquiry beyond that
stated in the opinion, threatened either (a) that seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge any of the Operative
Documents or any of the Transactions or (b) that could, singly or in the
aggregate, have a Material Adverse Effect.

 

3.                                       The terms of the Security Documents
conform in all material respects to the descriptions thereof contained in the
Offering Circular.  The information in the Offering Circular under [“Offering
Circular Summary—The Company—Limited Competition,” “Risk Factors—Risks Relating
to Our Business—Competition,” “Risk Factors—Risks Relating to Our
Business—Governmental Regulation,” “Risk Factors—Risks Relating to this
Offering—Required Regulatory Redemption,” “Risk Factors—Risks Relating to Our
Business—Liquor Regulation,” “Risk Factors—Risks Relating to Our
Business—Environmental Matters,” “Risk Factors—Risks Relating to Our
Business—Taxation,” “Risk Factors—Risks Relating to this Offering—Ability to
Realize on Collateral,” “Risk Factors—Risks Relating to this Offering—Mechanics’
Liens,” “The Transactions,” “Business—Competition,” “Business— Properties” and
“Regulatory Matters”] [to be updated based on Offering Circular] to the extent
that it constitutes matters of law, summaries of legal matters, summaries of
securities, instruments, agreements or other documents, summaries of proceedings
or legal conclusions, is complete and correct in all material respects.

 

4.                                       Neither of the Issuers nor Parent is in
violation of or is in default under, to the best of our knowledge, any
Applicable Law, except for such violations or defaults that could not, singly or
in the aggregate, have a Material Adverse Effect.

 

5.                                       No authorization, approval, consent,
license or order of, or filing, registration or qualification with, any
Governmental Authority (including, without limitation, any Iowa gaming authority
or regulatory body), other than have been obtained on or before the Closing
Date, is required in connection with, or as a condition to, the execution,
delivery or performance of the Operative Documents or for the consummation of
the Transactions.

 

6.                                       Neither the execution or delivery of
any of the Operative Documents nor the consummation of any of the Transactions
will conflict with, violate, constitute a breach of or a default

 

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under (with the passage of time or otherwise), require the consent of any person
under (other than consents already obtained), or result in the imposition of a
Lien on any properties of either of the Issuers or Parent (other than as
contemplated by the Offering Circular or the Security Documents) or an
acceleration of indebtedness pursuant to, any Applicable Law (including, without
limitation any applicable provision of law or regulation of the State of Iowa).

 

7.                                       Each of the Issuers possesses all
Permits required or necessary to own or lease, as appropriate, and to operate
its properties and to carry on its business as now or proposed to be conducted
as set forth in the Offering Circular, except where the failure to obtain such
Permits would not, individually or in the aggregate, have a Material Adverse
Effect.  Each of the Issuers has fulfilled and performed all of its obligations
with respect to such Permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any such
Permit.  To the best of our knowledge, neither of the Issuers has received any
notice of any proceeding relating to revocation or modification of any such
Permit, except where such revocation or modification would not, individually or
in the aggregate, have a Material Adverse Effect.  The execution, delivery and
performance by each of the Issuers of the Operative Documents, to the extent
they are a party thereto, and the consummation by each of the Issuers of the
Operative Transactions will not result in the condition, termination, suspension
or revocation of any Permit of either of the Issuers or result in any other
impairment of the rights of the holder of any such Permit.

 

8.                                       The Company possesses a validly
authorized and issued riverboat gaming license from the State of Iowa and is in
good standing with Iowa gaming regulators.

 

9.                                       Neither the Trustee nor any present or
future owner of a Note is or will be required to qualify to do business as a
foreign corporation in the State of Iowa or to comply with the requirements of
any foreign lender statute, or is or will become subject to any income,
franchise or similar tax imposed by the State of Iowa or any subdivision
thereof, solely by reason of the execution, delivery and performance of the
Operative Documents and the acquisition and retention of the Liens created and
perfected under the Security Documents.

 

10.                                 The Mortgage creates in favor of the Trustee
a valid and enforceable mortgage lien on, and security interest in, the right,
title and interest of the Company in the Mortgaged Property (as defined in the
Mortgage), all as security for the payment of the Obligations (as such term is
defined in the Mortgage).  The Mortgage is in appropriate form for recording in
the office of the County Recorder of Worth County, Iowa (the county in which the
Land (as such term is defined in the Mortgage) is located), both as a mortgage
and as a “fixture filing” within the meaning of the Iowa UCC (as defined
below).  Upon such recordation, the mortgage Lien of the Mortgage will be
perfected with respect to the Company’s right, title and interest in and to the
Land and Improvements (as such terms are defined in the Mortgage) and Proceeds
(as such terms is defined in the Mortgage), and no other filing or recording of
the Mortgage or any other instrument will be necessary to continue the
perfection of the mortgage Lien of the Mortgage.  Upon such recordation, the
security interest in Fixtures (as such term is defined in the Mortgage), and
Proceeds of Fixtures (as such term is defined in the Mortgage) will be
perfected, and no other filing or recording of the Mortgage or any other
instrument will be necessary to continue the perfection of such security
interest of the Mortgage in Fixtures and Proceeds of Fixtures.

 

11.                                 The Security Agreement creates a valid
security interest in favor of the Trustee in all right, title and interest of
DJL in the Collateral under Article 9 of the Iowa Uniform Commercial Code (the
“Iowa UCC”), all as security for the payment of the Secured Obligations (as such
term is defined in the Security Agreement).  The Financing Statement (as such
term in defined in the Mortgage), is in appropriate form for filing with the
Iowa Secretary of State pursuant to the Iowa UCC.  Upon the filing of

 

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the Financing Statement in the office of the Iowa Secretary of State, the
security interest created by the Security Agreement in those items and types of
such Collateral in which a security interest may be perfected by filing Iowa UCC
financing statements with the Iowa Secretary of State will be perfected.

 

15.                                 No documentary, stamp or intangible tax,
transfer tax or similar charge is payable under Iowa law in connection with the
execution, delivery, filing, recordation or performance of the Security
Documents in the State of Iowa.  However, such counsel advises you that
statutory filing fees are payable, calculated on a per document or per
page basis, or a combination thereof.

 

16.                                 The Security Documents contain terms and
provisions necessary to permit the Trustee, following the occurrence of an Event
of Default (as such term is defined in the Indenture), to exercise the rights
and remedies commonly and customarily available to secured lenders in the State
of Iowa holding mortgages and security interests in properties similar to the
Mortgaged Property and Collateral under the laws of the State of Iowa in
transactions involving substantial amounts of credit.

 

17.                                 Certain of the Operative Documents provide
that they are governed by the laws of the State of New York.  An Iowa court or a
federal court in Iowa applying Iowa principles of choice of law, in a properly
presented case, would uphold the aforesaid choice-of-law provision.  Moreover,
in the event that the laws of the State of Iowa were applied to govern such
Operative Documents, such Operative Documents will not violate any applicable
laws (including usury laws) of the State of Iowa.

 

18.                                 The Construction Contract and the
transactions contemplated thereby have been duly authorized by the Issuers, as
applicable, and the Construction Contract has been duly executed and delivered
by the Issuers, as applicable.  The Construction Contract is the legal, valid
and binding obligation of each of the Issuers, as applicable, enforceable
against each of the Issuers, as applicable, in accordance with its terms.

 

3

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