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,


 





















 


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





















 


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.  


 


10





















 


(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


 


11





















 


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


 


12





















 


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


 


13





















 


(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


 


14





















 


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





















 


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,


 


16





















 


(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


 


17





















 


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


 


18





















 


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


 


19





















 


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 


 


20





















 


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


 


21





















 


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


 


22





















 


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


 


23





















 


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),


 


24





















 


(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


 


25





















 


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


 


26





















 


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


 


27





















 


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 


 


28





















 


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


 


29





















 


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.


 


30





















 


(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





















 


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]


 


32





















 


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

  



 





















 


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.


 





















 


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 


 


1





















 


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]


 


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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.


 


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