Document:

Exhibit 10.5

 

PREPARED BY: 
Nathan H. Sevilla, Esq., Mayer, Brown, Rowe & Maw LLP,
1675 Broadway, New York,

NY 10019, (212) 506-2196

 

 

AMENDED AND
RESTATED MORTGAGE,

ASSIGNMENT OF RENTS,

SECURITY AGREEMENT

AND

FIXTURE FINANCING STATEMENT

 

FROM

DIAMOND JO WORTH, LLC

TO

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE

 

 

NOTICE:  This
Mortgage secures credit in the amount of $40,000,000.  Loans and advances up to this amount,
together with interest, are senior to indebtedness to other creditors under
subsequently recorded and filed mortgages and liens.

 

This Mortgage contains an after-acquired property
clause.

 

 

This AMENDED
AND RESTATED MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FINANCING STATEMENT (this “Mortgage”)
is made as of July 19, 2005 between DIAMOND JO WORTH, LLC,
a Delaware limited liability company (the “Company”),
and U.S. BANK, NATIONAL ASSOCIATION, as
trustee (the “Trustee”) under the
Indenture dated as of July 19, 2005 (the “Indenture”) among the Company and Diamond Jo Worth Corp., a
Delaware corporation, each as Issuer (“Capital”
and, together with the Company, the “Issuers”)
and the Trustee.

 

RECITALS

 

WHEREAS, the
Company is the sole owner of a fee simple interest (the “Real
Property”) for certain premises located in Worth County, Iowa and
more particularly described on Exhibit A attached hereto; and

 

WHEREAS, the
Company executed that certain Mortgage, Assignment of Rents, Security Agreement
and Fixture Financing Statement (the “Original Mortgage”), dated as of May 13,
2005 from the Company, as mortgagor in favor of U.S. Bank, National
Association, as trustee under the Indenture dated as of April 16, 2004
(the “Original Trustee”), as mortgagee and
recorded on May 16, 2005 in the office of the Worth County Recorder, Worth
County, Iowa as Document No. 20051171, and encumbering the Real Property;
and

 

WHEREAS,
pursuant to that certain Assignment of Mortgage, Assignment of Rents, Security
Agreement and Fixture Financing Statement dated of even date herewith from the
Original Trustee, as assignor, in favor of Trustee, as assignee and filed for
recorded in the office of the Worth County Recorder, Worth County, Iowa
immediately prior to this Mortgage, Original Trustee assigned all right, title
and interest of Original Trustee in, to and under the Original Mortgage to
Trustee; and

 

WHEREAS,
pursuant to the Indenture the Issuers have issued their 11% Senior Secured
Notes due 2012 (together with any replacements thereof as provided in the
Indenture and as the same may be amended or supplemented from time to time
hereafter, the “Notes”) in the
initial aggregate principal amount of $40,000,000, subject to increase as
provided in the Indenture and maturing on April 15, 2012.  The Indenture provides that to secure
performance by the Company of its obligations under the Indenture, including
payment of the Notes, the Company will execute and deliver this Mortgage to the
Trustee.  The Indenture, this Mortgage,
the Security Documents (as defined in the Indenture) and any other document
referred to in or made with reference to the Notes are hereby incorporated by
reference, and are sometimes collectively referred to as “Transaction Documents”; and

 

WHEREAS, the
Company and the Trustee desire to amend and restate the Original Mortgage in
its entirety and hereby agree as follows:

 

GRANTING
CLAUSES

 

NOW,
THEREFORE, in consideration of ten dollars and other good and valuable
consideration, the receipt of and sufficiency of which are hereby acknowledged,
and to secure:

 

1

 

(i) 
the payment when due of indebtedness evidenced by the Notes in the maximum
principal amount of $40,000,000 (plus the principal amount of any Additional
Notes (as defined in the Indenture) issued under the Indenture) payable to the
order of the Holders, bearing interest as set forth in the Indenture and
maturing on April 15, 2012, such date being the “Maturity Date,” and any notes exchanged for
the Notes or issued in replacement of the Notes (in each case pursuant to the
terms of the Indenture) plus all accrued and unpaid interest thereon (including
default interest and Accrued Bankruptcy Interest (as defined in the
Indenture)), and premiums and penalties, if any, thereon, including late
payment charges and Additional Interest (as defined in Section 6.2
hereof), and all other amounts payable by the Company under the Indenture or in
respect of the Notes,

 

(ii) 
all other sums that may or shall become due hereunder, in connection with the
Notes or under the other Transaction Documents, including the costs and
expenses of enforcing any provision of any of the foregoing documents or any
extensions or modifications of the Notes or any substitutions therefor,

 

(iii) 
the reimbursement to the Trustee of all monies which may be advanced as herein
provided and of any and all costs and expenses (including reasonable attorneys’
fees and expenses) incurred or paid on account of any litigation at law or in
equity that may arise in respect of this Shore Mortgage or the obligations
secured hereby or the lands and premises and other property herein mentioned or
in obtaining possession of said lands and premises and other property after any
sale that may be made as hereinafter provided,

 

(iv) 
the payment by the Company to the Trustee of all sums, if any, as may be duly
expended or advanced by the Trustee in the performance of any obligation of the
Company as provided hereunder,

 

(v) 
the payment of any and all other indebtedness that this Shore Mortgage by its
terms secures and

 

(vi) 
the performance and observance of the covenants, agreements and obligations of
the Company contained herein and in the other Transaction Documents

 

(all obligations
and sums included in the foregoing clauses (i), (ii), (iii), (iv), (v), (vi) and
(vii) being hereinafter collectively referred to as the “Secured Obligations”), and in order to
charge with such performance and with such payments said lands and premises and
other property hereinafter described and the rents, revenues, issues, income
and profits thereof, the Company does hereby mortgage, affect, hypothecate, to
inure to the use and benefit of the Trustee (as trustee under the Indenture),
and its successors and assigns, all right, title and interest of the Company
now or hereafter owned or leased, in, to or under, or derived from each and all
of the following properties, estates, rights, titles and interests
(collectively, the “Mortgaged Property”):

 

(a)                                  the
Real Property and all tenements, hereditaments, appurtenances, estates and
rights in and to any of the Real Property and all component parts of the Real
Property;

 

2

 

(b)                                 all
buildings, improvements and other structures now or hereafter located on any of
the Real Property (the “Improvements”);

 

(c)                                  all
of the Company’s right, title and interest in and to all servitudes, easements,
rights-of-way, gores of land, streets, ways, alleys, passages, sewer rights,
waters, water courses, water rights and powers, and all estates, rights, title,
interests, privileges, liberties, prescriptions, advantages and appurtenances
of any nature whatsoever, in any way belonging, relating or pertaining to any
of the Real Property or the Improvements;

 

(d)                                 all
of the Company’s right, title and interest in and to any right to purchase, or
to use and occupy, any land adjacent to any of the Real Property and any land
lying in the bed of any street, road or avenue, opened or proposed, in front of
or adjoining any of the Real Property;

 

(e)                                  all
of the Company’s right, title and interest, to all machinery, apparatus,
equipment, fittings, fixtures and other property of every kind and nature
whatsoever now or hereafter located upon any of the Real Property or the
Improvements, and all component parts of any building or other construction
located on any of the Real Property or appurtenances thereto, and used in
connection with the operation and occupancy of any of the Real Property or the
Improvements, and all building equipment, material and supplies of any nature
whatsoever now or hereafter located in or upon any of the Real Property or the
Improvements, including, without limitation, all metals, lumber and lumber
products, bricks, stones, building blocks, sand, cement, roofing materials,
paint, doors, windows, hardware, wires, wiring and other building materials and
any building equipment, materials and supplies obtained for use in connection
with any of the Real Property or the Improvements and all additions,
replacements, modifications and alterations of any of the foregoing, including,
but without limiting the generality of the foregoing, all heating, lighting
incinerating and power equipment, engines, pipes, tanks, motors, conduits,
switchboards, plumbing, lifting, cleaning, fire prevention, fire extinguishing,
refrigerating, ventilating and communications apparatus, air cooling and air
conditioning apparatus, elevators, ducts and compressors and all other
equipment and fixtures (collectively, the “Fixtures”).  The Company acknowledges that all Fixtures
are part and parcel of the real estate and appropriated to the use of the real
estate and, whether or not affixed or annexed to the Improvements, shall for
the purpose of this Mortgage be deemed conclusively to be real estate and
mortgaged hereby;

 

(f)                                    all
of the Company’s right, title and interest to all plans and specifications for
the Real Property and the Improvements, all contracts with architects and
engineers responsible for the design of the Improvements, the preparation or
evaluation of any of such plans and specifications or the supervision of the
construction of any of the Improvements, all contracts to which the Company is
now or hereafter a party providing for the connection therewith or the
furnishing or installation of any Fixtures or other personal property in
connection therewith, all contracts to which the Company is now or hereafter a

 

3

 

party providing for the management of the construction
of any of the Improvements, all rights of the Company as a third party
beneficiary under all contracts and subcontracts pertaining to the Real
Property or the Improvements as to which the Company is not a party, all
payment and performance bonds relating to the Real Property or the Improvements
and all other contracts and agreements related to the design, management,
construction, equipping and development of the Real Property or the
Improvements (collectively, the “Construction
Documents”);

 

(g)                                 all
of the Company’s right, title and interest to all awards or payments, and any
interest paid or payable with respect thereto, that may be made with respect to
all or any portion of the Real Property, the Improvements or the Fixtures,
whether from the exercise of right of condemnation, eminent domain or similar
proceedings (including any transfer made in lieu of the exercise of said
right), or from any taking for public use, or for any other injury to or
decrease in the value of all or any portion of the Real Property, the
Improvements or the Fixtures, or as a result of the exercise by any
governmental authority of any right or option to purchase any of the Real
Property, all of the foregoing to be held, applied and paid in accordance with
the provisions of this Mortgage (collectively, the “Eminent Domain Awards”);

 

(h)                                 all
of the Company’s right, title and interest to all proceeds of, and any unearned
premiums on, any insurance policies covering all or any portion of the Real
Property, the Improvements or the Rents (as hereinafter defined), including,
without limitation, the right to receive and apply the proceeds of any insurance,
judgments, or settlements made in lieu thereof, for damage to all or any
portion of the Real Property or the Improvements and any interest actually paid
with respect thereto, all of the foregoing to be held, applied and paid in
accordance with the provisions of this Mortgage (collectively, the “Insurance Proceeds”);

 

(i)                                     all
of the Company’s right, title and interest as lessor or landlord to all leases
and other agreements affecting the use or occupancy of any of the Real Property
or the Improvements now in effect or hereafter entered into (including, without
limitation, subleases (including licenses, concessions, tenancies and other
occupancy agreements covering or encumbering all or any portion of the Real
Property or the Improvements), but excluding any licenses and permits to the
extent not assignable under applicable law, including without limitation,
liquor and gaming licenses, together with any modifications, extensions or
renewals of the same (collectively, the “Space
Leases”) and the rents, revenues, issues, income, products and
profits of the Real Property and the Improvements, including, without
limitation, any security deposits or other funds deposited with the Company
pursuant to the Space Leases (collectively, the “Rents”), together with any guarantees of the Space Leases or
Rents delivered to the Company from time to time, and any modifications,
extensions and renewals of any such guarantees, together with the right, but
not the obligation, to exercise options, to give consents and to collect,
receive and receipt for the Rents and apply the Rents 

 

4

 

to the payment of the Secured Obligations and to
demand, sue for and recover the Rents (when due and payable), subject to a
license in favor of the Company in respect thereof prior to the occurrence of
an Event of Default (as defined in Section 6.1 hereof); and

 

(j)                                     any
and all other, further or additional rights, title, estates and interests of
the Company in and to any of the Real Property or the Improvements or the
Fixtures, and all renewals, substitutions and replacements of and all additions
and appurtenances to any of the Real Property or the Improvements or the
Fixtures or constructed, assembled or placed on any of the Real Property or the
Improvements, and all conversions of the assemblage, placement or conversion,
as the case may be, and in each such case without any further mortgage,
conveyance, assignment or other act by the Company, shall become subject to the
lien of this Mortgage as fully and completely, and with the same effect, as
though now owned by the Company, the Company expressly agreeing that if the
Company shall at any time acquire any other right, title, estate or interest in
and to any of the Real Property, the Improvements or the Fixtures, the lien of
this Mortgage shall automatically attach to and encumber such other right,
title, estate or interest as a lien thereon.

 

AND, as
additional security, the Company hereby grants to the Trustee a continuing
security interest in (a) the Fixtures, (b) the Construction
Documents, (c) the Insurance Proceeds, (d) the Eminent Domain Awards,
(e) the Space Leases, (f) the Rents, (g) all proceeds of the
foregoing and (h) all proceeds of any of the Real Property and the
Improvements (collectively, the “Security
Interests Property”) and this Mortgage shall be effective as a
security agreement pursuant to the Uniform Commercial Code as enacted and in
effect in the state in which any of the Real Property is located (the “Code”).

 

HABENDUM

 

TO HAVE AND TO
HOLD the Mortgaged Property, the rights and privileges hereby conveyed or
assigned, or intended so to be, unto the Trustee (as trustee under the
Indenture), its successors and assigns, forever for the uses and purposes and
subject to the terms and conditions herein set forth.

 

SUBJECT,
HOWEVER,  to Permitted Liens (as defined
in the Indenture).

 

PROVIDED
NEVERTHELESS, should the Company pay and perform all the Secured Obligations in
accordance with the Indenture and the Security Documents, then these presents
will be of no further force and effect, and this Mortgage shall be satisfied by
the Trustee, at the expense of the Company.

 

The Company
FURTHER agrees as follows:

 

5

 

ARTICLE I

AMENDMENT AND RESTATEMENT

 

Section 1.1                                      This
Mortgage amends and restates in its entirety the Original Mortgage.

 

ARTICLE II

COVENANTS

 

Section 2.1                                      Performance
of Obligations.  The Company shall
pay and perform the Secured Obligations. 
Time is of the essence hereof.

 

Section 2.2                                      Further
Assurances.  If the Trustee requests,
the Company shall sign and deliver and cause to be recorded as the Trustee
shall reasonably direct any further mortgages, instruments of further
assurance, certificates and other documents as the Trustee may consider
reasonably necessary or desirable in order to perform, perfect, continue, and
preserve the obligations of the Company under the Transaction Documents.  The Company further agrees to pay to the
Trustee, upon demand, all costs and expenses incurred by the Trustee in
connection with the preparation, execution, recording, filing and refiling of
any such documents, including attorneys’ fees and title opinion or title
insurance costs.

 

Section 2.3                                      Operation
and Maintenance; Compliance with Laws. 
The Company shall cause the Mortgaged Property to be maintained in
normal working order and condition, reasonable wear and tear excepted, and the
Company shall make all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably necessary for the
proper conduct of the business of the Company. 
The Company shall comply or cause compliance with all laws, ordinances
and regulations of any governmental authority with reference to the Mortgaged
Property and the manner of using or operating the same, including any
Environmental Laws or Regulations and Accessibility Regulations, as hereafter
defined, and with any restrictive covenants affecting the title to the
Mortgaged Property, and with the terms of all insurance policies relating to
the Mortgaged Property.

 

Section 2.4                                      Payment
of Utilities, Impositions, Liens. 
The Company shall pay or cause to be paid when due all charges or fees
for utilities and services supplied to the Mortgaged Property. The Company, at
least five (5) days before any penalty attaches thereto, shall pay and
discharge, or cause to be paid and discharged, all taxes, assessments and
governmental charges or levies (collectively, “Impositions”) imposed upon or against it, its income or
profits, the Mortgaged Property or rents therefrom, or upon or against the
Secured Obligations, or upon or against the interest of the Trustee in the
Mortgaged Property or the Secured Obligations, except Impositions measured by
the income of the Trustee. The Company shall provide evidence of such payment
at the Trustee’s request.  This Mortgage
is and shall be maintained by the Company as a valid mortgage lien and security
interest in the Mortgaged Property, subject only to the Permitted Liens and
such other matters as may be expressly permitted under the Indenture.  Except as otherwise provided in the
Indenture, the Company shall not, directly or indirectly, create or suffer, or
permit to be created or suffered, against the Mortgaged Property or any part 

 

6

 

thereof, and the
Company will promptly discharge any Lien (as defined in the Indenture) or other
Imposition that may affect the Mortgaged Property or any part thereof, or any
interest therein, except the Permitted Liens. 
If any Lien not permitted hereunder is filed, the Company will cause the
same to be discharged pursuant to the terms of the Indenture.

 

Section 2.5                                      Insurance.

 

(a)                                  The
Company shall maintain insurance on the Mortgaged Property as specified in Section 4.18
of the Indenture.

 

(b)                                 In
the event that the Company fails to keep the Real Property and the Improvements
insured in compliance with this Section, the Trustee may, but shall not be
obligated to, obtain insurance and pay the premiums therefor, and the Company
shall, on demand, reimburse the Trustee for all sums advanced and expenses
incurred in connection therewith.  Such
sums and expenses, together with interest thereon at the Additional Interest
Rate, shall be deemed part of the Secured Obligations and secured by the lien
of this Mortgage.

 

(c)                                  Subject
to the provisions of Section 4.1 hereof, nothing contained in this Section or
elsewhere in this Mortgage shall relieve the Company of its duty to maintain,
repair, replace or restore the Improvements or the Fixtures or rebuild the
Improvements, from time to time, in accordance with the applicable provisions
of the Transaction Documents, and nothing in this Section or elsewhere in
this Mortgage shall relieve the Company of its duty to pay the Secured Obligations,
which shall be absolute, regardless of the occurrence of damage to, destruction
of or condemnation of all or any portion of the Mortgaged Property.

 

Section 2.6                                      Books
and Records; Financial Information. 
The Company shall (i) keep complete and accurate books and records
with respect to the Mortgaged Property; (ii) permit the Trustee to inspect
such books and records during normal business hours and make copies thereof at
the Trustee’s expense; and (iii) provide the Trustee such information as the
Trustee may from time to time reasonably request concerning the operations and
financial affairs of the Company and the Mortgaged Property, including, if
requested, audited annual financial statements and quarterly operating
statements.

 

Section 2.7                                      Mortgage,
Sale, Lease of the Mortgaged Property.

 

(a)                                  The
Company will not, now or in the future, mortgage, pledge or encumber or place
any Lien or encumbrance (or permit the same to exist) on the Mortgaged
Property, or any part thereof, without the prior written consent of the
Trustee, except for Permitted Liens.

 

(b)                                 The
Company shall not sell, convey, transfer or otherwise alienate in any manner,
whether directly or indirectly, any right, title or interest in the Mortgaged
Property, or any part thereof except as expressly permitted under the
Indenture, without obtaining in each such instance the prior written consent of
the Trustee.

 

7

 

(c)                                  Except
as otherwise expressly permitted under the Transaction Documents or as
otherwise expressly permitted hereunder, the Company shall not, without the
Trustee’s prior consent, which consent will not be unreasonably withheld, enter
into any agreement with or conveyance to any other person or entity permitting
the use of any excess development rights that might otherwise be used by the
Company in expanding, altering, reconstructing, replacing or otherwise
improving the Improvements or making any other improvements on the Mortgaged
Property, or otherwise permit or suffer any change of the zoning of the
Mortgaged Property or the use that may be made thereof.

 

Section 2.8                                      Environmental
- ADA.  The Company agrees:

 

(a)                                  Except
for substances normally used for maintenance or operation of the Mortgaged
Property which are used, stored and disposed of in accordance with all
applicable Environmental Laws or Regulations (as defined below),  the Company shall not, nor shall it permit
others to, place, store, locate, generate, produce, create, process, treat,
handle, transport, incorporate, discharge, emit, spill, release, deposit or
dispose of any Hazardous Substance (as defined below) in, upon, under, over or
from the Mortgaged Property.  The Company
shall cause all Hazardous Substances found on or under the Mortgaged Property,
which are not permitted under the foregoing sentence, and which exist in
quantities which violate applicable Environmental Laws or Regulations, to be
properly removed therefrom and properly disposed of at the Company’s cost and
expense.  The Company shall not install
or permit to be installed any underground storage tank on or under the
Mortgaged Property.  If the Trustee shall
reasonably request, the Company shall at its cost obtain and deliver to the
Trustee an environmental review, audit, assessment and/or report relating to
the Mortgaged Property or shall have any previously delivered materials updated
and/or amplified, by an engineer or scientist acceptable to the Trustee.

 

(b)                                 the
Company shall comply with all Accessibility Regulations (as defined below)
which are applicable to the Mortgaged Property. 
If the Trustee shall reasonably request, the Company shall at its cost
obtain and deliver to the Trustee an Accessibility Regulation compliance report
relating to the Mortgaged Property or shall have any previously delivered
materials updated and/or amplified, by a qualified consultant acceptable to the
Trustee.

 

(c)                                  the
Company shall, promptly after obtaining actual knowledge thereof, give notice
to the Trustee of: (i) any activity in violation of any applicable Environmental
Laws or Regulations relating to the Mortgaged Property, (ii) any
governmental or regulatory actions instituted or threatened under any
Environmental Laws or Regulations or any Accessibility Regulations affecting
the Mortgaged Property, (iii) all claims made or threatened by any third
party against the Mortgaged Property relating to any Hazardous Substance or a
violation of any Environmental Laws or Regulations or any Accessibility
Regulations, (iv) discovery by any the Company of any occurrence or
condition on or under the Mortgaged Property or on or under any real property
adjoining or 

 

8

 

in the vicinity of the Mortgaged Property which could
subject the Company, the Trustee or the Mortgaged Property to a claim under any
Environmental Laws or Regulations or Accessibility Regulations.  Any such notice shall include copies of any
written materials received by the Company.

 

(d)                                 Any
investigation, remedial or corrective action, taken with respect to the
Mortgaged Property shall be done under the supervision of a qualified
consultant, engineer or scientist acceptable to the Trustee who shall, at the
Company’s cost and at the completion of such investigation or action, provide a
written report of such investigation or action to the Trustee.

 

(e)                                  If
the Mortgaged Property has, or is suspected to have, asbestos or asbestos
containing materials (“ACM”)
which, due to its condition, location and/or planned building renovation or
demolition, is recommended to be abated by repair, encapsulation, removal or
other action, the Company shall promptly carry out the recommended abatement
action.  If the recommended abatement
includes removal of ACM, the Company shall cause the same to be removed and
disposed of offsite by a licensed and experienced asbestos removal contractor,
all in accordance with Environmental Laws or Regulations.  Upon completion of the recommended abatement
action, the Company shall deliver to the Trustee a certificate, signed by an
officer of the Company and the consultant overseeing the abatement action,
certifying to the Trustee that the work has been completed in compliance with
all applicable laws, ordinances, codes and regulations (including without
limitation those regarding notification, removal and disposal) and that no
airborne fibers beyond permissible exposure limits remain on site.  The Company shall develop and implement an
Operations and Maintenance Program (as contemplated by Environmental Protection
Agency guidance document entitled “Managing Asbestos In Place: A Building Owner’s
Guide to Operations and Maintenance Programs for Asbestos–Containing Materials”)
for managing in place any ACM in the Mortgaged Property.  The Company shall deliver a complete copy of
such Operations and Maintenance Program to the Trustee and certify to the
Trustee that such Program has been implemented.

 

(f)                                    After
an Event of Default, or if at any time there is a reasonable basis to believe
that a violation of Environmental Laws or Regulations may have occurred on the
Mortgaged Property, the Trustee shall have the right, after ten (10) days’
prior written notice to the Company, to have an environmental review, audit,
assessment, testing program and/or report with respect to the Mortgaged
Property performed or prepared by an environmental engineering firm selected by
the Trustee.  The Company shall reimburse
the Trustee for the cost incurred for each such action within ten (10) days
following demand therefor by the Trustee. 
The amount shall accrue interest at the Additional Interest Rate (as
defined in Section 6.2) from and including the date of disbursement by the
Trustee through the date of payment by the Company.

 

For purposes of this Mortgage, the following
definitions shall apply:

 

9

 

“Environmental Laws or Regulations” means
and includes the Federal Comprehensive Environmental Response, Compensation and
Liability Act (“CERCLA” or the Federal Superfund Act) as amended by the
Superfund Amendments and Reauthorization Act of 1986 (“SARA”), 42 U.S.C. §§ 9601
et seq.; the Federal Resource Conservation and Recovery Act of 1976 (“RCRA”),
42 U.S.C. §§ 6901 et seq.; Chapter 455B of the Iowa Code; the Clean Water
Act, 33 U.S.C. §§ 1321 et seq.; and the Clean Air Act, 42 U.S.C. §§ 7401
et seq., all as the same may be from time to time amended, and any other
federal, state, county, municipal, local or other statute, code, law,
ordinance, regulation, requirement or rule which may relate to or deal
with human health or the environment, including, without limitation, all
regulations promulgated by a regulatory body pursuant to any such statute,
code, law or ordinance.

 

“Hazardous Substances” means asbestos,
asbestos containing materials, urea formaldehyde, polychlorinated biphenyls,
nuclear fuel or materials, chemical waste, radioactive materials, explosives,
known carcinogens, petroleum products including but not limited to crude oil or
any fraction thereof, natural gas, natural gas liquids, gasoline or synthetic
gas, and any other waste, material, substance, pollutant or contaminant which
would subject the owner of the Mortgaged Property to any damages, penalties,
liabilities, or obligations under any applicable Environmental Laws or
Regulations.

 

“Accessibility Regulations” means any law
ordinance or regulation relating to accessibility of a facility or property for
disabled, handicapped and/or physically challenged persons, including, without
limitation, the Americans With Disabilities Act of 1991, as amended.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

The Company
makes the following representations and warranties:

 

Section 3.1                                      Existence
and Powers.  The Company is a limited
liability company duly created and validly existing and in good standing under
the laws of the State of Delaware.  The
Company has the power to own its property, to carry on its business and to
execute and perform the Transaction Documents. 
The Company has obtained all licenses and permits necessary to conduct
its business in the manner presently conducted.

 

Section 3.2                                      Ownership,
Liens, Compliance with Laws.  The
Company owns the Mortgaged Property free from all Liens and encumbrances except
for the Permitted Liens.  All applicable
zoning and environmental, land use, subdivision, building, fire, safety or health
laws, ordinances and regulations affecting the Mortgaged Property permit the
current use and occupancy thereof, and the Company has obtained all consents,
permits and licenses required for such use. 
The Company will comply with and satisfy all applicable formalities and
provisions of the laws and regulations of the United States of America and the
laws of the State of Iowa in order to perfect, establish and maintain this
Mortgage, and any supplement or amendment hereto.

 

Section 3.3                                      Authority,
Consents.  The execution, delivery
and performance of the Transaction Documents have been duly authorized by all
necessary action of the Company.  

 

10

 

Except for
consents and approvals previously obtained, no consent or approval of, or
exemption by, any person or entity, governmental or private, is required to
authorize the execution, delivery and performance of the Transaction Documents
or the validity thereof.

 

Section 3.4                                      Binding
Agreement.  The Transaction Documents
are the valid and legally binding obligations of the Company enforceable
against the Company in accordance with their respective terms, except to the
extent limited by bankruptcy, insolvency or similar laws affecting the rights
of creditors generally.

 

Section 3.5                                      No
Conflict, Default.  The execution,
delivery and performance by the Company of the Transaction Documents will not
violate or cause default under or permit acceleration of any agreement to which
the Company is a party or by which it or the Mortgaged Property is bound.  To the Company’s knowledge, it is not in
default (beyond any applicable grace period) in the performance of any
agreement, order, writ, injunction, decree or demand to which it is a party or
by which it is bound.

 

Section 3.6                                      Litigation.  There is no litigation, arbitration or other
proceeding in process or to the Company’s knowledge pending or threatened
against the Mortgaged Property or the Company which is reasonably likely to
have a materially adverse effect on the ability of the Company to fulfill its
obligations under the Transaction Documents or on the condition, financial or
otherwise, of the Company’s business, properties or assets.

 

Section 3.7                                      Use.  The Mortgaged Property is not homestead
property nor is it agricultural property in agricultural use.

 

Section 3.8                                      Utilities.  The Mortgaged Property is serviced by all
necessary public utilities, and all such utilities are operational and have
sufficient capacity.

 

Section 3.9                                      Environmental.  To the Company’s knowledge:

 

(a)                                  There
is not located on, in, about, or under the Mortgaged Property any Hazardous
Substances except for Hazardous Substances of the type ordinarily used, stored,
or manufactured in connection with the ownership or operation of the Mortgaged
Property as it is presently operated and such existing Hazardous Substances
have been used, stored and manufactured in compliance with all Environmental
Laws or Regulations.

 

(b)                                 The
Mortgaged Property is not presently used, and has not in the past been used as
a landfill, dump, disposal facility, gasoline station or for the storage,
generation, production, manufacture, processing, treatment, disposal, handling,
transportation, or deposit of any Hazardous Substances.

 

(c)                                  There
has not in the past been, and no present threat now exists of, a spill,
discharge, emission or release of a Hazardous Substance in, upon, under, over
or from the Mortgaged Property or from any other property which would have an
impact on the Mortgaged Property.

 

11

 

(d)                                 There
are no past or present investigations, administrative proceedings, litigation,
regulatory hearings or other action completed, proposed, threatened or pending,
alleging noncompliance with or violation of any Environmental Laws or
Regulations respecting the Mortgaged Property, or relating to any required
environmental permits covering the Mortgaged Property.

 

(e)                                  The
Company has disclosed to the Trustee all reports and investigations
commissioned by the Company and relating to Hazardous Substances and the Real
Property and the Improvements.

 

(f)                                    There
are not now, nor have there ever been, any above ground or underground storage
tanks located in or under the Mortgaged Property.   There are no wells on or under the Mortgaged
Property.

 

Section 3.10                                Mortgage
Lien.  This Mortgage constitutes a
valid mortgage and, upon proper recording hereof, will constitute a valid and
perfected mortgage lien, and security interest in the Mortgaged Property
(subject only to the Permitted Liens and any mortgage filed pursuant to the
provisions of the Intercreditor Agreement), and there are no defenses or
offsets to the Company’s obligations pursuant to this Mortgage or the other
Transaction Documents, including without limitation, the Company’s applicable
obligations to pay and perform the Secured Obligations.

 

Section 3.11                                Tax
Liens; Bankruptcy.  There are no
federal, state or local tax claims or liens assessed or filed against the
Company or the Mortgaged Property for taxes which are due and payable, unsatisfied
of record or docketed in any court of the state in which the Real Property is
located or in any other court located in the United States, and no petition in
bankruptcy has ever been filed by the Company, or, to the Company’s knowledge,
against the Company, and the Company has never made any assignment for the
benefit of creditors or taken advantage of any insolvency act or any act for
the benefit of debtors.

 

Section 3.12                                Damage;
Eminent Domain Proceedings.  The
Mortgaged Property has not been damaged or destroyed by fire or other casualty,
and no condemnation or eminent domain proceedings have been commenced and none
are pending with respect to the Mortgaged Property, and, to the Company’s
knowledge, no such condemnation or eminent domain proceedings are about to be
commenced.

 

ARTICLE IV

CASUALTY – CONDEMNATION

 

Section 4.1                                      Damage
or Destruction.  During the period
the indebtedness remains outstanding, in the event that the Real Property, the
Improvements, or the Fixtures shall be damaged or destroyed in whole or in
part, by fire or other casualty covered by insurance, the Company shall give
prompt written notice thereof to the Trustee. 
At such time as such damage, destruction or casualty shall occur, the Insurance
Proceeds shall be treated as proceeds of an Asset Sale (as defined in the
Indenture) and shall be payable to the Trustee and shall be released, applied
and/or distributed in accordance with Sections 4.13 and 10.4 of the
Indenture.  Upon the occurrence of an
Event of Default which has not been waived in writing by the Holders in 

 

12

 

accordance with Section 9.2
of the Indenture, the Trustee shall have the right to apply such Insurance
Proceeds in accordance with Section 6.10 of the Indenture.

 

Section 4.2                                      Condemnation.

 

(a)                                  During
the period the indebtedness remains outstanding, in the event that the
Mortgaged Property, or any part thereof, shall be taken in condemnation
proceedings or by exercise of the right of eminent domain, or by conveyance in
lieu of condemnation, or as a result of the exercise by any governmental
authority of any right or option to purchase (hereinafter collectively called “Proceedings”), the Trustee shall have the
right to participate in any such Proceedings at the Company’s expense,
including reasonable attorneys’ fees and disbursements, and any Eminent Domain
Awards that may be made or any proceeds thereof shall be deposited with the
Trustee and held in trust by the Trustee and distributed in the manner herein
set forth.  The parties agree to execute
any and all further documents that may be required in order to facilitate
collection of any Eminent Domain Award and the making of any such deposit.

 

(b)                                 During
the period the indebtedness remains outstanding, if there occurs a Proceeding,
any Eminent Domain Awards payable in connection therewith shall be considered
an Asset Sale (as defined in the Indenture) and shall be released, applied
and/or distributed in accordance with Sections 4.13 and 10.4 of the Indenture.

 

(c)                                  Upon
the occurrence of an Event of Default which has not been waived in writing by
the Holders in accordance with Section 9.2 of the Indenture, the Trustee
shall have the right to apply such Eminent Domain Awards in accordance with Section 6.10
of the Indenture.

 

ARTICLE V

LEASES AND RENTS

 

Section 5.1                                      Space
Leases, Rents and Cash Collateral.

 

(a)                                  As
additional collateral security for payment of the Secured Obligations, and
cumulative of any and all rights and remedies herein provided, the Company
hereby bargains, sells, transfers, assigns and sets over to the Trustee for the
benefit of the Holders, any and all Space Leases and Rents and any and all cash
collateral to be derived from the Mortgaged Property, or the use and occupation
thereof, or under any contract or bond relating to the construction or
reconstruction of the Mortgaged Property, including all Rents, royalties,
revenues rights, deposits (including security deposits) and benefits accruing
to the Company under all Space Leases, and the right to receive the same and
apply them against the Secured Obligations or against the Company’s other
obligations hereunder or the Company’s obligations under the Transaction
Documents, together with all Space Leases, contracts, bonds, leases and other
documents evidencing the same now or hereafter in effect and all right of the
Company 

 

13

 

thereunder. 
Nothing contained in the preceding sentence shall be construed to bind
the Trustee to the performance of any of the provisions of any such Space
Lease, contract, bond, lease or other documents or otherwise impose any
obligation upon the Trustee, except that the Trustee shall be accountable for
any money actually received pursuant to such assignment to the extent of its disposition
thereof in a manner inconsistent with this Mortgage or the Transaction
Documents.  The Company shall deliver to
the Trustee upon the Trustee’s request an executed counterpart of each such
Space Lease, contract, bond or other documents. 
The assignment of said Space Leases, Rents, income profits, proceeds and
cash collateral, and any of the aforesaid rights with respect thereto and to
the contracts, bonds, leases and other documents evidencing the same, is
intended to be and is an absolute present assignment from the Company to the
Trustee and not merely the passing of a security interest.

 

(b)                                 So
long as there shall exist no Event of Default hereunder which has not been
waived in writing by the Holders in accordance with the Indenture, the Company
shall have the right and license to exercise all rights, options and privileges
extended to the lessor under the terms of the Space Leases, including, without
limitation, the right to collect all Rents. 
The Company agrees to hold the same in trust and to use the same, first,
in payment of the Secured Obligations, second, the Taxes and insurance premiums
payable hereunder and all other charges on or against the Mortgaged Property
and, third, to the expenses of the Company’s business in or on the Mortgaged
Property.

 

(c)                                  In
the event of any such Event of Default which has not been so waived, the right
and license set forth in subparagraph (b) of this Section shall be
automatically revoked, and, thereafter, the Trustee shall have the right and
authority to exercise any of the rights or remedies referred to or set forth
herein.  In addition, upon such an Event
of Default, the Company shall promptly pay to the Trustee (i) all rent
prepayments and security or other deposits paid to the Company pursuant to any
Space Leases and (ii) all charges for services or facilities or for
escalations which were paid pursuant to any Space Leases to the extent
allocable to any period from and after such Event of Default and any such sums
received by the Trustee shall be applied by the Trustee in accordance with Section 6.10
of the Indenture.

 

(d)                                 If
the Company is not required to surrender possession of the Mortgaged Property
hereunder in the event of any such Event of Default which has not been so
waived, the Company will pay monthly in advance to the Trustee, or to any
receiver appointed to collect the same, the income, profits or proceeds
received by the Company under any of the Space Leases.

 

(e)                                  The
Company will upon the Trustee’s request execute, acknowledge and deliver to the
Trustee, in form approved by the Trustee, one or more general or specific
assignments of the lessor’s interest under any Space Lease (which are
consistent with the foregoing provisions). 
The Company will, on demand, pay to the Trustee, or reimburse the
Trustee for the payment of, all 

 

14

 

costs or expenses incurred in connection with the
preparation or recording of any such assignment.

 

(f)                                    The
Company will (i) perform or cause to be performed the lessor’s obligations
under any Space Lease, (ii) enforce the performance by the lessee under
its respective Space Lease of all of said lessee’s material obligations
thereunder and (iii) give the Trustee prompt notice and a copy of any
notice of default, event of default, termination or cancellation sent or
received by the Company.

 

(g)                                 Except
to the extent expressly permitted herein or under the other Transaction
Documents, the Company will not, without the Trustee’s written consent, (i) assign,
mortgage, pledge or otherwise transfer, dispose of or encumber, whether by
operation of law or otherwise, any Space Lease or the Rents or other income
thereunder or therefrom, (ii) accept or permit the acceptance of a
prepayment of any Rents for more than one month in advance of the due dates
therefor, (iii) amend, modify or otherwise alter any Space Lease or (iv) cancel,
terminate or accept a surrender of any Space Lease.

 

(h)                                 The
Company will from time to time, promptly upon the Trustee’s request, prepare
and deliver to the Trustee such information concerning the Space Leases as the
Trustee shall request.

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

Section 6.1                                      Events
of Default.  Each of the following
shall constitute an Event of Default hereunder:

 

(a)                                  the
occurrence of an “Event of Default” as defined in Section 6.1 of the
Indenture; or

 

(b)                                 the
failure of the Company to observe and perform any covenant, condition or
agreement on its part to be observed or performed in this Mortgage (other than
an occurrence which may sooner constitute an “Event of Default” under the
Indenture) including, without limitation, the covenants contained in Article I
herein for a period of thirty (30) days after written notice specifying such
failure and requesting that it be remedied, given to the Company by the
Trustee, unless the Trustee agrees in writing to an extension of such time
prior to its expiration.

 

Section 6.2                                      Remedies.  Upon the occurrence of an Event of Default,
all Secured Obligations, at the option of the Trustee, shall be accelerated and
become immediately due and payable upon notice to the Company.  The outstanding principal amount and the
interest accrued thereon of the Secured Obligations shall be due and payable
without presentment, demand or further notice of any kind, all of which are
hereby expressly waived by the Company. 
The Company will pay to the Trustee the entire Secured Obligations or
portions thereof, as applicable, and to the extent permitted by law, the
premiums and penalties, if any, provided in 

 

15

 

this Mortgage and
each other Transaction Document, as applicable, and such payment shall be
applied in accordance with Section 6.10 of the Indenture.

 

In the event
of any Event of Default, whether or not an acceleration shall occur, the
Trustee shall have the right to proceed to protect and enforce its rights by
one or more of the following remedies:

 

(a)                                  THE
TRUSTEE SHALL HAVE THE RIGHT TO BRING SUIT either for damages, specific
performance of any agreement contained in any Transaction Document, or for the
foreclosure of this Mortgage, or for the enforcement of any other appropriate
legal or equitable remedy.

 

(b)                                 THE
TRUSTEE SHALL HAVE THE RIGHT TO OBTAIN A RECEIVER at any time after an Event of
Default, whether or not an action for foreclosure has been commenced. Any court
having jurisdiction shall at the request of the Trustee following an Event of
Default appoint a receiver to take immediate possession of the Mortgaged
Property and to rent or operate the same as he may deem best for the interest
of all parties concerned, and such receiver shall be liable to account to the
Company only for the net profits, after application of rents, issues and
profits upon the costs and expenses of the receivership and upon the Secured
Obligations.

 

The Trustee
shall have the right, at any time to advance money to the receiver to pay any
part or all of the items which the receiver should otherwise pay if cash were
available from the Mortgaged Property and sums so advanced, with interest (“Additional Interest”) at the per annum rate
equal to the interest rate then borne by the Notes (the “Additional Interest Rate”), shall be
secured hereby, or if advanced during the period of redemption shall be a part
of the sum required to be paid to redeem from the sale.

 

(c)                                  THE
TRUSTEE SHALL HAVE THE RIGHT TO COLLECT THE RENTS from the Mortgaged Property
and apply the same in the manner hereinbefore provided with respect to a
receiver.  For that purpose, the Trustee
may enter and take possession of the Mortgaged Property and manage and operate
the same and take any action which, in the Trustee’s judgment, is necessary or
proper to collect the Rents and to conserve the value of the Mortgaged
Property.  The Trustee may also take
possession of, and for these purposes use, any and all of the Security
Interests Property.  The expense
(including any receiver’s fees, attorneys’ fees, costs and agent’s
compensation) incurred pursuant to the powers herein contained shall be secured
by this Mortgage.  The Trustee shall not
be liable to account to the Company for any action taken pursuant hereto other
than to account for any Rents actually received by the Trustee.  Enforcement hereof shall not cause the
Trustee to be deemed a Trustee in possession unless the Trustee elects in
writing to be a Trustee in possession.

 

(d)                                 THE
TRUSTEE SHALL HAVE THE RIGHT TO ENTER AND TAKE POSSESSION of the Mortgaged
Property and manage and operate the 

 

16

 

same in conformity with all applicable laws and take
any action which, in the Trustee’s judgment, is necessary or proper to conserve
the value of the Mortgaged Property.

 

(e)                                  THE
TRUSTEE SHALL HAVE ALL OF THE RIGHTS AND REMEDIES PROVIDED IN THE CODE,
including Iowa Code Chapter 554, including the right to proceed under the Code
provisions governing default as to any Security Interests Property separately
from the real estate included within the Mortgaged Property, or to proceed as
to all of the Mortgaged Property in accordance with its rights and remedies in
respect of said real estate.  If the
Trustee should elect to proceed separately as to such Security Interests
Property, the Company agrees to make such Security Interests Property available
to the Trustee at a place or places acceptable to the Trustee, and if any
notification of intended disposition of any of such Security Interests Property
is required by law, such notification shall be deemed reasonably and properly
given if given at least ten (10) days before such disposition in the
manner hereinafter provided.

 

(f)                                    THE
TRUSTEE SHALL HAVE THE RIGHT TO FILE PROOF OF CLAIM and other documents as may
be necessary or advisable in order to have its claims allowed in any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceedings affecting the Company, its creditors
or its property, for the entire amount due and payable by the Company under the
Secured Obligations, this Mortgage and any other instrument securing the
Secured Obligations, at the date of the institution of such proceedings, and
for any additional amounts which may become due and payable by the Company
after such date.

 

Each remedy herein specifically given shall be in
addition to every other right now or hereafter given or existing at law or in
equity, and each and every right may be exercised from time to time and as
often and in such order as may be deemed expedient by the Trustee and the
exercise or the beginning of the exercise of one right shall not be deemed a
waiver of the right to exercise at the same time or thereafter any other
right.  The Trustee shall have all rights
and remedies available under the law in effect now and/or at the time such
rights and remedies are sought to be enforced, whether or not they are available
under the law in effect on the date hereof.

 

Section 6.3                                      Expenses
of Exercising Rights, Powers and Remedies. 
The reasonable expense (including any receiver’s fees, attorneys’ fees,
appraisers’ fees, environmental engineers’ and/or consultants’ fees, costs
incurred for documentary and expert evidence, stenographers’ charges,
publication costs, costs (which may be estimated as to items to be expended
after entry of the decree of foreclosure) of procuring all abstracts of title,
continuations of abstracts of title, title searches and examinations, title
insurance policies and commitments and extensions therefor, Torrens duplicate
certificates of title, UCC and chattel lien searches, and similar data and
assurances with respect to title as the Trustee may deem reasonably necessary
either to prosecute any foreclosure action or to evidence to bidders at any
sale which may be had pursuant to any foreclosure decree the true condition of
the title to or the value of the Mortgaged Property, and agent’s compensation)
incurred by the Trustee after the occurrence of any Event of Default under this
Mortgage and/or in pursuing the rights, powers 

 

17

 

and remedies
contained in this Mortgage shall be immediately due and payable by the Company,
with interest thereon at the Additional Interest Rate, and shall be added to
the indebtedness secured by this Mortgage.

 

Section 6.4                                      Restoration
of Position.  In case the Trustee
shall have proceeded to enforce any right under this Mortgage by foreclosure,
sale, entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely, then, and in
every such case, the Company and the Trustee shall be restored to their former
positions and rights hereunder with respect to the Mortgaged Property subject
to the lien hereof.

 

Section 6.5                                      Marshalling.  The Company, for itself and on behalf of all
persons, parties and entities which may claim under the Company, hereby waives
all requirements of law relating to the marshalling of assets, if any, which
would be applicable in connection with the enforcement by the Trustee of its
remedies for an Event of Default hereunder, absent this waiver. The Trustee
shall not be required to sell or realize upon any portion of the Mortgaged
Property before selling or realizing upon any other portion thereof.

 

Section 6.6                                      Waivers.  No waiver of any provision hereof shall be
implied from the conduct of the parties. 
Any such waiver must be in writing and must be signed by the party
against which such waiver is sought to be enforced.  The waiver or release of any breach of the
provisions set forth herein to be kept and performed shall not be a waiver or
release of any preceding or subsequent breach of the same or any other
provision.  No receipt of partial payment
after acceleration of any of the Secured Obligations shall waive the
acceleration.  No payment by the Company
or receipt by the Trustee of a lesser amount than the full amount secured
hereby shall be deemed to be other than on account of the sums due and payable
hereunder, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed an accord and satisfaction, and the
Trustee may accept any check or payment without prejudice to the Trustee’s
right to recover the balance of such sums or to pursue any other remedy
provided in this Mortgage.  The consent
by the Trustee to any matter or event requiring such consent shall not
constitute a waiver of the necessity for such consent to any subsequent matter
or event.

 

Section 6.7                                      The
Trustee’s Right to Cure Defaults.  If
the Company shall fail to comply with any of the terms hereof with respect to
the procuring of insurance, the payment of taxes, assessments and other
charges, the keeping of the Mortgaged Property in repair, the payment and
satisfaction of Liens and encumbrances against the Mortgaged Property, the
payment of any other sum or deposit required under this Mortgage, or any other
term herein contained, the Trustee may make advances or take other actions to
perform the same without releasing the Company from any Secured Obligations and
may enter upon the Mortgaged Property for any such purpose and take all such
action thereon as the Trustee or any of its duly appointed agents may deem
necessary or appropriate therefor.  The
Company agrees to repay upon demand all sums so advanced and all sums expended
by the Trustee in connection with such performance, including without
limitation attorneys’ fees, with Additional Interest at the Additional Interest
Rate from the dates such advances are made, and all sums so advanced and/or
expenses incurred, with Additional Interest at the Additional Interest Rate,
shall be secured hereby as Secured Obligations, but no such advance and/or
incurring of expense by the Trustee, 

 

18

 

shall be deemed to
relieve the Company from any default hereunder, or to release the Company from
any Secured Obligations. The Trustee shall not be bound to inquire into the
validity of any Imposition or Lien which the Company fails to pay as and when
required by this Mortgage and which the Company does not contest in strict
accordance with the terms of this Mortgage.

 

Section 6.8                                      Suits
and Proceedings.  The Trustee shall
have the power and authority, upon prior notice to the Company to institute and
maintain any suits and proceedings as the Trustee may deem advisable to (i) prevent
any impairment of the Mortgaged Property by any acts which may be unlawful or
any violation of this Mortgage, (ii) preserve or protect its interest in
the Mortgaged Property, or (iii) restrain the enforcement of or compliance
with any legislation or other governmental enactment, rule or order that
may be unconstitutional or otherwise invalid, if, in the sole opinion of the
Trustee, the enforcement of or compliance with such enactment, rule or
order might impair the security hereunder or be prejudicial to the Trustee’s
interest.

 

Section 6.9                                      Waiver
of Redemption Rights; Alternative Foreclosure Procedures.  It is agreed that if this Mortgage covers any
parcel of less than ten (10) acres of land, and in the event of the
foreclosure of this Mortgage and sale of the property by sheriff’s sale in such
foreclosure proceedings, the time of one (1) year for redemption from said
sale provided by the statutes of the State of Iowa with respect to such parcel
shall be reduced to six (6) months provided the Trustee in such action
files an election to waive any deficiency judgment against the Company which
may arise out of the foreclosure proceedings; all to be consistent with the
provisions of Chapter 628 of the Iowa Code.

 

It is further
agreed that the period of redemption after a foreclosure of this Mortgage shall
be reduced to sixty (60) days if all of the three following contingencies
develop with respect to any parcel of real estate included in the Mortgaged
Property: (1) the real estate is less than ten (10) acres in size; (2) the
court finds affirmatively that the said real estate has been abandoned by the
owners and those persons personally liable under this Mortgage at the time of
such foreclosure; and (3) the Trustee in such action files an election to
waive any deficiency judgment against the Company or its successor in interest
in such action. Entry of appearance by pleading or docket entry by or on behalf
of the Company shall create a presumption that the property is not
abandoned.  Any such redemption period
shall be consistent with all of the provisions of Chapter 628 of the Iowa Code.

 

This Section shall
not be construed to limit or otherwise affect any other redemption provisions
contained in Chapter 628 of the Iowa Code. 
This Section also shall not be construed to limit the Trustee’s
right to elect foreclosure without redemption or to elect foreclosure by
nonjudicial procedure as set forth in Chapters 654 and 655A of the Iowa
Code.  The Company agrees that, in the
event of a foreclosure of the Mortgage, under any provision of Iowa law, the
Trustee shall be entitled to sole possession and use of the Mortgaged Property
during any redemption period.

 

Section 6.10                                Application
of Proceeds.  The proceeds from the
foreclosure, sale or lease or any recovery pursuant to Chapter 554 of the
Iowa Code or hereunder shall be applied to the payment of the Secured
Obligations in accordance with the Indenture if such Secured 

 

19

 

Obligations have
been deemed due and payable upon the Event of Default.  Any surplus of the proceeds shall be paid to
the Company.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.1                                      Binding
Effect; Survival; Number; Gender. 
This Mortgage shall be binding on and inure to the benefit of the
parties hereto, their successors and assigns. 
All representations and warranties contained herein or otherwise
heretofore made by the Company to the Trustee shall survive the execution,
delivery and foreclosure hereof.  The
singular of all terms used herein shall include the plural, the plural shall
include the singular, and the use of any gender herein shall include all other
genders, where the context so requires or permits.

 

Section 7.2                                      Severability.  The unenforceability or invalidity of any
provision of this Mortgage as to any persons or circumstances shall not render
that provision unenforceable or invalid as to any other persons or
circumstances and shall not affect the enforceability of the remaining
provisions hereof.

 

Section 7.3                                      Notices.  All notices and demands required or permitted
to be given to or made upon any party hereto under any Transaction Document
shall be in writing and shall be personally delivered or sent by certified
mail, postage prepaid, return receipt requested or by a nationally recognized
courier, or by telecopier, and shall be deemed to be given for purposes of this
Mortgage on the day that such writing is delivered or sent to the intended
recipient thereof in accordance with the provisions of this Section.  Notices shall be given to or made upon the
respective parties hereto at their respective addresses set forth below:

 

If to the Company:

 

Diamond Jo Worth, LLC

3rd Street Ice Harbor

P.O. Box 1750

Dubuque, Iowa 52001

Attention:  Chief Financial Officer 

Phone:  (563) 690-2173

Fax:      (563) 690-2190

 

With a copy
to:

Mayer, Brown,
Rowe & Maw LLP

1675 Broadway

New York, NY
10019

Attention:
Douglas L. Wisner

Phone:  (212) 506-2665

Fax:      (212)
849-5665

 

20

 

If to the Trustee:

 

U.S. Bank
National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul, Minnesota 55107-1419

Attention: Corporate Trust Department

Phone:  (651) 495-3909

Fax:      (651) 495-8097

 

Either party may change the address for notices by a
notice given not less than five (5) business days prior to the effective
date of the change.

 

Section 7.4                                      Survival
of Warranties, Etc.  All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Mortgage.

 

Section 7.5                                      Applicable
Law.  THIS MORTGAGE AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA, PROVIDED, HOWEVER, THAT THE PROVISIONS FOR THE
CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
CREATED HEREUNDER WITH RESPECT TO THE MORTGAGED PROPERTY SHALL BE GOVERNED BY
IOWA LAW TO THE EXTENT NECESSARY FOR THE VALIDITY AND ENFORCEMENT THEREOF.

 

Section 7.6                                      Waiver
of Jury Trial.  EACH OF THE COMPANY AND
THE TRUSTEE, BY ITS ACCEPTANCE OF THIS MORTGAGE, IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS MORTGAGE AND ANY OF THE OTHER SECURITY DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

Section 7.7                                      Effect.  This Mortgage is in addition to and not in
substitution for any other guaranties, covenants, obligations or other rights
now or hereafter held by the Trustee from any other person or entity in
connection with the Secured Obligations.

 

Section 7.8                                      Assignability.  The Trustee shall have the right to assign
this Mortgage, in whole or in part or sell participation interests herein, to
any person obtaining an interest in the Secured Obligations.

 

Section 7.9                                      Headings.  Headings of the Sections of this Mortgage are
inserted for convenience only and shall not be deemed to constitute a part
hereof.

 

Section 7.10                                Security
Interest.

 

(a)                                  An
express security interest is hereby granted to the Trustee in respect to any
part of the Mortgaged Property which under Iowa law might now or hereafter be
construed or considered as personal property or fixtures, or otherwise be
considered collateral subject to the Code, including without 

 

21

 

limitation the collateral described in granting
clauses (e) hereof, and this Mortgage shall constitute a security
agreement in respect thereto.

 

(b)                                 Upon
the occurrence of an Event of Default hereunder in addition to the other rights
and remedies available to it, the Trustee may exercise all other rights and
remedies with respect to such property that are available to a secured party
under the Code.  The Company agrees to
pay any reasonable attorney fees and legal expenses incurred by the Trustee in
enforcing or protecting its rights under the security interest created
hereunder.  In the event notice of
intended disposition of such property is required by law in any particular
instance, the Company agrees that notice given in the manner and place provided
in Section 7.3 hereunder and sent ten (10) days prior to a
disposition of collateral is commercially reasonable notification within the
meaning of the Code.  Information
concerning the security interests may be obtained from the Trustee (the “Secured Party”) at the address set forth in
Section 7.3 hereof.

 

(c)                                  The
Company warrants and agrees that no financing statement or security agreement
covering any of the Mortgaged Property is or will be placed on file in any
public office or delivered to any secured party except pursuant hereto, except
for Permitted Encumbrances and Permitted Liens.

 

Section 7.11                                Fixture
Filing.  From the date of its
recording, this Mortgage shall be effective as a financing statement filed as a
fixture filing with respect to the collateral described in the Granting Clauses
hereof which are fixtures within the meaning of the Code, and for this purpose
the name and address of the Company (the “Debtor”)
is the name and address set out for the Company in Section 7.3 herein, and
the name and address of the Secured Party is the name and address of the
Trustee, as set out in Section 7.3 hereof. 
Pursuant to the provisions of Section 554.9403 subparagraph 6 of
the Code, such fixture filing remains in effect until this Mortgage is released
or satisfied of record or its effectiveness otherwise terminates as to the Real
Property.

 

Section 7.12                                Defined
Terms.  All capitalized terms used in
this Mortgage and not defined herein shall have the meanings ascribed to them
in the Indenture.

 

Section 7.13                                Discharge
of Lien.  In accordance with Section 10.4
of the Indenture and upon the observance and performance of each and every
covenant and condition set forth herein and in the Indenture and the Notes,
then and in that case all property, rights and interest hereby conveyed or
assigned or pledged shall revert to the Company, and the estate, right, title
and interest of the Trustee therein shall thereupon cease, terminate and become
void; and this Mortgage, and the covenants of the Company contained herein,
shall be discharged and the Trustee in such case on demand of the Company and
at the Company’s cost and expense, shall execute and deliver to the Company a
proper instrument or proper instruments acknowledging the satisfaction and
termination of this Mortgage, and shall convey, assign and transfer or cause to
be conveyed, assigned or transferred, and shall deliver or cause to be
delivered, to the Mortgagor, all property, including money, then held by the
Trustee hereunder.

 

22

 

Section 7.14                                Conflicts
with Security Agreement.  In the
event of a conflict between the provisions of the Security Agreement and the
provisions of this Mortgage, the Mortgage shall govern in all matters relating
to the validity and enforceability of the Lien created hereby on the Real
Property, the Improvements, the Fixtures and the Rents and (except as expressly
set forth to the contrary herein or in the Security Agreement), the Security
Agreement shall govern in all other respects.

 

Section 7.15                                Mortgage
Absolute.  The obligations of the
Company under this Mortgage are independent of the obligations of Company under
the other Transaction Documents, and a separate action or actions may be
brought and prosecuted against Company to enforce this Mortgage, irrespective
of whether any action is brought against Company under such other Transaction
Documents.  All rights of Trustee and the
mortgage, assignment and security interest hereunder, and all obligations of
Company hereunder, shall be absolute and unconditional, irrespective of:

 

(a)                                  any
lack of validity or enforceability of any other Transaction Document or any
other agreement or instrument relating thereto;

 

(b)                                 any
change in the time, manner or place of payment of, or in any other term of, all
or any of the obligations of the Company under the other Transaction Documents
or any other amendment or waiver of or any consent to any departure from the
other Transaction Documents, including, without limitation, any increase in
such obligations resulting from the extension of additional credit to the
Company or otherwise;

 

(c)                                  any
taking, exchange, release or non-perfection of any other collateral, or any
taking, release or amendment or waiver of or consent to departure from any
guaranty, for all or any other of the obligations of the Company under the
other Transaction Documents;

 

(d)                                 any
manner of application of collateral, or proceeds thereof, to all or any of the
obligations of the Company under the other Transaction Documents, or any manner
of sale or other disposition of any collateral for all or any of such
obligations or any other assets of the Company;

 

(e)                                  any
change, restructuring or termination of the corporate restructure or existence
of the Company; or

 

(f)                                    any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Company or a third party of a security interest or mortgage.

 

Section 7.16                                Interaction
with Indenture.  All terms,
covenants, conditions, provisions and requirements of the Indenture are incorporated
by reference in this Mortgage. 
Notwithstanding any other provision of this Mortgage, the terms and
provisions of this Mortgage shall be subject and subordinate to the terms of
the Indenture.  To the extent that the
Indenture provides the Company with a particular cure or notice period, or
establishes any limitations or conditions on the Trustee’s actions with regard
to a particular set of facts, the Company shall be 

 

23

 

entitled to the
same cure periods and notice periods, and Trustee shall be subject to the same
limitations and conditions, under this Mortgage, as under the Indenture, in
place of the cure periods, notice periods, limitations and conditions provided
for under this Mortgage; provided, however, that such cure periods, notice
periods, limitations and conditions shall not be cumulative as between the
Indenture and this Mortgage.  In the
event of any conflict or inconsistency between the provisions of this Mortgage
and those of the Indenture, including, without limitation, any conflicts or
inconsistences in any definitions herein or therein, the provisions or
definitions of the Indenture shall govern.

 

Section 7.17                                Excluded
Assets.  Notwithstanding anything to
the contrary contained herein, if a portion of the Mortgaged Property becomes
an Excluded Asset (as defined in the Indenture) after the Issue Date (as
defined in the Indenture), the Trustee shall, simultaneous with the granting of
the applicable Permitted Lien, without the payment of any partial release for,
or any other prepayment with respect to, the Notes, release the Lien in favor
of the Trustee in such Excluded Asset in accordance with the provisions of Section 10.4
of the Indenture.  Once any Excluded
Asset is released, such Excluded Asset shall be expressly excluded from and
shall no longer be deemed Mortgaged Property under this Mortgage and shall not
be subject to any of the representations, covenants or obligations under this
Mortgage.

 

Section 7.18                                Indemnity.  The Company hereby agrees to indemnify,
defend and hold the Trustee (and its directors, officers, agents and employees)
and each Holder harmless from and against any and all loss, liability, damage,
claim, judgment or expense (including reasonable attorneys’ fees and expenses,
bond expenses, printing and automated document preparation and retention
expenses and other ordinary litigation expenses) incurred by it (or such
director, officer, agent or employee) in connection with the acceptance or
administration of the Trustee’s duties under this Mortgage, any action or
proceeding to foreclose this Mortgage or in or to which the Trustee or any
Holder may be made a party due to the existence of this Mortgage or the other
Transaction Documents or to which action or proceeding the Trustee or any
Holder may become a party for the purpose of protecting the lien of this
Mortgage.  All sums paid by the Trustee
or any Holder to prosecute or defend the rights herein set forth shall be
deemed a part of the Secured Obligations and shall be paid by the Company to
the Trustee or such Holder within ten (10) days after written demand, and
if not paid within that period, shall accrue interest from and including the
date of disbursement or advance by the Trustee or such Holder to and including
the date of payment by the Company at the Additional Interest Rate.

 

24

 

IN
WITNESS WHEREOF, the Company and the Trustee have executed this Mortgage as of
the date first written above.

 

IMPORTANT:  READ
BEFORE SIGNING.  THE TERMS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE.  NO OTHER TERMS OR ORAL
PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY
ENFORCED.  YOU MAY CHANGE THE TERMS
OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.  THIS NOTICE APPLIES TO ALL AGREEMENTS ENTERED
INTO TO WHICH THE COMPANY AND THE TRUSTEE ARE PARTIES.

 

	
   

  	
   

  	
  DIAMOND JO WORTH, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/
  Natalie Schramm

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Natalie Schramm

  
	
   

  	
   

  	
   

  	
  Title: 
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (No Seal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as

  Trustee under that certain Indenture dated July 19, 2005

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/
  Richard H. Prokosch

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Richard H. Prokosch

  
	
   

  	
   

  	
   

  	
  Title: 
  Vice President

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (No Seal) 

  	
   

  	
   

  

 

25

 

THE
COMPANY:

 

	
  STATE
  OF                                 

  	
  )

  	
   

  
	
   

  	
  )ss:

  	
   

  
	
  COUNTY
  OF                             

  	
  )

  	
   

  

 

On this
         day of July, A.D., 2005 before
me, a Notary Public in and for the State of
                      ,
personally appeared
                                      ,
to me personally known, who being by me duly sworn did say that the person is (a) (the)
                                    
of Diamond Jo Worth, LLC, a Delaware limited liability company, executing the
foregoing instrument, that the instrument was signed on behalf of the said
limited liability company by authority of the limited liability company and the
said                                  
acknowledged the execution of said instrument to be the voluntary act and deed
of said limited liability company by it voluntarily executed.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public in the State
  of                     

  	
   

  

 

TRUSTEE:

 

	
  STATE
  OF                                 

  	
  )

  	
   

  
	
   

  	
  )ss:

  	
   

  
	
  COUNTY
  OF                             

  	
  )

  	
   

  

 

On this
         day of July, A.D., 2005 before
me, a Notary Public in and for the State of
                      ,
personally appeared
                                      ,
to me personally known, who being by me duly sworn did say that the person is (a) (the)
                                    
of U.S. BANK NATIONAL ASSOCIATION, a national banking association, executing
the foregoing instrument, that the instrument was signed on behalf of the said
national banking association by authority of the national banking association
and the said
                                 
acknowledged the execution of said instrument to be the voluntary act and deed
of said national banking association by it voluntarily executed.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public in the State
  of                     

  	
   

  

 

 

EXHIBIT A

 

Legal
Description of Real Property

 

PARCEL A

 

Lots 1, 2, 3, 4, 5 and 6 in Block 1 and lot 5 in Block
2, Top of Iowa Addition, Worth County, Iowa, according to the recorded plat thereof.Exhibit 10.6

 

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of July 12,
2005, among DIAMOND JO, LLC (formerly known as
Peninsula Gaming Company, LLC), a Delaware limited liability company (“DJL”),
THE OLD EVANGELINE DOWNS, L.L.C., a
Louisiana limited liability company (“OED”), DIAMOND JO
WORTH, LLC, a Delaware limited liability company (“DJW”, and
together with OED and DJL, referred to hereinafter each individually as a “Borrower”,
and individually and collectively, as “Borrowers”), the Lenders (as
defined in the hereinafter defined Loan Agreement) signatories hereto, and WELLS FARGO FOOTHILL, INC., a California corporation, as the
arranger and agent for the Lenders (“Agent”).

 

W I T N E S S E T H:

 

WHEREAS, Borrowers,
Agent, and the Lenders are parties to that certain Loan and Security Agreement
dated as of June 16, 2004, as amended by that certain First Amendment to
Loan and Security Agreement dated as of November 10, 2004, and as
supplemented by that certain Borrower Supplement No. 1 dated as of May 13,
2005 (as amended and supplemented and as otherwise amended, restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”;
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Loan Agreement), pursuant to which the
Lender Group has agreed to make the Term Loan, Advances and other extensions of
credit to Borrowers from time to time pursuant to the terms and conditions
thereof and the other Loan Documents;

 

WHEREAS, Borrowers have
requested that certain terms and conditions of the Loan Agreement be amended, and
the Lender Group and, by their respective acknowledgment hereof, Guarantors
have agreed to the requested amendments on the terms and conditions provided
herein;

 

NOW THEREFORE, in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

 

1.                                       Amendments
to the Loan Agreement.

 

(a)                                  Section 1.1
of the Loan Agreement, Definitions, is hereby modified and amended by
deleting the definitions of “Applicable Prepayment Premium”, “Borrower”,
“Fee Letter”, “Gaming Property”, “Loan Documents”, “Maximum
Revolver Amount”, “Permitted Dispositions”, “Restricted
Subsidiaries”, “Subordination of Mortgage” and “Subordination of
Preferred Fleet Mortgage” in
their respective entirety from such Section and inserting in lieu thereof,
respectively, the following:

 

““Applicable Prepayment Premium” means, as of
any date of determination, an amount equal to (a) during the period of
time from and after the date of the execution and delivery of this Agreement up
to the date that is the first anniversary of the Closing Date, 4% of the
Maximum Revolver Amount, (b)

 

 

during
the period of time from and including the date that is the first anniversary of
the Closing Date up to the date that is the second anniversary of the Closing
Date, 3% of the Maximum Revolver Amount, (c) during the period of time
from and including the date that is the second anniversary of the Closing Date
up to the date that is the third anniversary of the Closing Date, 2% of the
Maximum Revolver Amount, and (d) during the period of time from and
including the date that is the third anniversary of the Closing Date up to the
Maturity Date, 1% of the Maximum Revolver Amount.

 

 “Borrower”
and “Borrowers” means, individually, each of OED, DJL and DJW and individually
and collectively, jointly and severally, OED, DJL and DJW.

 

 “Fee Letter”
means that certain amended and restated fee letter, dated as of July 12,
2005, between Borrowers and Agent, in form and substance satisfactory to Agent.

 

“Gaming Property” or “Gaming Properties”
means one or more of the foregoing:  (a) the
Diamond Jo Vessels; (b) the casino and racetrack located in Opelousas, St.
Landry Parish, Louisiana; (c) the Worth County Project, in each case, so
long as it is owned by Borrowers or a Restricted Subsidiary; and (d) any
other gaming facility or gaming operation owned and controlled or to be owned
and controlled after the Closing Date by Borrowers or a Restricted Subsidiary
and that contains, or that based upon a plan approved by the applicable Borrower’s
Managers will contain upon the completion of the construction or development
thereof, an aggregate of at least 500 slot machines or other gaming devices,
provided, in each case, that the property and assets (other than Excluded
Assets) of such Gaming Property constitute Collateral.

 

 “Loan
Documents” means this Agreement, the Control Agreements, the Diamond Jo
Ship Mortgage, the Disbursement Letter, the Fee Letter, the Guaranties, the
Intercompany Subordination Agreement, the Intercreditor Agreement, the Letters
of Credit, the Mortgages, the Management Fees Subordination Agreement, the
Guarantor Security Agreement, the Officers’ Certificate, the Trademark Security
Agreement, the Pledge Agreement, the Subordination of Preferred Fleet Mortgage,
the Subordination of Mortgage, any Commercial Tort Claim/Judgment Assignments,
any note or notes executed by a Borrower in connection with this Agreement and
payable to a member of the Lender Group, any subordination agreement, subordination
instrument or other subordination document executed and/or delivered by any
Person in favor of Agent or the Lender Group and any other agreement entered
into, now or in the future, by any Borrower or any Guarantor in favor of Agent
or the Lender Group in connection with this Agreement.

 

“Maximum Revolver Amount” means $50,000,000.

 

2

 

“Permitted Dispositions” means (a) sales
or other dispositions by any Borrower or any Guarantor of FF&E Collateral
that is substantially worn, damaged, or obsolete in the ordinary course of
business; provided, however, Agent shall have received 10 days’
prior written notice of such sale or disposition, and upon the consummation of
such sale or disposition, Borrowers shall repay the Term Loan in an amount
equal to the Net Proceeds for such Collateral (which repayment shall be applied
against the installments due under Section 2.2 in the inverse order
of maturity), (b) sales or other dispositions by any Borrower or any
Guarantor of Equipment (other than (i) Operating Assets and (ii) FF&E
Collateral) that is substantially worn, damaged, or obsolete in the ordinary
course of business; provided, however, Agent shall have received
10 days’ prior written notice of such sale or disposition, and upon the consummation
of such sale or disposition, Borrowers shall repay Advances, as applicable, in
an amount equal to the Net Proceeds for such Collateral, (c) sales by any
Borrower or any Guarantor of Inventory to buyers in the ordinary course of
business, (d) the use or transfer of money or Cash Equivalents by any
Borrower, any Restricted Subsidiary or any Guarantor in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents, (e) the
licensing by any Borrower, any Restricted Subsidiary or any Guarantor, on a
non-exclusive basis, of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business, (f) transfers of
assets by a Borrower or a Restricted Subsidiary to another Borrower or another
Restricted Subsidiary, (g) any exchange of Equipment for replacement
Equipment in the ordinary course of business, so long as such replacement
Equipment is of at least equal fair market value to the Equipment so replaced,
and (h) so long as no Event of Default has occurred and is then
continuing, dispositions of assets (other than, without the prior written
consent of Agent (in its sole and absolute discretion), FF&E Collateral) with
an aggregate fair market value not to exceed $1,000,000 during the term of this
Agreement.

 

“Restricted Subsidiaries” means any Subsidiary
of a Borrower which at the time of determination is not an Unrestricted
Subsidiary.

 

“Subordination of Mortgage” means those certain
subordination agreements relating to the Mortgages (as such term is defined in
the Indenture) executed by the Indenture Trustee in favor of Agent from time to
time, in form and substance satisfactory to Agent.

 

“Subordination of Preferred Fleet Mortgage”
means those certain subordinations relating to the Lien of the Indenture
Trustee on the Diamond Jo Vessels executed by the Indenture Trustee in favor of
Agent from time to time, in form and substance satisfactory to Agent.”

 

(b)                                 Section 1.1
of the Loan Agreement, Definitions, is hereby further modified and
amended by amending and restating clause (q) of the definition of “Permitted
Liens” in its entirety as follows:

 

3

 

“(q)                           leases
or subleases of Real Property (other than the Real Property comprising the Racino
Project, the Worth County Project and the Ice Harbor Facility) granted to
others that do not interfere in any material respect with the business of
Borrowers or any of the Restricted Subsidiaries or materially detract from the
value of the relative assets of Borrowers or any Restricted Subsidiary;”

 

(c)                                  Section 1.1
of the Loan Agreement, Definitions, is hereby further modified and
amended by adding the following definitions thereto in the appropriate
alphabetical order:

 

““DJW” means Diamond Jo Worth, LLC, a Delaware limited liability
company.

 

“Operating Assets” means, collectively (i) the Ice Harbor
Facility, (ii) the casino and racetrack and related Real Property owned by
OED and located in Opelousas, St. Landry Parish, Louisiana, and (iii) the
excursion gambling boat and related Real Property owned by DJW and located in
Northwood, Worth County, Iowa.

 

“Worth County Project” means the project to design, develop,
construct, equip and operate that certain excursion gambling boat to be owned
by DJW and located in Northwood, Worth County, Iowa.”

 

(d)                                 Section 2.1
of the Loan Agreement, Advances, is hereby modified and amended by amending
and restating subsection (b) of such Section in its entirety as
follows:

 

“(b)                           Anything
to the contrary in this Section 2.1 notwithstanding, Agent shall have the
right to establish reserves in such amounts, and with respect to such matters,
as Agent in its Permitted Discretion shall deem necessary or appropriate,
against the Borrowing Base, including reserves with respect to (i) sums
that Borrowers are required to pay (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable
under such leases) and has failed to pay under any Section of this
Agreement or any other Loan Document, and (ii) amounts owing by Borrowers
or their Subsidiaries to any Person to the extent secured by a Lien on, or
trust over, any of the Collateral (other than any existing Permitted Lien set
forth on Schedule P-1 which is specifically identified thereon as entitled
to have priority over the Agent’s Liens), which Lien or trust, in the Permitted
Discretion of Agent, likely would have a priority superior to the Agent’s Liens
(such as Liens or trusts in favor of landlords, warehousemen, carriers,
mechanics (including, without limitation, any Liens in favor of mechanics or
subcontractors arising in connection with the Racino Project or the Worth
County Project), materialmen, laborers, or suppliers, or Liens or trusts for ad
valorem, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral.”

 

(e)                                  Section 2.3(a) of
the Loan Agreement, Procedure for Borrowing, is hereby modified and
amended by amending and restating such Section in its entirety as follows:

 

4

 

“(a)                            Procedure for Borrowing. 
Each Borrowing (other than the funding of the Term Loan on the Closing
Date) shall be made by a written request by an Authorized Person delivered to
Agent (which notice must be received by Agent no later than 10:00 a.m.
(California time) 5 Business Days prior to the date that is the requested
Funding Date specifying (i) the amount of such Borrowing, (ii) the
requested Funding Date, which shall be a Business Day, and (iii) as
applicable, that such Borrowing is requested by DJW or is to be used in
connection with the Worth County Project; provided, however, that
in the case of a request for Swing Loan in an amount of $1,000,000, or less,
such notice will be timely received if it is received by Agent no later than
10:00 a.m. (California time) on the Business Day that is the requested
Funding Date).  At Agent’s election, in
lieu of delivering the above-described request in writing, any Authorized
Person may give Agent telephonic notice of such request by the required time,
with such telephonic notice to be confirmed in writing within 24 hours of the
giving of such notice.”

 

(f)                                    Section 2.3(f) of
the Loan Agreement, Settlement, is hereby modified and amended by
amending and restating clause (i) of such Section in its entirety as
follows:

 

“(i)                               Agent
shall request settlement (“Settlement”) with the Revolving Lenders on a
weekly basis, or on a more frequent basis if so determined by Agent, (1) on
behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for
itself, with respect to each Agent Advance, and (3) with respect to
Collections of Borrowers or their Subsidiaries received, as to each by
notifying the Revolving Lenders by telecopy, telephone, or other similar form
of transmission, of such requested Settlement, no later than 1:00 p.m.
(California time) on the Business Day immediately prior to the date of such
requested Settlement (the date of such requested Settlement being the “Settlement
Date”).  Such notice of a Settlement
Date shall include a summary statement of the amount of outstanding Advances,
Swing Loans and Agent Advances, as applicable, for the period since the prior
Settlement Date.  Subject to the terms
and conditions contained herein (including Section 2.3(c)(iii)):  (y) if a Lender’s balance of the Advances
(including Swing Loans and Agent Advances) exceeds such Lender’s Pro Rata Share
of the Advances (including Swing Loans and Agent Advances) as of a Settlement
Date, then Agent shall, by no later than 12:00 p.m. (California time) on
the Settlement Date, transfer in immediately available funds to the account of
such Lender as such Lender may designate, an amount such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its Pro
Rata Share of the Advances (including Swing Loans and Agent Advances); and (z)
if a Lender’s balance of the Advances (including Swing Loans and Agent
Advances) is less than such Lender’s Pro Rata Share of the Advances (including
Swing Loans and Agent Advances) as of a Settlement Date, such Lender shall, by
no later than 12:00 p.m. (California time) on the Settlement Date,
transfer in immediately available funds to the Agent’s Account, an amount such
that each such Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances (including Swing Loans and
Agent Advances).  Such amounts made available
to Agent under clause (z) of the immediately preceding 

 

5

 

sentence shall be applied against the amounts of the applicable Swing
Loans or Agent Advances and, together with the portion of such Swing Loans or
Agent Advances representing Swing Lender’s Pro Rata Share thereof, shall
constitute Advances of such Lenders.  If
any such amount is not made available to Agent by any Lender on the Settlement
Date applicable thereto to the extent required by the terms hereof, Agent shall
be entitled to recover for its account such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate.”

 

(g)                                 Section 2.4(b) of
the Loan Agreement, Apportionment, Application and Reversal of Payments,
is hereby modified and amended by amending and restating clause (i) of
such Section in its entirety as follows:

 

“(i)                               Except
as otherwise provided with respect to Defaulting Lenders and except as
otherwise provided in the Loan Documents (and letter agreements between Agent
and individual Lenders), aggregate principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid principal
balance of the Obligations to which such payments relate held by each Lender,
after giving effect to any letter agreements between Agent and individual
Lenders) and payments of fees and expenses (other than fees or expenses that
are for Agent’s separate account), shall be apportioned ratably among the
Lenders having a Pro Rata Share of the type of Commitment or Obligation to
which a particular fee relates.  All
payments shall be remitted to Agent and all such payments (other than payments
received while no Default or Event of Default has occurred and is continuing
and which relate to the payment of principal or interest of specific
Obligations or which relate to the payment of specific fees), and all proceeds of
Collateral received by Agent shall be applied as follows:

 

(A)                              first,
to pay any Lender Group Expenses then due to Agent under the Loan Documents,
until paid in full,

 

(B)                                second,
to pay any Lender Group Expenses then due to the Lenders under the Loan Documents,
on a ratable basis, until paid in full,

 

(C)                                third,
to pay any fees then due to Agent (for its separate accounts, after giving
effect to any letter agreements between Agent and individual Lenders) under the
Loan Documents until paid in full,

 

(D)                               fourth,
to pay any fees then due to any or all of the Lenders (after giving effect to
any letter agreements between Agent and individual Lenders) under the Loan
Documents, on a ratable basis, until paid in full,

 

(E)                                 fifth,
ratably to pay interest due in respect of all Agent Advances until paid in
full,

 

(F)                                 sixth,
ratably to pay interest due in respect of the Advances (other than Agent
Advances), the Swing Loans, and the Term Loan until paid in full,

 

6

 

(G)                                seventh,
ratably to pay the principal of all Agent Advances until paid in full,

 

(H)                               eighth,
so long as no Event of Default has occurred and is continuing, ratably to pay
all principal amounts then due and payable (other than as a result of an
acceleration thereof) with respect to the Term Loan until paid in full,

 

(I)                                    ninth,
to pay the principal of all Swing Loans until paid in full,

 

(J)                                   tenth,
so long as no Event of Default has occurred and is continuing, to pay principal
of all Advances until paid in full,

 

(K)                               eleventh,
if an Event of Default has occurred and is continuing, ratably (i) to pay
the principal of all Advances until paid in full, (ii) to pay the
outstanding principal balance of the Term Loan (in the inverse order of the
maturity of the installments due thereunder) until the Term Loan is paid in
full, and (iii) to Agent, to be held by Agent, for the ratable benefit of
Agent and those Lenders having a Revolver Commitment, as cash collateral in an
amount up to 105% of the then extant Letter of Credit Usage until paid in full,

 

(L)                                 twelfth,
if an Event of Default has occurred and is continuing, to pay any other
Obligations, and

 

(M)                            thirteenth,
to Borrowers (to be wired to the Designated Account) or such other Person
entitled thereto under applicable law.”

 

(h)                                 Section 2.5
of the Loan Agreement, Overadvances, is hereby modified and amended by
amending and restating such Section in its entirety as follows:

 

“2.5                         Overadvances.  If, at any time or for any reason, the amount
of Obligations (other than the FF&E Obligations) owed by Borrowers to the
Lender Group pursuant to Sections 2.1(a) and 2.12 is greater
than either the Dollar or percentage limitations set forth in Sections 2.1(a) or
2.12 (an “Overadvance”), Borrowers immediately shall pay to
Agent, in cash, the amount of such excess, which amount shall be used by Agent
to reduce the Obligations (other than the FF&E Obligations) in accordance
with the priorities set forth in Section 2.4(b).  In addition, Borrowers hereby promise to pay
the Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to Agent as and when due and payable under the terms of this
Agreement and the other Loan Documents.”

 

(i)                                     Section 2.10
of the Loan Agreement, Maintenance of Loan Account; Statements of
Obligations, is hereby modified and amended by amending and restating such Section in
its entirety as follows:

 

“2.10                     Maintenance of Loan Account; Statements of
Obligations.  Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”)
on which Borrowers will be charged with the Term Loan and all

 

7

 

Advances
(including Agent Advances and Swing Loans) made by Agent, Swing Lender or the
Lenders to Borrowers or for Borrowers’ account, the Letters of Credit issued by
Agent for Borrowers’ account, and with all other payment Obligations hereunder
or under the other Loan Documents, including, accrued interest, fees and
expenses, and Lender Group Expenses.  In
accordance with Section 2.8, the Loan Account will be credited with
all payments received by Agent from Borrowers or for Borrowers’ account.  Agent shall render statements regarding the
Loan Account to Borrowers, including principal, interest, fees, and including
an itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrowers and the Lender
Group unless, within 30 days after receipt thereof by Borrowers, a Borrower
shall deliver to Agent written objection thereto describing the error or errors
contained in any such statements.”

 

(j)                                     Section 2.11(b) of
the Loan Agreement, Audit, Appraisal, and Valuation Charges, is hereby
modified and amended by amending and restating such Section in its
entirety as follows:

 

“(b)                           Audit, Appraisal, and Valuation Charges.  For the separate account of Agent, audit,
appraisal, and valuation fees and charges as follows, (i) a fee of $850
per day, per auditor, plus out-of-pocket expenses for each financial audit of a
Borrower performed by personnel employed by Agent, (ii) a fee of $1,500
per day per appraiser, plus out-of-pocket expenses, for each appraisal of the
Collateral performed by personnel employed by Agent, and (iii) the actual
charges paid or incurred by Agent if it elects to employ the services of one or
more third Persons to perform financial audits of Borrowers, to appraise the
Collateral, or any portion thereof, or to assess a Borrower’s business
valuation, provided that so long as no Event of Default has occurred in any 12
consecutive month period, Borrowers shall not be obligated to reimburse Agent
for the costs and expenses of more than 21 audit days in any such 12
consecutive month period, and”

 

(k)                                  Section 2.11(c) of
the Loan Agreement, Unused Line Fee, is hereby modified and amended by
amending and restating such Section in its entirety as follows:

 

“(c)                            Unused Line Fee.  On the first day of each quarter during the
term of this Agreement, an unused line fee (for the account of the Revolving
Lenders in accordance with their Pro Rata Shares of the Revolver Commitment) in
an amount equal to (i) for any preceding quarter in which the average
Revolver Usage during such quarter was less than $20,000,000, 0.625% per annum,
(ii) for any preceding quarter in which the average Revolver Usage during
such quarter was equal to or greater than $20,000,000 but less than $35,000,000,
0.500% per annum and (iii) for any preceding quarter in which the average
Revolver Usage during such quarter was equal to or greater than $35,000,000,
0.375% per annum, in each case, times the result of (x) the Maximum Revolver
Amount, less (y) the sum of (1) the average Daily Balance of Advances that
were outstanding during 

 

8

 

the immediately preceding quarter, plus (2) the average Daily
Balance of the Letter of Credit Usage during the immediately preceding quarter.”

 

(l)                                     Section 2.12
of the Loan Agreement, Letters of Credit, is hereby modified and amended
by amending and restating subsection (a) of such Section in its
entirety as follows:

 

“(a)                            Subject
to the terms and conditions of this Agreement, Agent agrees to issue letters of
credit for the account of Borrowers (each, an “L/C”) or to purchase
participations or execute indemnities or reimbursement obligations (each such
undertaking, an “L/C Undertaking”) with respect to letters of credit
issued by an Underlying Issuer (as of the Closing Date, the prospective
Underlying Issuer is to be Wells Fargo) for the account of Borrowers.  To request the issuance of an L/C or an L/C
Undertaking (or the amendment, renewal, or extension of an outstanding L/C or
L/C Undertaking), a Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by
Agent) to Agent (reasonably in advance of the requested date of issuance,
amendment, renewal, or extension) a notice requesting the issuance of an L/C or
L/C Undertaking, or identifying the L/C or L/C Undertaking to be amended,
renewed, or extended, the date of issuance, amendment, renewal, or extension,
the date on which such L/C or L/C Undertaking is to expire, the amount of such
L/C or L/C Undertaking, the name and address of the beneficiary thereof (or of
the Underlying Letter of Credit, as applicable), and such other information as
shall be necessary to prepare, amend, renew, or extend such L/C or L/C
Undertaking.  If requested by Agent,
Borrowers also shall be an applicant under the application with respect to any
Underlying Letter of Credit that is to be the subject of an L/C
Undertaking.  Agent shall have no
obligation to issue a Letter of Credit if any of the following would result
after giving effect to the requested Letter of Credit:

 

(i)                                     the
Letter of Credit Usage would exceed the Borrowing Base less the then extant
amount of outstanding Advances, or

 

(ii)                                  the
Letter of Credit Usage would exceed $10,000,000, or

 

(iii)                               the
Letter of Credit Usage would exceed the Maximum Revolver Amount less the then
extant amount of outstanding Advances.

 

Borrowers and Agent acknowledge and agree that certain Underlying
Letters of Credit may be issued to support letters of credit that already are
outstanding as of the Closing Date.  Each
Letter of Credit (and corresponding Underlying Letter of Credit) shall be in
form and substance acceptable to Agent (in the exercise of its Permitted
Discretion), including the requirement that the amounts payable thereunder must
be payable in Dollars.  If Agent is obligated
to advance funds under a Letter of Credit, Borrowers shall immediately
reimburse such L/C Disbursement to Agent by paying to Agent an amount equal to
such L/C Disbursement not later than 11:00 a.m., California time, on the
date that such L/C Disbursement is made, if any Borrower shall have received
written or telephonic 

 

9

 

notice of such L/C Disbursement prior to 10:00 a.m., California
time, on such date, or, if such notice has not been received by any Borrower
prior to such time on such date, then not later than 11:00 a.m.,
California time, on the (i) Business Day that any Borrower receives such
notice, if such notice is received prior to 10:00 a.m., California time,
on the date of receipt, and, in the absence of such reimbursement, the L/C
Disbursement immediately and automatically shall be deemed to be an Advance
hereunder and, thereafter, shall bear interest at the rate then applicable to Advances
under Section 2.6.  To the
extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers’
obligation to reimburse such L/C Disbursement shall be discharged and replaced
by the resulting Advance.”

 

(m)                               Section 2.16(d) of
the Loan Agreement, Special Provisions Applicable to LIBOR Rate, is hereby
modified and amended by deleting the reference to “LIBOR Advances” in clause (ii) of
such Section and in place thereof inserting “LIBOR Rate Loans”.

 

(n)                                 Section 5.1
of the Loan Agreement, No Encumbrances, is hereby modified and amended
by amending and restating such Section in its entirety as follows:

 

“5.1                         No
Encumbrances.  Each Borrower and
its Subsidiaries has good and indefeasible title to their personal property
assets and good and marketable title to their Real Property, including the
Diamond Jo Vessels and the Real Property comprising the Racino Project, the Ice
Harbor Facility, and the Worth County Project, in each case free and clear of
Liens except for Permitted Liens and except for defects in title that do not
interfere in any material respect with its ability to conduct its business or
to utilize such property for its intended purpose.”

 

(o)                                 Section 5.22
of the Loan Agreement, Senior Debt, is hereby modified and amended by
amending and restating such Section in its entirety as follows:

 

“5.22                  Senior
Debt.  (a) This Agreement is
the New Revolving Agreement (as defined in the Intercreditor Agreement), (b) the
Term Loan is a refinancing of the obligations under the FF&E Credit
Agreement (as defined in the Intercreditor Agreement), (c) all Obligations
constitute Credit Facility Indebtedness (as defined in the Intercreditor
Agreement), and (d) the Agent’s Liens on the Collateral are “Permitted
Liens” as defined in and under the Indenture.”

 

(p)                                 Section 5
of the Loan Agreement, Representations and Warranties, is hereby
modified and amended by adding the following to the end of such Section:

 

“5.33                  Worth
County Project.  No asset
comprising the Worth County Project is a vessel or other seagoing vehicle subject
to registration with the State of Iowa, the United States or any similar
Governmental Authority.”

 

(q)                                 Section 6.2
of the Loan Agreement, Reporting, is hereby modified and amended by
amending and restating subsection (a) of such Section in its
entirety as follows:

 

10

 

“(a) a detailed itemized report reflecting the prior months and
year-to-date revenues from the Diamond Jo Vessels, any Gaming Vessels, the
racetrack, off-track betting parlors (including video poker revenues) and
out-of-state satellite operations,”

 

(r)                                    Section 6.2
of the Loan Agreement, Reporting, is hereby further modified and amended
by amending and restating subsection (c) of such Section in its
entirety as follows:

 

“(c) a detailed itemized report showing actual and estimated
constructions costs and a statement reflecting the construction related costs
incurred or reasonably expected to be incurred by Borrowers in connection with
the Worth County Project prior to or through the construction completion date
and any variances thereof,”

 

(s)                                  Section 6.3
of the Loan Agreement, Financial Statements, Reports, Certificates, is
hereby modified and amended by amending and restating subsection (g) of
such Section in its entirety as follows:

 

“(g)                           as
soon as any Borrower has knowledge that the construction of the Worth County
Project cannot be completed, or has knowledge that such Borrower cannot meet
its obligations under any construction documents, notice thereof and a
statement of the curative action that Borrowers propose to take with respect thereto,”

 

(t)                                    Section 6.3
of the Loan Agreement, Financial Statements, Reports, Certificates, is
hereby further modified and amended by amending and restating subsection (h) of
such Section in its entirety as follows:

 

“(h)                           as
soon as any Borrower has knowledge thereof, notice of any proposed legislation
or administrative action specifically affecting any Borrower’s or any
Subsidiary of a Borrower’s gaming activities, the Racino Project, the Ice
Harbor Facility or the Worth County Project submitted to the floor for business
before any Governmental Authority in the state of Louisiana or Iowa (including
the state legislature or any committee thereof),”

 

(u)                                 Section 7.1,
Indebtedness, is hereby modified and amended by amending and restating
subsection (b) of such Section in its entirety as follows:

 

“(b)                           Indebtedness
set forth on Schedule 7.1(b);”

 

(v)                                 Section 7.1,
Indebtedness, is hereby further modified and amended by amending and
restating subsection (c) of such Section in its entirety as
follows:

 

“(c)                            Indebtedness
represented by Capitalized Lease Obligations or Purchase Money Obligations; provided,
that (i) neither OED nor DJO shall in any way be or become obligated with
respect to any such Indebtedness incurred in connection with the Worth County
Project, (ii) no Advances hereunder are utilized for the purchase or lease
of FF&E financed with such Indebtedness, and 

 

11

 

(iii) the aggregate principal amount of such Indebtedness
outstanding at any time does not exceed an amount equal to $7,500,000 times the
number of Gaming Properties owned and controlled by any of the Borrowers or
their respective Subsidiaries on the date of incurrence of such Indebtedness;
and provided, further, that the aggregate principal amount of
such Indebtedness secured by or incurred in connection with any Gaming Property
shall not exceed $10,000,000 at each such Gaming Property;”

 

(w)                               Section 7.4
of the Loan Agreement, Disposal of Assets, is hereby modified and
amended by amending and restating subsection (a) of such Section in
its entirety as follows:

 

“(a)                            Make
any sale, lease, exchange, or other disposition, in one or a series of related
transactions, of all or any portion of the assets of Borrowers (other than the
sale or other disposition of any asset that is a Permitted Disposition) that
compose the Ice Harbor Facility, the Racino Project or the Worth County
Project;”

 

(x)                                   Section 7.4
of the Loan Agreement, Disposal of Assets, is hereby further modified
and amended by deleting “(other than an Asset Sale comprised of any assets that
compose the Ice Harbor Facility or the Racino Project)” from subsection (b) of
such Section and in place thereof inserting “(other than an Asset Sale (i) comprised
of any assets that compose the Ice Harbor Facility, the Racino Project or the
Worth County Project or (ii) to the extent not otherwise covered in (i) above,
of any FF&E Collateral)”.

 

(y)                                 Section 7.4
of the Loan Agreement, Disposal of Assets, is hereby further modified
and amended by adding the following clause (d) to the end of such Section:

 

“(d)                           Notwithstanding
anything to the contrary contained in this Section 7.4, the
Borrowers may make any sale, lease, exchange, or other disposition, in one or a
series of related transactions, of all or any portion of the FF&E
Collateral with the prior written consent of Agent (in its sole and absolute
discretion).”

 

(z)                                   Section 7.8
of the Loan Agreement, Prepayments and Amendments, is hereby modified
and amended by amending and restating subclause (ii) of clause (b) of
such Section in its entirety as follows:

 

“(ii) directly or indirectly, amend, modify, alter, increase or
change any of the terms or conditions of any Management Agreement for which an
executed subordination agreement is required to be delivered pursuant to Section 7.21,
the Fixed Price Contract, the Lease, the Ice Harbor Parking Agreement or any
Governing Documents of a Borrower or its Subsidiary in any manner that would
make the covenants, defaults or other provisions thereof more burdensome on any
Borrower or any Guarantor or otherwise have a material adverse effect on the
interests of the Lender Group”

 

(aa)                            Section 7.11
of the Loan Agreement, Restricted Payments, is hereby modified and
amended by amending and restating subclause (ii) of clause (4) of the
second paragraph of such Section in its entirety as follows:

 

12

 

“(ii) so long as clause (a) above is satisfied, distributions
pursuant to, and in accordance with, Management Agreements in effect from time
to time, provided that (A) to the extent a subordination agreement
with respect to such Management Agreement is required to be entered into
pursuant to Section 7.21, such distributions are permitted by such
subordination agreement and (B) the aggregate amount payable to PGP or any
other Excluded Person or Affiliate (excluding any payments (x) permitted by Section 7.16
and (y) payable under employment agreements entered into in the ordinary course
of business for which an executed subordination agreement is not required to be
delivered pursuant to Section 7.21), pursuant to the Management
Agreements or any employment, consulting or similar agreements or arrangements
for any fiscal year shall not exceed the lesser of (A) 4.00% of Combined
EBITDA for the immediately preceding fiscal year, or (B) $4,000,000,”

 

(bb)                          Section 7.11
of the Loan Agreement, Restricted Payments, is hereby further modified
and amended by deleting the proviso following subclause (iii) of clause (4) of
such Section in its entirety.

 

(cc)                            Section 7.11
of the Loan Agreement, Restricted Payments, is hereby modified and
amended by deleting “and” from the end of clause (8) of such Section, by
deleting “.” from the end of clause (9) of such Section and in place
thereof inserting “; and” and by adding the following clause (10) to the
end of such Section:

 

“(10)                      directly
(or indirectly by way of a distribution to Parent and a concurrent contribution
by Parent to a Borrower), Restricted Payments by a Borrower to another
Borrower.”

 

(dd)                          Section 7.20(a) of
the Loan Agreement, Minimum Combined EBITDA, is hereby modified and
amended by amending and restating such Section in its entirety as follows:

 

(a)                                  Minimum Combined EBITDA.  Fail to maintain an aggregate
amount of Combined EBITDA plus, for the relevant period, the premiums paid in
connection with the April 2004 repurchase of a portion of the notes issued
pursuant to the OED Indenture and the April 2004 redemption of the notes
issued pursuant to the PGC Indenture, measured on a fiscal quarter-end basis,
of at least the required amount set forth in the following table for the period
set forth opposite thereto:

 

	
  Applicable
  Amount

  	
   

  	
  Period

  
	
  $26,000,000

  	
   

  	
  12 fiscal month period
  ended March 31, 2005

  
	
  $30,000,000

  	
   

  	
  12 fiscal month
  period ended June 30, 2005

  
	
  $32,000,000

  	
   

  	
  12 fiscal month
  period ended September 30, 2005

  
	
  $35,000,000

  	
   

  	
  12 fiscal month
  period ended December 31, 2005, and each fiscal quarter ended thereafter

  

 

13

 

(ee)                            Section 7.21
of the Loan Agreement, Management Agreements, is hereby modified and
amended by amending and restating such Section in its entirety as follows:

 

“7.21                  Management
Agreements.  Enter into any
Management Agreement with an Excluded Person or any other Person beneficially owning
in excess of five percent (5%) of the voting equity securities of Parent
without delivering to Agent (a) a subordination agreement, in form and
substance satisfactory to Agent, executed by the parties to such Management
Agreement, and (b) a copy of such fully executed Management Agreement.”

 

(ff)                                Section 8
of the Loan Agreement, Events of Default, is hereby modified and amended
by amending and restating Section 8.16 of such Section in its
entirety as follows:

 

“8.16.               If any Governmental Authority (including
the Louisiana state legislature) restricts the ability of any Borrower to
operate, or restricts, limits or prohibits any Borrower from operating, its
gaming business as conducted on the Closing Date or operating the Racino
Project or the Ice Harbor Facility in the manner contemplated on the Closing
Date or operating the Worth County Project in the manner contemplated on July 12,
2005, and such restriction, limit or prohibition results in a Material Adverse
Change;”

 

(gg)                          Section 8
of the Loan Agreement, Events of Default, is hereby further modified and
amended by amending and restating Section 8.17 of such Section in its
entirety as follows:

 

“8.17.               If Agent fails to receive evidence of,
on or prior to August 31, 2006, the completion of construction of the gambling
and casino facility at the Worth County Project location;”

 

(hh)                          The
Exhibits to the Loan Agreement are hereby modified and amended by adding to
such Exhibits in the appropriate order the Exhibit 2.3 attached hereto.

 

(ii)                                  Schedules
C-1, Commitments, D-1, Designated Account, P-1, Permitted
Liens, P-2, Existing Investments, R-1, Real Property Collateral,
2.12, Existing Letters of Credit, 5.5, Locations of Equipment,
5.7, Jurisdiction; Chief Executive Office; FEIN; State Organizational No.;
Commercial Tort Claims, 5.8(b), Capitalization of Borrowers, 5.8(c),
Capitalization of Borrowers’ Subsidiaries, 5.8(e), Restricted
Subsidiaries; Unrestricted Subsidiaries, 5.10, Litigation, 5.14, Environmental
Matters, 5.16, Intellectual Property, 5.18, Demand Deposit
Accounts, 5.20, Existing Indebtedness, 5.21, Licenses and Permits,
and 7.14, Affiliate Transactions, to the Loan Agreement are hereby modified
and amended by replacing such Schedules with the corresponding Schedules
attached hereto.

 

(jj)                                  The
Schedules to the Loan Agreement are hereby further modified and amended by
adding to such Schedules in the appropriate order the Schedule 7.1(b) attached
hereto.

 

14

 

2.                                       Amendments
to the Loan Agreement upon the DJW Release Date.

 

(a)                                  Effective
automatically upon the occurrence of the DJW Release Date (as defined below):

 

(i)                                     Each
of the following shall occur:  (A) DJW
shall be released from any and all Obligations under the Loan Documents, (B) DJW
shall no longer be a Borrower under any of the Loan Documents (and each
reference to the Borrowers or a Borrower in any Loan Document shall be deemed
not to refer to DJW), (C) the memberships interests in DJW shall be
released from the Lien of the Pledge Agreement (and any certificates
representing such membership interests in the possession of Agent shall be
returned by Agent to the Parent promptly after the DJW Release Date), and (D) any
Lien on any assets of DJW shall be terminated and released (and from time to
time after the DJW Release Date, Agent shall execute and deliver to DJW, at the
sole expense of the Borrowers, such other documents, instruments, assignments
and other releases (including UCC-3 termination statements) reasonably
requested by the Borrowers to effect the foregoing); and

 

(ii)                                  The
Loan Agreement shall be modified and amended by deleting or rendering
ineffective, as the context may require, all references to “DJW” and “the Worth
County Project” therein, and in furtherance of the foregoing:

 

(A)                              Section 1.1
of the Loan Agreement, Definitions, shall be modified and amended by
deleting the definition of “Operating Assets” in its entirety from such Section and
inserting in lieu thereof the following:

 

““Operating
Assets” means, collectively (i) the Ice Harbor Facility,  and (ii) the casino and racetrack and
related Real Property owned by OED and located in Opelousas, St. Landry Parish,
Louisiana.”

 

(B)                                Section 1.1
of the Loan Agreement, Definitions, shall be further modified and
amended by deleting the definitions of “DJW” and “Worth County Project” from
such Section in their respective entirety.

 

(C)                                The
Loan Agreement shall be modified and amended by deleting Sections 5.33, 6.2(c),
6.3(g), and 8.17 of the Loan Agreement in their respective entirety.

 

(b)                                 As
used in this Section 2, “DJW Release Date” shall mean the first
date on which all of the following shall be true:

 

(i)                                     Agent
shall have received (i) a copy of the written designation of DJW as an “Unrestricted
Subsidiary” pursuant to, and in compliance with, the Indenture and (ii) a
copy of any agreements, certificates and other documents that are executed and
delivered evidencing the release of (i) DJW from its Subsidiary Guaranty
(as defined in the Indenture) and (ii) the assets of DJW from the Security
Documents (as defined in the Indenture);

 

(ii)                                  any
Advances made to DJW on or after the date of this Amendment (and all accrued
interest thereon) shall have been paid in full; and

 

15

 

(iii)                               no
Default or Event of Default shall be continuing.

 

(c)                                  in
connection with the release of DJW contemplated by this Section 2, Parent
shall be permitted to contribute all its Equity Interests in DJW to a
wholly-owned subsidiary of Parent that is not a Borrower, provided that,
immediately following such contribution, DJW and such Subsidiary are designated
as “Unrestricted Subsidiaries” pursuant to, and in compliance with, the
Indenture.

 

3.                                       Acknowledgment
and Covenant of Borrowers Regarding Real Property Collateral.  Each of Borrowers hereby acknowledges its
obligation to create, perfect and insure Liens in favor of Agent on any Real
Property acquired after the Closing Date not currently subject to a Lien in
favor of Agent and covenants to fulfill such obligation within 60 days after
the closing of this Amendment (or such longer period as Agent approves in
writing, in its sole and absolute discretion). 
In furtherance of the foregoing, Borrowers shall execute and deliver all
agreements, instruments and other documents required by Section 4.4 of the
Loan Agreement and deliver Mortgage Policies for such Real Property Collateral
in form and substance satisfactory to Agent.

 

4.                                       No
Other Amendments or Waivers.  Except
in connection with the amendments set forth above, the execution, delivery and
effectiveness of this Amendment shall not operate as an amendment of any right,
power or remedy of Agent or the Lenders under the Loan Agreement or any of the
other Loan Documents, nor constitute a waiver of any provision of the Loan Agreement
or any of the other Loan Documents. 
Except for the amendments set forth above, the text of the Loan
Agreement and all other Loan Documents shall remain unchanged and in full force
and effect and Borrowers hereby ratify and confirm their respective obligations
thereunder.  This Amendment shall not
constitute a modification of the Loan Agreement or any of the other Loan
Documents or a course of dealing with Agent or the Lenders at variance with the
Loan Agreement or the other Loan Documents such as to require further notice by
Agent or the Lenders to require strict compliance with the terms of the Loan
Agreement and the other Loan Documents in the future, except as expressly set
forth herein.  Borrowers acknowledge and
expressly agree that Agent and the Lenders reserve the right to, and do in
fact, require strict compliance with all terms and provisions of the Loan
Agreement and the other Loan Documents, as amended herein.  Borrowers have no knowledge of any challenge
to Agent’s or any Lender’s claims arising under the Loan Documents, or to the
effectiveness of the Loan Documents.

 

5.                                       Conditions
Precedent to Effectiveness.  This
Amendment shall become effective as of the date hereof when, and only when, Agent
shall have received, in form and substance satisfactory to Agent:

 

(a)                                  counterparts
of this Amendment duly executed and delivered by Borrowers, Agent and the
Lenders;

 

(b)                                 all
licenses (including Gaming Licenses (other than liquor licenses)), approvals or
evidence of other actions required by any Governmental Authority, including the
Louisiana Regulatory Authorities and the Iowa Gaming Authorities, necessary to
own and operate the Worth County Project;

 

16

 

(c)                                  the
amended and restated fee letter among Borrowers and Agent, duly executed and
delivered by Borrowers and Agent;

 

(d)                                 updated
Schedules C-1, D-1, P-1, P-2, R-1, 2.12, 5.5, 5.7, 5.8(b), 5.8(c), 5.8(e),
5.10, 5.14, 5.16, 5.18, 5.20, 5.21, and 7.14 of the Loan Agreement;

 

(e)                                  amendments,
each in form and substance satisfactory to Agent, modifying and amending the
Diamond Jo Ship Mortgage, the Mortgages, the Pledge Agreement and the
Intercompany Subordination Agreement;

 

(f)                                    an
acknowledgment with respect to the Intercreditor Agreement duly executed by
DJW;

 

(g)                                 a
Subordination of Mortgage and a Subordination of Preferred Fleet Mortgage duly
executed by the Indenture Trustee for each Mortgage (as defined in the
Indenture)  in place on the date of the
Loan Agreement;

 

(h)                                 a
letter duly executed by the Indenture Trustee with respect to the Maximum
Credit Facility Amount (as defined in the Intercreditor Agreement);

 

(i)                                     opinions
of Borrowers’ and Guarantors’ counsel (including, without limitation, admiralty
counsel, real estate counsel and regulatory counsel) in form and substance
satisfactory to Agent, such opinions to include (i) that the increase in
the Maximum Revolver Amount is permitted to be made under the Indenture and
that such increase constitutes Credit Facility Indebtedness (as defined in the
Intercreditor Agreement) and (ii) regulatory opinions as to the due
issuance and valid existence of Borrowers’ Gaming Licenses;

 

(j)                                     evidence
in form and substance satisfactory to Agent that Borrowers shall have received
all licenses (including the Gaming Licenses), approvals or evidence of other
actions required by any Governmental Authority, including the Louisiana
Regulatory Authorities and the Iowa Gaming Authorities, in connection with the
execution and delivery by Borrowers of this Amendment or with the consummation
of the transactions contemplated hereby;

 

(k)                                  a
detailed budget on construction costs at the Worth County Project, in form and
substance satisfactory to Agent; and

 

(l)                                     such
other information, documents, instruments or approvals as Agent or Agent’s
counsel may reasonably require; provided, however, in no event
shall the Borrowers be required to deliver a Mortgage Policy with respect to
any Real Property Collateral owned by DJW until the date that is 30 days
following the date of this Amendment.

 

6.                                       Representations
and Warranties of Borrowers.  In
consideration of the execution and delivery of this Amendment by Agent and the
Lenders, each Borrower hereby represents and warrants in favor of Agent and the
Lenders as follows:

 

(a)                                  As
to each Borrower, the execution, delivery, and performance by such Borrower of
this Amendment have been duly authorized by all necessary action on the part of
such Borrower;

 

17

 

(b)                                 As
to each Borrower, the execution, delivery, and performance by such Borrower of
this Amendment do not and will not (i) violate any provision of federal,
state, or local law or regulation applicable to any Borrower, the Governing
Documents of any Borrower, or any order, judgment, or decree of any court or
other Governmental Authority binding on any Borrower, (ii) conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any material contractual obligation of any Borrower (including
any of the Senior Note Documents), (iii) result in or require the creation
or imposition of any Lien of any nature whatsoever upon any properties or
assets of any Borrower, other than Permitted Liens, or (iv) require any
approval of any Borrower’s members or shareholders or any approval or consent
of any Person under any material contractual obligation of any Borrower;

 

(c)                                  The
execution, delivery, and performance by such Borrower of this Amendment do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority or other Person,
other than any consent or approval that has been obtained and remains in full
force and effect;

 

(d)                                 As
to each Borrower, the Loan Documents to which such Borrower is a party (including,
without limitation, the Loan Agreement, this Amendment and all other documents
contemplated hereby), when executed and delivered by such Borrower, will be the
legally valid and binding obligations of such Borrower, enforceable against
such Borrower in accordance with their respective terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally;

 

(e)                                  No
Default or Event of Default exists under the Loan Agreement or the other Loan
Documents;

 

(f)                                    No
Uniform Commercial Code Financing Statement has been filed in any jurisdiction
naming DJW as debtor and U.S. Bank National Association, as trustee, as secured
party; and

 

(g)                                 As
of the date hereof, all representations and warranties of Borrowers set forth
in the Loan Agreement and the other Loan Documents are true, correct and
complete in all material respects, except to the extent such representation or
warranty expressly relates to an earlier date (in which case such statement was
true and correct on and as of such earlier date).

 

7.                                       Counterparts.  This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement.  In proving this Amendment in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is
sought.  Any signatures delivered by a
party by facsimile transmission or by e-mail transmission of an adobe file
format document (also known as a PDF file) shall be deemed an original
signature hereto.

 

8.                                       Reference
to and Effect on the Loan Documents. 
Upon the effectiveness of this Amendment, on and after the date hereof,
each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof”
or words of like import referring to the Loan Agreement, and 

 

18

 

each
reference in the other Loan Documents to “the Loan Agreement” “thereunder,” “thereof”
or words of like import referring to the Loan Agreement, shall mean and be a
reference to the Loan Agreement as amended hereby.

 

9.                                       Affirmation
of Guaranty.  By executing this
Amendment, each Guarantor hereby acknowledges, consents and agrees that all of
its obligations and liability under the Guaranty to which it is a party remain
in full force and effect, and that the execution and delivery of this Amendment
and any and all documents executed in connection herewith shall not alter,
amend, reduce or modify its obligations and liability under such Guaranty or
any of the other Loan Documents to which it is a party.

 

10.                                 Costs,
Expenses and Taxes.  Borrowers agree,
jointly and severally, to pay on demand all costs and expenses in connection
with the preparation, execution, and delivery of this Amendment and the other
instruments and documents to be delivered hereunder, including, without
limitation, the fees and out-of-pocket expenses of counsel for Agent with
respect thereto and with respect to advising Agent as to its rights and
responsibilities hereunder and thereunder. 
In addition, Borrowers agree, jointly and severally, to pay any and all
stamp and other taxes payable or determined to be payable in connection with
the execution and delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and agree to save Agent and the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.  Borrowers hereby acknowledge and agree that Agent
may, without prior notice to Borrowers, charge such costs and fees to Borrowers’
Loan Account pursuant to Section 2.6(d) of the Loan Agreement.

 

11.                                 Section Titles.  The section titles contained in this
Amendment are included for the sake of convenience only, shall be without
substantive meaning or content of any kind whatsoever, and are not a part of
the agreement between the parties.

 

12.                                 Entire
Agreement.  This Amendment and the
other Loan Documents constitute the entire agreement and understanding between
the parties hereto with respect to the transactions contemplated hereby and
thereby and supersede all prior negotiations, understandings and agreements
between such parties with respect to such transactions.

 

13.                                 GOVERNING
LAW.  THE VALIDITY, INTERPRETATION
AND ENFORCEMENT OF THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

 

14.                                 Loan
Document.  This Amendment shall be
deemed to be a Loan Document for all purposes.

 

[Remainder of page intentionally left blank.]

 

19

 

IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment
as of the day and year first written above.

 

	
  BORROWERS:

  	
  DIAMOND JO, LLC,
  a Delaware limited liability 

  company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Natalie Schramm

  	
   

  
	
   

  	
   

  	
  Natalie Schramm

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE OLD EVANGELINE DOWNS,
  L.L.C.,

  	
   

  
	
   

  	
  a Louisiana limited
  liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Natalie Schramm

  	
   

  
	
   

  	
   

  	
  Natalie Schramm

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DIAMOND JO WORTH, LLC,
  a Delaware

  limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Natalie Schramm

  	
   

  
	
   

  	
   

  	
  Natalie Schramm

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGENT AND

  	
   

  	
   

  
	
  LENDERS:

  	
  WELLS FARGO FOOTHILL, INC.,

  	
   

  
	
   

  	
  a California
  corporation, as Agent and as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Larissa Megadichian

  	
   

  
	
   

  	
   

  	
  Larissa Megadichian

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  D.B. ZWIRN SPECIAL
  OPPORTUNITIES

  FUND, L.P. (formerly known as Highbridge/Zwirn Special
  Opportunities Fund, L.P.) a Delaware limited partnership, as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  D.B. Zwirn Partners,
  LLC, its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Zwirn Holdings, LLC,
  its

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Perry A. Gruss

  	
   

  
	
   

  	
   

  	
  Perry A. Gruss

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signatory

  	
   

  
									

 

[Signatures continue on following page.]

 

 

[Signatures continued from previous page.]

 

	
  ACKNOWLEDGED
  AND

  	
   

  	
   

  
	
  AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
  PENINSULA
  GAMING, LLC, a
  Delaware

  limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Natalie Schramm

  	
   

  
	
   

  	
   

  	
  Natalie Schramm

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PENINSULA
  GAMING CORP. (formerly
  known as The Old Evangeline Downs Capital Corp.), a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Natalie Schramm

  	
   

  
	
   

  	
   

  	
  Natalie Schramm

  	
   

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
						

 

 

SCHEDULE C-1

COMMITMENTS

 

	
  Lender

  	
   

  	
  Revolver

  Commitment

  	
   

  	
  Term Loan

  Commitment

  	
   

  	
  Total Commitment

  	
   

  
	
  Wells Fargo Foothill, Inc.

  	
   

  	
  $

  	
  36,000,000

  	
   

  	
  $

  	
  10,083,333.34

  	
   

  	
  $

  	
  46,083,333.34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.B. Zwirn Special Opportunities Fund, L.P.

  	
   

  	
  $

  	
  14,000,000

  	
   

  	
  $

  	
  4,583,333.34

  	
   

  	
  $

  	
  18,583,333.34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All Lenders

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  $

  	
  14,666,666.68

  	
   

  	
  $

  	
  64,666,666.68

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]