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Set for Public Hearing - Dubuque Racing Association Lease, Dubuque Copyrighted September 11, 2023 City of Dubuque Items to be set for Public Hearing # Special Meeting 01. ITEM TITLE: Setfor Public Hearing - Dubuque Racing Association Lease, Dubuque Racing Association Improvement Projects — Lot 1 of Chaplain Schmitt I sland, Requesting Consent of City to I mprovements, Leasehold Mortgage & Subordination Agreement SUMMARY: CityAttorney Brumwell recommending City Council approve resolution and set a public hearing for September 18, 2023. RESOLUTION Intent to Dispose of an Interest in Real Property by Lease Agreement with the Dubuque Racing Association, LTD. and Approving a Leasehold Mortgage and Subordination Agreement Between the Dubuque Racing Association, Ltd and MidWestOne Bank. SUGGESTED Receive and File;Adopt Resolution(s), Set Public Hearing for DISPOSITION: September 18, 2023Suggested Disposition: ATTACHMENTS: Description Type Staff Memo Staff Memo Resolution Resolutions Notice Supporting Documentation Amended and Restated Lease (consolidation of Casino Supporting Documentation lease and Hilton Garden leasee DRA_Subordination Agreement Supporting Documentation DRA_Leasehold Mortgage Supporting Documentation Chaplain Schmitt Handout Supporting Documentation Dubuque THE CITY OF � AIFAneriea Cil� Du B E ��,��,��v��. ' � II ��' MRSt� iece on the Mississi 1 zoo��zoiz=zois �P pP zai�*zoi9 CRENNA M. BRUMWELL, ESQ. CITY ATTORNEY TO: MAYOR BRAD M. CAVANAGH & MEMBERS OF THE CITY COUNCIL DATE: SEPTEMBER 8, 2023 RE: DUBUQUE RACING ASSOCIATION LEASE DUBUQUE RACING ASSOCIATION IMPROVEMENT PROJECTS — LOT 1 OF CHAPLAIN SCHMITT ISLAND REQUESTING CONSENT OF CITY TO IMPROVEMENTS, LEASEHOLD MORTGAGE &SUBORDINATION AGREEMENT The City of Dubuque in conjunction with the Dubuque Racing Association (DRA) and community participants have worked diligently for years to procure a Chaplain Schmitt Island Master Plan and Schmitt Island Placemaking & Implementation Plan. Work on implementation of the plans has been ongoing. The biggest project to date has been the Veteran's Memorial. A Community Project Funding grant was received via Representative Hinson for construction of the Veterans Memorial Trailhead Project and will be constructed in 2024. The Chaplain Schmitt Island Master Plan as adopted in 2014 and amended in 2017. The Chaplain Schmitt Island Placemaking & Implementation Plan was adopted in 2017. The goals of the plan were largely recreational focused and included connecting and expanding access to the riverFront, creation of educational opportunities on the island, highlighting the unique characteristics of the island, bringing new visitors to the island, and offering activities and events for all seasons. The largest tenant on the island is the DRA leasing and operating Q Casino. The DRA in has proposed $130+ million dollars in public and private improvements to the island. The improvements include: Public Improvements o lowa Amphitheater on Chaplain Schmitt Island o Veterans Memorial Trailhead Project OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 3OO MAIN STREET DUBUQUE, IA 52001-6944 TE�EPHONE(563)589-4381 /Fax(563)583-1040/Ennai�cbrumwel@cityofdubuque.org Private Improvements • Construction of a new 8-story, 108 room Hilton Tapestry Collection hotel adjacent to the existing Hilton Garden Inn, including an upscale rooftop restaurant, lounge, and event space overlooking the Mississippi River • Interior casino remodel, including elevated bar with bar top slot machines and updated showroom, new Sports Book, and new sports bar. • New banquet space and party rooms • Additional of a family entertainment zone for all ages with high-end arcade games • Exterior upgrades including the fa�ade, signage, landscaping, and surface parking • included a recreational focus for the island and included the concept of an amphitheater on the island. When funding through Destination lowa became available the City applied for funding toward construction of lowa Amphitheater on Schmitt Island. The City was successful in its application receiving $3 million towards construction of an amphitheater from the state of lowa. The lowa Amphitheater on Schmitt Island project will be a significant investment in an outdoor amphitheater. The project is the centerpiece of ongoing efforts coordinated by the DRA to create a recreational landmark and gateway into lowa — with the goal being to enhance outdoor recreational amenities and activities on the island and increase tourism in Dubuque and the tri-state region. The DRA will contribute to the project financially, paying the City's debt payment related to construction of the amphitheater and desires to lease the amphitheater property from the City. A lease has been negotiated between the City and DRA for Lots 2 and 3 of Chaplain Schmitt Island which contains the area where the amphitheater will be constructed by the City. Public hearing on the lease is proposed for September 18, 2023, in the attached resolution and public notice. cc: Michael C. Van Milligen, City Manager Teri Goodmann, Director of Strategic Partnerships Marie Ware, Leisure Services Director Wally Wernimont, Planning Services Director Jill Connors, Economic Development Director Steve Sampson Brown, Project Manager Alex Dixon, CEO and President, Dubuque Racing Association Mike Donahue, Dubuque Racing Association Board Chair 2 Prepared by Crenna Brumwell 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 RESOLUTION NO. -23 INTENT TO DISPOSE OF AN INTEREST IN REAL PROPERTY BY LEASE AGREEMENT WITH THE DUBUQUE RACING ASSOCIATION, LTD. AND APPROVING A LEASEHOLD MORTGAGE AND SUBORDINATION AGREEMENT BETWEEN THE DUBUQUE RACING ASSOCIATION, LTD AND MIDWESTONE BAN K. WHEREAS, the City of Dubuque, lowa (City) is the owner of the real property legally described as Lot 1 of Chaplain Schmitt Island in the City of Dubuque, lowa, according to the Plat recorded as Instrument #2023-7679, records of Dubuque County, I owa (the Property); and WHEREAS, the Property is subject to a Lease Agreement between City and the Dubuque Racing Association (DRA); and WHEREAS, the parties now desire to enter into a new Lease Agreement; and WHEREAS, the DRA seeks City approval for a construction project in excess of $100,000 which requires City consent; and WHEREAS, the DRA seeks City consent to finance the improvement project with MidWestOne Bank, which requires City consent to a Leasehold Mortgage; and WHEREAS, as part of the project financing MidWestOne Bank requires subordination of the DRA's lease obligations to the City in favor of MidWestOne Bank pursuant to a Subordination Agreement and the DRA seeks the City's consent to the subordination; and WHEREAS, the City Council of City believes it is in the best interests of City to approve the Lease Agreement with the DRA, to consent to the improvements, to consent to a Leasehold Mortgage, and to consent to the Subordination Agreement in favor or MidWestOne Bank. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Council intends to dispose of City's interest in the foregoing- described real property pursuant to the Lease Agreement, to consent to improvements, consent to a Leasehold Mortgage, and to consent to the Subordination Agreement in favor of MidWestOne Bank. Section 2. The City Clerk is hereby authorized and directed to cause this Resolution and a Notice to be published as prescribed by lowa Code §364.7 of a public hearing on City's intent to dispose of the foregoing-described real property, to be held on the 18t" of September 2023, at 6:30 o'clock p.m. in the City Council Chambers at the Historic Federal Building, 350 W. 6t" Street, Dubuque, lowa Passed, approved and adopted this day of , 2023. Brad M. Cavanagh, Mayor Attest: Trish L. Gleason, Assistant City Clerk 2 CITY OF DUBUQE, IOWA OFFICIAL NOTICE PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, lowa, will hold a public hearing on the 18t" day of September 2023, at 6:30 p.m. in the Historic Federal Building, 350 West Sixth Street, 2nd floor, Dubuque, lowa, at which meeting the City Council proposes to dispose of an interest in real property to the Dubuque Racing Association Ltd. by Lease Agreement. The real property encumbered by the Lease Agreement is Lot 1 of Chaplain Schmitt Island in the City of Dubuque, lowa, according to the Plat recorded as Instrument#2023-7679, records of Dubuque County, lowa. At the meeting, the City Council will receive oral and written comments from any resident or property owner of said City to the above action. The official agenda will be posted the Friday before the meeting and will contain public input options. The City Council agenda can be accessed at: https://cityofdubuque.novusaqenda.com/AqendaPublic/ or by contacting the City Clerk's Office at 563-589-4100, ctyclerk(a�cityofdubuque.orq. Written comments regarding the above public hearings may be submitted to the City Clerk's Office, before said time of public hearing: Via email at ct clerk cityofdubuque.orq or By mail to City Clerk's Office, City Hall, 50 W. 13t" St., Dubuque, IA 52001. At said time and place of public hearings the City Council will receive any written comments. Copies of supporting documents for the public hearings are on file in the City Clerk's Office and may be viewed Monday through Friday between 8:00 a.m. and 5:00 p.m. Individuals with limited English proficiency, vision, hearing, speech, or other impairments requiring special assistance should contact the City Clerk's Office at (563) 589-4100, ctyclerk _cityofdubuque.orq as soon as feasible. Deaf or hard-of-hearing individuals can use Relay lowa by dialing 711 or (800) 735-2942. Published by order of the City Council given on the day of September 2022. Trish L. Gleason, Assistant City Clerk AMENDED AND RESTATED LEASE AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND DUBUQUE RACING ASSOCIATION, LTD. This Amended and Restated Lease Agreement (this "Lease") is dated for reference purposes as of the 19th day of September 2023, and is by and between the City of Dubuque, Iowa, a municipal corporation ("Citv"), and Dubuque Racing Association, Ltd., an Iowa nonprofit corporation ("Association"). WHEREAS, City and Association are parties to that certain Lease Agreement dated July 6, 2004, originally between City and Dubuque Casino Hotel, L.L.C. ("DCH"), as amended by that certain Amendment No. 1 to Lease Agreement dated March 21, 2005, that certain Second Amendment to Lease Agreement dated Apri14, 2005, and that certain Amendment No. 3 to Lease Agreement dated September 6, 2005, and subsequently assigned by DCH to Association pursuant to that certain Assignment of Lease Agreement dated June 2,2014,between DCH and Association and consented to by City, which Lease Agreement relates to the property on which Houlihan's Restaurant and the Hilton Garden Inn are located and operated(the "Hilton Garden Lease"); WHEREAS,City and Association are parties to that certain Second Amended and Restated Lease Agreement dated September 14, 2021, as amended by that certain First Amendment to the Second Amended and Restated Lease Agreement dated December 22, 2022, which relates to the property on which the casino and the parking lots are located (the "Casino Lease"); WHEREAS, a survey of plat with the respect to the northern half of Chaplain Schmitt Island was recently prepared and recorded in order to,among other things,clarify lease boundaries, which recorded plat affects the legal descriptions of the properties subject to the Hilton Garden Lease and the Casino Lease; and WHEREAS, City and Association now desire to amend,restate, and consolidate the Hilton Garden Lease and the Casino Lease in order to (i) amend certain terms and provisions thereof, (ii) consolidate them into one and the same document, (iii) substitute and replace the legal descriptions set forth therein with the newly created legal description,and(iv)delete the provisions thereof that are no longer applicable. NOW, THEREFORE, City and Association, in consideration of the mutual covenants and conditions hereinafter set forth, agree as follows: L Term of Lease. The term of this Lease shall commence on 12:01 a.m. on September 19, 2023, and terminate at 11:59 p.m. on December 31, 2056 (the "Term"). 2. Leased Premises. During the Term City agrees to lease to Association, and Association agrees to lease from City, the real estate described on attached Exhibit A (hereinafter, the "Leased Premises"). Association may grant utility easements for the purpose of obtaining utility services to the facilities located on the Leased Premises,provided that such easements shall only be granted with the written consent of City. 3. Rental. For each month during the term of this Lease, Association shall pay City the sum of the following amounts as monthly rent hereunder: (a) for the portions of the Leased Premises consisting of the Hilton Garden Inn and Houlihan's Restaurant, Association shall pay City a base rent of Four Thousand Nine Hundred Thirty-Nine Dollars ($4,939.00) per month as monthly rent hereunder, which payments shall be due on the tenth (l Oth) day of each month. The base rent payment shall be adjusted annually on October lst of each year beginning on October 1, 2024, pursuant to the percentage increase, if any, in the Consumer Price Index US City Average averaged over the prior twelve (12) months. (b) for the remaining portions of the Leased Premises (other than those portions consisting of the Hilton Garden Inn and Houlihan's Restaurant): (i) an amount equal to one and one-half percent (1.5%) of slot coin-in from slot machines and video machines which simulate table games of chance at Q Casino for such month; (ii) an amount equal to four and eight-tenths percent (4.8%) of the table game adjusted gross receipts (amounts actually wagered at table games less winnings paid to wagerers) for table games conducted at Q Casino for such month; and (iii) an amount equal to one-half of one percent(0.50%) of monthly sports wagering conducted on Q Sportsbook retail or Q advance deposit sports wagering internet site ("ADSW") (or any successor/replacement sports wagering internet site owned and operated by Association) for such month, which payments shall be due on the tenth (lOth) day of the following month. City shall expend such funds by erecting or maintaining public buildings or works, or otherwise lessening the burden of government in accordance with and as contemplated by Iowa Code Section 99B1(14), as amended. Notwithstanding the foregoing, however, City shall not be limited in any manner from the issuance of debt to fund capital improvements for other purposes or from using other revenue sources, required to be dedicated to capital improvements, to fund the capital improvement budget. All rent payments pursuant to paragraph 3(b) of this Lease shall be used by City exclusively for the promotion of social welfare under IRC §501(c)(4), or otherwise lessening the burden of government. 4. Fund Requirements. 2 (a) City and Association acknowledge and agree that the monies on deposit in the depreciation and improvement fund previously established by Association pursuant to the terms of the Casino Lease (the "De�reciation and Im�rovement Fund") are the sole property of Association. The balance of the Depreciation and Improvement Fund shall be used by Association to (i) pay for costs and expenses related to the removal of any structures (including any necessary environmental remediation), equipment, furniture, furnishings, and other personal property of Iowa Greyhound Association and/or its vendors, suppliers and contract partners remaining on the Leased Premises and/or the land adjacent thereto, (ii)pay for any costs and eXpenses incurred by Association in connection with preparing and readying such areas for Association's operations, and/or (iii) make or fund the Equity Contribution (as defined in paragraph 12 hereo�. Any interest accruing on the balance in the Depreciation and Improvement Fund shall be deposited to the Depreciation and Improvement Fund and shall be available to and expended by Association as provided in this subparagraph (a). (b) Association shall establish a Debt Payment Reserve Fund (the "Debt Payment Reserve Fund")to be held in a restricted fund with Association,into which it shall deposit funds until such time as the balance on deposit therein equals $7,000,000.00 pursuant to the following schedule: FY23 $1,000,000 FY24 $2,500,000 FY25 $1,000,000 FY26 $1,500,000 FY27 $1,000,000 Association reserves the right to contribute more to the Debt Payment Reserve Fund than required to reach the required balance of $7,000,000.00 at an earlier date. In the event Association reaches the required balance of$7,000,000.00 prior to any of the contributions outlined above,the contribution listed will not be required unless Association has accessed the Debt Payment Reserve Fund to cover a debt payment. The monies on deposit in the Debt Payment Reserve Fund, together with all accrued interest thereon, are the sole property of Association;however,Association shall not use,pledge or otherwise encumber the Debt Payment Reserve Fund or the funds on deposit therein without the prior written consent of City. In the event Association must access the Debt Payment Reserve Fund to cover a debt payment, Association shall, in writing, provide to City a written plan within sixty (60) days as to how Association will replenish the fund with a specific timeline for replenishment acceptable to City. If the City's lease payment is ever subordinated to Association's lender, Association will repay the City at its first opportunity prior to replenishing the Debt Payment Reserve Fund. A written plan, submitted to and approved by City, to pay the subordinated lease payment shall be submitted within siXty (60) days. 3 5. Sufficiencv of Pavments. City's acceptance of rent and required distributions shall not be an admission of the sufficiency of any such payments nor the accuracy of any statement furnished by Association. All such payments shall be received subject to the audit to be provided by Association to City. 6. Non-transferabilitv of Lease. This Lease shall be a privilege to be held for the benefit of the public by Association. This Lease shall not, in any event, be transferred, assigned, sold, leased, or disposed of, in whole or in part, by means, without the prior written consent of City expressed by a resolution duly passed by the City Council of the City of Dubuque, Iowa and then only under such conditions as the City Council may establish. 7. Use of Leased Premises. Association warrants that it is validly existing and in good standing under the laws of the State of Iowa as a nonprofit organization. Association warrants that it has the necessary authority to operate its businesses in the State of Iowa. The Leased Premises shall be used by Association for the sole purpose of conducting gambling games and other entertainment activities, operating restaurants and providing lodging unless, prior to the use of the Leased Premises by Association for any other purpose, Association obtains the written consent of City with respect to such alternate use. Use for the purpose of this paragraph shall not mean individual events associated with a particular type of use. Association agrees that it will at all times hold the Leased Premises available for use by the general public without regard to membership in the protected classes covered by Title 8 of the city code, as amended. However, Association may prepare and promulgate rules for the purpose of regulating the admission of persons into Q Casino and for the further purpose of regulating the conduct of persons admitted to Q Casino, which rules shall be consistent with the regulations of the Iowa Racing and Gaming Commission. 8. License to Operate. (a) For so long as such license is required by the Iowa Racing and Gaming Commission, Association shall maintain a valid license to conduct gambling games issued by the Iowa Racing and Gaming Commission and shall make timely application,together with the appropriate documentation, for the renewal of such license as it expires from time to time. City shall provide, on a timely basis, any and all information within its control necessary to sustain the license or to secure renewals thereof. (b) Association shall procure and maintain any and all licenses and permits required by law for the operations at the Leased Premises. 9. Ins�ection of Premises. An authorized representative of City, as designated in writing by its City Manager, shall have the right to enter and have access to the Leased Premises, whether or not events are in operation, at all reasonable times and for any reasonable purposes, in furtherance of City's responsibility to the public for the operation of the Leased Premises, as long as such entrances do not unreasonably interfere with Association's right to quiet occupancy. Q Casino entrances shall be subject to the rules of the Iowa Racing and Gaming Commission. The 4 authorized representative shall advise Association's President and CEO of such representative's presence upon arrival at the Leased Premises. 10. Maintenance of Facilitv. Association agrees that, at all times during the Term, Association shall, at its own expense, maintain, preserve, and keep the Leased Premises in good repair, working order and condition. 11. Taxes and Fees. (a) Property TaXes. Association shall pay all property taxes,both real and personal, before they shall become delinquent, and which may be levied and assessed against the Leased Premises. City shall not oppose any application filed by Association for exemption from the payment of property taxes, both real and personal. In the event Association pays real estate taxes levied and assessed against the portion of the Leased Premises described in paragraph 3(b) hereof, such real estate taxes paid are deductible from the next rental payments due under paragraph 3(b) of this Lease. (b) Other Taxes and Fees. Association shall be responsible for and agrees to pay all other taxes, rates, charges, levies, and assessments, general and special, of every name, nature, and kind, whether now known or hereafter created which may be taxed, charged, assessed, levied or imposed, which become payable during the term of the Lease and would become delinquent if not so paid,arising from Association's operations at the Leased Premises. 12. Alterations. City acknowledges that Association has entered into certain contracts with respect to various improvements to be made to Association's facilities on the Leased Premises, which include the remodel of the casino facility, the addition of a family entertainment zone, and the addition of a new hotel and restaurant(the"Project"), the total cost of which Project will not exceed$80,000,000.00. Subject to its approval of the various financing related documents to be entered into by Association in connection with the Project (the "Project Financing Documents"), City hereby consents to and approves the Project. City further acknowledges that the Project Financing Documents require Association to commit a minimum of$20,000,000.00 cash equity to the Project (the "Equity Contribution"). Notwithstanding anything to the contrary contained in this Lease (including, without limitation, any limitation on Association's use of cash or funds and/or any provision or covenant requiring use of such cash or funds for a different purpose), City hereby consents to and authorizes Association to make or fund the Equity Contribution with the following sources of cash: (a) capital reserves established in connection with any portion of the Leased Premises (including, without limitation, up to $3,000,000.00 of funds on deposit in the Capital Reserve Fund); (b)portions of Association's cash reserves and cage cash; (c) proceeds of a loan from Dubuque Initiatives; and (c) to the extent authorized by the subcommittee with discretion over the funds contained therein, funds from the Schmitt Island Master Plan Implementation Fund, subject to the prior obligations committed to by the 5 subcommittee and obligated under the Lease between City and Association for the Destination Iowa Grant Application and associated projects. Other than the Project, Association shall not commence alterations to any structure or structures or make additions to any existing structures or facilities in an amount exceeding One- Hundred Thousand Dollars ($100,000.00) without the prior written approval of the plans and specifications by City. Any improvements,modifications or additions to the Leased Premises wheresoever located or however financed shall become part of the real estate and owned by City upon termination of this Lease. City consent is not required for any items in Association's CIP budget except for improvements to the Leased Premises costing over $100,000.00, or for capital improvements to be financed by incurring debt in excess of $100,000.00. City consent is not required for Association expenditures for ongoing replacement of slot machines and other video games, or far equipment replacement in the normal course of business. 13. Security and Traffic Control. Association shall provide an internal security force sufficient in numbers to maintain the integrity of Q Casino and all of its operations. Association may, in its sole discretion, supplement DRA's security force at Q Casino with a City of Dubuque uniformed police officer (or, if a uniformed police officer is not available, a uniformed Dubuque County Sheriff deputy peace officer) at such times as it deems appropriate. The determination of the days and hours, if any, during which Association shall supplement its security force with a uniformed City or County peace officers shall be in the sole discretion of Association. For such services of City for County peace officers,Association shall reimburse City at the rates established by City. City shall be responsible for all billings and payments to Deputies. Selection and responsibilities of such officers shall be by mutual consent of City Police Department and Association. Association shall reimburse City for any and all expenses incurred by City to maintain traffic control for the safe ingress and egress of the public to the Leased Premises, including but not limited to staff salaries and traffic lane control devices, but excluding any traffic signal installation. Decisions concerning traffic control measures needed to comply with the intent of this paragraph shall be by mutual consent of City and Association. 14. Liabilitv Insurance and Indemnification. Association shall defend, indemnify and hold City, its officers, employees and agents, harmless from and against any and all claims, suits, actions,penalties, damages and causes of action of any kind arising during the term of this Lease, including but not limited to costs, reasonable attorney fees, expenses and liabilities incurred by City in and about such claim, suit, action, penalty, damage or cause of action, the investigation thereof, or the defense of any action or proceeding brought thereon, as a result of any operations occurring at the Leased Premises,including the operation of Q Casino; arising out of any violation of the license granted by the Iowa Racing and Gaming Commission; for the failure by Association to keep, maintain and abide by each and every covenant of this Lease on its part to be kept and performed; or as a result of any negligence, act, error or omission of Association,its employees or agents, or third party contractors; provided, however, that notwithstanding the foregoing: (a) Association shall not be required to provide such defense and indemnification with respect to 6 any claims, suits, actions,penalties, damages and/or causes of action stemming from(i) any action or omission taken by Association with the full knowledge and express consent of City, or (ii) any negligence, act, error or omission of City, its employees or agents, or third party contractors; and (b) to the extent of any inconsistency, conflict or contradiction between the terms and provisions of this paragraph 14 and the terms and provisions of paragraph 17 hereof,the terms and provisions of paragraph 17 shall control. Association shall maintain,throughout the term of this Lease,liability insurance as set forth in City's standard Insurance Schedule for Lessees of City Property, as such schedule may from time to time be amended. 15. Other Insurance. During the term of this Lease, Association shall purchase and maintain property insurance coverages in companies licensed to do business in the State of Iowa with an A.M. Best rating of"A" or better and with a financial size category rating of"FSC VIII". City shall be included as a named insured. Coverage shall be provided on the following basis: (a) Blanket coverage for buildings and contents, with an amount equal to at least 90% of the insurable replacement value. Such insurable value shall be determined annually by a qualified appraiser.For purposes of this paragraph,additions,improvements, fixtures,trade fixtures,machinery,and equipment attached or unattached to a building shall be included in determining the total insurable value. (b) Coverage shall be provided on an"all risk"coverage that is at least as broad as is provided by the ISO "Special Causes of Loss Form". (c) All coverages should be provided on a replacement cost basis. (d) An Agreed Value Endorsement shall be attached to the policy, subject to annual agreed statements of values. The Agreed Value Endorsement shall waive the coinsurance. (e) In the event of new construction, coverages shall be provided on as broad, or a broader, basis than those indicated above, with the amount of insurance to be equal to the completed value of the new construction. (� All policies shall be endorsed to provide a thirty-day advanced notice of cancellation, material change, or non-renewal of any coverage. (g) Coverage should include Ordinance/Law Coverage (the equivalent of ISO endorsement CP0405), which covers: (i) Increased cost of construction from operation of building codes, (ii) Demolition costs, and (iii) Contingent liability from operation of building codes. (h) Coverage should also include: 7 (i) Back-up of sewers and drains, (ii) Personal property of employees, (iii) Property in transit, (iv) Computer equipment, including data and media, and (v) Equipment Breakdown (Boiler& Machinery). (i) Business Income and Extra Expense (i) The business income limit shall be: (A) Net income (net profit or loss before income taxes) that would have been earned or incurred; and continuing normal operating expenses incurred, including payroll. (B) Extra Expense limit shall be the necessary expenses incurred during the period of restoration that would not have been incurred if there had been no physical loss to the insured property caused by a covered loss. (ii) Coverage shall include an unlimited extended period of indemnity. (iii) Coverage shall be on an agreed amount basis. (iv) During any period of business interruption, and to the extent of the amounts and limits of coverage afforded by Association's business interruption coverages, Association shall continue to make all payments required by this Lease based upon the average monthly rentals for the six-month period prior to the commencement of the interruption, including but not limited to rent, taxes, and distributions. A cancellation or lapse of such policy without an immediate approved replacement shall be a material violation of this Lease. 16. Waiver of Subro ag tion. City and Association mutually release the other from liability and waive all right of recovery against the other for any loss of or damage to the property of each, including earnings derived therefrom, caused by or resulting from fire, casualty or any other peril insured against and for which proceeds are payable under any insurance policies maintained by the parties hereto, regardless of the cause of such loss or damage and even though it results from some act or negligence of either party hereto, or one of the party's agents, employees, customers or representatives. All fire and extended coverage insurance policies shall carry an endorsement wherein the insurance company waives any and all right of subrogation against either party to this Lease by reason of any such fire, casualty or other peril insured against and for which proceeds are payable. 17. Environmental Matters. (a) For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City hereby releases and farever discharges Associations and its 8 successors, affiliates, parents, subsidiaries, lenders, members, officers and assigns from any Loss and all claims, acts, liabilities, penalties, damages (including foreseeable and unforeseeable consequential damages), orders,judgments, liens,rights of action, causes of action, costs and expenses of whatever kind or nature, known or unknown, contingent or otherwise, which arise out of or relate in any way, directly or indirectly, to the Contamination. (b) For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, only to the extent allowed by law, City shall indemnify and may elect to defend Association and its successors, permitted assigns, affiliates, parents, subsidiaries, lenders, members, and officers ("Indemnified Party�ies�") for and against any Loss and Litigation Expenses incurred in any Proceeding brought against any Indemnified Party arising out of the Contamination ("Contamination Claim"). (i) To be entitled to indemnification under paragraph 17(b), an Indemnified Party shall promptly (and in no event later than thirty (30) business days after the Indemnified Party received written notification of such Contamination Claim) notify in writing City of the Contamination Claim received in writing by an Indemnified Party and deliver to City a copy of all legal pleadings, to the eXtent in such Indemnified Party's possession, with respect to the Contamination Claim. If the Indemnified Party fails to promptly notify City of the Contamination Claim and City is prejudiced in any material respect by such failure, City's obligation to indemnify the Indemnified Party against any Loss with respect to that Contamination Claim will be limited or reduced, as appropriate, on account of such prejudice, and City will not be required to reimburse the Indemnified Party for any Litigation Expenses the Indemnified Party incurred during the period in which the Indemnified Party failed to notify City as required hereby. (ii) Following receipt of written notice of a Contamination Claim under paragraph 17(b)(i), City shall promptly notify the Indemnified Parties whether it is electing to defend the Indemnified Parties and assume the defense of the Contamination Claim with counsel of City's choosing. If City assumes the defense of the Contamination Claim, then City will not be required to reimburse the Indemnified Parties for any Litigation Expenses arising out of the Contamination Claim, except for those Litigation Expenses incurred by any Indemnified Parties arising out of the Contamination Claim before City makes its election to assume the defense. After City assumes the defense of a Contamination Claim, City may contest,pay, or settle the Contamination Claim with the consent of Association (or its successor or assign, if applicable), which consent shall not be unreasonably withheld, conditioned or delayed, and City shall pay the Indemnified Parties for any Loss resulting from the Contamination Claim. (iii) An Indemnified Party may defend a Contamination Claim with counsel of its own choosing and without City participating only if(A) City notifies the Indemnified Party that the does not wish to defend the Indemnified Party against the Contamination Claim, (B) City fails to promptly notify the Indemnified Party 9 whether it is electing to defend the Indemnified Parties and assume the defense of the Contamination Claim with counsel of City's choosing, or (C) joint representation of City and the Indemnified Party by the same counsel would, in the opinion of that counsel, constitute a conflict of interests. If the Indemnified Party does retain separate counsel for a reason permitted under this subparagraph, then City shall pay all Litigation Expenses that each Indemnified Party incurs in connection with defense of the Contamination Claim. (c) For purposes of this paragraph 17, the following terms have the following meanings: "Contamination"means Hazardous Materials within, affecting or under the Leased Premises and that were not first introduced by Association at the Leased Premises. "Environmental Laws" means the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq., as amended), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq., as amended), the Comprehensive Environmental Response,Compensation,and Liability Act(42 U.S.C. § 9601 et seq., as amended), the Toxic Substances Control Act (15 U.S.C. § 2601, et seq., as amended), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Clean Air Act (42 U.S.C. § 7401, et seq., as amended), the Occupational Safety and Health Act (29 U.S.C. § 651, et seq., as amended), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001, et seq., as amended), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq., as amended), the Rivers and Harbors Act (33 U.S.C. § 401, et seq., as amended), the Endangered Species Act(16 U.S.C. § 1531, as amended), the Safe Drinking Water Act, 42 USC 300f et. seq., as amended, and all analogous state laws, including, without limitation, Chapter 455B of the Iowa Code and the regulations and publications issued under any such laws, and in any similar federal, state or local laws or in the regulations adopted and publications promulgated pursuant to any of the foregoing laws by any governmental authority, agency, department, commission, board or instrumentality of the United States of America, the State of Iowa or any political subdivision thereof. "Hazardous Materials" means (a) any material, substance, chemical, gas, vapor or waste which is defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," "restricted hazardous waste," "contaminant," "pollutant," "toxic waste" or "toxic substance" under any provision of Environmental Laws or any other formulations intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toXicity, reproduction toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any provision of Environmental Laws; (b) any asbestos or asbestos containing materials in any form that is or could become friable, tremolite, anthophylite, actinolite; (c) any solvents, degreasers,heavy metals,refrigerants,nitrates,urea formaldehyde,polychlorinated 10 biphenyls, dioxins, petroleum and petroleum products and derivatives, fuel additives, ethanol, bio-fuels, methyl tertiary butyl ether, per- and polyfluoroalkyl substances; and (d) any other product, byproduct, compound, substance, chemical, material, waste; solid, liquid, gaseous or thermal irritant; greenhouse gas; carbon emission; atomic, molecular and macromolecular nanomaterials; and microbial material whose presence, characteristics, nature, quantity, intensity, existence,use, manufacture, possession, handling, disposal, transportation, spill, Release, threatened Release,remedial action or effect, either by itself or in combination with other materials is or is allegedly: (x) injurious, dangerous, toxic, hazardous to human health, safety or welfare or any other portion of the environment or natural resources; (y)is now or at any time in the future becomes regulated, defined, listed, prohibited, controlled, studied or monitored in any manner by any governmental authority or Environmental Laws; or(z) a basis for liability,responsibility, or duty owed to any governmental authority or private or public third party. "Litigation Expenses" means any reasonable out-of-pocket expense incurred in a Proceeding, including court filing fees, court costs, arbitration fees, witness fees, and attorneys' and other professionals' fees and disbursements. "Loss" means any amount awarded in, or paid in settlement of, any Proceeding, including any interest but excluding any Litigation Expenses. "Proceedin�" means any judicial, administrative, mediation, settlement, or arbitration action, suit, claim, investigation, or proceeding. "Release" means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into the indoor or outdoor environment (including, without limitation, the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), or into or out of the Leased Premises, structure, vessel or vehicle, including, without limitation, the movement of any Hazardous Materials into or through the air, soil, soil gas, surface water, groundwater or other media. 18. Termination. Either City or Association may terminate this Lease whenever the other party has failed to comply with a material condition of this Lease, provided the non- defaulting party has provided written notice of default as provided herein and such default has not been remedied or cured within the time frame provided herein. The written notice of default delivered to the defaulting party shall specify the default and state that this Lease shall be terminated and forfeited sixty (60) days after the date of such notice unless such default is remedied within that sixty(60) day period. Upon receipt of notice of termination by either party, neither party shall incur new obligations for the terminated portion of the Lease after the effective date of the termination and shall cancel as many outstanding obligations as possible. 11 19. Records, Reports and Filin�s. Association shall maintain, or cause to be maintained, accurate and proper books of record showing complete and current entries of all transactions relating to the operation of the Leased Premises. Such records shall be fully substantiated with documentation sufficient to satisfy standards for certified audits. Copies of all petitions, applications or communications submitted by Association to any state regulatory commission or agency having jurisdiction in respect to any matters affecting the Leased Premises' operations or the financial records thereof shall be submitted simultaneously to the City Manager. Representatives of City shall have the right to inspect such recards, accounts, and books upon written request by the City Manager. 20. Annual Reports. Association shall file, no later than March 31 of each year, with the City Clerk, two copies of an audit of the financial records of Association, prepared by an independent certified public accountant, showing all receipts and disbursements,together with the comments of the auditor concerning whether the books and records are being kept in compliance with this Lease, regulations of the State of Iowa, and in accordance with recognized accounting practices. 21. Conflict of Interest. City agrees that no officer, employee of City, or member of the governing body of City who exercises or has exercised any functions of responsibility with respect to Association and/or the Leased Premises shall have any interest,direct or indirect,in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the Leased Premises or in any activity or benefit therefrom which is part of this project at any time during such person's tenure or for a period of one year thereafter, subject to the exceptions outlined in Iowa Code §362.5, as amended. Association agrees that no member or officer who exercises or has eXercised any functions of responsibility with respect to Association and/or Q Casino shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, in connection with any contracts awarded by Association or City for work to be performed or services to be provided to Association or City in connection with Q Casino at any time during such person's tenure, subject to the exceptions outlined in Iowa Code §362.5, as amended. 22. Distribution of Net Cash Proceeds. (a) Net Cash Remaining (as hereinafter defined) will be allocated at the end of each fiscal year for distribution as follows: (i) one-third(1/3rd) to City (the "City Distribution Amount"); (ii) one-third (1/3rd) to charitable or non-profit recipients, and/or allocated to Association accounts for use in advancing Association's non-profit 12 purposes in the discretion of Association's board of directors (the "Charitable Distribution Amount"); and (iii) one-third (1/3rd) to the Schmitt Island Master Plan Implementation Fund (as hereinafter defined) (the "Schmitt Island Distribution Amount"). (b) Association shall distribute the City Distribution Amount for each fiscal year to City by no later than the January 31 st following the end of such fiscal year, or another date as mutually agreed upon by the parties. City shall use funds distributed to City under this subparagraph 22(b) in the same manner and for the same purposes that City is authorized to use rent payments under paragraph 3 of this Lease. (c) Association shall distribute the Charitable Distribution Amount for each fiscal year to the following recipients by no later than the December 31st following the end of such fiscal year (however, Association shall use reasonable efforts to make such distribution before the September lst following the end of such fiscal year), or another date as mutually agreed upon by the parties, as follows: (i) the first $1,000,000.00 of the Charitable Distribution Amount shall be allocated to Association's Grants Program and retained in a restricted Association account for ultimate distribution to the various recipients thereof; (ii) the next$428,571.43 of the Charitable Distribution Amount shall be allocated to the Endowment Fund and distributed to the Community Foundation of Greater Dubuque; and (iii) if the Charitable Distribution Amount exceeds $1,428,571.43, the amount by which the Charitable Distribution Amount exceeds $1,428,571.43 will be split, with 30% allocated to the Endowment Fund and distributed to the Community Foundation of Greater Dubuque and 70% retained in a restricted Association account for ultimate distribution to the various recipients of Association's charitable and nonprofit distributions (including, but not limited to, Association's Grants Program and,in Association's sole discretion,other dedicated funds which Association may establish from time to time). (d) Association shall deposit the Schmitt Island Distribution Amount for each fiscal year into the Schmitt Island Master Plan Implementation Fund by no later than the December 31 St following the end of such fiscal year. (e) For purposes of this Lease including, without limitation, this paragraph 22, the following terms have the following meanings: "Endowment Fund" means the irrevocable permanent endowment established by Association in 2009 at the Community Foundation of Greater Dubuque where the principal is invested, and only a portion of the investment earnings is spent and the rest of the earnings are directed back into the Endowment 13 Fund, so that the endowment grows over time. The portion of the Endowment Fund's investment earnings that is permitted to be spent, and is not directed back into the Endowment Fund, shall be available for distribution to other charitable and non-profit recipients and distributed in the discretion of Association's board of directors. "fiscal .�"means Association's fiscal year. "Net Cash Remainin�" means, for each fiscal year, Association's net cash remaining after payment of and/or provision or reserve for the following items: (i) operational eXpenses and expenses for normal replacement items; (ii) provision for(A)operating funds, (B) capital improvements, and(C)a cash reserve fund not to exceed ten percent(10%)of Association's total budget for the following fiscal year(the"Cash Reserve Fund"), which is calculated each year and is not cumulative. Monies deposited in the Cash Reserve Fund are the sole property of Association and shall be designated for the sole purpose of maintaining a cash balance far Association to be used by Association as needed to fund its operations, provided, however, that up to $2,500,000.00 of funds on deposit in the Cash Reserve Fund may be used in fiscal year 2023 and up to $500,000.00 of funds on deposit in the Cash Reserve Funds may be used in fiscal year 2024 as a down payment on any construction loan incurred by Association. Any interest accruing on the balance in the Cash Reserve Fund shall also be available to Association to fund operations; (iii) required debt service payments (including prepayment of debt, upon Board approval and City consent) for debt incurred with the consent of City; (iv) distributions to charities or non-profit entities from operational funds,not to exceed the greater of Four Hundred Fifty Thousand Dollars ($450,000.00) or sixty-five (65) basis points (0.0065) of Association's adjusted gross receipts from all gambling games (slots and table games); (v) funds which Association is required to provide as collateral or otherwise for purposes of obtaining and securing any bond required by the Iowa Racing and Gaming Commission pursuant to the Iowa Code; (vi) payment into a capital reserve fund (the "Ca�ital Reserve Fund"), subject to a maximum annual payment of Five Hundred Thousand Dollars ($500,000.00) per fiscal year, for use in funding capital improvements or gambling devices (including, but not limited to, gaming 14 devices and necessary hardware and/or software relating to the installation or operation of such gaming devices) in the discretion of Association; and (vii) funds deposited into the Debt Payment Reserve Fund pursuant to paragraph 4(b) of this Lease. (viii) Two Million Five Hundred Thousand Dollars ($2,500,000.00)with respect to fiscal year 2022 for a down payment on any construction loan incurred by Association. "Schmitt Island Master Plan Im�lementation Fund" means a restricted Association account into which the Schmitt Island Distribution Amount shall be deposited each fiscal year. The monies held in the Schmitt Island Master Plan Implementation Fund, together with all interest thereon, shall be used solely to advance, pay for, and/or finance/fund any of the permitted purposes, activities, and/or developments contemplated by the Chaplain Schmitt Island Master Plan adopted by Dubuque City Council, as amended and as the same may be further amended, modified, andlor restated from time to time. The spending and distribution of funds from the Schmitt Island Master Plan Implementation Fund, which shall be solely for the purposes described above, shall be in the discretion of a subcommittee of Association's board of directors consisting of not less than four (4) nor more than eight (8) members of Association's board of directors, the total number of which shall be divisible by two(2). The members of such subcommittee shall be appointed by the Chair of Association's board of directors and shall consist of, at a minimum, Association's President and CEO, the Chair of Association's board of directors, the City Manager and at least one (1) city council member(who shall be the Mayor if the Mayor is currently serving on Association's board of directors). 23. Representation. Association shall reserve three positions on its Board of Directors for City Council members as appointed by the City Council of Dubuque, Iowa in consultation with Association and one position on its Board of Directors for the City Manager or the City Manager's designee. Each of the appointments is subject to removal by Association in the event of failure to comply with the resolutions and bylaws of Association. Association shall reserve on its Executive Committee, or its governing committee by whatever name such committee is designated, one position for the City Manager. 24. Public Purpose. City has determined that the operation of Q Casino accomplishes a public purpose by promoting community development and tourism for the civic betterment and social welfare of City. Association has been designated by City as an appropriate nonprofit entity to further and advance such purpose.Both parties acknowledge that Association's primary purpose in the operation of its businesses is to promote such community development, tourism, civic betterment, and social welfare for the benefit of City and its citizens. 15 25. Nature of Relationship. The relationship created in this Lease is a landlord-tenant relationship, and each party shall be liable for its own action and shall hold the other harmless from any liability arising from the action of it or its agents or employees. 26. Com�liance with A�licable Laws. Association, in the operation and management of its businesses, shall comply with all applicable federal, state, and local laws, ordinances and regulations. The parties shall comply with all applicable local, state and federal laws or regulations relating to this Lease and/or the Leased Premises. 27. Protection of Association Property. City acknowledges that property,both real and personal, owned or under the control of Association is entitled to all protection provided for by law for the protection of private property even if located on public land unless otherwise specified herein. 28. Notice. Both City and Association shall give prompt notice in writing to the other party of any adverse development, financial or otherwise, which would materially affect the operation of Q Casino. 29. Ri�ht of Intervention. City and Association shall have the right of intervention in any suit or judicial or regulatory proceeding to which the other is a party and which may affect the rights of either party. Neither City nor Association shall oppose any such intervention. 30. Discrimination. In carrying out all of its activities, Association shall not discriminate against any employee or applicant far employment because of the protected classes covered by Title 8 of the city code, as amended. Association shall take affirmative action to assure that applicants for employment are employed and that employees are treated during employment without regard to their membership in a protected class, as outlined in Title 8 of the city code, as amended. Such action shall include,but not be limited to, the following: employment, upgrading, demotion or transfer; rates of pay or other forms of compensation; and selection for training, including apprenticeships. Association shall post notices setting forth the provisions of this nondiscrimination clause on employee bulletin boards. The notices shall state that all qualified applicants will receive consideration for employment with regard to the protected classes covered by Title 8 of the city code, as amended. Association agrees and will undertake whatever affirmative measures are necessary so that no person shall, on the grounds of the protected classes covered by Title 8 of the city code, as amended, be excluded from participation in, denied the benefits of, or be subjected to discrimination under any program or activity associated with operation of Q Casino or any other operation on the Leased Premises. Association further agrees that these nondiscrimination provisions shall be incorporated into any and all third-party contracts. 31. Condemnation. 16 (a) If at any time during the term of this Lease all substantially all of the Leased Premises or the improvements thereon shall be taken in the exercise of the power of eminent domain by any sovereign, municipality or other public or private authority, then this Lease shall terminate on the date of vesting of title in such taking and any prepaid rent shall be apportioned as of said date. Substantially all of the Leased Premises and the improvements thereon shall be deemed to have been taken if the remaining portion of the Leased Premises shall not be of sufficient size to permit Association, in its sole discretion, to operate its business thereon in a manner similar to that prior to such taking. Any award far such taking of all or substantially all of the Leased Premises shall be paid to the parties hereto in accordance with the following: (i) to City, the amount of the award attributable to the Leased Premises, determined as if this Lease was not in effect at the time of such award, excluding therefrom the amount of the award attributable to the improvements thereon, and all other sums not directly attributable to the value of the land constituting the Leased Premises; and (ii) to Association, the entire award except that portion allocated to City above. (b) If less than all or substantially all of the Leased Premises or the improvements thereon shall be taken in the exercise of the power of eminent domain by any sovereign, municipality or other public or private authority, then Association, at its option, may elect to continue this Lease in full force and effect or terminate this Lease. If Association shall elect to maintain this Lease in full force and effect, the award for such partial condemnation shall be allocated as provided in subparagraph (a), above, and Association shall proceed with reasonable diligence to carry out any necessary repair and restoration so that the remaining improvements and appurtenances shall constitute a complete structural unit or units which can be operated on an economically feasible basis under the provisions of this Lease. In the event Association elects to continue this Lease in full force and effect after a partial condemnation, the parties shall mutually agree upon a reduction in the rent and distributions paid to City pursuant to this Lease to account for the area of the Leased Premises taken. Should Association elect to terminate this Lease upon a partial condemnation, Association shall provide City with written notice of such election within thirty (30) days after the date of vesting of title for such taking. Association shall specify in such written notice the date on which this Lease shall terminate, which date shall be not less than sixty (60) days nor more than 360 days after delivery of such notice to City. In the event Association terminates this Lease as provided for in this subparagraph (b), City shall be entitled to the entire award for such partial taking. (c) If the temporary use of the whole or any part of the Leased Premises or the improvements thereon shall be taken at any time during the term of this Lease in the eXercise of the power of eminent domain by any sovereign,municipality,or other authority, the term of this Lease shall not be reduced or affected in any way, and Association shall continue to pay in full the rent, distributions rent and other sum or sums of money and charges herein reserved and provided to be paid by Association, and the entire award for such temporary taking shall be paid to Association.Association shall repair and restore any 17 and all damage to the Leased Premises and the improvements thereon as soon as reasonably practicable after such temparary taking. 32. Ri�ht of First Refusal. Association shall have the preemptive right during the Term to purchase the Leased Premises on the same terms and conditions as those of any bona fide offer received by and acceptable to City. Before making sale ar any agreement to sell, City shall notify Association in writing of the terms and conditions of the offer. Association, within sixty(60) days after receipt of such notice, may exercise this preemptive right by written notice to City. Failure of Association to exercise this preemptive right on one or more occasions shall not affect Association's right to eXercise it on any subsequent occasion. Any sale or transfer of the Leased Premises, or any part thereof, or of any larger tract of land of which the Leased Premises may be a part, shall be expressly made subject to all of the terms, covenants and conditions of this Lease. 33. Restatement. This Lease (including all exhibits and addendums attached hereto) amends, restates, and replaces in their entirety each of the Hilton Garden Lease and the Casino Lease. This Lease contains the entire understanding of the parties and supersedes all other understandings (oral or written), with respect to the subject matter hereof. 34. Amendments. This Lease may be modified or amended, in writing, following proper authorization by each party's governing body. This Lease may not be amended or modified by oral agreement or understanding between the parties unless the same shall be in writing, duly approved,and executed by both parties. Notwithstanding the foregoing,City and Association shall enter into an amendment to this Lease to the extent necessary: (a) to conform with a change in federal or state law or regulation,administrative ruling or judicial decision; and/or (b) to comply with any requirements of Iowa law and the Iowa Racing and Gaming Commission,including all matters required in order to obtain,maintain,and renew the appropriate licenses required by state law. 35. Severabilitv.If any provisions of this Lease or any application thereof to any person or circumstance shall be held invalid by judicial decision, the invalidity shall not affect other provisions or applications of this Lease that can be given effect without the invalid provision or application, and to this end and extent, the provisions of the Lease are severable. If any provision of this Lease becomes invalid and results in a significant loss of benefit to City or Association or both, as determined by either party,the party claiming the loss may demand renegotiation. Such demand for renegotiation must be made and delivered to the other party within one year after the date both City and Association have received notice of the invalidity. Within fifteen (15) days of receipt of such a demand, City and Association shall meet and begin renegotiations. The renegotiations shall be limited to reforming this Lease and restoring the party suffering the loss to its former position with equivalent benefits. The lease shall be effective from the date the invalidity took place, even if such reformation is retroactive and involves a settlement for loss of past benefits. 18 The purpose of this paragraph is to maintain the continuity of this Lease and conformity with the expressed intentions of the party when this Lease was formed. 36. Mailing Addresses. Notices to City and to Association shall be sent by certified mail as follows: If to City: City Manager City of Dubuque City Hall - 50 West 13th Dubuque, IA 52001 With a copy to: City Attorney City of Dubuque 300 Main Street, Suite 330 Dubuque, IA 52001 If to Association: President Dubuque Racing Association, Ltd. P. O. Box 3190 Dubuque, IA 52001 With a copy to: Corporation Counsel O'Connor& Thomas, P.C. Attn: Tonya A. Trumm 1000 Main Street Dubuque, IA 52001 or to such other address as either party shall, by written notice, request. 37. A�proval Contingency. This Lease is contingent upon the prior approval of the City Council of the City of Dubuque, Iowa, the Iowa Racing and Gaming Commission, and Association's board of directors. 38. Entire Agreement. This Lease contains the entire agreement between City and Association, and any statements, inducements or promises not contained herein shall not be binding upon the parties. 39. Memorandum for Recordin�. The parties mutually agree that this Lease shall not be recorded but that if necessary or desirable for title purposes, a Memorandum of Lease Agreement shall be executed and filed of record. 19 CITY OF DUBUQUE, IOWA DUBUQUE RACING ASSOCIATION, LTD. By: Its: Its: Date: Date: 20 EXHIBIT A LEASED PREMISES Lot 1 of CHAPLAIN SCHMITT ISLAND in the City of Dubuque, Iowa, according to the Plat recorded as Instrument#2023-7679,records of Dubuque County, Iowa. EXHIBIT B CITY INSURANCE SCHEDULE City of Dubuque Insurance Requirements for Lessees of City Property and Right of Way Licensees or Permittees INSURANCE SCHEDULE A 1. Lessee shall furnish a signed certificate of insurance to the City of Dubuque, lowa for the coverage required in Exhibit I prior to the lease, license, or permit commencement. All lessees of City property and right of way licensees or permittees shall submit an updated certificate annually. Each certificate shall be prepared on the most current ACORD form approved by the lowa Insurance Division or an equivalent. Each certificate shall include a statement under Description of Operations as to why the certificate was issued. Lease Agreement dated December 14. 2021. 2. All policies of insurance required hereunder shall be with an insurer authorized to do business in lowa and all insurers shall have a rating of A or better in the current A.M. BesYs Rating Guide. 3. Each certificate shall be furnished to the Finance Department of the City of Dubuque. 4. The lessee, licensee, or permittee shall be required to carry the minimum coverage/limits, or greater if required by law or other legal agreement, in Exhibit I. Failure to provide the required minimum coverage shall not be deemed a waiver of such requirements by the City of Dubuque. 5. Failure to obtain or maintain the required insurance shall be considered a material breach of the lease, license, or permit. 6. All required endorsements shall be attached to certificate. 7. Whenever a specific ISO form is referenced the current edition of the form must be used unless an equivalent form is approved by the Director of Finance and Budget.The lessee, licensee, or permittee must identify and list in writing all deviations and exclusions from the ISO form. 8. If lessee's, licensee's, or permittee's limits of liability are higher than the required minimum limits then the lessee's, licensee's, or permittee's limits shall be this agreement's required limits. 9. Lessee, licensee, or permittee shall require all subcontractors and sub-subcontractors to obtain and maintain during the performance of work insurance for the coverages described in this Insurance Schedule and shall obtain certificates of insurance from all such subcontractors and sub-subcontractors. Lessee, licensee, or permittee agrees that it shall be liable for the failure of a subcontractor and sub-subcontractor to obtain and maintain such coverage. The City may request a copy of such certificates from the lessee, licensee, or permittee. 10. Lessee, license&permittees shall be responsible for deductibles and self-insured retention and for payment of all policy premiums and other costs associated with the insurance policies required below. 11. All certificates of insurance must include agents name, phone number and email address. 12. The City of Dubuque reserves the right to require complete, certified copies of all required insurance policies, including endorsements, required by this Schedule at any time. 13. The City of Dubuque reserves the right to modify these requirements, including limits, based on changes in the risk or other special circumstances during the term of the agreement, subject to mutual agreement of the parties. Page 1 Of 4 Schedule A Lessees of City Property; Right of Way Licensees or Permittees April 2021 City of Dubuque Insurance Requirements for Lessees of City Property and Right of Way Licensees or Permittees INSURANCE SCHEDULE A (Continued) EXHIBIT I A) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Products-Completed Operations Aggregate Limit $1,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence $1,000,000 Fire Damage Limit(any one occurrence) $50,000 Medical Payments $5,000 1) Coverage shall be written on an occurrence, not claims made,form.The general liability coverage shall be written in accord with ISO form CG 00 01 or business owners form BP 00 02. All deviations from the standard ISO commercial general liability form CG 0001,or Business owners form BP 00 02,shall be clearly identified. 2) Include ISO endorsement form CG 25 04"Designated Location(s)General Aggregate Limit." 3) Include endorsement indicating that coverage is primary and non-contributory. 4) Include Preservation of Governmental Immunities Endorsement(Sample attached). 5) Include additional insured endorsement for: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards,commissions and/or authorities and their board members, employees and volunteers. Use ISO form CG 20 10 (Ongoing operations)or its equivalent. 6) Policy shall include Waiver of Right to Recover from�thers Endorsement. B) WORKERS'COMPENSATION&EMPLOYERS LIABILITY Statutory Benefits covering all employees injured on the job by accident or disease as prescribed by lowa Code Chapter 85. Coverage A Statutory—State of lowa Coverage B Employers Liability Each Accident $100,000 Each Employee-Disease $100,000 Policy Limit-Disease $500,000 Policy shall include Waiver of Right to Recover from Others endorsement. Coverage B limits shall be greater if required by the umbrella/excess insurer. OR If, by lowa Code Section 85.1 A,the lessee, licensee,or permittee is not required to purchase Workers'Compensation Insurance,the lessee, licensee,or permittee shall have a copy of the State's Nonelection of Workers'Compensation or Employers' Liability Coverage form on file with the lowa Workers'Compensation Insurance Commissioner,as required by lowa Code Section 87.22.Completed form must be attached. Page 2 of 4 Schedule A Lessees of City Property;Right of Way Licensees or Permittees April 2021 23 City of Dubuque Insurance Requirements for Lessees of City Property and Right of Way Licensees or Permittees INSURANCE SCHEDULE A (Continued) C) POLLUTION LIABILITY Coverage required: _Yes X No Pollution liability coverage shall be required if the lessee,contracting party, or permittee has any pollution exposure for abatement of hazardous or contaminated materials including,but not limited to, petroleum products,the removal of lead,asbestos,or PCBs. Pollution product and completed operations coverage shall also be covered. Each occurrence $2,000,000 Policy Aggregate $4,000,000 1) Policy to include job site and transportation coverage. 2) Include additional insured for: The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards,commissions and/or authorities and their board members, employees and volunteers. Use ISO form CG 2010. (Ongoing operations)or its equivalent and CG2037(completed operations)or its equivalent. 3) Include Preservation of Governmental Immunities Endorsement. 4) Provide evidence of coverage for 5 years after completion of project. D) PROPERTY INSURANCE REQUIRED BY LEASE,LICENSE,OR PERMIT X Yes _No Evidence of property coverage provided: X Yes Include the City of Dubuque as Lender Loss Payable. E) RIGHT-OF-WAY WORK ONLY: U MBRELLAlEXC ESS $1,000,000 X Yes _ No The General Liability,Automobile Liability and Workers Compensation insurance requirements may be satisfied with a combination of primary and Umbrella or Excess Liability Insurance. If the Umbrella or Excess Insurance policy does not follow the form of the primary policies, it shall include the same endorsements as required of the primary policies including Waiver of Subrogation AND Primary and Non-contributory in favor of the City. F) FLOODINSURANCE X Yes _No If Required Coverage Federal Flood Program Maximum Page 3 of 4 Schedule A Lessees of City Property;Right of Way Licensees or Permittees April 2021 24 City of Dubuque Insurance Requirements for Lessees of City Property and Right of Way Licensees or Permittees Please be aware that naming the City of Dubuque as an additional insured as is required by this Insurance Schedule may result in the waiver of the City's governmental immunities provided in lowa Code sec. 670.4. If you would like to preserve those immunities, please use this endorsement or an equivalent form. PRESERVATION OF GOVERNMENTAL IMMUNITIES ENDORSEMENT 1. Nonwaiver of Governmental Immunitv.The insurer expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, lowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, lowa under Code of lowa Section 670.4 as it is now exists and as it may be amended from time to time. 2. Claims Coveraqe.The insurer further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Code of lowa Section 670.4 as it now exists and as it may be amended from time to time.Those claims not subject to Code of lowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. 3. Assertion of Government Immunitv.The City of Dubuque, lowa shall be responsible for asserting any defense of governmental immunity,and may do so at any time and shall do so upon the timely written request of the insurer. 4. Non-Denial of Coveraae.The insurer shall not deny coverage under this policy and the insurer shall not deny any of the rights and benefits accruing to the City of Dubuque, lowa under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s)of governmental immunity asserted by the City of Dubuque, lowa. No Other Chanqe in PolicV.The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. SPECIMEN (DEPARTMENT MANAGER: FILL IN ALL BLANKS AND CHECK BOXES) Page 4 of 4 Schedule A Lessees of City Property;Right of Way Licensees or Permittees April 2021 25 LEASE SUBORDINATION AGREEMENT THIS LEASE SUBORDINATION AGREEMENT ("A�reement") is made as of , 2023,by and among DuBuQuE RaCrtvG ASsoCIaTION,LT�.,an Iowa nonprofit corporation("DRA"and/or as applicable, the `Borrower"); the CITy oF DuBUQUE, IowA, a municipal corporation (the "City"); MIDWESTONE BaNK, an Iowa state bank ("Lender"); and DuBuQuE INiT1aTIVEs, an Iowa nonprofit corporation ("DI"). RECITALS A. Lender has made, and has agreed to make certain loans and other financial accommodations to Borrower pursuant to the terms and conditions of a Credit Agreement of even date herewith (as amended from time to time, the "Credit A�reement") between Borrower and Lender. B. DI has agreed to make certain loans and other financial accommodations to Borrower pursuant to the terms and conditions of a promissory note and/or credit agreement of even date herewith (as amended from time to time, the"DI Note")between Borrower and DI. C. Borrower is obligated to City pursuant to the Lease Agreement, as hereinafter defined. D. Lender is willing to make the loans and other financial accommodations to Borrower under the Credit Agreement and the other Credit Documents on the condition, among other things, that this Agreement be signed by the parties hereto and delivered to Lender. E. DI is willing to make the loans and other financial accommodations to Borrower under the DI Note on the condition, among other things, that this Agreement be signed by the parties hereto and delivered to DI. F. City and Borrower desire to enter into this Agreement in arder to induce each of Lender and DI to make their respective loans and financial accommodations contemplated by the Credit Agreement, the other Credit Documents, and the DI Note. City acknowledges that neither Lender nor DI would consent to the transactions but for the execution of this Agreement. AGREEMENT In exchange for the consideration described above, the receipt and sufficiency of which is hereby acknowledged, and as part of the consideration for the making by Lender and DI to Borrower of any loan or financial accommodation, the parties hereto agree as follows: 1. Definitions. Except as otherwise provided herein, all capitalized terms used in this Agreement shall have the meanings ascribed to such terms in the Credit Agreement,provided that the following terms shall have the meanings set forth below: a. "DI Indebtedness" means all obligations, liabilities, and indebtedness of Borrower from time to time owed to DI under or pursuant to the DI Note and any amendments, modifications, renewals, restatements and refinancing thereof, including, without limitation, the costs of collecting those liabilities 1 � Page and interest accruing on those liabilities after the commencement of bankruptcy or similar insolvency proceedings. b. "Event of Default" means the occurrence of an "Event of Default" as defined in the Credit Agreement and/or the DI Note. c. "Indebtedness" means the DI Indebtedness and the Lender Indebtedness, to the extent such Indebtedness has not been Paid in Full. d. "Lease Agreement"means that certain Amended and Restated Lease Agreement by and between DRA and City, dated , 2023, as amended or supplemented from time to time for the rental of the "Leased Premises" as defined in the Lease Agreement and more particularly described on Exhibit A of the Lease Agreement. e. "Lender Indebtedness"means all obligations,liabilities,and indebtedness of Borrower from time to time owed to Lender or Lender's Affiliate, of any and every kind and nature, whether heretofore, now, or hereafter owing, arising, due or payable and howsoever created, incurred, acquired, or owing, whether primary, secondary, direct, contingent, fixed, or otherwise (including obligations of performance), in each case,to the extent evidenced or contemplated by the Credit Agreement and all other Credit Documents and any amendments, modifications, renewals, restatements and refinancing thereof, including, without limitation, the costs of collecting those liabilities and interest accruing on those liabilities after the commencement of bankruptcy or similar insolvency proceedings. £ "Paid in Full"when used in connection with the DI Indebtedness and/or the Lender Indebtedness, as applicable,means Borrower has(i) indefensibly paid all such Indebtedness in cash(other than contingent indemnification or reimbursement claims in relation to such Indebtedness to the extent no claim giving rise thereto has been asserted), (ii)performed all material obligations under the Credit Agreement and DI Note and(iii) in the case of the DI Indebtedness,Borrower has agreed to terminate all of its rights to future credit from DI under the DI Note and, in the case of the Lender Indebtedness, Borrower has agreed to terminate all of its rights to future credit from Lender under the Credit Documents and all Letters of Credit, if any, have expired or terminated. g. "Permitted Monthly Rental Payments" means that portion of rental payments due to City under Paragraph 3 of the Lease Agreement that constitutes the fair market ground rent for the Leased Real Property,which fair market ground rent far the Leased Real Property shall be determined within thirty(30) days following an Event of Default by a certified commercial appraiser approved and engaged by Lender following the occurrence of an Event of Default. Borrower shall be responsible for the payment of all appraisal fees. h. "Subordinated Payments"means the following rent and distributions payable by Borrower to City: (i)Any rental payments(other than Permitted Monthly Rental Payments)due to City under Paragraph 3 of the Lease Agreement; (ii) Any distribution of Net Cash Remaining payments to City under Paragraph 22(a)(i) of the Lease Agreement; and (iii) Any distribution of Net Cash Remaining to the Schmitt Island Master Plan Implementation Fund under Paragraph 22(a)(iii) of the Lease Agreement. Far avoidance of doubt and for clarification,the parties acknowledge and agree that Permitted Monthly Rental Payments shall not, under any circumstances, constitute or be deemed to constitute Subordinated Payments. 2 � Page 2. Subordination of Subordinated Payments to Indebtedness. City acknowledges and agrees that,upon the occurrence and during the continuance of an Event of Default, the Subordinated Payments are and shall automatically be deemed to be subordinate in all respects to the Indebtedness. Notwithstanding the foregoing, each of Lender and DI expressly acknowledges and agrees that Borrower shall be permitted to make,and City shall be permitted to receive, Subordinated Payments unless and until otherwise prohibited pursuant to Paragraph 3(a) hereof. 3. Default/Cessation of Lease Payments. a. Upon the occurrence and continuance of an Event of Default, Borrower shall not directly or indirectly make any payments of any kind of the Subordinated Payments until the Event of Default is cured or waived in writing by Lender and/or DI, as applicable. Upon receipt of notice that an Event of Default has occurred, the City shall not accept any payment on account of the Subordinated Payments until the Event of Default is cured or waived in writing by Lender and/or DI, as applicable. b. Notwithstanding anything to the contrary contained herein,upon the occurrence and continuance of an Event of Default, Borrower may make, and City may accept, Permitted Monthly Rental Payments. Provided, however,upon the Event of Default, such Permitted Monthly Rental Payments shall not become payable until the amount of such payments is determined in accordance with Section 1(g) of this Agreement. If the amount of the Permitted Monthly Rental Payments is not determined within the thirty (30) day timeframe provided under Section 1(g) of this Agreement, then, until such determination is made, the City may demand and accept payment from the Borrower of an amount the City, in its sole discretion, determines to be the fair market ground rent for the Leased Real Property, which amount may not exceed the then applicable monthly base rental rate on a per acre basis payable by Borrower to City under Section 3(a) of the Lease Agreement for the portion of the Leased Premises consisting of the Hilton Garden Inn and Houlihan's. For the avoidance of doubt, the parties hereto expressly agree that the total Leased Premises consists of 27.784 acres and the portion of the Leased Premises consisting of the Hilton Garden Inn and Houlihan's consists of 1.317 acres. c. Notwithstanding any other term or condition of this Agreement, if a payment under the Subordinated Payments would cause an Event of Default, and without notice from Lender or DI, Borrower shall immediately cease making any such distributions and payments of the Subordinated Payments. Upon receipt of notice that a payment of a Subordinated Payment by Borrower would cause an Event of Default, the City shall not accept or retain payments of the Subordinated Payments even if otherwise permitted hereby. d. When such Event of Default is cured or waived as provided in the Credit Agreement and/or the DI Note, as applicable, City may accept, ask for, demand, and receive any payments on the Subordinated Payments owed to City for the duration of the Event of Default discounted by any Permitted Monthly Rental Payments paid to City pursuant to Section 3(b) that were actually paid by the Borrower during the time period an Event of Default continued. 4. No Enforcement by City. City covenants and, agrees not to sue upon, or enforce any right City may have pertaining to the Subordinated Payments, nor to collect or receive payment of the Subordinated Payments in contradiction to this Agreement. 3 � Page 5. Payment to Lender of Payments and Distributions on Account of Subordinated Payments. City shall promptly (and in any event within thirty (30) days after demand by Lender) pay or otherwise deliver to Lender all amounts that City may receive on account of the Subordinated Payments in violation of Section 3(a)of this Agreement, and those sums shall be held in trust by City for the benefit of Lender until paid or delivered to Lender. In the event the DI Indebtedness remains outstanding after the Lender Indebtedness has been Paid in Full, all references to Lender in this Section 5 shall be deemed to be amended to refer to DI and the provisions hereof shall inure to the benefit of DI. 6. Bankruptcv Rights. In any bankruptcy, liquidation, insolvency, receivership, or similar proceeding, whether at law or in equity, or pursuant to state or federal law, Lender shall be entitled to be Paid in Full with respect to the Lender Indebtedness and DI shall be entitled to be Paid in Full with respect to the DI Indebtedness, in each case, from the assets of Borrower before City is entitled to receive any payment or thing of value on account of the Subordinated Payments. In case of any assignment for the benefit of creditors by Borrower or in case any proceedings under the United States Bankruptcy Code are instituted by or against Borrower, or in case of the appointment of any receiver for Borrower's business or assets, or in case of any dissolution or winding up of the affairs of Borrower: a. Borrower and any assignee, trustee in bankruptcy, receiver, debtor in possession or other person or persons in charge are hereby directed to (i) pay to Lender the full amount of the Lender Indebtedness (including interest to the date of payment and all unpaid fees and expenses and all other items included in the Lender Indebtedness) before making any Subordinated Payment to City, and insofar as may be necessary for that purpose, City hereby assigns and transfers to Lender all security or the proceeds thereof, and all rights to any payments, dividends or other distributions and(ii)pay to DI the full amount of the DI Indebtedness (including interest to the date of payment and all unpaid fees and expenses and all other items included in the DI Indebtedness)before making any Subordinated Payment to City, and insofar as may be necessary for that purpose, City hereby assigns and transfers to DI all security or the proceeds thereof, and all rights to any payments, dividends or other distributions. Notwithstanding the foregoing, as between Lender and DI, DI's rights hereunder shall be subordinate and junior to Lender's rights as provided in Section 10 hereof and/ar in any other agreement between Lender and DI pertaining thereto. b. In any Proceeding involving Borrower or any Collateral under applicable Bankruptcy Laws: (i) City will file a proof of claim in respect of its claims against Borrower,which proof of claim shall include this Agreement as an attachment and acknowledge on the face of the proof of claim the assignment of such bankruptcy claim and any other related claim to Lender,which shall become the holder thereof in accordance with the requirements of Federal Rule of Bankruptcy Procedure 3001 and other applicable law, and shall send to Lender a copy thereof together with evidence of the filing with the appropriate court or other authority; (ii) Notwithstanding the foregoing, Lender may file such proof of claim, ar corrected proof of claim, on behalf of City having such a claim and Lender, as assignee of the claim of City, at any time; and (iii) If objection is made to the allowance of any claim of City, Lender has the right to intervene and fully participate in such proceedings and if such rights are denied and City fails to defend such claim, then Lender may defend such claim in the name of City or the name of 4 � Page Lender, as assignee of said claim, or may chose not to defend such objection, as Lender determines in its sole discretion. In the event the DI Indebtedness remains outstanding after the Lender Indebtedness has been Paid in Full, all references to Lender in this Section 6.b. shall be deemed to be amended to refer to DI and the provisions hereof shall inure to the benefit of DI. 7. Representations, Warranties, and Covenants of Parties. a. Bv CitX. City represents, warrants, and covenants that: (i) City has the full power to make the subordinations set forth in this Agreement; (ii) as of the date of this Agreement, City has not made or permitted any assignment or transfer, as collateral or otherwise, of its interest under the Lease Agreement; (iii) City has entered into this Agreement based on its own independent investigation of (or decision not to investigate) the financial condition of Borrower, and has not relied on and shall not rely on any representation or information of any nature regarding Borrower made by or received from Lender or DI; (iv) except as permitted pursuant to the terms of the Credit Agreement, City will take no action to amend or modify the Lease Agreement in a manner that (A) increases the rental payments, increases distributions of Net Cash Remaining (as defined in the Lease Agreement)to City and/or the Schmitt Island Master Plan Implementation Fund(as defined under the Lease Agreement), or provides for any additional payments from Borrower to City regardless of how characterized, or (B)reduces the term of the Lease Agreement, in either case, without Lender's prior written consent(or, if the Lender Indebtedness has been Paid in Full, without DI's prior written consent), which consent shall not be unreasonably delayed, conditioned and/or withheld; (v) except as permitted under this Agreement, City will take no action to terminate the Lease Agreement or to collect or sue to collect on the Lease Agreement, in either case, for nonpayment of the Subordinated Payments, without Lender's prior written consent (or, if the Lender Indebtedness has been Paid in Full, without DPs prior written consent); (vi) City shall not transfer or assign the Lease Agreement to any other Person without Lender's prior written consent (or, if the Lender Indebtedness has been Paid in Full, without DI's priar written consent), which consent may be withheld unless such transferee or assignee has entered into a subordination agreement in the same form and substance as this Agreement; and (vii) City shall not, and shall not encourage any other person to, at any time, contest the validity, perfection,priority, enforceability of the provisions of this Agreement. b. Bv Borrower. Borrower represents, warrants, and covenants that: (i) Borrower is the is the tenant under the Lease Agreement; S � Page (ii) Borrower has full power to perform and assume its obligations as set forth in this Agreement; (iii) except as specifically permitted under this Agreement and the Credit Agreement, Borrower will not make any payment on the Subordinated Payments in contradiction to the terms of this Agreement without Lender's prior written consent (or, if the Lender Indebtedness has been Paid in Full, without DI's prior written consent); (iv) except as permitted under the Credit Agreement, Borrower will not grant any lien, security interest or otherwise encumber its interest under the Lease Agreement without Lender's prior written consent (or, if the Lender Indebtedness has been Paid in Full, without DI's prior written consent); (v) except as permitted pursuant to the terms of the Credit Agreement, Borrower will take no action to amend, modify or waive any of its rights under the Lease Agreement and any agreement relating to any Subordinated Payments, to transfer or assign the Lease Agreement or Subordinated Payments to a subsidiary or otherwise, or to perform or omit to perform any act required to be performed by Borrower (if any) with respect to the Lease Agreement or Subordinated Payments without Lender's prior written consent (or, if the Lender Indebtedness has been Paid in Full, without DI's prior written consent); and (vi) Borrower shall not, and shall not encourage any other person to, at any time, contest the validity,perfection,priority or enforceability of the provisions of this Agreement,the Credit Agreement, the other Credit Documents, or the DI Note. c. Bv Lender. Lender represents and warrants that: (i) it has the full power to enter into this Agreement; (ii) as of the date of this Agreement, Lender has not made or permitted any assignment or transfer,as collateral or otherwise,of the Lender Indebtedness,of any instrument evidencing the Lender Indebtedness, or of any of the Collateral, provided that Lender may do so in the future pursuant to the terms and conditions of the Credit Agreement; and (iii) Lender has extended the Lender Indebtedness and Lender has entered into this Agreement based on its own independent investigation (or decision not to investigate) of the financial condition of Borrower, and has not relied on and shall not rely on any representation or information of any nature regarding Borrower made by or received from City or DI. d. Bv DI. DI represents and warrants that: (i) it has the full power to enter into this Agreement; (ii) as of the date of this Agreement, DI has not made or permitted any assignment or transfer, as collateral or otherwise, of the DI Indebtedness, of any instrument evidencing the DI Indebtedness,provided that DI may do so in the future pursuant to the terms and conditions of the DI Note; and 6 � Page (iii) DI has extended(or will extend)the DI Indebtedness and DI has entered into this Agreement based on its own independent investigation (or decision not to investigate) of the fmancial condition of Borrower, and has not relied on and shall not rely on any representation or information of any nature regarding Borrower made by or received from City or Lender. 8. Waivers. Borrower and City each waive: (a) notice of acceptance of this Agreement; and (b) demand, presentment, notice of dishonor, and protest in the collection of the Indebtedness or the Subordinated Payments. 9. Action Re a�g Indebtedness. Without notice to or the consent of City, each of Lender (with respect to the Lender Indebtedness) and DI (with respect to the DI Indebtedness) may take or refrain from taking any action regarding such Indebtedness that it deems appropriate, including, without limitation: (a) amending, modifying, extending, or renewing such Indebtedness or changing any interest rate applicable to it; (b)releasing, compromising, or settling any claim related to such Indebtedness; (c) forbearing or agreeing to forbear from enforcing any right or remedy related to such Indebtedness, including rights and remedies against any guarantor, surety, or accommodation party of all or any part of such Indebtedness; or (d) substituting, releasing, or exchanging any collateral for such Indebtedness. Lender shall not be required to perfect any security interest in any collateral securing the Lender Indebtedness. Notwithstanding the foregoing,the parties expressly acknowledge and agree that the provisions of this Section 9 shall not, and are not intended to,vary or alter any provision contained in the Lease Agreement that requires Borrower to obtain the consent of City with respect to certain indebtedness of Borrower (including the Indebtedness), which provisions shall remain applicable and enforceable notwithstanding anything to the contrary in this Agreement, the Credit Agreement, any of the other Credit Documents, or the DI Note. Notwithstanding the foregoing, if the Lender or DI increases the amount of the Lender Indebtedness or DI Indebtedness above the amount committed on the date of this Agreement without the consent of the City,then any increased amount shall not be subject to this Agreement. 10. DI Acknowledgements and Agreements. DI hereby acknowledges and agrees that, notwithstanding anything to the contrary contained in this Agreement,the Credit Agreement, the other Credit Agreements, the DI Note, and/or any other agreement between DI and Borrower: (a) all of DI's present and future rights, claims, and interests under this Agreement are subordinate in all respects to the rights, claims, and interests of Lender under this Agreement; (b) DI shall not exercise or pursue any rights, claims, and/or interests hereunder without the prior written notice to Lender; (c) any and all DI Indebtedness is subordinate in all respects to all Lender Indebtedness; and (d)upon the occurrence and during the continuance of an Event of Default, the Lender Indebtedness shall be Paid in Full before DI is entitled to receive any payment on account of any DI Indebtedness. 11. Continued Reliance. Each of Lender and DI, by accepting delivery of this Agreement, shall be deemed to have relied upon all of its terms and conditions and shall be entitled to continue that reliance. This Agreement constitutes an irrevocable continuing agreement of subordination. 12. Subro ag tion. So long as this Agreement remains in effect, City shall not exercise any right of subrogation or other similar rights with respect to the Indebtedness. 13. Construction. As used in this Agreement the term "or" shall mean "and/or". Section headings are for convenience of reference only and do not affect the interpretation of this Agreement. 7 � Page 14. Binding Effect; Governing Law; Counterparts. This Agreement binds Borrower and City and their respective successors and assigns, and benefits Lender, DI and their respective successors and assigns. This Agreement is to be governed by and construed in accordance with Iowa law, without regard to principles of conflicts of law. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same Agreement. 15. CONSENT TO JURISDICTION; WAIVER. EACH PARTY HERETO IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS 1N ANY WAY,MANNER OR RESPECT,ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT, SHALL BE LITIGATED 1N COURTS HAVING SITUS WITHIN THE COUNTY OF DUBUQUE, STATE OF IOWA. THE PARTIES HERETO HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE. 16. WAIVER OF BOND. EACH PARTY HERETO WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF LENDER AND/OR DI IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF LENDER AND/OR DI, AS APPLICABLE, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER, OR PRELIMINARY OR PERMANENT INJUNCTION THIS AGREEMENT. 17. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN OR AMONG THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM 1N CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO. EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY OF THEM MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTY TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 18. Acknowled�ement of Recitals. The above Recitals are incorporated herein by reference and acknowledged by each parry hereto as true and correct. 19. Termination. This Agreement shall automatically and immediately terminate, without action on the part of or notice to any party hereto, when the Indebtedness is Paid in Full, at which time this Agreement and each and all of the terms, conditions and provisions hereof shall automatically and immediately become and be deemed to be null, void, and of no further force or effect. Notwithstanding the foregoing, this Agreement shall be deemed to be terminated and of no further force or effect(a)with respect to Lender once that the Lender Indebtedness has been Paid in Full, even if the DI Indebtedness remains outstanding, and (b) with respect to DI once that the DI Indebtedness has been Paid in Full, even if the Lender Indebtedness remains outstanding. 20. Entire A�reement. Except for any other agreement now or hereafter entered into by and between Lender and DI regarding with the priorities and subordination, as between themselves, with respect to the Indebtedness,this Agreement constitutes the entire agreement among the parties hereto with respect to the 8 � Page subj ect matter of this Agreement and supersedes and is in full substitution for any and all prior agreements and understandings between them relating to the subject matter of this Agreement. [REMAINDER OF PAGE INTENTIONALLYLEFT BLANK; SIGNATURE PAGE FOLLOWSJ 9 � Page IN WITNESS WHEREOF, each party hereto has authorized and signed this Agreement as of the date first written above. BORROWER: DusuQuE RaCiNG ASSOCiaTioN LTn. By: Alex Dixon President and Chief Executive Officer CITY: CITY OF DUBUQUE,IOWA By: Brad Cavanagh Mayor LENDER: MIDWEST ONE BANK By: Wayne Breckon First Vice President and Regional Credit Off'icer DI: DUBUQUE INITIATIVES By: � � � � Signatu�e Page to Lease Subordination Agreement LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS Recorder's Cover Sheet Preparer Information: Fuerste, Carew, Juergens & Sudmeier, P.C. 890 Main Street, Suite 200 Dubuque, Iowa 52001 Attn: Stephan Alt Taxpayer Information: Dubuque Racing Association, Ltd. 1855 Greyhound Park Road Dubuque, Iowa 52001 Return Document To: Fuerste, Carew, Juergens & Sudmeier, P.C. 890 Main Street, Suite 200 Dubuque, Iowa 52001 Attn: Stephan Alt Mortgagor: Dubuque Racing Association, Ltd. Mortgagee: MidWestOne Bank Legal Description: See Exhibit"A" NOTICE: This Mortgage secures credit in the amount of$51,308,775. Loans and advances up to this amount,together with interest, are senior to indebtedness to other creditors under subsequently recorded or filed mortgages and liens. THIS MORTGAGE ALSO CONSTITUTES A FIXTURE FILING �l� LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS THIS LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF RENTS ("Mortgage"), made as of October , 2023, by and between DUBUQUE RACIt�1G Assoc�TloN,LT�., an Iowa nonprofit corporation ("Mortgagor"), and MIDWEST01vE BaNK(hereinafter the terms "Lender" and"Mortgagee" may be used interchangeably). RECITALS A. As of the date hereof, Mortgagor has executed that certain Credit Agreement (as amended, restated, supplemented for modified from time to time, the "2023 Credit Agreement") relating to certain loans to be made by Mortgagee to Mortgagor in the amount of up to $29,768,671 (collectively the "2023 Loan"). B. The 2023 Loan is evidenced by certain Promissory Notes executed by Mortgagor on or after the date hereof(the "2023 Notes"). C. Mortgagor and Lender(s/b/m/AMExicaN TxusT&SavnvGs BaNK)previously entered into that certain Business Loan Agreement dated as of June 13, 2014, as amended from time to time, relating to that certain loan used for the purchase of the Hilton Garden Inn,Houlihan's restaurant, and substantially all of the assets related thereto, the `Bxisting Hilton Garden Loan Agreement"), the current outstanding amount of which is $8,293,229 (the "Existing Hilton Garden Loan"). D. The Existing Hilton Garden Loan is evidenced by a certain Promissory Note executed by Mortgagar on June 13, 2014, as amended (the `Bxisting Hilton Garden Note"). E. Mortgagor and Lender previously entered into that certain Business Loan Agreement dated as of April 1, 2023, to provide Mortgagar a Line of Credit (the "Existing Line of Credit") and certain letters of credit(the`Bxisting Letter of Credit")in the aggregate, combined amount of up to Three Million Dollars ($3,000,000) (the `Bxisting Line of Credit Loan" and "Existing Letter of Credit Loan", respectively). F. The Existing Line of Credit Loan and the Existing Letter of Credit Loan are evidenced by a certain Promissory Note executed by Mortgagor on April 1, 2023, as amended (the "Existing Line of Credit and Letter of Credit Note"). G. "Loan" collectively shall mean the 2023 Loan, the Existing Hilton Garden Loan, the Existing Line of Credit Loan, and the Existing Letter of Credit Loan. H. "Credit Agreement" collectively shall mean the 2023 Credit Agreement, the Existing Hilton Garden Loan Agreement, the Existing Line of Credit, and the Existing Letter of Credit. L "Note" collectively shall mean the 2023 Notes, the Existing Hilton Garden Note, the Existing Line of Credit and Letter of Credit Note. �2� J. The Credit Agreement requires that the Loan be secured by all of Mortgagor's interest in the real property described herein in Dubuque County, Iowa. NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants herein contained, the parties hereto hereby agree as follows: ARTICLE I MORTGAGE GRANT l.l For the purposes of and upon the terms and conditions set forth in this Mortgage, to the extent allowed by any license issued to Mortgagor under Chapter 99F of the Iowa Code (the "Gaming License"), Mortgagor hereby irrevocably mortgages, grants, conveys and assigns to Mortgagee, all Mortgagor's right, title and interest in and to the following:the leasehold interest in the real property described in Exhibit A created by the Primary Leases (defined below) (the "Land"), which together with all rights,privileges, tenements, hereditaments,rights-of-way, easements, appendages and appurtenances appertaining thereto and all interests now or in the future arising in respect of, benefiting or otherwise relating to the Land, including, without limitation, easements, rights-of-way and development rights, including all right, title and interest now owned or hereafter acquired by Mortgagor in and to any land lying within the right of way of any street adjoining the Land, and any and all sidewalks, alleys, and driveways adjacent to or used in connection with the Land(which,together with the Land, are collectively referred to as the "Real Property"); (b) all the buildings, structures, facilities and improvements of every nature whatsoever now or hereafter situated on the Land (the "Improvements"); (c) (i) all fixtures, machinery, appliances, goods, building or other materials, equipment, including all gaming equipment and devices, and all machinery, equipment, engines, appliances and fixtures far generating or distributing air,water,heat, electricity, light, sewage, fuel or refrigeration, ar far ventilating or sanitary purposes, the exclusion of vermin or insects, or the removal of dust, refuse or garbage, now owned or hereafter acquired by Mortgagor and now or hereafter attached to, installed in ar used in connection with the Real Property and/or the Improvements; (ii) all wall-beds, wall-safes, built-in furniture and installations, shelving, lockers, partitions, doorstops, vaults, motors, elevators, dumb- waiters, awnings,window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm, communication, surveillance and security systems, computers, drapes, drapery rods and brackets, mirrors, mantels, screens, linoleum, carpets and carpeting, signs, decorations, plumbing,bathtubs, sinks,basins,pipes, faucets,water closets, laundry equipment,washers, dryers,mini- bars,ice-boxes and heating units;kitchen and restaurant equipment(including stoves,refrigerators,ovens, ranges, dishwashers, disposals, water heaters and incinerators) now owned or hereafter acquired by Mortgagor and now or hereafter attached to, installed in or used in connection with any of the Real Property or the Improvements; (iii) all amusement rides and attractions attached to the Land; and (iv) all furniture and furnishings of every nature whatsoever now or hereafter owned or leased by Mortgagor or in which Mortgagor has any rights or interest and located in ar on, or attached to, ar used or intended to be used or which are now or may hereafter be appropriated for use on or in connection with the operation of the Real Property and/or the Improvements, and all extensions, additions, accessions, improvements, betterments,renewals, substitutions, and replacements to any of the foregoing,which, to the fullest extent permitted by law, shall be conclusively deemed fixtures and improvements and a part of the real property �3� hereby encumbered (the "Fixtures") (the Real Property, Fixtures and Improvements are collectively referred to as the "Premises"); (d) (i) all cocktail lounge supplies, including bars, glassware, bottles and tables wherever so located; (ii) all chaise lounges, hot tubs, swimming pool heaters and equipment and all other recreational equipment and beauty and barber equipment wherever so located; (iii) all personal property, goods, equipment and supplies used in connection with the operation of the hotel, casino, restaurants, stores, parking facilities, and all other commercial operations wherever so located, including communication systems,visual and electronic surveillance systems and transportation systems; (iv) all tools,utensils,food and beverage, silverware, dishes, liquor, uniforms, linens, housekeeping and maintenance supplies, vehicles and fuel wherever so located; and (v) all other personal property of any kind or character, including such items of personal property as defined in the UCC (defined below),now or hereafter owned or leased by Mortgagor or in which Mortgagor has any rights or interest wherever so located, and all extensions, additions, accessions, improvements, betterments, renewals, substitutions, and replacements to any of the foregoing and including everything in Subsection 1.1(c)not permitted to be deemed Fixtures or Improvements (the "Personalty"); (e) (i) the rights to use all names,logos and designs and all derivations thereof now or hereafter used by Mortgagor, together with the goodwill associated therewith, with the exclusive right to use such names,logos and designs wherever they are now or hereafter used and any and all trade names,trademarks or service marks, whether or not registered, now or hereafter used in the operation of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of the Mortgagor, including any interest as a lessee, licensee (except the Gaming License) or franchisee, and, in each case, together with the goodwill associated therewith; (ii) all books, records, customer lists, concession agreements, supply or service contracts, licenses, permits, governmental approvals, signs, goodwill, casino and hotel credit and charge records, supplier lists, checking accounts, safe deposit boxes (excluding the contents of such deposit boxes owned by persons other than Martgagar and its subsidiaries), cash, instruments, chattel papers, including inter-company notes and pledges, documents, unearned premiums, deposits, refunds (including income tax refunds), prepaid expenses, rebates; (iii) all accounts, general intangibles, instruments, documents, chattel paper of Mortgagor including all reserves, escrows or impounds required under the Credit Agreement ar other Related Documents (as defined in the Credit Agreement) and all deposit accounts maintained by Mortgagor with respect to the Subject Property; (iv) all actions and rights in action, and all other claims and all other contract rights and general intangibles resulting from or used in connection with the operation and occupancy of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagar and in which Mortgagor now or hereafter has rights; (v) all casino operator's agreements,vacation license resort agreements or other time share license or right to use agreements, including all rents, issues, profits, income and maintenance fees resulting therefrom; and (vi) advertising and promotional material,blueprints, surveys,plans and other documents used in the construction or operation of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor, whether any of the foregoing is now owned or hereafter acquired (the "Intangible Property") (Mortgagee's rights to the Intangible Property associated with the operation by Mortgagor of franchises are limited to those rights that Mortgagor is allowed to grant Mortgagee under the terms of current and future franchise agreements); (� all leases, subleases, lettings, licenses, concessions, operating agreements, management agreements,and all other agreements affecting the Subj ect Property,that Mortgagor has entered into,taken by assignment, taken subj ect to, or assumed, or has otherwise become bound by, now or in the future, that �4� give any person the right to conduct its business on, or otherwise use, operate or occupy, all or any portion of the hotel,casino,restaurants, stores,parking facilities and all other commercial operations of Mortgagor and any leases, agreements or arrangements permitting anyone to enter upon or use any of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor to extract or remove natural resources of any kind, together with all amendments, extensions, and renewals of the foregoing entered into in compliance with this Mortgage, together with all rental, occupancy, service, maintenance or any other similar agreements pertaining to use or occupation of, or the rendering of services at the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor or any part thereof, together with all related security and other deposits (the "Leases"); (g) all of the rents, revenues, receipts, royalties, income, proceeds, profits, license and concession fees, security and other types of deposits, and other benefits paid or payable by parties to the Leases for using, leasing, licensing possessing, operating from, residing in, selling or otherwise enjoying the Subject Property (the "Rents"); (h) all other agreements, such as construction contracts, architects' agreements, engineers' contracts, utility contracts, maintenance agreements, management agreements, service contracts, listing agreements, guaranties, warranties, permits, licenses, certificates and entitlements in any way relating to the construction, use, occupancy, operation, maintenance, enjoyment or ownership of the Real Property, including without limitation that certain Revocable License Agreement dated on or about the date hereof, between Mortgagor and the City of Dubuque, Iowa, as amended from time to time (the "Property Agreements"); (i) all rights,privileges, tenements,hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing; (j) all property tax refunds and rebates and utility refunds and rebates (the "Refunds"); (k) all accessions, replacements and substitutions for any of the foregoing and all proceeds thereof(the"Proceeds"); (1) all insurance policies, unearned premiums therefor and proceeds from such policies covering any of the above property now or hereafter acquired by Mortgagar(the "Insurance"); and (m) all of Mortgagor's right, title and interest in and to any awards, damages, remunerations, reimbursements, settlements or compensation heretofore made or hereafter to be made by any Government Authority pertaining to the Premises, Fixtures or Personalty (the "Condemnation Awards"), all of the faregoing, whether now owned or hereafter acquired, being collectively referred to as the "Subject Property"; provided, however, that notwithstanding the foregoing or anything to the contrary in this Mortgage, the Subject Property does not and shall not include (A) the Gaming License ar (B) any other right of Mortgagor or item of real or personal property of Mortgagor, to the extent, in the case of this subsection (B), that Mortgagor's assignment and conveyance to, ar grant of a lien or security interest in favor of, Mortgagee in such particular right or item of real or personal property is prohibited by, or would constitute a default under, the terms of any current or future agreement (including any franchise agreement)to which Mortgagor is a party and/or any law,regulation or ordinance applicable to Mortgagor. The listing of specific rights or property shall not be interpreted as a limit of general terms. LS] 1.2 Certain Definitions. (a) The term "Primary Leases" shall mean all of the leases and agreements described on Exhibit B attached hereto and incorporated by this reference. 1.3 Term. In no event shall the term of this Mortgage extend beyond December 31, 2056, without the prior written consent of the titleholder of the Land and the written agreement of Mortgagor. ARTICLE II OBLIGATIONS SECURED 2.1 Obligations Secured. Mortgagor enters into this Mortgage for the purpose of securing the following obligations ("Secured Obligations"): (a) Payment and performance of all Obligations as defined in the Credit Agreement,including, without limitation, all covenants and obligations on the part of Mortgagor under the Credit Agreement, the Note and all other Related Documents (as de�ned in the Credit Agreement); (b) Payment and performance of all covenants and obligations of Mortgagor under this Mortgage; and (c) All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced, including, without limitation: (i) modifications of the required principal payment dates or interest payment dates or both, as the case may be, deferring or accelerating payment dates wholly or partly; or (ii) modifications, extensions or renewals at a different rate of interest whether or not in the case of a note,the modification, extension or renewal is evidenced by a new or additional promissory note or notes. 2.2 Maturit.�. The latest maturity date of the Notes secured hereby is October 20, 2023. 2.3 Future Advances. This Mortgage is given to secure not only the existing indebtedness of the Mortgagar to the Mortgagee evidenced by the Note secured hereby, but also future advances made pursuant to the Credit Agreement, plus interest thereon, and any disbursements made by Mortgagee for the payment of taxes, insurance or other liens on the property encumbered by this Mortgage,with interest on such disbursements, which advances shall be secured hereby to the same extent as if such future advances were made this date. The total amount of indebtedness secured hereby may increase or decrease from time to time. 2.4 Incorporation. All terms of the Secured Obligations and the documents evidencing such obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Subject Property shall be deemed to have notice of the terms of the Secured Obligations and to have notice, if provided therein, that: (a) the Note or the Credit Agreement may permit borrowing, repayment and re-borrowing so that repayments shall not reduce the amounts of the Secured Obligations; and(b) the rate of interest on one or more Secured Obligations may vary from time to time. 2.5 Obli atg ions. The term"obligations"is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges,prepayment charges (if any), late charges and loan fees at any time accruing ar assessed on any of the Secured Obligations (and �6� shall include interest that accrues after the commencement of any bankruptcy or other insolvency proceeding by or against the Mortgagor, whether or not allowed or allowable) and all the foregoing shall be part of the Secured Obligations. ARTICLE III ASSIGNMENT OF LEASES AND RENTS 3.1 Representations,Warranties and Covenants.Mortgagor represents,warrants and covenants that, as of the date hereo£ (a) it has provided a list of all Leases to Mortgagee as of the date of this Mortgage, (b) as of the date of this Mortgage, Mortgagor is not, in the capacity of lessor, a party to any other lease, whether written or oral, or any agreement for the use and occupancy of the Real Property, except as disclosed in writing to Mortgagee prior to the date of this Mortgage, (iii) the Leases are valid, binding and in full force and effect and have not been amended or modified, except as disclosed in writing to Mortgagee prior to the date of this Mortgage, (iv) Mortgagor is the sole owner of the lessor's interest in the Leases, (v) except for any Permitted Liens, Mortgagor has not executed any other assignment or pledge of any of the Leases or Rents or performed any other act or executed any other instrument which might materially and adversely prejudice Mortgagee's rights hereunder, (vi) to the best of Mortgagor's knowledge, no material default exists on the part of any lessee, or on the part of Mortgagor, as lessor, in the performance of the terms, covenants, provisions, conditions or agreements contained in the Leases, (vii) Mortgagor knows of no condition which, with the giving of notice or the passage of time or both, would constitute a material default under any of the Leases on the part of any lessee or Mortgagor, as lessor, except as disclosed in writing to Mortgagee prior to the date of this Mortgage, (viii) no Rent has been paid by any lessee for more than one installment in advance, and (ix) the payment of none of the Rents to accrue under the Leases has been or will be waived, released, reduced, discounted or otherwise discharged or compromised by Mortgagor, except as disclosed in writing to Mortgagee prior to the date of this Mortgage. 3.2 Assi ng ment. Mortgagor hereby irrevocably assigns to Mortgagee all of Mortgagor's right, title and interest in, to and under: (a) all Leases and all other Property Agreements, whether now existing ar entered into after the date hereof; and(b) the Rents. The term"Leases" shall also include all guarantees of and security for the lessees' performance under the Leases, and all amendments, extensions, renewals ar modifications thereto which are permitted hereunder. This is a present and absolute assignment, not an assignment for security purposes only, and Mortgagee's right to the Leases and Rents is not contingent upon, and may be exercised without possession of, the Subject Property. 3.3 Grant of License. Mortgagee confers upon Mortgagor a license ("License") to collect and retain the Rents as they become due and payable,until the occurrence of an Event of Default(as hereinafter defined).Upon an Event of Default,the License shall be automatically revoked and Mortgagee may collect and apply the Rents pursuant to Section 6.3 of this Mortgage without notice and without taking possession of the Subject Property. Mortgagor hereby irrevocably authorizes and directs the lessees under the Leases to rely upon and comply with any notice or demand by Mortgagee for the payment to Mortgagee of any rental or other sums which may at any time become due under the Leases, or for the performance of any of the lessees' undertakings under the Leases, and the lessees shall have no right or duty to inquire as to whether any Event of Default has actually occurred or is then existing hereunder. Mortgagor hereby relieves the lessees from any liability to Mortgagar by reason of relying upon and complying with any such notice or demand by Mortgagee. �� 3.4 Effect of Assi_ng ment. The foregoing irrevocable assignment shall not cause Mortgagee to be: (a) a mortgagee in possession; (b)responsible or liable for the control, care, management or repair of the Subject Property or for performing any of the terms, agreements, undertakings, obligations, representations, warranties, covenants and conditions of the Leases; or (c)responsible or liable for any waste committed on the Subject Property by the lessees under any of the Leases or any other parties; for any dangerous or defective condition of the Subject Property; or for any negligence in the management, upkeep,repair or control of the Subject Property resulting in loss or injury or death to any lessee, licensee, employee, invitee or other person, except to the extent such loss, injury, or death is caused by the gross negligence or intentional misconduct of Mortgagee or any of its employees, agents, contractors or subcontractors. Except as otherwise expressly provided herein, Mortgagee shall not directly or indirectly be liable to Mortgagor or any other person as a consequence o£ (i) the exercise or failure to exercise any of the rights, remedies or powers granted to Mortgagee, or any of Mortgagee's respective employees, agents, contractors or subcontractors hereunder; or (ii) the failure or refusal of Mortgagee to perform or discharge any obligation, duty or liability of Mortgagor arising under the Leases. 3.5 Covenants. Mortgagor covenants and agrees at Mortgagor's sole cost and expense to: (a)perform the obligations of lessor contained in the Leases and enforce by all available remedies performance by the lessees of the obligations of the lessees contained in the Leases; (b) give Mortgagee prompt written notice of any material default which occurs with respect to any of the Leases, whether the default be that of the lessee or of the lessor; (c) exercise Mortgagor's commercially reasonable efforts to keep all portions of the Subject Property that are capable of being leased at all times at rentals not less than the fair market rental value, (d) deliver to Mortgagee fully executed, counterpart original(s) of each and every Lease if requested to do so; and(e) execute and record such additional assignments of any Lease or specific subordinations (or subordination, attornment and non-disturbance agreements executed by the lessor and lessee) of any Lease to the Mortgage, in form and substance acceptable to Mortgagee, as Mortgagee may reasonably request. Mortgagor shall not, without Mortgagee's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed, or as otherwise permitted by any provision of the Credit Agreement: (i) enter into any Leases after the date of this Mortgage; (ii) execute any other assignment relating to any of the Leases; (iii) discount any rent or other sums due under the Leases ar collect the same in advance, other than to collect rent one (1)month in advance of the time when it becomes due; (iv) terminate, modify or amend any of the terms of the Leases or in any manner release ar discharge the lessees from any obligations thereunder; (v) consent to any assignment or subletting by any lessee; or (vi) subordinate or agree to subordinate any of the Leases to any other mortgage or encumbrance. Any such attempted action in violation of the provisions of this Section shall be null and void. 3.6 Esto�el Certificates. Within thirry (30) days after written request by Mortgagee, Mortgagor shall deliver to Mortgagee and to any party designated by Mortgagee estoppel certificates eXecuted by Mortgagor and by each of the lessees, in recordable form, certifying (if such be the case): (a) that the foregoing assignment and the Leases are in full force and effect; (b) the date of each lessee's most recent payment of rent; (c) that there are no defenses or offsets outstanding, ar stating those claimed by Mortgagor or lessees under the foregoing assignment or the Leases, as the case may be; and (d) any other information reasonably requested by Mortgagee. �g� ARTICLE IV SECURITY AGREEMENT AND FIXTURE FILING 4.1 Security Interest. As security for the full, prompt, complete and final payment when due (whether at stated maturity, by acceleration or otherwise) and prompt performance of all the Secured Obligations, Mortgagor hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to the Mortgagee, for itself and for the benefit of Lender, a security interest in and to all of Mortgagor's right, title and interest in, to and under each of the following, whether now owned or hereafter acquired by Mortgagor or in which Mortgagor now holds or hereafter acquires any interest, other than assets encumbered by Liens or other security interest allowed under the Credit Agreement and to the extent Lender can take a security interest under applicable laws or regulations (all of such interest of Mortgagor being hereinafter collectively called the "Collateral"): (a) all of the Subject Property which is personal property, including without limitation: (i) all "Equipment" owned by Grantor, as such term is defined in Section 554.9102(1)(ag) of the UCC (or any other then applicable provision of the UCC), now or hereafter owned or acquired by Mortgagor or in which Mortgagor now holds or hereafter acquires any interest which, in any event, shall include, without limitation, all machinery, equipment, fixtures, gaming machines, casino chips, signage, change banks, change bins, slot machine bases, furniture, furnishings, trade fixtures, mainframe,personal and other computers, terminals and printers and related components and accessories, all copiers, telephonic, video, electronic data-processing, data storage equipment and other equipment of any nature whatsoever, and any and all additions, substitutions and replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto; (ii) all development rights and credits and any and all permits, consents, approvals, licenses (except the Gaming License), authorizations and other rights granted by, given by or obtained from, any governmental entity with respect to the Subject Property; all water and water rights, wells and well rights, canals and canal rights, ditches and ditch rights, springs and spring rights, and reservoirs and reservoir rights appurtenant to ar associated with the Subject Property, whether decreed or undecreed, tributary, non-tributary or not non-tributary, surface or underground or appropriated or unappropriated, and all shares of stock in water, ditch, lateral and canal companies, well permits and all other evidences of any of such rights; all deposits or other security now or hereafter made with or given to utility companies by Mortgagor with respect to the Subj ect Property; all advance payments of insurance premiums made by Mortgagor with respect to the Subject Property; all guaranties, warranties or indemnities related to the Subject Property; all plans, drawings, reports and specifications relating to the Subject Property; and (iii) to the extent not otherwise included, all proceeds of each of the foregoing and all accessions to, additions to, substitutions and replacements for, and rents, profits and products of each of the foregoing, together with all books, records and files relating to any of the foregoing. As to all of the above-described personal property which is or which hereafter becomes a"fixture" under applicable law, this Mortgage constitutes a fixture filing under the Uniform Commercial Code as enacted in the State of Iowa, as amended from time to time (the "UCC"). All terms defined in the UCC shall have the respective meanings given to those terms in the UCC. �9� 4.2 Fixture Filin�. This Mortgage constitutes a financing statement filed as a fixture filing in the Official Records of the County Recorder of Dubuque County,Iowa with respect to any and all fixtures comprising Collateral. The "debtor" is Dubuque Racing Association, Ltd., a nonprofit corporation organized under Iowa law, the "secured party" is MIDWEST01vE BAtvx, as Lender, the collateral is as described in Section 4.1 above and in the granting clause of this Mortgage, and the addresses of the debtor and secured party are the addresses stated in Section 7.10 of this Mortgage for Notices to such parties. The owner of record of the Real Property is City of Dubuque, Iowa, an Iowa municipal corporation. 4.3 Representations and Warranties. Mortgagor hereby represents and warrants to the Mortgagee as of the date hereof that: (a) Mortgagor is the sole legal and equitable owner of each item of the Collateral in which it purports to grant a security interest hereunder, having good and merchantable title or rights thereto free and clear of any and all Liens, except for the Permitted Liens(as defined in the Credit Agreement) or Liens allowed under the Credit Agreement. (b) No effective mortgage, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Collateral exists, except the Permitted Liens. The liens created in the Collateral hereunder are first priority perfected liens, subject only to Permitted Liens or Liens allowed under the Credit Agreement. (c) This Mortgage creates a legal and valid security interest on and in all of the Collateral in which Mortgagor now has rights and all filings necessary or desirable to perfect and protect such security interest have been duly made. Accordingly, the Mortgagee has a fully perfected first priority security interest in all of the Collateral in which Mortgagor now has rights and which can be perfected by filing, subject only to the Permitted Liens or Liens allowed under the Credit Agreement. Except as noted in the first sentence,to the extent such security interest can be perfected by filing,this Mortgage and such filings will create a legal and valid and fully perfected first priority security interest in the Collateral in which Mortgagor later acquires rights,when Mortgagor acquires those rights, subject only to the Permitted Liens or Liens allowed under the Credit Agreement. (d) Mortgagor's exact legal name is set forth on the first page of this Mortgage. Mortgagor was formed under the laws of the State of Iowa. Mortgagor's chief executive office,principal place of business, and the place where Mortgagor maintains records concerning the Collateral are the address provided for in Section 7.10. The tangible Collateral is presently located in Dubuque County, Iowa. Mortgagor shall not change such chief executive office or principal place of business ar remove or cause to be removed, except in the ordinary course of Mortgagor's business, the Collateral or the records concerning the Collateral from those premises without priar written notice to the Mortgagee. All of Mortgagor's organizational documents delivered to Mortgagee pursuant to the Credit Agreement are complete and accurate in every respect. (e) No authorization, approval or other action by, and no notice to or filing with, any governmental authority or any other Person is required far the exercise by the Mortgagee of the rights provided for in this Mortgage, except in connection with a disposition of the investment property as may be required by governmental rules affecting the offering and sale of securities generally and the Gaming Laws as such term is defined in the Credit Agreement. [10] 4.4 Further Assurances. Mortgagor agrees: (a) to execute and deliver such documents as Mortgagee reasonably deems necessary to create,perfect and continue the security interests contemplated hereby to the extent the same may be perfected by filing; (b) to cooperate with Mortgagee in perfecting all security interests granted herein and in obtaining such agreements from third parties as Mortgagee deems necessary, proper or convenient in connection with the preservation,perfection or enforcement of any of its rights hereunder(including, without limitation, control agreements with respect to accounts not at MidWestOne Bank, or its affiliates); and (c) that Mortgagee is authorized to file financing statements in the name of Mortgagor to perfect Mortgagee's security interest in Collateral (including financing statements that include an "all assets," "all personal property," or similar collateral description). Mortgagor shall promptly notify Mortgagee in writing after the filing of any application for a patent, trademark or copyright or the issuance of any patent or registration of any trademark or copyright or otherwise obtaining any interest in any patent, trademark or copyright. If requested by the Mortgagee, Mortgagor shall execute such additional documentation to be filed in the United States Copyright Office or the United States Patent and Trademark Office as the Mortgagee may reasonably require from time to time. 4.5 Further ldentification of Collateral; Continuous Perfection.Mortgagor shall,if so requested by the Mortgagee,furnish to the Mortgagee,as often as the Mortgagee shall reasonably request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Mortgagee may reasonably request, all in reasonable detail. Mortgagor shall not change its name, identity or corporate structure in any manner unless Mortgagor shall have given the Mortgagee at least thirty (30) days' prior written notice thereof and shall have taken all action (or made arrangements to take such action substantially simultaneously with such change if it is impossible to take such action in advance) necessary or reasonably requested by the Mortgagee to amend such financing statement or continuation statement so that it is not seriously misleading. Mortgagor shall not reincorparate or reorganize itself under the laws of any jurisdiction other than Iowa without the priar written consent of the Mortgagee. Mortgagor acknowledges that it is not authorized to file any amendment ar termination statement with respect to any financing statement relating to any security interest granted hereunder without the prior written consent of the Mortgagee and agrees that it will not do so without the prior written consent of the Mortgagee, subject to Mortgagor's rights under Section 554.9509(4)(b) of the UCC. 4.6 Ri�hts of Mortga�ee. In addition to Mortgagee's rights as a"Secured Party"under the UCC, Mortgagee may, but shall not be obligated to, at any time without notice and at the expense of Mortgagor: (a) give notice to any person of Mortgagee's rights hereunder and enforce such rights at law or in equity; (b) insure, protect, defend and preserve the Collateral or any rights or interests of Mortgagee therein; (c)inspect the Collateral; and (d) endarse, collect and receive any right to payment of money owing to Mortgagor under or from the Collateral. 4.7 Rights of Mortga�ee on Default. Upon the occurrence of an Event of Default under this Mortgage, then in addition to all of Mortgagee's rights as a"Secured Party"under the UCC or otherwise at law, Mortgagee shall have the following rights, subject, in each case,to the Gaming Laws: (a) Mortgagee may: (i) upon written notice, require Mortgagor to assemble any or all of the Collateral and make it available to Mortgagee at a place designated by Mortgagee; (ii) without prior notice, enter upon the Subject Property or other place where any of the Collateral may be located and take possession of, collect, sell, lease, license and dispose of any or all of the Collateral, and store the same at [11] locations acceptable to Mortgagee at Mortgagor's expense; (iii) sell, assign and deliver at any place or in any lawful manner all or any part of the Collateral and bid and become purchaser at any such sales in accordance with the UCC; (b) Mortgagee may,for the account of Mortgagor and at Mortgagor's expense: (i) operate,use, consume, sell, lease, license or dispose of the Collateral as Mortgagee deems appropriate for the purpose of performing any or all of the Secured Obligations; (ii) enter into any agreement, compromise, or settlement, including insurance claims, which Mortgagee may deem desirable or proper with respect to any of the Collateral; and (iii) endorse and deliver evidences of title for, and receive, enforce and collect by legal action or otherwise, all indebtedness and obligations now or hereafter owing to Mortgagor in connection with or on account of any or all of the Collateral; and (c) In disposing of Collateral hereunder, Mortgagee may disclaim all warranties of title, possession,quiet enj oyment and the like. Any proceeds of any disposition of any Collateral may be applied by Mortgagee to the payment of expenses incurred by Mortgagee in connection with the foregoing including attorneys' fees, and the balance of such proceeds may be applied by Mortgagee toward the payment of the Secured Obligations in such order of application as Mortgagee may from time to time elect. 4.8 Power of Attorney. Mortgagor hereby irrevocably appoints Mortgagee as Mortgagor's attorney-in-fact(such agency being coupled with an interest), and as such attorney-in-fact Mortgagee may, without the obligation to do so,in Mortgagee's name,or in the name of Mortgagor,prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve any of Mortgagee's security interests and rights in or to any of the Collateral, and, upon an Event of Default hereunder, but subject to the Gaming Laws, take any other action required of Mortgagor;provided,however,that Mortgagee as such attorney-in-fact shall be accountable only for such funds as are actually received by Mortgagee. 4.9 Possession and Use of Collateral. Except as otherwise provided in this Section or the other Related Documents, so long as no Event of Default exists under this Mortgage and no Default or Event of Default exists under any of the Related Documents, Mortgagor may possess, use, move, transfer or dispose of any of the Collateral in the ordinary course of Mortgagor's business and in accordance with the Credit Agreement. ARTICLE V RIGHTS AND DUTIES OF THE PARTIES 5.1 Title. Mortgagor represents and warrants that Mortgagor lawfully holds and possesses (a) a valid leasehold interest in the Real Property and (b) fee simple title to the Subject Property that is not the Real Property without limitation on the right to encumber (unless otherwise disclosed in the Credit Agreement), and that except as specifically provided herein this Mortgage is a first and prior lien on the Subject Properry, subject only to the Permitted Liens (as defined in the Credit Agreement) or Liens allowed under the Credit Agreement. This Mortgage is not a lien on the Land unless title thereto is acquired by Mortgagor. Mortgagor does not have any interest in any real property,not encumbered hereby, which is utilized in any material manner in connection with the use or operation of the Subject Property or which is necessary and required for the use and operation of the Subject Property. �12� 5.2 Taxes and Assessments. Mortgagor shall pay prior to delinquency all taxes, assessments, levies and charges imposed by any public or quasi-public authority or utility company which are or which may become a lien upon or cause a loss in value of the Subject Property or any interest therein. Mortgagor shall also pay prior to delinquency all taxes, assessments, levies and charges imposed by any public authority upon Mortgagee by reason of its interest in any Secured Obligation or in the Subject Property, or by reason of any payment made to Mortgagee pursuant to any Secured Obligation; provided,however, Mortgagor shall have no obligation to pay taxes which may be imposed from time to time upon Mortgagee and which are measured by and imposed upon Mortgagee's net income. 5.3 Tax and Insurance Impounds. At Mortgagee's option and upon its demand following the occurrence and during the continuation of an Event of Default, Mortgagor shall, until all Secured Obligations have been paid in full, pay to Mortgagee monthly, annually or as otherwise directed by Mortgagee an amount estimated by Mortgagee to be equal to: (a) all taxes,assessments and levies imposed by any public or quasi-public authority or utility company which are or may become a lien upon the Subject Property or Collateral and will become due for the tax year during which such payment is so directed; and (b)premiums for fire, other hazard and mortgage insurance required or requested pursuant to the Related Documents when same are next due. If Mortgagee determines that any amounts paid by Mortgagor are insufficient for the payment in full of such taxes, assessments, levies or insurance premiums, Mortgagee shall notify Mortgagor of the increased amounts required to pay all amounts due, whereupon Mortgagor shall pay to Mortgagee within thirty (30) days thereafter the additional amount as stated in Mortgagee's notice. All sums so paid shall not bear interest, except to the extent and in any minimum amount required by law; and Mortgagee shall apply said funds to the payment of, or at the sole option of Mortgagee release said funds to Mortgagor for the application to and payment of, such sums, taxes, assessments, levies, charges, and insurance premiums. Upon an Event of Default by Mortgagor hereunder or under any Secured Obligation, Mortgagee may apply all or any part of said sums to any Secured Obligation or to cure such Event of Default, as well as to cure any other events or conditions of Event Default not cured by such application. Upon assignment of this Mortgage, Mortgagee shall have the right to assign all amounts collected and in its possession to its assignee whereupon Mortgagee shall be released from all liability with respect thereto. Within thirty (30) days following full repayment of the Secured Obligations (other than full repayment of the Secured Obligations as a consequence of a foreclosure or conveyance in lieu of foreclosure of the liens and security interests securing the Secured Obligations) or at such earlier time as Mortgagee may elect, the balance of all amounts collected and in Mortgagee's possession shall be paid to Mortgagor or the persons otherwise legally entitled thereto. 5.4 Performance of Secured Obli atg ions. Mortgagor shall promptly pay and perform each Secured Obligation when due. 5.5 Liens, Encumbrances and Char�. Mortgagor shall immediately discharge any lien not approved by Mortgagee in writing that has or may attain priority over this Mortgage, it being expressly acknowledged and agreed that Permitted Liens shall constitute liens approved by Mortgagee in writing. Mortgagor shall pay when due all obligations secured by or reducible to liens and encumbrances which shall now or hereafter encumber ar appear to encumber all or any part of the Subject Property or any interest therein, whether senior or subordinate hereto. 5.6 Dama�es; Insurance and Condemnation Proceeds. The following(whether now existing ar hereafter arising) are all absolutely and irrevocably assigned by Mortgagor to Mortgagee and, provided an Event of Default has occurred and is continuing and at the request of Mortgagee, shall be paid directly [13] to Mortgagee in accordance with any applicable Section of the Credit Agreement: (i) all awards of damages and all other compensation payable directly or indirectly by reason of a condemnation or proposed condemnation for public or private use affecting all or any part of, or any interest in, the Subj ect Property or Collateral; (ii) all other claims and awards for damages to, or decrease in value of, all or any part of, or any interest in, the Subject Property or Collateral; (iii) all proceeds of any insurance policies payable by reason of loss sustained to all or any part of the Subject Property or Collateral; and (iv) all interest which may accrue on any of the foregoing. Subject to applicable law, and without regard to any requirement contained in Section 5.7(d)of this Mortgage,upon the occurrence and during the continuation of an Event of Default, Mortgagee: (x) may at its discretion apply all or any of the proceeds it receives to its expenses in settling, prosecuting or defending any claim; (y) after payment of subpart (x) above, shall distribute such of the remaining proceeds referred to in the above subparts (i) through (iv) to Mortgagor for use in satisfying any obligation to rebuild, repair, replace, or modify any structures, improvements, fixtures, appurtenances, or other collateral on the Land and under the terms of any franchise agreement between Mortgagor and one or more franchisors, or under the terms of the Primary Leases; and (z) may apply the balance to the Secured Obligations in such order and amounts as Mortgagee in its sole discretion may choose, or Mortgagee may, in its sole discretion, release all or any part of the proceeds to Mortgagor upon any conditions Mortgagee may impose, subject to any restrictions contained in the Credit Agreement. Upon the occurrence and during the continuation of an Event of Default, Mortgagee may commence, appear in, defend or prosecute any assigned claim or action and may adjust, compromise, settle and collect all claims and awards assigned to Mortgagee; provided, however, in no event shall Mortgagee or any of its officers, directors, employees, agents, advisors or representatives be responsible for any failure to collect any claim or award, except for any failure resulting from the gross negligence or willful misconduct of Mortgagee or its employees or agents. 5.7 Maintenance and Preservation of the Sub'ecl t PropertX. Subject to the provisions of the Credit Agreement, Mortgagor covenants: (a) to insure the Subject Property and Collateral against such risks as Mortgagee may reasonably require and, at reasonable Mortgagee's request, to provide evidence of such insurance to Mortgagee, and to comply with the requirements of any insurance companies insuring the Subject Property and Collateral, all in accordance with Section 51(d) of the Credit Agreement(or any other applicable Section of the Credit Agreement); (b) to keep the Subject Property in good condition and repair, ordinary wear and tear excepted; (c) not to remove or demolish the Subject Property or Collateral ar any part thereof, not to alter, restore or add to the Subject Property or Collateral and not to initiate or acquiesce in any change in any zoning or other land classification which affects the Subject Property or Collateral without Mortgagee's prior written consent or as provided in the Credit Agreement; (d) to complete or restore promptly and in good and workmanlike manner the Subject Property and Collateral, ar any part thereof which may be damaged or destroyed; (e) to comply with all laws, ordinances, regulations and standards, and all covenants, conditions, restrictions and equitable servitudes, whether public or private, of every kind and character which affect the Subject Property or Collateral and pertain to acts committed or conditions existing thereon, including, without limitation, any work, alteration, improvement or demolition mandated by such laws, covenants or requirements; (� not to commit or permit waste of the Subject Property or Collateral; (g) not to permit any material structural altercation of the Subject Property other than the Project without the consent of Mortgagee; and (h) to do all other acts which from the character or use of the Subject Property and Collateral may be reasonably necessary to maintain and preserve its value. 5.8 Defense and Notice of Losses, Claims and Actions. At Mortgagor's sole expense, Mortgagar shall protect, preserve and defend the Subject Property and title to and right of possession of [14] the Subject Property and Collateral,the security hereof and the rights and powers of Mortgagee hereunder against all adverse claims. Mortgagor shall give Mortgagee prompt notice in writing of the assertion of any claim, of the filing of any action or proceeding, of the occurrence of any damage to the Subject Property and Collateral and of any condemnation offer or action. 5.9 Due on Sale or Encumbrance. Except as otherwise expressly permitted in the Credit Agreement, if the Subject Property or any interest therein, or any direct or indirect interest in Mortgagor, shall be sold, transferred, mortgaged, assigned, further encumbered or leased, whether directly or indirectly, whether voluntarily, involuntarily or by operation of law, without the prior written consent of Mortgagee, then Mortgagee, in its sole discretion, may declare all Secured Obligations immediately due and payable. 5.10 Releases, Extensions, Modifications and Additional Security. Without notice to or the consent, approval or agreement of any persons or entities having any interest at any time in the Subject Property and Collateral or in any manner obligated under the Secured Obligations ("Interested Parties"), Mortgagee may, from time to time, release any person or entity from liability for the payment or performance of any Secured Obligation, take any action or make any agreement extending the maturity or otherwise altering the terms or increasing the amount of any Secured Obligation, or accept additional security or release all or a portion of the Subject Property and other security for the Secured Obligations. None of the foregoing actions shall release or reduce the personal liability of any of said Interested Parties, or release or impair the priority of the lien and security interests created by this Mortgage upon the Subject Property and the Collateral. 5.11 Subro_a� tion. Mortgagee shall be subrogated to the lien of all encumbrances, whether released of record or not, paid in whole or in part by Mortgagee pursuant to this Mortgage or any other Related Document or by the proceeds of any loan secured by this Mortgage. 5.12 Ri,ght of Inspection. Mortgagee, its agents and employees, may enter the Subject Property, at any reasonable time and upon reasonable prior notice to Mortgagar, for the purpose of inspecting the Subject Property and ascertaining Mortgagor's compliance with the terms hereof. 5.13 Easements. If an easement or other incorporeal right (collectively, an "Easement") constitutes any portion of the Subject Property, Mortgagor shall not amend, change, terminate or modify such Easement, or any right thereto or interest therein, without the prior written consent of Mortgagee, which consent may be withheld in Mortgagee's reasonable discretion, and any such amendment, change, termination or modification without such prior written consent shall be deemed void and of no force or effect. Mortgagor agrees to perform all obligations and agreements with respect to said Easement and shall not take any action or omit to take any action, which would affect or permit the termination thereof. Upon receipt of notice, or otherwise becoming aware, of any default or purported default under any Easement, by any party thereto, Mortgagor shall promptly notify Mortgagee in writing of such default or purported default and shall deliver to Mortgagee copies of all notices, demands, complaints or other communications received or given by Mortgagor with respect to any such default or purported default. 5.14 Performance by Mortga�ee. Should Mortgagor fail to make any payment or perform any act which it is obligated to make or perform hereunder or under the Credit Agreement,then the Mortgagee, without giving notice to Mortgagor, or any successor in interest of Mortgagor, and without releasing Mortgagor from any obligation hereunder, may make such payment or perform such act and incur any [15] liability, or expend whatever amounts, in its reasonable discretion, it may deem necessary therefor. All sums incurred or expended by the Mortgagee, under the terms of this Section, shall become due and payable by Mortgagor to the Mortgagee on demand and shall bear interest until paid at an annual percentage rate equal to the Default Rate expressed in the Credit Agreement. In no event shall such payment or performance of any such act by Mortgagee be construed as a waiver of the default occasioned by Mortgagor's failure to make such payment(s) or perform such act(s). 5.15 Ri�ht of Mortga�ee to A�pear. If there be commenced or pending any suit or action affecting the Subject Property or the Collateral, or any part thereof, or the title thereto, or if any adverse claim for or against the Subject Property or the Collateral, or any part thereof, be made or asserted, the Mortgagee (unless such suit, action or claim is being contested in good faith by Mortgagor and Mortgagor shall have established and maintained adequate reserves in accordance with generally accepted accounting principles for the full payment and satisfaction of such suit or action if determined adversely to Mortgagor), may appear or intervene in the suit or action and retain counsel therein and defend same, or otherwise take such action therein as they may be advised, and may settle or compromise same or the adverse claim; and in that behalf and for any of the purposes may pay and expend such reasonable sums of money as the Mortgagee may deem to be necessary and Mortgagor shall reimburse Mortgagee, for such reasonable sums expended, together with accrued interest thereon, at the Default Rate which is defined in the Credit Agreement. 5.16 EnvironmentalIndemnity. (a) Mortgagor agrees to indemnify, protect, defend and save harmless Mortgagee, as well as its respective, officers, employees, agents, attorneys and shareholders (individually, an "Indemnified Party"and collectively,the"Indemnified Parties")from and against any and all losses, damages, expenses ar liabilities, of any kind or nature from any investigations, suits, claims or demands, including reasonable counsel fees incurred in investigating or defending such claim, suffered by any of them and caused by, relating to, arising out of, resulting from ar in any way connected with: (a) the presence in, on or under the Subject Property of any Hazardous Materials, as defined by reference in the Credit Agreement, or any releases or discharges of any Hazardous Materials on, under or from the Subject Property; (b) any violation of Hazardous Materials Laws (as defined in the Credit Agreement); or (c) any activity carried on or undertaken on ar off the Subject Property, whether priar to or during the term of the Credit Agreement, and whether by Mortgagor or any predecessor in title or any employees, agents, contractors ar subcontractors of Mortgagor or any predecessor in title, ar any third persons at any time occupying or present on the Subject Property, in connection with the handling, treatment, removal, storage, decontamination, clean-up,transport ar disposal of any Hazardous Materials at any time located ar present on or under the Subject Property. The foregoing indemnity shall further apply to any residual contamination on or under the Subject Property, or affecting any natural resources, and to any contamination of any property or natural resources, arising in connection with the generation, use, handling, storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any of such activities were or will be undertaken in accordance with applicable laws, regulations, codes and ardinances. It is provided, however, that Mortgagor shall not be obligated to indemnify, protect, defend or save harmless an Indemnified Party if, and to the extent that, any such loss, damage, expense or liability was caused by the gross negligence or intentional misconduct of such Indemnified Party. Mortgagor acknowledges that Mortgagee's appraisal of the Subj ect Property is such that Mortgagee would not extend the Loan but far the liability undertaken by Mortgagor for the obligations under this Section. The obligations of Mortgagor under this Section are separate from and in addition to the obligations to pay the [16] indebtedness evidenced by the Note, the obligations under the Credit Agreement and the other obligations secured by, or imposed under, this Mortgage. The liability of Mortgagor under this Section 5.16 shall not be limited to or measured by the amount of the indebtedness secured hereby or the value of the Subject Property. Mortgagor shall be fully liable for all obligations of Mortgagor under this Section. Mortgagor waives the right to assert any statute of limitations as a bar to the enforcement of this Section or to any action brought to enforce this Section 5.16. This Section 5.16 shall not affect, impair or waive any rights or remedies of Mortgagee or any obligations of Mortgagor with respect to Hazardous Materials created or imposed by Hazardous Materials Laws (including Mortgagee's rights of reimbursement or contribution under Hazardous Materials Laws). The remedies under this Section 5.16 are cumulative and in addition to all remedies provided by law. (b) In case any action shall be brought against any Indemnified Party based upon any of the above and in respect to which indemnity may be sought against Mortgagor, Mortgagee shall promptly notify Mortgagor in writing, and Mortgagor shall assume the defense thereof, including the employment of counsel selected by Mortgagor and reasonably satisfactory to the Indemnified Party, the payment of all costs and expenses and the right to negotiate and consent to settlement upon the consent of the Indemnified Party. Upon reasonable determination made by an Indemnified Party that such counsel would have a conflict representing such Indemnified Party and Mortgagor, the applicable Indemnified Party shall have the right to employ, at the expense of Mortgagor, separate counsel in any such action and to participate in the defense thereof. Mortgagor shall not be liable for any settlement of any such action effected without its consent, but if settled with Mortgagor's consent, or if there be a final judgment for the claimant in any such action, Mortgagor agrees to indemnify, defend and save harmless such Indemnified Parties from and against any loss or liability by reason of such settlement or judgment. 5.17 Environmental Certificate. Concurrently with the execution of the Credit Agreement, Mortgagor shall execute an instrument entitled "Certificate and Indemnification Regarding Hazardous Materials" (which, together with all amendments, modifications, extensions, renewals or restatements thereof, is referred to herein as the `Bnvironmental Certificate"). Mortgagor further acknowledges and agrees that it is bound by the terms and conditions of the Environmental Certificate. 5.18 Principal Place of Business. Mortgagor's principal place of business is in Dubuque County in the State of Iowa. Mortgagor does not do business under any trade name except as previously disclosed in writing to Mortgagee. Mortgagor transacts business under the names [Q Casino, Mystique, Dubuque Greyhound Park, Q Sports Bar, and Q Sports Book]. Mortgagor will immediately notify Mortgagee in writing of any change in its place of business or the adoption or change of any trade name or fictitious business name by it, and will upon request of Mortgagee, execute any additional financing statements or other certificates necessary to reflect any such adoption or change in trade name or fictitious business name. ARTICLE VI DEFAULT PROVISIONS 6.1 Events of Default. The term `Bvent of Default" shall mean the existence of any Event of Default as defined in the Credit Agreement. 6.2 Ri�hts and Remedies.At any time after an Event of Default,Mortgagee shall have all rights and remedies available at law or in equity, or as provided under any other Related Document, including, �17� without limitation, the following (but in each case expressly subject to any limitations or restrictions on such rights and remedies under the Gaming Laws): (a) All sums secured hereby shall, at the option of Mortgagee, and upon the giving of notice required by the Credit Agreement, if any, become immediately due and payable; (b) With or without notice,and without releasing Mortgagor from any Secured Obligation, and without becoming a mortgagee in possession, to cure any breach or Event of Default of Mortgagor and, in connection therewith, to enter upon the Subject Property and do such acts and things as Mortgagee deems necessary or desirable to protect the security hereof, including, without limitation: (i) to appear in and defend any action or proceeding purporting to affect the security of this Mortgage or the rights or powers of Mortgagee under this Mortgage; (ii) to pay,purchase, contest or compromise any encumbrance, charge, lien or claim of lien which, in the sole judgment of Mortgagee, is or may be senior in priority to this Mortgage, the judgment of Mortgagee being conclusive as between the parties hereto; (iii) to obtain insurance; (iv) to pay any premiums or charges with respect to insurance required to be carried under this Mortgage; or(v) to employ counsel, accountants, contractors and other appropriate persons; (c) To foreclose this Mortgage under Iowa law, either judicially or nonjudicially; (d) To exercise any remedies granted to mortgagees, assignees, or secured parties under Iowa law; (e) To apply to a court of competent jurisdiction for and obtain the ex parte appointment of a receiver of the Subj ect Property as a matter of strict right and without regard to the adequacy of the security for the repayment of the Secured Obligations, the existence of a declaration that the Secured Obligations are immediately due and payable, ar the filing of a notice of default, and Mortgagor hereby consents to such ex parte appointment of a receiver and waives notice of any hearing or proceeding for such appointment; (� To enter upon, possess, manage and operate the Subject Property or any part thereof, to take and possess all documents, books, recards, papers and accounts of Mortgagar or the then owner of the Subject Property, to make, terminate, enforce or modify Leases of the Subject Property upon such terms and conditions as Mortgagee deems proper, to make repairs, alterations and improvements to the Subject Property as necessary, in Mortgagee's sole judgment, to protect or enhance the security hereof; (g) Upon sale of the Subject Property in connection with any judicial or non judicial foreclosure, Mortgagee may credit bid (as determined by Mortgagee in its sole and absolute discretion) all or any portion of the Secured Obligations. In determining such credit bid, Mortgagee may, but is not obligated to, take into account all or any of the following: (i) appraisals of the Subject Property as such appraisals may be discounted ar adjusted by Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and costs incurred by Mortgagee with respect to the Subject Property prior to foreclosure; (iii) expenses and costs which Mortgagee anticipates will be incurred with respect to the Subject Property after foreclosure,but prior to resale, including,without limitation, costs of structural reports and other due diligence, costs to carry the Subject Property prior to resale, costs of resale (e.g. commissions, attorneys' fees, and taxes), costs of any hazardous materials clean-up and monitoring, costs of deferred maintenance, repair, refurbishment and retrofit, costs of defending or settling litigation affecting the Subject Property, and lost opportunity costs (if any), including the time value of money during any anticipated holding �ig� period by Mortgagee; (iv) declining trends in real property values generally and with respect to properties similar to the Subj ect Property; (v) anticipated discounts upon resale of the Subj ect Property as a distressed or foreclosed property; (vi) the fact of additional collateral (if any), for the Secured Obligations; and (vii) such other factors or matters that Mortgagee (in its sole and absolute discretion) deems appropriate. In regard to the above, (� Mortgagor acknowledges and agrees that: (w) Mortgagee is not required to use any or all of the foregoing factors to determine the amount of its credit bid; (x) this Section does not impose upon Mortgagee any additional obligations that are not imposed by law at the time the credit bid is made; (y) the amount of Mortgagee's credit bid need not have any relation to any loan-to-value ratios specified in the Related Documents or previously discussed between Mortgagor and Mortgagee; and (z) Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion) higher or lower than any appraised value of the Subject Property, and (I� Mortgagee acknowledges and agrees that: (aa) Mortgagor's interest in the Premises constitutes a leasehold interest (bb) its rights and remedies are expressly limited to Mortgagor's right, title and interest in and to the Subject Property; (h) In the event Mortgagee shall institute judicial proceedings to foreclose the lien hereof, and shall be appointed as a receiver or a Mortgagee in possession of the Subject Property, Mortgagee during such time as it shall be a receiver or mortgagee in possession of the Subject Property pursuant to an order or decree entered in such judicial proceedings, shall have, and Mortgagor hereby gives and grants to Mortgagee, subject to any limitations or restrictions contained in the Primary Leases, the right,power and authority to make and enter into leases of the Subject Property or the portions thereof for such rents and for such periods of occupancy and upon such conditions and provisions as such receiver or Mortgagee in possession may deem desirable; it being the intention of Mortgagor that while Mortgagee is a receiver or mortgagee in possession of the Subject Property pursuant to an order or decree entered in such judicial proceedings, Mortgagee shall be deemed to be and shall be the attorney-in-fact of Mortgagor for the purpose of making and entering into leases of parts or portions of the Subject Property for the rents and upon the terms, conditions and provisions deemed desirable to Mortgagee and with like effect as if such leases had been made by Mortgagor as the owner in fee simple of the Subject Property free and clear of any conditions or limitations established by this Mortgage. The power and authority hereby given and granted by Mortgagor to Mortgagee shall be deemed to be coupled with an interest and shall not be revocable by Mortgagar but shall be, in all cases, expressly subject to any restrictions or limitations contained in the Primary Leases; Every right, power and remedy granted to Mortgagee in this Mortgage shall be cumulative and not exclusive,and in addition to all rights,powers and remedies granted at law or in equity or by statute,and each such right, power and remedy may be exercised from time to time and as often and in such order as may be deemed expedient by Mortgagee, and the exercise of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the time or thereafter, any other right,power or remedy. 6.3 Application of Foreclosure Sale Proceeds and Other Sums. All sums received by Mortgagee under Section 3.3 ar Section 6.2 of this Mortgage, less all costs and expenses incurred by Mortgagee or any receiver under Section 33 or Section 6.2 of this Mortgage, including, without limitation, reasonable attorneys' fees, shall be distributed to the persons legally entitled thereto for application to the Secured Obligations each in accordance with the Credit Agreement;provided,however, Mortgagee shall have no liability for funds not actually received by Mortgagee. 6.4 No Cure or Waiver. Neither Mortgagee's nor any receiver's entry upon and taking possession of all or any part of the Subject Property, nar any collection of rents, issues,profits, insurance [19] proceeds, condemnation proceeds or damages, other security or proceeds of other security, or other sums, nor the application of any collected sum to any Secured Obligation, nor the exercise or failure to exercise of any other right or remedy by Mortgagee or any receiver shall cure or waive any breach,Event of Default or notice of default under this Mortgage, or nullify the effect of any notice of default (unless all Secured Obligations then due have been paid and performed and Mortgagor has cured all other defaults), or impair the status of the security, or prejudice Mortgagee in the exercise of any right or remedy, or be construed as an affirmation by Mortgagee of any tenancy, lease or option or a subordination of the lien of this Mortgage. 6.5 Payment of Costs, Expenses and Attorney's Fees. Mortgagor agrees to pay to Mortgagee immediately and without demand all costs and expenses incurred by Mortgagee pursuant to Section 6.2 of this Mortgage (including, without limitation, court costs and reasonable attorneys' fees, whether incurred in litigation or not) with interest from the date of expenditure until said sums have been paid at the rate of interest then applicable to the principal balance of the Note as specified therein. 6.6 Power to File Notices and Cure Defaults. Mortgagor hereby irrevocably appoints Mortgagee and its successors and assigns, as its attorney-in-fact,which agency is coupled with an interest, (a) to execute and record any notices of completion,cessation of labor,or any other notices that Mortgagee deems appropriate to protect Mortgagee's interest, (b)upon the issuance of a order of foreclosure of this Mortgage, to execute all instruments of assignment or further assurance with respect to the Leases and Rents (if any such Leases and Rents exist), as may be necessary or desirable for such purpose, (c) to prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve Mortgagee's security interests and rights in or to any of the Collateral, and (d) upon the occurrence of an event, act or omission which, with notice or passage of time or both, would constitute an Event of Default, Mortgagee may perform any obligation of Mortgagor hereunder; provided, however, that: (i) Mortgagee as such attorney-in-fact shall only be accountable far such funds as are actually received by Mortgagee; and(ii) Mortgagee shall not be liable to Mortgagor or any other person or entity for any failure to act under this Section. 6.7 Reinstatement. This Mortgage shall remain in full farce and effect and continue to be effective should any petition be filed by or against Mortgagor for liquidation or reorganization, should Mortgagar become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Mortgagor's property and assets, and shall continue to be effective or be reinstated, as the case may be,if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a "voidable preference," "fraudulent conveyance," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded,reduced, restared or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded,reduced,restored ar returned. ARTICLE VII MISCELLANEOUS PROVISIONS 7.1 Additional Provisions. The Related Documents contain or incorporate by reference the entire agreement of the parties with respect to matters contemplated herein and supersede all prior negotiations. The Related Documents grant further rights to Mortgagee and contain further agreements �2�� and affirmative and negative covenants by Mortgagor which apply to this Mortgage and to the Subject Property and Collateral and such further rights and agreements are incorporated herein by this reference. 7.2 Merger. No merger shall occur as a result of Mortgagee's acquiring any other estate in, or any other lien on, the Subject Property unless Mortgagee consents to a merger in writing. 7.3 Obligations of Mortga�or, Joint and Several. If more than one person has executed this Mortgage as "Mortgagor", the obligations of all such persons hereunder shall be joint and several. 7.4 Time is of the Essence. Mortgagor agrees that TIME IS OF THE ESSENCE hereof in connection with all obligations of Mortgagor herein or in the Note. 7.5 Waiver of Marshallin�hts. Mortgagor, for itself and for all parties claiming through or under Mortgagor, and for all parties who may acquire a lien on or interest in the Subject Property, hereby waives all rights to have the Subject Property or any other property, including, without limitation, the Collateral, which is now or later may be security for any Secured Obligation ("Other Property") marshalled upon any foreclosure of this Mortgage or on a foreclosure of any other lien or security interest against any security for any of the Secured Obligations. Mortgagee shall have the right to sell, and any court in which foreclosure proceedings may be brought shall have the right to order a sale of, the Subject Property and any or all of the Collateral or Other Property as a whole or in separate parcels, in any order that Mortgagee may designate. In regard to the foregoing, Mortgagee acknowledges and agrees that: (aa) Mortgagor's interest in the Premises constitutes a leasehold interest (bb) its rights and remedies are expressly limited to Mortgagor's right, title and interest in and to the Subject Property. 7.6 Rules of Construction; Definitions. When the identity of the parties or other circumstances make it appropriate the masculine gender includes the feminine or neuter, and the singular number includes the plural. The term "Subject Property" means all and any part of the Subject Property and "Collateral" means all and any part of the Collateral, and any interest in the Subject Property and Collateral, respectively. Notwithstanding anything set forth herein, Mortgagor agrees and acknowledges that each of Mortgagor and Mortgagee has participated in the negotiation and drafting of this document, and that this Mortgage shall not be interpreted or construed against or in favor of any party by virtue of the identity, interest or affiliation of its preparer. Capitalized terms not otherwise defined herein shall have the meaning given such terms in the Credit Agreement. 7.7 Successors in Interest. The terms, covenants, and conditions herein contained shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided, however, that this Section does not waive or modify the provisions of any applicable provision in the Related Documents regarding transfers of interest in the Subject Property or the Mortgagor. 7.8 Execution in Counterparts. This Mortgage may be executed in any number of counterparts, each of which, when executed and delivered to Mortgagee, will be deemed to be an original and all of which, taken together, will be deemed to be one and the same instrument. 7.9 Iowa Law. This Mortgage shall be governed by and construed in accordance with the laws of the State of Iowa without regard to conflict of law principles. 7.10 Notices. All notices or other communications required or permitted to be given pursuant to the provisions of this Mortgage shall be in writing and shall be considered as properly given if delivered �21� personally or sent by first class U.S. mail,postage prepaid, except that notice of a Default may be sent by certified mail, return receipt requested, or by Overnight Express Mail or by overnight commercial courier service, charges prepaid. Notices so sent shall be effective three (3) days after mailing, if mailed by first class mail,and otherwise upon receipt at the addresses set forth below;provided,however,that non-receipt of any communication as the result of any change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication. For purposes of notice, the addresses of the parties shall be: Mortgagor DuBuQuE RAc�NG Assoc�A`r1oN,LTD. 1855 Greyhound Park Road Dubuque, IA 52001 Attn: Alex Dixon, President and CEO Tel. No.: (563) 585-3002 Fax No.: Mortgagee MIDWESTONE BANx 895 Main Street Dubuque, Iowa 52001 Attn: Wayne Breckon, First Vice President Tel. No.: (563) 589-0828 Fax No. (563) 589-0860 Any party shall have the right to change its address for notice hereunder to any other location within the continental United States by the giving of thirty (30) days' notice to the other party in the manner set forth hereinabove. Mortgagor shall forward to Mortgagee, without delay, any notices, letters ar other communications delivered to the Subject Property or to Mortgagor naming Mortgagee, "Lender" or any similar designation as addressee, or which could reasonably be deemed to affect the construction of the Improvements or the ability of Mortgagor to perform its obligations to Mortgagee under the Note or the Credit Agreement. 7.11 After Acquired Property. The lien of this Mortgage will automatically attach, without further act, to all after acquired property of any nature whatsoever attached to, located in, on, or used in the operation of the Subject Property or any part thereof, owned by Mortgagor or in which Mortgagor has an interest, and Mortgagor covenants and warrants that it will have good and absolute title to all of the aforesaid after acquired property it acquires, free of any lien or encumbrance. 7.12 Assignment and Subordination of Mana,�ement A�reement to Mortga�e. Pursuant to this Mortgage or any additional document required by Mortgagee, any management agreement with respect to the Premises, if any, is hereby assigned to Mortgagee and the rights of the manager thereunder shall be subordinated to the lien of this Mortgage and such manager shall consent to such subardination and assignment upon request from Mortgagee. Mortgagor shall give Mortgagee written notice of any change of management or termination ar modification of any such management agreement within thirty (30)days. Failure to provide such written notice shall constitute an Event of Default hereunder. 7.13 No Agricultural Land. Mortgagor hereby represents and warrants that the Subject Property does not include any "agricultural land" as defined in Iowa Code Section 9H.1. �22� 7.14 Acknowledgment re ag rding Gamin� Matters. The parties acknowledge and agree that, if any provision contained in this Mortgage (i) violates any of the Gaming Laws or the terms of the Gaming License, (ii)jeopardizes the Gaming License, or (iii) otherwise causes or would cause Mortgagor to be out of compliance with the Iowa Racing and Gaming Commission,then such provision shall automatically and immediately be deemed to be deleted and stricken from this Mortgage. The parties further acknowledge and agree that this Mortgage and the effectiveness hereof is expressly subj ect to the approval of the Iowa Racing and Gaming Commission. 7.15 Waiver of Jur,v Trial. AFTER CONSULTATION WITH COLTNSEL, MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT MORTGAGOR MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED UPON THIS MORTGAGE, OR ARISING OUT OF, UNDER OR 1N CONNECTION WITH ANY OF THE OTHER RELATED DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF MORTGAGOR OR MORTGAGEE AND ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE MAKING THE LOAN EVIDENCED BY THE NOTE WHICH IS SECURED BY THIS MORTGAGE. ARTICLE VIII LEASEHOLD MORTGAGE PROVISIONS 8.1 Representations; Warranties; Covenants. Mortgagor hereby represents, warrants and covenants that: (a) (i) Each Primary Lease, as amended, is in full force and effect except as set forth on Exhibit B attached hereto, (ii) all rent and other charges therein have been paid to the extent they are payable to the date hereof, (iii) Mortgagor enjoys the quiet and peaceful possession of the properry demised thereby, (iv) to the best of its knowledge, Mortgagor is not in default under any of the terms thereof and there are no circumstances which, with the passage of time ar the giving of notice or both, would constitute an event of default thereunder, and(v) to the best of Mortgagor's knowledge, the lessor thereunder is not in default under any of the terms or provisions thereof on the part of the lessar to be observed or performed; (b) Mortgagar shall promptly pay, when due and payable, the rent and other charges payable pursuant to each Primary Lease, and will timely perform and observe all of the other terms, covenants and conditions required to be performed and observed by Mortgagor as lessee under such Primary Lease subject to the terms of that certain Subordination Agreement of even date herewith by and among Mortgagee, Mortgagor and the City of Dubuque; (c) Mortgagor shall notify Mortgagee in writing of any material default by Mortgagor in the performance or observance of any material terms, covenants or conditions on the part of Mortgagor to be performed or observed under the Primary Lease within three (3) Business Days after Mortgagor receives written notice or has actual knowledge of such default, except in each case where the failure to so notify Mortgagee could not reasonably be expected to result in a Material Adverse Effect; (d) Mortgagar shall, immediately upon receipt thereof, deliver a copy of each material written notice given to Mortgagor by the lessor pursuant to the Primary Leases and promptly notify Mortgagee in �23� writing of any material default by the lessor in the performance or observance of any of the terms, covenants or conditions on the part of the lessor to be performed or observed thereunder promptly after Mortgagor knows of such default; (e) Unless required under the terms of any Primary Lease, Mortgagor shall not, without the prior written consent of Mortgagee (which may be granted or withheld in Mortgagee's reasonable discretion) terminate, materially modify or surrender such Primary Lease if such action could reasonably be expected to result in a Material Adverse Effect, and any such attempted termination, material modification or surrender without Mortgagee's prior written consent shall be void; (� Mortgagor shall, within twenty (20) days after written request from Mortgagee, use its commercially reasonable efforts to obtain from the lessor and deliver to Mortgagee a certificate setting forth the name of the tenant thereunder and stating that each Primary Lease is in full force and effect, is unmodified or, if any Primary Lease has been modified, the date of each modification (together with copies of each such modification), that no notice of termination thereon has been served on Mortgagor, stating that to such lessor's knowledge, no default or event which with notice or lapse of time (or both) would become a default is existing under such Primary Lease, stating the date to which rent has been paid, and specifying the nature of any defaults, if any, and containing such other statements and representations as may be reasonably requested by Mortgagee; (g) In the event that any Primary Lease is rejected or disaffirmed by the lessor thereunder (or by any receiver, trustee, custodian or other party who succeeds to the rights of such lessor) pursuant to any bankruptcy, insolvency, reorganization, moratorium or similar law, Mortgagor covenants that it will not elect to treat such Primary Lease as terminated under Title 11, U.S.C., Section 365(h) or any similar or successor law or right and hereby assigns to Mortgagee the sole and exclusive right to make or refrain from making any such election, and Mortgagor agrees that any such selection,if made by Mortgagor, shall be void and of no force or effect; (h) If the lessar under any Primary Lease (or any receiver, trustee, custodian or other party who succeeds to the rights of such lessor) rejects or disaffirms such Primary Lease pursuant to any bankruptcy, insolvency, reorganization, maratarium or similar law and Mortgagee elects to have Mortgagor remain in possession under any legal right Mortgagor may have to occupy the premises leased pursuant to such Primary Lease, (i) Mortgagar shall remain in possession and shall perform all acts necessary for Mortgagor to retain its legal rights and to remain in such possession for the unexpired term of such Primary Lease (including all renewals thereof�, whether such acts are required under the then existing terms and provisions of such Primary Lease or otherwise, and(ii) all of the terms and provisions of this Mortgage and the Lien created hereby shall remain in full force and effect and shall be extended automatically to such possession, occupancy and interest of Mortgagor; (i) Mortgagar shall, at Mortgagor's sole cost and expense, appear in and defend any action or proceeding arising under or in any manner connected with any Primary Lease or the obligations, duties or liabilities of the lessor or Mortgagor thereunder. Mortgagee may, but shall not be obligated to, take any action Mortgagee deems necessary or desirable to cure any default by Mortgagor under any Primary Lease. Mortgagar agrees to indemnify, defend and hold the Mortgagee harmless from and against any and all liability, loss or damage which the Mortgagee may incur under any Primary Lease by reason of the mortgage of Mortgagor's interest in such �24� Primary Lease and from any and all claims and demands whatsoever which may be asserted against Mortgagee by reason of any alleged undertaking or obligation on Mortgagee's part to perform or discharge any of the terms, covenants or agreements contained in such Primary Lease, except to the extent that any such claims and demands arise out of the gross negligence or willful misconduct of the Mortgagee. 8.2 No Mer�. So long as any of the Indebtedness or the Obligations remain unpaid or unperformed, the fee title to and the leasehold estate in the premises subject to any Primary Lease shall not merge but shall always be kept separate and distinct notwithstanding the union of such estates in the lessor or Mortgagor, or in a third party, by purchase or otherwise. If Mortgagor acquires the fee title or any other estate, title or interest in the property demised by any Primary Lease, or any part thereof, the Lien of this Mortgage shall attach to, cover and be a Lien upon such acquired estate, title or interest and the same shall thereupon be and become a part of the Subject Property with the same force and effect as if specifically encumbered herein. Mortgagor agrees to execute all instruments and documents that Mortgagee may reasonably require to ratify, confirm and further evidence the Lien of this Mortgage on the acquired estate, title or interest. Furthermore, Mortgagor hereby appoints Mortgagee as its true and lawful attorney-in-fact to execute and deliver, following and during the continuance of an Event of Default, all such instruments and documents in the name and on behalf of Mortgagor. This power, being coupled with an interest, shall be irrevocable as long as any portion of the Indebtedness remains unpaid. 8.3 Mortga�ee as Lessee. If any Primary Lease is terminated prior to the natural expiration of its term due to default by Mortgagor or any tenant thereunder, and if Mortgagee or its designee acquires from the lessor a new lease of the premises, Mortgagor shall have no right, title or interest in or to such new lease or the leasehold estate created thereby, or renewal privileges therein contained. 8.4 No Assi ng ment. If this Mortgage constitutes a prohibited collateral assignment of any Primary Lease under the terms of such Primary Lease, then the assignment of such Primary Lease in this Mortgage will be deemed conditioned upon the receipt of any consent expressly required under such Primary Lease and Mortgagee has no liability or obligation thereunder by reason of its acceptance of this Mortgage. Mortgagee will be liable for the obligations of the tenant arising out of such Primary Lease for only that period of time for which Mortgagee is in possession of the Premises or have acquired, by foreclosure or otherwise, and are holding all of Mortgagor's right, title and interest therein. 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. MORTGAGOR ACKNOWLEDGES THE RECEIPT OF A COPY OF THIS DOCUMENT AT THE TIME IT WAS SIGNED. [Remainder of Page Intentionally Left Blank, Signature Pages FollowJ �25� IN WITNESS WHEREOF, Mortgagor has executed this Mortgage, effective as of the day and year set forth above. MORTGAGOR: DUBUQUE RACING ASSOCIATION LTD. By: Alex Dixon President and Chief Executive Officer STATE OF IOWA ) ) ss: COUNTY OF DUBUQUE ) This instrument or record was acknowledged before me on October , 2023 by Alex Dixon as CEO and President of Dubuque Racing Association, Ltd. Notary Public By signing below, the City of Dubuque, Iowa (the "City"), is signing this Mortgage solely to evidence the City's consent to Mortgagor's execution and delivery of this Mortgage and not as an indication that the City is pledging any interest that the City owns in the real estate subject to this Mortgage. CITY: CITY OF DUBUQUE,IOWA By: Brad M. Cavanagh, Mayar Attest: Adrienne N. Breitfelder, City Clerk STATE OF IOWA ) ) ss: COUNTY OF DUBUQUE ) This instrument ar record was acknowledged before me on October , 2023 by Brad M. Cavanagh, as Mayor of the City of Dubuque, Iowa, and Adrienne N. Breitfelder, as City Clerk of the City of Dubuque, Iowa. Notary Public [Signature page to Leasehold Mortgage, Fixture Filing and Security Agreement with Absolute Assignment of Leases and RentsJ EXHIBIT A (Description of Land) Lot 1 of CHAPLAIN SCHMITT ISLAND in the City of Dubuque, Iowa, according to the Plat recorded as Instrument#2023-7679, records of Dubuque County, Iowa. EXHIBIT B (Primary Leases) That certain Amended and Restated Lease Agreement dated , 2023, by and between Dubuque Racing Association, Ltd. and the City of Dubuque, Iowa. 1 � 1 jy-�as��. . , . . . , � � �y r � . , � t�.`~� ! '4�. �4��\� �+ '2 iv",'¢'-��q.� - �� Y r4��•'� f,�.�'W �X.�, �'l ♦"'`a .l'j'"�:�ii`-h `�`��.C �� v�P�a�.� - ! 1 i'., ..,�' _ ty_. _ . _ _ • . '6��I ' l �i .yF . ��., w _. � � � � Q _.--� _. . 8�ii .�,YR.�EF �.. .f.vNy�'. ... -. __ . .— ._ _ , +adFc - � P�.Tc. ` `4 �' `°�i'�'t!"_ :�' t� � y�� x ��, .. ; .:_.� .,sl'iu�,{ � . � , � , • � , ��• . .� l � �� I� [ ^ ��r�''.' £ � '�` � � � �� ..r�� — Y . .. . �- - ` �4 4y � _� �yr +,,: .,� ,�e • �'_ # �y 7d.B. _ `"F a+3 '�` 11� �';�, '"�nky� `' �- � �' ` �.. , k� h� :�,a��, � �. � � �E ..-_ ."- _ -n Y` , �c_. �t��t,c ' r� �`�-7 „��i �'. �'tte _11 .� �` �� '�_. '��'��'�� .r .� � ��,�' ,,,�. ��p �. � �.�`~�i` .• . s :�� --e� � � � ♦ �� f�Y�,,�sL�> � y � � ��"M1 rb '?*'.r'��''y 2 h� :. "� 1 v, s. �� ,_..� t� - '; .. r r tiYJ� � i�'' -♦E�.r r�t fi�..x , d.. e " �`��'� � �.:�` . i��, � �..��'��,5 *v . _ � � ��:a,A,,�:. . . y�g�,,.�� f F, �"�� e�..-- 4� rt �� f,�".y. . .� '`t e ", E,.`�@� r4 q�' .. I r. Y _ ' y,, �''; `,� ��'�� . r ' �� "` �� r3..'�°�l .��-v ,� ' �� q�„� ru . . `�^'�x. �' .�. � - �.v. _ . i�� '�' - S 9t^_ Y ._I. f .. � , . �J r q fi :,i _�e1... qrt { :� y�_�., .-.'��.-. �— �F��:�,,�, •'-. f- �.F � �'y-�`- " _ .. . '^�� , � `�7!"` New public and private investments and MASTER PLAN GOALS: implementation of the Chaplain Schmitt Island Master Plan will leverage the Connectthe Riverfront signifieant investments that have been • Make the island a larger regional walking and biking trail system and connect walkable areas along the riverfront, made within and around the island. with special focus on new investment areas. • Connect the island with the Port of Dubuque and adjoining neighborhoods. Chaplain Schmitt Island is a connected island that welcomes visitors and the community to recreation, Celebrate the Island entertainment and the outdoors. Through $130+ million • Highlight special island characteristics that make it a in public and private investment, the island's vision unique place to visit and stay. can be realized. • Plan for varying Mississippi River levels. • Clean up the river for plants and animals. Accessibility to the River �;. • Improve accessibility to the river's edge and expand .� �;• opportunities to get out on the water. � .�� ' '. Spend the day and night j" • • Bring new visitors to the island year-round with new, complimentary development • Interconnect existing and future uses so visitors can ��s� spend more time on the island. ��Nt� �- .. �.. '' � • • � � � P n n Am n �t� a e e es Casino Remodel & Family Entertainment Area A reimagined casino and entertainment area,including an elevated bar with bar top slot machines and updated showroom.Addition of a family entertainment zone for all ages complete with high-end arcade games, inclusive of banquet space/party rooms,and a new Sports Book and Sports Bar. Exterior upgrades include a remodel of the facility fa4ade, new outdoor signage and improved landscaping and surface parking. ,. ��'.,-�►.�.��'' ' �°�`�►��p,u��1��1��1��r��_� ` ..,. ��""��+•�� . � ��—�� - �.�. ��.��4s��l��'� - ��.��''+� �!�a��r►'a��r - � — `�_� . '- �� .��'� '�: -. --y��"� �� _� � �- -=- _ _ �""3`� �_��.��!xi.r � �i � �.� _ i��^�ye��'„�r :�� ,~�f/f��r -,s��_ �� r �SC� �.'. �� f - �. =� 'w P= _ �-,��. _ __<, �`--- � . �� ._ _ � P��1 . '.... '.:. — . ..:: .......�. .,..:...��.:. ...,.,.. :: � . .. . ' ��+. ': �;�. '-. -- � . ;.,:�- — - ,:i:. :... lV�". �• S—t' ` t Y 1 7 _ _ � :- � a �, � �3�� i,;�� ;-� _�i� :? �;�� '"'u`�� .9 ' � u �',�ii �,_ , .: ... � . , .�� ., — _ � _ ...+' . x�• �� j �� ,. .� � � �. �j .--- _, �.�.�r :_� _ _. �. _ c — � w� Y _ .� ^' - -- 1, ��.� -- - - - ��.� ;>_1/-:� . - � }... _ - .o'mra. � �S_��'- �. Hotel The crown jewel will be the construction of a new,8-floor,108-room Hilton Tapestry ' Collection hotel adjacent to the existing _ �� Hilton Garden Inn,complete with an upscale � �. �� rooftop restaurant,lounge,and event space ;.,';��. .- `�' overlooking the majestic Mississippi � �• �`� • - and scenic bluffs. � _ . �,.�I`� ' �' ;�� .,. yq � � lil��..� . ! �♦ . I I I ' .� •• I I I II � �'�� • • . :• • • e_u'r _ ♦ f... , p� ;:! � �♦ j�._ ..� / � � �A / � �— 1 l 1 1 E � � �/� ^��45�::� �u1'�:5i^" '•"� ••, . � k � ..� � _� ti:�i c:-�a -—_._ �� irr�� •�s♦ `l��N�1� " .� Amphitheater A spectacular outdoor amphitheater that will host as many ��•r x ,� �g;� �� ., ,� ,�, � ss,� � ��. �, �`�� _ �t�^ � as 8,000 people for national acts will be built over what is � �� T:�,�, � .,��-�- . ��_ � �� `,_. �~ � � currently the former greyhound track.The City of Dubuque ��. .� „r�_� �� was awarded a$3 miUion Destination lowa Grant to assist "' � �`� E � � �`'� � .z�h E'� i!!.�__ ��,��`'�� with funding this$15.8 million project.The remaining$12.8 �� .��- � �, �&.' ,� �� f .�r �:-- �.;a� �t�- '-~ ''� million will be funded solely by the DRA. �--~°' �" � �;:� e �.�� '� � ,� <: *•��',�°,.N ,',k• :� � � ,.�', � �� '��r�f � � — � �� ,e # �. ^F 3� I � � ti `� -- �'�� " : � ,� �;�?� '� ,�,�,. .r' �� -+k a �, `�',�• �� '� ,� �' �` r �`��i �� . � �.�-.l��- ,�.,� �-1 �-�.. .c � �'�'" , ,�� i -�- .� rr��,.,.�,Y� , � _ - � , Z; _ J [ � . 'i' � �. i�W',� �� . � � �I (f � �..a�Lit. . � - � � 4 �,`-- �._� ' _ H i ke/Bi ke Trai ls `�� - - :� �� ,, Greatly enhanced pedestrian and bicycle access to � �� , all Chaplain Schmitt Island amenities, businesses,and --- �� - : �„ � �..,_ �. ._ ,, , �� , � employers will be realized.Construction of the Lower `��. .,,. �. �' — ' _ I . ' Bee Branch Trail Phase 1 is under way.The project extends �`'�` � ., _ $� south from Sycamore St.and under the U.S. HWY 61/151 � overpass along the shoreline of the 16th St.Detention , `' ; :�- " � �� `� ��; Basin to 12th St. -� '' x✓ �-� � > _ —� �,:. �_ � 4i.. _.. .�r�� s� -�;�-�`_ _ The Veterans Memorial Trailhead project will better '� '�' � L : � ��'�`��r �� connect Chaplain Schmitt Island to Dubuque's existing - --� � � ' trail system. -- 4--��- �i �-..y. �.f r�;:. ��\ '��S.�Si �� ..�.�:o�"F f � �„! 1; Within funding from a RAISE planning grant,plans will be 5 � � � � � �� -- � ;�' �. " ' 4� � developed for further connectivity with a pedestrian/ �tiF �� .4 bike path adjacent to the existing 16th St. Peosta Channel , � _ . � . " bridge to improve safe access to employment and � 3 ' ,� � =��' �- - `- �y recreational opportunities on Chaplain Schmitt Island. �► $ :�4 � ' -� - � '`� ;� . ,�� a� � �._, 1� � � �_'_'+.. .�N' �V! . � � � Project: Budget/Funding: Managed By: Funded By: Q Casino Redevelopment $80 million DRA DRA lowa Amphitheater $15.8 million City of Dubuque DRA/Destination lowa Ice Arena Improvements and Upgrades $6.6 million City of Dubuque City of Dubuque Lower Bee Branch Trail Phase 1 $721,000 City of Dubuque City of Dubuque/lowa DOT Veterans Memorial Trailhead $890,000 City of Dubuque City of Dubuque/Federal Community Project �i '^ . _ p_'F �'Wti"` � }F �� .-R- •_ .. _� _. - . _ ' � - .Sa� 1^l�l�...'c��l .. _� ' ._ ^r:nSa, __- �it ` r-=�,.,;��'. - �-�. -�`� � Yy . �#� � Artist rendering ;,y�,,,� �`. � ��„ �. , � �� 5f�+�� . _�� + � g� '� L �?��, = �... � .� , _ .� �y,� � � �'"___ h � � Y ��` • ', . �� g�y ��`�� A W��-� �5.')"� �� . ��.a�� . ~S`i� _ �' -- "_ _ •^w-. � � � �� .,�=f r �,�_� .s .__ .� ��; _,.. -'�' �"�°. .' _ �^�`�,.�_ �'� -.. 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F� t r�� r : ' �� , .'�t_ �� 'r_ � j y _'� �~� . 3�"� . . � - •.~_ � 'L,VZ � f.. " =� �r+ 1 �� p � ��..� _ '� �'"', �1`� ��k �'Y_�L x.. +�°�.�. � -.� ��4 �_. '� ' 5!� . :.�.f7ia.�.:..',•��:w"�'�.'' �52: - .. „�'�k�. �°t _ ' �,rl ��1� '�� J � a;l. 4r�i-I�,, �� "'�.:` , •� � �� 1 � 1 . . , � � ' ... ;�„ ✓'w��.:: ,�. s f, .. ,h. , 'ii_ . / � CITY OF DUBUQUE � � � , � - to Em lo ment / p Y & E uit q Y In 2022, the City of Dubuque THE RAISE GRANT INCLUDES PLANNINGAND received a $2.28 million RAISE DESIGN FOR THE FOLLOWING: Planning Grant from the U.S. Department of Transportation A vehicular/pedestrian overpass at the 14th St. railroad grade crossing which will connect downtown residents to assist with the planning and design of to job opportunities while reducing train delays that multimodal transportation corridors which negatively impact the safe and efficient movement of will connect vulnerable neighborhoods people and goods to and from the Kerper Boulevard Industrial Park and Chaplain Schmitt Island and low-income residents with economic opportunities, recreational amenities, and — Complete street enhancements and roundabouts along key community resources in the Kerper 16th St. and Elm St. to improve vehicle flow and restore Boulevard Industrial Park, on Chaplain the corridors to a state of good repair Schmitt Island, Downtown Dubuque,the Historic Millwork District, and on the A pedestrian/bike path adjacent to the existing 16th St. Peosta Channel bridge to improve safe access to west side of the city via the downtown employment and recreational opportunities on Chaplain Intermodal Transportation Center. Schmitt Island The grant will be administered by the A roundabout at Admiral Sheehy Dr. on Chaplain Schmitt Federal Highway Administration in Island partnership with the Iowa Department These improvements will improve safety; enhance quality of life and of Transportation. racial equity in disadvantaged neighborhoods; improve mobility and community connectivity with alternative transportation modes; THE��TY oF and support mixed-use,transit-oriented private development as DUB E well as ensure the efficient movement of goods along corridors with manufacturing businesses.The City will submit a federal grant Maste,�p�e�e on the�vttsstsstppt request for construction of the $40 million project. CM037-012023