Dubuque Racing Association Loan Documents 2004
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MEMORANDUM
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June 2, 2004
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TO:
The Honorable Mayor and City Council Members
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FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Dubuque Racing Association Bank Loan Documents
At the May 25, 2004 meeting, the Board of Directors of the Dubuque Racing Association
approved the bank loan documents allowing them to borrow up to $22 million for their
renovations at Dubuque Greyhound Park & Casino,
The loan documents do not mortgage Dubuque Greyhound Park and Casino, but they
do use the DRA lease as collateral. The City also subordinates its right to any
distributions needed to pay the loan. As you are aware from your review of the new
lease with the DRA, there still will be substantial distributions made to the City and
charities unless there is a major change in the assumptions.
The bank documents also require that in the year that there is to be a referendum,
distributions must be held up until the results of the referendum are known. The loan
documents also include that the year that the lease expires, that the distribution for that
year must be held up until a new lease has been executed. These are both there to
protect the bank so that there are enough funds to payoff the loan if, in fact, the
operations of the DRA were to stop because of a failed referendum or a failed lease
negotiation in 10 years.
I respectfully recommend Mayor and City Council approval of the loan agreements.
ftJJ ~;J¡ /
Michael C. Van Milligen -
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Bruce Wentworth, General Manager, Dubuque Racing Association
DRL\
DUBUQUE RACING ASSOCIATION
May 25, 2004
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Honorable Mayor and City Council
Dubuque City Hall
50 West 13th Street
Dubuque, IA 52001-4864
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RE: DRAfCity Lease and DRA Loan Documents Approval
Dear Honorable Mayor and City Council:
Please consider this letter as a request from the Dubuque Racing Association
that the Dubuque City Council approve:
1. A new DRAICity Lease with the term of April 1, 2004 through March
31, 2014, and
2. Loan Documents necessary for the financing of the IRGC-approved
DGP&C expansion project.
The Dubuque Racing Association approved both of these items at their
Board of Directors meeting on May 25, 2004.
Copies of both sets of documents are included with this letter. IfI can be of
any assistance, please contact me at your convenience.
3Y~
Bruce Wentworth
General Manager
Dubuque Racing Association
P.O. Box 3 190 . DUBUOUE, IA 52004-3190 . PHONE 563.582.3647 . FAX 563.582.9074
hane;, j. O'Con"or, 1916-1990
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May 25, 2004.
Mr. Bruce Wentworth
Dubuque Greyhound Park and Casino
1855 Greyhound Park Drive
P.O. Box 3190
Dubuque IA 52004.3190
Re:Summary of Loan Documents for DBA Expansion Project
Dear Bruce:
The following is a summary of the loan documents for the DBA expansion project:
1.
Loan Aureement
Essence of transaction is in this document
Agreement is beÞ-veen DRA and American Trust & Savings Bank (ATSB)
CaBs for advances of up to $22 million on construction and term loan basis
13 summarizes Joan. InitiaBya construction loan maturing in 2005. 13.1. (See
Construction Loan Note below)
Upon maturity of Construction loan, converts to term loan 13.2. (See Term Note below)
Maturity of Term Note varies based on 8 alternative scenarios. Scenarios 1-4 all based..on
7-year amortization, with terms of three, five, and seven years, and varying interest rates
(see attached schedule)
Interest on Construction Loan Note at five basis po;nts bdowprime, '[3.3.
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O'CONNOR & THOMAS, P,C.
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Mr. Bruce Wentworth
May 25, 2004
Page 2
Principal on Construction Loan Note al1 due at maturity. PrincipJe payments on Term
Note vary based on scenario chosen. 13.4.
No prepayment penalty if loan is paid off in fuJ1 out of Borrower's cash. If prepaid due to
a refinancing,' there is a prepayment penalty of 3% in year I, 2% in year 2,and 1 %
thereafter. 1!3.6.
Loan may only be used to finance purchase of gaming devices and equipment, and
renovation and expansion ofDGP&C (the "Project"). 1[3.7.
Total estimated cost of Project is $29,626,889. Evidence of this cost is to be provided to
ATSB at closing. '13.8.
Disbursements will be made out ora construction account set up at ATSR 5%of
contract price will be withheld at completion of construction pending receipt of certificate
of completion ITom c.onstruction manager. 'f3.9.
'1f1f3.l 0 and 3.11 regulate authorization and manner of disbursements.
14 sets forth conditions precedent. 'These executed documents .must be produced:
Note
*Security Agreement
" Assignment of Lease Agreement
"Negative Pledge Agreement
"Collateral Pledge Agreement
*UCC Financing statements
Certified copy of Corporate resoJutions
Certified. copy of Articles of Incorporation
Certificate of Good Standing from Secretary of State
Opirlion of Counsel
1[4. L 1 through 4.1.12. "-these documents referred to as "Collateral Documents,"
and serve as security for notes.
Other events set forth as' conditions precedent, among them are these significant ones:
Renewal of lease between DRA and City 1[4.2.4
Consent by City for suboidinationof profit sharing revenues 14.2.5
¡RGC Approval 1[4.2.6
O'CONNOR & THOMAS, P.C.
Mr. Bruce Wentworth
, May 25, 2004
Page 3
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Performance bond ITom general contractor 14.2.7
Construction financing fee ofO.25% oftota] Project cost (not total loan amourit)
Participation of Dubuque Bank & Trust for half ofloan ($11 million)
15 provides for blanket security interest (acGOunts, chattel paper, contracts, contract
rights, documents, equipment, fixtures, general intangibles, instnnnents, inventory, rights
as sellers of goods, rights to returned or repossessed' goods). bcludes after-acquired
property, replacements, and proceeds (including ins\:lTance pr~ceeds). Financing
statement required for this security interest.
1 6 sets forth representation$ and warranties, incJuding corporate existence, no default on
indebtedness exists, Agreement doesn't violates Articles, Bylaw$, or any law, or will
cause any default on any obligation, or "ill create any security interest in anyone other
than bank.
Other representations and warranties in 1 6 are standard.' "
~ 7 sets forth environmental warranties, and includes an indemnification clause in case
bank is sued over any environmental matter.
~ 8 sets forth affinnatlve covenants, including:
loan proceeds wiJ] onJy be used for project 18.1
reports wi1l be furnished to bank (financiaJ statements, etc.) '8.2
insurance (subject to maximum $50,000 deductible for each claim) ~8.5
other covenants .are pretty standard
No distributions may be made to City tmder paragraph 4] of Lease Agreement in 2010
until approval of continued gambling in referendll¡rL - .
No distributions may be made to City under paragraph 4l of Lease Agreement in 2014
until new lease is executed.
19 contains negative covenants, all of which are pretty standard, including prohibition
against new debt, unless consented to in writing by ATSB, exceptfor trade debt in
ordinary course of business (except PMSI's in inventory, which require consent).
110 sets forth events constituting default, including failure to make payments (beyond 30
day cure period~,:\ailure to perform other obligations (beyond 5 day cure period fDllowing
O'CON"NOR & THONiAS, P.C.
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Mr. Bruce Wentworth
May 25, 2004
Page 4
2.
3.
4.
receipt of notice by ATSB), or if City fails to comply with subordination. Otherevents
are pretty standard.
~ 11 provides for acceleration following an uncured default.
11 l2 sets forth ATSB's remedies upon default. Thisis standard UCC Article 9 language.
1 13 provides for right of set off
1 16 contains miscellaneous provision, among them, that DRA is responsìble for all of
ATSB's expenses, including legal fees (1116.4).
Construction Loan Note
Discussed above. Loan is for up to $22 million, due in 2005.
Late charge of 5% of payment amount charged for any payment over 15 days late.
Interest rate goes to 18% folJowing uncured default or al\ermaturity.
Interest rate is 5 basìs points below Wan Street JournaI prime.
Secured by Collateral Documents.
Term Note
Replaces Construction Loan Note in 2005.
Amount, amortization, term, balloon, and interest rate dependant on which 0£8 scenarìos
selected. (See attached schedule of scenarios).
Secured by Collateral Documents.
Security A"reement
DRA grants ATSB a security interest in:
all inventory,. including after-acquired
all accounts; and all chattel paper, documents, and instruments relating to
accounts
all general intangibles, including after-acquìred
all eqLlipq¡.ent, including after-acquired
., .
O'CONNOR.& THOMAS, P.C,
:Mr. Bruce Wentworth
May25,2004
Page 5
~ll from products, ir¡cluding after-acqulred
all fixtures on the Dubuque Greyhound Park and Casino premises,
proceeds ora!l ofthe above
The rest of the paragraphs are standard Article 9 Security Agreement language.
5.
Collateral Pled~e A1!reement
Parties are DRA andATSB
DRA is to establish a money market account at ATSB,.and will deposit its reserve
balances and excess cash flows in that account 1 L
DRA pledges a security interest in that money market account as collateral for its loan. 1
2.
6.
Assi~nment of Lease A1!reement
Parties are DRA, as lessee, City, as lessor, and ATSB
1 1 includes recitals, and contains DR.A.'s assignment of its lease with City- to ATSB,
along with Citjls consent.
~ 2 contains COVe11rolts by DRA and City regarding performance ofJease (standard
Janguage regarding current state oflease and ATSB's rights upon loan default)
1r 3 contains Subordination by City of any current or future Landlord's liens, and
subordination of City's right to receive Distribution of Cash Proceeds under Section 45 of
lease. .
Remaining paragraphs all standard language in lease assignments.
7.
Neoative PJedpe A~reement
Parties are City and ATSB
Substantive provision is ~ 2, Negative Covenants, in which City agrees not to allow any
encumbrance to the real estate on which the track is located, or any security interest or
mortgage to be placed on the real estate,
O'CONNOR & THOMAS, P.C.
Mr. Bruce Wentworth
May 25, 2004
Page 6
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Very truly yours,
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Stephen C. Krumpe I. /
SCKldnh V
895 Main Street
P.O.8ox 938
Dubuque, Iowa 52004-09315'
563.589.0849
Faxß~9.0860
tutzlg@americantrusLcom
www.americantrust.com
Thomas J. Utzig
Executive Vice President'
Chief Credit Officer
May 20, 2004
Mr. Bruce Wentworth, General Manager
Dubuque Greyhound Park & Casino
P.O. Box.3190
Dubuque, IA 52004-3190
Dear Bruce:
j American Trust & Savings Bank and Dubuque Bank & Trust Company ("Banks") are
pleased to provide the following credit facility to the DubuqueRacing Association
("ORA") for the planned casino expansion and remodeling of the Dubuque Greyhound
Park & Casino. This proposal supersedes the one submitted May,.9, 2004,as the scope
and the amount olthe project changed.
Credit Amount:
Not to exceed $22,000,000 for 1000 machine expansion, addition
of gaming tables, and expansion of the facilities.
Credit Purpose:
Finance purchase of gaming devicesa!]~ equipment, and finance
the renovation and expansion project at the Dubuque Greyhound
Park & Casino.
Collateral:
This credit will collateralized by a general business security
agreement on substantially all assets of the Dubuque Greyhound
Park & Casino. Additionally, an assignment of the lease between
the city of Dubuque and the ORA will be obtained. A negative
pledge agreement, from the city of Dubuque, will be obtained so
the assets cannot be assigned or mortgaged by the .city without
the express written consent of the Banks.
.Construction Loan:
. There will be one construction multiple advance loan availed for
the entire amount of the proposed financing. This will be a
variable rate loan set up for a 12-month interest only period. The
rate will be 5 basis points below The Wall Street Journal Prime
('Prime"). Interest will be paid monthly and will be based upon the
amount outstanding on the loan. . If funding today, the initial
interest rate would be 3.95 percent There will be a construction
loan fee of 025 percent of the total project .
Term Facility:
We are ofleringthefollowing financing options:
.;
American Trust & Savings Bank
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Mr. Bruce Wentworth
May 20, 2004
Page 2 of5
Term Loan
Amount
Amortization
Term of loan
Interest Rate
Scenario 1 Scenario 2 Scenario 3 Scenario 4
$22,000,000 $22,000,000 ,$22.,000,000 $22,000,000
seven years seven years seven years seven years
three-year five-year balloon seven years seven years
balloon
Fixed at Prime Fixed at Prime Fixed at Prime Variable at
plus 0.75% plus 1.50% plus 2.50% Prime -.05%
Rate if funding today 4.75% 5.50% 6.50% 3.95%
Min. payment if funding today $309,084 $316,983 $327,702 $300,793
OR
Fixed þrincipal
of $261 ,905.76
plus accrued
interest
Scenario 5 Scenario 6 Scenario 7 Scenario 8
Loan 1 Amount $11,000,000 $11,000.,000 '$11,000,000 $11,000,000
Amortization seven years seven years seven years seven years
Term of Loan three-year five-year balloon seven years. seven years
balloon
Interest Rate Fixed at Prime Fixed at Prime Fixed at Prime Variable at
plus 0.75% plus 1.50% plus 2.50% Prime - 0.05%
Rate if funding today 4.75% 5.50% 6.50% 3.95%
Min. payment if funding today $154,542 $158,491 $163,851 $150,397
Loan 2 Amount $11,000,000 $11,000,000 $11,000,000 $11,000,000
Amortization fifteen years fifteen years fifteen years fifteen years
Term of Loan three-year five-year balloon seven-year fifteen years.'
balloon balloon
Interest Rate Fixed at Prime Fixed at Prime Fixed at Prime Variable at
plus 1.00% plus 1.75% plus 3.00% Prime + .25%
Rate if funding today 5% 5.75% 7% 4.25%
Min. payment if funding today $87,407 $91,841 $99,502 $83,097
Total monthly payment $241,949 $250,332 $263,353 $233,494
O¡:ç
Fixe<J Principal
payments of
$192,063.49
.plus accrued
interest
American Trust & Savings Bank
Mr. Bruce Wentworth
May 20, 2004
Page 3 of 5
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A frfteen~year fixed rate'may be offered at the time of closing. If offered today, the rate
would be in the 9 percent range with a monthly payment of approximately $225,000. All
fixed-rate financing proposals are subject to a prepayment fee to be negotiated at a làter
date.
'If you choose the variable rate option and elect to have a set monthly principal and
interest payment, we will adjust the payment annually in order to maintain th.e intended
amortization schedule: '
Pre-funding Conditions:
.j 1. Renewal of the lease between the Dubuque Greyhound Park & Casino and the. city
of Dubuque. .
2. Satisfactory consent by the city of Dubuque for the subordination of profit sharing
revenues until the Banks' loans are repaid.
3. Satisfactory approval of the expansion project by the Iowa Gaming Commission.
Satisfactory review of the licenses for operating the casino at the Dubuque
Greyhound Park & Casino.
;: 4. A performance bond acceptable to the lenders will be required for the construction
project
Other General Conditi?ns:
The proposed credit facility will be governed by a credit agreement between the Banks
and the DRA This agreement will contain a number of conditions including, but not
limited to:
1. The credit facility will be subject to documentation as may be required by the Banks
and their legal counsel. .
2. The Banks are to receive a perfected first lien on all collateral.
3. The DRA will provide the Banks with annual audits of its operations, as well as
quarterly internal financial statements.
4. The DRA will be responsible for all expenses related to the preparation and closing
of the credit facilities including; but not limited to, filing fees, and legal expenses.
5.
In any of these financing proposals, there will be a significant balance owing on the
credit facility at November 2010, at which time there will be a public referendum to
determine whether Borrower shall continue its business: Borrower shall make no
distributions pursuar¡Ho paragraph 41 of the Lease Agreement between Borrower
and the City of Dubùque, Iowa, as a result of operations during Borrower's fiscal year
American Trusf & Savings Bank
Mr. Bruce Wentworth
-May 20,2004
Page 4 of 5
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2010. Such funds, which otherwise would have been distributed at the end of
Borrower's fi~calyear 201 0, shall instead be maintained in an account with Bank and
pledged to Bank as additional collateral. If the referendum in 2010 approves the
continuation of Borrower's gambling activities, such funds will be released by Bank to
Borrower promptly after the results of the referendum are certified.
6. In the event the DRAchooses any of the is-year amortization proposals, Borrower
shall make no distributions pursuant to paragraph 41 of the Lease Agreement
between Borrower and the City of Dubuque, Iowa, as a result of operations during
Borrower's fiscal year2014, unless and until Borrower has negotiated and executed
a new lease with the City of Dubuque, Iowa. . Such funds, which otherwise would
have been distributed at the end of Borrower's fiscal year 2014, shall instead be
maintained in an account with Bank, and pledged to Bank as additional collateral.
Upon negotiation and execution of said lease, such funds will be released to
Borrower by Bank promptly after execution of said lease.
American Trust & Savings Bank shall serve as the lead bank for the credit facilities.
Dubuque Bank & Trust Company will be purchasing an equal share of the credit amount
All documents will be prepared in the name of American Trust & Savings Bank.
American Trust & Savings Bank and Dubuque Bank & Trust C9mpany appreciate the
opportunity to assist th", Dubuque Racing Association with the expansion project By
using our collective efforts, we can expedite the approval/closing process, assure
efficiencies, and maintain the majority of this credit facility within the local community.
Purpose of Letter:
This letter shall not be deemed as evidence ora binding agreement on the part bf either
the Banks or .the Borrower. Important terms may remain to be negotiated,and e','en if an
agreement in principal should be reached on the terms of the financing at a subsequent
date, neither party to the financing shall be legally bound until definitive loan documents
have been signed by the respective parties. .
If the foregoing terms are in accordance with what we discussed, please indicate
acceptance.on both of the enclosed originals of this letter and return one fully signed
original. If such acceptance is not received by us on or before .May 31, 2004, and closed
by July 1, 2004, this proposal shall expire.
Sincerely,
'~d ié#:
Thomas J. Utzig tJ;;lz-
Executive Vice President
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American Trust & Savings Bank
Mr. Bruce Wentworth
May20, 2004
Page 5 of 5
Agreed and accepted this
Dubuque Racing Association
by:
day of May 2004.
It
IMPORTANT: .READ BEFORE SIGNING. THE TERMS OF TillS AGREEMf:f.T SHOULD
BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRHING ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN TillS
WRITTEN CONTRACT MAYBE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS
OF TillS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
LOAN AGREEMENT
This Loan Agreement ("Agreement") is effective , 2004, between Dubuque
Racing Association, Ltd., an Iowa Non-Profit Corporation, ("Borrower") and American Trust &
Savings Bank ("Bank").
Recitals. Borrower has requested Bank to lend it up to the sum of Twenty-Two Million &.
00/1 00 Dollars ($22,000,000.00) on a construction. and tenD loan basis. Bank is willing to
provide such construction and tenD loan on the terms and conditions set out below. Therefore, in
consideration of the promises herein contained, and each intending to be legally bound hereby,
the parties agree as provided in this Agreement.
I.
2.
Definitions. As used in this Agreement, the following tenDS shall mean:
2.1.
22.
2.3.
2.4.
2.5.
Accounting Tenns. Accounting terms used and not otherwise defmed in this Agreement
have the meanings detennined by, and all calculations with respect to accounting or
fmancial matters, shaH be computed in accordance with generaHy accepted accounting
principles from time-to-time in effect in the United Státes of America ("GAAP"), unless
this Agreement specifically provides otherwise. "
"Accounts, ""Chattel Paper, ""Contracts, ""Documents, ""Equipment, ""F ixtures, ""General
Intangibles,""Goods,""Instruments" and "Inventory" shall have the meanings given to
those tenDS by the Unifonn Commercial Code presently in .effect in the State of Iowa.
"Affiliate"means as to any Person, each other Person that directJy or indirectly, through
one or more intermediaries, controls, is controlled by or is under common control with,
such Person.
"Business Day" means a day other than a Saturday, a Sunday, or a day on which
commercial banks in Dubuque, Iowa are authorized to close.
"Collateral Documents" means the Security Agreement specified in Section 4. l.2, the
Assignment of Lease Agreement specified in Section 4.1.3, the Negative Pledge
Agreement specified in Section 4. 1.4, the CoHateral Pledge Agreement specified in
Section 4.1.5, and the documents, whether deJiverable at or after the Closing, required
under Section 5.
wp60docslAmerican Trust & Savings BankIDRAlLoan Ag,,:ement 5.19.04
2.6.
2.7.
2.8.
2.9.
2.10.
"Environm€ntal Laws" means a1l federal, state and local laws, including#!!tutes,
regul~tions, ordinances, codes, rules and other governmental restrictions add'
requirements relating to the environment or hazardous substances, including, but not
limited to, the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the Federal
Clean Water Act, the Federal Resource Conservation and Reeovery Act of 1976, the
FederaJ Comprehensive Environmental Responsibility, Cleanup and Liability Act of
1980, regulations of the Environmental Protection Agency, regulations of the NucJear
Regulatòry Agency, and reguJations of any state Department of Natural Resources or
sta!eEnvironmental Protection Agency now, or.at any time hereafter, in effect.
"Indebtedness" means, as to Borroweror any Subsidiary, a1l items of indebtedness,
obligation or liabiJity, whether matured or unmatured, liquidated or unliquidated, direct
or contingent, joint or several, including (withqut implied limitation): (1) A1I
indebtedness guaranteed, directly, in any manner, or endorsed (other than for c01lection
or deposit in the ordinary course of business) or discounted with recourse; (2) A1I
indebtedness in effect guaranteed, directly or indirectly, through agreements, contingent
or otherwise (a) to purchase such indebtedness; (b) to purchase, se1l, or lease (as lessee
or lessor) property, products, materials, or supplies or to purchase or se1l services,
primarily for the purpose of enabling the debtor to make payment of such indebtedness or
to 'insure the owner of the indebtedness against loss; or \!:)) to supply funds to, or in any
other manner invest in, the debtor; (3) A1I indebtedness secured by (or for which the
holder of such indebtedness has a right, contingent or otherwise, to be secured by) any
mortgage, deèd of trust, pJedge, Jien, security interest, or other charge or encumbrance
upon property owned or acquired subject thereto, whether or not the liabiJities secured
thereby have been assumed; and (4 )A1I indebtedness incurred as the lessee of goods or
services under Jeases that, in accordance with GAAP, slitould notbe reflected on the
lessee's balance sheet.
Notes" means a1l promissory notes executed and delivered pursuantto Section 3, and any
and a1l extensions, substitutions,amendments and renewals thereof.
"Obligations" means the obligation of Borrower: (1) To pay the principaL of, and interest
on, the Note in accordance with the terms thereof and to satisfy a1l of its other liabilities
to Bank, whether required by this Agreement or otherwise, whether now existing or
hereafter incurred, matured or unmatured, direct or contingent, joint or several, including
any extensions, modifications, renewals thereof, and substitutions therefor; (2) To repay
to Bank all amounts advanced by Bank hereunder or otherwise on behalf of Borrower,
including, but without Jimitation, advances for principal or interest payments to prior
secured parties, mortgages, or lienors, or for taxes, levies, insurance, rent, or repairs to, or
maintenance or storage of, any of the C01lateraJ; and (3) To reimburse Bank, on demand,
for all of Bank's expenses and costs, including attorneys' fees, in connection with the
preparation, administration, amendment, modification or enforcement of this Agreement
and the documents required under this Agreement, including, without limitation, any
proceeding brought, or threatened, to enforce payment of any of Borrower's obligations
under this Agreement.
"Permitted Liens" means:
2
2.11.
2.10.2.
2.10.5.
. 2.10.1. Liens for taxes, assessments, or similar charges, incurre~,i'lthe ordinary
course of business, that are not yet due and payabJe; ~
Pledges or deposits made in the ordinary course of business to secure payment öf
worker's compensation or to participate in any fund~n connection with worker's
compensation, unemployment insurance, old-age pensIons, or other social
security programs;
2.10.3. Liens of mechanics, materialmen, warehousemen, carriers or other like
liens, securing obligations incurred in the ordinary course of business that are not
yet due and payable;
2.10.4. Good faith pJedges or deposits made in the ordinary course of business to
secure performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, not in excess often per cent (10%) of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance, or other simiJar bonds required in the ordinary course of
business;
Encumbrances consisting of zoning restrictions, easements, or otheLrestrictions
on the use of real property, none of which materially impairs the use of such
property by Borrower in the operation of its business, and none of which is
violated in any material respect by existing or proposed structures or Jand use;
2.l0.6. Liens in favor of Bank;
2.10.7. Purchase money security interests grante\:i to secure not more than
seventy-five per cent (75%) of the purchase price of assets, the purchase of which
does not violate this Agreement or any instrument required hereunder; and
2.10.8. The following, if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings, so long as levy and execution
thereon have been stayed and continue to be stayed and they do not, in the
aggregate, materially detract trom the value of the property of Borrower or any
Subsidiary, or materially impair the use thereof in the operation of its business:
(I)- Claims or Jiens for taxes, assessments, or charges due and payable and subject
to interest or penalty; (2) Claims, liens, and encumbrances upon, and defects of
title to, reaJ or personal property, including any attaclunent of personal or real
property or other legal process prior to adjudication of a dispute on the merits; (3)
Claims or liens of mechanics, materialmen, warehousemen carriers or other like
liens; aftà (4) Adverse judgments on appeal; and (5) Any other liens to which
Bank has consented in writing..
"Person" means any individual, corporation, limited liability company, partnership,
association, joint-stock company, trust, unincorporated organization, joint venture, court
or government or political subdivision or agency thereof
3
2.l2.
2.13.
2.14.
2.15.
"Records" means correspondence, memoranda, tapes, discs, papers, book$ ¡md other
documents, or transcribed information of any type, whether expressed in oftlinary or
machine.readable language.
"Subordinated Indebtedness" means all Indebtedness incurred at any time by Borrower or
any Subsidiary, the repayment of which is subordinated to the Loan in form and manner
. satisfactory to Bank.
"Subsidiary" means any Affiliate that is directJy, or indirectly through one or more
intermediaries, controlled by Borrower or not Jessthan fifty per cent (50%) of the voting
capital stock of which is owned, directJy or through one or more i\1tennediaries, by
Borrower.
"WalJ Street Journal Prime Rate" means that certain interest rate published from time-to-
time in the Wall Street Journal, and consisting of the base rate on corporate loans posted
by at least 75% of the nation's 30 largest banks.
The Loan. Subject to all of the terms and provisions of this Agreement, Bank agrees to grant a
loan to Borrower, concurrently with the execution of this Agreement, in the principal.amount of
up to Twenty-Two Million & 00/100 Dollars ($22,000,000.00) , due , 2005.
Borrower will submit construction draw requests for advances on this Loan.
3.
3.1.
3.2.
3.3.
Construction Loan Note. The loan "granted by Bank to Borrower shall be evidenced by
a Construction Loan Note, dated the same date as this Agreement, and maturing on
, 2005, on which maturity date the full amount of principaJ and unpaid
interest shall be due and payable, and, provided that BOITower is not in default hereunder,
will be converted to the Term note. ;
Term Note; Upon the maturity of the Construction Loan Note, the Joan granted by Bank
to Borrower shall be evidenced by a Term Note, dated ,2005, and maturing
on at a date based on Borrower's seJection of options from among Scenarios 1 - 8
contained in said Term Note, on which maturity date the full amount of principal and
unpaid interest shall be due and payable. Any extension of time for payment of principal
or interest on the Note resuJting from the due date falling on a Saturday, Sunday or legal
hoJiday, shall be included in the computation of interest.
Interest. Interest on the Construction Loan Note shall be paid from the date of
execution, or the date funds are first provided, whichever is later, on the outstanding
unpaid principal balances of the Note, from time to time outstanding, computed on the
basis of a year of three hundred sixty (360) days and the actual number of days lapsed,
said payment consisting of all interest billed and unpaid through the.Jast day ofthe month
preceding the month in which said payment is due, at a rate five (5) basis points below
The Wall Street Journal Prime Rate per annum, payable monthly commencing on
, 2004, and continuing on the 1st day of each month thereafter. Interest on
the Term Note shall be selected by Borrower from among Scenarios 1 - 8 contained in the
Term Note.
4
3.4.
3.5.
3.6.
3.7.
3.8.
3.9.
Principal. No principal payments on the Construction Loan Notesha]]kh¡e due until its
maturity date. The principaJ balance of the Tenn Note sha]] be paid r!tonthly, in an
amount detennined based on the Scenario seJected by Borrower as outlined above,
commencing on , 2005, and on the I" day of each month thereafter
until maturity, at which time the entire principal balance and.a~crued interest is due.
Payment AI1 sums payable to Bank under the Note or this Agreement shal1 be paid in
inunediateJy available funds. Bank shal1 send to Borrower statements of a]] amounts due
under the Note or this Agreement, which sha]] be considered correct and conclusively
binding on Borrower unJess Borrower notifies Bank to the contrary within thirty (30)
days of Borrower's receipt of any statement that it deems to be incorrect.
Prepayment; Penalty. Prepayments made as a result of the refinancing ofalJ or any part
of the then outstanding principal balance shal1 be charged a prépayment fee of three
percent (3%) in year one under this Agreement, two percent (2%) in year two under this
Agreement, and one percent (1%) thereafter until the principal balance is paid in ful1.
Except for prepayments made as a result of refinancing al1 of any part of the then
outstanding principal balance, prepayments sha]] not be subject to a prepayment penalty.
AI1 such partial prepayments shal1 be applied against the installm~nts of principal
required by Section 3.4 in the inverse order of the maturity thereof
The Project The purpose of this Loan is to provide Borrower with some of the funds
necessary to finance the purchase of gaming devices and equipment, and the renovation
.and expansion of the Dubuque Greyhound Park & Casino located in Dubuque, Dubuque
County, Iowa (the "Project"), and the funds provided hereunder will be used onJy for the
Project. The Project wil1 be built essentia]]y in accordance with plans and specifications,
copies of which are to be delivered to Bank as soon as possible. Construction of the
Project wi]] be completed not later than ,2005.
Cost of Project. Total cost of the Project is estimated to be $29,626,889.00. At the
closing of this Loan, Borrower shal1 provide evidence satisfactory to Bank of the total
cost of the project, including al1 furniture, fixtures, equipment and a]] other items
necessary to complete and operate the Project AI1 costs of the Project in excess of this
Loan shall be the sole responsibility of Borrower.
Disbursement The net proceeds of the Loan shall be conclusively deemed a fu]] and
complete consideration for such Note. Such funds are to be paid out, and are to be used,
for the purposes set out in this Agreement. Borrower acknowledges that it has 'i:1O right to
the net proceeds of this Loan other than to have the same disbursed by Bank in
accordance with the provisions of this Agreement The disbursement of this Loan by
Bank from a construction account set up for that purpose shal1 be to the party entitled
thereto, and shall be made upon written approval by Borrower' s construction
management finn, approved by Bank, and upon receipt by Bank of all appropriate lien
waivers and verification of entitlement to such disbursement An amount equal to five'
percent (5%) of the contract price sha]] be withheld following completion of construction
pending receipt of the construction manager's certificate of completion.
3.10.
3.l 1.
Authorization and Manner of Disbursement The Loan proceeds wilV.be disbursed in
the following manner: il.
3.10.1.
3.10.2.
3.10.3.
3.10.4.
Bank is authorized to disburse the Loan proceeds in payment of materials, Jabor
and all other necessary expenses in relation to the-Project. All disbursements
made under the terms of this Agreement shall be in--the manner and upon the
forms, waivers and receipts as Bank may determine.
Borrower warrants that all improvements proposed to be erected and completed
will be in accordance with the plans and specifications submitted to Bank, and
will comply with a]] laws and regulations of all governmental bodies having
jurísdiction.
Borrower covenants that it wi]] not directly or indirectly authorize the doing of
any work, or the furnisbing of any materiaJs which will be an expense in addition
to the Project budget supplied to Bank, without first notifying .Bank and; if
necessary, without first depositing with Bank sufficient funds with which to pay,
or evidencing payment to subcontractors or supp tiers, for such additional work or
material.
Borrower agrees that no liability shall attach to Bank, its agents or employees in
.connection with the construction of the Project, it being understood that
Borrower alone shall continue to be Jiable for the payment of any and a]] debts,
actions, claims, demands, accounts or causes of action which may .arise
hereunder, liability on the part of Bank being expressly waived and released.
Disbursement Regulations. Borrower agrees that the following regulations will govern
disbursement'ôfthe Loan proceeds:
3.11.1. A complete set of plans and specifications will have been furnished to and
approved by Bank before commencement of construction:
3.11.2.
3.11.3.
Inspections by The Durrant Group, Inc., construction manager, are required after
installation of the foundation prior to backfilling, when the building is under roof,
when the building is ready for drywa]] and all roofing is completed, when the
building is completely finished, and at such other times as Bank deems necessary
or advisable. Borrower shall admit Bank's representatives to the Project at such
times as are requested by Bank to view the Project.
Borrower shall furnish orders,. schedules of lien waivers showing actual
consideration paid and necessary affidavits on forms meeting the requirements of
BanJ<. Orders for payment are to be signed by both Borrower and Borrower's
genera] contractor.
4.
Conditions Precedent The obligation of Bank to make the Loan is subject to the following
conditions precedent:
4.1.
Documents Required for the Closing. Borrower shall have deJivered tb,;Bank, in fonD
and content acceptable to Bank, prior to the initial disbursement of '!:he .Loan (the
"Closing"), the following:
4.1.1. The Note, duly executed by Borrower;
4.1.2.
The Security Agreement, duly executed by BóÍTower;
4.1.3.
The Assignment of Lease Agreement; duJy executed by Borrower
4.1.4.
The Negative Pledge Agreement, duly executed by the City of Dubuque, Iowa;
4.1.5.
The Collateral PJedge Agreement, duly executed by Borrower;
4.1.6.
The fmancing statements and other instruments required by Section 5;
4.1.7. A copy, certified as of the date .i)f the Closing, of resolutions of the
Directors of Borrower authorizing the exeèution, deJivery and, performance of
this Agreement, the Note, the Collateral Documents, and each other document to
be delivered pursuant hereto;
4.1.8. A copy, certified as of the date of the Closing, of the Articles of
Incorporation of Borrower;
4.1.9.
A certificate (dated the date of the Closing) of the President of Borrower as to the
incumbency and signature of the Officers of Borrower signing this Agreement,
the Note, the Collateral Documents, and each, other document to be delivered
pursuant hereto; ,
4.LlO.
A copy, certified as of the most recent date practicable by the Secretary of State
of Iowa, of the Articles of Incorporation of Borrower, together with a certificate
(dated the date of the Closing) of the President of Borrower to the effect that such
Articles of Incorporation have not been amended since the date of the aforesaid
certification of the Secretary of the State ofIowa.
4.1.11. . Certificates, as of the most recent dates practicable, of the Secretary of State of
Iowa as to the good standing of Borrower;
4.Ll2. A written opinion of Borrower's counsel, dated the date of the Clösing and
addressed to Bank to the effect that:
4.1.12.1.
Borrower is a nonprofit corporation organized, existing and in
good standing under the Jaws of the State ofIowa, is qualified to
transact business and is in good standing in the State of Iowa
and, to the knowledge of such counsel, is not required to be
qualified as a foreign corporation in any other jurisdiction;
4.1.12.2.
Borrower has the power to execute and deliver this Agreement,
to borrow money hereunder, to grant the Collateral required
7
4.2.
4.1.12.3.
hereunder, to execute and deliver the Note an@ lithe Cóllateral
Documents (other than the Guaranty Agreement),!ind to perform
its obligations hereunder and thereunder;
All corporation actions by Borrower and an consents and
approvals of any Persons necessary to the validity of .this
Agreement, the Note, the Collateral Documents, and such other
documents do not conflict witb any provision of the Articles of
Incorporation or Bylaws of Borrower, or of any applicable
Laws, or any other agreement binding Borrower or its property
of which, after reasonable inquiry, such counsel has knowledge.
4.1.12.4.
This Agreement, the Note, the Conateral Documents, and all
other docurnents to be delivered hereunder have been duly
executed by, and each is a valid and binding obligation of,
Borrower, each of the foregoing documents is in all respects
sufficient to achieve its purported function and is enforceabJe in
accordance with its terms, except as limited bybanktuptcy,
insolvency, -reorganization, moratorium, or other similar laws
affecting creditors' rights generany or by general equitable
principles.
4.1.l3. The representations and warranties set forth in herein are true as of the date of the
CJosing. .
Certain Events. At the time of, and as a condition to, the Closing:
4.2.1.
4.2.4.
No Event of Default, as that term is defined in Section 10, below, shan have
occurred and be continuing, and no event shan have occurred and be continuing
that, with the giving of notice or passage of time or both, would be an Event of
Default;
4.2.2. No material adverse change shan have occurred in the financial condition
of Borrower or any Subsidiary since the dates of the Financial Statements; and
4.2.3. All of the Collateral Documents shall have remained in fun force and
effect.
Renewal of the lease between Borrower and the City of Dubuque, Iowa;
4.2.5.Consentby the City of Dubuque, satisfactory to Bank, for the subordination of
profit sharing revenues due to the City of Dubuque from Borrower, until the
Loans are repaid;
4.2.6.
4.2.7.
Approval of the Project, satisfactory to Bank, by the Iowa Racing and Gaming
Commission;
Borrower shall have caused its general contractor to provide a performance bond
in form and substance satisfactory to Bank;
4.3.
4.4.
4.5.
4.6.
4.7.
4.2.8.
i, ,
Bank shall be satisfied that. there exists on the Closing Date 10 uncorrected
vioJation by Borrower of any Environmental Laws, or condition which would
subject Borrower to damages, penalties, injunctive relief or cleanup costs under
any Environmental Laws, or which require or are likely to require cleanup,
removal, remedial action or other response pursuant to Environmental Laws by
Borrower.
Construction Financing Fee. A one-time Construction Financing Fee of 0.25% of the
total Project cost is paid to Bank by Borrower;
Zoning. Borrower shall have provided evidence that the real estate on which the Project
will be constructed is properly zoned for the operation of the Project.
General Contractor; Plans and Specifications. It is 'understood and agreed that
Borrower will utilize , as the general contractor for the
Project. The Durrant Group, Inc., the architectural firm for the Project, shall draft and
certify the pJans and specifications for the Project.
Participation. Bank shall have obtained, in form and content satisfåctory to' it, the
participation of Dubuque Bank and Trust Company in the amount of Eleven Mi11ion &
001100 Dollars (l 1,000,000.00).
Legal Matters. At the time of the Closing, all legal matters incidentaJ thereto shall be
satisfactory to legal counsel to Bank.
Collateral Security. The property in which a security interest is granted pursuant to the
provisions of this Section is collectively called the "Collateral." The Collateral, together with all
other property of Borrower of any kind held by Bank, shall stand as .one general, continuing
collateral security for all Obligations and may be retained by Bank until all Obligations have been
satisfied in full.
5.
5.1.
5.2.
Rights in Property Held by Bank. As security for the prompt satisfaction of all
Obligations, Borrower hereby assigns, transfers, and sets over to Bank all of its right, titJe
and interest in and to, and grants Bank a lien on, and a security interest in, all amounts"
thatmay be owing from time to time by Bank to Borrower in.any capacity, including
without limitation, any balance or share beJonging to Borrower, or any deposit or other
accoUllt with Bank, other than those deposits or accounts, if any, which may not by law
be pledged as security, which lien and security interest shall be independent of, and in
addition to, any right of set-off that Bank has under Section 13 or otherwise.
Rights in Property Held Either by Borrower or by Bank. As further security for the
prompt satisfaction of all Obligations, Borrower hereby assigns to Bank all of its right,
title, and interest in and to, and grants Bank a lien upon, and a security interest in, all of
the following, wherever located, whether now owned or hereafter acquired, together with
all replacements therefor and proceeds (including, but without hmitation, insurance
proceeds) and products thereof: Accounts; Chattel Paper; Contracts; Contract rights;
Documents; Equipment; Fixtures; General Intangibles; Instruments; Inventory; Rights as
9
5J.
5.4.
5.5.
seller of Goods and rights to returned orrepossessed Goods; and All ReË'f,ds pertaining
to any other Collateral;
Priority of Liens. The foregoing liens shall be first and pri?r liens except for Permitted
Liens;
Financing Statements. Borrower wìll:
5.4.1.
Join with Bank in executing such financing statements (including amendments
thereto and continuation statements thereof) in form satisfactory to Bank as
Bank, from time to time, may specifY;
5A.2.
Pay, or reimburse Bank for paying, all costs and taxes oÎ filing or recording the
same in such public offices as Bank may designate; and
5AJ.
Take such other steps as Bank, from time to time, may direct, including the
noting of Bank's lien on the Collateral and on any certificates oftitJe tJlerefor, all
to perfect to the satisfaction of Bank, Bank's interest in the Collateral;
5AA.
In addition to the foregoing, and not in limitation thereof: (1) To the extent
permitted by law, carbon, photographic, or other reproduction oftbis Agreement
shall be sufficient as a financing statement and may be filed in any.appropriate
office in lieu thereof; and (2) To the extent lawful, Borrower hereby appoints
Bank as its attorney-in-fact (without requiring Bank to act as such) to execute
any fmancing statement in the name of Borrower and to perform all other acts
that Bank deems appropriate to perfect and conÍil)ue its security interest in, and to
protect and preserve, the Collateral. . .
Landlords' and Warehousemen's Waivers. Borrower wìll, within twenty (20) days
after any request of Bank, cause any landlord of premises leased by Borrower and any
warehouseman or other bailee on whose premises any of the Collateral may be located, to
execute and deliver to Bank instruments, in form and substance satisfactory to Bank, by
which such Jandlord or warehouseman or other bailee waives its rights, if any, in and to
all Goods composing a part of the Collateral.
6.
Representations and Warranties. To induce Bank to enter into this Agreement, Borrower
represents and warrants as follows:
6.l.
Borrower is a nonprofit corporation organized, existing and in good standing under the
Laws of the State ofIowa; Borrower has no Subsidiaries; Borrower has the power to own
its properties .and to engage in the businesses its conducts, and is quaJified and in good
standing as a corporation in the State of Iowa; the addresses of all places of business of
Borrower are as previously disclosed to Bank in writing; Borrower has not changed its
name, been the surviving corporation in a merger, acquired any business, or.changed its
principal executive office within five (5) years and one (I) month prior to the date hereof;
10
6.2.
6.3.
6.4.
6.5.
6.6.
6.7.
6.8.
6.9.
Borrower is not directJy or indirectJycontrol1ed by, or acting on behalf ~f, any Person
which is an "Investment Company," within the meaning of the Investment'Company Act
of 1940, as amended;
Borrower is not in default with respect to any of its existing Iñèebtedness, and the making
and performance of this Agreement, the Note, and the Collateral Documents wj]] not
(inunediately or with the passage of time, the giving of notice, or both): (1) Violate the
Articles ofIncorporation or Bylaws of Borrower or violate any Laws orresult in a'default
under any contract, agreement, or instrument to which Borrower is a party or by which
Borrower or its property is bound; or (2) Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of the assets of Borrower, except in
favor of Bank;
Borrower has the power and authority to enter into and perform this Agreement, the Note
and the Col1ateral Documents, and to incur the obligations herein and therein provided
for, and has taken all àctions necessary to authorize the execution, delivery and
performance of this Agreement, the Note, and the Col1ateral Documents;
This Agreement, the Note, and the Col1ateral Documents are, or when delivered wj]] be,
valid, binding and enforceable in.accordance with their respective terms;
Except as previously disclosed in writing to Bank, there is np pending order, notice,
claim, litigation, proceeding, or investigation against or affecting Borrower, whether or
not covered by insurance, that would be in the aggregate involve the payment of
$25,000.00 or more or would otherwise material1y or adverseJy affect the fmancial
condition of- business prospects of Borrower if adversely ;determined;
Borrower has good and merchantable title to al1 of its assets, none of which is subject to
any security interest, encumbrance or lien, or claim of any third Person, except for
Permitted Liens;
As of the date hereof, Borrower has no material Indebtedness of any nature, including,
but without limitation, liabilities for taxes and any interest or penalties relating thereto,
except to the extent permitted by this Agreement; and Borrower does not know or have
reasonable ground to know of any basis for the assertion against it of any such
Indebtedness as of the .date of the CJosing except as previously disclosed in writing to
Bank;
Except as otherwise pennitted herein, Borrower has filed all federal, state and 10caJ tax
returns and other reports required by any applicable Laws to have been filed prior to the
date hereof, has paid or caused to be paid al1 taxes, assessments, and other governmental
charges that are due and payable prior to the date hereof, and has made adequate
provision for the. payment of sucb taxes, assessments, or other. charges accruing but not
yet payable; Borrower has no knowJedge of any deficiency or additional assessment in
materially important amount in connection with any taxes, assessments, or charges
not provided for on its books;
II
6.l0.
6.11.
6.l2.
6.13.
6.14.
6.15.
6.16.
6.17.
Except to the extent that the faiJure to coinply would not roateria1ly irlt$fere with. the
conduct of the business of Borrower, Borrower has complied with a1l applicable Laws
with respect to: (I) Any restrictions, specifications, or other requirements pertaining to
the services it performs; (2) The conduct of its business; and (3) The use, maintenance,
and operation of the real and personaJ properties owned or leased by it in the conduct of
its business;
No representation or warranty by, or with respect to, Borrower contained herein or in any
certificate or other document furnished by Borrower pursuant hereto contains any untrue
statement of a material fact or omits to state a material fact necessary to make such
representation or warranty not misleading in light of the circumstances under which it
was made;
Each consent, approval, or authorization of, or filing, registration, or qualification with,
any Person required to be obtained or effected by Borrower in connection with the
execution and delivery of this Agreement, the Note, and the Co1lateral Documents or the
undertaking or performance of any obligation hereunder or thereunder has been duJy
obtained or effected;
A1l existing Indebtedness of Borrower for money borrowed, or under any security
agreement, mortgage, or agreement covering the lease by Borrower as lessee of real or
personal property, has previously been disclosed in writing to Bank.
Except as previously disclosed to Bank in writing, Borrower has no material .leases,
contracts, or commitments of any kind (including, without limitation: employment
agreements; collective bargaining agreements; pov,ers of attorney; distribution
arrangements; patent Jicense agreements; contracts for future purchase or delivery of
goods or rendering of services; bonuses, pension, and retirement plans; or accrued
vacation pay, insurance, and weJfare agreements). To the best of Borrower's knowJedge
no party is in default under any agreement to which it is a party, and no event has
occurred which, but for the giving of notice or the passage of time, or both, would
constitute a default;
Borrower has not made any agreement or taken any action which may càuse anyone to
become entitled to a commission or finder's fee as a result of, or in connection with, the
making of the Loan.
Borrower's federal tax returns for a1l years of operation wi1l be properly filed with the
Internal Revenue Service;
Any Employee Pension Benefit Plans, as defined in the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), of Borrower meet; as of the date hereof,
the minimum funding standards of 29 U.S.C.A §IO82 (§302 of ERISA), and no
Reportable Event or Prohibited Transaction, as defined in ERISA, has occurred with
respect to any Employee Benefit Plan of Borrower, as defmed in ERISA
12
7.
7.2.
7.3.
7.4.
7.5.
6.18.
Survival. A1I of the representations and warranties set forth above sha1l~~prvive until a1l
Obligations are satisfied in fu1l, and there remain no outstanding commitments under this
Agreement.
Environmental Warranties. To further induce Bank to enter intá.lhis Agreement, Borrower
represents and warrants to Bank, as f01l0ws:
7.LDump ¡:>ites. 'With respect to the period during which Borrower has owned or occupied
its real estate, and to Borrower's knowledge after reasonable investigation withrespectto
the time before Borrower owned or occupied its reaJ. estate, no person or entity has
caused or permitted materials to be stored, deposited, treated, recycJed, or disposed of on,
under or at any reaJ estate owned or occupied by Borrower, which materials, if known to
be present, would require cleanup, removaJ or some other remedial action under
Environmental Laws.
Tanks. Except as disclosed to Bank in writing, there are not now, nor, to Borrower's
knowledge after reasonable investigation, have there ever been tanks or other facilities on
or under any real estate owned or occupied by Borrower which contain materials which
have leached or leaked into soils or groundwater, and which require cJeanup, removal or
s°':1le other remedial action under Environmental Laws.
Other EnvironmentaJ Conditions. To Borrower's knowledge, there are no conditions
existing currently, or likely to exist during the term of this Agreement which would
subject Borrower to damages, penalties, injunctive relief or cleanup costs under any
Environmental Laws, or which require or are Jikely to require cleanup, removal, remedial
action or other response pursuant to Environmental .Laws by Borrower. Also, .to
Borrower's knowJedge, there are no proposed or pending,changes in Environmental Laws
which wouJd.,materia1ly adverseJy .affect Borrower's ability to meet its ObJigations
hereunder.
Representation Regarding Spills. Borrower warrants that it wi1l not emit, spill,
discharge, release or leak, or a1l0w to be emitted, spilled, discharged, released or leaked,
any Hazardous Substance into the atmosphere, ground, sewer system, the property, or any
body of surface or subsurface water during the term of the loans, except as such emission,
spill, discharge, reJease or leak is a1l0wed or permitted by law.
Representation Regarding Legal Action and Compliance. Except as disclosed in
writing to Bank, Borrower represents that it is not subject to any legal or administrative
actions, claims, notices, proceedings, inquiries or request for information involving the
C01lateral which raise or invoJve any environmental, health or safety issues or
requirements. During the term of the loans, Borrowe.r sha1l provide Bank with immediate
written notice of any legal or administrative action, claims, notices, proceedings,
inquiries or requests for information involving the Collateral or Borrower that come to
Borrower, and raise or involve any environmental, health or safety. issues or
requirements. Such notice shall include copies of written and summaries of oral
infonnation. that precipitates the notice. Borrower further represents that, to its
knowledge, the C01lateral is in compliance with all applicable local, state and federal
statutes, regulations, ordinances, rules and notice requirements regarding Hazardous
13
7.6.
7.7.
7.8.
7.9.
7.10.
I
Substances, and Borrower warrants that it will comply with, and the ¡.<;¡tollateral shall
remain, in compliance with a] applicable local, state and federal statnte's, reguJations,
ordinances, rules and notice requirements regarding Hazardous Substances during the
term of the Loans.
Environmental Permits and Licenses. Borrower represents that all permits, licenses,
ëertific:¡tes and approvals required to operate the business to be carried ..on using the
Collateral have been disclosed, and that said permits are or wi] be in full force and effect
throughout the term of the Joans, and no condition exists which might threaten the
validity of such permits, or which might significantly increase the cost to obtain such
permits. Borrower warrants that it will maintain a] pem1its, licenses, certificates and
'approvals at all times during the term of the Loans.
Environmental Andit. Bank may, during the term of the loans, or any renewals or
extensions thereof, at its sole and compJete discretion, for reasonable cause, and upon
reasonable notice to Borrower, but without. regard to whether an event of default or
breach has occurred, obtained at the soJe cost and expense of Borrower, one or more
environmental. assessments or audits of the soil, groundwater, property, water or air
pr.epared by a geohydroJogist, an independent engineer or other qualified consultant or
expert selected by Bank, for the purposes of evaluating or confirming whether any
Hazardous Substances are present in the ground, groundwater or air at or adjacent to the
properties, and/or whether the use and operation of the Properties complies with any and
all then-existing environmental laws, rules, statntes or regulations. Environmental
assessments or audits may include visual inspections of the Properties, including, without
limitation, any and all storage areas, storage tanks, equipment, drains, dry wells and
Jeaching areas, and the taking of soil samples, surface water samples, groundwater
samples and . ,air samples, as well as such other investigations or anaJyses as may be
necessary or' appropriate for a compJete determination of the compliance of the
Properties, and the use and operation thereof, with applicable laws, Bank wi] promptJy
provide the results of the environmental assessments or audits to Borrower after receipt
of same by Bank.
Warranty of Fu] Disclosure. Borrower warrants that there are no costs. of operations
which are associated with the compliance with any environmental regulation, ruJe,
statute, or ordinance, that have not been disclosed to Bank.
Agreement to Remove. Borrower, at its sole cost and expense, agrees to ¡:,orrect or
remove from the Properties, with all reasonable due care, any contamination of the
Properties caused by any Hazardous Substances which may be discovered on the
Properties. Correction or removal shall be completed in a safe manner, and to a safe
degree, in accordance with applicable law, as the same may be required by federal,state
or local governmental agencies having jurisdiction. Borrower reserves all rights allowed
by law to seek contribution or indemnification from any party, other than bank, who is or
may be liabJefor all or any part of said correction or removal.
Cost of Use, Storage and DisposaL During the term .of the Loans, Borrower shall ,be
fully liable for alJ costs and expenses related to the use, storage and disposal of
14
7.11.
7.12.
7.13.
Hazardous Substances kept on the Properties by Borrower, and BorrlJter' shall give
immediate notice to Bank of any violation of any environmental regulation, ruJe, statute
or ordinance relating to the use, storage or disposal of any Hazardous Substance.
Indemnification. Borrower shall indemnify and hold fiarmless Bank and Bank's
.directors, officers, agents, attorneys, representatives, partners, employees, successors and
assigns, including, without limitation, participants in this Agreement, and each of them,
jointly and severally, from and against:
7.11.1.
Any and all claims, demands, causes of action, damages, losses, costs, expenses,
lawsuits and liabilities, including, but noi Jimited. to, injury to or death of any
person or persons, and damage to or destruction of any property, threatened,
brought, instituted or incurred, arising out of or in any manner directly or
indirectly connected with Hazardous Substances, a breach of Borrower's
representations and warranties set fòrth herein, or Borrower's obligations under
this Agreement;
7.11.2.
Any and all penalties, fines, charges and response cosis threatened, sought or
imposed on account of a violation or noncompliance with any law, statute, order,
rule, regulation for ordinance pertaining to the Hazardous Substances, or
Borrower's obligations hereunder;
7.1 1.3. Any and all consultant, attorney and/or engineering fees incurred by Bank in
connection with Borrower's obligations hereunder; and
7.11.4. Any material diminution of the value of the Properties which may result from
problems arising from Hazardous Substances;
7.11.5.
This indemnity shall survive termination or expiration of this Agreement,any
foreclosure of the Mortgages hereunder, the taking by Bank of deeds in lieu. of
foreclosure, any release or discharge of the Mortgages hereunder, and payment of
the secured Obligations.
Disclaimers. Borrower acknowledges and understands that Bank is not an environmental
consultant or adviser. Borrower further acknowledges and understands that the
responsibility for compliance with 'all federal, state and local.environmental, health and
safety laws and regulations rests solely with Borrower, and that Bank has no duty or
obligation for any such compliance.
Survival. All of the representations and warranties set forth in Sections 7.l though 7.1 1
shall survive until all Obligations are satisfied in full,and there remain no outstanding
committnents hereunder.
Affirmative Covenants of Borrower. Borrower hereby covenants and agrees with Bank that so
long as any of the ob1igations remain unsatisfied or anycommittnents hereunder remain
outstanding, it will comply at all times with the following affirmative covenants:
8.
l5
8.1.
Use of Proceeds. BoITower wj]] use the proceeds of the Loan only for ili( purposes set
forth herein and wj]] furnish Bank such evidence as it may reasonably require with
. respect to such use;
8.2.
Reports to Bank BoITower wi]] furnish Bank:
8.2.1.
.Within twenty-one (21) days after the close of each quarterJy a<::counting period
in each fiscal year: (l) Income statements of BoITower'for such quarters; and (2)
Balance sheets of Borrower as of the end of such quarter. A]] such statements
sha]] be in reasonabJe detail, subject to normal year-end audit adjustments and
certified by BoITower's president or principal financial. effort to have been
prepared in accordance with GAAP;
8.2.2.
Within ninety (90) days after the close of each fiscal year: (1) Income statements
of Borrower for such fiscal year; and (2) Balance sheets of Borrower as of the
end of such fiscal year. A]] such statements shall be in reasonable detail,
including all supporting schedules and comments; the consoJidated statements
and baJance sheets to be audited by an independent certified public accountant
selected by Borrower and acceptable to Bank, and certified by such accountants
to have been prepared in accordance with GAAP and to present fairly the'
financial position and results of operations of Borrower. In addition, Borrower
will obtain from such independent certified public accountants and deliver to
Bank, within ninety (90) days after the close of each fiscal year, their written
statement that in making the examination necessary to their certification they
have obtained no knowledge of any Event of Default by Borrower, or disclosing
all Events of Default of whicb they have' ;obtained knowJedge (it being
under.stood and agreed by Bank that in making their examination such
accountants shall not be required to go beyond the bounds of genera]]y accepted
auditing procedures for the purpose of certifying financiaJ statements). Bank
shall have the right, from time to time, to discuss the affairs of Borrower directly
with such mdependent certified public accountants after notice to Borrower and
opportunity of Borrower to be represented at any such discussions;
8.3. ' Agreements, Etc. Upon Bank's request, from time to time, copies of any or all
agreements, contracts or commitments referred to above;
8.4.
8.5.
Maintenance. BoITower will maintain its Equipment and other properties in good
condition and repair (normal wear and tear excepted) and will pay and discharge or cause
to be paid and discharged when due, the cost of repairs to, or maintenance of, the same,
and will payor cause to be paid in a timely manner all rental or mortgage payments due
on such reaIestate. BoITower hereby agrees that, in the event it fails to payor cause to be
paid any such payment, it wi]] promptJy notify Bank thereof, and Bank, in its discretion,
may do so and on demand be reimbursed therefor by Borrower;
Insurance. Borrower wi]] maintain public liability insurance (subject to a maximum of
$50,000.00 in deductibles for each claim) and fire and extended coverage insurance on all
assets which are of a character usua]]y insured by corporations engaged in the same or
16
8:6.
8.7.
I
similar businesses, alJ in form and. amount sufficient to indemnify Borrow~r for 1 00% of
the appraised value of any such asset Jost or' damaged (subject to any deductibJe
customary in Borrower's industry) or in an amount consistent with the .amount of
insurance generally carried on comparable assets within the industry and with such
insurers as may be satisfactory to Bank. Borrower will cause.oalJ such insurance policies
to contain a standard mortgage clause and to be payable to Bank as its interest may
appear, to deliver the policies of insurance to Bank, and, in the case of all policies of
insurance carried for the benefit of Borrower by any lessee, sublessee, subtenant or other
party having rights to occupy or use the mortgaged property or any part thereof or interest
therein under any lease, sublease, or other agreement (whether oral, written, or otherwise
evidenced), to cause all such policies to be payable to Bank as its interest may appear.
Such policies shall contain a provision whereby they cannot be canceled except after
thirty (30) days' written notice to Bank. Borrower will furnish to Bank such evidence of
insurance as Bank may require. Borrower hereby agrees that, in the event it faiJs to pay
or cause to be paid the premium on any such insurance when due, Bank, in its discretion,
may do so and be reimbursed by Borrower therefor. Borrower hereby assigns to Bank
any returned or unearned premiums that may be due Borrower upon cancellation by the
insurer.of any such policy for any reason whatsoever and directs any such insurer'to pay
Bank any amounts so due. However, Bank will pay to Borrower any such returned or'
unearned premiums within five (5) days after the receipt thereof if there has not occurred
and be continuing an Event of Default hereunder. .
In the event of any casuaJty from which the insurance proceéds do not exceed $70,000,
and provided that Borrower is not then in 'default, Borrower and Bank agree that
Borrower shall make claim for such proceeds, and may apply the proceeds in. its
discretion, provided that Borrower first repairs any damage to the Property for which the
proceeds apply. Subject to the foregoing reservation, Bank is hereby appointed
BorTOwer's attorney-in-fact (without requiring Bank to act as such) to endorse any check
which may be payabJe to Borrower to collect any premiums or the proceeds of such
insurance (other than proceeds of public liability insurance), and any amount so collected
may be applied by Bank toward satisfaction of any of the Obligations if an Event of
Default has occurred and is continuing. If Bank receives any proceeds from insurance in
the absence of an Event of Default it shall remit such proceeds to Borrower within three
(3) Business Days after Bank's receipt of such proceeds;
Taxes. Borrower wj]] pay when due all taxes, assessments, and charges or levies
imposed upon it or on any of its property or which it is required to withhold. and pay,
except when contested in good faith by appropriate proceedings with adequate reserves
therefor having been set aside on its books. However, Borrower shall pay all such taxes,
assessments, charges or levies forthwith whenever foreclosure on any lien that may
have attached (or security therefor) appears imminent;
Books & Records. Borrower, when requested to do so,' wj]] make avaiJable for
inspection by authorized representatives of Bank any of its books and records and will .
furnish Bank any information regarding its business affairs and financial condition within
a reasonable time after written request therefor;
17
8.8.
8.9.
8.10.
8.l 1.
8.12.
8.13.
8.14.
8.l5.
Preservation of Existence. Borrower will take all. necessary stepsi'~p preserve its
corporate existence and comply with all present and future Laws applicable to it in the
operation of its business and all materiaJ agreements to which it is subject;
Records. Borrower will keep accurate and complete Records..of its Accounts, Inventory,
and Equipment, consistent with sound business practice;
Notices. Borrower will give immediate notice to Bank of: (1) Any litigation or
proceeding in which it is a party if an adverse decision therein would require it to pay
more than $25,000.00 or deliver assets the value of which exceeds such sum (whether or
not the claim is considered to be covered by insurance); and (2) The institution of any'
other suit or proceeding invoJving Borrower that might materially and adversely affect
its operations, fmancial condition, property, or business prospects;
Income Tax Returns.. Within twenty (20) days after the filing thereof, Borrower will
fumish Bank with copies or federal income tax returns filed by Borrower;
Payment of Debts. Borrower will pay when due (or within applicable grace periods) all
of its other Indebtedness due third Persons, except when the amount thereof is being
contested in good faith by appropriate proceedings' and with adeqnate reserves therefor
being set aside on its books. However, no payment shall be made in respect of
Subordinated. Indebtedness except in strict compliance with alJ of the terms of
subordination thereof theretofore approved in writing by Bank. If default be made by
Borrower in the payment of any principal (or installment thereof) of, 'or interest on, any
such Indebtedness, Bank shall have the right, in its discretion, to pay such interest or
principal for the account of Borrower and be reimbursed ,þy Borrower therefor;
Events of Default. Borrower will notify Bank immediately if it becomes aware of the
occurrence of any Event of Default. or of any fact, condition, or event that only with the
giving of notice or passage of time br both 'couJd become an Event of Default or if it
becomes aware of any material adverse change in the business prospects, financial
condition. (including, without limitation, proceedings in bankruptcy, insolvency,
reorganization, or the appointment of a receiver of trustee), or results of operations of
Borrower or any Guarantor or of the failure of Borrower to observe any of its
undertakings hereunder under the Collateral Documents;
Places of Business. Borrower will notify Bank thirty (30) days in advance of any change
in the location of any of its place of business or of the establishment of any new, or the
discontinuance of any existing, place of business;
Employee Benefit Plans. Borrower will: (1) Fund any of its Employee Pension Benefit
Plans in accordance with no Jess than the minimum funding standards of 29 U.S.CA.
§1082 (§302 of ERISA); (2) Furnish Bank, promptly after the filing of the same, with
copies of any reports or other statements fiJed with the United States Department of'
Labor or the Internal Revenue Service with respect to any such Plan; and (3) Promptly
advise Bank of the occurrence of any Reportable Event or Prohibited Transaction with
respect to any Employee Benefit Plan.
l8
8.16.
8.17.
8.18.
8.19.
8.20.
8.21.
t. #
Taxes. Borrower will notifY Bank immediately of the receipt of any~ô~ices from the
Internal Revenue Service, or any other taxing authority (including any Notice of
Proposed Assessment, Notice of Assessment and Demand for Payment, or Notice of
Delinquency in Payment ofPayrol1 Taxes), and shal1 immediately provide Bank with a
copy of same.
Construction. Borrower shall proceed immediateJy with the construction of the Project
according to Borrower's builder, previously approved by Bank Prior to Bank making
advances hereunder, Borrower shal1 have filed the plans and specifications as required
with the appropriate governmental authorities, and shal1 have obtained al1 necessary
approvals of the plans and specifications, and al1 necessary building permits, and shalJ
have paid al1 required fees. '
Liens. Borrower shaH keep the Project free of mechanics liens, other liens and claims,
whether inferior or superior to the Mortgage of Bank. A discharge of the Mortgage, and
the taking of a new Mortgage in substitution, shaH not release or diminish this obligation.
Delivery of Documents. Borrower shal1 deliver to Bank executed copies of al1
construction contracts and schedule of subcontracts, and, upon Bank's request, change
orders, invoices, bonds, estimates with respect to the construction, and aJso sworn
statements setting forth the names of contractors, subcontractors and aU others furnishing
labor, materiaJs or services to the Project, including amounts due, amounts paid and total
contract prices.
Under any of Scenarios 1 - 8 contained in the Tenn rjote, there will be a significant
principal balance due and owing under the Tenn Note as of November,20 10, at which
time there will be a public referendum to detennine whether Borrower shal1 continue its
business. Borro~er shaH make no distributions pursuant to paragraph 4l of the Lease
Agreement between Borrower and the City of Dubuque, Iowa, as a result of operations
during Borrower's fiscal year 2010. Such funds, which otherwise wouJd have been
distributed at the end of Borrower's fiscal year 20 I 0, shaH instead be maintained in an
account with Bank" and pledged to Bank as additional collateral. If the referendum in
20l0 approves the continuation of Borrower's gambling activities, such funds will be
released by Bank to Borrower promptly after the results of the referendum are certified.
If Borrower chooses from among Scenarios 5 . 8 contained in the Tenn Note, Borrower
shal1 make no distributionS"'Mpursuant to paragraph 41 of the Lease Agreement between
Borrower and the City of Dubuque, Iowa, as a result of operations during Borrower's
fiscal year 20l4, unless and until Borrower has negotiated and executed a new lease with
. the City of Dubuque, Iowa. Such funds, which otherwise would have been distributed at
the end of Borrower's fiscaJ year 2014, shal1 instead be maintained in an account with.
Bank, and pledged to Bank as additional col1ateral. Upon negotiation and execution of
said lease, such funds wil1 be released by Bank to Borrower promptly .after execution of
said lease.
"
19
.9.
9.5.
9.6.
9.7.
9.8.
9.9.
9.10.
Negative Covenants. Borrower does hereby covenant and agree with Bank tha~ ~o long as any
of the Obligations remain unsatisfied or any commitments hereunder remain outstanding, it will
comply at al1 times with the fol1owing negative covenants unless. Bank shal1 otherwise have
agreed in writing and Borrower wil1 not: .
9.1.
Name, Etc. Change its name; enter into any merger, consolidation, reorganization, or
recapitaJization; or reclassifY its capital stock; .
9.2.
Disposition of Assets. Sel1, transfer, Jease, or' otherwise dispose of al1 or (except in the
ordinary course of business) any material part of its assets;
9.3.
Disposition of Col1ateral. Sel1, Jease, transfer, assign, or otherwise dispose of any of the
Col1ateral except in the ordinary course of business; ,
9.4.
Disposition' of Business, Etc.. Sel1 or otherwise dispose of, or for any -reason cease
operating, any of its divisi.ons, franchises, or lines of business;
Liens. Mortgage, pledge, grant, or permit to exist a sècurity interest in, or a lien upon,
any of its assets of any kind, now owned or hereafter acquired, except for Permitted
Liens, liens of the Col1ateral Documents, and existing liens previously disclosed to Bank
. in writing.
Liability. Become liabJe, directly or indirectly, as guarantor or otherwise for any
obligation of any other Person, except for the endorsement of commercial paper. for
deposit or col1ection in the ordinary course of business;
,
,
Indebtedness. Incur, create, assume, or permit to exist any Indebtedness except: (1) The
Loans; (2) Existing indebtedness previously disclosed to Bank in writing; (3) Trade
. indebtedness incurred in the ordinary course of business (provided, however, that neither
Borrower nor any Subsidiary may acquire Inventory other than for cash or on open
account except as expressly approved in writing and in advance by Bank); (4) Operating
lease obligations permitted hereunder; (5) Indebtedness secured by Permitted Liens; (6)
Subordinated Indebtedness; and (7)Otller indebtedness to which Bank has consented in
writing;
Snbsidiaries, Etc. Form any subsidiary, make any investment in (including any
assignment of Inventory or other property), or make any loan in the . nature of an
investment' to, any Person, other than investments of Borrower' in any Subsidiaries and
previously disclosed to Bank in writing;
Loans, Etc. Make any loan or advance to any officer, shareholder, director, or employee
of Borrower, except for business travel and simiJar temporary advances in tbeordinary
course of business;
Purchase of Assets. Make payments on account of the purchase orlease of Fixed Assets
that, in the aggregate, in any fiscal year (commencing with the current fiscal year) will
20
10.
9.11.
9.l2.
9.13.
9.14.
9.i5.
9.16.
exceed the depreciation taken or to be taken with respect to FixedAs§~p during such
year;
Leases. Payor commit to pay, in an aggregate amount for any fiscal quarter
(commencing with. the current fiscal quarter), lease obligatións in .excess of $25,000.00;
as used in this Section, the term "lease" means a lease that is not capitalized in a balance
sheet of the Borrower and should not be so capitalized under GAAP;
Prepayment Prepay any Subordinated Indebtedness, Indebtedness for borrowed money
except the Obligations, or Indebtedness secured by any of its assets (except the
ObJigations), or enter into or modify any agreement as a result of which the terms of
payment of any of the foregoing Indebtedness are waived or modified;
Sale-Lease Backs. Enter into any saJe-Ieaseback transaction;
Acquisitions. Acquire or agree to acquire any stock in, or all or substantially all of the
assets of, any Person;
Misrepresentations. Fumish Bank any certificate or other document that will contain
any untrue statement of materiaJ fact or that will omit to state a materiaJ fact necessary to
make it not misleading in light of the circumstances under which it was furnished;
Margin Stock. Directly or indirectly appJy any part of the proceeds of the Loan to the
purchasing.or carrying of any "margin stock" within the meaning of Regulation U of the
Board ofGovemors of the Federal Reserve System, or any regulations, interpretations, or
rulings thereunder. '
Default. The occurrence of anyone or more of the following events constitutes an Event of
Default hereunder:
10.1.
10.2.
10.3.
lOA.
Payments. Borrower fails to pay when due any installment of principal or interest or fee
payable hereunder, and such failure shall continue for a period of thirty (30) days;
Observance of Obligations. Borrower fails to observe or perform any other obligation
to be observed or performed by it hereunder or under any of the Collateral Documents,
and such failure shall continue for five (5) days after: (1) Notice of such failure from
Bank; or (2) Bank is notified of such failure or should have been so notified pursuant to.
the provisions of this Agreement, whichever is earJier;
Indebtedness to Third Parties. Borrower fails to pay any Indebtedness due any third
Person, and such failure shall continue beyond any applicable grace period, or Borrower
permits to exist any other event of default under any agreement binding Borrower;
Misrepresentation. Any .financial statement, representation, warranty, or <:ertificate
made or furnished by, or with respect to, Borrower to Bank in connection with this
Agreement, or as inducement to Bank to enter into this Agreement, or in any separate
statement or document to be delivered to Bank hereunder is materially false, incorrect, or
incomplete when made.'
2l
10.5.
10.6.
10.7.
10.8.
10.9.
¡. a
Inability to Pay Debts. Borrower admits its inability to pay its debts as they mature or
makes an assignment for the benefit of itself or any of its creditors;
Bankruptcy, Etc. Proceedings in bankruptcy or for reorgañi.zation of Borrower, or for
the readjustment of any of its debts, under Bankruptcy Code, as amended, or any part
'thereof, or under any other Laws, whether state or federaJ, for the relief of debtors, now
or hereafter existing, shall be commenced against or by Borrower and, except with
respect to any such proceedings instituted by Borrower, are not discharged within
thirty (30) days of their commencement
Receiver, Ek A receiver or trustee is appointed for Borrower or for any substantial part
of its assets, or any proceedings shall be instituted for the dissolutíon or the full or partial
liquidation of Borrower, and,' except with respect to any such appointments requested or
instituted by Borrower, such receiver or trustee are not discharged within thirty (30) days
of his appointment, and, except with respect to any such proceedings instituted by
Borrower, such proceedings are not discharged within thirty (30) days of their
commencement, or Borrower discontinues business or materially changes the nature of its
business, or the CollateraJ becomes, in the reasonable judgment of Bank, insufficient in
value to satisfy the Obligations, or Bank otherwise reasonabJy finds itseJf insecure as to
the prompt and punctual payment and discharge of the Obligations; .
Judgments. Borrower suffers finaJ judgments for payment of money aggregating in
excess of$lOO,OOO.OO and does not discharge the same within a period of thirty (30) days
unJess, pending further proceedings, execution has not been commenced or, if
commenced, has been effectively stayed;
Levy, Etc. A judgment creditor of Borrower obtains possession of any of the Collateral
by any means, incI\lding (without implied limitation) levy, distraint, repJevin, or self-
help;
10.10. Subordination. Any obligee of Subordinated Indebtedness fails to comply with the
subordination provisions of the instruments evidencihg such Subordinated Indebtedness;
lO.lL
10.12.
Construction. .If Borrower does not construct the Project substantially in accordance
with the plans and specifications delivered to Bank, and in accordance with all laws,
rules, regulations and requirements of all governmental authorities having jurisdiction,
and in accordance with any amendments and additions to the plans and specifications
made with the written approval of Bank, and any govenunental authority having
jurisdiction, or if Borrower fails to file amended or supplemental plans and specifications,
if required.
Inspection. If Borrower does not permit the construction manager and/or Bank or its
representatives to enter upon the Project to inspect it at all reasonable times, and to
examine all detaiJed plans, shop drawings and specifications which are kept at the
Project, or fails to furnish, when requested, copies of the plans, drawings and
specifications;
22
11.
I
¡'/i
. ~.
10.13. Discontinuance. If, for any reason, construction of the Project is discontinued, or not
carried on with reasonable dispatch in the sole judgment of Bank;
10.14.
10.15.
Liens. If Borrower creates any security interest in any materials, fixtures or articles used
in the construction or operation of the Project, or appurtenant to it, or in articles of
personal property placed on the premises or in the Project, or if any materials, fixtures or
articles 'are not satisfactory to Bank, or are purchased on conditional bills .of ~ale, or
otherwise, so that their ownership will not vest unconditionally in Borrower, free from
encumbrance, on delivery at the Project; or if Borrower does not deliver to Bank if
requested, the contracts, bills of sale, statements, receipted vouchers and agreements, or
any of them, under which Borrpwer claims title to materials, fIXtures or articJes;
Governmental Requirements. If Borrower fails to comply with any requirement of any
governmental authority having jurisdiction within thirty (30) days after notice in writing
of the requirement' has been given to Börrower; or fails to deliver to Bank, when
requested, official searches made by governmental authorities having jurisdiction;
lO.16. Disclosure. If Borrower does not disclose to Bank upon demand the names of an persons
or 'entities with whom Borrower contracted, or intends to contract, for the construction of
the Project, or for the furnishing of labor or materials;
10.17.
10.18.
Insecurity. Additionally, and notwithstanding any provision of this Agreement to the
contrary, a default will occur and the entire balance win be due if Bank, in good faith,
becomes insecure, even if on the basis of mistaken facts, with respect to Borrower's
ability or willingness to perform or with respect to any, and all security collateralizing
Borrower's obligations. Bank shall give thirty (30) days' written notice to Borrower of
such insecurity, defauJt or acceleration, and may pursue its remedies, as provided by Jaw
or agreement, as soon as such notice period expires, unless B.orrower notified Bank of its
mistake offact within said thirty (30) business days, and provides written documentation
of same, also within said thirty (30) days. Bank's failing to act immediateJy upon such
insecurity,. and tolerating it to any degree or extent and for any period of time, does not
affect Bank's right thereafter and Jater to pursue remedies or otherwise to act because of
the insecurity.
Materiality. Each of these Events of Default is a material term of this Agreement, so
that any breach as to any of them is a default of the whole Agreement that accelerates the
entire balance of this Agreement and entitIes Bank to pursue any and a]] remedies
provided by law or agreement. Bank's faiJure to act on any such breach, or tolerating
same for any period oftime, does not waive the breach or otherwise modify or affect the
terms or conditions of this Agreement or Bank's rights thereunder. In no event can the
terms or conditions of this Agreement be waived or modified, expressly or implicitly by
any conduct of one or both parties, other than by a writing signed by both of them.
Acceleration. Immediately and without notice upon the occurrence of an Event of Default
specified in the foregoing Sections 10.5,10.6, or lO.7, or at the option of Bank, but only upon
notice to Borrower, upon the occurrence of any other Event of Default, all Obligations, whether
23
13.
hereunder or otherwise, shall immediately become due and payable without furtlf#, action of any
kind.
12.
.Remedies. After any acceleration, as provided for in Section 1 l, Bank sha11 have, in addition to
the rights and remedies given it by this Agreement and the Co11ãteraJ Documents, alL those
allowed by a11 applicable Laws, including,but without limitation, the Uniform CommerciaJ Code
as enacted in any jurisdiction in which any Co11ateral may be located. Without limiting the
generality of the foregoing, Bank may immediately, without demand of performance and without
other notice (except as specifica11y required by this Agreement or the Co11ateral Documents) or
demand whatsoever to Borrower, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize upon, in Dubuque County, lowa,
or in any other place where the Collateral may be Jocated, or in such other place or places as Bank
may designate, the whole or, from time to time, any part of the Collateral, or any interest that
Borrower may have therein. After deducting from the proceeds of saJe or other disposition of the
Co11ateral all expenses (including all reasonable expenses for legal services), Bank shall appJy
such proceeds toward the satisfaction of the Obligations. Any remainder of the proceeds after
satisfaction in full of the Obligations shall be distributed as required by applicable Laws. Notice
of any saJe or other disposition shall be given to Borrower at least five (5) days before the ti1]1e.of
any intended public sale or of the time after which any intended private saJe or other disposition
of the Collateral is to be made, which Borrower hereby agrees shall be reasonabJe notice of such
.sale or other disposition. Borrower agrees to assemble, or to cause to be assembJed, at its own
expense, the Collateral at such place or places as Bank shall designate. At any such saJe or other
disposition, Bank may, to the extent permissible under applicabJe Laws, purchase the whole or
any part of the Co11ateral, free from any right of redemption on the part of Borrower, which right
is hereby waived and released. Without limiting the generaJity' of any of the rights and remedies
conferred upon Bank under this paragraph, Bank may, to .the full extent permitted by the
.applicable Laws: (1) Enter .upon the premises of Borrower (and, to the extent necessary in the
judgment of Bank, exclude therefrom Borrower or any Affiliate thereof) and take immediate
possession of the Co11ateral, either personally or by means of a receiver appointed by a court of
competent jurisdiction, using all necessary force to do so; (2) At Bank's option, use, operate,
manage, and control the Co11ateral in any lawful manner; (3) Co11ect and receive all rents,
income, revenue, earnings, issues, and profits therefrom; and (4) Maintain, repair, renovate, alter,
or remove the Co11ateral as Bank may detèrmine in its discretion.
Right of Set-Off. Upon the occurrence of any Event of Default, Bank may, and is hereby
authorized by Borrower, at any time and from time to time, to the fu11est extent permitted by
applicabJe Laws, without advance notice to.Borrower (any such notice being expressly waived by
Borrower), set-off and apply any and a11 deposits (general or special, time or demand, provisional
or final) at any time held and any other indebtedness at any time owing by Bank to, or for the
credit or the account of, Borrower, against any or all of the Obligations of Borrower now or
hereafter existing, whether or not such Obligations have matured and irrespective of whether
Bank has exercised any other rights which it has or may have with respect to such Obligations,
including, without ¡imitation, any acceleration rights. Bank agrees promptly to notifY Borrower
after any such set-off and application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of Bank under this Section are in addition
to the other rights and remedies (including, without limitation, other rights of set-off) that Bank
may have. Upon receipt by Borrower or Bank of checks, drafts, cash or other remittances. in
24
,
payment of an account or accounts payabJe to Borrower, Borrower will provid~: all necessary
endorsements and deliver such remittance to Bank to be applied upon the Obligations.
14.
Bank as Attorney-in-Fact. Borrower hereby appoints Bank to be Borrower's attorney-in.fact
(without requiring Bank to act as such) for the purpose of carrying óut the provisions hereof and
taking any action and executing any instrument which Bank may deem necessary or advisabJe to
accompJish the, purposes hereof, at any time during which Borrower is in defauJt, which
appointment as attorney-in-fact is irrevocable and. coupled with an interest Without limiting the
generality of the foregoing, Bank shall, as attorney-in-fact of Borrower, have the right to receive,
col1ect, and endorse all checks made payable to Borrower or Borrower's order, representing any
payment on. account of any of the Col1ateral, and to give ful1 discharge therefor. Bank may
notify the account debtor or obligor. of any accounts, chatteJ paper, negotiable instruments,
documents, general intangibles or other evidence of Indebtedness in favor of Borrower to payor
make delivery to Bank directly, and Bank may take controJ of the proceeds paid or the goods
delivered to Bank. Until and unless Borrower is in default, and Bank elects to exercise these
rights, Borrower is authorized to collect and enforce the col1ection ofsuèh accounts. The costs of
col1ection and enforcement, including attorneys' fees and expenses, shal1 be borne solely by'
Borrower, whether incurred by Bank or Borrower.
IS.
Possession of Col1ateral. It shall not be necessary that Bank take possession ofthe Col1ateral, or
any part thereof, prior to the time that any sale pursuant to this section is conducted, and it shall
not be necessary that ¡he Col1ateraJ, or any part th.ereof, be present at the location of such sale.
l6.
Miscellaneous Provisions.
16.1.
Construction. The provisions of this Agreement shaJL be in addition to those of any
guaranty, pJeclge .or security agreement, note or other evidence of liability now' or
hereafter held by Bank, al1 of which shall be construed as complementary to each other.
Nothing herein contained shall prevent Bank from enforcing any or all other guaranty,
pledge or security agreements, notes or other evidences of liabiJity in accordance with
their respective terms.
l6.2.
Further Assurance. From time to time, Borrower wiU execute and deliver to Bank such
additional documents and will provide such additional information as Bank may
reasonably require to carry out the terms of this Agreement and be informed of the status
and affairs of Borrower.
l6.3.
Enforcement and Waiver by Bank. Bank shall have the right at all times to enforce the
provisions of this Agreement and the Col1ateral Documents in strict accordance with the
terms hereof and thereof, notwithstanding any conduct or custom on the part of Bank in
refraining from so doing at any time or times. The failure of Bank.at any time or times to
enforce its rights under such provisions, strictly in accordance with the same, shall not be
construed as having. created a custom in any way or manner contrary to specific
provisions of this Agreement or as having in any way or manner modified or' waived the
same. All rights and remedies of Bank are cumulative and concurrent, and the exercise
of one right or remedy shal1 not be deemed a waiver or reJease of any other right or
remedy.
25
16.4.
16.5.
16.6.
. i&,
Expenses of Bank. Borrower will, on demand, reimburse Bank for' all expenses,
including the reasonable fees and expenses of JegaJ counsel for Bank, incurred by-Eank
in connection with the preparation, administration, amendment, modification, or
enforcement of this Agreement and the Collateral DocuID<!Ilts and the collection or
attempted collection of the Note. In' connection with the loan document preparation,
filing fees and Jegal and a~~raiaal expenses in relation to the initial making of the Loan.
Notices. Any notices or consents required or permitted by this Agreement shall be in
writing and shall be deemed delivered if delivered in person or if sent by certified mail,
postage prepaid, return receipt requested, or telegraph, as follows, unless such address is
changed by written notice hereunder.
If to the Borrower:
Dubuque Racing Association, Ltd.
Post Office Box 3190
Dubuque, IA 52004-3190
Attn: Bruce Wentworth, General Manager
If to the Bank: American Trnst & Savings Bank
895 Main Street
Dubuque, IA 52004-0938
Attn: Victoria J. Richter, Vice President
Waiver and ReJease by Borrower. To the maximum extent .pennitted by applicable
Laws, Borrower:
16.6..[. Waives (1) protest of all commercial paper at any time heJd by Bank on which Borre
before exercise by Bank of the remedies of self.heJp, set-off, or of other
summary procedures pennitted by any applicable Laws or by ally agreement with
Borrower, and except where required hereby or by any appJicable Laws, notice of
any other action taken by Bank; and (4) the right to assert any statute of
limitations as a bar to the enforcement of the lien of this Agreement and
Collateral Documents, or to any action brought to enforce the. Obligations
secured by this Agreement and CollateraJ Documents.
16.6.2. Notwithstanding the existence of any other Security Interest in the
property held by Bank, or by any other party, Bank shall have the right to
detennine the order in which any or all of the prop~rty shall be subjected to the
remedies provided herein. Bank shall have the right to detennine the order in
which any or all portions of the Obligations secured hereunder are satisfied from
the proceeds reaJized after the exercise of the remedies provided herein.
Borrower, any party who consents to this Agreement and Collateral Documents,
and any party who now or hereafter acquires a Security Interest in the property
and who has actual or constructive notice hereof, hereby waives any and all right
to require the marshaling of assets in connection with the exercise of any other
remedies pennitted by applicable Law, or provided herein; and
26
16.7.
l6.8.
16.9.
l6.10.
16.6.3.. Releases Bank and its officers, attomeys, agents and emp!iÞyees from all
cJaims for Joss or damage caused by any act or omission on the part of any of
them except willful misconduct.
Participation. Notwithstanding any other provisions of~this Agreement, Borrower
understands that Bank may at any time enter into participation agreements with one or
more participating banks whereby Bank will allocate certain percentages of its
commitment to them. Borrower acknowledges that, for the convenience of all parties,
this Agreement is being entered into wÜh Bank only and that its Obligations under this
Agreement are undertaken' for the benefit of, and as an inducement to, any such
participating bank, to the extent of its participation in the Loan, the right to set off deposit
accounts maintained by Borrower with such bank.
Applicable Law. This Agreement is entered into and performable in Dubuque, Dubuque
County, Iowa, and shall be subject to, and construed and enforced in accordance with, the
laws of the State ofIowa.
Binding Effect; Assignment; Entire Agreement. This Agreement shall inure to the
benefit of, and shall be binding upon, the respective successors and permitted assignsof
the parties hereto. Borrower has no right to assign any of Üs rights .or obJigations
hereunder without the prior written consent of Bank. This Agreement, including the
ExhibÜs hereto, all of which are hereby incorporated herein by reference, and' the
documents executed and delivered pursuant hereto, constitute the entire agreement
between the parties, and may be amended only by a writing signed on behaJf of each
party. All agreements, instruments and documents referred to in this Agreement are by
this reference made a part of this Agreement for all pur¡1oSes.
S'everability. If any provision of this Agreement shall be held invalid under any
appJicable law, such invalidity shall not affect any other provision of this Agreement that
can be given effect without the invalid provision, and, to this end, the provisions hereof
are severabJe.
16. 1 I. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute but one
and the same instrument.
16.12.
Interpretation; Headings. Words and phrases herein shall be interpreted and
understood according to the context in. which they are used. .The headings in this
Agreement are intended soleJy for convenience of reference, and shall be given no effect
in the construction or interpretation of this Agreement.
16.13. Incorporation by Reference. All agreements, instruments and documents referred to in
this Agreement are by this reference made a part of this Agreement for all purposes.
16.14. Disclaimer. In no event shall either party to this Agreement be ¡¡able to the other for
indirect, special or consequential damages, including loss of anticipated profits.
27
16.l5.
l6.16.
l6.17.
16.18.
16.l9.
Bank's Obligation to Close. Bank's obligation to close or otherwise per!r~rm is excused
if, before or at the time of Closing, Bank, in good faith, and in its fulJ discretion, believes
to its personal satisfaction that: (1). Borrower wilJ be unable to perform fulJy and
completely its Obligations under the terms of this Agreement; (2) Written agreements and
other documents, ordinarily required by industry custom. to evidence and secure
BorTOwer's Obligations, have not or will not be provided at the time of CJosing; (3) Bank
will not have, as of the .time of CJosing, a fIrst Jien priority in the ColJateral agreed upon
to fully secure Borrower's Obligations; or (4) A change in circumstances affecting
Borrower or Bank, or new information has been acquired since the making of the'
Commitment Letter that significantJy adversely affects Bank's decision to loan. For the
purposes of this Section, and every other provision or duty, express or implied, of this
Agreement, "good faith" means honesty in fact, determined subjectively, rather than by
an objective standard.
Liability. Borrower has selected alJ architects, engineers, contractors, subcontractors,
materialmen, as welJ as all others furnishing services or'materials to the Project, and
Bank has, and shall have, no responsibility for them, or for the quality of their materials
or workmanship. Bank's sole function is that of lender, and the only consideration
passing from Bank to Borrower is the loan proceeds in accordance with and subject to the
terms of this Agreement. Bank shalJ have .no right to rely on any procedures required by
Bank, the procedures being for Bank's protection as lender, and no one else. Borrower
shall hold Bank harmless 'and indemnify it against claims of any kind, of any persons,
including but 'without Jimited the generality of the foregoing, Borrower's employees, any
contractor constructing the Project and the contractor's empJoyees, any tenant of
Borrower, any subtenant or concessionaire of any such tenant, and the employees and
business invitees of any tenant, subtenant or concessio1\aire arising from or out of the
construction, used, occupancy or possession of the Project in llccordance with the plans
and specifications. .
Discontinuance of Construction. If the construction of the Project is discontinued, or
not carried with reasonable dispatch in Bank's judgment, Bank may purchase materials
and employ workman to protect the Project so that it will nbt suffer from depredation or
weather, or to complete the Project, so that it may be used for the purposes for which it is
designated. B>llk, at Borrower's expense, may employ watchmen to protect the Project
and its contents from depredation or injury;
Sums Paid by Bank. All sums paid or expended by Bank in accordance with any of the
. provisions of this Agreement shall be deemed advanced to Borrower, and secured by the
Note and Collateral Documents, and may be applied, at Bank's option, to any advances
thereafter becoming due.
Deduction from Advances. Bank may deduct from any advances to be made under this
Agreement, any amount necessary for the payment of: any fees and expenses reJating to
inspections; architect's and engineer's fees; insurance premiums; utility rates and other
charges; any liens or encumbrances upon the Project; and any other amounts necessary
for the payment of the cost of the Project Bank may apply these amounts in making the
28
,
payments, and all sums so applied Shall be deemed advances under this ~greement, and
secured by the Note.
16.20. Definition of CompJetion. For the purposes of this Agreement, construction of the
Project shall be deemed completed when:
.l6.20.LThe
Durrant Group, Inc., certifies to Bank in. writing that the physical
construction of the Project has been completed in strict accordance with
the pJans and specifications, with notice of all amendments thereto given
to Bank, and that of any governmental authorities having jurisdiction, all
utilities serving the Project have been connected and are operating, and
the Project is ready for occupancy for the purposes for which it was
designed; .
l6.20.2.A final certificate of occupancy has 'been issued for the Project by the
governmental authorities having jurisdiction, authorizing its use for the
purposes for which it was designed;
16.21. Contractor
to
Complete.
Prior to the commencement of construction,
shall provide written assurance to Bank, should
Bank, its successors or assigns under the terms of this Agreement, 'request it, as
contractor, to complete the construction of the Project under the tenus of its construction
.contract, the contract being with Borrower,. that the contiactor shall compJete the
construction in consideration of the payments to be made under the terms of the
construction contract, comply with all other terms of that contract, and will recognize
Bank's rights under its Note and this Agreement, prov'itJpd that at the same time, Bank
agrees in writing to perform all obJigations of Borrower under the contract. In addition,
the contractor shall agree that the. contract shall not be terminated by it without a sixty
(60) day prior written notice to Bank. Bank shall have a thirty (30) day period, at its
option, to cure any defect or breach by Borrower in the contract.
L
Priority of Documents. In case of a conflict between a provision of this Agreement, and the
provisions of any reaJ estate mortgage, security agreement, promissory notes or any other
collateral or related document, the provisions of this Agreement shall govern.
2.
Due on Sale. It is understood that the Obligations and this Agreement ar.e personal to the
undersigned Borrower, and that no sale or transfer of all or any portion of the reaJ estate secured
hereby, or any interest therein, shall be made without first securing the written consent of Bank.
If, however, all or any part of the reaJ estate secured hereby, or any interest in it, is sold or
transferred by Borrower without Bank's prior written consent, Bank may, at its option, require
immediate payment in full of all sums and indebtedness under this Agreement. If Bank exercises
its option, Bank shall give Borrower notice of acceleration. Tbe notice shalJ provide a period of
not less .than fifteen (15) days fÌom the date that the notice is mailed or delivered, within which
Borrower must pay all sums advanced and outstanding under this Agreement and the Collateral
Documents. . If Borrower fails to pay these sums prior to the expiration of the fifteen (l 5) day
period; Bank may invoke any remedy permitted by law or under this Agreement, without further
. notice or .demand on Borrower.
29
u
.~
In Witness Whereof,. the parties have executed this Agreement on the date fITSt aöove written.
American Trust & Savings Bank
Dubuque Racing Association, Ltd.
By:
Victoria J. Richter, Vice President
By:
By:
30
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREE~IINT SHOULD
BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.
NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT
MAYBE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT
ONLY BY ANOTHER WRITTEN AGREEMENT.
CONSTRUCTION LOAN NOTE
$22,000,000.00
May -' 2004
For Value Received, the undersigned, Dubuque Racing Association,
Ltd., an Iowa. non-profi tcorporation, (the "Borrower"),. promises to
pat to the order of American Trust & Savings Bank, Dubuque, Iowa, (the
"Bank"), on Or before May -' 2005, the sum Twenty-Two Million &
00/100 Dollars ($22,000,000.00), or such lesser amount as maybe
advanced by the Bank to, or for the benefit of, the Borrower pursuant
to the Loan Agreement between the Bank and the Borrower of even date
herewith, and is shown to be outstanding according to the records of
the Bank.
Prior to maturity, this Note shall bear interest computed. from
the date of each advance at the rate which is Ùve (5). basis points
below The Wall Street Journal prime rate ("Prime, Rate"), and the
interest rate shall change on each day in which the Prime Rate
changes. The Prime Rate may, or may not be, the lowest rate of
interest charged by the Bank on commercial loans. Interest shall be
paid monthly, commencing on the date of the first construction
disbursement., .and on the same day of each month thereafter until
maturity, at which time all remaining interest shall be paid in full.
Interest shall be calculated on the basis of the actual number of days
elapsed over a year of 360 days and shall be computed daily. The
interest rate on uncured default or after maturity shall be eighteen
percent (18%) per annum. If a payment is more than fifteen (15) days
late, a late charge will be assessed of an additional five percent
(5%) of the regularly scheduled principal and interest payment.
Payments shall be applied, first, to the payment of .the interest.
then accrued and due on .the unpaid principal balance and, next, to the
payment of the unpaid principal.
The Borrower agrees to pay all costs of collection, including
reasonable attorneys' fees and all fees .and expenses incurred in
endeavoring to protect, enforce and realize upon any collateral
security for the payment of this Note. The Borrower, for itself, its
successors and assigns, hereby expressly waives presentment for
. .
Page 1 of 1
payment, notice of dishonor, presentment, notice of protest., l¡¡>,rotest
and all diligence of collection.' ". ~
All payments shall be made in lawful currency'of the .United
States of America, at the office of the Bank, 895 Main Street, P.O.
Box 938, Dubuque, Iowa 52004-0938. The holder of thi's Note may, from
time to time, designate in writing such other place of payment as it
may select.
This Note is secured by a Security Agreement arid other Collateral
Documents (as defined in the Loan Agreement referred to above).
wp60docs\Arneric.nTrust & Savin9s Banl\DRA\Note.Construction Loan 5.13.04
Without affecting the liability of the Borrower, the holder may,
without notice, renew or extend the time for payment, accept partial
payments, release or impair any collateral security for the .payment of
this Note or agree not to sue any party liable on it. Waiver of any
default shall not constitute a waiver of any other or subseguent
default.
This Note is the Construction Loan Note issued pursuant to the
Loan Agreement. Reference is made to the Loan Agreement for' right.s
and obligations as to prepayment and acceleration prior to maturity.
This Note .is executed in and is governed by the laws of the state
of Iowa. Invalidity of any provision shall not affect the validity of
any other provision.
Dubuque Racing Association,
Ltd., Borrower
By:
By:
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this day of , 2004, be.fore me, 'the
undersigned, a Notary Public in and for the State of. Iowa, personally
appeared and , to
Page 2 of 2
me personally known, who, being by.me duly .sworn, did say thw~ they
are the . . and.'.. , .' ~
. respeGtively, of. Dubuque RaGing Association, Ltd., exeGutingthe
within and foregoing instrument, that no seal has' been proGured by the
Gorporation; that said instrument was signed on behalf of the
Gorporation by ~uthority of its Board of DireGtors; and that
and , as
and " aGknowledged the
exeGution of the foregoing instrument to be the voluntary aGt and deed
of the Gorporation, by it and by them voluntarily exeGuted.
Notary Publiç, State of Iowa
Page 3 of 3
IMPORTANT: READ BEFORE SIGNING.. THE TERMS OF TillS AGREEl\1JjJl'1T SHOULD
BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRID1NG ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN TillS
WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS
OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
$22,000,000.00
TERM NOTE
May -' 2005
For VaJue Received, the imdersigned, Dubuque Racing Association, Ltd., an Iowa non-profit
corporation, (the "Borrower"), promises to pay to the order of American Trust &'Savings Bank,
Dubuque, Iowa, (the "Bank"), on or before the expiration of the term(s) set out in the Scenario below
selected by the Borrower, the sum Twenty-Two Million & 00/100 Dollars ($22,000,000.00), or such
les~er amount as may be advanced by the Bank to, or for the benefit of, the Borrower pursuant to the Loan
Agreement between the Bank and the Borrower of even date herewith, and is shown to be outstanding
according to the records of the Bank.
The maturity date, interest rate and totaJ monthly payment, inclusivec)f principal and interest,
depend upon which alternative, among the following four scenarios is chosen by Borrower upon the
maturity of the Construction Loan Note between the Bank and the Borrower, dated , 2004:
Term Loan
Scenario 1
Amount
.Amortization
Term of Loan
$22,000,000
Seven years
Thre.e-year
balloon
Fixed at
Prime pJus
0.75%
Interest Rate
Rate if funding
today
Approximate
minimum payment
if funding today$309,084
4.75%
$316,983
Scenario 2
Scenario 3
Scenario 4
$22,000,000
Seven Years
Five-year
balloon
Fixed atFixed atVariable at
Prime plus Prime plus
1.50% 2.50%
$22,000,0.00
Seven years
Seven years
, ,$22,000,000
Seven years
Seven years
Prime Jess
0.05%
5.50%
6.5%
3.95%
$327,702
$300,793
OR
Fixed principal
payments of
$261,905.76
plus accrued
interest
wp60docslAmerican Trust & Savings BankIDRAINote.Term .5.17.04
Page 1 of 1
Loan 1 Amount
Amortization
Term of Loan
Interest Rate
Rate if funding today
. Approximate
. minimum payment
if funding today$J54,542
Loan 2 Amount
Amortization
Term ofloan
Interest rate
Rate if funding today
Approximate
minimum payment
if funding today$ 87,407
Approximate
total payment'
if funding today$24],949
Scenario 5
Scenario 6
Scenario 7
Scenario 8
$11,000,00 .
Seven. years
. Seveñ Years
Prime less
0.05%
3.95%
$ll,OOO,OO
Fifteen years
Fifteen years
Prime plus
0.25%
4.25%
$233,494
OR
Fixed principal
payments of
$192,063.49
pJus accrued
interest
,
~ j
~
Interest on the unpaid baJance of this Term Note shall be paid monthly, commencing
, 2005, Blld continuing on the - day of each month thereafter. The unpaid principal
balance of this Term. Note shall be paid equal installments, inclusive of principal and
interest, commencing on -' 2005, and on the first day of each month thereafter until me maturity
date(s) selected by Borrower from Scenarios 1 - 8, above, at which time alJ unpaid principal and accrued
interest sha1l .be paid.
$11,000,000
$11,000,000
$11,000,000
The interest rate(s) of this Term Note shalJ be as set forth in the Scenario selected by Borrower.
Interest sha1l be calcuJated on the basis of the actual number of days elapsed over a year of three hundred
sixty (360) days and shall be computed daily.
Seven years
Seven Years
Seven years Seven years
Three-year Five-year
BalioonBal10on
'Fixed atFixed atFixed atVariabJe at
Prime plus Prime plus Prime plus
0.75% 1.50% 2.50%
4.75% 5.50% 6.50%
$158,491
$163,851
$l50,397
$11,000,000 $1 l,OOO,OOO $11,000,000
. Fifteen years Fifteen years Fifteen years
Three-year Five-year Seven-year
balJoon balJoon balloon
Fixed atFixed atFixed atVariable at
Prime plus Prime plus. Prime plus
1.00% 1.75% 3.00%
5.000/. 5.75% 7.00%
$ 91,841
$ 99,502.00
$83,09>7"
$250,332
$263,353
Page 2 of 2
Subject to the tenDS of the LoaÍ1 Agreement between Bank and Borrower, Borrow,!'" may at any
tìme prepay this Tenn Note in full or in part, provided, however, that any prepayment of pJ'hcipal shall
include accrued interest to the date of prepayment on the principal amount being prepaid. Any
prepayment shall be applied first to satisfaction of any accrued and unpaid interest on this Term Note and
the balance shall be against the principal balance thereof.
Payments shall be appJied, first, to the payment of the interest then accrued and due,on the unpaid
principal balance wd, next, to the payment of the unpaid principaL ."
The Borrower agrees to pay all costs of collection, including attorneys' fees and all fees and
expenses incurred in endeavoring to protect, enforce and realize upon any collateral security for the
payment of this Note. The Borrower agrees to pay interest to the Bank at the rate of eighteen percent
(18%) per annum if in an uncured default. lf a payment is more than fifteen (15) clays làte, a late charge
will be assessed of an additional five percent (5%) of the regularly scheduJed principaJ and interest
payment. The Borrower, for itself, its successors and assigns, hereby expressJy waives presentment for
pa)j'TIent, notice of dishonor, presentment, notice of protest, protest and all diligence of collection,
All payments shall be made in lawful currency of the United States of America, at the office of
the Bank, 895 Main Street, P.O. Box 938, Dubuque, Iowa 52004.0938. The holder of this Note may,
from tìme to time, designate in writing such other place of payment as it may select.
This Tenn Note is secured by the Collateral Documents (as derIDed in the Term Loan Agreement
referred to above).
Without affecting the Jiability of the Borrower, the hoJder may, without notice, renew or extend
the time for payment, accept partial payments, reJease or impair any collateral security for the payment of
this Note or agree not to sue any party liable on it. Waiver of any defauJf shall not constitute a waiver of
ariyother or subsequent default.
This Note is the Term Note issued pursuant to the Tenn Loan Agreement. Reference is made to
the Tenn Loan Agreement for rights and obligations as to prepayment and acceleration prior to maturity.
This Term Note is executed in and is governed by the laws of the State ofIowa. Invalidity of any
provision shalJ not affect the validity of any otþer provision.
Dubuque Racing Association,
Ltd., Borrower
By:
Page 3 of 3
By:
J'it
STATE OF IOWA, DUBUQUE COUNTY)ss:
On this day of February, 2004, be'fore me, theunde'rsigned', a"
Notary Public' in and for the State of Iowa, personally appeared
and , to me
personally known, who, being by me duly sworn, did say that they are
the and , respectively,
of Dubuque Racing Association, Ltd.', executing the within and
foregoing instrument, that no seal has been procured by the
corporation; that said instrument was signed on behalf of the
corporation by authority of its Board of Directors; and that
and , as
and , acknowledged the
execution of the foregoing instrument to be the voluntary act and deed
of the corporation, by it and by them voluntarily' executed.
Notary Public, State of Iowa
...
Page 4 of 4
Prepared by: Wayne 'A. Norman, Jr., Norman, Gilloon, Wright & Hamel, P.C., 800 Main Street., P.O.
Box 857, Oubuque, IA 52004-0857
1563) 556-6433'
SPACE ABOVE THIS LINE
FOR :RECORDER
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.
SECURITY AGREEMENT
1.
Grant of Security Interest. For value received, as security for
the Obligations (as defined below) the undersigned ("Debtor"-.)
hereby grants to American Trust & Savings Bank ("Secured party"-)
a security interest in the following described property:
1.1.
1. 2.
AI.I of Debtor's inventory now owned or hereafter acquired;
All of Debtor's .accounts, now existing or hereafter
arising, together with .all interest of Debtor in .any 90ods,
the sale or lease of which give rise to any of Debtor's
accounts, and all èha.ttel paper, documents and instruments
relating to accounts;
All of Debtor's general intangibles, now owned or. hereafter
acquired;
All of Debtor'.s equipment now owned or hereafter:acquired;
'AII of .Debtor's farm products now owned or hereafter
1. 3.
1.4
1.5.
acquired;
1. 6.
Exhibit A,
All of Debtor's
attached.
fixtures
on the real es.tate described on
Page 1 of 1
I
tagether wi th the proceeds, praducts, increas'èl{ issue,
accessians, attachments, accessaries, parts, additions, repairs,
replacements and substitutes of, ta, and far all .of the
foregaing. Debtar will promptly deliver ta Secured Party, duly
endarsed when necessary, all such chattel páper i dacuments and
instruments and related guaranties, now on hand or hereafter
received. All such praperty in which a security interest is
granted is herein .called the "Collateral."
2 .
wp60docs\Arnerican Trust & Savings Bank\DRAlsecurity AgreementS.H.D'
Obligations. Theafaresaid security interests secure payment .and
perfarmance .of the fallowing abligatians (the "Obligatians"):
Debtor's obligations under .one certain Loan Agreement,
Canstructian Laan Nate and callateral dacuments, and under a Term
Nate to be executed in the future, all securing a laan ta Debtor
by Secured Party of up to the sum of Twenty-Twa Million & 00/100
D.ollars ($22,000,000.00), tagether with all ather abligatians .of'
Debtar ta Secured Party naw existing .or hereafter arising,
whether direct .or indirect, contingent .or absalute and whether as
maker .or surety and including, but nat limited ta, future
advances and amounts advanced and expenses and attorneys' fees
incurred pursuant ta this Security Agreement.
3.
Debtor represents, warrants and agrees:
Collateral.
3.1.
All C.ollateral is bana fide and genuine and Debtar is
autharized ta grant a security interest in the Callateral,
free and clear of all liens and encumbrances, except the
security interest created hereby;
3.2.
Debtar's principal place .of operatian is the address shawn
herein, and Debtar shall promptly give Secured Party
written natice .of any change thereaf, unless prior written
consent of .Secured Party is obtained. All Callateral and
all .of the Debtar's business recards are now kept, and
shall cantinue to be kept, at such address;
4.
Representations and Agreements. Debtar represents and warrants
ta Secured Party, and agrees that:
.4.1.
Debtar is duly organized, existing, and is qualified and' in
good standing in all states in which it is doing business¡
and the executian, delivery and performance .of this
Securi ty Agreement are wi thin Debtor's powers, have been
duly autharized, and are not in cantraventian .of law or the
terms .of Debtar's charter, bylaws, if any, .or any.
indenture, agreement, .or undertaking ta which Debtor is a
Page 2 of 2
4.2.
4.3.
4.4.
4.5.
. ,
'party, or by which it is bound. If an individ,j~l, Debtor
is of legal age. Debtor will not change his, her or its
name, or identity unless written notice is given in advance
to Secured Party.
Debtor shall maintain insurance upon the Collateral which
is tangible property against all custòmarily insured risks
'for the full insurable value thereof (and furnish Secured
Party with duplicate policies if Secured Party so
requests), loss to be payable to Debtor and Secured Party
as their respective interests may appear. In the event of
any loss or damage to any Collateral, Debtor will give
Secured Party written notice. thereof forthwith, promptly
file proof of loss with the appropriate insurer and take
all other steps necessary or appropriate to collect such
insurance. If .Secured Party so elects, Secured Party shall
have full authority to collect all such insurance and to
apply any amount collected to amounts owed hereunder,
whether or not matured. Secured Party shall have no
liabili ty for any loss which may occur by reason of the
omission or the lack of coverage of any such insurance.
Debtor shall at all times maintain Collateral which is
tangible property in good condition and repair, defend at
Debtor's expense all Collateral from all adverse claims and
shall not use any of the Collate~al for any illegal
purpose.
Debtor shall (A) keep .such books and records pertaining to
the Collateral and to Debtor's business operations as shall
be satisfactory .to Secured 'Party; (B) permi t
representatives of secured Party at any time to inspect the
Collateral and inspect and make abstracts from Debtor's
books and records; and (C) furnish to Secured party suc!).
information and reports regarding the Collateral and
Debtor's business operations and its financial status, as
Secured Party may from time to time reasonably require.
SECURED PARTY IS HEREBY AUTHORIZED TO REQUEST CONFIRMATION
OF SUCH INFORMATION OR ADDITIONAL INFORMATION OF ANY KIND
WHATSOEVER DIRECTLY FROM ANY THIRD PARTY HAVING DEALINGS
WITH DEBTOR. SECURED PARTY IS FURTHER IRREVOCABLY
AUTHORIZED ,TO ENTER DEBTOR'S PREMISES TO INSPECT THE
COLLATERAL.
Debtor shall give such notice in writing (including but not
limited to notice of assignment or notice .to pay Secured
Party directly.) as Secured Party may require at any time to
any or all account debtors, with respect to accounts which
Page 3 of 3
4-6.
4-7.
4. B.
4.9.
4.10.
4.11
are Collateral, and, if Secu:çed. Party shall siC¡ request,
deliver to secured Party copies of any and' all such
notices.
Debtor shall promptly transmit to Secured Party all
information that it may have or receive with respect to
Collateral or with respect to any account debtor which
might in any way affect the value of the Collateral or
Se'cured Party's rights or remedies with respect thereto.
Unless in default under this Security Agreement, Debtor may
sell inventory in the ordinary course of business and
consume any raw materials or suppliès,. the 'use and
consumption of which are necessary to carryon Deb'tor' s
business. Debtor shall not otherwise consume, assign .or
transfer any Collateral without prior written consent of
Secured Party. The provision of this Security Agreement
granting a security interest in proceeds shall not be
construed to mean that Secured Party consents to any sale
or disposition of any Collateral.
Debtor shall pay when due all taxes, assessments, and any
other governmental levy which is, or maybe, levied against
any Collateral, and shall otherwise maintain the Collateral
free of all liens, charges, and encumbrances {except liens
set forth herein and'the security interest created hereby).
Debtor shall not store any Collateral with any warehouseman
without Secured Party's consent.
Debtor shall promptly, unless Secured Party shall waive
such requirement in writing, deliver to secured Party all
certificates of title, if any, (or any other documents
evidencing title) to all Collateral with such proper
notations, assignments or endorsements ,as may be nécessary
or appropriate to create, preserve or perfect Secured
Party's' security interest in the Collateral.
Debtor shall, at its cost and expense, execute, deliver,
file or record (in such manner and form as Secured Party
may require) any assignment, financing statement or o.ther
paper that may be necessary or desirable, o.r that Secured
Party may request, in order to create, preserve or perfect
any security interest granted hereby or to enable Secured
Party to exercise. and enforce its rights hereunder or under
any Collateral. Secured Party is further granted the
power, coupled with an interest, to sign on behalf of
Debt.or as attorney-in-fact and to file one or more
Page 4 of 4
5.
I
financing statements under the .Uniform co~ef~ialcode
naming Debtor as debtor and Secured Party as se'cured party
and describing the Collateral herein specified.
Expenses. Debtor upon demand shall pay ~o Secured Party
forthwith the amounts of all expenses, including attorneys' fees
and legal' expenses, incurred by Secured Party in seeking to
collect .any sums secured hereunder or to enforce any rights in
the. Collateral. Such amounts .s.hall be secured hereby, and if not
paid on demand shall bear interest at the highest rate payable on
any of the Obligations.
6.
Collection Authority on Accounts. Debtor hereby irrevocably
appoints Secured Party its true and lawful attorney, with full
power of substitution, in Secured Party' sname, Debtor's name or
otherwise, for Secured Party's sole use and benefit, but at
Debtor's cost and expense, to exercise, if Securedp'arty shall
elect after an event of default has occurred (whether or not
Secured' Party then elects to exercise any other of its rights
arising upon default) all or any of the following powers with
respect to all or any accounts which are Collateral: .
6.1.
To execute on Debtor's behalf assignments of. any or all
accounts which are Collateral to S.ecured Party, and to
notify account debtors thereunder to make payments directly
to Secured Party; .
6.2.
To demand, sue for, collect, receive and give acquittance
for any and all moneys due or to become due upon or by
virtue thereof;
6.3.
To receive, take, endorse, assign and deliver any and all
checks, notes, drafts, documents and other negotiable and
non-negotiable instrumentS and chattel 'paper taken or
re.ceived by Secured Party in connection therewith;
6.4.
To settle, compromise, compound, prosecute
.action or proceeding with respect thereto;
or
defend any
6.5.
To sell, transfer, assign or other.wise deal in or with the
same or the proceeds thereof or the r.elati ve goods, as
fully and effectually as if Secured Party were the absolute
owner thereof; and
6.6.
To extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference
thereto.
Page 5 of 5
9.
7.
6.7. Any funds collected pursuant to such powers~~shall be
applied to the payment of the Obligations. The exercise by
Secured Party of, or failure to so exercise, any .of the
foregoing authority, shall in no mann~r affect Debtor's
liabili ty to Secured Party on any of' the .Obliga.tions.
Secured Party shall be under no obligation or duty to
exercise any of the powers hereby conferred upon it and it
shall be without liability for any act or failure to act in
connection with the collection of or the preservation of
any rights under any such accounts. Secured Party shall
not be bound to take any steps necessary to preserve rights
in any instrument or chattel paper against prior parties.
Set Off. In the event of default hereunder, Se'cured Party, at
its option at any time, and without notice to Debtor, may apply
against the Obligations any property of Debtor held by Secured
Party. As additional security for payment of the Obligations,
Debtor hereby grants to secured Party a security interest in any
funds or property of Debtor now or hereafter in possessi-onof
Secured Party and with respect thereto Secured Party will have
all rights and remedies herein specified.
8. .
Waiver. Debtor waives protest, notice of dishonor, and
presentment of all commercial paper at any time held by Secured
Party on which Debtor is in any way lfable, notice of non-payment
atmaturi ty of any account or chattel paper, and notice of any
action taken by Secured Party except whet" notice is expressly
required by this Security Agreement or cannot. by law be waived.
Default. Debtor will be in default upon the occurrence of any of
the following events: (A) failure to make the payment, when' due
and payable, of any of the obligations; (B) failure of the
performance of any obligation or covenant contained or referred
to herein; (C) any warranty, representation or statement made or
furnished to Secured Party by or -on behalf of Debtor proved to
have been false in any material respect ,when made or furnished;
(D) any event which results in the acceleration of the maturity
of the indebtedness of Debtor or any guarantor or co-maker of any
of the Obligations to others under any indenture, agreement or
undertaking; (E) loss, theft, damage, destruction or encumbrance
to, or of, the Collateral or the making of any levy, seizure. of
attachment thereof or thereon; (F) death of, dissolution of,
termination of existence of, insolvency of, business failure of,
appointment of a receiver of any part of the property of,
assignment for the benefit of creditors by, or the comrnencement
of any proceeding under any bankruptcy or insolvency law by or
against, Debtor or any guarantor or co-maker of any of the
Obligations; (G) the occurrence or nonoccurrence of any event or
events which causes the Secured Party, in good faith, t-o deem
Page 6 of 6
10.
11.
itself insecure for any reason whatsoever. In any *4Ch event
Secured. Party may at its option declare any or all of the
'Obligations to be due and payable and such sums shall then be due
and payable immediately, without notice or demand.
Rights and Remedies on Default. After the occurrence of any
event of .default, Secured Party may exercise at any time and from
time to time any rights and remedies available to it under
applicable' law, including but not limited to .the right to sell,
lease or otherwise dispose of the Collateral, and the right to
take possession of the Collateral. FOR THAT PURPOSE SECURED
PARTY MAY ENTER UPON ANY PREMISES ON WHICH THE COLLATERAL OR ANY
PART THEREOF MAY BE SITUATED AND REMOVE IT. Secured Party may
require Debtor to assemble the Collateral and make it available
at a place to be designated by Secured Party which is reasonably
convenient to both parties - If at the time of repossession any
of the Collateral contains other personal property not included
in the Collateral, secured Party.may take such personal property
into custody and store it at the risk and expense of Debtor.
Debtor agrees to notify secured Party within forty-eight (48)
hours after repossession of the Collateral of any 'such other
personal property claimed, and failure to do so will release
Secured Party and its representatives from any liability for loss
or damage thereto. Any notice of intended disposition of any of
the collateral required by law shall be deemed reasonable if such
notice is given at least ten (10) days before the time of such
disposition. Any proceeds of any disposition by .secured. Party of
any of the Collateral may be applied by it to the payment of
expenses in connection with the Collateral, including but not
limited to repossession exPenses and reasonable attorneys' fees
and legal expEò11ses, and any balance of such proceeds shall be
then applied against the Obligations and other amounts secured
hereby in such order of application as Secured Party may elect.
General.
11.1.
Secured Party may, as its option, pay any tax, assessment,
or other Governmental levy, or insurance premium or any
other expense or charge relating to Collateral which is
payable by Debtor (and not timely paid by it), and further
may pay any filing or recording fees. Any amount or
amounts so paid, with interest thereon at the highest rate
payable on any of the Obligations (from the date of payment
until repaid) shall be secured hereby an>:i shall be payable.
upon demand.
11.2. Secured Party shall not be deemed to have waived any of its
rights hereunder or under any other agreement, instrument
or paper signed by Debtor unless such waiver be in writing
Page 7 of 7
and signed by Secured Party. No delay .or omisi;¡bn on the
part of Secured Party in exercising any right shall operate
as. a waiver of stich right or any other right. A waiver on
anyone occasion shall not be construed as a bar to, or
waiver of, any right or remedy on any fut~~e occasion.
'11.:3. Any notice, if mailed, shall be deemed given when mailed
postage prepaid, addressed to Debtor at its address shown
above, or at any other address of Debtor appearing on
Secured Party's records.
11. 4.
Cavenants, representations, warranties and' agreements
herein set forth shall be binding upon Debtor, its legal
representatives, successors and assigns. This Security
Agreement may be assigned by secured Party and all rights
and privileges of Secured Party under. this Security
Agreement shall then inure to the benefit of its successors
and assigns.
11.5. If any provision of this Security Agreement shall be for
any reason held to be invalid or unenforceable,' such
invalidi ty or unenforceabili ty shall not affect any other
provision hereaf, but this Security Agreement shall be
canst rued as if such invalid or unenforcea~Ie provision had
never been contained herein.
"
11.6. If Debtar is a guarantor, endorser, co-maker, or an
accommodation party with respect ta the Obligatians.
Debtar hereby waives the benefit of any and all defenses
and claims .of damage which are dependent upon Debtor's
character as a party ather than the maker. Each party to
any of the obligations hereby cansents to and waives notice
of (1) any and' all extensions (whether .or not far langer
than the original period) granted as to the time .of payment
of any or all of the obligations, and (2) any renewal of
any or all of the Obligations.
11. 7.
11.8.
This Security Agreement and all rights
hereunder, including but not limited to all
constructian, validity, and performance, shall
by the law of Iowa.
and duties
matters of
be governed
Unless otherwise defined or the context .otherwise requires,
all terms used herein which are defined in the Iowa Uniform
Commercial Code shall .have the meanings therein stated.
The rights and. remedies herein conferred upon Secured Party
shall. be in additian to, and not in substitution or in
Page 8 af8
,.
derogation of, rights and remedies confèrred b§l the Iowa
Uniform commercial Code and other applicable law.
11.9. All words and phrases used 'herein shall be construed as in
the singular or plural number, and as masculine,. feminine
or neuter gender, as the context may require.
11.10. Captions are inserted for convenience only and shall
not be taken as altering the text.
THIS AGREEMENT SPECIFICALLY INCLUDES ALL OF THE ADDITIONAL PROVISIONS
SET FORTH ABOVE. DEBTOR ACKNOWLEDGES RECEIPT OF A FULLY COMPLETED
COpy OF THIS SECURITY AGREEMENT.
Dated:
May -' 2004.
Dubuque Racing Association, Ltd.
By:
By:
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this day of May, 2004, before me, the undersigned, a
Notary Public ~ and for the State of Iowa, personally appeared
and . to me
personally known, who, being by me duly sworn, did say. that they are
the and respectively,
of Dubuque Racing Association, Ltd., executing the wi thin and
foregoing instrument, that no seal has been procured by the
corporation; that said instrument was signed on behalf of the
corporation by authority of its Board of Directors; and that
. and as
and acknowledged the
execution of the foregoing instrument to be the voluntary act and deed
of the corporation, by it and by them voluntarily executed. .
Page 9 of 9
Notary Public~ State of Iowa
EXHIBIT A
TO
SECURITY AGREEMENT
The Real Estate:
A parcel of land containing 43.73 acres, more or less, located on
Chaplain Schmitt Memorial Island lying immediately north of the Iowa-
Wisconsin Bridge "s set forth on the plat .attached hereto and made a
part hereof and subject to a utility and roadway' ,easement located on
and about the southerly property line, a roadway eas.ement located on
or about the easterly property line, and'a roadway easement on and
about the westerly property line (the "Real Estate").
Page 100f 10
I
/, ~
Prepared by: Wayne A Norman, Jr., Norman, Gilloon, Wright & Hamel, P.e., 800 Main Street, P.O. Box 857, Dubuque, IA 52004-0857
(563)556-6433
SPACE ABOVE THIS LINE
FOR RECORDER
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.
Re:
COLLATERAL PLEDGE AGREEMENT
A parcel of land containing 43.73 acres, more or less, located on
Chaplain Schmitt Memorial Island lying immediately north of the
Iowa-Wisconsin Bridge as set forth on the plat .attached hereto
and made a part hereof and subject to a utilïty and roadway
easement located on and about the southerly property line, a
roadway easement located on or about the easterly property line,
and a roadway easement on and about the westerly property line
(the "Real Estate") .
This Collateral Pledge Agreement ("Þ.greement") is effective May
,. 2004, between Dubuque Racing Association, Ltd., an Iowa Non~
Profit Corporation, ("Pledgor")" and American Trust & Savings Bank,
Dubuque, Iowa ("Secured Party"). .
1.
Recitals. Pledgor has requested that Secured Party lend it the
sum of $22,000,000.00, payable according to the terms of a Loan
Agreement and Collateral Documents of even date executed in favor
of Secured Party by the Pledgor (the "Obligation"). Secured
Party is willing to lend that sum to Pledger, under those terms
and conditions, but requires security for the Obligation.
Pledger has established a business money market account, number
, with Secured 'Party, into which Pledgor will deposit
of its reserve balances and excess cash flows, and has offered to
grant Secured Party a security interest in said business money
market account. as security for the Obligation, which Secured
1
.-
Party' agrees to accept. In consideration of the mutual covenants
contained' in. this Agreement, the parties agree as follows below.
t1<
wp60doc&\American .~ru&t , Savin9& Bank\Dubuque Racing A&&ociation\Collateral Pledge if9reement 5.13.04
2
5.
I .
Pledge. As' collateral security for performance of' a Flèdg€r' s
Obligation, Pledger hereby assigns, pledges and sets over unto
Secured Party a security interest in a business money market
account, nuinber in the name o~ Pledgor ("Pledged
Co,llateral") . Secured Party shall have and. hold the Pledged
Collateral, together with all rights, titles, interest,
privileges. and preferences appertaining or incidental thereto,
unto Secured Party, its successors and assigns, forever, subject
to the terms and conditions set forth in this Agreement and in
the Loan Agreement and Collateral Documents.
2.
3 .
Representations and Warranties. Pledger represents and warrants
that it is the legal and equitable owner of the Pledged
Collateral, free and clear of all liens (except that. granted to
Secured Party). Pledger has lawful authority to pledge the
Pledged Collateral (and any securities pledged in substitution
therefor or in addition thereto in the manner hereby pledged) in
the manner contemplated by this Agreement. No consent or
approval of any governmental body or regulatory authority to
pledge' the Pledged Collateral (and any securities pledged in
substitution therefor or in addition thereto), will be necessary.
4.
Affirmative Covenants.
Agreement shall remain
outstanding, it shall:
4.1.
4.2.
4.3.
4.4.
Pledger" covenants that so long as this
in effect or the Obligation shall be
.,
Deliver and/or cause to be delivered to Secured Party any
and all pledged Collateral;
Not terminate, modify or amend the Pledged Collateral, or
any of the terms thereof, or grant any concessions in
connections therewith, either orally or in writing, or
accept a surrender thereof, without the written consent of
Secured Party, and any .such attempted termination,
modification or amendment of the Pledged Collateral without
such written consent shall be null and void;
Not consent to any assignments of the Pledged Collateral,
whether or not in accordance with their terms, without the
prior written consent of Secured Party;
Expressly waives and
asserted or enforced
the exercise of the
Agreement.
releases any liability which could be
against Secured Party as a result of
powers granted Secured Party in this
Default. The following events shall be deemed a default: (1.)
Pledger fails, after notice as set out below, to pay when due any
3
. ,
amaunt required under the Obligatian, .or ta perfarm, i]r rectify
breach .of, any warranty or other undertaking by ".Pledgerunder
this Agreement and the Loan Agreement and Callateral Dacuments;
or (2) Pledger becomes insalvent, or is the subject .of bankruptcy
.or insalvency praceedings, and the 'same is nó:t:. rectified within
the natice.
6.
Rights on Default. In the event of a default hereunder which is
nat cured, Secured Party shall have all rights and remedies far
default provided by the Io.wa Uniform Commercial Code, as well as
any other applicable law, or in any- other dacument relating ta
the Obligatian, including, but nat limited ta:
6.1.
6.2.
6.3.
6.4.
6.5.
7.
Secured Party shall be deemed the .owner of the Pledged
Collateral, and shall be entitled t.o exercise all rights
and powers relating to the Pledged Collateral for any
purpose consistent with the terms of this Agreement;
Secured Party shall be entitled to receive and retain the
Pledged Collateral.
Pledger shall execute and deliver, or cause to be executed
and delivered, to Secured Party, any instruments which
Secured Party may request for the purpose of enabling
Secured Party ta exercise the rights which it 'is entitled'
to exercise under this Agreement! or '1:,0 receive the Pledged
Collateral which it is authorized to réceive and retain.
Pledger shall reimburse Secured Party for any expenses
incurred by Secured Party in protecting .or enforcing its
rights under'this Agreement, including, without limitation,
attorneys' fees and legal expenses, and all expenses of
taking possession, holding .or administering the Pledged
Collateral.
Secured Party may waive any default, withaut leaving any
ather subsequent default, or prior default, by Pledger.
Rights of Pledgor. S.o long as no event of default as defined
'hereunder is uncured after the notice required herein:
7.1.
7.2.
Pledger shall be deemed the owner .of the Pledged Callateral
and shall be entitled to exercise all rights and powers.
relating to the Pledged Collateral for arw purp.ose
consistent with the terms .of this Agreement.
Upan the occurrence and during the continuance of an event
of default which is uncured, all rights of Pledger to
4
8.
, 1
exercise the rights and powers which it is e'tllti tled to
exercise with respect to the Pledged Collateral, shall
cease, and all such rights shall thereupon become vested in
Secured Party, which shall have the ~ole and exclusive
right and authority to ex.ercisesuch r-ights and powers.
All money and other property paid to Secured Party pursuant
. to tJ;1e provisions of this Secti.on shall be retained by
Secured Party as additional collateral.
Amendments to Obligations, Etc. Pledger agrees and consents
that, at any time and from time to time, so long as it has then
agreed':
8.1.
8.2.
8.3.
8.4.
8.5.
The time, manner, place and/or terms of payment of the
Obligation may be extended or changed in whole or in part
and/or the Obligation may be renewed in whole or in part;
Any or all of the Pledged Collateral' or any other
collateral for the Obligation may be exchanged, released,
surrendered and/or otherwise disposed of;
Any action may be taken under or in respect of the
Obligation in the exercise of any remedy, power or
privilege therein or herein contained or otherwise with
respect thereto, or such remedy, power or privilege may be
waived, omitted or not. enforced;
The time for Pledger's performance of or compliance with
any term, covenant or agreement on its part to be performed
or observed under the Obligation or this Agreement may be
extended, or such performance or compliance waived, or
failure in or departure from such performance or compliance
may be consented to; and
The Obligation or any terms thereof, may
modified in any respect for any purpose;
be
amended
or
all without affecting the Obligation, this Agreement
obligations .of Pledger hereunder, which shall continue
force and effect until all indebtedness evidenced by the
secured by this Agreement and all obligations of
hereunder shall have been fully paid and performed.
9.
or the
in full
Note and'
Pledger
Authori ty of Secured Party. Secured Party shall be entitled to
exercise all such powers as are specifically delegated to Secured
Party.by the terms of this Agreement, together with such powers
as are reasonably incidental thereto. Secured Party may execute
any of its duties hereunder by or through agents or employees and
5
10.
11.
12.
13.
14.
'shâll be entitled to retain counsel and to aêt in reí~ance upon
the advice of such counsel concerning all matters' pertaining to
its duties hereunder. However, Secured Party shall not be
required to exercise any right or remedy grant~d to it hereunder,
and shall in all cases be fully protected -- in acting or in
refraining from acting.
Secured Party as Attorney-in-Fact. Pledger hereby appoints
Secured Party as Pledger's attorney-in-fact for the purpose of
¿arrying out the provisions of this Agreement after an event 'of
default, which is uncured after the notice required herein, in
taking any action and execÙting any instrument which Secured
Party may deem advisable to accomplish the purposes hereof,.which
appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, Secured Party shall
have the right and power to receive, endorse and collect all
checks and other orders .for the payment of money made payable to
Pledger representing any distribution payable in respect of
Pledged Collateral, and to give full discharge for the same.
Non-Waiver; Remedies Cumulative. No failure. on the part of
Secured Party to exercise., and no delay in exercising any right,
power or remedy hereunder shall operate as â waiver thereof, nor
shall any single or partial exercise of any such right, power or
remedy by Secured Party preclude any other or further exercis.e
thereof or the exercise of any other right: ,power or remedy. All
remedies hereunder are cumulative and are not .exclusive of any
other remedies. provided by law.
Termination. If Pledger is not in default, this Agre.ement shall
terminate when the Obligation secured hereby, and .all obligations
of Pledger hereunder, have been fully paid and performed, at
which time Secured Party shall reassign and redeliver the Pledged
Collateral to Pledger, or to such person or persons as Pledger
shall designate, against receipt, together with appropriate
instruments of reassignment and release. Any such reassignment
shall be without recourse upon, or warranty by, Secured. Party and
at the expense of Pledger. .
Further Assurances. Pledger agrees to do such further acts and
things, and to execute and .deliver such additional conveyances,
assignments, agreements, and instruments as Secured Party may at
any time request in connection with the administration or
enforcement of the Obligation, this Agreement or related to the
Pledged Collateral or any part thereof. .
Notices. Any notices or consents required or permitted "by. this
Agreement shall in writing, and shall be deemed delivered if.
6
15.
16..
17.
18.
19.
I .
delivered in per'son, sent by certified mail, postag~4' prepaid,
return receipt requested or telecopier, as follows, un'less such
address is changed by written notice hereunder:
If to Pledgor:
Dubuque Racing Association-, Ltd.
Post Office Box 3190
Dubuque, IA 52004-3190
Attn: Bruce Wentworth, General Manager
If to Secured Party:
American Trust & Savings Bank
'Town Clock Plaza
P.O. Box 938
Dubuque, IA 52004-0938
Applicable Law; Severability. This'Agreement shall be subject to,
construed and enforced in accordance with the laws of the State
of Iowa. If any provision of this Agreement is held. invalid
under applicable Law, such invalidity shall not affect any other
provisi-on of this Agreement that can be giv.en .effect without the
invalid provision, and to this end, the provisions hereof are
severable.
Binding Effect; Assignmemt. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted
assigns of the parties. Pledger has no right to assign any of .i ts
rights or obligations hereunder without the,prior written consent
of Secured Party.
Interpretation; Headings. Words and phrases herein shall be
interpreted and understood according to the. context in which they
are used. The headings in this Agreement are intended solely for
convenience of reference, and shall be given no effect in the.
construction or interpretation of this Agreement.
Entire Agreement; Counterparts. This Agreement, including' any
Exhibits, . all of which are incorporated by this reference, and
the documents executed and delivered pursuant hereto, constitute
the entire agreement between the parties, and may be amended only
by a writing signed by e.ach party. All agreements, instruments
and documents referred to in this Agreement are by this reference
made a part of this Agreement for all .purposes. This Agreement
may be executed in. any number of counterparts, each of which
shall be 'deemed to be an original, but all of which' together
shall constitute but one and the same instrument.
Disclaimer. In no event shall either party to this Agreement be
liable to the other for indirect, special or consequential
damages, including loss of anticipated profits.
7
20.
21.
written.
'I
I!J
Arbitration. All disputes sha¡l be submitted by ,the parties to
binding arbitration under the auspices of the American
.Arbitration Association in accordance with its rules. The
arbitration shall be held at Dubuque, Iowa.
Attorney's Fees. , If any action at law, equity or arbitration,
including an action for declaratory re¡ief and arbitration is
brought to enforce or interpret the provisions of this Agreement,
the prevailing party .shall be entitled to recover r.easonab¡e
attorney's fees and costs of litigation from the other party.
Such fees and costs of Ii tigation may be set by the court in the
trial of such action or may be enforced in a 'separate action
brought for that purpose. Such fees and costs .of litigation
shall be in addition to any other relief which may be awarded
In Witness Whereof, the parties have executed this Agreement on the date first above
American Trust & Savings Bank
By:
Dubuque Racing Association, Ltd.
By:
Victoria J. Richter, Vice President
By:
STATE OF IOWA,.DUBUQUE COUNTY) ss:
On this _day of , 2004, before me, the undersigned, a Notary Public in and
the State of Iowa, personalJy appeared and
, to me personally known, who, being by me duly sworn, did say that they
are the and , respectively, of Dubuque Racing
Association, Ltd., executing the within and foregoing instrument, that no seal has been procured by the
corporation; that said instrument was signed on behalf of the corporation by authority of its Board of
Directors; and that and , as
and . , acknowledged the execution of the foregoing
instrumentto be the voluntary act and deed of the corporation, by it and by them voluntarily executed.
for
8
Notary PubJic, State ofIowa
STATE OF IOWA, DUBUQUE COUNTY) ss:
1
1111
!'
On this - day of , 2004, before me, the undersigned, aNotaryPublic in and
for the State ofIowa, personally appeared Victoria J. Richter, to me personally known, who, being by me
duly sworn, did say that she is a Vice President of American Trust & Savings Bank, executing the within
and foregoing instrument, that the seal which appears below id the seaJ of the corporation; that said
instrument was signed on behalf of the corporation by authority of its Board of Directors; and that
Victoria J. Richter, as Vice President, acknowledged the execution of the foregomg instrument to be the
voluntary act and deed of the corporation, by it and by her voluntarily executed.
Notary Public, State ofIowa
'3
I
tit
Prepared by: WayneA'Nonnan, Jr., Nonnan, Gilloon, Wright & Hamel, P.c., 800 Main Street, P.O. Box 857, Dubuque, IA 52004-0857
(563) 556-6433
SPACE ABOVE THIS UN[
FOR RECORDER'
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 TillS
WRITTEN CONTRACT MAYBE LEGALLY ENFORCED. YOU MAY CHANGE THE TERiVIS
OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
Re:
à parcel' of land containing' 43.73 acres, ~ore or less; located on ChapJain Sch~itt
Memorial Island lying immediately north of the Iowa-Wisconsin Bridge as set forth on the'
plat attached hereto and made a part hereof and subject to a utility and roadway easement
located on and about the southerly property line,. a roadway easement located on or about
the easterly property line, and a roadway easement on and about the westerly property line
(the "Real Estate").
"
ASSIGNMENT OF LEASE AGREEMENT
This Assignment of Lease Agreement ("Agreement") is effective ,2004,
.among Dubuque Racing Association, Ltd., an Iowa non-profit. corporation, Lessee, ( "Borrower"), City
of Dubuque, Iowa ("Lessor") and American Trust & Savings Bank ("Bank").
L
RecitaJs. Borrower has leased from Lessor certain real property under a Parts I and III of a Jease
dated May -' 2004, a copy of which is attached hereto as Exhibit A (the "L-ease"). The Bank
has authorized the making a loan to the Borrower by virtue of a Loan Agreement executed by the
Borrower and the Bank of even date ("Loan"). The Loan is for the benefit of both BOJTower and
Lessor insofar as funds from the Loan will be used for the benefit of the business conducted on
the leased premises. In consideration of the promises contained in this Agreement, and of the
disbursement of part or all of the Loan by Bank, Borrower, with the consent of Lessor, assigns to
Bank the lease referred to above during the remainder of its term,including aH extensions and
renewals. .' Upon payment of the loan infuH, Bank shaH provide to City in recordable form a
cancellation of this Assignment.
The Assignment of Lease Agreement between the parties dated September 7, 1995, is cancelled.
1
2.
Borrower and Lessor Further Covenant and Agree:
2.1.
2.2.
2.3.
2.4.
Borrower is not now in defauJt in the performance of the Lease; Borrower and Lessor
will each perform the covenants and conditions required of it by the Lease for the term of
the loan arid any extensions or renewals. -
Borrower and/or Lessor will not modify or terminate the Lease without the prior written
consent of Bank.
If Borrower defaults under the terms of the Lease, Lessor shall have the right to terminate
the Lease according to its terms. However, Lessor shall first give Bank sixty (60) days'
written notice of such default and the right, at the option of Bank, during such period, to
cure such default. During the sixty (60) day period, Lessor will take no action to enforce
its claim arising from such default without Bank's prior written consent.
If Borrower defaults in the performance of any of its obligations under the Loans, any
renewals or extensions, or of any related agreement, then Bank, at its option, may,
without notice, using such force as may be necessary, enter said leased premises and do
anyone or more of the following: (I) Remove all personal property of Borrower that is
pledged as collateral for the Loans; (2) Sell such personal property; (3) Transfer and
assign the Lease and Borrower's rights in it to parties satisfactorY to Bank; Lessor and the
Iowa Racing and Gaming Commission, and upon assignment the obligations of the Lease
shall be binding on such transferees. In .the event that Bank undertakes the options
provided in Subsections (1) or (2), it shall have no obligation other than payment ofrent
accruing during the period of its possession of the premises. In the event that Bank
transfers the Lease as provided in Subsection. (3), Bank will cure all defaults in said
Lease, and its sole other obligation shall be the payment of rent which accrued prior to
the transfer of said Lease.
Subordination. Lessor subordinates any lièn it has or may have on. the personal property .of
Borrower that is or may be security for the Loans to Bank's Jiens on Borrower's property, and to
Bank's rights under. this Agreement. TIlls subordination shall be effective regardless of whether
or not the collateraJ constitutes fixtures. For the purposes of this Agreement, the term "liens"
specifically includes any LandJord's Lien under Chapter 570, Code ofIowa, as amended, to which
the Lessor may be entitJed. The Lessor further subordinates its rights to receive a Distribution of
Net Cash Proceeds under Section 45 of the Lease, as amended,in 'the event of and for so Jong as'
the Borrower is in default of the Loan, or as otherwise provided in sections 8.20 and 8..21 of the
Loan Agreement. . .
3,
4.
Warranty. of Title. Lessor warrants that title to the Jeased premises is held by it in fee simple
and that it has full power and authority to enter into this Agreement.
Notices. All notices under this Agreement shall be in writing and shall be deemed delivered if
delivered in person, if sent by certified mail (postage prepaid, return rèceipt requested), telegraph
or facsimiJe, as follows:
5.
2
American Trust & SaVings Bank
895 Main Street
Post Office.Box 938
Dubuque, IA 52004-0938
Attn: Victoria J. Richter, Vic'; President
If to Bank:
If to Borrower:Dubuque Racing Association, Ltd.
Post Office Box 3190
Dubuque,IA 52004-3190
Attn: Bruce Wentworth, General Manager
If to Lessor:
City of Dubuque
City Hall
50 West 13th Street
Dubuque, IA 5200 I
Attn.: Mich",el C. Van MiJligen, City Manager
6.
Applicable Law; Severability. This Agreement shall be subject to, construed and enforced in
accordance with the laws of the State of Iowa. If any provision of this Agreement is held invalid
under applicable Law, such invaIidÚy shaH not affect any other provision of this Agreement that
can be given effect without the invalid provision, and to this end, .the provisions hereof are
severable.
7.
Binding Effect; Assignment. This Agreement shaH inure to thð benefit of and be binding upon
the. successors and peìmitted assigns ofthe parties. . Neither Borrower nor Lessor shaH assign any
of its rights or obligations hereunder without the prior written consent of Bank.
8.
Interpretation; Headings. Words and phrases herein shaH be interpreted and understood
according to the context in which they are used. The headings in this Agreement are intended
solely' for convenience of reference, and' shaH be given no effect in the construction or
interpretation of this Agreement.
9.
Entire Agreement;. Counterparts; Remedies CumuJative. This Agreement, including any
Exhibits, all of which are incorporated by this reference, and the' documents executed and
delivered pursuant hereto, constitute the entire agreement. between the parties, and may be
amended only by a writing signed by each party. All agreements, instruments and documents
referred to in this Agreement are by this reference made a part of this Agreement for aH purposes.
This Agreement may be executed in any number of counterparts, each of which shaH be deemed
to be an original; but aH of which together shaH constitute but one and the same instrument. The
parties shaH have, in addition to the rights and remedies provided by this Agreement, all those
aHowed by an applicable laws, aH of which shaH be in extension of and not in limitation of those
provided hereunder.
]0.
Waivers. Except as herein expressly provided, no waiver by either party of any breach of this
Agreement, or of any-warranty or representation. hereunder, shall be deemed to be a waiver by the
3
lL .
I
I
same party of any other breach of any kind or nature (whether preceding or succeed~g the.breach
in question, and whether or not of the same or similar nature).
10.1.
No acceptance by a party of payment or performance after any such breach shall .be
deemed to be a waiver of any breach of this Agreement or of any representation or
warranty hereunder, whether or not the party knows of the breach when it accepts such
payment or performance.
10.2.
No failure by a party to exercise any right it may have under this Agreement or .under law
upon aÙother party's defauJt, and no delay in the exercise of that right, shaH prevent it
from exercising the right whenever the other party continues to be in default. No sU:ch
failure or delay shaH operate as a wàiver of any default or as II. .modification of the
provisions of this Agreement.
Attorney's Fees. 1f any action at law or in equity, including an action for declaratory relief, is
brought to enforce or interpret the provisions of this Agreement, the prevaiEng party shaH be
entitled to recover reasonable attorney's fees and costs of litigation from the other party. Such
fees and costs of litigation may be set by the court in the triaJ of such action or by the arbitrator,
as the case may be, or may be enforced in a separate action brought for that purpose. Such fees
and costs of litigatiòn shall be in addition to any other relief which may be 'awarde4.
Effective as of the date first written above.
Dubuque Racing Association, Ltd.
City of Dubuque
By:
By:
By:
Terrance M. Duggan, Mayor
By:
Jeanne F. Schneider, City CJerk
American Trust & Savings Bank
By:
Victoria J. Richter, Vice President
/,
;' a
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this ~ day of , 2004, before me, the undersigned, a Notary Public in and
for the State of' Iowa, persona11y. appeared . and
, to me persona11y known, who, being by me duly sworn, did say that they
are the and , respectively, of Dubuque Racing
Association, Ltd., executing the within and foregoing instrument, that no seal has been procured by the
corporation; that said ìnstrumentwas signed on behalf of the corporation by authority of its Board of
Directors; and that '. and , as
and , acknowledged the execution of the foregoing
instrument to be the voluntary act and deed of the corporation, by it and by them voluntarily executed.
Notary Public, State ofIowa
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this. .day of , 2004, before me, the undersigned, a Notary PubJic ìnand
for the State of Iowa, persona11y appeared Terrance M. Duggan ¡¡nd Jeanne F. Schneider; to me
personally known, who,beìng by me duly swom, did say that they 'are the Mayor and City Clèrk,
respectiveJy, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal
has been procured by the CitY; that said instrument was signed on behalf of the City by authority. of the
City Council; and that Terrance M. Duggan and Jeanne F. Schneider, as Mayor and City CJerk,
acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the City, by
it and by them voluntarily executed. .
Notary Public, State ofIowa
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this - day of , 2004, before me, the undersigned, a.Notary Public in and
for the State of Iowa, persona11y appeared Victoria J. Richter, to me personally known, who, being by
me duly sworn, did say that she is a Vice President of American Trust & Savings Bank, executing the
within and foregoing instrument, that the seal which appears beJow' id .the sea] of the corporation; that
said instrument was signed on behalf of the corporation by authority of its Board of Directors; and that
Victoria J. Richter, as Vicè President,acknowledged the execution ofthe foregoing instrument to be the
voluntary act and deed of the corporation, by it and by her voJuntarilyexecuted.
5
Notary PubJic, Stat~ofIowa
6
Prepared By' Wayne A. Norman, Jr., Norman, Gilloon, Wright & Hamel, P. C., 800 Town Clock Plaza,
P.O. Box 857, Dubuque, IA 52004-0857
(5631 556-6433
SPACE ABOVE THIS LINE
FOR RECORDER
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.
Re:
A parcel of land containing 43.73 acres, more or less, . located on
Chaplain SchIni tt Memorial Island lying i=ediateÜy north of the
Iowa-Wisconsin Bridge as set forth on the plat attached hereto
and made a part hereof and subject to a utility and roadway
easement located on and about the southerly property line, a
roadway easement located .on or about the e¡asterly property line,
and a roadway easement on and about the westerly property line
(the ~Real Estate").
NEGATIVE PLEDGE AGREEMENT
This.Negative Pledge Agreement (~Agreement") is effective
, 2004, by the City of Dubuque, Iowa (the ~City"), in
favor of American Trust & Savings Bank, Dubuque, Iowa (the ~Bank").
1.
2.
Recitals. Dubuque Racing Association, Ltd., an Iowa non-profit
corporation ("Borrower") has applied to .the Bank for a
Construction 'and Term Loan in the amount of Twenty-Two Million &
00/100 Dollars ($22,000,000.00). The Bank agreed to lend such
funds to the Borrower subj ect to certain terms and conditions,
one of .which was the execution of this Agreement. Therefore, it
is agreed by the City as follows below.
Negative Covenants. The City covenants and agrees that until the
full and final payment of the Construction and Term Loans
Page 1 of 1
referred to above, unless the, prior written consent of the'Bank
has first been obtained, the City will not:
2.1.
in
Creâte, 'incur, assume, guarantee, endorse, beco~e liable
for or permit to exist any debt, liability or obligation
encumbering the Real Estate;
2.2.
wp60docs\American Trust & Savings Bank\DRA\Ne9ati;e_Pledge A9reernent 5.13.0'
Create, assume or permit to exist any purchase money'
security interests, or any other security interests,
additional mortgages, pledges, encumbrances, or liens of
any kind upon the Real Estate.
3.
Forbearance by the Bank not a Waiver.
Bank in exercising any right or remedy
afforded by applicable law, shall not be
the exercise of, any right or remedy.
Any forbearance by the
hereunder, or otherwise
a waiver of, or preclude
4.
Notices. All notices under this Agreement shall be
and shall be deemed delivered if delivered in person,
certified mail (postage prepaid, return receipt
telegraph or facsimile, as follows:
in writing
if sent by
requested) ,
If to Bank:
American Trust & Savings Bank
895 Main Street
Office Box 938
Dubuque, IA 52004-0938
Attn: Victoria J. Richter, Vice President
Post
If to City:
City of Dubuque
City Hall
50 West 13th Street
Dubuque, IA 52001
Attn.: Michael C. Van Milligen, City Manager
5.
Applicable Law; severability. This Agreement shall be subject to;
construed and enforced in accordance with the laws of the State
of Iowa. If any provision of this Agreement is held invalid
under applicable Law, such invalidity shall not .affect any other
provision of this Agreement that can be given effect without the
invalid provision, and to this end, the provisions. hereof are
severable.
6.
Binding Effect; Assignment. This Agreement shall
benefi t . of and be binding upon the successors
assigns of the parties. The Borrower has no right
of its rights or obligations hereunder without the
consent of the Bank.
inure to the
and permitted
to assign any
prior written
7.
Interpretation; Headings. .Words and phrases herein shall be
interpreted and understood according to the context in which they
Page 2 of 2
8.
9.ì
10.
11.
12.
are used. The headings in this Agreement are intendedfl¡';olely for
convenience of reference, and shall be given no effect in the
construction or interpretation of this Agreement..
Entire Agreement; Counterparts. This Agreement, including any
E¡{hibi ts, all of which are incorporated by this reference, and
the documents executed and delivered pursuant hereto; constitute'
the entire agreement between the parties, and may be amended only
by a writing signed by each party. All agreemerlts, instruments
and documents referred to in this Agreement are by this reference
made a part of this Agreement for all purposes. This Agreement
may be executed in any number of counterparts '. each of which
shall be deemed to be an original, but all of which together
shall constitute but one and the same instrument.
Remedies Cumulative. The parties shall have, .in addition to the
rights and remedies provided by this Agreement, all those allowed
by all applicable laws, all of which shall be in extension of and
not in limitation of those provided hereunder.
Waivers. Except as herein expressly provided, no' waiver by
either party of any breach of this Agreement, or of any warranty
or representation hereunder, shall be deemed to be awai ver by
the same party of any other breach of any kind or nature (whether
preceding or succeeding the breach in question, and whether or
not of the same -or similar nature) . '
10.1.
No accep.tance by a party of payment or performance after
any such breach shall bè deemed to be a waiver of any
breach of this Agreement or of any representation or
warranty hereunder, whether or not the party knows of the
breach when it accepts such payment or performance.
10.2.
No failure by a party to exer.cise any right it may have
under this Agreement or under law upon another party's
default, .and no delay in the exercise of that right, shall
prevent it from exercising the right whenever the other
party continues to be in default. No such failure or delay
shall operate as a waiver of any default or as a
modification of the provisions of this Agreement.
Arbitration. All disputes shall be submitted by the parties to
binding arbitration under the auspices of the ,American
Arbitration Association in accordance with its rules. The
arbitration shall be. held at Dubuque, Iowa.
Attorney's 'Fees.
arbi tra tion and
If any action at law or in equity, including
an action for declaratory relief and/or
Page 3 of 3
. i
arbitration, is brought to enforce or interpret the prb#isions of
this Agreemen't, the ..prevailing party shall be entitled, to recover
reasonable attorney's fees and costs of litigation from the other
party. Such fees and costs of litigation may be set by the court
in the trial of such action or may. beenfor.cedin a separate
action 'brought for .that purpose. Such fees and costs of
litigation' shall be.. in addition to any other relief which may be
awarded.
'Executed the date first .written above.
Ci ty of -Dubuque
By:
Terrance M. Duggan, Mayor
By:
Jeanne F. Schneider, City Clerk
STATE OF IOWA, DUBUQUE COUNTY) ss:
On this - day of , 2004, before me, the undersigned, a Notary PubJic in and
for the State of Iowa, personally appeared Terrance M. Duggan and Jeanne F.' Schneider, to me
personally known, who, being by me duly sworn, did say that they. are the Mayor and City CJerk,
respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal
has been procured by the City; that said instrument was signed on behalf of the City by authority of the
City Council; and that .Terrance M. Duggan and Jeanne F. Schneider, as Mayor and City Clerk,
acknowledged the execution of the foregoing instrument to be the voluntary act and deed ofthe City, by
it and by them voluntarily executed.
Notary Public, State ofIowa
Page 4 of.4