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Dubuque Racing Association Loan Documents 2004 D~~~ ~ck~ MEMORANDUM '§? June 2, 2004 ( §I I,,> TO: The Honorable Mayor and City Council Members -'- þ~; G5 " = '~ 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 Q ~.~ n c. c ¿;- , -u .n --' !,.:J (Jl ") Tl ,- i'J - ~ Honorable Mayor and City Council Dubuque City Hall 50 West 13th Street Dubuque, IA 52001-4864 , . þ~~ G5 .,.. "" '-..J 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 . .' i' ~ ATrOIL><EY5ATL^,,' tn."" ,~.odunna.""",-""", 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. Stephen C. !<rumpe I e.'~ 232 I skn<mþe@odMmaslaw."'ffi Dubuqo< Building I ;CO Lncu", Scròet, Sui" ICO 1 1'.0: Box 599 I Dubq~..I':',"" 51004-05991 Pbon,5O3.55;.8400 I Fox 563.556.18ó; k,,:~q:~~Ii,~;;K:~~ jAD:,~g:K~:;~'t' :;;-:;'6.':.\ T";::',~~~", A JOHN ,A.""", t+ S""_PHBNC l1Ru"", 't PAL'1- S",w""'¡ t Mou., A POSSE"' t AU""""""I"=,"inl","~ ì 'Al>clica""dinllfu"," I tAI",li",~"d",Wn"~-"n I §A&"lic~",di"Mi"".",," . "C""fidinCidTri.,]Ad.""""iryN""Gnd1J<=do[TriciAó"""", . O'CONNOR & THOMAS, P,C. I ¡'It 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 " Q: 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. ;' ~ 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 i'~ Very truly yours, ~¿;z 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 ,. 4 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 q 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 I ~'l¡ 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 , " , ' 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