Greyhound Pk Expansion Loan Inc
D~
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MEMORANDUM
December 28, 2004
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Dubuque Greyhound Park & Casino Expansion - Loan Increase
Dubuque Racing Association General Manager Bruce Wentworth has submitted a
request for approval for an expanded loan amount, from $22,000,000 to $25,000,000, to
meet the currently projected needs of the casino expansion and related equipment
purchases.
I respectfully request Mayor and City Council approval of the expanded loan amount.
!l (I' if
.. . i(/ /.' i
IlL v i III / ¿II '\
Michael C. Van Milligen .
MCVM/jh
Attachment
cc: Bruce Wentworth, General Manager, Dubuque Racing Association
Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
(,
DR4
DUBUQUE RACING A550ClAnON
December 24, 2004
Honorable Mayor and City Council
Dubuque City Hall
50 West 13th Street
Dubuque, IA 52001-4864
RE: Dubuque Greyhound Park & Casino Expansion-Loan Increase
Dear Honorable Mayor and City Council:
Please accept this letter and packet of supporting information as a request by the
Dubuque Racing Association to increase the DGP&C expansion loan amount from
$22,000,000 to $25,000,000 in order to meet the currently projected needs of the casino
expansion and related equipment purchases with the loan repayment to be structured on a
7-yearand IS-year basis.
Provisions within the DRAICity Lease require approval for alterations in excess of
$10,000 (DRA/City Lease, para. 17) and for debt incurred with the consent of the City
(DRA/City Lease, para. 45. (e)).
At a meeting of the Dubuque Racing Association Board of Directors held on Tuesday,
November 23, 2004, the Board passed a motion instructing staff to proceed with securing
the increased loan commitment from AmTrust and DB&T. AmTrust's credit facility
letter of approval is included in this packet.
If the City approves this request, the DRA will present the increased loan proposal to the
Iowa Racing & Gaming Commission on January 13, 2005. The Dubuque Racing
Association respectfully requests that the City approve this request.
Sincerely,
~~
Bruce Wentworth
General Manager
Dubuque Racing Association
P.O. Box 3190 . DUBUOUE. IA 52004-3190 . PHONE 563.582.3647 . FAX 563.582.9074
DR4
DUBUQUE RACING ASSOCIATION
Date:
November 18,2004
To:
DRA Board of Directors
Roger Hoeger b1Jv
From:
Issue:
Request to Increase Loan from $22M to $25M
Recommendation:
DRA Executive Committee recommends Board approval authorizing staff to
contact American Trust (the lead bank), to request an increase of the
DGP&C expansion loan amount from $22,000,000 to $25,000,000, in order
to meet the currently projected needs of the casino expansion and related
equipment purchases with the loan repayment to be structured on a 7 year
and 15 year basis.
Background:
A loan of $22M is currently in place with American Trust and Dubuque
Bank & Trust to fund the casino expansion, based on a DRA's request of
$21.4M. The banks agreed to loan $600,000 more that what was needed at
the time of the request.
The two reasons for the increased borrowing relate to a construction budget
overage of $1,389,114 and also for purchasing 100 poker machines and
related equipment for $1,639,293.
A schedule titled "DGP Casino - Project Budget" prepared by Durrant'
detailing the variances from budget is included for your review.
Addition.ally, a representative from Durrant will be at the Executive
Committee meeting to review the schedule, discuss the variances from
budget, and answer questions.
The second reason for the increased loan asking relates to' the purchase of
100 poker machines and related equipment projected to cost $1,639,293.
Staff's previous position was to work with 950 regular slot machines and to
P.O. Box 3190 . DUBUQUE. IA 52004-3190 . PHONE 563.582.3647 . FAX 563.582.9074
purchase an additional 50 poker machines, which did fit within the $22M
loan.
However, in light of the Diamond Jo potentially wanting to increase their
number of slot machines from 729 to around 1,100 to 1,200 machines,
necessitated rethinking our position to the point of asking Will Cummings
for updated projections. Based on Mr. Cummings work and in a
conversation with Bruce Wentworth and me, Mr. Cummings advised us that
we should plan on purchasing the additional 100 poker machines in order to
minimize adverse financial impacts of the Diamond Jo adding more
machines.
If we are able to secure an additional $3M loan, then based on current
projections, approximately $450,000 and $150,000 are in place for
construction contingencies and for equipment contingencies, respectively.
In addition to the above two contingencies an additional $600,000 would be
available to meet unanticipated future needs - if the needs don't materialize,
then the draws on the loan total $24.4M.
Bank, DRA Board, City of Dubuque, and Iowa Racing & Gaming
Commission approvals are necessary to increase the loan amount from
$22M to $25M.
Staff will review the attached schedules during the Executive Committee
meeting.
If you have any questions, please contact Bruce Wentworth or me.
Sources and Uses of Funds Statement
Sources of Funds Nov. 2004 Mav 2004 March 2004
Depreciation & Improvement Fund:
D & I Fund - Funding Source for Street Lighting $200.000
0 & I Fund - Funding Source for Hotel Parking $220.000
0 & I Fund - Funding Source Greyhound Park onve Entry Sign $50.000
Sutotal 0 & I Fund $470,000
0 & I Fund (11130/04 Belance of $1.267.013 @ 50% to Fund Const) $633.507 $633.507 $633.507
Total 0 & I Fund $1,103,507 $633,507 $633,507
ORA Reserve Fund:
ORA Reserve - CIP Fund (Balance 11130/04) $835.918 $835.918 $835.918
ORA Reserve - Contlngency Fund (Balance 11/30/04) $3.916,961 $3,916.961 $3.916.961
ORA Portion of 2003 ~istribution Escrowed for Gaming Tax $1.902.000 $1.902.000 $1.901.500
2% Increase in Gaming Tax (7/02 - 11/30/03) hom Escrowed Funds ($275,070 ($275.070) ($275,070
12% Increase In Gamin9 Tax (6/12/02 - 6130/02) from Escrowed Funds ($64.862 ($64.662) N/A
Subtotal ORA Reserve $6,314,947 $6,314,947 $6,379,3<19
Previous Commitment to Fund Project from ORA Reserve Funds $1.285,819 $1,285.819 $1.285.819
Additional Draw Down on ORA Reserve Balance $159,55O
ORA Reserve - Previously Reserved for Non Expansion Related Uses $505.289 N/A N/A
Subtotal DRA Reserve $1,950,658 $1,285,819 $1,285,819
Total DRA Reserve $8,265,605 $T,600,768 $7,865,128
ORA Reserve - 5% of Operating (Balance of $905.088 11/30/04) $0 $0 $0
Available DGP&C Funds $9,369,112 $8,234,273 $6,379,309
Previously Boa'" Approved Loan Amount $21,392,616 $21.392.616 $21,363.273
Additional Loan Amount Requested (Round to $3M) $2,837,917 N/A N/A
Total Loan Amount $24,230,533 $21.392.616 $21.363.273
Total Sources $33,599,645 $29,626,889 $27,742,582
Other:
Contingency for CIP
Additional Bankroll Requirements
Total - Oth..
Total tiP & Other
Nov. 20041 Ma 2004 March 2004
$17.453.399 $17.453.399 $16.464.752
$312.000 $312,000 $312.000
$520.000 $520,000 $520.000
$300,000 $300.000 $300.000
$131,880 $131.880 $131.860
20,106, $18,717,278 $17,T28,632
($5". ($511.208) ($511.208
$19,595, $18,206,071 $17,217,424
$7.446.878 $6,069.200 $5,505.200
Incl. In Slot & Equip. $511.208 $511.208
$200.000
Incl. In 5101 & Equip. $250.000 $250.000
Incl. in Slot & Equip. $190.490 $190,490
$220,000
$50.000
$7,916,878 $7,020,888 $6,456,898
$505.289 N/A N/A
$8,422,167 $7,020,888 $6,456,898
$150.000 $606.920 $275.260
$293.000 $293.000 $293.000
$443,000 $899,920 $568,260
$B,B65,167 $7,920,818 $7,025,158
$3,000,000 $3,000,000 $3,000,000
$300,000 $300.000
$200,000 $200.000
$500,000 $500,000
$29,626,889 $27,742,582
11/18/2004 reconfi9uration - AAAF 2.123
Uses of Funds
Construction:
Construction Project Budget
Union Wage Agreement
Incentive Bonus Plan
Emergency Power UP9rade
Durrant Fees to Abandon Cunenl Planning
Subtotal
Non Gaming FF&E & Sign age to Signage to CIP Budget
Total Construction
CIP Budget:
Slot Machines & Related Casino Equipment
Non Gaming FF&E & Signage to Signage to CIP Budgef
Street lighting
Greyhound Park Drive Signage & Impro,ements
Hardware & Software Purchase & Installation Increases
Parking Lot for Hotel
Greyhound Park on'e Entry Sign
Subtotal
CIP Items Previously Identified for Non expansion Related Uses
Total CIP Budget
Table Game License Fee
tiP 2006:
Table Games & Related Equipment (Fiscal 2006)
Table Game Software (Fiscal 2006)
- 'n. t
Total CIP 2006 Related to Expansion
Total Uses
):.1it¡¡:lOOÞj¡JJj!j¡lffi:'Ië...a~'jf.(ñ¡"òIIi!~ê_aTl~
20041
20051
20061
20071
20081
200911
I Description
D & I Fund Balance Calculation
D & I Fund Balance (Includes Re,trlcted Fund,) $1.119,037 $592.3"" $257.134 $383.583 $513.152 $645.980
Resources - Annual Payments $80,000 $120.000 $120.000 $120.000 $120.000 $120.000
Roconfiguration Project Use ($633.507) $0 N/A N/A N/A NIA
Uses-Current Year $0 ($470,000) $-<> $-0 $-<> $-0
Inte..st lnoome $26.796 $14,808 $6,428 $9.589 $12,829 $16,150
Fund Balance (Includes Res"'cled Funds) $592.328 $257.134 $383.583 $513,152 $645,980 $782.130
Re"rlcted Fund, ($250.000) ($250.000) ($250,000) ($250,000) ($250,000) ($250,000
Fund Balance Available $342 328 $7134 $133583 $283152 $395 980 $532130
CIP Fund of DRA Reserve Fund
Fund 6alance Start Of Fiscal Year $3.274.357 $315,339 $1.171.121 $72.592 $1.210.188 $783,687
Re,ou<ces - ol,tnbution (Start of FN & Debt Servlce@ 7/15 Yea, Plan) $3.035,000 $2.819,606 $3.152.890 $3.261,035 $3.409.574 $3.628,179
Additional Loan - 100 Slot Poker Machines $1.639.293
DRA., Sha,e of Additional Debt Service ($3.0M 7.50%l10.0%@7/15Yr.j $0 $0 ($140.855) ($140.855) ($140,855) ($140,855
Uses - Prior Year (Fund' TransfeITed Current Year) ($1.604.276) NfA N/A N/A NfA N/A
Uses - Current Year ($1.570.559) ($7,952.167) ($6.219.996) ($1,968.872) ($3.696.070) ($3.726.842
Expansion Project ($6.314.947) ($1.285.819)
Loan - Slot Mochines & Relaled Equipment $6.069.200
Loan - Contingency $506,920
Loan - Contingency (Reserve Amount) ($150.000)
Loan - Greyhound Pa" Signage & Improvements $250,000
Loan - Non Gaming FF&E & Interior Signage (Induded in Con"ruction 6udget) $511,208
Loan - Ta~e Game, & Related Equipment $300.000
Loan - Ta~e Game Softwa.. $200.000
Restrlcled Fund, (5% Of Operating Expenses) ($42.050) ($31.472) ($30.933) ($31.597) ($30.437) ($37.747
Re,tncted Funds - Contingency - From (To) $3.534.138 $0 $0 $0 $0 $0
Re"rlcted Funds - Debt Reserve $0 $0 $0 $0 $0 $0
Inte.." lnoome $4.675 $17.307 $1,073 $17.885 $11.286 $7.296
Fund Balance $316338 $1 171 121 $72 592 $1 210 188 $763 687 $493718
5% of Operating Fund of DRA Reserve Fund
Fund Balance Start Of Fiscal Yea, $863,030 $905,088 $936.560 $967"93 $999.090 $1.029.527
Resources - Annual Payment (Start of Fiscal Year) $42.050 $31.472 $30,933 $31,597 $30.437 $37.747
Uses
Fund Balance $905088 $938560 $967493 $999 090 $1029527 $1067274
Contingency Fund of DRA Reserve Fund
Fund Balance Start Of Fiscal Year ' $3.534,130 $0 $0 $0 $0 $0
Ine..ase (Deeraase) - (Start of Fiscal Year) ($3.534,130) $0 $0 $0 $0 $0
Interast Income $0 $0 $0 $0 $0 $0
Fund Balance $0 $0 $0 $0 $0 $0
Debt Reserve Fund of DRA Reserve Fund
Fund 6alance Start Of Fiscal Year $0 $0 $0 $0 $0 $0
Inc..ase - (Start of Fiscal Year) $0 $0 $0 $0 $0 $0
Prapaymenf of Oebt (Debl ratirad In Fiscal 1999) $0 $0 $0 $0 $0 $0
Fund Balance $0 $0 $0 $0 $0 $0
DRA Reserve Fund Percentage Allocations
RestOcted Fund, - Operating (Balance to equal 5% of Operating Budget)
Early Deb! Retirament 0.00%
Capital Improvements 100.00%
Conti en 0.00%
epraeiation mpro'ement Fun a ance in Exee" of 250.000 342.326 7,134 133,563 263,162 395,980 532.130
CJP Fund of ORA Reserve Fund $316,338 $1,171.121 $72,592 $1.210.188 $763.687 $493,718
Contingency Fund of ORA Re,erve Fund $0 $0 $0 $0 $0 $0
------
$658664 1 178 255 $206155 1473340 $1159 667 $1025848
11/18/2004
2005dp1.123
Description Code 2005 2006 2007 2008 2009 Total
RES $4,655.624 $2,652.200 $1.405.oB6 $2.977.460 $3.155.100 $15,045,670
RES $1.639.293 $1.639,293
RES $300.000 $300.000
RES $200,000 $200,000
RES $75,500
RES $196.000
ftware RES $775.000
RES $3,000
RES $210,000
RES $202.100 $533.050
RES $367.600 $641.500
RES $156,032
RES $135.626 $76.774 $165,171 $100.029 $496.760
RES $27.399 $13.356 $26.995 $14,112 $106.252
RES $15,000 $15.000
RES $12,305
Re lacements RES $26.000 $26,500 $92.160
RES $11.320
RES $15.000 $26,912
RES $1,690
RES $50,000 $50.000
RES $25.000 $25.000
RES $10,000 $10,000
RES $50.000 $50,000
RES $4.500 $4.500
RES $5.000 $5.000
RES $31,824 $19.121 $19.695 $20.265 $20,694 $111,619
RES $68,S24 $68,624
RES $121.237 $134,416 $255.655
RES 11.672 $6.240 $6.458 $24.370
RES ,236
RES .312
RES
RES $22, $11.749 $6.242 $2.875 $4,600
RES $16,964
RES $6.554
RES $1.000
RES $23,450 $27.500
RES $5,019
RES $2.190
RES $1.659
RES $4,938
RES $36.224
RES $8,646
RES $18,676
IS ,tem to, Dmft Beer Lines RES $14,322
RES $1.621
Conc.,.lon, RES $16.500
R, la"ments RES $12.000
RES $24,000
RES $105,000
RES $10,000
RES $52,100
RES $35.000
RES $25,000 $25,000 $25.000 $25.000 $25.000
RES $70,600
D&I $220.000 $220.000
RES $411,603 $411.603
D&I $200,000 $200,000
D&I $50.000 $50.000
RES NfA $421106 $311 000 $196667 $369 607 $1296602
$8.422,167 $6,219.996 $1,966,872 $3,696,070 $3,726,842 $24,033.947
RES = CIP Portion of 30% R"'Ne Fund
D & I = Depr. & Impm"menl Fund
OPER = Opemting Ca,"
Total
$7,952.167
$470.000
$0
$8422167
$6.219,996
$0
$0
$6219996
3.696.070
$0
$0
$3698010
$3.726.842 23,563.947
$0 $470.000
$0 $0
$3726842 $24033947
1,966.872
$0
$0
$1 968 872
11/1812004
2005cipf.123
-
Project Summary
DGP Casino. Project Budget
11/112004
Confract Contingency Adjusted Invoice To Contracf Current May 2.2004 Differential
Scope Change Projected Approved Current vs.
Description Amount Change Contract Amount Date Balance Budoet Budoet Approved.
Construction Contracts
Bid Package #1 - Under Contracf $980.085 $58,017 $142,358 $1.180.460 $969.727 $210.733 $1.180,460 $808.270 $372.1 gO
Bid Package #2 - Under Contract $5.322,OB5 $0 $0 $5.322.085 $0 $5,322.085 $5,322.0B5 $4.620.000 $702.085
Bid Package #3 - Under Contract $7.083,553 $0 $0 $7,083,553 $0 $7,083,553 $7.493.553 $7,432.201 $61.352
Bid Package #4 . Bids Received $2.028.222 $0 $0 $2,028.222 $0 $2,02B,222 $2.026,222 $1,2B6,099 $742.123
Consfruction Contingency Budget $573,919 $573,9'9 $573,919 $0
Consfruction Contingency Used $58.017 -$124,801 -$124.801
oGP Direct Purchase & Other DIrect Construction Expenses
Direct Purchase Contracts $270.218 $465,500 -$195.282
Other Construction Expenses $231.367 $115.000 $116.367
Durrant Group AlE/CM Fees
AlE Design Fees $1.122.276 $0 $1.122.276 $905,116 $217.160 $1.122.276 $1,122,276 $0
CM Fees $698,270 $0 $698,270 $225,541 $472.729 $698,270 $698.270 $0
AlE/CM Fees for Abandoned Project $131.621 $0 $131.621 $131.621 $0 $131.621 $131.621 $0
Durrant Relmb. Consultant Fees & Printing
Consultant Fees $140,700 $122,268 $18,432 $140.700 $130,000 $10.700
Printing & oistnbution Fees $40,000 $41.340 -$1.340 $40.000 $20,000 $20.000
Durrant Reimbursable Construction Costs
Field Office Expenses $B.OOO $2,353 $5,B47 $8.000 $8.000 $0
Construction Staking, Testing & Special Inspections $65.000 $54.628 $10.372 $65,000 $75.000 -$10,000
Construction Facilities & Temporary Confrols $60,607 $6.187 $54,420 $58.000 $60.000 -$2.000
Miscellaneous $66,380 $19.201 $47.179 . $66.380 $40,000 $26.380
Subtotal $19.305,270 $17.586,156 $1.719,114
Other Soft Costs Not Included In Detail Tabs
Non Gaming FF&E & Intenor Signage - -..... $0
Incentive Bonus Plan $260.000 $520.000 -$260,000
Mlsceltaneous Contingency Not Included In Detail Tabs $100.000 $100.000 $0
For Modular Office Space -$20.000 -$20.000
For A&G Preliminary Work -$50.000 .$50.000
Total $17,366,112 $58,017 $142,358 $17,947,174 $2,477,980 $15,469,194 $20,106,478 $18,717,364 $1,389,114
8/18& 10/11 Total $19.601.662
895 MBin Street
P.O. BDX 938
Dubuque, Iowa 52004-0938
563.589.0849
Fax 589.0860
tutzig@americantrustcom
www.americantrust.cDm
Thomas J. Utzig
Executive Vice President
Chief Credit Officer
December 17, 2004
Mr. Bruce Wentworth, General Manager
Dubuque Greyhound Park & Casino
P.O. Box 3190
Dubuque, IA 52004-3190
Dear Bruce:
American Trust & Savings Bank and Dubuque Bank & Trust Company ("Banks") are
pleased to provide the following credit facility to the Dubuque Racing Association
("DRA") for the planned casino expansion and remodeling of the Dubuque Greyhound
Park & Casino. This proposal supersedes the one submitted May, 20, 2004, as the
scope and the amount of the project changed.
Credit Amount:
Not to exceed $25,000,000 for 1000 machine expansion, addition
of gaming tables, addition of up to 100 poker machines, and
expansion of the facilities.
Credit Purpose:
Finance purchase of gaming devices and 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 DRA 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. The construction
loan will have a maturity date of June 15, 2005. 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 5.20 percent. The construction loan fee for the project
has already been assessed and paid.
Term Facility:
We are offering the following financing options:
American Trust & Savings Bank
Mr. Bruce Wentworth
December 17, 2004
Page 2 of 5
Interest Rate
Scenario 1 Scenario 2 Scenario 3 Scenario 4
$25,000,000 $25,000,000 $25,000,000 $25,000,000
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%
Term Loan
Amount
Amortization
Term of loan
Rate if funding today 6.0% 6.75% 7.75% 5.20%
Min. payment if funding today $366,268 $375,473 $387,958 $356,601
OR
Fixed principat
of $297,620
plus accrued
interest
Scenario 5 Scenario 6 Scenario 7 Scenario 8
Loan 1 Amount $12,500,000 $12,500,000 $12,500,000 $12,500,000
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 6.00% 6.75% 7.75% 5.20%
Min. payment if funding today $183,134 $187,736 $193,979 $178,300
Loan 2 Amount $12,500,000 $12,500,000 $12,500,000 $12,500,000
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 6.25 % 7.00% 8.25% 5.50%
Min. payment if funding today $107,802 $113,070 $122.147 $102,670
Total monthly payment $290,936 $300,806 $316,126 $280,970
OR
Fixed Principal
payments of
$218,254 plus
accrued interest
American Trust & Savings Bank
Mr. Bruce Wentworth
December 17, 2004
Page 3 of 5
A fifteen-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 $255,528. All
fixed-rate financing proposals are subject to a prepayment fee to be negotiated at a later
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 the intended
amortization schedule.
Pre-funding Conditions:
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 Conditions:
The proposed credit facility will be govemed by a credit agreement between the Banks
and the ORA. 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 ORA will provide the Banks with annual audits of its operations, as well as
quarterly internal financial statements.
4. The ORA 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 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 year
American Trust & Savings Bank
Mr. Bruce Wentworth
December 17, 2004
Page 4 of 5
2010. Such funds, which otherwise would have been distributed at the end of
Borrower's fiscal year 2010, 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 DRA chooses any of the 15-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 year 2014, 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 Company appreciate the
opportunity to assist the 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 of a binding agreement on the part of either
the Banks or the Borrower. Important terms may remain to be negotiated, and even 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
~ 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 retum one fully signed
original. If.such a¿ceptance is not received by us on or before January 31, 2005, this
.,pl,QpOSal shall expire.
Sincerely,
~
Thomas J. Utzig
Executive Vice President
American Trust & Savings Bank
Mr. Bruce Wentworth
December 17, 2004
Page 5 of 5
Agreed and accepted this
day of January 2005.
Dubuque Racing Association
by: