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Dubuque Racing Association Purchase of Hilton Hotel and Houlihan's RestaurantTHE CITY OF Dui Masterpiece on the Mississippi Dubuque band AI -America City r 2007 • 2012 • 2013 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Purchase of Hilton Garden Hotel and Houlihan's Restaurant by Dubuque Racing Association DATE: May 28, 2014 On May 5, 2014, the City Council adopted Resolution No. 143-14 to facilitate an Asset Purchase Agreement between the Dubuque Racing Association, LTD. (DRA) and Dubuque Casino Hotel, LLC for the purchase by DRA of substantially all of the assets of Dubuque Casino Hotel, including the Hilton Garden Hotel and Houlihan's Restaurant which are situated on property owned by the City and leased to Dubuque Casino Hotel. City Attorney Barry Lindahl recommends City Council approval of a Resolution approving the Landlord's Consent, Assignment of Lease Agreement, and Leasehold Mortgage. I concur with the recommendation and respectfully request Mayor and City Council approval. l. Mic ael C. Van Milligen bd-t44 , MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Jesus Aviles, President & CEO, Dubuque Racing Association THE CITY OF DUB E MEMORANDUM Masterpiece on the Mississippi BARRY LINDAHL CITY ATTORNEY To: Michael C. Van Milligen City Manager DATE: May 27, 2014 RE: Purchase of Hilton Garden Hotel and Houlihan's Restaurant by Dubuque Racing Association On May 5, 2014, the City Council adopted Resolution No. 143-14 to facilitate an Asset Purchase Agreement between the Dubuque Racing Association, LTD. (DRA) and Dubuque Casino Hotel, LLC (DCH) for the purchase by DRA of substantially all of the assets of DCH, including the Hilton Garden Hotel and Houlihan's Restaurant which are situated on property owned by the City and leased to DCH. The resolution also approved the City's consent, as landlord, to DRA's leasehold mortgage to American Trust & Savings Bank as well as an assignment of the lease between DCH and the City of Dubuque to DRA, subject to the approval of those documents by the City Attorney and the City Manager. I have reviewed the documents, copies of which are attached, and find them acceptable in form. I recommend the attached Resolution approving the Landlord's Consent, Assignment of Lease Agreement, and Leasehold Mortgage be submitted to the City Council for consideration and approval. BAL:tls Attachment F:\USERS\tsteckle\Lindahl\Casino Hotel -Hilton Garden Inn Purchase\MVM_ PurchaseHotelByDRA_052714.doc OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 TELEPHONE (563) 583-4113 / FAX (563) 583-1040 / EMAIL balesq@cityofdubuque.org RESOLUTION NO. 162-14 APPROVING A LANDLORD'S CONSENT, AN ASSIGNMENT OF LEASE AGREEMENT, AND LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS IN CONNECTION WITH DUBUQUE RACING ASSOCIATION, LTD.'S PURCHASE OF THE ASSETS OF DUBUQUE CASINO HOTEL, LLC. WHEREAS, the City of Dubuque, Iowa (hereafter "City"), and Dubuque Racing Association, Ltd. (hereafter "DRA"), are parties to an Amended and Restated Lease Agreement dated for reference purposes the 31st day of March, 2004, as amended by the First Amendment dated April 4, 2005, the Second Amendment dated June 29, 2005, the Third Amendment dated February 2, 2009, and the Fourth Amendment dated on or about June 7, 2010 (the "DRA Lease"); and WHEREAS, Dubuque Casino Hotel, LLC (DCH) is the Lessee under the Lease Agreement entered into by and between City and DCH on the 6th day of June, 2004, and subsequently amended by an Amendment No. 1 to Lease Agreement dated March 21, 2005, a Second Amendment to Lease Agreement dated April 4, 2005, and an Amendment No. 3 to Lease Agreement dated September 6, 2005 (collectively, the "DCH -City Lease") on which Hilton Garden Inn and Houlihan's Restaurant are situated; and WHEREAS, DCH has agreed to sell its interest in and to the DCH -City Lease to DRA, and DRA has agreed to purchase substantially all of DCH's assets pursuant to the Asset Purchase Agreement dated May 1, 2014 by and between DCH and DRA; and WHEREAS, DCH desires to assign its rights and obligations under the DCH -City Lease to DRA, and DRA desires to accept such assignment; and WHEREAS, DRA has requested that City consent to the Assignment of DCH - City Lease Agreement attached hereto; and WHEREAS, DRA intends to enter into 'a Leasehold Mortgage, Fixture Filing and Security Agreement with Absolute Assignment of Leases and Rent with American Trust & Savings Bank in connection with the sale; and WHEREAS, DRA has requested that City consent to the Landlord's Consent, Leasehold Mortgage, Fixture Filing and Security Agreement with Absolute Assignment of Leases and Rent with American Trust & Savings Bank attached hereto; and WHEREAS, the City Council finds that it is in the best interests of the City of Dubuque to consent to the Landlord's Consent, Leasehold Mortgage, Fixture Filing and Security Agreement with Absolute Assignment of Leases and Rent with American Trust & Savings Bank. 052714ba1 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City Council hereby approves the Landlord's Consent, and consents to Assignment of Lease Agreement and the Leasehold Mortgage, Fixture Filing and Security Agreement with Absolute Assignment of Leases and Rent, all attached hereto. Section 2. The City Attorney and the City Manager are hereby authorized to negotiate such non -material changes to the Landlord's Consent, Leasehold Mortgage, and Fixture Filing and Security Agreement with Absolute Assignment of Leases and Rent as they determine are necessary and proper. Passed, approved and adopted this 2nd day of Jun, 2014 UC Roy D. mol, Mayor Attest: Keviry .'Firnstah , Ci ry' Ierk F:\USERS\tsteckle\Lindahl\Casino Hotel -Hilton Garden Inn Purchase\Resolution_LandlordsConsentEtc 052714.doc 2 Number: 201400006272 Recorded: 6/13/2014 at 3:25:11.287 PM Fee Amount: $37.00 Revenue Tax: Kathy Flynn Thurlow RECORDER Dubuque County, Iowa LANDLORD'S CONSENT Recorder's Cover Sheet Preparer Information: Brian J. Kane, 2100 Asbury Road, Ste. 200, Dubuque, IA 52001-3091 (563) 582-7980 Taxpayer Information: N/A Return Address: Greg A. Rehmke, O'Connor & Thomas, P.C., 700 Locust St., Ste. 200, Dubuque, IA 52001 (563) 557-8400 Grantors: Dubuque Casino Hotel, L.L.C. Grantees: Dubuque Racing Association, Ltd. Legal Description: N/A Document or instrument number if applicable: 2005-12433 2005-13953 2005-15840 r Recorded Electronically 4! cJae? '7 County 414 6 u n I f Date :/3/211 Time 1: AS: S mplifile.com 800.460.5657 Al LANDLORD'S CONSENT Recorder's Cover Sheet Preparer Information: Brian J. Kane, 2100 Asbury Road, Ste. 200, Dubuque, IA 52001-3091 (563) 582-7980 Taxpayer Information: N/A Return Address: Greg A. Rebmke, O'Connor & Thomas, P.C., 700 Locust St., Ste. 200, Dubuque, IA 52001 (563) 557-8400 Grantors: Dubuque Casino Hotel, L.L.C. Grantees: Dubuque Racing Association, Ltd. Legal Description: , NIA Document or instrument number if applicable: 2005-12433 2005-13953 2005-15840 5 JL t) LANDLORD'S CONSENT The City of Dubuque, Iowa ("Landlord" or "City") has been informed that Dubuque Casino Hotel, LLC ("Tenant" or "DCH") intends to sell substantially all of its assets to Dubuque Racing Association, Ltd. ("Company" or "DRA"). City has further been informed by DRA that American Trust & Savings .Bank ("Lender" or "ATSB") intends to make a certain term loan to the DRA (the "Loan"), pursuant to the terms of that certain Business Loan Agreement (as the same may hereafter be amended, restated, supplemented or otherwise modified from time to time (the "Loan Agreement"), dated as of June 13, 2014, by and between DRA and ATSB. The capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Loan Agreement. RECITALS A. WHEREAS, Landlord has made and executed that certain Lease dated July 6, 2004 by and between City and DRA (as successor in interest to DCH) as amended by that certain Amendment 1 to Lease Agreement dated March 21, 2005, as further amended by Amendment 2 to Lease Agreement dated April 4, 2005, as further amended by Amendment 3 to Lease Agreement dated September 6, 2005, as assigned to Dubuque Bank & Trust Company pursuant to that certain Assignment of Lease Agreement among DCH, City, and Dubuque Bank &Trust Company dated March 23, 2005 (the "Hotel and Restaurant Lease"), pursuant to which DCH currently leases certain real property and the improvements ' thereon located in the City of Dubuque, County of Dubuque, State of Iowa as set forth therein; B. WHEREAS, City has made and executed that certain Parking Use Agreement dated July 6, 2004, by and between DRA, DCH, and City, as amended pursuant to that First Amendment to Parking Use Agreement dated May 2, 2005, as assigned to Dubuque Bank & Trust Company pursuant to that certain Assignment of Parking Use Agreement, as amended among DRA, DCH, City, and Dubuque Bank & Trust Company dated March 23, 2005 (the "Parking Lease"), pursuant to which DCH currently leases certain real property and the improvements thereon located in the City of Dubuque, County of Dubuque, State of Iowa as set forth therein; C. WHEREAS, the Hotel and Restaurant Lease and the Parking Lease, are collectively referred to herein as the "Leases"; D. WHEREAS, ATSB intends to extend the Loan to the DRA pursuant to the Loan Agreement; 053014 E. WHEREAS, contemporaneously, with the Loan, DCH will assign the Leases to the DRA and Dubuque Bank & Trust will cancel its assignment of the Leases. F. WHEREAS, the Loan will be secured by various assets of the DRA and its affiliates, including that certain Leasehold Mortgage, Fixture Filing and Security Agreement with Absolute Assignment of Leases and Rents (as the same may hereafter be amended, restated, supplemented or otherwise modified from time to time, the ''Mortgage") affecting the interest of DRA under the Leases and the interest of the DRA in the premises demised by the Leases (the "Premises"); G. WHEREAS, ATSB has requested that, pursuant to the terms and conditions of the Loan Agreement, City provide this City's Consent (this "Agreement") to the ATSB and the Participants; and H. WHEREAS, generally, DRA is continuing to negotiate for the operation of the restaurant facilities, currently operated as Houlihan's Restaurant. NOW, THEREFORE, in consideration of the foregoing recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City confirms and agrees as follows: 1. Notwithstanding anything to the contrary contained in the Leases, City hereby consents to: (a) the DRA's execution and delivery of the Mortgage, and (b) ATSB's recording the Mortgage against DRA's interest under the Leases and DRA's interest in the Premises. 2. Notwithstanding anything to the contrary contained in the Leases, City hereby consents to DRA granting ATSB a lien on, and security interest in, DRA's personal property and agrees that neither the grant of such lien and security interest, nor the enforcement thereof, will create a default under the terms of the Leases. ATSB shall be entitled to enforce its security interest in DRA's personal property located upon or in the Premises, provided that ATSB shall repair any physical damage caused to the Premises by such removal, and ATSB agrees to hire equipment movers carrying public liability insurance to perform such removal. 3. ATSB shall be entitled to and shall receive from City written notice of, and ATSB shall have an opportunity to cure, defaults by DRA under the Leases including a default in payment of money under the Leases. Notwithstanding anything to the contrary contained in the Leases, Lender shall have sixty (60) days (or, if such default cannot reasonably be cured by Lender within such period, such longer period as may be reasonably be required) to cure such defaults. In the event of a default by Company under the Leases, other than a default in the payment of money under the Leases, Landlord shall not terminate such lease without first giving Lender reasonable time within whieh either (a) to obtain possession of the Premises (by appointment of a receiver, foreclosure or otherwise) and cure such default with reasonable diligence, in the case of a default which is susceptible of being cured after Lender obtains possession of the Premises, or (b) to institute foreclosure proceedings and complete such foreclosure with reasonable diligence, or otherwise acquire Company's interest under such Lease with reasonable diligence, in the case of a default which is not susceptible of being cured by Lender (any such non -curable default shall be deemed to have been cured upon the completion of such foreclosure or acquisition of Company's interest in such Lease); provided, however, that Lender shall pay all rent and other sums payable under such Lease within thirty (30) days after any such sums become due and payable, together with interest on any past due sums at the rate specified in such Lease. If the cure of a non -monetary default requires possession of the Premises by Lender, or if the default cannot be cured by Lender, then Landlord shall not terminate any Lease so, long as Lender (y) continues to pay all rent and other sums due to Landlord within thirty (30) days after any such sums become due and payable, together with interest on 2 any past due sums at the rate specified in such Lease and (z) proceed diligently to obtain possession of the Premises through a receiver or prosecute foreclosure proceedings with reasonable diligence. Lender's right to cure hereunder and under the Leases shall be contingent upon Lender giving Landlord written notice within thirty (30) days of receipt of notice of default whether Lender intends to cure such defaults of Company. 4. This Agreement may not be modified except by an agreement in writing signed by City and ATSB or their respective successors in interest. This Agreement shall inure to the benefit of and be binding upon City and ATSB, and their respective heirs, representatives, successors and assigns. City agrees that any transfer of any Lease or the Premises through foreclosure by ATSB or similar action or action in lieu thereof shall be permitted by such Lease without any requirement that City consent thereto, provided, the transferee agrees to comply with the terms and conditions of such Lease in writing (including, without limitation any restrictions on the use of the premises as set forth therein). 5. City acknowledges: . a. The Leases are in full force and effect, and have not been modified, supplemented or amended except as set forth above; b. The Leases represent the entire agreement between the City, the DRA and the DCH; there is no existing default on the part of the City, the DRA or the DCH in any of the terms and conditions thereof, and no event has occurred which, with the passing of time or giving of notice or both, would constitute an Event of Default under the Leases; o City has not received written notice of assignment of the DCH's interest under the Leases to anyone other than the DRA. 6. Any notices sent to City shall, until further notice, be sent by registered mail and addressed as follows: City of Dubuque Attn: Mayor 50 W. 13th St. Second Floor Dubuque, IA 52001 With copies to: City Manager 50 W. 13th St. Second Floor Dubuque, IA 52001 7. Any notices sent to ATSB shall, until further notice, be sent by registered mail and addressed as follows: American Trust & Savings Bank Attn: Tori Richter, Senior Vice President 895 Main Street Dubuque, IA 52001 3 With a copy to: Fuerste, Carew, Juergens & Sudrneier, P.C. Attn: Stephen J. Juergens 151 W. 8th Street 200 Security Building Dubuque, IA 52001 8. DRA may in its sole discretion enter into a franchise agreement with Houlihan's, terminate or refuse to renew or enter into a franchise agreement with Houlihan's for the operation of a restaurant, or enter into an agreement with another franchisor or operate an independent restaurant. DRA may enter into an agreement with DCH for DCH 'to continue to operate the Houlihan's Restaurant until the expiration of DCH's franchise agreement with Houlihan's on or about October 28, 2014. [Remainder of Page Intentionally Left Blank] 4 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers. Dubuque Ra g Association, Ltd. By: Typed N Title: e:.Jtt+is f1. Av:U.s Prts.`tt co City of Dubuque, Iowa By: Typed Name: d Roy D. B u o l Title: Mayo Attest: City' erk Kevin S. Firnstahi STATE OF IOWA, COUNTY OF DUBUQUE ti /� This instrument was acknowledged before me on June 12, 2014, by sip ( . S n . Ads .3, as Ptegtitn ' cr COEof Dubuque Racing Association, Ltd. (Stamp or Seal) GREG A. REHMKE COMMISSION NO. 752407 - MY COMMISSION EXPIRES 5 Nota FuliQc in and for said State STATE OF IOWA, COUNTY OF DUBUQUE This instrument was acknowledged before me on June 12, 2014, by Roy D. Buol, as Mayor of the City of Dubuque, Iowa. (Stamp or Seal) TRACEY L. STECKLEi!i r Commission Number X716^16 ate► My Comm. Exp. ki'11"i • STATE OF IOWA, COUNTY OF DUBUQUE ditikatA L Notary Public i and for said State This instrument was acknowledged before me on June 12, 2014, by Kevin S. Firnstahl, as City Clerk of the City of Dubuque, Iowa. (Stamp or Seal) TRACEY L. STECKLEiN f' Commission Number 716016 ,.� Aly Comm. Exp. �' lt`I1 /.)? Notary Public i [Signature page to City's Consent] 6 nd for said State RESOLUTION NO 143-14 AUTHORIZING THE DRA TO MAKE ALTERATIONS TO THE FACILITIES IN EXCESS OF TEN THOUSAND DOLLARS ($10,000), FINANCE CAPITAL IMPROVEMENTS BY INCURRING DEBT AND USING FUTURE FUND DOLLARS AS PART OF A DOWNPAYMENT TO FACILITATE AN ASSET PURCHASE AGREEMENT FOR SUBSTANTIALLY . ALL OF THE ASSETS OF DUBUQUE CASINO HOTEL, LLC., INCLUDING BUT NOT LIMITED TO THE HILTON GARDEN INN AND HOULIHAN'S RESTAURANT ASSETS AND OPERATIONS. • . WHEREAS, the City of Dubuque, Iowa (hereafter "City"), and the Dubuque Racing DRA, Ltd. (hereafter "DRA"), are parties to an Amended and Restated Lease Agreement dated for reference purposes the 31st day of March,. 2004, as amended by the First Amendment dated April 4, 2005, the Second Amendment dated June 29, 2005, the Third Amendment dated February 2, 2009, and the Fourth Amendment dated on or .about June 7, 2010; and WHEREAS, Section 13 of the Amended & Restate Lease requires written City consent prior to the DRA commencing alterations to any structure or structures or making additions to any existing structures or facilities in an amount exceeding Ten Thousand Dollars ($10,000) or capital improvements to be purchased by incurring debt; and WHEREAS, the Amended and Restated Lease Agreement, as amended by the Fourth Amendment thereto, provides in paragraph 41(a)(vii) for the establishment and use of a Capital Reserve Fund for use in funding future capital improvements in the discretion of DRA's board of directors; and WHEREAS, the Amended and Restated Lease Agreement, as amended by the Fourth Amendment thereto, provides in paragraph 41(a)(x) for a Future Fund to make distributions to charities and non-profit entities; and WHEREAS, the DRA has been engaged in negotiations with Dubuque Casino Hotel, LLC, for the purchase of substantially all of the assets of Dubuque Casino Hotel, LLC, including,. but not limited to, the Hilton Garden Inn and Houlihan's Restaurant assets and operations and assignment of the current lease between Dubuque Casino Hotel, LLC, as lessee, and the City of Dubuque, as lessor, for the real estate and improvements, which lease expires between July 2, 2044 and July 1, 2045, at which time the real estate and improvements thereon (including any improvements made by the DRA following the purchase) shall revert to the City of Dubuque; and WHEREAS, the Board of Directors of the DRA approved the use of the current balance of funds in the Capital Reserve Fund, supplemented by.$700,000.00 from the Future Fund, to be applied toward the purchase .price and for, necessary expenses .incurred in negotiating and completing the transaction; and WHEREAS, the City has been informed by the DRA that American Trust & Savings Bank ("Lender") intends to make a certain term loan to the DRA, pursuant to the terms of that certain Business Loan Agreement (as the same may hereafter be amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement"), dated as of June 13, 2014, by and between D RA and Lender; and - WHEREAS, the DRA desires to proceed with the purchase on the terms contained in the Asset Purchase Agreement and Exhibits thereto; and WHEREAS, the DRA Intends to enter into an Asset Purchase Agreement with Dubuque Casino Hotel, LLC. which requires prior written approval from the City as the transaction will result in: 1) Alterations to any structure or structures or making additions to any existing structures or .facilities in an amount exceeding Ten Thousand Dollars ($10,000) 2) Capital improvements financed by incurring debt 3) -The use of the $700,000.00 balance in the Future Fund at the time of closing to be transferred to the Capital Reserve Fund, and that the balance of the Capital Reserve Fund, as thus supplemented, is approved for use toward the purchase price; and WHEREAS, the City has determined that the operation of the DRA accomplishes a public purpose by promoting community development and tourism for the civic betterment and social welfare of the City of Dubuque and its citizens. NOW, THEREFORE, BE IT RESOLVED BY THE CiTY COUNCIL OF THE CITY OF DUBUQUE; IOWA: Section 1. The City Council has been presented with a request from the DRA • pursuant to the Amended and Restated Lease Agreement and subsequent amendments, to facilitate an Asset Purchase Agreement .between the DRA and Dubuque Casino Hotel, LLC. for substantially all of the assets of Dubuque Casino Hotel, LLC, including, but not limited to, the Hilton Garden Inn and Houlihan's Restaurant assets and operations and assignment of the current lease between Dubuque Casino Hotel, LLC, as lessee, and the City. of Dubuque, as lessor, for the real estate and improvements, and a Landlord's Consent document; the City Council hereby authorizes the DRA to: 1. Make alterations to any structure or structures or make additions to any existing structures or facilities in an amount exceeding Ten Thousand Dollars ($10,000) 2. Incur debt for capital improvements 3. Use the $700,000.00 balance in the Future Fund at the time of closing to • be transferred to the Capital Reserve Fund, and that the balance of the Capital Reserve Fund, as thus supplemented, is approved for use toward the down payment for the Asset Purchase Agreement. The foregoing approval' of the Landlord's Consent is subject to satisfactory review of all documents referred to in the Landlord's Consent by the City Attorney and the City Manager. Passed, approved and adopted this 5th day of May, 2014 p4,/ Roy D.,v ol, Mayor Attest: Kevin S. Eirnstahl, City erk F,\USERS\tsteckle\Lindahl\Casino Hotel -Hilton Garden Inn Purchase\Resotution_Asset Purchase_050514,doc CERTIFICATE of the CITY CLERK STATE OF IOWA ) SS: COUNTY OF DUBUQUE ) I, Kevin S. Firnstahl, do hereby certify that I am the duly appointed, qualified, City Clerk of the City of Dubuque, Iowa, in the County aforesaid, and as such City Clerk, I have in my possession or have access to the records of the proceedings of the City Council. I do further state that the hereto attached Resolution No. 143-14 is a true and correct copy of the original. In Testimony Whereof, I hereunto set my hand and official seal of the City of Dubuque, Iowa. Dated at Dubuque, Iowa, on this 6th day of May, 2014. . „ (SEAL)., /J irnstahl, CM65City Clerk Execution Version Number: 2014000062 73 Recorded: 6/13/2014 at 3:225:12.647 PM Fee Amount: $137.00 Revenue Tax: Kathy Flynn Thurlow RECORDER Dubuque County, Iowa LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS Recorder's Cover Sheet Preparer Information: Fuerste, Carew, Juergens & Sudmeier, P.C. 151 West 8th Street 200 Security Building Dubuque, IA 52001 Attn: Stephen J. Juergens Taxpayer Information: Dubuque Racing Association, Ltd. 1855 Greyhound Park Road Dubuque, IA 52001 Return Document To: Fuerste, Carew, Juergens & Sudmeier, P.C. 151 West 8`h Street 200 Security Building Dubuque, IA 52001 Attn: Stephen 3. Juergens Mortgagor:. Dubuque Racing Association, Ltd Mortgagee: American Trust & Savings Bank Legal Description: See Exhibit "A" NOTICE: THIS IS A PURCHASE MONEY MORTGAGE NOTICE: This Mortgage secures credit in the amount of $12,800,000, Loans and advances up to this amount, together with interest, are senior to indebtedness to other creditors under subsequently recorded or filed mortgages and liens. THIS MORTGAGE ALSO CONSTITUTES A FIXTURE FILING NC - 0b4-MPL.03' i'--1) Execution Version Record d Electronically ,yr r) r Lf 0000 Gvr 7 county ....toF'�!- ao u Date G r3 Time/ -.'45:r 64? 5impiifile.cam 803.460.5557 pr" LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS Recorder's Cover Sheet Preparer Information: Fuerste, Carew, Juergens & Sudmeier, P.C. 151 West 8th Street 200 Security Building Dubuque, IA 52001 Attn: Stephen J. Juergens Taxpayer Information: Dubuque Racing Association, Ltd. 1855 Greyhound Park Road Dubuque, IA 52001 Return Document To: Fuerste, Carew, Juergens & Sudmeier, P.C. 151 West 8`h Street 200 Security Building Dubuque, IA 52001 Attn: Stephen J. Juergens Mortgagor: Dubuque Racing Association, Ltd Mortgagee: American Trust & Savings Bank Legal Description: See Exhibit "A" NOTICE: THIS IS A PURCHASE MONEY MORTGAGE NOTICE: This Mortgage secures credit in the amount of $12,800,000. Loans and advances up to this amount, together with interest, are senior to indebtedness to other creditors under subsequently recorded or filed mortgages and liens. THIS MORTGAGE ALSO CONSTITUTES A FIXTURE FILING NCS;. Di) 4 P LS L S1i-1 1 Execution Version LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS THIS LEASEHOLD MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT WITH ABSOLUTE ASSIGNMENT OF RENTS ("Mortgage"), made as of June 13, 2014, by and between DUBUQUE RACING ASSOCIATION, LTD., an Iowa nonprofit corporation ("Mortgagor"), and AMERICAN TRUST & SAVINGS BANK, as "Collateral Agent" on behalf of the Participants, as defined and described in the Loan Agreement referred to below, as secured party ("Mortgagee"). RECITALS A. As of the date hereof, Mortgagor has executed that certain Business Loan Agreement (as amended, restated, supplemented for modified from time to time, the "Loan Agreement") relating to a loan to be made by Mortgagee to Mortgagor in the amount of up to $12,800,000 (the "Loan"). B. The Loan is evidenced by a certain Promissory Note executed by Mortgagor on or after the date hereof (the "Note"). C. The Loan Agreement requires that the Loan be secured by all of Mortgagor's interest in the real property described herein in Dubuque County, Iowa. D. This Mortgage is a purchase money mortgage under Iowa law. NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants herein contained, the parties hereto hereby agree as follows: ARTICLE L MORTGAGE GRANT 1.1 For the purposes of and upon the terms and conditions set forth in this Mortgage, to the extent allowed by any license issued to Mortgagor under Chapter 99F of the Iowa Code (the "Gaming License"), Mortgagor hereby irrevocably mortgages, grants, conveys and assigns to Mortgagee, all Mortgagor's right, title and interest in and to the following: (a) the leasehold interest in the real property described in Exhibit A created by the Primary Leases (defined below), together with any greater estate therein as hereafter may be acquired by Mortgagor (collectively, the "Land"), which together with all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing and all interests now or in the future arising in respect of, benefiting or otherwise relating to the Land, including, without limitation, easements, rights-of-way and development rights, including all right, title and interest now owned or hereafter acquired by Mortgagor in and to any land lying within the right of way of any street adjoining the Land, and any and all sidewalks, alleys, and driveways adjacent to or used in connection with the Land (which, together with the Land, are collectively referred to as the "Real Property"); (b) all the buildings, structures, facilities and improvements of every nature whatsoever now or hereafter situated on the Land or any real property encumbered hereby (the "Improvements"), (c) (i) all fixtures, machinery, appliances, goods, building or other materials, equipment, including all gaming equipment and devices, and all machinery, equipment, engines, appliances and 2 Execution Version fixtures for generating or distributing air, water, heat, electricity, light, sewage, fuel or refrigeration, or for ventilating or sanitary purposes, the exclusion of vermin or insects, or the removal of dust, refuse or garbage, now owned or hereafter acquired by Mortgagor and now or hereafter attached to, installed in or used in connection with the Premises; (ii) all wall -beds, wall -safes, built-in furniture and installations, shelving, lockers, partitions, doorstops, vaults, motors, elevators, dumb -waiters, awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm, communication, surveillance and security systems, computers, drapes, drapery rods and brackets, mirrors, mantels, screens, linoleum, carpets and carpeting, signs, decorations, plumbing, bathtubs, sinks, basins, pipes, faucets, water closets, laundry equipment, washers, dryers, mini -bars, ice -boxes and heating units; kitchen and restaurant equipment (including stoves, refrigerators, ovens, ranges, dishwashers, disposals, water heaters and incinerators) now owned or hereafter acquired by Mortgagor and now or hereafter attached to, installed in or used in connection with any of the Premises; (iii) all amusement rides and attractions attached to the Land; and (iv) all furniture and furnishings of every nature whatsoever now or hereafter owned or leased by Mortgagor or in which Mortgagor has any rights or interest and located in or on, or attached to, or used or intended to be used or which are now or may hereafter be appropriated for use on or in connection with the operation of the Premises, and all extensions, additions, accessions, improvements, betterments, renewals, substitutions, and replacements to any of the foregoing, which, to the fullest extent permitted by law, shall be conclusively deemed fixtures and improvements and a part of the real property hereby encumbered (the "Fixtures") (the Real Property, Fixtures and Improvements are collectively referred to as the "Premises"); (d) (i) all cocktail lounge supplies, including bars, glassware, bottles and tables wherever so located; (ii) all chaise lounges, hot tubs, swimming pool heaters and equipment and all other recreational equipment and beauty and barber equipment wherever so located; (iii) all personal property, goods, equipment and supplies used in connection with the operation of the hotel, casino, restaurants, stores, parking facilities, and all other commercial operations wherever so located, including communication systems, visual and electronic surveillance systems and transportation systems; (iv) all tools, utensils, food and beverage, silverware, dishes, liquor, uniforms, linens, housekeeping and maintenance supplies, vehicles and fuel wherever so located; and (v) all other personal property of any kind or character, including such items of personal property as defined in the UCC (defined below), now or hereafter owned or leased by Mortgagor or in which Mortgagor has any rights or interest wherever so located, and all extensions, additions, accessions, improvements, betterments, renewals, substitutions, and replacements to any of the foregoing and including everything in Subsection 1.1(c) not permitted to be deemed Fixtures or Improvements (the "Personalty"); (e) (i) the rights to use all names, logos and designs and all derivations thereof now or hereafter used by Mortgagor, together with the goodwill associated therewith, with the exclusive right to use such names, logos and designs wherever they are now or hereafter used and any and all trade names, trademarks or service marks, whether or not registered, now or hereafter used in the operation of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of the Mortgagor, including any interest as a lessee, licensee (except the Gaming License) or franchisee, and, in each case, together with the goodwill associated therewith; (ii) all books, records, customer lists, concession agreements, supply or service contracts, licenses, permits, governmental approvals, signs, goodwill, casino and hotel credit and charge records, supplier lists, checking accounts, safe deposit boxes (excluding the contents of such deposit boxes owned by persons other than Mortgagor and its subsidiaries), cash, instruments, chattel papers, including inter -company notes and pledges, documents, unearned premiums, deposits, refunds (including income tax refunds), prepaid expenses, rebates; (iii) all accounts, general intangibles, instruments, documents, chattel paper of Mortgagor including all reserves, escrows or impounds required under the Loan Agreement or other Related Documents (as defined in the Loan Agreement) and all deposit accounts maintained by Mortgagor with respect to the Subject Property; (iv) all actions and rights in action, and all other claims and all other contract rights and general 3 Execution Version intangibles resulting from or used in connection with the operation and occupancy of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor and in which Mortgagor now or hereafter has rights; (v) all casino operator's agreements, vacation license resort agreements or other time share license or right to use agreements, including all rents, issues, profits, income and maintenance fees resulting therefrom; and (vi) advertising and promotional material, blueprints, surveys, plans and other documents used in the construction or operation of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor, whether any of the foregoing is now owned or hereafter acquired (the "Intangible Property") (Mortgagee's rights to the Intangible Property associated with the operation by Mortgagor of franchises are limited to those rights that Mortgagor is allowed to grant Mortgagee under the terms of current and future franchise agreements); {f) all leases, subleases, lettings, licenses, concessions, operating agreements, management agreements, and all other agreements affecting the Subject Property, that Mortgagor has entered into, taken by assignment, taken subject to, or assumed, or has otherwise become bound by, now or in the future, that give any person the right to conduct its business on, or otherwise use, operate or occupy, all or any portion of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor and any leases, agreements or arrangements permitting anyone to enter upon or use any of the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor to extract or remove natural resources of any kind, together with all amendments, extensions, and renewals of the foregoing entered into in compliance with this Mortgage, together with all rental, occupancy, service, maintenance or any other similar agreements pertaining to use or occupation of, or the rendering of services at the hotel, casino, restaurants, stores, parking facilities and all other commercial operations of Mortgagor or any part thereof, together with all related security and other deposits (the "Leases"); {g) all of the rents, revenues, receipts, royalties, income, proceeds, profits, license and concession fees, security and other types of deposits, and other benefits paid or payable by parties to the Leases for using, leasing, licensing possessing, operating from, residing in, selling or otherwise enjoying the Subject Property (the "Rents"); (h) all other agreements, such as construction contracts, architects' agreements, engineers' contracts, utility contracts, maintenance agreements, management agreements, service contracts, listing agreements, guaranties, warranties, permits, licenses, certificates and entitlements in any way relating to the construction, use, occupancy, operation, maintenance, enjoyment or ownership of the Subject Property, including without limitation that certain Parking Use Agreement dated as of July 6, 2005, among Dubuque Racing Association, Ltd., Dubuque Casino Hotel, and the City of Dubuque, as amended, as it may be amended in the future, as assigned to Mortgagor (the "Property Agreements"); {i) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing; (j) all property tax refunds and rebates and utility refunds and rebates (the "Refunds"); (k) all accessions, replacements and substitutions for any of the foregoing and all proceeds thereof (the "Proceeds"); (1) all insurance policies, unearned premiums therefor and proceeds from such policies covering any of the above property now or hereafter acquired by Mortgagor (the "insurance"); and 4 Execution Version (m) all of Mortgagor's right, title and interest in and to any awards, damages, remunerations, reimbursements, settlements or compensation heretofore made or hereafter to be made by any Government Authority pertaining to the Premises, Fixtures or Personalty (the "Condemnation Awards"). All of the foregoing, whether now owned or hereafter acquired, being collectively referred to as the "Subject Property". The listing of specific rights or property shall not be interpreted as a limit of general terms. 1.2 Certain Definitions. (a) The term "Primary Leases" shall mean all of the leases and agreements described on Exhibit 13 attached hereto and incorporated by this reference. 1.3 Term. In no event shall the term of this Mortgage extend beyond July 1, 2044, without the prior written consent of the titleholder of the Land and the written agreement of Mortgagor. ARTICLE 1I. OBLIGATIONS SECURED 2.1 Obligations Secured. Mortgagor enters into this Mortgage for the purpose of securing the following obligations ("Secured Obligations"): (a) Payment and performance of all Obligations as defined in the Loan Agreement, including, without limitation, all covenants and obligations on the part of Mortgagor under the Loan Agreement, the Note and all other Related Documents (as defined in the Loan Agreement); and (b) Payment and performance of all covenants and obligations of Mortgagor under this Mortgage; and • (c) All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced, including, without limitation: (i) modifications of the required principal payment dates or interest payment dates or both, as the case may be, deferring or accelerating payment dates wholly or partly; or (ii) modifications, extensions or renewals at a different rate of interest whether or not in the case of a note, the modification, extension or renewal is evidenced by a new or additional promissory note or notes. 2.2 Maturity Date. The Note secured hereby has a maturity date of June 12, 2019. 2.3 Future Advances. This Mortgage is given to secure not only the existing indebtedness of the Mortgagor to the Mortgagee evidenced by the Note secured hereby, but also future advances made pursuant to the Loan Agreement, plus interest thereon, and any disbursements made by Mortgagee for the payment of taxes, insurance or other liens on the.property encumbered by this Mortgage, with interest on such disbursements, which advances shall be secured hereby to the same extent as if such future advances were made this date. The total amount of indebtedness secured hereby may increase or decrease from time to time. 2.4 Incorporation. All terms of the Secured Obligations and the documents evidencing such obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Subject Property shall be deemed to have notice of the terms of the Secured Obligations and to have notice, if provided therein, that: (a) the Note or the Loan Agreement may permit borrowing, repayment 5 Execution Version and re -borrowing so that repayments shall not reduce the amounts of the Secured Obligations; and (b) the rate of interest on one or more Secured Obligations may vary from time to time. 2.5 Obligations. The term "obligations" is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges (if any), late charges and loan fees at any time accruing or assessed on any of the Secured Obligations (and shall include interest that accrues after the commencement of any bankruptcy or other insolvency proceeding by or against the Mortgagor, whether or not allowed or allowable) and all the foregoing shall be part of the Secured Obligations, ARTICLE III. ASSIGNMENT OF LEASES AND RENTS 3.1 Renresentations, Warranties and Covenants. Mortgagor represents, warrants and covenants that: (a) it has provided a list of all Leases to Mortgagee as of the date of this Mortgage, (b) as of the date of this Mortgage, Mortgagor is not, in the capacity of lessor, a party to any other lease, whether written or oral, or any agreement for the use and occupancy of the Subject Property, except as disclosed in writing to Mortgagee prior to the date of this Mortgage, (iii) the Leases are valid, binding and in full force and effect and have not been amended or modified, except as disclosed in writing to Mortgagee prior to the date of this Mortgage, (iv) Mortgagor is the sole owner of the lessor's interest in the Leases, (v) except for any Permitted Liens, Mortgagor has not executed any other assignment or pledge of any of the Leases or Rents or performed any other act or executed any other instrument which might prejudice Mortgagee's rights hereunder, (vi) to the best of Mortgagor's knowledge, no material default exists on the part of any lessee, or on the part of Mortgagor, as lessor, in the performance of the terms, covenants, provisions, conditions or agreements contained in the Leases, (vii) Mortgagor knows of no condition which, with the giving of notice or the passage of time or both, would constitute a material default under any of the Leases on the part of any lessee or Mortgagor, as lessor, except as disclosed in writing to Mortgagee prior to the date of this Mortgage, (viii) no rent has been paid by any lessee for more than one installment in advance, and (ix) the payment of none of the Rents to accrue under the Leases has been or will be waived, released, reduced, discounted or otherwise discharged or compromised by Mortgagor, except as disclosed in writing to Mortgagee prior to the date of this Mortgage. 3.2 Assignment. Mortgagor hereby irrevocably assigns to Mortgagee all of Mortgagor' s right, title and interest in, to and under: (a) all Leases and all other agreements of any kind relating to the use or occupancy of the Subject Property or any portion thereof, whether now existing or entered into after the date hereof; and (b) the Rents. The term "Leases" shall also include all guarantees of and security for the lessees' performance thereunder, and all amendments, extensions, renewals or modifications thereto which are permitted hereunder. This is a present and absolute assignment, not an assignment for security purposes only, and Mortgagee's right to the Leases and Rents is not contingent upon, and may be exercised without possession of, the Subject Property. 3.3 Grant of License. Mortgagee confers upon Mortgagor a license ("License") to collect and retain the Rents as they become due and payable, until the occurrence of a Event of Default (as hereinafter defined). Upon an Event of Default, the License shall be automatically revoked and Mortgagee may collect and apply the Rents pursuant to Section 6.3 of this Mortgage without notice and without taking possession of the Subject Property. Mortgagor hereby irrevocably authorizes and directs the lessees under the Leases to rely upon and comply with any notice or demand by Mortgagee for the payment to Mortgagee of any rental or other sums which may at any time become due under the Leases, or for the performance of any of the lessees' undertakings under the Leases, and the lessees shall have no right or duty to inquire as to whether any Event of Default has actually occurred or is then existing hereunder. Mortgagor hereby relieves the lessees from any liability to Mortgagor by reason of relying upon and complying with any such notice or demand by Mortgagee. 6 Execution Version 3.4 Effect of Assignment. The foregoing irrevocable assignment shall not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or liable for the control, care, management or repair of the Subject Property or for performing any of the terms, agreements, undertakings, obligations, representations, warranties, covenants and conditions of the Leases; or (c) responsible or liable for any waste committed on the Subject Property by the lessees under any of the Leases or any other parties; for any dangerous or defective condition of the Subject Property; or for any negligence in the management, upkeep, repair or control of the Subject Property resulting in loss or injury or death to any lessee, licensee, employee, invitee or other person. Mortgagee shall not directly or indirectly be liable to Mortgagor or any other person as a consequence of: (i) the exercise or failure to exercise any of the rights, remedies or powers granted to Mortgagee, or any of Mortgagee's respective employees, agents, contractors or subcontractors hereunder; or (ii) the failure or refusal of Mortgagee to perform or discharge any obligation, duty or liability of Mortgagor arising under the Leases. 3.5 Covenants. Mortgagor covenants and agrees at Mortgagor' s sole cost and expense to: (a) perform the obligations of lessor contained in the Leases and enforce by all available remedies performance by the lessees of the obligations of the lessees contained in the Leases; (b) give Mortgagee prompt written notice of any default which occurs with respect to any of the Leases, whether the default be that of the lessee or of the lessor; (c) exercise Mortgagor's best efforts to keep all portions of the Subject Property that are capable of being leased at all times at rentals not less than the fair market rental value, (d) deliver to Mortgagee fully executed, counterpart originals) of each and every Lease if requested to do so; and (e) execute and record such additional assignments of any Lease or specific subordinations (or subordination, attornment and non -disturbance agreements executed by the lessor and lessee) of any Lease to the Mortgage, in form and substance acceptable to Mortgagee, as Mortgagee may request. Mortgagor shall not, without Mortgagee's prior written consent, which shall not be unreasonably withheld, or as otherwise permitted by any provision of the Loan Agreement: (i) enter into any Leases after the date of this Mortgage; (ii) execute any other assignment relating to any of the Leases; (iii) discount any rent or other sums due under the Leases or collect the same in advance, other than to collect rent one (1) month in advance of the time when it becomes due; (iv) terminate, modify or amend any of the terms of the Leases or in any manner release or discharge the lessees from any obligations thereunder; (v) consent to any assignment or subletting by any lessee; or (vi) subordinate or agree to subordinate any of the Leases to any other mortgage or encumbrance. Any such attempted action in violation of the provisions of this Section shall be null and void. 3.6 Estoppel Certificates. Within thirty (30) days after written request by Mortgagee, Mortgagor shall deliver to Mortgagee and to any party designated by Mortgagee estoppel certificates executed by Mortgagor and by each of the lessees, in recordable form, certifying (if such be the case): (a) that the foregoing assignment and the Leases are in full force and effect; (b) the date of each lessee's most recent payment of rent; (c) that there are no defenses or offsets outstanding, or stating those claimed by Mortgagor or lessees under the foregoing assignment or the Leases, as the case may be; and (d) any other information reasonably requested by Mortgagee. ARTICLE IV. SECURITY AGREEMENT AND FIXTURE FILING 4.1 Securitv Interest. As security for the full, prompt, complete and final payment when due (whether at stated maturity, by acceleration or otherwise) and prompt performance of all the Secured Obligations, Mortgagor hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to the Mortgagee, for itself and for the benefit of the Lenders, a security interest in and to all of Mortgagor' s right, title and interest in, to and under each of the following, whether now owned or hereafter acquired by Mortgagor or in which Mortgagor now holds or hereafter acquires any interest, other than assets encumbered by Liens or other security interest allowed under the Loan Agreement and 7 Execution Version to the extent Lender can take a security interest under applicable laws or regulations (all of such interest of Mortgagor being hereinafter collectively called the "Collateral"): (a) all of the Subject Property which is personal property, including without limitation; (i) all "Equipment" owned by Grantor, as such terra is defined in Section 554.9102(1)(ag) of the UCC (or any other then applicable provision of the UCC), now or hereafter owned or acquired by Mortgagor or in which Mortgagor now holds or hereafter acquires any interest which, in any event, shall include, without limitation, all machinery, equipment, fixtures, gaming machines, casino chips, signage, change banks, change bins, slot machine bases, furniture, furnishings, trade fixtures, mainframe, personal and other computers, terminals and printers and related components and accessories, all copiers, telephonic, video, electronic data-processing, data storage equipment and other equipment of any nature whatsoever, and any and all additions, substitutions and replacements of any of the foregoing, wherever Iocated, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto; (ii) all development rights and credits and any and all permits, consents, approvals, licenses (except the Gaming License), authorizations and other rights granted by, given by or obtained from, any governmental entity with respect to the Subject Property; all water and water rights, wells and well rights, canals and canal rights, ditches and ditch rights, springs and spring rights, and reservoirs and reservoir rights appurtenant to or associated with the Subject Property, whether decreed or undecreed, tributary, non -tributary or not non -tributary, surface or underground or appropriated or unappropriated, and all shares of stock in water, ditch, lateral and canal companies, well permits and all other evidences of any of such rights; all deposits or other security now or hereafter made with or given to utility companies by Mortgagor with respect to the Subject Property; all advance payments of insurance premiums made by Mortgagor with respect to the Subject Property; all guaranties, warranties or indemnities related to the Subject Property; all plans, drawings, reports and specifications relating to the Subject Property; and (iii) to the extent not otherwise included, all proceeds of each of the foregoing and all accessions to, additions to, substitutions and replacements for, and rents, profits and products of each of the foregoing, together with all books, records and files relating to any of the foregoing. As to all of the above described personal property which is or which hereafter becomes a "fixture" under applicable law, this Mortgage constitutes a fixture filing under the Uniform Commercial Code as enacted in the State of Iowa, as amended from time to time (the "UCC"). All terms defined in the UCC shall have the respective meanings given to those terms in the UCC. 42 Fixture Filing. This Mortgage constitutes a financing statement filed as a fixture filing in the Official Records of the County Recorder of Dubuque County, Iowa with respect to any and all fixtures comprising Collateral. The "debtor" is Dubuque Racing Association, Ltd., a nonprofit corporation organized under Iowa law, the "secured party" is American Trust & Savings Bank, as Collateral Agent, the collateral is as described in Subsection 4.1 above and in the granting clause of this Mortgage, and the addresses of the debtor and secured party are the addresses stated in Section 7.10 of this Mortgage for Notices to such parties. The owner of record of the Real Property is City of Dubuque, Iowa, an Iowa municipal corporation. 4.3 Representations and' Warranties. Mortgagor hereby represents and warrants to the Mortgagee that: (a) Mortgagor is the sole legal and equitable owner of each item of the Collateral in which it purports to grant a security interest hereunder, having good and merchantable title or rights thereto free 8 Execution Version and clear of any and all Liens, except for the Permitted Liens (as defined in the Loan Agreement) or Liens allowed under the Loan Agreement. (b) No effective mortgage, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Collateral exists, except the Permitted Liens. The liens created in the Collateral hereunder are first priority perfected liens, subject only to Permitted Liens or Liens allowed under the Loan Agreement. (c) This Mortgage creates a legal and valid security interest on and in all of the Collateral in which Mortgagor now has rights and all filings necessary or desirable to perfect and protect such security interest have been duly made. Accordingly, the Mortgagee has a fully perfected first priority security interest in all of the Collateral in which Mortgagor now has rights and which can be perfected by filing, subject only to the Permitted Liens or Liens allowed under the Loan Agreement. Except as noted in the first sentence, to the extent such security interest can be perfected by filing, this Mortgage and such filings will create a legal and valid and fully perfected first priority security interest in the Collateral in which Mortgagor later acquires rights, when Mortgagor acquires those rights, subject only to the Permitted Liens or Liens allowed under the Loan Agreement. (d) Mortgagor's exact legal name is set forth on the first page of this Mortgage. Mortgagor was formed under the laws of the State of Iowa. Mortgagor's chief executive office, principal place of business, and the place where Mortgagor maintains records concerning the Collateral are the address provided for in Section 7A0. The tangible Collateral is presently located in Dubuque County, Iowa. Mortgagor shall not change such chief executive office or principal place of business or remove or cause to be removed, except in the ordinary course of Mortgagor's business, the Collateral or the records concerning the Collateral from those premises without prior written notice to the Mortgagee. All of Mortgagor's organizational documents or agreements delivered to Mortgagee are complete and accurate in every respect. (e) No authorization, approval or other action by, and no notice to or filing with, any governmental authority or any other Person is required for the exercise by the Mortgagee of the rights provided for in this Mortgage, except in connection with a disposition of the investment property as may be required by governmental rules affecting the offering and sale of securities generally and except for the Gaming Laws as such term is defined in the Loan Agreement. 4.4 Further Assurances. Mortgagor agrees: (a) to execute and deliver such documents as Mortgagee deems necessary to create, perfect and continue the security interests contemplated hereby to the extent the same may be perfected by filing; (b) to cooperate with Mortgagee in perfecting all security interests granted herein and in obtaining such agreements from third parties as Mortgagee deems necessary, proper or convenient in connection with the preservation, perfection or enforcement of any of its rights hereunder (including, without limitation, control agreements with respect to accounts not at American Trust & Savings Bank, or its affiliates); and (c) that Mortgagee is authorized to file financing statements in the name of Mortgagor to perfect Mortgagee's security interest in Collateral (including financing statements that include an "all assets," "all personal property," or similar collateral description). Mortgagor shall promptly notify Mortgagee in writing after the filing of any application for a patent, trademark or copyright or the issuance of any patent or registration of any trademark or copyright or otherwise obtaining any interest in any patent, trademark or copyright. If requested by the Mortgagee, Mortgagor shall execute such additional documentation to be filed in the United States Copyright Office or the United States Patent and Trademark Office as the Mortgagee may reasonably require from time to time. 9 Execution Version 4.5 Further Identification of Collateral; Continuous Perfection. Mortgagor shall, if so requested by the Mortgagee, furnish to the Mortgagee, as often as the Mortgagee shall reasonably request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Mortgagee may reasonably request, all in reasonable detail. Mortgagor shall not change its name, identity or corporate structure in any manner unless Mortgagor shall have given the Mortgagee at least thirty (30) days' prior written notice thereof and shall have taken all action (or made arrangements to take such action substantially simultaneously with such change if it is impossible to take such action in advance) necessary or reasonably requested by the Mortgagee to amend such financing statement or continuation statement so that it is not seriously misleading. Mortgagor shall not reincorporate or reorganize itself under the laws of any jurisdiction other than Iowa without the prior written consent of the Mortgagee. Mortgagor acknowledges that it is not authorized to file any amendment or termination statement with respect to any financing statement relating to any security interest granted hereunder without the prior written consent of the Mortgagee and agrees that it will not do so without the prior written consent of the Mortgagee, subject to Mortgagor's rights under Section 554.9509(2)(b) of the UCC, 4.6 Rights of Mortgagee. In addition to Mortgagee's rights as a "Secured Party" under the UCC, Mortgagee may, but shall not be obligated to, at any time without notice and at the expense of Mortgagor: (a) give notice to any person of Mortgagee's rights hereunder and enforce such rights at law or in equity; (b) insure, protect, defend and preserve the Collateral or any rights or interests of Mortgagee therein; (c) inspect the Collateral; and (d) endorse, collect and receive any right to payment of money owing to Mortgagor under or from the Collateral 4.7 Rights of Mortgagee on Default. Upon the occurrence of an Event of Default under this Mortgage, then in addition to all of Mortgagee's rights as a "Secured Party" under the UCC or otherwise at law, Mortgagee shall have the following rights: (a) Mortgagee may: (i) upon written notice, require Mortgagor to assemble any or all of the Collateral and make it available to Mortgagee at a place designated by Mortgagee; (ii) without prior notice, enter upon the Subject Property or other place where any of the Collateral may be located and take possession of, collect, sell, lease, license and dispose of any or all of the Collateral, and store the same at locations acceptable to Mortgagee at Mortgagor's expense; (iii) sell, assign and deliver at any place or in any lawful manner all or any part of the Collateral and bid and become purchaser at any such sales; (b) Mortgagee may, for the account of Mortgagor and at Mortgagor's expense: (i) operate, use, consume, sell, lease, license or dispose of the Collateral as Mortgagee deems appropriate for the purpose of performing any or all of the Secured Obligations; (ii) enter into any agreement, compromise, or settlement, including insurance claims, which Mortgagee may deem desirable or proper with respect to any of the Collateral; and (iii) endorse and deliver evidences of title for, and receive, enforce and collect by legal action or otherwise, all indebtedness and obligations now or hereafter owing to Mortgagor in connectionwith or on account of any or all of the Collateral; and (c) In disposing of Collateral hereunder, Mortgagee may disclaim all warranties of title, possession, quiet enjoyment and the like. Any proceeds of any disposition of any Collateral may be applied by Mortgagee to the payment of expenses incurred by Mortgagee in connection with the foregoing including attorneys' fees, and the balance of such proceeds may be applied by Mortgagee toward the payment of the Secured Obligations in such order of application as Mortgagee may from time to time elect. (d) Notwithstanding any other provision hereof, Mortgagee shall not be deemed to have accepted any property other than cash in satisfaction of any obligation of Mortgagor to Mortgagee unless Mortgagor shall make an express written election of said remedy under Section 554.9620 of the UCC, or 10 Execution Version other applicable law. Mortgagor agrees that Mortgagee shall have no obligation to process or prepare any Collateral for sale or other disposition. 4.8 Power of Attornev. Mortgagor hereby irrevocably appoints Mortgagee as Mortgagor's attorney-in-fact (such agency being coupled with an interest), and as such attorney-in-fact Mortgagee may, without the obligation to do so, in Mortgagee' s name, or in the name of Mortgagor, prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve any of Mortgagee's security interests and rights in or to any of the Collateral, and, upon an Event of Default hereunder, take any other action required of Mortgagor; provided, however, that Mortgagee as such attorney-in-fact shall be accountable only for such funds as are actually received by Mortgagee. 4.9 Possession and Use of Collateral. Except as otherwise provided in this Section or the other Related Documents, so long as no Event of Default exists under this Mortgage and no Default or Event of Default exists under any of the Related Documents, Mortgagor may possess, use, move, transfer or dispose of any of the °Collateral in the ordinary course of Mortgagor's business and in accordance with the Loan Agreement. ARTICLE V. RIGHTS AND DUTIES OF THE PARtihS 5.1 Title. Mortgagor represents and warrants that Mortgagor lawfully holds and possesses (a) a valid leasehold interest in the Real Property and (b) fee simple title to the Subject Property that is not the Real Property without limitation on the right to encumber, and that except as specifically provided herein this Mortgage is a first and prior lien on the Subject Property, subject only to the Permitted Liens (as defined in the Loan Agreement) or Liens allowed under the Loan Agreement. This Mortgage is not a lien on the Land unless title thereto is acquired by Mortgagor. Neither Mortgagor, nor any Affiliate of Mortgagor, has any interest in any real property, not encumbered hereby, which is utilized in any material manner in connection with the use or operation of the Subject Property or which is necessary and required for the use and operation of the Subject Property. 5.2 Taxes and Assessments. Mortgagor shall pay prior to delinquency all taxes, assessments, levies and charges imposed by any public or quasi -public authority or utility company which are or which may become a lien upon or cause a loss in value of the Subject Property or any interest therein. Mortgagor shall also pay prior to delinquency all taxes, assessments, levies and charges imposed by any public authority upon Mortgagee by reason of its interest in any Secured Obligation or in the Subject Property, or by reason of any payment made to Mortgagee pursuant to any Secured Obligation; provided, however, Mortgagor shall have no obligation to pay taxes which may be imposed from time to time upon Mortgagee and which are measured by and imposed upon Mortgagee's net income. 5.3 Tax and Insurance Imvounds. At Mortgagee's option and upon its demand, Mortgagor shall, until all Secured Obligations have been paid in full, pay to Mortgagee monthly, annually or as otherwise directed by Mortgagee an amount estimated by Mortgagee to be equal to: (a) all taxes, assessments and levies imposed by any public or quasi -public authority or utility company which are or may become a lien upon the Subject Property or Collateral and will become due for the tax year during which such payment is so directed; and (b) premiums for fire, other hazard and mortgage insurance required or requested pursuant to the Related Documents when same are next due. If Mortgagee determines that any amounts paid by Mortgagor are insufficient for the payment in full of such taxes, assessments, levies or insurance premiums, Mortgagee shall notify Mortgagor of the increased amounts required to pay all amounts due, whereupon Mortgagor shall pay to Mortgagee within thirty (30) days thereafter the additional amount as stated m Mortgagee's notice, All sums so paid shall not bear interest, except to the extent and in any minimum amount required by law; and Mortgagee shall, unless Mortgagor 11 Execution Version is otherwise in default hereunder or under any Secured Obligation, apply said funds to the payment of, or at the sole option of Mortgagee release said funds to Mortgagor for the application to and payment of, such sums, taxes, assessments, levies, charges, and insurance premiums. Upon an Event of Default by Mortgagor hereunder or under any Secured Obligation, Mortgagee may apply all or any part of said sums to any Secured Obligation or to cure such Event of Default, in which event Mortgagor shall be required to restore all amounts so applied, as well as to cure any other events or conditions of Event Default not cured by such application. Upon assignment of this Mortgage, Mortgagee shall have the right to assign all amounts collected and in its possession to its assignee whereupon Mortgagee shall be released from all liability with respect thereto. Within ninety-five (95) days following full repayment of the Secured Obligations (other than full repayment of the Secured Obligations as a consequence of a foreclosure or conveyance in lieu of foreclosure of the liens and security interests securing the Secured Obligations) or at such earlier time as Mortgagee may elect, the balance of all amounts collected and in Mortgagee's possession shall be paid to Mortgagor or the persons otherwise legally entitled thereto. 5.4 Performance of Secured Obligations. Mortgagor shall promptly pay and perform each Secured Obligation when due. 5.5 Liens, Encumbrances and Charges. Mortgagor shall immediately discharge any lien not approved by Mortgagee in writing that has or may attainpriority over this Mortgage. Mortgagor shall pay when due all obligations secured by or reducible to liens and encumbrances which shall now or hereafter encumber or appear to encumber all or any part of the Subject Property or any interest therein, whether senior or subordinate hereto. 5.6 Damages: Insurance and Condemnation Proceeds. The following (whether now existing or hereafter arising) are all absolutely and irrevocably assigned by Mortgagor to Mortgagee and, at the request of Mortgagee, shall be paid directly to Mortgagee in accordance with any applicable Section of the Loan Agreement: (1) all awards of damages and all other compensation payable directly or indirectly by reason of a condemnation or proposed condemnation for public or private use affecting all or any part of, or any interest in, the Subject Property or Collateral; (ii) all other claims and awards for damages to, or decrease in value of, all or any part of, or any interest in, the Subject Property or Collateral; (iii) all proceeds of any insurance policies payable by reason of loss sustained to all or any part of the Subject Property or Collateral; and (iv) all interest which may accrue on any of the foregoing. Subject to applicable law, and without regard to any requirement contained in Section 5.7(d) of this Mortgage, Mortgagee: (x) may at its discretion apply all or any of the proceeds it receives to its expenses in settling, prosecuting or defending any claim; (y) after payment of subpart (x) above, shall distribute such of the remaining proceeds referred to in the above subparts (i) through (iv) to Mortgagor for use in satisfying any obligation to rebuild, repair, replace, or modify any structures, improvements, fixtures, appurtenances, or other collateral on the Land and under the terms of any franchise agreement between Mortgagor and one or more franchisors, or under the terms of the Primary Leases; and (z) may apply the balance to the Secured Obligations in such order and amounts as Mortgagee in its sole discretion may choose, or Mortgagee may, in its sole discretion, release all or any part of the proceeds to Mortgagor upon any conditions Mortgagee may impose, subject to any restrictions contained in the Loan Agreement. Mortgagee may commence, appear in, defend or prosecute any assigned claim or action and may adjust, compromise, settle and collect all claims and awards assigned to Mortgagee; provided, however, in no event shall Mortgagee or any of its officers, directors, employees, agents, advisors or representatives be responsible for any failure to collect any claim or award, regardless of the cause of the failure, including, without limitation, any malfeasance or nonfeasance by Mortgagee or its employees or agents. 5,7 Maintenance and Preservation of the Subiect Property. Subject to the provisions of the Loan Agreement, Mortgagor covenants: (a) to insure the Subject Property and Collateral against such risks as Mortgagee may require and, at Mortgagee's request, to provide evidence of such insurance to 12 Execution Version Mortgagee, and to comply with the requirements of any insurance companies insuring the Subject Property and Collateral, all in accordance with Sections 4.22, 5.1(g) and 6.5 of the Loan Agreement (or any other applicable Section of the Loan Agreement); (b) to keep the Subject Property in good condition and repair; (c) not to remove or demolish the Subject Property or Collateral or any part thereof, not to alter, restore or add to the Subject Property or Collateral and not to initiate or acquiesce in any change in any zoning or other land classification which affects the Subject Property or Collateral without Mortgagee's prior written consent or as provided in the Loan Agreement; (d) to complete or restore promptly and in good and workmanlike manner the Subject Property and Collateral, or any part thereof which may be damaged or destroyed; (e) to comply with all laws, ordinances, regulations and standards, and all covenants, conditions, restrictions and equitable servitudes, whether public or private, of every kind and character which affect the Subject Property or Collateral and pertain to acts committed or conditions existing thereon, including, without limitation, any work, alteration, improvement or demolition mandated by such laws, covenants or requirements; (f) not to commit or permit waste of the Subject Property or Collateral; (g) not to permit any material structural altercation of the Subject Property without the consent of Mortgagee; and (h) to do all other acts which from the character or use of the Subject Property and Collateral may be reasonably necessary to maintain and preserve its value. 5.8 Defense and Notice of Losses. Claims and Actions. At Mortgagor's sole expense, Mortgagor shall protect, preserve and defend the Subject Property and title to and right of possession of the Subject Property and Collateral, the security hereof and the rights and powers of Mortgagee hereunder against all adverse claims. Mortgagor shall give Mortgagee prompt notice in writing of the assertion of any claim, of the filing of any action or proceeding, of the occurrence of any damage to the Subject Property and Collateral and of any condemnation offer or action. 5.9 Due on Sale or Encumbrance. Except as otherwise expressly permitted in the Loan Agreement, if the Subject Property or any interest therein, or any direct or indirect interest in Mortgagor, shall be sold, transferred, mortgaged, assigned, further encumbered or leased, whether directly or indirectly, whether voluntarily, involuntarily or by operation of law, without the prior written consent of Mortgagee, then Mortgagee, in its sole discretion, may declare all Secured Obligations immediately due and payable. 5.10 Releases. Extensions. Modifications and Additional Security,. Without notice to or the consent, approval or agreement of any persons or entities having any interest at any time in the Subject Property and Collateral or in any manner obligated under the Secured Obligations ("Interested Parties"), Mortgagee may, from time to time, release any person or entity from liability for the payment or performance of any Secured Obligation, take any action or make any agreement extending the maturity or otherwise altering the terms or increasing the amount of any Secured Obligation, or accept additional security or release all or a portion of the Subject Property and other security for the Secured Obligations. None of the foregoing actions shall release or reduce the personal liability of any of said Interested Parties, or release or impair the priority of the lien and security interests created by this Mortgage upon the Subject Property and the Collateral. 5.11 Subrogation. Mortgagee shall be subrogated to the lien of all encumbrances, whether released of record or not, paid in whole or in part by Mortgagee pursuant to this Mortgage or any other Related Document or by the proceeds of any loan secured by this Mortgage. 5.12 Right of Inspection. Mortgagee, its agents and employees, may enter the Subject Property at any reasonable time for the purpose of inspecting the Subject Property and ascertaining Mortgagor's compliance with the terms hereof. 13 Execution Version 5.13 Easements, If an easement or other incorporeal right (collectively, an "Easement") constitutes any portion of the Subject Property, Mortgagor shall not amend, change, terminate or modify such Easement, or any right thereto or interest therein, without the prior written consent of Mortgagee, which consent may be withheld in Mortgagee's reasonable discretion, and any such amendment, change, termination or modification without such prior written consent shall be deemed void and of no force or effect. Mortgagor agrees to perform all obligations and agreements with respect to said Easement and shall not take any action or omit to take any action, which would effect or permit the termination thereof. Upon receipt of notice, or otherwise becoming aware, of any default or purported default under any Easement, by any party thereto, Mortgagor shall promptly notify Mortgagee in writing of such default or purported default and shall deliver to Mortgagee copies of all notices, demands, complaints or other communications received or given by Mortgagor with respect to any such default or purported default. 5.14 Performance by Mortgagee. Should Mortgagor fail to make any payment or perform any act which it is obligated. to make or perform hereunder or under the Loan Agreement, then the Mortgagee, at the election of either of them, without giving notice to Mortgagor, or any successor in interest of Mortgagor, and without releasing Mortgagor from any obligation hereunder, may make such payment or perform such act and incur any liability, or expend whatever amounts, in its reasonable discretion, it may deem necessary therefor. All sums incurred or expended by the Mortgagee, under the terms of this Section, shall become due and payable by Mortgagor to the Mortgagee on demand and shall bear interest until paid at an annual percentage rate equal to the Default Rate expressed in the Loan Agreement. In no event shall such payment or performance of any such act by Mortgagee be construed as a waiver of the default occasioned by Mortgagor's failure to make such payment(s) or perform such act(s). 5.15 Right of Mortgagee to Annear. If there be commenced or pending any suit or action affecting the Subject Property or the Collateral, or any part thereof, or the title thereto, or if any adverse claim for or against the Subject Property or the Collateral, or any part thereof, be made or asserted, the Mortgagee (unless such suit, action or claim is being contested in good faith by Mortgagor and Mortgagor shall have established and maintained adequate reserves in accordance with generally accepted accounting principles for the full payment and satisfaction of such suit or action if determined adversely to Mortgagor), may appear or intervene in the suit or action and retain counsel therein and defend same, or otherwise take such action therein as they may be advised, and may settle or compromise same or the adverse claim; and in that behalf and for any of the purposes may pay and expend such sums of money as the Mortgagee may deem to be necessary and Mortgagor shall reimburse Mortgagee, for such sums expended, together with accrued interest thereon, at the Default Rate which is defined in the Loan Agreement. 5.16 Environmental Indemnity. (a) Mortgagor agrees to indemnify, protect, defend and save harmless Mortgagee, as well as its respective, officers, employees, agents, attorneys and shareholders (individually, an "Indemnified Party" and collectively, the "Indemnified Parties") from and against any and all losses, damages, expenses or liabilities, of any kind or nature from any investigations, suits, claims or demands, including reasonable counsel fees incurred in investigating or defending such claim, suffered by any of them and caused by, relating to, arising out of, resulting from or in any way connected with: (a) the presence in, on or under the Subject Property of any Hazardous Materials, as defined by reference in the Loan Agreement, or any releases or discharges of any Hazardous Materials on, under or from the Subject Property; (b) any violation of Environmental Law (as defined in the Loan Agreement); or (c) any activity carried on or undertaken on or off the Subject Property, whether prior to or during the term of the Loan Agreement, and whether by Mortgagor or any predecessor in title or any employees, agents, contractors or subcontractors of Mortgagor or any predecessor in title, or any third persons at any time occupying or present on the Subject Property, in connection with the handling, treatment, removal, storage, 14 Execution Version decontamination, clean-up, transport or disposal of any Hazardous Materials at any time located or present on or under the Subject Property. The foregoing indemnity shall further apply to any residual contamination on or under the Subject Property, or affecting any natural resources, and to any contamination of any property or natural resources, arising in connection with the generation, use, handling, storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any of such activities were or will be undertaken in accordance with applicable laws, regulations, codes and ordinances. It is provided, however, that Mortgagor shall not be obligated to indemnify, protect, defend or save harmless an Indemnified Party if, and to the extent that, any such loss, damage, expense or liability was caused by the gross negligence or intentional misconduct of such Indemnified Party. Mortgagor acknowledges that Mortgagee's appraisal of the Subject Property is such that Mortgagee would not extend the Loan but for the liability undertaken by Mortgagor for the obligations under this Section. Mortgagor and Mortgagee agree that any obligations of Mortgagor under this Section which may also be obligations of Mortgagor under the Environmental Certificate (which is referred to below) shall be deemed to arise solely under this Section and not under the Environmental Certificate. The obligations of Mortgagor under this Section are separate from and in addition to the obligations to pay the indebtedness evidenced by the Note, the obligations under the Loan Agreement and the other obligations secured by, or imposed under, this Mortgage. The liability of Mortgagor under this Section 5.16 shall not be limited to or measured by the amount of the indebtedness secured hereby or the value of the Subject Property. Mortgagor shall be fully liable for all obligations of Mortgagor under this Section. Mortgagor waives the right to assert any statute of limitations as a bar to the enforcement of this Section or to any action brought to enforce this Section 5.16. This Section 5.16 shall not affect, impair or waive any rights or remedies of Mortgagee or any obligations of Mortgagor with respect to Hazardous Materials created or imposed by Hazardous Materials Laws (including Mortgagee's rights of reimbursement or contribution under Hazardous Materials Laws). The remedies under this Section 5.16 are cumulative and in addition to all remedies provided by law. (b) In case any action shall be brought against any Indemnified Party based upon any of the above and in respect to which indemnity may be sought against Mortgagor, Mortgagee shall promptly notify Mortgagor in writing, and Mortgagor shall assume the defense thereof, including the employment of counsel selected by Mortgagor and reasonably satisfactory to the Indemnified Party, the payment of all costs and expenses and the right to negotiate and consent to settlement upon the consent of the Indemnified Party. Upon reasonable determination made by an Indemnified Party that such counsel would have a conflict representing such Indemnified Party and Mortgagor, the applicable Indemnified Party shall have the right to employ, at the expense of Mortgagor, separate counsel in any such action and to participate in the defense thereof. Mortgagor shall not be liable for any settlement of any such action effected without its consent, but if settled with Mortgagor's consent, or if there be a final judgment for the claimant in any such action, Mortgagor agrees to indemnify, defend and save harmless such Indemnified Parties from and against any loss or liability by reason of such settlement or judgment. 5.17 Environmental Certificate. Concurrently with the execution of the Loan Agreement, Mortgagor shall execute an instntment entitled "Environmental and ADA Indemnification Agreement" (which, together with all amendments, modifications, extensions, renewals or restatements thereof, is referred to herein as the "Environmental Certificate"). The obligations of Mortgagor under the Environmental Certificate are not secured by this Mortgage. 5.18 Princinal Place of Business. Mortgagor's principal place of business is in Dubuque County in the State of Iowa. Mortgagor does not do business under any trade naive except as previously disclosed in writing to Mortgagee. Mortgagor transacts business under the names Mystique, Dubuque Greyhound Park, Champagne, Bon Ap&it, The Player's Choice, and TPC Sports Bar. Mortgagor will immediately notify Mortgagee in writing of any change in its place of business or the adoption or change of any trade name or fictitious business name by it, and will upon request of Mortgagee, execute any 15 Execution Version additional financing statements or other certificates necessary to reflect any such adoption or change in trade name or fictitious business name. ARTICLE VI. DEFAULT PROVISIONS 6.1 Events of Default. The term "Event of Default" shall mean the existence of any Event of Default as defined in the Loan Agreement. 6.2 Rights and Remedies. At any time after an Event of Default, Mortgagee shall have all rights and remedies available at law or in equity, or as provided under any other Related Document, including, without limitation, the following: (a) All sums secured hereby shall, at the option of Mortgagee, and upon the giving of notice required by the Loan Agreement, if any, become immediately due and payable. With respect to any Event of Default under the Loan Agreement, all sums secured hereby shall automatically become due and payable without notice and without any action on the part of Mortgagee; (b) With or without notice, and without releasing Mortgagor from any Secured Obligation, and without becoming a mortgagee in possession, to cure any breach or Event of Default of Mortgagor and, in connection therewith, to enter upon the Subject Property and do such acts and things as Mortgagee deems necessary or desirable to protect the security hereof, including, without limitation: (i) to appear in and defend any action or proceeding purporting to affect the security of this Mortgage or the rights or powers of Mortgagee under this Mortgage; (ii) to pay, purchase, contest or compromise any encumbrance, charge, lien or claim of lien which, in the sole judgment of Mortgagee, is or may be senior in priority to this Mortgage, the judgment of Mortgagee being conclusive as between the parties hereto; (iii) to obtain insurance; (iv) to pay any premiums or charges with respect to insurance required to be carried under this Mortgage; or (v) to employ counsel, accountants, contractors and other appropriate persons; (c) To foreclose this Mortgage under Iowa law, either judicially or nonjudicially; (d) To exercise any remedies granted to mortgagees, assignees, or secured parties under Iowa law; (e) To apply to a court of competent jurisdiction for and obtain the ex parte appointment of a receiver of the Subject Property as a matter of strict right and without regard to the adequacy of the security for the repayment of the Secured Obligations, the existence of a declaration that the Secured Obligations are immediately due and payable, or the filing of a notice of default, and Mortgagor hereby consents to such ex parte appointment of a receiver and waives notice of any hearing or proceeding for such appointment; (f) To enter upon, possess, manage and operate the Subject Property or any part thereof, to take and possess all documents, books, records, papers and accounts of Mortgagor or the then owner of the Subject Property, to make, terminate, enforce or modify Leases of .the Subject Property upon such terms and conditions as Mortgagee deems proper, to make repairs, alterations and improvements to the Subject Property as necessary, in Mortgagee' s sole judgment, to protect or enhance the security hereof; (g) Upon sale of the Subject Property in connection with any judicial or non judicial foreclosure, Mortgagee may credit bid (as determined by Mortgagee in its sole and absolute discretion) all or any portion of the Secured Obligations. In determining such credit bid, Mortgagee may, but is not obligated to, take into account all or any of the following: (i) appraisals of the Subject Property as such 16 Execution Version appraisals may be discounted or adjusted by Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and costs incurred by Mortgagee with respect to the Subject Property prior to foreclosure; (iii) expenses and costs which Mortgagee anticipates will be incurred with respect to the Subject Property after foreclosure, but prior to resale, including, without limitation, costs of structural reports and other due diligence, costs to carry the Subject Property prior to resale, costs of resale (e.g. commissions, attorneys' fees, and taxes), costs of any hazardous materials clean=up and monitoring, costs of deferred maintenance, repair, refurbishment and retrofit, costs of defending or settling litigation affecting the Subject Property, and lost opportunity costs (if any), including the time value of money during any anticipated holding period by Mortgagee; (iv) declining trends in real property values generally and with respect to properties similar to the Subject Property; (v) anticipated discounts upon resale of the Subject Property as a distressed or foreclosed property; (vi) the fact of additional collateral (if any), for the Secured Obligations; and (vii) such other factors or matters that Mortgagee (in its sole and absolute discretion) deems appropriate. In regard to the above, Mortgagor acknowledges and agrees that: (w) Mortgagee is not required to use any or all of the foregoing factors to determine the amount of its credit bid; (x) this Section does not impose upon Mortgagee any additional obligations that are not imposed by law at the time the credit bid is made; (y) the amount of Mortgagee' s credit bid need not have any relation to any loan -to -value ratios specified in the Related Documents or previously discussed between Mortgagor and Mortgagee; and (z) Mortgagee's credit bid may be (at Mortgagee's sole and absolute discretion) higher or lower than any appraised value of the Subject Property. (h) In the event Mortgagee shall institute judicial proceedings to foreclose the lien hereof, and shall be appointed as a receiver or a Mortgagee in possession of the Subject Property, Mortgagee during such time as it shall be a receiver or mortgagee in possession of the Subject Property pursuant to an order or decree entered in such judicial proceedings, shall have, and Mortgagor hereby gives and grants to Mortgagee, the right, power and authority to make and enter into leases of the Subject Property or the portions thereof for such rents and for such periods of occupancy and upon such conditions and provisions as such receiver or Mortgagee in possession may deem desirable, and Mortgagor expressly acknowledges and agrees that the term of any such lease may extend beyond the date of any sale of the Subject Property pursuant to a decree rendered in such judicial proceedings; it being the intention of Mortgagor that while Mortgagee is a receiver or mortgagee in possession of the Subject Property pursuant to an order or decree entered in such judicial proceedings, Mortgagee shall be deemed to be and shall be the attorney-in-fact of Mortgagor for the purpose of making and entering into leases of parts or portions of the Subject Property for the rents and upon the terms, conditions and provisions deemed desirable to Mortgagee and with like effect as if such leases had been made by Mortgagor as the owner in fee simple of the Subject Property free and clear of any conditions or limitations established by this Mortgage. The power and authority hereby given and granted by Mortgagor to Mortgagee shall be deemed to be coupled with an interest and shall not be revocable by Mortgagor. (i} Mortgagor agrees that in the event of the foreclosure of this Mortgage and sale of the real estate by sheriff's sale in such foreclosure proceedings, the time of one year for redemption from said sale provided by the statutes of the State of Iowa shall be reduced to six months provided Mortgagee waives in such foreclosure proceedings any rights to a deficiency judgment against Mortgagor which may arise out of the foreclosure proceedings; all to be consistent with all provisions of Chapter 628 of the Code of Iowa. If the redemption period is so reduced, for the first three (3) months after sale such right of redemption shall be exclusive to the Mortgagor, and the time periods in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to four (4) months. It is further agreed that the period of redemption after a foreclosure of this Mortgage shall be reduced to sixty (60) days if all of the three following contingencies develop: (1) The real estate is less than ten (10) acres in size; (2) the Court finds affirmatively that the said real estate has been abandoned by the owners and those persons personally liable under this Mortgage at the time of such foreclosure; and (3) Mortgagee in 17 Execution Version such action files an election to waive any deficiency judgment against Mortgagors or their successors in interest in such action. If the redemption period is so reduced, Mortgagors or their successors in interest or the owner shall have the exclusive right to redeem for the first thirty (30) days after such sale, and the time provided for redemption by creditors as provided in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to forty (40) days. Entry of appearance by pleading or docket entry by or on behalf of Mortgagors shall_ be a presumption that the property is not abandoned. Any such redemption period shall be consistent with all of the provisions of Chapter 628 of the Iowa Code. This paragraph shall not be construed to limit or otherwise affect any other redemption provisions contained in Chapter 628 of the Iowa Code. Every right, power and remedy granted to Mortgagee in this Mortgage shall be cumulative and not exclusive, and in addition to all rights, powers and remedies granted at law or in equity or by statute, and each such right, power and remedy may be exercised from time to time and as often and in such order as may be deemed expedient by Mortgagee, and the exercise of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the time or thereafter, any other right, power or remedy. 6.3 Application of Foreclosure Sale Proceeds and Other Sums. All sums received by Mortgagee under Section 3.3 or Section 6.2 of this Mortgage, less all costs and expenses incurred by Mortgagee or any receiver under Section 3.3 or Section 6.2 of this Mortgage, including, without limitation, attorneys' fees, shall be distributed to the persons legally entitled thereto for application to the Secured Obligations each in accordance with the Loan Agreement; provided, however, Mortgagee shall have no liability for funds not actually received by Mortgagee. 6.4 No Cure or Waiver. Neither Mortgagee's nor any receiver's entry upon and taking possession of all or any part of the Subject Property, nor any collection of rents, issues, profits, insurance proceeds, condemnation proceeds or damages, other security or proceeds of other security, or other sums, nor the application of any collected sum to any Secured Obligation, nor the exercise or failure to exercise of any other right or remedy by Mortgagee or any receiver shall cure or waive any breach, Event of Default or notice of default under this Mortgage, or nullify the effect of any notice of default or sale (unless all Secured Obligations then due have been paid and performed and Mortgagor has cured all other defaults), or impair the status of the security, or prejudice Mortgagee in the exercise of any right or remedy, or be construed as an affirmation by Mortgagee of any tenancy, lease or option or a subordination of the lien of this Mortgage. 6.5 Payment of Costs, Expenses and Attorney's Fees. Mortgagor agrees to pay to Mortgagee immediately and without demand all costs and expenses incurred by Mortgagee pursuant to Section 6.2 of this Mortgage (including, without limitation, court costs and attorneys' fees, whether incurred in litigation or not) with interest from the date of expenditure until said sums have been paid at the rate of interest then applicable to the principal balance of the Note as specified therein. 6.6 Power to File Notices and Cure Defaults. Mortgagor hereby irrevocably appoints Mortgagee and its successors and assigns, as its attorney-in-fact, which agency is coupled with an interest, (a) to execute and record any notices of completion, cessation of labor, or any other notices that Mortgagee deems appropriate to protect Mortgagee's interest, (b) upon the issuance of a deed pursuant to the foreclosure of this Mortgage or the delivery of a deed in lieu of foreclosure, to execute all instruments of assignment or further assurance with respect to the Leases and Rents in favor of the grantee of any such deed, as may be necessary or desirable for such purpose, (c) to prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve Mortgagee's security interests and rights in or to any of the Collateral, and (d) upon the occurrence of an event, act or omission which, with notice or passage of time or both, would constitute an Event of Default, Mortgagee may perform any obligation of Mortgagor hereunder; provided, however, that: (i) Mortgagee as such attorney-in-fact shall only be accountable for such funds as are 18 Execution Version actually received by Mortgagee; and (ii) Mortgagee shall not be liable to Mortgagor or any other person or entity for any failure to act under this Section. 6.7 Reinstatement, This Mortgage shall remain in full force and effect and continue to be effective should any petition be filed by or against Mortgagor for liquidation or reorganization, should Mortgagor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Mortgagor's property and assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a "voidable preference," "fraudulent conveyance," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned. ARTICLE VII. MISCELLANEOUS PROVISIONS 7.1 Additional Provisions. The Related Documents contain or incorporate by reference the entire agreement of the parties with respect to matters contemplated herein and supersede all prior negotiations. The Related Documents grant further rights to Mortgagee and contain further agreements and affirmative and negative covenants by Mortgagor which apply to this Mortgage and to the Subject Property and Collateral and such further rights and agreements are incorporated herein by this reference. 7.2 Merger. No merger shall occur as a result of Mortgagee's acquiring any other estate in, or any other lien on, the Subject Property unless Mortgagee consents to a merger in writing. 7.3 Obligations of Mortgagor. Joint and Several. If more than one person has executed this Mortgage as "Mortgagor", the obligations of all such persons hereunder shall be joint and several. 7.4 Time is of the Essence. Mortgagor agrees that TIME IS OF THE ESSENCE hereof in connection with all obligations of Mortgagor herein or in the Note. 7.5 Waiver of Marshalling Rights. Mortgagor, for itself and for all parties claiming through or under Mortgagor, and for all parties who may acquire a lien on or interest in the Subject Property, hereby waives all rights to have the Subject Property or any other property, including, without limitation, the Collateral, which is now or later may be security for any Secured Obligation ("Other Property") marshalled upon any foreclosure of this Mortgage or on a foreclosure of any other lien or security interest against any security for any of the Secured Obligations. Mortgagee shall have the right to sell, and. any court in which foreclosure proceedings may be brought shall have the right to order a sale of, the Subject Property and any or all of the Collateral or Other Property as a whole or in separate parcels, in any order that Mortgagee may designate. 7.6 Rules of Construction; Definitions. When the identity of the parties or other circumstances make it appropriate the masculine gender includes the feminine or neuter, and the singular number includes the plural. The term "Subject Property" means all and any part of the Subject Property and "Collateral" means all and any part of the Collateral, and any interest in the Subject Property and Collateral, respectively. Notwithstanding anything set forth herein, Mortgagor agrees and acknowledges that each of Mortgagor and Mortgagee has participated in the negotiation and drafting of this document, and that this Mortgage shall not be interpreted or construed against or in favor of any party by virtue of the identity, interest or affiliation of its preparer. Capitalized terms not otherwise defined herein shall have the meaning given such terms in the Loan Agreement. 19 Execution Version 7.7 Successors in Interest. The terms, covenants, and conditions herein contained shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties hereto; provided, however, that this Section does not waive or modify the provisions of any applicable provision in the Related Documents regarding transfers of interest in the Subject Property or the Mortgagor or any of Mortgagor's Affiliates. 7.8 Execution in Counterparts. This Mortgage may be executed in any number of counterparts, each of which, when executed and delivered to Mortgagee, will be deemed to be an original and all of which, taken together, will be deemed to be one and the same instrument. 7.9 Iowa Law. This Mortgage shall be governed by and construed in accordance with the laws of the State of Iowa without regard to conflict of law principles. 7.10 Notices. All notices or other communications required or permitted to be given pursuant to the provisions of this Mortgage shall be in writing and shall be considered as properly given if delivered personally or sent by first class U.S. mail, postage prepaid, except that notice of a Default may be sent by certified mail, return receipt requested, or by Overnight Express Mail or by overnight commercial courier service, charges prepaid. Notices so sent shall be effective three (3) days after mailing, if mailed by first class mail, and otherwise upon receipt at the addresses set forth below; provided, however, that non -receipt of any communication as the result of any change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication. For purposes of notice, the addresses of the parties shall be: Mortgagor Mortgagee Dubuque Racing Association, Ltd. 1855 Greyhound Park Road Dubuque, IA 52001 Attn: Dustin Manternach, CFO Tel. No.: (563) 582-3647 Fax No.: American Trust & Savings Bank 895 Main Street Dubuque, IA 52001 Attn: Tori Richter, Senior Vice President Tel, No.: (563) 589-0827 Fax No. (563) 589-0860 Any party shall have the right to change its address for notice hereunder to any other location within the continental United States by the giving of thirty (30) days notice to the other party in the manner set forth hereinabove. Mortgagor shall forward to Mortgagee, without delay, any notices, letters or other communications delivered to the Subject Property or to Mortgagor naming Mortgagee, "Lender" or any similar designation as addressee, or which could reasonably be deemed to affect the construction of the Improvements or the ability of Mortgagor to perform its obligations to Mortgagee under the Note or the Loan Agreement. 7.11 Intentionally Left Blank. 7.12 After Acquired Property. The lien of this Mortgage will automatically attach, without further act, to all after acquired property of any nature whatsoever attached to, located in, on, or used in the operation of the Subject Property or any part thereof, owned by Mortgagor or in which Mortgagor has 20 Execution Version an interest, and Mortgagor covenants and warrants that it will have good and absolute title to all of the aforesaid after acquired property it acquires, free of any lien or encumbrance. 7.13 Assignment and Subordination of Management Agreement to Mortgage. Pursuant to this Mortgage or any additional document required by Mortgagee, any management agreement is hereby assigned to Mortgagee and the rights of the manager thereunder shall be subordinated to the lien of this Mortgage and such manager shall consent to such subordination and assignment upon request from Mortgagee. Mortgagor shall give Mortgagee written notice of any change of management or termination or modification of any management contract within 30 days, Failure to provide such written notice shall constitute an Event of Default hereunder. 7.14 No Agricultural Land. Mortgagor hereby represents and warrants that the Subject Property does not include any "agricultural land" as defined in Iowa Code Section 9H.1. 7.15 Waiver of Jury Trial. AFTER CONSULTATION WITH COUNSEL, MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT MORTGAGOR MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED UPON THIS MORTGAGE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH ANY OF THE OTHER RELATED DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF MORTGAGOR OR MORTGAGEE AND ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE MAKING THE LOAN EVIDENCED BY THE NOTE WHICH IS SECURED BY THIS MORTGAGE. ARTICLE VIII, LEASEHOLD MORTGAGE PROVISIONS 8.1 Representations: Warranties: Covenants. Mortgagor hereby represents, warrants and covenants that: (a) (i) Each Primary Lease, as amended, is in full force and effect except as set forth on Exhibit B attached hereto, (ii) all rent and other charges therein have been paid to the extent they are payable to the date hereof, (iii) Mortgagor enjoys the quiet and peaceful possession of the property demised thereby, (iv) to the best of its knowledge, Mortgagor is not in default under any of the terms thereof and there are no circumstances which, with the passage of time or the giving of notice or both, would constitute an event of default thereunder, and (v) to the best of Mortgagor's knowledge, the lessor thereunder is not in default under any of the terms or provisions thereof on the part of the lessor to be observed or performed; (b) Mortgagor shall promptly pay, when due and payable, the rent and other charges payable pursuant to each Primary Lease, and will timely perform and observe all of the other terms, covenants and conditions required to be performed and observed by Mortgagor as lessee under such Primary Lease; (c) Mortgagor shall notify Mortgagee in writing of any material default by Mortgagor in the performance or observance of any material terms, covenants or conditions on the part of Mortgagor to be performed or observed under the Primary Lease within three (3) Business Days after Mortgagor receives written notice or has actual knowledge of such default, except in each case where the failure to so notify Mortgagee could not reasonably be expected to result in a Material Adverse Effect; (d) Mortgagor shall, immediately upon receipt thereof, deliver a copy of each material written notice given to Mortgagor by the lessor pursuant to the Primary Leases and promptly notify Mortgagee in writing of any material default by the lessor in the performance or observance of any of the 21 Execution Version terms, covenants or conditions on the part of the lessor to be performed or observed thereunder promptly after Mortgagor knows of such default; (e) Unless required under the terms of any Primary Lease, Mortgagor shall not, without the prior written consent of Mortgagee (which may be granted or withheld in Mortgagee's reasonable discretion) terminate, materially modify or surrender such Primary Lease if such action could reasonably be expected to result in a Material Adverse Effect, and any such attempted termination, material modification or surrender without Mortgagee's prior written consent shall be void; (f) Intentionally left blank; (g) Mortgagor shall, within twenty (20) days after written request from Mortgagee, use its commercially reasonable efforts to obtain from the lessor and deliver to Mortgagee a certificate setting forth the name of the tenant thereunder and stating that each Primary Lease is in full force and effect, is unmodified or, if any Primary Lease has been modified, the date of each modification (together with copies of each such modification), that no notice of termination thereon has been served on Mortgagor, stating that to such lessor's knowledge, no default or event which with notice or lapse of time (or both) would become a default is existing under such Primary Lease, stating the date to which rent has been paid, and specifying the nature of any defaults, if any, and containing such other statements and representations as may be reasonably requested by Mortgagee; (h) In the event that any Primary Lease is rejected or disaffirmed by the lessor thereunder (or by any receiver, trustee, custodian or other party who succeeds to the rights of such lessor) pursuant to any bankruptcy, insolvency, reorganization, moratorium or similar law, Mortgagor covenants that it will not elect to treat such Primary Lease as terminated under Title 11, U.S.C., Section 365(h) or any similar or successor law or right and hereby assigns to Mortgagee the sole and exclusive right to make or refrain from making any such election, and Mortgagor agrees that any such selection, if made by Mortgagor, shall be void and of no force or effect; (i) If the lessor under any Primary Lease (or any receiver, trustee, custodian or other party who succeeds to the rights of such lessor) rejects or disaffirms such Primary Lease pursuant to any bankruptcy, insolvency, reorganization, moratorium or similar law and Mortgagee elects to have Mortgagor remain in possession under any legal right Mortgagor may have to occupy the premises leased pursuant to such Primary Lease, (i) Mortgagor shall remain in possession and shall perform all acts necessary for Mortgagor to retain its legal rights and to remain in such possession for the unexpired term of such Primary Lease (including all renewals thereof), whether such acts are required under the then existing terms and provisions of such Primary Lease or otherwise, and (ii) all of the terms and provisions of this Mortgage and the Lien created hereby shall remain in full force and effect and shall be extended automatically to such possession, occupancy and interest of Mortgagor; U) Mortgagor shall, at Mortgagor's sole cost and expense, appear in and defend any action or proceeding arising under or in any manner connected with any Primary Lease or the obligations, duties or liabilities of the lessor or Mortgagor thereunder; Mortgagee may, but shall not be obligated to, take any action Mortgagee deems necessary or desirable to cure any default by Mortgagor under any Primary Lease. Mortgagor agrees to indemnify, defend and hold the Mortgagee harmless from and against any and all liability, loss or damage which the Mortgagee may incur under any Primary Lease by reason of the mortgage of Mortgagor's interest in such Primary Lease and from any and all claims and demands whatsoever which may be asserted against Mortgagee by reason of any alleged undertaking or obligation on Mortgagee's part to perform or discharge any of the 22 Execution Version terms, covenants or agreements contained in such Primary Lease, except to the extent that any such claims and demands arise out of the gross negligence or willful misconduct of the Mortgagee. 82. No Merger. So long as any of the Indebtedness or the Obligations remain unpaid or unperformed, the fee title to and the leasehold estate in the premises subject to any Primary Lease shall not merge but shall always be kept separate and distinct notwithstanding the union of such estates in the lessor or Mortgagor, or in a third party, by purchase or otherwise. If Mortgagor acquires the fee title or any other estate, title or interest in the property demised by any Primary Lease, or any part thereof, the Lien of this Mortgage shall attach to, cover and be a Lien upon such acquired estate, title or interest and the same shall thereupon be and become a part of the Subject Property with the same force and effect as if specifically encumbered herein. Mortgagor agrees to execute all instruments and documents that Mortgagee may reasonably require to ratify, confirm and further evidence the Lien of this Mortgage on the acquired estate, title or interest. Furthermore, Mortgagor hereby appoints Mortgagee as its true and lawful attomey,in-fact to execute and deliver, following and during the continuance of art Event of Default, all such instruments and documents in the name and on behalf of Mortgagor. This power, being coupled with an interest, shall be irrevocable as long as any portion of the Indebtedness remains unpaid. 8.3. Mortgagee as Lessee. If any Primary Lease is terminated prior to the natural expiration of its term due to default by Mortgagor or any tenant thereunder, and if Mortgagee or its designee acquires from the lessor a new lease of the premises, Mortgagor shall have no right, title or interest in or to such new lease or the leasehold estate created thereby, or renewal privileges therein contained. 8.4. No Assignment. If this Mortgage constitutes a prohibited collateral assignment of any Primary Lease under the terms of such Primary Lease, then the assignment of such Primary Lease in this Mortgage will be deemed conditioned upon the receipt of any consent expressly required under such Primary Lease and Mortgagee and Lenders have no liability or obligation thereunder by reason of its acceptance of this Mortgage. Mortgagee and the Lenders will be liable for the obligations of the tenant arising out of such Primary Lease for only that period of time for which Mortgagee or the Lenders are in possession of the Premises or have acquired, by foreclosure or otherwise, and are holding all of Mortgagor's right, title and interest therein. IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. MORTGAGOR ACKNOWLEDGES THE RECEIPT OF A COPY OF THIS DOCUMENT AT THE TIME IT WAS SIGNED. [Remainder of Page Intentionally Left Blank] 23 IN WITNESS WHEREOF, Mortgagor has executed this Mortgage, effective as of the day and year set forth above. STATE OF IOWA ) ss: COUNTY OF DUBUQUE DUBUQUE RACING ASSOCIATION, LTD., an Iowa nonprofit corporation By: Name: Dustin Manternach Title: CFO This instrument or record was acknowledged before me on June 13, 2014 by Dustin Manteernach as CFO of Dubuque Racing Association, Ltd. JASON I.. CONIISKY Corruntssien Number 750630 My Commission January 1 i7 es Neary Public [Signature page to Leasehold Mortgage, Fixture Filing and Security Agreement with Absolute Assignment of Leases and Rents] 3 Execution Version EXHIBIT A (Description of Land) All that certain real property situated in the County of Dubuque, State of Iowa, described as follows: A parcel of land lying within the Southeast Quarter of Fractional Section 18, Township 89 North, Range 3 East of the 5`s Principal Meridian, Dubuque County, Iowa, more particularly described as follows: Commencing at the Southeast corner of said Fractional Section 18 (the South line of the Southeast Quarter of Fractional Section 18 bears North 88 degrees 37 minutes 17 seconds East for the purposes of this description); Thence North 51 degrees 42 minutes 10 seconds West, 1642.95 feet, to the point of beginning; Thence North 64 degrees 38 minutes 50 seconds West, 98.25 feet; Thence North 25 degrees 21 minutes 10 seconds East, 85.67 feet; Thence South 64 degrees 38 minutes 50 seconds East, 27.46 feet; Thence North 25 degrees 21 minutes 10 seconds East, 51.08 feet; Thence North 64 degrees 38 minutes 50 seconds West, 22.29 feet; Thence Northeasterly, 45.81 feet along the arc of a circular curve concave to the Southeast, having a radius of 25,00 feet, a central angle of 104 degrees 58 minutes 10 seconds, and whose chord bears North 25 degrees 21 minutes 10 seconds East, 39.67 feet; Thence South 64 degrees 38 minutes 50 seconds East, 22.29 feet; Thence North 25 degrees 21 minutes 10 seconds East, 92.33 feet; Thence South 64 degrees 38 minutes 50 seconds East, 70.00 feet; Thence South 25 degrees 21 minutes 10 seconds West, 44.67 feet; Thence South 64 degrees 38 minutes 50 seconds East, 213.83 feet; Thence South 25 degrees 21 minutes 10 seconds West, 102.00 feet; Thence South 64 degrees 38 minutes 50 seconds East, 118.56 feet; Thence South 25 degrees 21 minutes 10 seconds West, 17.42 feet; Thence North 64 degrees 38 minutes 50 seconds West, 182.81 feet; Thence South 25 degrees 21 minutes 10 seconds West, 59.75 feet; Thence North 64 degrees 38 minutes 50 seconds West, 38.17 feet; Execution Version Thence South 25 degrees 21 minutes 10 seconds West, 41.33 feet; Thence North 64 degrees 38 minutes 50 seconds West, 24.17 feet; Thence North 25 degrees 21 minutes 10 seconds East, 4133 feet; Thence North 64 degrees 38 minutes 50 seconds West, 38.17 feet; Thence North 25 degrees 21 minutes 10 seconds East, 52.35 feet; Thence North 64 degrees 38 minutes 50 seconds West, 48.29 feet; Thence South 25 degrees 21 minutes 10 seconds West, 97.26 feet, to the point of beginning. Containing 1.317 acres (57,364 square feet), more or less, and subject to easements, reservations, restrictions, and rights.of way of record and not of record. Execution Version EXHIBIT B (Primary Leases) Lease dated July 6, 2004 by and between The City of Dubuque, Iowa, an Iowa Municipal Corporation (the "City") and Dubuque Casino Hotel, L.L.C. ("Dubuque Casino"), as amended by that certain Amendment 1 to Lease Agreement dated March 21, 2005, as further amended by Amendment 2 to Lease Agreement dated April 4, 2005, as further amended by Amendment 3 to Lease Agreement dated September 6, 2005, as assigned to Dubuque Bank & Trust Company pursuant to that certain Assignment of Lease Agreement among Dubuque Casino Hotel, City, and Dubuque Bank &Trust Company dated March 23, 2005. Parking Use Agreement date July 6, 2004, by and between Dubuque Racing Association, Ltd ("DRA"), Dubuque Casino Hotel, and the City, as amended pursuant to that First Amendment to Parking Use Agreement dated May 2, 2005, as assigned to Dubuque Bank & Trust Company pursuant to that certain Assignment of Parking Use Agreement, as amended among DRA, Dubuque Casino Hotel, City, and Dubuque Bank & Trust Company date March 23, 2005 Number: 201400006270 .Recorded: 6/13/2014 at 3:25:08.457 PM Fee Amount: $237.00 Revenue Tax: Kathy Flynn Thurlow RECORDER Dubuque County, Iowa ASSIGNMENT OF LEASE AGREEMENT Recorder's Cover Sheet Preparer Information: Brian J. Kane, 2100 Asbury Road, Ste. 200, Dubuque, IA 52001-3091 (563) 582-7980 Taxpayer Information: Dubuque Racing Association, Ltd. 1855 Greyhound Park Dubuque, IA 52001 Return Address: Greg A. Rehmke, O'Connor & Thomas, P.C., 700 Locust St., Ste. 200, Dubuque, IA 52001 (563) 557-8400 Grantors: Dubuque Casino Hotel, L.L.C. Grantees: Dubuque Racing Association, Ltd. Legal Description: N/A Document or instrument number if applicable: 2005-12433 2005-13953 2005-15840 11 I) -MPL$1FSILT) Recorded Electronically County bfehA,a,i.o Date t3me.4.9 ..4.i=. n ' Sim,olifile.cam 800.480.56574'n ASSIGNMENT OF LEASE AGREEMENT Recorder's Cover Sheet Preparer Information: Man J. Kane, 2100 Asbury Road, Ste, 200, Dubuque, IA 52001-3091 (563) 582-7980 Taxpayer Information: Dubuque Racing Association, Ltd. 1855 Greyhound Park Dubuque, IA 52001 Return Address: Greg A. Rehmke, O'Connor & Thomas, P.C., 700 Locust St., Ste. 200, Dubuque, IA 52001 (563) 557-8400 Grantors: Dubuque Casino Hotel, L.L.C. Grantees: Dubuque Racing Association, Ltd. Legal Description: N/A Document or instrument number if applicable: 2005-12433 2005-13953 2005-15840 NGS- lA. -V 6 0ti -MPL$,(FSJcr) } ASSIGNMENT OF LEASE AGREEMENT This Assignment of Lease Agreement ("Assignment") is entered into effective as of the 2 rid day of June, 2014, by and between DUBUQUE' CASINO HOTEL, L.L.C., an_Iowa limited liability company ("Assignor") and DUBUQUE RACING ASSOCIATION, LTD., an lowa non-profit corporation ("Assignee"), RECITALS A. Assignor is the Lessee under that certain Lease Agreement entered into by and between the City of Dubuque, an Iowa municipal corporation, as Lessor, and Assignor, as Tenant on the 6th day of June, 2004, and subsequently amended by an Amendment No, 1 to Lease Agreement dated March 21, 2005, a Second Amendment to Lease Agreement dated April 4, 2005, and an Amendment No. 3 to Lease Agreement dated September 6, 2005 (the "Lease"), a copy of which is attached hereto as Exhibit A. B, Assignor sold its interest in and to the Lease to Assignee pursuant to Section 1.1(0 of that certain Asset Purchase Agreement dated May 1, 2014 by and between Assignor (as Seller) and Assignee (as l3uyer) (the "Asset Purchase Agreement"). C. Assignor desires to assign its rights and obligations under the Lease to Assignee and Assignee desires to accept such assignment. THEREFORE, in consideration of the mutual terms, covenants and conditions contained herein, the parties agree as follows: 1. Assienment. Pursuant to Section 15 of the Lease and Section 1.1(e) of the Asset Purchase Agreement, Assignor hereby assigns all of its right, title and interest under the Lease to Assignee and Assignee accepts all such right, title and interest and further accepts all of the obligations of Lessee under such Lease arising on or after the effective date of this Assignment. Assignor is hereby released from all obligations under the Lease arising on or after the effective date of this Assignment. 2. Consent to Assignment. The City of Dubuque, the Lessor pursuant to the Lease, hereby consents to the assignment of the Lease by Assignor to Assignee pursuant to Section 15 of the Lease and agrees that it has received timely notice of such assignment. Assignor shall be released from all obligations arising under the Lease on or after the effective date of this Assignment. 3. Miscellaneous. This Assignment is binding upon the parties hereto and their successors and assigns. This Assignment shall be construed under the laws of the State of Iowa. 052714 Assignor: Dubuque Casino otel, LLC By: Bradley A. Bi errnan Its Authorized Manager Assignee: Dubuque Racin ssociation, Ltd, By: )1irGI/A JesiAyiies, Its President and CEO Consenting Pursuant to Section 2: City of Dubuqug, IA, Landlord By: Ro Its By: STATE OF IOWA, COUNTY OF DUBUQUE Kevin S. irnstah1 • Its CityClerk This instrument was acknowledged before me on June 12, 2014, by Bradley A. Bierman, as Manager of Dubuque Casino Hotel, L.L.C. (Stamp or Seal) S��" I BRIAN J. KANE * * Commission Number 125603 ow, My Comm. Exp. JAN. 12, 2016 Not. Publi' i an?for said State Page 2 of STATE OF IOWA, COUNTY OF DUBUQUE Pres) instrument was acknowledged before me on June 12, 2014, by Je Sik$ , /1 Vi ¢t $ as !'fes) of CEO of Dubuque Racing Association, Ltd. (Stamp or Seal GREG A. REHMKE COMMISSION NO, 752407 MY COMM ION EXPIRES /2-/ 2-0 / 7 Notary Pub STATE OF IOWA, COUNTY OF DUBUQUE l�. in and for said State This instrument was acknowledged before me on June 12, 2014, by Roy D. Buol, as Mayor of the City of Dubuque, Iowa. (Stamp or Seal) v TRACEY L. STECKLEiNi Comrmssion Number 716018 My Comm. Exp. }1-11 STA LE OF IOWA, COUNTY OF DUBUQUE Notary Publ'o in and for said State This instrument was acknowledged before me on June 12, 2014, by Kevin S. Firnstahl, as City Clerk of the City of Dubuque, Iowa. (Stamp or Seal) " •, 1TRACEY L. STECKLEiN Commission Number 7160:5 +or*'f My Comm. Exp, � 11 Notary Publi Page 3 of 4 and for said State See attached. Exhibit A Lease to be Assigned Page 4 of 4 Prepared by: Brian I. Katie, Kane, Norby & Reddick, P.C., 2100 Asbury Rci., Ste. 2 Dubuque, IA 5200I 563-582-7980 LEASE AGREEMENT IBIS LEASE AGREEMENT (the "Lease") is made and entered into as of the ' day of dlufg, 2004, by and between the CITY OF DUBUQUE, an Iowa municipal corporation, ("Lessor") and DUBUQUE CASINO HOTEL, L.L.C., an Iowa limited liability company ("Lessee"). RECITALS A. Lessor is the owner of that certain real estate described on Exhibit "A" attached .hereto and by this reference made apart hereof, a portion of which Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor (the "Demised Premises"); and; B. Lessor desires to lease the Demised Premises for the purpose ofLessee constr=ucting a certain hotel, restaurant and other improvements thereon ( (hereafter the "Project"); and,' - C.' For the purpose of authorizing the City's Lease of certain property to DCH for purposes of the Project, which property is a currently leased to DIU under the Prior Lease, DRA joins in this agreement with respect to paragraphs 25, 26, 27, and 28 only; and concurrently with such agreement, DRA enters into a Parking Use Agreement with the City and DCH for the purpose of lessening the burdens of the City's duties under the Lease With respect to provision of parking areas 'and parking area maintenance for the Project. D. Lessor and Lessee desire to enter into this Lease in connection. with the Project. Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree upon the following 'mutual terms and conditions: ARTICLE 1 DEMISE AND TERM L1 Demise and Term. In consideration of the.rents hereinafter reserved and the terms, covenants, conditions and agreements set forth in this Lease, Lessor hereby leases to Lessee the real property described on Exhibit A attached to and made a part of this Lease, together with any and all easements and appurtenances thereto and subject to any easements and restrictions of record (the "Demised Premises"), to have and to hold for an initial term commencing as of the date of this Lease - Page 1 of 27 x f. 1 and ending on the 40 -year anniversary of the issuance of the Certificate of Completion (defined below) for the completion of the Phase I Improvements (the "Initial Term.") but into event later than July 1, 2045, subject to all ofthe terms, covenants, conditions and agreements contained herein. Upon the issuance of a Certificate of Completion for the Phase 11 Improvements (as defined in Section 3.2(B) hereof) within ten (10) years of the date hereof the Initial Term shall be extended for an additional ten (10) years in order that the Lease term shall be fitly (50) years from the issuance ofthe Certificate of Completion (defined below) for Phase I Improvements but in no event later than Judy 1., 2055. 1.2 Phase I Improvements. Lessee shall construct the Phase I Improvements in the time and manner required pursuant to Exhibit "B" attached hereto and by this reference made a part hereof (the "Project"). 1.3 Parking Rights. For the benefit of the Demised Premises, and subject to the approval of DRA and American Trust and Savings Bank, Lessee shall have the right to use such public . parking area(s) during the .Initial Term (and any extension thereof) pursuant to the Parking Use .: Agreement in the form attached hereto as Exhibit "C" and by this reference made, a part hereof. ARTICLE 2 RENT Lessee shall pay Lessor (in addition to taxes, assessments, and other charges required to be ° .. paid under this Lease by Lessee) rent for the Demised Premises as follows: 2.1 B ase Rent. Until August 31, 2005, Lessee shall pay B ase Rent in the amount of $1.00 per year. For each year thereafter for the first ten years of this Lease following receipt of such' Certificate of Completion, Lessee shall pay Lessor rent as follows: ($45,000,00 per acre per year x acres constituting the Demised Premises. Upon issuance of a Certificate of Completion for the Phase II Improvements, Lessee shall pay Lessor rent as determined in accordance with the appraisal procedure set forth below All such Base Rent shall be payable in twelve (12) equal monthly installments on the first day of each month beginning on the lst day of July September, 2005. Notwithstanding the foregoing, in the event that Lessee completes the Phase U Improvements in accordance with Section 3.2(B) hereof, the Base Rent shall indrease as provided above effective on the date a Certificate of Completion (defined below) is issued to Lessee and the new Base Rent shall be paid beginning on the 1st day of the first month following the issuance of the Certificate of Completion.• For rental payable after the time the first ten (10) years of rent payment expires, Lessor and Lessee shall have prepared ninety (90) days prior to such time and ninety (90) days prior to every sixty (60) Months anriversarythereafter, an appraisal ofthe DemisedPremises (exclusive of Please . I Improvements and Phase II Improvements) by a certified appraiser experienced in appraising similar types of properties in the Dubuque area mutually selected by Lessor and Lessee. If either party is dissatisfied with the appraisal or the parties cannot agree on an appraiser, each shall, not Page 2 of 27 • • later than forty-five (45) days prior to the end of the aforesaid ten (10) years and each sixty (60) months anniversary thereafter, appoint its own appraiser, each of which shall be experienced in appraising similar types ofproperties in the Dubuque area and the two appointed by the parties shall select a third experienced appraiser. The average appraised values ofthe three appraisers shall be the appraised value of the Demised Property for the purposes of this Article. The annual rent shall be ten percent (10%) of the appraised value of the Demised Premises for the succeeding sixty (60) month period. The Demised Premises shall be appraised as vacant, unimproved ground only without regard to any buildings or other improvements on the Demised Premises. The annual rent as determined shall be paid in twelve (12) equal monthly installments. 2.2 Utility Upgrade. Lessee acknowledges that Lessor intended to upgrade a lift station that serves the Demised Premises and that construction of the Improvements will cause Lessor to incur additional costs for the lift station upgrade to serve the Improvements on the Demised Premises, which additional costs the parties estimate to be $10,000 for increased pump size and $15,000 for electrical installation. Lessee agrees to pay to Lessor such additional costs but not to exceed the total of $25,000. ARTICLE 3 IIILE TO IMPROVEMENTS AND TRADE FIXTURES 3.1 Trade Fixtures. For the purposes of this Lease, "Trade Fixtures" shall mean all of Lessee's personal property located on the Demised Premises used in Lessee's business. Title to Lessee's trade fixtures (the "Trade Fixtures") is and shall be the sole and exclusive property of Lessee during the term of this Lease. Lessor acknowledges and understands that it shall have no right, title or interest in or to Lessee's Trade Fixtures during the term of this Lease. Lessor acknowledges and agrees that Lessee shall have the right to encumber, sell, or hypothecate Lessee's Trade Fixtures, to remove them from the Demised Premises, or to otherwise deal with all or any portion of such Lessee's Trade Fixtures; in Lessee's sole discretion. Upon ten (10) days' prior written notice to Lessor, Lessor shall execute anddeliver to Lessee a certificate in recordable form prepared by Lessee stating that Lessor has no interest or right in or to Lessee's Trade Fixtures, as well as any other or further document which Lessee may reasonably request from Lessor. • 3.2 .Improvements. (A) On delivery ofpossession ofthe Demised Premises to Lessee, Lessee shall construct on the Demised Premises the Phase I Improvements pursuant to Exhibit "B" necessary to complete the Project (the "Improvements"). Lessor agrees to apply as expeditiously as possible for all permits, variances and approvals reasonably required by law to develop and construct the Improvements anthe Demised Premises. The Phase I Improvements shall be substantially complete by no later thaa July September 1, 2005. All Improvements hereafter constructed on the Demised Premises and all Trade Fixtures located on the Demised Premises are and shall be the property of Lessee during the term of this Lease and the extension referred to in Par. 1.1 but in no event Wei- than atexthan July 1, 2055 and no longer. Subject to the payment obligations of Lessee herein, upon any termination of this Lease, by reason of any cause whatsoever, if the Improvements or any part Page 3 of 27 thereof shall then be on the Demised Premises, all of Lessee's right, title, and interest therein shall cease and terminate, and title to the Improvements shall vest in Lessor, and the Improvements or the part thereof then within the Demised Premises and all Trade Fixtures (in the rooms and lobby) shall be surrendered by Lessee to Lessor (excluding furniture, fixtures, and equipment in the offices). At the time of surrender, such Trade Fixtures shall be of the same quantity, type and quality as were located in the rooms and lobby for the operation of the Improvements during the term ofthis Lease. No further deed or other instrument shall be necessary to confirm the vesting in Lessor oftitle to the Improvements or Trade Fixtures. However, upon any termination of this Lease, Lessee, upon request of Lessor, shall execute, acknowledge and deliver to Lessor a quitclaim deed confirming that all of Lessee's right, title and interest in or to the Improvements or Trade Fixtures has expired, and that title to the Improvements and Trade Fixtures has vested in Lessor. See Article 21 below. (B) Phase 11 Improvements. Attached hereto is Exhibit "D" and by this reference made a part hereof is a schedule of the Phase 11 Improvements for all purposes herein. Lessee, at its • option, may elect to construct the additional rooms contemplated by Exhibit "D" provided Lessee provides Lessor thirty (3 0) days written notice thereof prior to commencing any such construction. • For all purposes hereunder, a Certificate of Completion shall meansuch certificate (or any. certification or a similar written statement) by the City of Dubuque, Iowa, providing that any Improvements hereunder are completed pursuant to applicable City ordinances. • ARTICLE 4 ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST 4.1 Lessee's Right to Encumber Leasehold Interest. Lessee may encumber by mortgage, deed of trust or other proper instrument, its leasehold interest and estate in the Demised Premises; together with all Improvements on the Demised Premises, as security for any indebtedness of Lessee,.provided that no such encumbrance shall extend beyond the term of this Lease. Lessee shall provide prompt written notice to Lessor of any such encumbrance together with a copy of such encumbrance. In the event of any judicial or nonjudicial foreclosure under any mortgage, deed of trust or other similar instrument made by Lessee covering its leasehold interest in the Demised Premises, Lessor shall, upon such foreclosure or sale, recognize the purchaser thereunder as Lessee under this Lease, provided such purchaser expressly agrees in writing to be bound by the terms of this Lease. 4.2 Notice to Holder of Encumbrance; Right of Holder to Cure Lessee's Default. Xflessee shall encumber its leasehold interest and estate in the Demised Premises and if Lessee, or the holder of the indebtedness, its successors and/or assigns (the "Holder") securedbythe encumbrance shall give notice to Lessor ofthe existence ofthe encumbrance and the address of the Holder, then Lessor shall mail or deliver to the Holder, at such address, a duplicate copy of all notices in writing which Lessor may, from time to time, give or serve on Lessee under and pursuant to the terms and provisions of this Lease. The copies shall be mailed or delivered to the Holder at, or near as possible to, the same time the notices are given to or served on Lessee. The Holder may, at its option, at any time before the rights ofLessee shall be terminated as provided in this Lease, pay any of the rents due under this Page 4 of 27 Lease or pay any taxes and assessments, or do any other act or thing required of Lessee by the terms of this Lease, or do any act or thing that may be necessary and proper to be done in the observance - of the covenants and conditions of this Lease or to prevent the termination of this Lease; provided, however, that the doing, of any act or thing requiring possession of the Demised Premises shall be subject to the fluther rights of Holder as set forth in Section 16.2. All payments so made and all things so done and performed by the Holder shall be effective to prevent a foreclosure of the rights of Lessee thereunder as the same would have been if done and performed by Lessee. .ARTICLE 5 TAXES Lessee agrees to pay as additional rent an amount equal to real estate taxes upon the real estate of the Demised Premises that become payable (as such taxes come due) during the term hereof and which would become delinquent if not so paid -during the term hereof Lessee shall further provide to Lessor official receipts of the appropriate taxing authority or other evidence satisfactory to Lessor evidencing payment thereof During the term of this Lease, Lessee further agrees to pay all other taxes, rates, charges, levies and assessments, general and special, of every name, nature and kind, whether now known to the law or hereafter created which may be taxed, charged, assessed, levied or imposedupon said real estate and which become payable during the term hereof and which would become delinquent if not so paid during the term hereof, any buildings or improvements thereon which may be taxed, charged, assessed, levied or imposed upon the leasehold estate hereby created and upon the reversionary estate in said real estate during the term hereof and which become payable during the term hereof and which would become delinquent if not so paid during the term hereof, and all such other taxes, rates, charges, levies and assessments shall be paid by Lessee as they become due and before they become delinquent during the term hereof. Lessee agrees to timely pay all taxes, assessments or other public charges levied or assessed by lawful authority (but reasonably preserving Lessee's rights of appeal) against its personal property on the premises, during the term of this Lease. Nothing herein shall require Lessee to pay any of Lessor's income taxes, surtaxes, excess profit taxes or any taxes on the rents or otherwise reserved to Lessor hereunder. Lessee shall at all times have the right to contest in good faith, in any proper proceedings, in the name of Lessor if necessary, the payment or satisfaction of any such taxes, assessments, rates, charges or levies so agreed to be paid by Lessee, if the validity thereof, or the right to assess or levy the same against or collect the same from said Demised Premises or Improvements, shall be disputed with respect to the Demised Premises. Upon the conclusion of any such suit or proceedings, or not less than three (3) months prior to the date when the right to redeem therefrom expires, whichever will be the earlier, Lessee shall promptly pay and satisfy such disputed tax, assessment or other charge as finally determined, together with all expenses, costs and attorneys' fees whatsoever incurred in connection therewith. Page 5 of 27 ARTICLE 6 REPAIRS Lessee shall at all times during the term of this Lease, at Lessee's expense, keep the Demised Premises and the Improvements thereon, and all sidewalks, curbs, and all appurtenances to the Demised Premises, in good order, condition and repair, casualties and ordinary wear and tear excepted. Lessee shall keep and maintain the Demised Premises and all Improvements in 'a condition consistent with other similarly classed operations. Lessee shall keep the Demised Premises in such condition as may be required by law and by the terms of the insurance policies furnished pursuant to this Lease, whether or not such repair shall be interior or exterior, and whether or not such repair shall be of a structural nature. Upon reasonable notice to Lessee, Lessor may, at its discretion and at its cost, conduct an annual inspection of the Demised Premises to determine Lessee's compliance with this Article 6. ARTICLE 7 COMPLIANCE WITH LAW 7.1 During the term of this Lease, Lessee shall comply with all local, state and federal laws applicable to Lessee's use ofthe Demised Premises, including but not limited to the Americans with Disabilities Act. 7.2 Lessee shall not commit waste on the Demised Premises except as necessary for its business purposes including the removal or construction of any buildings and Improvements on the Demised Premises, and shall be liable for any damages to or destruction of any buildings or Improvements on the'Demised Premises resulting from waste and shall be required to .repair or rebuild such buildings or Improvements. Lessee may remove existing Improvements or construct new Improvements on the Demised Premises subject to all of the terms and conditions of this Lease provided Lessee has received the prior approval of Lessor, which approval Lessor shall not unreasonably withhold. ARTICLE 8 ALTERATIONS Lessee shall have the right, ' with Lessor's prior written consent (which consent shall not be unreasonably withheld) to make any such alteration, addition, or modification that equals or exceeds Fifty Thousand and 00/100 Dollars ($50,000.00) in cost, at Lessee's expense, from time to time during the term of this Lease (any alteration, addition or modification less than Fifty Thousand and 00/100 Dollars ($50,000.00) in cost shall not require Lessor's consent). ARTICLE 9 USE OP DEMISED PREMISES - Lessee shall operate the Improvements/Project for the purposes outlined herein and shall not knowingly use or allow the Demised Premises or any buildings or Improvements thereon or any Page 6 of 27 ) appurtenances thereto, to be used or occupied for any unlawful purpose or in violation of any certificate of occupancy. Lessee shall not suffer any act to be done or any condition to exist within 'the Demised Premises or in any .Improvement thereon, or permit any article to be brought therein, . which is dangerous, unless safeguarded as required by law, or which, in law, constitute a nuisance, public or private, or which may make void or voidable any insurance in force with respect thereto. After the issuance of the Certificate of Completion, Lessee shall not cause, allow or permit any outdoor storage of any materials, objects or things of any kind, including refuse, trash or garbage, at any time on the Demised Premises. Notwithstanding the foregoing, refuse storage is permissible in an accessory storage enclosure if the City Manager determines that the structure is in character with the principal building and constructed of the same quality permanent materials as the principal building. The accessory structure shall be within close proximity to the principal structure. Where the structure exceeds 200 square feet in area, at least 1/3 ofthe structure's exterior perimeter shall be landscaped with ornamental trees and shrubs. ARTICLE 10 INSURANCE 10.1 Lessee shall provide and maintain or cause to be maintained' at all times during the process of constructing Improvements (and, from time to time at the request of Lessor, furnish Lessor with proof of payment of premiums on): A. Builder's risk insurance, written on the Special Perils Form in an amount equal to one hundred p ercent (100%) ofthe replacement value oflmprovements as the same shall exist from time to time during the construction process; and, B. Commercial general liability insurance as set forth in the attached insurance • Schedule. • 10.2 Upon completion of construction of Improvements, Lessee shall maintain, or cause to be maintained, at its cost and expense (and from time to time at the request ofLessor shall furnish proof of the payment of premiums on) insurance as follows: A. . Property insurance against loss and/or damage to Improvements under an insurance policy written on the Special Perils Form in an amount not less than the full insurable replacement value of Improvements, but any such policy may have a deductible amount of not more than $50,000.00. No policy of insurance shall be so written that the proceeds -thereof will produce less than the. minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by Lessor. The term "replacement value" shall mean the actual replacement cost oflmprovements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be determined from time to time at the request of Lessor, but not more frequently than once every three years, and paid for by Lessee. Page 7 of 27 P. Commercial general liability insurance as set forth in Lessor's standard insurance r schedule for tenants of city property, which schedule may from time to time be amended by Lessor. Lessor's current Insurance Schedule is attached hereto. 10.3 Lessee shall complete the repair, reconstruction and restoration of Improvements, whether or not the Net Proceeds of insurance received by Lessee for such purposes are sufficient. ARTICLE 11 LESSOR'S WARRANTIES AND REPRES.ENTAflONS 11.1 Lessor's Representation of Good Title, Lessor covenants and warrants that Lessor is lawfully in possession of the Demised Premises, and that it has (or will have) fall right and authority to enter into this Lease for the full term hereof (subj ect to Article 25 below), and covenants and agrees that upon paying the rent provided for herein, and upon Lessee's performing the covenants and agreements of this Lease required to be performed by said Lessee, that Lessee will have, hold and enjoy quiet possession of the Demised Premises. Lessor warrants to Lessee that the Demised Premises are properly zoned for the conduct of the operation of Lessee's business. ARTICLE 12 LESSEE'S WARRAN'IThS AND REPRESENTATION 12.1 Lessee Compliance With Law. A Lessee shall comply with all applicable local, state and federal laws, rules, regulations and permits with regard to the Demised Premises and its use, occupancy and control of 'the Demised Premises. B. Lessee shall be responsible for obtaining any and all applicable permits, licenses or authorizations as may be necessary for Lessee's use, occupancy and control of the Demised Premises, the obtaining thereof being a conditioned precedent to this Lease. 12.2 Environmental Matters. A. Lessee covenants and agrees that Lessor shall have no responsibility for or Liability arising from any release of a Hazardous Substance which is caused by or results from Lessee's use, occupancy or control of the Demised Premises, except for Lessor Hazardous Substances (any Hazardous Substance which leaches or migrates upon the Demised Premises from any property owned by Lessor). Notwithstanding any other provision of this Lease, Lessee shall not have any responsibility for any Hazardous Substance which leaches or migrates upon the Demised Premises from any adjacent property or any release of a Hazardous Substance which is caused by Lessor or which pre-exists as ofthe date of this Lease, all of which shall be and remain the liability of Lessor. R. Lessee covenants and agrees to notify Lessor promptly of any release of Hazardous Substance ia, on or about the Demised Premises of which Lessee has actual knowledge. Page 8 of 27 C. Lessee covenants and agrees to take promptly any and all necessary and appropriate response to address any release of Hazardous Substance for which Lessee is responsible under Section 12.2A. Such response shall include, without limitation, notification to appropriate governmental authorities, as may be required by law. D. Lessee covenants and agrees not to manufacture, treat or dispose of Hazardous Substances at the Demised Premises or knowingly allow the manufacture, treatment, or disposal of Ha7Prdo-us Substances on the Demised Premises. E. Lessee shall have the right to perform environmental site assessments of the Demised Premises to assess the environmental condition of the Demised Premises for the purpose of constructing and operating (even through an a.ffiliate) a hotel and restaurant. Any results or reports created by such site assessment shall be the property of Lessee and may be used by Lessee and. Lessor for any purpose provided that Lessor shall not disclose any such report or the information contained therein to any third party unless required to do so by law or legal process. For the purposes of this Leas; "Haaardous Substance or "Hazardous Substances" means .any hazardous or toxic substance, material or waste which is or becomes. regulated by anyiocal government, the State ofIowa or the United States Government. It includes, without limitation, any material or substance that is (i) defined as a "hazardous substance" or "hazardous waste" under Chapter 455B, Iowa Code, (ii) petroleum and petroleum products, (iii) asbestos containing materials in any form or condition, (iv) designated as a "hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1321), (v) defined as a "hazArdous waste pursuant to § 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.0. §6901 et seq., (vi) defined as a "hazardous substance" pursuant to § 101 of the Comprehensive Environmental Response, Compensation and Liability Act, U.S.0 § 9601 et seq., or (vii) defined as a "regulated, substance" pursuant to Subchapter IX, Solid Waste Disposal Act (Regulation of Underground Storage Tanks), 42 U.S.C. § 6991 et seq.1 The term "Hazardous Substance" shall not include any air emissions discharged into the atmosphere as allowed by a duly issued permit from the applicable governmental agency. ARTICLE 13 INDEMNIFICATION 13.1 Indemnification of Lessee. To the extent allowed by law, Lessor will indemnify and save harmless Lessee from and against all liabilities, obligations, claims, damages, penalties, causes ofaction, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted against Lessee by reason of (a) any accident, injury to or . death of persons or loss of or damage to property occurring on or about the Demised Premises and • resulting from any act or omission of Lessor or anyone acting by, through, or under Lessor, (b) any failure on the part of Lessor to perform or comply with any of the terms of this Lease and (c) any breach on the part of Lessor of any warranty or representation contained in Article 11. In case any action, suit or proceeding is brought against Lessee by reason of such occurrence, Lessor will, at Lessor expense and discretion, either defend such action, suit or proceeding, or cause the same to Page 9 of 27 be defended by counsel approved by Lessee, which approval will not be unreasonably withheld. 13.2 Indemnification ofLessor. Lessee will indemnify and save harmless Lessor from and against all' liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses '(including, without limitation, reasonable attorneys' fees and expenses) imposed upon or incurred by or asserted against Lessor by reason of (a) any accident, injury to or death of persons or loss of or damage to property occurring on or about the Demised Premises during the term ofthis Lease and resulting from any negligence of Lessee or anyone claiming by, through or under Lessee during the term of the Lease and (b) any failure on the part of Lessee to perform or comply in any material respect with any of the material terms of this Lease, and (c) any material breach on the part of Lessee of any warranty or representation contained in Article 12. In case any action, suit or proceeding is brought against Lessor by reason of such occurrence, Lessee will, at Lessee's expense and discretion, either defend such action, suit or proceeding, or cause the same to be defended by counsel approved by Lessor, which approval will not be unreasonably withheld. 13.3 Survival. The obligations and liabilities under this Article shall survive and continue in full force and effect and shall not be terminated, discharged or released, in whole or in part, irrespective of the termination or expiration of the term of this Lease. ARTICLE 14 • CONDEMNATION 14.1 Entire Condemnation. If at any time during the term ofthis Lease all .or substantially all ofthe Demised Premises or the Improvements thereon shall be taken in the exercise of the power of eminent domain by any sovereign, municipality or other public or private authority, then this Lease shall terminate on the date of vesting of title in such taking and any prepaid rent shall be • apportioned as of said date. Substantially all of the Demised Premises and the Improvements thereon shall be deemed to have been taken if the remaining portion ofthe Demised Premises shall not be of sufficient size to permit Lessee, in Lessee's sole discretion, to operate its business thereon in a manner similar to that prior to such taking. 14.2 Allocation of Award. Any award for. such taking of all or substantially all of the Demised Premises shall be paid to the parties hereto in accordance with the following: A. To Lessor, the amount ofthe award attributable to the Demised Premises, determined as if this Lease was not in effect at the time of such award, excluding therefrom the amount of the award attributable to the Improvements, and ail other sums not directly attributable to the value of the Land constituting the Demised Premises; B. To Lessee, the entire award except that portion allocated to Lessor above. 14.3 Partial Condemnation. If less than all or substantially all of the Demised Premises or the Improvements thereon shall be taken in the exercise of the power of eminent domain by any sovereign, municipality or other public or private authority, then Lessee, at its option, may elect to Page 10 of 27 continue this Lease in full force and effect or terminate this Lease. If Lessee shall elect to maintain this Lease in full force and effect, the. award for such partial condemnation shall be allocated as provided in Section 14.2, and Lessee shall proceed with reasonable diligence to carry out any necessary repair and restoration so that the remaining Improvements and appurtenances shall constitute a complete structural unit or units which can be operated on an economically feasible basis under the provisions of this Lease. In the event Lessee elects to continue this Lease in full force and effect after a partial condemnation; the Base Rent shall be reduced in proportion to the area ofthe Demised Premises taken. Should Lessee elect to terminate this Lease upon a partial condemnation, Lessee shall provide Lessor with written notice of such election within thirty (30) days after the date of vesting of title for such taking. Lessee shall specify in such written notice the date on which this Lease shall terminate, which date shall be not less than 60 days nor more than 360 days after.delivery of such notice to Lessor (the "Termination Date"). In the event Lessee terminates this Lease, as provided for in this Section 113, Lessee shall be entitled to the entire award for such partial taking. 14.4 Temporary Taking. If the temporary use of the whole or any part of the Demised Premises or the improvements thereon or the appurtenances thereto shall be taken at any time during the term of this Lease in the exercise of the power of eminent domain by any sovereign,. • municipality, or other authority, the term of this Lease shall not be reduced or affected in any way, and Lessee shall continue to pay in full the rent, additional rent and other sum or sums ofmoney and .. charges herein reserved and provided to be paid by Lessee, and the entire award for such temporary, - taking shall be paid to Lessee. Lessee shall repair and restore any and all damage to the Demised Premises and the Improvements as soon as reasonably practicable after such temporary taking. e • ARTICLE 15 ASSIGNMENT AND SUBLETTING This Lease may not be assigned or sublet by Lessee without the prior written consent of Lessor, which consent shall not be unreasonably withheld, provided said third party assignee or sublessee agrees in writing to comply with the terms and conditions of this Lease. ARTICLE 16 DEFAULT 16.1 Lessor's Rights in the Event of Lessee's Default. If Lessee shall fail or neglect to observe, keep or perform any ofthe covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, and the default shall continue for a period ofthirty (30) days after written notice from Lessor setting forth the nature of Lessee's default (it being intended that in connection with a default not susceptible of beim; cured with diligence within thirty (30) days, the time within which Lessee has to cure the same shall be extended for such period as may be necessary to complete the same with all due diligence, but in no event longer than ninety (90) days), then and in any such event, Lessor shall have the right at its option, on written notice to Lessee, to terminate this Lease. Lessor shall thereafter have the right to enter and take possession of the Demised Premises with process of law and to remove all personal property from the Demised. Page 11 of 27 r Premises and all persons occupying the Demised Premises and to use all necessary and legal force therefor and in all respects to take the actual, full and exclusive possession of the Demised Premises and every part of the Demised Premises as of Lessor's original estate, without incurring any liability to Lessee or to any persons occupying or using the Demised Premises for any damage caused or sustained by reason of such entry on the Demised Premises or the removal of persons or property from the Demised Premises. 16.2 Rights of Holder of Encumbrance in Event Lessee Defaults. If Lessee fails or - neglects to observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, the Holder of any indebtedness secured by an encumbrance on the leasehold estate under this Lease shall have thirty (30) days after receipt of written notice from Lessor setting forth the nature of Lessee's default and a reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature thereof within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than ninety (90) days, within which to endeavor to make good or remove the default or cause for termination of the Lease. All right of Lessor to terminate this Lease on the failure or neglect of Lessee to observe, keep and perform the covenants, terms and conditions of this Lease is, and shall continue to be, at all times prior to payment in full of the indebtedness to the Holder of Lessee, subject to and conditioned on Lessor's having first given the Holder written notice thereof and the Holder having failed to cause the default or cause for termination to be made good or removed within thirty (30) days after receiving written notice of default or cause for termination or within a reasonable time thereafter if it shall have commenced foreclosure or other appropriate proceedings in the nature of foreclosuree within such thirty (30) days and is diligently prosecuting such proceedings, but in no event longer than ninety (90) days. In the event that the Lease is terminated due to the Lessee's bankruptcy, insolvency or other proceedings, and in the event the Holder has conaplied with the terms of this Section 16.2, then Lessor at Holder's option, shall enter into a new Lease with Holder or the successful bidder at foreclosure on the same terms as this Lease, for the term then remaining, and specifically preserving all unexercised options. Lessor agrees to execute • ° and deliver any- nondisturbance and attornment agreements reasonably requested by Lessee's lenders, from time to time, provided such nondisturbance and attornment agreement is consistent with this section 16.2. 16.3 Lessee's Rights in the Event of Lessor's Default. If Lessor shall fail or neglect to observe, keep or perform any of the covenants, terms or conditions contained in this Lease on its part to be observed, kept or performed, and the default shall continue for a period of thirty (30) days after written notice from Lessee setting forth the nature of Lessor's default (it being intended that in connection with a default not susceptible of being cured with diligence within thirty (30) days, the time within which Lessor has to cure the same shall be extended for such period as may be necessary to complete the same with all due diligence, but in no event longer than ninety (90) days), then and in any such event, Lessee shall have all rights available to it provided by law or equity. ARTICLE 17 RIGHT TO CURE OTHER'S DEFAULTS Page 12 of 27 • Whenever and as often as a party shall fail or neglect to comply with and perform any term, covenant, condition or agreement to be complied with or performed by such party hereunder, then, following thirty (30) days' prior written notice to such defaulting party (or such additional time to cure as may be accorded Lessee pursuant to Section 16.1 above, but in no event longer than, ninety (90) days), the other party, at such other party's option, in addition to all other remedies available to such other party, may perform or cause to be performed such work, labor, services, acts or things, and take such other steps, including entry onto the Demised Premises and the Improvements thereon, as such other party may deem advisable, to comply with and perform any such term, covenant, condition or agreement which is in default, in which event such defaulting party shall reimburse such other party upon demand, and from time to time, for all costs and expenses suffered or incurred by such other party in so complying with or performing such term, covenant, condition or agreement. The commencement of any work or the taking of any other steps or performance of any other act by such other party pursuant to the immediately preceding sentence shn11 not be deemed to obligate such other party to complete the curing of any term, covenant, condition or agreement which is in default. Either party, upon giving twenty (20) days' written notice to the other, may offset amounts due to the other party for any amounts the notifying party pays or incurs hereunder proper the obligation of the other party to whom such notice is sent. ARTICLE 18 QUIET ENJOYMENT Lessor covenants that at all times during the term ofthii Lease, so long as Lessee is not in default hereunder, Lessee's quiet enjoyment of the Demised Premises or any part thereof shall not . be disturbed by any act of Lessor, or of anyone acting by, through or under Lessor. ARTICLE 19 ESTOPPEL CERTIFICATES Each party hereto agrees that at any time and from time to time during the term of -this Lease, within ten (10) days after request by the other party hereto or by any lender having an interest in Lessee's leasehold estate, it will execute, acknowledge and deliver to the other party or to such lender or any prospective purchaser, assignee or any mortgagee designated by. such other party, a certificate stating (a) that this Lease is unmodified and in force and effect (or if there have been modifications, that this Lease is in force and effect as modified, and identifying the modification. agreements), (b) the date to which rent has been paid, (c) whether or not there is any existing default by Lessee in the payment of any rent or other sum of money hereunder, and whether or not there is any other existing default by either party hereto with respect to which a notice of default has been served, and, if there is any such default, specifying the nature and extent thereof; and (d) whether or not there are any setoffs, defenses or counterclaims against enforcement of the obligations to be performed hereunder existing in favor of the party executing such certificate. ARTICLE 20 WAIVER Page 13 of 27 No waiver by either party hereto of any breach by the other of any term, covenant, condition or agreement herein and no failure by any party to exercise any right or remedy in respect of any breach hereunder, shall constitute a waiver or relinquishment for the future of any such term, covenant, condition or agreernent or of any subsequent breach of any such term, covenant, condition or agreement, nor bar any right or remedy of the other party in respect of any such subsequent breach, nor shall the receipt of any rent, or any portion thereof, by Lessor, operate as a waiver ofthe rights of Lessor to enforce the payment of any other rent then or thereafter in default, or to terminate this Lease, or to recover the Demised Premises, or to invoke any other appropriate remedy which Lessor may select as herein or by law provided. ARTICLE 21 SURRENDER Lessee shall, on the last day ofthe term -of this Lease or upon any termination of this Lease, surrender and deliver up the'Demised Premises, with the Improvements then located thereon into the possession and use of Lessor, without fraud or delay and in' good order, condition and repair, reasonable wear and tear excepted, free and clear of all lettings and occupancies, free and clear of all liens and encumbrances other than those existing on the date of this Lease and those, if any, created by Lessor, without (except as otherwise. provided herein) any payment ,or allowance whatever by Lessor on account of or for any buildings and Improvements erected or maintained on the Demised Premises at the time of the surrender, or for the contents thereof or appurtenances thereto. Lessee's Trade Fixtures, personal property and other belongings of Lessee or of any Lessee or other occupant of space in the Demised Premises (excluding furniture, fixtures, and equipment in room or the lobby) shall be and remain the property of Lessee, and Lessee shall have a reasonable time after the expiration of the term of this Lease (not to exceed thirty (30) days) to remove the same. See Article 3 above. ARTICLE 22 MEMORANDUM OF LEASE Each ofthe parties hereto will, promptly upon request ofthe other, execute a memorandum of this Lease in .a form suitable for recording setting forth the names of the parties hereto and the term of this Lease, identifying the Demised Premises, and also including such other clauses therein as either party may desire, except the amounts of Base Rent payable hereunder. ARTICLE 23 NOTICES 23.1. All notices, demands or other writings in thisLease provided to be given or made or sent, or which may be given or made or sent, by either party to the other, shall be deemed to have been fully given or made or sent when made in writing and deposited in the United States mail, registered and postage prepaid, and by facsimile addressed as follows: Page 14 of 27 To Lessor: To Lessee: • City of Dubuque, Iowa Attn: Mr. Michael C. Van Mil.ligen City Hall 13th St. & Central Ave. Dubuque, IA 52001-4864 Dubuque Casino Hotel, LLC Attn: Mr. Wayne A. Briggs 137 Main St, Ste. 400 Dubuque, IA 52001 To DRA: Dubuque Racing Association, LTD Attn: Mr. Bruce Wentworth 1855 Greyhound Park Rd: Dubuque, IA 52001; 23.2 The address and/or fax number to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by the party as above provided. ARTICLE 24 MISCELLANEOUS . 24.1 Time of the Essence. Time is ofthe essence of this Lease and all of its provisions. 242 Governing Law. It is agreed that this Lease shall be governed by, construed and forced in .accordance with the laws of the State of Iowa. • :. 24.3 Paragraph Headings. The titles to the paragraphs of this Lease are solely for the convenience of the parties and shall not be used to explain, modify, simplify or aid in the . interpretation ofthe provisions of this Lease. 24.4 . Modification ofAgreement. Any modification, ofthis Lease or additional obligation assumed by either party in connection with this Lease shall be binding only if evidenced in a writing signed by each party or an authorized representative of each party. 24.5 Parties Bound. This Lease shall be binding on and shall inure to the benefit of and shall apply to the respective successors and assigns of Lessor and Lessee. All references' in. this Lease to "Lessor" or "Lessee" shall be deemed to refer to and include successors and assigns of Lessor or Lessee without specific 3nention of such successors or assigns. 24.6 Force Majeure. In the event that either party hereto shall be delayed ar hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, unavailability of construction materials, unavailability or excessive price of fuel, Page 15 of 27 n power failure, riots, insurrection, war, terrorist activities, explosions, hazardous conditions, fire, flood, weather or acts of God, or by reason of any other cause beyond the exclusive and reasonable control ofthe party delayed in performing work or doing acts required under the terms ofthis Lease (collectively "Force Majeure"), then performance of such act shall be excused for the period ofthe delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. 24.7 Transient Boat Docking. During the Initial Term of this Lease, and as soon as reasonably possible and practicable, City agrees to investigate with Lessee the feasibility of providing transient boat docking facilities, at the expense of Lessee, for the benefit of the Project. ARTICLE 25 DUBUQUE RACING ASSOCIATION, LTD. ("DRA") . The Dubuque Racing Association, LTD., an Iowa not for corporation ("DRA"), by and through its authorized representatives, agrees that the City. may Lease the Demised Premises to Lessee, notwithstanding that certain Lease wherein the City of Dubuque, Iowa, a municipal corporation, is the Lessor, and DRA is the Lessee, dated March 31, 2004 (the "Prior Lease"). Lessor'. andDRA agree to amend the Prior Lease at or prior to the execution hereof or within a reasonable time thereafter. ARTICLE 26 APPROVAL This Lease shall not become effective until the prior written approval or consent of DRA, - the Iowa Racing and Gaming Commission and American Trust & Savings Bank is received. If all • of the foregoing approvals are not received by July 15, 2004, then this Lease shall be null and void. and of no further force or effect. ARTICLE 27 RIGHTS OF FIRST REFUSAL Lessee shall have the preemptive right during the Initial Term and the extension refered to in Par. 1.1 to purchase the Demised Premises and the parking area described in the Parking Use Agreement on the same terms and conditions as those of any bona fide offer received by and ` acceptable to Lessor. Before making any sale or any agreement to sell, Lessor shall notify Lessee in writing of the terms and conditions of the offer. Lessee, within sixty (60) days after receipt of such notice, may exercise this preemptive right by written notice to Lessor. Failure of Lessee to . exercise this preemptive right on one or more occasions shall not affect Lessee's right to exercise it on any subsequent occasion. Any sale or transfer of the Demised Premises, or any part thereof, or of any larger tract of land of which the Demised Premises may be apart, shall be expressly made subject to all of the terms, covenants and conditions of this Lease. DRA shall have the preemptive right during the Initial Term or any extension thereof to Page 16 of 27 purchase the Improvements on the same terznz s and conditions as those of any bona fide offer received by and acceptable to Lessee. Before making any sale or any agreement to sell, Lessee shall notify Lessor and DRA in writing of the terms and conditions of the offer. DRA, within sixty (60) days after receipt of such notice, may exercise this preemptive right by written notice to Lessee. Failure of DRA to exercise this preemptive right on one or more occasions shall not affect DRA's right to exercise it on any subsequent occasion. Any sale or transfer of the Improvements shall be expressly made subject to all of the terms, covenants and conditions of this Lease. In the event DRA purchases the Improvements, Lessor shall lease the Demised Premises to DRA for the remainder of the Initial Term or any extension thereof, subject to all of the terms, covenants and conditions of this Lease. ARTICLE 28 JOINT MARKETING , Any] pint marketing or other j oint ventures or opportunities for business relationships by and . • between DPA and Lessee with regard to the -hotel and restaurant contemplated herein and the gaming and related facilities operated by DRA shall be the subject of separate agreements, from time to time, by and between Lessee and DRA. ° DRA agrees that, during the entire time this Lease remains in full force and effect, Lessee shall be the exclusive provider of any hotel, motel or similar facility on any part of the entire real estate described on Exhibit ""A"" attached hereto and by this reference made a part hereof (consisting of 43.73 acres, more or less), as well as the exclusive provider of any franchised or . otherwise casual fine dining restaurant onthe Demised Premises. DRA further agrees that DRA shall not, without the consent ofDCH, operate or permit another to operate any franchised dining facility on any part of the entire real estate described on Exhibit ""A"" attached hereto, other than a franchised dining facility operated by DCH on the Demised Premises. Other than as provided in this paragraph, nothing in this Lease shall, in any way, limit the operations of DRA adjacent to the Demised Premises, including but not limited to the right or ability of DRA to conduct its own (non- franchised) food and/or beverage operations on or adjacent to DRA's facilities. ARTICLE 29 FINANCING CONDITION This Lease is subject to Lessee obtaining financing from or through a local financial institution on prevailing terms for no less than eighty percent (80%)' of the cost of the Project on or before June 22, 2004. Page 17 of 27 CITY OF DUBUQUE, IOWA, Lessor DUBUQUE CASINO HOTEL, L.L.C., s By i authorized r esentative DUBUQUE RACING ASSOCIATION, LTD, ("DRA") For purposes of Articles 25, 26, 27 and 28 only By its authorized representative Page 18 of 27 EfP "A" LEGAL DESCRIPTION OF DEMISED PREMISES That portion of the following -described real estate consisting of approximately•one acre ' depicted on the drawing attached to this Exhibit "A" and by this reference made a part hereof: A parcel ofland containing 43.73 acres, more or less, located on Chaplain Schmitt Memorial Island, lying immediately north ofthe Iowa -Wisconsin Bridge as set forth on theplat 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 and about the easterly property line, and a roadway easement on and about the westerly property line [Exact legal description to be supplied later.] Lessor and Lessee agree to amend this Exhibit A. upon determination of the exact location • and extent ofthe Improvements and determination ofthe legal description. Lessor and Lessee intend . that the Demised Premises shall initially consist of approximately one acre upon which the Phase I Improvements shall be constructed andthat the Demised Premises shall be enlarged by the area necessary for the construction of the Phase 11 Improvements, if so constructed. Page 19 of 27 • SCHEDULE ATTACHED TO EXHIBIT "A" [Need exhibit before city council action] [Drawing of footprint of Demised Premises upon which hotel and restaurant are to be constructed and Lessee's employee parking area.] • ['Phis Schedule shall show the planned/approximate area of the Phase 1 and Phase 1I parking •areas.] Page 20 of 27 YNR 7nb"11Y1 �3101-4 1 EXITIBIT "B" PHASE 1 IMPROVEMENTS [Need exhibit before city council action] Lessee shall construct on the Demised Premises at Lessee's option either a Sheraton Four Points or Hilton Gardens Hotel, and a casual fine dining restaurant [Exact description of Phase 1 Improvements to be provided later). Lessee shall commence construction of the Phase 1 Improvements by no later than AuguSt 1,2004, and the Phase 1 Improvements -shall be substantially complete by no later than July 1, 2005. Plans and specifications with respect to the Improvements and the construction of the: improvements shall be in substantial conformity with all applicable State and local laws and . - regulations. Lessee shall submit to Lessor, for approval by Lessor, plans, drawings, specifications, an d related documents with resp ect to the Improvements to be constructed by Lessee on the Demised Premises. All work with respect to the Improvements shall be in substantial conformity with the. construction plans approved by Lessor and shall be coordinated with any Lessor improvements in,. ... the general vicinity of the Demised Premises, The Improvements shall include an indoor pool and hot tub. Lessee shall use its best efforts to maintain its affiliation with [Sheraton Four Points or Hilton, . • Gardens Hotell during the Initial Term and the extension referred to in Par. 1.1. Lessor shall have the right in its sole discretion to approve any change in such affiliation and no such change or - attempted change by Lessee shall be effective without Lessor's prior written approval. Page 21 of 27 EIT "C" PARHING USE AGREEMENT - SEE ATTACHED Page 22 of 27 E2(M.151,1. "JY' PRASE If IMPROVEMENTS [Need exhibit before city council action] • ,[Additional 100 rooms.] • [Exact specifications for these additional 100 rooms to be provided later.] Plans"and specification With resPect to the Improvements and the construction ofthe Improvements . • ' • , • shP11. be' in substantial conformity with all applicable State and local laws and regulations. Lessee . . shall submit to Lessor, for approval by Lessor, plans, drawings„ specifications, and related • documents with respect to the Improvements to be constructed by Lessee on the Demised Premises: • All work with respect to the Improvements shall be in substantial conformity with the construction . • • A , • plans approved by Lessor and. shall be coordinated with any Lessor improvements in the general . • vicinity ofthe Demised Premises: • Page 23 of' 27 1 INSURANCE SCHEDULE INSURANCE REQUIREMENTS FOR TENANTS AND LESSEES OF CITY PROPERTY OR VENDORS (SUPPLIERS, SERVICE PROVIDERS) TO T'.tXE CITY OF DUBUQUE 1. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa. All insurers shall have a rating of A of better in the current A.M. Best Rating Guide. 2. AlI policies of insurance shall be endorsed to provide a thirty (30) day advance notice of cancellation to the City of Dubuque if cancellation is prior to the expiration date. This endorsement supersedes the standard cancellation statement on the Certificate of Insurance. • 3. Lessee shall furnish a Certificate of Insurance to the City of Dubuque, Iowa for the • coverage required in Paragraph 6 below. Such certificates shall include copies of the following policy endorsements: a) Thirty day notice of cancellation to the City of Dubuque. b) Commercial General Liability policy is primary and non-contributing. c) Commercial General Liability additional insured endorsement. d) Governmental Immunity Endorsements. e) Waiver of recovery under workers compensation. 4. • Each certificate shall be submitted to the Finance Department of the City of Dubuque. 5. ' Failure to provide minimum coverage shall not be deemed a waiver of these' . requirements by the City of Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of this agreement 6. Lessee shall be required to carry the following minimum coverage/limits or greater if required by law or other legal agreement: a) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Products -Completed Operations Aggregate Limit $1,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence Limit $1,000,000 Fire Damage Limit (any one occurrence) $ 50,000 Medical Payments $ 5,000 This coverage shall be written on an occurrence, not claims made, form per location. All deviations or exclusions from the standard ISO commercial general liability form CG 0001 or Page 24 of 27 Business owners form BP 0002 shall be clearly identified, Governmental Immunity Endorsement identical, or equivalent to form attached. An additional insured endorsement identical or equivalent to IS 0 Form CG 2026 or CG 2011 .andinclude as additional insureds: "The City of Dubuque, including all its elected and appointed officials, all its employees and volunteers, all its boards, commissions and/or authorities and their • - board members, employees, and volunteers." WORKERS' COMPENSATION & EMPLOYERS LIABILITY Statutory for Coverage A Employers Liability: $100,000 each accident $100,000 each employee -disease $500,000 policy limit --disease ©/icy shall include an endorsement waiving right of recovery against City of Dubuque. ICTMBRELLAIEXCESS LIABILITY $ 4,000,000 LIQUOR OR DRAM SHOP LIABILITY $ 1,000,000 'Coverage to be determined on a case-by-case basis by Finance Director. Page 25 of 27 POLICY NUMBER. COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED — DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART. SCHEDULE Name of Person, Or Organization: The City of Dubuque, including all its elected and appointed officials, all its employees and - volunteers, all its boards, commissions and/or authorities and their board members, employees, and ••• . • volunteers. • (I.f no entry appears above, information required to complete this endorsement will be shown in the. "- Declarations as applicable to this endorsement) : ' • WHOIS AN INSURED (Sectionfl) is amended -to include as an insured the person or orgRnizntion shown in the Schedule as an insured but only with respect to liability arising out of your operations - or premises owned by or rented to you. • Copyright. Insurance Services Office. Inc. 1994. . CG 20 26 1185 Page 26 of 27 CITY OF DUBUQUE, IOWA GOVERNMENTAL IMMUNITIES ENDORSEMENT Nonwaiver of Governmental Immunity. The insurance carrier expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670A as itis now exists and as it may be amended from time to time. Claims Coverage. The insurance carrier further agrees that this policy of insurance shall cover only those claims not subject to the def-nse ofgovernmental immunity under the Code of Iowa Section 670A as it now exists and as it may be amended from time to time. Those claims not subject to Code of Iowa Section 670.4 shall be covered by the terms and conditions of this insurance policy. Assertion -of Government Immunity. The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time and shall do so upon the timely written request of the insurance carrier. Non -Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the insurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governrizentai immtmity unless and until a court of competent jurisdiction has ruled in favor of the defenses) of governmental immunity asserted by the City of Dubuque, Iowa. No Other Change in Policy. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. • PMVPD061143334DOCSICI ofDoSmgw • DBq Casino Hotel Las Agsemrat $7RFn Lwpt Page 27 of 27 r j Prepared by Brian ICane, KANE, NUBBY & REDDICIC, P.C. 2100 Asbury Road, Suite 2, Dubuque, IA 52001 563/582-7980 • Space Above This Line for Rceordei AMENDMENT NO. 1 TO LEASE AGREEMENT This Amendment No. 1 to Lease Agreement ("Amendment No. 1") is made and entered into as of the cM day of , 2005, by and between The City of Dubuque, an Iowa municipal corporation (' Lessor") and Dubuque Casino Hotel, L.L.C., an. Iowa limited liability company ("Lessee"). 'RECITALS Lessor and Lessee entered into that certain Lease Agreement dated July 6, 2004 (hereinafter the "Lease"); B. Pursuant to Exhibit "B" of the Lease, Lessee was to commence construction of the Phase I Improvements by no later than August 1, 2004; C. The parties desire to execute this Amendment No, 1 to acknowledge that construction of the Phase I Improvements commenced after August 1, 2004; and • D. All other terms and conditions of the Lease shall remain in full force and effect. THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Amendment of Exhibit B. The parties hereby acknowledge that construction of the Phase 1 Improvements commenced on November 1, 2004, and the third paragraph of Exhibit B is amended in its entirety to read as follows: Lessee shall commence construction of the Phase I Improvements by no later than November 1, 2004, and the Phase 1 Improvements shall be substantially complete by no later than July 1, 2005. 2. Acknowledgment of Commencement. The parties acknowledge that construction of the Phase I Improvements has been timely commenced in accordance with this .Amendment No. 1 and that there are no defaults under the Lease as of the date hereof. Page 1 of 2 IN WITNESS WHEREOF, the parties have executed the foregoing Amendment No. 1 as of the date and year first above written. MVPDOtSAfiaa6A8nd1 tibCas ollatel-AmmdmestMa. 1 to Lease ASawRd CITY OF DUBUQUE, IOWA, Lessor Bv: / 1 DUBUQUE CASINO HOTEL, L.L.C. By: , Wayne : riggs, Its A R Page 2 of 2 ed. tative SECOND AMENDMENT • TO •• LEASE AGREEMENT BETWEEN ' THE CITY OF DUBUQUE, IOWA • AND • DUBUQUE CASINO HOTEL, L.L.C. • This SECOND AMENDMENT TO LEASE AGREEMENT is dated for reference purposes this jth day of April ' 2005., • • Whereas, the City of Dubuque (City) and Dubuque Casino Hotel, L.L.C. (Hotel) are parties to a Lease Agreement dated for reference purposes the 6th , day of July 2004; Whereas, the parties noWdesire to amend the Lease Agreement as set forth herein. NOW, THEREFORE, City and Hatel agree as follows: 1.. Par. A of the Lease Agreementis amended to read as follows: . • A. Lessor is the owner of that Certain real estate described on Exhibit A-1' attached hereto and by this reference made a part hereon, which. Lessor desires. to lease to Lessee, and Lessee desires to lease from Lessor (the "Demised Premises"); and CITY OF PUBUQ By IOWA '•' TfTance M. Dugga1ayor DUBUQU By: `ta its C IND HOT, L.L.C. Exhibit A-1 I Sheet 2 of 3 Legal Description for Dubuque Casino Hotel, L.L.C. A parcel of land lying within the Southeast Quarter of Fractional Section .1e;"TowshiP 89 North, Range 3 East of the 51h Principal Meridian, Dubuque County, Iowa, more particularly described as follows: Commencing at the Southeast comer of said Fractional Section 18 (the South line of the Southeast Quarter of Fractional Section 18 bears North 88 degrees 37 minutes 17 seconds East for thepurposes of this description); Thence North 51 degrees 42 minutes 10 seconds West, 1642.95 feet, to the point of beginning; Thence North 64 degrees 38 minutes 50 seconds West, 98.25 feet; Thence Nerth 25 degrees 21 minutes 10 seconds East, 85.67 feet; Thence South 64 degrees 38 minutes 50 seconds East, 27.46 feet; Thence North 25 degrees 21 minutes 10 seconds East, 51.08 feet; Thence North 64 degrees 38 minutes 50 seconds' West, 22.29 feet; Thence Northeasterly, 45.81 feet along the arc of a circular curve concave to the Southeast,. having a radius of 25.00 feet, a central angle of 104 degrees 58 minutes 10 seconds, and whose chord bears North 25 degrees 21 minutes 10 seconds East, 39.67 feet, Thence South 64 degrees 38 minutes 50 seconds East, 22.29 feet; Thence North 25 degrees 21 minutes 10 seconds East, 92.33 feet; Thence South 64 degrees 38 minutes 50 seconds East, 70.00 feet; Thence South 25 degrees 21 minutes 10 seconds West, 44.67 feet; Thence South 64 degrees 38 minutes 50 seconds East, 213.83 feet; Thence South 25 degrees 21 minutes 10 seconds West, 102.00 feet; Thence South 64 degrees 38 minutes 50 seconds East, 11856 feet; Thence South 25 degrees 21 minutes 10 seconds West, 17.42 feet; Thence North 64 degrees 38 minutes 50 seconds West, 182.81 feet; Thence South 25 degrees 21 minutes 10 seconds West, 59.75 feet; Thence North 64 degrees 38 minutes 50 seconds West, 38.17 feet; Thence South 25 degrees 21 minutes 10 seconds West, 41.33 feet; Sheet 3 of 3 Thence North 64 degrees 38 minutes 50 seconds West, 24.17 feet; Thence North 25 degrees 21 minutes 10 Seconds East, 41.33 feet" Thence North 64 degrees 38 minutes 50 seconds West 38.17 feet; Thence North 25 degrees 21 minutes 10 seconds East, 52.35 feet; Thence North 64 degrees 38 minutes 50 seconds West, 48.29 feet; 'Thence South 25 degrees 21 minutes 10 seconds West, 97/6 feet, to the point of beginning. Containing 1.317 acres (57,364 square feet), more or less, and subject to,easements, reservations, restrictions, and rights-of-way of record and not of record. Return to: Brian J. Kane 2100 Asbury Rd. Ste. 2, Dubuque, IA 52001 563-582-7980 Prepared by Brian 7. Kane, KANE, NOBBY & REDDICK, P.C., 2100 Asbury Road, Suite Z', Dubuque, JA 52001 563-5S2-7980 Space Above This Line for Recorder AMENDMENT NO. 3 TO LEASE AGREEMENT This Amendment No. 3 to Lease Agreement ("Amendment No. 3") is made and entered into as of the 6th day of September, 2005, by and between The City of Dubuque, an Iowa municipal corporation ("Lessor") and Dubuque Casino Hotel, L.L.C., an Iowa limited liability company ("Lessee"). RECITALS Lessor and Lessee entered into that certain Lease Agreement dated July 6, 2004 (hereinafter the "Lease"), which was amended by that certain Amendment No. 1 to Lease Agreement dated March 21, 2005, and that certain Second Amendment to Lease Agreement dated April 4, 2005; B. The parties desire to execute this Amendment No. 3 to acknowledge that construction of the... Phase I Improvements shall be substantially completed on or before October 15, 2005; and C. All other terms and conditions of the Lease (as amended) shall remain in full force and effect. THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Amendment of Lease. Notwithstanding anything to the contrary contained in the Lease (as amended), the parties hereby acknowledge that construction of the Phase X Improvements shall be substantially complete by October 15, 2005. IN WITNESS WHEREOF, the parties have executed the foregoing Amendment No. 1 as ofthe date and year first above written. CITY OF DUBUQUE, IOWA, Lessor DUBUQUE CASINO HOTEL, L.L.C. By: errance M.Dugg Its uthorized represent, ve FAWPDOCS5andAredlDulaCnsmoHoml-Amendment No. 3 to Lout Agr.wrd 7 By: Wa A. Briggs, Its autho ized representa Iria6+65- ea, Lynam. her I iiii: JI11iJ1JGIi1Illi1 1[1111110 11IDoc ID: ill Recorded: 09/27/20050atT03:42:15 PM Fee Amt: $27,00 Page f of 5 Dubuque nnThurlow Recorder F11e2 0051.1100 15 8 4 0 • Prepared by: Brian J. Kane, KANE, NORBY & REDDICK, P.C., 2100 Asbury Rd., Ste. 2, Dubuque, IA 52001 563-582-7980 Return document to: Brian J. Kane, KANE, NOBBY •& REDTMICK, P.C., 2100 Asbury Rd., Ste, 2, Dubuque, IA 52001 563-582-7980 STA' h, OF IOWA COUNTY OF DUBUQUE ) ) ss: AFFI DAVYT The undersigned, being duly sworn on oath, hereby states of his own personal knowledge that he is the Attorney for Dubuque Casino Hotel, LLC, and that attached hereto and by this reference made a part hereof is a true and correct copy of Amendment No. 3 to Lease Agreement with respect to the Lease entered into by and between the City of Dubuque, Iowa, as Lessor, and Dubuque Casino Hotel, LLC, as Lessee dated July 6, 2004, and located upon the following -described real estate:' See attached legal description and plat. Further affiant sayeth not. Dated this 27th day of September, 2005. STATE OF IOWA COUNTY OF DUBUQUE Kane. ) ss: This instrument was acknowledged before me on the 2 in day of Se + ember, 2005, by Brian J. eSt 1L5U1 q / 62:44.... 4 ,., 4J/f NOTARY PUBLIC D+l' FOR THE STATE OF IOWA P SVPDOCSAMisseDOCSDabuque Casiaa Hotel Affidavit Amendreeat03toLeaseAgtwpd E270 Return to: Brian J. Kane 2100 AsburyRd. Dubuque, Ste. '2, Dubuue 52001 563-582-7980 Prepared by Brian J. Kane, KANB, NORBY & REDDICK, P.C., 2100 Asbury Road, Suite Z Dubuque, IA 52001563-582-7980 Space Above This Line for Recorder AMENDMENT NO. 3 TO LEASE AGREEMENT This Amendment No. 3 to Lease Agreement ("Amendment No. 3") is made and entered into as of the 6a` day of September, 2005, by and between The City of Dubuque, an Iowa municipal corporation ("Lessor") and Dubuque Casino Hotel, L.L.C., an Iowa limited liability company ("Lessee"). RECITALS A. Lessor and Lessee entered into that certain Lease Agreement dated July 6, 2004 (hereinafter the "Lease"), which was amended by that certain Amendment No. 1 to Lease Agreement dated March 21, 2005, and that certain Second Amendment to Lease Agreement dated April 4, 2005; B. The parties desire to execute this Amendment No. 3 to acknowledge that construction of the Phase I Improvements' shall be substantially completed on or before October 15, 2005; and C. All other terms and conditions of the Lease (as amended) shall remain in full force and effect. THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Amendment of Lease. Notwithstanding anything to the contrary contained in the Lease (as amended), the parties hereby acl€nowledge that construction of the Phase I Improvements shall be substantially complete by October 15, 2005. IN WITNESS WHEREOF, the parties have executed the foregoing Amendment No. 1 as of the date and year first above written. CITY OF DUBUQUE, IOWA, Lessor Byerrance M. Dug Its uthorized represent, fve F:IWPDOC S.SandySrad\DobeasiooSiafeS-Amendment No. 3 to Lase Agr.wpd DUBUQUE CASINO HOTEL, L.L.C. By: Wa A. Briggs, Its autho ed representa "‘. Sheet 2 of 3 Legal Description for Dubuque Casino Hotel, L.L.C. A parcel _of:land lying within the Southeast Quarter of Fractional.Seation_1B,Zownship.89.North, Range 3 East of the 5th Principal Meridian, Dubuque Coun01, Iowa, more particularly described as follows: Commencing at the Southeast corner of said Fractional Section 18 (the South line of the Southeast Quarter of Fractional Section 18 bears North 88 degrees 37 minutes 17 seconds East for the purposes of this description); Thence North 51 degrecs 42 minutes .10 seconds West, 1642.95 feet, to the point of begirmin Thence North 64 degrees 38 minutes 50 seconds West, 98.25 feet Thence North 25 degrees 21 minutes 10 seconds East, 85.67 feet Thence South 64 degrees 38 minutes 50 seconds East, 27.46 feet Thence North 25 degrees 21 minutes 10 seconds East, 51.08 feet Thence North 64 degrees 38 minutes 50 seconds West, 2229 feet ' Thence Northeasterly, 45.81 feet along the arc of a circular curve concave to the Southeast, having a radius of 25.00 feet, a central angle of 104 degrees 58 minutes 10 seconds, and whose chord bears North 25 degrees 21 minutes 10 seconds East, 39.67 feet Thence South 64 degrees 38 minutes 50 seconds East, 22.29 feet Thence North 25 degrees 21 minutes 10 seconds East, 9233 feet; Thence South 64 degrees 38 minutes 50 seconds East, 70.00 feet Thence South 25 degrees 2.1 minutes 10 seconds West, 44.67 feet Thence South 64 degrees 38 minutes 50 seconds East, 213.83 feet Thence South 25 degrees 21 minutes 10 seconds West, 102.00 feet; Thence South 64 degrees 38 minutes 50 seconds East, 118.56 feet; Thence South 25 degrees 21 minutes 10 seconds West, 17.42 feet; Thence North 64 degrees 38 minutes 50 seconds West, 182.81 feet Thence South 25 degrees 21 minutes 10 seconds West, 59.75 feet; Thence North 64 degrees 38 minutes 50 seconds West, 38.17 fee Thence South 25 degrees 21 minutes 10 seconds West, 41.33 feet; Sheet 3 of 3 Thence North 64 degrees 38 minutes 50 seconds West, 24.17 feet; Thence North 25 degrees minutes ,10 seconds East, 41.33. feet; Thence North 64 degrees 38 minutes 50 seconds West, 38.17 feet Thence North 25 degrees 21 minutes 10 seconds East, 52.35 feet Thence North 64 degrees 3.8 minutes 50 seconds West, 48.29 feet; Thence South 25 degrees 21 minutes 10 seconds West, 97.26 feet, to the point of beginning. Containing 1.317 acres (57,364 square feet), more or less, and subject to easements; reservations, restrictions, and rights-of-way of record and not of record. 413s PQ"rs''' .tre TM�ycylS C tti++ . A ^13 13 Qty^ — Grp rn Xtfny ..c.3;=, A 0 C)v3 tr Cs al .c out 44Z -a rnz N 0 0t,--11-3 S G ti�N Q 0 N N W cc - r." `.ia .4.0_1 _ 1 S. 7'j fi F1 sn ro Cti a