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Applicant response 2008 00-02
- 7. “formal commitment letter to provide up to $20,000,000 for the Interim Gaming Facility o KAW VALLEY BANK development based on our most recent July 21, 2008 Dear Mr. Stewart: Still old-fashioned where it indicative term sheet that we have provided You have requested our bank provide a commitment on the financing for your proposed project in Dodge City, Kansas associated with your application to be the Manager for to you subject only to Butler National the Southwest Zone Lottery Gaming Facility. We understand that you are planning on initially developing an interim gaming facility until certain water treatment and sewer capacity constraints are addressed before developing your permanent casino and Service Corporation being selected as the resort. Based on our review of your proposed development costs and equity investment commitments from yourself and other parties, your debt financing needs for the interim facility are in the range of $15.0 to $20.0 million and the incremental debt Manager for the Southwest Gaming Zone” needs for the permanent facility are in the range of $50.0 to 60.0 million. We are prepared to issue a formal commitment letter to provide up to $20,000,000 for the Interim Gaming Facility development based on our most recent indicative term sheet that we have provided to you subject only to Butler National Service Corporation being selected as the Manager for the Southwest Gaming Zone. Further, we are highly confident in our ability to issue a formal commitment letter for the Permanent Gaming Facility development subject to the successful syndication of the requested loan amount. The specific terms for this financing would need to be developed at a time that is closer to the expected closing date for the permanent financing. This letter is confidential and is being delivered to you with the understanding that no disclosure of, or reference to, this letter may be made to any person or entity other than “Highly confident in our ability to issue a formal commitment letter for the Permanent (a) the directors and officers of Butler National Service Corporation and its subsidiaries who are directly involved in the project, or (b) the Kansas Lottery Commission or other appropriate governmental or regulatory authorities, provided, however, you may Gaming Facility development subject to the disclose this letter to your respective financial and legal advisors on a confidential basis. We look forward to working with you on this unique opportunity in Dodge City, Kansas. ?1 - successful syndication of the requested loan Ken J Schwerdt Senior Vice-President Amount” (“in the range of $50.0 to 60.0 Kaw Valley Bank 6831 SW 29 th St, Ste 100 Topeka, KS 66614 million”) kents@kawvalleybank.com 785-478-0373 phone 785-478-4876 fax IlION. KANSAS AVE. 1-888-232-5872 PHONE 785-232-6062 TOPEKA, KS. 66608 WWW.KAWVALLEYBANK.COM FAX 785-232-6513 Butler National Service Corporation
- 14. Proposed Casino Locations for the SW Gaming Zone 0 mi 1 2 3 4 5 Butler National Copyright © and (P) 1988–2006 Microsoft Corporation and/or its suppliers. All rights reserved. http://www.microsoft.com/mappoint/ Portions © 1990–2005 InstallShield Software Corporation. All rights reserved. Certain mapping and direction data © 2005 NAVTEQ. All rights reserved. The Data for areas of Canada includes information taken with permission from Canadian authorities, 243 including: © Her Majesty the Queen in Right of Canada, © Queen's Printer for Ontario. NAVTEQ and NAVTEQ ON BOARD are trademarks of NAVTEQ. © 2005 Tele Atlas North America, Inc. All rights reserved. Tele Atlas and Tele Atlas North America are trademarks of Tele Atlas, Inc. Service Corporation
- 15. “Please be aware that we are writing to Dodge City II Gaming Division MAC 54649-027 5340 Kietzke lane, Suite 201 Reno, NV 89511 LLC to remind them that the December 20, 2007 77S 689-6003 775689-6026 Fax May 30, 2008 Clark D. Stewart, President and Chief Executive Officer Butler National Corporation 19920 West 161" Street letter did not constitute an offer, obligation or Olathe, Kansas 66062 Dear Clark, commitment on the part of Wells Fargo to provide financing for their proposed project in Dodge City. I am in receipt of the email from Doug Smith sent May 27, 2008, concerning Mr. Brad Peterson's (EVP, our decision to continue discussions solely with Butler until Kansas Lottery since they were informed of awarded the license. Furthermore, at no time did or would Wells Fargo share, or divulge any confidential Wells Fargo Las Vegas Gaming Division) letter dated December 20,2007 to Dodge City Resort and information regarding your Project to another party. Wells Fargo takes our customers privacy very Gaming Company, LLC ("Dodge City LLC"). You have informed us that a portion ofMr. Peterson's letter We are also reminding Dodge City LLC that, based seriously. was recently presented in the Dodge City LLC gaming license application. Please be aware that we are writing to Dodge City LLC to remind them that the December 20, 2007 letter This letter will provide a brief chronology of events so you can understand the contextconstitute an offer, obligation or commitment on the part of Wells Fargo to provide financing for did not in which the December 20, 2007 letter to Dodge City LLC was written and to inform you of their proposed project in Dodge City. We are also reminding Dodge City LLC that, based upon our Wells Fargo's position with upon our discussions with Butler, we would not respect to Dodge City LLC's submission of a portion of that letter to the Kansas Lottery Commission.we would not support Dodge City LLC's application to the Kansas Lottery discussions with Butler, Commission and would have no further communications with Dodge City LLC conceming that application On December 6, 2007, Mr. Greg Rossiter, Vice President, Wells Fargo's Reno Gamingthe award of a license. We are asking Dodge City LLC to communicate to the Kansas Lottery prior to Division (Reno Commission the entirety of our December 20, 2007 letter and our subsequent conversation concerning our support Dodge City LLC's application to the Gaming) provided Butler a Letter ofInterest for its potential Casino/Hotel in Dodge City, Kansas (the decision not to support Dodge City LLC's application prior to any award. Project). On December 20, 2007, Mr. Peterson provided a similar letter of interest to Dodge City LLC for its potential casino site to be located in Dodge City. Neither of these letters representedthat this letter allays any concerns you may have concerning Wells Fargo's discussions with We trust commitments by Wells Fargo and Were subject to significant due diligence. Dodge City LLC. [fyou would like to discuss this matter further, please contact me at your convenience. In Janullry 2008, Reno Gaming continued its discussions with Butler and visited the site of the planned Project. During this period, Reno Gaming, Wells Fargo Syndications and BalTington Associates provided discussion material which outlined potential capital structures for the Project. Kansas Lottery Commission and would have no Sue Fuller In February 2008, Reno Gaming and Wells Fargo Syndication provided to Butler an Indicative Term Sheet Senior Vice President which outlined terms and conditions for a potential $45,000,000 financing for the Project. The Indicative further communications with Dodge City LLC concerning that application prior to the award of a Term Sheet was not intended to be a commitment to lend or as an attempt to establish all of the terms and conditions relating to any ultimate financing. During this period, Steve Erickson, Financial Advisor for Butler, indicated that Las Vegas Gaming had discussions with Dodge City LLC and noted that Butler preferred that Wells Fargo not support both parties prior to an award of the license. Wells Fargo then indicated to Butler that it would exclusively support Butler's application during the bid process in the event that Butler engaged Wells Fargo to an-ange license. We are asking Dodge City LLC to communicate to the Kansas Lottery financing. In March of2008, Butler requested Wells Fargo to provide a Mandate Letter that would formally mandate Wells Fargo to move forward with its due diligence process, including engaging outside counsel and other Commission the entirety of our December 20, appropriate parties to complete this process, and to seek credit and other internal approvals after the Kansas Lottery Commission awards to Butler the contract to build and manage the Project. The Mandate Letter, like the Indicative Term Sheet, was not intended as a Commitment to provide financing, but further outlined the terms and conditions under which such commitment would be provided, including that Butler would not directly or indirectly enter into any credit facilities or bank financing with any other party. Wells Fargo submitted multiple drafts of the Mandate Letter to Butler and never concluded negotiations on fees, expenses and our requirement that Butler not seek financing from someone other than Wells Fargo. 2007 letter and our subsequent conversation concerning our decision not to support Dodge However, under the belief this document would be executed, Wells Fargo decided to work solely with Butler. With this intent Las Vegas Gaming verbally informed Dodge City LLC that Wells Fargo would have no further discussions on their proposed project prior to the Kansas Lottery Commission award of the gaming license for the Dodge City location. With the exception that will be detailed below, no one from City LLC's application prior to any award.” Wells Fargo Gaming has had any communication with Dodge City LLC concerning potential financing OHS West:260447470,2 OHS West:260447470.2 Butler National Service Corporation