U.S.

SMALL BUSINESS ADMINISTRATION

WASHINGTON, D.C.20416

AUG 1 6 2010

The Honorable Harold Rogers

U.S. House ofRepresentatives
Washington, DC 20515

. Dear Representative Rogers:

Thank you for your recent letter on behalfof your constituent, James D. Hamilton, President,
Lee's Ford[bock, Inc. Mr. Hamilton contacted your office seeking your assistance in obtaining
an increase to his disaster loan from the u.s. Small Business Administration (SBA) for losses his
business sustained as a result ofthe U.S. Army Corps ofEngineers lowering Lake Cumberland.
More specifically, Mr. Hamilton requested that the SBA designate Lee's Ford Dock a Major
Source ofEmpl~ent (MSE) allowing the SBA to waive the statutory $1.5 million loan limit.
..~

After receipt of your letter, Jerome Edwards, Senior Loan Officer on my staffmet with.
Mr. Hamilton at your Washington office. This meeting's outcome was relayed to our Processing
and Disbursement Center (pDC) in Ft. Worth, Texas. After a thorough review of Lee's Ford
Dock's loan file, it is my pleasure to inform you that Lee's Ford Dock was designated as an -
_ .... ... ~l?-"- Q~gu...§LQ, 2010,_we.E-PQIQy.Yda $2.5 million increase to Lee's FordDock existinK_· ~_._~ _
__m~._--=-=-=--- $t5 m1l1JOn loan. MOdlfiedloan closing documents will be issued very soon, and once we
receive the required executed loan documents we will begin disbursement ofthe newly approved
$2.5 million proceeds.

Thank you for yourcontinued support of the small business community. Your interest in this
matter on behalfofyour constituent is appreciated. If you or your staffhave additional questions,
please contact our Office of Congressional and Legislative Affairs at (202) 205-6700. If
Mr. Hamilton has any additional questions regarding this loan, he should contact Cynthia Steed,
Supervisory Loan Specialist, atthePDC at (800) 366-6303, ext. 5127.

Sin~~lY'9~
(-::-
James . Rivera
Associate Administrator
for Disaster.Assistance
 HAROLD ROGERS PLEASE RESPOND TO,
5TH DISlNCT. :<EUTUO(Y
WASH!NGTONOfF{CE:

COMMrrTEE ON APPROPRIATIONS o 2406 RAYBURN HOUSE OFFICEBUILDING

WASHfNGTON, DC 20515-1705
RANKJNG MEMBER 1202) 22$-4601
SUBCOMMl1TEEON 'THEDEPARTMENT OF
HOMELA~'D SECURITY OlSTRICTOFflCES;

SUBCOMMITTEEON DEFENSE o 551 CLIFTY ST?EET

SOMERSET,KY..::2501
(606167--=5 OR
~--80C-532-e588

(tongre55 of thr ilnitnl fi§ tarrs o S01 MAIN STREET

HAZARD.KY 4170t
16(0) 43S-<)784

jltOllst af '1RQJrtSffitatiufS o 110 RESOURCE COURT

SUITEA
PRESTONSBURG,KY 41653

illlJashington, 3B<.t 205J5-1705 1505)886-{)844

July 13,2010
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Mr. James E. Rivera
Associate Administrator
Office of Disaster Assistance
U.S. Small Business Administration
499 Third St., SW, Suite 6050
Washington, DC 20416
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," .., ,Dear Mr. Rivera: 'I .

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ram writing on behalf of a constituent, .Mi.Tanles~D: Hamilton, President, Lee's Ford Dock,
Ine., located in Nancy, Kentucky.' Mr. Hamilton's marina business has suffered significantly
since January 2007 when the U.S. Army Corps of Engineers' (USACE) lowered the summer
pool of Lake Cumberland in conjunction with emergency repairs necessary to mitigate the risk of
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structural failure at WolfCreek Dam. The severe economic impact of this43-foot reduction in
water level on the Lake Cumberland business community was certified by the Governor of
Kentucky. Based on this certification, the Small Business Administration (SBA) issued a
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disaster declaration for a select number of counties in the Commonwealth. CAtch 1) As a result, f

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Lee's Ford Dock applied for and received an SBA Economic Injury Disaster Loan (EIDL) in the
initial amount of$830,400--revised upward 13 months later to $1,500,000. (Atchs 2-5)
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When Lee's Ford Dock applied for the increase to its EIDL in 2008, there was still hope that the I
Corps' use of an accelerated grouting process would safely allow for a rise in the water level in
the very near future. However, despite additional funding provided by Congress, unforeseen
complications have slowed completion of the grouting curtain, and Lake Cumberland continues
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to be maintained at the grievously lower level. Most. notably, based O¥ my March 23,2010
conversation with theUSACE Nashville District Commander Mitchell, the situation will not
soon improve. Faced with a more prolonged disaster and a $250,000 reduction in Lee's Ford's
line ofcredit by its financing bank, Mr. Hamilton requested that SBA designate Lee's Ford Dock
as a Major Source of Employment (MSE) in order to establish eligibility for consideration of a
waiver to the $1,500,000 limitation on its EIDL. (Atch 6)

SBA declined Mr. Hamilton's request for MSE$.tus and furtherpoipt~d ollt that hisdeadline to
increase tlle)o(l1;l amount ~4 e~pg~s..ept.~J:B1:>~44,.AO()9.~et)y(J-Ye~~y~~gypf1:ljs~:\: •..•........
ori~nQte.(Atc):l.7) ,·Thedec!inanciri 1.efter:$teq that SBAwpu1d not consider.•a loan increase
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 for this reason unless "in the sole discretion ofSBA, there are extraordinary and unforeseeable
circumstances beyond the control ofthe borrower." The May 6, 2010 letter went on to state that
"there [were] no reconsideration/reacceptance rights associated with this decline." However, in a
subsequent email, dated May 14, 2010, an SBA supervisory loan officer in the Fort Worth, TX,
office said he would "review any information" Mr. Hamilton provided.

In response to the loan officer's offer, Mr. Hamilton addressed.the SBA declination letter point-
by-point and requested clarifications regarding several of the assertions that formed the basis for
its conclusions. (Atch 8) SBA responded by once again declining his reconsideration request.
(Atch 9)

As a long-standing Member of Congress, let me assure you the conditions at Lake Cumberland
and the inability of USACE to close the primary grout line or its unwillingness to make
concessions to raise the summer pool constitute conditions which warrant SBA to exercise this
discretion. Having been notionally promised three times by the USACE that the summer pool
would be moderately increased, three years later, no action has been taken. In the meantime,
regional businesses have dried up, visitors have sought otherdestinations, and revenues have
plummeted across the region. In summary, Lee's Ford Dock and other marina owners are
suffering under a government-induced hardship, through no fault of their own, necessitating
thought.ft1l·consideration ofU;S:federalassis$ice.·' ' -. - ---- ,,'.'
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. ----,-A.fter liavillgreviewed theSEA decful~rti"on letters, I do not beli~ve MSE determination has been
sufficiently and adequately examined by SBA. I respectfully request SBA aDA immediately
and fairly revisit Lee's Ford Dock's denial of MSE status and subsequent loan increase.
Specifically, I would encourage you to personally meet with Mr. Hamilton as soon as possible to
address the concerns outlined above. Please have a member ofyourstaffcontaetmy office to
provide the dates and times for the meeting that your schedule will permit. We will provide
these to Mr. Hamilton and promptly reply with his acceptance.. Thank you for your
consideration.

Sincerel ,

~. aLDR~{RS
,,6/2~d~~,.
Member of Congr s
 Chronology of Lee's Ford Dock's
Requests to Increase.its SBA
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:r;cop.omic Tnjury Disaster Loan (EIDL) . ,I.
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Atch 1: SBA Disaster Declaration Due to the Governor ofKentucky's Certification ofEconomic
Injury (Undated) I
Atch 2: Lee's Ford Dock's Initial Applicationfor EIDL, July 9, 2007
Atch 3: SBA Approval ofLee's Ford Dock'sApplication, August IS, 2007
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Atch 4; Lee's Ford Dock's Request for EIDL Increase, July 25,2008
Atch 5: SBA Approval ofLee's Ford Dock's Request for EIDL Increase, September 24,2008
Atch 6: Lee's Ford Dock's, Request for Designation as a Major Source of Employment (MSE)
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For the Purpose ofHaving its EIDLLimit Increased, March 30, 2010
Atch 7: SBA Denial ofLee's Ford Dock's Request for Designation as an MSE, May 6, 2010
Atch 8: Lee's Ford Dock's Request fat Reconsideration ofSBA's Declination for Designation " f

as an MSE, May 17,2010

Atch 9; SBA Denial of Lee's Ford Dock's Request for Reconsideration ofSBA's Declination,
JUne 18,2010

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u.s.s..a ........ ! , It .... I
u.s. SMALL BUS.INESS ADMlNlSTRATlQN
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'. ', . ',. ECONOMIC INJtJRYDlSASTER LOANS .: r , ".' -, ".' -.":'. -.,'

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STATE: . ,_.::' nNTUCI{Y:'109{)2. . ."

(Disaster jfri~ 11)- .

COUNTIES: .• ~. ,I. :'

&.u. ~ of_IwL~,futm
Ai{;jfi;~car;f!avt c~
Rump IQlw_~~ cme¢e,q(
/ticlirinL Qiai' ~·~fe·tmJfiiultYm lil~~'
(Ifni cmd~-;;;;;;;;r#caiwkt4c.tiiYt'I~idi#t,m;J*Wt't#.tJir._etm
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INCIDENrAND DATE::: ':Below AV~WaterL e v e 1 s , . : , y : . : ,.... -:: "'_;" : .' -I,

---.... ---- ::::--=~ __ ._.. .~ --- - ~JlUluarylt~OO7aJldeontiDuiDg
~ ' ~ .:

APPUCATIriN·DEADLlNEfM&fch26.200s·;·;· .,
"~"'., • ,~~. :,., :: '" ,.--~-~. "',= ~.-..~ :'";:/ :--.Y- ~'-:-~'" t_": .-:-:;':--.. ' 5:;-::--."--"--.---=--"~"-~--;~~~' -~':.----
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• , ~Inj~~'~ (~~ EIriUit.ie'Wm·king:eapital·roans:tOmeet~ary
JrJ~~~;:_~~~,~_~29i.:!:-_,:
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• Only small businesses ai1d small agricultural cooperatives are c:ligiblel

-'~"l:";"~" ~~~~~,;'~.:.;-.~. "The ~ ~Jmy must ~Ve~.~~·~Ofthe~~gnsted.. ~.
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• The aP.Pucant business must be located in ~ declared disaster are&;orm1l'cOntigUotti' .' .
county.
• '.:' / ••.~.~ :: ,'. "!-\ ._.....~. '. ~ '. • -: - ~ .'... ~.::. . ~~.~!.... ;
• Loan assistance'is available oM' to ~,~. ~ ~ and its ~wners cannotmeet
~~ryfi~rwf~loP~~dueJO~.~i~,··This.~~is~bySBA.
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.. Only 'applicants who do .not have "Odlt A ~ Elsewhre" are eligible. That
,detmnination is made by SBA based on ·wbetIier tbC busineSs and its oWners cannot recover
from the disaster. i:qjury with their own resources or by borrowing' from non-govemment
sources.
 CREDIT REQUIREMENTS:

• These are loans 8nd'appli~':iIiUSt ~t1lat.they have repayriierit ability. Loam in excess
of 55,000 must· be secured with co~· ;·Generally. this Will .include·a lien on the
applicant's business andIor·pC:rsonarreal·estaie~:'If<;l~;·IOanS·Wi11 not be declined for lack
ofa fixed
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INTEREST RAtES:

•. ~ interest rate fur ~ Inlsblesses~ sifiail agneU1tuta1 coopetatives unable to obtain ..

aedit elsewhere is 4.000% . ." : ': :--:" , ., :;. ". '.

LOAN AMOUNT: ,~' ',",

·,;,:·~·fatIl'··looii ~tO" .. ". "&ie'~ .entity 'f . hunng ffil:'""~} ~t '~.
··~~,~~~.il~~~i~:::~~~~" . .
.LO~TERM:
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.-':.' ~<-·-r:-:.: .• :~:~";':;:;. ' .~.:'':~ ~ : ;-t.~ .. J ... : • p ....... •

~ .•-~L6antennSnot to exceed 30 years afeavaiisb~~ 'L~T~'8re indiVidually cL~ .. ..'

.: based ~ what is re8SOnab~ in ~nsidermon:of~ ~U~f!,,~~lJ~.;':'- .', '...;_:_~. __ n ~n._ .. _

FLOOD INSURANcE REQUIREMENTS:

• Appbts with ~ SBA loans winch ~ them to ~ f1~ ~~are-~' .
~Iigibl,~ if.tb;yJll~~~lD~:!~~~:~;tl~ ~~ :;'" :' :a.::. .:-.:;'.' '.-__.. ,........_. ,.
• GeMrallYp' if~118teral·~··°thc· l~:'d i~'iIi ~a!~ ~f1O<)d·::l1&ika-.m~\ the
~licant may be. required to pUrchase and maintain fiood)~~~,f.S<:~.;~
loan. . . ' .."'. .". .'. , o{"~
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FORD
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: HES(tRT,

451 Lee's FordDock Road

Nancy, Kentucky42544
606-636-6426
Fax 606-636-6872
www.1eesfordmarina.com

7/9/2007

U.S. Small Busin~ss AdmiIllstration

Disaster.Loan Processing and Disbursement Center
1425Kingsport Road . ..
FortWort:h;. Texa:i16155.,.2243
".' '. , ..

To whonl it may concern.

, The United States Army Corps ofEngineers (USACE) announced on 1119/2007 that it
considers Wolf CreekDam which impounds Lake Cumberland to be at 'high risk' of
structural failure. The USACE began loweringthe operating pool ofLake Cumberland
43'to an elevation 6f680\ This was done to reducepressureon the dam structure and
. facilitate SeepageControl and Major Rehabilitation. The USACE has notified
municipalities that their intakes should be lowered to 650' by December 31st 2007
because the 'real possibility' exists that they may have to furtherreduce the operating
pool duringconstruction, They estimatethese repairs will take seven years to complete.
Based on historicalpool reductions on other lakes it is estimated the visitation levels at
Lake Cumberland may have a recoveryperiod of one and baIfto three years following .
projectcompletion. This means the visitation levelsmay not return to normal for 8.5 to
10 years.
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This actionhas already had a d~vastating effecton the assetsand cash flow ofHamilton
Capital, LLClLee's Ford Dock; Inc and me personally.

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 The businessmodel is such that most ofthe businessexpenses are fixed indirect costs.
The largest of'the indirect expenses is debt service. Other indirect costs include utilities,
maintenance, management and general overhead.Since the direct costs for the basic
business model are low managementhas little flexibility in its ability to lower operating
expenses anyfurther to maintain necessarycash flow needed to maintain operations.
Consequently the business is unable to service its debt much less maintain the debt
coverageratio of 1.29 required by its lender BB&T.Additionally,the timing of this
unfortunate event comes when its debt with BB&T on all three notes of both principle
and interest comes fully due and payable on September Ist 2007 without mentioning
other substantialobligations included in our application. _

the
Tf1e Market Value of assets has decreased substantiallyand their marketability is
highlyquestionable and furthermore, extremely doubtful.

The Marinaproperty value has substantiallydecreaseddue to the nature ofvaIuations of

investmentgrade marinas and the tremendous amount ofuncertainty surrounding the
ongoing Major Rehabilitation Project by the USACE. Investment grade marina values are
basedon cash flow as an income producingproperty similar to apartment buildings,
shoppingcenters or other commercial buildings. They are valued on a capitalization rate.
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Currently investment grade marinas trade at a capitalization rate of 10 and sometimes 8 in I
'astable market. - .
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--~ --~:::=--The Marinapr6j5ertY was- valued-by futegraRea1.ty Resources forBB&T ~Il July 31
2006for $14 million basedon a capitalizationrate of 10. This was based a on a projected
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Cash flow of51.4 million. The cash flow for the 2007 year is now estimated to be
5993,000, $948,890 for 2008, and $824,000for the following five years 2009,2010,
2011,2012 and 2013. Theseprojections are based on ilie premise that the USACE will
not further lower the operating pool below 680'and the business will be able to retain
annual/seasonal slip customers. As mentionedabove the USACE has stated that a further I
loweringto 650' is a 'real possibility'.

Thecore business of slip rental could begin to rapidly erode if the operating pool were to
be further reduced at all. Weare unable to project the effect the USACE repair project
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and its associated Uncertainties will have on the businesses ability to retain slip - 1
customers. _This threat ofpossible lowering could cause slip customers to seek moorage
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fortheirboats elsewhere where these uncertainties do not exist. Annual slip renewals
begin December of2007. Ifthe operating pool was reduced to 650 the marina would have
no water and the entire marina would have to be moved to a completely new site. No site
has yet been identified with the USACBand therefore no cost projections have been
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madefor such a move. The cost would he very substantial.
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The fee simple property owned by the entities after road and sewage improvements !
scheduled for completion this summer was appraised by Childers Financial Services Inc
for BB&T on August 2nd 2006 for $2,510,000. Since this appraisal one of the buildings 1
was sold which would change the Childersappraisal to approximately $2.1 million. I
The~appraisals were coIIl,pl~tedap'proxiInat~Iy six months before the USACE's actions -. - - - f
$
~tak~n qn V19a.OO7. Thes.eproperrles high appraisalvalue was due to their location - f
.ai~entrancfofiheID.arinanear the lake. Needless to Say property sales surrounding r

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Lake Cumberland have slowed dramatically more than thegeneralhousingsectorand
propertyvaluesare beginningto declinerapidly. Giventhe decline in visitationand
uncertainties associated with the USACE possible future necessary actionsinvolving the
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repairs to WolfCreek DB.!Jl the businesses assets marketability is in a very questionable
state.
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.... Mypersonal :financial conditionis nowprecarious. I'm currently ingreat.danger of not
being able to pay my personal bills. I
[purchased the marina in Octoberof2D03 and moved to the area to run the business in
the springof2004. The first two years were difficultfrom a management and financial
perspective. There was a leaming curvefor myself. The business was lackinginternal
controls, managementsystems, routines and information systems. The property was in
need ofmanyrepairs and improvements which were not disclosed by the seller.
Consequently the business did not meet its debt serviceratios the first two years of
operation and BB&Tmoved the interestrate from US to 1 overprime.

In 2006 thenecessary improvements to the facilities and systems were in place and the
business was operating well. It was certain thatthe business would financially perform in
2006to meet its targetdebt coverage rarios; However the business needed additional
operatingcapital, BB&T allowed some principlepayments to be deferred but changed
their commitment to one year. I advanced the businessmy remaining liquidity to operate
in
through 2006. The plan was torefinance early 2007 onceit was veritie4by the annual
.. ".. . .........• independent review that the bUsmess wasperformmg as believed and my personal-
liqUidity would be returned throughthe refinancing.

The business did financiallyperform as expectedand met the debt coverageratio of 1.29
in 2006. This was verified by the annualreview ofthe financials by Radwan, Brownand
Company, PSC the independentaccounting firm. Howeveron 1/19/07 before tlIereview
was completed ora refinancingcould begin the USACEissuedtheir emergencyorder
arid began lowering the operating pool of Lake Cumberland.

TheUSACE concessionairesincludingLee's Ford OIl Lake Cumberland were given but

10 days notice. The business had to immediately spendalmost $300,000 to reposition all
873 slips to continue operationsand preserve its slip customer base. We were able to
accomplish this enormous task and preserve our slip customer base. However the ensuing
negativepress, rumors and speculationhave driven visitation levels down. Currently our
Lodgingis down 40%, Boat reritals 400ti, Restaurantsales 20%, Ship Store sales 37%,
Transientslips 50% and Seasonal slips 1'JOh.,Theseevents havecaused our current
.financial crisis.

Wehave enclosed a letter from the SomersetPulaski County Chamberof Commerce

stating the business is one of the top 15 employers in the region. This is not surprising
sincethe region is very dependent on tourism. It has no majortransportation arteries,
industrial base or natural resources other than Lake Cumberland which used to draw 5
millionvisitorsper year.

Giv~$e current state of affairs, current obligations, risk to the business due to the
~4Ityof sittiation and its effects on the business, the business must find a way to

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 reduce its total debt service to no more than $500,000 per year.It is highly unlikely any
conventional financing options will be made available to the business by any entity in the
commercial market.

I sincerely hope SBA can be ofimmediate assistance in a meaningful way to achieve this
crucial need consideringwe have no other options. The very survival of the business and i
its employees are at stake.
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 us, SMAlL BUSINESS ADMINISTRATlON 817-868-2300
Disaster Assistance·, .800-366-6303
Processing'and Disbursement Center Hearing Impaired
817-267-4688
P.O. Box 156119
Fort Worth, Texas 76155

August 15. 2007

JamesD. Hamilton, President - -,»

Lee's Ford Dock, Inc.

451 Lee'sFord-DockRoad
-Nancy, ~ 42544

RE: SBA Disaster Loan AppIicatio~ NO~

-.....- .
Dear Applicant:
t
SBA is pleased to advise you that your Ioaareqnest has been approved for $830,400.00 for 30
years at an interest rate of 4.000~~ ~~,,~?~m~.payments ofS4,178.00. . I
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The loanapprovalis subject to thefQn~-d1iJ~;iMq;r;:·
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'-----'----··-your loan amounfinaybe ieviewedfurth~'td co~d;'~~~~;~ ~m;;~;i~~ce i

company. FEMA. American Red Crossor othersources, Yourloan amount may bereduced for
any recoveries that may duplicate the SBAdisasterIoan, PI~ adviseSBAif you have received
additional funds sincethe time you submitted your loanapplication or communicatedwith your
SBAloanofficer. SBA must confirm your loanrequestis in accordance withfederal regulations
and SDA p o / i c i e s . ' .

Beforeproceeding with preparation ofyour loan closing documents, we need specific

documentation to confirm your eligibility. Pleaseprovide the following:
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J. A copy ofthe deed that includes a cOIDp1ete legal description, for the property located at
, 21 Lee'ifFord Dock R~ Nancy, KY 42544 and 81 Lee's Ford Dock: Road, Nancy, KY
42544 reflecting ownership iiI the name(s) of Lee's Ford Hotels, LLC.
of
2. A eompleee copy the Operating Agreement and
Articles ofOtganization for Lee'sFord
Hotels, LLC and Lee's Ford Woods, L L C . . ,
3. A complete copy of the Recorded lease!Rgreement for theproperty located at 451 Lee's
Ford Dock Road ':.... . .',. ':,l:<~~~: ":,:..'
4. A copy ofthe.associetion By-Laws' and CGR!s: '.
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 In orderto assure prompt disaster loan assistance, we request that you forward thein.formation as
soon as possible but 110 later than 21 days from the date of this letter. Ifyou feel that you
may have difficultyproviding the infbrmarion, or if you have questions about yourdisaster loan
please call us at 1-800-366-6303. You may
fax;t1ichequested information to 1-202-741~893.
Please return a copy of this letter with yoUr response,
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'Sincerely, I
Legal Commitments Team I

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451 Lee's Ford Dock.Road
Nancy, KY42544
Phone: (606) 636-6426 Fax: (606) 636-6872
wwwleesfordmarina.com
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July 25, 2008

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John W. Schoenthaler
Small Business Administration
14925 Kingsport Road
Fort Worth, TX 76155
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~_!!~.~_~Ag~s~a~~~f::'::?~":_:~~f11-?=~!:IID~:
John,

This letter is to serve as Lee's Fords written request for additional funding under the SBA's disaster relief
program. Our Loan # is EID~

The business has incurred additional expenses associated with reconfiguring the marina and estimate we will have i

additional expenses as well. In addition the business is experiencing lower than expected sales. While we make
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every effort to reduce expenses to help offset lower revenue; it is critical that we continue to keep our property in
good condition with necessary repair arid maintenance. Equally it is critical that we retain quality employees and
management to continue providing customers with a positive experience. Without these continued measures our I,
customers will choose other competitors causing our core business to erode beginning a vicious downward spiral.
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I'm proud of my staff because we have responded and managed the business very well under the circumstances. !
Notwithstanding we will need an additional $871,000.00 from the Disaster Relief Program to properly finance the
business and enable us to continue to managing through this unfortunate event I have attached form 8821's for all
entities and the cash flow projections for the remainder of the year and 2009 which demonstrate the need for
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additional funds.

Please fed free to contact me or our CFO Steven Brans (606-636-6426 ext 233 or 606-383-3702) with any
qUtrtions you may have.

Siz:rereIy,

<~~-~,.
:JD Hamilton .' .' ---:-"~"'
\.pz.eskI6ht <'..
ill';sF'ord Dock, Inc.
60~26ext.23.4{office)
..•'8.-5~~~;,(~p12l-):> ..
. ;":.:'
 U.S~ SMALL BUSINESS ADMINlSTRAOON (811}868-2300
DisU1er AssIstance 1(800)366-6303
Processing and Disbursement Center HearingImpaIfttd
14925 Kingsport Road TOO (800) 871-333i
Fort Wortft, Texas 76155

September 24, 2008

Lees FordDock, fne.

James D. Hamilton, President and Steven Brans, Secretary
451 Lees FOrd DockRd
Nancy, KY 42544

RE: SBA Disaster

'- .. - .. _-' -
loan Numbe~
.~-~.,j~_.,.:,"-," ~ ..:..I.~_- .-.. ..... •

DearMr. Hamilton and Mr. Brans:

We received your request for an increase in your disasterloan for economic injury losses. After
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a thorough re-evafuation of your disasterlosses, we are pleased to inform you that an increase
of $669,600,00 is approved,

Asa result,yo~rapprovE3ddisaster: loan increased to $1.500,000.00,. ThSil'!terestrate

.......:. : ~==--- WiChangedand WiIl·accruEFat thEfrate of4.000%-Per annum. Installment payments-remain at-
is is I /.
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$4,178.00·for the m'onths of October. November an.d ~Cember2ob8 and Wiu inCrea~to the ·r,
amount Of$7:4§9.00 beginning-January 24,2009. The maturity term is uricliarigedat 30 years.
. '. .- .' . ~ . . ' . .' ~. '. .

(Note: If yo~r payment is made through an automatic withdraWal from a checking or savings
account, please contact our CustomerService Center at 1-8D0-659-2955 for assistance in
changing the amount ofyour withdrawaO, .

Paragraph 4, Use of Proceeds, of yoor Loan.Authorization and Agreement is amended as

follows: . . .

A Approximately $1,044,100.00 for working capital.

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B. Approximately $219,800,00 as payment on note payable to Branch Banking & Trust

Company.

C, Approximately $238,100;00 as payment on a;count{s) ~yable to To pay elIgible

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accounts payable aged 50 days. and greater. . I
Paragraph 19, DistributiOns andCompensation, ofyour Loan Authorization and Agreement is
amended as follows: . .: . ".

~ Bo.~r willO,ot, .witho.ut the prior written consent of SBA, make aoy distri~n of·_
, :..'._~rrcWers a~. ~th~!l reasona.b~ compensation fo( serVices; or give ~riy" ,.,'-
' ..;..'·prefetential-treatment; ml:II(~ any advam:e,. direc:try or indirectly, .bY ~'i Of[oar(gift," .
. '" . bonus, or oth~e;' to" any" owner orpartri~or any .ofitSemplgy~. or to any" .... ' t>
~pany direct&';Qf indirectfy controllingorafflUated:witf'l()r:,~llectby~~r. or: -.
anY()~cpQl~riy.:' ..•.. '.•.....•....•. '. . ; ··"··;·.i·:\.·.\·;.<\; .
""- ;

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 B. Borrower and its affiliates agree to Umit annualcompensation (including salaries.

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withdra'Nals. fees. bonuses. commissions. and anyother payments, whether direct or
iildirect, in moneyor otherwise) to the following named persons and positions in the
amount set opposite the respectiVe namewithout the prior writtenconsent of SBA.

James 0 Hamilton, President $100,000.00

C. Borroweragreesthat in the event any funds are raised 1hrough a securities offering
teither a Publicoffering or private placement of common or preferred stock, or long tenn
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d'ebtW!thaneqUity feature). SBAwilt have the immediate right to requirefuIJ payment of
the loan balanceor reqUire that a portion of proceeds be applied to the Loan balance.

D. In addition to installment payments established herein, Borrowerwill makea supplement

-'" - - - .. ·~·-aMual-peyment·~tG-5%~$·Aet-eamirlgs.fSQr·tf:Ie.pu~d~: ~- .... -~ - .
-Net Earnings- Is defined as net profit after tax plus depreciation less scheduled principal
payments on aD indebtedness of Borrowerat the time of the application less principal
paymentsagainstthis loan. Borrowerwill make supplemental annual payment no later
than ~ days fOllowing the close of Borrower's fiscal yearending December 31. The
determination of net earnings will be made by reviewing either auditedfinancial I
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statements; or if there are no audited financial statements, federal tax returns. I
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ALL 0Tf:iSR n:RM$ AND ,CQNOITIONS REMAIN UNCHANGED. '!
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':-. -~'~"'ThisJattersfiould I:lEfattacffiii~ioyour[OanAUffionzatioriandAQreement';asit ls~a ~nt'
amendmentto it. 'If you have any questionsabout this action. please contact our office at the
above address or toll free number. . . .

Sincerely.

Supervisory t,.oan Officer

SBAAppllcation Number: 00031330261 LM: 04
 451 Lees Ford Dock Road
Nancy, KY42544
Tel: 606.636.64261 Fax: 606.636.6872
www.leesfordmarfna.com

Ma!'fh 30,2010

Fully Disbursed Team

Small Business Administration
14925 Kingsport Road
Fort Worth, TX 76155
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RE: SBA Disaster Loan Number: EIDL~·, I

:
Fully Disbursed Team,

The United States Army Corps of Engineers (USACE) has made another announcement on
March 10,2010 stating a partial suspension of work on the WolfCreek Dam Safety Major
Rehabilitation Project due to slight material movement in critical area 1. Before this
announcement it was projected that lake levels would rise for the 2011 (originally 2009) vacation
season which would have greatly aided in returning visitation to Lake Cumberlandtherefore,
retumingcash to the business. This announcement has most likely wiped away any chance of
this occurring in 20n. Also, it is unknown if the project completion date of December 2012 will
be obtained or extended.

In 2007, when we originated our disaster loan with the SBA, our financial impact was calculated
only through 2009. As the paragraph above explains, it is taking much longer to complete the
project-and our financial situation it now back to a state where we need assista..l1ce to make it
through the remainder ofthe project. Due to the negative impact of the lower than normal water
levels we continue to see a decrease in income. We have cut expenses to the maximum we can
to helpoffset the lower income but this is not enough. Also,' the business is in despite need' of
some necessary capital improvements to maintain the business and without assistance we will
not be able to complete them.

In addition, since this latest announcement, our financing bank, Branch Banking and Trust, has
now decided to pull back their exposure. They have informed us that they will not consider
interest only on our notes and are going to Q~creas~2prJin~ ofF~itfrom $5(){),Qo.O·O~~,~fto
~d~~~~~~ r~:~~av~giv,~lf ,~sunta}~e ~,~()iO't6~~"i~e. apliU1before~is 'line .~, r~uc~ ..
 Also. I believe we qualify for the Major Source of Employment (MSE) designation for our
industry for the type of loan we currentlyhave with the SBA. We needto get our debt cost
down. This could be accomplished by replacing bank debtwith disasterassistance funds since
the amortization period is much longer.

r am attaching a copy ofthe announcementreferenced above and also copies of IRS form 8821
for all entities involved in our loan with this letter.

Unfortunatelywe have a short widow of time to find solutions. Pleasecontactme at your

earliestconvenience. You may also contact Steven Brans, Secretary/Treasurer, should you have
any questions or need additional information. His contact information is:
sbrans@Ieesfordmarina.com, (606) 636-6426 ext. 233 - office or (606) 383-3702 - cellular.

Sincerely,
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JamesD, Hamilton
Owner/President-
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(§Q§)il:i§__§±~!'-ext.234- offiCe
~~~~~-. ----(8S9)806~2636-=-cel1U1ar-----

-jd@leesfordmarina.com
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BIanlStory
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US Army Corps of Engineers

Nashville District BUILDING STRONG~

Horne Newsroom Who WeAre MissIons History-

NEWS STORTES Corps announces partiar suspension of work at Worf Creek Dam
NEWSROOM Release 10-08 -
Posted March 10, 2010

NASHVILLE, TENN. - The U.S. Army Corps of Engineers Nashville District announced
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today a partial suspension of work on the Wolf Creek Dam Safety Major Rehabifitatlon
Project In Jamestown, Ky. Instrumentation used to monitorthe foundation has indicated
movement and increased hydrostatic pressure since work began In the area adjacent to
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the concrete section of the darn, which includes Critical Area 1.

"As a precautionary measure, we have suspended construction in Critical Area 1 while

we evaluate the most recent monitoring and instrumentation data," stated Barney Davis,
Chief of Engineering and Construction Division for the NashviJIe District. Critical Area 1
is the portion of the dam where the earthen embankment ties into the concrete section
and has been the major source of seepage dUring the history- of the dam's operatlon.-

"We want t6 ensure that our treatment methods are effective and that we can safely
--
lnstalLthe rernalnder ct the.concrete.berrter wallt~Davis continued;:..________cc - -- - --

The suspension affects only 600 feet of the 4400-footlong, 275-foot deep concrete
.barrier wall, which Is the major structural component of the $584 million rehabilitation
project. Work is continuing in the non-critical areas of the dam, and Davis indicated
that the Corps does not foresee any changes to the lake operation plan at this time.

Instrumentation used to monitor the dam's foundation is one of the Interim Risk
Reduction Measures {IRRM} in place at Wolf Creek•. IRRM are designed to minimize risk f
to public safety in the short term while pursuing long-term permanent fixes, such as the
ongoing rehabilitation project.

"Wolf Creek Dam is one of the most heavily monitored dams in the country, If stressed
Davis. "Our instrumentation is doing its job and giving us the information we need to
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protect public safety and effectively rehabilftate the dam." J

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Points of Contact:
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Page Last Updated:
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 U.s. SMALL BUSINESS ADMINfSTRATION (817}858-2300
Disaster Assistance 1(SOO}366-0303
Processing and Disbursement Center Hearing fmpaired
14925KingsportRoad roo (SOO) 877-8339
Fort Worth, Texas 76155-2243
MayS, 2010

.' Lee's Ford Dock, Inc.

James D. Hamilton" President
451 Lee's Ford Dock Road
Nancy, KY 42544

- - - -RE;..SSAO~LOanNumber;~
. ... - -- - _.~'--'''------'-- . __ . _ - .------ .. --..

Dear Mr. Hamilton:

We received your requesttcccnslcer yo~r company as a Major Source of Employment for the
purpose of increasingyour roan above the legislative limits. After a thorough analysisof your
loaninformaijonwe are unable to grant your requestfor the foJlowingreason(s): .:c-. I
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. ' .' .-, ",>. ' - " ..• ,... •

a
. ------- --.. TCfco~icfera"15I1smesS'as- Major Source-of Empfoyment, SOP Pafagraph-42a(2) -;'-A
business applicant qualifiesas an MSE if, at the time the disastercommences, it is a
concern whichhas one or more locations in the disaster area, employees 5 percent or more
of the work force in' an indUstry within the disaster area and has no less than 50 employees
in the disaster area. To Waive the legislative loariHmit, SOP Paragraph 42 b (1)..., The
location of the MSEisout of business or in imminent danger of going out of business and
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the waiver is necessaryto permitthe location to. reopen or stay open to avoid substantial.
unemployment .
in the disasterarea.
,","'''' .... "., '

After receiving the payroll statistics for 2006 and 2007 for Lee'sFord Dqck, Inc. and
comparing them with the Bureau of Labor Statistics for Pulaski County, Kentucky, we have
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determined that Lee's Dock Ford, Inc. could potentially be considered to be MaJor Source.of
Employment. However, Lee's Ford Dock, Inc. is still in full operation and does not appear
- ---to be in inlmi-nent danger of-going out of business -as--a~1t of the disaster: effects.' -A.-s-a- --.- -
result because Lee's Ford Dock, inc. is notclosed' or in imminentdanger of closing due to
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the ongoing disaster, a waiverof the legislative limits has beendeclined.

Had we been able to qualify the businessunder the Major Source" of Employment guidelines,
your requestwould have been denied due to the following: .

The sole purpose of an Economic Injury DisasterLoan' (EIDL) is to help a small business
meet its working capital 'requirements during the disaster-affected period untff normal
operationsresume or in the case of a prolonged disaster incident, the business has had an
opportunityto adjust its operations to the new operating environment. Economic injury is a I~
change in the financial condition of a small business.concern that is directlyattributable to !
the effects of the declared disaster, This ch~r19~jTlf.inar:'lcj~lC(}ngi~. Cl[l·mU~r~~L.!lt in #1~ . J
business; ~iqQllti~~P.'~,tc>m~~c).bHga~9~ . ~Sf!1E!YIl1~4~C'rtO;paY·9r9i~~~d'·"· . I
necessaryo~rang~nses,·" '.
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...~ .':.'.: .'..' : .: .: '·"·.i
:.;.:~:_~,:.:~.~. . ,
 Generally, we measure economic injury by comparing the gross margins generated by the
business during the period affectedby the disasterto those generated in similar, non-
disaster periods. The differences show the disaster's financial impact on the business'
.operatlone. Next, we'detennine the amount of funds the business and its owners needuntil
normal operations resume. Finally, we compare thediscister's impact on operations with
the identifiedfinancial needs: The smaller of these two amounts is the business' maximum
, economic injuryeligibility. Economicinjury disaster loans cannotexceed the financial
requirements the business and its owners could have covered had there been no disaster.

BasSet on our reviewof t/':le financial information submitted, we are

unable to establish
i3dditional eligibilityabovethe approved loan amount. Although revenuesdo lndicate a
continued depressed leyel. the business has .continued to operatewlth positive cash flows
from operations." Additionally. the financial statements do not indicate that the business has
Itiade allY-SUbStantial adjusflllent in Its expense levels over the 'thtee vea'rsslrJcetrie
declared disastercommenced. ' .

Additionally. the specificrequestfor funds to refinance existing debts or for capital

improvements are ineligible for consideration underthe disasterloan program as these are-
proh~bited uses of economic injury disaster loan funds: '

-. -,' --Thedeadfine to requestan increase in your loan amQurlte~Qiredon §'~R!ember 2.4, 2Q.Q~!~_ . .] ..
··------Stafed -ln~Paragraph6Gof yourLoan AuthOri~tion aridAgreement. ''The SBA will not consider f
a requestfor a loan increasereceived more them two (2) years from the date of the original Loan .
Authorization and Agreement unless, in the sole discretion of the SBA, there are extraordinary
and unforeseeable cirCUmstances beyond the control of the Borrower." As a result, thereare no
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reconsideration/reacceptance rights associatedwith this decfine. i
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If you have any questions aboutthis action, please contact our office at the above'address or
toll free number.

Sincerely,

Paul SaJick
Superviso'iY Loah-6ffieer'--
--- ---- - ,-_._----~---,--_._----' ---'------ I
SBA.Application Number:
The FedeiaJ Equal Credit Opportunity Act prohibits creditors from discriminating a~3inSt ~ecUt applicants on t~e basis
of race, color, religion, national origin,sex,marital status, age (provided that the applicant has the capacity to-enter .
into a binding con~ct); because all or part of the applicant's income derives from any public assistance program; or .
becausethe applicant has In good faith exercised any right underthe ConsumerProtection Act. The Federal agency .
that administers compliance with this law conceming this creditor is the Consumer Response Center, Federnl Trade
Commisslon, Washington, D.C. 20580.
 451 Lees Ford Dock Road
Nancy,KY 42544-
Tel: 606.636.64~61 Fax: 606.636.6872
wwwdeesfcrdmarina.com

Mr. Paul SaIick

U.S. Small Business Administration
Disaster Assistance
Processingand Disbursem~nt Center Ii
14925Kingsport Road ,
Fort Worth.. TX 76155-2243
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Mr. Salick:

I am responding to your May 14th email whereinyou reiterated that I have no appeal rights to SBA' s May
6th letter informing me of its decision to decline issuinga waiver of the legislativelimits of my Economic
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Injury Disaster Loan (EIDL) but that you would review any information I provided. Thank you for the" ..' j::' ..
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~ ~£fg~~~-~J()\VJTIe to()~C~~~~~~_e._ml5~~':'·~'··,~ . _ f --
I will address the May 6 th letter point by point

Point One: Whether Lee's Ford Dock qualifiesas a Major Source of Employment (MSE) under SOP
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Paragraph 42M a. (2)...

The letter states, "Afterreceiving the payroll statistics for 2006 and 2007 for Lee's Ford Dock. Inc. and
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comparing them with the Bureau of LaborStatisticsfor Pulaski County, Kentucky, we have determined
that Lee's Dock Ford, Inc. couldpotentially be considered to be Major Source of Employment."

The SOP states:

42M MAJOR SOURCE OF EMPLOYMENT WAIVER OF LENDING LIMIT

The Agency may waive the $1,500,000 legislative limit if a business is a MSE. This is to
minimize unemployment of large numbers of people in a disaster-impacted community.

a. MSE Eligibility. A business applicant qualffies as an MSE if it is a concern which has one or
more locations in the disaster area, which locations individually, or in the aggregate:

(1) Employed 10 percent or more of the entire work force within the commuting
area of a geographically identifiable community, no larger than a county;
provided that the commutlngarea does ~ot ~)('!~n~~Qre than?O mH~sf~om ,
such community; or "
 (2) Employed 5 percent or more of the work force in an industry within the disaster
area and, if the concern is a nonmanufacturing concern, employed no less
than 50 employees in the disaster area or, if the concern is a manufacturing
concern, employed no less than 150 employees in the disaster area; or

(3) Employed no less than 250 employees within the disaster area.

We meet the criteria under42M a. (2) and have since the origination ofthis loan. Consequently, wedo
rightfully qualify as an MSE, and this fact should be acknowledged. Thus, I do not understand your
statement that our request would have beendenied even had you "been able to qualify the business under
the MSE guidelines."
{

Point Two: Whetherwe meet the criteria allowingSBA discretionto Waive the legislative loan limit
under SOP Paragraph 42M b.(1)...

The SOP states

42M MAJOR SOURCE OF EMPLOYMENT WAIVER OF LENDING LIMIT

b. DiscretiontoVllaive legislative ~an Limit. The SBA may waive the $1,500,000 limit if:

(iJ TnedarnagedlocaHon(s) of t~¥~~E are out of business or in imminent danger of

and the-waiver Isnecessaryfo -permifth-e location(s)toreop·en
·····-~·going·outof business
or stay open in order to avoidsubstantial unem ployment in the disaster area; and

The letter states. "However.Lee's Ford Dock, [nco is stilI in full operation and does not appearto be in
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imminentdanger of going out of business as a result of the disaster effects. As a result,becauseLee's
Ford Dock, Inc is not closed or in imminent danger ofclosingdue to the ongoing disaster, waiver of the
legislative limits has been declined."

I respectfully, but vociferously, disagree with this assertionand have attached the cash flow projections
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we sent to you on May6 th• lbelieve these projections speak for themselves. Most assuredly, 'We are in
imminentdanger ofclosing.

Point Three: Whetherwe would have been granteda waiverto the legislative loan limit if we had been
qualified as an MSE...

As noted above, we do not understand the statement,"Had we been.able to qualify the business underthe f.

MSE guidelines your-request would have been denied due to the following:" Notwithstanding this fact. I
would like to address your reasonsfor denial.
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-The first paragraph belowthis statement explainsthat the sole purpose ofan EIDL is to help a smaIl
businessmeet its workingcapital requirements during the disaster-affectedperiod until normal operations
resume or, in the case ofa prolonged disaster incident, the business has had an opportunity to adjust its
operations to the new operating environment.
 I assure you the "disaster-affectedperiod" is not overand "normal operations" have not resumed.They
will not until the water level of LakeCumberland is raised, which is totally beyondour control and
continues to severely affect operations, expensesand revenue. Our situation is certainly a "prolonged
disaster incident."
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The businessand everyone associated with it have spared no effort to adjust our operationsto the new --
operating environment,and we are doinga tremendous job given the many challenges we face. Your
letter states that, "The financial statements do not indicatethat the business has made any substantial
_adjustment in its expense levels over the three years since the declared disaster commenced." I can
assure you we have made many adjustments. It's not as simple as laying everyone off because we are 10
trying to.retain as many ofour customersas possible through this crisis. Then.too, we have encountered
unforeseen expensesas described below. .

Our harbor depth used to average about SO feet in our pre-disaster days. Now, however,it averages about
36 feet-less than halfits norma! depth. Some marinasare still in 120 feet of water and buildingnew
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slips in very wide areas ofthe lake. Our marinais at the head ofa tributary creek, and our harbor is
shallow and narrower. At our current depth our customers are looking at a 40-foot mud bank wherethey
used to look at trees, birds and fish.Our water is not as clean as it once was because it takeslonger for the
silt and mud to settle after a, rainfall.Moreover, the low water level has created a marsh-typeland around
and near the marina which previously did not exist The marsh-type land has becomea breedingground
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forinsects which.in tum, has caused spiderinfestations. We never had to combat these iS$UeS befureand .-1..
have actually lost customers over it <iespite thetimeand money we have put into ovef(;oITJ.ing Eh~111.- __ .

We just experienced another example of'an unforeseeableproblem. As noted above, Lee's Ford sits close
to the mouth ofa tributary to Lake Cumberland. We have a floating"trash break" installed that normally
diverts debris from the tributary around the bulk of the marina without Incident.. However, on May 2nd we
had a torrential downpour, and we suffered about $800,000 WOrth ofdamage. The damage was not due
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the rain but rather.to the lower-than-normal water leveL Why? Normally, debris in the lake drifts
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downstream with the natural current With40 feet ofshoreline exposed since the loweringofthe lake,
literally three and a halfyears of debris was picked up by the torrent. The immense size and weight of this
debris smashed through the trash break into the marinadestroying and buckling docks and snapping 55
stainless steel anchor cables. Fortunately, the debris was stopped before reaching our fuel pier, hut
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emergency medical services personnel, firefighters and police evacuated almost half ofthe marina for the
night. I have attached pictures of the damageand an article describing it. Although we have insurance,it
won't cover everything. (Of course, we will also have to pay the $25,000 deductible.) In addition to
these added expenses, f now have customerswho are frightened and talking about leaving.

The point is that these types ofthings had never been problems in the normal operation ofour business..
Now they are, and the negative experiences from the lake's lowering keep adding up. The conditions are
chronic and very fluid. Our focus must be on continuingto give customers a reason to stay. Ifwe don't,
more will leave and accelerate our downward spiral. We have and will continue to adjust. In summary, I
don't see where this paragraph describes a basis for denial. Could you please provide an explanation?

- The second paragraph merely describes how economic injury is determined. I don't see where this
paragraph describes a basis for denial either. Again, could you please provide an explanation?
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-The third paragraph notesthat a review of the financial Information we submitted does not establish
additional eligibilityabove the approved Joan amount Not having been furnished with the results of the
review (the ones for which r have submitted a separate Freedomof Information Act request). I am asked
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to accept its conclusionwithout benefit ofhaving access to the analyses that form the basis upon which I
the conclusion is reached. Furthermore, I'm asked to accept it without benefit ofbaving it reconsidered
because ofan arbitrarytirneline, Wouldyou please provide an explanationof why this is so? I
-The fourth paragraphstates "The specific request for funds to refinanceexisting debts or for capital
improvements are ineligiblefor consideration underthe disaster loan program as these are prohibited uses
ofEIDL funds. Although I note in CFR123.303 below under (bXI) where loan proceeds may not be
used to refinance indebtedness incurred prior to the disaster event, it doesn't prohibit use ofthe funds to
refinance indebtedness incurreddurjng an ongoing disaster event. Furthermore, I do not see any
prohibition cited on capital improvements. (In reality our capital improvementsare really ordinary and
necessary operating expenses. The fact is that all this is for workingcapital which is necessary to carry
on and manage the business concern until resumptionof normal operations.The business would have had

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these funds and never needed an SBA EIDL ifit were not for the disaster and its continuation.)

ntle 13: Business Credit and Assistance

?ARTi23-DISASTER LOANPROGRAM
SUbp,art ~Ecan9mic Injury Dlsaster Leans
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- _.- --~-c-
---
§ 123.303 How can my business spend my economic iojurydisaster loan?
-
... _---~-,-_.__.,..,---:-.--------;-~.- ..,--,--- - ----- - ~ -- - -- I
(a) You can only use the loan proceeds for working capital necessary to cany your
concern until resumptionofnormal operations and for expendituresnecessary to
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alleviate the specific economic rrywy, but not to exceed that which the business
could have provided had the injwynot occurred.
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(b) Loan proceeds may not be used to:

(l) Refinance indebtednesswhich you incurred prior to the disaster event;
(2) Make payments on loans owned by another federal agency (including SBA) or a
Small Business Investment ComMI1Y licensed underthe Small Business Investment
Act;
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(3) Pay, directly or indirectly,any obligations resulting from a federal, state or

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local tax penalty as a result ofnegligence or fraud, or any non-tax criminalfine,
civil fire, or penalty for non-compliance with a Jaw, regulation, or order ofa
federal, state, regional, or local agency or similar matter;
(4) Repairphysica1 damage; or
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(5) Paydividends or otherdisbursements to owners, partners, officers or
stockholders,.except for reasonable remuneration direct!y related to their
performance ofservices for the business.

Point Four: Why we have been afforded no reconsideration rights...

The fetter states, "The SBA will not consider a request for a loan increase received more than two years
from the date ofthe original Loan Authorization and Agreement unless, in ~he ~e dispre!!onofthe SBA.
tlt~reare'extrf1ord.inaf')' andlinfl!resei!able circumstances beyondthe control ofthe Borrower." I find it
 difficult to understand howanyone could honestly say the circumstances we have confronted and
currentlyconfront are not extraordinaryand unforeseeable. I see no evidence that the SBA has exercised
its discretion. I can only deduce that it has optednot to do so since I am told that [ have no
reconsideration/reacceptance rights associated with the declinationof the waiver.

The SBA EIDLs and the MSEdesignation werecreated to help folksjust like us. I'm certainly thankful
for the loanI have received since it has kept us open. I don't want to borrowmore money; but,
unfortunately, 1 don't have any other option. All of my problemscontinueto stem from the water
lowering. Wehave cut costswhere we can but are, also desperatelytrying to retain our customers by
keeping the facilities in reasonable condition underthe circumstances so they don't leave before the water
is again raised. I
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Especiallysince our disaster was occasionedby the actions ofanotherFederal agency, I ask that you
pleasereconsideryour declinationof'our request I
Sincerely,
. - ..._--.._.., -
..

JDHamilton

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U.S. SMAU BUSINESS ADMINISTRATION
Disaster Assistance
Processing and Disbursement Center
(S1~2300·
1(SOO}36U303
Hearing Impalred
TOO (BOO) 877-8339
Ii
14925 KingsportRoad j

Fort Worth., Texas 76155-2243 i

June 18,2010 I
Lee's Ford Dock, Inc.
James D. Hamilton, President
451 lee's Ford DOck Road
Nancy, KY 42544

RE: S8A Disaster Loan Numbe~

Dear Mr. Hamilton:

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We receivedyour requestfor a waiver of the legislative limits and for an increase in your
economic injury loan. Aflera thorough analysisof your loan information we are unable to grant
yourrequest for the foUowing reasons:
The legis!$l~Jin1itmay be waived for a Major Sourceof Employment (MS~Lonlyj(the ..
~---_._--_.-.- -
.......--.. ---------- -.. BOrrower has exnaaste<fall avairaole reSOUrcesanderedifelSewhere and is either out of
business or is in imminentdanger of closure as a direct result of the disaster.

After a thoroughreview of your file, we determined that, while lee's Ford Dock, Inc. may be
an MSE due to employment of 5% or greater of the industryworkforcewithin the disaster
area, it does not meet the criteria for a waiver ofthe legislativeloan limit. Lee's Ford Dock,
Inc. is not closed, nor is there an imminent danger of closure resulting directly from the
declared disaster. As a result, a waiverof the legislative limits cannot be recommended.
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Because a waiver is not warranted, no increasecan be considered. Your loan is at the
maximum available under the legislativelimit.

Furthermore, we determined that, if a waiverwere allowed, no increase ineligibility would be

warranted for the fol/owing reasons:

Economic iiijuif is a change in the financial condition of a business which is directJy

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attributableto the declared disaster and which results in an inabilityto cover obligations
as they mature or to pay ordinary and necessary operatingexpenses. Funding for capital 1
improvements and refinancing isstrictfy'prohibited under the economic injul)' program." t
A thorough revieW 6fthe Borrower's flnCllncial statements indicatesthat the aJready
approved loan amount is sufficient to cover all eligible needsdirectly resulting.from the

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declared disasterincident.

You also providedinformation regarding construction of upgraded facilities at other

marinas which subsequentlyresulted in a loss of revenuefor Lee's Ford Dock, Inc. The
impact of any nOn-disaster event, such as increasedcompetition, must be exclud~ frofn Ij
the analysis.· ... .'. .. .. . < > , : ( . / . : ...
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 Our Loan Servicing offlce granted lee's Ford Dock, Inc. a four (4) monthdeferral of payments
from July 24, 2009through October 24, 2009 and interest accrued on the outstanding principal
balance dUring that time. Although some interestpaymentswere made, they did not fully cover
the interest accrued. The current loan installment paymentswill not fully amortizeyour loan by ..."-1~
the maturity date of your Joan. SBA policy prohibitsa balloon payment.Therefore, we revised
your monthlyinstallment payments to provide for payment within the loan term.

As a result, your approved disaster loan is unchanged at $1.500 1000.00. The interest rate is
unchanged and will accrue at the rate of4.0q9% per annum. Installmentpayments are
.increased to the amount of $7.595.00 beginning September 24.2010. Your paymentremains
$7,459,&2 for the months of June. Ju'y and August. The maturitY term is unchanged at'~
years.

ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

The Code of Federal Regulations (13 CFR 123.202) defines the legislative limit and provides
criteria for consideration of a waiver of the limit. The legislative limit at the time your loan was
approvedwas $1,500,000.00. The definitionof a Major Sourceof Employment and the criteria
under which a waiver of the "mit may be considered are contained in the following excerpt frpm .
theCFR:· '.
.!f'-'.
(a) Disasterbusiness loans, including both physicaland economic injury loans to the ·.C ..

same,borrower, together witbit~_ affi!@t~s, cannot exceed the lesser ofthe- t

and-economicinjury or $1.5 -miliiorC PhysiCal- ._-" ,-
.... -...--_._, ..c~----=:::c_::,:-:uhC6fiipensatedphyslcalloss·
disaster loans may include amounts to meet current building code requirements. If I
your business is a major source of employment, SBA m'aywaive the $1.5 million
limitation. A major source of employmentis a business concern which has one or I
more locations in the disaster area which:

(1) Employed 10 percent or more of the entire work force within the commuting area
of the geographically identifiable community (no larger than a county)provided
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that the commuting area does not extend more than 50 miles from such
community; or

(2) Employed5 percent of the work force in an industry within the disasterarea and,
if the concern is a non-manufacturing sma'l business, employed no less than 50
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employees in the disaster area. or if the small business is a manufacturing
concern, employed no less than 150 employees in the disaster area; or

(3) Employed no less than 250 employeeswithin the disaster area

(b) ·",SBA will consider waiving the $1.5 million loan limit only if:

1. Your damaged location or locations are out of business or in imminentdanger of

going out of business as a result of the disaster, ~ a loan in excess of $1.5
millionis necessary to reopen or keep open the damaged locations in order to
avoid substantial unemployment in the disaster area: and

2. You have used all reasonably available funds from your business, its affiliates
and its principal owners (20%
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or grea,t~r
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ChVnsrship ill~est)and
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 credit elsewhere (as described in §123.1D4) to alleviate your physical damage
and economic injury.

You may request reconsideration of this action. Your request for reconsideration must:

1. Be in writing and received by this office within slx (6) months from the date of this I
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fetter.

2. Include a completed, signed and dated (with current date), Federal Income Tax
Information Authorization,lRS Form 8821, (enclosed). I
3. Include infonnation showing that the business is in imminent danger of going out of
business as a result of the disaster, and that a loan in excess of $1.5 million is
necessary to keep the business open in order to avoid substantial unemployment in the
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disaster area.

This letter should be attached to your Loan Authorization and Agreement as it is a permanent
amendment to it. If you have any questions about this action, please contact our officeatthe
above address or toll free number. ..
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. . Sincerely,.

DavidAtkinson--- - .
.---- .--- ----SupervlsoryToan OffiCer---

SBA Application Number:

The Federal Equal Credit Opportunity Act prohibits eteditors from discriminating against credit applicantson the basis i
of race, color. religion, nationalorigin, sex, marital status, age (providedthat the applicanthas the capacity to enter ,!
into a binding contract); because all or part of the applicant's income derivesfrom any public assistance program; or I-
because the applicant has in goodfaith exercisedany right under the ConsumerProtection Act. The Federalagency
that administers compliance with this law conceming this creditor is the Consumer Response Genter, FederalTrade
Commission, Washington, D.C. 20580.