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Platinum Holdings 2nd MortgageMEMORANDUM October 17, 2002 TO:The Honorable Mayor and City Council Members FROM:Michael C. Van Milligen, City Manager SUBJECT:Platinum Holdings, L.LC. Second Mortgage: Consent & Subordination The City of Dubuque has received a request from Wayne A. Norman, Jr., the attorney representing Platinum Holdings, LL.C., to allow them to borrow an additional $1,800,000 for construction of the Grand Harbor Resort and Water Park project. Platinum Holdings, EEC. is requesting the City's consent and subordination to the second mortgage. Paragraph 4.1 of the City Lease with Platinum Holdings, EEC. does allow Platinum to mortgage the leasehold. I respectfully request Mayor and City Council approval of the request ____________________ Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Mana§er Wayne A. Norman, Jr., Esq. Preparer:. Barry A. Lindahl. Corporation Counsel Address: Suite 330, Harbor View Place 300 Main Street ~001-6944 Telephone: (563) 583-4113 RESOLUTION NO. 564-02 APPROVING CONSENT AND SUBORDINATION TO SECOND MORTGAGE AGREEMENT FOR PLATINUM HOLDINGS, L.L.C. IN FAVOR OF AMERICAN TRUST AND SAVINGS BANK Whereas, the City of Dubuque (City) has entered into an Amended Development Agreement, Lease Agreement and Parking Use Agreement with Platinum Holdings, L.L.C. (Platinum) for the development of certain property owned by the City (the Property) for a hotel and water park; and Whereas, Platinum has requested that City consent to a second mortgage of the Property in favor of American Trust & Savings Bank (the Bank) and that City subordinate its interests in the Property to the second mortgage, a copy of which Consent and Subordination to Mortgage is attached hereto; and Whereas, the City Council finds that it is in the best interests of the City to approve Platinum's request. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The Consent and Subordination to Mortgage are hereby approved; and Section 2. The Mayor Pro Tem is hereby authorized and directed to execute the documents on behalf of the City. Attest: Jeanne F. Schneider, CMC City Clerk Passed, approved and adopted this 21st day of October Roy Buol, Mayor Pro-Tem ,2002. F:[USERSt NORMAN, GILLOON, WRIGHT & HAMEL, P.C. Attorneys Wayne A, Norman, Jr.* Arthur F. Gilloon* E. David Wright* Dirk J. Ramel** Christopher R. Paar*** RE C !VED 02 OCT 16 Pi'i 2:03 City C ~'s O~Ece Dubuq~ e, tA October 16, 2002 Please Reply To: P.O. Box 857 Dubuque, IA 52004-0857 E-Mail: ngwhlaw@pcii.net Writer's E-Mail Address: wnorman~dbqlaw.com City Council City of Dubuque City Hall Dubuque, IA 52001 Re: Platinum Holdings, L.L.C. Second Mortgage: Consent & Subordination Dear Mr. Mayor and Members of the City Council: We represent American Trust & Savings Bank (the "Bank") which, as you know, has provided mortgage financing for the construction of the new riverfront hotel (the "Project") to Platinum Holdings, L.L.C. (the "Borrower"). The financing originally provided for the Project by the Bank was $15,000,000.00, and the total estimated cost of the Project was $22,800,000.00. The Borrower has requested that the B auk loan to the Borrower an additional $1,800,000.00 on essentially the same terms and conditions as the original loan, and the Borrower has agreed to provide additional equity funding to the project in the amount of $1,200,000.00. Due to design changes and enhancements, and the total estimated cost of the Project is now $26,300,000. The Bank is willing to provide the additional $1,800,000.00 in financing requested by the Borrower on the terms and conditions contained in a Second Amendment to Loan Agreement, Second mortgage and Security Agreement, First Amendment to Assignment of Rents Agreement, Limited Guarantors' Acknowledgments and Consents and a Consent and Subordination to Second Mortgage. Copies of drafts of the Second Mortgage and the City's Consent and Subordination to Second Mortgage are enclosed herewith. On behalf of the Bank and the Borrower, we request that the City Council of the City of Dubuque approve and execute the Consent and Subordination to Second Mortgage in order to allow this additional £mancing to proceed. Please contact me if there are questions or additional information is needed. Thank you for your consideration. Security Building / 800 Main Street / Dubuque, IA 52001 / (563) 556-6433 / Fax: (563) 556-7706 Also Licensed in Wisconsin / Also Licensed in Illinois / Also Licensed in Minnesota NORMAN, GILLOON, WRIGHT & HAMEL, P.C. Attorneys City Council October 16, 2002 Page 2 Sincerely, Wayne A. Norman, Jr. WAN/ljw Enclosures (2) Cc: American Trust & Savings Bank Platinum Holdings, L.L.C. Barry A. Lindahl, Esq. Prepared by: YVayne A. Norman, Jr., Norman, Cdlloon, Wright & Hamel, P.C., 800 Main Street, P.O. Box 857, Dubuque, IA 52004-0857 563.556.6433 SPACE ABOVE THIS LINE FOR RECOP. I)ER IMPORTANT: READ BEFORE SIGNING. TI:rE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTIqFF, R TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTH I~;R WRITTEN AGREEMENT. Lot 1 ofRIVERWALK 3P~ ADDITION, in the City of Dubuque, Iowa, according to the recorded Plat thereof. SECOND MORTGAGE AND SECURITY AGREEMENT This Second Mortgage and Security Agreement ("Mortgage") is effective ,2002, by Platinum Holdings, LLC, an Iowa limited liability company ("Mortgagor"),/n favor of American Trust & Savings Bank ("Mortgagee"). Recitals. Mortgagor is indebted to Mortgagee in the principal sum of One Million Eight Hundred Thousand & 00/100 Dollars ($1,800,000.00), or so much as shall be advanced as provided under that certain Loan Agreement (the "Loan Agreement"), effective August 15, 2001, as amended by Amendment No. I to Loan Agreement effective October 31,2001, and by the Second Amendment to Loan Agreement dated the date hereof, between the Mortgagor and Mortgagee (the "Loan"), which indebtedness is evidenced by: (1) A Construction Loan Note executed this date, and any extensions, renewals or modifications of, or substitutes orreplacements for, or future advances made thereunder, all as is more particularly set forth in the Construction Loan Note; and (2) if exercised by Mortgagor, a Term Note, to be executed at or prior to the maturity of the Construction Loan Note referred to above, and any extensions, renewals or modifications of, or substitutes or replacements for, or future advances made thereunder, ail as more particularly set forth in the Term Note. As a condition to the incurring of said indebtedness, Mortgagor agrees to execute and deliver this Mortgage to secure payment of the Construction Loan wp60docsLAmerican Trust & Savings Bank~Plafinum Holdings, L.L.C.Wiortgage. Second- 101602 Page 1 of 26 Note and the Term Note, performance of the covenants and conditions in this and any extension, renewal or modification thereof, performance of all covenants and agreements contained in the Loan Agreement executed this date between Mortgagor and Mortgagee. In order to secure the repayment of the indebtedness evidenced by the Construction Loan Note and the Term Note (including, without limitation, the principal amount thereof, interest thereunder and ail other sums payable thereunder), ail other sums payable hereunder and the performance of the covenants and agreements of Mortgagor contained in this Mortgage and the Loan Agreement, as amended, Mortgagor hereby grants, bargains, sells, transfers, assigns, conveys, confirms and mortgages to Mortgagee, its successors and assigns forever, as follows below. The Mortgaged Property. Mortgagor grants to Mortgagee, to have and to hold the Mortgaged Property, and ail parts thereof, to Mortgagee, its successors and assigns forever, to its and their own proper use and benefit forever, subject, however, to the terms and cnnchtions in this Mortgage. Ail of the property described below is collectively referred to as the "Mortgaged Property." Leasehold. All of Mortgagor's right, title and interest in that certain Lease, dated June 4, 2001, by and between the Mortgagor and the City of Dubuque, Iowa (the "City"), pursuant to which the City has leased to Mortgagor the following described premises situated in Dubuque County, Iowa, described above on page I (the "Leasehold"). 2.2. Improvements. (1) Ali buildings, structures and improvements of every nature now or hereafter situated on the Leasehold; ail building materials, supplies and other property stored at or delivered to the Leasehold or any other location for incorporation into any of the buildings, structures and improvements located on the Leasehold; (2) All fixtures, machinery, appliances, equipment, furniture and personal property of every nature whatsoever located in or on, or attached to, and used or intended to be used in connection w/th the Leasehold, such buildings, structures or other improvements, or in connection with any construction being conducted thereon, including all extensions, additions, improvements, betterments, renewals, substitutions and replacements to any of the foregoing; (3) All right, title and interest of Mortgagor to such personal property and fuctures, whether as owner, chattel lessee or otherwise. It is understood and agreed that all such personal property and fixtures shall be part of the Leasehold encumbered by this Mortgage, whether or not affixed to the Leasehold, to the fullest extent pemaitted by law, are to be conclusively deemed to be fixtures, a part of the Leasehold and a part of the security provided by this Mortgage. All of the property described in this Section is collectively referred to as the "Improvements." 2.3. Streets, Etc. All estate, fight, title and interest of Mortgagor, of whatever character, now owned or hereafter acquired, to: (1) All streets, roads and public places adjoining the Leasehold, and the land lying in the bed of suer s~reets, roads and public places: and (2) All other side~valks, alleys, ways, passages, water courses, strips and gores of land adjoining or used or intended to be used in connection with any of the property described above in this Section. 2.4. Easements, Etc. All right, title and interest of Mortgagor to all easements, rights-of-way and rights of use or passage, public or private, and ail estates, interests, benefits, powers, rights including, without limitation, any and all lateral support, drainage, slope, sewer, water, a/r, mineral, oil, gas and subsurface rights, privileges, licenses, profits, rents, royalties, tenements, hereditaments, reversions and subreversions, remainders and Page 2 of 26 2.5. 2.6. subremainders and appurtenances whatsoever in any way belonging, relating or appertaining to any of the property described above, or any part of such property, or which hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by Mortgagor. Judgments, Refunds, Accounts Receivable, Proceeds, Etc. (1) Any and all judgments, settlements, claims, awards, insurance proceeds and other proceeds and compensation, and interest thereon (collectively, "Compensation"), hereafter made or to be made or hereafter payable in connection ~vith any casualty or other damage to the Improvements, any part of such propcn'ty or any fights appurtenant thereto, or in connection with any condemnation proceedings affecting such property or rights or any taking under power of eminent domain (or any conveyance in lieu of or under threat of any such taking) of such property or fights, including, without limitation, any and all Compensation for change of grade of streets or any other injury or decrease in the value of such property or rights, any and all proceeds of any sales, assignments or other dispositions of such property or fights, (2) Any and ail refunds of insurance premiums, taxes, assessments, water charges, sewer rents or other impositions in respect of such property or rights, (3) All accounts receivable, contract fights, general intangibles, permits, licenses (including, without limitation, any and ail liquor, cabaret and vending licenses), approvals, actions and rights in action (including, without limitation, all rights to insurance proceeds and unearned insurance premiums) arising from or relating to any such property or rights, and (4) All proceeds, products, replacements, additions, substitutions, renewals, accessions and accretions of and to such property or rights. Rents, Royalties, Etc. All rents, royalties, issues, profits, revenues, income and other benefits (which terms, whenever used in this Mortgage, shall include, without limitation, all monetary sums paid or payable by guests or occupants of hotel or motel rooms within the improvements and all accounts receivable with respect to such sums), to which Mortgagor may now or hereafter be entitled from the Improvements, above, or any part of such property, to be applied against the indebtedness and other sums secured hereby; provided, however, that permission is hereby given to Mortgagor, so long as no Event of Default (as defined below) shall have occurred, to collect and use such rents, royalties, issues, profits, revenues, income and other benefits as they become due and payable, but not in advance thereof. The foregoing assignment shall be fally operative without any further action by any party, and specifically Mortgagee shall be entitled, at its option upon the occurrence of an Event of Default, to all such rents, royalties, issues, profits, revenues, income and other benefits, whether or not Mortgagee takes possession of such property. Upon the occurrence of an Event of Default, the permission given to Mortgagor to collect such rents, royalties, issues, profits, revenues, income and other benefits shall terminate. Neither the exercise of any rights under this Section by Mortgagee nor the application of any such rents, royalties, issues, profits, revenues, income or other benefits to the indebtedness and other sums secured hereby, shall cure or waive any Event of Default or notice of any Event of Default hereunder or invalidate any act done pursuant hereto or to any such notice, but shall be cumulative of all other rights and remedies. 2.6.1. Present Assignment. The foregoing provisions shall constitute an absolute and present assignment of the rents, royalties, issues, profits, revenues, income and other benefits from the Improvements, subject, however, to the conditional permission given to Mortgagor to collect and use such rents, royalties, issues, Page 3 of 26 profits, revenues, income and other benefits as provided above. The existence or exercise of such right of Mortgagor shall not operate to subordinate this assignment to any subsequent assignment, in whole or in part, by Mortgagor, and any such subsequent assigmnent by Mortgagor shall be subject to the rights of Mortgagee under this Mortgage. 2.7. Leases, Etc. All right, title and interest of Mortgagor in and to any and all leases, subleases, occupancy, purchase and sale or similar agreements (collectively "Leases") now orhereafter on or affecting the Improvements, or any part of such property, together with all security therefor (including, without limitation, any and all right, title and interest of Mortgagor in and to property of any tenant or other party under any such lease, and all cash or security deposits, advance rentals and deposits or payments of a similar nature thereunder) and together with all moneys payable thereunder, and all books and records which reflect payments made under the leases and all security therefore, subject, however, to the conditional permission hereinabove given to Mortgagor to collect the rents, income and other benefits arising under any such lease. Mortgagee shall have and is hereby granted the right, at any time and from time to time, to notify any lessee, sublessee, licensee, occupant or purchaser of the rights of Mortgagee as provided by this Section. 2.8. After Acquired Property. Any and all further or greater estate, right, title, interest, claim and dmmnd whatsoever of Mortgagor, whether now owned or hereafter acquired, in or to any of the propm-ty described in the foregoing Subsections, or any rights or interests appurtenant thereto. 2.9. Performance of Obligations. If Mortgagor promptly pays to Mortgagee the Indebtedness as defmed below, and at the times and in the manner req~nced by this Mortgage and in all other instruments securing the Indebtedness, without any deduction or credit for taxes or other similar charges paid by Mortgagor, and performs all the covenants and promises in the Construction and Term Notes, and any renewal, extension or modification thereof, in this Mortgage and in all other insmmaents securing the Indebtedness, to be kept, performed or observed by Mortgagor, then this Mortgage, and the grants, conveyances and assignments contained in th/s Mortgage shall cease and be void. Otherwise they shall remain in full force and effect. Covenants of Mortgagor. Mortgagor shall perform, observe and comply with ali provisions of this Mortgage, of the Construction and Term Notes and of every other instrument securing the Indebtedness evidenced by the Construction and Term Notes, and will promptly pay to Mortgagee when due the principal and accrued interest, and all other sums req~f~red to be paid by Mortgagor under the Construction and Term Notes and the provisions of this Mortgage or any other instrument securing the Indebtedness evidenced by the Construction and Term Notes. The entire principal amount of the Construction and Term Notes, all accrued interest and all obligations and indebtedness described in this Mortgage are referred to as the "Indebtedness." The Mortgage, the Loan Agreement and all other documents securing the Indebtedness being collectively referred to as the "Security Documents." Mortgagor further covenants and agrees with Mortgagee as follows: g.I. General Representations, Covenants and Warranties. Mortgagor represents, warrants and covenants that as of the date hereof: Page 4 of 26 3.1.1. 3.1.2. 3.1.3. 3.1.4. 3.1.5. 3.1.6. 3.1.7. 3.1.8. Mortgagor, in the Leasehold, the Improvements and related streets and easements (as defined in Sections 2.3 and 2.4 hereof), has a valid enforceable lease for a term of fifty (50) years from June 4, 2001, and in the case of the remainder of the Mortgaged Property, has absolute title to the remainder of the Mortgaged Property, and has the power and author/ty to mortgage and pledge the same as provided in this Mortgage. Mortgagee may at all times peaceably and quietly enter upon, hold and occupy the Mortgaged Property in accordance with the terms of this Mortgage. Except as shown on Schedule 3.1.2, the Mortgaged Property is free and clear of all liens, security interests, cha[ges, encumbrances and other exceptions to title whatsoever; Mortgagor will m~mtain and preserve the lien of this Mortgage until the Indebtedness has been paid in full; All corporate action has been taken to make and constitute the Construction and Term Notes, this Mortgage, and any and all other instruments executed by Mortgagor in connection with the Indebtedness, and the same do constitute, legal, valid and binding obligations, enforceable in accordance with their respective terms, subject to the application of bankruptcy and other laws affecting the fights of creditors generally. There are no provisions in any indenture, contract, agreement or other document affecting Mortgagor, or to which Mortgagor is a party or is bound, which prohibit or limit the execution of the Construction and Term Notes, this Mortgage or any other insmunents executed by Mortgagor in connection with the Indebtedness, or the observance by Mortgagor of any of the terms and conditions of the Construction and Term Notes and the Security Documents. Such actions by Mortgagor will not violate any provisions of any law, regulation, injtmctinn or decree presently in effect, the fa/lure of which will have a material adverse effect on the Mortgagor or this Mortgage. All reports, statements and other data famished by Mortgagor to Mortgagee hi connection with the Loan are true, correct and complete in all mater/al respects and do not ontit to state any fact or circumstance necessary to make the statements contained therein not misleading. There are no actions, suits or proceecFmgs pencFmg, or to the knowledge of Mortgagor threatened, against or affecting Mortgagor or the Mortgaged Property in any court or governmental agency, nor is Mortgagor in default with respect to any order of any court or governmental agency; All costs arising from construction of any improvements and the purchase of all equipment located on, or constituting part of, the Mortgaged Property which have been incurred pr/or to the date ofth/s Mortgage have been paid or are in the normal process of being paid; Page 5 of 26 3.2. 3.4. 3.1.9. The Leasehold, upon completion of the construction of the Improvements, will have direct access for ingress and egress to, the street(s) adjoining the Leasehold, as such access is described in the plans and specifications submitted to Mortgagee; 3.1.10. All necessary utilities will be, upon completion of the construction of the Improvements, available in sufficient capacity, as set forth in the plans and specifications submitted to Mortgagee, to service the Mortgaged Property satisfactorily during the term of the Construction and Term Notes and Security Documents. 3.1.11. Mortgagor has not received a notice of default under the terms of any instrument evidencing or securing any indebtedness, and there has occurred no event~ which would, if uncured or uncorrected, constitute a default under any such instrument with the giving of notice, passage of time or both. Mortgagor fully warrants and will forever defend its interest in the Mortgaged Property against the claims of all persons whosoever claiming or to claim the same or any part thereof. Compliance with Laws; Notice. Mortgagor covenants and warrants that the Leasehold and the Improvements, and the proposed development and use thereof, presently materially comply, and will continue to materially comply, with all applicable restrictive covenants, zoning and subdivision ordinances, building codes, health and environmental laws and regulations, and all other applicable laws, roles and regulations, the failure of which would have a material adverse effect on the Mortgagor, the Leasehold and the Improvements. All material licenses, approvals and permits required in connection with the Leasehold and the Improvements either have been obtained or will be obtained when required. If Mortgagor receives notice from any federal, state or other governmental body that any such covenant, ordinance, code, law or regulation is not being complied with, Mortgagor ~vill promptly provide Mortgagee with a copy of such notice. Taxes and Other Charges. Subject to the provisions of this Section, Mortgagor shall pay when due all taxes, asses sments,.charges, fees, levies, fines and encumbrances of every kind imposed, levied or assessed against the Mortgaged Property or any part thereof, or against this Mortgage or the Indebtedness, or agWmst the interest of Mortgagee in the Mortgaged Property, as well as ali income taxes, assessments and other governmental charges levied and imposed by any tax'rog authority against Mortgagor or the Mortgaged Property or any part thereof. However, Mortgagor may in good faith, by appropriate proceedimgs contest the validity, applicability or amount of any asserted tax or assessment. PencYmg such contest, Mortgagor shall not be deemed in default under this Mortgage if, on or before the due date of the asserted tax or assessment, there is established an escrow acceptable to Mortgagee in an amount estimated by Mortgagee to be adequate to cover the payment of such tax or assessment with interest, costs and penalties. If the amount of such escrow is insufficient to pay any amount adjudged by a court to be due, with all interest, costs and penalties, Mortgagor shall pay such deficiency no later than the date such judgment becomes final. No Credit Against the Indebtedness. Mortgagor shall not claim, demand or be entitled to receive any credit agWmst the Indebtedness for any part of the taxes, assessments or Page 6 of 26 3.5. similar impositions assessed against the Mortgaged Property or any part thereof, or that are applicable to the Indebtedness or to Mortgagee's interest in the Mortgaged Property. No deduction shall be claimed from the taxable value of the Mortgaged Property or any part thereof by reason of the Construction and Term Notes or the Security Documents. Insurance. Mortgagor shall, at its sole expense, obtain for, deliver to and m~mtain for the benefit of Mortgagee during the life of this Mortgage, public liability insurance and fire and extended coverage insurance on the Mortgaged Property which are of a character usually insured by business organizations engaged in the same or similar businesses, all in form and mount sufficient to indemnify Mortgagor for 100% of the replacement cost of any such asset lost or damaged (subject to any deductible customary in Borrower's industry) or in an amount consistent with the an~ount of insurance generally carried on comparable assets witlim the industry, and shall pay when due all premiums on such insurance policies and any renewals thereof. Mortgagor shall maintain such insurance in builder's risk, completed value, non-reporting form, with permission to complete and occupy, and workers' compensation coverage. All such policies and renewals shall be held by Mortgagee and shall cont~m a noncontributory standard Mortgagee's endorsement making losses payable to Mortgagee as its interest may appear. All such policies shall provide that they shall not be canceled, ternfmated or materially altered without at least thirty (30) days' prior written notice to Mortgagee. Within fifteen (15) days after the anniversary or effective date of each policy, Mortgagor shall deliver to Mortgagee evidence of the payment of ali premiums on such -insurance policies and renewals. In the event of loss, Mortgagor will give immediate written notice to Mortgagee, and Mortgagee may make proof of loss if not made promptly by Mortgagor. In the event of the foreclosure of this Mortgage or any other transfer of title to the Mortgaged Property in extinguishrnent of the Indebtedness, all right, title and interest of Mortgagor to all insurance policies and renewals in force shall pass to the purchaser or grantee. 3.5.1. In the event of any casualty from which the insurance proceeds do not exceed $250,000, and provided that no Event of Default exists, Mortgagor shall make claim for such proceeds, and may apply the proceeds in its discretion, provided that Mortgagor first repairs any damage to the property for which the proceeds apply. Subject to the foregoing reservation, Mortgagee may, at its option, endorse any check which may be payable to Mortgagor to collect any proceeds of such insurance (other than proceeds of public liability insurance), and any amount so collected may be applied by Mortgagee toward satisfaction of any of the Obligations if an Event of Default has occurred and is continuing. If Mortgagee receives any proceeds from insurance in the absence of an Event of Default it shall remit such proceeds to Borrower wittfm three (3) Business Days after Mortgagee's receipt of such proceeds. Subject to the foregoing reservation, pursuant to its rights granted in this Mortgage in all proceeds from any insurance policies, Mortgagee is authorized, at its option to adjust or compromise any loss reasonably estimated by Mortgagee to exceed $250,000, under any insurance policies on the Mortgaged Property, and to collect and receive the proceeds resulting from a loss from any such policy. Each insurance company is authorized and directed to make payment for all such losses (whether or not Mortgagee exercises its option to adjust any such loss) directly to Mortgagee alone, and not to Mortgagor and Mortgagee jointly. Page 7 of 26 3.5.2. Except with respect to insurance proceeds of $250,000 or less as set forth in Section 3.5.1 above, Mortgagor shall immediately pay to Mortgagee any payments received directly from any insurance company. After deducting from such insurance proceeds any reasonable expenses incurred by Mortgagee in the collection or handling of such funds (including attorneys' fees), Mortgagee may, if an Event of Default has occurred and is continuing, apply the net proceeds, at its option, either toward restoring the Mortgaged Property or as a credit on any portion of the Indebtedness, whether then matured or to mature in the furore, or at the option of Mortgagee such sums either wholly or in part may be paid over to Mortgagor to be used to repair the Improvements or to build new Improvements in their place, or for any other purpose or object satisfactory to Mortgagee, without affecting the lien of this Mortgage for the full amount secured before such payment took place. Provided an Event of Default has not occurred or is not continuing, any insurance proceeds collected by Mortgagee shall be applied, at its option, either toward restoring the Mortgaged Property, or paid over to Mortgagor to be used to repair the Improvements or build new Improvements in their place, or for any other purpose or object satisfactory to Mortgagee. 3.5.3. Any such proceeds made available by Mortgagee as provided above shall earn interest at the highest rate of interest then paid by Mortgagee on any of its savings or other accounts offered or provided to any customer or client of Mortgagee. Although Mortgagee intends to and shall use its best efforts to collect such payments in a timely fashion, Mortgagee shall not be responsible for any failm'e to collect any insurance proceeds due under the terms of any policy except for failures as a result of Mortgagee's gross negligence or intentional act. 3.5.4. Mortgagor shall not carry any additional or separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under the Security Documents, or in excess of the amounts required hereunder, unless such insurance shall comply with the provisions of this Section 3 (including the loss payable provisions set out above). Mortgagor immediately shall notify Mortgagee if any such additional, separate or excess insurance is carded, and shall deliver to Mortgagee duplicate originals of all policies of such insurance and renewals. Further Assurances. Upon Mortgagee's request, Mortgagor shall make, execute and deliver to Mortgagee and, where appropriate record or file in such places deemed desirable by Mortgagee, all such further mortgages, instruments of further assurance, certificates and such other documents as Mortgagee may reasonably consider desirable in order to effectuate, complete, perfect, continue or preserve the obligations of Mortgagor under the Notes and the Security Documents, and the lien of this Mortgage as a lien upon ali of the Mortgaged Property, whether now owned or hereafter acquired, and with respect to every person deriving any estate, right, title or interest under this Mortgage. Upon any failure by Mortgagor to do so, Mortgagee may make, execute, record and file any such mortgages, instruments, certificates and documents for and in the name of Mortgagor. Mortgagor hereby irrevocably appoints Mortgagee its agent and attorney-in-fact for the limited purpose stated in the immediately preceding sentence. Page 8 of 26 3.7, 3,8. Mechanic's and Other Liens. Mortgagor shall not pmuuit any mechanic's or other lien (other than any lien for taxes not yet due) to be created upon the Mortgaged Property, or any part thereof. However, that if such liens are filed against the Mortgaged Property, or any part thereof, then Mortgagor shall not be in breach of this covenant if Mortgagor shall, within thirty (30) days after notice of the existence thereof, causes the same to be discharged of record by payment or otherwise, or, pending the contest of such lien, deposits an amount equal to the mount of such lian, plus interest, costs and penalties, if any, with a bonding company satisfactory to Mortgagee as security for the payment of the lien. If the lien is not discharged, or the amount is not deposited, then in addition to any other right or remedy of Mortgagee, Mortgagee may, but shall not be obligated to, discharge such lien in a manner as Mortgagee selects. If the lien is not discharged, or the amount is not deposited, Mortgagee is entitled, if Mortgagee so elects, to compel the prosecution of an action for the foreclosure of the lien by the lienor, and to pay the amount of any judgment in favor of such lienor w/th interest, costs and allo~vances. Any amount paid by Mortgagee as provided above, together with ail costs and expenses incurred by Mortgagee in connection therewith (including attorneys' fees), together with interest thereon at the Default Rate, shall be paid by Mortgagor to Mortgagee upon demand. Condemnation. Mortgagee shall be entitled to ail compensation, awards, damages, claims, rights of action, proceeds, payment and other relief (collectively, "compensation") on account of any damage or taking of the Mortgaged Property, or any part thereof, in connection with any condemnation proceedings or any exercise of the power of eminent domain (or any conveyance in lieu of or under threat of any such talcing), including, without limitation, any such compensation for change of grade of streets or any other injury to or decrease in the value of the Mortgaged Property. All such compensation, and the fight to receive it, is included in the Mortgaged Property. Mortgagor agrees to execute further assignments of any such compensation as Mortgagee reasonably requires. Mortgagor shall take all reasonable steps to assure that such compcmsation is paid to Mortgagee alone, and not to Mortgagor and Mortgagee jointly. Mortgagee is irrevocably authorized and appointed attorney-in-fact for Mortgagor, for the sole purpose of endorsing Mortgagor's name on any instrument in payment of such compensation. 3.8.1. In the evant of any condemnation proceeding from ~vhich the compensation does not exceed $250,000, and provided that no Event of Default exists, Mortgagor may prosecute any proceeding relating to any condemnation or exercise of the power of eminent domain, to settle or compromise any claim in connect/on therewith and to collect and receive compensation therefore, and may apply the compensation in its discretion, provided that Mortgagor first repairs the Mortgaged Property if necessary. Subject to the foregoing reservat/on, Mortgagee is authorized, at its option, to commance, appear in and prosecute in its own or Mortgagor's name any proceeding relating to any condemnation or exercise of the power of eminent domain, to settle or compromise any claim in connect/on therewith and to collect and receive compensation and give proper receipts and acquittances therefor. After deducting from such compensation all reasonable expenses (including attorneys' fees) incurred by Mortgagee in connect/on therewith, Mortgagee may release such compensation to Mortgagor without affecting the lien of tiffs Mortgage (wiffch release maybe subject to such terms and conditions as Mortgagee may impose), or Page 9 of 26 3.9. Mortgagee may apply such compensation, in such manner as Mortgagee determines to the reduction of the Indebtedness if an Event of Default has occurred and is continu/ng. Any balance of such compensation remaining after such application to the Indebtedness shall be paid to Mortgagor. If Mortgagee receives any compensation in the absence of an Event of Default, it shall remit such compensation to Mortgagor within three (3) Business Days after Mortgagee's receipt of such compensation, and Mortgagor shall apply such compensation first to the repair and restoring of the Mortgaged Property. 3.8.2. Any compensation made available by Mortgagee as provided above shall earn interest at the h/ghest rate of interest then paid by Mortgagee on any of its savings or other accounts offered or provided to any customer or client of Mortgagee. Notwithstanding any such condemnation, Mortgagor shall continue to pay interest at the rate provided in the Notes on the entire unpaid principal amount thereof. Care of Mortgaged Property. Mortgagor shall preserve and maintain the Mortgaged Property in good condition and repair. Except for normal wear and tear, Mortgagor shall not permit, commit or suffer any waste, impairment or deterioration of the Mortgaged Property or of any part thereof, and will not take any action which will increase the risk of fire or other hazard to the Mortgaged Property or to any part thereof. 3.9.1. Upon prior notice to Mortgagor, Mortgagee and its representatives, employees and contractors may enter upon and inspect the Mortgaged Property at any reasonable time during normal business hours during the life of this Mortgage. Mortgagee and its reI~cesentatives, employees and contractors shall be accompanied by a representative or employee of Mortgagor during any and all inspections of the Mortgaged Property. 3.9.2. If any part of the Mortgaged Property is lost, damaged or destroyed by fire or other cause, Mortgagor will give immediate written notice to Mortgagee as to any loss, damage or destruction of any part of the Mortgaged Property which exceeds $100,000, and shall promptly restore the Mortgaged Property (regardless of such replacement value) to the equivalent of its original condition regardless of whether there shall be any insurance proceeds therefor. Ifa part of the Mortgaged Property is lost, physically damaged or destroyed through condemnation, Mortgagor will promptly restore, repair or alter the remair~mg property in a manner satisfactory to Mortgagee. 3.9.3. No work required to be performed under this Section (other than routine maintenance and repairs or other repairs the aggregate cost of which does not exceed $250,000) shall be undertaken until plans and specifications therefor, prepared by an architect or engineer satisfactory to Mortgagee, have been submitted to and approved in ~vriting by Mortgagee. 3.9.4. No part of the Improvements or the Mortgaged Property the aggregate value of which exceeds $100,000 shall be removed, demolished or altered, without the prior written consent of Mortgagee. However, Mortgagor may, without the conseat of Page 10 of 26 3.10. 3.i1. Mortgagee, remove and dispose of, free from the lien of this Mortgage, tangible personal property constituting part of the Mortgaged Property which becomes worn out or obsolete, provided that, either simultaneously with or prior to such removal or disposition, such item is replaced with another item of equal utility and value. Such item shall be owned by Mortgagor and shall be free from any security interest, ownership interest or any other right or claim of any other person. By such removal and replacement Mortgagor has elected to subject the replacement item to the lien and security interest of this Mortgage. Security Agreement and Financing Statements. Mortgagor grants to Mortgagee a security interest in all personal property and fixtures described in the section of tins Mortgage entitled "The Mortgaged Property," and in any other personal property or fixtures constituting part of the Mortgaged Property. This Mortgage is a self-operative security agreement and fixture filing with respect to the Mortgaged Property. Mortgagor agrees to execute and deliver on demand such other secm/ty agreements and other instruments as Mortgagee reasonably requests to preserve and maintain the priority of the lien created hereby on property which may be deemed personal property or fixtures, to perfect its security interest or to impose the lien hereof more specifically upon any such property, and shall pay to Mortgagee on demand any reasonable expenses incurred by Mortgagee in connection with the preparation, execution and filing of any such documents. Mortgagor appoints the Mortgagee its attorney-in-fact for the limited purpose of executing and filing, on Mortgagor's behalf, all such documents and ali fmancing statements and refilings and continuations thereof, as Mortgagee reasonably deems advisable to create, preserve and protect said lien, which appointment is coupled with an interest and is irrevocable. Mortgagee shall have ali the rights and remedies in addition to those specified herein of a secured party under the Uniform Commercial Code. Assignment of Rents. The assignment contained under the section of tiffs Mortgage entitled "The Mortgaged Property," is fully operative without any further action on the part of either party. Mortgagee is entitled, at/ts option, upon the occurrence of an Event of Default, to ali rents, royalties, issues, profits, revenues, income and other benefits from the Mortgaged Property, or any part thereof, wh~ther or not Mortgagee takes possession of such property. Mortgagor grants to Mortgagee the right, upon the occurrence of an Event of Default: (1) To enter upon and take possession of the Mortgaged Property, or any part thereof, for the purpose of collecting rents, royalties, issues, profits, revenues, income and other benefits; (2) To lease the Mortgaged Property or any part thereof; and (3) To apply rents, royalties, issues, profits, revenues, income and other benefits, after payment of all necessary charges and expenses, on account of the Indebtedness. Such assigrnnent and grant shall continue in effect until the Indebtedness is paid, the execution of th/s Mortgage constituting and evidencing the irrevocable consent of Mortgagor to the entry upon and taking possession of the Mortgaged Property by Mortgagee pursuant to such grant, whether or not foreclosure bas been instituted. Neither the exercise of any rights under tiffs paragraph by Mortgagee nor the application of any such rents, royalties, issues, profits, revenues, income or other benefits to the Indebtedness, shall cure or waive any default or notice of default hereunder or invalidate any act done pursuant hereto or to any such notice, but shall be cumulative of all other rights and remedies. Page 11 of 26 3.i2. After-Acquired Property. To the extent permitted by applicable law, the lien of this Mortgage will automatically attach, without further action, to all after-acquired personal property and fixtures owned by Mortgagor and located in or on, or attached to, or used or intended to be used in connection with, or with the operation of, the Mortgaged Property or any part thereof. Mortgagor shall execute and deliver such instnm~ents as Mortgagee reasonably requests to confirm such lien, and Mortgagor hereby appoints Mortgagee Mortgagor's attorney-in-fact for the limited purpose of executing all such insmm~ents, which power is coupled with an interest and is irrevocable. 3.13. Expenses. Mortgagor will pay when due ali reasonable appraisal fees, recording fees, taxes, brokerage fees and commissions, abstract fees, title policy fees, escrow fees, attorneys' fees, court costs, fees of inspecting architect(s) and engineer(s) and all other costs and expenses of every character wh/ch have been incurred or which may hereafter be incurred by Mortgagee in connection with: 3.13.1. The preparation, execution and recording of this Mortgage or any other instrument evidencing or securing the Indebtedness or otherwise governing Mortgagor's or a guarantor's responsibilities in connectipn with the Indebtedness or the Mortgaged Property; 3.13.2. The funding of the Loan; 3.13.3. After the occurrence of an Event of Default, preparation for enforcement of th/s Mortgage or any other instrument evidencing or securing the Indebtedness or otherwise govemmg Mortgagor's or a guarantor's responsibilities in connection with the Indebtedness or the Mortgaged Property, whether or not suit or other action is actually commenced or undertaken; 3.13.4. Enforcement of this Mortgage or any other instrument evidencing or securing the Indebtedness or otherwise governing Mortgagor's or a guarantor's responsibilities in connection with the Indebtedness or the Mortgaged Property; 3.I3.5. Court or administrative proceedings of any kind to which Mortgagee may be a party, by reason of the Construction and Term Notes, the Security Documents, or any other instrument evidencing or securing the Indebtedness or otherwise governing Mortgagor's or a Guarantor's responsibilities in connection with the Indebtedness or the Mortgaged Property; 3.13.6. Preparation for and act/ons taken in connection with Mortgagee's taking possession of the Mortgaged Property or any part thereof; 3.13.7. Negotiations with Mortgagor, a guarantor or any of their agentsin connection with the existence or cure of any Event of Default; 3.13.8. Any proposed refinancing of the Indebtedness; 3.13.9. The transfer of the Mortgaged Property or any part thereof in lieu of foreclosure; Page 12 of 26 3.I4. 3.15. 3.16. 3.13.10.The approval by Mortgagee of actions taken or proposed to be taken by Mortgagor, a guarantor or other person or entity which approval is required by the terms of this Mortgage or any other instrument evidencing or securing the Indebtedness or otherwise governing Mortgagor's or a guarantor's responsibilities in connection with the Indebtedness or the Mortgaged Property. Mortgagor will, upon demand by Mortgagee, reimburse Mortgagee for all reasonable expenses which have been incurred or which shall be incurred by Mortgagee. Mortgagor will indemnify and hold harmless Mortgagee fi:om and against, and reimburse it for, all claims, demands, liabilities, losses, damages, judgments, penalties, costs and expenses (including attorneys' fees) which are imposed upon, asserted against, or incurred or paid by it by reason of, on account of or in connection with any bodily injury or death or property damage occurring in or upon or in the vicinity of the Mortgaged Property or any part thereof through any cause whatsoever or asserted against it on account of any act performed or omitted to be performed hereunder or on account of any transaction arising out of or in any way connected with the Mortgaged Property, or with this Mortgage or the Indebtedness, unless resulting from the gross negligence or intentional act of Mortgagee. Mortgagee's Performance of Defaults. If Mortgagor defaults in the payment of any tax, assessment, encumbrance or other imposition, in its obligation to furnish insurance hereunder, or in the performance of any other condition of the Construction and Term Notes, the Security Documents or any other instrument securing the Indebtedness, Mortgagee may, to preserve its interest in the Mortgaged Property, perform the same, and ail payments made (whether such payments are regular or accelerated payments), costs and expenses incurred or paid by Mortgagee in connection therewith shall become due and payable immediately. The amounts incurred or paid by Mortgagee, together with interest thereon at the Default Rate from the date incurred until paid by Mortgagor, shaI1 be added to the Indebtedness and secured by the lien of this Mortgage to the extent permitted by law. Mortgagee is authorized to enter and to authorize others to enter upon the Mortgaged Property or any part thereof for the purpose of performing any such defaulted condition ~vithout thereby becoming liable to Mortgagor or any person in possession holding under Mortgagor. Estoppel Affidavits. Mortgagor, upon ten (10) days written request from Mortgagee, shall furnish a written statement, duly acknowledged, setting forth the unpaid principal of and interest on the Indebtedness, and whether or not any offsets or defenses exist against such principal and interest or other sums. Use of Property. Mortgagor covenants that the Mortgaged Property will be used as a hotel and indoor water park project in the Ice Harbor Urban Renewal District located in Dubuque, Iowa and for no other purposes. Mortgagor shall not declare, advertise or market the Mortgaged Property as an existing or proposed condominium, cooperative or other common interest community. 3.16.1. Mortgagor shall not permit the Mortgaged Property, or any portion thereof, to be used by the public, as a condominium, cooperative or other common interest community, without restriction or in such manner as might reasonably tend to Page 13 of 26 impair Mortgagor's right, tire and interest in and to the Mortgaged Property or any portion thereof, or in such manner as might reasonably make possible a claim or claims of adverse usage or adverse possession by the public, as such, or of implied dedication of the Mortgaged Property or any portion thereof. 3.16.2. If, at any time, the then-existing use or occupancy of any part of the Mortgaged Property shall, pursuant to any zoning or other law, ordinance or regulation, be permitted only so long as such use or occupancy shall continue, Mortgagor will not cause or permit such use or occupancy to be discontinued without the prior written consant of Mortgagee. 3.17. Business Loan. To induce Mortgagee to disburse the principal amount of the Construction Note, Mortgagor warrants, represents and covenants that the loan evidenced by the Construction and Tm-m Notes and secured hereby is a business loan to Mortgagor, that Mortgagor is involved in a commercial or industrial enterprise which is carried on for the purpose of investment or profit in connection with the Mortgaged Propcu~ty and that the fands represented by the Consh-uction and Tcu-m Notes will be used solely to further such commercial or industrial enterprise. DefauRs. The tcu'm "Event of Default" as used in this Mortgage, means any one or more of the following events: 4.1. Failure by Mortgagor to pay when due and such failure shall continue for a period of fiftecm (15) days: (i) Any periodic installment of interest or principal thereof under the Construction and Term Notes; (2) The outstanding principal balance on the ConsWaction and Term Notes, together with interest accrued thereon, at maturity or upon prepayment of the Construction and Term Notes; or (3) Any other sums to be paid by Mortgagor to Mortgagee under the Construction and Term Notes or Security Documants after written notice by Mortgagee to Mortgagor. 4.2. Failure by Mortgagor to perform any other condition in the Construction and Tmau Notes, the Security Documents or any other instrument now or hereafter evidancing or securing the Indebtedness or any part thereof, or otherwise executed in connection therewith. However, that such failure shall not constitute an Event of Default unless it shall not be cured within: (1) Thirty (30) days after notice thereof shall have been given to Mortgagor; or (2) Such longer period of time after such notice as may be reasonably be required to complete such cure in the case of any such failure that is not reasonably susceptible to being cured within such thirty (30) day period, provided that Mortgagor has commenced steps to effectuate such cure within such thirty (30) day period and thereaft~ diligently continues its efforts in that regard until such failure is fully cured. If any material inaccuracy exists in any of the information furnished by Mortgagor or any guarantor to Mortgagee under the provisions of this Mortgage or furnished to Mortgagee to induce Mortgagee to make the Loan. 4.4. Breach of any material warranty or untruth of any material representation of Mortgagor or a guarantor contained in the Construction and Term Notes, the Security Documents or any Page 14 of 26 other instrument now or h~reafter evidencing or securing the Indebtedness or any part thereof or otherwise executed in connection therewith. 4.5. If: (1) A petition is filed against Mortgagor under any bankruptcy, reorganization, arrangement, composition, readjustment, liquidation, dissolution or insolvency law, and is not dismissed within forty-five (45) days after such filing; (2) Mortgagor files a petition in voluntary bankruptcy or seeking relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustmant o£debt, dissolution or liquidation law of any jurisdiction, or consents to the filing of any petition against it under any such law, or makes any general assignment for the benefit of creditors or admits in writing its inability to pay its debts as they become due, or consents to the appoinWaent of a receiver, aster, custodian, liquidator or trustee of itself, or of ail or any part of its propcniy; (3) Mortgagor is "insolvent," as defined in th/s Mortgage; (4) Any trustee, custodian, receiver, master, liquidator of Mortgagor or of all or any part of the Mortgaged Property or of any or all of the rents or income thereof is appointed by court order and such order remains in effect for more than sixty (60) days, or an order for relief is entered with respect to Mortgagor; or (5) Mortgagor is adjudicated a bankrupt or insolvent, or any of the property of either of them is sequestered by court order and such order remains in effect for more than sixty (60) days. For purposes of this Section, a person or entity is insolvent if he/she/it is unable to pay his/her/its debts as they become due, or if the fair market value of his/her/its assets do not exceed his/her/its aggregate liabilities. 4.6. If all or any material part of the Mortgaged Property is taken through condemnation, and Mortgagor has not been adequately compensated for such talcing, or if the value of the Mortgaged Property is materially impaired by condemnation, and any transfer by private sale in lieu thereof, either temporarily or permanently. 4.7. The occurrence ora default under any encumbrance now or hereafter affecting all or any portion of the Mortgaged Property, or any other evcmt permitting acceleration of the maturity of any indebtedness secured thereby or any other such default or event with respect to any other indebtedness of Mortgagor to Mortgagee. Mortgagor shall promptly notify Mortgagee in writing of the occurrence of any such default or event. 4.8. The occurrence of a default under any other instrument now or hereafter evidencing or securing the Indebtedness or any part thereof, or executed in connection therewith, including, without limitation, any future notes or mortgages executed by Mortgagor in connection with the Indebtedness. Remedies. 5.1. Acceleration of Maturity. Subject to the terms and conditions of this Mortgage, if an Event of Default occurs, Mortgagee may declare without demand or notice the outstanding Indebtedness to be due and payable immediately, and upon such declaration such Indebtedness shall immediately become and be due and payable without demand or notice 5.2. Foreclosure. If an Event of Default occurs, regardless of whether Mortgagee has declared the Indebtedness to be immediately due and payable, Mortgagee may, in any combination, Page i5 of 26 foreclose this Mortgage and take such other action as the law allows to enforce this Mortgage, to realize upon the security hereof and to enforce any or ail of the other instruments securing the Indebtedness. In any such foreclosure proceeding, the Mortgaged Property, or any part thereof, may be sold in one or more parcels, at Mortgagee's option, and without obligation to have the Mortgaged Propm~[y marshaled. The proceeds of any such sale shall be applied as follows: ( I ) To the payment of all necessary costs and expenses incident to such foreclosure sale, including but not limited to all court costs and reasonable attorneys' fees; (2) To the payment in full of the Indebtedness in such order as Mortgagee may elect; (3) To discharge junior liens, if the court so directs; and (4) The r~nainder, if any, shall be paid to Mortgagor or Mortgagor's successors or assigns. 5.2.1. Upon any sale held by Mortgagee, any receiver or public officer, Mortgagee may bid for and purchase the Mortgaged Property, or any part thereof, and, upon compliance with the terms of sale, may hold, retain, possess and dispose of such property in its own absolute right without further accountability. 5.2.2. Upon any such sale, Mortgagee may, if permitted by law, and after allowing for costs and expenses of the sale, compensation and other charges, in paying the purchase price, apply any portion of or all of the indebtedness and other sums due to Mortgagee under the Construction and Term Notes, this Mortgage, the Loan Agreensent, or any other instrument securing the Indebtedness, in lieu of cash, to the mount which shall, upon distribution of the net proceeds of such sale, by payable thereon, to the extent of the purchase price. 5.3. Mortgagee's Right To Enter and Take Possession, Operate and Apply Income. If an Event of Default occurs, Mortgagor, upon demand of Mortgagee, shall immediately surrender to Mortgagee the actual possession and, to the extent permitted by law, Mortgagee itself, or by such officers or agents as it may appoint, may enter and take possession of all the Mortgaged Property, or any part thereof, or have a receiver oft. he rents, royalties issues, profits revenues, income and other benefits thereof appointed, without proof of depreciation in the value of the Mortgaged Property, inadequacy of the value of the Mortgaged Property as security for the debt, or insolvency of Mortgagor. Mortgagee or the receiver may lease the Mortgaged Property, or any part thereof, in the name of Mortgagor, Mortgagee or the receiver, and may receive the rents, royalties issues, profits revenues, income and other benefits and apply the same as set out in this Mortgage. 5.3.1. If Mortgagor fails to surrender or deliver the Mortgaged Property or any part thereof after Mortgagee's demand, Mortgagee may obtain a judgment or decree conferring on Mortgagee the r/ght to immediate possession or requiring Mortgagor to deliver immediate possession of all or part of the Mortgaged~ Property to Mortgagee, to the entry of which judgment or decree Mortgagor specifically consents. Mortgagor shall pay to Mortgagee, upon demand, all costs and expenses of obtaining such judgment or decree and reasonable compensation to Mortgagee, its attorneys and agents, and all such costs, expenses and compensation shall, until paid, be secured by the lien of this Mortgage. Page 16 of 26 5.3.2. 5.3.4. 5.3.5. Upon every such entering upon or taking of possession, Mortgagee may hold, store, use, operate, manage and control the Mortgaged Property and conduct the business thereof, and, from time to time: 5.3.2.1. Make all necessary and proper maintenance, repairs, renewals, replacements, additions, betterments and improvements thereto and thereon and purchase or otherwise acquire additional fixtures, personal and other mortgaged property; 5.3.2.2. Insure the Mortgaged Property; 5.3.2.3. Manage and operate the Mortgaged Property and exercise all the rights and powers of Mortgagor in its name or otherwise with respect to the same; 5.3.3.4. Enter into agreements w/th others to exercise the powers granted to Mortgagee under this Mortgage, as Mortgagee from time to time may determine. Mortgagee may collect and receive all the rents, royalties, issues, profits, revenues, income and other benefits thereof, including those past due as well as those accruing thereafter; and shall apply the moneys so received by Mortgagee in such priority as Mortgagee may determine to: (1) The payment of interest, principal and other payments due and payable on the Construction and Term Notes, or pursuant to this Mortgage; (2) The deposits for taxes and assessments and insurance premiums due; (3) The cost of insurance, taxes, assessments and other expenses of operating, maintaining, repairing and improving the Mortgaged Property, including, without limitation, renting commissions andrental collection commissions paid to an agent of Mortgagee or of the receiver; (4) The compensation, expenses and disbursements of the agents, attorneys and other representatives of Mortgagee; and (5) Amounts advanced for any purpose recognized under this Subsection. Ali reasonable costs, expenses and liabilities of every character incurred by Mortgagor in managing, operating and maintaining the Mortgaged Property, not paid out of rent as provided above, shall constitute advances and be demand obligations of Mortgagor, shall bear interest at the Default Rate and shall constitute a portion of the Indebtedness and be secured hereby to the extent permitted by law. While in possession of the Mortgaged Property, Mortgagee or the receiver shall be Iiable to account only for rents, royalties, issues, profits, revenues, income and benefits actually received. Mortgagee may remain in possession of the Mortgaged Property, in the event of foreclosure, until the foreclosure sale and thereafter during the entire period of redemption. Mortgagee shall incur no liability for, nor shall Mortgagor assert any claim or set offas a result of, any action taken while Mortgagee is in possession of the Mortgaged Property. In the event no foreclosure proceedings are commenced, Mortgagee may remain in possession as long as there exists an Event of Default. Page 17 of 26 5.5E 5.6. The same right of taking possession, however, shall exist if any subsequent Event of Default shall occur and continue. Receiver. Upon the occurrence of an Event of Default, either before or after the foreclosure sale, a receiver of the Mortgaged Property, or any part thereof, may be appointed by the court ~vithout notice, without regard to the solvency or insolvency of Mortgagor, without regard to the then value of the Mortgaged Property, and without regard to whether they are then occupied as a homestead. The receiver shall have the power to collect the rents and income of the Mortgaged Property during the pendency of the foreclosure suit and, in case ora sale and a deficiency, during the full statutory period of redemption, whether there be redemption or not. The receiver shall have all other powers for the protection, possession, management and operation of the Mortgaged Property which an absolute owner would have, but the net rents in the hands of the receiver shall be applied to the Indebtedness or to such expenses of the receivership or foreclosure suit as the court may direct. Mortgagor consents to the appointment of such receivers and agrees not to oppose any application therefor by Mortgagee. However, that the appointment of any receiver, trustee or other appointee by virtue of any court order, state or regulation shall not impair or in any manner prejudice the rights of Mortgagee to receive payment of the rents and income pursuant to this Mortgage. Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws; Marshalling. Mortgagor agrees that after an Event of Default, neither Mortgagor nor anyone claiming through or under it will set up, claim or seek to take advantage of the appraisement, valuation, stay, notice of election to mature or declare due the whole of the Indebtedness, extension, redemption or moratorium laws, or any exemption from execution or sale of the Mortgaged Property or any part thereof, now or hereafter in force, in order to prevent or hinder the enforcement or foreclosure of this Mortgage, or the absolute sale of the Mortgaged Property, or any part thereof, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereat. Mortgagor, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may lawfully so do, all benefit or advantage of any such law or laws and any and all right to have the assets comprising the Mortgaged Property marshaled upon any foreclosure hereof and agrees that any court having jurisdiction to foreclose this Mortgage may sell the Mortgaged Property in part or as an entirety. If any law now in force of which Mortgagor, its successors and assigns, might take advantage despite this Subsection shall hereafter be repealed or cease to be in force, such law shall not thereafter be deemed to preclude the application of this paragraph. Without limiting the generality of the foregoing, Mortgagor waives all rights of redemption from sale under any order or decree of foreclosure of this Mortgage on its own behalf and on behalf of the trust estate and each and every person except decree and judgment creditors of Mortgagor, who may hereafter acquire any interest in or title to the Mortgaged Property. Suits To Protect the Property. If an Event of Defanlt occurs, Mortgagee shall have the power and authority to institute and maintain any suits and proceedings as Mortgagee may deem advisable: (1) To prevent any impairment of the Mortgaged Property by any acts which may be unlawful or any violation of this Mortgage; (2) To preserve and protect its interest in the Mortgaged Property; (3) To foreclose this Mortgage; and (4) To restrain the enforcement of or compliance with any legislation or other governmental enactment, rule Page 18 of 26 5,7. 5.8. or order that may be unconstitutional or other~vise invalid, as determine~ by a court having proper jurisdiction over the matter, if the enforcement of or compliance with such enactment, role or order might impair the security hereunder or be prejudicial to Mortgagee's interest. Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial case or proceedings affecting Mortgagor, its creditors or its properties, Mortgagee to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have its claims allowed in such case or proceedings for the entire Indebtedness, at the date of the institution of such case or proceedings, and for any additional amounts which may become due and payable hereunder or under the Construction and Term Notes after such date. Application of Monies by Mortgagee. If an Event of Default occurs, then, upon Mortgagee's demand, Mortgagor will pay to Mortgagee the entire amount of the Indebtedness. If Mortgagor fails to immediately pay the same upon demand, Mortgagee shall be e~titled to sue for and to recover judgment against Mortgagor for the whole amount due and unpaid together with reasonable costs and expenses and disbursements of Mortgagee's agents, attorneys and other representatives, either before, after or during the pendency of any proceedings for the enforcement of this Mortgage. The right of Mortgagee to recover such judgment shall not be affected by any taking possession or foreclosure hereunder, or by the exercise of any other fight, power or remedy for the enforcement of the terms of this Mortgage, or the foreclosure of the lien hereof. 5.8.1. In case ora foreclosure sale of ail or any part of the Mortgaged Property and of the application of the proceeds of sale to the payment of the Indebtedness, Mortgagee shall be entitled to enforce payment from Mortgagor of all amounts then remaining due and unpaid and to recover judgment against Mortgagor for any portion thereof rmnalning unpaid, with interest. 5.8.2. No recovery of any such judgment by Mortgagee (unless the Indebtedness is paid in full) and no attachment or levy of any execution upon any of the Mortgaged Property or any other property shall in any way affect the lien of this Mortgage upon the Mortgaged Property or any part thereof or any lien, rights, powers or remedies of Mortgagee hereunder. Such liens, rights, powers and remedies shall continue unimpaired as before. 5.8.3. Any moneys collected or received by Mortgagee under this Subsection shall be applied to the payment of compensation, expenses and disbursements of the agents, attorneys and other representatives of Mortgagee, and the balance remaining shall be apphed to the payment of the Indebtedness. 5.8.4. The provisions of this Subsection shall not be interpreted to modify the provisions of any guaranty of the Indebtedness. Page i9 of 26 5.9. 5.10. 5.11. 5.12. Delay or Omission No Waiver. No delay or omission of Mortgagee or of any holder of the Construction and Tcwm Notes to exercise any fight, power or remedy accruing upon any Event of Default shall exhaust or impair any such right, power or remedy or shall be construed to waive any such Event of Default or to constitute acquiescence therein. Every right, power and remedy given to Mortgagee may be ex~rcised from time to time and as often as is deemed expedient by Mortgagee. No Waiver of One Default To Affect Another. No waiver of any Event of Default hereunder shall extend to or affect any subsequent or any other Event of Default then existing, or impair any rights, powers or remedies consequent thereon, and no such act or omission shall release, discharge, modify, change or affect the original liability under this Mortgage or otherwise of Mortgagor, or any subsequant purchaser of the Mortgaged Property or any part thereof or any maker, co-signer, endorser, surety or guarantor. No such act or om/ssion shall preclude Mortgagee from exercising any right, power or privilege h~rein granted or intended to be granted in case of any Event of Default then existing or of any subsequent Event of Default nor, except as otherwise expressly provided in an instrument or instruments executed by Mortgagee, shall the lien of this Mortgage be altered thereby. Remedies Cumulative. No fight, power or remedy conferred upon or reserved to Mortgagee by the Construction and Term Notes, the Security Documents or any other instrument evidencing or securing the Indebtedness or otherwise governing Mortgagor's responsibilities in connection with the Indebtedness or the Mortgaged Propc~y or any part thereof, is exclusive of any other fight, power or remedy. Each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder or under the Construction and Term Notes or any other instrument evidencing or securing the Indebtedness or any part thereof, or now or hereafter existing at law, in equity or by statute. Discontinuance of Proceedings; Position of Parties Restored. If Mortgagee has proceeded to enforce any right or remedy under this Mortgage by foreclosure, entry or otherwise, and such proceedings are discontinued or abandoned for any reason, or such proceedings have resulted in a final determination adverse to Mortgagee, then and in every such case Mortgagor and Mortgagee shall be restored to the/r former positions and rights hereunder, and all rights, powers and remedies of Mortgagee shall continue as if no such proceedings had occurred or had been taken. 5.13. Interest After Event of Default; Default Rate. If an Event of Default occurs, the Indebtedness shall, at Mortgagee's option, bear interest at the Default Rate set forth in the applicable Construction and Term Notes (the "Default Rate"). In such event, any deferred interest provision, as contained in the Construction and Term Notes, shall be inoperative, and interest at the Default Rate shall be currently payable. Construction. Conditions Precedent to Advances. If at any time before the entire Loan has been advanced: (1) An Event of Default exists; (2) Any legal or equitable process or action is Page 20 of 26 6.2. 6.4. filed against Mortgagor or the Mortgaged Property in any court, administrative agency or other tribunal which seeks to enjoin the construction on the Mortgaged Property or the performance of Mortgagor hereunder, or alleges that any permit, approval, governmental requirement or other legal matter concerning the Mortgaged Property is not valid or in effect, or alleges that this the Mortgage does not have first priority with regard to title to the Mortgaged Property; (3) Mortgagee shall have good reason to believe that any advance under the Construction Notes shaI1 not be secured by a first and valid lien on the Mortgaged Property; or (4) There is a material adverse change in the financial condition of Mortgagor, then Mortgagee shall not be required to advance any part of the remainder of the Loan, it being expressly agreed that full performance of said provisions and complete compliance with all of the aforesaid conditions shall be conditions precedent to Mortgagee's obligation to advance the remainder of said sums to be advanced or any part thereof. Lien Waivers, Surveys and Construction. Mortgagor shall furn/sh to Mortgagee as Mortgagee reasonably requests, waivers of liens and claims on the Mortgaged Property executed by all mechanics and materialman and others who may have any rights to file liens against the Mortgaged Property. Mortgagor shall immediately proceed with, and diligently continue to completion of, the construction of the Improvements according to plans and specifications submitted to Mortgagee (which plans and specifications and construcfiun details shall not be modified in any material respect which materially affects, or, together with all previous modifications cumulatively materially affects, the value of the Mortgaged Property, without the prior written approval of Mortgagee) and in accordance with all applicable building laws, ordinances and restrictions. Trust Fund. Mortgagor will receive the advances secured hereby as a trust fund to be applied by Mortgagor solely for the purpose of paying the cost of developing the Mortgaged Property in accordance with the above-mentioned plans and specificafiuns. Other Remedies of Mortgagee. Upon the occurrence of an Event of Default hereunder, in addition to any other remedies available to Mortgagee by the terms of this Mortgage or by law, Mortgagee may at its sole discretion: (1) Complete the Improvements on the Mortgaged Property in accordance with the plans and specifications previously submitted to Mortgagee with such reasonable changes as Mortgagee deems appropriate, all at the risk, cost and expense of Mortgagor; (2) Discontinue at any time any work commenced on the consh-uction of the Improvements on the Mortgaged Property by Mortgagor or by Mortgagee; (3) Engage builders, contractors, engineers, architects and others for the purpose of furnishing labor, material and equipment in connection with the construction of the Improvements on the premises, which personnel may, but need not, be the same as those engaged by Mortgagor; (4) Pay, compromise or settle all bills or claims incurred in connection with the construction of the Improvements on the Mortgaged Property; and (5) Take or refrain from taking such reasonable action as Mortgagee from time to time determines. All such action shall be at Mortgagor's sole cost and expense, and such sums shall be secured by this Mortgage. Construction Contracts. Mortgagor shall materially perform faithfully all of its obligations under ail construction contracts concerning the Improvements (copies of which will be delivered to Mortgagee), and shall not enter into any amendments thereto which Page 21 of 26 materially affect the value of the Mortgaged Property or any additional material contracts without first submitting the same to Mortgagee. Upon the request of Mortgagee, Mortgagor shall assign to Mortgagee, in such form as Mortgagee requires and w/th the consent of the contractor thereunder, any or all of such contracts. Ho~vever, such assignment shall not be deemed to impose upon Mortgagee any of the obligations or duties of Mortgagor thereunder, and Mortgagor shall materially comply and observe its obligations thereunder. Budgets. Mortgagor shall furnish to Mortgagee on request of Mortgagee a current construction budget concerning the Mortgaged Property and the construction of Improvements thereon, verified to Mortgagee's reasonable satisfaction and in such detail as Mortgagee reasonably requires, including, without limitation, all costs and expenses of matefial, supplies and labor, insurance, architects' and designers' fees, and a schedule of anticipated monthly disbursements. Transfer of Further Encumbrance of Mortgaged Property. Option to Accelerate; Consent of Mortgagee. In the event of any sale, conveyance, transfer, pledge or further encumbrance of the Mortgaged Property, or of any interest in or any part of the Mortgaged Propea~, or of any interest in Mortgagor results in a change of control of Mortgagor (transfers in excess of 50% of outstanding interests), or any further assignment of rents from the Mortgaged Property or any part thereof, or any lease of all or substantially all of the Mortgaged Propcn-~y, the Leasehold or the Improvements (except in the ordinary course of business), without the prior written consent of Mortgagee, then, at Mortgagee's option, Mortgagee may declare the Indebtedness to be due and/mmediately payable. On such declaration the Indebtedness shall immediately become and be due and payable without demand or notice. Mortgagee's consent shall be within its sole and absolute reasonable discretion, and Mortgagee specifically reserves the fight to condition its consent upon (by way of illustration but not by way of limitation) its approval of the financial and/or management ability of the purchaser, transferee, lessee, pledges or assignee, upon an agreement to escalate the interest rate of the Construction or Term Note, as the case may be, to Mortgagee's then current interest rate for similarly situated properties, upon the assumption of the obligations and liabilities of the Construction or Term Note, as the case may be, and this Mortgage by the purchaser, transferee, lessee, pledgee or assignee, upon the receipt of guarantees of the Indebtedness reasonably satisfactory to Mortgagee (the amount and form similar to the current guarantees) and upon payment to Mortgagee of a reasonable assumption fee. 7.2. Sub sequent Owner. Any purchaser, transferee, lessee, pledgee or assignee shall be deemed to have assumed and agreed to pay the Indebtedness and to have assumed and agreed to be bound by the terms and conditions of this Mortgage (including, without limitation, the terms of this Section) unless Mortgagee specifically agrees in writing to the contrary. Mortgagor agrees that, in the event ownership of the Mortgaged Property, or any part thereof, becomes vested in a person other than Mortgagor, Mortgagee may, without notice to Mortgagor, deal in any way with such successor or successors in interest with reference to this Mortgage and the Construction and Term Notes and ail obligations hereby secured without in any way vitiating or discharging Mortgagor's liability hereunder or under the Construction and Term Notes and other obligations hereby secured. No transfer or encumbrance of the Mortgaged Page 22 of 26 Property or any interest therein and no forbearance or assumption by any person with respect to this Mortgage and no extension to any person of the time for payment of the Indebtedness shall operate to release, discharge, modify, change or affect the liability of Mortgagor or the guarantor, either in whole or in part, unless Mortgagee specifically agrees in writing to the contrary. Miscellaneous Provisions. 8.1. Heirs, Successors and Assigns Included in Parties. Whenever one of the parties hereto is named or referred to herein, the heirs, successors and assigns of such party shall be included and ali covenants and agreements contained in this Mortgage, by or on behalf of Mortgagor or Mortgagee shall bind and inure to the banefit of their respective heirs, successors and assigns, whether so expressed or not. 8.2. Addresses for Notices, Etc. Any notice, report, demand or other instrument authorized or required to be given or furnished under this Mortgage to Mortgagor or Mortgagee shall be deemed given or furnished on the earlier of: (1) The date of receipt by such party; or (2) The date on which such party refuses to accept delivery. Any such notice, report, demand or other insmunent shall be sent to the parties hereto at the following addresses: If to Mortgagor: Platinum Holdings, L.L.C. Attn.: James P. Rix, CEO 801 Jackson Street Dubuque, IA 52001 If to Mortgagee: American Trust & Savings Bank Attn.: Jeffrey L. Vorwald or Victoria J. Richter 895 Town Clock Plaza P.O. Box 938 Dubuque, IA 52004-0938 Any party may change the address to which any such notice, report, demand or other instrument is to be delivered or mailed, by furnishing written notice of such change to the other parties, but no such notice of change shall be effective unless and until received by such other parties. 8.3. Headings. The headings of the arhcles, sections, paragraphs and subdivisions of this Mortgage are for convenience of reference only, are not to be considered a part hereof and shall not limit or expand or otherwise affect any of the terms hereof. 8.4. Provisions Subject to Applicable Laws; Invalid Provisions to Affect No Others. All rights, powers and remedies provided herein may be exercised only to the extent that the exercise thereof does not violate any law and are intended to be limited to the extent necessary so that they will not render this Mortgage invalid or unenforceable. In thc event that any of the covenants, agreements, terms or provisions contained in the Construction and Term Notes, or in this Mortgage or in any other instrament securing the Indebtedness shall Page 23 of 26 be deemed invalid, illegal or unenforceable in any respect, the validity of the remaining covenants, agreements, terms or provisions contained herein or in the Construction and Term Notes or in any other instrument securing the Indebtedness shall be in no way affected, prejudiced or disturbed thereby. 8.5. Changes. Neither this Mortgage nor any term hereof may be changed, waived, discharged or terminated orally, or by any action or inaction, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. Any agreement hereal~er made by Mortgagor and Mortgagee relating to this Mortgage shall be superior to the rights of the holder of any interveffmg lien or encumbrance. The modification of this Mortgage or of the Construcfion and Term Notes, the Loan Agreement, or any other instrument evidencing or securing the Indebtedness or the release of any part of the Mortgaged Prop~ty fi.om the lien hereof shall not impair the priority of the lien hereof. 8.6. Governing Law. This Mortgage shall be construed, interpreted, enforced and governed by and in accordance with the laws of the State of Iowa. 8.7. Required Notices. Mortgagee shall notify Mortgagor promptly of the occurrence of any of the following: (1) Receipt of notice fi.om any governmental authority relating to the Mortgaged Property; (2) Receipt of any notice from the holder of any other lien or security interest in the Mortgaged Proper~y; or (3) Comrnencement of any judicial or adrrfmistrative proceedings by or against or otherwise affecting Mortgagor or a guarantor, the Mortgaged Property or any entity controlled by or under common control w/th Mortgagor or a guarantor, or any other action by any creditor thereof as a result of any default under the terms of any loan. Maximum Amount of Indebtedness Secured Hereby. This Mortgage shall secure not only the Indebtedness but also such amounts and expenses expended or incurred by Mortgagee to protect and preserve its interest in the Mortgaged Prop~ and which are permitted pursuant to this Mortgage and by law, and which are made witlfm twenty (20) years from the date hereof, to the same extent as if such amounts were made on the date of the execution hereof, although there may be no advance made at the time of such execution and although there may be no indebtedness outstancVmg at the time such amounts are expended or incurred. At no time, however, shall the principal amount and other indebtedness secured by this Mortgage, not including sums advanced pursuant hereto to protect the security of this Mortgage, exceed One Million Eight Hundred Thousand & 00/100 Dollars ($1,800,000.00). Special Notice in Accordance With Section 654.12A, Code of Iowa. NOTICE: This Mortgage secures credit in the amount of $1,800,000.00. Loans and advances up to this mount, together with interest, are senior to indebtedness to other creditors under subsequently recorded or fried mortgages and liens. Page 24 of 26 In Witness Whereof, Platinum Holdings, LLC, has caused this Mortgage to be executed by its duly authorized officer as of the date first above written. Platinum Holdings, LLC By:. James P. Rix, Chief Executive Officer STATE OF IOWA, DUBUQUE COUNTY) ss: On this __ day of. ,2002, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared James P. Rix, to me personally known, who being by me duly sworn, did say that he is the Chief Executive Officer of the limited liability company executing the within and foregoing instrument to which this is attached; that said instrument was signed on behalf of the limited liability company by authority of its Management Committee; and that James P. tC~x, as Chief Executive Officer, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the limited liability company, by it and by him voluntarily executed. Notary Public, State of Iowa Page 25 of 26 SCHEDULE 3.1.2. LIENS, SECURITY UNTERESTS, CHARGES, ENCUMBRANCES AND OTtIER EXCEPTIONS Page 26 of 26 CONSENT AND SUBORDINATION TO SECOND MORTGAGE Lot 1 ofR1VERWALK 3~ ADDITION, in the City of Dubuque, Iowa, according to the recorded Plat thereof. The undersigned City of Dubuque, Iowa ("City"), is the owner of the above-described property ("the Property") described in the Second Mortgage ("the Mortgage") to which th/s Consent and Subordination to Mortgage is attached,, and hereby consents to the mortgaging of the Property by Platinum Holdings, L.L.C., an Iowa limited hability company (Platinum), in favor &American Trust & Savings Bank, Dubuque, Iowa (Bank), in an amount not to exceed One Million Eight Hundred Thousand & 00/100 Dollars ($1,800,000.00). City further consents that the interest owned by City shall be subordinate, junior and inferior to the mortgage established in favor of Bank, subject to the following: In the event foreclosure is brought, City consents to being named a party defendant for the purposes of foreclosing its interests in the Property, but with no personal 1/ability being incurred or any deficiency judgment resulting by or against City. In the event of any foreclosure by Bank, Bank agrees to be bound by the terms and conditions of that certain Minimum Assessment Agreement entered into between City and Platinum on June 4, 2001, and that certain Amended Development Agreement entered into between City and Platinum on January 15, 2001, with respect to the Property (including the Lease Agreement and Parking Use Agreement described therein). City agrees that this Consent and Subordination to Second Mortgage document will be attached to, and become a part of, the executed Second Mortgage between Bank and Platinum. Bank executes this Consent and Subordination to Second Mortgage solely for the purpose of agreeing to be bound by the terms of the agreements referred to in Section 2, above, in the event of foreclosure by Bank. Dated ,2002. City of Dubuque, Iowa American Trust & Savings Bank By: By: Terrance M. Duggan, Mayor By: Jeffrey L. Vorwald, Senior Vice President Jeanne F. Schneider, City Clerk wp60docs~Amadcan Trust & Savings Bank~Platinum Holdings, L.L.C.\ Mortgage Consent & Subordination. Second Mortgage-101602 Page 1 of 2 STATE OF IOWA, DUBUQUE COUNTY) ss: On this dayof ,2002, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Terrance M. Duggan and Jeanne F. Schneider, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal has been procured by the corporation; that said instrument was signed on behalf of the City by authority of its City Council; and that Terrance M. Duggan and Jeanne F. Schneider, as Mayor and City Clerk, respectively, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the City, by it and by them voluntarily executed. Notary Public, State of Iowa STATE OF IOWA, DUBUQUE COUNTY) ss: On this __ day of ,2002, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Jeffrey L. Vorwald, to me personally known, who, being by me duly s~vom, did say that he is the Senior Vice President of American Trust & Savings Bank executing the within and foregoing instrument, that no seal has been procured by the corporation; that said instrument was signed on behalf of the corporation by authority of its Board of D/rectors; and that Jeffrey L. Vorwald, as Senior Vice President, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the corpomtiun, by it and by him voluntarily executed. Notary Public, State of Io~va Page 2 of 2