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