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Amendment to UDAG Loan - River Nursery & LandscapingT®: The Honorable Mayor and City Council Members FR®M: Michael C. Van Milligan, City Manager SUBJECT: Amendment to UDAG loan for Dubuque Nursery and Landscaping ®ATE: May 13, 2009 Economic Development Director Dave Heiar is recommending an extension of the $20,000 loan balance payment due from Dubuque Nursery and Landscape to December 2009. I concur with the recommendation and respectfully request Mayor and City Council approval. 1~ Michael C. Van Milligan `' t MCVM:Iw Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Dave Heiar, Economic Development Director Abu{=;r~ 1 ~:li~i';ii~:';, ic;~ ~i:y ~, ~' 2007 May 12, 2009 TO: Michael Van Milligen, City Manager ~`'E,,, FROM: David J. Heiar, Economic Development Director` ~ ~`~~ SUBJECT: Amendment to UDAG loan for Dubuque Nursery and Landscaping BACKGROUND In April, 2004, Greg Schmidt and Wayne Klostermann submitted a business plan to the City and local lenders in an attempt to finance an upscale residential landscaping and nursery business. The company planned to be a "one of a kind" in the trade area and compete with the market currently lost to Davenport, Cedar Rapids, and Madison companies. The company received a written commitment from American Trust and Savings Bank for the financing of the purchase and renovation of the real estate. The bank's commitment was contingent upon the securing of an additional $20,000 in capital to fund inventory and cash flow needs for the first few months of operation. The City agreed to fill this gap in funding for the company with a UDAG loan. The property on Jackson Street was in a run-down condition, and was a blighting influence on the neighborhood. The proposed new business was the only full service landscape garden center located in the "North end" of the City. A UDAG loan agreement was approved in the amount of $20,000. The loan was for afive-year term, at 3% interest, with interest only payments due for the term, and a balloon payment due at the end of the loan period. The City required security of a second mortgage on the property and personal guarantees of Gregory W. Schmidt and Wayne C. Klostermann. The balloon loan payment was due in March of 2009. Due to the current economic conditions, the company is requesting an extension on the repayment of the loan. The company would continue to make interest payments until June 2009 at which time they would make monthly principal and interest payments of $2,000 with a balloon payment of the loan balance in December 2009. RECOMMENDATION Based on the national economy, I concur with this request. ACTION REQUIRED The City Council is requested to approve the attached resolution approving an amendment to the loan agreement with Dubuque Nursery and Landscape. F:\USERS\DHeiar\memo on UDAG loan amendment to Dubuque Nursery and Landscaping.doc RESOLUTION NO. 154-09 AMENDING LOAN AGREEMENT WITH DUBUQUE NURSERY AND LANDSCAPE Whereas, Dubuque Nursery and Landscape operates a business at 2813 Jackson Street, and Whereas, the City of Dubuque approved an Urban Development Action Grant (UDAG) loan to Dubuque Nursery and Landscape on April 5, 2004; Whereas, the Company has requested an extension on repayment of the loan; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the amendment to the Loan Agreement by and between the City of Dubuque, and the Dubuque Nursery and Landscape attached hereto is hereby approved. Section 2. That the City Manager is authorized to execute, on behalf of the City of Dubuque, Iowa, said Loan Agreement in substantially the form attached hereto; but with such changes as the City Manager, with the assistance of the Corporation Counsel, find to be appropriate, the City Manager's execution thereof to constitute this City Council's approval of said Loan Agreement. Passed, approved and adopted this 18th day of May, 2009. Roy D. Buol, Mayor Attest: Jeanne F. Schneider, City Clerk River Valley Nursery & Landscape 2811 Jackson Street Dubuque, IA 52001 Phone (563) 582-1296 Fax (563) 582-4481 May 7, 2009 Mr. David J Heiar Economic Development Director Economic Development Dept 50 West 13`h Street Dubuque, IA 52001-4864 Dear Mr. Heiar, RE: UDAG Loan We are requesting an extension of the above loan for 8 months from this date. We would also propose to make principal and interest payments of $2,000 per month with a balloon payment due in December 2009. Payments would be made starting June 25, 2009 If you have any questions, please contact Wayne at 563-582-1296. Thank you, Wayne Klostermann River Valley Nursery & Landscape THE CITY OF DUBUQUE Masterpiece on the Mississippi Dubuque All-American City 2007 Finance Department 50 West 13th Street Dubuque, Iowa 52001-4805 Office (563) 589-4133 Fax (563) 690-6689 TTY (563) 690-6678 finance@cityofdubuque.org www.cityofdubuque.org October 20, 2008 LOAN PAYMENT REMINDER COPY River Nursery and Landscape, Inc. 2813 Jackson Dubuque, Ia 52001-1962 the $20,000.00 principal payment on your UDAG is due 4/15/2009. Please main the payment to: Cheryl Pregler City of Dubuque Finance Department 50 W 13th St. Dubuque, IA 52001 (563) 589-4140 Principal balance $20,000.00 (Final payment) Payment amount to be applied to principal $20,000.00 Payment amount to be applied to interest $ Please attach lower portion with your payment: River Nursery and Landscape, Inc. UDAG265 April 26410265 48105 $ 2651265 43405 $20,000.00 (Final Payment) Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY AND LANDSCAPE) Page 1 CITY OF DUBUQUE, IOWA ECONOMIC DEVELOPMENT LOAN PROGRAM RIVER VALLEY NURSERY AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY AND LANDSCAPE) LOAN AGREEMENT NUMBER: UDAG#1-04 This AGREEMENT, dated as of the 27th day of April, 2004, is entered into by and between the CITY OF DUBUQUE, IOWA, a municipal corporation organized and existing under the laws of the State of Iowa (hereinafter referred to as the "City") and RIVER VALLEY NURSERY AND LANDSCAPE, INC. (also know as (AKA) DUBUQUE NURSERY AND LANDSCAPE) a Iowa Corporation with its principal place of business in Dubuque, Iowa (hereinafter referred to as the "Company"). WITNESSETH: WHEREAS, City has funded an economic development loan program to support the growth and expansion of new and existing businesses; and WHEREAS, Company has requested a loan to offset the costs associated with the acquisition and operation of a nursery and landscaping business located at 2813 Jackson Street, Dubuque, Iowa; and WHEREAS, City has considered said proposal and has determined that it will improve the Jackson Street neighborhood and contribute to the local economy through the creation of jobs for area residents. NOW THEREFORE, in consideration of the promises and respective covenants, agreements and representations hereinafter set forth, the parties agree as follows: 1. SOURCE OF LOAN FUNDS. City has sufficient Urban Development Action Grant (UDAG) funds to carry out its obligations under this Agreement. Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE) Page 2 AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY 2. LOAN TERMS. City agrees to provide a loan to Company in the amount of twenty thousand dollars ($20,000.00). The term of the loan shall be five (5) years. Interest shall accrue at the rate of three percent (3%) per annum. Payments of interest shall be made quarterly during the term of the loan, and the entire amount of principal shall be due and payable on April 15, 2009. On or before the date of the first disbursement of loan funds to Company, Company shall execute its Promissory Note in the form attached hereto as Exhibit A payable to the order of City in the principal amount of twenty thousand dollars ($20,000.00). 3. DISBURSEMENT AND USE OF LOAN FUNDS: Loan funds shall be disbursed for the benefit of Company by City for Qualifying Project Expenses up to twenty thousand dollars ($20,000.00). Company shall furnish to City written request for disbursement of loan funds. It is expressly understood that all funds advanced under this Agreement shall be specifically earmarked and used by Company only for the purpose of paying the Qualifying Project Expenses listed in the applicable written request and as defined in Section 26(b). Company shall complete the Project as defined in Section 26(a) in accordance with the terms of this Agreement within twelve (12) months of the date of this Agreement. City shall not be obligated to pay any funds not drawn by Company as of said date and any undrawn funds shall be credited against the balance due on the Promissory Note. 4. SECURITY. This loan shall be secured by Personal Guarantees from Gregory W. Schmidt and Wayne C. Klostermann, and a second mortgage on the real estate located at 2813 Jackson Street. 5. STATUS OF COMPANY. Company represents that it is a corporation duly organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the Note and otherwise perform the obligations of this Agreement; that is has corporate authority and power to own its property and conduct its business as it is currently carried on; that the performance of its obligations under this Agreement and the issuance of any note under it will not conflict with any provision of law, the Articles of Incorporation or the Bylaws of Company, or any agreement binding on it; and that, except as disclosed in writing to City, it is not a party to any pending or threatened litigation or to any proceeding or action for the assessment or collection of additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the financial statement provided City. Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE) Page 3 AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY 6. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Company, in addition to the Note, shall deliver to City such other papers and documents as may be required to comply with the conditions of this Agreement, as counsel for City may reasonably request. Company shall be required at the closing date to comply, or establish compliance, as follows: (a) That the representations and warranties of Company are correct on the closing date, as well as on the date of execution of this Agreement; (b) That Company has fully complied with the covenants and agreements to the extent required before the closing date; (c) That no default or event which might mature into a default has occurred or continues to the closing date; (d) That no litigation or proceeding is pending against Company which might result in any change in the business or adversely affect the properties of Company, taking into account the entire assets and overall business of Company; (e) That since the date of execution of this Agreement and to the closing date there has been no material adverse change in the financial condition of Company; (f) That since the date of execution of this Agreement no fire or casualty has occurred in any building or to any inventories or property of Company that might substantially, adversely affect the conduct of its business; (g) That it will furnish to City on the closing date with the opinion of Company's counsel that Company is a corporation duly organized, existing and in good standing under the laws of the State of Iowa; that it has corporate power to own its properties and conduct the business in which it is then engaged; that Company is not in violation of any law, ordinance or regulation of any governmental authority as to its business, premises or assets; that Company has full power to execute and deliver this Agreement, to execute and deliver the Note that evidences the sum borrowed, to borrow moneys under this Agreement, and to perform its obligations under this Agreement and the Note; that such actions have been duly authorized by all necessary corporate actions and are not in conflict with any agreement binding on Company known to counsel; and that this Agreement and the Note when executed and delivered by Company will be a valid and binding obligation of Company in accordance with its terms. Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE) Page 4 AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY 9. COVENANTS OF COMPANY. Company covenants that until any sums borrowed under this Agreement are paid in full, it will, unless City agrees in writing to a modification or otherwise stated herein: (a) Take all actions necessary and required to create a minimum of eight (8) new permanent full-time job equivalents with Company in Dubuque, Iowa by April 15, 2009. Company shall use its best efforts to hire local area residents whenever practicable and not otherwise in conflict with nondiscrimination provisions herein stated. (b) Furnish City within ninety (90) days after the end of each fiscal year with a copy of its annual report, which shall be prepared in conformity with generally accepted accounting principles consistently applied, and, within thirty (30) days after the end of each quarter of its fiscal year, with a copy of its financial statement similarly prepared and, from time to time, such other financial information as City may reasonably request. City reserves the right to request audited annual reports, certified by the accountants that supplied the statements at the execution, or such other accountants satisfactory to City as may be retained by Company, which shall be prepared in conformity with generally accepted accounting principles consistently applied. Reports shall be supplied at the expense of Company; (c) Pay when due all rent, taxes, assessments and other liabilities, except those contested in good faith where notice of such contest has been given to City; (d) Not create or permit to exist any mortgage, pledge, security interest, lien or other encumbrance on the security for this Loan Agreement provided in Section 4 above and the Note provided pursuant to this Loan Agreement without written consent of City. City approval of such written consent will not be unreasonably withheld; (e) Not become a party to any merger, consolidation or sale of Company; not sell, transfer, convey or lease all or any part of its property except in the ordinary course of business; (f) Not cause, suffer or permit any of its subsidiaries to do any of the things prohibited to Company in this Agreement; (g) Not change the general character of its business as conducted at the date hereof, engage in any-type of business not reasonably related to its business as normally conducted, or relocate Company's project operations outside the city limits of the City of Dubuque; Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE) Page 5 AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY (h) Give prompt notice in writing to City of any adverse development, financial or otherwise, which would materially affect its business, properties or affairs, or the ability of Company to perform its obligations under this Agreement or the Promissory Note executed pursuant to the terms of this Agreement; (i) Use loan funds only for purposes authorized herein; (j) Pay all fees, expenses and charges in respect to this Agreement or its making in any way connected therewith including, but not limited to, legal fees, abstract continuation, recording and filing fees, mortgage taxes, documentary stamps, and any other taxes, fees and expenses payable in connection with this transaction. 10. DEFAULT. Company shall be in default if: (a) It fails to pay any instillment of principal or interest on any note (whether to City or any other public or private lender) when due or within ten (10) days thereafter; (b) It becomes insolvent or admits in writing its inability to pay its debts as they mature; or applies for, consents to or acquiesces in the appointment of a trustee or received for any of its property; or in the absence of an application for consent, or acquiescence, a trustee or receiver is appointed for it or a substantial part of its property and is not discharged within ten (10) days; or it otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is instituted by or against it and if instituted is consented to or acquiesced in by it or remains for ten (10) days undismissed; (c) It fails in the performance of the terms and conditions of this Agreement (other than the payment terms referred to in (a) above) and such non- performance continues for ten (10) days after notice thereof from City or from the holder of a note; (d) Any warranty made by Company is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Company to City is untrue in any material respect on the date as of which the facts set forth are stated or cerkified; (e) Any government board, agency, department, commission or public or private lender takes possession or control of any substantial part of the property of Company and such possession or control continues for ten (10) days. Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE) Page 6 AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY 11. ACCELE TION AT OPTION OF CITY. If any default occurs, City may declare the Note immediately due and payable, at which time all unpaid principal and interest shall immediately become due and payable. City shall promptly advise Company in writing of any acceleration under this section, but the failure to do so shall not impair the effect of such declaration. 12. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Company will keep and maintain all normal business books and records and all other documents, invoices and receipts relating directly to the receipt and disbursement of loan funds and job creation; and any duly authorized independent accounting representative of City shall at all reasonable times have access to and the right to inspect, copy, audit and examine all such books and other documents of Company pertaining to the project until the completion of all closeout procedures respecting City's loan and the final settlement and conclusion of all issues arising out of said loan. 13. ADDRESS. Cornpany's.initial business address is: RIVER VALLEY NURSERY AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY AND LANDSCAPE) 2813 Jackson Dubuque, Iowa 52001 Company shall promptly give City written notice of any further change in its principal office address. City's address is: Economic Development Department City Hall 50 West 13th Street Dubuque, IA 52001 14. ACCESS TO PROJECT. Company agrees that any duly authorized representative of City shall at all reasonable times have access to any portion of the project, for monitoring purposes, until the completion of all closeout procedures respecting this loan. 15. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall not be liable to Company, or to any party, for the completion of, or the failure to complete, any activities that are part of the project, except as may be specifically provided in this Agreement. Company agrees to indemnify, hold harmless and defend City from any such claims against City for which liability is limited hereunder. Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE) Page 7 AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY 16. CONFLICT OF INTEREST'. Company agrees that no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the project during his or her tenure, or who is in a position to participate in a decision making process or gain inside information with regard to the project, shall have any interest, director indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the project, or in any activity, or benefit therefrom, which is part of this project at any time during or after such person's tenure. 17. NONDISCRIMINATION. In carrying out the project, Company shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, age or disability. Such action shall include, but not be limited to, the following: employment upgrading, demotion or transfer; recruitment or recruitment adverkising; layoff or termination; rate of pay or other forms of compensation; and selection for training, including apprenticeship. 18. DISCLAIIVIER OF RELATIONSHIPS. Nothing contained in this Agreement between the parties, riot any act of City or Company shall be deemed or construed by any of the parties, or by any third persons, to create any relationship of third party beneficiary, principal or agent, limited or general partnership, or joint venture, or of any association or relationship involving the United States. 19. NOTICE. Any notice, if mailed by United States cerkified mail, shall be deemed given when mailed, postage prepaid, addressed to Company at its address shown above, or at any other address subsequently designated to City by Company. 20. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and agreements herein set forth shall be binding upon Company, and its legal representatives, successors and assigns. This Agreement may not be assigned by City or Company without the express written consent of the other party. 21. LEGALITY. If any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. 22. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not limited to, all matters of construction, validity and performance shall be governed by the laws of the State of Iowa. Loan Agreement RIVER VALLEY NURSERY AND LANDSCAPE, INC. (AKA DUBUQUE NURSERY AND LANDSCAPE) Page 8 23. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Company shall survive the execution and delivery of this Agreement and any notes executed and delivered under it, and no investigation by City nor any closing shall affect the representations or warranties or the right of City to rely on and enforce them. 24. DELAY. No delay on the part of City or the holder of any note in the exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional exercise of any right. 25. DEFINITIONS. (a) "Project" shall mean those activities to be carried out by Company for the expansion of Company in Dubuque, Iowa. (b) "Qualifying Project Expenses" shall mean those expenditures or expenses incurred by Company during and for the Project for the acquisition of needed inventory and for working capital. (c) "Full-Time Job Equivalent" shall equal a total of forty hours of labor per work week. Such hours may be accrued by single individuals or divided among two or more Company employees. IN WITNESS WFIEREOF, City has caused this Loan Agreement to be executed by the City Manager. The Company has executed this Loan Agreement in its corporate name by its duly authorized officer. All of the above occurred as of the 27th day of April, 2004. CITY OF DUBUQUE, IOWA RIVER VALLEY NURSERY AND LANDSCAPE INC. (AKA DUBUQUE BURSERY AND LANDSCAPE) Michael C. Van Milligen City Manager Wayne C. Klosermann President and Secretary Gregory W. Schmidt Vice President and Treasurer Exhibit A PROMISSORY NOTE RIVER VALLEY NURSERY AND LANDSCAPE, INC. Economic Development Lan Program UDAG #1-04 Value: $20,000 FOR VALUE RECEIVED, River Valley Nursery and Landscape, Inc (also known as Dubuque Nursery and Landscape) ("Company") promises to pay to the order of the CITY F ®UEUQUE, I®VVA-, a municipal corporation ("City"), the principal amount of twenty thousand dollars ($20,000) from the date said monies~are disbursed by City suant to the terms of the attached Loan Agreement dated the 27 day of April 27th 2004, ("Loan Agreement") which interest shall be at the rate of three percent (3%) per annum. All payments hereunder shall be made in lawful money of the United States at the administrative offices of the Finance Department of City, or at such other place as City may from time to time in writing designate. Company may, from time to time, prepay all or any portion of the principal balance due hereunder without penalty and without consent of City. All such payments of principal shall be applied to principal installments in reverse order of maturity and which last come due under the terms of this Promissory Note. This Promissory Note is made, executed and delivered in accordance with and subject to all of the terms and provisions of the Loan Agreement, entered into and between Company, as borrower, and City, as lender, which is incorporated herein by reference. This Promissory Note is secured by Personal Guarantees of Gregory W. Schmidt and Wayne C. Klostermann. PERSONAL GUARANTY In Consideration of financial accommodations given or to be given to River Valley Nursery and Landscaping, Inc ("Business") by the City of Dubuque, Iowa ("City of Dubuque, Iowa") the undersigned irrevocably and unconditionally guarantees to the City of Dubuque, Iowa, payment when due, whether by acceleration or otherwise, of any and all liabilities of the Business to the City of Dubuque, Iowa, in connection with a $20,000 loan ("the Loan") together with all interest thereon; all attorneys' fees, costs and expenses of collection incurred by the City of Dubuque, Iowa in enforcing any of such liabilities related to the Loan; and all attorneys' fees, costs and expenses incurred by the City of Dubuque, Iowa in foreclosing, preserving, protecting, retaking, holding and selling of collateral as a result of the enforcement or foreclosure of any security interest given by Business to City of Dubuque, Iowa. The term "Liabilities of the Business" shall include all liabilities related to the Loan, director contingent, joint, several or independent, of the Business incurred for any purpose whatsoever, or hereafter existing, due or to become due to, or held or to be held by, the City of Dubuque, Iowa whether created directly or acquired by assignment or otherwise. The undersigned waive notice of acceptance of this guaranty and notice of any liability to which it may apply, and waive presentment, demand of payment, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking other action by the City of Dubuque, Iowa against, and any other notice to, any party liable thereon (including the undersigned). The City of Dubuque, Iowa may at any time and from time to time without the consent of, or notice to the Undersigned, without incurring responsibility to the undersigned, without impairing or releasing the obligations of the undersigned hereunder, upon or without any terms or conditions and in whole or in part; (1) consistent with that certain Loan Agreement No, 01-04 dated /~~~'~ ~ ~ ~, 2004 by and among the Business ,and City of Dubuque, Iowa change the manner, rate of interest, place or terms of payment, and/or change or extend (for a period less than equal to or longer than the original period) the time of payment of, renew or alter, any liability of the Business, any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the liabilities of the Business as so changed, extended, renewed or altered; (2) sell, exchange, release, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the liabilities hereby guaranteed or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; (3) exercise or refrain from exercising any rights against the Business or others (including the undersigned) or otherwise act or refrain from acting; (4) settle or compromise any liability hereby guaranteed, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Business to creditors of the Business other than the City of Dubuque, Iowa and the undersigned; and (5) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities (regardless of the origin thereof) of the Business to the City of Dubuque, Iowa, regardless of the nature of the liabilities of the Business which remain unpaid and regardless of Business' application or use of the consideration, if any, received in connection with such liability or liabilities. No invalidity, irregularity or unenforceability of all or any part of the liabilities hereby guaranteed or of any security therefor shall affect, impair or be a defense to this guaranty, and this guaranty is a primary obligation of the undersigned. This guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. As to each of the undersigned, this guaranty shall remain in full force and effect until all liabilities of the Business have been paid in full. If claim is ever made upon the City of Dubuque, Iowa for repayment or recovery of any amount of amounts received by the City of Dubuque, Iowa in payment or on account of any of the liabilities of the Business and the City of Dubuque, Iowa repays all or part of said amount by reason of (a) any judgment, decree or order of any court or administrative body having jurisdiction over the City of Dubuque, Iowa or any of its property, or (b) any settlement or compromise of any such claim affected by the City of Dubuque, Iowa with any such claimant (including the Business), then and in such event the undersigned agree that any such judgment, decree, order, settlement or compromise shall be binding upon the undersigned, notwithstanding any revocation hereof or the cancellation of any note or other instrument evidencing any liability of the Business, and the undersigned shall be and remain liable to the City of Dubuque, Iowa hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the City of Dubuque, Iowa. Any acknowledgement or new promise, whether by payment of principal or interest or otherwise and whether by the Business or others (including the undersigned), with respect to any of the liabilities of the Business shall, if the statute of limitations in favor of the undersigned against the City of Dubuque, Iowa shall have commenced to run, toll the running of such statute or limitations and, if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations. No delay on the part of the City of Dubuque, Iowa in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute a waiver thereof. No waiver of any of its rights hereunder, and no modification or amendment of this guaranty, shall be deemed to be made by the City of Dubuque, Iowa unless the same shall be in writing, duly signed on behalf of the City of Dubuque, Iowa, and each such waiver, if any, shall apply only with respect to the specific instance involved, and shall in noway impair the rights of the City of Dubuque, Iowa or the obligations of the undersigned to the City of Dubuque, Iowa in any other respect at any other time. "The undersigned waive all rights of subrogation to any collateral and remedies of the City of Dubuque, Iowa against the Business, and other persons, until the liabilities guaranteed hereunder shall have been fully paid and discharged." This guaranty and the rights and obligations of the City of Dubuque, Iowa and of the undersigned hereunder shall be governed and construed in accordance with the laws of the State of Iowa; and this guaranty is binding upon the undersigned, his, their or its executors, administrators, successors or assigns, and shall inure to the benefit of the City of Dubuque, Iowa, its successors or assigns. The undersigned, if more than one, shall be jointly and severally liable hereunder and the term "undersigned" wherever used herein shall mean the undersigned or any one or more of them. Anyone signing this guaranty shall be bound hereby, whether or not anyone else signs this guaranty at any time. The term "City of Dubuque, Iowa" includes any agent of the City of Dubuque, Iowa acting for it. It is understood that the liability of the undersigned to the City of Dubuque, Iowa hereunder shall not exceed Twenty Thousand dollars. Dated this ~ day of ~a''>^ ` ~ , 2004. ,~) /~ /, Wayne C. Klostermann 2636 Queen Street Dubuque, Iowa 52001 1 Gre ry .Schmidt 16~ Paradise Lane Dubuque, Iowa 52003 Social Security Number: ~~~ ~~ Social Security Number: `~ ~~~ ~`(~ STATE OF IOWA r ,_ COUNTY OF ~-~~ /,~Y`~ ~~(4% G~ L~ :SS. ,~ n ; . BE IT REMEMBERED, that this ~~ C)7j~~ day of ~~ I`~j< 1 ~-- , 2004, before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Wayne C. Klostermann and Gregory W. Schmidt, to me personally known to be the identical persons named in and who executed the above and foregoing instrument and acknowledged that they/he/she executed the same as their/his/her voluntary act and deed. ,~ t Notary Public in and for the State of Iowa ~, „ ~~`(' L% ~ aa~`~^i~ "K~'e@IEFa' P-~, G@iESTERMAN ~ r GG@,~t;it:;c;lUhd N0. 10®259 ` PAY ~~7i~~'~CIS510N EXPIfl~S ~OWP .C~/C~(C ~r~/'Yl _ _' f ~ ~-,,.~ .....