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44 Main LLC Development AgreementMasterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Public Hearing for a Development Agreement with 44 Main, LLC to Redevelop Property at 44 Main Street DATE: October 12, 2010 Dubuque kittill Al- America City 11111 ! 2007 Economic Development Director Dave Heiar recommends City Council approval of a Development Agreement on the property located at 44 Main Street. The key elements of the Development agreement are: 1) The project will receive $240,000 in incentives through the Downtown Housing Incentive Program. 2) 44 Main, LLC must redevelop 44 Main Street at a cost of approximately $4,000,000 by no later than July 1, 2011. 3) 44 Main, LLC will receive a 15 year TIF in the form of a $300,000 TIF forgivable loan. Should 44 Main, LLC repay the loan by July 1, 2012, the TIF benefits will change to semi - annual tax rebates on the value of the assessable improvements. 4) A Downtown Rehabilitation Loan Program loan of $300,000. The expected year of funding this is FY2024. 5) Fagade, Planning and Design, and Financial Consultant grants will be made to the project. The expected year of funding these grants is FY2012. This project will redevelop the property located at 44 Main Street into 24 apartments. This is the same developer that renovated the 40 Main, LLC project, which has delivered 18 much needed rental units in the downtown area. All of these residential units are leased. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director Masterpiece on the Mississippi Dubuque AN1nailcaclty m 2007 TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director SUBJECT: Development Agreement with 44 Main, LLC to redevelop property at 44 Main Street DATE: October 10, 2010 INTRODUCTION This memorandum presents for City Council consideration a Resolution approving a Development Agreement on the property located at 44 Main Street. BACKGROUND City staff has worked with 44 Main, LLC. to formulate a funding package to redevelop the property located at 44 Main Street. 44 Main, LLC plans to invest $4,000,000 in redeveloping the building into 24 apartments within the building. DISCUSSION The proposed Development Agreement provides for several incentives to encourage redevelopment of the property. The Development Agreement requires the redevelopment of the property located at 44 Main Street into twenty -four (24) apartments. The key elements of the Development Agreement include the following: 1) The project will receive $240,000 in incentives through the Downtown Housing Incentive Program. . 2) 44 Main, LLC must redevelop 44 Main Street at a cost of approximately $4,000,000 by no later than July 1, 2011. 3) 44 Main, LLC will receive a 15 year TIF in the form of a $300,000 TIF forgivable loan. Should 44 Main, LLC repay the loan by July 1, 2012, the TIF benefits will change to semi - annual tax rebates on the value of the assessable improvements. 4) A Downtown Rehabilitation Loan Program loan of $300,000. The expected year of funding this is FY2024. 5) Facade, Planning and Design, and Financial Consultant grants will be made to the project. The expected year of funding these grants is FY2012. Additional terms and conditions of the disposition of the property are included within the attached Development Agreement. RECOMMENDATION recommend that the City Council approve the issuance of not to exceed $350,000 of urban renewal tax increment obligations to 44 Main, LLC for the purpose of redeveloping the building located at 44 Main Street and approve the attached Development Agreement. ACTION STEP The action step for the City Council is to adopt the attached proceedings prepared by the City's Bond Counsel Bill Noth. F: \USERS \Econ Dev \44 Main \Development Agreement\20101008 44 Main Memo Approv DA.doc THIS DEVELOPMENT AGREEMENT (Agreement) dated for reference purposes the day of a� oi3U►2 , 2010 is made and entered into by and between the City of Dubuque, Iowa (City), 44 Main, L.L.C. (Developer) and 44 Main SLM, Inc. (an affiliate of Developer). DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF DUBUQUE, IOWA AND 44 MAIN, L.L.C. AND 44 MAIN SLM, INC. WHEREAS, Developer is the owner of the following described real estate (the Property): Lot 12, Lot 13, Lot 14 and Lot 15 of the West Half of Block 1, Dubuque Harbor Company's Addition to the City of Dubuque, Iowa according to the recorded plat thereof, except that part of lot 12 deeded to the City of Dubuque, by Warranty Deed recorded as Instrument No.5316 -1988, subject to easements of record; and WHEREAS, the Property is located in the Greater Downtown Urban Renewal District (the District) which has been so designated by City Council Resolution 393 -09 as a slum and blighted area (the Project Area) defined by Iowa Code Chapter 403 (the Urban Renewal Law); and WHEREAS, Developer has undertaken the redevelopment of a vacant building located on the Property and will be operating the same during the term of this Agreement; and WHEREAS, Developer will make an additional capital investment in building improvements, equipment, furniture and fixtures in the Property (Project) to create Twenty - Four market -rate rental housing units; and WHEREAS, the Property is historically significant and it is in the City's best interest to preserve the Property; and WHEREAS, pursuant to Iowa Code Section 403.6(1), and in conformance with the Urban Renewal Plan for the Project Area adopted on May 18, 1967 and last amended on October 5, 2009, City has the authority to enter into contracts and agreements to implement the Urban Renewal Plan, as amended; and WHEREAS, the Dubuque City Council believes it is in the best interests of the City to encourage Developer in the development of the Property by providing certain incentives as set forth herein. NOW, THEREFORE, the parties to this Development Agreement, in consideration of the promises, covenants and agreements made by each other, do hereby agree as follows: SECTION 1. REPRESENTATIONS AND WARRANTIES 1.1 Representations and Warranties of City. In order to induce Developer to enter into this Agreement, City hereby represents and warrants to Developer that to the best of City's knowledge: (1) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and that it has full power and authority to execute, deliver and perform its obligations under this Agreement. City's attorney shall issue a legal opinion to Developer at time of closing confirming the representation contained herein, in the form attached hereto as Exhibit A. (2) City shall exercise its best efforts to cooperate with Developer in the development process. (3) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (4) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the charter of City, any evidence of indebtedness, agreement or instrument of whatever nature to which City is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (5) There are no actions, suits or proceedings pending or threatened against or affecting City in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the financial position or operations of City or which affects the validity of the Agreement or City's ability to perform its obligations under this Agreement. (6) No ordinance or hearing is now before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re -align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (7) The representations and warranties contained in this article shall be correct in all respects on and as of the Closing Date with the same force and effect as if 2 ■ such representations and warranties had been made on and as of the Closing Date which representations and warranties shall continue and survive the Closing Date. 1.2 Representations and Warranties of Developer. The Developer makes the following representations and warranties: (1) Developer is a limited liability company duly organized and validly existing under the laws of the State of Iowa, and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as presently proposed to be conducted, and to enter into and perform its obligations under the Agreement. (2) This Agreement has been duly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by the City, is in full force and effect and is a valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. Developer's counsel shall issue a legal opinion to the City, at time of closing, confirming the representations contained herein, in the form attached hereto as Exhibit B. (3) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the articles of organization or the operating agreement of Developer or any contractual restriction, evidence of indebtedness, agreement or instrument of whatever nature to which Developer is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (4) There are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, financial position or result of operations of Developer or which affects the validity of the Agreement or Developer's ability to perform its obligations under this Agreement. (5) Developer will perform its obligations under this Agreement in accordance with the material terms of this Agreement, the Urban Renewal Plan and all local, State and federal laws and regulations. (6) Developer will use its best efforts to obtain, or cause to be obtained, in a timely manner, all material requirements of all applicable local, state, and federal laws and regulations which must be obtained or met. (7) Developer has firm commitments for permanent financing for the Project in an amount sufficient, together with equity commitments, to successfully complete 3 the requirements of this Agreement and shall provide evidence thereof to City prior to the Closing Date. (8) No member of Developer owns or has an interest in any property in the city of Dubuque which is in violation of any provision of the City of Dubuque Code of Ordinances (9) Developer will not apply for or utilize Low - Income Housing Tax Credits or any other program which places income restrictions on the residential tenants within the Project. 1.3 Closing. The closing shall take place on the Closing Date which shall be the 1 day of November, 2010, or such other date as the parties shall agree in writing but in no event shall the Closing Date be later than the 31 day of December, 2010. Consummation of the closing shall be deemed an agreement of the parties to this Agreement that the conditions of closing shall have been satisfied or waived. 1.4 Conditions to Closing. The closing of the transaction contemplated by this Agreement and all the obligations of Developer under this Agreement are subject to fulfillment, on or before the Closing Date, of the following conditions: (1) The representations and warranties made by City in Section 1.1 shall be correct as of the Closing Date with the same force and effect as if such representations were made at such time. At the closing, City shall deliver a certificate to that effect in the form of Exhibit C. (2) Developer shall have the right to terminate this Agreement at anytime prior to the consummation of the closing on the Closing Date if Developer determines in its sole discretion that conditions necessary for the successful completion of the Project contemplated herein have not been satisfied in Developer's sole discretion. Upon the giving of notice of termination by Developer to City, this Agreement shall be deemed null and void. (3) Developer and City shall be in material compliance with all the terms and provisions of this Agreement. (4) Developer shall have furnished City with evidence, in a form satisfactory to City (such as a letter of commitment from a bank or other lending institution), that Developer has firm financial commitments in an amount sufficient, together with equity commitments, to complete the Minimum Improvements (as defined herein) in conformance with the Construction Plans (as defined herein), or City shall have received such other evidence of Developer's financial ability as the reasonable judgment of the City requires. (5) Developer's counsel shall issue a legal opinion to the City confirming the representations contained herein in the form attached hereto as Exhibit B. 4 1.5 City's Obligations at Closing. At or prior to the Closing Date, City shall deliver to Developer such other documents as may be required by this Agreement, all in a form satisfactory to Developer. SECTION 2. DEVELOPMENT ACTIVITIES 2.1 Required Minimum Improvements. Developer will make a capital investment of not Tess than four million dollars ($4,000,000.00) to improve the Property (the Minimum Improvements). These Minimum Improvements include creating twenty -four (24) apartments for market -rate rental within the building. 2.2 [This section intentionally left blank] 2.3 Plans for Construction of Minimum Improvements. Plans and specifications with respect to the development of the Property and the construction of the Minimum Improvements thereon (the Construction Plans) shall be in conformity with Urban Renewal Plan, this Agreement, and all applicable state and local laws and regulations, including but not limited to any covenants, conditions, restrictions, reservations, easements, liens and charges, recorded in the records of Dubuque County, Iowa. Developer shall submit to City, for approval by City, plans, drawings, specifications, and related documents with respect to the improvements to be constructed by Developer on the Property. All work with respect to the Minimum Improvements shall be in substantial conformity with the Construction Plans approved by City. 2.4 Timing of Improvements. Developer hereby agrees that construction of the Minimum Improvements on the Property shall be commenced within thirty (30) days after the Closing Date, and shall be substantially completed by July 1, 2011. The time frames for the performance of these obligations shall be suspended due to unavoidable delays meaning delays, outside the control of the party claiming its occurrence in good faith, which are the direct result of strikes, other labor troubles, unusual shortages of materials or labor, unusually severe or prolonged bad weather, acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action or by the exercise of reasonable discretion directly results in delays, or acts of any federal, state or local government which directly result in extraordinary delays. The time for performance of such obligations shall be extended only for the period of such delay. 2.5 Certificate of Completion. Promptly following the request of Developer upon completion of the Minimum Improvements, City shall furnish Developer with an appropriate instrument so certifying. Such certification (the Certificate of Completion) shall be in recordable form and shall be a conclusive determination of the satisfaction and termination of the agreements and covenants in this Agreement. 5 SECTION 3. CITY PARTICIPATION 3.1 Downtown Housing Incentive. (1) City agrees to provide to 44 Main SLM, Inc., an affiliate of Developer, on the terms and conditions set forth herein a grant in the amount of Two Hundred Forty Thousand Dollars ($240,000.00) (the Grant) that shall consist of Incentive Program funds. (2) Grant funds shall be disbursed to 44 Main SLM, Inc. by City and 44 Main SLM, Inc. shall make a capital contribution in an amount equal to such funds to Developer and Developer shall use such funds for Qualifying Project Expenses as defined in the Grant Agreement for amounts not in excess of the total sum in Section 3.1. It is expressly understood that all funds under this Agreement shall be paid by 44 Main SLM, Inc. to Developer and be used by Developer only for the purpose of paying the Qualifying Project Expenses set forth in such written requests. (3) Grant funds will be disbursed to 44 Main SLM, Inc. after City issuance of a Certificate of Occupancy for the Project. Prior to the disbursement of any funds, 44 Main SLM, Inc. shall provide evidence satisfactory to City that the improvements have been completed in accordance with the plans and other documentation submitted to City with the application. The Grant funds shall be disbursed in phases if Developer obtains a Certificate of Occupancy and evidence satisfactory to the City that the improvements have been completed in accordance with the plans and other documentation submitted to the City as to a portion of the Project. For example, if Developer completes eight of the twenty -four units comprising the Project, obtains a Certificate of Occupancy as to such eight units and provides the other documentation required above, City shall disburse $80,000 of the Grant funds to 44 Main SLM, Inc., reserving the remaining $160,000 for future phases of the Project. 3.2 Economic Development Incentives to Developer. 1) Loan. For and in consideration of Developer's obligations hereunder, and in furtherance of the goals and objectives of the urban renewal plan for the Project Area and the Urban Renewal Law, City agrees, subject to Developer being and remaining in compliance with the terms of this Agreement, to make an Economic Development Loan to the Developer in the amount of $300,000. The full amount of the Economic Development Loan shall be paid to the Developer on October 26, 2010, subject to the Developer being in compliance with the terms of this Agreement on said date. The Developer shall repay the principal of said Economic Development Loan, together with interest at the rate of 6% percent per annum, on or before July 1, 2012. Developer's failure to repay the Economic Development Loan, with interest, on or before July 1, 2012 shall constitute failure of a condition precedent to the making of Economic Development Grants under Section 3.2(2) and Developer's right to such Economic Development Grants shall terminate without 6 written notice or time for cure upon Notwithstanding anything herein to Development Grants shall be City's Developer fails to pay the Loan provid November 1, 2012 November 1, 2013 November 1, 2014 November 1, 2015 November 1, 2016 November 1, 2017 November 1, 2018 November 1, 2019 November 1, 2020 November 1, 2021 November 1, 2022 November 1, 2023 November 1, 2024 November 1, 2025 November 1, 2026 7 failure to meet such condition precedent. the contrary, forfeiture of the Economic sole and exclusive remedy in the event ed herein on or before July 1, 2012. 2). Grants. For and in consideration of Developer's obligations hereunder, and in furtherance of the goals and objectives of the urban renewal plan for the Project Area and the Urban Renewal Law, City agrees, subject to Developer being and remaining in compliance with the terms of this Agreement, and subject to the condition precedent that the Developer has made full repayment of principal and interest of the Economic Development Loan to the City under subsection 1 on or before July 1, 2012, to make thirty (30) consecutive semi - annual payments (such payments being referred to collectively as the Economic Development Grants) to Developer as follows: May 1,2013 May 1, 2014 May 1, 2015 May 1,2016 May 1,2017 May 1,2018 May 1,2019 May 1, 2020 May 1, 2021 May 1, 2022 May 1, 2023 May 1, 2024 May 1, 2025 May 1, 2026 May 1, 2027 pursuant to Iowa Code Section 403.9 of the Urban Renewal Law, in amounts equal to a portion of the tax increment revenues collected by City under Iowa Code Section 403.19 (without regard to any averaging that may otherwise be utilized under Iowa Code Section 403.19 and excluding any interest that may accrue thereon prior to payment to Developer) during the preceding six -month period in respect of the Minimum Improvements constructed by Developer (the Developer Tax Increments). For purposes of calculating the amount of the Economic Development Grants provided in this Section, the Developer Tax Increments shall be only those tax increment revenues collected by City in respect of the increase in the assessed value of the Property above the assessment of January 1, 2010 ($224,600). The Developer Tax Increments shall not include (i) any property taxes collected for the payment of bonds and interest of each taxing district, (ii) any taxes for the regular and voter - approved physical plant and equipment levy, (iii) the remaining actual amount of tax increment revenues collected by City in respect of the valuations of the Property prior to January 1, 2011 and (iv) any other portion required to be excluded by Iowa law, and thus such incremental taxes will not include all amounts paid by Developer as regular property taxes. 3.3 To fund the Economic Development Grants, City shall certify to the County prior to December 1, 2011, its request for the available Developer Tax Increments resulting from the assessments imposed by the County as of January 1 of that year and each year thereafter until and including January 1, 2025, to be collected by City as taxes are paid during the following fiscal year and which shall thereafter be disbursed to the Developer on November 1 and May 1 of that fiscal year. (Example: if City so certifies in December, 2011, the Economic Development Grants in respect thereof would be paid to the Developer on November 1, 2012, and May 1, 2013.) 3.4 The Economic Development Grants shall be payable from and secured solely and only by the Developer Tax Increments paid to City that, upon receipt, shall be deposited and held in a special account created for such purpose and designated as the 44 Main TIF Account of City. City hereby covenants and agrees to maintain its TIF ordinance in force during the term hereof and to apply the incremental taxes collected in respect of the Minimum Improvements and allocated to the 44 Main TIF Account to pay the Economic Development Grants, as and to the extent set forth in Section 3.2 hereof. The Economic Development Grants shall not be payable in any manner by other tax increments revenues, or by general taxation or from any other City funds. City makes no representation with respect to the amounts that may be paid to Developer as the Economic Development Grants in any one year and under no circumstances shall City in any manner be liable to Developer so long as City timely applies the Developer Tax Increments actually collected and held in the 44 Main TIF Account (regardless of the amounts thereof) to the payment of the Economic Development Grants to Developer as and to the extent described in this Section. 3.5 City shall be free to use any and all tax increment revenues collected in respect of other properties within the Project Area and the remaining actual amount of the property taxes paid by Developer to City, or any available Developer Tax Increments resulting from the termination of the annual Economic Development Grants under Section 3.2 hereof, for any purpose for which such tax increment revenues may lawfully be used pursuant to the provisions of the Urban Renewal Law, and City shall have no obligations to Developer with respect to the use thereof. 3.6 City and Developer anticipate that Developer's interests in the Economic Development Grant and Loan will be assigned to other intermediary parties in order to permit an intermediary party to qualify for New Markets Tax Credits, and thereby bring additional funding into the Project. City hereby declares its intent to consent to the assignment of any of the interests and obligations of Developer, provided that by such assignment (I) City's obligations are not increased, (ii) the security for the repayment of the Economic Development Loan is not materially impaired, (iii) the performance of Developer's obligations under this Agreement is not materially affected, and (iv) City has no liability or responsibility for payment of any of the fees, expenses or charges of the intermediate parties or otherwise arising in connection with the assignment. 8 3.7 Downtown Rehab Loan /Grant. (1) Subject to the conditions set forth in this section, City hereby commits to a $300,000 low interest loan through the Downtown Rehabilitation Loan /Grant Program. This commitment is subject to Resolution 86 -10 approved on March 15, 2010. The Project is to be completed in accordance with the regulations set forth for the City of Dubuque Downtown Rehabilitation Loan /Grant Program, with loan funding anticipated during FY 2024. The loan is for twenty years at 3% interest and is intended to reimburse Developer for historic renovation of the exterior facade and historically significant elements of the interior with remodeling of the remainder of the interior for use as commercial /residential space. Monthly interest only payments shall be required for the first sixty (60) months of the loan. Monthly principal and interest payments, amortized over an additional fifteen (15) year period, shall begin the sixty -first month of the loan. Developer's counsel shall not less than thirty (30) days prior to closing on the loan provide City with an opinion of title showing merchantable title in Developer to the satisfaction of City. City shall have until the closing to render objections to title, including any easements or other encumbrances not satisfactory to City, in writing to Developer. Developer shall promptly exercise its best efforts to have such title objections removed or satisfied and shall advise City of its intended action within ten (10) days of receipt of City's objections to title. If Developer shall fail to have such objections removed as of the closing, or any extension thereof consented to by City, City may, at its sole discretion, either (a) terminate its obligation under this Section 3.1 without liability on its part, or proceed to closing subject to such objections. Developer agrees to use its best reasonable efforts to promptly satisfy any such objections. The loan shall be secured by a mortgage and personal guarantees in a form acceptable to City. The City will enter into the loan agreement at the time funds are available given the Developer still owns the Property; and Developer is in compliance with this Agreement and there has been no Event of Default, as described in Section 5. (2) Up to the full amount of the loan shall be forgiven by the City as an incentive for the creation of new employment and /or housing opportunities. The amount of the loan to be forgiven shall be determined sixty (60) months from the completion of the Minimum Improvements. The base employment number to be used to calculate the Employment Incentive has been determined to be zero (0) FTE employees for the Building. (3) The amount of the loan forgiven shall be as follows: (a) Two thousand dollars ($2,000) shall be forgiven for each new FTE position created and maintained by the Owner or his /her tenant. (b) To qualify, the Owner must provide documentation to the City for the following: 9 The job represents a FTE position. An FTE position is defined as forty hours of labor per workweek. Such hours may be accrued by single individuals or divided among two or more individuals; ii. The job was created between the completion of the Minimum Improvements and twenty -four (24) months from the completion of the Minimum Improvements; iii. The job has been maintained by the Owner or his /her tenant for a period of not less than sixty (60) months after the completion of the Minimum Improvements; iv. The job is a paid position; and v. The job has been created by the Developer or another entity located in the Building and is for employment in a business located on the Property. (c) Two thousand dollars ($2,000) shall be forgiven for each new housing unit created. A new housing unit shall be defined as one of the following: i. The creation of a housing unit where one did not previously exist; or ii. An existing housing unit which has been unlicensed and unoccupied for a period of not less than five years. (4) A grant not to exceed ten thousand dollars ($10,000) shall be available to offset documented predevelopment costs, architectural and engineering fees and other miscellaneous soft costs for the Property. A determination must be made by City that the Project is substantially complete and satisfies the conditions of this agreement prior to the release of any grant monies. Funding is anticipated for this program to occur in FY2012. (5) A grant not to exceed ten thousand dollars ($10,000) shall be available to offset Developer's documented costs for front or rear facade renovations to the Property to eliminate inappropriate additions or alterations and restore the facade to its historic appearance, or to rehabilitate the facade to include new windows, paint, signage, awnings, etc. to improve the overall appearance of the Property. The costs of landscaping or screening with fencing or retaining walls may also be allowed, especially as it may improve property adjacent to the public right -of -way. Funding is anticipated for this program to occur in FY2012. (6) A grant not to exceed fifteen thousand dollars ($15,000) will be available to offset cost related to hiring a financial consultant to evaluate the project's feasibility. Financial Consultant Grant Funds will be dispensed on completion of work, documentation of costs and an inspection of completed project at a rate of $.50 for 10 each $1.00 of costs incurred. Financial Consultant Grant Funds will be dispensed after the project has been completed. Written requests for payment must be submitted to the Economic Development Department. Funding is anticipated for this program to occur in FY2012. SECTION 4. COVENANTS OF DEVELOPER 4.1 The Minimum Improvements shall conform to the U.S. Secretary of the Interior's Standards for Rehabilitation. 4.2 Execution of Assessment Agreement. Developer shall agree to, and with City, shall execute, as soon as the plans and specifications for Minimum Improvements are prepared, but no later than Closing Date, an Assessment Agreement substantially in the form attached hereto as Exhibit E ( "Assessment Agreement") pursuant to the provisions of Section 403.6(19) of the Code of Iowa specifying the Assessor's Minimum Actual Value for Property and Minimum Improvements for calculation of real property taxes. Specifically, Developer shall agree to a minimum actual value for Property and Minimum Improvements which will result in a minimum actual value as of January 1, 2011 of not less than One Million Two Hundred Sixty Dollars ($1,260,000.00) (such minimum actual value at the time applicable is herein referred to as the "Assessor's Minimum Actual Value "). Nothing in the Assessment Agreement shall limit the discretion of the Assessor to assign an actual value to Property in excess of such Assessor's Minimum Actual Value nor prohibit Developer from seeking through the exercise of legal or administrative remedies a reduction in such actual value for property tax purposes; provided, however, that Developer shall not seek a reduction of such actual value below Assessor's Minimum Actual Value in any year so long as Assessment Agreement shall remain in effect. The Assessment Agreement shall remain in effect until June 1, 2027 (the "Termination Date "). Assessment Agreement shall be certified by the Assessor for City as provided in Iowa Code Section 403.6(19) and shall be filed for record in the office of the County Recorder of Dubuque County, and such filing shall constitute notice to any subsequent encumbrancer or purchaser of Property (or part thereof), whether voluntary or involuntary, and such Assessment Agreement shall be binding and enforceable in its entirety against any such subsequent purchaser or encumbrancer. 4.3 Books and Records. During the term of this Agreement, Developer shall keep at all times and make available to City upon reasonable request proper books of record and account in which full, true and correct entries will be made of all dealings and transactions of or in relation to the business and affairs of Developer in accordance with generally accepted accounting principles consistently applied throughout the period involved, and Developer shall provide reasonable protection against loss or damage to such books of record and account. 4.4 Real Property Taxes. Developer shall pay or cause to be paid, when due, all real property taxes and assessments payable with respect to all and any parts of the Property unless Developer's obligations have been assumed by another person pursuant to the provisions of this Agreement. 11 4.5 No Other Exemptions. During the term of this Agreement, Developer agrees not to apply for any state or local property tax exemptions which are available with respect to the Development Property or the Minimum Improvements located thereon that may now be, or hereafter become, available under state law or city ordinance during the term of this Agreement, including those that arise under Iowa Code Chapters 404 and 427, as amended. 4.6 Insurance Requirements. (1) Developer shall provide and maintain or cause to be maintained at all times during the process of constructing the Minimum Improvements and at its sole cost and expense builder's risk insurance, written on a Completed Value Form in an amount equal to one hundred percent (100 %) of the building (including Minimum Improvements) replacement value when construction is completed. Coverage shall include the "special perils" form and developer shall furnish City with proof of insurance in the form of a certificate of insurance. (2) Upon completion of construction of the Minimum Improvements and up to the Termination Date, Developer shall maintain, or cause to be maintained, at its cost and expense property insurance against loss and /or damage to the building (including the Minimum Improvements) under an insurance policy written with the "special perils" form and in an amount not less than the full insurable replacement value of the building (including the Minimum Improvements). Developer shall furnish to City proof of insurance in the form of a certificate of insurance. The term "replacement value" shall mean the actual replacement cost of the building with Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and shall be reasonably determined from time to time at the request of City, but not more frequently than once every three (3) years. (3) Developer shall notify City immediately in the case of damage exceeding $50,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. Net proceeds of any such insurance (Net Proceeds), shall be paid directly to Developer as its interests may appear, and Developer shall forthwith repair, reconstruct and restore the Minimum Improvements to substantially the same or an improved condition or value as they existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction and restoration, Developer shall apply the Net Proceeds of any insurance relating to such damage received by Developer to the payment or reimbursement of the costs thereof, subject, however, to the terms of any mortgage encumbering title to the Property (as its interests may appear). Developer shall complete the repair, reconstruction and restoration of Minimum Improvements whether or not the Net Proceeds of insurance received by Developer for such purposes are sufficient. 12 4.7 Preservation of Property. During the term of this Agreement, Developer shall maintain, preserve and keep, or cause others to maintain, preserve and keep, the Minimum Improvements in good repair and working order, ordinary wear and tear accepted, and from time to time shall make all necessary repairs, replacements, renewals and additions. 4.8 Non - Discrimination. In carrying out the project, Developer shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, sexual orientation, national origin, age or disability. 4.9 Conflict of Interest. Developer 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 insider information with regard to the project, shall have any interest, direct or 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. In connection with this obligation, Developer shall have the right to rely upon the representations of any party with whom it does business and shall not be obligated to perform any further examination into such party's background. 4.10 Non - Transferability. Until such time as the Minimum Improvements are complete (as certified by City under Section 2.5), this Agreement may not be assigned by Developer nor may the Property be transferred by Developer to another party without the prior written consent of City, which shall not be unreasonably withheld. Thereafter, Developer shall have the right to assign this Agreement and upon assumption of the Agreement by the assignee, Developer shall no longer be responsible for its obligations under this Agreement. 4.11 No change in Tax Classification. Developer agrees not to take any action to change, or otherwise allow, the classification of the Development Property for property tax purposes to become other than commercial property and to be taxed as such under Iowa law. 4.12 Restrictions on Use. Developer agrees for itself, and its successors and assigns, and every successor in interest to the Property or any part thereof that they, and their respective successors and assigns, shall: (1) Devote the Property to, and only to and in accordance with, the uses specified in the Urban Renewal Plan (and City represents and agrees that use of the Property as a restaurant and upper -story housing, is in full compliance with the Urban Renewal Plan) (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same); and 13 (2) Not discriminate upon the basis of race, religion, color, sex, sexual orientation, gender identity, national origin, age or disability in the sale, lease, rental, use or occupancy of the Property or any improvements erected or to be erected thereon, or any part thereof (however, Developer shall not have any liability to City to the extent that a successor in interest shall breach this covenant and City shall seek enforcement of this covenant directly against the party in breach of same). 4.13 Compliance with Laws. Developer shall comply with all laws, rules and regulations relating to its businesses, other than laws, rules and regulations the failure to comply with or the sanctions and penalties resulting therefrom, would not have a material adverse effect on the business, property, operations, financial or otherwise, of Developer. SECTION 5. EVENTS OF DEFAULT AND REMEDIES 5.1 Events of Default Defined. The following shall be Events of Default under this Agreement and the term Event of Default shall mean, whenever it is used in this Agreement, any one or more of the following events: (1) Failure by Developer to pay or cause to be paid, before July 1, 2012, repayment of the Economic Development Loan under Section 3.2(1) of this Agreement, and failure to repay before delinquent, all real property taxes assessed with respect to the Minimum Improvements and the Property. (2) Failure by Developer to cause the construction of the Minimum Improvements to be commenced and completed pursuant to the terms, conditions and limitations of this Agreement. (3) Transfer of any interest by Developer of the Minimum Improvements in violation of the provisions of this Agreement prior to the issuance of the final Certificate of Completion. (4) Failure by Developer or City to substantially observe or perform any other material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement. 5.2. Remedies on Default by Developer. Developer's failure under Section 3.2(1) to repay the Economic Development Loan, with interest, on or before July 1, 2012 shall, in addition to constituting a Default, shall constitute failure of a condition precedent to the making of Economic Development Grants under Section 3.2(2) and Developer's right to such Economic Development Grants shall terminate without written notice or time for cure upon failure to meet such condition precedent. Whenever any other Event of Default referred to in Section 5.1 of this Agreement occurs , and is continuing, City, as specified below, may take any one or more of the following actions after the giving of written notice by City to Developer (and the holder of any mortgage encumbering any interest in the Property of which City has been notified of in writing) of the Event of Default, but only if the Event of Default has not been cured within sixty (60) days following such notice, or if the Event of Default cannot be cured within sixty 14 (60) days and Developer does not provide assurances to City that the Event of Default will be cured as soon as reasonably possible thereafter. (1) City may suspend its performance under this Agreement until it receives assurances from the Developer deemed adequate by City, that the Developer will cure its default and continue its performance under this Agreement; (2) Until the Closing Date, City may cancel and rescind this Agreement; (3) City shall be entitled to recover from Developer the sum of all amounts expended by City in connection with the funding of the Downtown Rehab Loan /Grant or Economic Development Loan and Economic Development Grant to Developer and City may take any action, including any legal action it deems necessary, to recover such amounts from the Developer; (4) City may withhold the Certificate of Completion; or (5) City may take any action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. 5.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to City is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 5.4 No Implied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. 5.5 Agreement to Pay Attorneys' Fees and Expenses. If any action at law or in equity, including an action for declaratory relief or arbitration, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of litigation from the other party. Such fees and costs of litigation may be set by the court in the trial of such action or by the arbitrator, as the case may be, or may be enforced in a separate action brought for that purpose. Such fees and costs of litigation shall be in addition to any other relief that may be awarded. 5.6 Remedies on Default by City. If City defaults in the performance of this Agreement, Developer may take any action, including legal, equitable or administrative action that may appear necessary or desirable to collect any payments due under this Agreement, to recover expenses of Developer, or to enforce performance and observance of any 15 obligation, agreement, or covenant of City under this Agreement. Developer may suspend its performance under this Agreement until it receives assurances from City, deemed adequate by Developer, that City will cure its default and continue its performance under this Agreement. SECTION 6. GENERAL TERMS AND PROVISIONS 6.1 Notices and Demands. Whenever this Agreement requires or permits any notice or written request by one party to another, it shall be deemed to have been properly given if and when delivered in person or three (3) business days after having been deposited in any U.S. Postal Service and sent by registered or certified mail, postage prepaid, addressed as follows: If to Developer: With copy to: If to City: With copy to: Chris Miller 44 Main LLC 3211 North Cedar Court Dubuque IA 52003 D. Flint Drake Drake & Freund, P.C. 1005 Main Street, Suite 200 Dubuque, IA 52001 Phone: (563) 582 -2000 Fax: (563) 583 -5225 City Manager 50 W. 13th Street Dubuque, Iowa 52001 Phone: (563) 589 -4110 Fax: (563) 589 -4149 City Attorney City Hall 50 W. 13 Street Dubuque IA 52001 Or at such other address with respect to either party as that party may, from time to time designate in writing and forward to the other as provided in this Section. 6.2 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of City and Developer and their respective successors and assigns. 6.3 Termination Date. This Agreement and the rights and obligations of the parties hereunder shall terminate on June 1, 2027 (the Termination Date). 6.4. Execution By Facsimile. The parties agree that this Agreement may be transmitted between them by facsimile machine. The parties intend that the faxed signatures 16 constitute original signatures and that a faxed Agreement containing the signatures (original or faxed) of all the parties is binding on the parties. 6.5 Memorandum of Development Agreement. Developer shall promptly record a Memorandum of Development Agreement in the form attached hereto as Exhibit D in the office of the Recorder of Dubuque County, Iowa. Developer shall pay the costs for so recording. IN WITNESS WHEREOF, City has caused this Agreement to be duly executed in its name and behalf by its Mayor and attested to by its City Clerk and Developer has caused this Agreement to be duly executed on or as of the first above written. 17 CITY OF DUBUQUE, IOWA 44 MAIN, LLC. By &V Roy D. Bu Mayor UUUUUU Attest: Jeanne F. Schneider City Clerk (City Seal) STATE OF IOWA COUNTY OF DUBUQUE On this/ _ day of a" 20/4 before me the undersigned, a Notary Public in and for the said County and State, personally appeared Roy D. Buol 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, a municipal corporation executing the instrument to which this is attached; that the seal affixed hereto is the seal of said municipal corporation; that said instrument was signed and sealed on behalf of the City of Dubuque, Iowa, by authority of its City Council; and that said Mayor and City Clerk acknowledged the execution of said instrument to be the voluntary act and deed of said C 0' , by it and by them voluntarily executed. Nota ; ' ublic KEVIN S. FIRNSTAHL COMMISSION NO.745295 MY 0 MISSI N EXPIRES SS 18 By Chris Miller Member 44 MAIN SLM, Chris Miller It's President STATE OF IOWA COUNTY OF DUBUQUE On this day of CIO/MK 20 /4, before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Chris Miller, to me personally known, who, being by me duly sworn, did say that he is the Managing Member of 44 Main LLC., the corporation executing the instrument to which this is attached and that as said Managing Member 44 Main LLC. acknowledges the execution of said instrument to be the voluntary act and deed of said company, by it and by him, an individual, voluntarily executed. STATE OF IOWA ) SS COUNTY OF DUBUQUE ) On this (- day of c A,— 20Z, before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Chris Miller, to me personally known, who, being by me duly sworn, did say that he is the President of 44 Main SLM, Inc., the corporation executing the instrument to which this is attached and that as said President of 44 Main SLM, Inc. acknowledges the execution of said instrument to be the voluntary act and deed of said company, by it and by him, an individual, voluntarily executed. ) SS ) 19 BRENDAFUGLSANG Commission Number 745861 My Comm, Exp, MAR 19, 2013 BRENDA FIJGLSANG Commission Number 745861 My Comm, Exp, MAR 19, 2013 F: \USERS \Econ Dev\44 Main \Development Agreement\20101008.2 44 Main Development Agreement final.doc EXHIBIT A — EXHIBIT B — EXHIBIT C EXHIBIT D EXHIBIT E — LIST OF EXHIBITS City Attorney's Certificate Opinion of Developer's Counsel — City Certificate — Memorandum of Development Agreement Minimum Assessment Agreement 20 EXHIBIT A CITY ATTORNEY'S CERTIFICATE 21 Barry A. Lindahl, Esq. City Attorney Suite 330, Harbor View Place 300 Main Street Dubuque, Iowa 52001 -6944 (563) 583 -4113 office (563) 583-1040 fax balesq @cltyofdubuque.org Mr. Chris Miller President, 44 Main, LLC 3211 North Cedar Court Dubuque, IA 52003 RE: Development Agreement Dear Mr. Miller: BAL:)mg Dubuque AWAmMCaCdy 11111! 2007 November 2, 2010 Very sing Bar ' A. Lindahl, Esq. Cit Attorney Masterpiece on the Mississippi I have acted as counsel for the City of Dubuque, Iowa, in connection with the execution and delivery of a certain Development Agreement between 44 Main, LLC and 44 Main SLM, Inc. (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the 18th day of October, 2010. The City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and has full power and authority to execute, deliver and perform its obligations under this Agreement, and to the best of my knowledge, the representations of the City Manager in his letter dated the 2nd day of November, 2010, are correct. EXHIBIT B OPINION OF DEVELOPER'S COUNSEL 23 D. Flint Drake* fdrake @drakefreund.com Both admitted in Iowa *Also admitted in Wisconsin Mayor and City Council Members City Hall 13` and Central Avenue Dubuque IA 52001 Dear Mayor and City Councilmembers: Drake & Freund, P.C. ATTORNEYS 1005 Main Street, Suite 200 Dubuque, IA 52001 www.drakefreund.com November 2, 2010 John D. Freund jfreund @drakefreund.com Telephone: (563) 582 -2000 Facsimile: (563) 583 -5225 RE: DEVELOPMENT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND 44 MAIN, LLC We have acted as counsel for 44 MAIN, LLC, (Developer) in connection with the execution and delivery of a certain Development Agreement (Development Agreement) between Developer, and the City of Dubuque, Iowa ( "City ") dated for reference purposes the 18th day of October, 2010. We have examined the original certified copy, or copies otherwise identified to our satisfaction as being true copies, of the Development Agreement and such other documents and records as we have deemed relevant and necessary as a basis for the opinions set forth herein. Based on the pertinent law, the foregoing examination and such other inquiries as we have deemed appropriate, we are of the opinion that: 1. Developer is a limited liability company organized and existing under the laws of the State of Iowa and has full power and authority to execute, deliver and perform in the full Development Agreement. The Development Agreement has been duly and validly authorized, executed and delivered by Developer and, assuming due authorization, execution and delivery by City, is in full force and effect and is valid and legally binding instrument of Developer enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally. 2. The execution, delivery and performance by Developer of the Development Agreement and the carrying out of the terms thereof, will not result in violation of any provision of, or in default under partnership agreement or certificate of Developer, any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order, statute, rule, regulation or restriction to which Developer is a party or by which Developer's property is bound or subject. November 2, 2010 Page 2 DRAKE & FREUND, P.C. 3. To our actual knowledge, there are no actions, suits or proceedings pending or threatened against or affecting Developer in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business (present or prospective), financial position or results of operations of Developer or which in any manner raises any questions affecting the validity of the Agreement or the Developer's ability to perform Developer's obligations thereunder. Best Regards, DR '1 /IA_ By D. Flint Drake EXHIBIT C CITY CERTIFICATE 25 City Manager's Office 50 West 13th Street Dubuque, Iowa 52001 -4864 (563) 589 -4110 phone (563) 589 -4149 fax ctymgr ©cityofdubuque.org Dear t)06»€- z,) -o/c (DATE) am the City Manager of the City of Dubuque, Iowa and have acted in that capacity in connection with the execution and delivery of a certain Development Agreement between yy 11914 LLC (Developer) and the City of Dubuque, Iowa (City) dated for reference purposes the jQ' day of Ocra/t , 20 I On behalf of the City of Dubuque, I hereby represent and warrant to Developer that: (1) City has duly obtained all necessary approvals and consents for its execution, delivery and performance of this Agreement and that it has full power and authority to execute, deliver and perform its obligations under this Agreement. City's attorney shall issue a legal opinion to Developer at time of closing confirming the representation contained herein, in the form attached hereto as Exhibit B. (2) City shall exercise its best efforts to cooperate with Developer in the development process. (3) City shall exercise its best efforts to resolve any disputes arising during the development process in a reasonable and prompt fashion. (4) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of or compliance with the terms and conditions of this Agreement are not prevented by, limited by, in conflict with, or result in a violation or breach of, the terms, conditions or provisions of the charter of City, any evidence of indebtedness, agreement or instrument of whatever nature to which City is now a party or by which it or its property is bound, or constitute a default under any of the foregoing. (5) There are no actions, suits or proceedings pending or threatened against or affecting City in any court or before any arbitrator or before or by any governmental body in which there is a reasonable possibility of an adverse decision which could materially adversely affect the financial position or operations of City or which 26 MCVM:jh affects the validity of the Agreement or City's ability to perform its obligations under this Agreement. (6) No ordinance or hearing is now or before any local governmental body that either contemplates or authorizes any public improvements or special tax levies, the cost of which may be assessed against the Property. To the best of City's knowledge, there are no plans or efforts by any government agency to widen, modify, or re -align any street or highway providing access to the Property and there are no pending or intended public improvements or special assessments affecting the Property which will result in any charge or lien be levied or assessed against the Property. (7) The representations and warranties contained in this article shall be correct in all respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date which representations and warranties shall continue and survive the Closing Date. 27 Sincerely, Michael C. Van Milligen City Manager EXHIBIT D MEMORANDUM OF DEVELOPMENT AGREEMENT 28 1111111111111111111911111111 Doc ID: 006908010003 Type EN Kind: AGREEMENT Recorded: $19.00/2010 Pape itof23 6:32 PM Dubuque County Iowa Kathy Flynn Thurlow Recorder Q% /� File2010-0001 1erV / 4 Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583-4113 MEMORANDUM OF DEVELOPMENT AGREEMENT A Development Agreement by and among the City of Dubuque, Iowa, an Iowa municipal corporation, of Dubuque, Iowa, and 44 Main, LLC. was made regarding the following described premises: Lot 12, Lot 13, Lot 14 and Lot 15 of the West Half of Block 1, Dubuque Harbor Company's Addition to the City of Dubuque, Iowa according to the recorded plat thereof, except that part of lot 12 deeded to the City of Dubuque, by Warranty Deed recorded as Instrument No.:5316-1988, Subject to easements of record; ��Th Development Agreement is dated for reference purposes the / -day of , d' 2010, and contains covenants, conditions, and restrictions concerning the sale and use of said premises. This Memorandum of Development Agreement is recorded for the purpose of constructive notice. In the event of any conflict between the provisions of this Memorandum and the Development Agreement itself, executed by the parties, the terms and provisions of the Development Agreement shall prevail. A complete counterpart of the Development Agreement, together with any amendments thereto, is in the possession of the City of Dubuque and may be examined at its offices as above provided. Dated this 1V�-day o 2010 CITY OF DUBUQUE, IOWA By -,� '.. 0. &/ Roy D. Bu Mayor Attest: Jeanne F. Schneider City Clerk (City Seal) STATE OF IOWA SS COUNTY OF DUBUQUE 44 MAIN, LLC. By Chris Miller Member 44 MAIN SLM, B Chris Miller It's President On this�"day of 20l� before me the undersigned, a Notary Public in and for the said County and State, personally appeared Roy D. Buol 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, a municipal corporation executing the instrument to which this is attached; that the seal affixed hereto is the seal of said municipal corporation; that said instrument was signed and sealed on behalf of the City of Dubuque, Iowa, by authority of its City Council; and that said Mayor and City Clerk acknowledged the execution of said instrument to be the voluntary act and deed of said CjV, by it and by them voluntarily executed. NotaVPublic KEVIN S. FIRNSTRHL _ COMMISSION NO.745295 MY COMMISSION EXPIRES �ow� STATE OF IOWA SS COUNTY OF DUBUQUE On this h6y`'day of20 /4, before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Chris Miller, to me personally known, who, being by me duly sworn, did say that he is the Managing Member of 44 Main LLC., the corporation executing the instrument to which this is attached and that as said Managing Member 44 Main LLC. acknowledges the execution of said instrument to be the voluntary act and deed of said company,. by it and by him, an individual, voluntarily executed. Notary Public STATE OF IOWA SS COUNTY OF DUBUQUE W BRENDA FUGLSANGCommission Number 745861My Comm. Exp, MAR 19, 2013 On this day of r;�pr^ 20/"� before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Chris Miller, to me personally known, who, being by me duly sworn, did say that he is the President of 44 Main SLM, Inc., the corporation executing the instrument to which this is attached and that as said President of 44 Main SLM, Inc. acknowledges the execution of said instrument to be the voluntary act and deed of said company, by it and by him, an individual, voluntarily executed. BRENDA FUGLSANG Commission Number 745861 My Comm. Exp, MAR 19, 2013 No ary Public r FAUSERS\Econ Dev\44 Main\Development Agreement\20101008.2 44 Main Development Agreement final.doc Prepared by: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 Return to: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 MEMORANDUM OF DEVELOPMENT AGREEMENT A Development Agreement by and among the City of Dubuque, Iowa, an Iowa municipal corporation, of Dubuque, Iowa, and 44 Main, LLC. was made regarding the following described premises: Lot 12, Lot 13, Lot 14 and Lot 15 of the West Half of Block 1, Dubuque Harbor Company's Addition to the City of Dubuque, Iowa according to the recorded plat thereof, except that part of lot 12 deeded to the City of Dubuque, by Warranty Deed recorded as Instrument No.:5316 -1988, Subject to easements of record; The Development Agreement is dated for reference purposes the day of , 2010, and contains covenants, conditions, and restrictions concerning the sale and use of said premises. This Memorandum of Development Agreement is recorded for the purpose of constructive notice. In the event of any conflict between the provisions of this Memorandum and the Development Agreement itself, executed by the parties, the terms and provisions of the Development Agreement shall prevail. A complete counterpart of the Development Agreement, together with any amendments thereto, is in the possession of the City of Dubuque and may be examined at its offices as above provided. Dated this day of , 2010. CITY OF DUBUQUE, IOWA By: Roy D. Buol, Mayor By: Jeanne F. Schneider, City Clerk 29 STATE OF IOWA COUNTY OF DUBUQUE Notary Public, State of Iowa Notary Public, State of Iowa ) ) ) SS On this day of , 20_, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Roy D. Buol 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, a Municipal Corporation, created and existing under the laws of the State of Iowa, and that the seal affixed to said instrument is the seal of said Municipal Corporation and that said instrument was signed and sealed on behalf of said Municipal corporation by authority and resolution of its City Council and said Mayor and City Clerk acknowledged said instrument to be the free act and deed of said Municipal Corporation by it voluntarily executed. STATE OF IOWA ) SS COUNTY OF DUBUQUE ) On this day of , 20, before me, a Notary Public in and for the State of Iowa, in and for said county, personally appeared Chris Miller to me personally known, who being by me duly sworn did say that he is the Managing Member of 44 Main, LLC. and that said instrument was signed on behalf of said company by authority of its members and that he acknowledged the execution of this instrument to be the voluntary act and deed of said company by it voluntarily executed. 30 EXHIBIT E MINIMUM ASSESSMENT AGREEMENT 31 Prepared by David J. Heiar, 50 W. 13 Street, Dubuque IA 52001. 563 - 589 -4393 Return to David J. Heiar, 50 W. 13 Street, Dubuque IA 52001. 563 - 589 -4393 MINIMUM ASSESSMENT AGREEMENT CITY OF DUBUQUE, IOWA 1111111111 111111111111111111111111 Doc ID: 007069320008 Type: GEN Kind: AGREEMENT Recorded: 06 /20/2011 at 0 3:28:20 PM Fee Amt: $44.00 Page 1 of 8 Kathy hyFlynnnThurlow Recorder F11e2011_0 THIS MINIMUM ASSESSMENT AGREEMENT, dated for reference purposes the 18 day of October, 2010, by and among the City of Dubuque, Iowa (City), 44 Main SLM, Inc. (an affiliate of Developer) and 44 Main, L.L.C., an Iowa limited liability company with its principal place of business at Dubuque, Iowa (Developer), and the City Assessor of the City of Dubuque (Assessor). WHEREAS, City and Developer have entered into a Development Agreement dated as of October 18, 2010, as amended (Development Agreement) regarding certain real property ( the Property) described in Exhibit A attached hereto, located within the City of Dubuque; and WHEREAS, it is contemplated that Developer will undertake the development of an area (the Project) within the Greater Downtown Urban Renewal District by the construction of the Minimum Improvements on the Property as provided in the Development Agreement; and WHEREAS, pursuant to Section 403.6 of the Iowa Code, as amended, City, and Developer desire to establish a minimum actual value for the Minimum Improvements and the Property, which shall be effective upon substantial completion and from then until this Agreement is terminated pursuant to the terms herein; and WHEREAS, City and Assessor have reviewed the preliminary plans and the specifications for the Minimum Improvements which it is contemplated will be erected. 32 ecki NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each other, do hereby agree as follows: 1) Commencing January 1, 2011, the minimum actual value which shall be fixed for assessment purposes for the Property described in Exhibit A attached hereto, together with the Minimum Improvements to be constructed thereon by Developer shall be not less than one million two hundred sixty thousand dollars ($1,260,000.00), until termination of this Agreement. The parties hereto expect that the construction of the Minimum Improvements will be substantially completed on or before the 1 day of July, 2011. 2) The minimum actual value herein established shall be of no further force and effect and this Agreement shall terminate on the 30 day of June, 2025, the final date of the City's obligation to pay interest or principal with respect to the indebtedness incurred in support of the Project, in the principal amount of $337,000.00. The final scheduled maturity date of the said indebtedness is June 30, 2027. Provided, further, that in the event said indebtedness had not been fully paid as to principal and interest as of January 1, 2027, this Agreement shall continue in effect for such additional time as shall be required therefore, but not later than January 1, 2029. 3) This Agreement shall be promptly recorded by Developer.. Developer shall pay all costs of recording. 4) Neither the preambles nor provisions of this Agreement are intended to, nor shall be construed as, modifying the terms of the Development Agreement between City and Developer. 5) This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 33 THE CITY 0 DUBUQUE, IOWA By: ATTEST Roy . Buol, Mayor B I Jeanne F. Schneider, City Clerk STATE OF IOWA COUNTY OF DUBUQUE ) ) SS On this /r 'day of , 20 0, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Roy D. Buol 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; a municipal corporation; that the seal affixed to the foregoing instrument is the corporate seal of the corporation, and that the instrument was signed and sealed on behalf of the corporation, by authority of its City Council, .as eenta+rted -in Rees-atiun -4e. passed -by tile -Eity Gettrrcil-ef ; and Roy D. Buol and Jeanne F. Schneider acknowledged the execution of the instrument to be their voluntary act and deed and the voluntary act and deed of the corporation, by it voluntarily executed. 34 AWL • otary Public, State of Iowa KEVIN S. FIRNSTAHL COMMISSION NO.745295 MY Co I S /0, EXPIRES 44 MAIN, LLC (DEVELOPER) Chris Miller, It's Member STATE OF IOWA ) ) SS DUBUQUE COUNTY ) On this /8 day of c dh , 2010, before me, a Notary Public in and for said county and state, personally appeared Chris Miller, to me personally known, who stated that he is the member of 44 Main, LLC, the member of 44 Main, LLC, and that said instrument was signed on behalf of said company by authority of its members and that he acknowledged the execution of this instrument to be the voluntary act and deed of said company by him and by it voluntarily executed. 35 Notary Pu • ic, Stat- o Iowa BRENDA FUGLSANG Commission Number 745861 My Comm. Exp. MAR 19, 2013 44 MAIN SLM, INC By: Chris Miller, It's President STATE OF IOWA ) ) SS COUNTY OF DUBUQUE ) On this day of OcAeler , 2010, before me the undersigned, a Notary Public in and for the State of Iowa, personally appeared Chris Miller, to me personally known, who, being duly sworn, did say that he is the President of 44 MAIN SLM, INC, the President of 44 MAIN SLM, INC., an affiliate of Developer, that no seal has been procured by the said limited liability company, that said instrument was signed on behalf of said company; and that said Chris Miller acknowledged the execution of said instrument to be the voluntary act and deed of said limited liability company, by it voluntarily executed. / A . A . ■A-,. N � ary Public in and fir the ` of Iowa 36 lc w' BRENDA FUGLSANG Commission Number 745861 My Comm. Exp. MAR 19, 2013 The undersigned, as holder of a mortgage on the Development Property, hereby consents to the Developer's execution and delivery of this Minimum Assessment Agreement and agrees to be bound by the terms hereof to the same extent as the Developer with respect to the Minimum Actual Value set forth herein. STATE OF IOWA COUNTY OF ow ) SS DEBRA C. BAKKEN Commission Number 707100 My Comm. Exp. i I P CONSENT OF LENDER AMERICAN TRUST & SAVINGS BANK By: Qw.e4 Its: On this oc day of ©c+ob { , 201 6 before me, a Notary Public in and for said County, personally appeared , to me personally known, who, being by me duly sworn, did say that that person is the U, ' Rresa e► & of American Trust & Savings Bank; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and acknowledged the execution of the foregoing Consent to be the voluntary act and deed of said corporation, by it voluntarily executed. Dated this day of OG4 bev' , 20 10 37 Notary Public in and or said County and State CERTIFICATION OF ASSESSOR The undersigned, having reviewed the plans and specifications for the Minimum Improvements to be constructed and the market value assigned to the land upon which the Minimum Improvements are to be constructed, and being of the opinion that the minimum market value contained in the foregoing Assessment Agreement appears reasonable, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the property described in the foregoing Assessment Agreement, upon completion of Minimum Improvements to be made on it and in accordance with the Assessment Agreement, certifies that the actual value assigned to such land, building and equipment upon completion shall not be less than one million two hundred sixty thousand Dollars ($1,260,000.00) until termination of this Assessment Agreement pursuant to the terms hereof. 38 Rick Encelken, Du u ue City Assessor Date: l/ ' /. .&vo STATE OF IOWA ) ) SS COUNTY OF DUBUQUE ) Subscribed and sworn to before me by C c\& g,x C , City Assessor for the City of Dubuque, Iowa. Notary Public in and for the State of Iowa My Commission expires: 2 r7 -a� .� Date: El lite B. STIERMAN Com Izairm Number 177922 my Comm. Evp. — I EXHIBIT A LEGAL DESCRIPTION Lot 12, Lot 13, Lot 14 and Lot 15 of the West Half of Block 1, Dubuque Harbor Company's Addition to the City of Dubuque, Iowa according to the recorded plat thereof, except that part of lot 12 deeded to the City of Dubuque, by Warranty Deed recorded as Instrument No.5316 -1988, subject to easements of record. 39 American Trust "'""'° Simply better banking. November 2, 2010 Michael C. Van Milligen City Manager City of Dubuque 50 West 13 Street Dubuque, IA 52001 Dear Mr. Van Milligen, 895 Main Street P.O. Box 938 Dubuque, Iowa 52004 -0938 563.589.0857 Fax 589.0860 dfischer@amerIcantrust.com www.ameticantrust.com Darin P. Fischer Vice President . Commercial Banking This letter shall serve to confirm that 44 Main, LLC has sufficient firm commitments to finance the completion of the minimum improvements as described in the Development Agreement by and between the City of Dubuque, Iowa and 44 Main, LLC dated October 18, 2010. If you have any further questions or need any additional information, please do not hesitate to contact me at 589 -0857. Sincerely, 19_ Darin P. Fischer Vice President Commercial Banking (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of Dubuque, Iowa. Date of Meeting: October 18, 2010. Time of Meeting: 6:30 o'clock P.M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for said meeting is as follows: Not to exceed $350,000 Urban Renewal Tax Increment Revenue Notes. X Public hearing on the issuance. X Resolution instituting proceedings to take additional action. Such additional matters as are set forth on the additional 11 page(s) attached hereto. This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of said governmental body. 1 ity Clerk, Dubuque, Iowa October 18, 2010 The City Council of Dubuque, Iowa, met in regular session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the above date. There were present Mayor Roy D. Buol, in the chair, and the following named Council Members: Joyce Connors, Ric Jones, Kevin Lynch, David Resnick, Dirk Voetberg Absent: Karla Braig 2 The Mayor announced that this was the time and place for the public hearing and meeting on the matter of the issuance of not to exceed $350,000 Urban Renewal Tax Increment Revenue Notes in order to provide funds to pay costs of aiding in the planning, undertaking and carrying out of urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District, including those costs associated with the funding of economic development grants and loans to 44 Main, LLC, an Iowa limited liability company, under the terms of a Development Agreement between the City of Dubuque and 44 Main, LLC, and that notice of the proposed action by the Council to institute proceedings for the issuance of said Urban Renewal Tax Increment Revenue Notes had been published pursuant to the provisions of Section 403.9 of the Code of Iowa. The Mayor then asked the Clerk whether any written objections had been filed by any City resident or property owner to the issuance of said Urban Renewal Tax Increment Revenue Notes. The Clerk advised the Mayor and the Council that no written objections had been filed. The Mayor then called for oral objections to the issuance of said Urban Renewal Tax Increment Revenue Notes and none were made. Whereupon, the Mayor declared the time for receiving oral and written objections to be closed. (Attach here a summary of objections received or made, if any) 3 The Council then considered the proposed action and the extent of objections thereto. Whereupon, Council Member Dirk Voetberg introduced and delivered to the Clerk the Resolution hereinafter set out entitled "RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE ISSUANCE OF NOT TO EXCEED $350,000 URBAN RENEWAL TAX INCREMENT REVENUE NOTES," and moved its adoption. Council Member Ric Jones seconded the motion to adopt. The roll was called and the vote was, AYES: Buol, Connors, Jones, lynch, Resnick, Voetberg NAYS: None Whereupon, the Mayor declared said Resolution duly adopted as follows: RESOLUTION NO. 410-10 RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE ISSUANCE OF NOT TO EXCEED $350,000 URBAN RENEWAL TAX INCREMENT REVENUE NOTES WHEREAS, pursuant to notice published as required by law, this Council has held a public meeting and hearing upon the proposal to institute proceedings for the issuance of not to exceed $350,000 Urban Renewal Tax Increment Revenue Notes for the purpose of pay costs of aiding_ in the planning, undertaking and carrying out of urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District, including those costs associated with the funding of economic development grants and loans to 44 Main, LLC, an Iowa limited liability company, under the terms of a Development Agreement between the City of Dubuque and 44 Main, LLC, and has considered the extent of objections received from residents or property owners as to said proposed issuance; and, accordingly the following action is now considered to be in the best interests of the City and residents thereof: 4 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That this Council does hereby institute proceedings and takes additional action for the sale and issuance in the manner required by law of not to exceed $350,000 Urban Renewal Tax Increment Revenue Notes for the foregoing purpose. Section 2. The Finance Officer is authorized and directed to proceed on behalf of the City with the sale of said Notes, to select a date for the sale thereof, to cause to be prepared such notice and sale information as may appear appropriate, to publish and distribute the same on behalf of the City and this Council and otherwise to take all action necessary to permit the sale of said Notes on a basis favorable to the City and acceptable to the Council. ATTEST: PASSED AND APPROVED this 18 day of Octgber, 2010. Mayor 5 STATE OF IOWA COUNTY OF DUBUQUE CERTIFICATE ) SS ) CIG -3 9/91 I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of said Municipality showing proceedings of the Council, and the same is a true and complete copy of the action taken by said Council with respect to said matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of said agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty -four hours prior to the commencement of the meeting as required by said law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective city offices as indicated therein, that no Council vacancy existed except as may be stated in said proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of said Municipality hereto affixed this 19 day of October, 2010. SEAL cornell/ 671369 /Word \10422.118 ity Clerk, Dubuque, Iowa 6 NOTICE AND CALL OF PUBLIC MEETING (This Notice to be posted) Governmental Body: The City Council of Dubuque, Iowa. Date of Meeting: October 18, 2010 Time of Meeting: 6:30 o'clock P.M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for said meeting is as follows: $337,000 Urban Renewal Tax Increment Revenue Note, Taxable Series 2010H (44 Main LLC Project). Resolution authorizing the issuance. Such additional matters as are set forth on the additional 11 page(s) attached hereto. This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of said governmental body. ity Clerk, Dubuque, Iowa 1 October 19, 2010 The City Council of Dubuque, Iowa, met in regular session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the above date. There were present Roy D. Buol, in the chair, and the following named Council Members: Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick, Dirk Voetberg Absent: None * * * * * * * ** 2 Council Member Dirk Voetberg introduced the following Resolution entitled "A RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF $337,000 URBAN RENEWAL TAX INCREMENT REVENUE NOTES, TAXABLE SERIES 2010H (44 MAIN LLC PROJECT), OF THE CITY OF DUBUQUE, IOWA, AND PROVIDING FOR THE SECURING OF SUCH NOTES FOR THE PURPOSE OF CARRYING OUT AN URBAN RENEWAL PROJECT IN THE AREA OF THE CITY OF DUBUQUE, IOWA DESIGNATED AS THE GREATER DOWNTOWN URBAN RENEWAL DISTRICT ", and moved its adoption. Council Member Ric Jones seconded the motion to adopt. The roll was called and the vote was: AYES: Buol, Connors, Jones, Lynch, Resnick, Voetberg NAYS: None Whereupon the Mayor declared the following Resolution duly adopted: RESOLUTION NO. 411-10 RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF $337,000 URBAN RENEWAL TAX INCREMENT REVENUE NOTES, TAXABLE SERIES 2010H (44 MAIN LLC PROJECT), OF THE CITY OF DUBUQUE, IOWA, AND PROVIDING FOR THE SECURING OF SUCH NOTES FOR THE PURPOSE OF CARRYING OUT AN URBAN RENEWAL PROJECT IN THE AREA OF THE CITY OF DUBUQUE, IOWA DESIGNATED AS THE GREATER DOWNTOWN URBAN RENEWAL DISTRICT WHEREAS, the City Council of the City of Dubuque, Iowa (the "City" or the "Issuer ") has heretofore adopted an Amended and Restated Urban Renewal Plan (the "Urban Renewal Plan ") under which plan there are to be carried out urban renewal project activities in an area designated as the Greater Downtown Urban Renewal District (the "Project Area "); and 3 WHEREAS, it is presently estimated that the costs of carrying out the purposes and provisions of the Urban Renewal Plan for the Project Area, including the purpose set forth in Section 3 hereof, exceed $350,000, and provisions must now be made by the City to provide for the payment of such costs by the issuance of Notes; and WHEREAS, the City has heretofore adopted Ordinances under Section 403.19 of the Code of Iowa (the "Ordinance "), under which the taxes levied on the taxable property in the Project Area shall be divided, and a special fund created under the authority of Section 403.19(2) of the Code of Iowa, as amended (which special fund is hereinafter referred to as the "Greater Downtown Urban Renewal District Tax Increment Revenue Fund" or "Revenue Fund ") which fund was created in order to pay the principal of and interest on loans, monies advanced to or indebtedness whether funded, refunded, assumed, or otherwise, including bonds issued under the authority of Section 403.9(1) of the Code of Iowa, as amended, incurred by the City to finance or refinance in whole or in part urban renewal project activities undertaken within the Project Area, and pursuant to which Ordinance such Revenue Fund may be irrevocably pledged by the City for the payment of principal and interest on such indebtedness; and WHEREAS, the notice of intention of Issuer to take action for the issuance of not to exceed $350,000 Urban Renewal Tax Increment Revenue Notes has heretofore been duly published and no objections to such proposed action have been filed and it is now necessary and advisable that provisions be made for the issuance of Notes to the amount of $337,000 pursuant to the provisions of Section 403.9(1) of the Code of Iowa, payable from a portion of the income and proceeds of the Revenue Fund and other funds of the City derived from or held in connection with the undertaking and carrying out of the Urban Renewal Plan for the Project Area as described herein. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IN THE COUNTY OF DUBUQUE, STATE OF IOWA: Section 1. Definitions. In addition to the defined terms set forth in the preambles hereof, the following terms shall have the following meanings in this Resolution unless the text expressly or by necessary implication requires otherwise: ❑ "Clerk" shall mean the City Clerk or such other officer of the successor Governing Body as shall be charged with substantially the same duties and responsibilities; ❑ "Corporate Seal" shall mean the official seal of Issuer adopted by the - 4 - Governing Body; ❑ "Developer" shall mean 44 Main, LLC, an Iowa limited liability company; ❑ "Development Agreement" shall mean the Development Agreement expected to be dated as of October 18, 2010 by and between the City and the Developer, as amended from time to time; ❑ "Development Property" shall mean that portion of the Project Area being developed by the Developer under the terms of the Development Agreement, upon which the Developer has covenanted to construct the Minimum Improvements, being legally described as set forth in the Development Agreement; ❑ "Fiscal Year" shall mean the twelve -month period beginning on July 1 of each year and ending on the last day of June of the following year, or any other consecutive twelve -month period adopted by the Governing Body or by law as the official accounting period of the Issuer; ❑ "44 Main, LLC TIF Account" means a separate account to be established within the Greater Downtown Urban Renewal District Tax Increment Revenue Fund of the City, in which there shall be deposited all Tax Increments received by the City in respect of the Minimum Improvements and the Development Property; ❑ "Governing Body" shall mean the City Council of the City, or its successor in function with respect to the operation and control of the Project Area; ❑ "Greater Downtown Urban Renewal District Tax Increment Revenue Fund" or "Revenue Fund" means the special fund of the City created under the authority of Section 403.19(2) of the Code of Iowa and the Ordinance, which fund was created in order to pay the principal of and interest on loans, monies advanced to, or indebtedness, whether funded, refunded, assumed or otherwise, including bonds or other obligations issued under the authority of Section 403.19 or 403.12 of the Code of Iowa, incurred by the City to finance or refinance in whole or in part projects undertaken pursuant to the Urban Renewal Plan for the Project Area; ❑ "Independent Auditor" shall mean an independent firm of Certified Public Accountants or the Auditor of State; -5- ❑ "Issuer" and "City" shall mean the City of Dubuque, Iowa; ❑ "Minimum Improvements" shall mean the construction of twenty four (24) apartments for market -rate rental by the Developer on the Development Property in accordance with the terms of the Development Agreement; ❑ "Notes" or "Note" shall mean the $337,000 Urban Renewal Tax Increment Revenue Note, Taxable Series 2010H (44 Main LLC Project), authorized to be issued by this Resolution; ❑ "Original Purchaser" shall mean American Trust & Savings Bank, Dubuque, Iowa, as the purchaser of the Note from Issuer at the time of its original issuance; ❑ "Paying Agent" shall be the City Treasurer, or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein as Issuer's agent to provide for the payment of principal of and interest on the Note as the same shall become due; ❑ "Project Area" shall mean the Greater Downtown Urban Renewal District of the Issuer, as amended from time to time; ❑ "Project Fund" or "Construction Account" shall mean the fund required to be established by this Resolution for the deposit of the proceeds of the Note; ❑ "Registrar" shall be the City Treasurer of Dubuque, Iowa, or such successor as may be approved by Issuer as provided herein and who shall carry out the duties prescribed herein with respect to maintaining a register of the owners of the Note. Unless otherwise specified, the Registrar shall also act as Transfer Agent for the Note; ❑ "Tax Increments" means the property tax revenues divided and made available to the City for deposit in the Greater Downtown Urban Renewal District Tax Increment Revenue Fund under the provisions of Section 403.19 of the Code and the Ordinance; ❑ "Treasurer" shall mean the City Treasurer or such other officer as -6- shall succeed to the same duties and responsibilities with respect to the recording and payment of the Note issued hereunder. Section 2. Authority. The Note authorized by this Resolution shall be issued pursuant to Section 403.9 of the Code of Iowa, and in compliance with all applicable provisions of the Constitution and laws of the State of Iowa. Section 3. Authorization, Purpose, Approval of Purchase Agreement and Disbursements. There are hereby authorized to be issued, one negotiable, serial, fully registered Urban Renewal Tax Increment Revenue Note, Taxable Series 2010 (44 Main LLC Project), of the City of Dubuque, in the County of Dubuque, State of Iowa, in the aggregate principal amount of $337,000 for the purpose of paying costs of aiding in the planning, undertaking and carrying out of urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District, including those costs associated with the funding of economic development grants and loans to 44 Main, LLC, an Iowa limited liability company, under the terms of a Development Agreement between the City of Dubuque and 44 Main, LLC, as the same may be amended from time to time, and the funding of related reserves and payment of capitalized interest and the costs of issuance of the Notes. The Purchase Agreement between the City and the Original Purchaser (the "Purchase Agreement ") is hereby approved in substantially the form presented at this meeting, and the Mayor and City Clerk are authorized to execute and deliver the same on behalf of the City with such changes as shall to them, upon the advice of the City Attorney, be necessary or appropriate. On the date of issuance of the Note, proceeds of the Note in the amount set forth in the disbursement and repayment schedule attached to the Purchase Agreement shall be drawn upon and deposited in the Project Fund and held in such fund until disbursed to the Developer in accordance with the Development Agreement and applied to costs of issuance of the Note. In addition to such amount, the amounts set forth in said disbursement and repayment schedule shall be withdrawn by the Treasurer on December 31, 2010, June 30, 2011, December 31, 2011 and June 30, 2012 (in the respective amounts set forth in the said schedule) and deposited in the Sinking Fund established in Section 16 hereof and thereafter applied to the payment of interest on the Note on said dates. Section 4. Source of Payment. As provided and required by Chapter 403 of the -7- Code of Iowa, and Section 403.9, the Note and interest thereon shall be payable from and secured solely and only by amounts deposited and held from time to time in the 44 Main LLC TIF Account of the City. The City hereby covenants and agrees to maintain the Ordinance in force during the term of the Notes and to apply the Tax Increments collected in respect of the Development Property and the Minimum Improvements located thereon and allocated to the 44 Main LLC TIF Account to the payment of the principal of and interest on the Notes. The Notes shall not be payable in any manner from other Tax Increments collected in respect of other properties within the Project Area or by general taxation or from any other City funds. The Notes shall not constitute an indebtedness within the meaning of any statutory debt limitation or restriction and shall not be subject to the provisions of any other law relating to the authorization, issuance or sale of notes. The Notes shall recite in substance that they have been issued by the City in connection with an urban renewal project as defined in Chapter 403 of the Code of Iowa, and in any suit, action or proceeding involving the validity or enforceability of any Note issued hereunder or the security therefor, such Notes shall be conclusively deemed to have been issued for such purpose and such project shall be conclusively deemed to have been planned, located and carried out in accordance with the provisions of Chapter 403 of the Code of Iowa. Section 5. Note Details. Urban Renewal Tax Increment Revenue Notes of the City in the amount of $337,000 shall be issued pursuant to the provisions of Section 403.9 of the Code of Iowa for the aforesaid purpose. The Notes shall be designated "URBAN RENEWAL TAX INCREMENT REVENUE NOTE, TAXABLE SERIES 2010H (44 MAIN LLC PROJECT) ", be dated as of the date of delivery, and bear interest from the date of disbursement of the proceeds thereof at the rate of 6.00% per annum, until payment thereof, at the office of the Paying Agent, and shall mature in the principal amounts set forth on the disbursement and repayment schedule attached to the Purchase Agreement as Exhibit A and incorporated herein by this reference. As set forth on said schedule, principal shall be payable on December 31, 2012 and semiannually thereafter on the last business day of June and December of each year in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of principal and interest, if not sooner paid, shall become due and payable on June 30, 2027. The Note shall be executed by the manual signature of the Mayor and attested by the manual signature of the City Clerk, and impressed with the seal of the City and shall -8- be fully registered as to both principal and interest as provided in this Resolution; principal, interest and premium, if any shall be payable at the office of the Paying Agent by mailing of a check to the registered owner of the Note. The Note may be in the denomination of $1,000 or multiples thereof and shall, at the request of the Original 9 Purchaser, be issued initially as a single Note in the principal amount of $337,000 and numbered R -1. Section 6. Redemption. The principal of the Note may be called for redemption by the Issuer and paid before maturity on any date, from any funds regardless of source, in whole or from time to time in part, by giving thirty days' notice of redemption by registered or certified mail, to the registered owner of the Note. The terms of redemption shall be par, plus accrued interest to date of call. Section 7. Registration of Notes; Appointment of Registrar; Transfer; Ownership; Delivery; and Cancellation. (a) Registration. The ownership of Notes may be transferred only by the making of an entry upon the books kept for the registration and transfer of ownership of the Notes, and in no other way. The Treasurer is hereby appointed as Note Registrar under the terms of this Resolution. Registrar shall maintain the books of the Issuer for the registration of ownership of the Notes for the payment of principal of and interest on the Notes as provided in this Resolution. All Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code and Section 384.83(5) of the Code of Iowa, subject to the provisions for registration and transfer contained in the Notes and in this Resolution. (b) Transfer. The ownership of any Note may be transferred only upon the Registration Books kept for the registration and transfer of Notes and only upon surrender thereof at the office of the Registrar together with an assignment duly executed by the holder or his duly authorized attorney in fact in such form as shall be satisfactory to the Registrar, along with the address and social security number or federal employer identification number of such transferee (or, if registration is to be made in the name of multiple individuals, of all such transferees). In the event that the address of the registered owner of a Note (other than a registered owner which is the nominee of the broker or dealer in question) is that of a broker or dealer, there must be disclosed on the Registration Books the information pertaining to the registered owner required above. Upon the transfer of any such Note, a new fully registered Note, of any denomination or denominations permitted by this Resolution in aggregate principal amount equal to the unmatured and unredeemed principal amount of such transferred fully registered Note, and bearing interest at the same rate and maturing on the same date or dates shall be delivered by the Registrar. - 10- (c) Registration of Transferred Notes. In all cases of the transfer of the Notes, the Registrar shall register, at the earliest practicable time, on the Registration Books, the Notes, in accordance with the provisions of this Resolution. (d) Ownership. As to any Note, the person in whose name the ownership of the same shall be registered on the Registration Books of the Registrar shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Notes and the premium, if any, and interest thereon shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note, including the interest thereon, to the extent of the sum or sums so paid. (e) Cancellation. All Notes which have been redeemed shall not be reissued but shall be cancelled by the Registrar. All Notes which are cancelled by the Registrar shall be destroyed and a certificate of the destruction thereof shall be furnished promptly to the Issuer; provided that if the Issuer shall so direct, the Registrar shall forward the cancelled Notes to the Issuer. (f) Non - Presentment of Notes. In the event any payment check representing payment of principal of or interest on the Notes is returned to the Paying Agent or is not presented for payment of principal at the maturity or redemption date, if funds sufficient to pay such principal of or interest on Notes shall have been made available to the Paying Agent for the benefit of the owner thereof, all liability of the Issuer to the owner thereof for such interest or payment of such Notes shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Paying Agent to hold such funds, without liability for interest thereon, for the benefit of the owner of such Notes who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Resolution or on, or with respect to, such interest or Notes. The Paying Agent's obligation to hold such funds shall continue for a period equal to two years interest or principal became due, whether at maturity, or at the date fixed for redemption thereof, or otherwise, at which time the Paying Agent, shall surrender any remaining funds so held to the Issuer, whereupon any claim under this Resolution by the Owners of such interest or Notes of whatever nature shall be made upon the Issuer. Section 8. Reissuance of Mutilated, Destroyed, Stolen or Lost Notes. In case any outstanding Note shall become mutilated or be destroyed, stolen or lost, the Issuer shall at the request of Registrar authenticate and deliver a new Note of like tenor and amount as the Note so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Note to Registrar, upon surrender of such mutilated Note, or in lieu of and substitution for the Note destroyed, stolen or lost, upon filing with the Registrar evidence satisfactory to the Registrar and Issuer that such Note has been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Registrar and Issuer with satisfactory indemnity and complying with such other reasonable regulations as the Issuer or its agent may prescribe and paying such expenses as the Issuer may incur in connection therewith. Section 9. Record Date. Payments of principal and interest, otherwise than upon full redemption, made in respect of any Note, shall be made to the registered holder thereof or to their designated agent as the same appear on the books of the Registrar on the 15th day of the month preceding the payment date. All such payments shall fully discharge the obligations of the Issuer in respect of such Notes to the extent of the payments so made. Final payment of principal shall only be made upon surrender of the Note to the Paying Agent. Section 10. Execution, Authentication and Delivery of the Notes. Upon the adoption of this Resolution, the Mayor and Clerk shall execute and deliver the Notes to the Registrar, who shall authenticate the Notes and deliver the same to or upon order of the Original Purchaser. No Note shall be valid or obligatory for any purpose or shall be entitled to any right or benefit hereunder unless the Registrar shall duly endorse and execute on such Note a Certificate of Authentication substantially in the form of the Certificate herein set forth. Such Certificate upon any Note executed on behalf of the Issuer shall be conclusive evidence that the Note so authenticated has been duly issued under this Resolution and that the holder thereof is entitled to the benefits of this Resolution. Section 11. Right to Name Substitute'Paying Agent or Registrar. Issuer reserves the right to name a substitute, successor Registrar or Paying Agent upon giving prompt written notice to each registered Noteholder. Section 12. Form of Note. Notes shall be printed in substantial compliance with standards proposed by the American Standards Institute substantially in the form as follows: (6) ( (2) (1) (3) (4) (6) ( (5) (9) (9a) (10) (Continued on the back of this Note) (11)(12)(13) (14) FIGURE 1 (Front) (15) - 13 - FIGURE 2 - 14- (Back) The text of the Notes to be located thereon at the item numbers shown shall be as follows: Item 1, figure 1 = "STATE OF IOWA" "COUNTY OF DUBUQUE" "CITY OF DUBUQUE" "URBAN RENEWAL TAX INCREMENT REVENUE NOTE" "TAXABLE SERIES 2010H" "(44 MAIN LLC PROJECT) Item 2, figure 1 Item 3, figure 1 Item 4, figure 1 Item 5, figure 1 Item 6, figure 1 Item 7, figure 1 Item 8, figure 1 = Rate: 6.00% = Maturity: As described herein = Note Date: = Cusip No.: N/A = "Registered" = Certificate No. R -1 = Principal Amount: $337,000 Item 9, figure 1 = The City of Dubuque, Iowa, a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of Iowa (the "Issuer "), for value received, promises to pay from the source and as hereinafter provided, to: American Trust & Savings Bank Dubuque, Iowa Item 10, figure 1 = or registered assigns, the principal sum of (principal amount written out) THOUSAND DOLLARS in lawful money of the United States of America, on the maturity dates described herein, only upon presentation and surrender hereof at the office of the City Treasurer, Paying Agent of this issue, or its successor, with interest on said sum from the dates of disbursement of the proceeds hereof (set forth on the disbursement and repayment schedule hereinafter referred to) until paid at the rate per annum specified above, payable on December 31, 2010, and semiannually thereafter on the last business day of June and December of each year until maturity as hereinafter provided. - 15 - Principal of this Note shall be disbursed and this Note shall mature in the principal amounts set forth on the disbursement and repayment schedule attached hereto and incorporated herein by this reference. As set forth on said schedule, principal shall be payable on December 31, 2012 and semiannually thereafter on the last business day of June and December of each year in the amounts set forth therein until principal and interest are fully paid, except that the final installment of the entire balance of principal and interest, if not sooner paid, shall become due and payable on June 30, 2027. Interest and principal shall be paid to the registered holder of the Note as shown on the records of ownership maintained by the Registrar as of the 15th day of the month next preceding such interest payment date. Interest shall be computed on the basis of a 360 - day year of twelve 30 -day months. THE ISSUER DOES NOT INTEND OR REPRESENT THAT THE INTEREST ON THE NOTE WILL BE EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES, AND THE ISSUER IS NOT OBLIGATED TO TAKE ANY ACTION TO ATTEMPT TO SECURE ANY SUCH EXCLUSION. THE HOLDER OF THIS NOTE THEREFORE SHOULD TREAT THE INTEREST THEREON AS BEING SUBJECT TO FEDERAL INCOME TAXATION. This Note is issued pursuant to the provisions of Section 403.9 of the Code of Iowa, as amended, for the purpose of paying costs of aiding in the planning, undertaking and carrying out of urban renewal project activities under the authority of Chapter 403 of the Code of Iowa and the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District, including those costs associated with the funding of economic development grants and loans to 44 Main, LLC, an Iowa limited liability company, under the terms of a Development Agreement between the City of Dubuque, Iowa and 44 Main, LLC, as the same may be amended from time to time, and the funding of related reserves and payment of capitalized interest and the costs of issuance of the Notes, in conformity to a Resolution of the Council of said City duly passed and approved (the "Resolution "). This Note is not an indebtedness within the meaning of any statutory provisions, or a general obligation of the City. This Note may be called for redemption by the Issuer and paid before maturity on any date, from any funds regardless of source, in whole or from time to time in part, by giving thirty days' notice of redemption by registered or certified mail, to the registered owner of the Note. The terms of redemption shall be par, plus accrued interest to date of call. - 16 - Ownership of this Note may be transferred only by transfer upon the books kept for such purpose by the City Treasurer, the Registrar. Such transfer on the books shall occur only upon presentation and surrender of this Note at the office of the Registrar, together with an assignment duly executed by the owner hereof or his duly authorized attorney in the form as shall be satisfactory to the Registrar. Issuer reserves the right to substitute the Registrar and Paying Agent but shall, however, promptly give notice to registered Noteholders of such change. All Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code and Section 384.83(5) of the Code of Iowa, subject to the provisions for registration and transfer contained in the Note Resolution. This Note, as provided in the Resolution of which notice is hereby given and is hereby made a part hereof, is payable from and secured solely and only by a pledge of the tax increment revenues ( "incremental taxes ") collected in respect of certain Development Property and Minimum Improvements constructed thereon, as defined and provided in said Resolution, which are located within the Greater Downtown Urban Renewal District (the "Project Area ") as referred to and authorized in subsection 2 of Section 403.19 of the Code of Iowa, as amended. There has heretofore been established and the City covenants and agrees that it will maintain in force an ordinance providing for the division of incremental taxes within the Project Area and for the establishment of a sinking fund to meet the principal of and interest on this Note as the same becomes due. This Note is not payable in any manner from incremental taxes collected in respect of other properties within the Project Area or by general taxation and under no circumstances shall the City be in any manner liable by reason of the failure of the pledged tax increment revenues to be sufficient for the payment hereof. And it is hereby represented and certified that all acts, conditions and things requisite, according to the laws and Constitution of the State of Iowa, to exist, to be had, to be done, or to be performed precedent to the lawful issue of this Note, have been existent, had, done and performed as required by law. IN TESTIMONY WHEREOF, said City by its City Council has caused this Note to be signed by the manual signature of its Mayor and attested by the manual signature of its City Clerk, with the seal of said City impressed hereon, and authenticated by the manual signature of an authorized representative of the Registrar, the City Treasurer, Dubuque, Iowa. Item 11, figure 1 = Date of authentication: Item 12, figure 1 = This is one of the Notes described in the within mentioned Resolution, as registered by the City Treasurer. - 17- Item 13, figure 1 = Registrar and Transfer Agent: City Treasurer Paying Agent: City Treasurer Item 14, figure 1 = (Seal) Item 15, figure 1 = [Signature Block] Dated: ATTEST: CITY TREASURER By: Registrar CITY OF DUBUQUE, IOWA By: Mayor's manual signature Mayor By: City Clerk's manual signature City Clerk Item 17, figure 2 = [Assignment Block] [Information Required for Registration] ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Social Security or Tax Identification No. ) the within Note and does hereby irrevocably constitute and appoint attorney in fact to transfer the said Note on the books kept for registration of the within Note, with full power of substitution in the premises. (Person(s) executing this Assignment sign(s) here) SIGNATURE ) GUARANTEED) IMPORTANT - READ CAREFULLY The signature(s) to this Power must correspond with the name(s) as written upon the face of the certificate(s) or bond(s) in every particular without alteration or enlargement or any change whatever. Signature guarantee must be provided in accordance with the prevailing standards and procedures of the Registrar and Transfer Agent. Such standards and procedures may require signature to be guaranteed by certain eligible guarantor institutions that participate in a recognized signature guarantee program. INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER Name of Transferee(s) Address of Transferee(s) Social Security or Tax Identification Number of Transferee(s) Transferee is a(n): Individual* Corporation Partnership Trust *If the Note is to be registered in the names of multiple individual owners, the names of all such owners and one address and social security number must be provided. The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common - 19 - IA UNIF TRANS MIN ACT - Custodian (Cust) (Minor) under Iowa Uniform Transfers to Minors Act (State) ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST. Section 13. Equality of Lien. The timely payment of principal of and interest on the Notes shall be secured equally and ratably by the Tax Increments collected and allocated to the 44 Main LLC TIF Account without priority by reason of number or time of sale or delivery; and the Tax Increments collected and allocated to the 44 Main LLC TIF Account are hereby irrevocably pledged to the timely payment of both principal and interest as the same become due. Section 14. Application of Note Proceeds. Proceeds of the Note shall be drawn upon and applied as described in Section 3 hereof. Subject to the limitations contained in Code Section 403.9(1) any amounts on hand in the Project Fund shall be available for the payment of the principal of or interest on the Note at any time that other funds shall be insufficient to the purpose, in which event such funds shall be repaid to the Project Fund at the earliest opportunity. Any balance on hand in the Project Fund and not immediately required for its purposes may be invested not inconsistent with limitations provided by law or this Resolution. Section 15. Tax Levy. After its adoption, a copy of this Resolution shall be filed in the office of the County Auditor of Dubuque County to evidence the pledging of a portion of the Greater Downtown Urban Renewal District Tax Increment Revenue Fund and the portion of taxes to be paid into the 44 Main LLC TIF Account and, pursuant to the direction of Section 403.19 of the Code of Iowa, the Auditor shall thereafter allocate the taxes in accordance therewith and in accordance with the Ordinance referred to in the preamble hereof. It is hereby certified that the annual amount of Tax Increments to be collected in respect of the Development Property and the Minimum Improvements located thereon pursuant to Section 403.19(2) of the Code of Iowa shall be not less than the annual requirement for principal and interest on the Note, as follows: - 20 - -21- Amount of Principal Fiscal Year (July 1 to June 30) and Interest Year of Collection $12,645 2010/2011 19,653 2011/2012 34,584 2012/2013 34,584 2013/2014 34,584 2014/2015 34,584 2015/2016 34,584 2016/2017 34,584 2017/2018 34,584 2018/2019 34,584 2019/2020 34,584 2020/2021 34,584 2021/2022 34,584 2022/2023 34,584 2023/2024 34,584 2024/2025 34,584 2025/2026 34,584 2026/2027 Section 16. Application of Revenues. From and after the delivery of the Note, and as long as the Note shall be outstanding and unpaid either as to principal or as to interest, or until the Note shall have been discharged and satisfied in the manner provided in this Resolution, the Tax Increments collected in respect of the Development Property and the Minimum Improvements located thereon shall be deposited as collected in the 44 Main LLC TIF Account and shall be disbursed only as follows: (a) Sinking Fund. There is hereby established and shall be maintained a special fund within the 44 Main LLC TIF Account from which interest and principal on the Note will be paid. The fund shall be known as the 44 Main LLC Principal and Interest Fund (the "Sinking Fund "). The amount to be deposited in the Sinking Fund in any year shall be an amount equal to the interest and principal corning due on such Note during the fiscal year. Money shall be first deposited into the Interest Account of the Sinking Fund to an amount equal to the interest falling due in each fiscal year. Money shall next be deposited into the Principal Account of the Sinking Fund to an amount equal to the principal falling due in each fiscal year. Money in the Sinking Fund shall be used solely for the purpose of paying principal of and interest on the Note, as the same shall become due and - 22 - payable. (b) Surplus Revenue. All revenues thereafter remaining in the 44 Main LLC TIF Account shall be deposited to remedy any deficiency in any of the funds created by this Resolution, or may be used to pay or reimburse the Issuer for other loans, moneys advanced to or indebtedness incurred to finance or refinance in whole or in part the project of the Developer, as permitted by law, or may be used to pay or redeem the Notes or for any other lawful purpose. Moneys on hand in the Project Fund and all of the funds provided by this Section may be invested only in direct obligations of the United States Government or deposited in financial institutions which are members of the Federal Deposit Insurance Corporation ( "FDIC ") and the deposits in which are insured thereby and all such deposits exceeding the maximum amount insured from time to time by FDIC or its equivalent successor in any one financial institution shall be continuously secured by a valid pledge of direct obligations of the United States Government having an equivalent market value. Alternatively, such moneys may be invested in tax - exempt bonds or obligations of any state or political subdivision thereof which are rated by Moody's Investors Service or Standard & Poor's Corporation at a rating classification equal to or better than the rating carried by the Notes or, in the case of short-term obligations, a rating of MIG -1, S &P -1 or better. All such interim investments shall mature before the date on which the moneys are required for the purposes for which said fund was created or otherwise as herein provided. The provisions of this Section shall not be construed to require the Issuer to maintain separate bank accounts for the funds created by this Section; except the Sinking Fund shall be maintained in a separate account but may be invested in conjunction with other funds of the City but designated as a trust fund on the books and records of the City. All income derived from such investments shall be deposited in the 44 Main LLC TIF Account and shall be regarded as revenues thereof. Such investments shall at any time necessary be liquidated and the proceeds thereof applied to the purpose for which the respective fund was created. Section 17. Covenants Regarding the Operation of the Project Area. The Issuer hereby covenants and agrees with each and every holder of the Notes: (a) Maintenance in Force. The Issuer will maintain the Urban Renewal Plan and the Ordinance in force and will cause the incremental taxes from the - 23 - Development Property and Minimum Improvements to be levied annually and certified to the County Auditor in an amount not less than the principal and interest falling due within the year, and applied as provided in this Resolution, unless the Notes are paid or sufficient provision for their payment is made. Provided, however, that to the extent that amounts are on hand and are sufficient to meet the payments required to be made and to maintain a sufficient balance in each fund as required by this Resolution, the Issuer may abate the levy of incremental taxes in any year. (b) Accounting and Audits. The Issuer will cause to be kept proper books and accounts adapted to the Project Area and in accordance with generally accepted accounting practices, and will cause the books and accounts to be audited annually not later than 180 days after the end of each fiscal year by an Independent Auditor and will provide copies of the audit report to the Original Purchaser upon request. The Original Purchaser and holders of any of the Notes shall have at all reasonable times the right to inspect the Issuer's records, accounts and data of the Issuer relating to the Revenue Fund or the 44 Main LLC TIF Account. (c) State Laws. The Issuer will faithfully and punctually perform all duties with reference to the Urban Renewal Plan required by the Constitution and laws of the State of Iowa, and will segregate the revenues of the Project Area and apply said revenues to the funds as specified in this Resolution. (d) Amendments. The Issuer reserves the right to amend the Urban Renewal Plan for the Project Area and the Ordinance in its lawful discretion; provided, that in no event shall obligations resulting from an amendment or merger thereof have any priority over the Note. Section 18. Remedies of Noteholders. Except as herein expressly limited the holder or holders of the Notes shall have and possess all the rights of action and remedies afforded by the common law, the Constitution and statutes of the State of Iowa, and of the United States of America, for the enforcement of payment of their Notes and interest thereon, and of the pledge of the revenues made hereunder, and of all covenants of the Issuer hereunder. Section 19. No Prior Lien or Parity Notes. The Issuer will issue no other bonds or obligations of any kind or nature payable from or enjoying a lien or claim on the property or revenues of the 44 Main LLC TIF Account having priority over the Note or standing on a parity therewith with respect to the lien and claim of such additional obligations to - 24 - the revenues thereof and the money on deposit in the funds created in this Resolution, without the written consent of the Original Purchaser or other registered holder of the Note. The Issuer reserves the right to issue other obligations payable from the Tax Increments collected in respect of other properties within the Project Area, without notice to or consent of the Original Purchaser. Section 20. Discharge and Satisfaction of Notes. The covenants, liens and pledges entered into, created or imposed pursuant to this Resolution may be fully discharged and satisfied with respect to the Note in any one or more of the following ways: (a) By paying the Note when the same shall become due and payable; or (b) By depositing in trust with the Treasurer, or with a corporate trustee designated by the governing body for the payment of said obligations and irrevocably appropriated exclusively to that purpose an amount in cash or direct obligations of the United States the maturities and income of which shall be sufficient to retire at maturity, or by redemption prior to maturity on a designated date upon which said obligations may be redeemed, all of such obligations outstanding at the time, together with the interest thereon to maturity or to the designated redemption date, premiums thereon, if any that may be payable on the redemption of the same; provided that proper notice of redemption of all such obligations to be redeemed shall have been previously published or provisions shall have been made for such publication. Upon such payment or deposit of money or securities, or both, in the amount and manner provided by this Section, all liability of the Issuer with respect to the Notes shall cease, determine and be completely discharged, and the holders thereof shall be entitled only to payment out of the money or securities so deposited. Section 21. Resolution a Contract. The provisions of this Resolution shall constitute a contract between the Issuer and the holder or holders of the Note, and after the issuance of any of the Note no change, variation or alteration of any kind in the provisions of this Resolution shall be made in any manner, except as provided in the next succeeding Section, until such time as all of the Note, and interest due thereon, shall have been satisfied and discharged as provided in this Resolution. Section 22. Modification of Resolution. This Resolution may be amended from time to time if such amendment shall have been consented to by holders of not less than -25- two- thirds in principal amount of the Notes at any time outstanding (not including in any case any Notes which may then be held or owned by or for the account of the Issuer, but including such Refunding Notes as may have been issued for the purpose of refunding any of such Notes if such Refunding Notes shall not then be owned by the Issuer); but this Resolution may not be so amended in such manner as to: (a) Make any change in the maturity or interest rate of the Notes, or modify the terms of payment of principal of or interest on the Notes or any of them or impose any conditions with respect to such payment; (b) Materially affect the rights of the holders of less than all of the Notes then outstanding; and (c) Reduce the percentage of the principal amount of Notes, the consent of the holders of which is required to effect a further amendment. Whenever the Issuer shall propose to amend this Resolution under the provisions of this Section, it shall cause notice of the proposed amendment to be filed with the Original Purchaser or to be mailed by certified mail to any other registered owner of the Note as shown by the records of the Registrar. Such notice shall set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory Resolution is on file in the office of the City Clerk. Whenever at any time within one year from the date of the mailing of said notice there shall be filed with the City Clerk an instrument or instruments executed by the holders of at least two- thirds in aggregate principal amount of the Notes then outstanding, as in this Section defined, which instrument or instruments shall refer to the proposed amendatory Resolution described in said notice and shall specifically consent to and approve the adoption thereof, thereupon, but not otherwise, the governing body of the Issuer may adopt such amendatory Resolution and such Resolution shall become effective and binding upon the holders of all of the Notes. Any consent given by the holder of a Note pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the instrument evidencing such consent and shall be conclusive and binding upon all future holders of the same Note during such period. Such consent may be revoked at any time after six months from the date of such instrument by the holder who gave such consent or by a successor in title by filing notice of such revocation with the City Clerk. - 26 - The fact and date of the execution of any instrument under the provisions of this Section may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction that the person signing such instrument acknowledged before him the execution thereof, or may be proved by an affidavit of a witness to such execution sworn to before such officer. The amount and numbers of the Notes held by any person executing such instrument and the date of his holding the same may be proved by an affidavit by such person or by a certificate executed by an officer of a bank or trust company showing that on the date therein mentioned such person had on deposit with such bank or trust company the Notes described in such certificate. Section 23. Severability. If any section, paragraph, or provision of this Resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions. Section 24. Repeal of Conflicting Ordinances or Resolutions and Effective Date. All other ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this Resolution are, to the extent of such conflict, hereby repealed; and this Resolution shall be in effect from and after its adoption. ATTEST: Passed and approved this 18 day of October, 2010. STATE OF IOWA COUNTY OF DUBUQUE SEAL comell/ 671394 /MSWord\10422.118 ) SS CERTIFICATE I, the undersigned City Clerk of Dubuque, Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of said Municipality showing proceedings of the Council, and the same is a true and complete copy of the action taken by said Council with respect to said matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of said agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty -four hours prior to the commencement of the meeting as required by said law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective city offices as indicated therein, that no Council vacancy existed except as may be stated in said proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of said Municipality hereto affixed this 19 day of October, 2010. ity Clerk, Dubuque, Iowa