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Platinum Holdings, LLC Debt RefinancingMasterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Platinum Holdings, LLC DATE: December 1, 2011 Dubuque All-America City 1 I 2007 City Attorney Barry Lindahl is recommending approval of a request from Platinum Holdings, LLC (The Grand Harbor) to refinance their debt, including approval of the following: 1. Consent to extend the maturity of the existing mortgage to December 2031. 2. Consent to the second mortgage position to the Small Business Association. 3. Consent for the third mortgage position to American Trust and Savings Bank. 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 THE CITY OF DUB UE MEMORANDUM Masterpiece on the Mississi BARRY LINDAH CITY ATTORNE To: DATE: November 30, 2011 RE: Platinum Holdings, LLC Michael C. Van Milligen City Manager In June 2000, the City of Dubuque entered into a Development Agreement with Platinum Holdings, LLC for the lease of property and the construction of a hotel and waterpark in the South Port and a Parking Use Agreement. In connection with the construction of the hotel and waterpark, Platinum Holdings, LLC, with the City's consent, granted a Mortgage and Security Agreement to American Trust & Savings Bank in the amount of $15 Million. As additional security for the loan, Platinum Holdings, LLC also assigned the Lease Agreement, the Development Agreement and the Parking Use Agreement to American Trust & Savings Bank. Platinum Holdings, LLC has now requested that the City consent to additional financing for improvements to the hotel and refinancing of its debt. Please see the attached letter from James P. Rix, Managing Member of Platinum Holdings, LLC. The American Trust mortgage will remain in place as a first mortgage with a maturity date of 2031. Platinum Holdings, LLC has requested that the City consent to the attached First Amendment to Mortgage and Security Agreement. Platinum Holdings, LLC is also requesting the City's consent and subordination to a second mortgage to ECIA Business Growth, Inc. in the amount of $3,987,000.00. As additional security for the loan, Platinum Holdings, LLC is requesting that the City assign the Development Agreement, Lease Agreement and Parking Use Agreement to ECIA Business Growth, Inc. Platinum Holdings, LLC is also asking that the City consent to a third mortgage. This is a mortgage to American Trust & Savings Bank in an amount not to exceed $500,000.00. The City's interest in the property will also be subordinate to that mortgage. OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001 -6944 TELEPHONE (563) 583 -4113 / FAx (563) 583 -1040 / EMAIL balesq @cityofdubuque.org Attached are three resolutions approving the various documents. I recommend that the three resolutions and documents be submitted to the City Council for consideration and approval. BAL:tls F:\ USERS \tsteckle \Lindahl \Platinum Refinance\ MVM_ ConsentToAdditionalFinancing _113011.doc Grandliartor R E S O R T A N D W A T E R P A R K November 30, 2011 City of Dubuque Mr. Barry Lindahl City Attorney 300 Main Street Suite 330 Dubuque, IA 52001 Dear Barry: Platinum Holdings, LLC (dba The Grand Harbor) is in the process of refinancing with American Trust and Savings Bank and the Small Business Administration. American Trust and Savings Bank has an existing mortgage on file with the City of Dubuque as August 15, 2001 in the amount of $15,000,000 and an additional $1,800,000 as of November 25, 2011. Recently, The Grand Harbor received national approval from the Small Business Administration (SBA) for a $3,987,000 loan through its 504 program. (The 504 program allows for refinancing of existing debt.) As part of our due diligence, the SBA requested a copy of our lease agreement with the City of Dubuque, and is now requesting approval of the financing by the City (as Lessor). Therefore, on behalf of Platinum Holdings, LLC I respectfully request the following by the City of Dubuque: 1. Consent to extend the maturity of the existing mortgage to December, 2031. 2. Consent for the second mortgage position to the Small Business Association. 3. Consent for the third mortgage position to American Trust and Savings Bank. As a part of this financing, American Trust & Savings Bank will initially have two loans to Platinum Holdings that will be secured by the existing first mortgage. The bank will release the second mortgage position, and will file a third mortgage in the amount of $500,000, which will secure a remodeling note. American Trust & Savings Bank needs to bridge the SBA financing portion until the debenture is funded. The SBA debenture will pay off the bridge loan, and the SBA will have a second mortgage position securing its loan. American Trust & Savings Bank will then sign an estoppel certificate, which will limit the amount of the first mortgage financing to the reduced debt amount. 350 Bed Street, Dubuque, 14 52001 • T6ie Port of Dubuque TeL (563) 690 -4000 • Fax: (563) 690-0558 www. grandliar6orresort. com While the current economic environment has proven to be challenging on several avenues, it has provided a unique opportunity for qualifying businesses to obtain long term financing at historically low rates. The Grand Harbor is fortunate to qualify for this financing. Obtaining this financing will not only enable The Grand Harbor to refinance its existing debt at lower interest rates, it will also secure financing for the hotel for the next ten years. Upon City approval, American Trust and Savings Bank will continue to hold a first mortgage on the property, with the SBA financing of $3,987,000 in a second position. The bank is also intending on providing an additional $500,000 for hotel renovations, which will be secured by a third position on the property. As you are aware, during 2009, the hotel began renovations which included the renovation of several guestrooms and the addition of Tony Roma's Restaurant. This addition has proven successful, not only for The Grand Harbor, but for the Port of Dubuque as well. An additional $1,500,000 was invested in the Grand Harbor /Port of Dubuque, with nearly 45 percent of this funding provided by members of Platinum Holdings, LLC. The remaining funds were provided by American Trust and Savings Bank, who have been instrumental to our success since our inception, nearly ten years ago. Pending the City's approval of the above, the hotel intends to invest an additional $500,000, in The Grand Harbor, bringing its total investment in the Port of Dubuque to $28,000,000. Upon completion of the renovation, hotel patrons will be greeted by automatic doors and a fresh, new decor in the common areas, as well as the remaining guest rooms. A listing of the planned improvements is attached. With the addition of Flexsteel Industries to the Port of Dubuque, it is, once again, an exciting time to be a part of America's River Project in the Port of Dubuque. We look forward the opportunities an improving economy will bring, not only to The Grand Harbor, but to the Port of Dubuque, as well. Your approval of our request will enable The Grand Harbor to continue its success in the Port of Dubuque. Thank you for your time and consideration. Sincerely, James P. Rix Managing Member Platinum Holdings, LLC Mr. Barry A. Lindahl November 30, 2011 Page 3 of 3 American Trust & Savings Bank Platinum Holdings, LLC Grand Harbor Resort & Water Park Estimated Hotel Remodel Costs Item Description Tape Back Up Drive Total Computer Equipment TV Total Fitness Room Paint Guestromm Carpet - Material Guestroom Carpet - Pad Guestroom Carpet - Install TV Electrical Strip for Desk Lamp Night Stand Desk Chair Linens Bathroom Wallpaper Removal & Paint Couch (Recover) Couch (Pull out mattress) PTAC Grills Shower Handle Replacement Total Guestroom Air Compressor Total Mechanical Boardroom Chairs Guestroom Hallway Carpet - Material Guestroom Hallway Carpet - Pad Guestroom Hallway Carpet - Install Elevator Carpet - Material Elevator Carpet - Pad Automatic Front Doors Lobby Tile - Material Lobby Tile - Material Lobby Tile - Install Lobby Carpet - Install Hospitality Suite - TV's Hospitality Suite - Chairs Hospitality Suite - Couches Hospitality Suite - Tables Hospitality Suite - Cocktail Tables Hospitality Suite - Lamps/Artwork Hospitality Suite - Buffet Refurbish Total Public Space Tree House Nets Total Water Park Category Computer Eq Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Guestroom Mechanical Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Public Space Water Park Calculation Fitness Room $400 *1 150 (rooms) *1(gallon) *$20 (per gallon) 395(avg sq ft) *181(rooms) /9 *$12 395 (avg sq ft) *181/9 *$2.00 170(rooms) *$100 180 *$400 193 *$15 2 lamps needed for king rooms + 1 for double double * $75 193(rooms) *$200 See following page 193(rooms) /2(rms per gallon)= 100 *$30.00 $500 *38(remaining couches) Estimate includes install $500 *12(chairs) 300(ft length) *8(ft wide) *5(floors) = 12,000/9 = 1,333 *$20 300(ft length) *8(ft wide) *5(floors) = 12,000/9 = 1,333 *$4 5(floors) *$1,000 300(sq ft) *5(floors)= 1,500/9 = 167 *$20 300(sq ft) *5(floors)= 1,500/9 = 167 *$4 Front doors to Elevators 75 *10= 750(sq ft) *$8.00 Vestibule 250(sq ft) *$8.00 Estimated at 50% of material cost 2000(sq ft) /9 *$4.50 4 *$400 8 *$300 3 *$1,000 10 *$300 5 *$300 Estimate Estimate Amount 4,300 400 3,000 95,327 15,888 17,000 72,000 2,895 17,700 38,600 61,698 3,000 19,000 2,000 3,500 2,000 10,000 6,000 26,660 5,332 5,000 3,340 668 25,000 6,000 2,000 4,000 1,000 1,600 2,400 3,000 3,000 1,500 3,000 2,500 9,000 Contingency 20,693 Grand Total 500,000 Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 RESOLUTION NO. 403 -11 APPROVING CONSENT AND SUBORDINATION TO THIRD MORTGAGE AGREEMENT FOR PLATINUM HOLDINGS, LLC IN FAVOR OF AMERICAN TRUST & SAVINGS BANK AND APPROVING AN AMENDMENT TO FIRST MORTGAGE AGREEMENT WITH AMERICAN TRUST & SAVINGS BANK WHEREAS, Platinum Holdings, LLC has requested that the City approve a Consent and Subordination to Mortgage for a third mortgage on property owned by the City in favor of American Trust & Savings Bank; and WHEREAS, Platinum Holdings, LLC has requested the City approve the First Amendment to Mortgage and Security Agreement with American Trust & Savings Bank. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA, AS FOLLOWS: Section 1. The Consent and Subordination to Mortgage and First Amendment to Mortgage and Security Agreement are hereby approved. Section 2. The Mayor is hereby authorized and directed to execute the documents on behalf of the City. Passed, approved and adopted this Attest: th day of December 2011. Roy D. ol, Mayor Kevi , S. Firnstah , Acting City Clerk F:\ USERS \tsteckle \Lindahl \Platinum Refinance\ ResolutionApprovingConsentToThirdMortgage _112311.doc Preparer: Barry Lindahl Address: ;goo Main Street, Suite 330 - Dubuque, IA 52001 -6944 Telephone: (563) 583 -4113 RESOLUTION NO. 404 -11 APPROVING CONSENT AND SUBORDINATION TO SECOND MORTGAGE AGREEMENT FOR PLATINUM HOLDINGS, LLC IN FAVOR OR E.C.I.A. BUSINESS GROWTH, INC. WHEREAS, the City of Dubuque ( "City ") has entered into an Amended Development Agreement, Lease Agreement and Parking Use Agreement with Platinum Holding, LLC ( "Platinum ") for the development of certain property owned by the City (the "Property ") for a hotel and water park; and WHEREAS, Platinum has requested that the City consent to a second mortgage of the Property in favor of E.C.I.A. Business Growth, Inc. ( "Lender "), and that City subordinate its interests in the Property to the second mortgage, a copy of which Consent and Subordination to Mortgage is attached hereto; and WHEREAS, The City Council finds that it is in the best interest of the City to approve Platinum's request. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The Consent and Subordination to Mortgage is hereby approved. Section 2. The Mayor is hereby authorized and directed to execute the documents on behalf of the City. Attest: STATE OF IOWA SS: COUNTY OF DUBUQUE I, Kevin Firnstahl, do hereby certify that I am the duly appointed, qualified, and acting Clerk of the City of Dubuque, Iowa, in the County aforesaid, and as such Clerk I have in my possession or have access to the records of the proceedings of the City Council. I do further state that the hereto attached Resolution No.404 -11 is a correct copy of the original Resolution No. 404 -1.1 approved and adopted by the City Council of the City of Dubuque, Iowa, at a session held by said Council on the 5 t- h day of Novembef, 2011. December In Testimony Whereof, I hereunto set my had and official seal of the City of Dubuque, Iowa. Dated this 5th. pecem ber day of N-ovem iee, 2011. Prepared by Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001 563 583 -4113 RESOLUTION NO. 405 -11 APPROVING AN ASSIGNMENT OF AMENDED DEVELOPMENT AGREEMENT, ASSIGNMENT OF LEASE, AND ASSIGNMENT OF PARKING USE AGREEMENT TO ECIA BUSINESS GROWTH, INC. WHEREAS, the City of Dubuque has entered into an Amended Development Agreement, Lease Agreement, and Parking Use Agreement with Platinum Holdings, LLC for the development of certain property owned by the City for a hotel and waterpark; and WHEREAS, Platinum Holdings, LLC has requested that City consent to the Assignment of the Lease, Assignment of Amended Development Agreement, and Assignment of the Parking Use Agreement to ECIA Business Growth, Inc. as security for a second mortgage of the property; and WHEREAS, the City Council finds that it is in the best interest of the City to approve the request. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA, AS FOLLOWS: Section 1. The Assignment of the Lease, Assignment of the Amended Development Agreement, and Assignment of the Parking Use Agreement are hereby approved. Section 2. The Mayor is hereby authorized and directed to execute the documents on behalf of the City. Passed, approved and adopted this 5th Attest: day of December , 2011. Kevi S. Firnstahl, Acting City Clerk F:\ USERS \tsteckle \Lindahl \Platinum Refinance\ ResolutionApprovingAssignmentAmendedDALeaseParkingUseAgreement _112311.doc Prepared by and return to: Wayne A. Norman, Jr., Norman, Fleming & Norman, 300 Main St., Suite 323, Dubuque, IA 52001 (563) 552 -1042 SPACE ABOVE THIS LINE FOR RECORDER IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. Re: Lot 1 of RIVERWALK 3RD ADDITION, in the City of Dubuque, Iowa, according to the recorded Plat thereof. FIRST AMENDMENT TO MORTGAGE AND SECURITY AGREEMENT This First Amendment to Mortgage and Security Agreement ( "Amendment ") is effective 2011, by Platinum Holdings, LLC, an Iowa limited liability company ( "Mortgagor "), in favor of American Trust & Savings Bank ( "Mortgagee "). 1. Recitals. Mortgagor and Mortgagee entered into a mortgage and Security Agreement ( "Mortgage ") dated August 15, 2001, recorded August 16, 2001, as Instrument No. 13038 -01, records of the Dubuque County, Iowa, Recorder. The parties now wish to amend said Mortgage by deleting section 1 thereof and substituting new section 1 as follows: 1. Recitals. Effective August 15, 2001, Bank and Borrower entered into a Loan Agreement ( "Agreement ") and collateral documents, as defined therein. Said Agreement was amended by Amendment No. 1 to Loan Agreement effective October 31, 2001; Second Amendment to Loan Agreement effective November 25, wp60docs\American Trust & Savings Bank\ Platinum Holdings, L.L.C.\ Mortgage. Amendment 11.23.11 Page 1 of 5 2002; Third Amendment to Loan Agreement dated December 11, 2006; Fourth Amendment to Loan Agreement effective January 11, 2009, and Fifth Amendment to Loan Agreement effective December 11, 2010. Borrower has requested that Bank loan it the sum of & 00 /100 Dollars ($ .00) on a term loan basis with a maturity date of December _, 2031,and any extensions, renewals or modifications of, or substitutes or replacements for, or future advances made thereunder ( "Term Loan "), Three Million Eight Hundred Eighty -One Thousand & 00 /100 Dollars ($3,881,000.00) on an interim loan basis ( "Interim Loan ") and Five Hundred Thousand & 00 /100 Dollars ($500,000.00) for certain improvements to the Project, and any extensions, renewals or modifications of, or substitutes or replacements for, or future advances made thereunder ( "Improvements Loan"). Borrower has applied for an SBA 504 Loan in the total amount of Three Million Nine Hundred Eighty -Seven Thousand & 00 /100 Dollars ($3,987,000.00), which amount, when funded, will repay the Interim Loan. Mortgagor agrees to execute and deliver this Mortgage to secure payment of the Term Loan Note, the Interim Loan Note and the Improvements Loan Note, performance of the covenants and conditions in this and any extension, renewal or modification thereof, performance of all covenants and agreements contained in the Loan Agreement executed between Mortgagor and Mortgagee. In order to secure the repayment of the indebtedness evidenced by the Term Loan Note, the Interim Loan Note and the Improvements Loan Note (including, without limitation, the principal amount thereof, interest thereunder and all other sums payable thereunder), all other sums payable hereunder and the performance of the covenants and agreements of Mortgagor contained in this Mortgage and the Loan Agreement, Mortgagor hereby grants, bargains, sells, transfers, assigns, conveys, confirms and mortgages to Mortgagee, its successors and assigns forever, as follows below. 2. Ratification. Except as specifically modified above, all other terms and conditions of the Mortgage are hereby ratified and confirmed. In Witness Whereof, Platinum Holdings, LLC, has caused this Mortgage to be executed by its duly authorized officer as of the date first above written. Platinum Holdings, LLC By: James P. Rix, Chief Executive Officer Page 2 of 5 STATE OF IOWA, DUBUQUE COUNTY) ss: On this day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared James P. Rix, to me personally known, who being by me duly sworn, did say that he is the Chief Executive Officer of the limited liability company executing the within and foregoing instrument to which this is attached; that said instrument was signed on behalf of the limited liability company by authority of its Management Committee; and that James P. Rix, as Chief Executive Officer, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the limited liability company, by it and by him voluntarily executed. Notary Public, State of Iowa Page 3 of 5 CONSENT AND SUBORDINATION TO FIRST AMENDMENT TO MORTGAGE AND SECURITY AGREEMENT Re: Lot 1 of RIVERWALK 3RD ADDITION, in the City of Dubuque, Iowa, according to the recorded Plat thereof. The undersigned City of Dubuque, Iowa ( "City "), is the owner of the above - described property ( "the Property ") described in the First Amendment to Mortgage and Security Agreement ( "the Amendment ") to which this Consent and Subordination to Mortgage is attached„ and hereby consents to the Amendment by Platinum Holdings, L.L.C., an Iowa limited liability company (Platinum), in favor of American Trust & -Savings Bank, Dubuque, Iowa (Bank). City further consents that the interest owned by City shall be subordinate, junior and inferior to the mortgage established in favor of Bank, subject to the following: 1.. In the event foreclosure is brought, City consents to being named a party defendant for the purposes of foreclosing its interests in the Property, but with no personal liability being incurred or any deficiency judgment resulting by or against City. 2. In the event of any foreclosure by Bank, Bank agrees to be bound by the terms and conditions of that certain Minimum Assessment Agreement entered into between City and Platinum on June 4, 2001, and that certain Amended Development Agreement entered into between City and Platinum on January 15, 2001, with respect to the Property. 3. City agrees that this Consent and Subordination to Mortgage document will be attached to, and become a part of, the executed Mortgage between Bank and Platinum. 4. Bank executes this Consent and Subordination to Mortgage solely for the purpose of agreeing to be bound by the terms of the agreements referred to in Section 2, above, in the event of foreclosure by Bank. Dated , 2011. City of Dubuque Iowa American Trust & Savings Bank By: By: ,/y Roy D. uol, Mayor Kev S. Firnstahl, ity Clerk By: Victoria J. Richter, Senior Vice President Page 4 of 5 STATE OF IOWA, DUBUQUE COUNTY) ss: On this ,A day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Roy D. Buol and Kevin S. Firnstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal has been procured by the corporation; that said instrument was signed on behalf of the City by authority of its City Council; and that Roy D. Buol and Kevin S. Firnstahl, as Mayor and City Clerk, respectively, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the City, by it and by them voluntarily executed. SUSAN M. WINTER COMMISSION NO.183274 MY COMMISSION EXPIRES +owe 2/14/14 STATE OF IOWA, DUBUQUE COUNTY) ss: tary Public, State of Iowa On this day of , 2001, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Victoria J. Richter, tome personally known, who, being by me duly sworn, did say that she is a Senior Vice President of American Trust & Savings Bank executing the within and foregoing instrument, that no seal has been procured by the corporation; that said instrument was signed on behalf of the corporation by authority of its Board of Directors; and that Victoria J. Richter, as Senior Vice President, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the corporation, by it and by her voluntarily executed. Notary Public, State of Iowa Page 5 of 5 MORTGAGE AND SECURITY AGREEMENT This Mortgage and Security Agreement made and entered into this day of by and between Platinum Holdings, LLC 350 Bell Street, Dubuque, IA 52001 (hereinafter referred to as mortgagor) and E.C.I.A. Business Growth, Inc. (hereinafter referred to as mortgagee who maintains an office at 7600 Commerce Park, Dubuque, IA 52002 WITNESSETH, that for the consideration hereinafter states, receipt of which is hereby acknowledged, the mortgagor does hereby mortgage, sell, grant, assign and convey unto the mortgagee, his successors and assigns, all of the following described property situated and being in the County of Dubuque, State of Iowa, as: a. Leasehold. All of Mortgagor =s right, title and interest in that certain Lease, dated June 4, 2001, by and between the Mortgagor and the City of Dubuque, Iowa (the ACity@), pursuant to which the City has leased to Mortgagor the following described premises situated in Dubuque County, Iowa, described as: Lot 1 RIVERWALK 3RD ADDITION, in the City of Dubuque according to the recorded plat thereof.. b. Improvements. (1) All buildings, structures and improvements of every nature now or hereafter situated on the Leasehold; all building materials, supplies and other property stored at or delivered to the Leasehold or any other location for incorporation into any of the buildings, structures and improvements located on the Leasehold; (2) All fixtures, machinery, appliances, equipment, furniture and personal property of every nature whatsoever located in or on, or attached to, and used or intended to be used in connection with the Leasehold, such buildings, structures or other improvements, or in connection with any construction being conducted thereon, including all extensions, additions, improvements, betterments, renewals, substitutions and replacements to any of the foregoing; (3) All right, title and interest of Mortgagor to such personal property and fixtures, whether as owner, chattel lessee or otherwise. It is understood and agreed that all such personal property and fixtures shall be part of the Leasehold encumbered by this Mortgage, whether or not affixed to the Leasehold, to the fullest extent permitted by law, are to be conclusively deemed to be fixtures, a part of the Leasehold and a part of the security provided by this Mortgage. All of the property described in this Section is collectively referred to as the AImprovements.@ c. Streets, Etc. All estate, right, title and interest of Mortgagor, of whatever character, now owned or hereafter acquired, to: (1) All streets, roads and public places adjoining the Leasehold, and the land lying in the bed of such streets, roads and public places: and (2) All other sidewalks, alleys, ways, passages, water courses, strips and gores of land adjoining or used or intended to be used in connection with any of the property described above in this Section. d. Easements, Etc. All right, title and interest of Mortgagor to all easements, rights -of -way and rights of use or passage, public or private, and all estates, interests, benefits, powers, rights including, without limitation, any and all lateral support, drainage, slope, sewer, water, air, mineral, oil, gas and subsurface rights, privileges, licenses, profits, rents, royalties, tenements, hereditaments, reversions and subreversions, remainders and subremainders and appurtenances whatsoever in any way belonging, relating or appertaining to any of the property described above, or any part of such property, or which hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by Mortgagor. SBA FORM 928 (11 -85) U.S. Government Printing Office 1992- 322 - 908/79010 e. Judgments, Refunds, Accounts Receivable, Proceeds, Etc. (1) Any and all judgments, settlements, claims, awards, insurance proceeds and other proceeds and compensation, and interest thereon (collectively, ACompensation @), hereafter made or to be made or hereafter payable in connection with any casualty or other damage to the Improvements, any part of such property or any rights appurtenant thereto, or in connection with any condemnation proceedings affecting such property or rights or any taking under power of eminent domain (or any conveyance in lieu of or under threat of any such taking) of such property or rights, including, without limitation, any and all Compensation for change of grade of streets or any other injury or decrease in the value of such property or rights, any and all proceeds of any sales, assignments or other dispositions of such property or rights, (2) Any and all refunds of insurance premiums, taxes, assessments, water charges, sewer rents or other impositions in respect of such property or rights, (3) All accounts receivable, contract rights, general intangibles, permits, licenses (including, without limitation, any and all liquor, cabaret and vending licenses), approvals, actions and rights in action (including, without limitation, all rights to insurance proceeds and unearned insurance premiums) arising from or relating to any such property or rights, and (4) All proceeds, products, replacements, additions, substitutions, renewals, accessions and accretions of and to such property or rights. f. Rents, Royalties, Etc. All rents, royalties, issues, profits, revenues, income and other benefits (which terms, whenever used in this Mortgage, shall include, without limitation, all monetary sums paid or payable by guests or occupants of hotel or motel rooms within the improvements and all accounts receivable with respect to such sums), to which Mortgagor may now or hereafter be entitled from the Improvements, above, or any part of such property, to be applied against the indebtedness and other sums secured hereby; provided, however, that permission is hereby given to Mortgagor, so long as no Event of Default (as defined below) shall have occurred, to collect and use such rents, royalties, issues, profits, revenues, income and other benefits as they become due and payable, but not in advance thereof. The foregoing assignment shall be fully operative without any further action by any party, and specifically Mortgagee shall be entitled, at its option upon the occurrence of an Event of Default, to all such rents, royalties, issues, profits, revenues, income and other benefits, whether or not Mortgagee takes possession of such property. Upon the occurrence of an Event of Default, the permission given to Mortgagor to collect such rents, royalties, issues, profits, revenues, income and other benefits shall terminate. Neither the exercise of any rights under this Section by Mortgagee nor the application of any such rents, royalties, issues, profits, revenues, income or other benefits to the indebtedness and other sums secured hereby, shall cure or waive any Event of Default or notice of any Event of Default hereunder or invalidate any act done pursuant hereto or to any such notice, but shall be cumulative of all other rights and remedies. Present Assignment. The foregoing provisions shall constitute an absolute and present assignment of the rents, royalties, issues, profits, revenues, income and other benefits from the Improvements, subject, however, to the conditional permission given to Mortgagor to collect and use such rents, royalties, issues, profits, revenues, income and other benefits as provided above. The existence or exercise of such right of Mortgagor shall not operate to subordinate this assignment to any subsequent assignment, in whole or in part, by Mortgagor, and any such subsequent assignment by Mortgagor shall be subject to the rights of Mortgagee under this Mortgage. h. Leases, Etc. All right, title and interest of Mortgagor in and to any and all leases, subleases, occupancy, purchase and sale or similar agreements (collectively ALeases @) now or hereafter on or affecting the Improvements, or any part of such property, together with all security therefor (including, without limitation, any and all right, title and interest of Mortgagor in and to property of any tenant or other party under any such lease, and all cash or security deposits, advance rentals and deposits or payments of a similar nature thereunder) and together with all moneys payable thereunder, and all books and records which reflect payments made under the leases and all security therefore, subject, however, to the conditional permission hereinabove given to Mortgagor to collect the rents, income and other benefits arising under any such lease. Mortgagee shall have and is hereby granted the right, at any time and from time to time, to notify any lessee, sublessee, licensee, occupant or purchaser of the rights of Mortgagee as provided by this Section. After Acquired Property. Any and all further or greater estate, right, title, interest, claim and demand whatsoever of Mortgagor, whether now owned or hereafter acquired, in or to any of the property described in the foregoing Subsections, or any rights or interests appurtenant thereto. g. Mortgagor grants to Mortgagee a security interest in all personal property, all buildings, all fixtures including but not limited to all, plumbing, heating, lighting, ventilating, refrigerating incinerating, air conditioning apparatus, and elevators (the mortgagor hereby declaring that it is intended that the items herein enumerated shall be deemed to have been permanently installed as part of the realty) and all improvements now or hereafter existing thereon; the hereditaments and appurtenances and all other rights thereunto belonging, or in anywise appertaining, and the reversion and reversions remainder and remainders, all rights of redemption, and the rents, issues, and profits of the above described property (provided, however, that the mortgagor shall be entitled to the possession of said property and to collect and retain the rents, issues, and profits until default hereunder). This mortgage is a self - operative security agreement and fixture filing with respect to the mortgaged property, and mortgagee shall have all rights and remedies in addition to those specified here of a secured party under the Uniform Commercial Code. Further, mortgagee shall have and hold the same unto the mortgagee and the successors in interest of the mortgage forever in fee simple or such other estate if any, as is stated herein. SBA FORM 928 (11 -85) U.S. Government Printing Office 1992- 322 - 908/79010 The mortgagor covenants that he is lawfully seized and possessed of and has the right to sell and convey said property; that the same is free from all encumbrances except as hereinabove recited; and that he hereby binds himself and his successors in interest to warrant and defend the title aforesaid thereto and every part thereof against the claims of all persons whomsoever. This instrument is given to secure payment of a promissory note dated sum of $ 3,987,000.00 signed by James P. Rix, Chief Executive Officer on behalf of in the principal Platinum Holdings LLC Said promissory note was given to secure a loan in which the Small Business Administration, an agency of the United Stated of America has participated. In compliance with section 101.106(b) of the Rules and Regulations of the Small Business Administration [13 C.F.R. 101.106(b)], this instrument is to be construed and enforced in accordance with applicable Federal law. 1. This mortgage covenants and agrees as follows: a. He will promptly pay the indebtedness evidenced by said promissory note at the times and in the manner therein provided. b. He will pay all taxes, assessments, water rates, and other governmental or municipal charges, fines, or impositions, for which provision has not been made hereinbefore, and will promptly deliver the official receipts therefore to the said mortgagee. c. He will pay such expenses and fees as may be incurred in the protection and maintenance of said property, including the fees of an attorney employed b the mortgagee for the collection of any or all of the indebtedness hereby secured, or foreclosure by mortgagee's sale, or court proceedings, or in any other litigation or proceeding affection said property. Attorney's fees reasonably incurred in any other way shall be paid by the mortgagor. d. For better security of the indebtedness hereby secured, upon the request of the mortgagee, its successors or assigns, he shall execute and deliver a supplemental mortgage or mortgages covering any additions, improvements, or betterments made to the property hereinabove described and all property acquired by it after the date hereof (all I form satisfactory to mortgagee). Furthermore, should mortgagor fail to cure any default in the payment of a prior or inferior encumbrance on the property described by this instrument, mortgagor hereby agrees to permit mortgagee to cure such default, but mortgagee is not obligated to do so; and such advances shall become part of the indebtedness secured by this instrument, subject to the same terms and conditions. e. The rights created by this conveyance shall remain in full force and effect during any postponement or extension of the time of the payment of the indebtedness evidenced by said promissory note or any part thereof secured hereby. f. He will continuously maintain hazard insurance, of such type or types in such amounts as the mortgagee may from time to time require on the improvements now or hereafter on said property, and will pay promptly when due any premiums thereof. All insurance shall be carried in companies acceptable to mortgagee and the policies and renewals thereof shall be held by mortgagee and have attached thereto loss payable clauses in favor of and in form acceptable to the mortgagee, in event of loss, mortgagor will give immediate notice in writing to mortgagee, and mortgagee may make proof of loss if not made promptly by mortgagor, and each insurance company concerned is hereby authorized and directed to make payment for such loss directly to mortgagee instead of to mortgagor and mortgagee jointly, and the insurance proceeds, or any part thereof, may be applied by mortgagee at its option either to the reduction of the indebtedness hereby secured or to the restoration or repair of the property damaged or destroyed. In vent of foreclosures of this mortgage, or other transfer of title to said property in extinguishment of the indebtedness secured hereby, all right, title and interest of the mortgagor in and to any insurance policies then in force shall pas to the purchaser or mortgagee or, at the option of the mortgagee, may be surrendered for a refund. He will keep all buildings and other improvements on said property in good repair and condition; will permit, commit, or suffer no waste, impairment, deterioration of said property or any part thereof; in the event of failure of the mortgagor to keep the buildings on said premises and those erected on said premises, or improvements therein, in good repair, the mortgagee may make such repairs as in its discretion it may deem necessary for the proper preservation thereof; and the full amount of such and each such payment shall be immediately due and payable; and shall be secured by the lien of this mortgage. h. He will not voluntarily create or permit to be created against the property subject to this mortgage any lien or liens inferior or superior to the lien of this mortgage without the written consent of the mortgagee; and further, that the will keep and maintain the same free from the claim of all persons supplying labor or materials for construction of any and all buildings or improvements now being erected or to be erected on said premises. He will not rent or assign any part of the rent of said mortgaged property or demolish, or remove, or substantially alter any building without the written consent of the mortgagee. All awards of damages in connection with any condemnation for public use of or injury to any of the property subject to this mortgage are hereby assigned and shall be paid to mortgagee, who may apply the same to payment of the installments g. J• SBA FORM 928 (11 -85) U.S. Government Printing Office 1992 - 322- 908/79010 last due under said note, and mortgagee is hereby authorized, in the name of the mortgagor, to execute and deliver valid acquittances thereof and to appeal from any such award. k. The mortgagee shall have the right to inspect the mortgaged premises at any reasonable time. 2. Default in any of the covenants or conditions of this instrument or of the note or loan agreement secured by shall terminate the mortgagor's right to possession, use and enjoyment of the property, at the option of the mortgagee of his assigns (it being agreed that the mortgagor shall have such right until default) Upon any such default, the mortgagee shall become the owner of all of the rents and profits accruing after default as secured for the indebtedness secured hereby, with the right to enter upon said property for the purpose of collection such rents and profits. This instrument shall operate as an assignment of any rentals on said property to that extent. 3. The mortgagor covenants and agrees that if he shall fail to pay said indebtedness or any part thereof, when due, or shall fail to perform any covenant or agreement of this instrument or the promissory note secured hereby, the entire indebtedness hereby secured shall immediately becomes due, payable, and collectible without notice, at the option of the mortgagee or assigns, regardless of maturity, and the mortgagee or his assigns may before or after entry sell said property with appraisement (the mortgagor having waived and assigned to the mortgagee all rights of appraisement). (I) at judicial sale pursuant to the provisions of 28 U.S.C.. 2001 (a); or (II) at the option of the mortgagee, either by auction or by solicitation of sealed bids, for the highest and best bid complying with the terms of sale and manner of payment specified in the published notice of sale, first giving four weeks' notice of the time, terms and place of such sale, by advertisement not less than once during each of said four weeks in a newspaper published or distributed in the county in which said property is situated, all other notice being waived by the mortgagor (and said mortgagee, or any person on behalf of said mortgagee, many bid with the unpaid indebtedness evidenced by said note). Said sale shall be held at or on the property to be sold or at the Federal, county, or city courthouse for the county in which the property is located. The mortgagee is hereby authorized to execute for and on the behalf of the mortgagor and deliver to purchaser at such sale a sufficient conveyance of said property, which conveyance shall contain recitals as to the happening of the default upon which the execution of the power of sale herein granted depends; and the said mortgagor hereby constitutes and appoints the mortgagee or any agent or attorney of the mortgagee, the agent and attorney in fact of said mortgagor to make such recitals and to execute said conveyance and hereby covenants and agrees that the recitals so made shall be effectual to bar all equity or right of redemption, homestead, dower, and all other exemptions of the mortgagor, all of which are hereby expressly waived and conveyed to the mortgagee; or (III) take any other appropriate action pursuant to state or Federal statute either in a state or Federal court otherwise for the disposition of the property. In the event of a sale as hereinbefore provided, the mortgagor or any persons in possession under the mortgagor shall then become and be tenants holding over and shall forthwith deliver possession to the purchaser at such sale or be summarily dispossessed, in accordance with the provision of law applicable to tenants holding over. The power and agency hereby granted are coupled with an interest and are irrevocable by death or otherwise, and are granted as cumulative to be remedies for collection of said indebtedness provided by law. 4. The proceeds of any sale of said property in accordance with the preceding paragraphs shall be applied first to pay the costs and expenses of said sale, the expenses incurred by the mortgagee for the purpose of protecting or maintaining said property, and reasonable attorney's fees; secondly, to pay the indebtedness secured hereby; and thirdly, to pay any surplus or excess to the person or persons legally entitled thereto. 5. In the event said property is sold at a judicial foreclosure sale or pursuant to the power of sale hereinabove granted, and the proceeds are not sufficient to pay the total indebtedness secured by this instrument and evidenced by said promissory note, the mortgagee will be entitled to a deficiency judgment for the amount of the deficiency without regard to appraisement. 6. In the event the mortgagor fails to pay any Federal, state or local tax assessment, income tax or other tax lien, charge, fee, or other expense charged against the property the mortgagee is hereby authorized at his option to pay the same. Any sums so paid by the mortgagee shall be added to and become part of the principal amount of the indebtedness evidenced by said note, subject to the same terms and conditions. If the mortgagor shall pay and discharge the indebtedness evidenced by said promissory note, and shall pay such sums and shall discharge all taxes and liens and the costs, fees, and expenses of making, enforcing and executing this mortgage, then this mortgage shall be canceled and surrendered. 7. The covenants herein contained shall bind and the benefits and advantages shall inure to the respective successor and assigns of the parties hereto. Whenever used, the singular number shall include the plural, the plural the singular, and the use of any gender shall include all genders. 8. No waiver of any covenant herein or of the obligation secured hereby shall at any time thereafter be held to be a waiver of the terms hereof or of the note secured hereby. SBA FORM 928 (11 -85) U.S. Government Printing Office 1992 - 322 - 908/79010 9. A judicial decree, order, or judgment holding any provision or portion of this instrument invalid or unenforceable shall not in any way impair or preclude the enforcement of the remaining provision of this instrument. 10. Any written notice to be issued to the mortgagor pursuant to the provisions of this instrument shall be addressed to the mortgagor at 350 Bell Street, Dubuque, IA 52001 and any written notice to be issued to the mortgagee shall be addressed to the mortgagee at 7600 Commerce Park, Dubuque, IA 52002. 11. The Loan secured by this lien was made under a United States Small Business Administration (SBA) nationwide program which uses tax dollars to assist small business owners. If the United States is seeking to enforce this document, then under SBA regulations: a) When SBA is the holder of the Note, this document and all documents evidencing or securing this Loan will be construed in accordance with federal law. b) CDC or SBA may use local or state procedures for purposes such as filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using these procedures SBA does not waive any federal immunity from local or state control, penalty, tax or liability. No Borrower or Guarantor may claim or assert against SBA any local or state law to deny any obligation of Borrower, or defeat any claim of SBA with respect to this loan. Any clause in this document requiring arbitration is not enforceable when SBA is the holder of the Note secured by this instrument. IN WITNESS WHEREOF, the mortgagor has executed this instrument and the mortgagee has accepted delivery of this instrument as of the day and year aforesaid. Platinum Holdings, LLC By: James Patrick Rix, Chief Executive Officer Executed and delivered in the presence of the following witnesses: LIMITED LIABILITY COMPANY ACKNOWLEDGMENT SS: STATE OF IOWA COUNTY OF DUBUQUE On this day of , before me, the undersigned, a Notary Public, personally appeared JAMES P. RIX, CHIEF EXECUTIVE OFFICER OF PLATINUM HOLDINGS, LLC, to me personally known, who being by me duly sworn, did say that he is CHIEF EXECUTIVE OFFICER, or designated agents of said limited liability company; and that said instrument was signed on behalf of said company by authority of the limited liability company and the members or designated agents acknowledge the execution of said instrument to be the voluntary act and deed of said company by it voluntarily executed. SBA FORM 928 (11 -85) NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE U.S. Government Printing Office 1992- 322 - 908/79010 CONSENT AND SUBORDINATION TO SECOND MORTGAGE RE: Lot 1 of RIVERWALK 3RD ADDITION, in the City of Dubuque, Iowa, according to the recorded plat thereof The undersigned CITY OF DUBUQUE, IOWA ( "City ") is the owner of the above - described property ( "the Property ") described in the Second Mortgage (the "Mortgage ") to which this Consent and Subordination to Mortgage is attached, and hereby consents to the mortgaging of the Property by PLATINUM HOLDINGS, LLC an Iowa limited liability company ("Borrower") in favor of E.C.I.A. BUSINESS GROWTH, INC., an Iowa corporation ( "Lender ") in the amount of Three Million Nine Hundred Eighty -seven Thousand Dollars ($3,987,000.00). City further consents that the interest owned by City shall be subordinated, junior and inferior to the Mortgage established in favor of Lender, subject to the following: 1. In the event foreclosure is brought, City consents to being named a party Defendant for the purposes of foreclosing its interest in the Property, but with no personal liability being incurred or any deficiency judgment resulting by or against City. 2. In the event of any foreclosure by Lender, Lender agrees to be bound by the terms and conditions of that certain Minimum Assessment Agreement entered into between City and Borrower on June 4, 2001, and that certain Amended Development Agreement entered into between City and Borrower on January 15, 2001, with respect to the Property (including Lease Agreement and Parking Use Agreement described therein). 3. City agrees that this Consent and Subordination to Second Mortgage document will be attached to, and become a part of, the executed Second Mortgage between Borrower and Lender. 4. Lender executes this Consent and Subordination to Second Mortgage solely for the purpose of agreeing to be bound by the terms of the agreement referred to in Section 2, above, in the event of foreclosure by Lender. Dated this day of , 2011. By: By: Bv: E.C.I.A. BUSINESS GROWTH, INC. JEROME P. SCHROEDER, President CI OF DUBUQUE ROY D. OL, Mayor KEVI IRNSTAHL, City C erk Page 1 of 2 STATE OF IOWA COUNTY OF DUBUQUE } SS: On this day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Jerome P. Schroeder to me personally known, who, being by me duly sworn, did say that he is the President of said corporation executing the within and foregoing instrument; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said Jerome P. Schroeder as such officer acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by it and by him voluntarily executed. STATE OF IOWA COUNTY OF DUBUQUE On this day of .1(J , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personaleared Roy D. Buol and Kevin Firnstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal has been procured by the City; that said instrument was signed on behalf of the City by authority of the City Council; and that Roy D. Buol and Kevin Firnstahl, as Mayor and City Clerk, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the City, by it and by them } SS: NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE voluntarily executed. SUSAN M. WINTER COMMISSION NO.183274 MY COMMISSION EXPIRES /ow" 2/14/14 110) dra NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE S: \wp \CASES \JEFF - Cases \ECIA Business Growth \Platinum Holdings LLC [Grand Harbor Hotel] - SBA \Consent & Subordination to Mortgage,wpd Page 2 of 2 Prepared by: Jeffrey L. Walters, 2080 Southpark Court, Dubuque, IA 52003 (563) 582-2926 IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. RE: Lot 1 of RIVERWALK 3RD ADDITION, in the City of Dubuque, Iowa, according to the recorded plat thereof ASSIGNMENT OF AMENDED DEVELOPMENT AGREEMENT THIS AGREEMENT is entered into this day of , 2011, between PLATINUM HOLDINGS, LLC, an Iowa limited liability company ( "Borrower "), CITY OF DUBUQUE, IOWA ( "City) and E.C.I.A. BUSINESS GROWTH, INC., an Iowa corporation, ( "Lender "). 1. Recitals. Borrower is the lessee of real estate described above (the "Premises "). Effective January 15, 2001, Borrower entered into an Amended Development Agreement ( "Development Agreement ") with the City under which Borrower will lease from City approximately 3.5 acres of land within the Ice Harbor Urban Renewal District, located within the City, for the purpose of redeveloping such property. A copy of said Development Agreement is attached as Exhibit "A ". Lender has authorized the making of a certain loan to Borrower by virtue of a Loan Agreement executed by Borrower and Lender of even date hereof ( "Loan "). The Loan is for the benefit of both Borrower and City insofar as funds from the Loan will be used for redevelopment purposes under the Development Agreement. In consideration of the promises contained in this Agreement, and of the disbursement of part or all of the Loan by Lender, Borrower, with the consent of City, assigns to Lender its rights under the Development Agreement during the remainder of its term, including all extensions and renewals. This Agreement is for the sole purpose of securing payment of all amounts due by the Borrower to the Lender under the Loans, together with an including any refinancing, renewal or extension of such indebtedness. Upon payment in full of all indebtedness secured by this Agreement, this Agreement and security interest created hereby shall become null and void and of no further force and effect. 2. Borrower and Lessor Further Covenant and Agree: 2.1. Borrower is not now in default in the performance of the Development Agreement; Borrower and City will each comply with the terms of the Development Agreement for the term of the Loan and any extensions or renewals. Page 1 of 4 2.2. Borrower and /or City will not modify or terminate the Development Agreement without the prior written consent of Lender which shall not unreasonably be withheld. 2.3. If Borrower defaults under the terms of the Development Agreement, Lessor shall have the right to terminate the Development Agreement according to its terms. However, City shall first give Lender sixty (6o) days' written notice of such default and the right, at the option of Lender, during such period, to cure such default. During the sixty (6o) day period, City will take no action to enforce its claim arising from such default without Lender's prior written consent. 2.4. If Borrower defaults in the performance of any of its obligations under the Loans, any renewals or extensions, or of any related agreement, and Borrower has not cured such default within the applicable cure period under the Loan or of any related agreement, then Lender, at its option, may, upon receiving the written consent of the City, transfer and assign the Development Agreement and Borrower's rights in it to parties reasonably satisfactory to the Lender and City, and upon assignment the obligation of the Redevelopment Agreement shall be binding on such transferees. In that event, Lender shall have no obligation other than performance of the terms of the Development Agreement during the period of its possession of the premises. In the event that Lender transfers the Redevelopment Agreement as provided above, Lender will cure all defaults in said Redevelopment Agreement. 3. Notices. All notices under this Agreement shall be in writing and shall be deemed delivered if delivered in person, if sent by certified mail (postage prepaid, return receipt requested), telegraph or facsimile, as follows: If to Lender: E.C.I.A. Business Growth, Inc. 760o Commerce Park Dubuque, IA 52002 If to Borrower: Platinum Holdings, LLC 801 Jackson Street Dubuque, IA 52001 If to City: City of Dubuque City Hall 5o W. 13th Street Dubuque, IA 52001 ATTN.: City Manager 4. Applicable Law; Severability. This Agreement shall be subject to, construed and enforced in accordance with the laws of the State of Iowa. If any provision of this Agreement is held invalid under applicable Law, such invalidity shall not affect any other provision of this Agreement that can be given effect without the invalid provision, and to this end, the provisions hereof are severable. 5. Binding Effect; Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties. Neither Borrower nor City shall assign any of its rights or obligations hereunder without the prior written consent of Lender. 6. Interpretation; Headings. Words and phrases herein shall be interpreted and understood according to the context in which they are used. The headings in this Agreement are intended solely for convenience of reference, and shall be given no effect in the construction or interpretation of this Agreement. 7. Entire Agreement; Counterparts; Remedies Cumulative. This Agreement, including any Exhibits, all of which are incorporated by this reference, and the documents executed and Page 2 of 4 delivered pursuant hereto, constitute the entire agreement between the parties, and may be amended only by a writing signed by each party. All agreements, instruments and documents referred to in this Agreement are by this reference made a part of this Agreement for all purposes. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. The parties shall have, in addition to the rights and remedies provided by this Agreement, all those allowed by all applicable laws, all of which shall be in extension of and not in limitation of those provided hereunder. 8. Waivers. Except as herein expressly provided, no waiver by either party of any breach of this Agreement, or of any warranty or representation hereunder, shall be deemed to be a waiver by the same party of any other breach of any kind or nature (whether preceding or succeeding the breach in question, and whether or not of the same or similar nature). 8.1. No acceptance by a party of payment or performance after any such breach shall be deemed to be a waiver of any breach of this Agreement or of any representation or warranty hereunder, whether or not the party knows of the breach when it accepts such payment or performance. 8.2. No failure by a party to exercise any right it may have under this Agreement or under law upon another party's default, and no delay in the exercise of that right, shall prevent it from exercising the right whenever the other party continues to be in default. No such failure or delay shall operate as a waiver of any default or as a modification of the provisions of this Agreement. 9. Attorney's Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's 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 maybe enforced in a separate action brought for that purpose. Such fees and costs of litigation shall be in addition to any other relief which may be awarded. Effective as of the date first written above. By By: By: PLATINUM HOLDINGS, LLC JAMES P. RIX, Chief Executive Officer E.C.I.A. BUSINESS GROWTH, INC. JEROME P. SCHROEDER, President CI. OF DUBUQUE 4-ati ROY D. UOL, Mayor By: . i �� I KEVI 'IRNSTAHL, City Clerk Page 3 of 4 STATE OF IOWA COUNTY OF DUBUQUE On this day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared James P. Rix, to me personally known, who being by me duly sworn, did say that he is a Member of said limited liability company, executing the within and foregoing instrument; that no seal has been procured by the said company; and that said instrument was signed on behalf of said company by authority of its managers and members; and that said PLATINUM HOLDINGS, L.L.C. acknowledged the execution of said instrument to be the voluntary act and deed of said company by it voluntarily executed. } SS: STATE OF IOWA COUNTY OF DUBUQUE } SS: NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE On this day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Jerome P. Schroeder to me personally known, who, being by me duly sworn, did say that he is the President of said corporation executing the within and foregoing instrument; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said Jerome P. Schroeder as such officer acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by it and by him voluntarily executed. STATE OF IOWA SS: COUNTY OF DUBUQUE NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE On this day of fhpf% , 2o11, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Roy D. Buol and Kevin Firnstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal has been procured by the City; that said instrument was signed on behalf of the City by authority of the City Council; and that Roy D. Buol and Kevin Firnstahl, as Mayor and City Clerk, acknowledged the execution of the foregoing instrument t► Be the lun . ry ac . • • deed of the City, by it and by them voluntarily executed. SUSAN M. WINTER r COMMISSION NO.183274 MY COMMISSION EXPIRES 2/14/14 NOT - RY 'U : LIC IN AND FOR SAID COUNTY AND STATE S: \wp \CASES \JEFF - Cases \ECIA Business Growth \Platinum Holdings LLC [Grand Harbor Hotel] - SBA \Assignment of Amended Development Agreement.wpd Page 4 of 4 Prepared by: Jeffrey L. Walters, 2080 Southpark Court, Dubuque, IA 52003 (563) 582-2926 IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. RE: Lot 1 of RIVERWALK 3RD ADDITION, in the City of Dubuque, Iowa, according to the recorded plat thereof ASSIGNMENT OF LEASE THIS AGREEMENT is entered into this day of , 2011, between PLATINUM HOLDINGS, LLC, an Iowa limited liability company, Lessee, ( "Borrower "), CITY OF DUBUQUE, IOWA ( "Lessor ") and E.C.I.A. BUSINESS GROWTH, INC., an Iowa corporation, ( "Lender "). Recital: Borrower is the lessee of real estate described above (the "Premises "). Borrower has leased from the Lessor certain real property under a Lease dated June 4, 2001, a copy of which is attached as Exhibit "A" ( "Lease "). Lender has authorized the making of certain loans to Borrower by virtue of a Loan Agreement executed by Borrower and Lender of even date hereof ( "Loan "). The Loan is for the benefit of both Borrower and Lessor insofar as funds from the Loan will be used for the benefit of the business conducted on the leased premises. In consideration of the promises contained in this Agreement, and of the disbursement of part or all of the Loan by Lender, Borrower, with the consent of Lessor, assigns to Lender its rights under the Lease during the remainder of its terms, including all extension and renewals. This Agreement is for the sole purpose of securing payment of all amounts due by the Borrower to the Lender under the Loan, together with and including any refinancing, renewal or extension of such indebtedness. Upon payment in full of all indebtedness secured by this Agreement, this Agreement and the security interest created hereby shall become null and void of no further force and effect. 2. Borrower and Lessor Further Covenant and Agree: 2.1. Borrower is not now in default in the performance of the Lease; Borrower and Lessor will each perform the covenants and conditions required of it by the Lease for the term of the loan and any extensions or renewals. Page 1 of 5 2.2. Borrower and /or Lessor will not modify or terminate the Lease without the prior written consent of Lender which shall not unreasonably be withheld. 2.3. If Borrower defaults under the terms of the Lease, Lessor shall have the right to terminate the Lease according to its terms. However, Lessor shall first give Lender sixty (6o) days' written notice of such default and the right, at the option of Lender, during such period, to cure such default. During the sixty (6o) day period, Lessor will take no action to enforce its claim arising from such default without Lender's prior written consent. 2.4. If Borrower defaults in the performance of any of its obligations under the Loans, any renewals or extensions, or of any related agreement, then Lender, at its option, may, without notice except as maybe required under the Loan Agreement, using such force as may be necessary, enter said leased premises and do any one or more of the following: (1) Remove all personal property of Borrower that is pledged as collateral for the Loans; (2) Sell such personal property; and (3) Transfer and assign the Lease and Borrower's rights in it to parties satisfactory to Lender and Lessor and upon assignment the obligations of the Lease shall be binding on such transferees. In the event that Lender undertakes the options provided in Subsections (1) or (2), it shall have no obligation other than payment of rent accruing during the period of its possession of the premises. In the event that Lender transfers the Lease as provided in Subsection (3), Lender will cure all defaults in said Lease, and its sole other obligation shall be the payment of rent which accrued prior to the transfer of said Lease and the performance of the terms of the Lease prior to the transfer. 3. Subordination. Lessor subordinates any lien it has or may have on the personal property of Borrower that is or may be security for the Loans to Lender's liens on Borrower's property, and to Lender's rights under this Agreement. This subordination shall be effective regardless of whether or not the collateral constitutes fixtures. For the purposes of this Agreement, the term "liens" specifically includes any Landlord's Lien under Chapter 57o, Code of Iowa, as amended, to which the Lessor may be entitled. 4. Warranty of Title. Lessor warrants that title to the leased premises is held by it in fee simple and that it has full power and authority to enter into this Agreement. 5. Notices. All notices under this Agreement shall be in writing and shall be deemed delivered if delivered in person, if sent by certified mail (postage prepaid, return receipt requested), telegraph or facsimile, as follows: If to Lender: E.C.I.A. Business Growth, Inc. 7600 Commerce Park Dubuque, IA 52002 If to Borrower: Platinum Holdings, LLC 801 Jackson Street Dubuque, IA 52001 If to Lessor: City of Dubuque City Hall 5o W. 13th Street Dubuque, IA 52001 ATTN.: City Manager 6. Applicable Law; Severability. This Agreement shall be subject to, construed and enforced in accordance with the laws of the State of Iowa. If any provision of this Agreement is held Page 2 of 5 invalid under applicable Law, such invalidity shall not affect any other provision of this Agreement that can be given effect without the invalid provision, and to this end, the provisions hereof are severable. 7. Binding Effect; Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties. Neither Borrower nor Lessor shall assign any of its rights or obligations hereunder without the prior written consent of Lender. 8. Interpretation; Headings. Words and phrases herein shall be interpreted and understood according to the context in which they are used. The headings in this Agreement are intended solely for convenience of reference, and shall be given no effect in the construction or interpretation of this Agreement. 9. Entire Agreement; Counterparts; Remedies Cumulative. This Agreement, including any Exhibits, all of which are incorporated by this reference, and the documents executed and delivered pursuant hereto, constitute the entire agreement between the parties, and may be amended only by a writing signed by each party. All agreements, instruments and documents referred to in this Agreement are by this reference made a part of this Agreement for all purposes. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. The parties shall have, in addition to the rights and remedies provided by this Agreement, all those allowed by all applicable laws, all of which shall be in extension of and not in limitation of those provided hereunder. lo. Waivers. Except as herein expressly provided, no waiver by either party of any breach of this Agreement, or of any warranty or representation hereunder, shall be deemed to be a waiver by the same party of any other breach of any kind or nature (whether preceding or succeeding the breach in question, and whether or not of the same or similar nature). 10.1. No acceptance by a party of payment or performance after any such breach shall be deemed to be a waiver of any breach of this Agreement or of any representation or warranty hereunder, whether or not the party knows of the breach when it accepts such payment or performance. 10.2. No failure by a party to exercise any right it may have under this Agreement or under law upon another party's default, and no delay in the exercise of that right, shall prevent it from exercising the right whenever the other party continues to be in default. No such failure or delay shall operate as a waiver of any default or as a modification of the provisions of this Agreement. 11. Attorney's Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's 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 which may be awarded. Effective as of the date first written above. By PLATINUM HOLDINGS, LLC JAMES P. RIX, Chief Executive Officer Page 3 of 5 By: By: By: E.C.I.A. BUSINESS GROWTH, INC. JEROME P. SCHROEDER, President RO CI i OF DUBUQUE D. OL, Mayor KEV N FIRNSTAHL, City C erk Page 4 of 5 STATE OF IOWA COUNTY OF DUBUQUE } SS: On this day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared James P. Rix, to me personally known, who being by me duly sworn, did say that he is a Member of said limited liability company, executing the within and foregoing instrument; that no seal has been procured by the said company; and that said instrument was signed on behalf of said company by authority of its managers and members; and that said PLATINUM HOLDINGS, L.L.C. acknowledged the execution of said instrument to be the voluntary act and deed of said company by it voluntarily executed. STATE OF IOWA COUNTY OF DUBUQUE } SS: NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE On this day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Jerome P. Schroeder to me personally known, who, being by me duly sworn, did say that he is the President of said corporation executing the within and foregoing instrument; that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and that the said Jerome P. Schroeder as such officer acknowledged the execution of said instrument to be the voluntary act and deed of said corporation, by it and by him voluntarily executed. STATE OF IOWA SS: COUNTY OF DUBUQUE NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE On this 5ek. day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Roy D. Buol and Kevin Firnstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal has been procured by the City; that said instrument was signed on behalf of the City by authority of the City Council; and that Roy D. Buol and Kevin Firnstahl, as Mayor and City Clerk, acknowledged the execution of the foregoing instrument to s e the volu : . Id deed o e City, by it and by them voluntarily executed. .1/ SUSAN M. WINTER COMMISSION NO.183274 MY COMMISSION EXPIRES 2/14/14 NOTA Y PUBLIC IN AND FOR SAID COUNTY AND STATE S: \wp \CASES \JEFF - Cases \ECIA Business Growth \Platinum Holdings LLC [Grand Harbor Hotel] - SBA \Assignment of Lease Agreement - City.wpd Page 5 of 5 Prepared by: Jeffrey L. Walters, 2080 Southpark Court, Dubuque, IA 52003 (563) 582-2926 IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. RE: Lot 1 of RIVERWALK 3R0 ADDITION, in the City of Dubuque, Iowa, according to the recorded plat thereof ASSIGNMENT OF PARKING USE AGREEMENT THIS AGREEMENT is entered into this day of , 2011, between PLATINUM HOLDINGS, LLC, an Iowa limited liability company, ( "Borrower "), CITY OF DUBUQUE, IOWA ( "Lessor ") and E.C.I.A. BUSINESS GROWTH, INC., an Iowa corporation, ( "Lender "). 1. Recital: Borrower is the lessee of real estate described above (the "Premises "). Borrower has entered into a Parking Use Agreement with Lessor effective June 4, 2001, a copy of which is attached as Exhibit "A" ( "Use Agreement "). Lender has authorized the making of a certain loan to Borrower by virtue of a Loan Agreement executed by Borrower and Lender of even date hereof ( "Loan "). The Loan is for the benefit of both Borrower and Lessor insofar as funds from the Loan will be used for the benefit of the business which is the subject of other agreements between Borrower and Lessor. In consideration of the promises contained in this Agreement, and of the disbursement of part or all of the Loan by Lender, Borrower, with the consent of Lessor, assigns to Lender its rights under the Use Agreement during the remainder of its terms, including all extension and renewals. This Agreement is for the sole purpose of securing payment of all amounts due by the Borrower to the Lender under the Loan, together with and including any refinancing, renewal or extension of such indebtedness. Upon payment in full of all indebtedness secured by this Agreement, this Agreement and the security interest created hereby shall become null and void of no further force and effect. 2. Borrower and Lessor Further Covenant and Agree: 2.1. Borrower is not now in default in the performance of the Use Agreement; Borrower and Lessor will each comply with the terms of the Use Agreement for the term of the Loan and any extensions or renewals. Page 1 of 4 2.2. Borrower and /or Lessor will not modify or terminate the Use Agreement without the prior written consent of Lender which shall not unreasonably be withheld. 2.3. If Borrower defaults under the terms of the Use Agreement, Lessor shall have the right to terminate the Use Agreement according to its terms. However, Lessor shall first give Lender sixty (6o) days' written notice of such default and the right, at the option of Lender, during such period, to cure such default. During the sixty (6o) day period, Lessor will take no action to enforce its claim arising from such default without Lender's prior written consent. 2.4. If Borrower defaults in the performance of any of its obligations under the Loan, any renewals or extensions, or of any related agreement, and Borrower has not cured wuch default within the applicable cure period under the Loan or any related agreement, then Lender, at its option and upon receiving the written consent of Lessor, may assume and complete Borrower's obligations under the Use Agreement, or may transfer and assign the Use Agreement and Borrower's rights in it to parties satisfactory to City and Lender. Upon assignment the obligations of the Use Agreement shall be binding on such transferees. 3. Warranty of Title. Lessor warrants that title to the leased premises is held by it in fee simple and that it has full power and authority to enter into this Agreement. 4. Notices. All notices under this Agreement shall be in writing and shall be deemed delivered if delivered in person, if sent by certified mail (postage prepaid, return receipt requested), telegraph or facsimile, as follows: If to Lender: E.C.I.A. Business Growth, Inc. 7600 Commerce Park Dubuque, IA 52002 If to Borrower: Platinum Holdings, LLC 801 Jackson Street Dubuque, IA 52001 If to Lessor: City of Dubuque City Hall 5o W. 13th Street Dubuque, IA 52001 ATTN.: City Manager 5. Applicable Law; Severability. This Agreement shall be subject to, construed and enforced in accordance with the laws of the State of Iowa. If any provision of this Agreement is held invalid under applicable Law, such invalidity shall not affect any other provision of this Agreement that can be given effect without the invalid provision, and to this end, the provisions hereof are severable. 6. Binding Effect; Assignment. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties. Neither Borrower nor Lessor shall assign any of its rights or obligations hereunder without the prior written consent of Lender. 7. Interpretation; Headings. Words and phrases herein shall be interpreted and understood according to the context in which they are used. The headings in this Agreement are intended solely for convenience of reference, and shall be given no effect in the construction or interpretation of this Agreement. Page 2 of 4 8. Entire Agreement; Counterparts; Remedies Cumulative. This Agreement, including any Exhibits, all of which are incorporated by this reference, and the documents executed and delivered pursuant hereto, constitute the entire agreement between the parties, and may be amended only by a writing signed by each party. All agreements, instruments and documents referred to in this Agreement are by this reference made a part of this Agreement for all purposes. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. The parties shall have, in addition to the rights and remedies provided by this Agreement, all those allowed by all applicable laws, all of which shall be in extension of and not in limitation of those provided hereunder. 9. Waivers. Except as herein expressly provided, no waiver by either party of any breach of this Agreement, or of any warranty or representation hereunder, shall be deemed to be a waiver by the same party of any other breach of any kind or nature (whether preceding or succeeding the breach in question, and whether or not of the same or similar nature). 9.1. No acceptance by a party of payment or performance after any such breach shall be deemed to be a waiver of any breach of this Agreement or of any representation or warranty hereunder, whether or not the party knows of the breach when it accepts such payment or performance. 9.2. No failure by a party to exercise any right it may have under this Agreement or under law upon another party's default, and no delay in the exercise of that right, shall prevent it from exercising the right whenever the other party continues to be in default. No such failure or delay shall operate as a waiver of any default or as a modification of the provisions of this Agreement. 11. Attorney's Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's 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 which may be awarded. Effective as of the date first written above. By By: By: PLATINUM HOLDINGS, LLC JAMES P. RIX, Chief Executive Officer OF DUBUQUE ROY if : UOL, Mayor Ar/f)AV N FIRNSTAHL, City Clerk Page 3 of 4 STATE OF IOWA SS: COUNTY OF DUBUQUE On this day of , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared James P. Rix, to me personally known, who being by me duly sworn, did say that he is a Member of said limited liability company, executing the within and foregoing instrument; that no seal has been procured by the said company; and that said instrument was signed on behalf of said company by authority of its managers and members; and that said PLATINUM HOLDINGS, L.L.C. acknowledged the execution of said instrument to be the voluntary act and deed of said company by it voluntarily executed. STATE OF IOWA SS: COUNTY OF DUBUQUE NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE On thi day of 1�'�� , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Roy D. Buol and Kevin Firnstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal has been procured by the City; that said instrument was signed on behalf of the City by authority of the City Council; and that Roy D�_77Buol and Kevin Firnst Ira yor and City Clerk, acknowledged the execution of the foregoing instrument ,fr e th • v6 untary ac I. s I eed of i e -. ity, by it and by them voluntarily executed. `ry ��„ fir SUSAN M. WINTER COMMISSION NO.183274 MY COMMISSION EXPIRES 2/14/14 NOTARY PUBLIC IN AND FOR SAID COUNTY AND STATE S: \wp \CASES \JEFF - Cases \ECIA Business Growth \Platinum Holdings LLC [Grand Harbor Hotel] - SBA \Assignment of Parking Use Agreement - City.wpd Page 4 of 4 State of Iowa Space Above This Line For Recording Data Prepared By: ROSEANN M. SABERS AMERICAN TRUST & SAVINGS BANK 895 MAIN ST, DUBUQUE, IA 52001 (563) 582 -1841 Return To: AMERICAN TRUST & SAVINGS BANK 895 MAIN ST PO BOX 938 DUBUQUE, IA 52001 • OPEN -END REAL ESTATE MORTGAGE (With Future Advance Clause) 1. DATE AND PARTIES. The date of this Mortgage is 12-12-2011 and their addresses are as follows: and the parties MORTGAGOR: PLATINUM HOLDINGS, LLC, AN IOWA LIMITED LIABILITY COMPANY 801 JACKSON ST DUBUQUE, IA 52001 -7014 ❑ Refer to the Addendum which is attached and incorporated herein for additional Mortgagors. The Addendum is located on LENDER: AMERICAN TRUST & SAVINGS BANK ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF IOWA 895 MAIN ST PO BOX 938 DUBUQUE, IA 52001 2. MORTGAGE. For good and valuable consideration, the receipt and sufficiency of which is acknowledged, and to secure the Secured Debt (hereafter defined), Mortgagor grants, bargains, warrants, conveys and mortgages to Lender the following described property: (If the legal description of the property is not on page one of this Mortgage, it is located on EXHIBIT A .1 IOWA - AGRICULTURAL /COMMERCIAL REAL ESTATE SECURITY INSTRUMENT (page 1 of .9) (NOT FOR FNMA, FHLMC, FHA OR VA USE, AND NOT FOR CONSUMER PURPOSES) ® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 The property is located in DUBUQUE at 350 BELL ST (County) , DUBUQUE , Iowa 52001 -7028 (Address) (City) (Zip Code) Together with all rights, easements, appurtenances, royalties, mineral rights, oil and gas rights, crops, timber, all diversion payments or third party payments made to crop producers, and all existing and future improvements, structures, fixtures, and replacements that may now, or at any time in the future, be part of the real estate described above (all referred to as "Property "). The term Property also includes, but is not limited to, any and all water wells, water, ditches, reservoirs, reservoir sites and dams located on the real estate and all riparian and water rights associated with the Property, however established. NOTICE: THIS MORTGAGE SECURES CREDIT IN THE AMOUNT OF $ 500,000.00 LOANS AND ADVANCES UP TO THIS AMOUNT, TOGETHER WITH INTEREST, ARE SENIOR TO INDEBTEDNESS TO OTHER CREDITORS UNDER SUBSEQUENTLY RECORDED OR FILED MORTGAGES AND LIENS. 3. MAXIMUM OBLIGATION LIMIT. The total principal amount of the Secured Debt (hereafter defined) secured by this Mortgage at any one time shall not exceed the amount stated above. This limitation of amount does not include interest, loan charges, commitment fees, brokerage commissions, attorneys' fees and other charges validly made pursuant to this Mortgage and does not apply to advances (or interest accrued on such advances) made under the terms of this Mortgage to protect Lender's security and to perform any of the covenants contained in this Mortgage. Future advances are contemplated and, along with other future obligations, are secured by this Mortgage even though all or part may not yet be advanced. Nothing in this Mortgage, however, shall constitute a commitment to make additional or future loans or advances in any amount. Any such commitment would need to be agreed to in a separate writing. 4. SECURED DEBT DEFINED. The term "Secured Debt" includes, but is not limited to, the following: A. The promissory note(s), contract(s), guaranty(ies) or other evidence of debt described below and all extensions, renewals, modifications or substitutions (Evidence of Debt) (e.g., borrower's name, note amount, interest rate, maturity date): PROMISSORY NOTE DATED 12 -12 -2011 ISSUED BY MORTGAGOR AND MADE PAYABLE TO LENDER IN THE ORIGINAL PRINCIPAL AMOUNT OF $500,000.00 B. All future advances from Lender to Mortgagor or other future obligations of Mortgagor to Lender under any promissory note, contract, guaranty, or other evidence of debt existing now or executed after this Mortgage whether or not this Mortgage is specifically referred to in the evidence of debt and whether or not such future advances or obligations are incurred for any purpose that was related or unrelated to the purpose of the Evidence of Debt. C. All obligations Mortgagor owes to Lender, which now exist or may later arise, to the extent not prohibited by law, including, but not limited to, liabilities for overdrafts relating to any deposit account agreement between Mortgagor and Lender. D. All additional sums advanced and expenses incurred by Lender for insuring, preserving or otherwise protecting the Property and its value and any other sums advanced and expenses incurred by Lender under the terms of this Mortgage, plus interest at the highest rate in effect, from time to time, as provided in the Evidence of Debt. E. Mortgagor's performance under the terms of any instrument evidencing a debt by Mortgagor to Lender and any Mortgage securing, guarantying, or otherwise relating to the debt. If more than one person signs this Mortgage as Mortgagor, each Mortgagor agrees that this Mortgage will secure all future advances and future obligations described above that are given to or incurred by any one or more Mortgagor, or any one or more Mortgagor and others. This Mortgage will not secure any other debt if Lender fails, with respect to such other debt, to make any required disclosure about this Mortgage or if Lender fails to give any required notice of the right of rescission. 5. PAYMENTS. Mortgagor agrees to make all payments on the Secured Debt when due and in accordance with the terms of the Evidence of Debt or this Mortgage. 6. WARRANTY OF TITLE. Mortgagor covenants that Mortgagor is lawfully seized of the estate conveyed by this Mortgage and has the right to grant, bargain, warrant, convey, sell, and mortgage the Property and warrants that the Property is unencumbered, except for encumbrances of record. 7. CLAIMS AGAINST TITLE. Mortgagor will pay all taxes, assessments, liens, encumbrances, lease payments, ground rents, utilities, and other charges relating to the Property when due. Lender may require Mortgagor to provide to Lender copies of all notices that such amounts are due and the (page 2 of .9) Exp-rjw ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 receipts evidencing Mortgagor's payment. Mortgagor will defend title to the Property against any claims that would impair the lien of this Mortgage. Mortgagor agrees to assign to Lender, as requested by Lender, any rights, claims or defenses which Mortgagor may have against parties who supply labor or materials to improve or maintain the Property. 8. PRIOR SECURITY INTERESTS. With regard to any other mortgage, deed of trust, security agreement or other lien document that created a prior security interest or encumbrance on the Property and that may have priority over this Mortgage, Mortgagor agrees: A. To make all payments when due and to perform or comply with all covenants. B. To promptly deliver to Lender any notices that Mortgagor receives from the holder. C. Not to make or permit any modification or extension of, and not to request or accept any future advances under any note or agreement secured by, the other mortgage, deed of trust or security agreement unless Lender consents in writing. 9. DUE ON SALE OR ENCUMBRANCE. Lender may, at its option, declare the entire balance of the Secured Debt to be immediately due and payable upon the creation of any lien, encumbrance, transfer, or sale, or contract for any of these on the Property. However, if the Property includes Mortgagor's residence, this section shall be subject to the restrictions imposed by federal law (12 C.F.R. 591), as applicable. For the purposes of this section, the term "Property" also includes any interest to all or any part of the Property. This covenant shall run with the Property and shall remain in effect until the Secured Debt is paid in full and this Mortgage is released. 10. TRANSFER OF AN INTEREST IN THE MORTGAGOR. If Mortgagor is an entity other than a natural person (such as a corporation or other organization), Lender may demand immediate payment if (1) a beneficial interest in Mortgagor is sold or transferred; (2) there is a change in either the identity or number of members of . a partnership or similar entity; or (3) there is a change in ownership of more than 25 percent of the voting stock of a corporation or similar entity. However, Lender may not demand payment in the above situations if it is prohibited by law as of the date of this Mortgage. 11. ENTITY WARRANTIES AND REPRESENTATIONS. If Mortgagor is an entity other than a natural person (such as a corporation or other organization), Mortgagor makes to Lender the following warranties and representations which shall be continuing as long as the Secured Debt remains outstanding: A. Mortgagor is an entity which is duly organized and validly existing in the Mortgagor's state of incorporation (or organization). Mortgagor is in good standing in all states in which Mortgagor transacts business. Mortgagor has the power and authority to own the Property and to carry on its business as now being conducted and, as applicable, is qualified to do so in each state in which Mortgagor operates. B. The execution, delivery and performance of this Mortgage by Mortgagor and the obligation evidenced by the Evidence of Debt are within the power of Mortgagor, have been duly authorized, have received all necessary governmental approval, and will not violate any provision of law, or order of court or governmental agency. C. Other than disclosed in writing Mortgagor has not changed its name within the last ten years and has not used any other trade or fictitious name. Without Lender's prior written consent, Mortgagor does not and will not use any other name and will preserve its existing name, trade names and franchises until the Secured Debt is satisfied. 12. PROPERTY CONDITION, ALTERATIONS AND INSPECTION. Mortgagor will keep the Property in good condition and make all repairs that are reasonably necessary. Mortgagor will give Lender prompt notice of any loss or damage to the Property. Mortgagor will keep the Property free of noxious weeds and grasses. Mortgagor will not initiate, join in or consent to any change in any private restrictive covenant, zoning ordinance or other public or private restriction limiting or defining the uses which may be made of the Property or any part of the Property, without Lender's prior written consent. Mortgagor will notify Lender of all demands, proceedings, claims, and actions against Mortgagor or any other owner made under law or regulation regarding use, ownership and occupancy of the Property. Mortgagor will comply with all legal requirements and restrictions, whether public or private, with respect to the use of the Property. Mortgagor also agrees that the nature of the occupancy and use will not change without Lender's prior written consent. No portion of the Property will be removed, demolished or materially altered without Lender's prior written consent except that Mortgagor has the right to remove items of personal property comprising a part of the Property that become worn or obsolete, provided that such personal property is replaced with other personal property at least equal in value to the replaced personal property, free from any title retention device, security agreement or other encumbrance. Such replacement of personal property will be deemed subject to the security interest created by this Mortgage. Mortgagor shall not partition or subdivide the Property without Lender's prior written consent. Lender or Lender's agents may, at Lender's option, enter the Property at any reasonable time for the purpose of inspecting the Property. Any inspection of the Property shall be entirely for Lender's benefit and Mortgagor will in no way rely on Lender's inspection. 13. AUTHORITY TO PERFORM. If Mortgagor fails to perform any of Mortgagor's duties under this Mortgage, or any other mortgage, deed of trust, security agreement or other lien document that has priority over this Mortgage, Lender may, without notice, perform the duties or cause them to be performed. Mortgagor appoints Lender as attorney in fact to sign Mortgagor's name or pay any (page 3 of 9) E,�® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 amount necessary for performance. If any construction on the Property is discontinued or not carried on in a reasonable manner, Lender may do whatever is necessary to protect Lender's security interest in the Property. This may include completing the construction. Lender's right to perform for Mortgagor shall not create an obligation to perform, and Lender's failure to perform will not preclude Lender from exercising . any of Lender's other rights under the law or this Mortgage. Any amounts paid by Lender for insuring, preserving or otherwise protecting the Property and Lender's security interest will be due on demand and will bear interest from the date of the payment until paid in full at the interest rate in effect from time to time according to the terms of the Evidence of Debt. 14. ASSIGNMENT OF LEASES AND RENTS. Mortgagor assigns, grants, bargains, warrants, conveys and mortgages to Lender as additional security all the right, title and interest in the following (Property). A. Existing or future leases, subleases, licenses, guaranties and any other written or verbal agreements for the use and occupancy of the Property, including but not limited to, any extensions, renewals, modifications or replacements (Leases). B. Rents, issues and profits, including but not limited to, security deposits, minimum rents, percentage rents, additional rents, common area maintenance charges, parking charges, real estate taxes, other applicable taxes, insurance premium contributions, liquidated damages following default, cancellation premiums, "loss of rents" insurance, guest receipts, revenues, royalties, proceeds, bonuses, accounts, contract rights, general intangibles, and all rights and claims which Mortgagor may have that in any way pertain to or are on account of the use or occupancy of the whole or any part of the Property (Rents). In the event any item listed as Leases or Rents is determined to be personal property, this Assignment will also be regarded as a security agreement. Mortgagor will promptly provide Lender with copies of the Leases and will certify these Leases are true and correct copies. The existing Leases will be provided on execution of the Assignment, and all future Leases and any other information with respect to these Leases will be provided immediately after they are executed. Mortgagor may collect, receive, enjoy and use the Rents so long as Mortgagor is not in default. Mortgagor will not collect in advance any Rents due in future lease periods, unless Mortgagor first obtains Lender's written consent. Upon default, Mortgagor will receive any Rents in trust for Lender and Mortgagor will not commingle the Rents with any other funds. When Lender so directs, Mortgagor will endorse and deliver any payments of Rents from the Property to Lender. Amounts collected will be applied at Lender's discretion to the Secured Debts, the costs of managing, protecting and preserving the Property, and other necessary expenses. Mortgagor agrees that this Security Instrument is immediately effective between Mortgagor and Lender and effective as to third parties on the recording of this Assignment. This Security Instrument will remain effective during any statutory redemption period until the Secured Debts are satisfied. As long as this Assignment is in effect, Mortgagor warrants and represents that no default exists under the Leases, and the parties subject to the Leases have not violated any applicable law on leases, licenses and landlords and tenants. Mortgagor, at its sole cost and expense, will keep, observe and perform, and require all other parties to the Leases to comply with the Leases and any applicable law. If Mortgagor or any party to the Lease defaults or fails to observe any applicable law, Mortgagor will promptly notify Lender. If Mortgagor neglects or refuses to enforce compliance with the terms of the Leases, then Lender may, at Lender's option, enforce compliance. Mortgagor will not sublet, modify, extend, cancel, or otherwise alter the Leases, or accept the surrender of the Property covered by the Leases (unless the Leases so require) without Lender's consent. Mortgagor will not assign, compromise, subordinate or encumber the Leases and Rents without Lender's prior written consent. Lender does not assume or become liable for the Property's maintenance, depreciation, or other losses or damages when Lender acts to manage, protect or preserve the Property, except for losses and damages due to Lender's gross negligence or intentional torts. Otherwise, Mortgagor will indemnify Lender and hold Lender harmless for all liability, loss or damage that Lender may incur when Lender opts to exercise any of its remedies against any party obligated under the Leases. 15. CONDOMINIUMS; PLANNED UNIT DEVELOPMENTS. If the Property includes a unit in a condominium or a planned unit development, Mortgagor will perform all of Mortgagor's duties under the covenants, by- laws,, or regulations of the condominium or planned unit development. 16. DEFAULT. Mortgagor will be in default if any of the following occur: A. Any party obligated on the Secured Debt fails to make payment when due; B. A breach of any term or covenant in this Mortgage, any prior mortgage or any construction loan agreement, security agreement or any other document evidencing, guarantying, securing or otherwise relating to the Secured Debt; C. The making or furnishing of any verbal or written representation, statement or warranty to Lender that is false or incorrect in any material respect by Mortgagor or any person or entity obligated on the Secured Debt; D. The death, dissolution, or insolvency of, appointment of a receiver for, or application of any debtor relief law to, Mortgagor or any person or entity obligated on the Secured Debt; (page 4 of 9) ® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 E. A good faith belief by Lender at any time that Lender is insecure with respect to any person or entity obligated on the Secured Debt or that the prospect of any payment is impaired or the value of the Property is impaired; F. A material adverse change in Mortgagor's business including ownership, management, and financial conditions, which Lender in its opinion believes impairs the value of the Property or repayment of the Secured Debt; or G. Any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M. 17. REMEDIES ON DEFAULT. In some instances, federal and state law will require Lender to provide Mortgagor with notice of the right to cure, mediation notices or other notices and may establish time schedules for foreclosure actions. Subject to these limitations, if any, Lender may accelerate the Secured Debt and foreclose this Mortgage in a manner provided by law if this Mortgagor is in default. Upon a default by the Mortgagor, the Lender may take possession of the Property itself or through a court appointed receiver, without regard to the solvency or insolvency of the Mortgagor, the value of the Property, the adequacy of the Lender's security, or the existence of any deficiency judgment, and may operate the Property and collect the rents and apply them to the costs of operating the Property and /or to the unpaid debt. At the option of Lender, all or any part of the agreed fees and charges, accrued interest and principal shall become immediately due and payable, after giving notice if required by law, upon the occurrence of a default or anytime thereafter. In addition, Lender shall be entitled to all the remedies provided by law, the Evidence of Debt, other evidences of debt, this Mortgage and any related documents. All remedies are distinct, cumulative and not exclusive, and the Lender is entitled to all remedies provided at law or equity, whether expressly set forth or not. The acceptance by Lender of any sum in payment or partial payment on the Secured Debt after the balance is due or is accelerated or after foreclosure proceedings are filed shall not constitute a waiver of Lender's right to require full and complete cure of any existing default. By not exercising any remedy on Mortgagor's default, Lender does not waive Lender's right to later consider the event a default if it continues or happens again. 18. REDEMPTION. Mortgagor agrees that in the event of foreclosure of this Mortgage, at the sole discretion of Lender, Lender may elect to reduce or extend the period of redemption for the sale of the Property to a period of time as may then be authorized under the circumstances and under any section of Iowa Code Chapter 628, or any other Iowa Code section, now in effect or as may be in effect at the time of foreclosure. 19. EXPENSES; ADVANCES ON COVENANTS; ATTORNEYS' FEES; COLLECTION COSTS. Except when prohibited by law, Mortgagor agrees to pay all of Lender's expenses if Mortgagor breaches any covenant in this Mortgage. Mortgagor will also pay on demand all of Lender's expenses incurred in collecting, insuring, preserving or protecting the Property or in any inventories, audits, inspections or other examination by Lender in respect to the Property. Mortgagor agrees to pay all costs and expenses incurred by Lender in enforcing or protecting Lender's rights and remedies under this Mortgage, including, but not limited to, attorneys' fees, court costs, and other legal expenses. Once the Secured Debt is fully and finally paid, Lender agrees to release this Mortgage and Mortgagor agrees to pay for any recordation costs. All such amounts are due on demand and will bear interest from the time of the advance at the highest rate in effect, from time to time, as provided in the Evidence of Debt and as permitted by law. 20. ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES. As used in this section, (1) "Environmental Law" means, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, 42 U.S.C. 9601 et seq.), all other federal, state and local laws, regulations, ordinances, court orders, attorney general opinions or interpretive letters concerning the public health, safety, welfare, environment or a hazardous substance; and (2) "Hazardous Substance" means any toxic, radioactive or hazardous material, waste, pollutant or contaminant which has characteristics which render the substance dangerous or potentially dangerous to the public health, safety, welfare or environment. The term includes, without limitation, any substances defined as "hazardous material," "toxic substances," "hazardous waste" or "hazardous substance" under any Environmental Law. Mortgagor represents, warrants and agrees that, except as previously disclosed and acknowledged in writing: A. No Hazardous Substance has been, is, or will be located, transported, manufactured, treated, refined, or handled by any person on, under or about the Property, except in the ordinary course of business and in strict compliance with all applicable Environmental Law. B. Mortgagor has not and will not cause, contribute to, or permit the release of any Hazardous Substance on the Property. C. Mortgagor will immediately notify Lender if (1) a release or threatened release of Hazardous Substance occurs on, under or about the Property or migrates or threatens to migrate from nearby property; or (2) there is a violation of any Environmental Law concerning the Property. In such an event, Mortgagor will take all necessary remedial action in accordance with Environmental Law. (page 5 of 9) ® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 D. Mortgagor has no knowledge of or reason to believe there is any pending or threatened investigation, claim, or proceeding of any kind relating to (1) any Hazardous Substance located on, under or about the Property; or (2) any violation by Mortgagor or any tenant of any Environmental Law. Mortgagor will immediately notify Lender in writing as soon as Mortgagor has reason to believe there is any such pending or threatened investigation, claim, or proceeding. In such an event, Lender has the right, but not the obligation, to participate in any such proceeding including the right to receive copies of any documents relating to such proceedings. E. Mortgagor and every tenant have been, are and shall remain in full compliance with any applicable Environmental Law. F. There are no underground storage tanks, private dumps or open wells located on or under the Property and no such tank, dump or well will be added unless Lender first consents in writing. G. Mortgagor will regularly inspect the Property, monitor the activities and operations on the Property, and confirm that all permits, licenses or approvals required by any applicable Environmental Law are obtained and complied with. H. Mortgagor will permit, or cause any tenant to permit, Lender or Lender's agent to enter and inspect the Property and review all records at any reasonable time to determine (1) the existence, location and nature of any Hazardous Substance on, under or about the Property; (2) the existence, location, nature, and magnitude of any Hazardous Substance that has been released on, under or about the Property; or (3) whether or not Mortgagor and any tenant are in compliance with applicable Environmental Law. I. Upon Lender's request and at any time, Mortgagor agrees, at Mortgagor's expense, to engage a qualified environmental engineer to prepare an environmental audit of the Property and to submit the results of such audit to Lender. The choice of the environmental engineer who will perform such audit is subject to Lender's approval. J. Lender has the right, but not the obligation, to perform any of Mortgagor's obligations under this section at Mortgagor's expense. K. As a consequence of any breach of any representation, warranty or promise made in this section, (1) Mortgagor will indemnify and hold Lender and Lender's successors or assigns harmless from and against all losses, claims, demands, liabilities, damages, cleanup, response and remediation costs, penalties and expenses, including without limitation all costs of litigation and attorneys' fees, which Lender and Lender's successors or assigns may sustain; and (2) at Lender's discretion, Lender may release this Mortgage and in return Mortgagor will provide Lender with collateral of at least equal value to the Property secured by this Mortgage without prejudice to any of Lender's rights under this Mortgage. L. Notwithstanding any of the language contained in this Mortgage to the contrary, the terms of this section shall survive any foreclosure or satisfaction of this Mortgage regardless of any passage of title to Lender or any disposition by Lender of any or all of the Property. Any claims and defenses to the contrary are hereby waived. 21. CONDEMNATION. Mortgagor will give Lender prompt notice of any action, real or threatened, by private or public entities to purchase or take any or all of the Property, including any easements, through condemnation, eminent domain, or any other means. Mortgagor further agrees to notify Lender of any proceedings instituted for the establishment of any sewer, water, conservation, ditch, drainage, or other district relating to or binding upon the Property or any part of it. Mortgagor authorizes Lender to intervene in Mortgagor's name in any of the above described actions or claims and to collect and receive all sums resulting from the action or claim. Mortgagor assigns to Lender the proceeds of any award or claim for damages connected with a condemnation or other taking of all or any part of the Property. Such proceeds shall be considered payments and will be applied as provided in this Mortgage. This assignment of proceeds is subject to the terms of any prior mortgage, deed of trust, security agreement or other lien document. 22. INSURANCE. Mortgagor agrees to maintain insurance as follows: A. Mortgagor shall keep the improvements now existing or hereafter built on the Property insured against loss by fire, hazards included within the term "extended coverage" and any other hazards, including floods or flooding, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. What Lender requires pursuant to the preceding two sentences can change during the term of the Secured Debt. The insurance carrier providing the insurance shall be chosen by Mortgagor subject to Lender's approval, which shall not be unreasonably withheld. If Mortgagor fails to maintain the coverage described above, Lender may, at Lender's option, obtain coverage to protect Lender's rights in the Property according to the terms of this Mortgage. All insurance policies and renewals shall be acceptable to Lender and shall include a standard "mortgage clause" and, where applicable, "lender loss payee clause." Mortgagor shall immediately notify Lender of cancellation or termination of the insurance. Lender shall have the right to hold the policies and renewals. If Lender requires, Mortgagor shall immediately give to Lender all receipts of paid premiums and renewal notices. Upon loss, Mortgagor shall give immediate notice to the insurance carrier and Lender. Lender may make proof of loss if not made immediately by Mortgagor. (page 6 of .9) Eye® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 Unless Lender and Mortgagor otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged if the restoration or repair is economically feasible and Lender's security is not lessened, If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the Secured Debt, whether or not then due, with any excess paid to Mortgagor. If Mortgagor abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay the Secured Debt whether or not then due. The 30 -day period will begin when the notice is given. Unless Lender and Mortgagor otherwise agree in writing, any application of proceeds to principal shall not extend or postpone the due date of scheduled payments or change the amount of the payments. If the Property is acquired by Lender, Mortgagor's right to any insurance policies and proceeds resulting from damage to the Property before the acquisition shall pass to Lender to the extent of the Secured Debt immediately before the acquisition. B. Mortgagor agrees to maintain comprehensive general liability insurance naming Lender as an additional insured in an amount acceptable to Lender, insuring against claims arising from any accident or occurrence in or on the Property. C. Mortgagor agrees to maintain rental loss or business interruption insurance, as required by Lender, in an amount equal to at least coverage of one year's debt service, and required escrow account deposits (if agreed to separately in writing), under a form of policy acceptable to Lender. 23. NO ESCROW FOR TAXES AND INSURANCE. Unless otherwise provided in a separate agreement, Mortgagor will not be required to pay to Lender funds for taxes and insurance in escrow. 24. FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Mortgagor will provide to Lender upon request, any financial statement or information Lender may deem necessary. Mortgagor warrants that all financial statements and information Mortgagor provides to Lender are, or will be, accurate, correct, and complete. Mortgagor agrees to sign, deliver, and file as Lender may reasonably request any additional documents or certifications that Lender may consider necessary to perfect, continue, and preserve Mortgagor's obligations under this Mortgage and Lender's lien status on the Property. If Mortgagor fails to do so, Lender may sign, deliver, and file such documents or certificates in Mortgagor's name and Mortgagor hereby irrevocably appoints Lender or Lender's agent as attorney in fact to do the things necessary to comply with this section. 25. JOINT AND INDIVIDUAL LIABILITY; CO- SIGNERS; SUCCESSORS AND ASSIGNS BOUND. All duties under this Mortgage are joint and individual. If Mortgagor signs this Mortgage but does not sign the Evidence of Debt, Mortgagor does so only to mortgage Mortgagor's interest in the Property to secure payment of the Secured Debt and Mortgagor does not agree to be personally liable on the Secured Debt. Mortgagor agrees that Lender and any party to this Mortgage may extend, modify or make any change in the terms of this Mortgage or the Evidence of Debt without Mortgagor's consent. Such a change will not release Mortgagor from the terms of this Mortgage. The duties and benefits of this Mortgage shall bind and benefit the successors and assigns of Mortgagor and Lender. If this Mortgage secures a guaranty between Lender and Mortgagor and does not directly secure the obligation which is guarantied, Mortgagor agrees to waive any rights that may prevent Lender from bringing any action or claim against Mortgagor or any party indebted under the obligation including, but not limited to, anti - deficiency or one - action laws. 26. APPLICABLE LAW; SEVERABILITY; INTERPRETATION. This Mortgage is governed by the laws of the jurisdiction in which Lender is located, except to the extent otherwise required by the laws of the jurisdiction where the Property is located. This Mortgage is complete and fully integrated. This Mortgage may not be amended or modified by oral agreement. Any section or clause in this Mortgage, attachments, or any agreement related to the Secured Debt that conflicts with applicable law will not be effective, unless that law expressly or impliedly permits the variations by written agreement. If any section or clause of this Mortgage cannot be enforced according to its terms, that section or clause will be severed and will not affect the enforceability of the remainder of this Mortgage. Whenever used, the singular shall include the plural and the plural the singular. The captions and headings of the sections of this Mortgage are for convenience only and are not to be used to interpret or define the terms of this Mortgage. Time is of the essence in this Mortgage. 27. NOTICE. Unless otherwise required by law, any notice shall be given by delivering it or by mailing it by first class mail to the appropriate party's address on page 1 of this Mortgage, or to any other address designated in writing. Notice to one mortgagor will be deemed to be notice to all mortgagors. 28. WAIVERS. Except to the extent prohibited by law, Mortgagor waives any rights relating to reinstatement, the marshalling of liens and assets, all rights of dower and distributive share and all homestead exemption rights relating to the Property. 29. U.C.C. PROVISIONS. If checked, the following are applicable to, but do not limit, this Mortgage: ❑ Construction Loan. This Mortgage secures an obligation incurred for the construction of an improvement on the Property. IN Fixture Filing. Mortgagor grants to Lender a security interest in all goods that Mortgagor owns now or in the future and that are or will become fixtures related to the Property. (page 7 of 9) ® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 ❑ Crops; Timber; Minerals; Rents, Issues and Profits. Mortgagor grants to Lender a security interest in all crops, timber and minerals located on the Property as well as all rents, issues and profits of them including, but not limited to, all Conservation Reserve Program (CRP) and Payment in Kind (PIK) payments and similar governmental programs (all of which shall also be included in the term "Property "). IK Personal Property. Mortgagor grants to Lender a security interest in all personal property located on or connected with the Property. This security interest includes all farm products, inventory, equipment, accounts, documents, instruments, chattel paper, general intangibles, and all other items of personal property Mortgagor owns now or in the future and that are used or useful in the construction, ownership, operation, management, or maintenance of the Property. The term "personal property" specifically excludes that property described as "household goods" secured in connection with a "consumer" loan as those terms are defined in applicable federal regulations governing unfair and deceptive credit practices. ® Filing As Financing Statement. Mortgagor agrees and acknowledges that this Mortgage also suffices as a financing statement and as such, may be filed of record as a financing statement for purposes of Article 9 of the Uniform Commercial Code. A carbon, photographic, image or other reproduction of this Mortgage is sufficient as a financing statement. 30. OTHER TERMS. If checked, the following are applicable to this Mortgage: ❑ Purchase Money Mortgage. This is a purchase money mortgage as defined by Iowa law. ❑ Line of Credit. The Secured Debt includes a revolving line of credit provision. Although the Secured Debt may be reduced to a zero balance, this Mortgage will remain in effect until released. ❑ Agricultural Property. Mortgagor covenants and warrants that the Property will be used principally for agricultural or farming purposes and that Mortgagor is an individual or entity allowed to own agricultural land as specified by law. ❑ Separate Assignment. The Mortgagor has executed or will execute a separate assignment of leases and rents. If the separate assignment of leases and rents is properly executed and recorded, then the separate assignment will supersede this Security Instrument's "Assignment of Leases and Rents" section. ❑ Additional Terms. SIGNATURES: By signing below, Mortgagor agrees to the terms and covenants contained in this Mortgage and in any attachments. Mortgagor also acknowledges receipt of a copy of this Mortgage on the date stated above on Page 1. ❑ Actual authority was granted to the parties signing below by resolution signed and dated Entity Name:PLATINUM HOLDINGS, LLC (Signature)JAMES P. RIX, CHIEF EXECUTIVE OFFICER (Signature) (Signature) (Signature) (Date) (Date) (Date) (Date) (page 8 of 9) ® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 ACKNOWLEDGMENT: STATE OF , COUNTY OF } ss. (Individual) On this day of before me, a Notary Public in the state of Iowa, personally appeared (Business or Entity Acknowl- edgment) to me known to be the person(s) named in and who executed the foregoing instrument, and acknowledged that executed the same as voluntary act and deed. My commission expires: (Notary Public) STATE OF IOWA , COUNTY OF DUBUQUE } ss. On this 12TH day of DECEMBER, 2011 before me, a Notary Public in the state of Iowa, personally appeared JAMES P. RIX to me personally known, who being by me duly sworn or affirmed did say that that person is CHIEF EXECUTIVE OFFICER of said entity, that (the seal affixed to said instrument is the seal of said entity or no seal has been procured by said entity) and that said instrument was signed and sealed, if applicable, on behalf of the said entity by authority of its board of directors /partners /members and the said CHIEF EXECUTIVE OFFICER acknowledged the execution of said instrument to be the voluntary act and deed of said entity by it voluntarily executed. My commission expires: (Notary Public) VICTORIA J. RICHTER (In the following statement "I" means the Mortgagor.) I understand that homestead property is in many cases protected from the claims of creditors and exempt from judicial sale; and that by signing this contract, I voluntarily give up my rights to this protection for this property with respect to claims based upon this contract. (Signature) (Date) (Signature) (Date) (page 9 of 9) ® ©1993, 2001 Bankers Systems, Inc., St. Cloud, MN Form AGCO - RESI -IA 10/24/2005 Exhibit "A" Re: Lot 1 of Riverwalk 4th Addition, in the City of Dubuque, Iowa, according to the recorded plat thereof 2 The Mortgaged Property. Mortgagor grants to Mortgagee, to have and to hold the Mortgaged Property, and all parts thereof, to Mortgagee, its successors and assigns forever, to its and their own proper use and benefit forever, subject, however, to the terms and conditions in this Mortgage. All of the property described below is collectively referred to as the "Mortgaged Property." 2.1. Leasehold. All of Mortgagor's right, title and interest in that certain Lease, dated June 4, 2001, by and between the Mortgagor and the City of Dubuque, Iowa (the "City"), pursuant to which the City has leased to Mortgagor the following described premises situated in Dubuque County, Iowa, described above on page 1 (the "Leasehold "). 2.2. Improvements. (1) All buildings, structures and improvements of every nature now or hereafter situated on the Leasehold; all building materials, supplies and other property stored at or delivered to the Leasehold or any other location for incorporation into any of the buildings, structures and improvements located on the Leasehold; (2) All fixtures, machinery, appliances, equipment, furniture and personal property of every nature whatsoever located in or on, or attached to, and used or intended to be used in connection with the Leasehold, such buildings, structures or other improvements, or in connection with any construction being conducted thereon, including all extensions, additions, improvements, betterments, renewals, substitutions and replacements to any of the foregoing; (3) All right, title and interest of Mortgagor to such personal property and fixtures, whether as owner, chattel lessee or otherwise. It is understood and agreed that all such personal property and fixtures shall be part of the Leasehold encumbered by this Mortgage, whether or not affixed to the Leasehold, to the fullest extent permitted by law, are to be conclusively deemed to be fixtures, a part of the Leasehold and a part of the security provided by this Mortgage. All of the property described in this Section is collectively referred to as the "Improvements." 2.3. Streets, Etc. All estate, right, title and interest of Mortgagor, of whatever character, now owned or hereafter acquired, to: (1) All streets, roads and public places adjoining the Leasehold, and the land lying in the bed of such streets, roads and public places: and (2) All other sidewalks, alleys, ways, passages, water courses, strips and gores of land adjoining or used or intended to be used in connection with any of the property described above in this Section. 2.4. Easements, Etc. All right, title and interest of Mortgagor to all easements, rights -of -way and rights of use or passage, public or private, and all estates, interests, benefits, powers, rights including, without limitation, any and all lateral support, drainage, slope, sewer, water, air, mineral, oil, gas and subsurface rights, privileges, licenses, profits, rents, royalties, tenements, hereditaments, reversions and subreversions, remainders and subremainders and appurtenances whatsoever in any way belonging, relating or appertaining to any of the property described above, or any part of such property, or which hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by Mortgagor. 2.5. Judgments, Refunds, Accounts Receivable, Proceeds, Etc. (1) Any and all judgments, settlements, claims, awards, insurance proceeds and other proceeds and compensation, and interest thereon (collectively, "Compensation "), hereafter made or to be made or hereafter payable in connection with any casualty or other damage to the Improvements, any part of such property or any rights appurtenant thereto, or in connection with any condemnation proceedings affecting such property or rights or any taking under power of eminent domain (or any conveyance in lieu of or under threat of any such taking) of such property or rights, including, without limitation, any and all Compensation for change of grade of streets or any other injury or decrease in the value of such property or rights, any and all proceeds of any sales, assignments or other dispositions of such property or rights, (2) Any and all refunds of insurance premiums, taxes, assessments, water charges, sewer rents or other impositions in respect of such property or rights, (3) All accounts receivable, contract rights, general intangibles, permits, licenses (including, without limitation, any and all liquor, cabaret and vending licenses), approvals, actions and rights in action (including, without limitation, all rights to insurance proceeds and unearned insurance premiums) arising from or relating to any such property or rights, and (4) All proceeds, products, replacements, additions, substitutions, renewals, accessions and accretions of and to such property or rights. 2.6. Rents, Royalties, Etc, All rents, royalties, issues, profits, revenues, income and other benefits (which terms, whenever used in this Mortgage, shall include, without limitation, all monetary sums paid or payable by guests or occupants of hotel or motel rooms within the improvements and all accounts receivable with respect to such sums), to which Mortgagor may now or hereafter be entitled from the Improvements, above, or any part of such property, to be applied against the indebtedness and other sums secured hereby; provided, however, that permission is hereby given to Mortgagor, so long as no Event of Default (as defined below) shall have occurred, to collect and use such rents, royalties, issues, profits, revenues, income and other benefits as they become due and payable, but not in advance thereof. The foregoing assignment shall be fully operative without any further action by any party, and specifically Mortgagee shall be entitled, at its option upon the occurrence of an Event of Default, to all such rents, royalties, issues, profits, revenues, income and other benefits, whether or not Mortgagee takes possession of such property. Upon the occurrence of an Event of Default, the permission given to Mortgagor to collect such rents, royalties, issues, profits, revenues, income and other benefits shall terminate. Neither the exercise of any rights under this Section by Mortgagee nor the application of any such rents, royalties, issues, profits, revenues, income or other benefits to the indebtedness and other sums secured hereby, shall cure or waive any Event of Default or notice of any Event of Default hereunder or invalidate any act done pursuant hereto or to any such notice, but shall be cumulative of all other rights and remedies. 2.6.1. Present Assignment. The foregoing provisions shall constitute an absolute and present assignment of the rents, royalties, issues, profits, revenues, income and other benefits from the Improvements, subject, however, to the conditional permission given to Mortgagor to collect and use such rents, royalties, issues, profits, revenues, income and other benefits as provided above. The existence or exercise of such right of Mortgagor shall not operate to subordinate this assignment to any subsequent assignment, in whole or in part, by Mortgagor, and any such subsequent assignment by Mortgagor shall be subject to the rights of Mortgagee under this Mortgage. 2.7. Leases, Etc. All right, title and interest of Mortgagor in and to any and all leases, subleases, occupancy, purchase and sale or similar agreements (collectively "Leases ") now or hereafter on or affecting the Improvements, or any part of such property, together with all security therefor (including, without limitation, any and all right, title and interest of Mortgagor in and to property of any tenant or other party under any such lease, and all cash or security deposits, advance rentals and deposits or payments of a similar nature thereunder) and together with all moneys payable thereunder, and all books and records which reflect payments made under the leases and all security therefore, subject, however, to the conditional permission hereinabove given to Mortgagor to collect the rents, income and other benefits arising under any such lease. Mortgagee shall have and is hereby granted the right, at any time and from time to time, to notify any lessee, sublessee, licensee, occupant or purchaser of the rights of Mortgagee as provided by this Section. 2.8. After Acquired Property. Any and all further or greater estate, right, title, interest, claim and demand whatsoever of Mortgagor, whether now owned or hereafter acquired, in or to any of the property described in the foregoing Subsections, or any rights or interests appurtenant thereto. 2.9. Performance of Obligations. If Mortgagor promptly pays to Mortgagee the Indebtedness as defined below, and at the times and in the manner required by this Mortgage and in all other instruments securing the Indebtedness, without any deduction or credit for taxes or other similar charges paid by Mortgagor, and performs all the covenants and promises in the Construction and Term Notes, and any renewal, extension or modification thereof, in this Mortgage and in all other instruments securing the Indebtedness, to be kept, performed or observed by Mortgagor, then this Mortgage, and the grants, conveyances and assignments contained in this Mortgage shall cease and be void. Otherwise they shall remain in full force and effect. CONSENT AND SUBORDINATION TO MORTGAGE Re: Lot 1 of RIVERWALK 3" ADDITION, in the City of Dubuque, Iowa, according to the recorded Plat thereof. The undersigned City of Dubuque, Iowa ( "City"), is the owner of the above - described property ( "the Property") described in the mortgage ("the Mortgage ") to which this Consent and Subordination to Mortgage is attached„ and hereby consents to the mortgaging of the Property by Platinum Holdings, L.L.C., an Iowa limited liability company (Platinum), in favor of American Trust & Savings Bank, Dubuque, Iowa (Bank), in an amount not to exceed Five Hundred Thousand & 00 /100 Dollars ($500,000.00). City further consents that the interest owned by City shall be subordinate, junior and inferior to the mortgage established in favor of Bank, subject to the following: 1. In the event foreclosure is brought, City consents to being named a party defendant for the purposes of foreclosing its interests in the Property, but with no personal liability being incurred or any deficiency judgment resulting by or against City. 2. In the event of any foreclosure by Bank, Bank agrees to be bound by the terms and conditions of that certain Minimum Assessment Agreement entered into between City and Platinum on June 4, 2001, and that certain Amended Development Agreement entered into between City and Platinum on January 15, 2001, with respect to the Property. 3. City agrees that this Consent and Subordination to Mortgage document will be attached to, and become a part of, the executed Mortgage between Bank and Platinum. 4. Bank executes this Consent and Subordination to Mortgage solely for the purpose of agreeing to be bound by the terms of the agreements referred to in Section 2, above, in the event of foreclosure by Bank. Dated , 2011. City of Dubuque, owa By: By: K vin S. Firnstahl, City Clerk American Trust & Savings Bank By: Victoria J. Richter, Senior Vice President wp60docs\ATSB\Platinum. Mortgage Consent & Subordination 11.22.11 Page 1 of 2 STATE OF IOWA, D : UQUE COUNTY) ss: On this 2514 of /` / , / ' , 2011, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Roy D. Buol and Kevin S. Fimstahl, to me personally known, who, being by me duly sworn, did say that they are the Mayor and City Clerk, respectively, of the City of Dubuque, Iowa, executing the within and foregoing instrument, that no seal has been procured by the corporation; that said instrument was signed on behalf of the City by authority of its City Council; and that Roy D. Buol and Kevin S. Fimstahl, as Mayor and City Clerk, respectively, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the City, by it and by • qm voluntargy e -cuted. SUSAN M. WINTER COMMISSION NO.183274 MY COMMISSION EXPIRES 2/14/14 STATE OF IOWA, DUBUQUE COUNTY) ss: No . ry Public, State of Iowa On this day of , 2001, before me, the undersigned, a Notary Public in and for the State of Iowa, personally appeared Victoria J. Richter, to me personally known, who, being by me duly sworn, did say that she is a Senior Vice President of American Trust & Savings Bank executing the within and foregoing instrument, that no seal has been procured by the corporation; that said instrument was signed on behalf of the corporation by authority of its Board of Directors; and that Victoria J. Richter, as Senior Vice President, acknowledged the execution of the foregoing instrument to be the voluntary act and deed of the corporation, by it and by her voluntarily executed. Notary Public, State of Iowa Page 2 of 2