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Cottingham and Butler Downtown Rehabilitation Loan Agreement_800 Main St. Economic Development Department 50 West 13th Street Dubuque, Iowa 52001-4864 Office (563) 589-4393 TTY (563) 690-6678 http://www.cityofdubuque.org TO: Michael Van Milligen, City Manager FROM: Maurice Jones, Economic Development Director SUBJECT: Release of Real Estate Mortgages to Security Partners, L.P. and Security Investments, LLC on the Property at 800 Main Street DATE: January 19, 2018 INTRODUCTION The purpose of this memorandum is to inform you of final loan payments and to request your signature on two releases of mortgage. BACKGROUND Security Partners, L.P. obtained a $300,000 Downtown Rehabilitation Loan from the City on November 13, 1998 (Loan #3-98) to help finance window replacement and the creation of 57 jobs at 800 Main Street. The loan was secured by a mortgage (Instrument #18110-98) on the property, also known as the Security Building. A second $300,000 Downtown Rehabilitation Loan (Loan #1-07) was entered into by Security Investments, LLC on November 19, 2007, secured by a mortgage (Instrument # 2008-00001182) on the same property. Both mortgages have since been assigned to Cottingham & Butler, Inc. DISCUSSION According to the Finance Director Jean Nachtman, Loan #1-07 was repaid in full on January 28, 2013 with a payment of $110,000.00, and Loan #3-98 was repaid in full on September 27, 2017 with a payment of 21,405.94. RECOMMENDATION/ ACTION STEP I request that you sign the attached two Releases of Real Estate Mortgage on the property at 800 Main Street. cc: Maurice Jones, Economic Development Director Jean Nachtman, Finance Director THE CITY OF DLTB E MEMORANDUM Masterpiece on the Mississippi November 14, 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Downtown Rehabilitation Loan and Facade Grant to Security Investments, LLC for Cottingham & Butler's Security Building Renovation Economic Development Director Dave Heiar is recommending approval of a loan agreement for a Downtown Rehabilitation Loan of $300,000, a $10,000 Facade Grant, and a $10,000 Design Grant for Security Investments, LLC to support Cottingham & Butler's rehabilitation of the Security Building on Main Street. I concur with the recommendation and respectfully request Mayor and City Council approval. V ~~ Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director THE CTTY OF L~LTB E MEM R O ANDUM Masterpiece ~~n the Mississippi November 13, 2007 TO: Michael Van Milligen, City Manager -~ _ ~~ FROM: David J. Heiar, Economic Development Director ~~' SUBJECT: Downtown Rehabilitation Loan and Facade Grant to Security Investments, LLC for Cottingham & Butler's Security Building renovation. INTRODUCTION This memorandum presents for City Council consideration a Resolution approving a loan agreement for a Downtown Rehabilitation Loan of $300,000, a $10,000 Facade Grant, and a $10,000 Design Grant for Security Investments, LLC to support Cottingham & Bulter's rehabilitation of the Security Building on Main Street. BACKGROUND On August 6, 2007, the City Council approved a Development Agreement with Cottingham & Butler, Inc. outlining an incentive package for the rehabilitation of the Security Building located at 800 Main Street. Cottingham & Butler has committed to retaining 306 jobs and creating 90 new jobs in the building. The Development Agreement includes a Downtown Rehabilitation Loan/Grant to encourage private investment and rehabilitation efforts in the City's Greater Downtown Urban Renewal District. The loan/grant program, capitalized with funds available through the City's tax increment financing district, provides for a maximum of $300,000 in attractive low-interest loan monies. The program is unique in that grants of up to $10,000 are available to offset necessary predevelopment costs. A facade grant is also available of up to $10,000. The program also includes a forgivable loan element whereby qualifying applicants may have up to the full amount of the loan forgiven as an incentive for the creation of new employment and housing opportunities in the district. After the original Development Agreement was approved by the City Council, the City discovered that Cottingham & Butler is not the owner of the building. The building is owned by Security Investments, LLC, which is a subsidiary company that also needs to be a party in the Agreement. The Agreement has been amended to include Security Investments, LLC as the Owner and Cottingham & Butler as the Developer. DISCUSSION This entire renovation of the Security building was estimated to cost over $4 million according to the Development Agreement. Recent estimates from the Company have shown the project will cost substantially more than originally anticipated. The RESOLUTION NO. 546-07 A RESOLUTION AUTHORIZING EXECUTION OF A DOWNTOWN REHABILITATION LOAN, FACADE GRANT, AND DESIGN GRANT TO COTTINGHAM & BUTLER SECURITY BUILDING RENOVATION. Whereas, the City of Dubuque, Iowa, has created a Downtown Rehabilitation Loan/Grant Program for the purpose of stimulating reinvestment in the Greater Downtown Urban Renewal District; and Whereas, the City of Dubuque, Iowa is encouraging the use of this loan/grant program to finance code compliance activities and to spur job creation activities; and Whereas, the amended and restated development agreement with Cottingham & Butler, Inc. and Security Investments, LLC approved by resolution 494-07 committed to a $300,000 Downtown Rehabiltation Loan, $10,000 Facade Grant, and $10,000 Design Grant for the renovation of the Security Building. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the City Council approves the attached Loan Agreement with Security Investments, LLC. Section 2. That the City Manager is hereby authorized to execute, on behalf of the City Council of the City of Dubuque, Iowa, all necessary loan documents and is further authorized to disburse loan funds from the Downtown Rehabilitation Loan/Grant Program, in accordance with the terms and conditions of the executed agreement. Passed, approved and adopted this 19th day of November, 2007. Patricia A. Cline, Mayor Pro Tem Attest: Kevin S. Firnstahl, Assistant City Clerk F:IUSERS\Adejong\Downtown Rehab LoanlCottingham & Butler Security Building\20071119 DRLP Approval Resolution.doc EXHIBIT A City of Dubuque, Iowa PROMISSORY NOTE Date: , 2007 Loan Number: DRLP # 1 - 07 Fund Source: Downtown Rehabilitation Loan Program (TIF) $300,000 FOR VALUE RECEIVED, the undersigned, Security Investments, LLC 800 Main Street, Dubuque, Iowa, promises to pay to the order of the City of Dubuque, Iowa, 50 W. 13th Street, Dubuque, Iowa, 52001, or at such place as it may direct, the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000), together with interest at the rate of 3 % per annum, upon the unpaid balance, in monthly interest only payments for the first sixty (60) months of the loan and monthly principal and interest payments, amortized over an additional one hundred-eighty (180) months, beginning in the sixty-first month of the loan, on the 1st day of each month beginning after the final disbursement of the loan proceeds and continuing on the 1 st day of each month until paid in full. The entire outstanding principal balance and interest, if not sooner paid, shall be paid in full on the 1st day of the two hundred-fortieth (240) month after final disbursement of the loan proceeds. If a default occurs under this Promissory Note or any of the other agreements between the undersigned and the holder and is not cured within TEN (10) DAYS after written notice to the undersigned, then the holder may, as its right and option, declare immediately due and payable the principal balance of this Promissory Note and interest accrued hereon. The undersigned further agrees to pay all costs of collection, including reasonable attorneys' fees. The City of Dubuque may at any time renew this Promissory Note or extend its maturity date for any period and release any security for, or any party to this Promissory Note, all without notice to or consent of and without releasing any maker, accommodation maker, endorser or guarantor from any liability on the Promissory Note. Presentment or other demand for payment, notice of dishonor and protest are hereby waived by the undersigned and each endorser and guarantor. This Promissory Note is subject to the Loan Agreement of same date by and between the undersigned and the City of Dubuque (including but not limited to a reduction in the principal amount of this Promissory Note as authorized by paragraph 5 of said Loan Agreement) and any default under said Loan Agreement is a default under this Promissory Note. Signed, Security Investments, LLC. John E. Butler, Title CITY OF DUBUQUE, IOWA DOWNTOWN REHABILITATION LOAN PROGRAM LOAN AGREEMENT NUMBER: DRLP # 1 - 07 This AGREEMENT, dated as of the day of , 2007, is entered into by and between the CITY OF DUBUQUE, IOWA, a municipal corporation organized and existing under the laws of the State of Iowa (hereinafter referred to as the "City") and Security Investments, LLC (hereinafter referred to as the "Owner"). WITNESSETH: Whereas, an Amended an Restated Development Agreement with Cottingham & Butler, Inc. and Security Investments, LLC was approved by the Dubuque City Council on October 1, 2007 by Resolution No. 494-07 to provide a $300,000 Downtown Rehabilitation Loan for the project. Whereas, the Owner's property of 800 Main Street, Dubuque, Iowa, (hereinafter referred to as the "Building") is located within the boundaries of the Greater Downtown Urban Renewal District most recently established by Resolution No. 108-07 on February; and Whereas, the goals and objectives of the Greater Downtown Urban Renewal Plan (the "Plan") provide for the creation of the financial incentives needed to eliminate conditions of blight through a program of voluntary or compulsory repair and rehabilitation of buildings and to retain or create employment and/or housing opportunities within the District; and Whereas, the City desires to assist the Owner in its efforts to bring said Building into compliance with local codes and ordinances, to eliminate certain conditions of physical decay, and to retain or create employment and/or housing opportunities within the District; and Whereas, without the assistance of the Loan Program, the Owner would be unable to operate the Building to its fullest capacity, thereby threatening local employment and/or housing opportunities. NOW THEREFORE, in consideration of the premises and respective covenants, agreements and representations hereinafter set forth, the parties agree as follows: 1. SOURCE OF FUNDS. City is prepared to provide financial assistance to qualified parties through the use of tax increment financing under Chapter 403 of the Iowa Code, and has allocated funds sufficient to carry out its obligations under this Agreement. 2. LOAN TERMS. City agrees to loan to Owner on the terms and conditions set forth herein the amount of three hundred thousand dollars ($300,000) that shall consist of the Loan Program funds, if and only if such funds are available. Payments shall be based on work completed and expenses encumbered. The term of the loan shall be twenty (20) years. Interest on the loan shall be three percent (3.0%) per annum. Monthly interest payments shall become due and payable the first sixty (60) months of the loan. Monthly interest and principal payments, amortized over a fifteen year period, shall become due and payable beginning the sixty-first (61) month of the loan. The entire balance of the loan, including interest and principal, shall become due and payable not later than the 240th month of the loan. At the time of the initial disbursement of loan funds to Owner, Owner shall execute the Promissory Note in the form attached hereto as Exhibit A payable to the order of the City in the principal amount of three hundred thousand dollars ($300,000) and the Mortgage, attached as Exhibit B. 3. DISBURSEMENT AND USE OF LOAN FUNDS. Loan funds shall be disbursed to Owner by City for Qualifying Project Expenses, defined in Paragraph 27(c), for amounts not in excess of the total sum of $300,000 nor more than ninety percent (90%) of the total project cost. Owner shall furnish to City written requests for disbursement of loan funds. Such request shall be accompanied by a statement of Owner's Qualifying Project Expenses and appropriate documentation of such expenses. It is expressly understood that all funds advanced under this Agreement shall be used by Owner only for the purpose of paying the Qualifying Project Expenses set forth in such written requests. Owner shall substantially complete the Project, defined in Paragraph 27(b), in accordance with the terms of this Agreement, on or before June 30, 2008. City shall not be obligated to pay any funds not drawn by Owner as of said date and any undrawn funds as of such date shall be credited against the balance due on the Promissory Note. 4. SECURITY. The loan shall be secured by at least a Second Mortgage on the building, a copy of which is attached as Exhibit B. The value of which shall at no time be less than the amount of any First Mortgage plus the amount of the loan funds disbursed for Qualifying Project Expenses. 5. AVAILABLE INCENTIVES. Up to the full amount of the loan shall be forgiven by the City as an incentive for the creation of new employment and/or housing opportunities. The amount of the loan to be forgiven shall be determined sixty (60) months from the Closing Date of this Agreement and a new amortization schedule shall be prepared. The base employment number to be used to calculate the Employment Incentive has been determined to be Three Hundred Six (306) FTE employees for the Building. The amount of the loan forgiven shall be as follows: (a) Two thousand dollars ($2,000) shall be forgiven for each new FTE position created and maintained by the Owner or his/her tenant. (b) To qualify, the Owner must document the following: (1) The job represents a FTE position as defined herein Paragraph 27(d); (2) The job was created between the project completion date and twenty-four (24) months from the Closing Date of this Agreement. (3) The job has been maintained by the Owner or his/her tenant for a period of not less than thirty-six (36) months (until October 1, 2011); (4) The job is a paid position; and (5) The job has been created by the Owner or another entity located in the Building and is for employment in a business located in the Building. 7. STATUS OF OWNER. Owner represents that it is a Corporation duly organized and existing under the laws of the State of Iowa; that it is authorized to borrow under this Agreement, to execute and deliver the note and otherwise perform the obligations of this Agreement; that it has authority and power to own its property and conduct its business as it is currently carried on; that the performance of its obligations under this Agreement and the issuance of any note under it will not conflict with any provision of law, the Articles of Incorporation or the Bylaws of Corporation, or any agreement binding on it. Owner also represents, except as disclosed in writing to City, that it is not a party to any pending or threatened litigation or to any proceeding or action for the assessment or collection of additional taxes, and that it knows of no known contingent liabilities not provided for or disclosed in the financial statement provided City which would affect the ability of the Owner to repay this loan. 8. FINANCIAL CONDITION OF OWNER. Owner has delivered to City a statement of Owner's financial condition as of the date of application for financial assistance which fairly represents the financial condition of Owner as of the date stated, all in accordance with generally accepted accounting principles consistently applied, and that the statements still correctly reflect the financial condition and status of its operations as of the date of this Agreement. Loan Agreement Page 3 9. TITLE OF OWNER. Subject to the liabilities reflected on Owner's financial statement as well as those incurred in relation to this Project, Owner represents that it has good and marketable title, free of any mortgage, pledge, lien, security interest, encumbrance, or charge to all those assets reflected on the financial statement and to assets since acquired. Taxes not due or payable or otherwise delinquent are excepted. 10. CONDITIONS OF BORROWING. On the date on which any sum is to be borrowed, Owner, in addition to the Note, shall deliver to City such other papers and documents as may be required to comply with the conditions of this Agreement, as counsel for City may reasonably request. Owner shall be required at the Closing Date defined herein Paragraph 27(a) to comply, or establish compliance, as follows: (a) That the representations and warranties of Owner are correct on the Closing Date; (b) That Owner has fully complied with the covenants and agreements to the extent required before the Closing Date; (c) That no default or event which might mature into a default has occurred or continues to the Closing Date; (d) That no litigation or proceeding is pending against Owner which would materially affect the assets of Owner, taking into account the entire assets and overall business of Owner; (e) That there has been no material adverse change in the financial condition of Owner from that shown by the financial statement delivered to City under paragraph 8; f) That no fire or casualty has occurred in any building or to any inventories or property of Owner that might substantially, adversely affect the conduct of its business. 11. SPECIAL CONDITIONS. Owner agrees to comply with the following requirements established by the City for the Loan Program: (a) All exterior work must coincide with the historic character of the building. 12. COVENANTS OF OWNER. Owner covenants that it will: (a) Correct code deficiencies in accordance with all applicable building and fire codes within the scope of the project. (b) Provide for the repair and rehabilitation of the Building in accordance with all applicable building, zoning, fire and housing codes. (c) Substantially complete the Project on or before June 30, 2008. (d) Maintain at all times insurance to the extent and against such hazards and liabilities as are in keeping with the current insurance program of Owner, set forth in Exhibit C attached hereto and entitled "Certificate of Insurance". Said certification shall be renewed on an annual basis and provided to City within thirty (30) days of the anniversary date of this Agreement. (e) Pay when due all taxes, assessments and other liabilities, except those contested in good faith where notice of such contest has been given to the City. Loan Agreement Page 4 (f) Not create or permit to exist any other pledge, security interest, lien or other encumbrance on the security for this Agreement provided in Paragraph 4 above and the Note provided pursuant to this Loan Agreement without written consent of City. (g) Give prompt notice in writing to City of any adverse development, financial or otherwise, which would materially affect its business, properties or affairs, or the ability of Owner to perform its obligations under this Agreement or the Note executed pursuant to the terms of this Agreement. (h) Use loan funds only for purposes authorized herein. (i) Pay all recording and filing fees, mortgage taxes, documentary stamps, and any other taxes payable in connection with this transaction. 13. DEFAULT. Owner shall be in default upon the occurrence of any of the following events: (a) Owner fails to pay any installment of principal or interest on any note (whether to City or any other public or private lender) when due or within thirty (30) days thereafter; (b) Owner becomes insolvent or admits in writing its inability to pay its debts as they mature; or applies for, consents to or acquiesces in the appointment of a trustee or receiver for any of its property; or in the absence of an application for consent or acquiescence, a trustee or receiver is appointed for it or a substantial part of its property and is not discharged within ten (10) days; or it otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding is instituted by or against it and if instituted is consented to or acquiesced in by it or remains for ten days undismissed; (c) Owner fails in the performance of any of the terms and conditions of this Agreement and such non-performance continues for ten (10) days after written notice thereof from City or from the holder of a note; (d) Any warranty made by Owner is untrue in any material respect, or any schedule, statement, report, notice or writing furnished by Owner to City is untrue in any material respect on the date as of which the facts set forth are stated or certified, provided any such error is not the result of unintentional errors which are capable of correction without prejudice to the City; (e) Any government board, agency, department, commission or public or private lender takes possession or control of any substantial part of any property of Owner. 14. ACCELERATION AT OPTION OF CITY. If any event of default occurs, City may, after ten days written notice of default to Owner, declare Note immediately due and payable, at which time all unpaid principal and interest shall immediately become due and payable. City shall promptly advise Owner in writing of any acceleration under this paragraph, but the failure to do so shall not impair the effect of such declaration. 15. MAINTENANCE OF RECORDS AND RIGHT TO INSPECT. Owner shall keep and maintain books, records and other documents relating directly to the receipt and disbursement of loan funds; and any duly authorized independent accounting representative of City shall at all reasonable times have access to and the right to inspect, copy, audit and examine all such books and other documents of Owner pertaining to the project until the completion of all close out procedures respecting City's loan and the final settlement and conclusion of all issues arising out of said loan. 16. ADDRESS. Owner's principal business address is: Loan Agreement Page 5 Security Investments, LLC 800 Main Street Dubuque, Iowa 52001 Owner shall promptly give City written notice of any further change in its principal office address City's address is: City Manager City Hall 50 West 13th Street Dubuque, Iowa 52001 17. LIMITATION OF CITY'S LIABILITY FOR PROJECT ACTIVITIES. City shall not be liable to Owner, or to any party, for the completion of, or the failure to complete, any activities which are part of the Project, except as may be specifically provided in this Agreement or other written agreements between City and Owner or any of Owner's affiliates or subsidiaries. Owner agrees to indemnify, hold harmless and defend City from any such claims. 18. CONFLICT OF INTEREST. Owner certifies that to its knowledge no member, officer or employee of City, or its designees or agents, nor any consultant or member of the governing body of City, and no other public official of City who exercises or has exercised any functions or responsibilities with respect to the Project during his or her tenure, or who is in a position to participate in a decision making process or gain inside information with regard to the Project, has nor shall have any interest, direct or indirect, in any contract or subcontract, or in any activity, or benefit therefrom, which is part of this Project at any time during or for one year after such person's tenure. 19. NONDISCRIMINATION. In carrying out the Project, Owner shall not discriminate against any employee or applicant for employment or tenancy because of race, religion, color, sex, national origin, age or disability. Owner shall post in a conspicuous place, available to employees and applicants for employment, notices to be provided by City setting forth the provisions of this nondiscrimination clause. Owner shall state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, national origin, age or disability. 20. DISCLAIMER OF RELATIONSHIPS. Nothing contained in this Agreement between the parties, nor any act of City or Owner shall be deemed or construed by any of the parties, or by any third persons, to create any relationship of third party beneficiary, principal or agent, limited or general partnership, or joint venture. 21. NOTICE. Any notice, if mailed by United States certified mail, shall be deemed given when mailed, postage prepaid, addressed to the other party at its address shown above, or at any other address subsequently designated by either party to the other. 22. SUCCESSORS AND ASSIGNS. All covenants, representations, warranties and agreements herein set forth shall be binding upon Owner, and its legal representatives, successors and assigns. This Agreement may not be assigned by City or Owner, without the express written consent of the other party. 23. LEGALITY. If any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable, such invalidity or unenforceabilityshatl not affect any other provision hereof, but this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein. Loan Agreement Page 6 24. GOVERNING LAW. This Agreement and all rights and duties hereunder, including but not limited to all matters of construction, validity and performance shall be governed by the laws of the State of Iowa. 25. SURVIVAL OF REPRESENTATIONS. All representations or warranties of Owner shall survive the execution and delivery of this Agreement and any note executed and delivered under it, and no investigation by City nor any closing shall affect the representations or warranties or the right of City to rely on and enforce them. 26. DELAY. No delay on the part of City or the holder of any note in the exercise of any right shall operate as a waiver, nor shall any single or partial exercise of any right preclude other or additional exercise of any right. 27. DEFINITIONS. (a) "Closing Date" shall mean the date on which this Agreement is executed by the parties. (b) "Project" shall mean the rehabilitation project of Owner's property at 800 Main Street, Dubuque, Iowa, identified in Owner's application for financial assistance. Said application is on file in the office of the Economic Development Department, 50 West 13th Street, Dubuque, Iowa 52001. (c) "Qualifying Project Expenses" shall mean those expenditures or expenses incurred by Owner during and for the Project and identified in the Owner's application for financial assistance, whether paid to third parties or incurred as wage expense, fringe benefit expense or other costs of Owner's employees, agents and contractors. (d) "Full-Time Job Equivalent" shall equal a total of forty hours of labor per workweek. Such hours may be accrued by single individuals or divided among two or more individuals. (e) "New housing unit" shall mean either a housing unit created where one did not previously exist, or an existing housing unit which has been unlicensed and unoccupied for a period of not less than five years. Dated this day of , 2007. CITY OF DUBUQUE, IOWA Michael C. Van Milligen, City Manager John E. Butler Security Investments, LLC F:\USERS\AdejonglDowntown Rehab Loan\Cottingham & Butler Security BuildinglSecurity Building Rehab Loan.doc ., Prepared by: Aaron M. DeJong City Hall, 50 W. 13th Street. Dubuque. Iowa 52001 Phone: 563-583-4393 Retum to: same MORTGAGE THIS MORTGAGE is made between Security Investments, LLC ("Mortgagors") and City of Dubuque, Iowa ("Mortgagee"). [ ] If this box is checked, this Mortgage is a Purchase Money Mortgage as defined in the Iowa Code. 1. Grant of Mortgage and Security Interest. Mortgagors hereby sell, convey and mortgage unto Mortgagee, and grant a security interest to Mortgagee in the following described property: a. Land and Buildings. All of Mortgagors' right, title and interest in and to the following described real estate situated in Dubuque County, Iowa (the "Land"); Lot 29, Lot 30, and the South 113 of Lot 31 in the City of Dubuque, Iowa, according to the United States Commissioners Map of the Town of Dubuque, Iowa (also known as 800 Main Street), and all buildings, structures and improvements now standing or at any time hereafter constructed or placed upon the Land (the "Buildings"), including all hereditaments, easements, appurtenances, riparian rights, mineral rights, water rights, rights in and to the lands lying in streets, alleys and roads adjoining the land, estates and other rights and interests now or hereafter belonging to or in any way pertaining to the Land. b. Personal Property. All fixtures and other personal property integrally belonging to, or hereafter becoming an integral part of the Land or Buildings. whether attached or detached, including but not limited to, light fixtures, shades, rods, blinds, Venetian blinds, awnings, storm windows, screens, linoleum, water softeners, automatic heating and air-conditioning equipment and all proceeds, products, increase, issue, accessions, attachments, accessories, parts, additions, repairs. replacements and substitutes of, to, and for the foregoing (the "Personal Property"). c. Revenues and Income. All rents, issues, profits, leases, condemnation awards and insurance proceeds now or hereafter arising from the ownership, occupancy or use of the Land, Buildings and Personal Property, or any part thereof (the "Revenues and Income"). TO HAVE AND TO HOLD the Land, Buildings, Personal Property and Revenues and Income (collectively called the "Mortgaged Property'), together with all privileges, hereditaments thereunto now or hereafter belonging, or in any way appertaining and the products and proceeds thereof, unto Mortgagee, its successors and assigns. 2. Obligations. This Mortgage secures the following (hereinafter collectively referred to as the "Obligations"): a. The payment of the loan made by Mortgagee to Security Investments, LLC. evidenced by a promissory note dated 2007 in the principal amount of $300,000.00, any renewals, extensions, modifications or refinancing thereof and any promissory notes issued in substitution therefor; and b. All other obligations of Mortgagors to Mortgagee, now existing or hereafter arising, whether direct or indirect, contingent or absolute and whether as maker or surety, including, but not limited to, future advances and amounts advanced and expenses incurred by Mortgagee pursuant to this Mortgage. 3. Representations and Warranties of Mortgagors. Mortgagors represent, warrant and covenant to Mortgagee that (i) Mortgagors hold clear title to the Mortgaged Property and title in fee simple in the Land; (ii) Mortgagors have the right, power and authority to execute this Mortgage and to mortgage, and grant a security interest in the Mortgaged Property; (iii) the Mortgaged Property is free and clear of all liens and encumbrances, except for real estate taxes not yet delinquent and except as otherwise stated in subparagraph 1a. herein; (iv) Mortgagors will warrant and defend title to the Mortgaged Property and the lien and priority of this Mortgage against all claims and demands of all persons, whether now existing or hereafter arising; and (v) all buildings and improvements now or hereafter located on the Land are, or will be, located entirely within the boundaries of the Land. 4. Payment and Performance of the Obligations. Mortgagors will pay all amounts payable under the Obligations in accordance with the terms of the Obligations when and as due and will timely perform all other obligations of Mortgagors under the Obligations. The provisions of the Obligations are hereby incorporated by reference into this Mortgage as if fully set forth herein. 5. Taxes. Mortgagors shall pay each installment of all taxes and special assessments of every kind, now or hereafter levied against the Mortgaged Property before the same become delinquent, without notice or demand, and shall deliver to Mortgagee proof of such payment within fifteen (15) days after the date in which such tax or assessment becomes delinquent. 6. Liens. Mortgagors shall not create, incur or suffer to exist any lien, encumbrance, security interest or charge on the Mortgaged Property or any part thereof which might or could be held to be equal or prior to the lien of this Mortgage, other than the lien of current real estate taxes and installments of special assessments with respect to which no penalty is yet payable. Mortgagors shall pay, when due, the claims of all persons supplying labor or materials to or in connection with the Mortgaged Property. 7. Compliance with Laws. Mortgagors shall comply with all present and future statutes, laws, rules, orders, regulations and ordinances affecting the Mortgaged Property, any part thereof or the use thereof. 8. Permitted Contests. Mortgagors shall not be required to (i) pay any tax, assessment or other charge referred to in paragraph 5 hereof, (ii) discharge or remove any lien, encumbrance or charge referred to in paragraph 6 hereof, or (iii) comply with any statute, law, rule, regulation or ordinance referred to in paragraph 7 hereof, so long as mortgagors shall contest, in good faith, the existence, amount or the validity thereof, the amount of damages caused thereby or the extent of Mortgagors' liability therefor, by appropriate proceedings which shall operate during the pendency thereof to prevent (A) the collection of, or other realization upon the tax, assessment, charge or lien, encumbrances or charge so contested, (B) the sale, forfeiture or loss of the Mortgaged Property or any part thereof, and (C) any interference with the use or occupancy of the Mortgaged Property or any part thereof. Mortgagors shall give prompt written notice to Mortgagee of the commencement of any contest referred to in this paragraph 8. 9. Care of Property. Mortgagors shall take good care of the Mortgaged Property; shall keep the Buildings and Personal Property now or later placed upon the Mortgaged Property in good and reasonable repair and shall not injure, destroy or remove either the Buildings or Personal Property during the term of this Mortgage. Mortgagors shall not make any material alteration to the Mortgaged Property without the prior written consent of Mortgagee. 10. Insurance. a. Risks to be Insured. Mortgagors, at their sole cost and expense, shall maintain insurance on the Buildings and other improvements now existing or hereafter erected on the Land and on the Personal Property included in the Mortgaged Property against loss by fire, extended coverage perils and such other hazards as Mortgagee may from time to time require, such insurance to have a "Replacement Cost" endorsement attached thereto, with the amount of the insurance at least equal to the balance of the Obligations. At Mortgagors' option, such policy may have a coinsurance clause of not less than 90% of replacement cost provided the policy contains an appropriate form of cost escalation endorsement. Mortgagors will at their sole cost and expense, from time to time, and at any time at the request of Mortgagee, provide Mortgagee with evidence satisfactory to Mortgagee of the replacement cost of Mortgaged Property. Mortgagors will maintain such other insurance as Mortgagee may reasonably require. b. Policy Provisions. All insurance policies and renewals thereof maintained by Mortgagors pursuant to this Mortgage shall be written by an insurance carrier satisfactory to Mortgagee, contain a mortgagee clause in favor of and in form acceptable to Mortgagee, contain an agreement of the insurer that it will not amend, modify or cancel the policy except after thirty (30) days prior written notice to Mortgagee, and be reasonably satisfactory to Mortgagee in all other respects. c. Delivery of Policy or Certificate. If requested by Mortgagee, Mortgagors will deliver to Mortgagee original policies satisfactory to Mortgagee evidencing the insurance which is required under this Mortgage, and Mortgagors shall promptly furnish to Mortgagee all renewal notices and, upon request of Mortgagee, evidence of payment thereof. At least ten (10) days prior to the expiration date of a required policy, Mortgagors shall deliver to Mortgagee a renewal policy in form satisfactory to Mortgagee. d. Assignment of Policy. If the Mortgaged Property is sold at a foreclosure sale or if Mortgagee shall acquire title to the Mortgaged Property, Mortgagee shall have all of the right, title and interest of Mortgagors in and to any insurance policies required hereunder, and the unearned premiums thereon, and in and to the proceeds thereof resulting from any damage to the Mortgaged Property prior to such sale or acquisition. e. Notice of Damage or Destruction; Adjusting Loss. If the Mortgaged Property or any part thereof shall be damaged or destroyed by fire or other casualty, Mortgagors will, within five (5) calendar days after the occurrence of such damage or destruction, give written notice thereof to the insurance carrier and to Mortgagee and will not adjust any damage or loss which is estimated by Mortgagors in good faith to exceed $25,000 unless Mortgagee shall have joined in or concurred with such adjustment; but if there has been no adjustment of any such damage or loss within four (4) months from the date of occurrence thereof and if an Event of Default shall exist at the end of such four (4) month period or at any time thereafter, Mortgagee may alone make proof of loss, adjust and compromise any claim under the policies, and appear in and prosecute any action arising from such policies. In connection therewith, Mortgagors do hereby irrevocably authorize, empower and appoint Mortgagee as attorney-in-fact for Mortgagor (which appointment is coupled with an interest) to do any and all of the foregoing in the name and on behalf of Mortgagors. f. Application of Insurance Proceeds. All sums paid under any insurance policy required by this Mortgage shall be paid to Mortgagee, which shall, at its option, apply the same (after first deducting therefrom Mortgagee's expenses incurred in collecting the same including but not limited to reasonable attorney's fees) to the reduction of the Obligations or to the payment of the restoration, repair, replacement or rebuilding of Mortgaged Property that is damaged or destroyed in such manner as Mortgagee shall determine and secondly to the reduction of the Obligations. Any application of insurance proceeds to principal of the Obligations shall not extend or postpone the due date of the installments payable under the Obligations or change the amount of such installments. g. Reimbursement of Mortgagee's Expenses. Mortgagors shall promptly reimburse Mortgagee upon demand for all of Mortgagee's expenses incurred in connection with the collection of the insurance proceeds, including but not limited to reasonable attorneys fees, and all such expenses shall be additional amounts secured by this Mortgage. 11. Inspection. Mortgagee, and its agents, shall have the right at all reasonable times, to enter upon the Mortgaged Property for the purpose of inspecting the Mortgaged Property or any part thereof. Mortgagee shall, however, have no duty to make such inspection. Any inspection of the Mortgaged Property by Mortgagee shall be entirely for its benefit and Mortgagors shall in no way rely or claim reliance thereon. 12. Protection of Mortgagee's Security. Subject to the rights of Mortgagors under paragraph 8 hereof, if Mortgagors fail to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which affects the Mortgaged Property or the interest of the Mortgagee therein, or the title thereto, then Mortgagee, at Mortgagee's option, may perform such covenants and agreements, defend against or investigate such action or proceeding, and take such other action as Mortgagee deems necessary to protect Mortgagee's interest. Any amounts or expenses disbursed or incurred by Mortgagee in good faith pursuant to this paragraph 12 with interest thereon at the rate of 10% per annum, shall become an Obligation of Mortgagors secured by this Mortgage. Such amounts advanced or disbursed by Mortgagee hereunder shall be immediately due and payable by Mortgagors unless Mortgagors and Mortgagee agree in writing to other terms of repayment. Mortgagee shall, at its option, be subrogated to the lien of any mortgage or other lien discharged in whole or in part by the Obligations or by Mortgagee under the provisions hereof, and any such subrogation rights shall be additional and cumulative security for this Mortgage. Nothing contained in this paragraph shall require Mortgagee to incur any expense or do any act hereunder, and Mortgagee shall not be liable to Mortgagors for any damage or claims arising out of action taken by Mortgagee pursuant to this paragraph. 13. Condemnation. Mortgagors shall give Mortgagee prompt notice of any action, actual or threatened, in condemnation or eminent domain and hereby assign, transfer and set over to Mortgagee the entire proceeds of any award or claim for damages for all or any part of the Mortgaged Property taken or damaged under the power of eminent domain or condemnation. Mortgagee is hereby authorized to intervene in any such action in the names of Mortgagors, to compromise and settle any such action or claim, and to collect and receive from the condemning authorities and give proper receipts and acquittances for such proceeds. Any expenses incurred by Mortgagee in intervening in such action or compromising and settling such action or claim, or collecting such proceeds shall be reimbursed to Mortgagee first out of the proceeds. The remaining proceeds or any part thereof shall be applied to reduction of that portion of the Obligations then most remotely to be paid, whether due or not, or to the restoration or repair of the Mortgaged Property, the choice of application to be solely at the discretion of Mortgagee. 14. Fixture Filing. From the date of its recording, this Mortgage shall be effective as a financing statement filed as a fixture filing with respect to the Personal Property and for this purpose the name and address of the debtor is the name and address of Mortgagors as set forth in paragraph 20 herein and the name and address of the secured party is the name and address of the Mortgagee as set forth in paragraph 20 herein. 15. Events of Default. Each of the following occurrences shall constitute an event of default hereunder ("Event of Default"): a. Mortgagors shall default in the due observance or performance of or breach its agreement contained in paragraph 4 hereof or shall default in the due observance or performance of or breach any other covenant, condition or agreement on its part to be observed or performed pursuant to the terms of this Mortgage. b. Mortgagors shall make an assignment for the benefits of its creditors, or a petition shall be filed by or against Mortgagors under the United States Bankruptcy Code or Mortgagors shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its properties or of the Mortgaged Property or shall not, within thirty (30) days after the appointment of a trustee, receiver or liquidator of any material part of its properties or of the Mortgaged Property, have such appointment vacated. c. A judgment, writ or warrant of attachment or execution, or similar process shall be entered and become a lien on or be issued or levied against the Mortgaged Property or any part thereof which is not released, vacated or fully bonded within thirty (30) days after its entry, issue or levy. d. An event of default, however defined, shall occur under any other mortgage, assignment or other security document constituting a lien on the Mortgaged Property or any part thereof. 16. Acceleration; Foreclosure. Upon the occurrence of any Event of Default and at any time thereafter while such Event of Default exists, Mortgagee may, at its option, after such notice as may be required by law, exercise one or more of the following rights and remedies (and any other rights and remedies available to it): a. Mortgagee may declare immediately due and payable all Obligations secured by this Mortgage, and the same shall thereupon be immediately due and payable, without further notice or demand. b. Mortgagee shall have and may exercise with respect to the Personal Property, all the rights and remedies accorded upon default to a secured party under the Iowa Uniform Commercial Code. If notice to Mortgagors of intended disposition of such property is required by law in a particular instance, such notice shall be deemed commercially reasonable if given to Mortgagors at least ten (10) days prior to the date of intended disposition. c. Mortgagee may (and is hereby authorized and empowered to) foreclose this Mortgage in accordance with the law of the State of Iowa, and at any time after the commencement of an action in foreclosure, or during the period of redemption, the court having jurisdiction of the case shall at the request of Mortgagee appoint a receiver to take immediate possession of the Mortgaged Property and of the Revenues and Income accruing there from, and to rent or cultivate the same as he may deem best for the interest of all parties concerned, and such receiver shall be liable to account to Mortgagors only for the net profits, after application of rents, issues and profits upon the costs and expenses of the receivership and foreclosure and upon the Obligations. 17. Redemption. It is agreed that if this Mortgage covers less than ten (10) acres of land, and in the event of the foreclosure of this Mortgage and sale of the property by sheriffs sale in such foreclosure proceedings, the time of one year for redemption from said sale provided by the statues of the State of Iowa shall be reduced to six (6) months provided the Mortgagee, in such action files an election to waive any deficiencyjudgment against Mortgagors which may arise out of the foreclosure proceedings; all to be consistent with the provisions of Chapter 628 of the Iowa Code. If the redemption period is so reduced, for the first three (3) months after sale such right of redemption shall be exclusive to the Mortgagor, and the time periods in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to four (4) months. It is further agreed that the period of redemption after a foreclosure of this Mortgage shall be reduced to sixty (60) days if all of the three following wntingencies develop: (1) The real estate is less than ten (10) acres in size; (2) the Court finds affirmatively that the said real estate has been abandoned by the owners and those persons personally liable under this Mortgage at the Ume of such foreclosure; and (3) Mortgagee in such action files an election to waive any deficiency judgment against Mortgagors or their successors in interest in such action. If the redemption period is so reduced, Mortgagors or their successors in interest or the owner shall have the exclusive right to redeem for the first thirty (30) days after such sale, and the Ume provided for redemption by creditors as provided in Sections 628.5, 628.15 and 628.16 of the Iowa Code shall be reduced to forty (40) days. Entry of appearance by pleading or docket entry by or on behalf of Mortgagors shall be a presumption that the property is not abandoned. Any such redemption period shall be consistent with all of the provisions of Chapter 628 of the Iowa Code. This paragraph shall not be construed to limit or otherwise affect any other redemption provisions contained in Chapter 628 of the Iowa Code. 18. Attorneys' Fees. Mortgagors shall pay on demand all costs and expenses incurred by Mortgagee in enforcing or protecting its rights and remedies hereunder, including, but not limited to, reasonable attorneys' fees and legal expenses. 19. Forbearance not a Waiver, Rights and Remedies Cumulative. No delay by Mortgagee in exercising any right or remedy provided herein or otherwise afforded by law or equity shall be deemed a waiver of or preclude the exercise of such right or remedy, and no waiver by Mortgagee of any particular provisions of this Mortgage shall be deemed effective unless in writing signed by Mortgagee. All such rights and remedies provided for herein or which Mortgagee or the holder of the Obligations may have otherwise, at law or in equity, shall be distinct, separate and cumulative and may be exercised concurrently, independently or successively in any order whatsoever, and as often as the occasion therefor arises. 20. Notices. All notices required to be given hereunder shall be in writing and deemed given when personally delivered or deposited in the United States mail, postage prepaid, sent certified or registered, addressed as follows: a. If to Mortgagors, to: Security Investments, LLC. 800 Main Street, Dubuque, Iowa 52001 b. If to Mortgagee, to: Economic Development Department; City Hall; 50 West 13th St., Dubuque, Iowa 52001 or to such other address or person as hereafter designated in writing by the applicable party in the manner provided in this paragraph for the giving of notices. 21. Severability. In the event any portion of this Mortgage shall, for any reason, be held to be invalid, illegal or unenforceable in whole or in part, the remaining provisions shall not be affected thereby and shall continue to be valid and enforceable and if, for any reason, a court finds that any provision of this Mortgage is invalid, illegal, or unenforceable as written, but that by limiting such provision it would become valid, legal and enforceable then such provision shall be deemed to be written, construed and enforced as so limited. 22. Further Assurances. At any time and from Ume to Ume until payment in full of the Obligations, Mortgagors will, at the request of Mortgagee, promptly execute and deliver to Mortgagee such additional instruments as may be reasonably required to further evidence the lien of this Mortgage and to further protect the security interest of Mortgagee with respect to the Mortgaged Property, including, but not limited to, additional security agreements, financing statements and continuation statements. Any expenses incurred by Mortgagee in connection with the recordation of any such instruments shall become additional Obligations of Mortgagors secured by this Mortgage. Such amounts shall be immediately due and payable by Mortgagors to Mortgagee. 23. Successors and Assigns bound; Number; Gender; Agents; Captions. The rights, covenants and agreements contained herein shall be binding upon and inure to the benefit of the respective legal representatives, successors and assigns of the parties. Words and phrases contained herein, including acknowledgment hereof, shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender according to the contexts. The captions and headings of the paragraphs of this Mortgage are for convenience only and are not to be used to interpret or define the provisions hereof. 24. Governing Law. This Mortgage shall be governed by and construed in accordance with the laws of the State of Iowa. 25. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby relinquishes all rights of dower, homestead and distributive share in and to the Mortgaged Property and waives all rights of exemption as to any of the Mortgaged Property. 26. Acknowledgment of Receipt of Copies of Debt Instrument. Mortgagors hereby acknowledge the receipt of a copy of this Mortgage together with a copy of each promissory note secured hereby. 27. Additional Provisions. Dated: , 2007 Security Investments, LLC. Mortgagor John E. Butler, Title 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 MORTGAGE, 1 VOLUNTARILY GIVE UP MY RIGHT TO THIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE. Dated: STATE OF IOWA COUNTY OF DUBUQUE ss: On this `'SY%1 day of ~ h~ ~"~ , 2007, before me, the undersigned, a Notary Public, personally appeared John E. Butler, Managing Member of Security Investments, LLC to me known to be the identical person named in and who executed the foregoing instrument, and acknowledged that they executed the same as their voluntary act and deed. -_.,.~.,,,,,-~- G . ~'P1A e° BETTY C ,Notary Public _~ Ccmnroienlr~n Number 1 3512: ' ~~ f~yComm.Exp. ~°U D r ' CSR Rl DATE (MM/DDlYYYY) ACORD CERTIFICATE OF LIABILITY INSURANCE coTBUTi 11 0l 07 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATIO PRODUCER LY AND CONFERS NO RIGHTS UPON THE CERTIFICATE ON HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR Cottingham & Butler, Inc. ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW 800 Main Street Dubuque IA 52001 Phone: 563-587-5000 Fax: 563-583-7339 INSURERS AFFORDING COVERAGE NAIC # INSURED INSURER A: Acuity A Mutual Insurance co. __ - _- 1418 4 __ - - Cottingham 6 Butler, Inc. rvices Co d S INSURER B: . e Self Insure Self Funded Services Company INSURER C: CAB Claims Services, Inc. O. BOX 28 P INSURER D: . Dubuque IA 52004 INSURER E: COVEKAGt, SUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN IS NY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR ANY REQUIREMENT, TERM OR CONDITION OF A POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LTR NSR TYPE OF INSURANCE POLICY NUMBER DATE MM/DDIYY DATE MM/DD/YY LIMITS CURRENCE $ lOOOOOO EACH OC GEN ERAL LIABILITY L LIABILITY 221513 04/01/07 04/01/08 PREMISES (Eaoccurence) $ 100000 A ][ COMMERCIAL GENERA CUR ~ ' MED EXP (Any one person) $ 5000 OC CLAIMS MADE PERSONAL & ADV INJURY $ lOOOOOO 0000 GENERAL AGGREGATE $ 200 00000 PPLIESPER ' PRODUCTS-COMPJOPAGG $ 20 : LAGGREGATELIMITA GEN POLICY PE 4 LOC AUT OMOBILE LIABILITY COMBINED SINGLE LIMIT (Ea accident) $ 1000000 221513 04/01/07 04/01/08 A ]( ANY AUTO _ ALL OWNED AUTOS BODILY INJURY (Per person) $ SCHEDULED AUTOS HIRED AUTOS BODILY INJURY (Per accident) $ NON-OWNED AUTOS PROPERTY DAMAGE (Per accident) $ AUTO ONLY - EA ACCIDENT $ GA RAGE LIABILITY OTHER THAN EA ACC $ ANY AUTO AUTO ONLY: AGG $ BILITY EACH OCCURRENCE $ 10000000 EXCESS/UMBRELLALIA AIMSMADE ~ 221513 04/01/07 04/01/08 AGGREGATE $ 10000000 A CL X OCCUR $ DEDUCTIBLE RETENTION $ _ X TORY LIMITS ER WORKERS COMPENSATION AND EMPLOYERS'LIABILITY 221513 04/01/07 04/01/08 E.L. EACH ACCIDENT $ 500000 A ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? E.L. DISEASE- EA EMPLOYE $ 500000 If yes, describe under E.L. DISEASE -POLICY LIMIT $ 500000 SPECIAL PROVISIONS below OTHER DESCRIPTION OF OPERATIONS! LOCATIONS /VEHICLES /EXCLUSIONS ADDED BY ENDORSEMENT /SPECIAL PROVISIONS *Except for non-payment of premium. The City of Dubuque is listed as an additional insured on the General Liability on a primary, non-contributory basis (form CC7167 5-05). Designated locations general aggregate is included in the general liability form. Governmental Immunities endorsement is included on the general liability. w ~~~wr GtKlll'II.HIC 11VLUCR - ---- - - SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION CIDUTA7 DATE THEREOF, THE ISSUING INSURER WILL AIL 3O * DAYS WRITTEN City of Dubuque NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT LL City Hall ~p~~p~q~~Qp~gpXq~~xgCIDQK~PRxI~QD(9(dJ~If90Q7FX;RDIECXX 50 W 13th 3t 52001-4845 ~?[~i~FTl9L~OCXX Dubuque IA AUT IZED REPRESENTATIVE n ernRn CnRPnRAT10N 1 XX} 988 ACORD 25 (2001/08) r ADDITIONAL INSURED -OWNERS, LESSEES OR CONTRACTORS -PRIMARY AND NONCONTRIBUTORY This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART 1. Who Is An Insured (Section II) is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for bodily injury, property damage or personal and advertising injury caused, in whole or in part, by: a. Your acts or omissions; or b. The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insureds) at the location(s) designated below. 2. The insurance provided by this endorsement is primary and noncontributory. CG-7167(5-05) 3. With respect to the insurance afforded to these additional insureds, the following additional ex- clusions apply: This insurance does not apply to bodily injury or property damage occurring after: a. All work, including materials, parts or equip- ment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insureds) at the location of the covered operations has been completed; or b. That portion of your work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontrac- tor engaged in performing operations for a principal as a part of the same project. SCHEDULE Name of Additional Insured Person(s) or Organization(s) (Name and Address) Location(s) of Covered Operations ~ ~ t . IOWA MUNICIPALITY ENDORSEMENT This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART BIS-PAK BUSINESS LIABILITY AND MEDICAL EXPENSES COVERAGE FORM 1. Additionallnsured The municipality shown in the Schedule includ- ing all its elected and appointed officials, all its employees and volunteers, all its boards, com- missions and/or authorities and their board members, employees and volunteers, is an ad- ditional insured with respect to liability arising out of your work and/or services performed for the municipality. This coverage shall be primary to the additional insured and not contributing with any other insurance or similar protection available to the additional insured, whether oth- er available coverage be primary, contributing or excess. 2. Governmental Immunities a. Nonwaiver of Governmental Immunity We expressly agree and state that the pur- chase of this policy and the including of the municipality shown in the Schedule as an additional insured does not waive any of the defenses of governmental immunity avail- able to the municipality under the Code of Iowa Section 670.4 as it now exists and as it may be amended from time to time. b. Claims Coverage We further agree that this policy of insur- ance shall cover only those claims not sub- ject to the defense of governmental immu- nity under the Code of Iowa Section 670.4 as it now exists and as it may be amended SCHEDULE Municipality IL-7064(1-03) from time to time. c. Assertion of Government Immunity The municipality shown in the Schedule shall be responsible for asserting any de- fense of governmental immunity, and may do so at any time and shall do so upon timely written request by us. Nothing con- tained in this endorsement shall prevent us from asserting the defense of governmental immunity on behalf of the municipality shown in the Schedule. d. Non-Denial of Coverage We shall not deny coverage under this poli- cy and we shalt not deny any of the rights and benefits accruing to the municipality shown in the Schedule under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s) of gov- ernmental immunity asserted by the munici- pality. e. We and the municipality shown in the Schedule agree that the above preservation of governmental immunities shall not other- wise change or alter the coverage available under the policy. 3. Cancellation and Material Changes We will give thirty (30) days advance written notice of cancellation, nonrenewal, reduction in coverage and/or limits and ten (10) days written notice for nonpayment of premium to the ad- dress shown in the Schedule. This endorse- ment supersedes the standard cancellation statement on the Certificate of Insurance to which this endorsement is attached. Address IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon.