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HomeMy WebLinkAbout2009 Lawsuits IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, Plaintiff, NO. EQCVO / C�KI I vs. FRANTZ CONSTRUCTION CO., INC., EASTSIDE INVESTORS, LLC, ORIGINAL NOTICE EUGENE W. NISSLEY, WILLIAM L. FRANTZ, PATRICIA J. NISSLEY, SHERRY L. FRANTZ, WOOD GRAIN SALES DBA SQUAW CREEK MILLWORK, THE STRUB CO., INC. DBA MULLER PLUMBING& HEATING, BACHMEIER CARPET ONE FLOOR&HOME, YODER ROOFING AND CONSTRUCTION LLC, WELDON DRYWALL, INC., M M S CONSULTANTS, INC. GARMIL, INC. D/B/A GARY MILLER INSULATION, N NAGLE LUMBER COMPANY, MIDAMERICAN 6 ENERGY, FOUNDATIONS UNLIMITED, INC., > on m KING'S MATERIALS INC., THE RIVER PRODUCTS o-< F CO., H.J. LIMITED, PORT"0"JONNY INC., 1 0 m BUILDERS COMPONENTS INCORPORATED m OF NORTH LIBERTY, HOMEWOOD ELECTRIC, INC., 0? ro JOHNNY SHWARTZ, PSK LLC DBA OVERHEAD DOOR CO OF CEDAR RAPIDS AND IOWA CITY, cp WHITE CAP CONSTRUCTION SUPPLY, INC., AERO RENTAL, INC., BLUMENTHAL TRUELSEN, INC. DBA SOILTEK, S & G MATERIALS,MENARD, INC., HAWKEYE SIDING, INC., CITY OF IOWA CITY, ASHTON ENGINEERING, INC., CORRIDOR STATE BANK, LIBERTY BANK, F.S.B., ERIC FRANTZ, LYNN FRANTZ,ALL PARTIES IN POSSESSION OF 22 DURHAM CT, IOWA CITY, IOWA, JOSE NAVARRO, CLAUDIA ZAMBRANO,ALL PARTIES IN POSSESSION OF 3446 JAMIE LANE, IOWA CITY, IOWA; ALL PARTIES IN POSSESSION OF 3321 WINTERGREEN DRIVE, IOWA CITY,ALL PARTIES IN POSSESSION OF 901 PARK ROAD, IOWA CITY, IOWA, CASEY M. MOEL,JOY E. MOEL, ALL PARTIES IN POSSESSION OF 4880 NO WHERE AVE SW, IOWA CITY, IOWA, ALL PARTIES IN POSSESSION OF 340 HIGHLAND AVE 08/07/09 C C , ;.. c,• c Q - I C rn IOWA CITY, IOWA, ALL PARTIES IN POSSESSION OF 344 HIGHLAND AVE, IOWA CITY, IOWA ALL PARTIES IN POSSESSION OF 348 HIGHLAND AVE, IOWA CITY, IOWA, DOUG SHEETZ, KAREN SHEETZ, ALL PARTIES IN POSSESSION OF 55 MONTGOMERY PLACE IOWA CITY, IOWA,ALL PARTIES IN POSSESSION OF 46 LANCESTER PLACE, IOWA CITY IOWA, ALL PARTIES IN POSSESSION OF 18 LANCESTER PLACE, IOWA CITY, IOWA, ALL PARTIES IN POSSESSION OF 31 MONTGOMERY PLACE IOWA CITY, IOWA, ALL UNKNOWN CLAIMANTS OF THE FOLLOWING DESCRIBED PROPERTY IN JOHNSON COUNTY, IOWA, TO WIT: LOT ONE (1)AND THE NORTHERLY TEN FEET OF LOT TWO(2), DESCRIBED AS: COMMENCING AT THE NORTHEAST CORNER OF LOT TWO (2), THENCE SOUTHERLY ALONG THE EASTERLY LINE OF SAID LOT TWO (2), TEN(10) p FEET, THENCE NORTHWESTERLY TO A POINT ON *0 c THE WEST LINE OF LOT TWO(2),TEN(10)FEET n SOUTH OF THE SOUTHWEST CORNER OF LOT ONE(1), THENCE NORTH TEN(10)FEET TO THE SOUTHWEST CORNER OF LOT ONE(1), THENCE o - a SOUTHEAST ALONG THE NORTHERLY LINE OF * -9 LOT TWO (2)TO THE POINT OF BEGINNING, ALL IN > o BLOCK 1 OF BLACK'S SECOND SUBDIVISION IN GOVERNMENT LOT TWO (2), SECTION NINE(9) TOWNSHIP SEVENTY-NINE (79)NORTH,RANGE SIX(6), WEST OF THE 5th P.M., ACCORDING TO THE RECORDED PLAT THEREOF RECORDED IN PLAT BOOK 1, PAGE 139, OF THE RECORDER'S OFFICE OF JOHNSON COUNTY, IOWA, EXCEPTING THEREFROM, HOWEVER, THAT PORTION OF THE ABOVE DESCRIBED REAL ESTATE PREVIOUSLY CONVEYED BY WARRANTY DEED DATED JULY 18, 1952,AND RECORDED AT PAGE 580 OF BOOK 214 OF THE DEED RECORDS OF JOHNSON COUNTY, IOWA, ALSO DESCRIBED AS: LOT 1 IN BLOCK 1 OF BLACK'S SECOND SUB-DIVISION IN GOVERNMENT LOT 2, SEC. 9, TWP. 79 N., R. 6 WEST OF THE 5th P.M., ACCORDING TO THE RECORDED PLAT THEREOF RECORDED IN PLAT BOOK 1,PAGE 139, OF THE RECORDER'S OFFICE OF JOHNSON COUNTY, IOWA, EXCEPT THE FOLLOWING: COMMENCING AT THE 08/07/09 2 SOUTHEASTERLY CORNER OF LOT 1; THENCE NORTHERLY ALONG THE EASERLY LINE OF SAID LOT 1, 18 FEET; THENCE WESTERLY PARALLEL WITH THE SOUTHERLY LINE OF SAID LOT 1 TO THE WESTERLY LINE OF SAID LOT 1; THENCE SOUTHERLY TO THE SOUTHWEST CORNER OF SAID LOT 1; THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID LOT 1 TO THE POINT OF BEGINNING; _ r.> ALL UNKNOWN CLAIMANTS OF THE FOLLOWING O DESCRIBED PROPERTY IN JOHNSON COUNTY, y ,`"; -71 IOWA, TO WIT: UNITS A,B AND C, BUILDING 14 IN n-< �' WELLINGTON CONDOMINIUMS II AT VILLAGE _3 n — ROAD, WINTERGREEN DRIVE AND LANCESTER m �- PLACE,ACCORDING TO THE DECLARATION 0 71 THEREOF RECORDED AUGUST 12,2005, IN BOOK 3925,PAGE 453, RECORDS OF THE JOHNSON o COUNTY RECORDER, TOGETHER WITH SAID UNIT'S INTEREST IN THE COMMON ELEMENTS, Defendants. TO THE ABOVE-NAMED DEFENDANT(S): You are notified that a petition has been filed in the office of the clerk of this court naming you as the defendant(s) in this action. A copy of the petition (and any documents filed with it) is attached to this notice. The Plaintiff's attorneys' names, addresses and telephone numbers are: Robert S. Michael and Crystal K. Raiber, Lynch, Greenleaf& Michael, LLP, 1402 Willow Creek Court, P.O. Box 1757, Iowa City, Iowa 52244-1757; (319) 351-1056 telephone; (319) 338-6834 fax. You must serve a motion or answer within 20 days after service of this original notice upon you, and within a reasonable time thereafter, file your motion or answer with the Clerk of Court for Johnson County, at the county courthouse in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the petition. If you require the assistance of auxiliary aids or services to participate in court because of disability, immediately call your district ADA coordinator at (319) 398-3920 Ext 1100. 08/07/09 3 • (If you are hearing impaired, call Relay Iowa TTY at 1-800-735-2942.) (SEAL) -: ,�. �,VIA BEP,'r�E� xky\it_ CLERK OF/COUR Johnson County Courthouse Iowa City, Iowa 52244-1757 IMPORTANT: YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS o n D „►'. i n-G --•1 n — r- Gr m a. o a o 0 08/07/09 4 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, Plaintiff, NO. EQCVOa1 paY .Q VS. t� q O w FRANTZ CONSTRUCTION CO., INC., na + EASTSIDE INVESTORS, LLC, PETITION IN ETYv EUGENE W.NISSLEY, WILLIAM L. FRANTZ, PATRICIA J.NISSLEY, SHERRY L. FRANTZ, (CAPTION CONTINUED AFTER NOTICE) v -4 NOTICE THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION.THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND,THE SALE WILL BE DELAYED UNTIL TWELVE MONTHS (or SIX MONTHS if the petition includes a waiver of deficiency judgment) FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE BUT NOT A ONE-FAM LY OR TWO- FAMILY DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED PROPERTY.YOU MAY PURCHASE AT THE SALE. IF YOU DO NOT FILE A WRITTEN DEMAND TO DELAY THE SALE AND IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY DWELLING,THEN A DEFICIENCY JUDGMENT WILL NOT BE ENTERED AGAINST YOU. IF YOU DO FILE A WRITTEN DEMAND TO DELAY THE SALE,THEN A DEFICIENCY JUDGMENT MAY BE ENTERED AGAINST YOU IF THE PROCEEDS FROM THE SALE OF THE MORTGAGED PROPERTY ARE INSUFFICIENT TO SATISFY THE AMOUNT OF THE MORTGAGE DEBT AND COSTS. p IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS NOT A . n m -n ONE-FAMILY OR TWO-FAMILY DWELLING,THEN A DEFICIENCY JUDGMENT. -o MAY BE ENTERED AGAINST YOU WHETHER OR NOT YOU FILE A WRITTEN n — DEMAND TO DELAY THE SALE. :<73 Or D CO 08/06/09 1 (CONTINUATION OF CAPTION) WOOD GRAIN SALES DBA SQUAW CREEK MILLWORK, THE STRUB CO., INC. DBA MULLER PLUMBING&HEATING, BACHMEIER CARPET ONE FLOOR&HOME, YODER ROOFING AND CONSTRUCTION LLC, WELDON DRYWALL, INC., M M S CONSULTANTS, INC. GARMIL, INC. D/B/A GARY MILLER INSULATION, NAGLE LUMBER COMPANY, MIDAMERICAN ENERGY, FOUNDATIONS UNLIMITED, INC., KING'S MATERIALS INC., THE RIVER PRODUCTS CO., H.J. LIMITED,PORT"0"JONNY INC., BUILDERS COMPONENTS INCORPORATED OF NORTH LIBERTY, HOMEWOOD ELECTRIC, INC., JOHNNY SHWARTZ,PSK LLC DBA OVERHEAD DOOR CO OF CEDAR RAPIDS AND IOWA CITY, WHITE CAP CONSTRUCTION SUPPLY, INC., AERO RENTAL, INC., BLUMENTHAL TRUELSEN, INC. DBA SOILTEK, S & G MATERIALS, MENARD, INC.,HAWKEYE SIDING, INC., CITY OF IOWA CITY, ASHTON ENGINEERING, INC., CORRIDOR STATE BANK, LIBERTY BANK, F.S.B., ERIC FRANTZ,LYNN FRANTZ,ALL PARTIES IN POSSESSION OF 22 DURHAM CT, IOWA CITY, IOWA, JOSE NAVARRO, CLAUDIA ZAMBRANO,ALL PARTIES IN POSSESSION OF 3446 JAMIE LANE, IOWA CITY, IOWA; ALL PARTIES IN POSSESSION OF 3321 WINTERGREEN DRIVE, IOWA CITY, ALL PARTIES IN POSSESSION OF 901 PARK ROAD, IOWA CITY, IOWA, CASEY M. MOEL,JOY E. MOEL,ALL PARTIES IN POSSESSION OF 4880 _ r. NO WHERE AVE SW, IOWA CITY, IOWA, ALL PARTIES IN POSSESSION OF 340 HIGHLAND AVE IOWA CITY, IOWA, ALL PARTIES IN POSSESSION n- OF 344 HIGHLAND AVE, IOWA CITY, IOWA -+ -- ALL PARTIES IN POSSESSION OF 348 HIGHLAND m AVE, IOWA CITY, IOWA, DOUG SHEETZ, ``-� KAREN SHEETZ,ALL PARTIES IN > POSSESSION OF 55 MONTGOMERY PLACE IOWA CITY, IOWA,ALL PARTIES IN POSSESSION OF 46 LANCESTER PLACE, IOWA CITY IOWA, ALL PARTIES IN POSSESSION OF 18 LANCESTER PLACE, IOWA CITY, IOWA, ALL PARTIES IN POSSESSION OF 31 MONTGOMERY PLACE IOWA CITY, IOWA, 08/07/09 2 ALL UNKNOWN CLAIMANTS OF THE FOLLOWING DESCRIBED PROPERTY IN JOHNSON COUNTY, IOWA,TO WIT:LOT ONE(1)AND THE NORTHERLY TEN FEET OF LOT TWO(2),DESCRIBED AS: COMMENCING AT THE NORTHEAST CORNER OF LOT TWO(2),THENCE SOUTHERLY ALONG THE EASTERLY LINE OF SAID LOT TWO(2),TEN(10) FEET,THENCE NORTHWESTERLY TO A POINT ON THE WEST LINE OF LOT TWO(2),TEN(10)FEET SOUTH OF THE SOUTHWEST CORNER OF LOT ONE(1),THENCE NORTH TEN(10)FEET TO THE SOUTHWEST CORNER OF LOT ONE(1),THENCE SOUTHEAST ALONG THE NORTHERLY LINE OF LOT TWO(2)TO THE POINT OF BEGINNING,ALL IN BLOCK 1 OF BLACK'S SECOND SUBDIVISION IN GOVERNMENT LOT TWO (2), SECTION NINE(9) TOWNSHIP SEVENTY-NINE (79)NORTH,RANGE SIX (6),WEST OF THE 5th P.M.,ACCORDING TO THE RECORDED PLAT THEREOF RECORDED IN PLAT BOOK 1,PAGE 139, OF THE RECORDER'S OFFICE OF JOHNSON COUNTY, IOWA, EXCEPTING THEREFROM, HOWEVER, THAT PORTION OF THE ABOVE DESCRIBED REAL ESTATE PREVIOUSLY CONVEYED BY WARRANTY DEED DATED JULY 18, 1952,AND RECORDED AT PAGE 580 OF BOOK 214 OF THE DEED RECORDS OF JOHNSON COUNTY, IOWA, ALSO DESCRIBED AS: LOT 1 IN BLOCK 1 OF BLACK'S SECOND SUB-DIVISION IN GOVERNMENT LOT 2, SEC. 9,TWP. 79 N.,R. 6 WEST OF THE 5th P.M., ACCORDING TO THE RECORDED PLAT THEREOF RECORDED IN PLAT BOOK 1,PAGE 139,OF THE RECORDER'S OFFICE OF JOHNSON COUNTY,IOWA, O EXCEPT THE FOLLOWING: COMMENCING AT THE SOUTHEASTERLY CORNER OF LOT 1;THENCE 0-< F NORTHERLY ALONG THE EASERLY LINE OF SAID r f g'1 LOT 1, 18 FEET;THENCE WESTERLY PARALLEL m 0 WITH THE SOUTHERLY LINE OF SAID LOT 1 TO THE 5 2 WESTERLY LINE OF SAID LOT 1; THENCE y SOUTHERLY TO THE SOUTHWEST CORNER OF SAID 'O LOT 1;THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID LOT 1 TO THE POINT OF BEGINNING; ALL UNKNOWN CLAIMANTS OF THE FOLLOWING DESCRIBED PROPERTY IN JOHNSON COUNTY, IOWA, TO WIT: UNITS A,B AND C,BUILDING 14 IN 08/06/09 3 WELLINGTON CONDOMINIUMS II AT VILLAGE ROAD,WINTERGREEN DRIVE AND LANCESTER PLACE,ACCORDING TO THE DECLARATION THEREOF RECORDED AUGUST 12, 2005, IN BOOK 3925,PAGE 453,RECORDS OF THE JOHNSON COUNTY RECORDER, TOGETHER WITH SAID UNIT'S INTEREST IN THE COMMON ELEMENTS, Defendants. o PREAMBLE ? ro COMES NOW,the Plaintiff University of Iowa Community Credit Union, by✓a through its attorneys,Robert S. Michael and Crystal K. Raiber of Lynch, Greenleaf& chaeclb L.L.P., and for its Petition, states as follows: 1. Plaintiff is a credit union lawfully doing business with its principal place of business in Iowa City,Johnson County, Iowa. 2. Frantz Construction Co., Inc. is an Iowa corporation with its principal place of business in Iowa City,Johnson County, Iowa. 3. Eastside Investors, LLC, is an Iowa limited liability company with its principal place of business in Iowa City,Johnson County, Iowa 4. The last known address of Eugene W.Nissley and Patricia J.Nissley is 1478 Cromwell Place,Iowa City,Iowa 52240 5. The last known address of William L. Frantz and Sherry L. Frantz is 1463 Buckingham Place,Iowa City,Iowa 52240. 6. None of the following described real estate is a residence of Defendant Eugene W.Nissley or Patricia J.Nissley or William L.Frantz or Sherry L. Frantz. 08/06/09 4 7. William L. Frantz signed numerous commercial guarantees for Frantz Construction Co., Inc.wherein he has a continuing obligation of liability for any indebtedness of Frantz Construction Co.,Inc. to Plaintiff. Said guarantees dated: July 20, 2007; June 11,2008; June 13, 2008; July 23, 2008; August 8, 2008; August 19, 2008; September 11, 2008;December 4, 2008; December 31, 2008; and May 7,2009, copies of which are attached hereto and incorporated herein,marked Exhibit"50". 8. Eugene W.Nissley signed numerous commercial guarantees for Frantz Construction Co., Inc. wherein he has a continuing obligation of liability for any indebtedness of Frantz Construction Co., Inc. to Plaintiff. Said guarantees dated: July 20, 2007; June 11, 2008;June 13, 2008;August 8, 2008; September 11, 2008;December 4, 2008; December 31, 2008; and May 7, 2009,copies of which are attached hereto and incorporated herein,marked Exhibit"51". 9. William L. Frantz signed numerous commercial guarantees for Eastside Investors LLC wherein he has a continuing obligation of liability for any indebtedness of Eastside Investors LLC to Plaintiff. Said guarantees dated: February 11,2005;February 17, 2005;March 23, 2005; October 21, 2005;December 21,2005;November 16, 2007, copies of which are attached hereto and incorporated herein,marked Exhibit"52". 10. Eugene W.Nissley signed numerous commercial guarantees for Eastside Investors LLC wherein he has a continuing obligation of liability for any indebtedness of Eastside Investors LLC to Plaintiff. Said guarantees dated: February 11,2005;February 17, 2005;March 23,200; 4 October 21, 2005;December 21,2005;November 16,2007, copies of which are attach herpp rn and incorporated herein, marked Exhibit"53". n - y - 11. On or about February 11,2005,Defendant William L. Frantz made, executed arg delivered a Note to Plaintiff(hereinafter Note 1), a copy of which is attached hereto anca' o 08/06/09 5 incorporated herein,marked Exhibit "1". Note 1 is in the principal sum of Thirty-Six Thousand Nine Hundred Thirteen Dollars and Thirty-Seven Cents($36,913.37). The initial interest rate of Note 1 is 6.25%. Note 1 provides for payment in full of all principal and interest,with full balance due on February 15, 2010. 12. On or about October 16, 2006,Defendant William L. Frantz made, executed and delivered a Note to Plaintiff(hereinafter Note 2). On October 15, 2007, Defendant William L. Frantz made, executed and delivered a Change in Terms Agreement to Plaintiff. On October 1, 2008, Defendant William L. Frantz made, executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein, marked Exhibit"2". Pursuant to the terms of the Note and Change in Terms Agreements, the principal sum is Fifty Thousand Dollars($50,000.00); the initial interest rate is 7.25%; and payment in full of all principal and interest is due on October 15, 2009. 13. On or about November 30, 2007,Defendants William L. Frantz and Sherry L. Frantz made, executed and delivered a Note to Plaintiff(hereinafter Note 3). On April 8, 2009, Defendants William L. Frantz and Sherry L. Frantz made,executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein, marked Exhibit"3". Pursuant to the terms of the Note and Change in Terms Agreements,the principal sum is One Hundred Ninety-Nine Thousand Seven Hundred Fifty Dollars O rr ($199,750.00); the initial interest rate is 6.75%; and payment in full of all princir pal and,i teres is — :J c; — due December 1, 2009. m 14. On or about October 6, 2006, Defendant Frantz Construction Co., Inc. made, exxuted�d delivered a Note to Plaintiff(hereinafter Note 4), a copy of which is attached hereto and incorporated herein,marked Exhibit"4". Note 4 is in the principal sum of Fifteen Thousand 08/06/09 6 Four Hundred Twenty-Five Dollars ($15,425.00). The initial interest rate of Note 4 is 6.95%. Note 4 provides for payment in full of all principal and interest,with full balance due on October 15,2011. 15. On or about January 9,2007, Defendant Frantz Construction Co.,Inc. made,executed and delivered a Note to Plaintiff(hereinafter Note 5), a copy of which is attached hereto and incorporated herein,marked Exhibit"5". Note 5 is in the principal sum of Eighteen Thousand Seven Hundred Dollars($18,700.00). The initial interest rate of Note 5 is 7.00%. Note 5 provides for payment in full of all principal and interest,with full balance due on January 15, 2011. 16. On or about July 20, 2007,Defendant Frantz Construction Co.,Inc. made, executed and delivered a Note to Plaintiff(hereinafter Note 6). On July 23, 2008,Defendant Frantz Construction Co., Inc,made, executed and delivered a Change in Terms Agreement to Plaintiff. On November 6, 2008, Defendant Frantz Construction Co., Inc. made, executed and delivered a Change in Terms Agreement to Plaintiff. On March 31, 2009,Defendant Frantz Construction Co., Inc. made, executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein,marked Exhibit"6". Pursuant to the terms of the Note and Change in Terms Agreements, the principal sum is One Hundred Forty Thousand —al 01 8 Dollars ($140,000.00); the interest rate is 6.25%as of March 31,2009; and paymer ii full pyf all .. principal and interest is due on November 15, 2009. rn 17. On or about October 25,2007,Defendant Frantz Construction Co.,Inc. made,execute =and 0. f,. delivered a Note to Plaintiff(hereinafter Note 7). On November 6,2008, Defendantanti F Construction Co.,Inc,made, executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein,marked Exhibit"7". Pursuant 08/06/09 7 to the terms of the Note and Change in Terms Agreements, the principal sum is One Hundred Seventy-Six Thousand Two Hundred Fifty Dollars ($176,250.00);the initial interest rate is 6.95%; and payment in full of all principal and interest is due on May 15, 2009. 18. On or about January 25,2008,Defendant Frantz Construction Co.,Inc. made, executed and delivered a Note to Plaintiff(hereinafter Note 8), a copy of which is attached hereto and incorporated herein, marked Exhibit"8". Note 8 is in the principal sum of Twenty-Five Thousand Dollars ($25,000.00). The initial interest rate of Note 8 is 6.25%. Note 8 provides for payment in full of all principal and interest,with full balance due on January 15,2013. 19. On or about June 11, 2008,Defendant Frantz Construction Co., Inc. made, executed and delivered a Note to Plaintiff(hereinafter Note 9), a copy of which is attached hereto and incorporated herein,marked Exhibit"9". Note 9 is in the principal sum of Six Hundred Ten Thousand Five Hundred Dollars($610,500.00). The initial interest rate of Note 9 is 6.25%. Note 9 provides for payment in full of all principal and interest,with full balance due on June 15, 2009. 20. On or about June 13,2008,Defendant Frantz Construction Co.,Inc. made, executed and delivered a Note to Plaintiff(hereinafter Note 10), a copy of which is attached hereto and incorporated herein,marked Exhibit"10". Note 10 is in the principal sum of Six Hundred -n Eighteen Thousand Seven Hundred Fifty Dollars($618,750.00). The initial interest rate of I!T� ill 10 is 6.25%. Note 10 provides for payment in full of all principal and interest,with full ba1aid' > due on June 15, 2009. 21. On or about December 4,2008,Defendant Frantz Construction Co., Inc.made, executed and delivered a Note to Plaintiff(hereinafter Note 11), a copy of which is attached hereto and incorporated herein,marked Exhibit "11". The Note 11 is in the principal sum of Seventy-Five 08/06/09 8 Thousand Dollars($75,000.00). The initial interest rate of the Note 11 is 6.75%. Note 11 provides for payment in full of all principal and interest,with full balance due on June 15, 2009. 22. On or about August 8, 2008,Defendant Frantz Construction Co.,Inc.made, executed and delivered a Note to Plaintiff(hereinafter Note 12), a copy of which is attached hereto and incorporated herein,marked Exhibit"12". Note 12 is in the principal sum of Two Hundred Thirty-Three Thousand Seven Hundred Fifty Dollars($233,750.00). The initial interest rate of Note 12 is 6.25%. Note 12 provides for payment in full of all principal and interest,with full balance due on August 15, 2013. 23. On or about August 19,2008,Defendant Frantz Construction Co.,Inc. made, executed and delivered a Note to Plaintiff(hereinafter Note 13), a copy of which is attached hereto and incorporated herein,marked Exhibit"13". Note 13 is in the principal sum of Twelve Thousand Three Hundred Forty Dollars and Eighty-Five Cents ($12,340.85). The initial interest rate of Note 13 is 6.00%. Note 13 provides for payment in full of all principal and interest,with full balance due on August 15,2011. 24. On or about May 7, 2009,Defendant Frantz Construction Co.,Inc. made,executed and delivered a Note to Plaintiff(hereinafter Note 14), a copy of which is attached heito ands incorporated herein,marked Exhibit"14". Note 14 is in the principal sum of Fouf kundrA. Seventy-Seven Thousand Dollars($477,000.00). The initial interest rate of Note 14 is 5.75.%. m Note 14 provides for payment in full of all principal and interest,with full balancdidtie oriMay 15,2014. 25. On or about February 11,2005,Defendant Eastside Investors,LLC made, executed and delivered a Note to Plaintiff(hereinafter Note 15), a copy of which is attached hereto and incorporated herein,marked Exhibit"15". Note 15 is in the principal sum of Two Hundred 08/06/09 9 Eighty-Eighty Thousand Dollars($288,000.00). The initial interest rate of Note 15 is 6.25%. Note 15 provides for payment in full of all principal and interest,with full balance due on February 15, 2010. 26. On or about February 17,2005,Defendant Eastside Investors,LLC made, executed and delivered a Note to Plaintiff(hereinafter Note 16). On February 17, 2005, Defendant Eastside Investors, LLC,made, executed and delivered a Change in Terms Agreement to Plaintiff. On January 25,2007,Defendant Eastside Investors, LLC,made, executed and delivered a Change in Terms Agreement to Plaintiff. On February 7,2008,Defendant Eastside Investors, LLC,made, executed and delivered a Change in Terms Agreement to Plaintiff On February 11, 2009, Defendant Eastside Investors, LLC, made, executed and delivered a Change in Terms Agreement to Plaintiff. On April 30,2009,Defendant Eastside Investors, LLC made, executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein,marked Exhibit"16". Pursuant to the terms of the Note and Change in Terms Agreements,the principal sum is Five Hundred Thirty-Five Thousand Dollars ($535,000.00);the interest rate is 5.50% as of April 30,2009; and payment in full of all principal and interest is due on May 15,2014. .O %r rr, 27. On or about March 23,2005,Defendant Eastside Investors,LLC made, execute4 m l —� delivered a Note to Plaintiff(hereinafter Note 17). On March 2,2007,Defendant Easle • ff. Investors, LLC,made,executed and delivered a Change in Terms Agreement to P1at O March 17,2008,Defendant Eastside Investors,LLC made, executed and delivered a Change in Terms Agreement to Plaintiff Copies of the above are attached hereto and incorporated herein, marked Exhibit"17". Pursuant to the terms of the Note and Change in Terms Agreements,the principal sum is Seven Hundred Twenty-Five Thousand Dollars($725,000.00);the interest rate 08/06/09 10 is 5.95%as of March 17, 2008; and payment in full of all principal and interest is due on September 30, 2009. 28. On or about October 21, 2005, Defendant Eastside Investors, LLC made, executed and delivered a Note to Plaintiff(hereinafter Note 18). On March 31,2006, Defendant Eastside Investors, LLC made, executed and delivered a Change in Terms Agreement to Plaintiff. On March 2,2007,Defendant Eastside Investors, LLC made, executed and delivered a Change in Terms Agreement to Plaintiff. On March 17, 2008,Defendant Eastside Investors,LLC made, executed and delivered a Change in Terms Agreement to Plaintiff. On March 5,2009,Defendant Eastside Investors, LLC made, executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein, marked Exhibit"18". Pursuant to the terms of the Note and Change in Terms Agreements,the principal sum is Ninety- Four Thousand Dollars($94,000.00); the interest rate is 6.25%as of March 17,2008; and payment in full of all principal and interest is due on November 1,2009. 29. On or about December 21,2005,Defendant Eastside Investors, LLC made, executed and delivered a Note to Plaintiff(hereinafter Note 19). On May 22,2007,Defendant Eastside Investors,LLC made, executed and delivered a Change in Terms Agreement to Plaintiff On May 28,2008,Defendant Eastside Investors, LLC made,executed and delivered a Change in Terms Agreement to Plaintiff. On November 6, 2008,Defendant Eastside Investors, LLC made, r-a J executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the abo are f„ r, attached hereto and incorporated herein,marked Exhibit"19". Pursuant to the terms1'ffihe Note r' and Change in Terms Agreements,the principal sum is Five Hundred Seventy-Seven.T Tfi usa l Five Hundred Dollars($577,500.00);the interest rate is 6.75%as of May 22,2007; =I pay o t in full of all principal and interest is due on August 1,2009. 08/06/09 11 30. On or about November 16,2007,Defendant Eastside Investors,LLC made, executed and delivered a Note to Plaintiff(hereinafter Note 20). On March 24, 2009,Defendant Eastside Investors, LLC made, executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein,marked Exhibit"20". Pursuant to the terms of the Note and Change in Terms Agreements,the principal sum is Five Hundred Sixteen Thousand Dollars($516,000.00); the interest rate is 6.95%; and payment in full of all principal and interest is due on July 15, 2009. 31. On or about January 29, 2008,Defendant Eastside Investors,LLC made, executed and delivered a Note to Plaintiff(hereinafter Note 21). On February 11, 2009,Defendant Eastside Investors, LLC made, executed and delivered a Change in Terms Agreement to Plaintiff. Copies of the above are attached hereto and incorporated herein,marked Exhibit"21". Pursuant to the terms of the Note and Change in Terms Agreements,the principal sum is Two Hundred Forty- Eight Thousand Dollars($248,000.00); the interest rate is 6.50%; and payment in full of all principal and interest is due on February 15,2010. 32. Each Mortgage referred to herein provides in the event of default, suit, and foreclosure that, o Plaintiffs attorneys' fees shall be paid by mortgagor, and each Security Agreement ref'Odtom i Immoherein provides that Plaintiffs attorneys' fees incurred shall be paid by Grantor, and ear-Ix-Note— ? -<:ra TTI r.I referred to herein provides that Plaintiffs attorneys' fees incurred shall be paid by Boribtr. �— s .. Plaintiffs'attorneys attach their affidavit for such fee as required by statute,which is aached hereto, and incorporated herein,marked Exhibit "48". Plaintiff requests such attorney fees in this matter. 33. As shown by the attached affidavit,marked Exhibit"49",the facts stated in Plaintiffs Mortgage Foreclosure Petition and Application for Immediate Appointment of Receiver are true. 08/06/09 1 2 34. Plaintiff elects to foreclose without redemption, and in addition to the specific relief requested in each Count referring to the foreclosure of a mortgage, unless stated otherwise,the Plaintiff also requests the following relief: PLAINTIFF FURTHER PRAYS that each Mortgage be established as a first and prior lien against the real estate described and as superior and paramount to the interests, lien, and claims of each and all Defendants; that said Mortgages be foreclosed for the full amount of said judgment, interest, and costs; that all claims, rights, title, and interest of the Defendants in this suit, and each of them, in or to or upon said real estate, may be decreed to be junior and inferior to the rights and lien of this Plaintiff, and that the right, title, and interest of each Defendant be forever barred and foreclosed. PLAINTIFF FURTHER PRAYS that, since there is no right of redemption,that special execution may immediately issue for the sale of each said mortgaged real estate or so much thereof as is necessary to satisfy Plaintiffs judgment, together with interest, cost, and accruing costs,to satisfy the judgment to be entered herein; that Plaintiff has the right to direct the sheriff as to the manner of and the order in which the real estate will be offered at such sale; that O Plaintiff shall have the right to bid any portion of its judgment on any one or more 4.2te ref4m estate properties as offered for sale. =-1 n — T-- rn PLAINTIFF FURTHER PRAYS that if possession be not immediately surrend tole grantee in the Sheriff Deed to be issued under said execution, a writ of possession may be o immediately issued directing the Sheriff of this county to put such grantee in possession of the mortgaged premises; that if a deficiency remains after the sale of the real estate properties, that a general execution issue against each and every Defendant against whom a judgment was entered. 08/07109 13 PLAINTIFF FURTHER PRAYS that in the event Plaintiff is required to advance any further sums for taxes, insurance or abstracting regarding the described real estate, Plaintiff be given an additional lien against the real estate for the amount so advanced. PLAINTIFF FURTHER PRAYS for such other and further relief as may be just and equitable in the premises. COUNT I: JUDGMENT ON NOTE 1 35. Plaintiff hereby incorporates paragraphs 1, 5, 11, 32 and 33 of this Petition. 36. Defendant William L. Frantz is now delinquent in his payment on said Note. 37. Plaintiff is the owner and holder of said Note. 38. In accordance with the provisions of said Note, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 39. That the Defendant is not and have not been at anytime during the preceding six (6)months a member of any of the Armed Forces of the United States of America and is not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 40. After crediting the amounts paid on said Note there is now due and owing Plaintiff from Defendant William L. Frantz: A. An unpaid principal balance, as of July 23, 2009,in the amount of$32,413.50. B. Interest as provided in the Note,on the unpaid principal balance to July 23,2009, in the _ N amount of$366.32. o 71 C. Interest as provided in the Note, on the unpaid principal balance as of July , 009,'to F �G r m date of filing herein, which interest currently accrues at the rate of 6.25%per annu th' o amount of$5.55 per day. > 0 08/07/09 14 WHEREFORE,Plaintiff prays for judgment in personam against Defendant William L. Frantz, for the following: A. $32,779.82 together with interest on the principal portion of the Note thereof at the rate of 6.25%percent per annum from July 23, 2009, to the date of filing of this petition,plus 6.25% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, and the costs of this action. COUNT II: JUDGMENT ON NOTE 2 41. Plaintiff hereby incorporates paragraphs 1, 5, 12, 32 and 33 of this Petition.6 42. Defendant William L. Frantz is now delinquent in his payment on said Note.n n— *13 - r 43. Plaintiff is the owner and holder of said Note. 44. In accordance with the provisions of said Note,Plaintiff has heretofore decla1GJZand'9 o hereby declares the entire indebtedness thereunder immediately due and payable. 45. That the Defendant is not and have not been at anytime during the preceding six (6)months a member of any of the Armed Forces of the United States of America and is not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 46. After crediting the amounts paid on said Note there is now due and owing Plaintiff from Defendant William L. Frantz: A. An unpaid principal balance,as of July 23, 2009,in the amount of$50,000.00. B. Interest as provided in the Note,on the unpaid principal balance to July 23,2009, in the amount of$818.93. C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, to date of filing herein, which interest currently accrues at the rate of 7.25%per annum in the amount of$9.93 per day. 08/07/09 15 WHEREFORE, Plaintiff prays for judgment in personam against Defendant William L. Frantz, for the following: A. $50,818.93 together with interest on the principal portion of the Note thereof at the rate of 7.25%percent per annum from July 23, 2009,to the date of filing of this petition,plus 7.25% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, and the costs of this action. _ Q COUNT III: FORECLOSURE OF NOTE 3 > -701 n 1 22 DURHAM COURTat- -- c7 47. Plaintiff hereby incorporates paragraphs 1, 5,6, 13, 32, 33 and 34 of this Peon. = * •:9 48. To secure Note 3,Defendants William L. Frantz and Sherry L. Frantz on orbout November 30,2007,made, executed and delivered to Plaintiff a written Purchase Money Mortgage (hereinafter"Mortgage")creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein,marked Exhibit"22". The Mortgage covers the following described real property in Johnson County, Iowa: Lot 11 in Part 1 Village Green Addition to Iowa City,Iowa,according to the plat thereof Recorded in Book 7,page 60,Plat Records of Johnson County,Iowa. This Mortgage was duly filed for record on December 4,2007, in Book 4240,Page 833 of the records of the Recorder for Johnson County,Iowa. 49. Defendants William L. Frantz and Sherry L. Frantz are the owners and holders of the following real estate: Lot 11 in Part 1 Village Green Addition to Iowa City,Iowa,according to the plat thereof Recorded in Book 7,page 60,Plat Records of Johnson County,Iowa. 50. Defendants William L. Frantz and Sherry L.Frantz are now delinquent in their payment on said Note and Mortgage. 08/06/09 16 51. The Mortgage provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property,pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgage. 52.Plaintiff is the owner and holder of said Note and Mortgage. 53. In accordance with the provisions of said Note and Mortgage,Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 54. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon,the Mortgage may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgage. >- .7 � n 55. The liens or interest of Eric Frantz, Lynn Frantz, and any other Parties in Posson 3.rtse = from their respective leases/subleases or other contracts relating to the above-descr reaLo v — estate. 0 56. That the Defendants are not and have not been at anytime during the preceding six (6) months members of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 57. Plaintiff's Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Mortgage. 58. After crediting the amounts paid on said Note secured by said Mortgage there is now due and owing Plaintiff from Defendants William L. Frantz and Sherry L. Frantz: A. An unpaid principal balance, as of July 23,2009, in the amount of$199,491.17. 08/06/09 17 B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009,in the amount of$2,782.81. C. Interest as provided in the Note,on the unpaid principal balance as of July 23,2009,to date of filing herein,which interest currently accrues at the rate of 6.75%per annum in the amount of$36.73 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz and Sherry L. Frantz,jointly and severally, and judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $202,273.98 together with interest on the principal portion of the Note thereof at the rate of 6.75%percent per annum from July 23,2009,to the date of filing of this petition,plus 6.75% interest on said judgment from and after the date of filing of this petition, g B. Plus all reasonable attorney's fees,taxes,insurance, abstracting fees, and the costs ofAis n ii action. y r' r .c,▪:. .� COUNT IV: JUDGMENT ON NOTE 4 > — 0 59. Plaintiff hereby incorporates paragraphs 1, 2,4, 5, 7, 8, 14, 32 and 33 of this Petition. 60. On or about October 6, 2006,Frantz Construction Co., Inc. made, executed and delivered a Commercial Security Agreement to Plaintiff, a copy of which is attached hereto and incorporated herein,marked Exhibit"23". The Agreement provides Plaintiff a security interest in a 2000 Ford F250 4x4(VIN 1FI'NF21 SOYEB74830)to secure the indebtedness of Note 4. 61. Defendant Frantz Construction Co., Inc. is now delinquent in its payment on said Note. 62. Plaintiff is the owner and holder of said Note and Agreement. 08/06/09 18 63. In accordance with the provisions of said Note,Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 64. That the Defendants are not and have not been at anytime during the preceding six(6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 65. After crediting the amounts paid on said Note there is now due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: A. An unpaid principal balance, as of July 23, 2009,in the amount of$7,245.98. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$95.20. C. Interest as provided in the Note,on the unpaid principal balance as of July 2909, date of filing herein,which interest currently accrues at the rate of 6.95%per annuthe r" r- fl'1 amount of$1.38 per day. —rn WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L.Frantz, 0 Eugene W.Nissley, and Frantz Construction Co.,Inc.,jointly and severally, for the following: A. $7,341.18 together with interest on the principal portion of the Note thereof at the rate of 6.95%percent per annum from July 23,2009,to the date of filing of this petition,plus 6.95% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, and the costs of this action. COUNT V: JUDGMENT ON NOTE 5 66. Plaintiff hereby incorporates paragraphs 1, 2, 4, 5, 7, 8, 15, 32 and 33 of this Petition. 08/06/09 19 67. On or about January 9, 2007,Frantz Construction Co., Inc.made, executed and delivered a Commercial Security Agreement to Plaintiff, a copy of which is attached hereto and incorporated herein,marked Exhibit"24". The Agreement provides Plaintiff a security interest in a 2004 Ford F-150(VIN 1ETPW 14504FA15822)to secure the indebtedness of Note 5. 68. Defendant Frantz Construction Co., Inc. is now delinquent in their payment on said Note. 69. Plaintiff is the owner and holder of said Note and Agreement. 70. In accordance with the provisions of said Note,Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 71. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembej Civil Relief Act. — n , 72. After crediting the amounts paid on said Note there is now due and owing Pla4ff from Defendant Frantz Construction Co., Inc.: 0 A. An unpaid principal balance, as of July 23, 2009, in the amount of$7,778.98. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$147.70. C. Interest as provided in the Note,on the unpaid principal balance as of July 23,2009,to date of filing herein,which interest currently accrues at the rate of 7.00%per annum in the amount of$1.49 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W.Nissley, and Frantz Construction Co.,Inc.,jointly and severally, for the following: 08/06/09 20 A. $7,926.68 together with interest on the principal portion of the Note thereof at the rate of 7.00%percent per annum from July 23, 2009, to the date of filing of this petition, plus 7.00% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, and the costs of this action. COUNT VI: FORECLOSURE OF NOTE 6 O r *0 cmi 3446 JAMIE LANE >—{ 72, 11 r. 73. Plaintiff hereby incorporates paragraphs 1, 2, 4, 5, 6, 7, 8, 16, 32, 33 and 34 Odds ~ m 70 Petition. a 74. To secure Note 6, Defendant Frantz Construction Co., Inc. on or about December 2006, made, executed and delivered to Plaintiff a written Purchase Money Mortgage (hereinafter "First Mortgage")creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"25". The First Mortgage covers the following described real property in Johnson County, Iowa: Lot 61,Village Green—Part XIX,Iowa City,IA,according to the plat thereof recorded in Book 46,Page 300,Plat Records of Johnson County,Iowa AND Lot 3,Village Green South,Part 3A,Iowa City,Iowa,according to the plat thereof recorded in Book 34, Page 38,Plat Records of Johnson County,Iowa. This First Mortgage was duly filed for record on December 20, 2006, in Book 4112, Page 757 of the records of the Recorder for Johnson County, Iowa. 75. To secure Note 6, Defendant Frantz Construction Co., Inc. on or about July 20, 2007, made, executed and delivered to Plaintiff a written Construction Mortgage (hereinafter "Second Mortgage")creating a lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"26". The Second Mortgage covers the following described real property in Johnson County, Iowa: 08/06/09 21 Lot 3,Village Green South,Part 3A,Iowa City,Iowa according to the plat thereof recorded in Book 34, Page 38,Plat Records of Johnson County,Iowa. This Second Mortgage was duly filed for record on July 25, 2007, in Book 4194,Page 615 of the records of the Recorder for Johnson County, Iowa. 76. Defendant Frantz Construction Co., Inc. is the owner and holder of the following real estate: Lot 3,Village Green South,Part 3A,Iowa City,Iowa according to the plat thereof recorded in Book 34, Page 38,Plat Records of Johnson County,Iowa. 77. Defendant Frantz Construction Co., Inc. is now delinquent in his payment on said Note and Mortgages. 78. The Mortgages provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property,pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgages. 79. Plaintiff is the owner and holder of said Note and Mortgages. 80. In accordance with the provisions of said Note and Mortgages,Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 81. Said Mortgages provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgages may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgages. p 82. That the Defendant,Bachmeier Carpet One Floor&Home may claim an interest i i:And to cm l the subject real estate by virtue of a Mechanic's Lien dated August 11, 2008, and recorded Aril �rn O ' 30, 2009, Document No. LNLN009170 . < '' "O 08/06/09 22 83. That the Defendants Jose L. Navarro and Claudia D. Zambrano may claim an interest in and to the subject real estate by virtue of a real estate contract relating to the above-described real estate, dated December 6, 2008,recorded December 11,2008,Book 4371,page 724. 84. That the Defendants are not and have not been at anytime during the preceding six(6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 85. Plaintiffs First Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Mortgage and all amounts of all Notes are secured by the First Mortgage 86. Plaintiff's Second Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Second Mortgage,and all amounts of all Notes are secured by the Second Mortgage. 87. After crediting the amounts paid on said Note secured by said Mortgages there is now due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: n r` A. An unpaid principal balance, as of July 23, 2009, in the amount of$140,000.00:0 i m m B. Interest and late fees as provided in the Note,on the unpaid principal balance tpJ ily 2 ; 0 .? 2009, in the amount of$3,007.95. o C. Interest as provided in the Note,on the unpaid principal balance as of July 23, 2009, to date of filing herein,which interest currently accrues at the rate of 6.25% per annum in the amount of$23.97 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L.Frantz, Eugene W.Nissley, and Frantz Construction Co.,Inc.,jointly and severally,and for judgment in 08/06/09 23 rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $143,007.95 together with interest on the principal portion of the Note thereof at the rate of 6.25%percent per annum from July 23, 2009, to the date of filing of this petition, plus 6.25% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of this action. _ N COUNT VII: FORECLOSURE OF NOTE 7 Cl • , ,,n 3321 WINTERGREEN DRIVE r r- m 88. Plaintiff hereby incorporates paragraphs 1, 2, 4, 5, 6, 7, 8, 17, 32, 33 and 34 ofs Petition. 89. To secure Note 7, Defendant Frantz Construction Co., Inc. on or about December 18, 2006,made, executed and delivered to Plaintiff a written Purchase Money Mortgage (hereinafter "First Mortgage") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"25" . The First Mortgage covers the following described real property in Johnson County, Iowa: Lot 61,Village Green—Part XIX,Iowa City,IA,according to the plat thereof recorded in Book 46,Page 300,Plat Records of Johnson County,Iowa AND Lot 3,Village Green South,Part 3A,Iowa City,Iowa according to the plat thereof recorded in Book 34, Page 38,Plat Records of Johnson County,Iowa. This First Mortgage was duly filed for record on December 20, 2006, in Book 4112,Page 757 of the records of the Recorder for Johnson County, Iowa. 90. To secure Note 7, Defendant Frantz Construction Co., Inc. on or about October 25, 2007, made, executed and delivered to Plaintiff a written Mortgage (hereinafter "Second Mortgage") 08/06/09 24 creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"27". The Second Mortgage covers the following described real property in Johnson County, Iowa: Lot 61,Village Green—Part XIX,Iowa City,Iowa,according to the plat thereof recorded in Book 46,Page 300,Plat Records of Johnson County,Iowa. This Second Mortgage was duly filed for record on October 26, 2007, in Book 4230, Page 65 of the records of the Recorder for Johnson County, Iowa. 91. Defendant Frantz Construction Co., Inc. is the owner and holder of the following real estate: Lot 61,Village Green—Part XIX,Iowa City,Iowa,according to the plat thereof recorded in Book 46,Page 300,Plat Records of Johnson County,Iowa. 92. Defendant Frantz Construction Co., Inc. is now delinquent in its payment on said Note and Mortgages. 93. The Mortgages provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property,pay taxes on the property, and add such amounts to the Mortgages debt. These amounts-become a part of the Mortgages indebtedness and are secured by the Mortgages. 94. Plaintiff is the owner and holder of said Note and Mortgages. 95. In accordance with the provisions of said Note and Mortgages,Plaintiff ha i eretofore declared and hereby declares the entire indebtedness thereunder immediately due arid payable. .,_L 96. Said Mortgages provide that if default shall be made in the payment of said Note or any ,1 1.1 part of the interest thereon, the Mortgages may be foreclosed upon; and Plaintiff, s:' the `2 commencement of this action, does elect to foreclose on the Mortgages. 08/06/09 25 97. That the Defendant, Bachmeier Carpet One Floor&Home may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated August 11, 2008, and recorded April 30, 2009, Document No. LNLN009170 . 98. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 99. Plaintiff's First Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's First Mortgage, and all amounts of all Notes are secured by the First Mortgage. 100. Plaintiff's Second Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Second Mortgage, and all amounts of all Notes are secured by the Second Mortgage. -n 101. After crediting the amounts paid on said Note secured by said Mortgages thefe is now- due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: J 0 A. An unpaid principal balance, as of July 23, 2009, in the amount of$176,250.00. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$17,585.54. C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, to date of filing herein, which interest currently accrues at the rate of 6.95%per annum in the amount of$33.56 per day. WHEREFORE, Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Frantz Construction Co., Inc.,jointly and severally, and for judgment in 08/06/09 26 rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $193,835.54 together with interest on the principal portion of the Note thereof at the rate of 6.95%percent per annum from July 23,2009, to the date of filing of this petition,plus 6.95% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees,taxes, insurance, abstracting fees, and the costs of this action. - _ J COUNT VIII: JUDGMENT ON NOTE 8 n y >. 1 Tt 102.Plaintiff hereby incorporates paragraphs 1,2,4, 5, 7, 8, 18, 32 and 33 of thisPetitioirrn 1;1 r1 r. 103. On or about January 25, 2008,Frantz Construction Co., Inc. made, executed - :" delivered a Commercial Security Agreement to Plaintiff, a copy of which is attached iereto and incorporated herein,marked Exhibit"28". The Agreement provides Plaintiff a security interest in a 2005 Ford F250 4x4 Super Cab XLT(VIN 1FTSX21525EB67514)to secure the indebtedness of the Note 8. 104. Defendant Frantz Construction Co., Inc. is now delinquent in its payment on said Note. 105. Plaintiff is the owner and holder of said Note and Agreement. 106. In accordance with the provisions of said Note,Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 107. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 08/06/09 27 108. After crediting the amounts paid on said Note there is now due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: A. An unpaid principal balance, as of July 23, 2009, in the amount of$19,430.50. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$329.38. C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, to date of filing herein, which interest currently accrues at the rate of 6.25%per annum in the amount of$3.33 per day. WHEREFORE, Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Frantz Construction Co., Inc.,jointly and severally, for the following: A. $19,759.88 together with interest on the principal portion of the Note thereof at the rate of 6.25%percent per annum from July 23, 2009, to the date of filing of this petition,plus 6.25% interest on said judgment from and after the date of filing of this petition, O n � ,L �^ 'n B. Plus all reasonable attorney's fees, taxes, insurance, and the costs of this action. -� :O — ... _. m COUNT IX: FORECLOSURE OF NOTE 9 > _ 3114, 3118, 3122 WINTERGREEN DRIVE 109. Plaintiff hereby incorporates paragraphs 1, 2, 4, 5, 6, 7, 8, 19, 32, 33 and 34 of this Petition. 110. To secure Note 9,Defendant Frantz Construction Co., Inc. on or about June 11, 2008, made, executed and delivered to Plaintiff a written Construction Mortgage/Purchase Money Mortgage (hereinafter "Mortgage") creating a lien on the real estate described therein, a copy of 08/06/09 28 which is attached hereto and incorporated herein, marked Exhibit"29". The Mortgage covers the following described real property in Johnson County, Iowa: Units A,B and C,Building 14 in Wellington Condominiums II at Village Road,Wintergreen Drive and Lancester Place,according to the Declaration thereof recorded August 12,2005,in Book 3925,Page 453,Records of the Johnson County Recorder,together with said unit's interest in the common elements. This Mortgage was duly filed for record on June 19, 2008, in Book 4311, Page 811 of the records of the Recorder for Johnson County, Iowa. This mortgage is inferior only to a first mortgage on the above described property recorded December 22, 2005, in Book 3975, Page 660 of the records of the Recorder for Johnson County, Iowa, as specified in Count XVIII. 111. Defendant Frantz Construction Co., Inc. is the owner and holder of the following real estate: Units A,B and C,Building 14,Wellington Condominiums II at Village Road,Wintergreen Drive anc .ancesteil Place,according to the Declaration thereof recorded August 12,2005,in Book 3925,Page 453,Records of the. Johnson County Recorder,together with said unit's interest in the common elements. 112. Defendant Frantz Construction Co., Inc. is now delinquent in his payment on-said Note rri and Mortgage. r, c 113. The Mortgageprovidein the eventofdefault that Plaintiff may procure a continuation of the abstract, obtain insurance for the property,pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgage. 114. Plaintiff is the owner and holder of said Note and Mortgage. 115. In accordance with the provisions of said Note and Mortgage, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 116. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgage may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgage. 08/06/09 29 117. That the Defendant, Builders Components Incorporated of North Liberty may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated January 27, 2009, and recorded May 11, 2009,Document No. LNLN009182. 118. That the Defendant,Yoder Roofing and Construction LLC may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated January 19, 2009, and recorded June 4,2009,Document No. LNLN009209. 119. That the Defendant, Wood Grain Sales DBA Squaw Creek Millwork may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated June 3,2009, and recorded June 5,2009, Document No. LNLN009212. 120. That the Defendant,MidAmerican Energy Company,may claim an interest in and to the subject real estate by virtue of work performed. > Er,i, T 121. That the Defendant,Foundations Unlimited, Inc.,may claim an interest in and g the r rn subject real estate by virtue of work performed. — 122. That the Defendant,Port"0"Jonny Inc.,may claim an interest in and to the attbject real estate by virtue of work performed. 123. That the Defendant, Blumenthal Truelsen,Inc. d/b/a Soil-Tek,may claim an interest in and to the subject real estate by virtue of work performed. 124. That the Defendant, S &G Materials,may claim an interest in and to the subject real estate by virtue of work performed. 125. That Defendant(s), all unknown claimants,may claim an interest in and to the subject real estate by virtue of work performed. 126. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not 08/06/09 30 entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 127. Plaintiffs Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiffs Mortgage. 128. After crediting the amounts paid on said Note secured by said Mortgage there is now due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: A. An unpaid principal balance, as of July 23, 2009,in the amount of$283,500.00. B. Interest and late fees as provided in the Note,on the unpaid principal balance to July 23, 2009, in the amount of$31,309.87. C. Interest as provided in the Note, on the unpaid principal balance as July 23,2009, to date of filing herein, which interest currently accrues at the rate of 6.25%per annum in the amount of $48.54 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Frantz Construction Co., Inc.,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $314,809.87 together with interest on the principal portion of the Note thereof at the rate of 6.25%percent per annum from July 23,2009,to the date of filing of this petition,plus 6.25% interest on said judgment from and after the date of filing of this petition, _ G B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the coif tl> action. n — P= m [r COUNT X: FORECLOSURE OF NOTES 10 AND 11 p '' 0 *7' •o 901 PARK ROAD D "— 08/07/09 31 129. Plaintiff hereby incorporates paragraphs 1, 2, 4, 5, 6, 7, 8, 20, 21, 32, 33 and 34 of this Petition. 130. To secure Note 10,Defendant Frantz Construction Co., Inc. on or about June 13, 2008, made, executed and delivered to Plaintiff a written Purchase Money Mortgage (hereinafter "Mortgage")creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein,marked Exhibit"30". The Mortgage covers the following described real property in Johnson County, Iowa: Lot One (1)and the Northerly Ten Feet of Lot Two(2),described as:Commencing at the Northeast corner of Lot Two(2),thence Southerly along the Easterly line of said Lot Two(2),Ten(10)feet,thence Northwesterly to a point on the West line of Lot Two(2),Ten(10)feet South of the Southwest corner of Lot One(1),thence North Ten(10) feet to the Southwest corner of Lot One(1),thence Southeast along the Northerly line of Lot Two(2)to the point of beginning,all in Block 1 of Black's Second Subdivision in Government Lot Two(2),Section Nine(9)Township Seventy-nine(79)North,Range Six(6), West of the 5th P.M.,according to the recorded plat thereof recorded in Plat Book 1,Page 139,of the Recorder's Office of Johnson County,Iowa,excepting therefrom,however,that portion of the above described real estate previously conveyed by Warranty Deed dated July 18, 1952,and recorded at Page 580 of Book 214 of the Deed Records of Johnson County,Iowa ALSO DESCRIBED AS: Lot 1 in Block 1 of Black's Second Sub-division in Government Lot 2,Sec.9,Twp.79 N.,R.6 West of the 5t° P.M.,according to the recorded plat thereof recorded in Plat Book 1,Page 139,of the Recorder's Office of Johnson County,Iowa,except the following:Commencing at the Southeasterly corner of Lot 1;thence Northerly alo i e Easterly line of said Lot 1, 18 feet;thence Westerly parallel with the southerly line of said Lot 1 to gie West''4= line of said Lot 1;thence Southerly to the Southwest corner of said Lot 1;thence Easterly along the Sou line12c-af said Lot 1 to the point of beginning. - m n i r" This Mortgage was duly filed for record on July 9, 2008, in Book 4322,Page 555 clRice records m o� of the Recorder for Johnson County, Iowa. 131. To secure Note 11,Defendant Frantz Construction Co.,Inc. on or about December 4, 2008,made, executed and delivered to Plaintiff a written Mortgage (hereinafter"Mortgage") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein,marked Exhibit"31". The Mortgage covers the following described real property in Johnson County, Iowa: Lot One (1)and the Northerly Ten Feet of Lot Two(2),described as:Commencing at the Northeast corner of Lot Two(2),thence Southerly along the Easterly line of said Lot Two(2),Ten(10)feet,thence Northwesterly to a point on the West line of Lot Two(2),Ten(10)feet South of the Southwest corner of Lot One(1),thence North Ten(10) feet to the Southwest corner of Lot One(1),thence Southeast along the Northerly line of Lot Two(2)to the point of beginning,all in Block 1 of Black's Second Subdivision in Government Lot Two(2),Section Nine(9)Township 08/07/09 32 Seventy-nine(79)North,Range Six(6), West of the 5th P.M.,according to the recorded plat thereof recorded in Plat Book 1,Page 139,of the Recorder's Office of Johnson County,Iowa,excepting therefrom,however,that portion of the above described real estate previously conveyed by Warranty Deed dated July 18, 1952,and recorded at Page 580 of Book 214 of the Deed Records of Johnson County,Iowa. ALSO DESCRIBED AS: Lot 1 in Block 1 of Black's Second Sub-division in Government Lot 2,Sec.9,Twp.79 N.,R.6 West of the 5ih P.M.,according to the recorded plat thereof recorded in Plat Book 1,Page 139,of the Recorder's Office of Johnson County,Iowa,except the following:Commencing at the Southeasterly corner of Lot 1;thence Northerly along the Easterly line of said Lot 1, 18 feet;thence Westerly parallel with the southerly line of said Lot 1 to the Westerly line of said Lot 1;thence Southerly to the Southwest corner of said Lot 1;thence Easterly along the Southerly line of said Lot 1 to the point of beginning. This Mortgage was duly filed for record on December 9,2008, in Book 4371, Page 31 of the records of the Recorder for Johnson County, Iowa. 132.Defendant Frantz Construction Co.,Inc. is the owner and holder of the following real estate: Lot One (1)and the Northerly Ten Feet of Lot Two(2),described as:Commencing at the Northeast corner of Lot Two(2),thence Southerly along the Easterly line of said Lot Two(2),Ten(10)feet,thence Northwesterly to a point on the West line of Lot Two(2),Ten(10)feet South of the Southwest corner of Lot One(1),thence North Ten(10) feet to the Southwest corner of Lot One(1),thence Southeast along the Northerly line of Lot Two(2)to the point of beginning,all in Block 1 of Black's Second Subdivision in Government Lot Two(2),Section Nine(9)Township Seventy-nine(79)North,Range Six(6), West of the 5th P.M.,according to the recorded plat thereof recorded in Plat Book 1,Page 139,of the Recorder's Office of Johnson County,Iowa,excepting therefrom,however,that portion of the above described real estate previously conveyed by Warranty Deed dated July 18, 1952,and recorded at Page 580 of Book 214 of the Deed Records of Johnson County,Iowa. ALSO DESCRIBED AS: Lot 1 in Block 1 of Black's Second Sub-division in Government Lot 2,Sec.9,Twp. 79 N.,R. 6 West of the 5th P.M.,according to the recorded plat thereof recorded in Plat Book 1,Page 139,of the Recorder's Office of Johnson County,Iowa,except the following:Commencing at the Southeasterly corner of Lot 1;thence Northerly along the Easterly line of said Lot 1, 18 feet;thence Westerly parallel with the southerly line of said Lot 1 to the Westerly line of said Lot 1;thence Southerly to the Southwest corner of said Lot 1;thence Easterly along the Southgrly line said Lot 1 to the point of beginning. U� cm >. 1Erd . Y1 133.Defendant Frantz Construction Co., Inc. is now delinquent in its payment o iTsaid Notes m and Mortgages. 5,-o = 0 134. The Mortgages provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property,pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgages. 08/07/09 33 135. Plaintiff is the owner and holder of said Notes and Mortgages. 136. In accordance with the provisions of said Notes and Mortgages, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 137. Said Mortgages provide that if default shall be made in the payment of said Notes or any part of the interest thereon, the Mortgages may be foreclosed upon; and Plaintiff, by the commencement of this action, does elect to foreclose on the Mortgages. 138. That the Defendant,Builders Components Incorporated of North Liberty may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated January 27, 2009, and recorded May 11,2009, Document No. LNLN009183. 139. That the Defendant, Wood Grain Sales DBA Squaw Creek Millwork,may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated October 14, 2008, and recorded May 29,2009, Document No. LNLN009204. 140. That the Defendant, Weldon Drywall, Inc.,may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated February 4,2009, and recorded July 2, 2009, Document No. LNLN009248. 141. That the Defendant,Foundations Unlimited,Inc. may claim an interest in and to the subject real estate by virtue of work performed. 142. That the Defendant,King's Materials, Inc. may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated October 31, 2008, and recorded July 14,20.09, O a Document No. LNLN009256. n >-a M 143. That the Defendant,M M S Consultants, Inc., may claim an interest in and to *r,qubject G` m real estate by virtue of work performed. o ? '' 0 08/07/09 34 144. That the Defendant,The Strub Co., Inc. d/b/a Muller Plumbing&Heating,may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated August 19, 2008, and recorded June 22, 2009,Document No. LNLN009234. 145. That the Defendant,River Products Co.,may claim an interest in and to the subject real estate by virtue of work performed. 146. That the Defendant,H.J. Limited may claim an interest in and to the subject real estate by virtue of work performed. 147. That the Defendant,Port"0"Jonny Inc.,may claim an interest in and to the subject real estate by virtue of work performed. 148. That the Defendant,Homewood Electric Inc., may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien recorded June 22,2009, Document No. LNLN009232. 149. That the Defendant,Johnny Schwartz, may claim an interest in and to the subject real estate by virtue of work performed. 150. That the Defendant,PSK LLC d/b/a Overhead Door Company of Cedar Rapids & Iowa City,may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated November 5, 2008, and recorded June 26, 2009, Document No. LNLN009241. 151. That the Defendant, Garmil, Inc. d/b/a Gary Miller Insulation,may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated November 18,2002, and 0 recorded July 30, 2009,Document No. LNLN009267. n n 152. That the Defendant, White Cap Construction Supply, Inc.,may claim an intern afia to m ITI the subject real estate by virtue of work performed. 0 153. That the Defendant, Aero Rental, Inc., may claim an interest in and to the subject rear estate by virtue of work performed. 08/07/09 35 154. That the Defendant,Blumenthal Truelsen Inc., d/b/a Soil-tek,may claim an interest in and to the subject real estate by virtue of work performed. 155. That the Defendant,Nagle Lumber Company,may claim an interest in and to the subject real estate by virtue of work performed. 156. That the Defendant,Johnny Schwartz,may claim an interest in and to the subject real estate by virtue of work performed. 157. That the Defendant,MidAmerican Energy,may claim an interest in and to the subject real estate by virtue of work performed. 158. That the Defendant,Hawkeye Siding, Inc., may claim an interest in and to the subject real estate by virtue of work performed. 159. That the Defendant, City of Iowa City, may claim an interest in and to the subject real estate by virtue of work performed. 160. That the Defendant,Ashton Engineering, Inc.,may claim an interest in and to the subject real estate by virtue of work performed. 161. That the Defendant,Menard,Inc.,may claim an interest in and to the subject real estate by virtue of work performed. 162. That Defendant(s), all unknown claimants,may claim an interest in and to the subject real estate by virtue of work performed. 163. That the Defendants are not and have not been at anytime during the preceding six(6M months a member of any of the Armed Forces of the United States of America and arts4t Fr" entitled in any way or manner to the benefit or relief provided by the Servicemembersvil a Relief Act. *7 a — 08/07/09 36 164. Plaintiff's Mortgages are superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Mortgages. 165. After crediting the amounts paid on the Notes secured by said Mortgages there is now due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: A. An unpaid principal balance, as of July 23, 2009, in the amount of$693,750.00. B. Interest and late fees as provided in the Notes, on the unpaid principal balance to July 23, 2009, in the amount of$41,477.16. C. Interest as provided in the Notes, on the unpaid principal balance as of July 23, 2009, to date of filing herein, which interest currently accrues at the rate of the blended interest rate of 6.304% per annum in the amount of$119.82 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Frantz Construction Co., Inc.,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $735,227.16 together with interest on the principal portion of the Note thereof at the rate of 6.304%percent per annum from July 23, 2009, to the date of filing of this petition, plus 6.304% interest on said judgment from and after the date of filing of this petition, _ O B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs;of tf m action. =ir COUNT XI: FORECLOSURE OF NOTE 12 5 5 4880 NO WHERE AVE SW 166. Plaintiff hereby incorporates paragraphs 1, 2,4, 5, 6, 7, 8, 22, 32, 33 and 34 of this Petition. 08/07/09 37 167. To secure Note 12,Defendant Frantz Construction Co., Inc. on or about August 8, 2008, made, executed and delivered to Plaintiff a written Mortgage (hereinafter "Mortgage") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein,marked Exhibit "32". The Mortgage covers the following described real property in Johnson County, Iowa: Commencing as a point of reference at the Northeast corner of Section 8,Township 78 North,Range 6 West of the Fifth Principal Meridian,Johnson County,Iowa;thence South 61°08' 00"West 2897.35 feet to a point of intersection with the county road centerline and point of beginning of tract herein described(for purposes of this description,the East line of said Section 8 is assumed to bear due North);thence South 6°21'20"West 571.74 feet along the centerline of said county road to a point; thence South 10°59' 20"West 382.24 feet along the centerline of said county road to a point;thence South 16°45' 50"West 156.20 feet along the centerline of said county road to a point;thence North 88°46' 50"East 920.08 feet to a point;thence North 1066.64 feet to a point;thence South 83° 45' 10"West 180.35 feet to a point;thence North 84°25' 00"West 301.79 feet to a point;thence South 89°21'00" West 259.05 feet to a point of beginning and containing 20.0 acres more or less. This Mortgage was duly filed for record on August 15, 2008, in Book 4339, Page 945 of the records of the Recorder for Johnson County, Iowa. 168. For additional security of Note 13, Defendant Frantz Construction Co., Inc. on or about August 8, 2008,made, executed and delivered to Plaintiff an Assignment of Rents (hereinafter "Assignment") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"33". The Assignment covers the following described real property in Johnson County, Iowa: Commencing as a point of reference at the Northeast corner of Section 8,Township 78 North,Range 6 West of the Fifth Principal Meridian,Johnson County,Iowa;thence South 61°08'00"West 2897.35 feet to a point of intersection with the county road centerline and point of beginning of tract herein described(for purposes of this description,the East line of said Section 8 is assumed to bear due North);thence South 6°21'20"West 571.74 feet along the centerline of said county road to a point;thence South 10°59'20"West 382.24 feet along the centerline of said county road to a point;thence South 16°45' 50"West 156.20 feet along the centerline of said county road to a point;thence North 88°46'50"East 920.08 feet to a point;thence North 1066.64 feet to a point;thence Soutltl3° 45' 10"West 180.35 feet to a point;thence North 84°25'00"West 301.79 feet to a point;thence South 89°2f4 00" West 259.05 feet to a point of beginning and containing 20.0 acres more or less. =� This Assignment was duly filed for record on August 15, 2008, in Book 4339, Page. i57 of"Che m records of the Recorder for Johnson County, Iowa. 0 08/07/09 38 169. Defendant Frantz Construction Co., Inc. is the owner and holder of the following real estate: Commencing as a point of reference at the Northeast corner of Section 8,Township 78 North,Range 6 West of the Fifth Principal Meridian,Johnson County,Iowa;thence South 61°08' 00"West 2897.35 feet to a point of intersection with the county road centerline and point of beginning of tract herein described(for purposes of this description,the East line of said Section 8 is assumed to bear due North);thence South 6°21'20"West 571.74 feet along the centerline of said county road to a point;thence South 10°59' 20"West 382.24 feet along the centerline of said county road to a point;thence South 16°45' 50"West 156.20 feet along the centerline of said county road to a point;thence North 88°46' 50"East 920.08 feet to a point;thence North 1066.64 feet to a point;thence South 83° 45' 10"West 180.35 feet to a point;thence North 84°25'00"West 301.79 feet to a point;thence South 89°21'00" West 259.05 feet to a point of beginning and containing 20.0 acres more or less. 170. Defendant Frantz Construction Co., Inc. is now delinquent in its payment on said Note and Mortgage. 171. The Mortgage provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property, pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgage. 172.Plaintiff is the owner and holder of said Note and Mortgage. 173. In accordance with the provisions of said Note and Mortgage, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 174. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgage may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgage. 0 175.Any interest of Casey M. Moel and Joy E. Moel in the subject real estate arise from their ' m real estate contract relating to the above-described real estate, dated July 26, 2008, reconI d September 24, 2008, Book 4352,page 126,plus two more re-recordings on October 6,7008 in— Book 4355,Page 256 and October 10, 2008 in Book 4356, Page 732. 08/07/09 39 176. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 177. Plaintiff's Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiffs Mortgage. 178. After crediting the amounts paid on said Note secured by said Mortgage there is now due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: A. An unpaid principal balance, as of July 23, 2009, in the amount of$231,376.33. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009,in the amount of$396.19. C. Interest as provided in the Note, on the unpaid principal balance as of July 23,2009,to date of filing herein,which interest currently accrues at the rate of 6.25%per annum in the amount of$39.619 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W.Nissley, and Frantz Construction Co., Inc.,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: - A. $231,772.52 together with interest on the principal portion of the Note thereof at the raf "Ti r 6.25%percent per annum from July 23, 2009, to the date of filing of this petition, plus 4:25% M interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of this action. 08/07/09 40 COUNT XII: JUDGMENT ON NOTE 13 179. Plaintiff hereby incorporates paragraphs 1, 2, 4, 5, 7, 8, 23, 32, and 33 of this Petition. 180. On or about August 19, 2008, Frantz Construction Co., Inc. made, executed and delivered a Commercial Security Agreement to Plaintiff, a copy of which is attached hereto and incorporated herein,marked Exhibit"34". The Agreement provides Plaintiff a security interest in a 1999 Dodge RAM 1500 Quad(yIN 3B7HF13Y4XG219073) to secure the indebtedness of the Note 13. 181. Defendant Frantz Construction Co., Inc. is now delinquent in his payment on said Note. 182. Plaintiff is the owner and holder of said Note and Agreement. 183. In accordance with the provisions of said Note, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 184. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 185. After crediting the amounts paid on said Note there is now due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: _ N Q A. An unpaid principal balance, as of July 23, 2009, in the amount of$9,780.78. 5.C ` m r 1 B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23; m IT 2009, in the amount of$159.17. 573 C. Interest as provided in the Note, on the unpaid principal balance as of July 23,2009, to date of filing herein,which interest currently accrues at the rate of 6.00%per annum in the amount of$1.607 per day. 08/07/09 41 WHEREFORE, Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Frantz Construction Co., Inc.,jointly and severally, for the following: A. $9,939.95 together with interest on the principal portion of the Note thereof at the rate of 6.00%percent per annum from July 23, 2009,to the date of filing of this petition,plus 6.00% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of this action. COUNT XIII: FORECLOSURE AND JUDGMENT OF NOTE 14 1069 HWY 1 W UNIT B; 327, 329 W BENTON STREET 340, 344,348 HIGHLAND AVENUE; 22 DURHAM COURT 186. Plaintiff hereby incorporates paragraphs 1, 2, 4, 5, 6, 7, 8, 24, 32, 33 and 34 of this Petition. 187. To secure Note 14,Defendants Eugene W.Nissley and Patricia J. Nissley on or about May 7,2009,made, executed and delivered to Plaintiff a written Mortgage (hereinafter "Mortgage 1") creating a lien on the real estate described therein, a copy of which is attached hereto and incorporated herein,marked Exhibit"35". The Mortgage covers the following 3 > _ described real property in Johnson County, Iowa: r- 0 rn Unit B,Westport Commercial Condominiums,according to the Declaration thereof recorded in Book 4225 F Page 98,Records of the Recorder of Johnson County,Iowa. — O This Mortgage was duly filed for record on May 11, 2009, in Book 4434,Page 508 of the records of the Recorder for Johnson County, Iowa. 188. To secure Note 14, Defendants Eugene W. Nissley and Patricia J. Nissley on or about May 7, 2009, made, executed and delivered to Plaintiff a written Mortgage (hereinafter "Mortgage 2") creating a lien on the real estate described therein, a copy of which is attached 08/07/09 42 hereto and incorporated herein, marked Exhibit "36". The Mortgage covers the following described real property in Johnson County, Iowa: The East Half(E 1/2)of Lot 3 in Plat of Irregular Survey in School Lot 5,Section 16,Township 79 North, Range 6 West of the 5th P.M.,according to the plat thereof recorded in Plat Book 3,on Page 132,plat records of Johnson County, Iowa. Subject to easements,agreements and restrictions of record. This Mortgage was duly filed for record on May 11, 2009, in Book 4434, Page 520 of the records of the Recorder for Johnson County, Iowa. 189. Defendant Eugene W. Nissley is the owner and holder of the following real estate: Unit B,Westport Commercial Condominiums,according to the Declaration thereof recorded in Book 4225 Page 98,Records of the Recorder of Johnson County,Iowa. AND The East Half(E 1/2)of Lot 3 in Plat of Irregular Survey in School Lot 5,Section 16,Township 79 North, Range 6 West of the 5th P.M.,according to the plat thereof recorded in Plat Book 3,on Page 132,plat records of Johnson County,Iowa.Subject to easements,agreements and restrictions of record. 190. To secure Note 14, Defendant Eastside Investors LLC on or about May 7, 2009, made, executed and delivered to Plaintiff a written Mortgage (hereinafter "Mortgage 3") creating a lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"37". The Mortgage covers the following described real property in Johnson County, Iowa: Units B,C,and D Frantz Commercial Condominiums,Iowa City,Iowa,according to the Declaration thereof recorded in Book 1751,page 89,Plat Records of Johnson County,Iowa, and amendments thereto. This Mortgage was duly filed for record on May 11, 2009, in Book 4434, Page 568 of the records of the Recorder for Johnson County, Iowa, and is inferior only to the Mortgage and Assignment of Rents to Plaintiff, and the mortgage to Corridor State Bank, all described in Count XIV. . ' 191. Defendant Eastside Investors LLC is the owner and holder of the following real estate,;. Units B,C,and D Frantz Commercial Condominiums,Iowa City,Iowa,according to the Declaration thOdf recorded in Book 1751,page 89,Plat Records of Johnson County,Iowa,and amendments thereto. ti 08/07/09 43 192. To secure Note 14, Defendants William L. Frantz and Sherry L. Frantz on or about May 7, 2009, made, executed and delivered to Plaintiff a written Mortgage (hereinafter "Mortgage 4") creating a lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"38". The Mortgage covers the following described real property in Johnson County, Iowa: Lot 11, in Part I Village Green Addition to Iowa City,Iowa according to the plat thereof recorded in Book 7,Page 60,Plat Records of Johnson County,Iowa. This Mortgage was duly filed for record on May 11, 2009, in Book 4434, Page 556 of the records of the Recorder for Johnson County, Iowa, and is inferior only to the Mortgage described in Count III. 193. Defendants William L. Frantz and Sherry L. Frantz are the owners and holders of the following real estate: Lot 11,in Part I Village Green Addition to Iowa City,Iowa according to the plat thereof recorded in Book 7,Page .60,Plat Records of Johnson County,Iowa. 194. Defendant Frantz Construction Co., Inc. is now delinquent in its payment on said Note C; cn � � a and Mortgages. - rn 195. The Mortgages provide in the event of default that Plaintiff may procure:al onti>rtratioi+3 u of the abstract, obtain insurance for the property,pay taxes on the property, and acid such _.. amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgages. 196. Plaintiff is the owner and holder of said Note and Mortgages. 197. In accordance with the provisions of said Note and Mortgages, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 08/07/09 44 198. Said Mortgages provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgages may be foreclosed upon; and Plaintiff, by the commencement of this action, does elect to foreclose on the Mortgages. 199. That the Defendant, Liberty Bank, F.S.B. may claim an interest in and to the subject real estate described in Paragraph 183 by virtue of a Mortgage and Assignment of Rents,both dated November 1, 2007 and filed for record on November 27, 2007, in Book 4238, Page 696 of the records of the Recorder for Johnson County, Iowa. 200. The liens or interest of Defendant Midtown Family Restaurant 2, and any other Parties in Possession, arise from their respective leases/subleases or other contracts relating to the above- 201. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 202. That the Defendant, Liberty Bank, F.S.B. may claim an interest in and to the subject real estate described in Paragraph 184 by virtue of a Mortgage dated April 28, 2004 and filed for record on May 11,2004, in Book 3732,Page 404 of the records of the Recorder for Johnson County, Iowa. 203. Plaintiff's Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Mortgagee„ 204. After crediting the amounts paid on said Note secured by said Mortgages there flow ! due and owing Plaintiff from Defendant Frantz Construction Co., Inc.: - m O A. An unpaid principal balance, as of July 23, 2009, in the amount of$406,925.11. > N 08/07/09 45 B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$4,864.51. C. Interest as provided in the Note,on the unpaid principal balance as of July 23, 2009, to date of filing herein, which interest currently accrues at the rate of 5.75%per annum in the amount of$64.1046 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L.Frantz, Eugene W. Nissley, and Frantz Construction Co.,Inc.,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $411,789.62 together with interest on the principal portion of the Note thereof at the rate of 5.75%percent per annum from July 23,2009,to the date of filing of this petition,plus 5.75% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of this action. COUNT XIV:-FORECLOSURE OF NOTE 15 340, 344,348 HIGHLAND AVENUE 205. Plaintiff hereby incorporates paragraphs 1,3,4, 5, 6, 9, 10,25, 32, 33 and 34 of this Petition. ^' O � 206. To secure Note 15,Defendant Eastside Investors LLC on or about February lc!, 2005 made, executed and delivered to Plaintiff a written Purchase Money Mortgage (hereinafter „6-n �J "Mortgage")creating first and prior lien on the real estate described therein, a copy of of ch i 9 attached hereto and incorporated herein,marked Exhibit"39". The Mortgage covers the following described real property in Johnson County, Iowa: • 08/07/09 46 Units A,B,C,D,&F Frantz Commercial Condominiums,Iowa City,Iowa,according to the Declaration thereof recorded in Book 1751,Page 89,Plat Records of Johnson County,Iowa,and amendments thereto. This Mortgage was duly filed for record on February 15, 2005, in Book 3844, Page 81 of the records of the Recorder for Johnson County, Iowa. 207. For additional security of Note 15, Defendant Eastside Investors LLC on or about February 11, 2005, made, executed and delivered to Plaintiff a written Assignment of Rents (hereinafter "Assignment") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"40". The Assignment covers the following described real property in Johnson County, Iowa: Units A,B,C,D,&F Frantz Commercial Condominiums,Iowa City,Iowa,according to the Declaration thereof recorded in Book 1751,Page 89,Plat Records of Johnson County,Iowa,and amendments thereto. This Assignment was duly filed for record on February 15, 2005, in Book 3844, Page 87 of the records of the Recorder for Johnson County, Iowa. 208. Defendant Eastside Investors LLC is the owner and holder of the following real estate: Units A,B,C,D,&F Frantz Commercial Condominiums,Iowa City,Iowa,according to the Declaration thereof recorded in Book 1751,Page 89,Plat Records of Johnson County,Iowa,and amendments thereto. 209. Defendant Eastside Investors LLC is now delinquent in its payment on said Note and Mortgage. 210. The Mortgage provide in the event of default that Plaintiff may procure a c tinua r i aK2. _n of the abstract, obtain insurance for the property,pay taxes on the property, and add such , r- amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness acl a 0 Ai are secured by the Mortgage. 211. Plaintiff is the owner and holder of said Note and Mortgage. 212. In accordance with the provisions of said Note and Mortgage, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 08/07/09 47 213. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgage may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgage. 214. That the Defendant, Corridor State Bank, may claim an interest in and to the subject real estate by virtue of a Mortgage dated November 27, 2007, and recorded December 7, 2007, in Book 4242, Page 155 of the records of the Recorder for Johnson County, Iowa. 215. The liens or interest of any other Parties in Possession arise from their respective leases/subleases or other contracts relating to the above-described real estate. 216. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 217. Plaintiffs Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Mortgage. 218. After crediting the amounts paid on said Note secured by said Mortgage.there is now due and owing Plaintiff from Defendant Eastside Investors LLC: A. An unpaid principal balance, as of July 23, 2009, in the amount of$251,225.54. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$4,301.81. -71 C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, td0 j ! r rn date of filing herein,which interest currently accrues at the rate of 6.25%per annum in the �-�, amount of$39.58 per day. D w • 08/07/09 48 WHEREFORE, Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Eastside Investors LLC,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $255,527.35 together with interest on the principal portion of the Note thereof at the rate of 6.25%percent per annum from July 23, 2009, to the date of filing of this petition,plus 6.25% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of this action. 0 COUNT XV: FORECLOSURE OF NOTE 16 � c" 55 MONTGOMERY PLACE -<!-- r 219. Plaintiff hereby incorporates paragraphs 1, 3, 4, 5, 6, 9, 10, 26, 32, 33 and 34 of this Petition. 220. To secure Note 16, Defendant Eastside Investors LLC on or about February 17, 2005, made, executed and delivered to Plaintiff-a written Construction Mortgage/Purchase-Money Mortgage (hereinafter"Mortgage") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"41". The Mortgage covers the following described real property in Johnson County, Iowa: Units A,B and C,Building 22,Wellington Condominiums II at Lancester and Montgomery Places, according to the Declaration recorded May 20,2004 in Book 3736,Page 788,Records of the Recorder of Johnson County,Iowa,together with said unit's percentage interest in and to the common elements of said regime. This Mortgage was duly filed for record on February 23, 2005, in Book 3846, Page 280 of the records of the Recorder for Johnson County, Iowa. 221. Defendant Eastside Investors LLC on or about January 30, 2007, made, executed and delivered to Plaintiff a Modification of Mortgage (hereinafter "First Modification") changing the 08/07/09 49 maturity date on the Mortgage to February 15, 2009. Defendant Eastside Investors LLC on or about April 30, 2009, made, executed and delivered to Plaintiff a Modification of Mortgage (hereinafter"Second Modification") changing the maturity date on the Mortgage to May 15, 2014. Both of these modifications were made on the real estate described therein, copies of which are attached hereto and incorporated herein,marked Exhibit"42". The Modifications covers the following described real property in Johnson County, Iowa: Units A,B and C,Building 22,Wellington Condominiums II at Lancester and Montgomery Places, according to the Declaration recorded May 20,2004 in Book 3736,Page 788,Records of the Recorder of Johnson County,Iowa,together with said unit's percentage interest in and to the common elements of said regime. The First Modification was duly filed for record on February 23, 2007, in Book 4131, Page 853 of the records of the Recorder for Johnson County, Iowa. The Second Modification was duly filed for record on May 13, 2009, in Book 4435, Page 838 of the records of the Recorder for Johnson County, Iowa. 222. Partial Releases of Real Estate Mortgages were filed for the following portions of the above described real estate: Unit A,Building 22 and Unit C, Building 22, leaving a lien only against the following property: Unit B,Building 22. 223. Defendant Eastside Investors LLC is the owner and holder of the following real estate: Unit B,Building 22, Wellington Condominiums II at Lancester and Montgomery Places,according to the Declaration recorded May 20,2004 in Book 3736,Page 788,Records of the Recorder of Johnson County,Iowa, together with said unit's percentage interest in and to the common elements of said regime. 224. Defendant Eastside Investors LLC is now delinquent in its payment on said Note and: u .5n Mortgage. > 'fl 0-‹ Ir 225. The Mortgage provide in the event of default that Plaintiff may procure a corltination rn ori 0 of the abstract, obtain insurance for the property, pay taxes on the property, and add sl amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness attrM are secured by the Mortgage. 08/07/09 50 226. Plaintiff is the owner and holder of said Note and Mortgage. 227. In accordance with the provisions of said Note and Mortgage,Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 228. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon,the Mortgage may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgage. 229. That the Defendant,The Strub Co.,Inc. d/b/a Muller Plumbing and Heating may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated May 22, 2009, and recorded June 22, 2009,Document No. LNLN009236. 230. That the Defendant,Weldon Drywall,Inc. may claim an interest in and to the subject real estate by virtue of a Mechanic's Lien dated May 28,2009, and recorded July 2, 2009,Document No. LNLN009247. 231. The liens or interest of Defendants Doug Sheetz,Karen Sheetz, and any other Parties in Possession arise from their respective leases/subleases or other contracts relating to the above- described real estate. 232. That the Defendants are not and have not been at anytime during the preceding six(6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers civil n v) . Relief Act. `s -240 - 233. Plaintiff's Mortgage is superior and paramount to all interests of all Defendants-frit-le �iJ real estate,and any interest of any Defendant in the real estate is subject to Plaintiff's N1i�tgage 234. After crediting the amounts paid on said Note secured by said Mortgage there is now due and owing Plaintiff from Defendant Eastside Investors LLC: 08/07/09 51 A. An unpaid principal balance, as of July 23, 2009, in the amount of$179,866.84. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$1,721.18. C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, to date of filing herein, which interest currently accrues at the rate of 5.50% per annum in the amount of$27.10 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Eastside Investors LLC,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $181,588.02 together with interest on the principal portion of the Note thereof at the rate of 5.50%percent per annum from July 23, 2009, to the date of filing of this petition,plus 5.50% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of this action. COUNT XVI: FORECLOSURE OF NOTE 17 46 LANCESTER PLACE; 18 LANCESTER PLACE; BUILDINGS 11, 12, 13, 16 235. Plaintiff hereby incorporates paragraphs 1, 3, 4, 5, 6, 9, 10, 27, 32, 33 and 34 of this 0 Petition. D 1 ro 'T'f 236. To secure Note 17, Defendant Eastside Investors LLC on or about March 23, 2005, r - rn • rn made, executed and delivered to Plaintiff a written Construction Mortgage (hereinafter O 5 Ps o "Mortgage") creating first and prior lien on the real estate described therein, a copy of which is 08/07/09 52 attached hereto and incorporated herein, marked Exhibit"43". The Mortgage covers the following described real property in Johnson County, Iowa: Lots 50 and 51,Village Green,Part XX,Iowa City,Iowa, according to the plat thereof recorded in Plat Book 49,Page 26,plat records of Johnson County,Iowa. This Mortgage was duly filed for record on April 26, 2005, in Book 3868, Page 68 of the records of the Recorder for Johnson County, Iowa. 237. Defendant Eastside Investors LLC on or about March 5, 2007, made, executed and delivered to Plaintiff a Modification of Mortgage (hereinafter " Modification") changing the maturity date on the Mortgage to March 31, 2009. The modification was made on the real estate described therein, copies of which are attached hereto and incorporated herein, marked Exhibit "44". The Modifications covers the following described real property in Johnson County, Iowa: Lots 50 and 51,Village Green,Part XX,Iowa City,Iowa,according to the plat thereof recorded in Plat Book 49,Page 26,plat records of Johnson County, Iowa. The Modification was duly filed for record on April 2, 2007, in Book 4141, Page 984 of the records of the Recorder for Johnson County, Iowa. 238. Partial Releases of Real Estate Mortgages were filed for the following portions of the above described real estate: Unit A,Building 17; Unit C, Building 17; Unit A Building 15;Units A,B, C Building 14, leaving a lien only against the following properties: Unit B, Building 17, Unit B, Building 15,Units A, B, C Building 11,Units A and B Building 12, Units A,B, C Building 13, Units A, B, C Building 16. -J 239. Defendant Eastside Investors LLC is the owner and holder of the following real.estate Unit B,Building 15,and Unit B,Building 17,and Units A,B&C,Building 11,and Units A&B,Buildi4 12,aad Units A,B,&C,Building 13,and Units A,B&C,Building 16,Wellington Condominiums II at Villa`g�',Read, c Wintergreen Drive and Lancester Place,according to the Declaration recorded August 12,2005 in Boo0925,Page 453,Records of the Recorder of Johnson County,Iowa,together with said unit's percentage interest in the comnWi elements of said regime. 08/07/09 53 240. Defendant Eastside Investors LLC is now delinquent in its payment on said Note and Mortgage. 241. The Mortgage provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property, pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgage. 242. Plaintiff is the owner and holder of said Note and Mortgage. 243. In accordance with the provisions of said Note and Mortgage, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 244. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgage may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgage. 245. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit orrelief provided by the Servicemembers Civil Relief Act. 246. Plaintiff's Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiff's Mortgage'. 247. After crediting the amounts paid on said Note secured by said Mortgage there is now 4pe 6 and owing Plaintiff from Defendant Eastside Investors LLC: A. An unpaid principal balance, as of July 23, 2009, in the amount of$391,252.47 B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23`""j 2009, in the amount of$8,291.33. 08/07/09 54 C. Interest as provided in the Note, on the unpaid principal balance as of July 23,2009,to date of filing herein,which interest currently accrues at the rate of 5.95%per annum in the amount of$63.78 per day. WHEREFORE, Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W.Nissley, and Eastside Investors LLC,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $399,543.80 together with interest on the principal portion of the Note thereof at the rate of 5.95%percent per annum from July 23,2009, to the date of filing of this petition,plus 5.95% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees,taxes, insurance, abstracting fees, and the costs of this action. COUNT XVII: JUDGMENT ON NOTE 18 248. Plaintiff hereby incorporates paragraphs 1,3, 4, 5, 9, 10,28, 32 and 33 of this Petition. 249. Defendant-is-now-delinquent-in its payment on said Note. 250. Plaintiff is the owner and holder of said Note. 251. In accordance with the provisions of said Note,Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. o r rn 252. That the Defendants are not and have not been at anytime during the precedingsic(67 -a 0 — months a member of any of the Armed Forces of the United States of America and aye qt �T'1 ON entitled in any way or manner to the benefit or relief provided by the Servicememberaivil �O Relief Act. 08/07/09 55 253. After crediting the amounts paid on said Note there is now due and owing Plaintiff from Defendant Eastside Investors LLC: A. An unpaid principal balance, as of July 23,2009, in the amount of$62,985.15. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$898.54. C. Interest as provided in the Note, on the unpaid principal balance as of July 23,2009, to date of filing herein, which interest currently accrues at the rate of 6.25%per annum in the amount of$10.79 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Eastside Investors LLC,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $63,883.69 together with interest on the principal portion of the Note thereof at the rate of 6.25%percent per annum from July 23,2009,to the date of filing of this petition,plus 6.25% interest on said judgment from and after the date of filing of this peti[tioo, B. Plus all reasonable attorney's fees,taxes, insurance, abstracting fees, and the costs of this action. COUNT XVIII: FORECLOSURE OF NOTE 19 r " o 46 LANCESTER PLACE; 18 LANCESTER PLACE; 3114,3118,3142. v i , F WINTERGREEN DRIVE; BUILDINGS 11, 12, 13, 16 - m 1. 254. Plaintiff hereby incorporates paragraphs 1, 3, 4, 5, 6, 9, 10, 29, 32, 33 and 349this,c, -- Petition. 08/07/09 56 255. To secure Note 19,Defendant Eastside Investors LLC on or about December 21, 2005, made, executed and delivered to Plaintiff a written Construction Mortgage (hereinafter "Mortgage") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"45". The Mortgage covers the following described real property in Johnson County, Iowa: Lots 50 and 51,Village Green,Part XX, Iowa City,Iowa,according to the plat thereof recorded in Plat Book 49,Page 26,plat records of Johnson County, Iowa. This Mortgage was duly filed for record on December 22, 2005, in Book 3975, Page 660 of the records of the Recorder for Johnson County, Iowa. This mortgage is inferior only to the mortgage described in Count XVI, recorded April 26, 2005 in Book 3868, Page 68 of the records of the Recorder for Johnson County, Iowa as to the following properties: 46 Lancester Place, 18 Lancester Place and Buildings 11, 12, 13, 16. 256. Partial Releases of Real Estate Mortgages were filed for the following portions of the above described real estate: Unit A, Building 17; Unit C, Building 17; Unit A,Building 15, leaving a lien only against the following properties: Unit B, Building 17, Unit B, Building 15, Units A, B, C Building 11,Units A and B Building 12, Units A, B, C Building 13, Units A,a, C7 1 tl 0 Building 14,Units A, B, C Building 16. n 6 - 257. Defendant Eastside Investors LLC is the owner and holder of the following reg estXe: 0 Unit B,Building 15,and Unit B,Building 17,and Units A,B&C,Building 11,and Units A&B,Building 12, d Units A,B&C,Building 13,and Units A,B&C,Building 14,and Units A,B&C,Building 16,Wellington Condominiums II at Village Road,Wintergreen Drive and Lancester Place,according to the Declaration recorded August 12,2005 in Book 3925,Page 453,Records of the Recorder of Johnson County,Iowa,together with said unit's percentage interest in the common elements of said regime. 258. Defendant Eastside Investors LLC is now delinquent in its payment on said Note and Mortgage. 259. The Mortgage provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property,pay taxes on the property, and add such 08/07/09 57 amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgage. 260. Plaintiff is the owner and holder of said Note and Mortgage. 261. In accordance with the provisions of said Note and Mortgage, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 262. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgage may be foreclosed upon; and Plaintiff, by the commencement of this action, does elect to foreclose on the Mortgage. 263. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 264. Plaintiffs Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiffs Mortgage. 265. After crediting the amounts paid on said Note secured by said Mortgage there is now due and owing Plaintiff from Defendant Eastside Investors LLC: A. An unpaid principal balance, as of July 23, 2009, in the amount of$180,000. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$43,457.87. _ rJ C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, torte TJ S date of filing herein, which interest currently accrues at the rate of 6.75%per annum in-.the i m amount of$33.29 per day. m 0 *n w 0W07/09 58 WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Eastside Investors LLC,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $223,457.87 together with interest on the principal portion of the Note thereof at the rate of 6.75%percent per annum from July 23, 2009, to the date of filing of this petition,plus 6.75% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of this action. COUNT XIX: FORECLOSURE OF NOTE 20 18 LANCESTER PLACE 266. Plaintiff hereby incorporates paragraphs 1, 3, 4, 5, 6, 9, 10, 30, 32, 33 and 34 of this Petition. 267. To secure Note 20, Defendant Eastside Investors LLC on or about November 16, 2007, made,executed and delivered to Plaintiff a written Construction-Mortgage (hereinafter "Mortgage")creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit"46". The Mortgage covers the following described real property in Johnson County, Iowa: 0 Units A and B,Building 15,Wellington Condominiums II at Village Road,Wintergreen Drive and '""C i Lancester Place,according to the Declaration thereof recorded in Book 3925,Page 453,Records of the Recorilei of v Johnson County,Iowa,together with the percentage ownership in the common elements provided for in the -. - - Declaration,and subject to easements and restrictions of record. r '— This Mortgage was duly filed for record on December 4, 2007, in Book 4240,Page 738 of t1 ;_ti records of the Recorder for Johnson County, Iowa. This mortgage is inferior only as to the two w mortgages described in Counts XVI and XVIII. 08/07/09 59 268. Partial Release of Real Estate Mortgages were filed for the following portion of the above described real estate: Unit A,Building 15, leaving a lien on the following property: Unit B, Building 15. 269. Defendant Eastside Investors LLC is the owner and holder of the following real estate: Units B,Building 15, Wellington Condominiums II at Village Road, Wintergreen Drive and Lancester Place,according to the Declaration thereof recorded in Book 3925,Page 453,Records of the Recorder of Johnson County,Iowa,together with the percentage ownership in the common elements provided for in the Declaration,and subject to easements and restrictions of record. 270. Defendant Eastside Investors LLC is now delinquent in its payment on said Note and Mortgage. 271. The Mortgage provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property, pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness and are secured by the Mortgage. 272. Plaintiff is the owner and holder of said Note and Mortgage. 273. In accordance with the provisions of said Note and Mortgage, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 274. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgage may be foreclosed upon; and Plaintiff,by the commencement of this action, does elect to foreclose on the Mortgage. 275. That the Defendants are not and have not been at anytime during the preceding i (6) months a member of any of the Armed Forces of the United States of America and are not r Ti entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil — m Relief Act. *7 o w 08/07/09 60 276. Plaintiff's Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiffs Mortgage. 277. After crediting the amounts paid on said Note secured by said Mortgage there is now due and owing Plaintiff from Defendant Eastside Investors LLC: A. An unpaid principal balance, as of July 23, 2009, in the amount of$273,750.00. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$14,793.92. C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, to date of filing herein, which interest currently accrues at the rate of 6.95%per annum in the amount of$52.13 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W.Nissley, and Eastside Investors LLC,jointly and severally„ and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $288;543.92 together with interest on the principal portion of the Note thereof at the rate of 6.95%percent per annum from July 23, 2009, to the date of filing of this petition, plus 6.95% interest on said judgment from and after the date of filing of this petition, B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the costs of t action. m m COUNT XX: FORECLOSURE OF NOTE 21 5 7 31 MONTGOMERY PLACE 278. Plaintiff hereby incorporates paragraphs 1, 3, 4, 5, 6, 9, 10, 31, 32, 33 and 34 of this Petition. 08/07/09 61 279. To secure Note 21, Defendant Eastside Investors LLC on or about January 29, 2008, made, executed and delivered to Plaintiff a written Mortgage (hereinafter "Mortgage") creating first and prior lien on the real estate described therein, a copy of which is attached hereto and incorporated herein, marked Exhibit "47". The Mortgage covers the following described real property in Johnson County, Iowa: Unit A,Building 21,Wellington Condominiums H at Lancester and Montgomery Places,according to the Declaration recorded May 20,2004 in Book 3736,Page 788,Records of the Recorder of Johnson County, Iowa, together with said unit's percentage interest in and to the common elements of said regime. This Mortgage was duly filed for record on February 7, 2008, in Book 4260, Page 448 of the records of the Recorder for Johnson County, Iowa. 280. Defendant Eastside Investors LLC is the owner and holder of the following real estate: Unit A,Building 21,Wellington Condominiums II at Lancester and Montgomery Places,according to the Declaration recorded May 20,2004 in Book 3736,Page 788,Records of the Recorder of Johnson County,Iowa, together with said unit's percentage interest in and to the common elements of said regime. 281. Defendant Eastside Investors LLC is now delinquent in its payment on said Note and Mortgage. 282. The Mortgage provide in the event of default that Plaintiff may procure a continuation of the abstract, obtain insurance for the property, pay taxes on the property, and add such amounts to the Mortgage debt. These amounts become a part of the Mortgage indebtedness ans Wit+ r are secured by the Mortgage. rn 573 283. Plaintiff is the owner and holder of said Note and Mortgage. �O v -- 284. In accordance with the provisions of said Note and Mortgage, Plaintiff has heretofore declared and hereby declares the entire indebtedness thereunder immediately due and payable. 285. Said Mortgage provide that if default shall be made in the payment of said Note or any part of the interest thereon, the Mortgage may be foreclosed upon; and Plaintiff, by the commencement of this action, does elect to foreclose on the Mortgage. 08/07/09 62 286. That the Defendants are not and have not been at anytime during the preceding six (6) months a member of any of the Armed Forces of the United States of America and are not entitled in any way or manner to the benefit or relief provided by the Servicemembers Civil Relief Act. 287. Plaintiff's Mortgage is superior and paramount to all interests of all Defendants in the real estate, and any interest of any Defendant in the real estate is subject to Plaintiffs Mortgage. 288. After crediting the amounts paid on said Note secured by said Mortgage there is now due and owing Plaintiff from Defendant Eastside Investors LLC: A. An unpaid principal balance, as of July 23, 2009, in the amount of$247,823.34. B. Interest and late fees as provided in the Note, on the unpaid principal balance to July 23, 2009, in the amount of$7,149.53. C. Interest as provided in the Note, on the unpaid principal balance as of July 23, 2009, to date of filing herein,which interest currently accrues at the rate of 6.50%per annum in the amount of$44.13 per day. WHEREFORE,Plaintiff prays for judgment in personam against Defendants William L. Frantz, Eugene W. Nissley, and Eastside Investors LLC,jointly and severally, and for judgment in rem as to the above described real estate against all Defendants, and for judgment in rem against the above described real estate for the following: A. $254,972.87 together with interest on the principal portion of the Note thereof at the rate of 6.50%percent per annum from July 23, 2009, to the date of filing of this petition,plus 6.50%a interest on said judgment from and after the date of filing of this petition, r,; B. Plus all reasonable attorney's fees, taxes, insurance, abstracting fees, and the edit's of thus action. 08/07/09 63 COUNT XXI–APPLICATION FOR IMMEDIATE APPOINTMENT OF RECEIVER 289. Plaintiffrepleads Paragraphs 1-288 above. 290. The immediate appointment of a receiver is necessary to protect the above described real estate during the pendency of this matter. 291. The mortgages provide that if the Mortgagor is in default, the Mortgagor agrees to have a receiver appointed,without bond. 292. Due to the fact that the Mortgagor has allowed the insurance to lapse on all properties, has failed to perform maintenance on various properties and has indicated by turning over all bills to Plaintiff that no further payments will be made on any matter concerning the properties, a Receiver is necessary to keep the properties from deteriorating. 293. The Receiver shall control and manage the real estate,protect it from further deterioration, collect and apply the rents secured by the Mortgages, and protect the rights and interests of Plaintiff and Defendants. 294. The Receiver will need full access to all books, records, rental and lease agreements apd - other-contracts-relating-to the real estateaswell as the authority to receive an-accounting-of;and payment of, any security deposit relating to the real estate. .. —57) �l'1 295. Plaintiff requests that it be appointed receiver in this matter. 7 WHEFEFORE,Plaintiff respectfully requests that the Court immediately appoint Plaintiff as receiver without bond, take possession and control of the properties, and preserve and maintain the property by: collecting and applying the property's rents and contract payments;providing services to the property; obtaining possession and taking control of the accounting of, and payment of the security deposits paid by the tenant of any property; and taking possession and 08/07/09 64 control of all books,records,rental and lease agreements and all other contracts relating to each property. LYNCH, GREENLEAF &MICHAEL, L.L.P. By R.bert S. Michael 00009240 By _1/4111 C;stagy' aiber#AT0009768 402 Willow Creek Court P.O. Box 1757 Iowa City, Iowa 52244 (319) 351-1056 (319) 338-6834 FAX ATTORNEYS FOR U OF I COMMUNITY CREDIT UNION _ > gi =ern- — • M 7Z -o 08/07/09 65 PROMISSORY NOTE PrFnsl� i loatr 13 #9 Miatutlty Loan Nn calx4001_,,4141.X740,, lai1 OLITO} t ltt >s R 'f _ .Q ` .x ©43 Ei2 T5 2(37f� R ,;; ,.??tfisr_ References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: William L.Frantz Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1463 Buckingham Place 825 Mormon Trek Blvd Iowa City,IA 52240 Iowa City.IA 52246 (319)339-1000 Principal Amount: $36,913.37 Interest Rate: 6.250% Date of Note: February 11, 2005 PROMISE TO PAY. William L.Frantz("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"),or order, in lawful money of the United States of America, the principal amount of Thirty-six Thousand Nino Hundred Thirteen & 37/100 Dollars ($36,913.37),together with interest at the rate of 6.250%per annum en the unpaid principal balance from February 11,2005,until paid In full. PAYMENT. Borrower will pay this loan In 59 regular payments of 8270.00 each and one Irregular last payment estimated at $31,760.66. Borrower's first payment is due March 15,2005,end all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on February 15.2010,and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest;then to principal; then to any unpaid collection costs;end tltert to any late charges. Interest on this Note Is computed on a 365/365 simple interest basis;that Is, by applying the ratio of the annual Interest rate over the number of days In a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full', "without recourse", or similar language. It Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will bear interest from the date of acceleration or maturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. N Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, salt-tieTp, B repossession or any other method,by any creditor of Borrower or by any governmental agency against any collateral securing the loah. �'i This includes a garnishment of any of Borrower's accounts, includingdeposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor-Or— rr-i forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies"or-4 "'0 a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate-( ^� reserve or bond for the dispute. -. ( r Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes.or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty-0 in a manner satisfactory to Lender,end,in doing so,cure any Event of Default. s3 Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of paymentbr performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 112) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (2) if the cure requires more than fifteen(15) days, immediately initiates stops which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon lender's request to submit to the jurisdiction of the courts of Johnson County. State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all jointand individual accounts Borrower has with Lender now and in the.future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. try.;„. COLLATERAL. This loan is unsecured. PURPOSE OF LOAN. The specific purpose of this loan is: Finance equity investment in Eastside Investors,L.L.C. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. • PROMISSORY NOTE Loan No: (Continued) Page 2 GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment, and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note, whether as maker,guarantor,'accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS.DEBT. .BORROWER: 1 X• 4 • William L.Frantz • i v.,.�._• rico acer� .�. _..�. �,.. .......w. .I.KM,010r1. A, • • • • • • • • • • • . ' )• rn - r rl1 PROMISSORY NOTE Priitcpal Loan Rate Maturity_ Loan No Can.:Cull $50,000 00 110 16-2006.10-?5 2007 1� Aecoun 1 Officer I Initials ....7.-..,-... Other bu. 1 ... References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: WIlliam L.Frantz IIIMMINIIMII.10) Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1463 Buckingham Place 825 Mormon Trek Blvd Iowa City,IA 52240 Iowa City,IA 52246 (3191339-1000 Principal Amount: $50,000.00 Interest Rate: 7.250% Date of Note: October 16, 2006 PROMISE TO PAY. William L.Frantz("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"),or order, In lawful money of the United States of America,the principal amount of Fifty Thousand&00/100 Dollars(S50,000.00),together with interest at the rate of 7.250%per annum on the unpaid principal balance from October 16,2006.until paid in full. The Interest rate may change under the terms and conditions of the'INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of $50,000.00 plus Interest on October 15, 2007. This payment due on October 15,2007,will be for all principal and all accrued interest not yet paid. In addition,Borrower will pay regular monthly payments of all accrued unpaid Interest due as of each payment date,beginning November 15, 2006,with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest:then to principal;then to any unpaid collection costs:and then to any late charges. Interest on this Note Is computed on a 365/365 simple interest basis;that Is.by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion 01 the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in lull", 'without recourse', or similar language, If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. II a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularty scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. • DEFAULT. Each of the following shall constitute an event 01 default("Event of Oelaulr)under this Note, Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower tails to comply with or to perform any other term.obligation,covenant or condition contained in this Note or'in any of the-related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower ur any Grantor defaults under any loan,extension of credit,security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death Or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral secutj.ng the loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender- However,this Event of Default shall not apply it there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and it Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies oc.-.' a surety bond for the creditor or forfeiture proceeding, in en amount determined by Lender,in its sole discretion, as being(ett,adequate -- reserve or bond for the dispute. l '• Events Affecting Guarantor. Any ol the preceding events occurs with respect to any guarantor,endorser,surety,or accomrnatl'aoe party— of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or'.ftRikes Or r•u b' disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,tarifa,at its7? _ option,may,but shell not be required to.permit the guarantor's estate to assume unconditionally the obligations arising underaeyaranty—' in a manner satisfactory to Lender,and,in doing so,cure any Event o1 Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the .c–prospect ofc>dayment or' • performance of this Note is impaired. ` —.Insecurity. Lender in good faith believes itsell insecure. Y Cure Provisions. It any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 112) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure o1 such default: 11) cures the default within fifteen(151 days;or 121 it the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient-to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS' FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note it Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'lees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'lees and legal expenses for bankruptcy proceedings(including efforts to modify ur vacate any automatic stay or injunction).and appeals. II not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. II there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the luture. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given es security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. This loan is unsecured. E.,,,A • 2 PURPOSE OF LOAN- The specific purpose 01 this loan is: Line ol credit tor businessnnvestment purposes. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's hairs, personal representatives. successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. PROMISSORY NOTE Loan No: 1'I (Continued) Page 2 GENERAL PROVISIONS. II any part of this Note cannot be enforced.this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note.and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker, guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of timet this loan ur release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note sre Joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.�� D BORRR • x William L.Frantz . 0 C n_ C/r > -<r m o73 2 CHANGE IN TERMS AGREEMENT h]G 11. Loan Date ' Maturity .' Loan No' Cat/Coll I - Account o 'OfflcInitlols r�tt' jge- 10-16'2006 10,15-2007.': 1'1fil► Other,; 1 ,:119�TI111�(11�:-- DU References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or nem. Any item above containing has been omitted due to text length limitations. Borrower: William L.Frantz gegn.1111111112801. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1463 Buckingham Place 825 Mormon Trek Blvd Iowa City,IA 52240 Iowa City,IA 52246 13191339-1000 Principal Amount: S50,000.00 Interest Rate: 7.250% Date of Agreement: 10/15/2007 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory Note dated 10/16/2006 in the original amount of$50,000.00. DESCRIPTION OF COLLATERAL. Unsecured. DESCRIPTION OF CHANGE IN TERMS. Extend maturity date from 10-15-2007 to 10-15-2008. PROMISE TO PAY. William L.Frantz(-Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"),or order, in lawful money of the United States of America,the principal amount of Fifty Thousand&00/100 Dollars 1$50,000.001,together with Interest at the rate of 7.250%per annum on the unpaid principal balance from October 16,2006,until paid in full. 1 he Interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in ono principal payment of $50,000.00 plus interest on October 15, 2007. This payment due on October 15,2007,will be for all principal and all accrued interest not yet paid. In addition.Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date,beginning November 15, 2006,with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs; and then to any late charges. Interest on this loan is computed on a 3651365 simple interest basis;that is, by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked •paid in full", "without recourse', or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes 'payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. II a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower tails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreemefr or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained;In any other., agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement, purchase or salaj{'agreement;,1 Ij or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrewer's ability'! rye, to perform Borrower's obligations under this Agreement or any of the Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's beha er this -171� Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnisher r comes false or misleading at any time thereafter. oA Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business,the_ilvencyra- :'.._j of Borrower, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors ype of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. , . Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,selfhelp,. repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the r- Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness evidenced by this Note. In the event of a death,Lender, at its option,may,but shall not be required to,permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen 1151 days;or (21 if the cure requires more than fifteen(151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default end thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that arnount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses. whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings lincluding efforts to modify or vacate any automatic stay or injunction).and appeals. II not prohibited by applicable law.Borrower also will pay any court costs. in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. This Indebtedness is unsecured. CHANGE IN TERMS AGREEMENT Loan No: (Continued) Page 2 CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation-or obligations, including all agreements evidenced or securing the obligation(s),remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the'obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligationlsl,including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below-acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend !repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. CHANGE SIGNERS: William L.Frantz LAM FPO u"On.. w m.,w sw,.,..., XOP. AM ir. Norm. .U..Km,neUGC 2,,.......: • _ rV • H --3 C) G <r 3 u1 m .40 • • • 1 CHANGE IN TERMS AGREEMENT x#t f wets putekk Etitaflear:2Klaa 1 au f Coil aunt Offfcar inkt�ais 4:046=00k; References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: William L.Frantz isimirampLender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1463 Buckingham Place 825 Mormon Trek Blvd Iowa City,IA 52240 Iowa City,IA 52246 • 1319)339-1000 Principal Amount: $50,000.00 Interest Rate: 7.250% Date of Agreement: October 1, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory Note dated 10/16/2006 in the original amount of 550,000.00. DESCRIPTION OF COLLATERAL. Unsecured. DESCRIPTION OF CHANGE IN TERMS. Extend maturity date from 10-15-2008 to 10-15-2009. PROMISE TO PAY. William L.Frantz("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Mender"),or order, in lawful money of the United States of America,the principal amount of Fifty Thousand&00/100 Dollars($50,000.00),together with interest at the rate of 7.250%per annum on the unpaid principal balance from October 16,2006,until paid In lull. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of 550,000.00 plus Interest an October 15, 2007. This payment due on October 15.2007,will be for all principal and all accrued interest not yet paid. In addition,Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date,beginning November 15,2006,with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law.payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple Interest basis;that Is,by applying the ratio of the annual interest rate over the number of days In a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. • PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier then it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance dues Borrower agrees not to send Lender payments marked'paid in full","without recourse'. or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remainobligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that Indicates that the payment constitutes"payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the Interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults.'Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this-Agreement`;a or in any of the Related Documents or to comply with or to perform any term,obligation,covenant or condition contained in.any other • agreement between Lender and Borrower. - - • { Default in Favor of Third Parties. Borro_ver defaults under any lean,extension of.:refit,security agreement,purchase or sales.egreeinent, ®. or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or abilityto perform .sae Borrower's obligations under this Agreement or any of the Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf Linder this Q t i Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished orbecomes false or misleading at any time thereafter. Iii r • -1 Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business,the f eol't'ncy of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors. agy:wpe 01 creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help. — repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply it there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. • Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(121 months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: 111 cures the default within fifteen(15)days;or (21 if the cure requires more than fifteen(151 days, immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable end necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' tees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs. in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County. State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has - with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. This Indebtedness is unsecured, CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s),remain unchanged and in full force and effect. Consent by Lender to this Agreement does 5 CHANGE IN TERMS AGREEMENT Loan No: imININNA. (Continued) Page 2 • not waive Lender's right to strict performance of the obligatioit(s)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers end endorsers of the original obligation(s),including accommodation parties,unless a party is expressly released by Lender In writing. Any maker or endorser,including accommodation makers,will not he released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact-will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's • security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. CHANGE I ERMS SIGNERS: • [elf X William L.Frantz • • �-^-� I-� _ fir; -o • o� 0 • • • • w PROMISSORY NOTE � f3F>�it+a� �.Aari D e Mattit'3ty €tan,[4o Cali f ct i cltf7ctt c i'ncer Inft�i . 1 3.11.2O�.''7. 1 'K-`Q ... :__. References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: William L.Frans Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Sherry L.Frantz 825 Mormon Trek Blvd 1463 Buckingham Place Iowa City,IA 52246 Iowa City,IA 52240 (3191 339-1000 Principal Amount: $199,750.00 Interest Rate: 6.750% Date of Note: November 30, 2007 PROMISE TO PAY. William L. Frantz and Sherry L. Frantz ("Borrower")jointly and severally promise to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT.UNION ("Lender"), or order, In lawful money of the United States of America, the principal amount of One Hundred Ninety-nine Thousand Seven Hundred Fifty&00/100 Dollars 15199,750.00),together with interest at the rate of 6.750%per annum on the unpaid principal balance from November 30, 2007, until paid in full. The interest rate may change under the terms.and conditions of the "INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$199,750.00 plus interest on December 1,2009. This payment due on December 1,2009,will be for all principal and all accrued interest not yet paid. In addition,Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date,beginning December 15, 2007,with all subsequent interest payments to be due on the sante day of each month after that. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note Is computed on a 365/365 simple Interest basis;that Is,by applying the ratio of the annual Interest rate over the number of days In a year.multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full','without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes 'payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute en event of default("Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation.covenant or condition contained in any other agreement between Lender and Borrower. Default In Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agreement, purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower'sproperty orJ Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf,under this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or beeorttes falser,'"Fr, 1 1 or misleading at any time thereafter. - - .� Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business,thelinsdvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors;anytype of I creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding:411-help; repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing kt4 loan.= 0 This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of fa shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of thrittetor or,.. forfeiture proceeding and if Borrower gives Lander written notice of the creditor or forfeiture proceeding and deposits with Lendrrmonies or •• a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,as being arj adequate.-- reserve dequate.reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse grange. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note Is impaired. Insecurity. Lender in good faith believes Itself insecure. Cure Provisions. If any default,other than a default in payment Is curable and If Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 1121 months,it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or 121 if the cure requires more than fifteen 115) days, immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This Includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lander and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that ell loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and In the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the • balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in en Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security Interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument Fisted herein: a Mortgage dated November 30,2007,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Purchase rental house at 22 Durham Court,Iowa City,IA. REPORTING REQUIREMENTS.Borrowers agree to provide Lender with updated personal financial statement and copy of personal federal income PROMISSORY NOTE Loan No: (Continued) Page 2 tax return annually. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower. and upon Borrower's heirs, personal representatives. successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Each Borrower understands and agrees that,with or without notice to Borrower,Lender may with respect to any other Borrower (a)make one or more additional secured or unsecured loans or otherwise extend additional credit (b)alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of any indebtedness,including increases and decreases of the rate of interest on the indebtedness; (c)exchange,enforce,waive,subordinate, fail or decide not to perfect,and release any security,with or without the substitution of naw collateral; Id) apply such security and direct the order or manner of sale thereof,including without limitation,any non-judicial sale permitted by the terms of the controlling security agreements, as Lender in its discretion may determine; (a) release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner'Lender may choose; and (f) determine how, when and whet application of • payments and credits shall be made on any other indebtedness owing by such other Borrower. Borrower and any other person who signs. guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change In the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor, accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. EACH BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORRO.ER: • William L.Frantz Sherry LFrantz wr.r.c..w .v,om,cogo,,............,O...14.IT,,mr. ,..,..,._,.... .4�.Krun,ow IC n..r PMI • _ rV O •• > L jo MONO p`� -a r-- --in r- firm m g� a -- Z CHANGE IN TERMS AGREEMENT x trrlrt ipa t o>�n Pati -N[a>at r twain Hn _ g;ii 1st _. p.A� Quist tvffiicer itiitin . >.r i$ 5D 0� 1' �3ralt J"1 .1Z07- 8 1 .... ( , fieai'r s .: ?.t) <..::.<SIti References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or Item. Any Item above containing "hes been omitted due to text length limitations. Borrower: William L.Frantz Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Sherry I..Frantz 825 Mormon Trek Blvd 1463 Buckingham Place Iowa City,IA 52246 Iowa City,IA 52240 (319)339-1000 Principal Amount:'-3199,750.00 Interest Rate: 6.750% Date of Agreement: April 8, 2009 DESCRIPTION OF EXISTING INDEBTEDNESS. A promissory note dated 11/30/2007 in the original amount of$199,750.00. DESCRIPTION OF COLLATERAL. A real estate mortgage dated 11130/2007. DESCRIPTION OF CHANGE IN TERMS. Change the payment for monthly interest only to monthly principal and interest payments of S1,265 starting on 4/15/2009. PROMISE TO PAY. William L. Frantz and Sherry L. Frantz ('Borrower') Jointly and severally promise to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1"Lender"), or order, in lawful money of the United States of America, the principal amount of One Hundred Ninety-nine Thousand Seven Hundred Fifty&00/100 Dollars (S199,750.00).together with interest at the rate of 6.750%per annum on the unpaid principal balance from November 30, 2007,until paid in full. The interest rate may change under the terms and conditions of the "INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$199,750.00 plus Interest on December 1. 2009. This payment due an December 1,2009,will be for all principal and all accrued Interest not yet paid. In addition.Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date,beginning December 15,2007.with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law.payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual Interest rate over the number of days In a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lander at Lander's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than It Is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full','without recourse', or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lander. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes'payment in full' of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 62246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,Including failure to pay upon final maturity,the total sum due under this Agreement raj I continue..t� accrue Interest at the interest rate under this Agreement. _. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: - _r Payment Default. Borrower falls to make any payment when due under the Indebtedness. � Other Defaults. Borrower falls to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained-jiiif pny other— agreement theragreement between Lander and Borrower. _;f-- '"ii • Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or sales r eemee�' L•-- or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or aL yperfomr Borrower's obligations under this Agreement or any of the Related Documents. ,"„ False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's be if under this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnish9d or becomes— false or misleading at any time thereafter. tf Death or Insolvency. The death of Borrower or the dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help. repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This Includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shell not apply if there Is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and If Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in en amount determined by Lender,in Its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness Is impaired. Insecurity. Lender In good faith believes Itself Insecure. Cure Provisions. If any default,other than a default in payment Is curable and If Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve 112)months,It may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (21 if the cure requires more than fifteen(16) days, Immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement end all accrued unpaid interest Immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lander that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'lees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lander and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness Is secured by all shares and deposits in all pint and Individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares end deposits in en Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is sec ed by the following collateral described In the security instrument listed herein:a CHANGE IN TERMS AGREEMENT Loan No:411INIMIIIMa (Continued) Page 2 Mortgage dated November 30,2007,to Lender on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including ell agreements evidenced or securing the obligation(s),remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate Lender to make any future change in terms. Nothing In this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s),including accommodation parties,unless a party Is expressly released by Lander in writing. Any maker or endorser, including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by It. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated In this Agreement on transfer of Borrower's Interest,this Agreement shall be binding upon and Inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Burrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Each Borrower understands and agrees that,with or without notice to Borrower,Lender may with respect to any other Borrower la)make one or more additional secured or unsecured loans or otherwise extend additional credit; (b)alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of any indebtedness, including increases and decreases of the rete of interest on the indebtedness; Icl exchange, enforce,waive,subordinate,tail or decide not to perfect,and release any security,with or without the substitution of new collateral; (dl apply such security and direct the order or manner of sale thereof, including without limitation, any non-judicial sale permitted by the terms of the controlling security agreements, as Lender in Its discretion may determine; le)release,substitute, agree not to sue,or deal with any one or more of Borrower's sureties,endorsers,or other guarantors on any terms or in any manner Lender may choose; and (f)determine how,when end what application of payments and credits shell be made on any other indebtedness owing by such other Borrower. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement, and unless otherwise expressly stated in writing, no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of timel this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT. EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. EACH BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROW : mem L.Frantz 4a111 Sherry L.Fra - LW,..o.... a....w...MaS.M.,.i-,r.nae ..M.,,,�... .u..1cm,nnnc..c..m..., • N• • O to D....j -a • n-< I `C rr- m m D PROMISSORY NOTE Pttt741*t " GCiatrF 3 a a Mdti > [ Loan No Can 1 Con � Account . Officer initials 6'134�'s:09 10.�6.20 .: 1� �"..'��Q.�-'�: � �f� ... . .DU References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co..Inc.01111011MINIII Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trak Blvd Iowa City.IA 52244 Iowa City,IA 52246 13191 339-1000 Principal Amount: $15,425.00 Interest Rate: 6.950% Date of Note: October 6,2006 PROMISE TO PAY. Frantz Construction Co.. Inc. f"Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,in lawful money of the United States of America,the principal amount of Fifteen Thousand Four Hundred Twenty-five& 001100 Dollars 1515,425.001,together with Interest at the rate of 6.950%per annum on the unpaid principal balance from October 5,2006, until paid in full. PAYMENT. Borrower will pay this loan In 59 regular payments of 5308.00 each and one irregular last payment estimated at S142.46. Borrower's first payment is due November 15, 2006, and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on October 15, 2011,and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual Interest rate over the number of days in a year,multiplied by the outstanding principal balance. multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will bear interest from the date of acceleration or maturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default 1"Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note 1N in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreemint between Lender end Borrower. ,': Era Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit,security agree n/L purcha?or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrch a'8 propet_jy2or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower'et)ehelf under" is Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished 6r becomes(else -"j". or misleading at any time thereafter. - - __ 3 Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the'apilointment of a Fri ( receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor wiekout, c re commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. G�: Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, selhfr@Jp, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the fdan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event.of Default-Oval) not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the credRo-pr forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Change In Ownership. Any change in ownership of twenty-five percent(25%)or more of the common stock of Borrower. Adverse Cherige. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. insecurity. Lender in good faith believes itself insecure. • Cure Provisions. If any default,other than a default In payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 1151 days;or (21 if the cure requires more than fifteen 1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default. Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS' FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether er not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lander and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has bean accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State or Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law.to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by Security Agreement dated 10/5/2006 and existing guarantees of William Frantz and Eugene Nissley dated 9/14/2006. PURPOSE OF LOAN. The specific purpose of this loan is: Purchase Truck with snow plow. PROMISSORY NOTE Loan No: (Continued) Page 2 SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives. successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note, whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend'repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;end take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lander may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ .G'NSTRUCTlON 0.,I C. By: A /Z."— William L. Frantz, President of Fri.— •nstruction Co_,Inc. m,c.r.Po*R...,..:....-...Mt,m. ....,. two, � .. rV O D� ry 3 i r- rn O 73 1.l1 PROMISSORY NOTE Pt p _�Lti;3ir .7 iiiiiiLii= 4 etT At r ; i1J4"aU_ txUCi't'` Offive '.Initial$,:' -L448:710.X ` 011,-t1'9':2107 ff1=2 .2ff7:1 77411/1 1 tfehrsriai, = . Du .-- :- References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.11111.M11.11.111.1 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 2 9 825 Mormon Trek Blvd Iowa City,IA 52244 Iowa City,IA 52246 13191 339-1000 Principal Amount: $18,700.00 Interest Rate: 7.000% Date of Note: January 9, 2007 PROMISE TO PAY. Frantz Construction Co.. Inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION -('Lender"). or order,in lawful money of the United States of America,the principal amount of Eighteen Thousand Seven Hundred&001100 Dollars 1418,700.001,together with Interest at the rate of 7.000%per annum on the unpaid principal balance from January 9,2007,until paid in fug. The interest rate may change under the terms and conditions of the'INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in 47 regular payments of $450.00 each and one Irregular last payment estimated at 3356.03. Borrower's first payment Is due February 15, 2007, and all subsequent payments are due on the same day of each month atter that. Borrower's final payment will be due on January 15,2011,and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs:and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due end may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked 'paid in lull", 'without recourse', or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay arty further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes 'payment in full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. II a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. . INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default('Event of Default')under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. _ bQ Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan.extension of credit, security agreemeQ purchase sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrowei:silpperty`prr7 Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. -,—--- 1.y.1 -�*;'y False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf Oder thiP x,. Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished oraitcomes fall or misleading at any time thereafter. _a{'- Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a 171 receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor work or thp, commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. —-t- • .1 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture Q�1 g proceedings, whether by judicial pracee8wf self-he1� repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral sec the loan,. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event fault shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of creditor g�r,,,,, forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies tie' a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lander,at its option,may,but shall not be required to,permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. . Change In Ownership. Any change in ownership o1 twenty-five percent 125%l or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance o1 this Note is impaired. ' Insecurity. Lender in good faith believes itself insecure. Cure Provisions. II any default,other than a default in payment is curable end if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen(15)days;or 12) if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon es reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. It not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. • ' CHOICE OF VENUE. II there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a motor vehicle described in a Commercial Security Agreement dated January 9,2007. PURPOSE OF LOAN. The specific purpose of this loan is: Purchase 2004 Ford F-150 VIN 15822. PROMISSORY NOTE Loan No:airaMMIND (Continued) Page 2 PERSONAL GUARANTEES. This note is further supported by Commercial Guarantees of William L. Frantz and Eugene W. Nissley dated 9/ta/2006. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shall be released From liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this •loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ CO STRUCTION INC. By: Eugene r. issley, Director of�Construct' Co.,In . r.aa...o I.,+.,w.nn.m.e.e.........r..,,,r a.,..«,..ran.mer. .,sr.,,.......,,-,.ucrc.,..ov re n1331 ma • • _ t'y 0 a- () c..") > rind • - i" Y 7 8 {Iij -sect `•1 ti▪. V7 PROMISSORY NOTE PrmG pa! 1 44t a4 c lvit *4. L�at1 No calf t of ut►i '�Jf# et init��fs $14 ,000 QR.....-Q! 0:ao.o7.1.07 45 20(g t511111.111111.1111V1RualPrvp ;: f7lJ References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular ban or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.11110.111111.11.1.1 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (3191 339-1000 Principal Amount: $140,000.00 Interest Rate: 7.375% Date of Note: July 20, 2007 PROMISE TO PAY. Frantz Construction Co., inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,in lawful money of the United States of America,the principal amount of One Hundred Forty Thousand&00/100 Dollars (5140,000.00),together with interest at the rate of 7.375% per annum on the unpaid principal balance from July 20.2007,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of S140,000.00 plus interest on July 15,2008. This payment due on July 15, 2008,will be-for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual Interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lander may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes "payment in full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default('Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. Default In Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit, security agreement,purchase Or.,) sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrowe s property On=e Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. `. False Statemehts. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalfvnder thfy7 Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or,becomes false'l i l or misleading at any time thereafter. `'0 Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of al r2.111211 receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout. or me— commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. - r Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceedj'self-herr repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securine loan: .7 This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event Ottleult shyl� not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of:ft creditor o J forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Leger monies gr„„_ a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequat1 reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Change In Ownership. Any change in ownership of twenty-live percent 125%I or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or 12) if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues end completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. -Lender may hire or pay someone else to help collect this Note If Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,In addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa whhout regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. py.)„,• CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a Mortgage dated July 20,2007,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Construct spec home at 3446 N.Jamie Ln.,Iowa City,IA. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. PROMISSORY NOTE Loan No:y'i (Continued) Page 2 GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note- Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing, no party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO • THIS DEBT. BORROWER: FRANT ON�$jT�RyU�CT�ION C•.,I C. /"..4"./4e/72/401111110 By: A/ William L. Frantz, of Frantz Cd ction Eugene . Nissley, Vice <Zgigje resident of Frantz Co.,Inc. • Construction Co.,Inc. usr.Pm..,,.,a r.amm.w H.d,,.n..,u a.'.,h,........n.7007. ..•'s-.a•••..n -u..,auamm.rc n W..m. • • • • r J a > r rri • m %' • 2 CHANGE IN TERMS AGREEMENT . PrmGlpal Loan 13axa ll/jaturit�r lµtritxl N� ' Calt/Asn Ascvuar= OffF�px'1 initials *'14.1L0,0: QQ .? C77 4 41F7 07 4 17 31ea1P...ttz 2: iaU References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing'••'"has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 522440209 Iowa City,IA 52246 (3191 339-1000 Principal Amount: $140,000.00 Interest Rate: 7.375% Date of Agreement: July 23, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. A promissory note dated 7/20/2007 in the original amount of$140,000. DESCRIPTION OF COLLATERAL. A mortgage dated July 20.2007,to Lender on real property located in Johnson County,Iowa. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 7/16/2008 to 11/15/2008. PROMISE TO PAY. Frantz Construction Co., Inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Mender"),or order,in lawful money of the United States of America,the principal amount of One Hundred Forty Thousand&00/100 Dollars l$140,000.001,together with Interest at the rate of 7.375%per annum on the unpaid principal balance from July 20.2007.until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$140.000.00 plus Interest on July 15,2008. This payment due on July 15, 2008,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal:then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. • PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full", 'without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes'payment in full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon def ault,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any y payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or In any of the Related Documents or to comply with or to perform any term,obligation, covenant or condition contained lir any other,'") agreement between Lender and Borrower. Default In Favor of Third Parties. AnyY guarantor or Borrower defaults under any loan,extension of credit,security agreement;ptx�`hase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor's ori ""'" Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Documents. •- -- a False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's beh'aif utlnder this 60 Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished oF'l ecome� false or misleading at any time thereafter. Q Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of sO receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or-Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help' repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and If Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor, Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of. or liability under, any Guaranty of the Indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent(25%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself Insecure. Cure Provisions. If any default,other than a default in payment is curable and ff Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;lir 121 if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses. • whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law.Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of lows. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law it given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated July 20,2007,to Lander on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement,the terms of the original obligation or obligations, including all 3 CHANGE IN TERMS AGREEMENT Loan No: (Continued) Page 2 agreements evidenced or securing the obligation(s),remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligationls). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligationls),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other parson who signs,guarantees or endorses this Agreement, to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANT ONSTRUCTION CO.,IN : By' ./ • ` By: i William L. Frantz, resident antz Construction Eugene • Nissley, Vice 'resident of Frantz • Co.,Inc. Constr •ion Co..Inc. • • N • Crei: f rn rn • 3 CHANGE IN TERMS AGREEMENT Prlf010:0l 1*0l itt _ itatF ivif t i"61 ri<o(I #ccolxittit Qtftcer initlala .R7 .O 2007..;G745s211X1:$ 11111 R Raaiprpp :..., PU .... . ^M References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co..Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 '825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $140,000.00 Interest Rate: 7.375% Date of Agreement: November 6, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. A promissory note dated 7/20/2007 In the original amount of$140,000. DESCRIPTION OF COLLATERAL. A mortgage dated July 20,2007,to Lender on reel property located in Johnson County,Iowa. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 11/15/2006 to 11/15/2009. PROMISE TO PAY. Frantz Construction Co., Inc. ("Borrower') promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ('Lender"),or order.in lawful money of the United States of America,the principal amount of One Hundred Forty Thousand&00/100 Dollars ($140,000.001.together with interest at the rate of 7.375%per annum on the unpaid principal balance from July 20.2007,until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$140,000.00 plus interest on July 15,2008. This payment due on July 15, 2008,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that Is.by applying the ratio of the annual interest rate over the number of days in a year, multipled by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve.Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full",'without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment Instrument that indicates that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled • payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the•Indebtedness. • Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreem or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition containld in any of J agreement between Lender and Borrower. . r.. Default in Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security agreement;perchase til sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any-'guergntor'sj " Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Documents.;• False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under It p� Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished pttbecomes ',9 false or misleading at any time thereafter. r- 1 I _ 4 1 Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the eppeiolipent oCet PL--3 receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor wOcdttf, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-hejpr_ repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing tpre Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Eve of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding end if Borrower gives Lender written notice of the creditor or forfeiture proceeding end deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent(25%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness Is Impaired. • Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment Is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(121 months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default 11) cures the default within fifteen(15)days;or (21 if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default end thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lander may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there Is a lawsuit,including without limitation all attorneys'teas and legal expenses for bankruptcy proceedings)including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, • State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and Individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares end deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated July 20,2007,to Lender on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all S CHANGE IN TERMS AGREEMENT Loan No:ifl- (Continued) Page 2 agreements evidenced or securing the obligationfs), remain unchanged and in full force end effect. Consent by Lander to this Agreement does not waive Lender's right to strict performance of the obligationls)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation's). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation's),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. II any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement Is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest, this Agreement shell be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this lett will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement, to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement, end unless otherwise expressly stated In writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shell be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest In the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other then the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ C ISTTTRRUCTION CO.,INC s , William L. Frantz. President of Frant•nstruction Eugono '. Nissley, Vic• President of Frantz Co.,Inc. Construction Co.,Inc. rV p Cn �I rrl C C: 73. `.O dbaa�� • 111 CHANGE IN TERMS AGREEMENT Principal I„oart-Date _N[aYuricy 3 QSt1!11©' a(1/GaIUAGGPLdCt.kfff4Qr lXtii3l�f . .1 1413.4OQ,t114, tit 20'i0070 idd aRifatNrop x ?ROM zgatgia References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co..In Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $140,000.00 Interest Rate: 7.375% Date of Agreement: March 31, 2009 DESCRIPTION OF EXISTING INDEBTEDNESS. A promissory note dated 7/20/2007 in the original amount of 5140,000. DESCRIPTION OF COLLATERAL. A mortgage dated July 20,2007,to Lender on real property located in Johnson County.Iowa. DESCRIPTION OF CHANGE IN TERMS. Change the interest rate from 7.375%to 6.25%.Change payment from single pay interest to monthly principal and interest payments of$865 starting April 15th,2009.. PROMISE TO PAY. Frantz Construction Co., Inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender").or order,in lawful money of the United States of America,the principal amount of One Hundred Forty Thousand&00/100 Dollars ($140,000.00).together with interest at the rate of 7.375%per annum on the unpaid principal balance from July 20,2007.until paid in full. The interest rate may change under the terms and conditions of the'INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$140,000.00 plus interest on July 15,2008. This payment due on July 15, 2008,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this • loan is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate'in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full,"without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that Indicates that the payment constitutes 'payment in lull"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF-IOWA COMMUNITY CREDIT UNION. 825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled ry payment. INTEREST AFTER DEFAULT. Upon default,Including failure to pay upon final maturity,the total sum due under this Agreement will continue to° accrue interest at the interest rate under this Agreement. . N yl DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: -> arra +^� Payment Default. Borrower fails to make any payment when due under the Indebtedness. ! Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement.","]n or in any of the•Related Documents or to comply with or to perform any term,obligation, covenant or condition contained in any other,,,i-- agreement between Lender and Borrower. m :Ze• Default in Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security agreement,purchase or ._. sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor's or O Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this > Agreement or the Related Documents Is false or misleading in any material respect,either now or at the time made or furnished or becomes f� false or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being en adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent(25%1 or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender In good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen(151 days;or 121 if the cure requires more than fifteen(151 days, Immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and ell accrued unpaid Interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement If Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' lees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees end legal expenses for bankruptcy proceedings(Including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs. in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lander and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law If given as security ere not subject to the security interest Borrower has given in Borrower's shares and deposits. • COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated July 20,2007,to Lender on real property located in Johnson County,State of Iowa. 7 CHANGE IN TERMS AGREEMENT Loan No: ' (Continued) Page 2 CONTINUING VALIDITY. Except es expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligationfsl,remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligationls)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s),including accommodation parties,unless a party Is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by It. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's Interest, this Agreement shall be binding upon and inure to the benefit of the parties,their successors end assigns. tf ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness.MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower end any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modificetiori is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ' STRUCTION CO., . C. By: dam L. Frantz, President of Frantz Con Sal tion Eugen W. Nissley, Vic President of Frantz Co.,Inc. / ' Con uction Co.,Inc. r...,,.,...a..d.,.. .te r.mr .ut Lwnnwmc.rc • rV c) D� c m n. 0 r )-- m o:;° a 8 PROMISSORY NOTE Ptrrt i2 rratr�3a:e Max+r tt loan N o flows a t000 o ftai�t S 7430. .0" .4 ; ¶.025ZQ42.., ;7iTt..'60. i�NIj1 R ttaalPrda. `:: .f_ ,13 ..r., Eli ...;. References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.t' Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244 Iowa City,IA 52246 13191339-1000 Principal Amount: $176,250.00 Interest Rate: 6.950% Date of Note: October 25. 2007 PROMISE TO PAY. Frantz Construction Co.. Inc. ("Borrower"I promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,In lawful money of the United States of America,the principal amount of One Hundred Seventy-six Thousand Two Hundred Fifty&00/100 Dollars($176,250.001.together with interest at the rate of 6.950%per annum on the unpaid principal balance from October 25, 2007,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of 5176,250.00 plus interest on November 15,2008. This payment due on November 15, 2008, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full","without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including - any check or other payment instrument that indicates that the payment constitutes"payment in full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA • COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. -.•J Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition containedirnhis Note ai-x'( any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any lather agreemsdt between Lender and Borrower. �! Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agreem&J t,lyrchas9_„b ( ji sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrowgg�r's pioperty Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. C) i False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's befja(funder Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished ot.becomes false or misleading at any time thereafter.. - a Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appprpf*rent ori" .,,::-J receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor vvJJoorrkket)<, or ON commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proce)lrig, self-help;" repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Ioaarl This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in.a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Change In Ownership. Any change in ownership of twenty-five percent 125%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve(12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen 115)days;or 121 if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. • COLLATERAL. Borrower acknowledges this Note is secured'by the following collateral described in the security instrument listed herein:a Mortgage dated October 25,2007,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Construct spec home at 3321 Wintergreen Dr.,Iowa City,IA. GUARANTEES.This note is further supported by the existing guarantees of William L.Frantz and Eugene W.Nissley,dated 7/20/2007. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, PROMISSORY NOTE Loan No: 11ra (Continued) Page 2 successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shell be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ •NSTRUCTION Ce.,INC • By./I 1�1rf William L. Frantz, President of F onstruction Co.,Inc. AMA wn la VA.s».,uCOI m.kwrw..n.....n,.1m,. ..w../*AA .u L.u,un1ourc 11‘441 MI - - - ------ _ tV o >- 0-< I r- .<ITI CD o • • i CHANGE-IN TERMS AGREEMENT Pr7tzctpal 4a 11#lax TViaxtlrii7i. #D1 1 4F 1 ail t ole Ae unt Cj#FCRRI figt 8i ..;$176,Z P R0 ... 007.. .1%-1.5.: 00$_.,.1 ., M.M.ati410.60 6641111.11111111111111EAK .O ..._ '. References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing"•••"has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244 Iowa City,IA 52246 (319)339-1000 Principal Amount: 5176,250.00 Interest Rate: 6.950% Date of Agreement: November 6, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. A promissory note dated 10/25/2007 In the original amount of 5176,250.00. DESCRIPTION OF COLLATERAL. An Iowa real estate mortgage dated 10/25/2007. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 11/15/2008 to 5/15/2009. PROMISE TO PAY. Frantz Construction Co., Inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,in lawful money of the Unhed States of America,the principal amount of One Hundred Seventy-six Thousand Two Hundred Fifty&00/100 Dollars($176,250.00),together with interest at the rate of 6.950%per annum on the unpaid principal balance from October 25. 2007,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$176.250.00 plus interest on November 15,2008. This payment due on November 15, 2008,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year. multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place es Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than It is due. Early payments will not,unless agreed to by Lender In writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid In full",'without recourse", or similar language. If Borrower sends such a payment,Lender may accept It without losing any of Lender's rights under this Agreement,and Borrower will remain obligatedto payany further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment In full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. _ ^? LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the ipgulariy scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreemenj will contir�u�to accrue interest at the interest rate under this Agreement. i '— DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: C")_�' Irows Payment Default. Borrower falls to make any payment when due under the Indebtedness. H C) Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition conteined.ln'[• Agreerttertt s or in any of the Related Documents or to comply with or to perform any term,obligation, covenant or condition contajue any 6Sfi&r P.j agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase ori lieVagreemelit, or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property orability to pertgerp Borrower's obligations under this Agreement or any of the Related Documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents Is false or misleading In any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the - commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This Includes a garnishment of any of Borrower's accounts,Including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,In its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to arty guarantor,endorser,surety,or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent(25%1 or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is Impaired. Insecurity. Lender in good faith believes itself Insecure. Cure Provisions. If any default,other than a default in payment is curable and If Borrower has not been given a notice of a breech of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen 1151•days;or 121 if the cure requires more than fifteen(151 days, Immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default ehd thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement end all accrued unpaid interest Immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement If Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees end Lender's legal expenses, whether or not there is a lawsuit,Including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not-prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extant not preempted by federal law,the - laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint end Individual accounts Borrower hes with Lender now and In the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares end deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given es security are not subject to the security Interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated October 25,2007,to Lender on real property located In Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all 3 CHANGE IN TERMS AGREEMENT Loan No:alginallnia (Continued) Page 2 agreements evidenced or securing the obligation(s),remain unchanged and In full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligatIon(s). It is the Intention of Lender to retain as liable parties all makers end endorsers of the original obligetionls),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any Initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's Interest,this Agreement shell be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this fact will not affect the rest of the Agreement, Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extant allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change In the terms of this Agreement,end unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shell be released from liability. All such parties agree that Lender may renew or extend Irepeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest In the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: • FRANTZC.TRUCTION CO..INC. By: William L. Frantz, President of Frantz 'o struction Co..Inc. W0100 .412.00.073 Cy,,,4.,w Ma.1•0.t* lmr,•Lt ulglu W..I. �u t.XMtrt,umc.rc mut hI • oa T1 n L r. • r- m o2 ❑ • • D.. PROMISSORY NOTE Pr�t1c:r ai1,f3Att 1?8t1 .votui(ty O PO - till f Gpli '' 1QlCC0 L1ftt OAtiGAK lnit #r $25.4fE?t3,Lrfk _. tf air) U 411 31—tf .....- gang References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,IncligmliNIMINo Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244 Iowa City,IA 52246 13191 339-1000 Principal Amount: $25,000.00 Interest Rate: 6.250% Date of Note: January 25,2008 PROMISE TO PAY. Frantz Construction Co., Inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"), or order, In lawful money of the United States of America, the principal amount of Twenty-five Thousand & 00/100 Dollars (525,000.00),together with Interest at the rate of 6.250%per annum on the unpaid principal balance from January 25,2008.until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in 59 regular payments of $485.00 each and one irregular last payment estimated at 5515.34. Borrower's first payment is due February 15, 2008, and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on January 15,2013,and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note Is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days In a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it Is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lends, payments marked "paid in full", 'without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment Instrument that indicates that the payment constitutes 'payment in lull'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,826 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: . Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained try"this Note of-1h any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any.gtfleregreerrealt between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agree ec t,.purchase sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borroyy.r'spropertylor opmsas Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's'bghr under this y U y Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or tfiiiaomes f318, ..a or misleading at any time thereafter. -- � li Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the ppp.514tment ea receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self- : repossession or any other method,by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Change In Ownership. Any change in ownership of twenty-five percent 125%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurtty. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12)months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (2) if the cure requires more than fifteen(151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance-as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or Injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. gSHOICE VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint end individual accounts Borrower has with Lender now and In the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is In default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL, Borrower acknowledges this Note is secured by Commercial Security Agreement of even date herewith and Commercial Guarantees of William Frantz and Eugene Nissley dated 9/14/2006. PURPOSE OF LOAN. The specific purpose of this loan is: Purchase pickup truck and add snow plow and accessories. PROMISSORY NOTE Loan No: (Continued) Page 2 SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,'demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security Interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ NSTRUCTION CO.,INC. By: William L. Frantz, President of Construction Co.,Inc. ,..m PRO Lw..V..s.,umr C,.,war r.,.,a..r„r.to,.n.In?.. ..Rpm Rom*.u L wa,c rn.au nu CV ' c • , - �� n""c 0 m o PROMISSORY NOTE .max;:.-g P iiiiilpii ;ra RaMpa1i _ r�11{d -�Qrdtt{1f ............_., e.z-;_�r:-s.:.::�.,9..:..:...,»:.....::.......:..:.�..n:-........_..;,�,: =-......__ :.... .. . _,__:y�� Wf__�;T,x:r.:"t:�.:__:.m�::..-:::::_:::zs:�":='�:���y" - .... . ., . 8 :.,...:...:.....:...........„_x..i.:.... Yrt1 �.f'o::=:lf1i11.:.'s�:?. :#1�p11.. 113:x,.,, References in the boxes above are for Lender's use only and do not limit-the applicability of this document to any particular loan or item. Any item above containing'••••has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.111111111111111111M1 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City.IA 52246 Iowa City,IA 52246 (319)339-1000 Principal Amount: $610,500.00 Interest Rate: 6.250% Date of Note: June 11,2008 PROMISE TO PAY. Frantz Construction Co., inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,in lawful money of the United States of America,the principal amount of Six Hundred Ten Thousand Five Hundred & 00/100 Dollars($610,500.00),together with Interest at the rate of 6.250%per annum on the unpaid principal balance from June 11,2008, until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT'section. PAYMENT. Borrower will pay this loan In one principal payment of$610,500.00 plus Interest on June 16,2009. This payment due on June 15,2009,will be for all principal and all accrued Interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual Interest rate over the number of days In a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full',"without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check-or other payment instrument that indicates that the payment constitutes "payment in full'of the amount owed or that is tendered with other'conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 62246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note, DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained ire this-Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any otkie,rr,greemejd .,r between Lender and Borrower, It �g I Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security reeme a nt, f g 4 purchase qrs» sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower"a property dr Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. --: s '— False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's beha)f..under Note or the related documents is false or misleading In any material respect,either now or at the time made or furnished otbeeernes fel . or misleading at any time thereafter. .,„ .. Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvencyof Borrower,the a al of receiver for any p)rkout, or part of Borrower's property, any assignment for the benefit of creditors, any type of creditor wdrkout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. - Creditor or forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor, Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent 425%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender In good faith believes itself Insecure. Cure Provisions. If any default,other than a default in payment Is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen(151 days;or (21 if the cure requires more than fifteen(161 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to ail other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender end,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account end any other account that would lose special tax treatment under state or federal law If given as security are not �• subject to the security interest Borrower has given In Borrower's shares and deposits. �� COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a Mortgage dated June 11,2008,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Construct 3 unit residential condominium building at 3114, 3118, & 3122 Wintergreen Dr.,Iowa City,IA. • FINANCIAL REPORTING REQUIREMENTS. Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed. Guarantor agrees to provide lender with updated personal financial statement annually.. PROMISSORY NOTE Loan No: - (Continued) Page 2 • GUARANTEES.This Note is further supported by the existing guarantees for William L.Frantz and Eugene W.Nissley,dated 7/20/2007. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,po party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL.THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: :zIcTIoo.. . William I.. Frantz, President of Fra nstruction Co.,Inc. ,A11A IIID I_a.p.Vim.LYCGYx CM... .1P11N.Y r.re.4 Y„flu.1001. -4 L1,-m m...f Tana PMI • B -S -0 rn 2 PROMISSORY NOTE 1t11pUI 3�C2d#tip _i1Vf11)11�t .t„ C: O: _ --- ifittordage a.,.�.. M= WF. :.::t?tlXlt�:;.a References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing'•••”has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.111111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy I W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 62246 (319)339-1000 Principal Amount: 5618,750.00 Interest Rate: 6,250% Date of Note: June 13, 2008 PROMISE TO PAY. -Frantz Construction Co., Inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,in lawful money of the United States of America,the principal amount of Six Hundred Eighteen Thousand Seven Hundred Fifty&00/100 Dollars($618,750.00),together with Interest at the rate of 6.250%per annum on the unpaid principal balance front June 13, 2008,until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$618.750.00 plus Interest on June 15,2009. This payment due on June 15,2009,will be for all principal and all accrued Interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due_ Borrower agrees not to send Lender payments marked"paid in full',"without recourse', or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,Including any check or other payment instrument that Indicates that the payment constitutes'payment in full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. h.1 INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will contl(tub to accrue•"'f interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default("Event of Default')under this Note: Payment Default. Borrower fails to make any payment when due under this Note. . en Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this:Note or int", 1 any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any othBf a reemenru between Lender and Borrower. t .-• Default In Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agreement,.purehase 0 sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower'}preperty or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf tinder this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false G� or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment -for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. • This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender, in its sole discretion,as being an adequate • reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. Change In Ownership. Any change In ownership of twenty-five percent(25%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 1151 days;or (2) if the cure requires more than fifteen 115) days, Immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note end all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees end Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(Including efforts to modify or vacate any automatic stay or Injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court coats,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all Joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the �� D balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described In the security instrument listed herein:a Mortgage dated June 13,2008,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Purchase and renovate real estate at 901 Park Road,Iowa City,IA. FINANCIAL REPORTING REQUIREMENTS. Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed. Guarantor agrees to provide lender with updated personal financial statement annually.. GUARANTEES.This Note is further supported by the existing guarantees of William L.Frantz and Eugene W.Nissley,dated 7/20/2007. PROMISSORY NOTE Loan No 401111.111.110 (Continued) Page 2 SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors end assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of Its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor, accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made. The obligations under this Note are joint and several. PRIOR,TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ C.t STRUCTION CO.,INC. By: ' / William L. Frantz, President of Franz ctlon Co.,Inc. 700 L.....v.....CC OW .Medan.P*1 I,. .—,w..,ua. ww..0* .0 x,x,uow,c.war.m, - -- - ----�� N O a <,n c. ) r- -10 - -<r 171 PROMISSORY NOTE Pritl f : ka xl l e ik9a#ul by Lf3at (11iT` aiE 3 cr]i A�1 a Qfttocil ittltrO $'75,000400 ... TZ 04:200 .:081M2,008. .;1 " References in the boxes above are for Lender's use only and do not limit the applicability o/this document to any particular loan or item. ". Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 (319)339-1000 Principal Amount: $75,000.00 Interest Rate: 6.750% Date of Note: December 4, 2008 PROMISE TO PAY. Frantz Construction Co_, Inc. ('Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"), or order, in lawful money of the United States of America, the principal amount of Seventy-five Thousand & 00/100 Dollars (575,000.00),together with interest at the rate of 6.750%per annum on the unpaid principal balance from December 4,2008.until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT'section. PAYMENT. Borrower will pay this loan in one principal payment of$75,000.00 plus Interest on June 15,2009. This payment due on June 15, 2009. will be for all principal end all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest:then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis:that is.by applying the ratio of the annual Interest rate over the number of days In a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid In full',"without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that Indicates that the payment constitutes'payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue, interest at the interest rete under this Note. _.._ DEFAULT. Each of the following shall constitute an event of default("Event of Default')under this Note: • Payment Default. Borrower fails to make any payment when due under this Note. •'.•� __ Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained irf ihi5•'Note of c•' u any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any Qther egreemerjt between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agreement;purchase or C-7-1 sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower'srproperty.sS, 9 i 6 Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. ' False Statements. Any _._. warran ry,representation or statement made or furnished[o Lender by Borrower or on Borrower's bah�l!under thi Note or the related documents Is false or misleading in any material respect,either now or at the time made or furnished or-pCotnes Fa or misleading at any tirrle thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business,the Insolvency of Borrower,the appointment oa, receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or Insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or Forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method,by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This Includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding end if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent(25%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default In payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 112) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (ll cures the default within fifteen 1151 days;or (2) if the cure requires more than fifteen 115) days, immediately initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest Immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note If Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation ell attorneys'fees and legal expenses for bankruptcy proceedings!including efforts to modify or vacate any automatic stay or Injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,In addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and Individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security Interest Borrower has given In Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a . Mortgage dated December 4,2008,to Lender on real property located In Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Additional funds to renovate real estate at 901 Park Road,Iowa City,IA. FINANCIAL REPORTING REQUIREMENTS. Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed. Guarantor agrees to provide lender with updated personal financial statement annually.. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, PROMISSORY NOTE Loan No: (Continued) Page 2 successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this tact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated ih writing,no party who signs this Note,whether as maker,guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of timel this loan or release any party or-guarantor or collateral;or impair,fail to realize upon or.perfect Lender's security interest in the collateral;end take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANTZ ONSTRUCTION CO. INC. By-/ " L1�' dliam L. Frantz, President o Frantz C.'•• •n Co.,Inc. USIA IMO Um....v..awm.am C .w.....nM...z....,..on.mor. AS n•�r. .u•.icm..uuxi.c,.VII M • • > 1 0.< wens r- --1� r • r. i C7'' 0' PROMISSORY NOTE PrIL) lpa1 kaon Qatff iyjaiurl#y' {:Daft NP 00061 , Acixuttf_ Ctfflcar lrtttlafs :: : 33> i43 E3Q .:r Q&Q8 2(�E78.,fT i (f . ..:: r RealRFvp References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.(111111111111111.111111) Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $233,750.00 .interest Rate: 6.250% Date of Note: August 8, 2008 PROMISE.TO PAY. Frantz Construction Co., Inc. ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"), or order, in lawful money of the United States of America, the principal amount of Two Hundred Thirty-three Thousand Seven Hundred Fifty&00/100 Dollars ff233,750.00),together with interest at the rate of 6.250%per annum on the unpaid principal balance from August 8,2008.until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in 59 regular payments of$1,439.00 each and one irregular last payment estimated at$220,055.63. Borrower's first payment Is due September 15, 2008. and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on August 15,2013,and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest:then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse",or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check-or other payment instrument that indicates-that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: CD Payment Default. Borrower fails to make any payment when due under this Note. •••• r� Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in J•'i —0 71 any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement n"'< .aro between Lender and Borrower. � Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit,security agreement,purchase,or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or- Borrower's ability to repay this Note or perform_Borrower's obligations under this Note or any of the related documents. _ " False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this 0:t1 Note or the related documents is false or misleading in any materiel respect,either now or at the time made or furnished or becomes false .19 or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This Includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent(25%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the • same provision of this Note within the preceding twelve 112) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (2) if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'lees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition •to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. • CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accountslance Borrower has with Lenderpaa now and in the future. Borrower authorizes is to theIt extent r this by applicablearlaw,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instruments listed herein: (A} a Mortgage dated August 8,2008,to Lender on real property located In Johnson County,Stdte of Iowa. (B) an Assignment of All Rents to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Refinance 4880 Nowhere Ave. SW, Iowa City, IA far additional funds to fix up property. PROMISSORY NOTE Loan No: 11111111.111.111111 (Continued) Page 2 FINANCIAL REPORTING REQUIREMENTS. Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed- Guarantor agrees to provide lender with updated personal financial statement annually.. SUCCESSOR INTERESTS. The terms of this Nate shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor, accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. • PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRA OONSTRUCTION CO., C. • By: William L. Frantz, President of Fra nstructfon • Co.,Inc. rwsa rio rwv.Vv.LamrrO r.,x.w rw...S 5r.6.,..on.,rn-Y. 4 M.....-.a -u • rV 0 B rin o f— • D _ PROMISSORY NOTE P,xincipal haat Diate _....�,..........__. - - .� - .... � ,: :�' :•,:_. . .:, M19a�ut�� �r�s�_ c�ir:� l-..._ ; �_� - -=4# t�i~���rnttta s - References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.611111111111111111PIP Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION • 1075 Hwy 1 West PO Box 209 825 Mormon Trek Blvd lows City,IA 52244-0209 Iowa City,IA 52246 (3191 339-1000 Principal Amount: 512,340.85 Interest Rate: 6.000% Date of Note: August 19,2008 PROMISE TO PAY. Frantz Construction Co., Inc_ ("Borrower") promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,in lawful money of the United States of America,the principal amount of Twelve Thousand Three Hundred Forty&85/100 Dollars(512,340.85),together with interest at the rate of 6.000%per annum on the unpaid principal balance from August 19,2008,until paid in full. The Interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In 35 regular payments of $375.00 each and one Irregular last payment estimated at $382.65. Borrower's first payment is due September 15. 2008, and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on August 15,2011,and will be for all principal and all accrued interest not yet paid. Payments Include principal end interest. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple Interest basis;that Is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing, PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier then It is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result In Borrower's making fewer payments. Borrower agrees not to send Lander payments marked "paid in full', "without recourse",or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning--disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed'emount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd.Iowa City,IA 52246. LATE CHARGE, If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regjilari,y�schedtjtq' payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue.to accrJe1 r=116. interest at the interest rate under this Note. • (yh DEFAULT. Each of the following shall constitute an event of default("Event of Default'l under this Note: ' , Payment Default. Borrower fails to make any payment when due under this Note. ( ('�-- .. =-1 Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in`Shilote Orin) any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any otter agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit, security agreement, purchase sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents, False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. • Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which Is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount-determined by Lender, in its sole discretion, as being an adequate • reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the Indebtedness evidenced by this Note. Change In Ownership. Any change in ownership of twenty-five percent(25%)or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or • performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default In payment Is curable and If Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days:or 12) if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does riot pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY UEN, Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not • subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a • motor vehicle described in a Commercial Security Agreement dated August 19,2008. PURPOSE OF LOAN. The specific purpose of this loan is: Refinance 1999 Dodge RAM 1500 end replacing the engine. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. PROMISSORY NOTE Loan No:V01111111WOM (Continued) Page 2 GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor,accommodation maker or -endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note ere joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FRANT ONN�BBT��RUU�CTION 0.,IN . By: 'add X-'4111'J William L. Frantz, President of Fra= •. truction Co.,Inc. u.aw IVO Ia..w.•rm.m Cep.w.rr,.frrwr...,.n. wrya,.mar..a .0 LAcrynwarc 1.Sly ma O -0 11 i r- r- rn 0 Ai v • PROMISSORY NOTE iNptPf ,tett k ° ktV t L ' 4:F_ar w n' '� _ t,s�€tt:��l Y �., M,...SftA}�13Pr�R: � �':.��,�SS()f..w;4024y.�a: References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any Item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 (319)339-1000 Principal Amount: $477,000.00 Interest Rate: 5.750% Date of Note: May 7, 2009 PROMISE TO PAY. Frantz_Construction Co., Inc. ("Borrower-I promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender"),or order,in lawful money of the United States of America,the principal amount of Four Hundred Seventy-seven Thousand&001100 Dollars 15477,000.00).together with interest at the rate of 5.750%per annum on the unpaid principal balance from May 7.2009,until paid in full. The interest rate may change under the terms and conditions of the'INTEREST AFTER DEFAULT'section. PAYMENT. Borrower will pay this loan in 59 regular payments of 53.000.00 each and one irregular lest payment estimated at$431,382.91. Borrower's first payment is due June 15, 2009.and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on May 15,2014,and will be for all principal and all accrued Interest not yet paid. Payments include principal and Interest. Unless otherwise agreed or required by applicable law.payments will be applied first to any accrued unpaid interest;then to principal; then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that Is. by applying the ratio of the annual interest rata over the number of days in a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender et Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lander payments marked "paid in full', 'without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes 'payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. --� LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of,the regularly.O heduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this NoteilvilFeontint acertrorn interest at the interest rate under this Note. — —17.7 1 DEFAULT.--Each-of the-following shell constitute an event of default f"Event of Default')under this Note: • •- •_ I - Payment Default. Borrower fails to make any payment when due under this Note. "— Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition costal In thisAgte or irrn any of the related documents or to comply with or to perform any term,obligation,covenant or condition contalnedjo otherEEeemenr between Lender and Borrower. lllJll)�111, Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit, security'eyr1ehtent,phase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any al-Borrower's properly or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf u under this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business,the insolvency of Borrower,the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of arty proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding end deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes Incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the Indebtedness evidenced by thle Note. Change In Ownership. Any change in ownership of twenty-five percent 125%1 or more of the common stock of Borrower. Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lander in good faith believes itself insecure. Cure Provisions. If any default,other than a default In payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 1121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (11 cures the default within fifteen(15)days;or (21 if the cure requires more than fifteen(15) days, immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note If Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys' fees and legal expenses for bankruptcy proceedings(Including efforts to modify or vacate any automatic stay or injunction).and appeals. If not prohibited by applicable law, Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW- This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request l0 submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instruments listed herein: (Al a Mortgage dated May 7, 2009, to Lender on real property described as'Real Property located at 1069 and 1075 Highway 1 West Unit A,Iowa City,IA 52240'and located in Johnson County,State of Iowa. fB) a Mortgage dated May 7, 2009,to Lender on real property described as'Reel Property located at 1069 Highway 1 West Unit B.Iowa City,IA 52240'and located in Johnson County,State of(owe. PROMISSORY NOTE Loan No: (Continued) Page 2 (CI a Mortgage dated May 7,2009,to Lender on real property described as'Real Property located at 1463 Buckingham Place,Iowa City, IA 52240'end located in Johnson County,State of Iowa. ID) a Mortgage dated May 7,2009, to Lender on reel property described as 'Real Property located at 22 Durham Court. Iowa City, IA 52240'and located in Johnson County,State of Iowa. (El a Mortgage dated May 7, 2009, to Lender on real property described as 'Real Property located at Lot 70 Saddlebunch RV Park, Saddlebunch Key,FL 33040'and located in Monroe County,State of Florida. (F) a Mortgage dated May 7,2009.to Lender on real property described as'Real Property located at 340,344,348 Highland Ave.,Iowa City,IA 52240'and located in Johnson County,State of Iowa. IG) a Mortgage dated May 7,2009,to Lender on real property described as'Real Property located at 495 Veranda Way,Naples,FL'and located in Collier County,State of Florida. (H) a Mortgage dated May 7,2009,to Lender on real property described as'Real Property located at 1478 Cromwell Place,Iowa City,IA 52240"and located in Johnson County,State of Iowa. III a Mortgage dated May 7, 2009,to Lender on real property described as 'Real Property located at 327 and 329 Benton Street.Iowa City,IA 52246'and located In Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Finance the portion of funds that went to 3114,3118, &3122 Wintergreen Drive loan. FINANCIAL REPORTING REQUIREMENTS. Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed. Guarantor agrees to provide lender with updated personal financial statement annually.. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of Its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,end notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lander may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor-or collateral;or impair fail to reale upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other then the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT-OF-A-COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: • FRANTSTRUCTION CO..INC. / By - ��4 .0 By: yl/ / Z. -- William L. Frantz, President of rantz C ion Eugene Nissley. Vic. President of Frantz Co.,Inc. Constr. don Co..Inc. Florida Documentary Stamp Tax Florida documentary stamp tax in the amount required by law has been paid with respect to this Note on the Mortgages securing this Note. . - - — IAYl1..01w�r.v" W..S.�O. Om Cyr...I...Iw•M w,. iiri201 Y Waw w S......,M).] ... r MrtvrA .. I+U .rC Hillsuen..r , — " ♦., -<1 om = 0 gw D . v • PROMISSORY NOTE •Aimatf ; t7t� f rT o ltlr r cwt � �#crlu1-t r vfiti ar .I tt�tttafs� References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $288,000.00 Interest Rate: 6.250% Date of Note: February 11, 2005 PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower"I promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, In lawful money of the United States of America, the principal amount of Two Hundred Eighty-eight Thousand &00/100 Dollars 13288,000.00),together with Interest at the rate of 6.250%per annum on the unpaid principal balance from February 11,2005,until paid in fun. PAYMENT. Borrower will pay this loan In 59 regular payments of$2,105.00 each and one irregular last payment estimated at$247,905.84. Borrower's first payment is due March 15,2005,and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on February 15,2010,and will be for all principal and all accrued Interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal; then to any unpaid collection costs;and then to any late charges. Interest on this Note Is computed on a 365/365 simple interest basis;that is, by applying the ratio of the annual Interest rate over the number of days in a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower wit pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked 'paid in full`, "without recourse',or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications.concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction or a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will bear interest from the date of acceleration or maturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: • Payment Default. Borrower fails to melte any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note.or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit,security agreement, purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower'sdperty or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf-wader this (,) m 11 Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false n:/ or misleading at any time thereafter. 1012111111. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency of Borrower, f the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor Ardrl out, I ! 1 I or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. _ yt Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,sC fl help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing he loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Da.Ault shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the'guaranty in a manner satisfactory to Lender, and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note Is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(151 days;or 12) if the cure requires more than fifteen(151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),end appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County. lig State of Iowa. • STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instruments listed herein: IA) a Mortgage dated February 11,2005,to Lender on real property located in Johnson County,State of Iowa. 1131 an Assignment of All Rents to Lender on real property located in Johnson County,State of Iowa. PROMISSORY NOTE Loan No:s (Continued) Page 2 • PURPOSE OF LOAN. The specific purpose of this loan is: Finance transfer of real estate at 340,344,348 Highland Ave.,Iowa City,IA from Eugene Nissley to Borrower. REPORTING REQUIREMENTS. Borrower agrees to provide lender with a copy of its federal income tax return annually. Guarantors agree to provide lender with personal federal income tax return copies and updated personal financial statements upon request. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment,demand for payment, and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note, whether as maker,guarantor,accommodation maker or endorser,shell be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;end take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTSIDE •VESTORS,L.L.C. 07 BYEBy. t�rlrr.:.�ifslJ William L. Frantz, . •er of Eastsid--estors, Eugene 'Issley, Member of Eastsi•a Investors, L.L.C. L.L.C. • • --- ----- ---- wrw••w1.......4.ncams ,.•.2e77. MMg...* •,.t wmm•e„1217«., • • 0 ran" > f-0 • T _m a a i O/• • PROMISSORY NOTE • i err 14A E �.' � w r :,.-4,1.,7.4.-.,,,,,4..,_s r racy ; ;_r- a ) Int+{s: ;p�i? Q._.. tX. f „_ _ 17.47 References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors.L.L.C.IINIMMIIMMO Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $535,000.00 Interest Rate: 5.750% Date of Note: February 17, 2005 PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION('Lender'). or order, In lawful money of the United States of America, the principal amount of Five Hundred Thirty-five Thousand & 00/100 Dollars ($535,000.00),together with interest at the rate of 5.750%per annum on the unpaid principal balance from February 17,2005,until paid is full. PAYMENT. Borrower will pay this loan in one principal payment of$535,000.00 plus interest on February 15,2006. This payment due or February 15, 2006, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges Interest on this Note is computed on a 365/365 simple Interest basis;that is,by applying the ratio of the annual interest rate over the number o• days In a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full', 'without recourse' or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, ant Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,includin( any check or other payment instrument that indicates that the payment constitutes'payment in full'of the amount owed or that is tenderer with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduler payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will bear interest fron the date of acceleration or maturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted by applicabli law. DEFAULT. Each of the following shall constitute an event of default("Event of Default')under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or it any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreemen between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agreement,purchase o sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property o • Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf-odder tlti: Note or the related documents is false or misleading In any material respect,either now or at the time made or furnished or becomes Pals• or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any nektibei with,..:?s fror wr, Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the frfsolvjncy o 11 rrower 1 9 the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor workout.... or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. _._ I Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeitureroceedin s, whether byr P 9 judicial,broCeedingsell-heli y�gw repossession or any other method, by any creditor of Borrower or by any governmental agency against any coll8terhl securing the boar! 1 G This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this ECbilt of 1311pult she p......! not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the of the"El%ditor t'� forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and depesit4�ith Lender peonies t a surety bond for the creditor or forfeiture proceeding, In an amount determined by Lender, in its sole discretior),e{{``being aiVidequat reserve or bond for the dispute. .,,Y Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedrrarr4 or en Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indabtednes evidenced by this Note. In the event of a death,Lender,at Its option,may,but shall not be required to,permit the Guarantor's estate t assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, end,in doing so,cure any Event t Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment i performance of this Note is Impaired. Insecurity. Lender in good faith believes itself insecure. • • Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of rt same provision of this Note within the preceding twelve (12) months, it may be cured If Borrower, after receiving written notice fro. Lender demanding cure of such default: (11 cures the default within fifteen(151 days;or (2) if the cure requires more than fifteen Ill days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereat!) continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid intere . immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pi Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether• not there is a lawsuit,including without limitation all attorneys' tees and legal expenses for bankruptcy proceedings(including efforts to modi or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in additic to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson Count State of Iowa. STATUTORY UEN. Borrower agrees that all loan advances under this Note are secured by all shares end deposits in all joint and indivich accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply tl balance in these accounts to pay any amounts due under this Note when Borrower is In default under this Note. Shares and deposits in. Individual Retirement Account and any other account that would lose special tax treatment under State or federal law if given as security are n subject to the security interest Borrower has given In Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: Mortgage dated February 17,2005,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Construct 3 unit residential condominium building at 51,55&59 Montgomery Plat Iowa City,IA. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representative PROMISSORY NOTE Loan No: 1111111.111111 (Continued) .Page 2 successors end assigns,and shall inure to the benefit of Lender and Its successors and assigns. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extant allowed by law,waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note. whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND AU.OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: • EAST�/SI////L/L/L//)INVESTORS,L.L. j7/ By:I�L-/ �/ `r By: ` Y William L. Frantz,T]lerr ter of Easts Investors, Eugene Nissley, Member of Eastside Investors, L.L.C. L.L.C. — -- LIMA TO a,.n.ou.a C.a.WI ..w.....,ni,m. ..An..a..... .u.r..u..maax ma,1 • • • N • >o ry • • o7) • • • • • • • • • 2- .`,lANGE IN TERMS AGREEMENT ,i*Mtwaft bse ,WMP i r _.,.._ ., �7t' #»��in�W '°�alrt�oi►ap: `A:�6= M _ �iCl��ifs�' ..,_ ,'*+r..�.F Zff44»f 4ix ,:::. ,'"..l 7_2Qtf5 ,02_?:rz:' G ._= I IfM__' ti�all op t'4 } zwessv References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. • Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 1319)339-1000 Principal Amount: $535,000.00 Interest Rate: 5.750% Date of Agreement: February 17,2005 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note originated for 5535,000 on 2/17/05. • DESCRIPTION OF COLLATERAL. A mortgage dated February 17,2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 2/15/2006 to 2/15/2007. Change rate from 5.75%to 6.25%. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, In lawful money of the United States of America, the principal amount of Five Hundred Thirty-five Thousand & 00/100 Dollars ($535,000.00),together with interest at the rate of 5.750%per annum on the unpaid principal balance from February 17,2005,until paid in full. PAYMENT. Borrower will pay this loan in one principal payment of$535,000.00 plus interest on February 15,2006. This payment due on February 15, 2006, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Agreement is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual Interest rate over the number of days in a year, multiplied by the outstanding principal balance, multiplied try the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make-payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid In full",'without-recourse', or similar language. If Borrower sends such a payment.Lender may accept it without losing anyof-Lender's rights under this Agreement,and • Borrower will remain obligated.to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes'payment In full'of the amount owed or that is tendered with other-conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825.Mormon Trek Blvd Iowa City,IA 52246. - LATE.CHARGE. II a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will bear interest from the date of acceleration or maturity at the interest rate on this Agreement. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. • Default In Favor.of Third Parties. Borrower detaults under any loan,extension of credit,security agreement,purchase or sales agreement, or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property Borrower's;ability to perform Borrower's obligations under this Agreement or any of the Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on.Borrowecs behalf urt les this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or(jimrs{ted or lames � • false or misleading at any time thereafter. _ Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdrawL from Yj�® Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insofvegclr of Borrower, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any typeml preditor workout, rri or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial propeing, se"TI"-help, „ repossession or any other method, by any creditor of Borrower or by any governmental agency against any codllatetiO secugnsk the Indebtedness. This includes a garnishment of any of Borrower's accounts,Including deposit accounts,with Lender.:However,this vera of Default shell not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim'which is the j is o' the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposiLs.witf Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,a'Steirq an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or ant Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. In the event of a death,Lender,at Its option,may,but shall not be required to,permit the Guarantor's estate tr assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event o Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment o performance cf the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions: If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of tie same provision of this Agreement within the preceding twelve(121 months,it may be cured if Borrower,after receiving written notice iron Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (2) if the cure requires more than fifteen 115 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafte . continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Agreement and all accrued unpaid interes immediately due,end then Borrower will pay that amount. ATTORNEYS'-FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower wi pay Lender-that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including effort to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs in addition,to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable-to Lender and,to the extent not preempted by federal law,th laws.of the State:of Iowa without regard to its contacts of law provisions. This Agreement has been accepted•by Lender In the State of Iowa. CHOICE OF VENUE. if there is a lawsuit.Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson Count", State: of Iowa. STATUTORY LIEN..Borrower agrees that all Indebtedness is secured by all share':and deposits in all joint and individual accounts Borrower ha with lender now and in the future. Borrower authorizes Lender, to the eaten permitted by applicable law, to apply the balance in thea accounts to pay any amounts due under this Agreement when Borrower is in deft dt under this Agreement. Shares end deposits in an Individur Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subjec to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL..'Borrower acknowledges this Agreement is secured by the followi'3 collateral described In the security instrument listed herein: • • CHANGE IN TERMS AGREEMENT • Loan No: 441111111111111.. • (Continued) Page 2 Mortgage dated February 17.200.5.to Lender on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY,. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including ell agreements evidenced or securing the obligetion(s),remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to.strict performance of the obligationfs)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s), It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligatlonlsl,Including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representailon.to Lender that the non-signing party consents to the changes end provisions of this Agreement or otherwise will not be released by it. This waiver'applies not only to any Initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender,'without notice"to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or.extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of Its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement, and unless otherwise expressly stated in writing,no party who signs this Agreement, whether as maker,guarantor, accommodation maker or endorser..shall be released from liability. All such parties agree that Lender may renewor.extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect.Lender's security interest in the collateral;and take any other action deemed necessary by Lender without • the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. • BORROWER.ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. -. BORROWER: • • FAS2mOEr :f ;e NVEST ,L.L. . By: By; Investors, Eugene Isley, Member of Eastside Investors, L.L.C. L.L.C. • wa no Loa,.r.1ammr w.I*w».r r�r ... Mel u Mg. -a 1.1orrwns.Fe.ear 1a, • • • • • • • • • • N •• O B N >=i T I r • • -I .• — rn 7 CO • • • •y • CHANGE IN TERMS AGREEMENT boar,,:**St ,,Y4.#poxy= itAiir. ...,-.77... Oalson e04tu+t _ ►f xaF.. 2 ,. ,.a.3,iliti Q .. ti _:F. 2#?115 02-'T.�r''�11�I6 1 - rraalFfop ..... . Dl) -:...T....:.:,'-:_ •.' References in the shaded ea are for Lender's use only and do not limit the applicability of this document to any particular loan or item. y item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.611111111.1111111111111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $535,000.00 Interest Rate: 5.750% Date of Agreement: January 25, 2007 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note originated for$535,000 on 2/17/05. DESCRIPTION OF COLLATERAL. A mortgage dated February 17,2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 2/1 5/2006 to 2/15/2008. Change rate from 5.75%to 6.75%. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower')promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, In lawful money of the United States of America, the principal amount of Five Hundred ThIrty-five Thousand & 00/100 Dollars (5535,000.00►,together with interest at the rate of 5.750%per annum on the unpaid principal balance from February 17,2005,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$535,000.00 plus interest on February 15, 2006. This payment due on February 15, 2006, will be for all principal and all accrued Interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest:then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan Is computed on a 365/365 simple Interest basis:that is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT.- Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full', 'without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes 'payment in full' of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. - • INTEREST AFTER DEFAULT, Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue'interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. , Default In Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or sales agreement, or any other agreement.in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to perform Borrower's obligations under this Agreement or any of the Related Documents. • False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower(regardless of whether election to continue is made), any member withdraws from • Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor workout,...,, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. - .t Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, -3 repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the-�) Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts, with Lender. However,thls-l:vent,r-'-` j'� of Default shall not apply if there-is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the bisis of'' r �r the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and depipsfts with "'' Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as-,being ' II an adequate reserve or bond for the dispute. -.. nriEvents Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness;..gr any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the I ness 0 evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor,$ a to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and,in doing so,cure apy�vent of -.0 Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. OCO Insecurity. Lender in good faith believes itself insecure. Cure Provisions- ft any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(1 21 months,it may be cured if Borrower,atter receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen 115)days;or 12) if the cure requires more than fifteen(151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lander that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not-there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there Is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the luture. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated February 17,2005,to Lender on real property located in Johnson County,State of Iowa. 5 CHANGE IN TERMS AGREEMENT Loan No: (Continued) Page 2 CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation•or obligations, including all agreements evidencedor securing the obligation(s),remain unchanged and in full force and effect: Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(sl,including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law.waive presentment,demand for payment. and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of timel this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: :STStvT0RSL .• • By: illiam L. Fran z, •ember of Investors, Eugene . Nissley, Member of Eastside Investors, • L.L.C. L.L.C. uuu .. x.:amen,Cr,Hole*Mem*.....,.w.,rr.,m. AK..,mm.... ...L.nrnrmocrc 11.121 w, • • • • col rri min • r m m • 00 CHANGE IN TERMS AGREEMENT ,A P 1.Iir 1p4l t L.fe#3,ata- iV[attu'fi t kaon No Last O NI = - + cau..� cat -�nfti�#;� #v3s:T16.050.:.:f.;St 77=FAQ , :...; ffea)Prir M References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.— Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $535,000.00 Interest Rate: 5.750% Date of Agreement: February 7,2008 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note originated for 8535,000 on 2/17/05. DESCRIPTION OF COLLATERAL. A mortgage dated February 17,2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 2/1512008 to 2/15/2009. . PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, in lawful money of the United States of America, the principal amount of Five Hundred Thirty-five Thousand & 00/100 Dollars (5535,000.00),together with interest at the rate of 5.750%per annum on the unpaid principal balance from February 17, 2005,until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of S535,000.00 plus interest on February 15,2006. This payment due on February 15, 2006, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid Interest;then to principal:then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple Interest basis:that is.by applying the ratio of the annual Interest rate over the number of days In a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full"."without recourse", or similar language. If Borrower sends such-a payment,Lender may accept it without losing any of Lender's rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that Indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 16 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including.failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each.of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. • Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term,obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default In Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or sales agreement, or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to perform Borrower's obligations under this Agreement or any of the Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws (rbfn:? Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency,of Borrower,; the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor,workout'' or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding;sell-help, �i1�r) repossession or any other method, by any creditor of Borrower or by any governmental agency against any collaterehsecuring the Indebtedness. This Includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there Is a good faith dispute by Borrower as to the validity or reasonableness of the claim which-le the basis vf- the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and.,deposita with F ri Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion;as being„ an adequate reserve or bond for the dispute. —_ Events Affecting Guarantor, Any of the preceding events occurs with respect to any Guarantor of any of the indeb dness or afty-� Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of th$:'in4ebtednese:'" evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor's estate 12... assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and, in doing so,cure any Event f ^3 Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: 111 'cures the default within fifteen(151 days;or (2) if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,end then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costa, in addition to all other sums provided by law. . GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and In the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law If given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated February 17,2005,to Lender on real property located in Johnson County,State of Iowa. CHANGE IN TERMS AGREEMENT Loan No: tifffillalla (Continued) Page 2 CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation's),remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation's)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation's). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation's),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfecr.Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: • EASTSID./E4TORS,L.L.C. � l to By: (/ �� By: • William L. Frantz, Member of Eastsvestors, Eugene . Nissley, Member of Eastside Investors, L.L.C. L.L.C. ...IMO a .V..S.1¢6.1 C..a,...,a....,.w...»,..,MB Ail N.M.liemer,.. .0 a.,crv.emc..ran, cm Z/) > (• e --I 0 .-- Co 2 CHANGE IN TERMS AGREEMENT . . ' k Lt3,0:W t^ra f*tit`tlM tg.1`.i i0 f -i -_ /�CG4EtS1 ?ffG9l AVM* C 40ittrik 4 . 'r Z.04:1441 ...Q24 QQ6 ." <.i Itenwsop . . �RaVo matro;._.,.r. References in the boxes above are for Lender's use only end do not limit the applicability of this document to any particular loan or item. Any item above containing"••••has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.- Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd lows City,IA 52244-0209 Iowa City,IA 5224-6 13191 339-1000 Principal Amount: $535,000.00 Interest Rate: 5:75o% • Date of Agreement: February 11, 2009 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note originated for$535,000 on 2/17/05. DESCRIPTION OF COLLATERAL. A mortgage dated February 17,2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 2/15/2009 to 2/15/2010. . PROMISE TO PAY. Eastside Investors,L.L.C.('Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), • or order, In lawful money of the United States of America, the principal amount of Five Hundred Thirty-five Thousand & 00/100 Dollars 1$535,000.001,together with interest at the rate of 5.750%per annum on the unpaid principal balance from February 17.2005.until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$535,000.00 plus interest on February 15,2006. This payment due on February 15, 2006, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual interest rate over the number of days in a year. multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lander may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender In writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lenderpayments marked"paid in full', "without recourse', or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,Including any check or other payment instrument that indicates that the payment constitutes 'payment In full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. • LATE CHARGE. If a payment Is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,Including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or In any of the Related Documents or to comply with or to perform any term, obligation.covenant or condition contained In any other agreement between Lender and Borrower. • Default in Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security agreement,purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor's or Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents Is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. - N Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower,or any other termination of Borrower's existence as going business or the death of any member,the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor workout, , or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. D"-1 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the n t r Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event 0 of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which Is the basis of r... rn the creditor or forfeiture proceeding and If Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with m Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sola discretion,as being an adequate reserve or bond for the dispute. 73 Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any " Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. CO Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes Itself insecure. Cure Provisions. If any def suit,other than a default in payment Is curable and If Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen(161 days;or 12) it the cure requires more than fifteen 1151 days, immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' lees and Lender's legal expenses, whether or not there Is e lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(Including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law, Borrower also will pay any court costa, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender end,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there Is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by ell shares and deposits in all joint end individual accounts Borrower has with Lender now end in the future. Borrower authorizes Lander, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account end any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given In Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated February 17,2005,to Lender on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligationlsl,remain unchanged end in full force end effect. Consent by Lender to this Agreement does 9 CHANGE IN TERMS AGREEMENT Loan No:111111111111111.1Z (Continued) Page 2 not waive Lender's right to strict performance of the obligation(sl as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligationls),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes end provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated In this Agreement on transfer of Borrower's Interest,this Agreement shall be binding upon and inure to the benefit of the pardes,their successors end assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change In the terms of this Agreement,end unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security Interest in the collateral:and take any other action deemed necessary by Lander without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint end several. PRIOR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTS IN ESTORS.L.L.C. ` By. By: • liam L. Prams, Member of Easts" vestors, Eugene . Nissley, Mem Sr of Eastsidelvastors, L.L.C. L.L.C. USER no rw.w.Lamm=C.F.n.`rfl, *is.._im.was w.my,.w—.r -u rxrwaua.c an,n, - • N O >={ Col 11 rer— o� 0 D tV ID CHANGE IN TERMS AGREEMENT PxfifAitiI 1,.6BET#3ut8 IYtef�til3ty '�+an calf r sit _ Account 1 Officer initials] =� 113-.1t, t3�s`-.0�`9�jb� f#e�it?tov 01111111111110. _DU References in the boxes above are for Lender's use only and do not limit the applicability of this"document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.immi, Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825.Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (3191339-1000 Principal Amount: 5535,000.00 Interest Rate: 5.750% Date of Agreement: April 30. 2009 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note originated for$535,000 on 2/17/05. DESCRIPTION OF COLLATERAL. A mortgage dated February 17,2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 2/15/2010 to 5/15/2014. Change to monthly payments of$1,050.00 on the 15th of each month starting 6/15/2009. Change Interest rate to 5.5%effective 4/30/2009. - PROMISE TO PAY. Eastside Investors.L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1"Lender"I, or order, in lawful money of the United States of America, the principal amount of Five Hundred Thirty-five Thousand & 00/100 Dollars ($535,000.001,together with Interest at the rate of 5.750%par annum on the unpaid principal balance from February 17,2005,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$535,000.00 plus interest on February 15,2006. This payment due on February 15, 2006, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days In a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. .PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full", "without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trak Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute en Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower falls to comply with or to perform any other term,obligation,covenant or condition contained in this AgreemAnt or in any of the Related Documents or to comply with or to perform any term,obligation, covenant or condition contained in any puler agreement between Lender and Borrower. ...�..1 Default in Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security agreemon4 purcha r sales agreement, or any other agreement, In favor of any other creditor or person that may materially affect any of a)fy guarantors r Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Document 1 False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's-behalf under/his Agreement or the Related Documents is false or misleading in any materiel respect,either now or at the time made or furnisher becdfTfBs false or misleading at any time thereafter. `r— Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws �p11 Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolverrsyJp Borrower. TMJ the appointment of a receiver for any pert of Borrower's property,any assignment for the benefit of creditors,any type of LlIadfror work,, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. .. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceefling, self- i , repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing"' 14 Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding end if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in en amount determined by Lender,In its sole discretion,as being ' an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default In payment is curable and If Borrower has net been given a notice of a breach of the same provision of this Agreement within the preceding twelve 1121 months,It may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (2) it the cure requires more than fifteen 1151 days, immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and ell accrued unpaid Interest Immediately due,end then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has bean accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits In all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares end deposits in en Individual Retirement Account end any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described In the security instrument listed herein:a Mortgage dated February 17,2006,to Lender on reel property located In Johnson County,Siete of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Abetment, the terms of the original obligation or obligations, including all CHANGE IN TERMS AGREEMENT Loan No: (Continued) Page 2 agreements evidenced or securing the obligationls),remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligationls)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligationis). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by It. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated In this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor.accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other then the party with whom the modification Is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: . EASTSID NVESTORS,L.L.C. C By: -l��Ll?Lilliriit I' By: William L. Frantz, Member of Eastsid. r. • ors, Eugene ssley. Member of estside Investors. L.L.C. L.L.C. • ,.s..ro.—... C.....1•••w..w IS.r,r-wn.m w w....—.r -,.ucrwuoa.c.l ill.1, • • 6-4 O _ m o� D N PROMISSORY NOTE Pi7t p Usfast j 1N ext' 3irc .=04,..,,,,A93, ::Nq liaGau f sta A ,L. tlaism RaPtop att* OM References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 13191 339-1000 Principal Amount: $725,000.00 Interest Rate: 6.500% Date of Note: March 23,2005 PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order,in lawful money of the United States of America,the principal amount of Seven Hundred Twenty-five Thousand&00/100 Dollars ($725,000.00),together with interest at the rate of 6.500%per annum on the unpaid principal balance from March 23,2005,until paid in full. PAYMENT. Borrower will pay this loan In one principal payment of$725,000.00 plus Interest on March 31,2007. This payment due on March 31,2007,will be for all principal and all accrued Interest not yet paid. In addition,Borrower will pay regular quarterly payments of all accrued unpaid interest due as of each payment date,beginning June 30,2005,with all subsequent Interest payments to be due on the same day of each quarter after that. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest; then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note Is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full',"without recourse', or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes 'payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will bear interest from the date of acceleration or maturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default I'Event of Default')under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements, Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf-under this fc) Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or bmes false ,:' or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member witkdjaws from E-71 Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency Of Burrower. 'V • ' the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of credi D7 koMOM or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. -v+4( I r°O Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,,liAl-help, E`,R'7 repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securi ig-the loan. 9 This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Defa_Utt shall -- not apply If there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis oft grljtor or —` 0 forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Landoples or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being 4n e3ae`-quate reserve or bond for the dispute. eV I Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness s or any \I Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guaramor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment Or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and it Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: 111 cures the default within fifteen(151 days;or (2). if the cure requires more than fifteen 115) days, immediately initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS' FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunctionl,and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal taw applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all Joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a Mortgage dated March 23,2005,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Development of Village Green Part XX Subdivision. LOAN AGREEMENT.This loan will be governed by the terms of the commitment letter/loan agreement excuted by the borrower dated 3/11105. PROMISSORY NOTE Loan No: 1.1111111.1.. (Continued) Page 2 SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and ns successors end assigns. GENERAL PROVISIONS. Lander may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower end any other person who signs, guarantees or endorses this Note,to the extent allowed by law, waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note, whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of timel this loan or release any party or guarantor or collateral;or impair,fail to malize.upon or perfect Lender's security interest in the collateral;end take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE.BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTS�NVESTORS,L .C. By: / By: KJ William L. Fra ember o<i astslde Investors, Eugene . NIsslay, Memb of Eastside Investors, L.L.C. . L.L.C. we,..o t-.*......a.wou u..,,...,.n,..w+.o,r..w. Wt..a.. ..w.�........ m,.1 aF Pri�c'C�� tw.o�M� uT tA0k S IAP v-1 EY ti VAJZI YL1 � 8` / Zrd .�0 of trP 4/12/br Uict:ufO,lA. ta,..t�r t%ti•wtr' yp I 27 rV B Cn rn 11 o_C MEMO r rri �rrn • o� D N 2 CHANGE IN TERMS AGREEMENT • - ;•„•.:,:4:,,,,,Piltycipat ,•-:;z1m.rt,:•.,..A.o.,,,,,,•...0.440ty::-N 7.7...:, ::;1.Q931.'t,k.f:.,;::'..t1 7-,• a.liqV011:.:',--.,.:1,;.-PnAr.401.4rit:,,,:::rffitie.71-ArlitiM" .... .64.14#1M7rd.6.I 4lditt,AN.W.145.0 .ailionnew; .44#4A4ii-04i 4tfTiiiiiiiiiiiiii ''•-•, •t.'''''''-''.• - _ .., . .;,- . ;;,:,-.: References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.f ' —. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City.IA 52244-0209 Iowa City,IA 52246 13191 339-1000 Principal Amount: $725,000.00 Interest Rate: 6.500% Date of Agreement: March 2, 2007 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note dated 3/23/2005 in the original ai-nount of 5725,000.00. DESCRIPTION OF COLLATERAL. Iowa real estate mortgage dated 3/23/2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 3/31/2007 to 3131/2008. Change interest rate from 6.5%to 6.75%. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Mender), or order,in lawful money of the United States of America,the principal amount of Seven Hundred Twenty-five Thousand&00/100 Dollars (5725,000.00).together with interest at the rate of 6.500%per annum on the unpaid principal balance from March 23,2005,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$725,000.00 plus interest on March 31,2007. This payment due on March 31, 2007,will be for all principal and all accrued interest not yet paid. In addition,Borrower will pay regular quarterly payments of all accrued unpaid interest due as of each payment date, beginning June 30,2005,with all subsequent interest payments to be due on the same day of each quarter after that. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest: then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full", 'without recourse', Or similar language. If Borrower sends such a payment.Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. . LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower falls to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement, or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained-in any other;,. ..._ , agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or salits,agreementyl , ...,-,1 or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's abilitrrei ..," I a to perform Borrower's obligations under this Agreement or any of the Related Documents. ...._ *40 .r.t=.. ..... . . - False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this I Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnishecomes-- a false or misleading at any time thereafter. <r- M Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is madel, any member withdr(fils frorrM, Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency 74 Borrower, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor:Workout. -...0 or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceediigr self-help,N) repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing three,' Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. In the event of a death, Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(121 months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(151 days;or (2) if the cure requires more than fifteen 1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues'end completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law. Lender's attorneys' fees and Lender's legal expenses, • whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law. Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW, This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in en Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and tie osits. Loan No: ilfr>� CHANGE IN TERMS AGREEMENT (Continued) Page 2 COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated March 23,2005.to Lender on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligationlsl,remain unchanged and in lull force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligationlsl as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligationlsl. It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not.only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower. may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced.this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTSID VESTORS,L.L.C. / OP By: � /�� h �i By. illiam L. Frantz. Member of Ea estors, Eugene W issley, Member • astside Investors, L.L.C. -- ......,...._,.. ,.r.L.L.C. uu• .nmoe. ..�. .. —._ •.14+.tir.,.1...,141,210C IC MS"w,i • tV O y 0 re111rrr -1 C7 - r Cr m OPO D N • 1 CHANGE IN TERMS AGREEMENT atatettRag 1WitiftingROOteEittgArvh;:za vmsotigilatitia4Onevitwzgifi ligOig R*1150),(Inpf,TilitwtOsAovaifi.7.:fg.4111111111MMOOMPU'V'A.MtlaKehMaAlibigilptitteilita References in in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing""'"has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.(iumommills Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City.IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $725,000.00 Interest Rate: 6.500% Date of Agreement: March 17, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note dated 3/23/2005 in the original amount of 8725,000.00. DESCRIPTION.OF COLLATERAL, Iowa real estate mortgage dated 3/23/2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 3/31/2008 to 9/30/2009. Change interest to 5.95%. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order.in lawful money of the United States of America.the principal amount of Seven Hundred Twenty-five Thousand&00/100 Dollars ($725,000.00),together with interest at the rate of 6.500%per annum en the unpaid principal balance from March 23.2005,until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$725,000.00 plus Interest on March 31,2007. This payment due on March 31,2007.will be for all principal and all accrued Interest not yet paid. In addition,Borrower will pay regular quarterly payments of all accrued unpaid interest due as of each payment date,beginning June 30,2005,with all subsequent Interest payments to be due on the same day of each quarter after that. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest; then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual interest rate over the number of days in a year,multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full", 'without recourse', or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. AU written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment In full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. .. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement, DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. — fa Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement 0 .......i. or in any of the Related Documents o:to comply with or to perform any term, obligation,covenant or condition contained in any other agreement between Lender and Borrower. f"r"I1 Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or sales agreement, >e-1 '13 NON or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability 0–< . r to perform Borrower's obligations under this Agreement or any of the Related Documents. -- ....„„ ) ....... False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this --1 L n Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes '^‹false or or misleading at any time thereafter. - rn 1,.. = Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from 5 Borrower,or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower, • the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor workout. or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower, > NO Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts, with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of. or liability under, any Guaranty of the Indebtedness evidenced by this Note. In the event of a death. Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve 112)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (21 if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses. • whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. II not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender end,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by ell shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. 5 CHANGE IN TERMS AGREEMENT Loan No:ii101111111111M (Continued) Page 2 COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated March 23,2005,to Lender on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligationlsl. It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to arty initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS- Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this tact will-not affect:he rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. • PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: • EASTSI jA VESTORS,L.L.0 1111 By: William L. Frantz, Member of E: • • Investors, Eugene . Nissley, Mamba Eastside Investors, •L.L.C. L.L.C. • LAbE1 wro u se,v.Na.raocm[e,M.4.+rw.w 1W6,,.w,.dem,m Y Mous 1••••••••••L .u.,C'Nfl_Ofl e,txxix..., • O C/S MINIMC r— rm 0 71 . 2' . > tom) • • • • .-J , . __.. • • PROMISSORY NOTE --••:•.,,,...,,. "•0••.-•,,,,,,,i;,•,m, 4*t :m:r„aw.,2.z;,..:,,.,.,•:,•..,.,.[,1 .•-4:•..t1,.„mf,7.,1,•_,..„_„ex,,.1„1.1.„..,!,. W, l7,,mml .mk„g.e.amm„•-,.••*.•.-„,..„,,7„e1,:,...,:: nb.vl.t.1 R.zii54.4,if, t .' ‘..-...44-.1-'-3.,.m,.1.,•.,„1,i•rra ,,,utm1.„0,izt,wz,,1,.,r,,',,.'. References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.fillainnlin. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd lows City,IA 52244-0209 Iowa City,IA 52246 13191 339-1000 Principal Amount: $94,000.00 Interest Rate: 6.950% Date of Note: October 21, 2005 PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, in lawful money of the United States of America, the principal amount of Ninety-four Thousand & 00/100 Dollars 1194,000.001, together with interest at the rate of 6.950%per annum on the unpaid principal balance from October 21,2005,until paid in full. PAYMENT. Borrower will pay this loan In one principal payment of$94,000.00 plus interest on March 31,2006. This payment due on March 31,2006,will be for all principal and all accrued Interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs:and then to any late charges. Interest on this Note Is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full",'without recourse', or similar language. If Borrower sends such a payment. Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. II a payment is 15 days or more late, Borrower will be charged 6.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will bear interest from the date of acceleration or maturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default 1•Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. Default In Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit,security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property-At) Borrower's ability to repay this Note or perform Borrower's obligations under this Nate or any of the related documents. 0 •=3 False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or.:4e.kbles faK or misleading at any time thereafter. -0 ill •••=1•1 Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member utfillidraikvs frorri Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvenoy-of.Aorrower' 7' the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of credioir'Workout, or the commencement of any proceeding under any bankruptcy or Insolvency laws by or against Borrower. --(r— . ,..,.. -,.., Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceegjoglf-heltz: repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral secarrieg'd2e loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event ciplie)ault shailr) not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of 11 creditor or" forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lenyar monies ii"...) a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion,as being an adequate-.4 reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and, in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 1121 months, it may be cured if Borrower, atter receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen(15)days;or 121 if the cure requires more than fifteen 115) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note_if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,Whether or not there is a lawsuit,including without limitation all attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender In the State of!OWE, CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan adv,.,,. ,.under this Note are secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law.to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in en Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. • COLLATERAL. This loan is unsecured_ PURPOSE OF LOAN. The specific purpose of this loan is: Working capital line of credit. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Le der and its successors and assigns. GENERAL PROVISIONS. Lender may delay or forgo enton ng any of its rights or remedies under this Note without losing them. Borrower and PROMISSORY NOTE Loan No: (Continued) Page 2 any other person who signs, guarantees or endorses this Note,to the extent allowed by law, waive.presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note, whether as maker,guarantor, accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification Is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTSID��NVESTORS,�L.L/.C. William L. Fronts, Member of E e Investors, By: L.L.C. Eugene issley, Member of Eastside Investors, L.L.C. wsn,.,,o lay,...S.s mm,<....,,.........,....,....,n,.,® uw..... ,S .,.L,rnun,oarc nro..wa _ rV B A.� T m A ff1 O 7? D Iv • • • • • 2. G_ -NGE IN TERMS AGREEMEP. 1,1j: ` I�vaare Maw Loan N:c 1"atfElwirn . References in the shaded area are for Lender's use only and do not limit the applicability of this document to any Any item above containing has been omitted due to text length limitations, particular loan or item. Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $94,000.00 Interest Rate: 6.950% Date of Agreement: 3/31/2006 DESCRIPTION OF EXISTING INDEBTEDNESS. A Promissory Nate dated 10/21/2005 in the original amount of$94,000.00. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 3/31/2006 to 3/31/2007. PROMISE TO PAY. Eastside Investors.L.L.C.1"Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), • or order, in lawful money of the United States of America, the principal amount of Ninety-four Thousand &00/100 Dollars 1$94,000.00), together with interest at the rate of 6.960%per annum on the unpaid principal balance from October 21,2005,until paid in full. PAYMENT. Borrower will pay this lean In one principal payment of$94,000.00 plus interest on March 31,2006. This payment due on March 31,2006.will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be • applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Agreement is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual Interest rate over the number of days In a year,multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full","without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment in full"of the amount owed or that Is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late,'Borrower will be charged 5.000%of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will bear interest from the date of acceleration or maturity at the interest rate on this Agreement. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default, Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreerpattt or in any of the Related Documents or to comply with or to perform any term,obligation,covenant or condition contaii m in any ORagreement between Lender and Borrower. �) Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or Wee agreem _ or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or I rov_yer's ab to perform Borrower's obligations under-this Agreement or any of tha Related Documents. [('� ���777 � False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's.b'a6alf under As M Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnisheld[od becontW false or misleading at any time thereafter. ..,. Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member winnows NYE Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolven-903orrower, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of ci rwork or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. �� Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by repossession or any other method, by any creditor of Borrower or byanyyagajudnst icial prateral securing ring tlpr3 Indebtedness. This includes a garnishment of any of Borrower's accounts,i cludingrdeposit accounts,with Lender. However,this Even of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety_bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the ie ness or any Guarantor dies or becomes incompetent, orerevokes eornd disputes the with validity.of,respect for o any liability under, any rantor of nG Guaranty ofy of the the edIndebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so.cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the sarr,e provision of this Agreement within the preceding twelve 1121 months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen(151 days;or 12f if the cure requires more than fifteen 1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. • ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, ender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'lees and legal expenses for bankruptcy proceedings lincluding efforts to modify or vacate any automatic stay or injunction/,and appeals. If not prohibited by•pplicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lend... and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreeme=t has been accepted by Lender In the State of Iowa. Ci-OiCE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to sub,.it to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and di;rosits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permi•ed by applicable law. to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default uncle-this Agreement. Shares and deposits in en Individual Retirement Account and any other account that would lose special tax treatment under,-ate or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. This Indebtedness is unsecured. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms 31 the original obligation or obligations, including all agreements evidenced or securing the obligation(s),remain un nged and in lull force z d effect. Consent by Lender to this Agreement does CHANGE IN TERMS AGREEMENT Loan No;1MIllaill.1211 (Continued) Page 2 not waive Lender's right to strict performance of the obligation(s)es changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligationlsl. It is the intention of Lender to retain as liable parties all makers end endorsers of the original obligationlsl,including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser-including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest, this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. It ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment, and notice of dishonor. Upon any change in the terms of this Agreement, and unless otherwise expressly stated in writing,no party who signs this Agreement, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend'repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lander without the consent of or notice to anyone. All such parties also.agree that.Lender may modify this loan without the consent of or notice to anyone other than the party with whorl'the modification is made..The'tjbligations under this Agreerhent are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A C MPLETED'COPY:OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. CHANGE TERMS SIGNERS: • .61/.)44r:MCX) • William L.Frantz X ' Eugene Wi.'slay. v.....o m.C....,w_,4 .....wr.mw. ,.R,...r.... ..nmawx T.xa..., O *C; CO, 1 r- • -1 n _ < m D N) • v • • • L CHANGE IN TERMS AGREEMENT • Iii l - t span Date Matwvty j Loan NQ Lell "•ail �,� e I ACf�t�ffY� #�f�O,9Y •-•Int'hek$ t.1o. Q0 o.: ..._ 1 3A0.ff 000M(Q outer -`-_9 >,j References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 1319)339-1000 Principal Amount: 594,000.00 Interest Rate: 6.950% Date of Agreement: March 2, 2007 DESCRIPTION OF EXISTING INDEBTEDNESS. A Promissory Note dated 10/21/2005 in the original amount of$94,000.00. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 3/31/2007 to 3131/2008. Change interest rate from 6.95%to 7.25%. PROMISE TO PAY. Eastside Investors,L.L.C.1"Borrower"I promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Mender-I. or order, In lawful money of the United States of America, the principal amount of Ninety-four Thousand Si 00/100 Dollars 094,000.001, together with Interest at the rate of 6.950%per annum on the unpaid principal balance from October 21,2005,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$94,000.00 plus Interest on March 31,2006. This payment due on March 31, 2006,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that is.by applying the ratio of the annual interest rate over the number of days in a year. multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full', "without recourse". or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes 'payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late. Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: . Payment Default. Borrower falls to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or.condition contained in any er • agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or;ares agreem nt, or any other agreement.in favor of any other creditor or person that may materially affect any of Borrower's property oi_Boanwer's 5f. ty to perform Borrower's obligations under this Agreement or any of the Related Documents. u False Statements. Any warranty,representation or statement made or furnished to Lender byBorrower or on Borrower' nishod, becotnes Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or lurrtis�t�or becomes false or misleading at any time thereafter. _I .) I1 Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any membertvCffthdraws4dgm Un s Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolveoc}Lgf 8orr ,r, �r�t the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type otJeditor workout, '' or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. ,��e. �.0 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proee'ading, self-h repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securin e Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts, with Lender. However, this t of Default shall not apply if there Is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and it Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. In the event of a death,Lender,at its option, may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured it Borrower,atter receiving written notice from Lender demanding cure of such default: (11 cures the default within fifteen 1151 days:or 12) if the cure requires more than fifteen 1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. if tthere is a jawduri,Burrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. This Indebtedness is unsecured. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does 5 CHANGE IN TERMS AGREEMENT Loan No: (Continued) Page 2 not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligationfs),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stared in this Agreement on transfer of Borrower's interest, this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. II ownership of the Collateral becomes vested in a person other than Borrower. Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated In writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Londer may renew or extend (repeatedly and for any length of timel this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. CHANGE TERMS SIGNERS: William L.Frantz X Eugene Issley ./4C v...-3,mm.C.......w.*......R..,..,.rmr. u+r-•awn,... .u I.Kwumue rc no... D� rrl O—< .r+.. r m N.) CHANGE IN TERMS AGREEMENT ,hrnl�ft3ai foal Hasa Mttitit � at1 0 Loll r>Kwl 94 f 50 f Q.:: 10 3 30.5 1 SJ3 3 �.;` ,Moi 1C#f flf8 References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing"••••has been omitted due to text length limitations. Borrower: Eastside Investors,L.L. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Principal Amount: $94,000.00 Interest Rate: 6.950% Date of Agreement: March 17, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. A Promissory Note dated 10/21/2005 in the original amount of 594,000.00. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 3/31/2008 to 3/31/2009. Change interest rote from 7.25%to 6.25%. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, in lawful money of the United States of America, the principal amount of Ninety-four Thousand & 00/100 Dollars ($94,000.00), together with Interest at the rate of 6.950%per annum on the unpaid principal balance from October 21,2005,until paid In lull. The Interest rate may change under the terms and conditions of the'INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$94,000.00 plus interest on March 31,2006. This payment due on March 31,2006,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan Is computed on a 365/365 simple Interest basis;that Is,by applying the ratio of the annual Interest rate over the number of days In a year. multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full", "without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term,obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement, purchase or sales agreement, or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability n to perform Borrower's obligations under this Agreement or any of the Related Documents. TOFalse Statements- Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this () Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes n false or misleading at any time thereafter. - I P� Death or Insolvency- The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower,or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower, M the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor workout, ' or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Q Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by repossession or any other method, by any creditor of Borrower or b anycy judicial proceeding, self-help, llateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts, with Lender.nst any However,this Event D IV of Default shall not apply if there Is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. In the event of a death,Lender,at Its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse Change. A materiel adverse change occurs in Borrower's financial condition, or Lander believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provialons- if any default,other than a default in payment is curable and if Borrower has not beer.given a notice of a hreerh of the same provision of this Agreement within the preceding twelve 112)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 115)days;or 12) if the cure requires more than fifteen 115) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings lincluding efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs. inaddition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State of lows. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law. to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tea treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. This Indebtedness is unsecured. CONTINUING VALIDITY, Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligationls).remain unchanged and in full force andeffect. Consent by Lender to this Agreement does 7 CHANGE IN TERMS AGREEMENT Loan No:L (Continued) Page 2 • not waive Lender's right to strict performance of the obligation(s)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligationfs). It is the intention of Lender to retain as liable parties ell makers and endorsers of the original obligation(s).including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies.not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and Inure to the benefit of the parties,their successors and assigns, if ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change In the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. CHANG N TERMS SIGNERS: X," /V` William L.Frantz , X Eu ane W Isley ' • aw.we...a,v..S..me.c..........,...us...w.....r ,no ...a..w...0 .u i.emrn,ma..c n w..wr OS {'0 A/I rrl wow __ ' f -<rte- rr A N v 0 CHANGE IN TERMS AGREEMENT PriTrGi r a #58 4 g.Ai ,f4 f5 W4 i.;.a.t1i +,z. h 4.ow 'S2 t 4 Q t Q References In the boxes above are for Lender's use only end do not limit the applicability of�th s documentcla.r��"F t_ . .�E';: Any item above containing"•""has been omitted due to text length limitations.any particular loan or Item. Borrower: Eastside Investors,L.L.C.i) Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339.1000 Principal Amount: $94,000.00 Interest Rate: 6.950% Date of Agreement: March 5, 2009 DESCRIPTION OF EXISTING INDEBTEDNESS. A Promissory Note dated 10/21/2005 in the original amount of 594,000.00. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 3/31/2009 to 11/01/2009. Change payments to monthly interest only payments starting on 4/15/2009.. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lander"), or order, in lawful money of the United States of America, the principal amount of Ninety-four Thousand & 00/100 Dollars IS94,000.00), together with interest at the rate of 6.950%per annum on the unpaid principal balance from October 21,2005,until paid In full. The interest rete may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of 594,000.00 plus Interest on March 31,2006. ThIs payment due on March 31,2006,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual interest rete over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than It is due. Early payments will not,unless _ agreed to by Lender In writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full","without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,Including any check or other payment instrument that indicates that the payment constitutes 'payment In full"of the amount owed or that Is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will he charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute en Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lander and Borrower. • Default in Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security agreement,purcheetyr sales agreement, or any other agreement, In favor of any other creditor or person that may materially effect any of any guerentot'rpr Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Documenfsj - False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's fseilelf undeEAis Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becpreers false or misleading at any time thereafter. "11 Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is model, any membek'withdraws firm ' Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvhney,.oj'Borroiatar, If ,oa the appointment of a receiver for any pert of Borrower's property,any assignment for the benefit of creditors,any type of creditor workout, '��,y or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. (' _ U 1 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceed(ng, sell-64, , repossession or any other method, by any creditor of Borrower or by any governmental agency against any collate' the Indebtedness. This includes a garnishment of any of Borrower's accounts, including deposit accounts,with Lender, Nowetrsr,this EVA[ of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim whieh.is the basis of the creditor or forfeiture proceeding end if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits vitt' i Lender monies or a surety bond for the creditor or forfeiture proceeding,In en amount determined by Lender,in its sole discretion,as bQ7ti an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of. or liability under, any Guaranty of the Indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes Itself insecure. Cure Provisions. If any default,other then a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(121 months,it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 116)days;or (2) if the cure requires more than fifteen(151 days, immediately Initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest Immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement If Borrower does not pay. Borrower will pay Lender that amount. This Includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or Injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, In addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there Is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of!owe. STATUTORY LIEN. Borrower agrees that all Indebtedness Is secured by all shares and deposits In all Joint end individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is In default under this Agreement. Shares and deposits In an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law If given as security era not subject to the security interest Borrower has given in Borrower's shares end deposits. COLLATERAL. This Indebtedness Is unsecured. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligatlonlel,remain unchanged and in full Force end effect. Consent by Lender to this Agreement does riot waive Lender's right to strict performance of the obligetion(sl as changed,nor obligate Lender to make any future change in terms. Nothing Loan No: CHANGE IN TERMS AGREEMENT (Continued) Page 2 In this Agreement will constitute a satisfaction of the abligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s),Including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers, will not be released by virtue of this Agreement. It any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any Initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's Interest,this Agreement shall be binding upon end inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of Its rights or remedies under this Agreement without losing them. Borrower and any other person who signs, guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest In the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are Joint end several. PRIOR TO SIGNING THIS AGREEMENT,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. CHANGE IN TE MS SIGNERS: 0 -� X - X William L.Frantz Eugene issiey Lan.Pm V la,m®un.M...r r.,...yti.r..w.+f?.xw uy.,.•....r . 4.L+CM/R.Y]Or.R M.M] • • t+J O n D=.{ ten .< � r -40rn -- -� O� a n� 0o I0 . .. PROMISSORY NOTE . _ .6:gaititi*:*ggFtAi.i.ftP_*gMyK41*.ptin,,_;AaritkA_rdikkO.7ii.fN.(Eggtg.gAjiiii.fiFtgftitfi.iikiKi.A.ItT.g.i.ki' Sit.1111.1)tliiISt.WIttbiltatiallfitklEfitiNiiiiimenv-711121MairieN-Krilift.rapatOrtmlr fla....a.P. :,§,:,.7:,' ........a.' .‘,,:;,3 e4g.,;,;: :,:z,W.,,..••4 References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.allinlmmhl Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City.IA 52246 (3191 339-1000 • Principal Amount: $577,500.00 Interest Rate: 6.500% Date of Note: December 21, 2005 PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, in lawful money of the United States of America, the principal amount of Five Hundred Seventy-seven Thousand Five Hundred & 00/100 Dollars ($577,500.001,together with Interest at the rate of 6.500%per annum on the unpaid principal balance from December 21, 2005,until paid In full. PAYMENT. Borrower will pay this loan In one principal payment of S577,500.00 plus interest on June 15,2007. This payment due on June 15,2007,will be for all principal and all accrued Interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple Interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lander at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full', "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes 'payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE, If a payment is 15 days or more late. Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will bear interest from the date of acceleration or maturity at the interest rate on this Note. The interest rate will not exceed the maximum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default("Event of Default')under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. Default In Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit, security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents, False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf unds•this Note or the related documents is false or misleading in any material respect,either now or at the time made or furnished or becomnfalse or misleading at any time thereafter. 0 Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is medal, any meni,aor(7a1-thdrearseirom Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the inseapney of Bertwar, '11 the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type&creditor wrarliout, . or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 0"-‹ I .,-..se Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial pr rrei ing, salfalaelp, ll repossession or any other method, by any.creditor of Borrower or by any governmental agency against any collateral,4 Liring the loan. rn This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Ei- 7:_cd Defaull4hall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis df.the creftr or Li forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits w0k,Llier monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as`teix an&deem reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the in-aittedness ii-Pany Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtaass evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not he required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lander in good faith believes itself insecure. Cure Provisions. II any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 1121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (11 cures the default within fifteen 1151 days;or (2) if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'tees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law.Borrower also will pay any court coats,in addition to all other sums provided by law. GOVERNING LAW, This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares arid deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by Iowa Real Estate Mortgages dated 12/21/2005 and 3/23/2005 covering Lots 50 and 51,Village Green. PURPOSE OF LOAN. The specific purpose of this loan is: Construct 3 unit spec condo building at 42,46,50 Lancaster Place,Iowa City,IA. SUCCESSOR INTERESTS. The terms of this Note shal be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lt ider and its successors and assigns. PROMISSORY NOTE Loan No:Mlimaime (Continued) Page 2 GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note,to the extent allowed by law, waive presentment,demand for payment, and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated In writing,no party who signs this Note, whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly end for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;end take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS DF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTSID@ INVESTORS,L.L C. By: William L. Fran;r ember • side Investors, L.L.C. Eugene isslay, Member o Eastside Investors, L.L.C. LASOI..0\...w r aaum,ts,�.. d n..w Mn.W..,, .WM. Al M.,• ,.wd. .u..W,&µ,amre iwrrr M, • CR r.) l 1 1.71 711 5 73 fV co CHANGE IN TERMS AGREEMENT p"----.* -r,--::.:. I.1,(4tED -toE4z1Vtaiiiiik-H.. . §,twili.IN &:,::.1,-,tiY417.r.i:-CW....T',Th:: .1.Aaiiiiiif.T: T:Ciffiiiii. :.fiilifitV ;;E:Vif.11).i3,1.:::.144iilfitigitattitablt iiiiiiiiiikk Vi'- References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.111.201111111.111111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 . Iowa City,IA 52246 .1319)339-1000 Principal Amount: $577,500.00 Interest Rate: 6.500% Date of Agreement: May 22, 2007 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note dated 12/21/2005 in the original amount of$577,500.00. DESCRIPTION OF COLLATERAL. Iowa Real Estate Mortgages dated 12/21/2005 and 3/23/2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 6/15/2007 to 6/15/2008. Change interest rate from 6.50%106.75%. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Mender"), or order, in lawful money of the United States of•America, the principal amount of Five Hundred Seventy-seven Thousand Five Hundred & 00/100 Dollars (5577,500.00),together with interest at the rate of 6.500% per annum on the unpaid principal balance from December 21, 2005,until paid In full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$577,50000 plus Interest on June 15, 2007. This payment due on June 15,2007,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple Interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty an or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in fur, 'without recourse", or similar language. It Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes "payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246, LATE CHARGE. If a payment is 15 days or more late. Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: • Payment Default. Borrower fails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any 01150.5 agreement between Lender arid Borrower. — Default in Favor of Third Parties. Borrower defaults under any loan,extension of credit,security agreement,purchase or sQsAgreemene or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Elkbtsier's abiew) to perform Borrower's obligations under this Agreement or any of the Belated Documents. ... ..... -.0 • En .71 _ ---L7 arts.. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's bbballfander this .7..,kke. Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished orbecome false or misleading at any time thereafter. -: .:...T —. rnDeath or Insolvency. The dissolution of Borrower (regardless of whether election to continue is medal, any member Witrqicriws from r=CIT Borrower, or any other termination of Borrower's existence as a going business or the death of any member,the insolvencli ofr*rrowe ,. L.3 the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of cretIromorkour".. or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 6 •e0 . ii.'`` •• Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceediod, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral)ecuring MIN) Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Even of Default shall not apply it there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. In the event of a death,Lender, at its option,may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and.in doing so.cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen(15)days;or (21 it the cure requires more than fifteen 1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES:EXPENSES. Lender may hire or pay someone else to help collect this Agreement it Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW, This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by Iowa Real Estate Mortgages dated 12/21/2005 and 3/23/2005 covering Lots 50 and 51,Village Green. 3 CHANGE IN TERMS AGREEMENT Loan No: 1101MMINIO (Continued) Page 2 CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligationls),remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obfigationls)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the bbligationls). It is the intention of Lender to retain as liable parties ell makers and endorsers of the original obligationfsl,including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest, this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,end notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTSID NVESTORS, 000, • By: / By: William L. Frantz, r em.er of East '. n estors, Eugene r. Nissley, Member .1 Eastside Investors, L.L.C. L.L.C. �s...o I.., 31 MOW :...,_....wr YWr ..R........... I.r'c...namc k...,r,», rV •o r -ICS0 r �Gr 0—33 ;o A N 0D LI CHANGE IN TERMS AGREEMENT rRIA. 0,sal +,�z �vtazurity IRaan No �a)I{1KoiF� rtxf � � . V4:.,- 2I1 .r.,�,4ti 7 .�2i7Cd7. ... �; Nraa_ rJ , atitUal References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing.....has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. 11Mw) Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 1319)339-1000 Principal Amount: $577,500.00 Interest Rate: 6.500% Date of Agreement: May 28, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note dated 12/21/2005 in the original amount of 8577,500.00. DESCRIPTION OF COLLATERAL. Iowa Real Estate Mortgages dated 12/21/2005 and 3/23/2005. DESCRIPTION OF CHANGE IN TERMS, Change maturity date from 6/15/2008 to 12/1/2008. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, In lawful money of the United States of America,the principal amount of Five Hundred Seventy-seven Thousand Five Hundred & 00/100 Dollars($577,600.001,together with Interest at the rate of 6.500%per annum on the unpaid principal balance from December 21. 2005,until paid in full. The Interest rate may change under the terms end conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$577,600.00 plus interest oh June 15,2007. This payment due on June 15,2007.will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis;that Is,by applying the ratio of the annual Interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than It Is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked 'paid In full","without recourse", or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. -All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment in full"of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under the Indebtedness. _ Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement 0 or in any of the Related Documents or to comply with or to perform any term, obligation,covenant or condition contained in any other t'/ ) �a agreement between Lender and Borrower. I In _ `TJ Default to Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security agreement,purchase or •'� sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor's or Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Documents. - False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this ._; Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes - i false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower(regardless of whether election to continue is made), any member withdraws from U Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of creditor workout, " IV or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower- CO Creditor .or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve 112)months,it may be cured if Borrower,after receiving written notice from Lender de,nanding cure of such default: 11) cures the default within fifteen 1151 days;or 12) if the cure requires more then fifteen,1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable end necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction],and appeals. If not prohibited by applicable law,Borrower also will pay any court costs. in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender end,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by lows Reel Estate Mortgages dated 12/21/2005 and 3/23/2005 covering Lots 50 and 51,Village Green. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligationis),remain unchanged and in full force and effect. Consent by Lender to this Agreement does $ CHANGE IN TERMS AGREEMENT Loan No: 11...111110 (Continued) Page 2 not waive Lender's right to strict performance of the obligation's)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligationlsl,including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any Initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment, and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security Interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modiricanon is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTSID VESTORS, By: By: vv �I William L. Frantz, Member of roe Investors. Eugene . Nissley, Member of Eastside Investors, L.L.C. L.L.C. 415re M0 t.10.oao03[,r.wn..1,Fr.0 s.L.n..wW 11101.,a Nw.,.11w.+ .y L...PLUMS Pi A.ln M, O _1 0 rf1 M 5 N CO CHANGE IN TERMS AGREEMENT i 400.Jtlt oan.,1�4;; Batt I ct:+i; y� officer fnitt ,,y,. 2 05�: 0itk�..it ' - � w- iditere ,w. k. Alive- gmq t;$.:7:�_i'�t7�1a��.a �7: t 4 S a �.: �. y xs'x'=' References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.j Any item above containing......hos been omitted due to text length limitations. Borrower; Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 1319)339-1000 • Principal Amount: $577,500.00 Interest Rate: 6.500% Date of Agreement: November 6, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note dated 12/21/2005 in the original amount of$577,500.00. DESCRIPTION OF COLLATERAL. Iowa Reel Estate Mortgages dated 12/21/2005 end 3/23/2005. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 12/1/2008 to 8/1/2009. PROMISE TO PAY. Eastside Investors,L.L.C.)'Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Mender"), or order, in lawful money of the United States of America,the principal amount of Five Hundred Seventy-seven Thousand Five Hundred & • 00/100 Dollars ($577,500.00).together with interest at the rate of 6.500%per annum on the unpaid principal balance from December 21, 2005,until paid in full. The interest rate may change under the terms and conditions of the'INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$577,500.00 plus interest on June 15,2007. This payment due on June 15,2007,will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid interest:then to principal:then to any unpaid collection costs;and then to any late charges, Interest on this loan is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days In a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full",'without recourse', or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes'payment in full'of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower tails to make any payment when due under the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security egr( h ent,purchta or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any oKany guarantbr3 or Borrower's property or ability to perform their respective obligations under this Agreement or any o1 the Related Documeri(a'• False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrowehalf undo ,S betjhis r'N•j� Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becd/nes telae or misleading at any time thereafter. I J ' Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any membes'vtilthdrawl,Tbm Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the inaolyenvyvf Borrower, , 11 I the appointment of a receiver for any pert of Borrower's property,any assignment for the benefit of creditors,any type of?littler wodpeut, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial eroeseetling, self, repossession or any other method, by any creditor of Borrower or by any governmental agency against any colla eeae ar securing• e Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this femme tt of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim whttt is the batty the creditor or forfeiture proceeding end if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in en amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of. or liability under, any.Guaranty of the Indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,atter receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen 1151 days;or (21 If the cure requires more than fifteen(151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Agreement end all accrued unpaid Interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES- Lender may hire or pay someone else to help collect this Agreement it Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law. Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings lincluding efforts to modify or vacate any automatic stay or injunction), end appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE Of VENUE. II there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by ell shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are nor subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement Is secured by lows Reel Estate Mortgages dated 1 2/2 112005 and 3/2312005 covering Lots 50 and 51,Village Green. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including ell agreements evidenced or securing the obligation(s),remain unchanged and in full force and effect. Consent by Lender to this Agreement does CHANGE IN TERMS AGREEMENT Loan No: siNINImii (Continued) Page 2 not waive Lender's right to strict performance of the obligation's)as changed,nor obligate Lender to make any future change in terms. Nothing In this Agreement will constitute a satisfaction of the obligation's'. It is the Intention of Lender to retain as liable parties all makers and endorsers of the original obligation's),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons_signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender chat the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest,this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly end for any length of timel this loan or release any party or guarantor or collateral;or impair,tail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: • EASTSIDE INVESTORS, /) i • William L. Frantz, Member of Eas 7— vestors, Eugene . Nissley, Memb= of Eastside Investors. L.L.C. L.L.C. ufu 1p,may .Si.ta.00a.s M....1 Mil,IDM. ,....".•••••••••+--u • O • -11 9.4 .gyp n 0 • • � N PROMISSORY NOTE riFrf R C $ 7100. ?aOJakt6tykk ugooptiggh • 0 ?#t �3 a r '`inttPt� References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing"•"has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.0111.1111111111111110 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (3191339-1000 Principal Amount: $516,000.00 Interest Rate: 6.950% Date of Note: November '16, 2007 PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, In lawful money of the United States of America, the principal amount of Five Hundred Sixteen Thousand & 00/100 Dollars (5516,000.00), together with interest at the rate of 6.950%per annum on the unpaid principal balance from November 16.2007,until paid in full. The interest rate may change under the terms end conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$516,000.00 plus interest an March 15,2009. This payment due on March 15.2009,will be for all principal and all accrued Interest not yet paid. Unless otherwise agreed or required by applicable law,payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Nate Is computed on a 365/365 simple Interest basis;that is,by applying the ratio of the annual interest rate over the number of days in a year. multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance Is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing, PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full","without recourse', or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default("Event of Default")under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained In any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit,security agreement, purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. LW False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrowas's behalf in r this Note or the related documents is false or misleading in any material respect,either now or at the time made or turnited or become,false or misleading at any time thereafter. Death or Insolvency. The dissolution of Borrower Iregardless of whether election to continue is made), any merrPrvyithdraff'1from Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolveftby of Bar ,wer, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type"i1f creditor workout, - or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial prgCL ing, self-help, ` 1 repossession or any other method, by any creditor of Borrower or by any governmental agency against any collaterjl' ring tha.,Joan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event Of Defapj[ahall 6 1 not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the be gi.the creditor or 333sss��� forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits on Lt�t(der mores or e surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as,lterng an addcluate reserve or bond for the dispute. ' Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness many Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes itself insecwe. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve 1121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 115)days;or (21 if the cure requires more than fifteen(15) days. immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid Interest immediately due,and then Borrower will pay that amount. ATTORNEYS' FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'lees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any.automatic stay or injunction).and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual accountslance Borrower hasu with Lenderpnow and in the future. isBorrower authorizes Borrower Lew r is o the extent r this N bye.applicableaelaw,to apply the /rib �O balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein! a Mortgage dated November 16,2007,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this loan is: Construct two unit condo building in'vJeiiington Condominiums it at Village Road. REPORTING REQUIREMENTS. Borrower and Guarantors agree to provide Lender with copies of their federal tax returns annually, and with updater guarantor personal financial statement upon Lender's request. Borrower will also provide Lender with copy of accountant prepared and consolidated financials for Frantz Construction Co.,Inc.when completed annually. PROMISSORY NOTE Loan No: (Continued) Page 2 LIMITATION ON LOAN ADVANCES.Advances on this loan during construction will be limited to$483,750.00. Once the project is completed Lender may,at it's discretion,lend the remainder of the note,up to a total of the face amount of 6516,000.00. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs. personal representatives, successors and assigns,and shall inure to the benefit of Letrder and its successors and assigns. GENERAL PROVISIONS. If any part of tgis Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing, no party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest In the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EASTSID VEgTORS,L.L.C./.0fTj By. --/-/-//-4 .)-1 ,411111 •! By: /V .-- 7Les.q William L. Frantz, Eastside • - . Eugene . Nissley, Mem er of Eastside Investors, L.L.C. L.L.C. LAM MO low..Va..s.a.16001 c.....w..,.,.w IMole.Ms INT.NOT ury..r....,. .w LIcm,nexirc m.m nI • • _ N O 2 t D—I r'v MN= \ I ri .30 y N co Z CHANGE IN TERMS AGREEMENT 5 c s g J cf . N{dtsu kg t H ��44:4-4UfCoA AICGAI•,l1 4, -•SJT.1402f", ' lh .. _ -., ...ttae ;F4P .� Vis, r... r ��. References in the boxes above are for Lender's use only and do not limi the applicability of this document to any particular loan or item. Any item above containing.....has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.11111111=1111111111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 925 Mormon Trek Blvd Iowa City,IA 522440209 Iowa City,IA 52246 (319)339-1000 Principal Amount:•$516,000.00 Interest Rate: 6.950% Date of Agreement: March 24,2009 DESCRIPTION OF EXISTING INDEBTEDNESS. A promissory note dated 11/16/2007,In the original amount of$516,000. DESCRIPTION OF COLLATERAL. An Iowa real estate mortgage dated 11/16/2007. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 03/15/2009 to 07/15/2009.. PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1-Lander"), or order, In lawful money of the United States of America, the principal amount of Five Hundred Sixteen Thousand & 00/100 Dollars ($516,000.00),together with Interest at the rate of 6.950%par annum on the unpaid principal balance from November 16,2D07,until paid In full. The interest rate may change under the terms and conditions of the INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$516,000.00 plus interest on March 15.2009. This payment due on March 15,2009,will be for all principal and all accrued interest not yet paid.-Unless otherwise agreed or required by applicable law.payments will be applied first to any accrued unpaid interest;than to principal;than to any unpaid collection costs:and then to any late charges. Interest on this loan is computed on a 365/365 simple interest basis:that is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lander at Lender's address shown above or et such other place as Lender may designate in writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not.unless agreed to by Lander in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid in full', 'without recourse', or similar language. It Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes"payment in full' of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. It a payment Is 15 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue Interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower fails to make any payment when due under.the Indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term,obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Any guarantor or Borrower defaults under any loan,extension of credit,security agreement,purchase or sales agreement, or any other agreement, In favor of any other creditor or person that may materially affect any of any guarantor's or Borrower's property or ability to perform their respective obligations under this Agreement or any of the Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower Lbehalf undei'tais Agreement or the Related Documents is false or misleading in any materiel respect,either now or at the time made or furnished or becgm s false or misleading at any time thereafter. _ Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any membe!"witiidrawa 7 'n Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency•of Borrover, the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of,creditor workqut, `® or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. '` I '�" Creditor or Forfehure Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, seiI.help, `"`i�"d repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral,securing the A t Indebtedness. This Includes a garnishment of any of Borrower's accounts,including deposit accounts, with Lender. Howeviei;this Ewa r"="0 of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim whr rs'rt�le basBS"ef u,:_ ;,1 the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding iirad deposits t}}ar� Lender monies or a surety bond for the creditor or fort allure proceeding.in en amount determined by Lender,in its sole disgaedon,as berifg an adequate reserve or bond for the dispute. �. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness orf $ Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness evidenced by this Note. • Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Borrower,after receiving written notice from Lender demanding cure ol such default: 111 cures the default within fifteen 1151 days;or 121 if the cure requires more than fifteen(151 days, Immediately initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default and thereafter continues end completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS, Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law. Lender's attorneys' tees and Lander's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees end legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction ol the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law it given as security are not subject to the security Interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security Instrument listed herein:a Mortgage dated November 16,2007,to Lender on real property located in Johnson County,State of lows. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain un anged end in full force and effect. Consent by Lender to this Agreement does • CHANGE IN TERMS AGREEMENT Loan No: (Continued) Page 2 not waive Lender's right to strict performance of the obligation(sl ae changed,nor obligate Lender to make any future change in terms. Nothing • in this Agreement will constitute a satisfaction of the obligationls). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligationlsi,including accommodation parries,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below. teen all persons signing below acknowledge that this Agreement is given conditionally,based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's interest, this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested In a person other than Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of Its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,end unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability.'All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair, fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint end several. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: FASTS/eNV(STORS�L.L. / C •illiam L. Frantz, Member of Eastside I •.rs. Eugene Piss'y, Member of E•st ide estors, L.L.C. / L.L.C. i v.5,...0 w.14107.01m0 Cot..w..w..........•se*,w i1ST.ran ...y.,,M..... -4.',cnun,Dxx.c 55.171,w • • r.wt . f Fri 71 OMNI re M 7 .19 > N co • • 1 PROMISSORY NOTE pcltt l al ,) a1 -..s jwiaz k oto Gija Cq4 r :_ ��,4£d�?Q�?i'tQ ... R7 �9-�QO$.4?2'1.�2t�n9 !fir � y . . . ��:::t�aatt�tua.�..'' :G1.1_,l References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. • Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 13191 339-1000 Principal Amount: $248,000.00 Interest Rate: 6.500% Date of Note: January 29, 2008 PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"), or order, in lawful money of the United States of America, the principal amount of Two Hundred Forty-eight Thousand &00/100 Dollars ($248,000.001,together with interest at the rate of 6.500%per annum on the unpaid principal balance from January 29,2008, until paid in full. The Interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan In one principal payment of$248,000.00 plus interest on February 15,2009. This payment due on February 15, 2009, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid Interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple Interest basis;that Is,by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not,unless agreed to by Lender in writing,relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked"paid in full","without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts,including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000%of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Note will continue to accrue interest at the interest rate under this Note. DEFAULT. Each of the following shall constitute an event of default("Event of Default')under this Note: Payment Default. Borrower tails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Borrower. Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan,extension of credit, security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect,,either now or at the time made or furnished or becomeslatpe or misleading at any time thereafter. _ Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member5vitlldraws fr m Borrower, or any other termination of Borrower's existence as a going business or the death of any member,the insolvpnck.of Borroty'y4r, '^Y'=y the appointment of a receiver for any part of Borrower's property,any assignment for the benefit of creditors,any type of_cfedit'or worktut, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-1311p, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral Seouririg the loan. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. However,this Event;of-befault shall n G not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis'of tf e,creditec 'r - t forfeiture proceeding.and if Borrower gives Lender written notice of the creditor or forfeitureroceedin TO p g and deposits with F'gn�jr monie�or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender, in its sole discretion, as beast-an adegc reserve or bond for the dispute. c7 ` Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or acco'r,)imodation pt/nr..) of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokesop disputes the validity of,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lender,at its option,may,but shall not be required to,permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,end,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Insecurity. Lender in good faith believes Itself Insecure. Cure Provisions. If any default,other than a default in payment is.curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (121 months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen 1151 days;or (2) if the cure requires more than fifteen 1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all.reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES;EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes,subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),and appeals. If not prohibited by applicable law,Borrower also will pay any court costs,in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender In the State of Iowa. CHOICE OF VENUE. If there Is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all loan advances under this Note are secured by all shares and deposits in all joint and individual �. accounts Borrower has with Lender now and in the future. Borrower authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Note when Borrower is in default under this Note. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not 21 subject to the security interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: a Mortgage dated January 29,2008,to Lender on real property located in Johnson County,State of Iowa. PURPOSE OF LOAN. The specific purpose of this ioan is: Refinance real estate located at 31 Montgomery Place,Iowa City,IA. FINANCIAL REPORTING REQUIREMENTS. Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed. Guarantor agrees to provide lender with updated personal financial statement annually.. PROMISSORY NOTE Loan No:_ (Continued) Page 2 GUARANTEES.This note is further supported by the existing guarantees of William L.Frantz and Eugene W.Nissley,dated 9/14/2006. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns,and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. If any part of this Note cannot be enforced,this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs,guarantees or endorses this Note,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Note,and unless otherwise expressly stated in writing,no party who signs this Note,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend(repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lander may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE,BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: • EASTSI �INVVESTORRS,L. C. • BY /1//e44.`'' INBy: '1/ t William L. Frantz, Member of iiriglre Investors, Eugene . Nissley, Member Eastside Investors, L.L.C. L.L.C. L*Sm.*O IweM.V.r.n.iOwl Cr M,n.S Inn,I. M ma,.nr.r. •I.IwemmmwrO,,TA.715 MA • • • 4� to coo, rrl >-i -0 r-- -4 0 I 0 7-1 Iv co Z CHANGE IN TERMS AGREEMENT e _ --0,74,:,-,./i440:004Wr`- l ul'}ft . .p,< .ff3Ci.. a k .. .. 1 se 414-'' ,, i.fF ab iA d l rf ':01z.0,,e:0.:« iduff f e� 6. 1,0.a Ott , 01511:003111M4 References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing'••"has been omitted due to text'length limitations. Borrower: Eastside Investors,L.L.C411111111.11.1111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 13191339-1000 Principal Amount: 5248,000.00 Interest Rate: 6.500% Date of Agreement: February 11,2009 DESCRIPTION OF EXISTING INDEBTEDNESS. A promissory note dated 1/29/2008,in the original amount of 5248,000.00. DESCRIPTION OF COLLATERAL. A real estate mortgage dated 1/2912008. DESCRIPTION OF CHANGE IN TERMS. Change maturity date from 2/1 5/2009 to 2/15/2010.- PROMISE TO PAY. Eastside Investors,L.L.C.("Borrower")promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION(-Lender"1, or order, in lawful money of the United States of America, the principal amount of Two Hundred Forty-eight Thousand & 00/100 Dollars ($248,000.001,together with interest at the rate of 6.500%per annum on the unpaid principal balance from January 29, 2008,until paid in full. The interest rate may change under the terms and conditions of the"INTEREST AFTER DEFAULT"section. PAYMENT. Borrower will pay this loan in one principal payment of$248,000.00 plus Interest on February 15, 2009. This payment due on February 15, 2009, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law. payments will be applied first to any accrued unpaid interest;then to principal;then to any unpaid collection costs;and then to any late charges. Interest on this loan Is computed on a 3651365 simple interest basis;that is,by applying the ratio of the annual interest rate over the number of days In a year.multiplied by the outstanding principal balance,multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than It is due. Early payments will not,unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked'paid In full",'without recourse". ' or similar language. If Borrower sends such a payment,Lender may accept it without losing any of Lender's rights under this Agreement,and Borrower will remain obligated to pay any further amount owed to Lander. All written communications concerning disputed amounts,Including any check or other payment Instrument that Indicates that the payment constitutes'payment in full" of the amount owed or that Is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd Iowa City,IA 52246. LATE CHARGE. If a payment Is 15 days or more lets, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment. INTEREST AFTER DEFAULT. Upon default,including failure to pay upon final maturity,the total sum due under this Agreement will continue to accrue interest at the interest rate under this Agreement. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Borrower falls to make any payment when due under the indebtedness. Other Defaults. Borrower fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. Default In Favor of Third Parties. Borrower defaults under any loan, extension of credit,security agreement,purchase or sales agreeme t, or any other agreement,in favor of any other creditor or person that may materially affect any of Borrower's property orablllty to path?n Borrower's obligations under this Agreement or any of the Related Documents. ,—,r co False Statements. Any warranty,representation or statement made or furnished to Lender by Borrower or on Borrower's'fiali51$under,-930 Agreement or the Related Documents is false or misleading in any materiel respect,either now or at the time made or furnla►ted or become¢ 'cil false or misleading at any time thereafter. _ ---I Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue Is made), any member withdraws frgm "..eife Borrower,or any other termination of Borrower's existence as a going business or the death of any member,the insolvency Ali BorroysAL, the appointment of a receiver for any pert of Borrower's property,any assignment for the benefit of creditors,any type of ciedltor workout, j i i or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. ,r Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceadliSp.,self-hii* 0 repossession or any other method, by any creditor of Borrower or by any governmental agency against any collatec3 securing the Indebtedness. This includes a garnishment of any of Borrower's accounts,including deposit accounts,with Lender. Howeve.,,'thls EJaal of Default shall not apply If there Is a good faith dispute by Borrower as to the validity or reasonableness of the claim which-is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding arj}f-deposits v ttO Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,In its sole discretion,as bei an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of.or liability under,any Guaranty of the Indebtedness evidenced by this Note. Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes Itself Insecure. Cure Provisions. If any default,other than a default in payment is curable end if Borrower has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(121 months,it may be cured it Borrower,after receiving written notice from Lender demanding cure of such default: (1l cures the default within fifteen 1151 days;or (2) If the cure requires more then fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default,Lender may declare the entire unpaid principal balance under this Agreement and all accrued unpaid interest immediately due,and then Borrower will pay that amount. ATTORNEYS'FEES:EXPENSES. Lender may hire or pay someone else to help collect this Agreement if Borrower does not pay. Borrower will pay Lender that amount. This Includes, subject to any limits under applicable law, Lender's attorneys' fees end Lender's legal expenses, whether or not there is a lawsuit,including without limitation all attorneys'fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction).and appeals. If not prohibited by applicable law,Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. CHOICE OF VENUE. If there Is a lawsuit,Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. STATUTORY LIEN. Borrower agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Borrower has with Lender now and in the future. Borrower authorizes Lender, to the extent permitted by applicable law, to apply the balance in these accounts to pay any amounts due under this Agreement when Borrower is in default under this Agreement. Shares and deposits In en Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security Interest Borrower has given in Borrower's shares and deposits. COLLATERAL. Borrower acknowledges this Agreement is secured by the following collateral described in the security instrument listed herein:a Mortgage dated January 29,2008,to Lender on real property located in Johnson County,State of Iowa. CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s),remainhanged and in full force and effect. Consent by Lender to this Agreement does CHANGE IN TERMS AGREEMENT Loan No: 11.11MIEW (Continued) Page 2 not waive Lender's right to strict performance of the obligationls)as changed,nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligationls). It Is the intention of Lender to retain as liable parties all makers and endorsers of the original obligationls),including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser,including accommodation makers,will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension,modification or release,but also to all such subsequent actions. SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on transfer of Borrower's Interest,this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. It ownership of the Collateral becomes vested in a person other then Borrower, Lender, without notice to Borrower, may deal with Borrower's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Borrower from the obligations of this Agreement or liability under the Indebtedness. MISCELLANEOUS PROVISIONS. If any pert of this Agreement cannot be enforced,this fact will not affect the rest of the Agreement. Lender may delay or forgo enforcing any of its rights or remedies under this Agreement without losing them. Borrower and any other person who signs,guarantees or endorses this Agreement,to the extent allowed by law,waive presentment,demand for payment,and notice of dishonor. Upon any change in the terms of this Agreement,and unless otherwise expressly stated in writing,no party who signs this Agreement,whether as maker,guarantor,accommodation maker or endorser,shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time)this loan or release any party or guarantor or collateral;or impair,fail to realize upon or perfect Lender's security interest in the collateral;end take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Agreement are joint and several. PRIOR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. BORROWER: EAST VESTORS,L .C. :::2 � e���/-//, ism L. Frantz, Member of Investors, Eugene Nissley, ember of Eastside Investors. L.L.C. L.L.C. USD MO t ...aG 5..4S 4 n..d+s.w..We.Mt Xal.31140.0 11.m0ol..u,CmtwnloCJC n>,{PR, n7 O t." > 0 a• • o • --1 C7 m -43 Co 111119A 11111111111111111111111111111 11111111 11 Doc ID: 021033670011 Type: OEN Recorded: 12/04/2007 at 02:21:27 PM Fee Amt: $57.00 Paae 1 of 11 Johnson County Iowa Kim Painter County Recorder BK4240 Pa833-843 FOR RECORDER'S USE ONLY Prepared By: Dan Uphoff,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City,IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246 MORTGAGE ra THIS IS A PURCHASE MONEY MORTGAGE 0 ..1 The names of all Grantors (sometimes "Grantor")can be found on page 1 of this Mortgage. The-intros of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property adr�lress can be found on page 1 of this Mortgage. The legal description can be found on page 1 atthis Mortgage. -C? rn THIS MORTGAGE dated November 30, 2007, is made and executed between William L. Frantx-a r Sherry L. Frantz, husband and wife (referred to below as "Grantor") and UNIVERSITY OF I �p COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property")located in Johnson County, State of Iowa: Lot 11 in Part 1 Village Green Addition to Iowa City, Iowa, according to the plat thereof Recorded in Book 7,page 60, Plat Records of Johnson County, Iowa The Real Property or its address is commonly known as 22 Durham Court,Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. eicki. 7 MORTGAGE (Continued) Page 2 POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (21 Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in • possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements,and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by_, Lender shall be for Lender's purposes only and shall not be construed to create any respoibility or,. liability on the part of Lender to Grantor or to any other person. The representations and Werranties'� contained herein are based on Grantor's due diligence in investigating the Property for Hazardou ') Substances. Grantor hereby (1) releases and waives any future claims against Lender forte Ti • indemnity or contribution in the event Grantor becomes liable for cleanup or other costs uhder any fCOMM such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any;and alL,,, claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or.indirectly r01 sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of ani use, generation, manufacture, storage, disposal, release or threatened release occurrini prior to"` Grantor's ownership or interest in the Property, whether or not the same was or should•4Tave been:: known to Grantor. The provisions of this section of the Mortgage, including the obyeation tov indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction an reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property,whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the MORTGAGE (Continued) Page 3 Property are not Jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE- CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale,deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale,assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15)days after the lien arises or,if a lien is filed, within fifteen (15) days after Grantor has notice of the filing,secure the discharge of the lien,or if requested by Lender, deposit with Lender cash,, r a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficieig)to discharge the lien plus any costs and attorneys' fees,or other charges that could accrue as a refu(,f) of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender Jntl'; EG1 shall satisfy any adverse judgment before enforcement against the Property. Grantor shall nerpa, Lender as an additional obligee under any surety bond furnished in the contest proceedings. I ti Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence0f- y 9 r payment of the taxes or assessments and shall authorize the appropriate governmental official deliver to Lender at any time a written statement of the taxes and assessments against9Y% Property. "19 Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any worts l'- commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall • deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood MORTGAGE • (Continued) Page 4 Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any,shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to)take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring,maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy;or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. G� m WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Propertyre�a c� part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property r"" in fee simple, free and clear of all liens and encumbrances other than those set forth in the-B0 Property description or in any title insurance policy,title report, or final title opinion issued in-•3649 of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full• 0 power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens gr tad hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, a ow enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claimintf by, W through or under Grantor,agrees that it claims no lien or right to a lien of the type contemplated by CD Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted,and represents and warrants that it is the sole party entitled to do so end agrees to indemnify,defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice,and Grantor will deliver,or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. • CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this MORTGAGE (Continued) Page 5 Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the tender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below_unless T. Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as pr'ided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporates`Oly bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to.:this 1 rte' Mortgage as a security agreement are a part of this Mortgage: —:', Security Agreement. This instrument shall constitute a Security Agreement to the extent any Bit T,. Property constitutes fixtures, and Lender shall have all of the rights of a secured party under-t Uniform Commercial Code as amended from time to time. p"'. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by t�J Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In O addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact part of this Mortgage: ,,, Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver,or will cause to be made, executed or delivered,to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the MORTGAGE (Continued) Page 6 case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: • Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance,or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with-or to 3 perform any term, obligation, covenant or condition contained in any other agreement between "a Lender and Grantor. tai -71 Default in Favor of Third Parties. Should Grantor default under any loan, extension of"credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any,Other I creditor or person that may materially affect any of Grantor's property or Grantor's ability to-feria)/ the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or.any related document. False Statements. Any warranty, representation or statement made or furnished to Lender Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleng in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Death or Insolvency. The death of Grantor, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined • by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantu, to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity MORTGAGE (Continued) Page 7 of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender • believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve(12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days;or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required notices of default end after passage of any grace period,to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required to pay without notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents,including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may r� require any tenant or other user of the Property to make payments of rent or use fees direetly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response-to Lender's demand shall satisfy the obligations for which the payments are I r- made, whether or not any proper grounds for the demand existed. Lender may exercise its'rights under this subparagraph either in person, by agent,or through a receiver. 8 d� Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession_al or any part of the Property, with the power to protect and preserve the Property, to operatO Property preceding foreclosure or sale, and to collect the Rents from the Property and appl Ife proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver>lay W serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist "'— whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. MORTGAGE (Continued) Page 8 Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten 1101 days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are . necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees'and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title •,_i reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurglIce, to .r. the extent permitted by applicable law. Grantor also will pay any court costs, in addititirf.to all other sums provided by law. • rzo �1 .— NOTICES. Anynotice required to be q given under this Mortgage, including without limitation any-notice of default and any notice of sale shall be given in writing, and shall be effective when actually 1 '1 delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited ll n with a nationally recognized overnight courier, or, if mailed, when deposited in the United States'tiiail, �i as first class, certified or registered mail postage prepaid, directed to the addresses shown neat t je �` beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien whinelags dt priority over this Mortgage shall be sent to Lender's address, as shown near the beginning tthis Mortgage. Any party may change its address for notices under this Mortgage by giving formal vwtten LJ notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a le..ault, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. Joint and Several Liability. All obligations of Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and every Grantor. This means that each Grantor MORTGAGE (Continued) Page 9 signing below is responsible for all obligations in this Mortgage. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, Invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence_in the performance of this Mortgage. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned heresy i s relinquishes all rights of dower, homestead and distributive share in and to the Property and Waives �g all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,`thet Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights.' ['; ;'moi DEFINITIONS. The following capitalized words and terms shall have the following meanings whert,.us in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall*a'n amounts in lawful money of the United States of America. Words and terms used in the singularhall '.x1 include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means William L. Frantz and Sherry L. Frantz and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means William L. Frantz and Sherry L. Frantz. Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety. or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words MORTGAGE (Continued) Page 10 "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other • amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated November 30, 2007, in the original principal amount of $199,750.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. The maturity date of this Mortgage is December 1, 2009. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, �ri� agreements, loan agreements, environmental agreements, guaranties, security agreemogt� fri mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments'( agreements and documents, whether now or hereafter existing, executed in connection with]he Indebtedness. ,_,I •r- Rents. The word "Rents" means all present and future rents, revenues, income, issues, royattiem profits,and other benefits derived from the Property. 3 .7\ -p W EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: X���C/{� William L. Frantz X her ' Sherry L.F ntz • • MORTGAGE (Continued) Page 11 INDIVIDUAL ACKNOWLEDGMENT STATE OF ��\J./a, I t• ) SS r—�— COUNTY OF : c; vl�lJ I h 1/ On this 3 O day of ,./(43 v-t VA.6 r , A.D., 20 07 _, before me, a Notary Public in and for said County and State, personally appeared William L. Frantz and Sherry L. Frantz, to me known to be the persons named in and who executed the forego..,instrument and acknowledged that they executed the same as their voluntary act and deed. �� Notary Public in the State of L+w e. �,, tip DANIEL F.UPHOFF COMMISSIONNUMBER173281 . MY Mrgsi 9 q RES ...RV 1 a um.la l..M...v..IAA Mali top.....,l r.wr Va..,ti 1M1.W . w nal. ... .IA LICISVl'.(N IC II-al IM, i1) 9 o ---5n • r" m o^ ,Q D w COMMERCIAL SECURITY AGREEMENT 61.04001#0::4'; 4tj01kx# - 1,0.4.ltY 1;-r�3,§REEN't:rlU-Fi ltu ? tit eve• I taaT i#:010;4151.076, TI1 �i 2 kyir 4-#vt �#� `ilY l ..: .: x :' s.: References in the shaded area are for Lender's use only and do not lime the applicability of this document to any particular loan or item. Any item above containing"•••"has been omitted due to text length limitations. Grantor: Frantz Construction Co.,Inc.11111111111111111.11 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City.IA 52244 Iowa City,IA 52246 (3191 339-1000 • THIS COMMERCIAL SECURITY AGREEMENT dated October 6,2006,is made and executed between Frantz Construction Co..Inc.("Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("lender"). GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest In the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral,in addition to all other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word 'Collateral' as used in this Agreement means the following described property in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement: 2000 Ford F250 4x4(VIN 1FTNF21SOYEB74830) In addition,the word'Collateral"also includes all the following: IA) All accessions,attachments,accessories,replacements of and additions to any of the collateral described herein,whether added now or later. IB) All products and produce of any of the property described in this Collateral section. (Cl All accounts,general intangibles,instruments,rents,monies,payments,and all other rights,arising out of a sale,lease,consignment or other disposition of any of the property described In this Collateral section. (D) All proceeds(including insurance proceeds)from the sale,destruction,loss,or other disposition of any of the property described in this Collateral section,and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer,whether due to judgment,settlement or other process. • 1E) All records and data relating to any of the property described in this Collateral section,whether in the form of a writing,photograph, microfilm,microfiche,or electronic media,together with all of Grantor's right,title,and interest in and to all computer software required to utilize,create,maintain,and process any such records or data on electronic media. STATUTORY LIEN. Grantor agrees that aft Indebtedness is secured by all shares and deposits in all joint and individual accounts Grantor has with Lender now and in the future. Grantor authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Agreement when Grantor is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Grantor has given in Grantor's shares and deposits. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, . ts � and promises to Lender that: �x.9ntor reprei® Perfection of Security Interest. Grantor agrees to take whatever actions ere requested by Lender to perfect and continue Ler}tfbr's se&y j interest in the Collateral. Upon request of Lender,Grantor will deliver to Lender any and all of the documents evidencing ort onstitutinte Collateral,and Grantor will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender fpr possession •aim by Lender. ) Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above(or such other addresses.aa tender may 111 designate from time to time)prior to any 11) change in Grantor's name; (2) change in Grantor's assumed business namefg)(-13) change in the management of the Corporation Grantor; (4) change in the authorized signer(s); 151 change in Grantor's principal o(fide addrest 161 change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity;ar�'(B(l chang5 n any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change ieyrraazor's nertw or state of organization will take effect until after Lender has received notice. /'s „GJ ti No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to t+�rich Grantde+ii a party,and its certificate or articles of incorporation end bylaws do not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code,the Collateral is enforceable in accordance with its terms,is genuine,and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the Collateral,and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lander in writing. Location of the Collateral. Except for vehicles,and except otherwise In the ordinary course of Grantor's business,Grantor agrees to keep the Collateral at Grantor's address shown above or at such other locations as are acceptable to Lender. If the Collateral is a vehicle, Grantor will keep the Collateral at those addresses except for routine travel. Upon Lender's request,Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations,including without limitation the following: (1) all real property Grantor owns or is purchasing; (21 all real property Grantor is renting or leasing; (31 all storage facilities Grantor owns,rents,leases,or uses;and (4) all other properties where Collateral is or may be located. Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing location without Lender's prior written consent. To the extant that the Collateral consists of vehicles,or other titled property,Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the State of Iowa,without Lender's prior written consent. Grantor shall,whenever requested,advise Lender of the exact location of the Collateral. Transactions Involving Collateral. Except for Inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement,Grantor shall not sell,offer to sell,or otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge,other than the security interest provided for in this Agreement,without the prior written consent of Lender. This includes security interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender,all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt,Grantor shall immediately deliver any such proceeds to Lender. Title. Grantor represents and warrants to Lender that Grantor holds good and marketable tide to the Collateral,free and clear of all liens and encumbrances except for the lien of this Agreement. The liens granted hereby are not the type of lien referred to in Chapter 575 of the !owe Code Supplement, as now enacted or hereafter modified; amended or replaced. Grantor, for itself and all persons ciaiming by: through or under Grantor,agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted,and represents end warrants that it is the sole party entitled to do so and agrees to indemnify and hold harmless Lender from any loss,damage,and costs, •?I including reasonable attorney fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shell defend Lender's rights in the Collateral against the claims and demands of all other persons. Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain,the Collateral in good order, repair and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on,or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine COMMERCIAL SECURITY AGREEMENT Loan No:- (Continued) Page 2 and inspect the Collateral wherever located. Taxes,Assessments and Liens. Grantor will pay when due all taxes,assessments end liens upon the Collateral,its use or operation,upon this Agreement,upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents, Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen 1151 days,Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys'fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes,assessments,and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is ingood faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities,now or hereafter in effect,applicable to the ownership,production,disposition,or use of the Collateral,including all laws or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding,including appropriate appeals,so long as Lender's interest in the Collateral,in Lender's opinion,Is not jeopardized. Hazardous Substances. Grantor represents and warrants that the Collateral never has been,and never will be so long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation,manufacture,storage,transportation, treatment,disposal,release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby Ill releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws,and 12) agrees to indemnify and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation to indemnify shall survive the payment of the Indebtedness and the satisfaction of this Agreement. Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral,in form,amounts,coverages end basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor,upon request of Lender,will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender,including stipulations that coverages will not be cancelled or diminished without at least thirty 130)days'prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act,omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest,Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement,Lender may(but shall not be obligated tol obtain such insurance as Lender deems appropriate,including it Lender so chooses 'single interest insurance,'which will cover only Lender's interest in the Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such casualty or loss is covered by Insurance. Lender may make proof of loss if Grantor fails to do so within fifteen 115)days of the casualty. All proceeds of any insurance on the Collateral, including accrued proceeds thereon,shall be held by Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed Collateral,Lender shall,upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six(6)months atter their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums,w-Tiich.reserves`s�tall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen:1151 days bebore the premium due data,amounts at least equal to the insurance premiums to be paid. If fifteen 1151 days before payment is due,the rbdefve Q,.Ci funds are insufficient,Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender.as a geTi�ral deposit and shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by Grantor as they become due. Lander does not hold the reserve funds in trust for Grantor,and Lender is not the-agent of Gor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premrumslshall remain - Grantor's sole responsibility. - ! 0 1 Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insuraece:Showing=ftach J information as Lender may reasonably request including the following: Ill the name of the insurer; (21 the risks insured18)'the amount of the policy; 14) the property insured; (5) the then current value on the basis of which insurance has been obtained .Uie mannaof determining that value;and 16) the expiration date of the policy. In addition,Grantor shall upon request by Lender Mlowever not more often than annually)have an independent appraiser satisfactory to Lender determine,as applicable,the cash value or replacement cbaifof the Collateral. Financing Statements. Grantor authorizes Lander to file a UCC financing statement,or alternatively, a copy of this Agreement to perfect Lender's security interest. At Lender's request,Grantor additionally agrees to sign all other documents that are necessary to perfect, protect,and continue Lender's security interest in the Property. Grantor will pay all filing fees,title transfer fees,end other lees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor irrevocably appoints Lender to execute documents necessary to transfer title if there is a default. Lender may tile a copy of this Agreement as a financing statement. If Grantor changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes,Grantor will promptly notify the Lender of such change. GRANTOR'S RIGHT TO POSSESSION. Until default,Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents,provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender Is required by law to perfect Lender's security interest in such Collateral. If Lander at any time has possession of any Collateral,whether before or after en Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender,In Lender's sole discretion,shall deem appropriate under the circumstances,but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties,nor to protect,preserve or maintain any security interest given to secure the Indebtedness. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate,including but not limited to discharging or paying all taxes,liens,security interests,encumbrances and other claims,at any time levied or placed on the Collateral and paying all costs for insuring,maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes wig then bear interest et the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and,at Lender's option,will (Al be payable on demand; 18) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (11 the term of any applicable insurance policy:or 12) the remaining term of the Note;or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. • DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor falls to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default In Favor of Third Parties. Should Borrower or any Grantor default under any loan,extension of credit,security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's or any Grantor's ability to repay the Indebtedness or perform their respective obligations under this Agreement or any of the COMMERCIAL SECURITY AGREEMENT Loan No:111111111.11111P (Continued) Page 3 Related Documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence es a going business,the insolvency of Grantor,the appointment of a receiver for any part of Grantor's property,any assignment for the benefit of creditors,any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the Indebtedness or guarantor,endorser,surety,or accommodation party dies or becomes incompetent or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender In good faith believes itself insecure. Cure Provisions. IF any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Grantor,after receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen(151 days;or (21 if the cure requires more than fifteen 1151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary step's sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter,Lender shall have all the rights of a secured party under the Iowa Uniform Commercial Code. In addition and without limitation,Lender may exercise any one or more of the following rights and remedies: Accelerate Indebtedness. Lender may declare the entire Indebtedness,Including any prepayment penalty which Grantor would be required to pay,immediately due and payable,without notice of any kind to Grantor. Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession,Grantor agrees Lender may take such other goods,provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell,lease,transfer,or otherwise deal with the Collateral or proceeds.thereof iner's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral,threatens to line speedily in value or is of a type customarily sold on a recognized market,Lender will give Grantor,and other persons-as required by law, reasonable notice of the time and place of any public sale,or the time after which any private sale or any other disposition of the Cral ,..o-� is to be made. However, no notice need be provided to any person who, after Event of Default occurs,enters into and authentic an ft 1 agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is giv n at «' least ten(10)days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral,including w$hout csr limitation the expenses of retaking,holding,insuring,preparing for sale and selling the Collateral,shall become a part of the Indebtedness 3�,,,,,... •secured by this Agreement and shall be payable on demand,with interest at the Note rate from date of expenditure until repaid, 5 I f, Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of theCallpfral,wl T he power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the puts from-the Collateral and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiver'it y';prve wit ut bond if permitted by law. Lender's right to the appointment of a receiver shell exist whether or not the apparent value_vf the Coll$ al exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a eceiver. >,J Collect Revenues,Apply Accounts. Lender,either itself or through a receiver,may collect the payments,rents,income,End revenuesltprn the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts,general intangibles,insurance policies,instruments, chattel paper,choses in action,or similar property, Lender may demand,collect,receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes, Lender may,on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor:change any address to which mail and payments are to be sent;and endorse notes,checks,drafts,money orders, documents of title,instruments and items pertaining to payment,shipment,or storage of any Collateral. To facilitate collection,Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender alter application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency even if the transection described in this subsection is a sale of accounts or chattel paper. Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available et law,in equity,or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement,the Related Documents,or by any other writing,shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement,after Grantor's failure to perform,shall not affect Lender's right to declare a default and exercise its remedies. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: Amendments. This Agreement,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shalt pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Grantor also shall pay all court coats and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Governing Law. This Agreement will be governed by federal taw applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit,Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. COMMERCIAL SECURITY AGREEMENT Loan No: (Continued) Page 4 No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Grantor,shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile(unless otherwise required,by law),when deposited with a nationally recognized overnight courier, Or,if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law,if there is more than one Grantor,any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect, amend,or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties. Lender may at any time,and without further authorization from Grantor,file a carbon,photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection end the continuation of the perfection of Lender's security interest in the Collateral. Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid,or unenforceable as to any circumstance,that finding shall not make the offending provision illegal,invalid,or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal,valid and enforceable. If the offending provision cannot be so modified,it shall be considered deleted from this Agreement. Unless otherwise required by law,the illegality,invalidity,or unenforceability of any provision of this Agreement shall not affect the legality,validity or enforceability of any other provision of this Agreement. Successors and Assigns. Subject to any limitations stated In this Agreement on transfer of Grantor's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor,Lender,without notice to Grantor.may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness. Survival of Representations and Warranties. All representations,warranties, end agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement,shall be continuing in nature,and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. Time Is of the Essence. Time is of the essence In the performance of this Agreement. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms In the Uniform Commercial Code: Agreement, The word'Agreement'means this Commercial Security Agreement,as this Commercial Security Agreement may be amended or modified from time to time,together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. Borrower. The word "Borrower'means Frantz Construction Co.,Inc.and includes all co-signers and co-makers signing the Note and all their successors and assigns. Collateral. The word"Collateral' means all of Grantor's right,title and interest In and to all the Collateral as described-in the Colleieral Description section of this Agreement. Default. The word"Default"means the Default set forth in this Agreement in the section tided'Default'. Environmental Laws. The words 'Environmental Laws' mean any and all state, federal and local statutes, regulations•arjd ordins i A relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Respo e, {•m Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund_Amendments pnd r._"' Reauthorization Act of 1986,Pub.L.No.99-499("SARA"J,the Hazardous Materials Transportation Act,49 U.S.C.Section 0611,et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or leder-al lwrules, or r regulations adopted pursuant thereto. ( 1 Event of Default. The words"Event of Defeuf['mean any of the events of default net forth in this Agreement in the default sq5tion ofi#'Ms Agreement. O Grantor. The word'Grantor"means Frantz Construction Co.,Inc.. Guaranty. The word "Guaranty' means the guaranty from guarantor, endorser, surety, or accommodation party to Lehder, indulge; without limitation a guaranty of all or part of the Note. Hazardous Substances. The words 'Hazardous Substances' mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words 'Hazardous Substances' are used in their very broadest sense and Include without limitation any and all hazardous or toxic substances,materials or waste as defined by or listed under the Environmental Laws. The term"Hazardous Substances"also includes,without limitation,petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word'Indebtedness'means the indebtedness evidenced try the Note or Related Documents,including all principal and interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of the Related Documents. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word"Note"means the Note executed by Frantz Construction Co.,Inc.in the principal amount of$15,426.00 dated October 6, 2006,together with all renewals of.extensions of,modifications of,refinancings of,consolidations of, and substitutions for the note or credit agreement. Property. The word 'Property' means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral Description'section of this Agreement. Related Documents. The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties, security agreements,mortgages, deeds of trust. security deeds,collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS.THIS AGREEMENT IS DATED OCTOBER 6,2006. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL SECURITY AGREEMENT AND ALL OTHER DOCUMENTS RELATiNG TO THIS DEBT. COMMERCIAL SECURITY AGREEMENT Loan No:i (Continued) Page 5 GRANTOR: FRAN / •NSTRUCTION C•.,INC. BY' • ��i .r � . William L. Frantz. Presi•ent of Fran• „,j,. ction Co.,Inc. LENDER: UNIVERSIF IOWA C•M• UNITY CREDIT UNION X / A o • wino,...4v..s.i.W Cy..u...v w........ ..4.M1.IDOL NJ M .....r, i.L,CO'4AI4O0C Tee.M] oA 5t7 11 -< F -<r ..... M o > w COMMERCIAL SECURITY AGREEMENT PrIr �A�l 1c2 3� Mlturity Loan No,_ • icpllh�roR - Q'ffi.Ger Itsi 'aJs '-t r, .$'ftr0,1.,.Xi .. '0tx =243017. O t.15-2011 .77711111111111111110::..:: EVahleJe ' _ Q.0 References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing......has been omitted due to text length limitations. Grantor: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244 Iowa City,IA 52246 (319)339-1000 • THIS COMMERCIAL SECURITY AGREEMENT dated January 9,2007,is made and executed between Frantz Construction Co..Inc.I"Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"). GRANT11 OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security Interest in the Collateral to secure the Indebtelness and agrees that Lender shall have the rights stated In this Agreement with respect to the Collateral,In addition to all other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word 'Collateral" as used in this Agreement means the following described property in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement: 2004 Ford F-150 WIN 1ETPW14504FA15B221 In addition,the word•Collateral"also includes all the following: (A) All accessions,attachments,accessories,replacements of and additions to any of the collateral described herein,whether added now or later. IBI All products and produce of any of the property described in this Collateral section. IC) All accounts,general intangibles,instruments,rents,monies,payments,and all other rights,arising out of a sale,lease,consignment or other disposition of any of the property described in this Collateral section. ID) All proceeds(including insurance proceedsl from the sale,destruction,loss,or other disposition of any of the property described in this Collateral section,and sums due from a third party who has damaged or destroyed the Collateral or from that parry's insurer,whether due to judgment,settlement or other process. IE) All records and data relating to any of the property described in this Collateral section,whether in the form of a writing,photograph, microfilm,microfiche,or electronic media,together with all of Grantor's right,title,and interest in and to all computer software required to utilize,create,maintain-and process any such records or data on electronic media. STATUTORY LIEN. Grantor agrees that all Indebtedness Is secured by all shares and deposits in all joint and individual accounts Grantor has with Lender now and in the future. Grantor authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Agreement when Grantor is in default under this Agreement. Shares end deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law it given as security are not subject to the security interest Grantor has given in Grantor's shares and deposits. 3, GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral,Grantor repret+etns and promises to Lender that: Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continuet rl h's sedurT►,r •=1interest in the Collateral. Upon request of Lender.Grantor will deliver to Lender any and all of the documents evidencing or onytituting tf�+e Collateral,and Grantor will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender)fdf,possession qsu by Lender. Y Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above for such other addresst,g.-ep.ender may designate from time to time)prior to any (1) change in Grantor's name; 121 change in Grantor's assumed business name&l;'-411) charge �p g in the management of the Corporation Grantor; (41 change in the authorized signer's); 15) change in Grantor's principaf..aflic;:addriEfiC (6) change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; B¢Ichange in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change irj iieor's nerd or state of organization will take effect until after Lender has received notice. ��� No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to ich Granto'g a party,and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code,the Collateral is enforceable in accordance with its terms,is genuine, and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in foot obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the Collateral,and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing. Location of the Collateral. Except for vehicles,and except otherwise in the ordinary course of Grantor's business,Grantor agrees to keep the Collateral et Grantor's address shown above or at such other locations as are acceptable to Lender. If the Collateral is a vehicle, Grantor will keep the Collateral at those addresses except for routine travel. Upon Lender's request,Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations,including without limitation the following: 111 all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; 131 all storage facilities Grantor owns,rents,leases,or uses;and (4) all other properties where Collateral is or may be located. Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles,or other titled property,Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the State of Iowa, without Lender's prior written consent. Grantor shall,whenever requested,advise Lender of the exact location of the Collateral. Transactions Involving Collateral. Except for Inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement. Grantor shall not sell, oiler to sell, or otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance. or charge,other than the security interest provided for in this Agreement,without the prior written consent of Lender. This includes security interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral(for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt,Grantor shall immediately deliver any such proceeds to Lender. Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement. The liens granted hereby are not the type of lien referred to in Chapter 575 of the !owa Code Supplement, as now enacted or hereafter .modilied, amended or replaced. Grantor. for itself and at persons claiming-ti y, through or under Grantor,agrees that it claims no lien or right to a lien oI the type contemplated by Chapter 575 or any other chapter of • the Code o1 Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted,and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend,and hold harmless Lender from any loss,damage, and costs,including reasonable attorney fees,threatened or sullered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lenders rights in the Collateral against the claims and demands of all other persons. Repairs and Maintenance. Grantor agrees to keep and maintain, and rn cause others to keep and maintain, the Collateral in good order, repair and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on,or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine COMMERCIAL SECURITY AGREEMENT Loan No:4111111111111111111. (Continued) Page 2 and inspect the Collateral wherever located. • Taxes,Assessments and Liens. Grantor will pay when due all taxes,assessments and liens upon the Collateral,its use or operation,upon this Agreement,upon any promissory note or notes evidencing the Indebtedness,or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest rn the Collateral is not jeopardized in Lender's sole opinion. II the Collateral is subjected to a lien which is not discharged within fifteen 115)days,Grantor shall deposit with Lender cash,a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys'fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes,assessments, and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and sd long as Lender's interest in the Collateral is not jeopardized. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities,now or hereafter in effect,applicable to the ownership,production,disposition,or use of the Collateral,including all laws or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the production of an. agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding,including appropriate appeals,so long as Lender's interest in the Collateral,in Lender's opinion,is not jeopardized. Hazardous Substances. Grantor represents end warrants that the Collateral never has been,and never will be so long as this Agreement remains a lien on the Collateral,used in violation of any Environmental Laws or for the generation,manufacture,storage,transportation, treatment,disposal,release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby 111 releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws,and 121 agrees to indemnify,defend,and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation toindemnify and defend shall survive the payment of the Indebtedness and the satisfaction of this Agreement. • Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral,in form,amounts,coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor,upon request of Lender,will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender,including stipulations that coverages will not be cancelled or diminished without at least thirty 1301 days' prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice. Each insurance policy also shall include en endorsement providing that coverage in favor of Lender will not be impaired in any way by any act,omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest,Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement,Lender may(but shall not be obligated tol obtain such insurance as Lender deems appropriate,including if Lender so chooses "single interest insurance,"which will cover only Lender's interest in the Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen 11 51 days of the casual[ All proceeds of any insurance on the Collateral,Including accrued proceeds thereon,shall be held by Lender as part of the Collatera f Lender consents to repair or replacement of the damaged or destroyed Collateral,Lender shall,upon satisfactory proof of¢expenditure, e or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration, If Lender does not consent to repak-'br replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall paellichalance.41 11 Grantor. Any proceeds which have not been disbursed within six 16)months after their receipt and which Grantor has mitred' 13 the repair or restoration of the Collateral shall be used to prepay the Indebtedness. a�, �:� rs Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums,which�eserves salt 5 be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce,at least fifteen(S)days beater r?,� the premium due date,amounts at least equal to the insurance premiums to be paid. II fifteen(15)days before payment is duu,"the reserve d tl 0 funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lendir a'sa generef> R," - deposit and shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums r, .:Wed to 6a �.. paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor,and Lender is not theaQeet.of4 Grantor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiumsrpill remalhO Grantor's sole responsibility. Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance sI owing such information as Lender may reasonably request including the following: I1) the name of the insurer; (2) the risks insured; 13) the amount of the policy; (41 the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; and 161 the expiration date of the policy. In addition, Grantor shall upon request by Lender(however not more often than annually!have an independent appraiser satisfactory to Lender determine,as applicable,the cash value or replacement cost of the Collateral. ' • Financing Statements. Grantor authorizes Lender to file a UCC financing statement,or alternatively,a copy of this Agreement to perfect Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect,and continue Lender's security interest in the Property. Grantor will pay all filing fees,title transfer fees,and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees end costs. Grantor irrevocably appoints Lender to execute documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes.Grantor will promptly notify the Lender of such change. GRANTOR'S RIGHT TO POSSESSION. Until default,Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents,provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral. If Lender at any time has possession of any Collateral,whether before or after an Event of Default, Lender shell be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender,in Lender's sole discretion,shall deem appropriate under the circumstances,but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties,nor to protect,preserve or maintain any security interest given to secure the Indebtedness. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents,Lender on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate,including but not limited to discharging or paying all taxes,liens,security interests,encumbrances and other claims,at any time levied or placed on the Collateral and paying all costs for insuring,maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and,at Lender's option,will IA) be payable on demand; (B1 be added to the balance of the Note end be apportioned among and be payable with any installment payments to become due during either (11 the term of any applicable insurance policy;or 121 the • remaining term of the Note;or IC! be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default In Favor of Third Parties. Should Borrower or any Grantor default under any loan,extension of credit,security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's or any Grantor's ability to repay the Indebtedness or perform their respective obligations under this Agreement or any of the COMMERCIAL SECURITY AGREEMENT Loan No: (Continued) Page 3 Related Documents. False Statements. Any warranty,representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property,any assignment for the benefit of creditors,any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the Indebtedness or guarantor,endorser,surely,or accommodation party dies or becomes incompetent or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve 1121 months,it may be cured if Grantor,after receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen(151 days;or 121 it the cure requires more than fifteen(151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical, RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the • rights of a secured party under the Iowa Uniform Commercial Code. In addition and without limitation,Lender may exercise any one or more of the following rights and remedies: Accelerate Indebtedness. Lender may declare the entire Indebtedness,including any prepayment penalty which Grantor would be required to pay,immediately due and payable,without notice of any kind to Grantor. Assemble Collateral- Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Grantor agrees Lender may take such other goods,provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell,lease,transfer,or otherwise deal with the Collateral or proceeds tth@teof in Lends own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threaitens to deglirS speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor,and other persons as`fegjS,ked by law, reasonable notice of the time and place of any public sale,or the time after which any private sale or any other disposition,stf'this Collafe2l is to be made. However, no notice need be provided to any person who,after Event of Default occurs,enters into and'aytFenticateyi-��y d agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice js given Xt --� least ten 110)days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, igcluuing withd}rt � limitation the expenses of retaking,holding,insuring,preparing for sale and selling the Collateral,shall become a part of the Indebtedness. secured by this Agreement and shall be payable on demand,with interest at the Note rate from date of expenditure until repaTQ:-:: Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collaiergf(with power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the anis.from the' 11 ) . .A Collateral and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiver ma efbe withouJ,, bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value ohe"CollateTb{v exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a reetliver. Collect Revenues,Apply Accounts. Lender,either itself or through a receiver,may collect the payments,rents,income,and'revenues from_ the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts,general intangibles, insurance policies, instruments,chattel paper, choses in action,or similar property, Lender may demand,collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor;change any address to which mail and payments are to be sent; and endorse notes,checks,drafts,money orders, documents of title, instruments and items pertaining to payment,.shipment, or storage of any Collateral. To facilitate collection,Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender, Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper. Other Rights and Remedies. Lender shall have ell the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law,in equity,or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement,the Related Documents,or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement,after Grantor's failure to perform,shall not affect Lender's right to declare a default and exercise its remedies. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a pert of this Agreement: Amendments. This Agreement, together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' lees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Governing Law. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the Slate of tows without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit,Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. COMMERCIAL SECURITY AGREEMENT Loan No:illINI1111111110, (Continued) Page 4 No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing ' and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Grantor,shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement. the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier, or,if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law,if there is more than one Grantor,any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect, amend,or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties. Lender may at any time, and without further authorization from Grantor,file a carbon,photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral. Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance,that finding shall not make the offending provision illegal,invalid,or unenforceable as to any other circumstance. If feasible, the of lending provision shall be considered modified so that it becomes legal,valid and enforceable. If the offending provision cannot be so modified,it shall be considered deleted from this Agreement. Unless otherwise required by law,the illegality,invalidity,or unenforceability • of any provision of this Agreement shall not affect the legality,validity or enforceability of any other provision of this Agreement. Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor,Lender,without notice to Grantor,may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement,shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shell be paid in full. Time is of the Essence. Time is of the essence in the performance of this Agreement. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word"Agreement'means this Commercial Security Agreement,as this Commercial Security Agreement may be amended or modified from time to time,together with all exhibits and schedules attached to this Commercial Security Agreement from time to time,) Borrower. The word "Borrower" means Frantz Construction Co., Inc.and includes all co-signers and co-makers signiri t,�J a Note and l their successors and assigns. ''ll Collateral. The word 'Collateral' means all of Grantor's right, title and interest in and to all the Collateral as described`in fif([', e Collaf,� 71 Description section of this Agreement. y .-,a Default. The word"Default"means the Default set forth in this Agreement in the section titled"Default'. (7)—C I ",,� li Environmental Laws. The words 'Environmental Laws" mean any and all state, federal and local statutes, regulations_End"'grdinaneer ''+�] relating to the protection of human health or the environment, including without limitation the Comprehensive Environmerse i.Response, ill 1 Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA'), the Superfund Aan rtdlnents a s Reauthorization Act of 1986,Pub.L.No.99499("SARA"),the Hazardous Materials Transportation Act,49 U.S.C.Sectioq_I.BI't°iT_•_et seq:. U the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal�la'vt rules, or regulations adopted pursuant thereto. --.0 Event of Default. The words'Event of Default'mean any of the events of default set forth in this Agreement in the delaul,ction of ttf Agreement. y Grantor. The word'Grantor"means Frantz Construction Co.,Inc.. Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words 'Hazardous Substances' mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated. manufactured, transported or otherwise handled. The words "Hazardous Substances' are used in their very broadest sense and include without limitation any and all hazardous or toxic substances,materials or waste as defined by or listed under the Environmental Laws. The term'Hazardous Substances'also includes,without limitation,petroleum and petroleum by-products or any Traction thereof and asbestos. Indebtedness. The word 'Indebtedness"means the indebtedness evidenced by the Note or Related Documents,including all principal and interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement nr under any of the Related Documents. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word'Nate'means the Note executed by Frantz Construction Co.,Inc.in the principal amount of S18,700.00 dated January 9, 2007, together with all renewals of,extensions of, modifications of, refinancings of,consolidations of, and substitutions for the note or credit agreement. Property. The word 'Property' means all of Grantor's right, title and interest in and to all the Property as described in the 'Collateral Description'section of this Agreement. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,security deeds,collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS.THIS AGREEMENT IS DATED JANUARY 9,2007. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL SECURITY AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. COMMERCIAL SECURITY AGREEMENT Loan No: (Continued) Page 5 GRANTOR: FRANTZCO�ry�TRUCTION CO..JINC. By: gerf ECtar Eu e�y, it for of Frantz Construction Co..Inc. LENDER: UNIVER ITY\OF IOW 0 UNITY CREDIT UNION X Authorized Signer _ rJ G Co"? C') ;40114... 5 73 • > ,-)o5a 1111I111I1111111ILIII11.1111In11111111111 Doc ID: 020736070011 Tvoe: DEN Rbcorded: 12/20/2006 at 12:54:36 Fri Fee Amt: $67.00 Paoe 1 of 11 Johnson County Iowa Kim Painter County Recorder 6K4112 PD757-767 FOR RECORDER'S USE ONLY Prepared By: Dan Uphoff,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City,IA 52246, 1319) 339-1000 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246 MORTGAGE O • THIS IS A PURCHASE MONEY MORTGAGE rri The names of all Grantors (sometimes "Grantor")can be found on page 1 of this Mortgage. The names -‹ ris of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property address _(0 M can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this 1-- Mortgage. _ ITt 73 THIS MORTGAGE dated December 18, 2006, is made and executed between Frantz Construction Co., O; Inc., an Iowa Corporation (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY 'G CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the"Real Property")located in Johnson County, State of Iowa: Lot 61, Village Green - Part XIX, Iowa City, IA, according to the plat thereof recorded in Book 46, Page 300. Plat Records of Johnson County, Iowa AND Lot 3, Village Green South, Part 3A, Iowa City, Iowa, according to the plat thereof recorded in Book 34, Page 38, Plat Records of Johnson County, Iowa. The Real Property or its address is commonly known as 3446 N. Jamie Lane and 3321 Wintergreen Dr.. Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: 'i 25 wage a or 11) MORTGAGE Loan No: (Continued) Page 2 PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1);or (31 Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property;and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs,replacements,and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property,there has been no use,generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or lc) any actual or threatened litigation or claims of any kind by any person relating to such 0 matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) a7 rel neither Grantor nor any tenant, contractor,agent or other authorized user of the Property shall use, C.,) generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, C ti -91 about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all -"10 "" a Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make r such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine m compliance of the Property with this section of the Mortgage. Any inspections or tests made by Q 7 Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or• liability on the part of Lender to Grantor or to any other person. The representations and warranties �+ W contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the hen of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent, Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities (Page a or 11) MORTGAGE Loan No:11111111111110116 (Continued) Page 3 Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as,in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due land in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15)days after the lien arises or,if a lien is filed, within fifteen(15)days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender,deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees,or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. O r o Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of *.() cm payment of the taxes or assessments and shall authorize the appropriate governmental official tom"�fl deliver to Lender at any time a written statement of the taxes and assessments against the c 1 .s Property. f Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is --t r commenced, any services are furnished, or any materials are supplied to the Property, if any n mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances o .Q satisfactory to Lender that Grantor can and will pay the cost of such improvements. C W PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender, Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required try Lender,and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the (Page 4 of 11) MORTGAGE Loan No:4110.1111111.11 (Continued) Page 4 Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property,end the manner of determining that value;and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may(but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the 0 term of any applicable insurance policy;or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure to -71payment of these amounts. Such right shall be in addition to all other rights and remedies to which -ea3A Lender may be entitled upon Default. C; f ; l: -" WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a l part of this Mortgage: _ n -- _ Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, Ib) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend,and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver,or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances,and regulations of governmental authorities, Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: (Page 5 of 11) MORTGAGE Loan No:- (Continued) Page 5 Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the r -� Indebtedness or on payments of principal and interest made by Grantor. 0 Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of b 0 c,5 this Mortgage, this event shall have the same effect as an Event of Default, and Lender may ' CT, 11 exercise any or all of its available remedies for an Event of Default as provided below unless n-< �e Grantor either (1) pays the tax before it becomes delinquent, or 12) contests the tax as providedre above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety F- r bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this 4 n Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the ' LIJ Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (31 days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code)are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver,or will cause to be made, executed or delivered,to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, trays a Or ii) MORTGAGE Loan No: 111111111111.1111111 (Continued) Page 6 continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay,if permitted by applicable law,any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to -- perform any term, obligation, covenant or condition contained in any other agreement between 0 Lender and Grantor. r, { r.e.9 Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, -, CI security agreement, purchase or sates agreement, or any other agreement, in favor of any other CD f creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay ._j C.) — the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any -<r" 1 t 1 related document. i- ( ,- -- False Statements. Any warranty, representation or statement made or furnished to Lender by 01,; Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading 3 t J at any time thereafter. EV Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors,any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occur.,with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, (Page 7 of 11) MORTGAGE Loan No: 111111111111111111111 (Continued) Page 7 in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (121 months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default; (11 cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates stops which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter. Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option to declare the entire Indebtedness immediately due and payable,including any prepayment penalty which Grantor would be required to pay without notice, except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to O Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of n • Cyr1 Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to D—11 ' mom Lender in response to Lender's demand shall satisfy the obligations for which the payments are C')'< made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person,by agent,or through a receiver. nl, 12 .<r Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the O ._ Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the `*►r proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may ?a to, serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or 121 vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (101 �ruyc v VL 11) MORTGAGE Loan No: i (Continued) Page 8 days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law,all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal r—> expenses, whether or not there is a lawsuit,including attorneys' fees and expenses for bankruptcy © :� proceedings:(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title C- t�n j' reports(including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will "-• pay any court costs, in addition to all other sums provided by law. —4 C, rn -- NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice - of default and anynotice of sale shall be s` given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited ..p with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. No Waiver by Lander. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. (Page 5 of 11) MORTGAGE Loan Novi (Continued) Page 9 No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 0 _ ^� 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 Property and waives C) all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that "^i Grantor executes this Mortgage for the sole purpose of relinquishing end waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used —i C7 fru in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean C r 1 amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and -? terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: W Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers fV and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response. Compensation, and Liability Act of 1980, as amended, 42 V.S.C. Section 9601, et seq. I"CERCLA"I, the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Frantz Construction Co., Inc.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. ' (Page 1:0 of 11) MORTGAGE Loan No: 1.011Mlio (Continued) Page 10 Improvements. The word "Improvements" means all existing and future improvements, buildings. structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated December 18, 2006, in the original principal amount of $83,200.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. O Real Property. The words "Real Property" mean the real property, interests and rights, as further 0 t,/) described in this Mortgage. >-� rrl 11 O s1 Related Documents. The words "Related Documents" mean all promissory notes, credit C)-< 1 r+ agreements, loan agreements, environmental agreements, guaranties, security agreements, ---i l) — m � mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, r. agreements and documents, whether now or hereafter existing, executed in connection with the ' r1 j Indebtedness. 7) Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, O profits, and other benefits derived from the Property. > W N GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: FRANTZ •NSTRUCTION CO., I .C s. William L. Frantz, Presidenntz Construction Co., Inc. (Page 11 of 11) MORTGAGE Loan No: , (Continued) Page 11 CORPORATE ACKNOWLEDGMENT STATE OF 1^ ISS COUNTY OF `7 "`Vk.. ) On this day of tf A.D., 20 (p , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, President of Frantz Construction Co., Inc.,to me personally known, who, being by me duly sworn did say he or she is authorized signer of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz of Frantz Construction Co., Inc. acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it volu.rily executed. 111 Notary Public in the State of DANIEL F.UPHOFF •:� COMMISSION NUMBER 173281 • MY COMMISSION DtPIRES —' ,..*...ob. ...nim ...,�..S..�. •W.m .I,. _..� 5 w,. K ..., .. _ rJ 0 D. ) EP, 11 } - m o� a • D w fV 1111111111I111I1I II II I I ILII II 111II11I1111111111I111 . Doc ID: 020927740011 Tvoe: OEN Recorded: 07/25/2007 at 10:39:02 AM Fee Amt: $57.00 Paoe 1 of 11 Johnson County Iona Kim Painter County Recorder BK4194 P0615-625 FOR RECORDER'S USE ONLY Prepared By: Dan Uphoff, Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, 52246 P- CONSTRUCTION MORTGAGE The names of all Grantors (sometimes"Grantor")can be found on page•1 of this Mortgage. The rta nes x� of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property addre�s 0 can be found on page 1 of this Mortgage. The legal description can be found on page 1 el)tffiees Mortgage. ;Y W THIS MORTGAGE dated July 20, 2007, is made and executed between Frantz Construction Co., Inc., N an Iowa Corporation (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in Johnson County,State of Iowa; Lot 3, Village Green South,Part 3A, Iowa City,Iowa, according to the plat thereof recorded in Book 34, Page 38, Plat Records of Johnson County, Iowa The Real Property or its address is commonly known as 3446 N.Jamie Ln., Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of �,. 26 MORTGAGE (Continued) Page 2 Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage secures an obligation incurred for the construction of an improvement on land, and is a "construction mortgage" within the meaning of Section 554.9334 of the Iowa Uniform Commercial Code. This Mortgage also secures loans or advancements made directly to finance work or improvements upon the real estate described herein, and is a "construction mortgage lien" within the meaning of Section 572.18 of the Iowa Code. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, r J manufacture, storage, treatment, disposal, release or threatened release of any Hiailardous a Substance on, under, about or from the Property by any prior owners or occupants of the .toperty, or (c) any actual or threatened litigation or claims of any kind by any person relating tollsuch rn HT matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing;-;(a) 1" neither Grantor nor any tenant, contractor, agent or other authorized user of the Property stialtlase, f ,_." generate, manufacture, store, treat, dispose of or release any Hazardous Substance on;=user, — 3 ,� about or from the Property; and (b) any such activity shall be conducted in compliance-wittrall y !1 applicable federal, state, and local laws, regulations and ordinances, including without limifatidirn all L'�9 Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property eke such inspections and tests, at Grantor's expense, as Lender may deem appropriate to datgrrr1ine compliance of the Property with this section of the Mortgage. Any inspections or tests n4fe by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or (v liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and 12) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. MORTGAGE (Continued) Page 3 Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens ry having priority over or equal to the interest of Lender under this Mortgage, except for thosJTiens specifically agreed to in writing by Lender, and except for the lien of taxes and assessmen%not due as further specified in the Right to Contest paragraph. - Cr) Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection -O with a good faith dispute over the obligation to pay, so long as Lender's interest in the Propeiti ins r- not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within flftgen' l (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notic6 the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash.er:45 sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficieh? discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a rizult '• of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender nd N shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. • Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance.assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Gran.tor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. MORTGAGE • (Continued) Page 4 Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located In an.area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property,and the manner of determining that value;and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any • Related Documents, including but not limited to Grantor's failure to discharge or pay when dee any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents,sunder on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems apprrip)1 , cn including but not limited to discharging or paying all taxes, liens, security interests, encumbrances other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining I and preserving the Property. All such expenditures incurred or paid by Lender for such purpose,will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to ikkie date of repayment by Grantor. All such expenses will become a part of the Indebtedness ands Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note Fd."-,.be apportioned among and be payable with any installment payments to become due during either ( 11e term of any applicable insurance policy; or (2) the remaining term of the Note;or (C) be treat@3:as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal MORTGAGE (Continued) Page 5 party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuig this 1 , Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for ..; recording or registering this Mortgage. , r , Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax'upon •;,; this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgagef(Y), a I specific tax on Grantor which Grantor is authorized or required to deduct from payments:olt-the 4 Indebtedness secured by this type of Mortgage; (31 a tax on this type of Mortgage chargaeble :11 against the Lender or the holder of the Note; and (4) a specific tax on all or any portion ofi`ftie ','== Indebtedness or on payments of principal and interest made by Grantor. '— — Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the gall:of this Mortgage, this event shall have the same effect as an Event of Default, and Lend Pmay U.J exercise any or all of its available remedies for an Event of Default as provided below unless N Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (31 days after receipt of written demand from Lender to the extent permitted by applicable law. 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 MORTGAGE (Continued) Page 6 name and address of the debtor is the name and address of Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver,or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as • may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the.things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. • FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time tome. C 7 -- EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of DSfgft cr." under this Mortgage: --- r rl =II Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to"ri;ake any payment for taxes or insurance, or any other payment necessary to prevent filing of or to:e'HFct discharge of any lien. — M O Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant;ei -9 condition contained in this Mortgage or in any of the Related Documents or to comply with;}r, to 1.0 perform any term, obligation, covenant or condition contained in any other agreement bettiveen Lender and Grantor. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings- Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the MORTGAGE (Continued) Page 7 validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion,as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: Ill cures the default within fifteen (15) days; or (21 if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option to declare the entire Indebt ess J immediately due and payable, including any prepayment penalty which Grantor would be requfiliCto "° pay without notice, except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall havea�the —0rights and remedies of a secured party under the Uniform Commercial Code. -�, f 7. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of.'t'te Property and collect the Rents, including amounts past due and unpaid, and apply the net proCee¢s; over and above Lender's costs, against the Indebtedness. In furtherance of this right, LendeFF99 require any tenant or other user of the Property to make payments of rent or use fees direcito •p Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lend Lendk as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the nanla of W Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to N Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by iaw. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the MORTGAGE (Continued) Page 8 Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action toperform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of r� this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasoile as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved,&)to t.' the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opirjIon..are ...0 necessary at any time for the protection of its interest or the enforcement of its rights shall eecorte - a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's lel ja expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for ban ptgy proceedings (including efforts to modify or vacate any automatic stay or injunction), appealigcl any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurane, to t� the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. MORTGAGE (Continued) Page 9 Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or- unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with a ther interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, ' without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's -,J 6� interest, this Mortgage shall be binding upon and inure to the benefit of the parties'',- their I successors and assigns. If ownership of the Property becomes vested in a person other-than — Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to 1 1 this Mortgage and the Indebtedness by way of forbearance or extension without releasing Gjftgr 2a from the obligations of this Mortgage or liability under the Indebtedness. O N Time is of the Essence. Time is of the essence in the performance of this Mortgage. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby IV relinquishes all rights of dower, homestead and distributive share in and to the Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as.the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Frantz Construction Co., Inc.. MORTGAGE (Continued) Page '10 Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word 'Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of.and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated July 20, 2007, in the original principal amount of $140,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit fr...;) agreements, loan agreements, environmental agreements, guaranties, security agreertients, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instrumehts� agreements and documents, whether now or hereafter existing, executed in connection wit . the "a MIONI Rents. The word "Rents" means all present and future rents, revenues, income, issues, royattf r" profits,and other benefits derived from the Property. 1 r O �o > w MORTGAGE (Continued) Page 11 GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: FRANTZ INSTRUCTION CO., INC. By! William L. Frantz, President .f Fra i rik. ruction Co., Inc. /10. Eugene Nissley, Vice resident of Frantz Construction Co., Inc. CORPORATE ACKNOWLEDGMENT STATE OF -Iowa. I SS COUNTY OF John SIDel On this 2U* day of Old‘,.) , A.D., 20 0'1 , before me, the undersigned Notary Public in said County and Stae, personally appeared William L. Frantz, President; Eugene W. Nissley, Vice President of Frantz Construction Co., Inc., to me personally known, who, being by me duly sworn did say they are authorized signers of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz; Eugene W. Nissley of Frantz Construction Co., Inc. acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it voluntarily executed. • ,1F YN �sun-H rotary P ,� in the ' at: of commission1# � /2 r J2o Q - — r_61 M u, r- _ m ram t*H lb t..raw.»aa tw[rn la....w.�.r.lwir.,l.c.fp l0O). u hIS?.* .M"MAN=st W.,a, =T C/7�' N 1111111111111111111111111111111111111111111 11 IIN II IIIII Doc ID: 021008120011 TVDe: GEN Recorded: 10/26/2007 at 03:28:20 PM Fee Amt: $57.00 Page 1 of 11 Johnson County Iona Kim Painter County Recorder BK4230 PG65-75 FOR RECORDER'S USE ONLY Prepared By: Dan Uphoff,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA - 52246 n c/a ..n WHEN RECORDED MAIL TO: "Go UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 r , ,a 0 CONSTRUCTION MORTGAGE The names of all Grantors (sometimes "Grantor")can be found on page 1 of this Mortgage. The names IV of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property address can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this Mortgage. THIS MORTGAGE dated October 25, 2007, is made and executed between Frantz Construction Co., Inc., an Iowa Corporation (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as • "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits: all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in Johnson County, State of Iowa: Lot 61, Village Green - Part XIX, Iowa City, Iowa, according to the plat thereof recorded in Book 46, Page 300, Plat Records of Johnson County, Iowa The Real Property or its address Is commonly known as 3321 Wintergreen Dr., Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE IA) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE. THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Eih . 27 MORTGAGE (Continued) Page 2 Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage secures an obligation incurred for the construction of an improvement on land, and is a "construction mortgage" within the meaning of Section 554.9334 of the Iowa Uniform Commercial Code. This Mortgage also secures loans or advancements made directly to finance work or improvements upon the real estate described herein, and is a "construction mortgage lien" within the meaning of Section 572.18 of the Iowa Code. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (21 Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or 13) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property;and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements,and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or recon to r believe that there has been, except as previously disclosed to and acknowledged by Larger in writing, (a) any breach or violation of any Environmental Laws, (b) any use, genetetiTh, manufacture, storage, treatment, disposal, release or threatened release of any Hazacdtius c n Substance on, under, about or from the Property by any prior owners or occupants of the Prppetty, or (c) any actual or threatened litigation or claims of any kind by any person relating to.such I j"' matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing;;CA) W neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall, a generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, about or from the Property; and (b) any such activity shall be conducted in compliance via";l �!J applicable federal, state, and local laws, regulations and ordinances, including without limitat(gr'all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to:Alake W such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine W compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements. Lender may require Grantor to make arrangements satisfactory to Lender to replace p•--- such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. MORTGAGE (Continued) Page 3 Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as,in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property! whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright;sale, deed;') installment sale contract, land contract, contract for deed, leasehold interest with a term gteater thane three 13) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in og to any land trust holding title to the Real Property, or by any other method of conveyance of..an interest •.1=60 in the Real Property. However, this option shall not be exercised by Lender if such.:exercise iJ prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property eri art this Mortgage: 0 Payment. Grantor shall pay when due (and in all events prior to delinquency) all tags, payroll" taxes, special taxes, assessments, water charges and sewer service charges levied agi;(rist or OAA) account of the Property, and shall pay when due all claims for work done on or for servicesw rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be • „n by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. MORTGAGE (Continued) Page 4 Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (21 the risks insured; (3) the amount of the policy; 14) the property insured, the then current replacement value of such property,and the manner of determining that value; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materialtp effect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage ar ny Related Documents, including but not limited to Grantor's failure to discharge or pay when due-any =j amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents;-Lender l a. on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, — e including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and J 1 n other claims, at any time levied or placed on the Property and paying all costs for insuring, maintsWting '7 and preserving the Property. All such expenditures incurred or paid by Lender for such purpo infill then bear interest at the rate charged under the Note from the date incurred or paid by Lender,.;oMte -O date of repayment by Grantor. All such expenses will become a part of the Indebtedness Sri, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be W apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: la) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify, defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens • hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal MORTGAGE (Continued) Page 5 party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full, CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes,fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all texas, as described below, together with all expenses incurred in recording, perfecting or continuing--this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charpes-for rNr-t recording or registering this Mortgage. '•' �, Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon F this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage;,-(2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments orr,the 7r: Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage el-1410-61e against the Lender or the holder of the Note; and (4) a specific tax on all or any portioa.ecthe "O Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of 1.r.! this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 MORTGAGE (Continued) Page 6 name and address of the debtor is the name and address of Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver,or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs-all the 11-; obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to GFantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement r. on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will'pay, if '--j hI permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. l EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. - 111 O_l -U Default on Other Payments. Failure of Grantor within the time required by this Mortgage tole any payment for taxes or insurance, or any other payment necessary to prevent filing of or tofect tai discharge of any lien. Lf.J Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any • assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the MORTGAGE (Continued) Page 7 validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary • steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: --? .,a Accelerate Indebtedness. Lender shall have the right at its option to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required.to t" m pay without notice, except as may be expressly required by applicable law. tea! U UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all ther- rights and remedies of a secured party under the Uniform Commercial Code. CC•} (— Collect Rents. Lender shall have the right, without notice to Grantor, to take possession oLhT^-1 .1^s. Property and collect the Rents, including amounts past due and unpaid, and apply the net procS�: over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender Iiia'' -.O require any tenant or other user of the Property to make payments of rent or use fees directf ,to W Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as W Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property MORTGAGE (Continued) Page 8 and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property,or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender.shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be.then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of _ this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as 0 attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are — necessary at any time for the protection of its interest or the enforcement of its rights shall become • a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date I r� of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, - t however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to W the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage,including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually • delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments, This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports, If the Property is used for purposes other than Grantor's residence, Grantor shaii furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. MORTGAGE (Continued) Page 9 • Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. • Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's N interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than — Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to --( ' this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor (7"< from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. , M Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby 0 relinquishes all rights of dower, homestead and distributive share in and to the Property and waives G 7 `"Q all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. A LJ DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Frantz Construction Co., Inc.. • MORTGAGE (Continued) Page '10 Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term 'Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender' means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word 'Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated October 25, 2007, in the original principal amount of $176,250.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including-without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Properly. _ Real Property. The words "Real Property" mean the real property, interests and rights, as'further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes,—edit ._. 0 agreements, loan agreements, environmental agreements, guaranties, security agrAerd rits, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instrJTnents, agreements and documents, whether now or hereafter existing, executed in connection uiith the L.! Indebtedness. W Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: FRANTZ CINSTRUCTION CO., INC. By: A041111 V% G William L. Frantz, Preside •f 'rantz Construction Co., Inc. MORTGAGE (Continued) Page 11 CORPORATE ACKNOWLEDGMENT STATE OF -I-DWQ... 1 I SS COUNTY OF - )l7t"IYLScri ) On this 254` day of (DC'-Obey , A.D., 20 Or/ , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, President of Frantz Construction Co., Inc., to me personally known, who, being by me duly sworn did say he or she is authorized signer of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it voluntarily executed. ,�'. �/7`� Y Cor KERRYN i8o5 Notary Pu.4 the Sta 41.4,�,a, • akin Expires I..u..c.., •VII.a.0./CO 110111.11./...Id I....,.....b0.mi u.o,.*.� .IA 1AL.LPTAcco tc n.u:MI 4 r _ r--.)O a nto n—‹ r �h - R m c D w w COMMERCIAL SECURITY AGREEM• ENT P31�clpat Loatr date Moffitt lir CafatF / ,>� tom ' Jnil�fs sus>aaa a 1)1.z 2faag. Gr 1 107 /1////a j References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing"•••"has been omitted due to text length limitations. Grantor: Frantz Construction Co.,Inc.fillIMM11111.11111111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd lows City,IA 52244 Iowa City.LA 52246 1319)339.1000 • THIS COMMERCIAL SECURITY AGREEMENT dated January 25,2008,Is made and executed between Frantz Construction Co.,Inc.("Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION Mender"). GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security Interest In the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral,In addition to ell other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word 'Collateral" as used in this Agreement means the following described property in which Grantor is giving to lender a security interest for the payment of the Indebtedness and performance of all other obligations under the Note end this Agreement: 2005 Ford F250 4x4 Super Cab XLT WIN 1FTSX21525EB67514) In addition,the word*Collateral"also includes all the following: IA) All accessions,attachments,accessories,replacements of and additions to any of the collateral described herein,whether added now or later. (B) All products and produce of any of the property described in this Collateral section. (C) All accounts,general intangibles,instruments, rents, monies,payments, and all other rights,arising out of a sale,lease,consignment or other disposition of any of the property described in this Collateral section. (D) All proceeds(including insurance proceeds)from the sale,destruction,loss,or other disposition of any of the property described in this Collateral section,and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer,whether due to judgment,settlement or other process. (E) All records and data relating to any of the property described in this Collateral section,whether in the form of a writing,photograph, microfilm,microfiche,or electronic media,together with all of Grantor's right,title,and interest in and to all computer software required to utilize,create,maintain, and process any such records or data on electronic media. STATUTORY LIEN. Grantor agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Grantor has with Lender now and in the future. Grantor authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Agreement when Grantor is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Grantor has given in Grantor's shares and deposits. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral.Grantor represents and promises to Lender that: Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continua Lender's security rJ interest in the Collateral. Upon request of Lender,Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral,and Grantor will note Lender's interest upon any and all chattel paper and Instruments if not delivered to Lender for possession Q by Lender. Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above(or such other addresses as Lender may D S designate from time to time)prior to any I1) change in Grantor's name; (21 change in Grantor's assumed business name's); 131 change in the management of the Corporation Grantor; 14) change in the authorized signer(s); 151 change in Grantor's principal office address; n (6) change in Grantor's state of organization; 171 conversion of Grantor to a new or different type of business entity;or 18) change in 0 any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of organization will take effect until after Lender has received notice. -�('— m 3 No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is -t� a party,and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement. O�' Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code,the Collateral is enforceable in accordance with Its terms,is genuine,and fully complies with all applicable laws D and regulations concerning form, content end manner of preparation and execution, and all persons appearing to be obligated on the w Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the Collateral,and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing. Location of the Collateral. Except for vehicles,and except otherwise in the ordinary course of Grantor's business,Grantor agrees to keep the Collateral at Grantor's address shown above or at such other locations as are acceptable to Lender. If the Collateral is a vehicle, Grantor will keep the Collateral at those addresses except for routine travel. Upon Lender's request,Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations,including without limitation the following: (1) all real property Grantor owns or is purchasing; (21 all real property Grantor is renting or leasing; (3) all storage facilities Grantor owns,rents,leases,or uses;and (41 all other properties where Collateral Is or may be located. Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles,or other titled property,Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the State of Iowa, without Lender's prior written consent. Grantor shall,whenever requested,advise Lender of the exact location of the Collateral. Transactions Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge,other than the security interest provided for in this Agreement,without the prior written consent of Lender. This includes security interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds to Lender. Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement. The liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced Granter, for itself and s!! persons cls;-;ng by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted,and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend,and hold harmless Lender from any loss,damage,and costs,including reasonable attorney fees,threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. No financing statement covering any of the Collateral is on file in any public office otherefthan those whichs reflect the securitya) interest claimscreated bthis Agreementofh to which Lender has specifically consented. Grantor shell • defend Lender's rights In the Collateral against the and demands of all other persons. Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep•and maintain, the Collateral in good order, 2r repair and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on,or services rendered or materiel furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine COMMERCIAL SECURITY AGREEMENT Loan No: 11111111111.10 (Continued) Page 2 and inspect the Collateral wherever located. Taxes,Assessments and Liens. Grantor will pay when due ell taxes,assessments and liens upon the Collateral,its use or operation,upon this Agreement,upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen 1151 days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, coats, attorneys'fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish lender with evidence that such taxes, assessments,and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay end so long as Lender's Interest in the Collateral is not jeopardized. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities,now or hereafter in effect,applicable to the ownership,production,disposition,or use of the Collateral,Including all laws or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding,including appropriate appeals,so long as Lender's interest in the Collateral,in Lender's opinion,is not jeopardized. Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation,manufacture, storage.transportation. treatment,disposal,release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws.and (2) agrees to indemnify,defend,and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation to indemnify and defend shall survive the payment of the Indebtedness and the satisfaction of this Agreement. Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral,in form,amounts,coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor,upon request of Lender,will deliver to Lender from time to rime the policies or certificates of insurance in form satisfactory to Lender,including stipulations that coverages will not be cancelled or diminished without at least thirty(301 days' prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage In favor of Lander will not be impaired in any way by any act,omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest,Grantor will provide Lender with such loss payable or other endorsements as Lender may require. II Grantor at any time fails to obtain or maintain any insurance as required under this Agreement,Lender may(but shall not be obligated tot obtain such insurance as Lender deems appropriate,including if Lender so chooses 'single interest insurance,'which will cover only Lender's interest in the Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen(151 days of the casualty. All proceeds of any insurance on the Collateral,including accrued proceeds thereon,shall be held by Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed Collateral,Lender shall,upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lander shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six 16)months after their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums,which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce,at least fifteen(151 days before the premium due date,amounts at least equal to the insurance premiums to be paid. If fifteen 115)days before payment is due,the reserve funds are insufficient,Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general deposit and shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor,and Lender is not the agent of.3rantor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment ofmiums shdW„jemain Grantor's sole responsibility. c`..JJ Insurance Reports. Grantor, upon request of Lender,shall furnish to Lender reports on each existing policy of insutahce shovem such information as Lender may reasonably request including the following: Ill the name of the insurer; (2) the risks ins-ter.(; 131 thount �i of the policy; 14) the property insured; 15) the then current value on the basis of which insurance has been obtained and the ma ner of determining that value;and (6) the expiration date of the policy. In addition,Grantor shall upon request by Lender-f however net more often than annually)have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or;rpplecement.cust of the Collateral. — ;="=ll 1. 311 Financing Statements. Grantor authorizes Lender to file a UCC financing statement,or alternatively, a copy of this Agreement tg erfect --- Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to.perfect, ',, j protect,end continue Lender's security interest in the Property. Grantor will pay all filing fees,title transfer fees,an o fret fees and costs -� involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor irrevocaWlyappoints Leper to execute documents necessary to transfer title If there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor changes Grantor's name or address, or the name or address of any person granting a security interest up'2er this Agbee4nent changes,Grantor will promptly notify the Lander of such change. W GRANTOR'S RIGHT TO POSSESSION. Until default,Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents,provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral. If Lender at any time has possession of any Collateral,whether before or atter an Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender,in Lender's sole discretion,shell deem appropriate under the circumstances,but failure to honor any request by Grantor shell not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties,nor to protect,preserve or maintain any security interest given to secure the Indebtedness. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate, Including but not limited to discharging or paying all taxes,liens,security interests,encumbrances and other claims,at any time levied or placed on the Collateral end paying all costs for insuring,maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness end,et Lender's option,will 1A1 be payable on demand: 181 be added to the balance of the Note and be apportioned among and be payable with env installment payments to become due during either Ill the term of any applicable insurance policy;or 121 the remaining term of the Note;or (C1 be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shall be In addition to all other rights and remedies to which Lander may be entitled upon Default. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default In Favor of Third Parties. Should Borrower or any Grantor default under any loan,extension of credit,security agreement,purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's or any Grantor's ability to repay the Indebtedness or perform their respective obligations under this Agreement or any of the COMMERCIAL SECURITY AGREEMENT Loan No: (Continued) Page 3 Related Documents. • False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at arty time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of e receiver for any pert of Grantor's property,any assignment for the benefit of creditors,any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in en amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,endorser,surety,or accommodation party of any of the Indebtedness or guarantor,endorser,surety,or accommodation party dies or becomes incompetent or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness. • Adverse Change, A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve 1121 months,it may be cured if Grantor,after receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen(15)days;or 12) it the cure requires more than fifteen 115) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under the Iowa Uniform Commercial Code. In addition and without limitation,Lender may exercise any one or more of the following rights and remedies: Accelerate Indebtedness. Lender may declare the entire Indebtedness,including any prepayment penalty which Grantor would be required to pay,immediately due and payable,without notice of any kind to Grantor. Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title •and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession,Grantor agrees Lender may take such other goods,provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell,lease,transfer,or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily In value or is of a type customarily sold on a recognized market, Lender will give Grantor, and other persons as required by law, reasonable notice of the time and place of any public sale,or the time after which any private sale or any other disposition of the Collateral is to be made. However,no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates an agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least ten 1101 days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral,including withoyt limitation the expenses of retaking,holding,insuring,preparing for sale and selling the Collateral, shall become a part of'?he Indebtedness secured by this Agreement and shall be payable on demand,with interest at the Note rate from date of expenditure until r id. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateer 1,with.lje power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rahfs fromrthe Collateral and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiver may salve witTiSZt bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value,of the Collateral exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Collect Revenues.Apply Accounts. Lender,either itself or through a receiver,may collect the payments,rents,income,and revenues from the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Leer's nomin,e and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness. ui apply payment of the Indebtedness in such order of preference as Lander may determine. Insofar as the Collateral consists of{{c3oonts,general intangibles, insurance policies, instruments,chattel paper, choses in action,or similar property, Lender may demand,cglfect,receipt.10, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not.iddebtednese br Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and,'dispose of IrA01 addressed to Grantor;change any address to which mail end payments are to be sent;and endorse notes,checks,drafts,money order, documents of title, instruments and items pertaining to payment,shipment, or storage of any Collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. Obtain Deficiency. If Lender chooses to sell any or all of the Collateral.Lender may obtain a judgment against Grantor far any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency even it the transection described in this subsection is a sale of accounts or chattel paper. Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law,in equity,or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement,the Related Documents,or by any other writing,shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and en election to make expenditures or to take action to perform an obligation of Grantor under this Agreement,after Grantor's failure to perform,shall not affect Lender's right to declare a default and exercise its remedies. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: Amendments. This Agreement,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expanses. Grantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'lees end Lender's legal expenses, incurred in connection with the enforcement of this Agreement Lender may hire or psy someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Governing Law. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of lows without regard to Its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. Choice of Venue. If there is a lawsuit,Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. COMMERCIAL SECURITY AGREEMENT Loan No: (Continued) Page 4 No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, not any course of dealing between Lender and Grantor,shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Any notice required to be given under this Agreement shall be given in writing,and shall be effective when actually delivered, when actually received by teletacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier, or,if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law,if there is more than one Grantor,any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect, amend,or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties. Lender may at any time,and without further authorization from Grantor,file a carbon,photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral. • Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid,or unenforceable as to any circumstance,that finding shall not make the offending provision illegal,invalid,or unenforceable as to any other circumstance. It feasible, • the offending provision shall be considered modified so that it becomes legal,valid and enforceable. If the offending provision cannot be so modified,it shall be considered deleted from this Agreement. Unless otherwise required by law,the illegality,invalidity,or unenforceability of any provision of this Agreement shall not affect the legality,validity or enforceability of any other provision o1 this Agreement. Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor,Lender,without notice to Grantor,may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement,shall be continuing in nature,and shall remain in full farce and effect until such time as Grantor's Indebtedness shall be paid in full. Time Is of the Essence. Time is of the essence in the performance of this Agreement. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,es the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word'Agreement'means this Commercial Security Agreement,as this Commercial Security Agreement may be amended or modified from time to time,together with all exhibits end schedules attached to this Commercial Security Agreement from time to time. Borrower. The word 'Borrower' means Frantz Construction Co.,Inc.and includes all co-signers and co-makers signing the Note and all their successors and assigns. Collateral. The word "Collateral' means all of Grantor's right,title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement. Default. The word'Default'means the Default set forth in this Agreement in the section titled"Default". Environmental Laws. The words 'Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response. Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. I•CERCLA'), the Superfund Amendments and Reauthorization Act of 1986,Pub.L.No.99-499('SARA"),the Hazardous Materials Transportation Act,49 U.S.C.Section 1801.et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq,. or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words"Event of Default'mean any of the events of default set forth in this Agreement in the default section of this Agreement. Grantor. The word'Grantor"means Frantz Construction Co.,Inc.. Guaranty. The word 'Guaranty' means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words 'Hazardous Substances' mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances' are used in their very broadest sense and include without limitation any and all hazardous or toxic substances,materials or waste as defined by or listed under the Environmental Laws. The term'Hazardous Substances'also includes,without limitation,petroleum and petroleum by-products or any fraction thereof end asbestos. Indebtedness. The word'Indebtedness'means the indebtedness evidenced by the Note or Related Documents,including all principal and interest together with all other indebtedness end costs and expenses for which Grantor is responsible under this Agreement or under any of the Related Documents. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word'Note" means the Note executed by Frantz Construction Co., Inc.in the principal amount of $25,000.00(dgted January.•3 25,2008,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of,and substitutions,or,he note of-' credit agreement. "") Property. The word 'Property' means all of Grantor's right, title and interest in and to all the Property p rry as described in-tKe-i*Collatedee Description'section of this Agreement. Related Documents. The words 'Related Documents" mean all promissory notes, credit agreements, loan agreements,—pfWprpnmenta( agreements,guaranties, security agreements,mortgages,deeds of trust, security deeds, collateral mortgages. and all other""lirktiumentt" agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGRI TO !T5' TERMS.THIS AGREEMENT IS DATED JANUARY 25,2008. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL SECURITY AGREEMENT ANci.RLC OTHI DOCUMENTS REI ATING TO THIS DEBT. l.,tf COMMERCIAL SECURITY AGREEMENT Loan No:a11111111111=1111 (Continued) Page 5 GRANTOR: FRANTZ NSTRUCTIOONN CO.,INC. B ,)! - �(•► William L. Frantz, Pres dent omen( •^ .nstruction Co.,Inc. LENDER: UNIVERSIT •F IOW• COMMUNITY CREDIT UNION 111, X L Authorized Signer uw.PRO . -S N.am.co,......n.._-._•+.......Sr.im. u ay.*...4 -u..wnaa.0 111-715 .72 .w t p w C) c� n I �' —4n rn r- n �- � w [1111111111 111111111011111 111111 111111111111 boc I0: 021192770011 Tvoe: OEN Recorded: 08/19/2008 at 09:49:02 AM Fee Amt: $57.00 Peas 1 of 11 Johnson County Iowa Klm Painter County Recorder BK4311 Pa811-821 _ 5.S9 • FOR RECORDER'S USE ONLY Prepared By: Scott Wilson,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City,IA 52246, 1319)339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City, IA 52246 WHEN RECORDED MAIL TO: ry UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 'tl CONSTRUCTION MORTGAGE THIS IS A PURCHASE MONEY MORTGAGE C The names of all Grantors (sometimes "Grantor") can be found on page 1 of this Mortgage. The natneq of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property addfess L.,J can be found on page 1 of this Mortgage. The legal description can be found on page 1 of teis .!~ Mortgage. THIS MORTGAGE dated June 11, 2008, is made and executed between Frantz Construction Co., Inc., an Iowa Corporation (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals,oil,gas, geothermal and similar matters, (the "Real Property")located in Johnson County, State of Iowa: Units A, B and C,Building 14 in Wellington Condominiums II at-Village Road,Wintergreen Drive and Lancaster Place, according to the Declaration thereof recorded August 12, 2005 In Book 3925, Page 453, Records of the Johnson County Recorder, together with said unit's interest in the common elements. The Real Property or its address is commonly known as 3114, 3118, & 3122 Wintergreen Dr., Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE IA) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED h. 2- q MORTGAGE (Continued) Page 2 DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage secures an obligation incurred for the construction of an improvement on land, and is a "construction mortgage" within the meaning of Section 554.9334 of the Iowa Uniform Commercial Code. This Mortgage also secures loans or advancements made directly to finance work or improvements upon the real estate described herein, and is a "construction mortgage lien"within the meaning of Section 572.18 of the Iowa Code. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (21. Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now • and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default,Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs,replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by:arty ;n person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason'tb believe that there has been, except as previously disclosed to and acknowledged by Lender.in writing, (a) any breach or violation of any Environmental Laws, .(b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous rn Substance on, under, about or from the Property by any prior owners or occupants of the Pro' or (c) any actual or threatened litigation or claims of any kind by . anyp�Wperson relating to.sac( -=— matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing.)(;9` neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall5e, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, urger, Lk) about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace MORTGAGE (Continued) Page 3 such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real • Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond,reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. CONSTRUCTION LOAN. The Improvements shall be completed no later than the maturity date of the Note (or such earlier date as Lender may reasonably establish)and Grantor shall pay in full all costs and expenses in connection with the work. Lender will disburse loan proceeds under such terms and conditions as Lender may deem reasonably necessary to insure that-the interest created by this Mortgage shall have priority over all possible liens, including those of material suppliers and workmen. Lender may require, among other things, that disbursement requests be supported by receipted bills, expense affidavits, waivers of liens, construction progress reports, and such other documentation as Lender may reasonably request. DUE ON SALE- CONSENT BY LENDER. Lender may, at Lender's option; declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable;whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greateLthan three (31 years, lease-option contract, or by sale, assignment, or transfer of any beneficial interese_jn or to any land trust holding title to the Real Property,or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercises prohibited by federal law or by Iowa law. • TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of I this Mortgage: � d Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, p fio taxes, special taxes, assessments, water charges and sewer service charges levied againstooij:� account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintainthe Property free of any lie�is `J having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien df taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or,if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys'fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall:defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in thecontest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part MORTGAGE (Continued) Page 4 of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor bf Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. =any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amoynt• .,� owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, §half �u be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment I p in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may. _ J.7 appear. 77 Grantor's Report on Insurance. Upon request of Lender, however,not more than once a year,;; '- Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the naeei. •J of the insurer; 12) the risks insured; (3) the amount of the policy; (4) the property insured, the ,J then current replacement value of such property, and the manner of determining that value;and (b') the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part:of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note;or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances,other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted . MORTGAGE (Continued) • Page 5 hereby are not the type of lien referred to in Chapter 575 of the Iovt,a Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents end warrants that it is the sole party entitled to do so and agrees to indemnify, defend,and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted, Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense.; Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate;in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. • • CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to documentation as may be requested by Lender from time to time to permit.ender uch pancip tionnts and i� Application of Net Proceeds. If all or any part of the Property is condemned by eminent_domain 'gommial proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its eteotion require that all or any portion of the net proceeds of the award be applied to the Indebtedness-or — the repair or restoration of the Property. The net proceeds of the award shall mean the award mer =' 0 payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in cont►ecfton with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred In recording,;perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event?of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2)i contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash dr a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. MORTGAGE (Continued) Page 6 Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three 131 days after receipt of written demand from Lender to the extent permitted by applicable law• 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security Interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code)are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make,execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the.Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender-for all J costs and expenses incurred in connection with the matters referred to in this paragraph. `.,) Attorney-in-Fact. If Grantor fails to do any of the things referred to in the Lender may do so for and in the name of Grantor and at Grantor's expense.p For su h purposes, G t9 Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, I executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph �_ . -;T^' FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, end otherwise performs ajr1thg obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Gran:t r-A. P suitable satisfaction of this Mortgage and suitable statements of termination of any financing statetlient on file evidencing Lender's security interest in the Rents and the Personal-Property. Grantor will pay, if permitted by applicable law,any reasonable termination fee as determined.by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shell Constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time requited by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. DefaultIn Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. MORTGAGE (Continued) Page 7 Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twettre 112) months, it may be cured if Grantor, after receiving written notice from Lender demanding:cure of such default: (1) cures the default within fifteen 115) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary t steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any�t(me Y „ thereafter, Lender, at Lender's option, may exercise any one or more of the following rights-and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required noflces^ sO 1,jj of default and after passage of any grace period,to declare the entire Indebtedness immediately due .0 and payable, including any prepayment penalty that Grantor would be required to pay without notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership,against the Indebtedness. The receiver may serve without bond if permitted by law_ Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver, Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any MORTGAGE (Continued) Page 8 part of the Property, Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of ,Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. 3 Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, , Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant:to -Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time'as'inay s be then applicable and provided by law. .�1 Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuitof:aity 7 9 other remedy, and an election to make expenditures or to take action to perform an obligation;gf Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's rtgh4 to "—� declare a default and exercise its remedies. Nothing under this Mortgage or otherwise st all;lie construed so as to limit or restrict the rights and remedies available to Lender following an Ev-eRt of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to • the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear Interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance,to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving notice to the other parties, specifying that the purpose of the notice is to changetheformal party'saddr address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MORTGAGE (Continued) Page 9 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver Is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance,that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless — otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of thiS =y Mortgage. - ;0 Merger. There shall be no merger of the interest or estate created by this Mortgage with any Athe`r ' interest or estate in the Property at any time held by or for the benefit of Lender in any capeeity, W without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words end terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled MORTGAGE (Continued) Page 10 "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Frantz Construction Co., Inc.. Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the' Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or �r Related Documents and any amounts expended or advanced by Lender to discharge Grantgrs cn obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, { 1 together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNIOW1 — p�7 successors and assigns. t- 1 '®, Mortgage. The word "Mortgage"means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated June 11, 2008, in the original princcipih 9 amount of $610,500.00 from Grantor to Lender, together with all renewals of, extensions:bf, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or "= agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of,and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits,and other benefits derived from the Property. MORTGAGE (Continued) Page 11 GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: FRANTZ ONSTRUCTION CO., INC. By: ,r William L.Frantz, President o Construction Co., Inc. CORPORATE ACKNOWLEDGMENT STATE OF 7-17)V40,, ) )SS COUNTY OF JDlikicry-i ) On this i I- day of ,LJ-ie , A.D., 20 Obi , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, President of Frantz Construction Co., Inc.,to me personally known,who, being by me duly sworn did say he or she is authorized signer of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz acknowledged the execution of said i strument to be the voluntary act and deed of said corporation by it voluntarily executed. ry/�'V/�'' ' 1. �rt.�, , ry it: KEpRyyNotary blic) he Stat of ca Ze roe r 746066 2 2 -C 71 ==i 0 * m LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 200F ,2:-All Rights Reserved. - IA L:1CFI1LPLlG03.FC TR-773 PR-1 i. .Q > w I U111111111111111111B IIS 1111111111111 11111111111 1111111 Doc ID: 021216330011 Tvoe: GEN Recorded: 07/08/2008 at 11:20:05 AM Fee Amt: $57.00 Paae 1 of 21 Johnson County Iona Kim Painter County Recorder 6K4322 PG555-565 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson, Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246, (3191 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City. IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City,IA 52246 WHEN RECORDED MAIL TO: �_,,, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City,IA 52246 - �_ —1 =v MORTGAGE -<r' THIS IS A PURCHASE MONEY MORTGAGE The names of all Grantors (sometimes "Grantor")can be found on page 1 of this Mortgage. The ndjges of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property address can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this Mortgage. THIS MORTGAGE dated June 13, 2008, is made and executed between Frantz Construction Co., Inc., an Iowa Corporation (referred to below as "Grantor")and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, end appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the"Real Property") located in Johnson County,State of Iowa: Lot One(1)and the Northerly Ten Feet of Lot Two(2), described as: Commencing at the Northeast corner of Lot Two (2), thence Southerly along the Easterly line of said Lot Two (2), Ten (10) feet, thence Northwesterly to a point on the West line of Lot Two 121, Ten (10) feet South of the Southwest corner of Lot One (1), thence North Ten (10) feet to the Southwest corner of Lot One 11), thence Southeast along the Northerly line of Lot Two 12) to the point of beginning, all in Block One (1) of Black's Second Subdivision in Government Lot Two (2), Section Nine (9) Township Seventy-nine (79) North, Range Six (6), West of the 5th P.M., according to the recorded plat thereof recorded in Plat Book 1, Page 139, of the Recorder's Office of Johnson County, Iowa, excepting therefrom, however, that portion of the,above described real estate previously conveyed by Warranty Deed dated July 18, 1952, and recorded at Page 580 of Book 214 of the Deed Records of Johnson County, Iowa. The Real Property or its address is commonly known as 901 Park Road, Iowa City, IA 52246. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents E-4,• go MORTGAGE (Continued) Page 2 • granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default, THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1);or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property, Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property,there has been no use, generation, manufal;fure, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any" person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to ['lrri believe that there has been, except as previously disclosed to and acknowledged by Lender in -'t7 ..e writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation,• 1 manufacture, storage, treatment, disposal, release or threatened release of any Hazardous) Substance on, under, about or from the Property by any prior owners or occupants of the Property;'" or (c) any actual or threatened litigation or claims of any kind by any person relating to suci'1 l 0 matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, j neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall usp!` generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, undeg, �) about or from the Property; and (b) any such activity shall be conducted in compliance with'all ' applicable federal, state, and local laws, regulations and ordinances, Including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or Indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or Interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace MORTGAGE (Continued) Page 3 such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character end use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE- CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale,deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, Wyroll '- taxes, special taxes, assessments, water charges and sewer service charges levied against"or on account of the Property, and shall - "- P Y, pay when due all claims for work done on or for services --0 r rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for thoseliens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments , q due as further specified in the Right to Contest paragraph. - __ , Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connef4.11Ort with a good faith dispute over the obligation to pay, so long as Lender's interest.in the Propel I's' �• not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fieen J (15) days after the lien arises or, if a lien is filed,within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees,or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shell authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, MORTGAGE (Continued) Page 4 business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. • Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. • Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured;the then current replacement value of such property, and the manner of determining that value;and`!5) C/) the expiration date of the policy. Grantor shall, upon request of Lender, have an indepgndert 1 O appraiser satisfactory to Lender determine the cash value replacement cost of the Property. n ( r- LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect ru Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage orany 72. ��®•• Related Documents, including but not limited to Grantor's failure to discharge or pay when duel& amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Leper on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriatdc's including but not limited to discharging or paying all taxes, liens, security interests, encumbrancesnd W other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified,amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens MORTGAGE (Continued) Page 5 hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property end Grantor's use of the Property complies with all existing applicable laws, ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding end to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The oljowing provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes,,as --1 described below, together with all expenses incurred in recording, perfecting or continuing:this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges,for IT': 71 recording or registering this Mortgage. —- Taxes. The following shall constitute taxes to which this section applies: (1) a specific tat.on this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage;'2) a 'LJ specific tax on Grantor which Grantor is authorized or required to deduct from payments on the til Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal MORTGAGE (Continued) Page 6 Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code)are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver,or will cause to be made,executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of-making, executing, delivering, filing, recording, and doing all other things as may be necessary or`efesirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all.the ( `� obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Granter a �-� suitable satisfaction of this Mortgage and suitable statements of termination of any financing staterp nt t p i on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor wiU'p4y if -� permitted by applicable law,any reasonable termination fee as determined by Lender from time to-tiny. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event offeolt under this Mortgage: +t5 trJ Payment Default. Grantor fails to make any payment when due under the Indebtedness. X11 Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance,or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. MORTGAGE (Continued) Page 7 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This • includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender,whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of,or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required notices of default and after passage of any grace period, to declare the entire Indebtedness immediately.-due and payable, including any prepayment penalty that Grantor would be required to pay without •-'=-' 6_4 notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the T rights and remedies of a secured party under the Uniform Commercial Code. -• Collect Rents. Lender shall have the right, without notice to Grantor, to take possession o fi the Property and collect the Rents, including amounts past due and unpaid, and apply the net proeetds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender jnay .� require any tenant or other user of the Property to make payments of rent or use fees directly to Lfl Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person,by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. MORTGAGE (Continued) Page B Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property • and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of r� Default, or in any way to limit or restrict the rights end ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. rra Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of .. this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as �q attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to ""(� t.+ the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are • nom"' 0 necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date 0 7° <7 of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal W expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance,to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, end shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited In the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address, Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the MORTGAGE (Continued) Page 9 Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage.flUnless otherwise required by law, the illegality, invalidity, or unenforceability of any provisiorl of this c") Mortgage shall not affect the legality, validity or enforceability of any other provision of this rn3 Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other — interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, I Y without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of O rttor's soso interest, this Mortgage shall be binding upon and inure to the benefit of the parties; their successors and assigns. If ownership of the Property becomes vested in a person other than W Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to t.Jl this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled • "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. MORTGAGE (Continued) Page 10 Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Frantz Construction Co., Inc.. Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The.words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated June 13, 2008, in the original principal amount of $618,750.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. tJ Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, a profits,and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND I r" GRANTOR AGREES TO ITS TERMS. o — ?� GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL `Ir OTHER DOCUMENTS RELATING TO THIS DEBT. el— GRANTOR: { ;o, CD w FRANTZ !•NSTRUCTION CO.,INC. t.l1 I deb- William t'iWilliam L.Frantz, President o" antz Construction Co., Inc. . MORTGAGE (Continued) Page 11 CORPORATE ACKNOWLEDGMENT STATE OF I rn uo_, ) ) SS • COUNTY OF (,Johnson ) On this r3 day of (J1L , A.D., 20 -CE3 , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, President of Frantz Construction Co., Inc.,to me personally known, who, being by me duly sworn did say he or she is authorized signer of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz acknowledged the execution of said i strument to be the voluntary act and deed of said corporation by it voluntarily executed. • ii fil CoKERRY M.SMITH Ila_ nrnmi Numbs716056 keirtrEvi- Notary Public the St e f"rpWQ, LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2008. All Rights Reserved. -IA L:1CFI\LPL\G03.FC TR-774 PR-1 r-,a O n t/, (7)-< , fig 4,h .. t . Vi , , , II I II 111111 111 MI 11111 111 II JulI IIIII 11111 11111 111111111 11111 1111111111 Doc ID; 021333180011 Type: GEN Recorded: 12/09/2008 at 11;04:42 AM Fee Amt: 557.00 Paoe 1 of 11 Johnson County Iowa Kim Painter County Recorder .K4371 Po31-41 FOR RECORDER'S USE ONLY Prepared By: Eric Baumgarth, 1st Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, !A 52246 • • RECORDATION REQUESTED BY: Q UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City,IAS C) ce) 52246 11 0'"< WHEN RECORDED MAIL TO: C UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City, IA--.'r— m1 1 52246 rn 0 7J e MORTGAGE v'1 • The names of all Grantors (sometimes "Grantor")can be found on page 1 of this Mortgage. The names of all Grantees (sometimes "Lender") can be found on page I of this Mortgage. The property address can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this Mortgage. THIS MORTGAGE dated December 4, 2008, is made and executed between Frantz Construction Co., Inc. , an Iowa Corporation (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals,oil, gas, geothermal and similar matters, (the "Real Property")located In Johnson County, State of Iowa: Lot One (1) and the Northerly Ten Feet.of lot Twb(2), described as: Commencing at the Northeast corner of Lot Two (2), thence Southerly along the Easterly line of said Lot Two (2), Ten (10) feet, thence Northwesterly to a point on the West line of Lot Two (2), Ten (10) feet South of the Southwest corner of Lot One (1), thence North Ten (10) feet to the Southwest corner of Lot One (1), thence Southeast along the Northerly line of Lot Two (2) to the point of beginning, all in Block One (1) of Black's Second Subdivision in Government Lot Two (2), Section Nine (9) Township Seventy-nine (79) North, Range Six (6), West of the 5th P.M., according to the recorded plat thereof recorded in Plat Book 1, Page 139, of the Recorder's Office of Johnson County, Iowa, excepting therefrom, however, that portion of the above described real estate previously conveyed by Warranty Deed dated July 18, 1952, and recorded at Page 580 of Book 214 of the Deed Records of Johnson County,Iowa. The Real Property or its address is commonly known as 901 Park Rd, Iowa City , IA 52246. Grantor presently assigns to Lender all of Grantor's right, 'r"^'stitle, and innat in and to all present and future leases of the Property and all Rents from the Proerty. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of •Eli% MORTGAGE (Continued) Page 2 default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE • FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined In Iowa Code Section 9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now end there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs,replacements,and maintenance necessary to preserve its value. Compliance With Environmental Laws. 'Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use,generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender In writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shalL use, r a generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, Oder, y •about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all rr-1 Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to,.make ,�� such Inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests mad, ' Lender shall be for Lender's purposes only and shall not be construed to create any responsibilii� Y t t liability on the part of Lender to Grantor or to any other person. The representations and warrent _r contained herein are based on Grantor's due diligence in investigating the Property for Hazioue Substances. Grantor hereby (1) releases and waives any future claims against Lender for •o indemnity or contribution in the event Grantor becomes liable for cleanup or other costs undo'any tAJ such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all 111 claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation-to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. MORTGAGE (Continued) Page 3 Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property,or by any other method of conveyance of en interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: O Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes;"-payroll taxes, special taxes, assessments, water charges end sewer service charges levied against,or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens I 1-2- having priority over or equal to the interest of Lender under this Mortgage, except for the fisting M Indebtedness referred to in this Mortgage or those liens specifically agreed to in writing by.Lender, and except for the lien of taxes and assessments not due as further specified in the Itieli;to Contest paragraph. LJ .rJ Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection t. with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is 1,l not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien,or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself end Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such Improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender, Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability Insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such MORTGAGE (Continued) Page 4 insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Compliance with Existing Indebtedness. During the period in which any Existing Indebtedness described below is in effect, compliance with the insurance provisions contained in the instrument evidencing such Existing Indebtedness shall constitute compliance with the insurance provisions under this Mortgage, to the extent compliance with the terms of this Mortgage would constitute a duplication of insurance requirement. If any proceeds from the insurance become payable on loss, the provisions in this Mortgage for division of proceeds shall apply only to that portion of the C./) proceeds not payable to the holder of the Existing Indebtedness. —I Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, n Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name —10 of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the " then current replacement value of such property, and the manner of determining that value; and (5) O� .mc the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect W Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to comply with any obligation to maintain Existing Indebtedness in good standing as required below, or to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances end other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (8) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in the Existing Indebtedness section below or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage MORTGAGE (Continued) Page 5 to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify, defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. EXISTING INDEBTEDNESS. The following provisions concerning Existing Indebtedness are a part of this Mortgage: Existing Lien. The lien of this Mortgage securing the Indebtedness may be secondary and faerior to the lien securing payment of an existing obligation with an account number of 13612421 1.6.to cn UICCU. The existing obligation has a current principal balance of approximately pproximately S606,951.5.0 and is in the original principal amount of S618,750.00. Grantor expressly covenants and agrees to.pay, or see to the payment of, the Existing Indebtedness and to prevent any default on -such -;�� indebtedness, any default under the instruments evidencing such indebtedness, or any default 6 1 under any security documents for such indebtedness. i No Modification. Grantor shall not enter into any agreement with the holder of any mortgage,aeet of trust, or other security agreement which has priority over this Mortgage by which-1216t agreement is modified, amended, extended, or renewed without the prior written conserr�'of u„) Lender. Grantor shall neither request nor accept any future advances under any such security 1.11 agreement without the prior written consent of Lender. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the MORTGAGE (Continued) Page 6 Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest In the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the firstgage of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from Which 1' information concerning the security interest granted by this Mortgage may be obtained (eacFl-as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. .- ) 1 FURTHER ASSURANCES;ATTORNEY-IN-FACT, The following provisions relating to further assurer-tees 5. d and attorney-in-fact are a part of this Mortgage: _, Further Assurances. At any time, and from time to time, upon request of Lender, Granttft make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to LeFtder's •,,j designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the Lu case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, • in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect MORTGAGE (Continued) Page 7 discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading • in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(Including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any'governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as tgthe EEll validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceng and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits'with c.") Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,In its sole discretion,as being an adequate reserve or bond for the dispute. r.taoa Existing Indebtedness. The payment of any installment of principal or any Interest on the ExistIrf& Indebtedness is not made within the time required by the promissory note evidencing ski indebtedness, ora default occurs under the instrument securing such indebtedness and is not during any applicable grace period in such instrument, or any suit or other action is commence0t. foreclose any existing lien on the Property. o` ;fl Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender,whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve(12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days;or (2) if the cure requires more then fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required notices of default and after passage of any grace period,to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required to pay without notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the MORTGAGE (Continued) Page 8 rights and remedies of a secured party under the Uniform Commercial Code. • Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Proper is,sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default erl of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the.Pra' erty and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property;of. (2) t f� vacate the Property immediately upon the demand of Lender. This paragraph is subjeCt"to-.any — rights of Grantor, under Iowa law, to remain in possession of the Property during a red&n�ption f o 1 period. 0 Other Remedies. Lender shall have all other rights and remedies provided in this Mortga�a: the Note or available at law or in equity. Cv�, Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any{and all os right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten 110) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' tees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date MORTGAGE (Continued) Page 9 of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property Is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenienceo oses ur .� not to be used to interpret or define the provisions of this Mortgage. p p ^ and ares . e.0 Governing Law. This Mortgage will be governed by federal law applicable to Lender olid,"�'' the" extent not preempted by federal law,the laws of the State of Iowa without regard to Its cuaNibts of I law provisions. This Mortgage has been accepted by Lender in the State of Iowa. _I Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit[VI the jurisdiction of the courts of Johnson County,State of Iowa. -- h TMJ No Waiver by Lender. Lender shall not be deemed to have waived any rights under this bage unless such waiver is given in writing and signed by Lender. No delay or omission on tlry,part of utj Lender in exercising any right shall operate es a waiver of such right or any other right. A waiver GT by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance,that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage, Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than • MORTGAGE • (Continued) Page 10 Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time Is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall Include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous . Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Existing Indebtedness. The words "Existing Indebtedness" mean the indebtedness described in the p Existing Liens provision of this Mortgage. • "" es) Grantor. The word"Grantor" means Frantz Construction Co.,Inc.. Guarantor. The word "Guarantor" means any guarantor,surety, or accommodation party of any or 0"'Y• all of the Indebtedness. 0 - • Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. —. 9 � —I0014— Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their -<f""<r� ` T quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a in A 1,y 7 present or potential hazard to human health or the environment when improperly used, treated, 0 r9 stored, disposed of, generated, manufactured, transported or otherwise handled. The words e` V`, "Hazardous Substances" are used in their very broadest sense and include without limitation any , and all hazardous or toxic substances, materials or waste as defined by or listed under the O. Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof end asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated December 4, 2008, in the original principal amount of$75,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. MORTGAGE (Continued) Page 11 Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, • agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, Issues, royalties, profits, and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL ' OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: 0 --qFRANTZ r•NSTRUCTION CO., INC. (-) U „Inn William L. Frantz, President of Frr nstruction Co., Inc. � ) lio {C -<r CORPORATE ACKNOWLEDGMENT O'U .o STATE OF _1..o1,10. ) SS COUNTY OF a6 dtA S o» ) On this It t''' day of < 21M/7. r , A.D., 20 " , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, President of Frantz Construction Co., Inc.,to me personally known, who, being by me duly sworn did say he or she is authorized signer of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it voluntarily executed. `_L?\) 5~'µc ERIC eAUtGGARTH NotaryYUb in the State of p v CcnmCS.lOr,Number 727317 x�a'._�+ 1, Cogiim, s;c:n cxplres (. rO:YP 3/1 Q LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2008. All Rights Reserved. - IA L:1CFIlLPL1G03.FC TR-878 PR-1 .-----' ail I111111111111111111111111111111111111111111111 Doc ID: 021255410012 Tvoe: GEN Recorded; 08/15/2008 at 01:28:37 PM Fee Amt: $62.00 Paae 1 of 12 Johnson County Iowa Kim Painter County Recorder 8K4339 PG945-956 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246, (319)339-1000 .ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City,IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City, IA 52246 MORTGAGE The names of all Grantors (sometimes "Grantor")can be found on page 1 of this Mortgage. The names of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property address -42 can be found on page 1 of this Mortgage. The legal description can be found on page 1 cif'this Mortgage. ��•+ THIS MORTGAGE dated August 8, 2008, is made and executed between Frantz Construction Co.,fnc.; 1 1 a corporation (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT- ... rn UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as CI. 0 "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender 85dr • grants to Lender a security interest in all of Grantor's right, title, and interest in and to the followips W described real property, together with all existing or subsequently erected or affixed buildings, Ces improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas,geothermal and similar matters, (the"Real Property")located in Johnson County,State of Iowa: See Exhibit A, which is attached to this Mortgage and made a part of this Mortgage as If fully set forth herein. The Real Property or its address is commonly known as 4880 Nowhere Ave. SW, Iowa City, IA 52244. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS • AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to • • EfiN• 3Z MORTGAGE (Continued) Page 2 Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in*Iowa Code Section 570.A.1 (2). Grantor represents.and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (41 There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests m4 by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender;for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any —" such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and;all' 9 9 claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirertif sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of;)ny' use, generation, manufacture, storage, disposal, release or threatened release occurring priot;td` Grantor's ownership or interest in the Property, whether or not the same was or should have been ,xJ known to Grantor. The provisions of this section of the Mortgage, including the obligation to CT indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold MORTGAGE (Continued) Page 3 compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond,reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale,deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS: The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15)days after the lien arises or,if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of : -71 payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the 1 �' Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work isf i commenced, any services are furnished, or any materials are supplied to the Property, if a�+y mechanic's lien, materialmen's lien, or other lien could be asserted on account of the wor.. . .9 services, or materials. Grantor will upon request of Lender furnish to Lender advance assurane`i satisfactory to Lender that Grantor can and will pay the cost of such improvements. U./ PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal MORTGAGE (Continued) Page 4 Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. • Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value;and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note-end be apportioned among and be payable with any installment payments to become due during either'.fl) the term of any applicable insurance policy;or (2) the remaining term of the Note; or (C) be treated'as a .c.!..") balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secureI II payment of these amounts. Such right shall be in addition to all other rights and remedies to Which I v. Lender may be entitled upon Default. _ WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property r-,a part of this Mortgage: _ 0 23 Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Prosy .p in fee simple, free and clear of all liens and encumbrances other than those set forth in tf -Real t Property description or in any title insurance policy, title report, or final title opinion issued irf favor O, of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified,amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor,agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify, defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, end Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. MORTGAGE (Continued) Page 5 Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as proaided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety; v bond or other security satisfactory to Lender. r../) RC1 SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to•.'this: u Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any ortt� Property constitutes fixtures, and Lender shall have all of the rights of a secured party under—tft'e� - 0 Uniform Commercial Code as amended from time to time. 0.� Security Interest. Upon request by Lender, Grantor shall take whatever action is requested.zby\ Lender to perfect and continue Lender's security interest in the Rents and Personal Property:"ln V addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which MORTGAGE (Continued) Page 6 information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, . continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenaat or a condition contained in this Mortgage or in any of the Related Documents or to comply with.dr to perform any term, obligation, covenant or condition contained in any other agreement between r.,' Lender and Grantor. - �,s.p • Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, I l security agreement, purchase or sales agreement, or any other agreement, in favor of any other p�� creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay 1 the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or a related document. 0_r J False Statements. Any warranty, representation or statement made or furnished to Lendecz y Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading v in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business; the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion, as being an adequate reserve or bond for the dispute. MORTGAGE (Continued) Page 7 Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required notices of default and after passage of any grace period, to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required to pay without notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as ra Grantor's attorney-in-fact to endorse instruments received in payment thereof in the nar)'t2,cif Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users So r.<1 Lender in response to Lender's demand shall satisfy the obligations for which the payments'ace -'p made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. —t m " Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession ofi 8!!, or any part of the Property, with the power to protect and preserve the Property, to operate-tfie 4 j Property preceding foreclosure or sale, and to collect the Rents from the Property and app4l.-I proceeds,over and above the cost of the receivership, against the Indebtedness. The receiver rday serve without bond if permitted by law. Lender's right to the appointment of a receiver shall whist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall,at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. MORTGAGE (Continued) • Page 8 Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to-all iv other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any noXjce0 of default and any notice of sale shall be given in writing, and shall be effective when actual) i 'v l 1 delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited` "C7 with a nationally recognized overnight courier, or, if mailed, when deposited in the United States nail() r- as first class, certified or registered mail postage prepaid, directed to the addresses shown near-tfje" beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which hasil priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of thjs'*d Mortgage. Any party may change its address for notices under this Mortgage by giving formal written" notice to the other parties, specifying that the purpose of the notice is to change the party's addrej. 4.0 For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. ' Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. MORTGAGE (Continued) Page 9 Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision • shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than • Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor • from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. ^ate DEFINITIONS. The following capitalized words and terms shall have the following meanings when used.; r 1 m in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean= "O ..� amounts in lawful money of the United States of America. Words and terms used in the singular shall) include the plural, and the plural shall include the singular, as the context may require. Words_ghidM • terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in tl Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co.. Inc. and includes all co-si rg'' ;Q and co-makers signing the Note and all their successors and assigns. tx! Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, end Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Frantz Construction Co., Inc.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. MORTGAGE (Continued) Page 10 Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances' also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated August 8, 2008, in the original principal amount of $233,750.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND • GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL r) OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: rri .Ti -< Ems. FRANT�CTION CO., INC_ -- M m x,.. !77 William L. Frantz, President of ranfz Construction Co.,Inc. C �O MORTGAGE (Continued) Page 11 CORPORATE ACKNOWLEDGMENT STATE OF ._L.0W0. ' SS COUNTY OF V Ohyischn On this 84-2 day of Au.gu.sf , A.D., 20 08 , before me, the undersigned Notary Public in said County and StIte, personally appeared William L. Frantz. President of Frantz Construction Co., Inc., to me personally known, who, being by me duly sworn did say he or she is authorized signer of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz acknowledged the execution of sa'd instrument to be the voluntary act and deed of said corporation by it voluntarily executed. M. Note •Pubs in the S&flak. of Iowa. 1441Ccovii="81P4;061/CA E��no LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2008. All Rights Reserved. -IA L:1CFI\LPL1G03.FC TR-808 PR-1 o o -� m *2; D w Exhibit A Commencing as a point of reference at the Northeast corner of Section 8, Township 78 North,Range 6 West of the Fifth Principal Meridian,Johnson County,Iowa;thence South 61°08' 00"West 2897.35 feet to a point of intersection with the county road centerline and point of beginning of tract herein described(for purposes of this description,the East line of snid Section 8 is assumed to bear due North); thence South 6°21' 20"West 571.74 feet along the centerline of said county road to a point: thence Suuth 10°59' 20"West 382.24 feet along the centerline of said county road to a point; thence South 16°45'50"West 156.20 feet along the centerline of said county road to a point;thence North 88"46'50"East 920.08 feet to a point; thence North 1066.64 feet to a point; thence South 83"45' 10"West 180.35 feet to a point;thence North 84°25'00"West 301.79 feet to a point; thence South 89° 21'00"West 259.05 feet to a point of beginning and containing 20.0 acres more or less. • N o a 1-r1 � 0 — -c- r— a Y - In LI • • ggl 1111111111111111111111111111111111111111 Doc ID: 021255420008 Tvoe: GEN Recorded: 08/L5/2008 et 01:28'53 PM Fee Amt: $42.00 Page 2 of 8 Johnson County Iowa Kim Painter County Recorder 5K4339 P°957-964 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246, (3191 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City, IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 0 • C") inn WHEN RECORDED MAIL TO: !'"l0 UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City, IA O-< 52246 ▪ r-- r m 673 • ASSIGNMENT OF RENTS The names of all Grantors (sometimes "Grantor") can be found on W page 1 of this Assignment. T The V names of all Grantees (sometimes "Lender") can be found on page 1 of this Assignment. The property address can be found on page 1 of this Assignment. The legal description can be found on page 1 of this Assignment. THIS ASSIGNMENT OF RENTS dated August 8, 2008, is made and executed between Frantz Construction Co., Inc., a corporation (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). • ASSIGNMENT. For valuable consideration, Grantor hereby assigns, grants a continuing security interest in, and conveys to Lender all of Grantor's right, title, and interest in and to the Rents from the following described Property located in Johnson County,State of Iowa: See Exhibit A, which is attached to this Assignment and made a part of this Assignment as if fully set forth herein. The Property or its address is commonly known as 4880 Nowhere Ave.SW, Iowa City, IA 52244. THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER THE NOTE, THIS ASSIGNMENT,AND THE RELATED DOCUMENTS. THIS ASSIGNMENT IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment or any Related Documents, Grantor shall pay to Lender all amounts secured by this Assignment as they become due, and shall strictly perform all of Grantor's obligations under this Assignment. Unless and until Lender exercises its right to collect the Rents as provided below and so long as there is no default under this Assignment, Grantor may remain in possession and control of and operate and manage the Property and collect the Rents, provided that the granting of the right to collect the Rents shall not constitute Lender's consent to the use of cash collateral in a bankruptcy proceeding. GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: Ownership. Grantor is entitled to receive the Rents free and clear of all rights, loans, liens, encumbrances, and claims except as disclosed to and accepted by Lender in writing. Right to Assign. Grantor has the full right, power and authority to enter into this Assignment and e-sh , 33 ASSIGNMENT OF RENTS (Continued) Page 2 to assign and convey the Rents to Lender. No Prior Assignment. Grantor has not previously assigned or conveyed the Rents to any other person by any instrument now in force. No Further Transfer. Grantor will not sell, assign, encumber, or otherwise dispose of any of Grantor's rights in the Rents except as provided in this Assignment. LENDER'S RIGHT TO RECEIVE AND COLLECT RENTS. Lender shall have the right at any time, and even though no default shall have occurred under this Assignment, to collect and receive the Rents. For this purpose, Lender is hereby given and granted the following rights, powers and authority: Notice to Tenants. Lender may send notices to any and all tenants of the Property advising them of this Assignment and directing all Rents to be paid directly to Lender or Lender's agent. Enter the Property. Lender may enter upon and take possession of the Property; demand, collect and receive from the tenants or from any other persons liable therefor, all of the Rents;institute and carry on all legal proceedings necessary for the protection of the Property, including such proceedings as may be necessary to recover possession of the Property; collect the Rents and remove any tenant or tenants or other persons from the Property. Maintain the Property. Lender may enter upon the Property to maintain the Property and keep the same in repair; to pay the costs thereof and of all services of all employees, including their equipment, and of all continuing costs and expenses of maintaining the Property in proper repair and condition, and also to pay all taxes, assessments and water utilities, and the premiums on fire and other insurance effected by Lender on the Property. Compliance with Laws. Lender may do any and all things to execute and comply with the laws of the State of Iowa and also all other laws, rules, orders, ordinances and requirements of all other governmental agencies affecting the Property. Lease the Property. Lender may rent or lease the whole or any part of the Property for such term or terms and on such conditions as Lender may deem appropriate. Employ Agents. Lender may engage such agent or agents as Lender may deem appropriate, either in Lender's name or in Grantor's name, to rent and manage the Property, including the collection and application of Rents. Other Acts. Lender may do all such other things and acts with respect to the Property as Lender may deem appropriate and may act exclusively and solely in the place and stead of Grantor ?td to have all of the powers of Grantor for the purposes stated above. • No Requirement to Act. Lender shall not be required to do any of the foregoing acts or things,arid the fact that Lender shall have performed one or more of the foregoing acts or things shall fret I� require Lender to do any other specific act or thing. .,. APPLICATION OF RENTS. All costs and expenses incurred by Lender in connection with the Pro'erty shall be for Grantor's account and Lender may pay such costs and expenses from the Rents. Lenr;in ASSIGNMENT OF RENTS (Continued) Page 3 Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Assignment also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Assignment: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Assignment or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default on Other Payments. Failure of Grantor within the time required by this Assignment to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Default in Favor of Third Parties. Any guarantor or Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor's or Grantor's property or ability to perform their respective obligations under this Assignment or any of the Related Documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Assignment or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Assignment or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business,-. the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property; any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. j Creditor or Forfeiture Proceedings. Commencement of.foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of y Grantor or by any governmental agency against the Rents or any property securing',the . d Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit =-- accounts, with Lender. However, this Event of Default shall not apply if there is a goorfaifh ,0 dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or !.'J forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture '4." proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Property Damage or Loss. The Property is lost, stolen, substantially damaged, sold, or borrowed against. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Assignment within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time ASSIGNMENT OF RENTS (Continued) Page 4 thereafter, Lender may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required notices of default and after passage of any grace period,to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required to pay without notice, except as may be expressly required by applicable law. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid,and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender shall have all the rights provided for in the Lender's Right to Receive and Collect Rents Section, above. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Other Remedies. Lender shall have all other rights and remedies provided in this Assignment or the Note or by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of - Grantor under this Assignment, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Assignment, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved,and-to .f the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's-legal '? expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankr'u'ptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Grantor also will pay any court costs,in addition to all other sums provided by law. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Assignment: Amendments. This Assignment, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Assignment._ No alteration of or amendment to this Assignment shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Caption Headings. Caption headings in this Assignment are for convenience purposes only and are not to be used to interpret or define the provisions of this Assignment. Governing Law. This Assignment will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Assignment has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. Merger. There shall be no merger of the interest or estate created by this assignment with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Interpretation. (1) In all cases where there is more than one Borrower or Grantor, then all words used in this Assignment in the singular shall be deemed to have been used in the plural where the context and construction so require. (2) If more than one person signs this Assignment as ASSIGNMENT OF RENTS (Continued) Page 5 "Grantor," the obligations of each Grantor are joint and several. This means that if Lender brings a lawsuit, Lender may sue any one or more of the Grantors. If Borrower and Grantor are not the same person, Lender need not sue Borrower first, and that Borrower need not be joined in any lawsuit (3) The names given to paragraphs or sections in this Assignment are for convenience purposes only. They are not to be used to interpret or define the provisions of this Assignment. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Assignment unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Assignment shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Assignment. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Assignment, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Merger. There shall be no merger of the interest or estate created by this assignment with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Notices. Any notice required to be given under this Assignment shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Assignment. Any party may change its address for notices under this Assignment by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender Celany Grantor is deemed to be notice given to all Grantors. Powers of Attorney. The various agencies and powers of attorney conveyed on Lender under this _ Assignment are granted for purposes of security and may not be revoked by Grantor until such time ` as the same are renounced by Lender. Severability. If a court of competent jurisdiction finds any provision of this Assignment-to(be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offendin j provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the off(i dir g provision shall be considered modified so that it becomes legal, valid and enforceable. f tfte "? offending provision cannot be so modified, it-shall be considered deleted-from this-Assigrtt+ient. , Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Assignment shall not affect the legality, validity or enforceability of any other provision of this Assignment. Successors and Assigns. Subject to any limitations stated in this Assignment on transfer of Grantor's interest, this Assignment shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Assignment and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Assignment or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Assignment. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Assignment. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Assignment shall have the meanings attributed to such terms in the Uniform Commercial Code: Assignment. The word "Assignment" means this ASSIGNMENT OF RENTS, as this ASSIGNMENT OF RENTS may be amended or modified from time to time, together with all exhibits and schedules attached to this ASSIGNMENT OF RENTS from time to time. Borrower. The word "Borrower" means Frantz Construction Co., Inc.. Default. The word "Default" means the Default set forth in this Assignment in the section titled • ASSIGNMENT OF RENTS (Continued) Page 6 "Default". Event of Default. The words "Event of Default" mean any of the events of default set forth in this Assignment in the default section of this Assignment. Grantor. The word "Grantor" means Frantz Construction Co., Inc.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Assignment, together with interest on such amounts as provided in this Assignment. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this ASSIGNMENT OF RENTS between Grantor and Lender. Note. The word "Note" means the promissory note dated August 8, 2008, in the original principal amount of $233,750.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Assignment" section of this Assignment. Related Documents. The words "Related Documents" mean all promissory notes, credit • agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all of Grantor's present and future rights, title and interest in, to and under any and all present and future leases, including, without limitation, all rents, revenue, income, issues, royalties, bonuses, accounts receivable, cash or security deposits, advance rentals, profits and proceeds from the Property, and other payments and benefits derived or to be derived from such leases of-every-kind and-nature,-whether-due now or later, including without limitation Grantor's right to enforce such leases and to receive and collect payment and proceeds thereunder. THE UNDERSIGNED ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT, AND NOT PERSONALLY BUT AS AN AUTHORIZED SIGNER, HAS CAUSED THIS ASSIGNMENT TO BE SIGNED AND EXECUTED ON BEHALF OF GRANTOR ON AUGUST 8, 2008. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS ASSIGNMENT OF RENTS AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: r� FRANT CQNSTRUCTION CO.,,INC. 0 C.0) 71 `i TMJ William L.Frantz,Presid••1- antz Construction Co.,Inc. " I C4) 1 m > %A., ASSIGNMENT OF RENTS (Continued) Page 7 CORPORATE ACKNOWLEDGMENT STATE OF ,1QWp 1 SS COUNTY OF Udem Son On this Bth day of AuR us , A.D., 20 OR , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, President of Frantz Construction Co., Inc.,to me personally known, who, being by me duly sworn did say he or she is authorized signer of said corporation, that no seal has been procured by said corporation and that said instrument was signed on behalf of the said corporation by authority of its Board of directors and that said William L. Frantz acknowledged the execution of said instrument to be the voluntary act and deed of said corporation by it voluntarily executed. it. KERRY M.SMITH ayCom Number ionEx Notary Pub in the S ate of=pwa 3/2(oi?_010 �JJJ LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2008. All Rights Reserved. -IA L:\CFI\LPL\G14.FC TR-808 PR-1 _ ra 'z—E' > f�- —11 —c) p=11•111 C < �.. U, - 2J O Exhibit A Commencing as a point of reference at the Northeast corner of Section 8, Township 78 North,Range 6 West of the Fifth Principal Meridian,Johnson County,Iowa; thence South 61"08'00"West 2897.35 feet to a point of intersection with the county road centerline and point of beginning of tract herein described(for purposes of this description,the East line of said Section 8 is assumed to bear due North);thence South 6°21'20"West 571.74 feet along the centerline of said county road to a point: thence South 10°59' 20"West 382.24 feet along the centerline of said county road to a point; thence South 16°45'50"West 156.20 feet along the centerline of said county road to a point;thence North 88"46'50"East 920.08 feet to a point; thence North 1066.64 feet to a point;thence South 83°45' 10"West 180.35 feet to a point; thence North 84°25'00" West 301.79 feet to a point; thence South 89° 21' 00"West 259.05 feet to a point of beginning and containing 20.0 acres more or less. O =Sae r"J m 373 ©;` .9 COMMERCIAL SECURITY AGREEMENT tarmaitionownicafinotim .. :�a�._ .........PZONZia.40.41.5.14e,laRgemoal "41i . vim, References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Grantor: Frantz Construction Co.,Inc.. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 West PO Box 209 825 Mormon Trek Blvd • Iowa City,IA 52244-0209 Iowa City,IA 52246 13191 339-1000 THIS COMMERCIAL SECURITY AGREEMENT dated August 19,2008,is made and executed between Frantz Construction Co_,Inc.("Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender"). GRANT OF SECURITY INTEREST. For valuable consideration. Grantor grants to Lender a security Interest In the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated In this Agreement with respect to the Collateral,in addition to all other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word "Collateral' as used in this Agreement means the following described property in which Grantor is giving to Lender a security Interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement: 1999 Dodge RAM 1500 Quad(VIN 3B7HF13Y4XG219073) In addition,the word'Collateral'also includes all the following: IA) All accessions,attachments,accessories,replacements of and additions to any of the collateral described herein,whether added now or later. (B) All products and produce of any of the property described in this Collateral section. (CI All accounts,general Intangibles,instruments,rents,monies,payments,and all other rights,arising out of a sale,lease,consignment or other disposition of any of the property described in this Collateral section. (Di All proceeds)including insurance proceeds)from the sale,destruction,loss,or other disposition of any of the property described in this Collateral section,and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer,whether due to judgment,settlement or other process. (E) All records and date relating to any of the property described in this Collateral section,whether in the form of a writing,photograph, microfilm,microfiche,or electronic media,together with all of Grantor's right,title,and interest in and to all computer software required to utilize,create,maintain,and process any such records or data on electronic media. STATUTORY LIEN. Grantor agrees that all Indebtedness is secured by all shares and deposits in all joint and individual accounts Grantor has with Lender now and in the future. Grantor authorizes Lender,to the extent permitted by applicable law,to apply the balance in these accounts to pay any amounts due under this Agreement when Grantor is in default under this Agreement. Shares and deposits in an Individual Retirement Account and any other account that would lose special tax treatment under state or federal law if given as security are not subject to the security interest Grantor has given in Grantor's shares and deposits. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral,Grantor represents and promises to Lender that: Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continua lender's secality interest in the Collateral. Upon request of Lender,Grantor will deliver to Lender any end all of the documents evidencing or°constituting the Collateral,and Grantor will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender for possessign by Lender. • _ Notices to Lender. Grantor will promptly notify Lender in writing at Lenderrs address shown above for such other addresses as Lender May ._ designate from time to time)prior to any (1) change in Grantor's name; 12) change in Grantor's assumed business name(s);y3) chaeee in the management of the Corporation Grantor; 14) change in the authorized signer(s); 151 change in Grantor's principal:office address;• _ (61 change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity;or;($1.. change in n' any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change i i•G[entor's name or state of organization will take effect until.after.Lenderhas received notice. j.''_T.I. No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to(yyh)cti Grantor,jts a party,and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as-defined bye thD Uniform Commercial Code,the Collateral is enforceable in accordance with its terms,is genuine,and fully complies with all applicable laws and regulations concerning form, content and manner.of preparation and execution, and all persons appearing to be obligated on the Collateral have authority end capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the Collateral,and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing. Location of the Collateral. Except for vehicles,and except otherwise In the ordinary course of Grantor's business,Grantor agrees to keep the Collateral at Grantor's address shown above or at such other locations as are acceptable to Lender. If the Collateral is a vehicle, Grantor will keep the Collateral at those addressee except for routine travel. Upon Lender's request,Grantor will deliver to Lender in form satisfactory to Lender a schedule of reel properties and Collateral locations relating to Grantor's operations,including without limitation the following: Ii) all real property Grantor owns or Is purchasing; 121 all real property Grantor is renting or leasing; (31 all storage facilities Grantor owns,rents,leases,or uses;and 14) all other properties where Collateral is or may be located. Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles,or other titled property,Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the State of Iowa,without Lender's prior written consent. Grantor shall,whenever requested,advise Lender of the exact location of the Collateral. Transactions Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement,Grantor shall not sell,offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge,other than the security interest provided for in this Agreement,without the prior written consent of Lender. This includes security interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender,all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however,this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt,Grantor shall immediately deliver any such proceeds to Lender. Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral,free and clear of all liens and encumbrances except for the lien of this Agreement. The liens granted hereby are not the type of lien referred to in Chapter 575 of the esh. 34/ Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor,agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted,and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend,and hold harmless Lender from any loss,damage,and costs,including reasonable attorney fees,threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights in the Collateral against the claims and demands of all other persons. Repairs and Maintenance. Grantor agrees to keep and maintain,and to cause others to keep and maintain,the Collateral in good order, repair and condition•at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on,or services rendered or material furnished In connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Lender and Lender's designated representatives end agents shall have the right at all reasonable times to nxa,,,iee COMMERCIAL SECURITY AGREEMENT Loan No:S (Continued) Page 2 and inspect the Collateral wherever located. Taxes.Assessments and Liens. Grantor will pay when due all taxes,assessments and liens upon the Collateral,its use or operation,upon this Agreement,upon any promissory note or notes evidencing the Indebtedness,or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen 11 6)days,Grantor shall deposit with Lender cash,a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys'fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments,and governmental and other charges have been paid in full and In a timely manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay end so long as Lender's interest in the Collateral is not jeopardized. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities,now or hereafter in effect,applicable to the ownership,production,disposition,or use of the Collateral,Including all laws or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding,including appropriate appeals,so long as Lender's Interest in the Collateral,in Lender's opinion,is not jeopardized. Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral,used in violation of any Environmental Laws or for the generation,manufacture,storage,transportation, treatment,disposal,release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby Ill releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws,and 12) agrees to indemnify,defend,and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement. This obligation to indemnify and defend shall survive the payment of the Indebtedness and the satisfaction of this Agreement. Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral,in form,amounts,coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor,upon request of Lender,will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender,including stipulations that coverages will not be cancelled or diminished without at least thirty 130)days' prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act,omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest,Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any Insurance as required under this Agreement,Lender may(but shall not be obligated to)obtain such insurance as Lender deems appropriate,including if Lender so chooses 'single interest insurance,'which will cover only Lender's interest in the Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral,whether or not such casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen(15)days of the casualty. All proceeds of any insurance on the Collateral, including accrued proceeds thereon,shall be held by Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed Collateral,Lender shall,upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six(61 months after their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums,which reservesshill be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce,at least fifteen 1151 days befoiie the premium due date,amounts at least equal to the insurance premiums to be paid. If fifteen(15)days before payment ia-due'the reserve funds are insufficient,Grantor stall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a gehefkl ...._,t deposit and shall constitute a non-interest-bearing account which Lender may satisfy.by payment of the insurance premiums required toile -� o paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor,and Lender is not the.agenfl of Grant6r for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums shall rerr(ain Grantor's sole responsibility. Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reportson each existing.policy of-Insurance bhowlng such jvij u information as Lender may reasonably request including the following: (1) the name of the insurer; (2) the risks insured; 131 the ambt/nt of the policy; 14) the property insured; (51 the then current value on the basis of which insurance has been obtained and the manner of _.. determining that value;and IS) the expiration date of the policy. In addition,Grantor shall upon request by Lender(however not mete ---' often than annually)have an independent appraiser satisfactory to Lender determine,as applicable,the cash value or replacement coSflif the Collateral. Financing Statements. Grantor authorizes Lender to file a UCC financing statement,or alternatively,a copy of this Agreement to perffggt Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect,and continue Lender's security interest in the Property. Grantor will pay all filing fees,title transfer fees,and other tees and costs Involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor irrevocably appoints Lender to execute documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes,Grantor will promptly notify the Lender of such change. GRANTOR'S RIGHT TO POSSESSION. Until default,Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents,provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral. If Lender at any time has possession of any Collateral,whether before or atter en Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral If Lender takes such action for that purpose as Grantor shall request or as Lender,in Lender's sole discretion,shell deem appropriate under the circumstances,but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shell not be required to take any steps necessary to preserve any rights in the Collateral against prior parties,nor to protect,preserve or maintain any security interest given to secure the Indebtedness. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's Interest In the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate,including but not limited to discharging or paying all taxes,liens,security interests,encumbrances and other claims,at any time levied or placed on the Collateral and paying all costs for insuring,maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expanses will become a part of the Indebtedness and,at Lender's option,will (A) be payable on demand; (R) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either 111 the term of any applicable insurance policy;or 121 the remaining term of the Note;or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shell be in addition to ail other rights and remedies to which Lender may be entitled upon Default. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults, Grantor fails to comply with or to perform any other term,obligation,covenant or condition contained in this Agreement or In any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default In Favor of Third Parties. Any guarantor or Grantor defaults under any loan,extension of credit,security agreement,purchase or sales agreement,or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor's or Grantor's property or ability to perform their respective obligations under this Agreement or any of the Related Documents. COMMERCIAL SECURITY AGREEMENT Loan No:iNNe (Continued) Page 3 False Statements. Any warranty,representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor,the appointment of a receiver for any part of Grantor's property,any assignment for the benefit of creditors,any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor's accounts,including deposit accounts,with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender, in its sole discretion,as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or Guarantor dies or becomes incompetent or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve(12)months,it may be cured if Grantor,after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen(15)days;or (2) if the cure requires more than fifteen(15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter,Lender shall have all the rights of a secured party under the Iowa Uniform Commercial Code. In addition and without limitation,Lender may exercise any one or more of the following rights and remedies: Accelerate Indebtedness. Lender may declare the entire Indebtedness,including any prepayment penalty which Grantor would be required to pay,immediately due and payable,without notice of any kind to Grantor. Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession,Grantor agrees Lender may take such other goods,provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell,lease,transfer,or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market,Lender will give Grantor,and other persons as required by law, reasonable notice of the time and place of any public sale,or the time after which any private sale or any other disposition of the Collateral is to be made. However,no notice need be provided to any person who,after Event of Default occurs,enters into and authenticates an agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice Is giventat least ten(101 days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral,;Triciuding wlthtitrt limitation the expenses of retaking,holding,insuring,preparing for sale and selling the Collateral,shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand,with interest at the Note rate from date of expenditure until repaid.. -11 Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral,with-tile .t power to protect and preserve the Collateral,to operate the Collateral preceding foreclosure or sale, and to collect the Rents from fete -"`" Collateral and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiver may serve without ""'=' bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value.of the Collateral exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. 1 Collect Revenues,Apply Accounts. Lender,either itself or through a receiver,may collect the payments,rents,income,and revenues f3ofi the Collateral. Lender may at any time in Lender's discretioptmnsfer_any.Collateral into Lender's own name or that of-Le'ffder's-nomlflee --.' and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness,oi::apply i so payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of acro.tints,general intangibles,insurance policies,instruments,chattel paper,choses in action,or similar property,Lender may demand,collect,receipt Jeri settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not-Mdebtedness 54 Collateral is then due. For these purposes, Lender may, on behalf of end in the name of Grantor, receive, open and dispose of rite addressed to Grantor;change any address to which mail and payments are to be sent and endorse notes,checks,drafts,money orders, documents of title,instruments and items pertaining to payment,shipment,or storage of any Collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency even if the,transaction described In this subsection is a sale of accounts or chattel paper. Other Rights end Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights end remedies it may have available at law,in equity,or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement,the Related Documents,or by any other writing,shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement,after Grantor's failure to perform,shall not affect Lender's right to declare a default and exercise its remedies. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: Amendments. This Agreement,together with any Related.Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Governing Law. This Agreement will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Lender In the State of Iowa. Choice of Venue. If there Is a lawsuit,Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's rioht otherwise to COMMERCIAL SECURITY AGREEMENT Loan No:dMNOUIIIIIIIIIb (Continued) Page 4 demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Grantor,shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier, or,if mailed,when deposited in the United States mail, as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes,Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor,any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect, amend,or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties. Lender may at any time,and without further authorization from Grantor,file a carbon,photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral. Severability. 11 a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance,that finding shall not make the offending provision illegal,invalid,or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal,valid and enforceable. If the offending provision cannot be so modified,it shall be considered deleted from this Agreement. Unless otherwise required by law,the Illegality.invalidity,or unenforceability of any provision of this Agreement shall not affect the legality,validity or enforceability of any other provision of this Agreement. Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor,Lender,without notice to Grantor,may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement,shall be continuing in nature,and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. Time Is of the Essence. Time is of the essence in the performance of this Agreement. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word"Agreement"means this Commercial Security Agreement,as this Commercial Security Agreement may be amended or modified from time to time,together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. Borrower. The word 'Borrower' means Frantz Construction Co., Inc.and includes all co-signers end co-makers signing the Note and all their successors and assigns. Collateral. The word 'Collateral' means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement. Default. The word'Default'means the Default set forth in this Agreement in the section titled'Default'. Environmental Laws. The words 'Environmental Laws' mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ('CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,Pub.L.No.99-499('SARA'),the Hazardous Materials Transportation Act,49 U.S.C.Section 1801,et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words'Event of Default"mean any of the events of default set forth in this Agreement in the default section of this Agreement. Grantor. The word'Grantor'means Frantz Construction Co.,Inc.. Guarantor. The word"Guarantor'means any guarantor,surety,or accommodation party of any or all of the Indebtedness. Guaranty. The word'Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances'mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words 'Hazardous Substances'are used in their very broadest sense and include without limitation any and all hazardous or toxic substances,materials or waste as defined by or listed under the Environmental Laws. The term'Hazardous Substances"also includes,without limitation,petroleum and petroleum by-products or any fraction thereof and asbestos. 7._ .v Indebtedness. The word 'Indebtedness'means the indebtedness evidenced by the Note or Related Documents,including all principal and interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of the Related Documents. - Fri Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. '7 Note. The word'Note'means the Note executed by Frantz Construction Co.,Inc.in the principal amount of $12,340.85 dated August 19, 2008,together with all renewals of, extensions of, modifications of,refinancings of, consolidations of, and substitutions for the note or credit agreement. Property. The word 'Property' means all of Grantor's right, title and interest in end to all the Property as described in the "Collateral --e Description'section of this Agreement. -� Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements,mortgages, deeds of trust,security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. CO GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS.THIS AGREEMENT IS DATED AUGUST 19,2008. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL SECURITY AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: FRANT ONSTRUCTION C By: J/L William L. Frantz, President of F istruction Co.,Inc. • FILED . 2039 SEP — I Al 9: 38 a CITY CLERK IOWA CITY. IOWA i I— z 1 W y W LU Q t H y EE 3 U't' 9 W 0 • N o U Q` t I U 3 cc w 2o g O s U 1-- ;[[ W 9 U U 7 O U O 5 0 H O ,- , 41 z R N _ W 2 C O W ra -1 7 X a `unKf5L Oto 111111111111 II II 1111 1111 11111 11111 11111 Ell 1 I II 11111 1111 (II Doc I0: 021489560012 Type: OEN Recorded: 05/11/2009 at 01:35:30 PM Fee Amt: 562.00 Pace 1 of 12 Johnson County Iowa Kim Painter County Recorder BK4434 Pa508-519 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City,IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City,IA 52246 WHEN RECORDED MAIL TO: -__-- ---. _.. ..-..- UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City,IA 52246 MORTGAGE to THIS IS A PURCHASE MONEY MORTGAGE I F The names of all Grantors(sometimes "Grantor")can be found on page 1 of this Mortgage:.the names p of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property address 7 can be found on page 1 of this Mortgage. The legal description can be found on page-1 of tYiis Mortgage. THIS MORTGAGE dated May 7, 2009, is made and executed between Eugene W. Nissle.i and Patricia J. Nissley,husband and wife(referred to below as "Grantor")and UNIVERSITY OF IOWA COMMUNIW CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the"Real Property") located in Johnson County, State of Iowa: See Exhibit A, which Is attached to this Mortgage and made a part of this Mortgage as if fully set forth herein. The Real Property or its address is commonly known as 1069 Highway 1 West Unit B, Iowa City, IA 52240. • Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to.all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security Interest in the Personal Property and Rents. The lien on the rents granted in.this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of any "one action" or e'$h . 35 MORTGAGE (Continued) Page 2 "anti-deficiency" law, or any other law which may prevent Lender from bringing any action against Grantor, including a claim for deficiency to the extent Lender is otherwise entitled to a claim for deficiency, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale. GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this Mortgage is executed at Borrower's request and not at the request of Lender; (b) Grantor has the full power, right, and authority to enter into this Mortgage and to hypothecate the Property; (c) the provisions of this Mortgage do not conflict with, or result in a default under any agreement or other instrument binding upon Grantor and do not result in a violation of any law, regulation, court decree or order applicable to Grantor; (d) Grantor has established adequate means of obtaining from Borrower on a continuing basis . information about Borrower's financial condition; and (e) Lender has made no representation to Grantor about Borrower(including without limitation the creditworthiness of Borrower). PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Borrower shall pay to Lender all Indebtedness secured by this Mortgage as it becomes due, and Borrower and Grantor shall strictly perform all Borrower's and Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Borrower and Grantor agree that Borrower's and Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2)or 175.2 (1);or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (31 There are not now alid-theTa wilt net be-any hazardous-wastes on the-Property;-(4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all rra applicable federal, state, and local laws, regulations and ordinances, including without limitation all rr-t Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine I r- compliance of the Property with this section of the Mortgage. Any inspections or tests made by — cc Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and wenanties =.: contained herein are based on Grantor's due diligence in investigating the Property for lsrdous Substances. Grantor hereby (1) releases and waives any future claims against *der for indemnity or contribution in the event.Grantor becomes liable for cleanup or other costs under any W such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all CO claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property,whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the MORTGAGE (Continued) Page 3 right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's Interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent,--of-all or-any art-of-the Real-Property, P -or-any-interest-in-the-Real-Property: -A=sale-or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll- taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for'service rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this-Mortgage, except for tosd liens I specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not— due as further specified in the Right to Contest paragraph. +� f: Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in 'errylection— with a good faith dispute over the obligation to pay, so long as Lender's interest in the wperty not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall witti!n fifteen" (15) days after the lien arises or, if a lien is filed,within fifteen(15) days after Grantor has notice o ClJ the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value • MORTGAGE (Continued) Page 4 covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and In such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or —replace-the—damaged-or-destroyed--Improvements in--a--manner-satisfactory-to Lender-.--Lender shall,_ _._. upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when_due any . amounts Grantor is required to discharge or pay under this Mortgage or any Related Documertta, Lender ..:.; on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrar)oes and`2-, other claims,-at-any time-levied or placed on the Property and paying all costs for insuring, maintaining-0 - - and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will i then bear interest at the rate charged under the Note from the date incurred or paid by Lender,:to the— date of-repayment by Grantor. All such expenses will become a part of the Indebtedness-and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note land bei apportioned among and be payable with any installment payments to become due during either-,ti) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be trettYd as a'9 balloon payment which will be due and payable at the Note's maturity. The Mortgage also trill securfl_v payment of these amounts. Such right shall be in addition to all other rights and remedies to whichCD Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a • part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify, defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. MORTGAGE • (Continued) Page 5 Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing In nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application-of-Net Proceeds.—lf-all-or-any-pact--of-the-Property_is-condemned by_eminent_domain- proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. cm v Taxes. The following shall constitute taxes to which this section applies: (-1) a specific:rau(Upon sn this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage;:.(2) a rrt `11 specific tax on Borrower which Borrower is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable I r" against the Lender or the holder of the Note; and (4) a specific tax on all or any portiori Of the r Indebtedness or on payments of principal and interest made by Borrower. -`I m �. 0 Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the,dsle of—` J this Mortgage, this event shall have the same effect as an Event of Default, and Lencler.may"O exercise any or all of its available remedies for an Event of Default as provided belo`vv unless. Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as-provided co above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal-Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand MORTGAGE (Continued) Page 6 from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be made,executed or delivered,to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Borrower's and Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in -- - this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Borrower and Grantor pay all the Indebtedness when due, and Grantor otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor)a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay,if permitted by applicable law, any reasonable termination fee as determined • by Lender from time to time. m m EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default —O under this Mortgage: ' (, r- - Payment Default. Borrower fails to make any payment when due under the Indebtedness. _.`f"" Default on Other Payments. Failure of Grantor within the time required by this Mortgage..torPnake any payment for taxes or insurance, or any other payment necessary to prevent filing of orad grlect discharge of any lien. Other Defaults. Borrower or Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained In this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower or Grantor. Default in Favor of Third Parties. Should Borrower or any Grantor default under any loan,extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or Borrower's ability to repay the Indebtedness or Borrower's or Grantor's ability to perform their respective obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or Grantor or on Borrower's or Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Death or Insolvency. The dissolution or termination of Borrower's or Grantor's existence as a going business, the Insolvency of Borrower or Grantor, the appointment of a receiver for any part of . Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or MORTGAGE (Continued) Page 7 against Borrower or Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Borrower's or Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower or Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower or Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Borrower or Grantor under the terms of any other agreement between Borrower or Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Borrower or Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of,or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has not been given a notieoatireachofthesame provision—cif-this Mort9a e-within the-P�reedi r§twev�(12) months, _._.---_---- it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: .a a Accelerate Indebtedness. Lender shall have the right at its option, after giving all required rtsttices '4) of default and after passage of any grace period, to declare the entire Indebtedness immediately due .n and payable, including any prepayment penalty that Borrower would be required to pay without notice,except as may be expressly required by applicable law. l UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have-al)!tkie """ rights and remedies of a secured party under the Uniform Commercial Code. •Collect Rents. Lender shall have the right, without notice to Borrower or Grantor, to-tpke :5' 0 possession of the Property and collect the Rents, including amounts past due and unpaid, and'apply .D . l the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance 1 t this G.) right, Lender may require any tenant or other user of the Property to make payments of rent 75r use UO fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property end apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond If permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received MORTGAGE (Continued) Page 8 from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Borrower or Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Borrower and Grantor hereby waive any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code S.e_ctipn_s.62.8,.26, 628.27, 0l 62$,28,_ar_an_y_otb_er Iowa Code__Se_gtion,_to_such_tim_e__as_maY. ..... be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or Borrower and/or against any other co-maker, guarantor, surety or endorser and/or to — a proceed against any other collateral directly or indirectly securing the Indebtedness. O �• _ Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of I-i-t this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to l r- the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are -{n -•- necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date • -,. of the expenditure until repaid, Expenses covered by this paragraph include, without limitation, 0 0 however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal n �O expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy D W proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and OD any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports),surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address, Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. MORTGAGE (Continued) Page 9 Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. Joint and Several Liability. All obligations of Borrower and Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and every Grantor, and all references to Borrower shall mean each and every Borrower. This means that each Grantor signing below is responsible for all obligations in this Mortgage. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given In writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any_of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any Instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceabilixx of any r a provision of this Mortgage shall not affect the legality, validity or enforceability of a if,' other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other =� 71 interest or estate in the Property at any time held by or for the benefit of Lender in any Capecity, ( "® without the written consent of Lender. ' r. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's 171 1 interest, this Mortgage shall be binding upon and inure to the benefit of the parties,..:l,heir successors and assigns. If ownership of the Property becomes vested in a person ot4r_.fhan `®+ Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with refereri'ce to this Mortgage and the Indebtedness by way of forbearance or extension without releasing`6rantor W from the obligations of this Mortgage or liability under the Indebtedness. 03 Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor Is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, MORTGAGE (Continued) Page 10 including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Eugene W. Nissley and Patricia J. Nissley. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without ♦imitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures-mobile-homes-affixed on-the-Real-Property, facilities,additions;-replacements and-other- construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated May 7, 2009, in the original principal amount of $477,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. --a Property. The word "Property" means collectively the Real Property and the Personal Propertyr,, Real Property. The words "Real Property" mean the real property, interests and rights, as further cm described in this Mortgage. • - rn a Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, -- 4., mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, r 4 agreements end documents, whether now or hereafter existing, executed in connection with_t e Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, roy4h'+es, profits, and other benefits derived from the Property. - 1� MORTGAGE (Continued) Page 11 EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR:4X �� Eugene . Nissley ki? -- n) Patricia J. Nissley,- fi INDIVIDUAL ACKNOWLEDGMENT ----- -- STATE-OF- h 1 SS "s„..1;) COUNTY OF ns� ) On this day of en , A.D., 20 01 , before me, a Notary Public in and for said County and State, persona y appeared Eugene W. Nissley and Patricia.1.Nissley, to me known to be the persons named in and who executed the foregoing instrument and acknowledged that they executed the same as their voluntar act and deed. Notary Pu is in the State . .. 1'1 f ContrniasionIfilANTZ 4238 iJecanstier t, o v 'C) cn LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2009. All i 7 Rights Reserved. -IA L:\CFI\LPL\G03.FC TR-922 PR-1 .-- , • — -p i�r pip 0-r 1 .?'"Ir i i i I'.i"i Y h0 > w Exhibit A UNIT B,WESTPORT COMMERCIAL CONDOMINIUMS,ACCORDING TO THE DECLARATION THEREOF RECORDED IN BOOK 4225, PAGE 98, RECORDS OF THE RECORDER OF JOHNSON COUNTY,IOWA. • • • • N o � *. >-i - " -< m 111 • o v w • 'tori can c_) • I�NIIINIVNIIIII�IIINBNIN�i���NNN��MIIIN Doc ID: 021469570012 Tvoe: OEN Recorded: 05/11/2009 at 01:07:10 PM Fee Amt: $62.00 Paoe 1 of 12 Johnson County Iowa Kim Painter County Recorder 6K4434 PD520-531 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson. Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246, (319)339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City,IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City, IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City,IA 52246 MORTGAGE CJ ' THIS IS A PURCHASE MONEY MORTGAGE 0 —0 The names of all Grantors (sometimes"Grantor") can be found on page 1 of this Mortgage. The names:—;7 01'41_0 1n r' of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property addressrr .-, can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this-- -� 8 Mortgage. f 7 - firr THIS MORTGAGE dated May 7, 2009, is made and executed between Eugene W. Nissley and Patricia m3 -- J. Nissley,husband and wife (referred to below as "Grantor")and UNIVERSITY OF IOWA COMMUNITY1-„?,7- >� CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). > W GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights): and all other rights, royalties, and profits relating to the real property, including without limitation all minerals,oil, gas, geothermal and similar matters, (the "Real Property") located in Johnson County,State of Iowa: See Exhibit A, which is attached to this Mortgage and made a part of this Mortgage as if fully set forth herein. The Real Property or its address is commonly known as 327 and 329 Benton Street, Iowa City, IA 52246. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of any "one action" or Set h. 36 MORTGAGE (Continued) Page 2 "anti-deficiency" law, or any other law which may prevent Lender from bringing any action against Grantor, including a claim for deficiency to the extent Lender is otherwise entitled to a claim for deficiency, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale. GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this Mortgage is executed at Borrower's request and not at the request of Lender; (b) Grantor has the full power, right, and authority to enter into this Mortgage and to hypothecate the Property; (c) the provisions of this Mortgage do not conflict with, or result in a default under any agreement or other instrument binding upon Grantor and do not result in a violation of any law, regulation, court decree or order applicable to Grantor; (d) Grantor has established adequate means of obtaining from Borrower on a continuing basis information about Borrower's financial condition; and (e) Lender has made no representation to Grantor about Borrower(including without limitation the creditworthiness of Borrower). PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Borrower shall pay to Lender all Indebtedness secured by this Mortgage as it becomes due, and Borrower and Grantor shall strictly perform all Borrower's and Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Borrower and Grantor agree that Borrower's and Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property;- (3)--There are-not-now-and-there.will notbeany hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs,replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged brLender writing, (a) any breach or violation of any Environmental Laws, (b) any use,'deneration,- manufacture, storage, treatment, disposal, release or threatened release of any: Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the PropertSt, or (c) any actual or threatened litigation or claims of any kind by any person relating-to sucfi, matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, ;71 generate, manufacture, store, treat, dispose of or release any Hazardous Substance'on,.;under,.. about or from the Property; and (b) any such activity shall be conducted in compliajtFle,"With et" applicable federal, state, and local laws, regulations and ordinances, including without 4`ffn3'etion a)rj Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Properiy to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determinpo compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the MORTGAGE (Continued) Page 3 right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shallpromptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond,reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent-, of all or any-part-of the Real Property, or any interest-in the Real Property.- A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll-; taxes, special taxes, assessments, water charges and sewer service charges levied against or op,, account of the Property, and shall pay when due all claims for work done on or for services.-r rendered or material furnished to the Property. Grantor shall maintain the Property free ofany liens'j having priority_over or equal to the interest of Lender under this Mortgage, except for those liens) specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not c=1- 2due as further specified in the Right to Contest paragraph. ' U 9 a Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in �qr i action with a good faith dispute over the obligation to pay, so long as Lender's interest in the f o rty i59 not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fiftee J (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice o' the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment-of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to.Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value MORTGAGE (Continued) Page 4 covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceedsto restoration and repair, Grantor shall repair or replace the damaged or destroyed-Improvements-in-a-manner--satisfactory-to-Lender-. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender =-3 on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appFopriate,-- including but not limited to discharging or paying all taxes, liens, security interests, encumbrances andr,.. other claims,at anytime levied orplaced on the Property and'paying all costs for insuring, rriairitainin '1 P Y P Y 9 9'•=� J and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness,arid, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note And bei, apportioned among and be payable with any installment payments to become due during either;{1) the" term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be tre tgcl as amp balloon payment which will be due and payable at the Note's maturity. The Mortgage also VAI secure payment of these amounts. Such right shall be in addition to all other rights and remediesto which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. MORTGAGE (Continued) Page 5 Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of-Net-Prooeeds-- If-all-or-any-part-of the Property.is-condemned by.eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes,fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or contipying thisv Mortgage, including without limitation all taxes, fees, documentary stamps, and other merges forte recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific-tax'uporj this type of Mortgage or upon all or any part of the Indebtedness secured by this MortgSge; (2) a specific tax on Borrower which Borrower is authorized or required to deduct from paymehts•on the_ Y Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeablern against the Lender or the holder of the Note; and (4) a specific tax on all or any portion-Alf thea Indebtedness or on payments of principal and interest made by Borrower. 0 73 Subsequent Taxes. If any tax to which this section applies is enacted subsequent to tl date or9 this Mortgage, this event shall have the same effect as an Event of Default, and Leader may,,,,/ exercise any or all of its available remedies for an Event of Default as provided below unless^O Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred In perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default,Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand MORTGAGE (Continued) Page 6 from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code)are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver,or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Borrower's and Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Borrower and Grantor pay all the Indebtedness when due, and Grantor otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and th@.Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined-r by Lender from time to time. cn EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event-of Defaulll-D "Ti under this Mortgage: ' - I Payment Default. Borrower fails to make any payment when due under the Indebtedness."'0 Default on Other Payments. Failure of Grantor within the time required by this Mortgage tb)'nake 0 any payment for taxes or insurance, or any other payment necessary to prevent filing of 6TO:effect discharge of any lien. Other Defaults. Borrower or Grantor fails to comply with or to perform any other term,'bligation,uJ covenant or condition contained in this Mortgage or in any of the Related Documents or to comply`O with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower or Grantor. Default in Favor of Third Parties. Should Borrower or any Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or Borrower's ability to repay the Indebtedness or Borrower's or Grantor's ability to perform their respective obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or Grantor or on Borrower's or Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any materiel respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Death or Insolvency. The dissolution or termination of Borrower's or Grantor's existence as a going business, the insolvency of Borrower or Grantor, the appointment of a receiver for any part of Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or MORTGAGE (Continued) Page 7 against Borrower or Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Borrower's or Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower or Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower or Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Borrower or Grantor under the terms of any other agreement between Borrower or Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Borrower or Grantor to Lender,whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding-twelve 112) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: ? Accelerate Indebtedness. Lender shall have the right at its option, after giving all required-.noticee of default and after passage of any grace period, to declare the entire Indebtedness imrnlicirately dui and payable, including any prepayment penalty that Borrower would be required to pay without,] �'U notice, except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall fiav_e all the _-7 rights and remedies of a secured party under the Uniform Commercial Code. r + d E Collect Rents. Lender shall have the right, without notice to Borrower or Gran ,.lo take —. possession of the Property and collect the Rents, including amounts past due and unpaid;and appy the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherp ce of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received MORTGAGE (Continued) Page 8 from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Borrower or Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Borrower and Grantor hereby waive any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa -Code Sections-628.-26,-628,27,--or-628.2-8,--or--any-other-Iowa-Code-Section, to suchtime as may . _ be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or Borrower and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial andupon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's op/won are necessary at any time for the protection of its interest or the enforcement of its rights shall tiepme -� a part of the Indebtedness payable on demand and shall bear interest at the Note rate from.tl'e..date c! of the expenditure until repaid. Expenses covered by this paragraph include, without limitation,."--01'' R>j however subject to any limits under applicable law, Lender's attorneys' fees and Lenderslegal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and 1111 any anticipated post-judgment collection services, the cost of searching records, obtaining:title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insi.,nnce, to "" the extent permitted by applicable law. Grantor also will pay any court costs, in additiepeto all.q other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice''O of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change Its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice Is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. MORTGAGE (Continued) Page 9 Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. Joint and Several Liability. All obligations of Borrower and Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and every Grantor, and all references to Borrower shall mean each and every Borrower. This means that each Grantor signing below is responsible for all obligations in this Mortgage. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute -a-waiver-of-any-of-Lender's-rights-or. of any of Grantor's obligations_as_-to_any future-_transactioDs. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. — Merger. There shall be no merger of the interest or estate created by this Mortgage wittc ry other interest or estate in the Property at any time held by or for the benefit of Lender in any.capacity.1 without the written consent of Lender. 8291.2111 _ II Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of:Grantor's ran Interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person-other they?. �. Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with rcefjelence tiS'" this Mortgage and the Indebtedness by way of forbearance or extension without releasitv'GrantorJ from the obligations of this Mortgage or liability under the Indebtedness. Time Is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth' in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, MORTGAGE (Continued) Page 10 including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Eugene W. Nissley and Patricia J. Nissley. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without • limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, - structures mobile homes"affixed on the Real Property,facilities; ad ditiorisTreplacements and-other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated May 7, 2009, in the original principal amount of $477,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other dispositfgn of the '' Property. Property. The word "Property" means collectively the Real Property and the Personal Property, Real Property. The words "Real Property" mean the real property, interests and rights, as-further described in this Mortgage. _ Related Documents. The words "Related Documents" mean all promissory notes,'.credit rri agreements, loan agreements, environmental. agreements, guaranties, security agredh)ents,- 0 mortgages, deeds of trust, security deeds, collateral mortgages, and all other inSuiJments, agreements and documents, whether now or hereafter existing, executed in connection yvi$t the-9 Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties,, profits,and other benefits derived from the Property. MORTGAGE (Continued) Page 11 EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: X ,(--' AX Eugen . Nissley • ....c_f_4 ) 20 Patricia J. Nissley INDIVIDUAL ACKNOWLEDGMENT ST-ATE OF I VINGI. ) COUNTY OF Oh r cco i SS On this day of 1 r1 , A.D., 20 e9e7 , before me, a Notary Public in and for said County and State, personal! appeared Eugene W. Nissley and Patricia J. Nissley, to me known to be the persons named in and who executed the foregoin• instrument and acknowledged that they executed the same as their volunta.act and d•,`IL IL..a.. I. JP Notary Pu• in the Statey11111... p AMY R.FRANTZ 2FNunbar 744138 Commission M11 Commission Expires a+ De-umber 1,2009 LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2009.- All -A Rights Reserved. -IA L:1CFI\LPL1G03.FC TR-922 PR-1 J • C7 r� -i o — ;r rr`t sy 5. . w Exhibit A THE EAST HALF(E 1/2)OF LOT 3 IN PLAT OF IRREGULAR SURVEY IN SCHOOL LOT 5,SECTION 16,TOWNSHIP 79 NORTH,RANGE 6 WEST OF THE 5TH P.M.,ACCORDING TO THE PLAT THEREOF.RECORDED IN PLAT BOOK 3,ON PAGE 132,PLAT RECORDS OF JOHNSON COUNTY,IOWA, SUBJECT TO EASEMENTS,AGREEMENTS AND RESTRICTIONS OF RECORD. • p • } o r- ai m y • •o yd 1 ,-T-0-1(0,4 r IIIIIIIIIIIIIIIIIIIIIIII IIINIIIIIIIIINIIIIQIIIIIIIICIIIcIQ)NII!Il Doc I0: 021469610012 Tvoe: GEN Recorded: 05/11/2009 at 01:45:34 Pm Fee Amt: 862.00 Pace I of 12 Johnson County Iowa Kim Painter County Recorder eK4434 Pe568-579 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson,Vice President,UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA 52246, (319)339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City,IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City,IA 52246 WHEN-RECORDED-MAIL-TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City;IA 52246 ,� MORTGAGE THIS IS A PURCHASE MONEY MORTGAGE The names of all Grantors(sometimes "Grantor")can be found on page 1 of this Mortgage. The names') of all Grantees(sometimes "Lender") can be found on page 1 of this Mortgage. The property address can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this Mortgage. THIS MORTGAGE dated May 7, 2009, is made and executed between Eastside Investors, L.L.C., a limited liability company in Iowa (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals,oil,gas, geothermal and similar matters, (the "Real Property")located in Johnson County, State of Iowa: See Exhibit A, which is attached to this Mortgage and made a part of this Mortgage as if fully set forth herein. The Real Property or its address is commonly known as 340, 344, 348 Highland Ave., Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of any "one action" or E,ch• 37 MORTGAGE (Continued) Page 2 "anti-deficiency" law, or any other law which may prevent Lender from bringing any action against Grantor, including a claim for deficiency to the extent Lender is otherwise entitled to a claim for deficiency, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale. GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this Mortgage is executed at Borrower's request and not at the request of Lender; (b) Grantor has the full power, right, and authority to enter into this Mortgage and to hypothecate the Property; (c) the provisions of this Mortgage do not conflict with, or result in a default under any agreement or other instrument binding upon Grantor and do not result in a violation of any law, regulation, court decree or order applicable to Grantor; (d) Grantor has established adequate means of obtaining from Borrower on a continuing basis information about Borrower's financial condition; and (e) Lender has made no representation to Grantor about Borrower(including without limitation the creditworthiness of Borrower). PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Borrower shall pay to Lender all Indebtedness secured by this Mortgage as it becomes due, and Borrower and Grantor shall strictly perform all Borrower's and Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Borrower and Grantor agree that Borrower's and Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2)or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on -the--Property;-(-3)-T-here-are--not-now-and-there_w.ilLnot.be-any hazardous_wastes_oo_the-Property;. (4).. There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in • possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation,tnanufactura; storage, treatment, disposal, release or threatened release of any Hazardous Substance by artV person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason'::ttRii1 believe that there has been, except as previously disclosed to and acknowledged by. Lender'-in writing, (a) any breach or violation of any Environmental Laws, (b) any use,"generatiorf, manufacture, storage, treatment, disposal, release or threatened release of any=Hazardoue- Substance on,under, about or from the Property by any prior owners or occupants of the Property, d� or (c) any actual or threatened litigation or claims of any kind by any person relating to suc matters; and (3) Except as previously disclosed to and acknowledged by Lender in w5iting, (a) -- neither Grantor nor any tenant,contractor, agent or other authorized user of the Property;s7iell usi9 generate, manufacture, store, treat, dispose of or release any Hazardous Substance:pn, under,- about nder,about or from the Property: and (b) any such activity shall be conducted in compliar5ce with al6 applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the MORTGAGE (Continued) Page 3 right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE -CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written • consent,--of--all-or--any--part-of-the-Real-Property,-or--any-interest-in_the_Real-_P-roperty.._._.A-s.ala._or_. transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale,assignment, or transfer of any beneficial interest in or • to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Prope are par€ this Mortgage: `C c.� Payment. Grantor shall pay when due (and in all events prior to delinquency) all tax-5., pas/rig 71 taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or:-far_servicrls - rendered or material furnished to the Property. Grantor shall maintain the Property free-cif any liens ;ill having priority over or equal to the interest of Lender under this.Mortgage, except for'those lieu, specifically agreed to in writing by Lender, and except for the lien of taxes and asseesrtiants rc 7. due as further specified in the Right to Contest paragraph. v=- Right to Contest. Grantor may withhold payment of any tax, assessment, or claim ire connectic with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property tms not jeopardized. If a arises or is filed as a result of nonpayment, Grantor shall within fifteen (15)days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and.Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value MORTGAGE (Continued) Page 4 covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to • Lenderand not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace-the-damaged-or_destroyed-lmprovements-in.a.manner-satisfactory_to_Lender..___Lender_shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in.default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principalbalance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent- appraiser ndependentappraiser satisfactory to Lender determine the cash value replacement cost of the Property. > LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect- �' Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any) Related Documents, including but not limited to Grantor's failure to discharge or pay when due an�r~ ;^g .... ..... amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appfOpriate-,,_.y�= including but not limited to.discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, itiatntaining2 and preserving the Property. All such expenditures incurred or paid by Lender for such putposes wilk� then bear interest at the rate charged under the Note from the date incurred or paid by Lender to thJ date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (8) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by MORTGAGE (Continued) Page 5 Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify, defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: • -- -Proceedings.- Ifany proceeding-in-condemnation_is-filed,-Grantor_shall_promptly notify_Lender_in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. • IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following_ provisions relating to governmental taxes, fees and charges are a part of this Mortgage: SIN Current Taxes. Fees and Charges. Upon request by Lender, Grantor shall execute such ddcuments in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all-takes, described below, together with all expenses incurred in recording, perfecting or continuing this"' Mortgage, including without limitation all taxes, fees, documentary stamps, and other cher9es for,., recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upond this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Borrower which Borrower is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Borrower. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or 12) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In MORTGAGE (Continued) Page 6 addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver,or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and.all such.mortgages, deeds of_trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as - may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Borrower's and Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now awned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in • this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such-purposes;=; Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making;;'a executing, delivering, filing, recording, and doing all other things as may be necessary or desirable,., in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph., . --'1 " . FULL PERFORMANCE. If Borrower and Grantor pay all the Indebtedness when due, and-Grantor/ otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall ekecuta— - and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of n G any financing statement on file evidencing Lender's security interest in the Rents and the r:'ersonal: Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as(tleter.mined— by Lender from time to time. • EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Evenkf Default-- under this Mortgage: Payment Default. Borrower fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Borrower or Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower or Grantor. Default in Favor of Third Parties. Should Borrower or any Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or Borrower's ability to repay the Indebtedness or Borrower's or Grantor's ability to perform their respective obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or Grantor or on Borrower's or Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. MORTGAGE (Continued) Page 7 Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Death or Insolvency. The dissolution or termination of Borrower's or Grantor's existence as a going business, the insolvency of Borrower or Grantor, the appointment of a receiver for any part of Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower or Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, • whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Borrower's or Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower or Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower or Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, es being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Borrower or Grantor under the terms of any other agreement between Borrower or Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Borrower or Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes of disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has net been .' given a notice of a breach of the same provision of this Mortgage within the preceding twerve(12) , months, it may be cured if Grantor, after receiving written notice from Lender demanding Cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires mora than ;71 =i1 fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to.be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. - RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at Any;Time thereafter, Lender, at Lender's option, may exercise any one or more of the following ri,,},is end remedies, in addition to any other rights or remedies provided by law: ° .3 Accelerate Indebtedness. Lender shall have theright at its option, after giving all requirecEnotices _rte of default and after passage of any grace period,to declare the entire Indebtedness immediately due tD and payable, including any prepayment penalty that Borrower would be required to pay without notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Borrower or Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid,,and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents ere collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender In response to Lender's demand shall satisfy the obligations for which the • payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver, • MORTGAGE (Continued) Page 8 Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Borrower or Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Borrower and Grantor hereby waive any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice-of Sale. Lender shall ive-Grantorreasonable-notice-of-the-time-andplace of- 9� any public-sale- of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's'richt to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise 'shall be . construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights end ability of Lender to proceed directly-against Grantor and/or Borrower and/or against any other co-maker, guarantor, surety or endorser and/or to I proceed against any other collateral directly or indirectly securing the Indebtedness. j, Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms?'of = rte, this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reaso bl 'as _" attorneys' fees at trial and any on p a ppeal. Whether or not any court action is involvedi-8nd to �? the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinjpn are necessary at any time for the protection of its interest or the enforcement of its rights shall become O a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacslmile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. MORTGAGE (Continued) Page 9 Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. Joint and Several Liability. All obligations of Borrower and Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and every Grantor, and all references..to_BorrowershalLmean-eachand..everyy-Borrower—_This means that each Grantor signing below is responsible for all obligations in this Mortgage. Where any one or more of the parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on the entity's behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Mortgage. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. 5 Whenever the consent of Lender is required under this Mortgage, the granting of such consent by y� Lender in any instance shall not constitute continuing consent to subsequent instances where such (/j consent is required and in all cases such consent may be granted or withheld in the sole discretion - �—'f1.4311 of Lender. :j-•< ewe. r. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, H n "" invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision M illegal, invalid, or unenforceable as to any•other circumstance. If feasible, the offending provision J 3 shall be considered modified so that It becomes legal, valid and enforceable. If the offending l provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless:3 b otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this> Mortgage shall not affect the legality, validity or enforceability of any other provision of this O Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used MORTGAGE (Continued) Page 10 in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Eastside Investors, L.L.C.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, l structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. D :71 rn 71 Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other n-< o amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or _< < ;<m Related-Documents-and any amounts expended or advanced by Lender to discharge Grantor's m obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. *7 �O Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its > successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated May 7, 2009, in the original principal amount of $477,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, MORTGAGE (Continued) Page 11 mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR:1EASTSID NVESTORS, L.L.C. ,, By: -12z i �V i William L. Frantz, Member of East -1"eters, L.L.C. t i --- By: Br , ./ • /�i�./,rr Eugen: . Nissley, Mem.er of Eastsi,e Investors, L.L.C. i. LIMITED LIABILITY COMPANY ACKNOWLEDGMENT I STATE OF —IAWq ) i , _ )SS COUNTY OF 00 kA SOVt. / CD On this 7fi4' day of0.y , A.D., 20 (7Q , before me, the undersigned Notary Public in said County and State((, personally appeared William L. Frantz, Member of Eastside Investors, L.L.C. and Eugene W. Nissley, Member of Eastside Investors, L.L.C., to me personally known, who being by me duly sworn, did say that they are one of the members or designated agents of said limited liability company, and that the instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrument to be the voluntary act and deed of the limited liability company by it and by the members or designated agents voluntarily executed. :,t�s .r ENiC BA'.B9i;AFTy G— -ow .. 4 Y. Corkrissbn ri;,,,per"_>,'" Notary Pull in the State of . . *i My Com siinFx,N..:, r LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997. 2009. All Rights Reserved. - IA L:1CFI\LPL\G03.FC TR-922 PR-1 Exhibit A Units B, C and D,Frantz Commercial Condominiums, Iowa City, Iowa, according to the Declaration thereof recorded in Book 1751, Page 89, Plat Records of Johnson County, Iowa,and amendments thereto. � O a n cn rn — ca • IppI'' InnI'' �Nf'nI 'uIIII `Iiidl fph�� 'n1(,O'Ytognlnl 1411111'1 11111 II111111111111II1111111 Doc ID: 021469600012 Tvoe: GEN Recorded: 05/11/2009 at 01:44:09 PM Fee Amt: $62.00 Paris 1 of 12 Johnson County Iowa Kim Painter County Recorder 6K4434 Pn556-567 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson,Vice President,UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 • Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City, IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 WHEN-RECORDED-MAIL TO .. - UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City, IA 52246 cn 77 r11 MORTGAGE _ THIS IS A PURCHASE MONEY MORTGAGE _ • • m The names of all Grantors(sometimes "Grantor")can be found on page 1 of this Mortgage. Thd named 0 of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The propert,;3ddress can be found on page 1 of this Mortgage. The legal description can be found on page:1this? • Mortgage. r- THIS MORTGAGE dated (Vlay 7, 2009, is made and executed between William L. Frantz and Sherry L. Frantz, husband and wife (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil,gas, geothermal and similar matters, (the"Real Property") located in Johnson County,State of Iowa: See Exhibit A, which is attached to this Mortgage and made a part of this Mortgage as If fully set forth herein. The Real Property or its address is commonly known as 22 Durham Court, Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be affective from the date of the Mortgage and not Just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: GRANTOR'S WAIVERS. Grantor waives all rights or defenses arising by reason of any "one action" or "anti-deficiency" law, or any other law which may prevent Lender from bringing any action against e-ich. 38 MORTGAGE (Continued) Page 2 Grantor, including a claim for deficiency to the extent Lender is otherwise entitled to a claim for deficiency, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale. GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (a) this Mortgage is executed at Borrower's request and not at the request of Lender; (b) Grantor has the full power, right, and authority to enter into this Mortgage and to hypothecate the Property; (c) the provisions of this Mortgage do not conflict with, or result in a default under any agreement or other instrument binding upon Grantor and do not result in a violation of any law, regulation, court decree or order applicable to Grantor; (d) Grantor has established adequate means of obtaining from Borrower on a continuing basis information about Borrower's financial condition; and (e) Lender has made no representation to Grantor about Borrower(including without limitation the creditworthiness of Borrower). PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Borrower shall pay to Lender all Indebtedness secured by this Mortgage as it becomes due, and Borrower and Grantor shall strictly perform all Borrower's and Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Borrower and Grantor agree that Borrower's and Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (11; or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; 14) -There-are-not-now-and-there-will-not-be-any-underground-stofage-tanks-on-the-Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) • remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and prom tly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that (1) During✓ the period of Grantor's ownership of the Property, there has been no use, generation, manufacture) storage, treatment, disposal, release or threatened release of any Hazardous Substance by any— person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to JL believe that there has been, except as previously disclosed to and acknowledged by Lender i'ffr. = ? writing, (a) any breach or violation of any Environmental Laws, (b) any use,(anaration, .= manufacture, storage, treatment, disposal, release or threatened release of any-.jieaardouSJ Substance on, under, about or from the Property by any prior owners or occupants of dig Property or (c) any actual or threatened litigation or claims of any kind by any person-relating to sucE matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use. generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock MORTGAGE (Continued) Page 3 products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or —transfer"-means-the--conveyance--of--Real Property-or-any-right--title-or interest--in-the-Real--Proper-ty ------ whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is •-, prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part bf .•,. this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes,.payroll r"— taxes, special taxes, assessments, water charges and sewer service charges levied against or-on -- account of the Property, and shall pay when due all claims for work done on or for services i rf rendered or material furnished to the Property. Grantor shall maintain the Property free of any Yens r' having priority over or equal to the interest of Lender under this Mortgage, except for thdsA liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessmetlts note. due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection CD with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15)days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien,or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest.proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account.of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any MORTGAGE (Continued) Page 4 coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, --up-on"satisfactory proo of such-expenditure,-pay-or-reimburse-Grantor--from-the-proceeds-for-the-- reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any r ry amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender - on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, j including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and r other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining ..%r and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will 171 then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the 77 IJ date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at �p Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy: or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY;DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property • in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, lb) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will MORTGAGE (Continued) Page 5 forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain or-purchase in-lieu-of-eondemnation,-Lender-ma lieu -election ._.__ proceedings-or-by-any-proceeding- - - Y- require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The.following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect ariFf bontinue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this, Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges #er recording or registering this Mortgage. '_:: • v 1 Taxes. The following shall constitute taxes to which this section applies: (1) a specie* tax upoe- this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2);:a; specific tax on Borrower which Borrower is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Borrower. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT: FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. • Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of • this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. MORTGAGE (Continued) Page 6 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make,execute and deliver,or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Borrower's and Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph.. FULL PERFORMANCE. If Borrower and Grantor pay all the Indebtedness when due, and Grantor=' otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall_execut ' and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination oe- any financing statement on file evidencing Lender's security interest in the Rents and the Persona Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determine a by Lender from time to time. tl EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event ol;-Pefautez under this Mortgage: _ Payment Default. Borrower fails to make any payment when due under the Indebtedness Default on Other Payments. Failure of Grantor within the time required by this Mortgage to makcP any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Borrower or Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower or Grantor. Default in Favor of Third Parties. Should Borrower or any Grantor default under any loan, extension of credit,security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or Borrower's ability to repay the Indebtedness or Borrower's or Grantor's ability to perform their respective obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or Grantor or on Borrower's or Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Death or Insolvency. The dissolution or termination of Borrower's or Grantor's existence as a going business, the insolvency of Borrower or Grantor, the appointment of a receiver for any part of Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower or Grantor. MORTGAGE (Continued) Page 7 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Borrower's or Grantor's accounts, including • deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower or Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower or Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Borrower or Grantor under the terms of any other • agreement between Borrower or Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Borrower or Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured-if-Grantor—after receivinD-written--notice-from-Lender-demanding-cure-of - - such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable angi,_necessary- steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time' thereafter, Lender, at Lender's option, may exercise any one or more of the following rights anti. remedies, in addition to any other rights or remedies provided by law: I Accelerate Indebtedness. Lender shall have the right at its option, after giving all required;notices— y t it of default and after passage of any grace period,to declare the entire Indebtedness immedfakely duo-, { g and payable, including any prepayment penalty that Borrower would be required to pay:tJithout notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the:.- rights hemerights and remedies of a secured partyunder the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Borrower or Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. MORTGAGE (Continued) Page 8 Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Borrower or Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Borrower and Grantor hereby waive any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given et least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may thell..applicible and provided by law. _ Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event.of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or Borrower and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. ,. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the-terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasormble assn attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shahbecome.__ it a part of the Indebtedness payable on demand and shall bear interest at the Note rate fromthe date ? of the expenditure until repaid. Expenses covered by this paragraph include, without-lin(ttation, - 'i however subject to any limits under applicable law, Lender's attorneys' fees and Len r,C legal"' expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for banfluptcy,9 proceedings (including efforts to modify or vacate any automatic stay or injunction), apa@als, and any anticipated post-judgment collection services, the cost of searching records, obtfning title" reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall MORTGAGE (Continued) Page 9 furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in tho State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. Joint and Several Liability. All obligations of Borrower and Grantor under this Mortgage shall be joint and several, and all references to Grantor shall mean each and every Grantor, and all references to Borrower shall mean each and every Borrower. This means that each Grantor signing below is responsible for all obligations in this Mortgage. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. -Whenever-the-consent-of-lender_is_required_under this.Mortgage,_the_gramjng_of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, yalid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from r.a this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of ani; '^ provision of this Mortgage shall not affect the legality, validity or enforceability of any other- provision of this Mortgage. -` � '/� • Merger. There shall be no merger of the interest or estate created by this Mortgage with any other . interest or estate in the Property at any time held by or for the benefit of Lender in any capacity._ i r without the written consent of Lender. - -'' C 7 "'— r- t f 1 Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's' fTl 0 interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their i7 successors and assigns. If ownership of the Property becomes vested in a person other tha -O n Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to> this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor 0 from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall . include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and MORTGAGE (Continued) Page 10 Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means William L. Frantz and Sherry L. Frantz. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the • Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property: ---- Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its ' successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated May 7, 2009, in the original principal amount of $477,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed r4 to the Real Property; together with all accessions, parts, and additions to, all replacements of, and Q all substitutions for, any of such property; and together with all proceeds (including without tJ 0 limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of+ f8 C7 Property. 0 9 -p Property. The word "Property" means collectively the Real Property and the Personal Property. -> 1 Real Property. The words "Real Property" mean the real property, interests and rights, as further-< 1 --d; -<; described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit~ O® agreements, loan agreements, environmental agreements, guaranties, security agreements,_'44 mortgages, deeds of trust, security deeds, collateral mortgages, and all other instrumento �• ... agreements and documents, whether now or hereafter existing, executed in connection with the • Indebtedness. .� Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. MORTGAGE (Continued) Page 11 EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND EACH GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: X d .,/./.41r4"4-- / T William L.Frantz 4 X h' �Sherry L. rantz INDIVIDUAL ACKNOWLEDGMENT --S-T-ATE-OF- —=CJWGI._- ---- _ )- SS COUNTY OF \TohntSan ) On this day of Cil ,I , A.O., 20 09 , before me, a Notary Public in and for said County and State, persodally appeared William L. Frantz and Sherry L. Frantz, to me known to be the persons named in and who executed the oregoing instrument and acknowledged that they executed the same as their voluntary act and deed./ / At ,01...'171r Notary Publi/ he State of L't AMY R.FRANTZ _ 'Co �I � amber 74423s • OW FtfL -- F e• �IWrr��sr 1.2009 LASER PRO Lending, Ver. 5.40.00.003 Copr. Harland Financial Solutions, Inc. 1997, 2009. All Rights Reserved. -IA L:1CFI\LPL\G03.FC TR-922 PR-1 IV O D 1p ro 1 I F � -‹ m S '4 Exhibit A . • LOT 11 IN PART 1.VILLAGE GREEN ADDITION TO IOWA CITY,IOWA, ACCORDING TO THE PLAT THEREOF RECORDED IN BOOK 7,PAGE 60, PLAT RECORDS OF JOHNSON COUNTY,IOWA,SUBJECT TO EASEMENTS AND RESTRICTIONS OF RECORD. • • O C rn t�- , r. r•- - m • r. 0 o� „o IIIIIIII 111111111111111111111111111111111111111111 Doc ID: 019487840006 Tvoe: GEN Recorded: 02/15/2005 at 01:26:19 Pt Fee Amt: $32.00 Paae 1 of 6 Johnson County Iowa Kim Painter County Recorder BK3844 PG81-86 Prepared By: Dan Uphoff,Vico President.UNIVERSITY OF IOWA COMMUNITY CREDIT UNION.825 Mormon Trek Blvd.Iowa City.IA 52246,13191339-1000 RECORDATION REQUESTED BY: �^^� UNIVERSITY OF IOWA COMMUNITY CREDIT UNION U ' 825 Mormon Trek Blvd Iowa City,IA 52246 " rinL —0 -rte WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 825 Mormon Trek Blvd Iowa City.IA 52246 _ FOR RECORDER'S USE ONLY • MORTGAGE T `9 THIS IS A PURCHASE MONEY MORTGAGE ..— .— THIS _THIS MORTGAGE dated February 11, 2005, is made and executed between Eastside Investors, L.L.C., an Iowa Limited liability Company (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd. Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration,Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right,title, and interest in and to the following described real property,together with all existing or subsequently erected or affixed buildings, improvements and fixtures;rents and profits; all easements, rights of way, and appurtenances;all water, water rights, watercourses and ditch rights lincluding stock in utilities with ditch or Irrigation rights);and all other rights,royalties,and profits relating to the real property,including without limitation all minerals,oil,gas,geothermal and similar matters. (the "Real Property") located in Johnson County, State of Iowa: Units A, B, C, D, & F Frantz Commercial Condominiums, Iowa City, Iowa, according to the Declaration thereof recorded in Book 1751, Page 89, Plat Records ol Johnson County, Iowa,and amendments thereto. The Real Property or its address is commonly known as 340,344,348 Highland Ave., Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right,title,and interest in and to all present and future leases ol the Property and all Rents Born the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE,INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (Al PAYMENT OF THE INDEBTEDNESS AND 18) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE-THE RELATED DOCUMENTS,AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage,Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the lunds represented by the Indebtedness will be used to purchase: (11 Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; 121 Agricultural land as defined in Iowa Coda Section 9H1 12)or 175.2 (1);or 131 Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: 11) There are not now and will not be any wells situated on the Property; 12) There are not now and will not be any solid waste disposal sites on the Property; (31 There are not now and there will not be any hazardous wastes on the Property: (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of en Event of Default,Grantor may 11) remain in possession and control of the Property; 12) usii.operate or manage the Property;and 131 collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: I1) During the period of Grantor's ownership of the Property, there has been no use, generation,manufacture,storage,treatment,disposal, release or threatened release of any Hazardous Substance by any person on, under,about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing. (a) any breach or violation of any Environmental Laws, Ib) any use, generation, manufacture, storage. treatment, disposal, release or threatened release of any Hazardous Substance on,under, about or from the Property by any prior owners or occupants of the Property,or Icl any actual or threatened litigation or claims of any kind by any person relating to such matters; and 131 Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor eny tenant, contractor. agent or other authorized user of the Property shall use,generate,manufacture,store,treat,dispose of or release any Hazardous Substance on,under, about or from the Property; • and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances,including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests,at Grantor's expense,as Lender may deem appropriate to determine compliance ol the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws;and 121 agrees to indemnify and hold harmless Lender against any and all claims,losses, liabilities,damages,penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation,manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property,whether by foreclosure or otherwise. Nuisance,Waste. Grantor shall not cause,conduct or permit any nuisance nor commit,permit,or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing,Grantor will not remove,or grant to any other party the right to remove, any timber, minerals lincluding oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. MORTGAGE Loan No: (Continued) Page 2 Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements,Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. - • Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect,of ell governmental authorities applicable to the use or occupancy of the Property,including without limitation,the Americans With Disabilities Act. Grantor may contest in good faith any such law,ordinance,or regulation and withhold compliance during any proceeding,including appropriate appeals,so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond,reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts,in addition to those acts set forth above in this section,which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE-CONSENT BY LENDER. Lender may, at Lender's option,declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer,without Lender's prior written consent, of all or any part of the Real Property,or any interest in the Real Property. A-sale or transfer'means the conveyance of Real Property or any right,title or interest in the Real Property;whether legal, beneficial or equitable;whether voluntary or involuntary;whether by outright sale,deed,installment sale contract,lend contract,contract for deed, leasehold interest with a term greater than three (31 years, lease-option contract, or by sale, assignment, or transfer of eny beneficial interest in or to any land trust holding title to the Real Property,or by any other method of conveyance of an interest in the Real • Property. However,this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND UENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage; Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes,assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having • priority over or equal to the interest of Lender under this Mortgage,except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment,or claim in connection with a good faith dispute over the obligation to pay,so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen 115)days after the lien arises or,if a lien is filed,within fifteen(151 days atter Grantor has notice of the tiling, secure the discharge of the lien, or if requested by Lender,deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys'fees,or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest,Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender et least fifteen (15) days before any work is commenced, any services are furnished,or any materials are supplied to the Property,if any mechanic's lien,matarlalmen's lien,or other lien could be asserted on account of the work,services,or materials. Grantor will upnn request of Lender furnish to Lender advance assurances satisfactory to .Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to Insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies'of lire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause,and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally,Grantor shall maintain such other insurance,including but not limited to hazard,business interruption and boiler insurance as Lender may require. Policies shall_be written by such insurance companies end in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage horn each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty(301 days'prior . written notice to Lender and not containing any disclaimef of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance,if available,within 45 days after notice is given by Lender that the Property is located in a special flood hazard area,for the full unpaid principal balance of the loan and any prior liens on the property aecuring the loan, up to the maximum policy limits set under the National Flood Insurance Program,or as otherwise required by Lender,and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss it Grantor fails to do so within fifteen 115)days of the casualty. Whether or not Lender's security is impaired,Lender may,at-Lender's election,receive end retain the proceeds of any Insurance and apply the proceeds to the reduction of the Indebtedness,payment of any lien affecting the Property,or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and r./) repair,Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shalt,upon -`i -.. satisfactory proof of such expenditure,pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration it �+v Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing-to Lender under this Mortgage, then to pay cccrued interest, and the remainder, if any, shall be applied to the principal balante of the • Indebtedness. If Lender holds any proceeds after payment In full of the Indebtedness,such proceeds shall be paid to Grantor as Y Y Grantor's interests may appear. - -7- Grantor's Report on Insurance. Upon request of Lender,however not more than once a year,Grantor shall furnish to Lender))report th on each existing policy.of insurance showing: (1) the name of e insurer; (2) the risks insured; 13) the amount of the pghcj,,141 -0 the property insured,the then current replacement value of such property,and the manner of determining that value;and.:(51 the expiration date of the policy. Grantor shall,upon request of Lander,have an independent appraiser satisfactory to Lender uTgermine l the cash value replacement cost of the Property. • LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's Interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents,Lender on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate,including but not limited to discharging or paying all taxes,liens,security interests,encumbrances end other claims,at any time levied or placed on the Property and paying all costs for insuring,maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and,at Lender's option,will (AI be payable on demand; IBI be added to the balance of the Note and be apportioned among end be payable with any installment payments to become due during either I1) the term of any applicable insurance policy;or 12) the remaining term of the Note;or IC) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. MORTGAGE Loan No: 11111111111.11111 (Continued) Page 3 WARRANTY;DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (al Grantor holds good-end marketabla-title of record to the Property in fee simple,free and clear of all hens and encumbrances other than those set forth in the Real Property description or in any title insurance policy,title report,or final title opinion issued in favor ol,and accepted by,Lender in connection with this Mortgage, (b)Grantor has the full right,power,and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the lows Code Supplement,as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by,through or under Grantor,agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify and hold harmless Lender from any loss,damage,and costs,including reasonable attorneys'fees,threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above,Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage,Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding,but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice,and Grantor.will deliver,or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations,warranties,and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage,shall be continuing in nature,and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed,Grantor shall promptly notify Lender in writing,and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding,but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation,Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of • all reasonable costs,expenses,and attorneys'fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES,FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes,fees and charges are a part of this Mortgage: Current Taxes,Fees and Charges. Upon request by Lender,Grantor shell execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses Incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes,fees,documentary stamps,and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; 121 a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; 131 a tax un this type of Mortgage chargeable against the Lender or the holder of the Note;and 14) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. • Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage,this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either 11) pays the tax before it becomes delinquent,or 121 contests the tax as provided above in the Taxes end Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT;FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures,and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender,Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records,Lender may, n..) at any time and without further authorization from Grantor,file executed counterparts,copies or reproductions of this Mortgage as a 9 financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default,Grantor shall not remove,sever or detach the Personal Property from the Property. Upon default,Grantor shell assemble any a Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it rel available to Lender within three(3)days after receipt of written demand from Lender to the extant permitted by applicable law. xxxe 't7 Fixture Filing. From the date of its recording,this Mortgage shall be effective as a financing statement filed as a fixture filing with '" ( t respect to the Personal Property and for this purpose,the name and address of the debtor is the name and address of Grantor as set -} forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth < ' on the first page of this Mortgage. rn y Addresses. The mailing addresses of Grantor(debtor) and Lender (secured party)from which information concerning the security — —� interest granted by this Mortgage may be obtained(each as required by the Uniform Commercial Code)are as stated on the first page Q of this Mortgage. <n �Q FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-In-fact are a part of • this Mortgage: Further Assurances. At any time,and from time to time,upon request of Lender,Grantor will make,execute and deliver,or will cause to be made, executed or delivered,to Lender or to Lender's designee,and when requested by Lender, cause to be filed,recorded, refiled,or rerecorded, as the case may be,at such times and in such offices and places as Lender may deem appropriate,any and all such mortgages,deeds of trust,security deeds, security agreements,financing statements,continuation statements,instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve 11) Grantor's obligations under the Note, this Mortgage, and the Related Documents,and 121 the liens and security interests created by this Mortgage as first and prior liens on the Property,whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing,Grantor shall reimburse Lander for all costs and expenses Incurred In connection with the matters referred to in this paragraph. Attorney-in-Fact. 11 Grantor fails to do any of the things referred to in the preceding paragraph,Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes,Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making,executing,delivering,filing,recording,and doing all other things as may be necessary or desirable,in Lender's sole opinion,to accomplish the matters referredto in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due,and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay,if permitted by applicable law,any reasonable termination fee as determined by Lender from time to time. MORTGAGE Loan No:alIMMINia (Continued) Page 4 EVENTS OF DEFAULT. Each of the following,at Lender's option,shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or Insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Grantor. Default in Favor of Third Parties. Should Grantor default under any loan,extension of credit,security agreement,purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. • False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. • Defective Collateralization. This Mortgage or any Of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Death or Insolvency. The dissolution of Grantor's(regardless of whether election to continue is made), any member withdraws from the limited liability company, or any other termination of Grantor's existence as a going business or the death of any member, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property,any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. • Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,whether by judicial proceeding,self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and If-Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in.an amount determined by Lender,in its sole discretion,as being an adequate reserve or band for the dispute. • • Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, Including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender,whether existing-now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent,or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default: Adverse Change. A material adverse change occurs in Grantor's financial condition,or Lender believes the prospect of payment or performance of the Indebtedness is impaired. • Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment Is curable end if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve(12)months,it may be cured if Grantor, after receiving written notice from Lender demanding cure'of such default: (1l cures the default within fifteen(15)days;or (21. if the cure requires more than fifteen(151 days,immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter,Lender,at Lender's option, may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right et its option to declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Grantor would be required to pay without notice,except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lendershall have ell the rights and remedies of a secured::' party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect'the Rents;' including amounts past due and unpaid, and apply the net proceeds,over end above Lender's costs, against the Indebtedness. In''" furtherance of this right,Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to) rax Lender, If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse_ instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds._layrnents by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are meds Y f whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either'atlperso by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the P.roparty,witRO the power to protect and preserve the Property,to operate the Property preceding foreclosure or sale,and to collect the-Rents from the Property and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiyel may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the.... Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's Interest in all or any part Of the Property. Nonjudiciaf Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified,amended or replaced. Deficiency Judgment. If permitted by applicable law,Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains In possession of the Property after the Property is sold as provided above or Lender • otherwise becomes entitled to possession of the Property upon default of Grantor,Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall,at Lender's option,either 11) pay a reasonable rental for the use of the Property,or (21 vacate the Property Immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor,under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies,Lender shall be free to sell all or any part of the Property together or separately,in one sale or by separate sales. Lender shall be emitted to bid at any public sale on all or any portion of the Property, Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10)days before the time of the sale or disposition. Any sale of the Personal Property may be made in MORTGAGE Loan No: 1'= (Continued) Page 5 conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that,in the event of foreclosure of this Mortgage,lender may,at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26. 628.27, or 628.28, or any other Iowa Code Section.to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and an election to make expenditures or to take action to perform en obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender folldwirig an Event of Default,or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker,guarantor,surety or endorser end/or to proceed against any,other collateral directly or indirectly securing the Indebtedness. Attorneyq.•Feesi:,Expenses. If Lender,institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled_to.facover Such SUM a$'the'court,may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court'action is involved, and'to the nt riot prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary-at any tin e.for the'protedtion:ot jts interest or the enforcement of its rights shall become a parrot the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation,however subject to.any limits under applicable law, Lender's attorneys'fees and Lender's legal expenses. whether or not there is a lawsuit,including attorneys'fees and expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records,obtaining title reports(including foreclosure:reports),surveyors'reports;and appraisal fees and title insurance,to the extent permitted by applicable law. Grantor also will pay any court costs,in addition to all other sums provided by law. NOTICES. Any notice,required to be given under thjs Mortgage, including without limitation any notice of default and any notice of sale shall be given in writig, and shall be effective.when actually delivered,when actually received by telefacsimile(unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, If mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the;holder of any lien which has priority over this Mortgage shall be sent to Lender's address,as shown near the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law,if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other then Grantor's residence.Grantor shall furnish to Lender,upon request,a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and,to the extent not preempted by federal law, the laws of the State of lows without regard 10 its conflicts of law provisions. This Mortgage has been accepted try Lender In the State of Iowa. Choke of Venue. If there is a lawsuit,Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shell operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender,nor any course of dealing between Lender and Grantor,shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as..,;. to any future transactions. Whenever the consent of Lender is required under this Mortgage,the granting of such consent by Lender T in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in ail cases such consent may be granted or withheld in the sole discretion of Lender. • Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal,invalid,or unenforceable as to circumstance,that finding shall not make the offending provision illegal,invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending 1 ' provision cannot be so modified,it shall be considered deleted from this Mortgage. Unless otherwise required by law,We invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability"6f!erty other �'�� G u 3 provision of this Mortgage. -�;i- Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in She'.rpperty .. . at any time held by or for the benefit of Lender in any capacity,without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortte ge shall be •3 binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Property becomes")sted in a r"— person other than Grantor,Lender,without notice to Grantor,may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby relinquishes nil rights of dower, homestead and distributive share in and to the Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower"means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note. Default. The word"Default"means the Default set forth in this Mortgage in the section titled"Default". Environmental Laws. The words"Environmental Laws"mean any and all state,federal and local statutes,regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA'), the Superfund Amendments and Reauthorization Act of 1986,Pub.L.No.99-499('SARA'),the Hazardous Materials Transportation Act,49 U.S.C. Section 1801,et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,et seq.,or other applicable state or federal laws,rules,or regulations adopted pursuant thereto. Event of Default. The words"Event of Default"mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word"Grantor'means Eastside Investors,L.L.C.. MORTGAGE Loan No: al1110111.111116 (Continued) Page 6 Guarantor. The word'Guarantor"means any guarantor,surety,or accommodation party of any or all of the Indebtedness. Guaranty. The word'Guaranty"means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical,chemical or infectious characteristics,may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words Hazardous Substances" are used in their very broadest sense and Include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also Includes,without limitation,petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word'Improvements"means all existing and future improvements,buildings,structures,mobile homes affixed on the Real Property,facilities,additions,replacements and other construction on the Real Property. Indebtedness. The word 'Indebtedness"means all principal,interest end late fees,and other amounts,costs and expenses payable under the Note or Related Documents, together with all renewals of. extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any.amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Mortgage. The word"Mortgage"means this Mortgage between Grantor and Lender. Note. The word 'Note' means the promissory note dated February 11, 2005, in the original principal amount of $288,000.00 from Grantor to Lender,together with all renewals of,extensions of.modifications of,refinancings of,consolidations of,and substitutions for the promissory note or agreement. The maturity date of this Mortgage is February 15,2010. Personal Property. The words "Personal Property' mean all equipment, fixtures, and other articles of personal property now or hereafter Owned by Grantor, and now or hereafter attached or affixed to the Real Property;together with all accessions.-parts,and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums)from any sale or other disposition of the Property. Property. The word'Property"means collectively the Reel Property and the Personal Property. • Real Property. The words"Real Property'mean the real property,interests and rights,as further described in this Mortgage. Related Documents. The words'Related Documents'mean all promissory notes,credit agreements,loan agreements,environmental agreements, guaranties, security agreements, mortgages, deeds-of trust,'security deeds, collateral mortgages, and all other instruments,agreements and documents•whether now or hereafter existing,executed in connection with the Indebtedness. Rents. The word'Rents"means all present end future rents,revenues,income,issues,royalties,profits,bnd other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE,AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT Or A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: - EASTSID. NVESTORS, 0 er /��rt�ifftift E7 r.")Illlam L.Frantz, a.:r.:r of astslde Inv L.L.C. - > ry -173 Eu. ne .N-.'ey, 'embe of Eas de v:stors,L.L.C. .C)„ N f" 111 r LIMITED LIABILITY COMPANY ACKNOWLEDGMENT 5 STATE OF �W A I ISS W/� COUNTY OF y On this (' 1� day of RS vv. Ir ,A.D.,20 Or' ,before me,the undersigned Notary Public in said County and State,personally appeared William L.Frantz,Member;Eugene W.Nissley,Member of Eastslde Investors,L.L.C.,to me personally known,who being by me duly sworn,did say that they are one of the members or designated agents of said limited liability company, and that the instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrumen be the voluntary act and deed of the limited liability company by it and by the members or designated agents voluntarily executed. Notary Public In the State of rt� �.0 ti. DANIEL F.UPHOFF wA COMMISSION NUMMBEA 1732S1 • MY COMMISSION ppIPIRES .. �... 2!lY/a L LAMA m0 0..a0,v.,0 a.00.00{Cl..Mas0 MsN la/w1.m.0.,m.0000. u 000.1...y.M 1.113110.1,MLIC MIT,Ml . . . Guac03o NV 1111111111111111110111111111111111111111111111111111 Doc ID: 019487850004 Tvoe: GEN Recorded: 02/16/2005 at 01:26:42 p Fee Amt: $22.00 Pace 1 of 4 Johnson County Iowa • K1m Painter County Recorder BK3844 P687-90 Prepared By: Dan Uphoff,Vice President,UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City,IA 52246.1319)339-1000 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 825 Mormon Trek Blvd Iowa City,IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 825 Mormon Trek Blvd Iowa City,IA 52246 FOR RECORDER'S USE ONLY ASSIGNMENT OF RENTS THIS ASSIGNMENT OF RENTS dated February 11, 2005, is made and executed between Eastside Investors, L.L.C., an Iowa Limited Liability Company (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). • ASSIGNMENT. For valuable consideration, Grantor hereby assigns;grants a continuing security interest in,and conveys to Lender all of Grantor's right, title, and interest in and to the Rents from the following described Property located in Johnson County,State of Iowa: Units A, B, C, D, & F Frantz Commercial Condominiums, Iowa City, Iowa, according to the Declaration thereof recorded in Book 1751, Page 89,Plat Records of Johnson County,Iowa,and amendments thereto. The Property or its address is commonly known as 340,344,348 Highland Ave., Iowa City, IA 52240. THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF GRANTOR UNDER THE NOTE,THIS ASSIGNMENT,AND THE RELATED DOCUMENTS. THIS ASSIGNMENT IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment or any Related Documents,Grantor shall pay to Lender all amounts secured by this Assignment as they become due,and shall strictly perform all of Grantor's obligations under this-Assignment,'? Unless and until Lender exercises its right to collect the Rents as provided below and so long as there is no default under thit,,Assignment,;. Grantor may remain in possession and control of and operate and manage the Property and collect the Rents,provided that the granting oN the right to collect the Rents shall not constitute Lender's consent to the use of cash collateral in a bankruptcy proceeding.. a GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: •CI -�` Ownership. Grantor is entitled to receive the Rents free and clear of all rights, loans, liens, encumbrances, and Claims except is disclosed to and accepted by Lender in writing. • Right to Assign. Grantor has the full right,power and authority to enter into this Assignment and to assign and convey t a Rents to Lender. iii d GG No Prior Assignment. Grantor has not previously assigned or conveyed the Rents to any other person by any instrum no7.4 in force No Further Transfer. Grantor will not sell,assign,encumber,or otherwise dispose of any of Grantor's rights in the:rfia'except.91 provided in this Assignment. J r LENDER'S RIGHT.TO RECEIVE AND COLLECT RENTS. Lender shall have the right at any time, and even though no default shall ave occurred under this Assignment,to collect and receive the Rents. For this purpose, Lender is hereby given and granted the lollow n�g rights,powers and authority: Notice to Tenants. Lender may send notices to any and all tenants of the Property advising them of this Assignment and directing all Rents to be paid directly to Lender or Lender's agent. Enter the Property. Lender may enter upon and take possession of the Property;demand,collect and receive from the tenants or from any other persons liable therefor, all of the Rents; institute and carry on all legal proceedings necessary for the protection of the Property,including such proceedings as may be necessary to recover possession of the Property;collect the Rents and remove any tenant or tenants or other persons from the Property. Maintain the Property. Lender may enter upon the Property to maintain the Property and keep the same in repair;to pay the costs thereof and of all services of all employees, Including their equipment, and of all continuing costs and expenses of maintaining the Property in proper repair end condition.and also to pay all taxes,assessments and water utilities,and the premiums on fire and other insurance effected by Lender on the Property. Compliance with Laws. Lender may do any and all things to execute and comply with the laws of the State of Iowa and also all other laws,rules,orders,ordinances and requirements of all other governmental agencies affecting the Property. Lease the Property. Lender may rent or lease the whole or any part of the Property for such term or terms and on such conditions as Lender may deem appropriate. Employ Agents. Lender may engage such agent or agents as Lender may deem appropriate,either in Lender's name or in Grantor's name,to rent and manage the Property,including the collection end application of Rents. Other Acts. Lender may do all such other things and acts with respect to the Property as Lender may deem appropriate and may act exclusively and solely in the place and stead of Grantor and to have all of the powers of Grantor for the purposes stated above. No Requirement to Act. Lender shall not be required to do any of the foregoing acts or things, and the fact that Lender shall have performed one or more of the foregoing acts or things shall not require Lender to do any other specific act or thing. APPLICATION OF RENTS. All costs and expenses incurred by Lender in connection with the Property shall be for Grantor's account and Lender may pay such costs and expenses from the Rents. Lender,in its sole discretion,shall determine the application of any and all Rents received by it; however, any such Rents received by Lender which are not applied to such costs and expenses shall be applied to the Indebtedness. All expenditures made by Lender under this Assignment and not reimbursed from the Rents shall become a part of the Indebtedness secured by this Assignment, and shall be payable on demand,with interest at the Note rate from date of expenditure until e h. 1/0 • ASSIGNMENT OF RENTS • • Loan No: (Continued) • Page 2 • paid. • FULL PERFORMANCE. if Grantor pays all of the Indebtedness when due and otherwise performs all the obligations imposed upon Grantor under this Assignment,the Note, and the Related-Documents, Lender shall execute and deliver to Grantor a suitable satisfaction of this Assignment and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Property. Any termination fee required by law shall be paid by Grantor,if permitted by applicable law. NO OBLIGATION OF LENDER. The assignment and security interest granted in this Assignment shall not be deemed or construed to constitute Lender as a mortgagee or trustee in possession of the Property,to obligate Lender to lease the Property or to attempt to do so, or to take any action, incur any expense or perform or discharge any obligation, duty or liability whatsoever under any of the leases or otherwise. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Assignment or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Assignment or any Related Documents,Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes,liens,security interests,encumbrances and other claims,at any time levied or placed on the Rents or the Property and paying all costs for-insuring,maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and,at Lender's option,will IA) be payable on demand; (81 be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy;or (21 the remaining term of the Note;or ICI be treated es a balloon payment which will be due and payable at the Note's maturity. The Assignment also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. DEFAULT. Each of the following,at Lender's option,shall constitute an Event of Default under this Assignment: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Assignment or in any of the Related Documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Grantor. Default on Other Payments. Failure of Grantor within the time required by this Assignment to make any payment for taxes or insurance,or any other payment necessary to prevent filing of or to effect discharge of any lien. Default In Favor of Third Parties., Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,or any other agreement,in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to perform Grantor's obligations under this Assignment or any of the Related Documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Assignment or the Related Documents is false or-misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. . Defective Collateralzation. This Assignment or any of the Related Documents ceases to be in full force and effect)including failure of any collateral document to create a valid and perfected security Interest or lien)at any time and for any reason. Death or Insolvency. The dissolution of Grantor's(regardless of whether election to continue is made),any member withdraws from the limited liability company,or any other termination of Grantor's existence as a going business or the death of any member,the insolvency of Grantor,the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against _ r•-•4 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,whether by judicial proceeding,self-help, 0 repossession or any other method, by any creditor of Grantor or by any governmental agency against the Rents or any property +' securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, Including deposit accounts, with Lender. However,this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the >..71 claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Property Damage or Loss. The Property is lost,stolen,substantially damaged,sold,or borrowed against. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or anyrn Guarantor dies or becomes incompetent,or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness. In the event of a death,Lender,at its option;may,but shall not be required to,permit the Guarantor's estate to assume unconditionally O." +Q the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. �[ •' Adverse Change. A material adverse change occurs in.Grantor's financial condition,or Lender believes the prospect of payment or performance of the Indebtedness is impaired. , insecurity- Lender in good faith believes itself insecure. Cure Provisions. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Assignment within the preceding twelve 1121 months,it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: 111 cures the default within fifteen 1151 days;or (21 if the cure requires more than fifteen 115)days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter,Lender may exercise any one or more of the following rights end remedies,in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its-option to.declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Granter would be required to pay Without notice,except as may be expressly required by applicable law. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, end apply the net proceeds,over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender shall have all the rights provided for in the Lender's Right to Receive and Collect Rents Section, above. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender In response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property,with the power to protect and preserve the Property,to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial-amount. Employment by Lender shall not disqualify a person from serving as a receiver. Other Remedies. Lender shall have all other rights end remedies provided in this Assignment or the Note or by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and an election to make • ASSIGNMENT OF RENTS Loan No:L (Continued) Page 3 expenditures or to take action to perform an obligation of Grantor under this Assignment, after Grantor's failure to perform,shall not affect Lender's right to declare a default and exerciseeits.remedies.. • Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Assignment,Lender shall be entitled to recover such sum as.the court may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court action is involved, end to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of Its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate From the date of the expenditure until repaid. Expenses covered by this paragraph include,without limitation,however subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction(, appeals, end any anticipated post-judgment collection services, the cost of searching records,obtaining tide reports(including foreclosure reports),surveyors'reports, end appraisal fees,title insurance, and fees for the Trustee, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. • MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Assignment: Amendments. This Assignment, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Assignment. No alteration of or amendment to this Assignment shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Caption Headings. Caption headings in this Assignment ere for convenience purposes only and are not to be used to interpret or define the provisions of this Assignment. Governing Law.• Thls Assignment will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Assignment has been accepted by Lender In • the State•df Iowa:` - Choice of Venue._,tf there is a lawsuit,Grantor agrees upon Lender's request to submit to the Jurisdiction of the courts of Johnson County,State of loWa:^- • - •• • • Merger. There shall be no merger of the interest or estate created by this assignment with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity,without the written consent of lender. Interpretation. ll) In all cases where there is more than one Borrower or Grantor,then all words used in this Assignment in the singular shall be deemed to have been used in the plural where the context end construction so require. (2) If more than one person signs this Assignment es'Grantor,'the obligations of each Grantor are joint and several. This means that if Lender brings a lawsuit, • Lender may sue any one or more of the Grantors.-If Borrower and Grantor are not the same person, Lender need not sue Borrower first,and that Borrower need not be joined in any lawsuit. (3) The names given to paragraphs or sections in this Assignment are for convenience purpobes'only.They are not to be'used to interpret or define the provisions of this Assignment. No Weiner by Lender. Lender shell not be deemed to have waived any rights under this Assignment unless such waiver is given in writing and signed by,Lender:,No delay or omission on the pert of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Assignment shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Assignment. No prior waiver by Lender, nor any course of dealing between Lender end Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Assignment,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Merger. There shall be no merger of the interest or sctete created bythisassignment with any other interest or e't to in the Pr_oJlerty at any time held by or for the benefit of Lender in any capacity,without the written consent Of Lender. �_�- Notices. Any notice required to be given under this Assignment shall be given in writing, end shall be effective when tertbally delivered, when actually received by telefacsimile (unless otherwise required by lend, when deposited with a nationally recogi?Szed G y overnight courier, or,if mailed, when deposited in the United States mail,as first class,certified or registered mei(postage prepaid, -_ directed to the addresses shown near the beginning of this Assignment. Any party may change its address for notices undo this Assignment by giving formal written notice to the other parties, specifying that the purpose of the notice is to Change the patty's 773' address. For-notice purposes. Grantor agrees to keep Lender informed at all times of Grantor's current address._Unless otherwise y-- provided or required by law,if there is more than one Grantor,any notice given by Lender to any Grantor is deemea'td,be noticg,tven U Y to all Grantors. I • e r-'d Powers of Attorney. The various agencies end powers of attorney conveyed on Lender under this Assignntar �" granted for purposes of security and may not be revoked by Grantor until such time as the same are renounced by Lender. Severability. If a court of competent jurisdiction finds any provision of this Assignment to be illegal,invalid,or eronforceableres to any circumstance,that finding shall not make the offending provision illegal,invalid,or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending • provision cannot be so modified,it shall be considered deleted from this Assignment. Unless otherwise required by law,the illegality, invalidity,or unenforceability of any provision of this Assignment shall not affect the legality,validity or enforceability of any other provision of this Assignment. Successors and Assigns. Subject to any limitations stated In this Assignment on transfer of Grantor's interest,this Assignment shall be binding upon and Inure to the benefit of the parties,their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor,Lender,without notice to Grantor•may deal with Grantor's successors with reference to this Assignment and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Assignment or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Assignment. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor Is not en owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rlghs. WAIVER OF RIGHT DF REDEMPTION. NOTWITHSTANDING ANY OF THE PROVISIONS TO THE CONTRARY CONTAINED IN THIS ASSIGNMENT,GRANTOR HEREBY WAIVES ANY AND ALL RIGHTS OF REDEMPTION FROM SALE UNDER ANY ORDER OR JUDGMENT OF FORECLOSURE ON-GRANTOR'S BEHALF AND ON BEHALF OF EACH AND EVERY PERSON, EXCEPT JUDGMENT CREDITORS OF GRANTOR,ACQUIRING ANY INTEREST IN OR TITLE TO THE PROPERTY SUBSEQUENT TO THE DATE OF THIS ASSIGNMENT, DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Assignment. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Assignment shall have the meanings attributed to such terms in the Uniform Commercial Code: Assignment. The word 'Assignment' means this ASSIGNMENT OF RENTS, as this ASSIGNMENT OF RENTS may be amended or modified from time to time,together with ell exhibits and schedules attached to this ASSIGNMENT OF RENTS from time to time. Borrower. The word'Borrower'means Eastside Investors,L.L.C.. Default. The word"Default'means'the Default set forth'in this Assignment In the section titled'Default'. Event of Default. The words"Event of Default mean any of the events of default sat forth in this Assignment in the default section of this Assignment. Grantor. The word'Grantor"means Eastside Investors,L.L.C.. Guarantor. The word'Guarantor'means any guarantor,surety,or accommodation party of any or all of the Indebtedness. ASSIGNMENT OF RENTS Loan No: 111111111.110 (Continued) Page 4 Guaranty. The word"Guaranty"means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Indebtedness. The word"Indebtedness"means all principal,interest and late tees,and other amounts,costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Assignment,together with interest on such amounts as provided in this Assignment. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Mortgage. The word'Mortgage'means this ASSIGNMENT OF RENTS between Grantor and Lender. Note. The word "Note' means the promissory note dated February 11, 2005. in the original principal amount of $288,000.00 from Grantor to Lender,together with all renewals of,extensions of.modifications of,refinancings of,consolidations of,and substitutions for the promissory note or agreement. Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the 'Assignment'section of this Assignment. Related Documents. The words"Rolated Documents"mean all promisrory notes,credit agl lements,lean ag'eements, l'nvironmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. Rents. The word'Rents"means all of Grantor's present and future rights,title and interest in,to and under any and all present and future leases,including,without limitation,all rents,revenue,income,issues,royalties,bonuses,accounts receivable,cash or security deposits,advance rentals,profits and proceeds from the Property,and other payments and benefits derived or to be derived from such leases of every kind and nature, whether due now or later, including without limitation Grantor's right to enforce such leases and to receive and collect payment and proceeds thereunder. • THE UNDERSIGNED ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT,AND NOT PERSONALLY BUT AS AN AUTHORIZED SIGNER,HAS CAUSED THIS ASSIGNMENT TO BE SIGNED AND EXECUTED ON BEHALF OF GRANTOR ON FEBRUARY 11,2005. • GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS ASSIGNMENT OF RENTS AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. • - GRANTOR: EASTSID/ ESIORS,L.L.C. 41/ r.J �j p By: - �.� William L.Frantz,Member of E:stsl **0 mammalA Eugene W -rssley,Member• is, vesters, .L.C. 0" I.— LIMITED LIABILITY COMPANY ACKNOWLEDGMENT rn• 3 STATE OF L,Vre. I COUNTY OF ti COUNTY SS t 1 On this day of .c .r Y ,A.D.,20 C,S In said County and State,personallyappearedbefore of E the undersignedInveNotary tome William L.Frantz,Member;Eugene W.Nissley,Member Eastside Investors,L.L.C., me personally known,who being by me duly sworn, did say that they are one of the members or designated agents of said limited liability company, and that the instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrument t e voluntary act and deed of the limited liability company by it and by the members or designated agents voluntarily executed. Notary Public in the State of T•W 01- -- FI t, DANIEL R UPHOFF COMMISSION NUMBER 173281 MY COMPISSION& FIRES o . 2 1►r ` • • IAta,,.I,L.,.,s V.,.p.mcm Cop,'_411.••4 I..., .m r.Mn•....",, .y LIcnuuo,,IC,,,,,,MA • Cu ac. - Y . �xst _,IIIIINifII!Doc ID: 016511810 : 0EN _IUIIB�II�NIIIUIIdIIua�I�INll�llllllull�llll Recorded: 02/23/20060atType02:04:50 PM Fee Amt: $32.00 Paae I of 6 Johnson County Iowa Kim Painter County Recorder BK3846 "280-285 Prepared By: Dan Uphoff,Vice President,UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City,IA 52246,(319)339-1000 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 825 Mormon Trek Blvd Iowa City,IA 52246 0 V^ WHEN RECORDED MAIL TO: jarl .1:)1 UNIVERSITY OF IOWA COMMUNITY CREDIT UNIONwawa825 Mormon Trek Blvd Iowa City,IA 52246 FOR RECORDER'S USE eNI.Y CONSTRUCTION MORTGAGE ©71 �rmmJ� THIS IS A PURCHASE MONEY MORTGAGE .• THIS MORTGAGE dated February 17, 2005,is made and executed between Eastside Investors,L-LC., an 16p Limited Liability Company (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd,Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration,Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right,title,and interest in and to the following described real property,together with all existing or subsequently erected or affixed buildings,improvements and fixtures;rents end profits;all easements,rights of way, and appurtenances;all water,water rights, watercourses and ditch rights(including stock in utilities with ditch or irrigation rights);and all other rights,royalties,and profits relating to the real property,including without limitation all minerals,oil,gas,geothermal and similar matters, (the Real Property")located in Johnson County,State of Iowa: Units A, B and C, Building 22,Wellington Condominiums II at Lancester and Montgomery Places, according to the Declaration recorded May 20, 2004 in Book 3736, Page 788, Records of the Recorder of Johnson County, Iowa,together with said unit's percentage intererst in and to the common elements of said regime. The Real Property or its address is commonly known as 51, 55 & 59 Montgomery Place, Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right,title,and interest in and to alt present and future leases of the Property and all Rents from the Property. In addition,Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from Me date of the Mortgage and not just in the event of default. THIS MORTGAGE,INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (8) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE,THE RELATED DOCUMENTS,AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage,Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform ail of Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage secures an obligation incurred for the construction of an improvement on land, and is a "construction mortgage" within the meaning of Section 554.9334 of the Iowa Uniform Commercial Code. This Mortgage also secures loans or advancements made directly to finance work or improvements upon the real estate described herein, and is a 'construction mortgage lien'within the meaning of Section 572.18 of the Iowa Code. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession end use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes,and none of the funds represented by the Indebtedness will be used to purchase: (11 Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2(1);or 13) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: Ill There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (31 There are not now and there will not be any hazardous wastes on the Property; 141 There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default,Grantor may 111 remain in possession and control of the Property; (2) use,operate or manage the Property;and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property,there has been no use,generation, manufacture,storage,treatment,disposal, release or threatened release of any Hazardous Substance by any person on,under,about or from the Property; (2) Grantor has no knowledge of,or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (bl any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on,under,about or from the Property by any prior owners or occupants of the Property,or Ic) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant,contractor, agent or other authorized user of the Property shell use,generate,manufacture,store,treat,dispose of or release any Hazardous Substance on,under,about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances,including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests,at Grantor's expense,as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be Construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws;and (2) agrees to indemnify and hold harmless Lender against any and all claims,losses, liabilities,damages,penalties,and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use,generation,manufacture, storage, disposal,release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of MORTGAGE Loan No:asiammi, (Continued) Page 2 any interest in the Property,whether by foreclosure or otherwise. Nuisance,Waste. Grantor shall not cause,conduct or permit any nuisance nor commit,permit,or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing,Grantor will not remove,or grant to any other party the right to remove, any timber, minerals (including oil and gas). coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. • Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements,Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect,of all governmental authorities applicable to the use or occupancy of the Property,including without limitation,the Americans With Disabilities Act. Grantor may contest in good faith any such law,ordinance, or regulation and withhold compliance during any proceeding,including spprop:iate appeals, so long as Grantor has notified Lender in writing prier to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized.' Lender may require Grantor to post adequate security or a surety bond,reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts,in addition to those acts set forth above in this section,which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE.CONSENT BY LENDER. Lender may, at Lender's option,declare immediately due and payable all sums secured by this .Mortgage upon the sale or transfer, without Lender's prior written consent,of all or any pert of the Real Property,or any interest in the Real Property. A"sale or transfer'means the conveyance of Reel Property or any right,title or interest in the Real Property;whether legal, beneficial or equitable;whether voluntary or involuntary;whether by outright sale,deed,installment sale contract,land contract,contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property,or by any other method of conveyance of en interest in the Real Property. However,this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due land in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges end sewer service charges levied against or on account of the Property,and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage,except for those liens-specifically agreed to in writing by Lender, end except for the lien of taxes and assessments not due as further specified In the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax,assessment,or claim in connection with a good faith dispute over the obligation to pay,so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen(15)days after the lien arises or,if a lien Is filed,within fifteen 115)days after Grantor has notice of the filing,secure the discharge of the lien,or it requested by Lender,deposit with Lender cash or a sufficient corporate surety bond or other securitysatisfactory to Lender In an amount sufficient to discharge the lien plus any costs and attorneys'fees;or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest,Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcementagainstthe Property. Grantoi shell.narne Lender as an additional obligee under arty surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lander satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are • furnished,or any materials are supplied to the Property,if any mechanic's lien,materialmen's lien,or other lien could be asserted on account of the work,services,or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE.INSURANCE. Thefollowing provisionsrelatingtoinsuring theProperty area.part.of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in en amount sufficient to avoid application of any coinsurance clause,and with a standard mortgagee clause in favor of Lender. Grantor shall eltso procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally,Grantor shell maintain such other insurance, including but not limited to hazard,business Interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage`ffiim each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty(30)days'.ptjor written notice to Lender and not containing any disclaimer'of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in anyway by any:act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of-the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance,If available,within 45 days atter notice is given by Lender that the Property is located in a special flood hazard area,for the = A a full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum:policy lim(jgjet -' under the National Flood Insurance Program,or as otherwise required by Lender,and to maintain such insurance ltpi The term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender mey'maka proof a[loss if Grantor fails to do so within fifteen(15)days of the casualty. Whether or not Lender's security is Impaired,Lander may,at Leer's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness,paym'BRt of any lien affecting the Property,or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair,Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall,upon satisfactory proof of such expenditure,pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shell be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender,however not more than once a year,Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (31 the amount of the policy; 14) the property insured,the then current replacement value of such property, and the manner of determining that value;and (5) the expiration date of the policy. Grantor shall,upon request of Lender,have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. • LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially effect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, Including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents,Lender on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate,including but not limited to discharging or paying all taxes,liens,security interests,encumbrances and other claims,at any time levied or placed on the Property and paying all costs for insuring,maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then MORTGAGE Loan No: — (Continued) Page 3 bear interest at the rate charged under the Note from the date incurred or paid by Lender to the data of repayment by Grantor. All such expenses will become a part of the Indebtedness and,at Lender's option,will IA) be payable on demand; (B) be added to the balance of the Note'and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy;or. (21 the remaining term of the Note;or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY;DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a)Grantor holds good end marketable title of record to the Property in tee simple,free and clear of all liens-and encumbrances other than those set forth in the Real Property description or in any title insurance policy,title report,or linal title opinion issued in favor of,and accepted by,Lender in connection with this Mortgage, lb)Grantor has the full right,power,and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement,as now enacted or hereafter modified,amended or replaced. Grantor, for itself and all parsons claiming by,through or under Grantor,agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it Is the sole party entitled to do so and agrees to indemnify and hold harmless Lender from any loss,damage,and costs,including reasonable attorneys'fees,threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above,Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any act4m or pro.aeding is commencer,that questions Grantor's title or the interest of Lender under this Mortgage,Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be•entitfed to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice,and Grantor will deliver,or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations,warranties,and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage,shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings era a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding,but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If ell or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation,Lender may at its election require,that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs,expenses,and attorneys'fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES. FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes,fees end charges are a part of this Mortgage: Current Taxes,Fees and Charges. Upon request by Lender,Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect end continue Lender's lien an the Real Property. Grantor shall reimburse Lender for all taxes, as described below,.together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes,fees,documentary stamps,and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (21 a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against ry the Lender or the holder of the Note;and 141 a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. 0 Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage.this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as >" ;'r') provided below unless Grantor either 11) pays the tax before it becomes delinquent,or -(2) contests the tax as provided above in the + "O Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. n"C SECURITY AGREEMENT;FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a pert ...}C) — of this Mortgage: ' r- • Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures,and (�(� Lander shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. —'4"' Security Interest. Upon request by Lender,Grantor shall take whatever action is requested by Lender to perfect and continue Lender's , Z .p security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records,Lender may, .L at any time and without further authorization from Grantor,file executed counterparts,copies or reproductions of this Mortgage as a .j financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon (V default,Grantor shall not remove,sever or detach the Personal Property from the Property. Upon default,Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three 131 days after receipt of written demand from Lender to the extent permitted by applicable law. Fixture Fling. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender cs set forth on the first page of this Mortgage. • --- . - - .. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained leach as required by the Uniform Commercial Code)are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part al this Mortgage: Further Assurances. At any time,and from time to time,upon request of Lender,Grantor will make,execute end deliver,or will cause to be made,executed or delivered, to Lender or to Lender's designee, and when requested by Lender. cause to be filed,recorded, refiled,or rerecorded,as the case may be,at such times and in such offices and places as Lender may deem appropriate,any and all such mortgages,deeds of trust,security deeds,security agreements, financing statements,continuation statements,instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue,'or preserve 111 Grantor's obligations under the Note, this.Mortgage, and the Related Documents,and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property.whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing,Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-In-Fact. It Grantor fails to do any of the things referred to In the preceding paragraph,Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes,Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making,executing,delivering,filing,recording,and doing all other things as may be necessary or desirable,in Lender's MORTGAGE Loan No: - (Continued) Page 4 sole opinion,to accomplish the matters referred to in the preceding paragraph. • FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay,if permitted by applicable law,any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following,.at Lender's option,shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. ' Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Grantor. Default In Favor of Third Parties. Should Grantor default under any loan,extension of credit, security agreement, purchase or sales agreement,or any other agreement;iii favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Death or Insolvency. The dissolution of Grantor's(regardless of whether election to continue is made),any member withdraws from the limited liability company, or any other termination of Grantor's existence as a going business or the death of any member, the insolvency of Grantor,the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,whether by judicial proceeding,self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being en adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor end Lender that is not remedied within any grace period provided therein,including without limitation any agreement concerning any indebtedness or.other obligation of Grantor to Lender,whether existing now or later. Events Affecting Guarantor. Any-of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes Incompetent,or revokes ur disputes the validity of,or liability under,any Guaranty of the Indebtedness. In the event of a death,Lender,at its option,may,but shall not be required to,permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,end,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition,or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. IV Right to Cure. If any default,other than a default in payment is curable and if Grantor has riot been given a notice of a breach of the 0 8 same provision of this Mortgage within the preceding twelve 1121 months, it may be cured if Grantor,after receiving written notice n Pn from Lender demanding cure of such default: Ili cures the default within fifteen 115)days;or 121 If the cure requires more than ...— � -r fifteen(151 days,immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and •'-'{ ewer thereafter•continues and completes all reasonable and necessary steps sufficient to-produce compliance as soon-as•reasonably --- practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter,Lander.at Lender's option, r Pl may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: m+ Accelerate Indebtedness. Lender shall have the right at its option to declare the entire Indebtedness immediately due and payable, M including any prepayment penalty which Grantor would be required to pay without notice, except as may be expressly required by applicable law. �. UCC Remedies. With respect to all or any part of the Personal Property,Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. N Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right,Lender may require any tenant or other user of the Property to make payments of rent or use tees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-tact to endorse instruments received in payment,thereof In the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender In response to Lender's demand shall satisfy the obligations,for which the payments are made, whether or not any proper grounds for_the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of ell or any part of the Property,with the power to protect and preserve the Property,to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified,amended or replaced. Deficiency Judgment. If permitted by applicable law,Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains In possession of the Property atter the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall,become a tenant at sufferance of Lender or the purchaser of the Property and shall,at Lender's option,either Ill pay a reasonable rental for the use of the Property,or (21 vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor,under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. lender shall have all other rights end remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property MORTGAGE Loan No: L (Continued) Page 5 marshalled. In exercising its rights and remedies,Lender shall be tree to sell all or any part of the Property together or separately,in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is.to be made. Reasonable notice shall mean notice given at least ten (10) days.before fhe'flfiio:of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the ReelProperty:., Shortened Redemption. Grentbr hereby'egrebs that ln..the event of foreclosure of this Mortgage,Lender may,at Lender's sole option, elect to reduce the penod of redemption ruraukht to Iowa Code Sections 628.26, 628.27, or 628.28,.or any other Iowa Code Section,to such time es may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shell not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default,or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/ac against any other co-maker,guarantor,surety or endorser endlor to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys'Fees:Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage. Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court action is involved, and.to the extent not prohibited by law,all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interes'.or the enforcement of its rights shall become a pan of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include,without limitation,however subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses, whether or not there is a lawsuit,including attorneys'fees and expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records,obtaining title reports(including foreclosure reports),surveyors'reports,and appraisal fees and title insurance,to the extent permitted by applicable law. Grantor also will pay any court costs,in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage,including without limitation any notice of default and any notice of sale shall be given in writing,and shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or, If mailed,when deposited in the United States mail, as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address,es shown near the beginning of this Mortgage.•Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Grantor agrees to keep Lender informed et all times of Grantor's current address. Unless otherwise provided or required by law,if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to ell Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth In this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence,Grantor shall furnish to Lender,upon request,e certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. 'Net operating income' shall mean all cash receipts from the Propeny less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define rV the provisions o:this Mortgsge. _ Governing Law. This Mortgage will be governed by federal law applicable to Lender and,to the extent not preempted by federal law, 0 the laws of the State of Iowa without regard to Its conflicts of law provisions. This Mortgage has been accepted by Lender in the *C) C� State of Iowa. >"') rin Choice of Venue. If there Is a lawsuit,Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County.State of Iowa. n No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right ' m otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender,nor any course of dealing between Lender and Grantor,shall constitute a waiver of any of Lender's rights or of any ofGrantor's obligations as 0 1 to any future transactions. Whenever the consent of Lender is required under this Mortgage,the granting of such consent by Lender #� in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. h7 Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal,invalid,or unenforceable as to any circumstance,that finding shall not make the offending provision illegal, Invalid,or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid end enforceable. If the offending provision cannot be so modified, It shall be considered deleted from this Mortgage. Unless otherwise required by law,the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity,without the.written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest,this Mortgage shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor,Lender,without notice to Grantor,may deal with.Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence In the performance of this Mortgage. Release of Rights of Dower, Homestead end Distributive Share. Each of the undersigned hereby relinquishes all rights of dower, homestead and distributive share in end to the Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used In this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall Include the singular,as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower"means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note. Default. The word"Default"means the Default set forth In this Mortgage in the section titled'Default". Environmental Laws. The words"Environmental Laws'mean any and all state,federal and local statutes,regulations end ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ('CERCLA"I, the Superfund Amendments and Reauthorization Act of 1986,Pub.L.No.99-499 l"SARA"),the Hazardous Materials Transportation Act.49 U.S.C. i • MORTGAGE Loan No: (Continued) Page 6 Section 1801,et seq.,the Resource Conservation and Recovery Act,42 U.S.C.Section 6901,at seq.,or other applicable state or federal laws,rules,or regulations adopted pursuant thereto. Event of-Default. The words 'Event of Default'mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word"Grantor'means Eastslde Investors,L.L.C.. Guarantor. The word'Guarantor'means any guarantor,surety,or accommodation party of any or all of the Indebtedness. Guaranty. The word'Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words 'Hazardous Substances' mean materials that, because of their quantity, concentration or physical,chemical or infectious characteristics,may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words 'Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances' also includes,without limitation,petroleum end petroleum by-products or any fraction thereof and asbestos. Improvements. The word'Improvements'means all existing and future improvements,buildings,structures,mobile homes affixed on the Real Property,facilities,additions,replacements and other construction on the Real Property. Indebtedness. The word'Indebtedness'means all principal,interest and late fees, and other amounts,costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Mortgage. The word'Mortgage'means this Mortgage between Grantor and Lender. Note. The word 'Note' means the promissory note dated February 17, 2005, in the original principal amount of $535,000.00 from Grantor to Lender,together with all renewals of,extensions of,modifications of,refinancings ol.consolidations of,and substitutions for the promissory note or agreement. The maturity date of this Mortgage is February 15,2006. Personal Property. The words 'Personal Property' mean all equipment, fixtures, end other articles of personal property now or hereafter owned by Grantor,and now or hereafter attached or affixed to the.Real Property;together with all accessions,parts,and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums)from any sale or other disposition of the Property. • Property. The word"Property"means collectively the Real Property and the Personal Property. Real Property. The words'Real Property'mean the real property,interests and rights,as further described in this Mortgage. Related Documents. The words'Related Documents'mean all promissory notes,credit agreements,loan agreements,environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. Rents. The word'Rents'means all present and futurt rents,revenues,income,issues,royalties,profits,end other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE,AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. • GRANTOR: • EASTSID INVESTORS,L.LC. • Gel By: r�a .1"1" .re. William L.Frantz,Member of East. e • ors,L.L.C. ig e W "res a "'ember o sem^ 'estor-, 0 LIMITED LIABILITY COMPANY ACKNOWLEDGMENT• 74 LIMITED r' iV STATE OF ,L 0 Wok, 1 ISS COUNTY OF p K K ry • c On this 17' ~ day of t t J f lA a/ y ,A.D.,20 0-c' ,before ma,the undersigned Notary Public in said County and State,personally appeared William L.Frantz.Member and Eugene W.Nissley,Member of Eastside Investors,L.L.C.,to me personally known,who being by me duly sworn,did say that they are one of the members or designated agents of said limited liability company, end that the Instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrument to he voluntary act and dead of the limited liability company by it and by the members or designated agents voluntarily executed. DANIEL.F.UPHOFF Notary Public In the State of Tp yaw COMMISSION NUMBER 173211 MY COMMISSION EXPIRES • usr"no,.+w w.su«m V,,w,....e.....•,d.....n.r.m. ..wp+...r L.wnmrc n.r:...., 11111111.11.1.11* 1111111111111111101010111111111111111 H IIII III 111111111111111111 Doc ID: 020784870002 Type: GEN Recorded: 02/23/2007 at 11:22:48 AM Fee Amt: $12.00 Paae 1 of 2 Johnson County Iowa Klm Painter County Recorder BK4131 PG853-854 Prepared by:Dan Uphoff,Vice President Loan#OMINCOM Prepared by: University of Iowa Community Credit Union,825 Mormon Trek Blvd,P.O.Box 2630,Iowa City, Iowa 52244,(319)341-2125 MODIFICATION OF MORTGAGE This Modification of Mortgage Agreement is made this 30th day of January 2007,by and between Eastside Investors,L.L.C.,Mortgagor(s),and University of Iowa Community Credit Union,Mortgagee. On February 17.2005 Mortgagor(s)executed a Note and Mortgage to Mortgagee which was secured by a Mortgage dated February 17,2005 and recorded February 23,2005,in Book 3846;Page 280 of the records of the Recorder of Johnson County,Iowa,and which covered the real property located in Johnson County, Iowa,described as follows: Units A,B and C,Building 22,Wellington Condominiums 11 at Lanccster and Montgomery Places,according to the Declaration recorded May 20,2004 in Book 3736,Page 788,Records of the Recorder of Johnson County, Iowa,together with said unit's percentage interest in and to the common elements of said regime. In exchange for valuable consideration,the receipt of which is hereby acknowledged,Mortgagor(s)and Mortgagee have agreed to modify the Note and the Mortgage securing said Note.Mortgagor(s)and Mortgagee agree that as of this date,the unpaid balance due under the Note is 5352,500 and the accrued and unpaid interest is 543,557.16.The Mortgage is hereby modified to extend the maturity date of said mortgage from February 15,2006 to February 15,2009. The Mortgage securing said Note shall not be prejudiced by this Agreement except as set forth herein. All terms,covenants,obligations and conditions of the Note and the Mortgage securing said Note shall remain in full force and effect except as expressly modified herein,and Mortgagor(s)agrees to execute any documents(s)reasonably required by Mortgagee to fulfill this Agreement. Each of the undersigned acknowledge receipt of a copy of this document on the date executed. MORTGA ORS: Eastside Investors,L.L.C. _. O "-Co G 1/30/2007 > -{ m By: Wil L.Fran mer of stud Investors .C. Date 7-< I —10 Aor 1/30/2007 By: Euge) f. • ey,Memb of astride Investors,L.L.C. Date t+i STATE OF IOWA,COUNTY OF JOHNSON,ss: On this L4 day of3't' ,t ZOO ,before me,a Notary Public,personally appeared, 11.10. t- u 17.—Fr �.. qHi� GU)t k. W. )j off f i ,to me known to be Members of Eastside Investors,L.L.C.,and who executed the foregoing instrument and acknowledged that he/she/they executed the same as their voluntary act and deed as authorized officers of the LLC. JONNIHECKER Notary Pub c in and for the State of Iowa CommissJon Wutnbu71My Commission stra 1iI60 Deownber 3, �,. y MORTGAGEE: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION By:Dan Uphoff,Vice President Date STATE OF IOWA,COUNTY OF JOHNSON,ss: On this 301h day of January,the undersigned,a Notary Public in and for the State of Iowa,personally appeared Dan Uphoff to me personally known,who being by me duly sworn,did say that they are the Vice President of said corporation executing the within and foregoing instrument that no seal has been procured by the said corporation;that said instrument was signed on behalf of said corporation by authority of its Board of Directors;and that the said Vice President as such officers acknowledged the execution of said instrument to be the voluntary act and deed of said corporation,by it and by them voluntarily executed. f SCOTT WILSON Commisdon Number 732082 s (:M‘/D INC�mmi ►Expires Notary Public in and for the State of Iowa rJ o n cn :"^i 0 d n -i C) *7-• •9 :> ry 7 1 of 3) 4111.1.111116 11110110111111111111111111111112 Doc ID: N Recorded: 06/ 13/20090at3 T1l'24:22 Art Fee Amt: 417.00 Page 1 of a Johnson County lova Kim Painter County Recorder .K4435 Pe838-840 FOR RECORDER'S USE ONLY Prepared By: Scott Wilson,Vice President,UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City,IA 52246,(319)339-1000 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd,Iowa City,IA 52246 MODIFICATION OF MORTGAGE The names of all Grantors (sometimes "Grantor") can be found on page 1 of this Modification. The names of all Grantees(sometimes "Lender") can be found on page 1 of this Modification. The property address can be found on page 1 of this Modification. The legal description can be found on page 1 of this Modification. The related document or instrument number can be found on page 1 of this Modification. THIS MODIFICATION OF MORTGAGE dated April 30, 2009, Is made and executed between Eastside — a Investors, L.L.C.,an Iowa Limited Liability Company (referred to below as "Grantor")and UNIVERSITY 9 OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA Co") 52246(referred to below as"Lender"). },_) Fri MORTGAGE. Lender and Grantor have entered into a Mortgage dated February 17, 2005 (the "Mortgage")which has been recorded in Johnson County, State of Iowa, as follows: 0 — y Recorded on 2/2312005, in the Johnson County Recorder office, Book 3846, Page 280-285 and Fr I t modified on 1/30/2007 and recorded on 2/23/2007, in the Johnson County Recorder, Book 4131, — Page 853-854. O REAL PROPERTY DESCRIPTION. Tho Mortgage covers the following described real property located in Johnson County,State of Iowa: N Units A, B and C, Building 22, Wellington Condominiums II at Lancester and Montgomery Places, according to the Declaration recorded May 20, 2004 in Book 3736, Page 788, Records of the Recorder of Johnson County, Iowa, together with said unit's porcentage intererst in and to the common elements of said regime. The Real Property or its address is commonly known as 51, 55& 59 Montgomery Place, Iowa City,IA 52240. MODIFICATION.Lender and Grantor hereby modify the Mortgage as follows: Extend Maturity date to 5/15/2014. CONTINUING VALIDITY. Except as expressly modified above, the terms of the original Mortgage shall remain unchanged and in full force and effect and are legally valid, binding, and enforceable in accordance with their respective terms. Consent by Lender to this Modification does not waive Lender's right to require strict performance of the Mortgage as changed above nor obligate Lender to make any future modifications. Nothing in this Modification shall constitute a satisfaction of the promissory note or other credit agreement secured by the Mortgage (the "Note"). It is the intention of Lender to retain as liable all parties to the Mortgage and all parties, makers and endorsers to the Note, including accommodation parties,unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, shall not be released by virtue of this Modification. If 3 2 of 3) MODIFICATION OF MORTGAGE (Continued) Page 2 any person who signed the original Mortgage does not sign this Modification, then all persons signing below acknowledge that this Modification is given conditionally, based on the representation to Lender that the non-signing person consents to the changes and provisions of this Modification or otherwise will not be released by it. This waiver applies not only to any initial extension or modification, but also to all such subsequent actions. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MODIFICATION OF MORTGAGE AND GRANTOR AGREES TO ITS TERMS. THIS MODIFICATION OF MORTGAGE IS DATED APRIL 30,2009. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MODIFICATION OF MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR; • EASTSID INVESTORS.L.L.C. • By. Wiliam L.Frantz,Member of Investors,L.L.C. •1 BY: // // .i�— ug .Nissley,Mof Eastside Investors,L.L.C. . LENDER: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION X " prized Signer 0 LIMITED LIABILITY COMPANY ACKNOWLEDGMENT. —` �v r " -!0 11 •If STATE OF .rotN4 -{r ► rnw SS COUNTY OF Sb ItN50 . I • On this 3a day of hp C`i I , A.D., 20 011 , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, Member of Eastside Investors, L.L.C. and Eugene W. Nissley, Member of Eastside Investors, L.L.C., to me personally known, who being by me duly sworn, did say that they are one of the members or designated agents of said limited liability company, and that the instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrument to be the voluntary act and deed of the limited liability company by it and by the members or designated agents voluntarily executed. Cji ERIC 9AUMGARTH Notary Pubfi the State of z Comm ssicm Neer 777317 4W PAY .,::al Expires • 3 of 3) MODIFICATION OF MORTGAGE (Continued) Page 3 LENDER ACKNOWLEDGMENT STATE OF —1.- vO0. ` )SS COUNTY OF J C 'A CAA On this 30kt'` day of pc. , A.D., 20 before me, the undersigned Notary Public in said County and State,persop IIy appeared Sco 1A/11V/'r^i and known to me to be the Vice. Pt"GStd&)/c-' , authorized agent for UNIVERSITY OF IOWA COMMUNITY CREDIT UNION that executed the within and foregoing instrument and acknowledged said instrument to be the free and voluntary act and deed of UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,duly authorized by UNIVERSITY OF IOWA COMMUNITY CREDIT UNION through its board of directors or otherwise,for the uses and purposes therein mentioned, and on oath stated that he or she is authorized to execute this said instrument and in fact executed this said instrument on behalf of UNIVERSITY OF IOWA COMMUNITY CREDIT UNIpON. Residing at 6 ZS Yorw1o4A --Fm) Notary Public in and for the State of .J-it. My commission expires 31,1110 Cttly-73f. AF/'144 o ERIC aAUMGAR1 H o Cernmissian Norther 727317 3 • LASER PRO Lending, V¢. befQ,00 •• •, . Harland Financial Solutions, Inc. 1997, 2009. All Rig�t'rs` erv'ed:""-=IA L7CCETCt'PCt0201.FC TR-221 PR-1 _ rJ O r HT1 • D . s IV 5 • -' 1671 IUI 1 1111 IIIV111111IIi1II.111I111I1111l IL Doc ID: 019634750007 Type: GEN Recorded: 04/26/2005 et 02:30:40 P(1 Fee Amt: $37.00 Pace 1 of 7 Johnson County Iowa Kim Painter County Recorder 81(3868 PG68-74 • Prepared By: Dan Uphoff,Vice President,UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd,Iowa City,IA 52246,(319)339-1000 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDfT UNION 825 Mormon Trek Blvd lowa City,IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 825 Mormon Trek Blvd Iowa Clty,IA 52246 FOR RECORDER'S USE ONLY CONSTRUCTION MORTGAGE THIS MORTGAGE dated March 23, 2005, is made and executed between Eastside Investors, L.L.C., an Iowa Limited Liability Company (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246(referred to below as"Lender"). GRANT OF MORTGAGE. For valuable consideration,Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right,tide,and interest in and to the following described real property,together with all existing or subsequently erected or affixed buildings,improvements and fixtures;rents and profits;all easements,rights of way, and appurtenances; all water,water rights, watercourses and ditch rights!including stock in utilities with ditch or irrigation rights);and all other rights,royalties,and profits relating to the real property,including without limitation all minerals,oil,gas,geothermal and similar matters, (the "Real Property") located in Johnson County,State of Iowa: • See Exhibit A, which is attached to this Mortgage and made a part of this Mortgage as if fully set forth herein. The Real Property or Its address is commonly known as Iowa City, IA 52240. Grantor presently assigns to Lender all of Grantor's right,title,and interest in and to all present and future leases of the Property and all Rents from the Property. In addition. Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property ander Rents. The Iver.on the rents granted in this Mcrtgage shall be effective from the date of the Mortgage end not just in the eveoz.of default:.3 THIS MORTGAGE,INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS.AND PERSONAL PROPERTY,-0 IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE,, ..� NOTE,THE RELATED DOCUMENTS,AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:=r( 1 PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage,Grantor shall pay to Lender all amounts secured by this e=we Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage secures an obligation incurred for the construction of an improvement on land, and is a-- "construction 'construction mortgage" within the meaning of Section 554.9334 of the lows Uniform Commercial Code. This Mortgage.alse Secures ssooaal loans or advancements made directly to finance work or improvements upon the real estate described herein, and is a 'coristfuction. ss mortgage lien'within the meaning of Section 572.18 of the Iowa Code. - _" POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the PropinOhall bei governed by the following provisions: None of the collateral for the Indebtedness constitutes,and none of the funds represented by the•• Indebtedness will be used to purchase: I1) Agricultural products or property used for an agricultural purpose as defined inlywe Code,, • Section 535.13; 12) Agricultural land as defined in Iowa Code Section 9H1 (2)or 175.2(1);or (3) Property used for art'agriculturally purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (11 There are not now and will not be any wells situated on the Property; 12) There are not now and will not be any solid waste disposal sites on the Property; 13) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default,Grantor may (11 remain in possession and control of the Property; 121 use,operate or manage the Property;and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation,manufacture,storage,treatment, disposal,release or threatened release of any Hazardous Substance by any person on,under,about or from the Property; (2) Grantor has no knowledge of,or reason to believe that there has been. except as previously disclosed to and acknowledged by Lender in writing, la) any breach or violation of any Environmental Laws. (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on.under, about or from the Property by any prior owners or occupants of the Property,or (c) any actual or 'threatened litigation or claims of any kind by any person relating to such matters; end (3) Except as previously disclosed to and acknowledged by Lender in writing, (al neither Grantor nor any tenant,contractor,agent or other authorized user of the Property shall use,generate,manufacture,store,treat,dispose of or release any Hazardous Substance on,under,about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances,including without limitation all Environmental Laws. Grantor authorizes Lender and Its agents to enter upon the Property to make such inspections and tests,at Grantor's expense,as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender far indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws;and 12) agrees to indemnify and hold harmless Lender against any and all claims,losses, liabilsections,damages,rt tag penalties,and expenses a which Lander may dt ,y r indirectly sustain, ssosr resulting e frhm a breech oel thase • section of the Mortgage or as a consequence of any use,generation,manufacture,storage,disposal,release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, Including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property,whether by foreclosure or otherwise. Nuisance,Waste. Grantor shall not cause,conduct or permit any nuisance nor commit,permit,or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing,Grantor will not remove,or grant to • MORTGAGE Loan No: (Continued) Page 2 any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements,Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender end Lender's agents end representatives may enter upon the Real Property et all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect,of all governmental authorities applicable to the use or occupancy of the Property,including without limitation,the Americans With Disabilities Act. Grantor may contest in good faith any such law,ordinance,or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as,in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond,reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shell do all other acts,in addition to those acts set forth above in this section,Which from the character and use of the Property are reasonably necessary to protect end preserve the Property. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due(and in all events prior to delinquency) ell taxes, payroll taxes,special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shell maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage,except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax,assessment,or claim in connection with a good faith dispute over the obligation to pay,so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen(151 days after the lien arises or, if a lien is filed,within fifteen(15)days after Grantor has notice of the filing,secure the discharge of the lien, or If requested by Lender,deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs end attorneys'fees,or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest,Grantor shall defend itself and Lender and shall satisfy any adversejudgment before enforcement against the Property. Grantor shall name Lender es an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shell upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shell authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished,or any materials are supplied to the Property,it any mechanic's lien,materialmen's lien,or other lien could be asserted on account of the work,services,or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure end maintain policies of fire insurance with standard extended coverage- endorsements on a replacemapt basis for the full insurable value covering all Improvements on the Real Property•Tri an amount, sufficient to avoid application of any coinsurance clause,and Witha standard mortgagee clause in favor of Lender: Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lander may request with Lender being named as additional insureds in such liability insurance policies. Additionally,Grantor shall maintain such other insurande;-including:i `- _1 but not limited to hazard,business interruption and boiler insurance as Lender may require. Policies shall be written by such-insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty(30J days'prior I written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance"" policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, ) 1 omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the.-- Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Feaera( Flood j Insurance,If available,within 45 days after notice is given by Lender that the Property is located in a special flood hazardafeejor the full unpaid principal balance of the loan end any prior liens on the property securing the loan, up to the maximum policy limits set;9 under the National Flood Insurance Program,or as otherwise required by Lender,and to maintain such insurance for theterm of the loan. =� ' Application of Proceeds. Grantor shall promptly notify Lander of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen(15)days of the casualty. Whether or not Lender's security is impaired.Lender may.at Lender's election,receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness,payment of any lien effecting the Property,or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair,Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall,upon satisfactory proof of such expenditure,pay or reimburse Grantor from the proceeds for the reasonable'coat of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, If any, shall be applied to the principal balance of the Indebtedness. II Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender,however not more than once a year,Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the Insurer; (21 the risks insured; (3) the amount of the policy; 14) the property insured,the than current replacement value of such property,and the manner of determining that value;and (51 the expiration date of the policy. Grantor-shall,upon request of Lender,have an independent appraiser satisfactory to Lander determine the cash value replacement cost of the Property. • LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's Interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor Is required to discharge or pay under this Mortgage or any Related Documents,Lander on Grantor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate,including but not limited to discharging or paying all taxes,Piens,security interests, encumbrances and other claims,at any time levied or placed on the Property and paying all costs for Insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expanses will become a part of the Indebtedness and,at Lender's option,will (A) be payable on demand; 181 be added to the balance of the Note and be apportioned among end be payable with any Installment payments to become due during either (1) the term of any applicable insurance policy;or (2) the remaining term of the Note;or (C) be treated as a balloon payment which will be due end payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY;DEFENSE OF TITLE. The following provisions relating to ownership dl the Property are a part of this Mortgage: Title. Grantor warrants that: (a)Grantor holds good and marketable title of record to the Property in fee simple,free and clear of all liens and encumbrances other than those set forth in the Real Property description or In any title insurance policy,title report,or final title opinion issued in favor of,and accepted by,Lender in connection with this Mortgage, (b)Grantor has the full right,power,and MORTGAGE Loan No:4111.11.0.b (Continued) Page 3 authority to execute and deliver this Mortgage to Lender, and (c)the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by,through or under Grantor,agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify and hold harmless Lender from any loss,damage,and costs,including reasonable attorneys'fees,threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above,Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of slender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding,but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of • Lender's own choice,and Grantor will deliver,or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations,warranties,and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage,shall be continuing in nature,and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed,Grantor shall promptly notify Lender in writing,and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding,but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application•of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase In lieu of condemnation,Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs,expenses,and attorneys'fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES,FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes,fees and charges are a part of this Mortgage: Current Taxes,Fees and Charges. Upon request by Lender,Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, is described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes,fees,documentary stamps,and other charges for recording or registering this Mortgage. • Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized w required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note;and (41 a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any te);to which this section applies.Is enacted subsequent to the date of this Mortgage,this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either Ill pays the tax before it becomes delinquent,or (21 contests the tax as provided above in the Taxes and Liens section and deposits with Lander cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT;FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures,and-- Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time; Securhy Interest. Upon request by Lender,Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents.and Personal Property. In addition to recording this Mortgage in the real property records,Lender may,..', at any time and without further authorization from Grantor,file executed counterparts,copies or reproductions of this Mortgage as:a financing.statement..Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default,Grantor shall not remove,sever or detach the Personal Property from the Property. Upon default,Grantor shall assemble any) Personal Property not affixed to the Property in'a manner end at a place reasonably convenient to Grantor and Lender and make N-- available to.Lender within three 13)days after receipt of written demand from Lender to the extent permitted by applicable law. . Fixture Filing. From the date of its recording,this Mortgage shall be effective as a financing statement filed as a fixture filing respect to the Personal Property and for this purpose,the name and address of the debtor is the name and address of�+rahtgr as ser— forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender'as-set forte on the first page of this Mortgage. Addresses. The mailing addresses of Grantor(debtor) and Lender(secured party) from which information concerning-lhe securitP interest granted by this Mortgage may be obtained(each as required by the Uniform Commercial Code)are as stated on the first page) • of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time,and from time to time,upon request of Lender,Grantor will make,execute and deliver,or will cause to be-made,executed or delivered,to Lender or to Lender's designee, and when requested by Lender,cause to be filed,recorded, . refiled,or rerecorded,as the case may be,at such times and in such offices and places as Lender may deem appropriate,any aid all such mortgages,deeds of trust,security deeds,security agreements,financing statements,continuation statements,instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents,and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property,whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing,Grantor shall reimburse Lender for all costa and expenses incurred in connection with the matters referred to in this paragraph. Attorney-In-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph,Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes,Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making,executing,delivering,filing,recording,and doing all other things as may be necessary or desirable,in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due,and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay,if permitted by applicable law,any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following,at Lender's option,shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. MORTGAGE Loan No: (Continued) Page 4 Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term,obligation,covenant or condition contained in any other agreement between Lender and Grantor. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement,or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty,representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect,either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Death or Insolvency. The dissolution of Grantor's(regardless of whether election to continue is made),any member withdraws from the limited liability company, or any other termination of Grantor's existence as a going business or the death of any member, the insolvency of Grantor,the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws-by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,whether by judicial proceeding,self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and If Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding,in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any broach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender,whether existing now or later. • Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent,or revokes or disputes the validity of,Or liability under,any Guaranty of the Indebtedness. In the event of a death,Lender, at its option,may,but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve 1121 months,it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: 11) cures the default within fifteen(15)days;or (2) if the cure requires more than fifteen(15)days,immediately initiates steps which Lender deems In Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter,Lender,at Lender's option, may exercise any one or more of the following rights and remedies,ir,addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option to declare the entire Indebtedness immediately due end payable, including any prepayment penalty which Grantor would be required to pay without notice, except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secure*; party under the Uniform Commercial Code. CV' Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents„-_ including amounts past due and unpaid, andapply the net proceeds, over and above Lender's costs, against the Indebtedness. In 1M9 0 furtherance of this right,Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to a Y Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse.= instruments received in payment thereof in the name of Grantor and to negotiate the same end collect the proceeds.7I e,rments by`• tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the paymeht 'are mede„D whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either'in persons• by agent,or through a receiver. • Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property,witfl...) the power to protect and preserve the Property,'to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds,over and above the cost of the receivership,against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the eppuietment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disquelily o person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest In all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.1 B and Chapter 655A es now enacted or hereafter modified,amended or replaced. Deficiency Judgment. It permitted by applicable law,Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold.os provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor,Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall,at Lender's option,either (1) pay a reasonable rental for the use of the Property,or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor,under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any end all right to have the Property marshalled. In exercising its rights and remedies,Lender shall be free to sell all or any part of the Property together or separately,in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shell mean notice given at least ten(10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that,in the event of foreclosure of this Mortgage,Lender may,at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section,to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and en election to make MORTGAGE Loan No:ilida11111.118 • (Continued) Page 5 expenditures or to take action to perform an obligation of Grantor under this Mortgage, atter Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default,or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker,guarantor,surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. II Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court action is involved,and to the extent not prohibited by law,all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its Interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall beer interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include,without limitation,however subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses, whether or not there Is a lawsuit, including attorneys' lees and expenses for bankruptcy proceedings [including efforts to modify or vacate any automatic stay or injunction), appeals, end any anticipated post-judgment collection services, the cost of searching records,obtaining title reports(including foreclosure reports),surveyors'reports,and appraisal fees and title insurance,to the extent permitted by appiihablelaw.""Gtantor.also Wilhpay any court costs,in addition to all other sums provided by law. NOTICES. Any notice required to be given:under-this Mortgage,including without limitation any notice of default and any notice of sale shall be given in wriiin6,:arid shall be effective when.aetually delivered,when actually received by telefacsimile(unless otherwise required by law), when deposited With-a ridtibnelly recognized overnight courier,or, if mailed, when deposited in the United States mail, as first class, certified or registered'rnaif postage repAid,'directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any party may change Its address for notices under this Mortgage by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law,if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any.Related Documents, constitutes the entire understanding and agreement of the parties as'to.the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and sighed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the'Property is used for purposes other than Grantor's residence,Grantor shall furnish to Lender,upon request,a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. • Caption Headings. Caption headings in this Mortgage aro for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and,to the extent not preempted by federal law, the laws of the State of Iowa without regard to Its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit,Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights.ander this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right ori any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or sny other provision of this Mortgage. No prior waiver by'-finder,nor eery' course of dealing between Lender and Grantor,shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage,the granting of such consent,by Lend in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in al cases stich ``"d consent may be granted or withheld in the sole discretion of Lender. Severabllty. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal,invalid,or unenforceable'as to rely circumstance,that finding shell not make the offending provision illegal, invalid, or unenforceable as to any other ejrcumstance.-11- •feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the-offending .1 provision cannot be so modified,it shall be considered deleted from this Mortgage. Unless otherwise-required by-law;tha.illegality,_ d k invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validityor enforceabiliiyr3any other: provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate-it-it/4 Property at any time held by or for the benefit of Lender in any capacity,without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest,this Mortgage shall pro binding upon and inure to the benefit of the parties,their successors end assigns. If ownership of the Property becomes vested in a person other than Grantor,Lender,without notice to Grantor,may deal with Grantor's successors with reference to this Mortgage end the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Properly. If a Grantor is not an owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shalt include the singular,as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower"means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note. Default. The word"Default"means the Default set forth in this Mortgage in the section titled'Default'. Environmental Laws. The words"Environmental Laws'mean any end all state,federal end local statutes,regulations and ordinances relating to the protection of human health or the environment. including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA'), the Superfund Amendments and Reauthorization Act of 1986,Pub.L.No.99-499("SARA"),the Hazardous Materials Transportation Act.49 U.S.C. Section 1801,et seq.,the Resource Conservation and Recovery Act,42 U.S.C. Section 6901, at seq.,or other applicable state or federal laws,rules,or regulations adopted pursuant thereto. Event of Default. The words'Event of Default"mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. • Grantor. The word"Grantor"means Eastslde Investors,L.L.C.. Guarantor. The word "Guarantor'means any guarantor,surety,or accommodation party of any or all of the Indebtedness. Guaranty. The word"Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words 'Hazardous Substances" mean materials that, because of their quantity, concentration or MORTGAGE Loan No: (Continued) Page 6 physical,chemical or infectious characteristics,may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words • "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term 'Hazardous Substances" also includes,without limitation,petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word"Improvements'means all existing and future improvements,buildings,structures,mobile homes affixed on the Real Property,facilities,additions,replacements and other construction on the Real Property. Indebtedness. The word'Indebtedness'means all principal,interest and late fees, and other amounts,costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Mortgage. The word"Mortgage"means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated March 23, 2005, in the original principal amount of $725,000.00 from Grantor to Lauder,,together with ail renewals of,extensions of.modifications of,refinancings of.consolidations of,and substitutions for the promissory note or agreement. The maturity date of this Mortgage is March 31,2007. Personal Property. The words 'Personal Property' mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor,and now or hereafter attached or affixed to the Reel Property;together with all accessions,parts, end additions to, all replacements of, and all substitutions for, any of such property;and together with all proceeds(including without limitation all insurance proceeds and refunds of premiums)from any sale or other disposition of the Property. Property. The word"Property"means collectively the Real Property and the Personal Property. Real Property. The words"Real Property"mean the real property,interests and rights,as further described in this Mortgage. Related Documents. The words'Related Documents'mean all promissory notes,credit agreements,loan agreements,environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other • instruments,agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. Rants. The word"Rents`means all present and future rents,revenues,income,issues,royalties,profits,and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE.AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. 5. . • GRANTOR: r EASTSID N\LESTORS,L.L.C. )—C: r. By: William L. rantz, er of Fsatani- .esters,L.L.C. Eugene W. slay, ember of' l vestors.L.L.b, LIMITED LIABILITY COMPANY ACKNOWLEDGMENT D tV • STATE OF W tw I I SS COUNTY OF O\A.^S� I On this 2 3 day of M rill ,A.D.,20 O " ,before me,the undersigned Notary Public in said County and State,personally appeared William L.Frantz.Member and Eugene W.Nlssley,Member of Eastslde Investors,L.L.C.,to me personally known,who being by ma duly sworn,did say that they are one of the members or designated agents of said limited liability company, and that the Instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrument to the vo ntary act and deed of the limited liability company by It and by the members or designated agents voluntarily executed. Notary Public In the Stats of .1,4,j 4 . DANIESL F.UPHOFF COMMISSION NUMBER 173281 MY COMMISSIQN 1:XPIRES WIN AP t.*,v..r.H moa cw 1a.drww."11.Wd.,a k irrr.AA. ..•W.*II. .,.rxrranwor.IC my MCI EXI11.&.1T A : Lots 50 and 51,Village Green,Part XX,Iowa City,Iowa,according to the plat thereof recorded in Plat Book PI,Page At.,plat records of Johnson County,Iowa O r 7 r--3 71 -1 C) • • • • • � r .- P-1 / 1111 111111111111EEE 1111111MMM PIM111(1 IP Doc ID: 020810160002 Tvoe: GEN Recorded: 04/02/2007 at 10:48:58 AM Fee Amt: $12.00 Page 1 of 2 Johnson County Iowa Kim Painter County Recorder BK4141 PG984-985 Prepared by:Dan Uphoff,Vice President Prepared by:University of Iowa Community Credit Union,825 Mormon Trek Blvd,P.O.Box 2630,Iowa City, Iowa 52244,(319)341-2125 MODIFICATION OF MORTGAGE This Modification of Mortgage Agreement is made this 5'"day of March 2007,by and between Eastside Investors,L.L.C.,Mortgagor(s),and University of Iowa Community Credit Union,Mortgagee. On March 23,2005 Mortgagor(s)executed a Note and Mortgage to Mortgagee which was secured by a Mortgage dated March 23,2005 and recorded April 26,2005,in Book 3868,Page 68-74 of the records of the Recorder of Johnson County,Iowa,and which covered the real property located in Johnson County,Iowa, described as follows: Lots 50 and 51,Village Green,Part XX,Iowa City,Iowa,according to the plat thereof recorded in Plat Book 49, Page 26,plat records of Johnson County,Iowa. In exchange for valuable consideration,the receipt of which is hereby acknowledged,Mortgagor(s)and Mortgagee have agreed to modify the Note and the Mortgage securing said Note.Mortgagor(s)and Mortgagee agree that as of this date,the unpaid balance due under the Note is$581,250.00 and the accrued and unpaid interest is$6,728.17.The Mortgage is hereby modified to extend the maturity date of said mortgage from March 31,2007 to March 31,2009. The Mortgage securing said Note shall not be prejudiced by this Agreement except as set forth herein. All terms,covenants,obligations and conditions of the Note and the Mortgage securing said Note shall remain in full force and effect except as expressly modified herein,and Mortgagor(s)agrees to execute any documents(s)reasonably required by Mortgagee to fulfill this Agreement. Each of the undersigned acknowledge receipt of a copy of this document on the date exei:+ited. a MORTG ORS: Eastside Investors,I ..C. to • 1/30/2007 i •y: Willis .Frantz,Member of rastsi L'vestors,J� Date `M � O° 4� d(/ i 1/30/2007 5%. .q By: Eugene .Nissley,Member of ."-si•e Investors,L.L.C. Date > N STATE OF IOWA CQUNTY OF JOHNSON,ss: I. On this ,50T day of before me,a Notary Public,personally appeared, Mi l(aH1 Tr-4µrZ. Rwt j icrt.. lh ca" .ti ,to me known to be Members of Eastside Investors,I..L.C.,and who execu(ed the foregoing instrument and acknowledged that he/she/they executed the same as their voluntary act and deed as authorized officers of the LLC. OP Fir comgCOTT IMLSO7N32062 1r 4AJ • N Public in and for the State of owa MORTGAGEE:UNIVERSITY OF IOWA COMMUNITY CREDIT UNION (644 31c1o7 By:Dan Uphoff,Vice President Date STATE OF IOWA,COUNTY OF JOHNSON,ss: On this 5th day of March,the undersigned,a Notary Public in and for the State of Iowa,personally appeared Dan Uphoff to me personally known,who being by me duly sworn,did say that they are the Vice President of said corporation executing the within and foregoing instrument that no seal has been procured by the said corporation; that said instrument was signed on behalf of said corporation by authority of its Board of Directors;and that the said Vice President as such officers acknowledged the execution of said instrument to be the voluntary act and deed of said corporation,by it and by them voluntarily executed. SCOTT WILSON Commission Number 732062 r.ZCosion � Notary Public in and for the State of Iowa _ N O - • ... -mow-� -. 1-1 n _I C7 r- _ r- tV • 7 111111111111111111111111111111111111111111111 • Doc ID: 020147690011 Tvpe: GEN Recorded: 12/22/2005 et 01:52:58 PM Fee Amt: $57.00 Peae 1 of it Johnson County Iona Kim Painter County Recorder 3975 PG660-670 • FOR RECORDER'S USE ONLY Prepared By: Dan Uphoff, Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City,IA 52246, (319) 339-1000 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA -.n 52246 3t • � J Y CONSTRUCTION MORTGAGE The names of all Grantors (sometimes "Grantor") can be found on page 1 of this Mortgage. The rie n .. of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property adf-ess can be found on page 1 of this Mortgage. The legal description can be found on page 1 of-this Mortgage. -C ti MORTGAGE dated December 21, 2005, is made and executed between Eastside Investors, L.L.C., and Iowa limited liability company (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the"Real Property") located in Johnson County,State of Iowa: Lots 50 and 51, Village Green, Part XX, Iowa City, Iowa, according to the plat thereof recorded in Plat Book 49, Page 26,plat records of Johnson County, Iowa The Real Property or its address is commonly known as Lots 50 and 51, Village Green XX, Iowa City, IA 52240. CROSS-COLLATERALIZATION. In addition to the Note, this Mortgage secures the following described additional indebtedness: Promissory note dated 3/25/2005 between Grantor and Lender. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. • THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to eithh• 05 MORTGAGE Loan No:011111.10120 (Continued) Page 2 • Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage secures an obligation incurred for the construction of an improvement on land, and is a "construction mortgage" within the meaning of Section 554.9334 of the Iowa Uniform Commercial Code. This Mortgage also secures loans or advancements made directly to finance work or improvements upon the real estate described herein, and is a "construction mortgage lien" within the meaning of Section 572.18 of the Iowa Code. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 91-(1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property,there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (al _ neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shalt use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, • about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all • Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance oftheProperty with this section of the Mortgage. Any inspections or tests made by 771 Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or ._' liability on the part of Lender to Grantor or to any other person. The representations and warranties '—" •-J contained herein are based on Grantor's due diligence in investigating the Property for Haaatdous .D Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any W such laws; and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property,whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property et all reasonable times to attend to Lender's interests and to inspect the Real Property for MORTGAGE Loan No: (Continued) Page 3 purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender,to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in.the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidencg of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the r") Property. • Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the. Property—if if..any , M • mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work; i i services, or materials. Grantor will upon request of Lender furnish to Lender advance assureicp satisfactory to Lender that Grantor can and will pay the cost of such improvements. . PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are 8'part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender, Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the • MORTGAGE Loan No: (Continued) Page 4 Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value;and (5) the expiration date of the policy. .Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note;or (C) be treated as a +73 balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. r,✓> J WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property area part of this Mortgage: ( Title. Grantor warrants that: .(a).Grantor holds good and marketable title of record to the PrapeYty d tl in fee simple, free and clear of all liens and encumbrances other than those set forth in the.,Ele 1 Property description or in any title insurance policy, title report, or final title opinion issued intivlt of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full rlglit; , power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now W enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted, and represents and warrants that it is the sole party entitled to do so and agrees to indemnify and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver,or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be MORTGAGE Loan No:411111MINIMIND (Continued) Page 5 continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURLTY_-.AGREEMENT;-FINANCING STATEMENTS. The following provisions relating tb this j Mortgage as a security agreement are a part of this Mortgage: , Ja Security Agreement. This instrument shall constitute a Security Agreement to the extent any-of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is request-6d by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In t 0 addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (31 days after receipt of written-demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code)are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: • MORTGAGE Loan No: S (Continued) Page 6 Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make,execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance,or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. -°a Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay ' the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender 6y Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or mislea`dirx,} '9 in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Death or Insolvency. The dissolution of Grantor's (regardless of whether election to continue is made), any member withdraws from the limited liability company, or any other termination of Grantor's existence as a going business or the death of any member,the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of . creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of MORTGAGE Loan No: - (Continued) Page 7 • Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option to declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Grantor would be required to pay without notice, except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. if the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are ,, made, whether or not any proper grounds for the demand existed. Lender may exercise 1W rights :3 under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession p`f all Ya or any part of the Property,with the power to protect and preserve the Property,p rty, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the r- proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may 1 r 1 serve without bond if permitted by law. Lender's right to the appointment of a receiver shelf exist whether or not the apparent value of the Property exceeds the Indebtedness by a sub5antial amount. Employment by Lender shall not disqualify a person from serving as a receiver. ?rte �O Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in alhyr any part of the Property. W Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all MORTGAGE Loan No: . (Continued) Page 8 right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports,and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, . - -near t 2 as first class, certified or registered mail postage prepaid, directed to the addresses es shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this I ;y Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. ; tl it For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. ____ F`"`' Unless otherwise provided or required by law, if there is more than one Grantor, any notice giver)by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the MORTGAGE Loan No:- (Continued) Page 9 jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance,that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified s.o that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness, Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used a in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean ' amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the.; ri Uniform Commercial Code: Borrower. The word "Borrower" means Eastside Investors, L.L.C. and includes all co-signers and tl �' co-makers signing the Note and all their successors and assigns. til .0 Default. The word "Default" means the Default set forth in this Mortgage in the section ti "Default". •- Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local W statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Eastside Investors, L.L.C.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their MORTGAGE Loan No: 'r (Continued) Page 10 quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means Any promissory notes of any date citing this mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. • Note. The word "Note" means Any promissory note of any date citing this mortgage. Personal Property. The words "Personal Property' mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. • Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. MATURITY. The maturity date of this mortgage is 12/15/2010 GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: C) m EASTSIDE INVESTORS, L.L.C. n"C ' f By: ,� ` f "<iDM " '-- William L.Frantz,Member o • `de Investors, L.L.C. _. V. O • BY: i. - Eugen/ . issley, Member of Eastside Investors,L.L.C. D "L La./ MORTGAGE Loan No:_ (Continued) Page 11 LIMITED LIABILITY COMPANY ACKNOWLEDGMENT STATE OF / W i SS COUNTY OF `To L K 1\ h } r� j� On this Z 1 day of t`w"'t-r , A.D., 20 0 �, before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, Member and Eugene W. Nissley, Member of Eastside Investors, L.L.C., to me personally known, who being by me duly sworn, did say that they are one of the members or designated agents of said limited liability company, and that the instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the•instrument to be the voluntary act and deed of the limited liability company by it and by the members or designated agents voluntarily executed. Notary Public in the State of 24 w„ DANIEL F UPHOFF COMMISSION NUMBER 173281 MY COMMISSION EXPIRES o..• �-/T Y n u3.131 wn lrt,V.laLmm 4.Mn�r w.v•Wi..3,r.rn,.I . y L,CIrra.Pm313.IC TR 337 3.3.1O 113 -in C7-< t r- ter' — m Lt.) 111111111111111111111111111111111111111 2103343 yp Recorded: 012/04/2001 atT 12:38:52 Pm Fee Amt: 557.00 Pane 1 of 11 Johnson County Iowa Kim Painter County Recorder BK4240 Po738-748 FOR RECORDER'S USE ONLY Prepared By: Dan Uphoff, Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 rti1 RECORDATION REQUESTED BY: J UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA n C"."3r9 M 52246 WHEN RECORDED MAIL TO: _10 -- .� UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City, IA ' __ � 52246 IT1 © CONSTRUCTION MORTGAGE L") The names of all Grantors (sometimes "Grantor")can be found on page 1 of this Mortgage. The names of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property address can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this Mortgage. • THIS MORTGAGE dated November 16, 2007, is made and executed between Eastside Investors, L.L.C., and Iowa Limited Liability Company (referred to below as "Grantor") and UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 (referred to below as"Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals,oil, gas, geothermal and similar matters, (the "Real Property") located in Johnson County,State of Iowa: Units A and B, Building 15, Wellington Condominiums II at Village Road, Wintergreen Drive and Lancester Place, according to the Declaration thereof recorded in Book 3925, Page 453, Records of the Recorder of Johnson County, Iowa, together with the percentage ownership in the common elements provided for in the Declaration,and subject to easements and restrictions of record. The Real Property or its address is commonly known as 14 and 18 Lancester Place,Iowa City, IA. Grantor presently assigns to Lender all of Grantor's right, title, and interest in end to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of eis yG MORTGAGE (Continued) Page 2 Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage secures an obligation incurred for the construction of an improvement on land, and is a "construction mortgage" within the meaning of Section 554.9334 of the Iowa Uniform Commercial Code. This Mortgage also secures loans or advancements made directly to finance work or improvements upon the real estate described herein, and is a "construction mortgage lien" within the meaning of Section 572.18 of the Iowa Code. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs,replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and 13). Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender-shall be-for-Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all • claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior'to a, La Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to .."... indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction.and- j reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of-any, _ •_1 interest in the Property, whether by foreclosure or otherwise. • Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permiCo suffer any stripping of or waste on or to the Property or any portion of the Property. Wit)tput limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the '-- right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. MORTGAGE (Continued) Page 3 Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the•lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (151 days after the lien arises or,if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of.Lender furnish to-Lender-advance..assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender c' may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, u71 business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor-shall deliver to Lender certificates of coverage from each insurer containing a stipulation that covefage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice'to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not-be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender,and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the • MORTGAGE (Continued) Page 4 casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (41 the property insured, the then current replacement value of such property, and the manner of determining that value;and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note;or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, ...� through or under Grantor, agrees that it claims no lien or right to a lien of the type contemple,ted by Chapter 575 or any other chapter of the Code of Iowa and further waives all notices and;rights pursuant to said law with respect to the liens hereby granted, end represents and warrants that it is P 7y Pi 1 � the sole party entitled to do so and agrees to indemnify,defend, and hold harmless Lender from any ' loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender I y� arising either directly or indirectly as a result of any claim of the applicability of said law to the liens — !--� hereby granted. Y 1 1 Defense of Title. Subject to the exception in the paragraph above, Grantor warrants forever defend the title to the Property against the lawful claims of all persons. In the ev fit;Any action or proceeding is commenced that questions Grantor's title or the interest of Lendet-under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the p p proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, end regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's MORTGAGE (Continued) Page 5 Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain • proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in "-"° perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal — .q Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor 1 0 and Lender and make it available to Lender within three (3) days after receipt of written demand — — from Lender to the extent permitted by applicable law. b Fixture Filing. From the date of its recording, this Mortgage shall be effective as a finulAcing statement filed as a fixture filing with respect to the Personal Property and for this purpose, the W name and address of the debtor is the name and address of Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code)are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will • MORTGAGE (Continued) Page 6 make, execute and deliver, or will cause to be made,executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, • perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law,any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of.or to effect discharge of any lien. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Default in.Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or any related document. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor-or-on Grantor's behalf under this Mortgage or the-Related Documents is-false or misleading- in isleadingin any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security ') interest or lien) at any time and for any reason. Death or Insolvency. The dissolution of Grantor's (regardless of whether election to continue is made), any member withdraws from the limited liability company, or any other termination of "0 Grantor's existence as a going business or the death of any member, the insolvency of Grantor,the ( r- appointment of a receiver for any part of Grantor's property, any assignment for the benefit of — creditors, any type of creditor workout, or the commencement of any proceeding under :any I r bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceediragsz .,Q whether by judicial proceeding, self-help, repossession or any other method, by any creditor. of Grantor or by any governmental agency against any property securing the Indebtedness. -This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. '`� However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. MORTGAGE (Continued) Page 7 Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve 112) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies,in addition to any other rights or remedies provided by law: • Accelerate Indebtedness. Lender shall have the right at its option to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required to pay without notice, except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the r p"--oce'e's; OVer and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in ail or any -) part of the Property. :=3 Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to-Iowa CN"t Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or --p replaced. �. I Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any m deficiency remaining in the Indebtedness due to Lender after application of all amounts received z from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property.4.7sirld �U as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender MORTGAGE (Continued) Page 8 shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent_to Lender's address, as-shown near-the beginning of this Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. - J MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage:.. hT Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage, No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by ` the party or parties sought to be charged or bound by the alteration or amendment. - Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor-shall furnish to Lender, upon request, a certified statement of net operating income received from the '? Property during Grantor's previous fiscal year in such form and detail as Lender shall require. -"klet operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage MORTGAGE (Continued) Page 9 unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. • DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Eastside Investors, L.L.C. and includes all co-signers and co-makers signing the Note and all their successors and assigns. Default. The word "Default" means the Default set forth in this Mortgage in the section titled F; j1 Environmental Laws. The words "Environmental Laws" mean any and all state, federal and.local jnr� statutes, regulations and ordinances relating to the protection of human health or the envirbnrfient, "0 including without limitation the Comprehensive Environmental Response, Compensation, and ( Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund — m Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservatit5j1d y Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rt.ill or regulations adopted pursuant thereto. -.9 Event of Default. The words "Event of Default" mean any of the events of default set forth-in this r__ Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Eastside Investors, L.L.C.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words MORTGAGE (Continued) Page 10 "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of. consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated November 16, 2007, in the original principal amount of $516,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits,and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GRANTOR: EASTSID INVESTORS, L.L C. 0 n cn By. 't j >-i 111 William L. Frantz, �er of . .: nvestors, L.L.C. l; L. "C r— Eugene/. Nissley,Memb•r of Eastside Investors,L.L.C. 0 -'O MORTGAGE (Continued) Page 11 LIMITED LIABILITY COMPANY ACKNOWLEDGMENT STATE OF .n uv q 1 _ 1 1 SS COUNTY OF 6 v On this ' C day of /"v v-e;by't••r , A.D., 20 0 ? , before me, the undersigned Notary Public in said County and State, personally appeared William L. Frantz, Member of Eastside Investors, L.L.C. and Eugene W. Nissley, Member of Eastside Investors, L.L.C., to me personally known, who being by me duly sworn, did say that they are one of the members or designated agents of said limited liability company, and that the instrument.was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrument to be the voluntary act and deed of the limited liability company by it and by the members or designated a ents voluntarily executed. Notary Public in the State of 'Iss•D w^ ., , DANIEL F.UPNOFF COMMISSION NUMBER 173281 ' M Y CO2MI Q�9ES we.ma t.tLy v..cam or C .ft...v...Revs._ , ran.atm ri4..r•w... •u LK,..fl Clan.ra, _ N • 4 Dr tt -fir II ININIl IININIIININNNIQNIN NI9NIIIINII NIMH M Doc ID: 021075470011 Tvoe: GEN Recorded: 02/07/2008 at 11:15:00 AM Fee Amt: $57.00 Paae 1 of 11 Johnson County Iona Kim Painter County Recorder 4260 PG448-458 Zoos FOR RECORDER'S USE ONLY Prepared By: Dan Uphoff,Vice President, UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246, (319) 339-1000 ADDRESS TAX STATEMENT: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION.825 Mormon Trek Blvd, Iowa City,IA 52246 RECORDATION REQUESTED BY: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, 825 Mormon Trek Blvd, Iowa City, IA 52246 WHEN RECORDED MAIL TO: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,825 Mormon Trek Blvd, Iowa City,IA 52246 MORTGAGE The names of all Grantors (sometimes"Grantor")can be found on page 1 of this Mortgage. The names of all Grantees (sometimes "Lender') can be found on page 1 of this Mortgage. The property address can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this Mortgage. THIS MORTGAGE dated January 29, 2008, is made and executed between Eastside Investors,'L.L.C., an Iowa Limited Liability Company (referred to below as "Grantor") and UNIVERSITY OF'IOWA <el COMMUNITY CREDIT UNION, whose address is 825 Mormon Trek Blvd, Iowa City, IA 52246 rrl 11 (referredto below_as-J.ender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and — m grants to Lender a security interest in all of Grantor's right, title, and interest in end to the following i i described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances;.all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrifetlon :9 rights); and all other rights, royalties, and profits relating to the real property, including without -� limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in Johnson County,State of Iowa: Unit A,Building 21, Wellington Condominiums II at Lancaster and Montgomery Places,according to the Declaration recorded May 20, 2004 in Book 3736, Page 788, Records of the Recorder of Johnson County, Iowa, together with said unit's percentage interest In and to the common elements of said regime. The Real Property or Its address is'commonly known as 31 Montgomery Place, Iowa City,IA 52240. Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: A• MORTGAGE (Continued) Page 2 PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as they become due and shall strictly perform all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: None of the collateral for the Indebtedness constitutes, and none of the funds represented by the Indebtedness will be used to purchase: (1) Agricultural products or property used for an agricultural purpose as defined in Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (11; or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and'there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: CO During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture. storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have-been known to Grantor. The provisions of this section of the Mortgage, including the obligation to •-3 indemnify and defend, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any - interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit;or '—' • suffer any stripping of or waste on or to the Property or any portion of the Property. Without. limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or Kock: products without Lender's prior written consent. �n Removal of Improvements. Grantor shall not demolish or remove any Improvements from the'Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities MORTGAGE (Continued) Page 3 Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. • DUE ON SALE- CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale,'deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law, TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as further specified in the Right to Contest paragraph. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection ,y with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen n (15)days after the lien arises or, if a lien is filed,within fifteen (15) days after Grantor has notice of • the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys' fees, or other charges that could accrue as a Jesuit �[ of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender•ard • shall satisfy any adverse judgment before enforcement against the Property. Grantor shall Warm Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidenta of _ payment of the taxes or assessments and-shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, • services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of thirty (30) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency MORTGAGE (Continued) Page 4 Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting.the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage,then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured,the then current replacement value of such property,and the manner of determining that value;and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Mortgage or any Related Documents,Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note arid be apportioned among and be payable with any installment payments to become due during either (1). the a term of any applicable insurance policy;or (2) the remaining term of the Note; or (C) be treated as ab �+ a oompayment.which will be due and payable_at the Note's maturity. The Mortgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. • WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are-a V I part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property �p in fee simple, free and clear of all liens and encumbrances other than those set forth in the:Real Property description or in any title insurance policy, title report, or final title opinion issued in favor ,Z of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced. Grantor, for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien or right to a lien of the type contemplated by Chapter 675 or any other chapter of the Code of Iowa and further waives all notices and rights pursuant to said law with respect to the liens hereby granted,and represents and warrants that it is the sole party entitled to do so and agrees to indemnify,defend, and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding end to be represented in the proceeding by counsel of Lender's own choice, end Grantor will deliver,or cause to be delivered,to Lender such instruments as Lender may request from time to time to permit such MORTGAGE (Continued) Page 5 participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. . Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect end continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for • recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from,payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. N Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of O this Mortgage, this event shall have the same effectas.an Event of Default, and Lender_may L7 exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided n-C above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety C) bond or other security satisfactory to Lender. ;I SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this �. Mortgage as a security agreement are a part of this Mortgage: 0 Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. MORTGAGE (Continued) Page 6 Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: • Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be made,executed or delivered,to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, ref iled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payment for taxes or insurance,or any other payment necessary to prevent filing of or to effect discharge of any lien. r-4 Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenarZ.gr•, condition contained in this Mortgage or in any of the Related Documents or to comply with dr'to- e'4-1 perform any term, obligation, covenant or condition contained in any other agreement between-;; "'Q Lender and Grantor. Default In Favor of Third Parties. Should Grantor default under any loan, extension of credits,...`. security agreement, purchase or sales agreement, or any other agreement, in favor of any other-l-1 3 c3 creditor or person that may materially affect any of Grantor's property or Grantor's ability to rept the Indebtedness or Grantor's ability to perform Grantor's obligations under this Mortgage or airy, .o related document. .. False Statements. Any warranty, representation or statement made or furnished to Lender by .� Grantor or on Grantor's behalf under this Mortgage or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Death or Insolvency. The dissolution of Grantor's (regardless of whether election to continue is made), any member withdraws from the limited liability company, or any other termination of Grantor's existence as a going business or the death of any member,the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding • MORTGAGE (Continued) Page 7 and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,in its sole discretion,as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default,other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Mortgage within the preceding twelve(12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (151 days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required notices of default and after passage of any grace period,to declare the entire Indebtedness immediately due and payable, including any prepayment penalty that Grantor would be required to pay without notice,except as may be expressly required by applicable law. -... UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. :r Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, _ over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender. nay require any tenant or other user of the Propertyto rnake_payments of rent or use fees-directly-to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the narhe;4 ..,7 Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments"are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights " under this subparagraph either in person, by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. . Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property MORTGAGE (Continued) Page 8 and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition-of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. .Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable ss attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and ' any anticipated post-judgment collection services, the cost of searching records, obtaining title ".'• reports(including--foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to s/) the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all -:C7 other sums provided by law. F r` NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice "" of default and any notice of sale shall be given in writing, and shall be effective when actuoljy delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States_rtail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near ftie beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien whidtr has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this -� Mortgage. Any party may change its address for notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall • furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. 'Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. MORTGAGE (Continued) Page 9 • Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. Release of Rights of Dower, Homestead and Distributive Share. Each of the undersigned hereby _ relinquishes allrightsof dower,-homestead and distributive share in and to the Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property,`that ' Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. • DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean t amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words:and _ . _ terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in-the Uniform Commercial Code: Borrower. The word "Borrower" means Eastside Investors, L.L.C. and includes all co-signers:and co-makers signing the Note and all their successors and assigns. '= Default. The word "Default" means the Default set forth in this Mortgage in the section titled ."Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words 'Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Grantor. The word "Grantor" means Eastside Investors, L.L.C.. MORTGAGE (Continued) Page 10 Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness' means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated January 29, 2008, in the original principal amount of $248,000.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property' mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions,parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. • GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. J GRANTOR: EASTSID VESTORS, L.L.C. 0-4: -0 r." • By: TA 4 r? —' m William Frantz,Member of a Investors, L.L.C. fM -- 0 olef 'O Eugen/, , issley,M=mber of astside Investors,L.L.C. . .f. MORTGAGE (Continued) Page 11 LIMITED LIABILITY COMPANY ACKNOWLEDGMENT STATE OF J ow, SS COUNTY OF Wh►"lsor1 On this 2c14b day of JQ.nU ry , A.D., 20 Q$ , before me, the undersigned Notary Public in said County and State, pfersonally appeared William L. Frantz, Member of Eastside Investors, L.L.C. and Eugene W. Nissley, Member of Eastside Investors, L.L.C., to me personally known, who being by me duly sworn, did say that they are one of the members or designated agents of said limited liability company, and that the instrument was signed and sealed on behalf of the limited liability company by authority of the limited liability company and the members or designated agents acknowledged the execution of the instrument to be the voluntary act and deed of the limited liability company by it and by the members or desig ted agents voluntarily executed. .)Vv KERRY I.CSMRH Conssian Number 746056 Notary Pub c n the S t of'Iowa. • My Corrvnission Expires 3/26./2101 r) u.aw,.....w.us.man u..,rr.',mi.'NNW,lo...w).me. ..nor.....a.,.aCLAC._FC lin.,., _ t`J Q a L; .,d r= 971 O 73 • • > .1= AFFIDAVIT RE COMPENSATION STATE OF IOWA, COUNTY OF JOHNSON, SS: We, Robert S. Michael and Crystal K. Raiber, being first duly sworn, under oath, depose and swear that we are the attorneys of record for the Plaintiff; that there is no contract, agreement or arrangement, either oral or written, expressed or implied, contemplating any division of compensation for the services rendered in the above entitled proceedings as attorney or participation of such compensation, directly or indirectly, by any other person, firm or corporation with such attorney except other legal counsel in a regular and bonafide law partnership with the undersigned in the above entitled matter. O 50 Ge) >1 201 4014 r- Robert S. Michael t bitv C s al K. Raiber Subscribed and sworn to before me the undersigned Notary Public by Robert S. Michael and Crystal K. Raiber this (ill day of ,iarak , 2009. ii, 1 . , Mini V g NOTARY I .„tAt,rF JENNIFER VIEIRA 4,;`t ;Commission Number 747615 wltmb ' My Cor }san Expires o (z) ala/vu),c p =o ::::0 c' 5-{ rj -71 -:0 _ rn ire 2 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY UNIVERSITY OF IOWA COMMUNITY CREDIT UNION, Plaintiff, NO. EQCVO vs. FRANTZ CONSTRUCTION CO., INC., EASTSIDE INVESTORS, LLC, EUGENE W. NISSLEY, WILLIAM L. FRANTZ, PATRICIA J.NISSLEY, SHERRY L. FRANTZ, WOOD GRAIN SALES DBA SQUAW CREEK MILLWORK,THE STRUB CO., INC.DBA MULLER PLUMBING&HEATING, BACHMEIER CARPET ONE FLOOR&HOME,YODER ROOFING AND CONSTRUCTION LLC, WELDON DRYWALL, INC., M M S CONSULTANTS, INC., GARMIL, INC. D/B/A GARY MILLER INSULATION, NAGLE LUMBER COMPANY,MIDAMERICAN ENERGY,FOUNDATIONS UMLIIVIITED, INC., KING'S MATERIALS INC.,THE RIVER PRODUCTS CO., H.J. LIMITED,PORT"0"JONNY INC., BUILDERS COMPONENTS INCORPORATED OF NORTH LIBERTY,HOMEWOOD ELECTRIC, INC., JOHNNY SHWARTZ, PSK LLC DBA OVERHEAD DOOR CO OF CEDAR RAPIDS AND IOWA CITY, WHITE CAP CONSTRUCTION SUPPLY,INC., AERO RENTAL,INC., BLUMENTHAL TRUELSEN, INC. DBA SOILTEK, S & G MATERIALS,MENARD, O INC., HAWKEYE SIDING, INC., CITY OF IOWA o s,, CITY, ASHTON ENGINEERING, INC., >7 t 71 CORRIDOR STATE BANK, LIBERTY BANK,F.S.B., n r- ERIC FRANTZ,LYNN FRANTZ,ALL PARTIES IN 0 — m� POSSESSION OF 22 DURHAM CT, --m IOWA CITY, IOWA, JOSE NAVARRO,CLAUDIA •? ZAMBRANO, ALL PARTIES IN POSSESSION OF 3446 JAMIE LANE, IOWA CITY,IOWA; �n ALL PARTIES IN POSSESSION OF 3321 WINTERGREEN DRIVE, IOWA CITY,ALL PARTIES IN POSSESSION OF 901 PARK ROAD, IOWA CITY, IOWA, CASEY M. MOEL, JOY E. MOEL,ALL PARTIES IN POSSESSION OF 4880 NO WHERE AVE SW, IOWA CITY,IOWA,ALL PARTIES IN POSSESSION OF 340 HIGHLAND AVE )(k 11? IOWA CITY, IOWA, ALL PARTIES IN POSSESSION OF 344 HIGHLAND AVE, IOWA CITY, IOWA ALL PARTIES IN POSSESSION OF 348 HIGHLAND AVE, IOWA CITY, IOWA,DOUG SHEETZ, KAREN SHEETZ, ALL PARTIES IN POSSESSION OF 55 MONTGOMERY PLACE IOWA CITY, IOWA,ALL PARTIES IN POSSESSION OF 46 LANCESTER PLACE, IOWA CITY IOWA, ALL PARTIES IN POSSESSION OF 18 LANCESTER PLACE, IOWA CITY, IOWA,ALL PARTIES IN POSSESSION OF 31 MONTGOMERY PLACE IOWA CITY, IOWA, ALL UNKNOWN CLAIMANTS OF THE FOLLOWING DESCRIBED PROPERTY IN JOHNSON COUNTY, IOWA, TO WIT:LOT ONE(1)AND THE NORTHERLY TEN FEET OF LOT TWO(2),DESCRIBED AS: COMMENCING AT THE NORTHEAST CORNER OF LOT TWO (2),THENCE SOUTHERLY ALONG THE EASTERLY LINE OF SAID LOT TWO (2), TEN(10) FEET, THENCE NORTHWESTERLY TO A POINT ON THE WEST LINE OF LOT TWO(2), TEN(10)FEET SOUTH OF THE SOUTHWEST CORNER OF LOT ONE(1),THENCE NORTH TEN(10) FEET TO THE SOUTHWEST CORNER OF LOT ONE(1),THENCE SOUTHEAST ALONG THE NORTHERLY LINE OF LOT TWO(2)TO THE POINT OF BEGINNING,ALL IN BLOCK 1 OF BLACK'S SECOND SUBDIVISION IN GOVERNMENT LOT TWO(2), SECTION NINE(9) TOWNSHIP SEVENTY-NINE(79)NORTH,RANGE SIX (6), WEST OF THE 5th P.M., ACCORDING TO THE RECORDED PLAT THEREOF RECORDED IN PLAT _ n, BOOK 1, PAGE 139, OF THE RECORDER'S OFFICE OF O JOHNSON COUNTY, IOWA,EXCEPTING THEREFROM, n ;r,' HOWEVER,THAT PORTION OF THE ABOVE i DESCRIBED REAL ESTATE PREVIOUSLY CONVEYED t --- 6� BY WARRANTY DEED DATED JULY 18, 1952,AND RECORDED AT PAGE 580 OF BOOK 214 OF THE DEED 0= r RECORDS OF JOHNSON COUNTY,IOWA, ALSO DESCRIBED AS: v, LOT 1 IN BLOCK 1 OF BLACK'S SECOND SUB-DIVISION IN GOVERNMENT LOT 2, SEC. 9, TWP. 79 N., R. 6 WEST OF THE 5th P.M., ACCORDING TO THE RECORDED PLAT THEREOF RECORDED IN PLAT BOOK 1,PAGE 139,OF THE RECORDER'S OFFICE OF JOHNSON COUNTY, IOWA, EXCEPT THE FOLLOWING: COMMENCING AT THE SOUTHEASTERLY CORNER OF LOT 1; THENCE NORTHERLY ALONG THE EASERLY LINE OF SAID LOT 1, 18 FEET; THENCE WESTERLY PARALLEL WITH THE SOUTHERLY LINE OF SAID LOT 1 TO THE WESTERLY LINE OF SAID LOT 1; THENCE SOUTHERLY TO THE SOUTHWEST CORNER OF SAID LOT 1; THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID LOT 1 TO THE POINT OF BEGINNING; ALL UNKNOWN CLAIMANTS OF THE FOLLOWING DESCRIBED PROPERTY IN JOHNSON COUNTY, IOWA, TO WIT: UNITS A, B ANT) C, BUILDING 14 IN WELLINGTON CONDOMINIUMS II AT VILLAGE ROAD, WINTERGREEN DRIVE AND LANCESTER PLACE, ACCORDING TO THE DECLARATION THEREOF RECORDED AUGUST 12, 2005, IN BOOK 3925, PAGE 453, RECORDS OF THE JOHNSON COUNTY RECORDER, TOGETHER WITH SAID UNIT'S INTEREST IN THE COMMON ELEMENTS, o tg N Defendants. GeJ >1 r, AFFIDAVIT OF SCOTT WILSON IN SUPPORT OF MORTGAGE FORECLOSURE PETITION AND APPLICATION FOR IMMEDIATE APPOINTMENT OF RECEIVER > STATE OF IOWA, COUNTY OF JOHNSON, SS: I, Scott Wilson, having been first duly sworn, on oath, depose and state: 1. That I am the Vice President for Commercial Services for the University of Iowa Community Credit Union,the Plaintiff in the foreclosure action of the University of Iowa Community Credit Union v. Frantz Construction Co., Inc., et. al and that I have charge of supervision over the records of the Credit Union in respect to its commercial mortgage loans. I make this affidavit based on personal knowledge, business records of Credit Union, and information by others who regularly compile such information in the course of regularly conducted business activities. I make this affidavit in support of Plaintiff's Mortgage Foreclosure Petition and Application for Immediate Appointment of Receiver. 2. Time of payment of the notes executed by William Frantz, Frantz Construction Co., Inc., and Eastside Investors LLC, true and accurate copies of which are attached to the Petition and marked as Exhibits 1-21, were accelerated prior to the filing of the Petition herein. The amounts of principal and interest claimed to be owed on said notes in Plaintiffs Petition in this action are correct, and are still owing. 3. All of the facts alleged in Plaintiffs Petition in this action filed herewith are true and correct. True and accurate copies of certain Notes and Mortgages Defendants William Frantz, Frantz Construction Co. Inc., and Eastside Investors LLC gave to Plaintiff are attached to Plaintiff's Petition as exhibits 1-47. 4. That due to Defendants William Frantz, Frantz Construction Co. Inc., and Eastside Investors LLC's default and failure to pay insurance on and maintain the properties,the immediate appointment of Plaintiff as receiver is necessary to protect the real estate described in Plaintiff's Petition during the pendency of this matter. Wilson / Subscribed and sworn to before me by Scott Wilson on this tP day of 2009. 4/(-- Ski 1./a/ NOTARY ( y a CRYSTAL K.RAISER -t $ Commission Number 754955 • �+ • MYC97.(7`!/fl Y COMMERCIAL GUARANTY 'P t1Ytl • ,f?�a r Maturity Loon No I 4ll 4§.1 - Accou• nt 'Off ICek: )a $ References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any Item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.Frantz 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance end not of collection, so Lender can enforce this Guaranty against Guarantor even when lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,In legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The ward'Indebtedness"as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees. arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness'includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection apreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or Invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT. PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lendella? any notice of revocation shall have been fully and finally paid and satisfied and ell of Guarantor's other obligations under this Guaranty shall If been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice`B! revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as lender may designate,in writing: Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation; For this purpose end without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due: For this • purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower priori revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of '?'7 the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or 1 Y incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or oth r- legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated It and with the;arime effect. Release of_any_other_guarantor.or termination_of_any_other-guaranty of_the_Irtdebtedness shall not-affect-the liability-of-Guarantor-under-tai-ts Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guaraptors under this Guaranty. It is anticipated that fluctuations may occur In the aggregate amount of the Indebtedness covered by this Guaranty;end Guarantee. specifically acknowledges and agrees that reductions in the amount of the Indebtedness,even to zero dollars 190.00). shall not constittruFej., termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of fhb' Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars(90.001. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: IA) prior to revocation as sat forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; IN to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including Increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and what application of payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (GI to sell,transfer,assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents end warrants to Lender that IA) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has lull power,right and authority to enter into this Guaranty; (DI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (El Guarantor has not and will not,without the prior written consent of Lander, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct In all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim, investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and W) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty,oiand Guarantor nts furtuagrees that, nthabsent caofrequest fore information, Lander Borrower. have no obligation to disclose to Guarantor any ���• O information or documents acquired Lender in the course of its relationship with aha GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender IA) to continue lending money or to extend other credit to Borrower; (B) to make any presentment,protest, demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender„ any surety,endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (CI to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (El to give COMMERCIAL GUARANTY Loan No:111101.11110 (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of IA) any "one action'or"anti-deficiency"law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (DI any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (B) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender end Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction), appeals,end any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings._Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the G provisions of this uaranty. Governing Law. ThIs Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the.•) laws of the State of Iowa without regard to Its conflicts of law provisions. This Guaranty has been accepted by Lender)n the State of-; Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnsxirf" County State of Iowa. I Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol emerie evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses; claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the LI to warranties,representations and agreements of this paragraph. _tet Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the Singular shall be deemed to have been used in the plural where the context and construction so require;and where there is more than—one:Borrowers named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' and`-Guarantor'' respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,'and'Lender"include the hei?'successor, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,them fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire Into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing,and, except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail, es first class,certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall he in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent Instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest,this Guaranty shall be binding upon and inure to the benefit of the parties,their successors end assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word 'Borrower" means Frantz Construction Co., Inc. and includes all co-signers end co-makers signing the Note and all Z COMMERCIAL GUARANTY Loan No:dellIMIMP (Continued) Page 3 their successors and assigns. Guarantor. The word "Guarantor'means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case. any signer's successors and assigns. Guaranty. The word"Guaranty"means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals ol,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreoments,guaranties, security agreements,mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION. EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JULY 20,2007. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARAN'•R: air— • ' i iam L.Frantz u[r[r[o r..•.. y w.. . ww [r . ..,....[ M. .., r.1.11 As r AM ,[[. . . rcrwili lo IC,n.[[.en, • nJ O ,rte M .tr.r. r. � rr- . r n - o? S COMMERCrAL GUARANTY '$' eke ��Q , .0 m aturl L0fin•NOS ,,:;,t`001lrea(fU a 'ACCOUrit- Offieof Innfaj8 xr sxr References in the boxes above are for Lenders use only and do not limit the applicability of this document to any particular loan or item. Any item above containing"•••"has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.FrantzifellIMINIMInememt 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This Is a guaranty of payment and performance and not of collection,so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,In legal tender of the United States of America,In same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word"Indebtedness"as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon end all collection casts and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower Individually or collectively or interchangeably with others,owes or will owe Lender."Indebtedness" includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rale protection agreements or foreign currency exchange agreements or commodity price protection agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities end obligations whether: voluntarily or involuntarily incurred; due or to become duo by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable Instrument of writing;originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason such as infancy, Insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lander,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness Incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mall,at Lender's address listed above or such other place as Lender may designate In writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness" does not Include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, new Indebtedness' does not Include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before end after Guarantor's death or Incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the_Indebtedness shall riot affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars ($0.001,shall not constitute a termination of this Guaranty, This Guaranty Is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as soy of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars 150.001. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lander, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; 181 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the tirne for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases end decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; IC) to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fall or decide not to perfect, and release any such security,with or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security end direct the order or manner of sale thereof, including ' without limitation,any nonjudiclal sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion, 'may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this' Guaranty In whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES, Guarantor represents and warrants to Lender that (AI no representations or agreements of any kind have been made to Guarantor which would limit or qualify In any way the terms of this Guaranty; (B) this Guaranty Is.,. executed at Borrower's request and not at the request of Lender; IC) Guarantor has full power,right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other Instrument binding upon Guerentoh.;) and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (El Guarantor has not end will not,without" the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of::: Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information In fermi,...), acceptable to Lender,and all such financial information which currently has been, and all future financial Information which will be provided to Lender is end will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (HI no litigation,claim, investigation, administrative proceeding or similar action(Including those for unpaid taxes)against Guarantor Is pending or threatened; Ill Lender has made no representation to Guarantor as to the Creditworlhinoss of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis Information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might In any way affect Guarantor's risks under this Guaranty, end Guarantor further agrees that, absent a request for information,Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S.WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continua lending money or to extend other credit to Borrower: 151 to make any presentment,protest, demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorsor,or other guarantor in connection with the Indebtedness or In connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (OI to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor,or any other parson; (E) to give y COMMERCIAL GUARANTY Loan No:411111111MOINEss (Continued) Page 2 • notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; IFI to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to arty matter whatsoever. Guarantor also waives any and all rights orrdefenses based o,suretyship or Impairment of collateral including, but not limited to,any rights or defenses arising by reason of (A) any "one action" or "anti-deficiency' law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (81 any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, Including without limitation, any loss of rights Guarantor may sutler by'reason of any law limiting, qualifying, or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; ID) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; 1E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at low or in equity other then actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above Is made with Guarantor's full knowledge of its significance and consequences and that.under the circumstances,the waivers ore reasonable end not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR- Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lander and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, end Lender Is hereby authorized. In the name of Guarantor,from time to time to file financing statements and continuation statements end to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions ore a part of this Guaranty: Amendments. This Guaranty.together with any Related Documents.constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs end expenses,including Lander's attorneys' fees and Lender's legal expenses,Incurred In connection with the enforcement of this Guaranty. Lender may hire or pay someone elso to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there Is a lawsuit, including attorneys' fees end legal expenses for bankruptcy proceedings [including efforts to modify or vacate any automatic stay or injunction), appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs end such additional fees as may be directed by the court. Caption Headings. Caption headings In this Guaranty are for convenience purposes only and are not to bo used to interpret or define the provisions of this Guaranty. Governing Low. ThLs Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that_Guarantor has reed end tufty understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's Intentions and parol evidence Is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations end agreements of this paragraph. Interpretation, In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used In the plural where the context and construction so require; and where there is more than one Borrower named In this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower' and "Guarantor' respectively shall mean all and any one or more of them. The words"Guarantor,' "Borrower,'and'Lender'include the heirs,successors, assigns, and transferees of each of Ihern. If a court finds that any provision of this Guaranty is not valid or should not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,It is not necessary for Lender to inquire Into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on • their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shelf bra guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shell be effective when actually delivered,when actually received by telefecsimlle(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed,when deposited In the United States mail,as first class,certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be In • writing and shall be effective upon delivery to Lander as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at ell times of Guarantor's current address. Unless otherwise provided or required by law,if there Is more than one Guarantor,any notice given by bander to any Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lender. Lander shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in W(tiiq.and signed by Lender. No delay or omission on the pert of Lender In exercising any right shall operate as a waiver of such right oe any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender In any instance shall not constitute continuing consent to subsequent Instances where such consent is required and in ell cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated In this Guaranty on transfer of Guarantor's Interest, this Guaranty shall be binding upon and Inure to the benefit of the parties,thou,successors end assigns. Financial Reporting Requirements.Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed. Guarantor agrees to provide lender with updated personal financial statement arnuolly.. DEFINITIONS. The following capitalized words end terms shall have the following meanings when used In this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shrill mean amounts in lawful money of the United States of America. Words end terms used In the singular shall include the plural,and the plural shell Include the singular,as the context may require. Words and terms not otherwise defined In this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: 5 COMMERCIAL GUARANTY Loan No: efilaMINNIN.— (Continued) Page 3 Borrower. The word 'Borrower'means Frantz Construction Co., Inc.and includes all co-signers end co-makers signing the Note and all their successors and assigns. Guarantor. The word'Guarantor' means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case, any signer's successors and assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness'means Borrower's Indebtedness to Lender as more particularly described In this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors end assigns. Note. The word 'Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations In favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,security deeds,collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed In connection with the Indebtedness. • EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JUNE 11,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR; • William L.Frantz .YQWmf Ca..nwvn .r f.YN+aa'Sn.ffva .s w,e. .".- waraHu e.c n.771 n4, • Sia 0 -�'; 3 COMMERCIAL GUARANTY PrIrfalp Y� 1 f►at• :Date ' Maturity T ....-Loan'NaCpll Con Account• Officer _InitieJs, RdatProp._ • SW- References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or iters. Any item above containing.....has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Intw11.11111111111111111111111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 fiwy 1 W PO Box 209 825 Morrison Trak Blvd Iowa City,IA 52246 Iowa City.IA 52246 (319)339-1000 Guarantor: William L.FrantzlININIMMIIIIme 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment end performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or Its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word"Indebtedness' as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid Interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys' lees. arising from any and all debts, liabilities and obligations of every nature or farm, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will own Lender."Indebtedness'includes,without limitation,loans.advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any Interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations. and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to became due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); end originated then reduced or extinguished and then afterwards Increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shell have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed In full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to now Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "now Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;Incurred under a commitment that became binding before revocation; any renewals,extensions,substitutions, and modifications of the Indebtedness. This Guaranty shell bind Guarantor's estate as to the Indebtedness created both before end after Guarantor's death or incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner In which Guarantor might have terminated it end with the same affect. Release of any other guarantor-or-termination of anyotherij o ant r under h guaranty of the—Indebtedness shell not affect the liability cd Guarantor uer this Guaranty. A revocation Lander receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. h is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars(50.001. shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's hairs, successors and assigns so long as any of the Indebtedness remains unpaid and oven though the Indebtedness may horn time to time be zero dollars 150.001. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice ori "' demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend 7. additional credit to Borrower; (BI to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment ["n or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rata of interest on the moms Indebtedness;extensions may be repeated and may be for longer than the original loan term; (CI to take and hold security for the payment of r- this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with ' c•-.) or without the substitution of new collateral; (D1 to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsors, or other guarantors an any terms or in any manner Lender may choose; (EI to determine how, when and what application of i r payments end credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, Including _ 17 without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender In its discretion ..... may determine; IGI to sell, transfer, assign or grant participations In all or any part of the Indebtedness;and IH) to assign or transfer this -- Guaranty In whole or in part. n GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lander that (A) no representations or y7 agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (5) this Guaranty is 1.PI executed at Borrower's request and not at the request of Lender; (CI Guarantor has full power,right and authority to enter into this Guaranty; (0) the provisions of this Guaranty do not conflict with or result In a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has riot and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been, and all future financial Information which will be provided to Lender is and will be true and correct in all materiel respects and fairly present Guarantor's financial condition es of the dates the financial information is provided; IGI no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely effect Guarantor's financial condition; (HI no litigation, claim, Investigation, administrative proceeding or similar action(Including those for unpaid taxes) against Guarantor is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower;end (JI Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such moans of any facts,events,or circumstances which might In any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request far information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; ICI to resort for payment or to proceed directly or at once against any parson,including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other person; IEI to give COMMERCIAL GUARANTY Loan No: 10111111.1111110 (Continued) Page 2 notice of the terms.time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or IGI to commit any act or omission of any kind,or at any time,with respect to ony matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of IA) any 'dee action' or 'anllydeficiency' law or any other law which may prevent Lander from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action. either judicially or by exercise of a power of sale; IB) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower far reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (C) any disability or other defense al Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment In full In legal tender, of the Indebtedness; ID) any right to claim discharge of the Indebtedness on the basis of unjustified Impairment of any collateral for the Indebtedness; IE) any statute of limitations, if at anytime any action or suit brought by Lender against Guarantor Is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or IF) any defenses given to guarantors at law or In equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to ony applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender end Guarantor shell be paid to Lander and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment In legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shell be marked with a legend that the same are subject to this Guaranty and shell be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions ore a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,Including Lender's attorneys' fees • end'Lender's legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction), appeals, end any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the-.7 laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of.Johnson/, County,State of Iowa. �� U ti Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has-had the i opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's Intentions and pawl-- evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all.losses, claims,damages,and costs(Including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the. warranties,representations and agreements of this paragraph. ��°n Rrra, Interpretation. in all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shell be deemed to have been used in the plural where the context end construction so require; end where there is more then one Borrower named in this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower" and'"Guarantor" respectively shall mann all end any one or more of them. The words'Guarantor,'"Borrower,"and'Lender'include the heirs,,successors,'-- assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that ki—n fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. 11 any one or mora of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entitles,It is not necessary for Lander to inquire into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given In writing, end,except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimife(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed, when deposited in the United States mall,as first class, certified or registered mall postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY," Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of ' Guarantor's currant address. Unless otherwise provided or required by law,if there is more than ono Guarantor,ony notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given In writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may bo granted or withheld in the sole discretion of Lender. Successors end Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's Interest, this Guaranty shall be binding upon end Inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have The following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used In the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Coda: Borrower. The word"Borrower" means Frantz Construction Co., Inc.and includes all co-signers and co-makers signing the Note and all their successors and assigns. COMMERCIAL GUARANTY Loan No:1111111.111111111111. (Continued) _ Page 3 Guarantor. The word 'Guarantor' means everyone signing this Guaranty,including without limitation William L.Frantz.and in each case. any signer's successors and assigns. Guaranty. The word'Guaranty"means this guaranty from Guarantor to tender. Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications ot,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents" mean ell promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages. and all other Instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED 'DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JUNE 13,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARAANN OR: William L.Frantz `fir -- • • r..J o •,0 t- 71 ,.,- "..0 2 < • ...... r ---1 _) M .`n r. O � 7Z D '= Vi 9 COMMERCIAL GUARANTY Principal-• ` Loan Onto Maturity .Loan No • Cali7Call Account Officer initials SW References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. - Lender; UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City.IA 52244-0209 Iowa City,IA 52246 1319)339-1000 Guarantor: William L.FrarrtzligiiMMINFA 1463 Buckingham Place Iowa City,IA 52240 • CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection,so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness"includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;Joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;.incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal repLesentative may terminate this Guaranty in the same manner in which_Guarantor,might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty.and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars 1$0.001, shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs. successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars($0.001. ,, GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereoft(without noticp or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (Al prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or othenoiye to ext4nd -- - additional credit to Borrower; 181 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payrnent or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate oL interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the peymedt of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect, and release any Ouch securityr with or without the substitution of new collateral; ID) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, i.. endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what.applicatitxayf payments and credits shall be made on the Indebtedness; (F) to apply such security end direct the order or manner of sale:theteof,inclpirDg without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lenderin its discretion may determine; (G) to sell,transfer, assign or grant participations in all or any part of the Indebtedness;and IHI to assigo•000 iransfent9is Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that IA) no reP.resentatiornr agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaran't1 is executed at Borrower's request and not at the request of Lender; ICI Guarantor has full power,right and authority to enter into this Guaranty; 101 the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim, investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (AI to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety,endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (E) to give COMMERCIAL GUARANTY Loan No:1 (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on.suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of (A) any"one action"or "ami-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or atter Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,including without limitation, any loss of rights Guarantor may suffer by reason of any law Igniting,qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (FI any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and riot contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lander may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized, in the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or Injunction), appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Gttegrat o c. Guarambr further agrees that Guarantor has read and fully understands the terms'Of fibs Guarenty,( uarantor haa�iad the - opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singylar?shall be deemed to have been used in the plural where the context and construction so require;and where there is mor han one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower': and "Guarantor respectively shall mean all and any one or more of them. The words'Guarantor,' 'Borrower,'and'Lender'include the heirs,successors. assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that e ' fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the ' provisions of this Guaranty even if e provision of this Guaranty may be found to be Invalid or unenforceable. If any one or more al Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire Into the powers of Borrower or Guarantor or of the officers,directors,partners, managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. i �� - � _ Notices. Any notice required to be given under this Guaranty shall be given In writing,and, except for revocation noticcsby Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),wihda deposited Pth a nationally recognized overnight courier,or,If mailed, when deposited in the United States mail,as first class,certified,,tt registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guagsntor•shall tie-in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARAf' ' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender inlormed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shell not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice.or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest,this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The fallowing capitalized words end terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower' means Frantz Cop ruction Co.,Inc.and includes all co-signers and co-makers signing the Note and all their successors and assigns. • COMMERCIAL GUARANTY Loan No: (Continued) Page 3 Guarantor. The word'Guarantor'means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case, any signer's successors end assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness'means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors end assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of.consolidations of end substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,security deeds,collateral mortgages,and all other instruments. agreements and documents,whether now or hereafter existing,executed In connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION. EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JULY 23,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARAN R:R:� �tsl�J1 William L.Frantz • • o �_ fn �q rn 0 73 UI • 12 COMMERCIAL GUARANTY PrOCipat Loan Dato Maturity I (gapNo1 Cali I cots I Account 0)fice1 )ftttlalS 444.:k• RoaIPrbp $1111 References in the boxes above are for Lender's use only and do not limn the applicability of this document to any particular loan or item Any itern above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.11111111111.a. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.Frantz 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees lull and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note end the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without setoff or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word"indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts,liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness'includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations, and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by thew terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY'UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue In full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty. Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the time of notice on revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or Incapacity,regardless of Lender's actual notice of Guarantor's death..Subject to the foregoing,Guarantor's executor or administrator or other _ legal re presentativemay terminate_this-Guaranty-in-the-same-manner-in-which Guarantor-might-have terminated-it and-Wtli ttje same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not effect the liability of Guarantor'under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur In the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions In the amount of the Indebtedness, even to zero dollars ($0.001, shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars 160.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, withogt notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make_�3 one or more additional secured or unsecured loans to Borrower, to tease equipment or other goods to Borrower, or otherwisto extend e. additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment• 1 or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the__, Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment 01 '� this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with ie— or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, i endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof,including 7,,. without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its ditiori9tion - may determine; IG) to sell,transfer,assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transtsy this ` Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; 191 this Guaranty is executed at Borrower's request and not at the request of Lender; IC) Guarantor has full power,right and authority to enter into this Guaranty; 0, 101 the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial Information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information Is provided; (G1 no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lander and no event has occurred which may materially adversely affect Guarantor's financial condition; (HI no litigation,claim, investigation, administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and 1,1) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information,Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment,protest,demand,of notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety,endorser,or other guarantor In connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; ICI to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held Lender from Borrower, any other guarantor,or any other person; (E) to give COMMERCIAL GUARANTY Loan No:f/l111.111 (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (GI to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based orrsuretyship or impairment of collateral including,but not limited to.any rights or defenses arising by reason of IA) any 'one action'or'anti-deficiency' law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation,any loss of . rights Guarantor may suffer by season of any lady limiting,qualifying,or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or IFI any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness end thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers sat forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. It any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors, by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of rhe claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender lull payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs end expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or Injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the Jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require;and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' end "Guarantor" respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,'and'Lender'include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the'rast of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one.or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire Into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on r� their behalf,and any indebtedness made or created In reliance upon the professed exercise of such powers shall be guaranteed under this " MOM Guaranty. Notices, Any notice required to be given under this Guaranty shall be given in writing, and,except for revocation notices by Guarantor, -- � shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by lawl,when deposjted'with O k l e nationally recognized overnight courier,or,If mailed,when deposited in the United States mail,as first class,certified or registered mail r'- sssa postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall-be in gO�1 writing end shall be effective upon delivery to Lender as provided In the section of this Guaranty entitled 'DURATION OF GUA,Rlh(TY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender Informed at 4(I'times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given-& Lender to any Guarantor is deemed to be notice given to all Guarantors. G� No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in writing and signed by Lender. No delay or omission on the part of Lander in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used In the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower, The word 'Borrower' means Frantz ConstructigIno., Inc.and includes all co-signers and co-makers signing the Note and all their successors and assigns. COMMERCIAL GUARANTY Loan No:INNINVIIIINkb (Continued) Page 3 Guarantor. The word "Guarantor"means everyone signing this Guaranty,including without limitation William L. Frantz, and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words `Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED AUGUST 8,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARA OR: X f'.'sr�.iiL William L.Frantz uMitelr 3..0.0.03 A, ."_.."...tie-,.,..,.....o.goo.. W.a..n.."... .u..rmin,rb IC .n.... • r t p -71>_ i0 o � r �R I t3 073 - '• a.. • • • Is COMMERCIAL GUARANTY i.pw,,�f,ftGip [ Loon Dat© *Utttity. Loan Non r Cot Account Officer Initia)s References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc, Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 West PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 1319)339-1000 Guarantor: William L.Frantz 1463 Buckingham (ace Iowa City.IA 62240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment end performance and not of collection,so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used In this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness"includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several;evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER. NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue In full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'new Indebtedness' does not Include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shell bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal representatide may terminate thisuG eranfy in the same manner in which Guarantor might have terminated It and with the same effect, Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur In the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars IS0.00), shall not constitute; termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs, successors and assigns so long.is any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars(SO.001, GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice-or demand and without lessening Guarantor's Debility under this Guaranty,from time to time: IA) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend ' additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the_ Indebtedness;extensions may be repeated and may be for longer than the original loan term; (CI to take and hold security for the payment of ,y this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with or without the substitution of new collateral; ID) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, • endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and whet application or - - payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof,including...) without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender inits discretion. may determine; (G) to sell,transfer,assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES, Guarantor represents and warrants to Lender that (Al no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; IB) this Guaranty is executed at Borrower's request and not at the request of Lender; IC) Guarantor has full power,right and authority to enter into this Guaranty; IDI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result In a violation of any law,regulation,court decree or order applicable to Guarantor; 1E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial arid credit information in form acceptable to Lender,and all such financial Information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; 10) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (HI no litigation,claim, investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate moans of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information,Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest,demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety,endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; ICI to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; I01 to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; IE) to give COMMERCIAL GUARANTY Loan No: 13612421-20 (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights ordefenses based qn suretyship or impairment of collateral Including,but not limited to,any rights or defenses arising by reason of (A) any 'one action'or "anti-deficiency'law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation,any loss of rights Guarantor may suffer by leason of any law limiting,qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent, Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of Insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee In bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness: If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law.the laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts ofJohnson_3 ._.County,-State-of Iowa. • --- — —. --- — — —. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the ') opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence Is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses,1 yf y claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the " .=re warranties,representations and agreements of this paragraph. - I r.•.as Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used In this Guaranty in the singular shell— be deemed to have been used in the plural where the context and construction so require;and where there is more than one Borrower 1 1 named in this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower' and 'Guarantor"74-7 raa respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,`and'Lender'include the heirs,.succassors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is riot valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court wit enforce the rest of the;9 provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. II any one-on more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it Is not necessary for Lander to inquire -- into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any Indebtedness made or created in reliance upon the plofessed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing,and, except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed,when deposited In the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided In the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's Interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors end assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word 'Borrower' means Frantz ConstructionCo.,Inc.and includes all co-signers and co-makers signing the Note end all their successors and assigns. 1-7 COMMERCIAL GUARANTY Loan No:11111111111.1.111113 (Continued) Page 3 Guarantor. The word "Guarantor'means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case, any signer's successors and assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in savor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED AUGUST 19,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARAAL "(52--)f" j/ -JI'"�//" G�/ 1 William L.Frantz usa, ...nwwj C..,.w.w....,«.:.....,..,.,.20011 .. :... .�,LACx41,5200}It el."I. • _ rJ o - y 0 cn >_I Iai 0 - rn o 70 gg COMMERCIAL GUARANTY Principal Loan Date • ,Maturity I, rr Edo';, Calif• r ! ` -,Account 'Office `initials References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing"•••'has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.v Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 West PO Box 209 625 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 1319)339-1000 Guarantor: William L.Frantz 1463 Buckingham Place • Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-oft or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty. Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness"as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness"Includes,without limitation,loans,advances, debts, overdraft Indebtedness, credit card indebtedness, tease obligations, liabilities and obligations under any interest rare protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether:voluntarily or Involuntarily Incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;Joint or several or joint end several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER. NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. •• DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,end will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of • any notice of revocation shall have been fully end finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. It Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation:any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or Incapacity,regardless of Landers.actual.notice_of Guarantors death.__Subject to the(Gregoing,Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shell not affect the liability of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by thus Guaranty;-and Guerento'I specifically acknowledges end agrees that reductions in the amount of the Indebtedness, even to zero dollars 150.001, shall riot constitute ti-) termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs,successors and assigns so long is any of the. Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars(50.001. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or-' ,gym demand end without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make rte• one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend__ additional credit to Borrower; IB) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment �",{ or other terms of the Indebtedness or any part of the Indebtedness, Including increases and decreases of the rate of iltterest on tile,. u Indebtedness;extensions may be repeated and may be for longer then the original loan term; IC) to take and hold security for the bayment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fall or decide not to perfect,and release any such with or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties,,' endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when end what,aQplication of• payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof,including-- without limitation,limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or dead of trust,as Lender iii its discretiot, may determine; (GI to sell,transfer, assign or grant participations in all or any part of the Indebtedness; and (Hi to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power,right and authority to enter into this Guaranty; (DI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; CE) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transler, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit Information in form acceptable to Lender,and all such financial information which currently has been.and all future financial information which will be provided to Lender is and will be true and correct in all material respects end fairly present Guarantor's financial condition as of the dates the financial information is provided; (G1 no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; IH) no litigation,claim,investigation,administrative proceeding or similar action )including those for unpaid taxes)against Guarantor is pending or threatened; II) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately Informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shell have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (BI to make any presentment,protest,demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety,endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor. ID) to proceed directly against or exhaust any collateral held'y Lender from Borrower,any other guarantor,or any other person; (E) to give COMMERCIAL GUARANTY Loan No:41/111=/ (Continued) Page 2 notice of the terms,time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; IF) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to,any rights or defenses arising by reason of (Al any "one action" or "anti-°deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by re"ason of any law limiting, qualifying, or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; 10) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. II payment is made by Borrower. whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that. under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness. whether now existing or hereaher created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or-not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors, by voluntary liquidation,or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be oflective only for the purpose of assuring to.Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys' fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help • enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings lincluding efforts to modify or vacate any automatic stay or injunction), appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson - - - - .-County;State of Iowa.------._-_--- _. _.. ......._._... Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses,' claims,damages,and costs lincluding Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shell be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower end 'Guarantor' respectively shall mean all and any ono or more of them. The words'Guarantor,""Borrower,"and"Lender'include the heirs,successors. assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,titer- fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of., Borrower or Guarantor are corporations,partnerships, limited liability companies,or similar entities,it is not necessary for Lender to inquire.; ire—) into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under tf>ieD Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantdt..— shall be effective when actually delivered,when actually received by telelacsimile runless otherwise required by law),when deposited with'' a nationally recognized overnight courier.or, if mailed.when deposited in the United States mail,as first class,certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any patty may change its address for notices under this Guaranty by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required end in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code:. Borrower. The word 'Borrower"means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns. /f T COMMERCIAL GUARANTY Loan (Continued) Page 3 Guarantor. The word "Guarantor' means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case. any signer's successors and assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness'means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of.consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental • agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments. agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED SEPTEMBER 11.2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANI . William L.Frantz -- �><...o.�d,,. "..,.r.....,...,....... ,.>...o. ".ro.,.....,,.. t%cm.,...,.,c MN..., • rJ rri rri • d g or 2d COMMERCIAL GUARANTY • PrlrrGlpsl I,A n.3 e fV{aturELY; 4�tari N4: CAIi icon Ar c�wnt=: Qif7jaf ltit�3 m t fop StW. References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing'"•• has been omitted due to text length limitations. Borrower: Frantz Construction Co..Inc.011.11111111MMINP Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.Frantz 11111.111111111111111111111R 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good end valuable consideration.Guarantor absolutely and unconditionally guarantees full end punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,In legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness"as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness"includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily Incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined:direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under ell guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid end satisfied end all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation df this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose end without limitation, "new Indebtedness' does not include all or pert of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation; any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or Incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal-representative-may-terminate_this_Guaranty_In the same manner In which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shell not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions In the amount of the Indebtedness,even to zero dollars 150.001, shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars(S0.00). - GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof,without notice er demand end without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend' additional credit to Borrower; 16) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment; ! r or other terms of the Indebtedness or any part of the Indebtedness, including Increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer then the original loan term; IC) to take end hold security for the payment ql ---' this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,tail or decide not to perfect,and release any such security,with- or without the substitution of new collateral; ID) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, I. endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application.01 ' '_ payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thpredf,includiFrg-_ without limitation,any nonjudiclal sale permitted by the terms of the controlling security agreement or deed of trust,as Lender irr'ts discretion -.- may determine; 1G) to sell,transfer, assign or grant participations in all or any pert of the Indebtedness;and (H) to assign i$L tr"gtisfer this f Guaranty in whole or in pert. '• GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no repredentations tin agreements of any kind have bean made to Guarantor which would limit or qualify in any way the terms of this Guaranty; 1B1 this Guaranty executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power,right and authority to enter Into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial and credit Information in form acceptable to Lender,and all such financial Information which currently has been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial Information is provided; IG) no material adverse change has occurred In Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim,investigation, administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; II) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and LII Guarantor has established adequate means of obtaining from Borrower on a continuing basis Information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way effect Guarantor's risks under this Guaranty, end Guarantor further agrees that, absent a request for information,Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of Its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender IA) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety,endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,Including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (E) to give COMMERCIAL GUARANTY Loan No: 4.111111111111111111m (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; IF) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights orjefenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of (A) any o e action" or'anti-deficiency' law or any other law which may prevent Lender from bringing any action,including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer bylleason of any IaeRliimiting,qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment In full In legal tender, of the Indebtedness; ID) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced,there Is outstanding Indebtedness which is not barred by any applicable statute of limitations;or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lander is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any.similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences end that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that.the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lander. Guarantor agrees,end Lender is hereby authorized,In the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a pert of this Guaranty:. Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred In connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, end Guarantor shall pay the costs and expenses of such enforcement. Costs end expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings In this Guaranty ere for convenience purposes only end are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there Is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby Indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or Incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there Is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used In the plural where the context and construction so require;and where there Is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' end._'Guarantor'==; respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,'and'Lender'Include the heirs,,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the.rest of the") provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. II any one or more e);' Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire ®®r Into the powers of Borrower or Guarantor or of the officers,directors,partners, managers,or other agents acting or purporting to act on) gals their behalf,and arty Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this_.. i Guaranty. . Notices. Any notice required to be given under this Guaranty shall be given In writing, and, except for revocation notices by Guarantor;, shall be effective when actually delivered,when actually received by telefacslmile(unless otherwise required by lew),when deposited with-a a nationally recognized overnight courier,or,if mailed,when deposited In the United States mail,as first class,certified or reglsfefed mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor;sfi"all be Irr0 writing end shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the= purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times Oa% Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to arty Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shell not be deemed to have waived any rights under this Guaranty unless such waiver Is given in writing and signed by Lender. No delay or omission on the part of Lender In exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any Instance shall not constitute continuing consent to subsequent instances where such consent Is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon end inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall Include the plural,and the plural shall include the singular,as the context may require. Words end terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word 'Borrower'means Frantz Construction Co., Inc.and includes all co-signers and co-makers signing the Note and all their successors end assigns. 23 • COMMERCIAL GUARANTY Loan No: 14111M/Milb (Continued) Page 3 Guarantor. The word'Guarantor'means everyone signing this Guaranty.including without limitation William L. Frantz, and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty"means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness"means Borrower's Indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of.modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED DECEMBER 4,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARA OR, William L.Frantz • ______. •� ,",o•.rwp.w. m m)C.r r.w rw.w f+,•.•,r.off.1� u"y."".�..�. r��Kmtnvm.,C n f rr m i • • • 0 ) rn r- 73. • �' Z`� COMMERCIAL GUARANTY Prttttpal; loan Date Maturity t�va>;No • can/ cot) AccoLt>�L Q#f# es 1n1ttBFa = - , Roa11;fQPt'..40-6014W. t.`-, t".tet._..-.... References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.- Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 West PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: Wallam L.Frantz 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good end valuable consideration,Guarantor absolutely and unconditionally guarantees full arid punctual payment and satisfaction of the indebtedness of Borrower to Lender, end the performance and discharge of all Borrower's obligations under the Note end the Related Documents. This Is a guaranty of payment and performance end not of collection,so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, end will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law.attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or Interchangeably with others,owes or will owe Lender.'Indebtedness'includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under.any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities end obligations whether: voluntarily or involuntarily Incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or Indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint end several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lander or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise(; and originated then reduced or extinguished and then afterwards Increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY. ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBUGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING.INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been Cully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mall,at Lender's address listed above or such other place es Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or nor due end which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: Incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before end after Guarantor's death or Incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it end with the same effect. Release of any o r guarantor or termination of any other guerantyof InAebted-nesash8lf nor affect the liability of Guarantor under-this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars 150.001. shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars IS0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: IAI prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend.) additional credit to Borrower; (81 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the tirne:for payment✓ or other terms of the Indebtedness or any pan of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; ICI to take and hold security for the payment pf,,.) this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fell or decide not to perfect,and release any such security,with.yI or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties;..j Y f endorsers, or other guarantors on any terms or in any manner Lender may choose; IE) to determine how, when and what application of payments and credits shall be made on the Indebtedness; iFI to apply such security and direct the order or manner of sale thereof, including) without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its dlscretior7 r may determine; (G) to sell, transfer,assign or grant participations in ell or any pert of the Indebtedness;end (H) to assign or transfer this Fri Guaranty in whole or in part. - past • GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no repreeeriietions 61 e� agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; 18) thisGuaranty iko executed at Borrower's request end not at the request of Lender; IC) Guarantor has full power,right and authority to enter into jlvs Guaranty.• (D) the provisions of this Guaranty do not conflict with or result In a default under any agreement or other instrument binding upop Guarantor.. and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; lE1 Guarantor has not and wig not,wilhoty� the prior written consent of Lender, sell, lease, assign, encumber. hypothecate, transfer, or otherwise dispose of all or substantially ell oY_ Guarantor's assets,or any Interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial end credit Information in form acceptable to Lender,and all such financial information which currently has been,end all future financial information which will be provided to Lender is and will be true end correct in all material respects end fairly present Guarantor's financial condition as of the dates the financial information Is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely effect Guarantor's financial condition; IH) no litigation, claim,Investigation, administrative proceeding or similar action(including those for unpaid taxes)against Guarantor Is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and iJ) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent e request for information, Lender shell have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender IA) to continue lending money or to extend other credit to Borrower; IBI to make any presentment,protest,demand,or notice of any kind, Including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the pert of Borrower, Lender,any surety,endorser, or other guarantor In connection with the Indebtedness or In connection with the creation of new or additional loans or obligations: IC) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by lender from Borrower, any other guarantor,or any other person; (El to give ZS COMMERCIAL GUARANTY Loan No: (Continued) Page 2 notice of the terms,time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but nor limited to, any rights or defenses arising by reason of (A) any "one action" or 'anti-deficiency' law or any other law which may prevent Lander from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; IBI any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by season of any lanylimiting, qualifying, or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment In full in legal tender, of the Indebtedness; (0) any right to claim discharge of the Indebtedness on the basis of unjustified Impairment of any collateral for the Indebtedness; (EI any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third parry,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WIT)) RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance end consequences end that,under the circumstances, the waivers are reasonable and not contrary to public policy or law. 11 any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of rho assets of Borrower, through bankruptcy.by art assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shell be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests.any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shell be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized, In the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. Na alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses,Incurred in connection with the enforcement of this Guaranty. Lander may hire or pay someone else to help enforce this Guaranty, and Guarantor shall'pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees end legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals. and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extant not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages,end costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more then one Borrower or Guarantor,then ell words used in this Guaranty in the singular shalt--) be deemed to have been used In the plural where the context and construction so require; and where there is more than one Borrower-1 named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower" and "Guarantor'- respectively shall mean all and any ono or more of them. The words'Guarantor,' 'Borrower,'and"Lender'include the heirs,successors,) assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that-f fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the_ - -_. provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. II any one or more of. --., Borrower or Guarantor ere corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire' into the powers of Borrower or Guarantor or of the officers, directors, partners,managers, or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this ., Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, and,except for revocation notices by Guarantor, J shell be effective when actually delivered,when actually received by talefacsimile(unless otherwise required by law),when depdsited with a nationally recognized overnight courier,or, if mailed,when deposited in the United States mail,as first class,certified or regfetered wait' postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor.shall be in--- writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY."--.� Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender Informed at all times of Guarantor's cu-rent address. Unless otherwise provided or required by law,it there is more than one Guarantor,any notice given by Lender to any Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required end in all cases such consent may be granted or withheld in the solo discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shell be binding upon and Inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all ref erences.to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall Include the plural,and the plural shall Include the singular,as the context may require. Words end terms not otherwise defined In this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower' means Frantz Constructign Co., Inc.and Includes ell co-signers and co-makers signing the Note and all their successors and assigns. Jp_ COMMERCIAL GUARANTY Loan No: iYl1101•1111111110 (Continued) Page 3 Guarantor. The word'Guarantor'means everyone signing this Guaranty. including without limitation William L. Frantz. and in each case, any signer's successors and assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness'means Borrower's indebtedness to Lender es more particularly described in this Guaranty. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION.EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED DECEMBER 31,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANT : X 40 22i { William L.Frantz ��YY • • rV O > rn "111 0_N 0 a o. 27 COMMERCIAL GUARANTY Principal Loan Date fNa.turltY Loan No ' cegltou• • Account Officer ,Initials References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or nom. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.Frantz 811111.0.11111111111111.1110 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lander can enforce this Guaranty against Guarantor even when lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,In same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word"Indebtedness' as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys' lees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness'includes,without limitation,loans,advances, debts, overdraft indebtedness. credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether; voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect:primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor.Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such-other unterminated-guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY- UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid end satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate In writing. Written revocation of this Guaranty will apply only to new Indebtedness created alter actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness" does not Include the Indebtedness which at the time of notice of revocation Is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation; any renewals,extensions,substitutions, and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or ' tV incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other 8 legal representative may terminate this Guaranty in-the same manner in which Guarantor-might have terminated it end with the same effect.-----Q---- -- Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this 0 (.."1 Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this "r• '–' f-rt Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor "'l specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars ($0.00), shall not constitute a 1 termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the -- - + Indebtedness remains unpaid and oven though the Indebtedness may from time to time be zero dollars(50.001. —'i t. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or m ., demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend O additional credit to Borrower; 1131 to alter.Compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; IC) to take and hold security for the payment of this Guaranty or the Indebtedness.and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with a or without the substitution of new collateral; (DI to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security end direct the order or manner of sale thereof, including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (G) to sell,transfer, assign or grant participations in alt or any part of the Indebtedness; and IH) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents end warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; IB1 this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power,right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (EI Guarantor has not and will not,without the prior written consent of Lander, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been, end all future financial information which will be provided to Lender is and will be true and correct in all material respects end fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender end no event has occurred which may materially adversely affect Guarantor's financial condition; (Hl no litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (AI to continue lending money or to extend other credit to Borrower; IB) to make any presentment,protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (0) to proceed directly against or exhaust any collateralraheld by Lender from Borrower, any other guarantor,or any other person; IE) to give /-Y COMMERCIAL GUARANTY Loan No: ?11111ffair. (Continued) Page 2 notice of the terms,time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; IF) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral Including, but riot limited to,any rights or defenses arising by reason of (Al any'one action' or 'anti-deficiency` law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, atjoinst Guarantor,before or alter Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (CI any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (DI any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for rho Indebtedness; IEl any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations; or In any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee In bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shell be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment ct the claims of both Lender end Guarantor shell be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documegtg_and-to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its rights under this Guaranty. - --- - -- - "" MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Feos;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' tees end legal expenses for bankruptcy proceedings lincluding efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-)Udgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or deflnB the provisions of this Guaranty. - Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal levy,the laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there Is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County, State of Iowa. . Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor.has hid the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's Intentions and petal evidence Is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all Idisbs, claims,damages,and costs lincluding Lender's attorneys'fee's)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. -_— Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used In this Guaranty in the singular all be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower" and "Guarantor" respectively shall mean ail and any one or more of them. The words'Guarantor," "Borrower,"and'Lender'include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the feat of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers,directors, partners, managers, or other agents acting or purporting to act on their behalf, end any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier.or,if mailed, when deposited in the United States mail,as first class,certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the,notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there Is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. • No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender In exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties, their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word 'Borrower' means Frantz Construction Co., Inc. end includes all co-signers and co-makers signing the Note end all their successors and assigns. ^^ • COMMERCIAL GUARANTY Loan No: (Continued) Page 3 Guarantor. The word'Guarantor" means everyone signing this Guaranty, including without limitation William L.Frantz.and in each case. any signer's successors and assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness'means Borrower's Indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note' means and Includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications ol.relinancings of.consolidations of and substitutions for promissory notes or credit agreements. • Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements. environmental agreements, guaranties, security agreements, mortgages. deods of trust, security deeds, collateral mortgages.and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MAY 7,2009. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANT R: X 'l 'V1 William L.Frantz LK....)... b:COL Ca 4.14...q-...4..94. xmJ. 0.11,9449...... .i,LKriwLAIO A9)]n, --- J .; C.") • ril -- It =' 1 a COMMERCIAL GUARANTY • PY Loan Dat° Maturity Loan No iCell r cos ACco tOftlGer^ Ittit;uty References in the shaded area are ler Lenders use only and an not limit the applicability of this document to any particular loan or item. Any itern above containing "" has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trak Blvd Iowa City.IA 52244-0209 Iowa City,IA 62246 (319)339-1000 Guarantor: Eugene W.Nissley 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness, Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without setoff or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form,now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.`Indebtedness"includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection apreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor.Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until ell the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully end finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the Mile;of notice.of. revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or-due. For this purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower prior to: revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications.of, the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or _+ incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner In which Guarantor might have terminated it and with the'same effect,- Rerease of any other guarantor or termfnation of any other guaranty of the Indebtedness shelf not effect the liability of Guarijptor'under this Guaranty. A revocation Lender receives from any one or more Guarantors shell not affect the liability of any remaining Guarantdri under this, = ' Guaranty. It is anticipated that fluctuations may occur In the aggregate amount of the Indebtedness covered by this GuarantyanQ'Guaranr,_ specifically acknowledges and agrees that reductions In the amount of the Indebtedness,even to zero dollars 150.00). shall re constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs, successors and assigns so ion ;spy of d%4l Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars 180.001. _17 GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof,without notice-err-- demand oticeardemand and without lessening Guaiantor's liability under this Guaranty,from time to time: IAI prior to revocation as set forth above,to maEb"I one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; ICI to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; IEI to determine how, when and what application of payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (G) to sell,transfer,assign or grant participations in all or any part of the Indebtedness;and IH) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; 18) this Guaranty is executed at Borrower's request and not at the request of Lender; IC) Guarantor has full power,right and authority to enter into this Guaranty: (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other Instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,end all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; IGI no material adverse change has occurred in Guarantor's financial condition since the data of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; II) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to �f keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment,protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety,endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (DI to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor,or any other person; IE) to give COMMERCIAL GUARANTY Loan No:friV- (Continued) Page 2 notice of the terms,time,and place of any public or private safe of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time.with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but nor limited to,any rights or defenses arising by reason of (Al any 'one action' or "atti-deficiency' law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (BI any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,br of-any other pbAon,or by reason of the cessation al Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; IE) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable stature of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment end performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the-amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recouprttent or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's lull knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors,by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions aro a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys' fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law; the laws of the State of Iowa without regard to Its conflicts of law provisions. This Guaranty has been accepted by Lender In the State of Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the c6urt&of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read end fully understands the terms of this Guaranty; GuaraomrWa hadthd - opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's into,tlSione and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless,froinall losses? claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Gii.arantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shad` be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' and 'Guarantor' respectively shall mean all and any one or more of them. The words'Guarantor,' 'Borrower,'and'Lender'include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors,partners, managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed, when deposited in the United States mail,as first class,certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lander. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor.shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word 'Borrower' means Frantz Construction Co., Inc. and includes all co-signers and co-makers signing the Note and all Z COMMERCIAL GUARANTY Loan No:1" (Continued) Page 3 their successors and assigns. Guarantor. The woad"Guarantor"means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty"means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness-means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word-Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust,security deeds,collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JULY 20,2007. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND AI.L OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: X Eugene W is • • o �O rri m • • 3 COMMERCIAL GUARANTY �3zy' an Bade Matunty Loan No Can i ol) _^ i=:,.A • ealProp Account Officer• Irina V it SW References in the boxes above are for Lander's use only end do not limit the applicability of this document to any particular loan or item. Any item above containing '••'has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Ine.cialagimminab Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 1319)339-1000 Guarantor: Eugene W.Niasiey 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender,and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This Is a guaranty of payment and performance end not of collection. so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,In same-day funds,without aet-off or deduction or counterclaim. and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited end Guarantor's obligations are continuing. INDEBTEDNESS. The word"Indebtedness'as used In this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid Interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower Individually or collectively or interchangeably with others,owes or will owe Lander.'Indebtedness`Includes,without limitation,loans,advances, debts, overdraft Indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future Judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable Instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as Infancy, Insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards Increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shell be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or Invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBUGATtONS AND LIABIUTY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied end all of Guarantor's other obligations under this Guaranty shall have been performed in full. II Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the indebtedness which at the time.of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose end without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that Is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal representative may terminate this Guaranty In the same manner In which Guarantor might have terminated it and with the'same effect. Release of any-other-guarantor-or-termination-of any other guarantyof the Indebtedness shall-not affect the liability of Guarentor'nnder this Guaranty. A revocation Lander receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,end Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars 150.001, shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's hairs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (AI prior to revocation as set forth above,.to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend- additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time fnr.paymen or other terms of the Indebtedness or any pert of the Indebtedness, Including Increases and decreases of the rate of interest on [f' Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for lt(e payment cit. this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate, fail or decide not to perfect,and release any such security,whh- or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's suretle ei endorsers, or other guarantors on any terms or In any manner Lender may choose; (El to determine how, when and what application of payments and credits shell be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudlcial sale permitted by the terms of the controlling security agreement or dead of trust,as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty In whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lander that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; IBI this Guaranty is executed et Borrower's request and not et the request of lender, (CI Guarantor hes full power,right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other Instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any Interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information In form acceptable to Lender,and all such financial Information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (01 no material adverse change'has occurred In Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event hes occurred which may materially adversely affect Guarantor's financial condition; 1111 no litigation,claim,Investigation,administrative proceeding or similar action lincluding those for unpaid taxes)against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might In any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to daclose to Guarantor any Information or documents acquired by Lender In the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (BI to make any presentment,protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the pert of Borrower, Lender, any surety,endorser,or other guarantor In connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by Lander from Borrower, any other guarantor,or any other person; (EI to give COMMERCIAL GUARANTY Loan No:L (Continued) Page 2 notice of the terms,time,and place of arty public or private sale of personal property security held by Lander from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue arty other remedy within Lender's power;or 1G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of (A) any"dne action' or''attitl-deficiency'law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor,before or after Lender's commencement or completion of any foreclosure action, either Judicially or by exercise of a power of sale; (BI any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, Including without limitation,any loss of rights Guarantor may sutler by reason of any law limiting,qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment In full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified Impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which Is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors,the Indebtedness shell be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above Is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the indebtedness, whether now existing or hereafter created;shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender end Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lander all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lander so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same we subject to this Guaranty and shell be delivered to Lender. Guarantor agrees,and Lender Is hereby authorized,In the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a pert,of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's coats end expenses,Including Lander's attorneys'fees and Lender's legal expenses,Incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costa and expenses Include Lender's attorneys' fees end legal expenses whether or not there is a lawsuit. Including attorneys' fees and legal expanses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated poet-Judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings In this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,this-) laws of the State of Iowa without regard to Its conflicts of law provisions. i--1 _ Choice Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson ' County,State of Iowa. - I _._Integration.-_Guarantor further agrees that Guarantor has-read-and fully understands the terms of this-Guaranty;Guarantor-hes-had-the— opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentb[{s and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from se losses,7T: , claims,damages,and costs(Including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the—" .--✓ warranties,representations end agreements of this paragraph. - - Interpretation. In all cases where there Is more than one Borrower or Guarantor,then all words used In this Guaranty in the/angular shall-9 • be deemed to have been used in the plural where the context and construction so require;and where there Is more than one.Borrower named In this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower' and'Guarantor' respectively shall mean all and any one or more of them. The words'Guarantor,"'Borrower,"and'Lender'Include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even If a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entitles,It Is not necessary for Lander to Inquire into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,end any Indebtedness made or created In reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shell be given In writing, and, except for revocation notices by Guarantor, shell be effective when actually delivered,when actually received by talefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,If mailed,when deposited in the United States mall,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there la more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lander,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lander in any Instance shall not constitute continuing consent to subsequent instances where such consent is required and In all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's Interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. Financial Reporting Requirements.Borrower and guarantor agree to provide lender with a copy of their federal income tax returns annually within 60 days of the date they were to be filed. Guarantor agrees to provide lender with updated personal financial statement annually.. DEFINITIONS. The following capitalized words end terms shall have the following meanings when used In this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts In lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shell include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shell have the meanings attributed to such terms in the Uniform Commercial Code: S COMMERCIAL GUARANTY Loan No:ilk (Continued) Page 3 Borrower. The word "Borrower" means Frantz Construction Co.,Inc.and Includes all co-signers and co-makers signing the Note and ell their successors and assigns. Guarantor. The word"Guarantor'means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and In each case, any signer's successors end assigns. Guaranty. The word"Guaranty"moans this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness'means Borrower's Indebtedness to Lender as more particularly described in this Guaranty. Lender. Tho word'Lender' means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION.its successors and assigns. Note. The word 'Note" means end Includes without limitation elf of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations In favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of end substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED'DURATION OF GUARANTY'. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JUNE 11,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: X Fugene W,-•issley LAMA rn0 1.••••••.w.S.0 C.a7]Cr.rrri' S Mww Born,w.1St?,MOL Pia 11•••'wi. .u L-a nAY10rt 77,-7n tel I --- • • r+3 a 1t'1 '1 o� (o COMMERCIAL GUARANTY Principal Loan Date Maturity Loan No czw f(;.l Account Officer' InitiaEs References in the boxes above are for Lender's use only and do not limit the appl.cub Iry cf this document to any particular loan or item. Any item above containing'•••'has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.Smelmomen.111) Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 1319)339-1000 Guarantor: Eugene W.Nissley I 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely end unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment end performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in soma-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability Is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities end obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower Individually or collectively or interchangeably with Others,awes or will owe Lender."Indebtedness"includes,without limitation,loans,advances, debts, overdraft Indebtedness, credit card indebtedness, lease obligations, liabilities end obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether; voluntarily or involuntarily Incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated than reduced or extinguished and then afterwards Increased or reinstated. It Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shell not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN ANO CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness Incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shell have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so In writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness" does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'now indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to '- revocation;incurred under a commitment that became binding before revocation;any renewals, extensions,substitutions, and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other '.r legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same-effect, Release of any other guarantor-or termination' any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this �1 Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this 1 r'a't= Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars ($0.001, shall not constitute e ?� termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any,cit the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars($0.001. - U` GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without M)iee'or demand and without leseaning Guarantor's liability under this Guaranty,from time to alma: (A) prior to revocation as set forth above,fo make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to istend additional credit to Borrower: 081 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including Increases and decreases of the rate of interest on the. Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness, end exchange,enforce,waive,subordinate,tall or decide not to perfect.and release any such security,with or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (FI to determine how, when end what application of payments and credits shall be made on the Indebtedness; IFI to apply such security end direct the order or manner of sale thereof, Including without limitation, any nonjudiclal sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; IGI to sell,transfer, assign or grant participations in all or any pert of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lander that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request end not at the request of Lender; (C) Guarantor has full power,right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other Instrument binding upon Guarantor and do not result In a violation of any law,regulation,court decree Or order appllceble to Guarantor; IEI Guarantor has not and not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IFI upon Lender's request,Guarantor will provide to Lender financial and credit Information in form acceptable to Lender,and all such financial information which currently hes been, and all future financial Information which will be provided to Lender Is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information Is provided; (GI no material adverse change has occurred in Guarantor's financial condition since the date of the most recant financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (HI no litigation, claim, Investigation,administrative proceeding or similar action(Including those for unpaid taxes) against Guarantor is pending or threatened; 111 Lender has made no representation to Guarantor as to the creditworthiness of Borrower; end (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis Information regarding Borrower's financial condition. Guarantor agrees in keep adequately Informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shell have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS, Except ae prohibited by applicable law, Guarantor waives any right to require Lender IA) to continue lending money or to extend other credit to Borrower; (8) to make any presentment, protest, demand, or notice of any kind, including notice of any nonpayment of the indebtedness or at any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety,endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; ICI to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (DI to proceed directly against or exhaust any collateral hold by yLLender from Borrower, any other guarantor,or any other person; (El to give COMMERCIAL GUARANTY Loan No: deimmomi (Continued) Page 2 notice of the terms,time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; IFI to pursue any other remedy within Lender's power;or (GI to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of IA) any 'oRe action' or 'artti•deficiency' law or any other law which may prevent Lender from bringing any action,Including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (8) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,Including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full In legal tender, of the Indebtedness; ID) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (El any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment Is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness end thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers sat forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether'or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of Insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by en assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shell be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which It may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce Its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions era a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expanses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lander's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lander may hire or pay someone else to help enforce this Guaranty, and Guarantor shell pay the costs and expenses of such enforcement. Coats end expenses Include Lender's --� attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy 3 proceedings(Including efforts to modify or vacate any automatic stay or injunction),appeals,and arty anticipated post-judgment collection 'J services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. rn Caption Headings. Caption headings In this Guaranty are for convenience purposes only and are not to be used to interpret or define the' r', k�� provisions of this Guaranty. "O mem, Governing Law. This Guaranty will be governed by federal law applicable to Lender end,to the extent not preempted by federal law,the ( r- laws of the State of Iowa without regard to its conflicts of law provisions. • . Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. 0 Integration. Guarantor further-agrees that Guarantor hes reed end fully understands the terms of this Guaranty;Guarantor has h)cf..the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from ea-kisses, claims,damages,end costs(including Lender's attorneys'fees)suffered or Incurred by Lender as a result of any breach by Guerantgt.nf the -= warranties,representations end agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context end construction so require; end where there is more then one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' end 'Guarantor' respectively shall mean all and any one or more of them. The words'Guarantor,"'Borrower,'and'Lender'include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to Inquire Into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any Indebtedness made or created In reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shell be given In writing,and,except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telelacaimile)unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,If malted,when deposited In the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown neer the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change Its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed'to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lander In exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent'instances where such consent is required and in all cases such consent may be granted or withheld In the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's Interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words end terms shall have the following meanings when used In this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts In lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word 'Borrower' means Frantz Construction Co., Inc.and Includes all co-signers and co-makers signing the Note and all their successors and assigns. COMMERCIAL GUARANTY Loan No:411011111.1. (Continued) Page 3 Guarantor. The word'Guarantor"means everyone signing this Guaranty,Including without limitation Eugene W.Nisslay,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness'means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements,mortgages,deeds of trust,security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed In connection with the Indebtedness. CH UNDERSIGNED ANTOR ACKNOWLEDGES HAVING TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAREADPROVISIONS THIS GUARANTY SEFF ECTIVEF TUPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED-DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JUNE 13,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: X Eugen tssley � AW%PMO l.,F"✓.4<.3.033Gw.IM.".,n+AAA S..nM.A.As,.MY. Ary...M...w, u,:KN"R�[IDrt nn,n, • o • J` V fir— m m O �^ w COMMERCIAL GUARANTY rfrGl al 1.tW0.47#10t Vlatnrf {dvw _ ot gatesm 1ta foo hfiq 7P References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.4111MMIIIIII111111110 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1119 Shirken Dr. PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: Eugene W.Nissley 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection,so Lander can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-oft or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and elf debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness'includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. • If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not)unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation;any renewals,extensions, substitutions,end modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or admigistrttor.orather_ legal representative may terminate-this Guaranty in the same-manner in which Guarantor might have terminated it and with the same effect: Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarar under this': Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this-' Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor,-, _ specifically acknowledges and agrees that reductions in the amount of the Indebtedness,even to zero dollars($0.00), shall not constitute a ��y termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors end assigns so longus any of the- Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender,either before or after any revocation hereof, withoutnotice orj demand and without lessening Guarantor's liability under this Guaranty,from time to time: IA) prior to revocation as set forth above;.to make • one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to-extend- additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time I r. a mens. or other terms of the Indebtedness or any part of the Indebtedness, Including increases and decreases of the rate of interest Rey Indebtedness;extensions may be repeated and may be for longer than the original loan term; IC) to take and hold security for thpa on the r prityent,wth thIs Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,tail or decide not to perfect,end release any such security,with" or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties,_ endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of' payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; 101 to sell,transfer,assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that .(Al no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has lull power,right and authority to enter into this Guaranty; (D) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber. hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any Interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; IG) no material adverse change has occurred in Guarantor's financial condition since the date al the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; IH) no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for Information,Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. • GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continua lending money or to extend other credit to Borrower; IBI to make any presentment,protest, demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety, endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (CI to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by LendeJ from Borrower,any other guarantor,or any other person; IE) to give COMMERCIAL GUARANTY Loan No:11111111111.1111111 (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with • any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of (A) any "one action"or "anti-deficiency"law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action. either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; ID) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (El any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. It payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to pubic policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'lees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender-may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs end expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees end legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional teas as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the.> provisions of this Guaranty. _ Governing Law. This Guaranty will be governed by federal law applicable to Lender end,to the extent not preempted by federal law,the' laws of the State of Iowa wIthout regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts ofJohnsorii County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantorhaa had the— opportunity I:�m opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless fiom-all fosses., I claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the'— 7=-7warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the stngufar shaf:9 be deemed to have been used in the plural where the context and construction so require; and where there Is more-than the Borrower. named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower' end-'Guarantor`' respectively shall mean all and any one or more of them. The wards"Guarantor,''Borrower,"and"Lender'include the heirs,successors assigns,and transferees of each of them. If a court finds that any provision of this Guaranty Is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it Is not necessary for Lander to inquire into the powers of Borrower or Guarantor or of the officers,directors, partners,managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created In reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefecsimile(unless otherwise required by lawl,when deposited with a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided In the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more then one Guarantor,any notice given by Lender to any Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lander's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender In any instance shall not constitute continuing consent to subsequent instances where such consent is required end in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specilically stated to the contrary,all references to dollar amounts shall mean amounts In lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall Include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: _ Borrower. The word 'Borrower'means Frantz Con trtiction Co.,Inc. and Includes all co-signers and co-makers signing the Note and all their successors and assigns. COMMERCIAL GUARANTY Loan No: j (Continued) Page 3 Guarantor. The word'Guarantor'means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty"means this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION.its successors and assigns. Note. The word 'Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings ot,consolidations of and substitutions for promissory notes or credit agreements. Related Documents, The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties,security agreements,mortgages,deeds of trust,security deeds,collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED AUGUST 8,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: ;Z‹..';.frafe--W X Eugene W i � 4fnl fp{yy,Vs. ..10o mf«wa.,4...04 1997.1C00 u*W,„Y.r .Ls CrµVo x K ni is ti., • • - c -` • n 0 • • • �2 COMMERCIAL GUARANTY (f ) �i f�1' ,i�» 1f fi f�.v ttllitX a F,xft11.1 N4 ¢ t�lt�(g 2t ? +(iii tltkt�L ?ft�1j�{� lith[ a F` ..._;'..,:: _ ._ ..,...;-. .< .. .-... S aeajP'rt)p ,a... E> ,...,�.w_i...,d il.lF ti t y References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Incom1111111101111111 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 West PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 13191 339-1000 Guarantor: Eugene W.Nissley 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender,and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'lees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower Individually or collectively or interchangeably with others,owes or will owe Lander.'Indebtedness'includes,without limitation,loans,advances, • debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;Joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished end then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lander without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid end satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice)ol revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lander of Guarantor's Witten revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined.or due. Foz Ais purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: Incurred by-Borrower prioQto 4 u revocation;incurred under a commitment that became binding before revocation; any renewals,extensions,substitutions,and-modifications of _._.' the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's Beater or -(ncapacity7 regardless-of Lender's-actual notice of Guarantor's death.--Subject-to the foregoing,Guarantor's executor_or.adminlstratot or Qtfter legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. 9 n Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under-this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarentor5 undeWtis Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty/entf Guarantor specifically acknowledges end agrees that reductions in the amount of the Indebtedness, even to zero dollars 150.001, shall riot constltf51 a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs.successors and assigns so IQtr'as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars 150.001. - --- GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice-Or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (Al prior to revocation as set forth above,to make one or more additional secured or'unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (131 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; IC) to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with or without the substitution of new collateral; (DI to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; IE) to determine how, when and what application of payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof, including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (GI to sell,transfer, assign or grant participations in all or any part of the Indebtedness;and (HI to assign or transfer this Guaranty in whole or In pert. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; 18) this Guaranty is executed et Borrower's request and not at the request of Lender; IC) Guarantor has lull power,right end authority to enter into this Guaranty; (0) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other Instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information Is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes) against Guarantor is pending or threatened; (II Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to • keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this • Guaranty,and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender IA1 to continue lending money or to extend other credit to Borrower; IB) to make any presentment,protest,demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety, endorser, or other guarantor In connection with the Indebtedness or In connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (0) to proceed directly against or exhaust any collateral held gi Lender from Borrower,any other guarantor,or any other person; (E) to give COMMERCIAL GUARANTY Loan No:.iY/1UI11111111. (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; IF) to pursue any other remedy within Lender's power;or IGI to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of (A) any 'one'ection'or 'anti-efficiency'law or any other law which may prevent Lender from bringing any action,including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,Including without limitation, any loss of rights Guarantor may suffer by reasodepf any law limiting,qualifying, or discharging the Indebtedness; (C) any disability or ether defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; ID) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; 151 any statute of limitations,if at any time any action or suit brought by Lander against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations:or IF) any defenses given to guarantors at law or in equity other then actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount ol that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and' not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise,the assets of Borrower applicable to the payment of the claims of both Lander and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however, that such assignment shall be effective only for the purpose of assuring to Lender lull payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, Including Lender's attorneys' fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costa and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees es may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only end are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by.federal later;'Ole laws of the State of Iowa without regard to Its conflicts of law provisions. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts ol Joh5gpn County,State of Iowa. • Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had`tfie opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's Intentions and pprol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result or any breach by Guarantor of the '^i warranties,representations and agreements of this paragraph. J J Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty int-the.iingular sb ll be deemed to have been used In the plural where the context and construction so require; and where there is more tpajf•orle Borrower named in this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower' and.tGuaraft(o' respectively shall mean all and any one or more of them. The words'Guarantor,' 'Borrower,'and'Lender'include the freirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not Dd enforced,-Vhet fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest ofthb provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entitles,it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing,and,except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shell be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there Is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lander in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest,this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,end the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word 'Borrower'means Frantz Construction'rTo.,Inc.and includes all co-signers and co-makers signing the Note and all their successors and assigns. I4 COMMERCIAL GUARANTY Loan No- (Continued) Page 3 Guarantor. The word"Guarantor'means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty"means this guaranty from Guarantor to Lander. Indebtedness. The word'Indebtedness'means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements,mortgages, deeds of trust,security deeds,collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED SEPTEMBER 11,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTO' �J// X Eugene W� Ilsley uamMO;may.V.t wm®Cape,-Imall Flo—rel; tm1u wy.s......". .u c,Cmalgm,c a. ,I. • O v� cn 1 � =1 c I • s_^ v 15 COMMERCIAL GUARANTY P0010.a1 Loan lane �A tc+rttir tats no----, t a l og As firs y E t as l References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc.amsmaxismaraLender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Boa 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City,IA 52246 (319)339-1000 Guarantor: Eugene W.Nissley 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally . guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance end discharge of all Borrower's obligations under the Note and the Related Documents, This Is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender hes not exhausted lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in earns-day funds,without set-off or deduction or counterclaim, end will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word"Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon end all collection costs and legal expenses related thereto permitted by law,attorneys'lees, arising from any and ell debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender."Indebtedness'Includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card Indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or Indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint end several; evidenced by a negotiable or non-negotiable Instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower far any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy. insanity, ultra vires or otherwise); end originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not lunless specifically provided below to the contrary)affect or Invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABIUTY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shell have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in lull. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be melted to Lender,by certified mail,et lender's address listed above or such other place as Lender may designate In writing. Written revocation of this Guaranty will apply only to new indebtedness created after actual receipt by Lander of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the tltna of notice-Oe. revocation Is contingent, unliquidated, undetermined or not due end which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation;any renewals, extensions,substitutions,and mddlfications'of) the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantors death.dt: ti il Incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other' .- legal_representative_may terminate this Guaranty in the same manner In which Guarantor might have terminated it and with the same effect ® Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of GG i iiior under this._ ii Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantois.under this Guaranty. It is anticipated that fluctuations may occur In the aggregate amount of the Indebtedness covered by this Guaranty,;and Guarani r, specifically acknowledges and agrees that reductions in the amount of the Indebtedness,even to zero dollars($0.00),shall not constitute-€y termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs,successors and assigns so longtes spy of t tf a Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars 1$0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, withriut notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation es set forth above,to mak one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to exten13-1 additional credit to Borrower; (8) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer then the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce.waive,subordinate,fail or decide not to perfect,and release any such.security,with or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security end direct the order or manner of sale thereof,including without limitation,any nonjudlcial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender In Its discretion may determine; 101 to sell, transfer, assign or grant participations In all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents end warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; IC) Guarantor has full power,right and authority to enter into this Guaranty; (DI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation.court decree or order applicable to Guarantor; IE) Guarantor has not and will not,without the prior written consent of Lender, sail, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information In form acceptable to Lender,end all such financial information which currently has been,and all future financial Information which w$I be provided to Lender Is end will be true and correct In all material respects and lairly present Guarantor's financial condition as of the dates the financial information is provided; 101 no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender end no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim,Investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor Is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis Information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way effect Guarantor's risks under this Guaranty,and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any Information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (Al to continue lending money or to extend other credit to Borrower; (B) to make any presentment,protest,demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; IC) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; IDI to proceed directly against or exhaust any collates aid by Lender from Borrower.any other guarantor.or any other person; (E) to give COMMERCIAL GUARANTY • Loan No:i' (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; In to pursue any other remedy within Lender's power;or (GI to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights oradefenses based on suretyship or impairment of collateral including,but not limited to, any rights or defenses arising by reason of IA) any one action' or 'anti-deficiency' law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; IBI any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law lirptiting, qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full In legal tender, of the Indebtedness; (DI any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy few or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees net to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of Its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver Is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes Insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee In bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lander. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents end to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions ere a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing end • signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of title Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there Is a lawsuit. including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,end any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings In this Guaranty are for convenience purposes only and are not to be used to Interpret or define the provisions of this Guaranty. • Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. Choice of Venue. If there Is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's inti)nhions and perp) evidence is not required to interpret the terms of this Guaranty. Guarantor hereby Indemnifies and holds Lender harmless-Nom all losses; claims,damages,and costs(including Lender's attorneys'teas)suffered or incurred by Lender as a result of any breach by'Guarantor of the warranties,representations and agreements of this paragraph. - J Interpretation. In all cases where there Is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shah -. be deemed to have been used in the plural where the context and construction so require; end where there is more than one Borrower - named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' arid 'Guarantor_ respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,'and'Lender'include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty Is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of ! provisions of this Guaranty even If a provision of this Guaranty may be found to be invalid or unenforceable. II any-nee,of more oP .__. Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entitles,it Is not necessary for Legder'to inggltt Into the powers of Borrower or Guarantor or of the officers,directors.partners,managers,or other agents acting or purportliig to act ea their behalf,end any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guarantied under this. Guaranty. - -— C Notices. Any notice required to be given under this Guaranty shall be given In writing, and, except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier.or,If mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing end shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lander informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shell not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shell not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent Instances where such consent is required and in all cases such consent may be granted or withheld In the sole discretion of Lender. Successors end Assigns. Subject to any limitations stated In this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors end assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words end terms used in the singular shall Include the plural,and the plural shell Include the singular,as the context may require. Words end terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word 'Borrower' means Frantz Construction Co.,Inc.and includes all co-signers and co-makers signing the Nota end all their successors and assigns. /7 COMMERCIAL GUARANTY Loan No:41101111110.111110 (Continued) Page 3 Guarantor. The word"Guarantor"means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lander as more particularly described in this Guaranty. Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties, security agreements,mortgages,deeds of trust, security deeds, collateral mortgages, end all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED DECEMBER 4,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTO • ir 24.7 X ,7.....r .,.... )6,X,74,!Q Eugene iss ay .�r..w 44......•..o.m.®.4 ...Liam 4..1997.X14. .4 44.44.",.4. w t..1.4.4 EL(C 4.n.w, • • _ :V _ .. . o to -›.....-1 . -; m 0 CO 1 5 COMMERCIAL GUARANTY „.r l .g.*rls pakfamrs R I IaturFtY Loan!i Gan:Gott ,4ccQ. t Mr—Win if1it a References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 West PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: Eugene W.Nissley 1.1.1.111111111111.11.111 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good end valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without setoff or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used In this Guaranty means all of the principal amount outstanding from time to time and at any one or more limes,accrued unpaid interest thereon and all collection casts and legal expenses related thereto permitted by law,attorneys'tees. arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower Individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness'includes,without limitation,loans,advances, debts, overdraft Indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements, other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect:primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others:barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or Invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER. NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBUGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY • REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME, DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any J notice to Guarantor or to Borrower, and will continue In full force until all the Indebtedness incurred or contracted before recelpaby Lender ot:. any notice of revocation shall have been fully end finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of .a?� revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing._ Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. Immus For this purpose end without limitation, the term 'new Indebtedness' does not include the Indebtedness which at the time of notice of t revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due.. -For this. purpose and without limitation, 'new Indebtedness' does not Include ell or part of the Indebtedness that Is: incurred by Borrower'prior to rn revocation;incurred under a commitment that became binding before revocation; any renewals,extensions,substitutions,end modifications of . , the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and atter Guarantor's death or incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrgtot br iother legal representative may terminate this Guaranty In the same manner in which Guarantor might have terminated It and with the s as e-effect. - Release-of-any other guarantor or termination of any other guaranty of the Indebtedness shall_not.aHect the liability_of.Guerentorynflel this • Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors itlnder this Guaranty. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and-Guarantor co specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars(50.001,shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars($0.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or atter any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: CA) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; 181 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; ICI to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fall or decide not to perfect,and release any such security,with or without the substitution of new collateral; 101 to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or In any manner Lender may choose; (EI to determine how, when and what application of payments end credits shell be made on the Indebtedness; IFI to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudlcial sale permitted by the terms of the controlling security agreement or deed of trust,as Lander in Its discretion may determine; (GI to sell,transfer,assign or grant participations in all or any part of the Indebtedness;end lHl to assign or transfer this Guaranty in whole or In part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents end warrants to Lender that (A/ no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (BI this Guaranty is executed at Borrower's request end not et the request of Lender: ICI Guarantor hes full power,right and authority to enter Into this Guaranty; IDI the provisions of this Guaranty do not conflict with or result In a default under any agreement or other instrument binding upon Guarantor and do not result In a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate. transfer, or otherwise dispose of all or substantially ell of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial end credit information in form acceptable to Lender,end all such financial Information which currently has been,and all future financial Information which will be provided to Lender Is and will be true and correct in all material respects end fairly present Guarantor's financial condition as of the dates the financial information Is provided; (G) no materiel adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender end no event has occurred which may materially adversely affect Guarantor's financial condition; IH) no litigation,claim,Investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; (I) Lander has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way effect Guarantor's risks under this Guaranty,and Guarantor further agrees that, absent a request for Information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law. Guarantor waives any right to require Lender IA) to continua fending money or to extend other credit to Borrower; 181 to make any presentment,protest,demand, or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the pert of Borrower. Lender,any surety,endorser,or other guarantor in connection with the Indebtedness or In connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any parson,Including Borrower or any other guarantor; 101 to proceed directly against or exhaust any collateral heldLender from Borrower,any other guarantor,or any other person; IE) to give COMMERCIAL GUARANTY Loan No:111IM•11•11.1011111 (Continued) Page 2 notice of the terms,time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (GI to commit any act or omission of any kind,or et any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of (A) any 'tine action' or 'anti deficiency' law or any other law which may prevent Lander from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by repson,of„gpy,jpw limiting, qualifying,or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the indebtedness; IEI any statute of limitations, if at any time any action or suit brought by Lander against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors et law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar parson under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shell be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes Insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by en assignment for the benefit of creditors,by voluntary liquidation,or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shell be paid to Lander and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower; provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized, in the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce Its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given In writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expanses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,Including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costa and expenses Include Lender's _ attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings lincluding efforts to modify or vacate any automatic stay or injunction), appeals,and any anticipated post-judgment collection r.7 --. services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty ere for convenience purposes only and are not to be used to Interpret or define the .� provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender end,to the extent not preempted by federal law,the - .i..ud laws of the State of Iowa without regard to its conflicts of law provisions. Choice of Venue. If there Is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. u •-Q Integration. Guarantor further agrees that Guarantor has read and fully understandsthe terms of this Guaranty;_Guarantor has bad.the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, G.7 claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breech by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require;and where there is mora than one Borrower named In this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' and 'Guarantor' respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,'end'Lender'Include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even If a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it Is not necessary for Lender to inquire Into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, end,except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefecalmile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,If mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shell be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled'DURATION OF GUARANTY.' Any party may change Its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's currant address. Unless otherwise provided or required by law,If there Is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lander. Lender shell not be deemed to have waived any rights under this Guaranty unless such waiver Is given In writing and signed by Lender. No delay or omission on the pert of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty, No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon end inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words end terms shell have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words end terms used In the singular shall include the plural,and the plural shall Include the singular,as the context may require. Words and terms not otherwise defined In this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower'means Frantz Construction Co., Inc.and Includes all co-signers and co-makers signing the Note end all their successors end assigns. 2j) COMMERCIAL GUARANTY Loan No:fallalinffib (Continued) Page 3 Guarantor. The word'Guarantor' means everyone signing this Guaranty,Including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note" means and Includes without limitation all of Borrower's promissory notes endlor credit agreements evidencing Borrower's loan obligations in favor of Lander,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions tor promissory notes or credit agreements. Related Documents. The words 'Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties, security agreements,mortgages, deeds of trust,security deeds, collateral mortgages,and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED`DURATION OF GUARANTY'. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED DECEMBER 31,2008. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: fJ�� X Eugene .Mssley USIA r"3 vs.".40.03 CO3 C."..".y., ,MP.POOL M L4Su".....i. rr Tr-r.n I • • • 0 •• i L/ c. rl • r � I r- -i c -- ; b 2j COMMERCIAL GUARANTY Pf-.-) .-. ,d fs##ii : NtB petty 1"z,an Nu ei . sa x t (..fin ra • •r ttaE�tai ^' References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any Item above containing"•• has been omitted due to text length limitations. Borrower: Frantz Construction Co.,Inc. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION 1075 Hwy 1 W PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52246 Iowa City.IA 52246 (319)339-1000 Guarantor: Eugene W.Nissley 41.11111.1111.1111111111. 1478 Cromwell Place Iowa City,IA 52240 • CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance end discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time end at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness"includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations,and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent:liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy- insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shell not(unless specifically provided below to the contrary)affect or Invalidate any such-other guaranties. _ Guarantor's liability will be Guarantor 's aggregate liability under the terms of this Guaranty and-any such-other unterminated guaranties. i CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND r� PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING'OR ,_� HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON311E INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY M REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. -r. -l DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all the Indebtedness incurred or contracted before rederpt by Lendeal any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed In full. If Guarantor elects to revoke this Guaranty- Guarantor may only do so In writing. Guarantor's wtJtten notiu"Thf revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writf(. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not Include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, 'new Indebtedness' does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;Incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or Incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it end with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not effect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur In the aggregate amount of the Indebtedness covered by this Guaranty.end Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness,even to zero dollars(60.001, shell not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars 160.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (Al prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B1 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any pert of the Indebtedness, including increases end decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness,end exchange,enforce,waive,subordinate,fall or decide not to perfect,and release any such security,with or without the substitution of new collateral; (DI to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and whet application of payments and credits shall be made on the Indebtedness; IFI to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender In its discretion may determine; (G) to sell, transfer,assign or grant participations in all or any part of the Indebtedness;and NI to assign or transfer this Guaranty In whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; 0) this Guaranty is executed at Borrower's request and not at the request of Lender; (Cl Guarantor hes full power,right and authority to enter into this Guaranty; (Dl the provisions of this Guaranty do not conflict with or result in a default under any agreement or other Instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (El Guarantor has not end will not.without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any Interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct In all material respects end fairly present Guarantor's financial condition as of the dates the financial information is provided; (01 no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; IH) no litigation,claim,investigation,administrative proceeding or similar action [including those for unpaid taxes)against Guarantor is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (JI Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way effect Guarantor's risks under this Guaranty,and Guarantor further agrees that, absent a request for information, Lander shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (AI to continue lending 1 money or to extend other credit to Borrower; (61 to make any presentment, protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety,endorser,or other guarantor in connection with the Indebtedness or In connection with the creation of new or additional loans or obligations; IC) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (DI to proceed directly against or exhaust any collateral Id by Lender from Borrower.any other guarantor,or any other person; (E) to give COMMERCIAL GUARANTY Loan Nom (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (FI to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based ors suretyship or impairment of collateral including,but not limited to, any rights or defenses arising by reason of IA) any 'one action' or`anti-deficiency' law or any other law which may prevent Lender from bringing any action,Including a claim for deficiency, against Guarantor, before or atter Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, Including without limitation, any loss of rights Guarantor may suffer by reeson..of any law limiting, qualifying,or discharging the Indebtedness; (Cl any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment In full In legal tender, of the Indebtedness; (0) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; IEl any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors et law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower. whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances-the waivers are reasonable and • not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes Insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender lull payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to_execute"documents.and totake such other actions as Lender deems necessary or appropriate to perfect.preserve end enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone elsg to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs end expenses include-sender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for liaialtroptcy proceedings(including efforts to modify or vacate any automatic stay or Injunction),appeals,and any anticipated post.udgment.collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. -1 ' Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret ord ine the provisions of this Guaranty. 3 • Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted-by federaFfaw,the laws of the State of Iowa without regard to its conflicts of law provisions. j Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of-the ldourta oDbhnson County,State of Iowa. i] Integration. Guarantor further agrees that Guarantor hes reed and fully.understands the terms of this Guaranty; Oisatisiitor hasmad the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully rellects Gueramoe'*Intentions Md parol evidence is not required to Interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from aft-kisses, claims,damages,end costs(including Lender's attorneys'lees)suffered or incurred by Lender as a result of any breach by GuereneFJot the warranties,representations end agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty In the singular shall be deemed to have been used In the plural where the context and construction so require; end where there is more than one Borrower named In this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower' and 'Guarantor' respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,'and'Lender'include the heirs.successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty Is not valid or should not be enforced,that fact by Itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even it a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entitles,it Is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers,directors,partners.managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices, Any notice required to be given under this Guaranty shall be given in writing, and,except for revocation notices by Guarantor. shall be effective when actually delivered,when actually received by telefecsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail,as first class,certified or registered mall postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled `DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice Is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more then one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent Instances where such consent is required end in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors end Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon end inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and farms used In the singular shall Include the plural,and the plural shall Include the singular,as the context may require. Words end terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word 'Borrower'means Frantz Consyucn Co.,Inc.and includes all co-signers and co-makers signing the Note and all their successors end assigns. `ijJ COMMERCIAL GUARANTY Loan No: 1111111.11111.0 (Continued) Page 3 Guarantor. The word'Guarantor'means everyone signing this Guaranty,Including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word'Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The ward"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note" means and Includes without limitation all of Borrowers promissory notes and/or credit agreements evidencing Borrower's loan obligations In favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean ell promissory notes, credit agreements, loan agreements, environmental agreements,guaranties,security agreements,mortgages,deeds of trust,security deeds, collateral mortgages, and ell other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY", NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MAY 7.2009. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: Eugen" Nissley 1.M.me Lww.1•v..LOAOan C.V.N,,Iw1 e.w.i1 SA.1N.,k MI.or,. a Ne,,,uw.,a .,4{:,Gens MAC A err nt1 fJ o co zy COMMERCIAL GUARANTY Prtrrclpa� •p t ? :J:.:^Mdiurtty 1 f ih fklp Ga�fs atf f+eff t) pfftoor li ixlet MEMEEMNEW References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item, Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. - Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (3191 339-1000 Guarantor: William L.Frantz(1111.1111111.111111.0 1463 Buckingham Place Iowa City,IA 52240 AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, William L. Frantz I"Guarantor") absolutely and unconditionally guarantees and promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender")or its order,in legal tender of the United States of America, the Indebtedness (as that term is defined below) of Eastside Investors, L.L.C. 1"Borrower")to Lender on the terms and conditions set forth in this Guaranty. Under this Guaranty,the liability of Guarantor Is unlimited and the obligations of Guarantor are continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes any and all of Borrower's indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities, obligations and debts to Lender, now existing or hereinafter incurred Of created,including,without limitation,all loans,advances,interest,costs,debts,overdraft indebtedness,credit card indebtedness,lease obligations,other obligations,and liabilities of Borrower,or any of them,and any present or future judgments against Borrower, or any of them; and whether any such Indebtedness is voluntarily or involuntarily incurred, due or not due,absolute or contingent, liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily,or as guarantor or surety;whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever;and whether the Indebtedness arises from transactions which may be voidable on account of infancy,insanity,ultra vires,or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full, If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written.notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term"new Indebtedness"does not include Indebtedness which at the time of notice of revocation is contingent,unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by.Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals,extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantors.? executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have, terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect') the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any., remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of Indebtedness covered by thls'i Y--' Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of Indebtedness,even to zero dollars 150.00),prior-j to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though the indebtedness_ guaranteed may from time to time be iero dollars($0.00). • - - - -- GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without:iotice or:•. _�_ demand and without lessening Guarantor's(lability under this Guaranty,from time to time: IAI prior to revocation as set forth aboJe;,to one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherWiSe,to extend additional credit to Borrower; (8i to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time^forpaymenO or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the' Indebtedness;extensions may be'repeated and may be for longer than the original loan term; (C) to take and hold security for the payment alt':: this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,wit () or without the'substitution-of-new collateral; (0) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties; - endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (G) to sell,transfer,assign or grant participations in all or any part of the Indebtedness;and IH) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that IA) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; 181 this Guaranty is executed at Borrower's request and not at the request of Lender; (CI Guarantor has full power,right and authority to enter into this Guaranty; (DI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all at Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's•financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (HI no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; 111 Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lander (Al to continue lending money or to extend other credit to Borrower; (e) to make any presentment,protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the pert of Borrower, Lender,any surety,endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; IC) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (El to give notice of the terms,time, and place of any public or private sale of personal property security held by Lender from Borrower or to comply with arty other applicable provisions of the Uniform Commercial Code; IF) to pursue any other remedy within Lender's power;or 101 to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses arising by reason of (A) any'one action"or"anti-deficiency"law or any other law which may prevent Lender from bringing any action,including a claim for deficiency,against Guarantor, before or after Lender's commencement or completion of any foreclosure action,either judicially or by exercise of a power of sale; (8) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,including without limitation,any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender,of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (El any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter COMMERCIAL GUARANTY Loan No:all111111.1.111 (Continued) Page 2 • Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors,the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter,demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of Its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or lakv.pijanyrsuch waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law orpublic policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of'Borrower to Lender, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency end consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation,or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lander so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given In writing and • signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys'fees and Lender's legal expenses,Incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs end expenses of such enforcement. Costs and expenses include Lender's • attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty era for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard tq Its conflicts of law provisions. This Guaranty has been accepted by Lender In the State of Iowa. Choke of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's Intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless.from ell to tris, claims,damages,and costs(including Lender's attorneys'tees)suffered or incurred by Lender as a result of any breach by Guarantor of-the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used In this Guaranty in the singular,S all be deemed to have been used in the plural where the context and construction so require; and where there is more then one Borreewr named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the wards "Borrower' end 'Guarantor" `-"`' respectively shall mean all and any one or more of them. The words'Guarantor,"'Borrower,"and"Lender"include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not-be enlorced,-that fact by Itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce'the rest of.the j Y tl provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any One or more-of .tet Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for.Ladder to indite p into thepowers of Borrower or Guarantor or of-the-officers,directors,-partners,managers,-or other agents acting -'� g. g -or pu�Jiertirtp to-act-on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under9s Guaranty. Notices.'Any notice required to be given under this Guaranty shall be given in writing,and, except for revocation notices by Guarantoy shall be effective when actually delivered,when actually received by telefaceimile(unless otherwise required by law),when deposited 09 a nationally recognized overnight courier,or,if mailed,when deposited in-the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown neer the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided In the section of this Guaranty entitled "DURATION OF GUARANTY.- . Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specilying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. . No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lander in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and In all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's Interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. REPORTING REQUIREMENTS . Borrower agrees to provide lender with a copy of its federal income tax return annually. Guarantors agree to provide lender with personal federal income tax return copies and updated personal financial statements upon request. DERNITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shell include the plural,end the plural shall Include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word"Borrower'means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note. Guarantor. The word "Guarantor' means each end every person or entity signing this Guaranty, including without limitation William L. Frantz. Guaranty. The word'Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or pert of the Note. Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory not credit agreements. _ Related Documents. The words "Rele,._u Documents" msg.,all promissory notes, credit .eementa, loan agreements. environmental COMMERCIAL GUARANTY Loan No: 11111111111.1001 (Continued) Page 3 agreements,guaranties, security agreements, mortgages, deeds of trust,security deeds,collateral mortgages, and all other instruments. agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED FEBRUARY 11,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARRAANNTTTT R: ile X .^ v William L.Frantz IP"- w.e•......le .... •,..........ru..u..., ,...i m. ..A.m ..r.. .....r. .i.• wm ec, .vrc 1.1st Por 11 C.) rn ED :%: ""0 3; CO • 3 COMMERCIAL GUARANTY '',r et int P 5 't cf oiD.,�ltp 1 otur tt.A l.Obfl tr Gel)fGalt Areido int - a e FO. Lfl1EI :' References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.1111111111.112111211 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.Frank 1111.11.11111111.11.1.11111.19 1463 Buckingham Place • Iowa City,IA 52240 AMOUNT OF GUARANTY. The amount of this Guaranty Is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, William L. Frantz ("Guarantor") absolutely and unconditionally guarantees and promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender")or its order,in legal tender of the United States of America, the Indebtedness las that term Is defined below)of Eastside Investors, L.L.C. 1"Borrower")to Lender on the terms and conditions set forth In this Guaranty. Under this Guaranty,the liability of Guarantor is unlimited and the obligations of Guarantor are continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty Includes any and all of Borrower's indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities,obligations and debts to Lender, now existing or hereinafter incurred or created,including,without limitation,all loans,advances,interest,costs,debts,overdraft indebtedness,credit card indebtedness,lease obligations,other obligations,and liabilities of Borrower,or any of them,and any present or future judgments against Borrower,or any of them; and whether any such Indebtedness is voluntarily or involuntarily incurred,due or not due,absolute or contingent, liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily,or as guarantor or surety;whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever;and whether the Indebtedness arises from transactions which may be voidable on account of infancy,insanity,ultra vires,or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term'new Indebtedness"does not include Indebtedness which at the time of notice of revocation is contingent,unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,Including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals,extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty end, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal,representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. it Is anticipated that fluctuations may occur in the aggregate amount of indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions In the amount of Indebtedness,even to zero dollars 1$0.00P,prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon Gu mor and Guarantor's heirs,successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though-the Indebtedness guaranteed may from time to time be zero dollars 150.00). . li GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender,either before or after any revocation hereof, without ngtice or --y demand and without lessening Guarantor's liability under this Guaranty,from time to time: IA) prior to revocation as set forth above,ta.make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend -'77 additional credit to Borrower; 18) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for tea rment - ` ' or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate ol'interest.ha the Indebtedness;extensions may be repeated and may be for longer than the original loan term; ICI to take and hold securi y,,Ipsrthe payment of .__. this Guaranty.or the Indebtedness,and exchange,enforce,_walve,subordinate,fail or decide not to perfect,and release.any)tryjr securipowith. or without the substitution of new collateral; ID) to release,substitute,agree not to sue,or deal with any one or more otBorrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and what application of payments and credits shall be made on the Indebtedness: IF) to apply such security and direct the order or manner of site thereof,iteliding without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; 101 to sell,transfer, assign or grant participations In all or any part of the Indebtedness;and IH) to assign or transfer this Guarpnty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that IA) no representations or agreements el any kind have been made to Guarantor which would limit or qualify In any way the terms of this Guaranty; IBI this Guaranty is executed at Borrower's request and not at the request of Lender; (CI Guarantor has full power,right and authority to enter into this Guaranty; ID) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (61 Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all 01 Guarantor's assets,or any interest therein; (19 upon Lender's request,Guarantor will provide to Lender financial and credit information in font acceptable to Lender,and all such financial information which currently has bean,and all future financial information which will be provided tc Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financia Information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most men- financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; IH: no litigation,claim,Investigation, administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending a threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has establisher adequate means of obtaining from Borrower on a continuing basis Information regarding Borrower's financial condition. Guarantor agrees tr keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under thi: Guaranty, and Guarantor further agrees that, absent a request for Information, Lender shall have no obligation to disclose to Guarantor am information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender IA) to continue lendint money or to extend other credit to Borrower; (B) to make any presentment,protest,demand,or notice of any kind, Including notice of are nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower Lender, any surety, endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or edditiona loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor (DI to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor,or any other person; (El to give notice of the terms,time,and place of any public or private sale of personal property security held by Lander from Borrower or to comply witl any other applicable provisions of the Uniform Commercial Code; fF) to pursue any other remedy within Lender's power;or (G) to commit an' act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses arising by reason of (Al any'one action'or"anti-deficiency"law or any other law whicl may prevent Lander from bringing any action,including a claim for deficiency,against Guarantor, before or after Lender's commencement o completion of any foreclosure action,either judicially or by exercise of a power of sale; (8) any election of remedies by Lender which destroy or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement includin without limitation,any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness; IC) an disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability fror any cause whatsoever,other than payment in full in legal tender,of the Indebtedness; (D) any right to claim discharge of the Indebtedness o the basis of unjustified impairment of any collateral for.the Indebtedness; (E) any statute of limitations,if at any time any action or suit brougl- by lender against Guarantor Is commenced, there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicabl statute of limitations; or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of th Indebtedness. If payment is made by Borrower, whether olunterily or otherwise,or by any third party, an the Indebtedness and thereafte • COMMERCIAL GUARANTY Loan No: f11.111111111116 (Continued) Page 2 Lander is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors,the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. •. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not' Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have-against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be First applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee In bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment In legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, In the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty, No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees end Lender's legal expenses,Incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, Including attorneys' fees end legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional tees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to hs conflicts of law provisions. This Guaranty has been accepted by Lender In the State of Iowa. Choice of Venue- If there Is a lawsuit,Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. - Integration. Guarantor further agrees that Guarantor has read and fully understand§the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarentos:s-intentions e'parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless front atl:hpsses, claims,damages,and costs lincluding Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach-by Guarantor of the warranties,representations and agreements of this paragraph. ,.y Interpretation: In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty inthesing- sk shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Beprrower named In this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' and 'Gudrentor- respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,'and'Lender'include the heirs,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should nqt be enforced,that - fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will erilorge She rest f the provisions of this Guaranty even if a provision of this Guaranty may be found to be'invalid or unenforceable. lf'gfly-one or mote of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entitles,it is not necessary far,Lender to quire _h__ or __-- o._ tin ._ - Into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or^pijrtfdrting to; ton their behalf,and any indebtedness made or created In reliance upon the professed exercise of such powers shall be dparanteed undr this Guaranty. - ---- Notices. Any notice required to be given under this Guaranty shall be given In writing, Guarantor, and,except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed,when deposited in the United States mall,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lander. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate es a waiver of such right or any other right. A waiver by Lender of a provision pf this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any Instance shall not constitute continuing consent to subsequent instances where such consent is required and In all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's Interest, this Guaranty shall be binding upon and inure to the'benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms In the Uniform Commercial Code: Borrower. The word'Borrower'means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note, Guarantor. The word 'Guarantor'means each end every person or entity signing this Guaranty,Including without limitation William L Frantz. Guaranty. The word'Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Indebtedness. The word'Indebtedness'means Borrower's indebtedness to Lender es more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION.its successors and assigns. Note. The word 'Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencin( Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environments agreements,guaranties,security ogre• Its.mortgages,deeds of trust,security deeds,r 'ere(mortgages, and all other instruments agreements and documents,whether i. Jr hereafter existing,executed in connection wilt. Indebtedness. COMMERCIAL GUARANTY Loan No: 11110 (Continued) Page 3 EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED`DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED FEBRUARY 17,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANT R: x • , William L.Frantz AMR uuo nm i mow .r,x.1..l r.w w41.,wrm.nm As i qM.1 7 -w L C11UUerarc n.n rit., • rJ 0 cm C2—` I • --1:7 Co COMMERCIAL GUARANTY • Pr +fp�lt i L+art a#itVlax n #tier+No # c�ll(rcoa= : ##rctiunL t t oortif Ti!tiaEs 7.tl Wit: asx ....iiaa'1F?cvp. UIIClirta References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.— Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.Frantz 1463 Buckingham Place Iowa City,IA 52240 AMOUNT OF GUARANTY. The amount of this Guaranty Is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, William L. Frantz ("Guarantor") absolutely and unconditionally guarantees and promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender")or its order,in legal tender of the United States of America,the Indebtedness (as that term Is defined below) of Eastside Investors, L.L.C. I"Borrower")to Lender on the terms and conditions set forth In this Guaranty. Under this Guaranty,the liability of Guarantor Is unlimited and the obligations of Guarantor are continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes any and all of Borrower's indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities, obligations and debts to Lender, now existing or hereinafter incurred or created,including,without limitation,all loans,advances,interest,costs,debts,overdraft indebtedness,credit card indebtedness,lease obligations,other obligations,and liabilities of Borrower,or any of them,and any present or future judgments against Borrower,or any of them;and whether any such Indebtedness is voluntarily or involuntarily incurred,due or not due,absolute or contingent. liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily,or as guarantor or surety;whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever;and whether the Indebtedness arises from transactions which may be voidable on account of infancy,insanity,ultra vires,or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and at of Guarantor's other obligations under this Guaranty shell have been performed In full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term'new Indebtedness"does not include Indebtedness which at the time of notice of revocation Is contingent,unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals,extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shell bind Guarantor's estate as to Indebtedness created both before and•after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations may occur In the aggregate amount of Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of Indebtedness,even to zero dollars 00.001,prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though the I.ndebteibtass guaranteed may from time to time be zero dollars(80.001. -._j " GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise•to et nd additional credit to Borrower; FBI to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the tfaie'1or payment .I i it or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest o4—the •- Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for-CtepaymeM-of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,tail or decide not to perfect,and release any such seiurity,nip or without the substitution'of new collateral; (DI to release,-substitute;agree not to sue,or deal with any one or more of Boer.wer's sure''t,(r b, endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and what applicetiorjf payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof,irtclu1J(rg without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discrAtiott may determine; (G) to sell,transfer,assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lander that (Al no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; IC) Guarantor has full power,right and authority to enter into this Guaranty; (DI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (El Guarantor has not end will not,without the prior written consent of Lender, Bell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred In Guarantor's financial condition since the date of the most recent financial statements provided to Lander and no event has occurred which may materially adversely affect Guarantor's financial condition; (HI no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately Informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty,and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; IB) to make any presentment,protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser,or other guarantor in connection with the indebtedness or In connection with the creation of new or additional loans or obligations; (CI to resort for payment or to proceed directly or at once against any person,Including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (E) to give notice of the terms,time,end place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses arising by reason of (Al any'one action'or'anti-deficiency'law or any other law which may prevent Lender from bringing any action,Including a claim for deficiency,against Guarantor, before or alter Lender's commencement or completion of any foreclosure action,either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,including without limitation,any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness: (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the Cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender,of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party, on the Indebtedness end thereafter COMMERCIAL GUARANTY Loan No: Itr (Continued) Page 2 Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person'under any federal or state bankruptcy law or law for the relief of debtors,the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. - V GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above Is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent pernftted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender,whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of Insolvency and consequent liquidation of the assets of Borrower,through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise,the assets of • Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender end shell be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which It may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, In the name of Guarantor, from time to time to file financing statements and continuation statements end to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are pert of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expanses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, incltlding attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional lees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Guaranty has bean accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol •evidence is not required to interpret the terms of this Guaranty. Guarantor hereby Indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or Incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' and 'GuararttoS respectively shall mean all and any one or more of them. The words-Guarantor,''Borrower,'and'Lender'include the heirs,successor7t, assigns,and transferees of each of there. If a court finds that any provision of this Guaranty is not valid or should not ba:enforced,the) fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even If a provision of this Guaranty may be found to be invalid or unenforceable. If any one.or more_{Yf ..-� Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,It is not necessary for Lender to inquir into the powers of Borrower-or Guarantor or of the officers,directors,partners, managers,.orother agents acting or purporting to act n .. their behalf,and any indebtedness made or created In reliance upon the professed exercise of such powers shall be guaranteed'under*Is Guaranty. _ Notices. Any notice required to be given under this Guaranty shall be given in writing,and, except for revocation notices.by'Guarantor, j 111 shall be effective when actually delivered,when actually received by telefecsimlle(unless otherwise required by law),when dq'osited Nish r..1.1274 a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail,as first class,certified dj7egistered well postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Gum's:Ade-shall belt writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled'DURATION OOUARANTy Any party may change its address for notices under this Guaranty by giving formal written notice to the,other parties,specifying that Lhe purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender Informed-at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lend-i? to any Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given In writing and signed by Lender. No delay or omission on the part of Lender In exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations es to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender In any instance shall not constitute continuing consent to subsequent Instances where such consent Is required and In all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest,this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words end terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall Include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined In this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower-means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note. Guarantor. The word 'Guarantor" means each and every person or entity signing this Guaranty, including without limitation William L. Frantz. Guaranty. The word'Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Indebtedness. The word'Indebtedness'means Borrower's Indebtedness to Lender as more particularly described In this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of end substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties, security agree--'nts,mortgages, deeds of trust,security deeds,r -feral mortgages,and all other instruments, agreements and documents,whether g hereafter existing,executed in connection witl Indebtedness. COMMERCIAL GUARANTY Loan No:1111111111111ft (Continued) Page 3 EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MARCH 23,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANT•R: X / I ' William L Frantz LASE .a oo m,Cern!Inland,w.,.�:,.m,.,w.ID,Mal A..an,Mane..l •u uCmLPLIM/c,,,2»,., •I • • • tet] r'_ C/7 o • © , 0 co • 1 ..OMMERCIAL GUARANTY pr!t1G!)7f.11 LvatT.Aa#e �IHdiutii3! C,ctat#T1Q .� i trar4f�a11' i4CG(?tAE3� 41ffiG91".- itTlxi�� References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations_ Borrower: Eastside Investors,L.L.C.Simmillinal lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trak Blvd Iowa City,IA 52244-0209 Iowa City.IA 52246 (3191 339-1000 • Guarantor: William L.Frantz(-) 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection,so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness"as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender."Indebtedness"includes,without limitation,loans,advances, debts,overdraft indebtedness,credit card indebtedness,lease obligations,other obligations,and liabilities of Borrower,and any present or future judgments against Borrower, future advances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts,liabilities and obligations whether:voluntarily or involuntarily incurred;i due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason(such as infancy,insanity,ultra vires or otherwise);and originated then reduced or extinguished and then afterwards increased or reinstated. The above limitation on liability is not a restriction on the amount of the Note of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more guaranties.or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING- BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term'new Indebtedness'does not include the Indebtedness which at the time of notice of revocation is contingent.unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness.' All renewals, extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to.the foregOingi Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall riot affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liabttfty 79 of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions In the amount of the Indebtedness,even to zsro dollars($0.001,prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This: uarenty-ir. binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and ovtrn though the Indebtedness may from time to time be zero dollars I$0.001. - .ry GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender,either before or after any revocation hereof, without notice ot demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth'above,to one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (8) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of Interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with or without the substitution of new collateral; 101 to release,substitute,agree not to sue,or deal with any one or more 01 Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender In Its discretion • may determine; IG) to sell,transfer, assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (Al no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (81 this Guaranty is executed at Borrower's request and not at the request of Lender: (CI Guarantor has full power,right and authority to enter into this Guaranty; IDI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (El Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IF) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender, end all such financial information which currently has been.and all future financial information which will be provided to Lender is and will be true and correct in all material respects end fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; IH) no litigation,claim,investigation, administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and 1.11 Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, end Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any . information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law. Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; IN to make any presentment,protest,demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender. any surety,endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional !0 COMMERCIAL GUARANTY Loan No:1111111.111116 (Continued) Page 2 loans or obligations; (CI to resort for payment or to proceed directly or at once against arty person,including Borrower or any other guarantor; 10) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor,or any other person; (El to give notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect'to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including, but not limited to, any rights or defenses arising by reason of (A) any 'one action' or 'anti-deficiency'law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise,, f a power of safe; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying,or discharging the Indebtedness; (CI any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (0f any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral'for the Indebtedness; tEl any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy, SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender ell claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender_is hereby authorized,in the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following.miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters sat forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also.shall pay all court costs and such additional fees as may be directed by the court. . Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to ba used to interpret or define the • provisions of this Guaranty. Governing Law, This Guaranty wilt be governed by federal law applicable to Lander and,to the extent not preempted,by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender In the Siete)of Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the,cowrts of Jcintion County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmlesS from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach tfy Guarantor 7=1 warranties,representations and agreements of this paragraph. -- . --- Interpretation, In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in 14 sjngularsfall be deemed to have been used in the plural where the context and construction so require;and where there is more theft one Borrd*er named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower"`and "Guararftmr' respectively shall mean all and any one or more o1 them. The words'Guarantor,"'Borrower,"and'Lender'include the heirs,succesaq c, assigns,and transferees of each of them. if a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore,a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,It Is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on • their behalf,and any indebtedness made or created in reliance upon the professed exercise of such power's shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shell be given in writing, and,except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacslmile(unless otherwise required by law),when deposited with a nationally recognized overnight courier.or,if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any Instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest,this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. . DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar .rnts shall mean amounts In lawful money of the ad States of America. Words and terms used in the singular shall include the plural, and.,ie piurl shall include the singular,as the context n,.,require. Words and terms not otherwise • COMMERCIAL GUARANTY Loan No:01111111111.111116 (Continued) Page 3 defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word"Borrower" means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note and all their successors and assigns. Guarantor. The word"Guarantor"means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty"means this guaranty from Guarantor to Lender. . Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements. environmental agreements,guaranties, security agreements, mortgages,deeds of trust,security deeds, collateral mortgages,and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED OCTOBER 21,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARAN OR: •William L.Frantz • • • • • _ ry o a • o • C/> ci m O• • !2 • :OMMERCIAL GUARANTY fttgPI� Lo z Y AOtti<1t'; Ears Gall r � 6 ::r9{F.. ..'E�:._ ,.. E.:. . .._ A'.�-^: '.,tom-=.-E References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.411111111111111.111.1111116 Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: William L.Frantz 1463 Buckingham Place Iowa City,IA 52240 • CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender cart enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word "Indebtedness' as used in this Guaranty means Any and all promissory notes to Lender executed by Eastside Investors,L.L.C.. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HERE, FTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have bean fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term"new Indebtedness'does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated,undetermined or not due and which later becomes absolute, liquidated,determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals, extensions,substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall./tot affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall ngtaffect the liability of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of-the Indebted6ss covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness,even to zero dollars(50.00), prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guar is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and.even though,, e Indebtedness may from time to time be zero dollars(50.001. •-_-_• GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth pliave,to make `71 one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend• t 6 ,1 additional credit to Borrower; (8) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the-time for payript 5 or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate ot--intarest on'tfte -✓ Indebtedness;extensions may be repeated and may be for longer than the original loan term; (CI to take and hold security fo(te'9ayment, f this-Guaranty-orthe Indebtedness,and-exchange,-enforce;waive,subordinate;"fail or decide not to perfect,and-release any sucfrsesiirity,,45th or without the substitution of new collateral; (DI to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or In any manner Lender may choose; (El to determine how, when and whet'application'a payments and credits shall be made on the Indebtedness; (F) to apply such security end direct the order or manner of sale thereof,including' without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender In its discretion may determine; (G) to sell, transfer,assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that IA) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is 'executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power,right and authority to enter Into this Guaranty; ID) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; 1E1 Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon lender's request,Guarantor will provide to Lender financial end credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true end correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; IGI no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; (I) lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (JI Guarantor has established adequate means of obtaining from Borrower on a continuing basis Information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest,demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety, endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (DI to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; IE) to give notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or IG) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of IA) any'one action'or 'anti-deficiency"law or any other law which may prevent Lender from bringing any action, Including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; 181 any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation,any loss of rights Guarantor may suffer by reason of any law limiting, qualifying,or discharging the Indebtedness; ICI any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness: (DI any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E1 any statute of limitations, if et any time any action or suit brought by Lender against I3 COMMERCIAL GUARANTY Loan No:111.11111111.16 (Continued) Page 2 Guarantor is commenced.there Is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and 'not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be • effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors, by voluntary liquidation,or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, Including attorneys' lees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the • provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Guaranty has been accepted by Lander ii the State of Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breech by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower"laid "Guarantor respectively shall mean all and any one or more of them. The words'Guarantor,"'Borrower,"and"Lender'include the fteits,successors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be.enforced,Ih t fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce:the.rest of: provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or morisK91ry It Y Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lander to inquire into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to action their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed urtderthfs ,tee Guaranty. - Notices. Any notice required to be given under this Guaranty shall be given in writing, and,except for revocation notices by'k uarania, r.c lI shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),wherrdeposited a nationally recognized overnight courier,or,ii mailed, when deposited in the United States mail,as first class,certified Jrjrfered(ail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guatantor shall beTn writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OE GUARANTY Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying theft purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender inlormed at all times'0t Guarantor's currant address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest. this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall Include the singular,as the context may require. Words end terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower'means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note and all their successors and assigns. Guarantor. The word "Guarantor'means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness'means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties, security egreerr ,mortgages,deeds of trust, security deeds, co' 'el mortgages, and all other instruments, agreements and documents,whether now_.hereafter existing,executed in connection with tr. .,rdebtedness. • /it COMMERCIAL GUARANTY Loan No: (Continued) Page 3 EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED DECEMBER 21,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANT R: X411 William L.Frantz wc. • w.,r..m /415>•••...wool .0 I+cMIPawmrc man n.I O > rn :7-< r • oma ' l5 COMMERCIAL GUARANTY p('tiiloot `r A2itUdTB Matsirity l,ttanNa fratrtt.6it tt ..�+Vr 2.it k!?[fi " 1xif it; 'r _. -- ., .; ;; , _ ... ., . ReaiPre�p : : _. _mss�`t References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has bean omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. ) Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (3191339-1000 Guarantor: William L.Frantz 41111.....111110111 1463 Buckingham Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word indebtedness"as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and ajl collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts,liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will owe Lender.'Indebtedness"includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations, and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred; due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured;joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason (such as infancy, insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lander of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have ;---.1 been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice-of .-3 revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocatidn. r � For this purpose and without limitation, the term 'new Indebtedness" does not include the Indebtedness which et the time of notice of- r'f'../)rl li Il revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this —10 .. purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior-to. rs>� revocation;incurred under a commitment that became binding before revocation;any renewals,extensions,substitutions,and modifications 9f i i;-�q the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death_or ill 1 incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other - legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect r;-j „ Release.of.any.other guarantor or termination of any other.guaranty of the Indebtedness shall not affect-the liability of Guarantor under this.. -"� Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under thrh Guaranty. It is anticipated that fluctuations may occur In the aggregate amount of the Indebtedness covered by thls Guaranty,and Guarantor—, specifically acknowledges and agrees that reductions M the amount of the Indebtedness, even to zero dollars($0.00),shall not constitute. termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of thi ..=e Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars 180.001. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; 161 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including Increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; (CI to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,with or without the substitution of new collateral; (DI to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and what application of payments and credits shall be made on the Indebtedness; 19 to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (G) to sell, transfer,assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that IA) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power,right and authority to enter into this Guaranty; 101 the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (EI Guarantor hes not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial end credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recant financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim, investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and (JI Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (8) to make any presentment,protest, demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety, endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateralheld by Lender from Borrower,any other guarantor,or any other person; (E) to give COMMERCIAL GUARANTY Loan No: 1111111111111111, (Continued) Page 2' notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; IFI to pursue any other remedy within Lender's power;or IG) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of (A) any''''one action' or'anti-deficiency' law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action. either judicially or by exercise of a power of sale; IB) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any.law limiting,qualifying,or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; IS) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced, there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. • GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be affective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred In connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. 0 Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson 4'n N County,State of Iowa. rri IntegratioGuarantor further agrees that.Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the D�� 'D n. opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, •-••. {� claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. .�rn Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used In this Guaranty in the singular shall .�. be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' and 'Guarantor' respectively shell mean all and any one or more of them. The words'Guarantor,'-Borrower,'and'Lender'include the heirs,successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing,and, except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail.as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender Informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lander -to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing end signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent Instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest,this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. REPORTING REQUIREMENTS. Borrower and Guarantors agree to provide Lender with copies of their federal tax returns annually, and with updater guarantor personal financial statement upon Lender's request. Borrower will also provide Lender with copy of accountant prepared and consolidated financials for Frantz Construction Co.,Inc.when completed annually. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise 7 COMMERCIAL GUARANTY Loan No:111111111.11111110 (Continued) Page 3 defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Eastside Investors, L.L.C.and includes all co-signers and co-makers signing the Note and all their successors and assigns. Guarantor. The word"Guarantor"means everyone signing this Guaranty,including without limitation William L.Frantz,and in each case, any signer's successors and assigns. Guaranty. The word'Guaranty"means this guaranty from Guarantor to Lender. • Indebtedness. The word indebtedness"means Borrower's indebtedness to Lender es more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements,guaranties, security agreements,mortgages, deeds of trust,security deeds, collateral mortgages,and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY'. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED NOVEMBER 16,2007. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: �� X William L.Frantz • u"s...o Illap•m,c..MO*/,,.,,. swar.-,.. It. .•..,,.,...... .,.I.W.A..ax rc mow.., • • ^J ... _. V ..._ _. J r," l_^' IruP a rn -4n O "g •• 4ti • 1g COMMERCIAL GUARANTY . tritiolonfigE oafr.eaata Met)a>kY {OdtT tsta fKau fearataWaiiiftagWirier ifal i� References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.411M.MIIIIIMINDI Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: Eugene W.Nissleyalliallillme 1478 Cromwell Place Iowa City,IA 52240 AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration,Eugene W.Nissley I"Guarantor") absolutely and unconditionally guarantees and promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender")or Its order,In legal tender of the United States of America, the Indebtedness (as that term is defined below) of Eastside Investors, L.L.C. ("Borrower") to Lender on the terms and conditions set forth in this Guaranty. Under this Guaranty,the liability of Guarantor Is unlimited and the obligations of Guarantor are continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty Includes any and all of Borrower's indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities, obligations and debts to Lender, now existing or hereinafter incurred or created,including,without limitation,all loans,advances,interest,costs,debts,overdraft indebtedness,credit card indebtedness,lease obligations,other obligations,and liabilities of Borrower,or any of them,and any present or future judgments against Borrower, or any of them;and whether any such Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute or contingent, •liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily,or as guarantor or surety;whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever;and whether the Indebtedness arises from transactions which may be voidable on account of infancy,insanity,ultra vires,or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term'new Indebtedness"does not include Indebtedness which at the time of notice of revocation is contingent,unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals,extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after Guarantor's death or incapacity,'regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might..heye terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indobtedness.shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. his anticipated that fluctuations may occur In the aggregate amount of Indebtedness covered bYt4s Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of Indebtedness,even to zero dollars'(Sf1.001,prior _. to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor -�---� and Guarantor's heirs,successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though-the Indebtedgpys guaranteed may from time to time be zero dollars(50.001. .. R 7. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without noticgror demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to rocks one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otheniyi.se7.to extend additional credit to Borrower; (8) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the iime.ffar payi1id t or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security fot:the payment Jf this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security,%Vifd -or-Without the substitution df"new collateral; ID)' to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale thereof, including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (G) to sell, transfer,assign or grant participations in all or any part of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in pert. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (AI no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower's request and not at the request of Lender; (CI Guarantor has Lull power,right and authority to enter into this Guaranty; (DI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (El Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (GI no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (HI no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes) against Guarantor is pending or threatened; (II Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and fJ) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty,and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (Al to continue lending money or to extend other credit to Borrower; (B) to make any presentment,protest, demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety,endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (Ea to give notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with •�� any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or IG) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses arising by reason of (A) any"one action"or"anti-deficiency"law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or atter Lender's commencement or completion of any foreclosure action,either judicially or by exercise of a power of sale; 181 any election of remedies by Lender which destroys • or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation,any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness; ICI any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender,of the Indebtedness; IDI any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; IEI any statute of limitations,if at any time any action or suit brought . by Lender against Guarantor is commenced, there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower,whether voluntarily or otherwise,or by any third party, on the Indebtedness and thereafter • COMMERCIAL GUARANTY Loan No:I (Continued} Page 2 • Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors,the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter./emend, recoupment or similar right, whether such claim, demand or right may be asserted by the .Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrents and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of Its significance and consequences end that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. 11,.egy uch wailer is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. . SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of Insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however, that such assignment shall be effective only lot the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lander deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. • Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses, Including Lender's attorneys'lees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shell pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there Is a lawsuit, 'including attorneys' lees and legal expenses for bankruptcy , proceedings(including efforts to modify or vacate any automatic stay or Injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extant not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions- This Guaranty has been accepted by Lender In the State of Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's inSentions and sterol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all los3e4. • claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the .. warranties,representations and agreements of this paragraph. • Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in.thb singular aha- be deemed to have been used in the plural where the context and construction so require;and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words "Borrower" and "Guarantor' respectively shall mean all and any one or more of them. The words"Guarantor,''Borrower,'and'Lender'include the heirs,successors, assigns,end transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore,a court will enfoioe'the rest oL1he provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any_orre'or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary fornder to inquire into the powers of Borrower or Guarantor or of the officers,dinkier!,partners,managers,or other agents acting or purporfjnib to acy)en their behalf,and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given In writing,and, except for revocation notices by GusrafW�V, shall be effective when actually delivered,when actually received by telefecsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed.when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. Allrevocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled "DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there Is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver Is given in writing and • signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate es a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shell not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of-such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated In this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. REPORTING REQUIREMENTS . Borrower agrees to provide lender with a copy of its federal income tax return annually. Guarantors agree to provide lender with personal federal income tax return copies and updated personal financial statements upon request. DEFINITIONS. The following capitalized words and terms shall have the lollowing meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts In lawful money of the United States of America. Words and terms used in the singular shall Include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower"means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note. Guarantor. The word 'Guarantor' means each end every person or entity signing this Guaranty, Including without limitation Eugene W. Nissley. Guaranty. The word'Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Indebtedness. The word'Indebtedness"means Borrower's Indebtedness to Lender as more particularly described In this Guaranty. Lender. The word'Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns, Note. The word 'Note" means and Includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory not, credit agreements. • Related Documents. The words 'Rela,au Documents neon all promissory notes, credit -.eements, loan agreements, environmental COMMERCIAL GUARANTY Loan No: (Continued) Page 3 agreements,guaranties,security agreements, mortgages, deeds of trust,security deeds,collateral mortgages,and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED FEBRUARY 11,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT, GUARANTOR: X ene W iss USIA r,oWog.Va...aWAN r.,....... ...+ ..,IN,MP, .. ,,., • _ tV a C/) • O3 • 3 • COMMERCIAL GUARANTY Rt6010 r e� fttt :40-6 can fpiKau, A. 1 op,; s111 . G115 ' References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C." Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 13191339-1000 Guarantor: Eugene W.Nissley 111111111111111111111.1101 1478 Cromwell Place Iowa City,IA 52240 AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, Eugene W.Nissley("Guarantor")absolutely and unconditionally guarantees and promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION("Lender")or Its order,In legal tender of the United States of America. the Indebtedness (as that term is defined below) of Eastslde Investors, L.L.C. ("Borrower")to Lender on the terms and conditions set forth in this Guaranty. Under this Guaranty,the liability of Guarantor Is unlimited and the obligations of Guarantor ars continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes any and all of Borrower's indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities,obligations end debts to Lender, now existing or hereinafter incurred or created,including,without limitation,all loans,advances,interest,costs,debts,overdraft indebtedness,credit card Indebtedness,lease obligations,other obligations,and liabilities of Borrower,or any of them,and any present or future judgments against Borrower,or any of them; and whether any such Indebtedness is voluntarily or involuntarily incurred,due or not due, absolute or contingent, liquidated or unliquidated, determined Or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily,or as guarantor or surety;whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever;and whether the Indebtedness arises from transactions which may be voidable on account of infancy,insanity,ultra vires,or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in Lull force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have bean fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lander of Guarantor's written revocation. For this purpose and without limitation,the term"new Indebtedness'does not include Indebtedness which at the time of notice of revocation is contingent,unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness Incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and rhodifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically wll not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after Guarantor's death or incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shell not affect the liability of. riv remaining Guarantors under this Guaranty. it Is anticipated that fluctuations may occur In the aggregate amount of Indebtedness covered by,his • Guaranty,and Guarantor specifically acknowledges and agrees that reductions In the amount of Indebtedness,even to zero dealers(90.001,prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guars for and Guarantor's heirs,successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even though the Indebtedness . --� guaranteed may from time to time be zero dollars 190.00). GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof;without notify or demand and without lessening Guarantor's liability under this Guaranty,from time to time: IA) prior to revocation as set forth above,tojke one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otheredse to extend additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times tie'tifne for paxment . eT or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest art he -= Indebtedness;extensions may be repeated and may be for longer than the original loan term; IC) to take and hold security..forhhje payment of _=l this Guaranty or the Indebtedness,and exchange,enforce,.waive,subordinate,fall or.decide not.toperfect,.and release anesUctaaecuriter- ith or without the substitution of new collateral; ID) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sues. endorsers, or other guarantors on any terms or in any manner Lander may choose; IE) to determine how, when and what applicatieo o1 payments and credits shall be made on the Indebtedness; IN to apply such security and direct the order or manner of safe thereof,i TL ing without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (G) to sell,transfer,assign or grant participations in all or any part of the Indebtedness;and (HI to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents end warrants to Lender that IAI no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms o1 this Guaranty; 181 this Guaranty is executed at Borrower's request and not at the request of Lender: ICI Guarantor has full power,right and authority to enter into this Guaranty: ID) the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (El Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all o' Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial end credit information in lore acceptable to Lander,end all such financial information which currently has been,and all future financial information which will be provided tc Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the Financia information is provided; (GI no material adverse change has occurred in Guarantor's financial condition since the data of the most recent financial statements provided to Lender and no event has occurred which may materially adversely effect Guarantor's financial condition; IH no litigation,claim, Investigation,administrative proceeding or similar action[including those for unpaid taxes)against Guarantor is pending o threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower; end (JI Guarantor has establisher adequate means of obtaining from Borrower on a continuing basis Information regarding Borrower's financial condition. Guarantor agrees tr keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under thie Guaranty, and Guarantor further agrees that, absent a request far information, Lender shall have no obligation to disclose to Guarantor an' information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (Al to continue lendint money or to extend other credit to Borrower; 181.to make any presentment, protest,demand,or notice of any kind, including notice of an. nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower Lander, any surety, endorser,or other guarantor in connection with the Indebtedness or In connection with the creation of new or additions loans or obligations; ICI to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor,or any other person; (El to giv' notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply witl any other abplicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (GI to commit an act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any end all rights or defenses arising by reason of (AI any action"or'anti-deficiency'law or any other law whic may prevent Lender from bringing any action,including a claim for deficiency, against Guarantor, before or after Lender's commencement a completion of any foreclosure action,either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroy or otherwise adversely effects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement.includin without limitation,any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness; (C) an disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability lror any cause whatsoever,other than payment in full in legal tender,of the Indebtedness: IDI any right to claim discharge of the Indebtedness o the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brougi by Lender against Guarantor is commenced, there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicabl statute of limitations; or IF) any defenses given to guarantors at law or in equity other than actual payment and performance of th Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereahe COMMERCIAL GUARANTY Loan No:411111111111.11.6 (Continued) Page 2 Lenderis forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any simile,person under any federal or state bankruptcy law or law for the relief of debtors,the Indebtedness shell be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff. counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. • GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances,the waivers are reasonable and not contrary to public policy or law. II any such waived'.is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permittby.law or public ISolicy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender, whether now existing,or hereafter created,shell be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes Insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender.may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which It may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. II Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shell be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys' fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include.Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to Its conflicts of law provisions. This Guaranty has been accepted by Lender in the State of Iowa. . Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jyrisdiction of the courts of Johnson County,State of Iowa. . Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised.by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to Interpret the terms of this Guaranty. Guarantor hereby Indemnifies and holds Lender harmless from all losses, claims,damages,and costs/including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guasifty In the singular shall be deemed to have been used in the plural where the context and construction so require;and where there is more than one-borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower'. and 'tiearantorr __.. respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,"and'Lender'include'theheirs,shdcessors, assigns,and transferees of each of them. If a court finds that any provision of this Guaranty Is not valid or should not'be enfolbed,that_= fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court wilhenfete the fest of title ,--e •provisions of this Guaranty even If a provision of this Guaranty may be found to be invalid or unenforceable...Jf any one-os-more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary.ldr Lender to inquire-' into the powers of Borrower or Guarantor or of the officers,directors,partners, managers,or other agents acting dr'purpdrtinp_,to act on."` their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be_g.rotentee%under this Guaranty. G:J Notices. Any notice required to be given under this Guaranty shall be given in writing,and, except for revocation-polices byarantor, shall be effective when actually delivered,when actually received by telefacsimlle lunless otherwise required by lair):when deposited with a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail,as first class,cettftied or regialered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarentor"aSell be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by.Lander. Lender shell not be•deemed to have waived any rights under this Guaranty unless such waiver is given in writing and 'signed by lender.1 No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance'with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest,this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words end terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used In the singular shall Include the plural,and the plural shell include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower'means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note. . Guarantor. The word'Guarantor" means each and every person or entity signing this Guaranty, including without limitation Eugene W Nissley. Guaranty. The word'Guaranty'means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Indebtedness. The word'Indebtedness'means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lander. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word 'Note means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencini Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidation! of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents" mean ell promissory notes, credit agreements, loan agreements, environments agreements, guaranties, security tearer ts, mortgages, deeds of trust,security deeds,c • seal mortgages,and all other instruments agreements and documents,whether n. ,r hereafter existing,executed in connection with ndebtedness. COMMERCIAL GUARANTY Loan No: (Continued) Page 3 EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED FEBRUARY 17,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: 24 X /(/ Eugene .NIssley • • _ « 9 O =a r� c� —0 '71 r— Fri 5 • 6 COMMERCIAL GUARANTY 4a k8 atttrt:y A i. a - noimofr T h ttaE . x -; ,. a. Raay0 • ` SEi- References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City.IA 52246 1319)339.1000 Guarantor: Eugene W.Nissley 1478 Cromwell Place Iowa City,IA 52240 AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited. CONTINUING UNLIMITED GUARANTY. For good and valuable consideration,Eugene W.Nissley("Guarantor")absolutely and unconditionally guarantees and promises to pay to UNIVERSITY OF IOWA COMMUNITY CREDIT UNION ("Lender')or Its order, in legal tender of the United States of America,the Indebtedness las that term Is defined below) of Eastside Investors, L.L.C. I"Borrower") to Lender on the terms and conditions set forth In this'Guaranty. Under this Guaranty,the liability of Guarantor is unlimited and the obligations of Guarantor era continuing. INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes any and all of Borrower's indebtedness to Lender and is used in the most comprehensive sense and means and includes any and all of Borrower's liabilities, obligations and debts to Lender,now existing or hereinafter incurred or created,including,without limitation,all loans,advances,interest,costs,debts,overdraft indebtedness,credit card indebtedness,lease obligations,other obligations,and liabilities of Borrower,or any of them,and any present or future judgments against Borrower,or any of them; end whether any such Indebtedness Is voluntarily or involuntarily incurred, due or not due,absolute or contingent. liquidated or unliquidated, determined or undetermined; whether Borrower may be liable individually or jointly with others, or primarily or secondarily,or as guarantor or surety;whether recovery on the Indebtedness may be or may become barred or unenforceable against Borrower for any reason whatsoever;and whether the Indebtedness arises from transactions which may be voidable on account of infancy,insanity,ultra vires,or otherwise. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lander,or any notice to Guarantor or to Borrower,and will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. II Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created atter actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term"new Indebtedness' does not include Indebtedness which at the time of notice of revocation is contingent,unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals,extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's • executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not aftect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur In the aggregate amount of Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of Indebtedness,even to zero dollars 150.001.prior to Guarantor's written revocation of this Guaranty shell not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the guaranteed Indebtedness remains unpaid and even thougli►he Indebtedness guaranteed may from time to time be zero dollars($0.00). - -> GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereofi without notfctPor demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,toelslke one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend - ., additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time'lor payment -. or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on lite .I Indebtedness;extensions may be repeated and may be for longer then the original loan term; (C) to take and hold security fol the payment of "",, this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fail or decide not to perfect,and release any such security, i with or without the substitution of new collateral; ID) to release,substitute,agree not to sue,or deal with any one or more-of Borrower's sureties, __ endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and sy t;application of _. payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order or manner of sale ereuf,includiitg without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender'in its discretion may determine; (G) to sell,transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assignor transfenthis Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (8) this Guaranty is executed at Borrower's request and not at the request of Lender; (C) Guarantor has full power,right and authority to enter into this Guaranty; IDI the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; (E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any Interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial end credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred In Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and IJ) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty,and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; 181 to make any presentment, protest, demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety,endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; IE) to give notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses arising by reason of (A) any'one action"or'anti-deficiency"law or any other law which may prevent Lender from bringing any action,including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action,either judicially or by exercise of a power of sale; 181 any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,including without limitation,any loss of rights Guarantor may suffer by reason of any law limiting,qualifying,or discharging the Indebtedness; ICI any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender,of the Indebtedness; (D1 any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness of Borrower to Lender which is not barred by any applicable statute of limitations; or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter COMMERCIAL GUARANTY Loan No:al11.11.110 (Continued) Page 2 Lender is forced to remit the amount of that payment to Borrower's trustee In bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors,the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable end not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitfild bQlavtorp'dblicpolicy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness of Borrower to Lender,whether now existing or hereafter created,shalt be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever,to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness of Borrower to Lender. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lander full payment in legal tender of the Indebtedness. If Lander so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, inthe name of Guarantor, from time to time to file financing statements end continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part-of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties es to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. . Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,Incurred in connection with the enforcement of this Guaranty. Lander may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. ThIs Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender in the State of Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence Is not required to interpret the terms of this Guaranty. Guarantor hereby Indemnifies and holds Lender harmless from all losses, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of ate warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in tfie singular she be deemed to have been used in the plural where the context end construction so require;and where there is more than,one Borrower z� named In this Guaranty or when this Guaranty Is executed by more than one Guarantor, the words 'Borrower' end-'Guarartort respectively shall mean all and any one or more of them. The words"Guarantor,'"Borrower,"end"Lender"include the heirs,successor.; assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce-the rest of,thg provisions of this Guaranty even if a provision of this Guaranty may be found to be Invalid or unenforceable. If anyone-or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for'ender to inquire + y into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to aciidi their behalf,and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteeff under t14b Guaranty. • „.!�l Notices. Any notice required to be given under this Guaranty shall be given in writing,and,except for revocation notices.by Guarentb'r, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when-deposited with a nationally recognized overnight courier,or,If mailed,when deposited In the United States mail,as first class,certified or registered nue postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there Is more than one Guarantor,any notice given by Lender to any Guarantor Is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given In writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent Is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated In this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. • DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word"Borrower"means Eastside Investors,L.L.C.end includes all co-signers and co-makers signing the Note. Guarantor. The word 'Guarantor" means each end every person or entity signing this Guaranty, including without limitation Eugene W. Nissley. Guaranty. The word'Guaranty"means the guaranty from Guarantor to Lender,including without limitation a guaranty of all or part of the Note. Indebtedness. The word'Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors end assigns. Note. The word 'Note' means and Includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit.agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements,environmental agreements, guaranties,security agree' -its,mortgages,deeds of trust,security deeds,r eral mortgages, and all other instruments, agreements and documents,whether r r hereafter existing,executed in connection with ,ndebtedness. COMMERCIAL GUARANTY Loan No: 11111.1111ft (Continued) Page 3 EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED MARCH 23,2005: GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: i .' L X Eugene Ilsley USN..o s.r.. ...MOO.ate Cy.....wr"..an uwn.,w-1907.Mos. ..N I,7..... .u LCMmnuwC II.m n.I • O >—i n-C rn 0� • .OMMERCIAL GUARANTY ft p 1 thatil f?At# Matto ty 1. at►NQ r+Celll Rl tJf#0t 1.0061 References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (3191339-1000 Guarantor: Eugene W.Nlssley 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance end not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order.on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word'Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time end at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired,that Borrower individually or collectively or interchangeably with others,owes or will owe Lender."Indebtedness'includes,without limitation,loans,advances, debts,overdraft indebtedness,credit card indebtedness,lease obligations,other obligations,and liabilities of Borrower,and any present or future judgments against Borrower, future advances, loans or transactions that renew, extend, modify, refinance, consolidate or substitute these debts,liabilities and obligations whether:voluntarily or involuntarily incurred;due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured: joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or others;barred or unenforceable against Borrower for any reason whatsoever;for any transactions that may be voidable for any reason(such as infancy,insanity,ultra vires or otherwise);and originated then reduced or extinguished and then afterwards increased or reinstated. The above limitation on liability is not a restriction on the amount of the Note of Borrower to Lender either in the aggregate or at any one time. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor,Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary)affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lander,or any notice to Guarantor or to Borrower,and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term'new Indebtedness'does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated,undetermined or not due and which later becomes absolute,liquidated,determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals, extensions,substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness crated both before end after Guarantor's death or incapacity,_regardless of_Lender's.actttpl notice of_Guarantor's death. Subjett10 the foregelog, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in whit:h Guarantonrtlight have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shelf:not ` affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the ftilicy of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur In the aggregate amount or the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness,even td zero dollars(50-00),prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty Is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars($0.00). • GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof<)w)thout notice or -- demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth jiipve,to.rnjtke one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to Mend additional credit to Borrower; (B) to alter,compromise,renew,extend,accelerate,or otherwise change one or more times tite.'time for payment or other terms of the Indebtedness or any part of the Indebtedness, including Increases and decreases of the rate of interest grrrfthe Indebtedness;extensions may be repeated and may be for longer than the original loan term; IC) to take and hold security for the payment of this Guaranty or the Indebtedness,and exchange,enforce,waive.subordinate,fail or decide not to perfect,and release any such security,with or without the substitution of new collateral; (D) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; IE) to determine how, when and what application of payments and credits shall be made on the Indebtedness; 4F1 to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness;and (H) to assign or transfer this Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (Al rio representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; IB) this Guaranty is executed at Borrower's request end not at the request of Lender; IC) Guarantor has full power,right and authority to enter into this Guaranty; (Dl the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; 1E) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; IFI upon Lender's request,Guarantor will provide to Lender financial and credit information in form acceptable to Lender,and all such financial information which currently has been,and all future financial information which will be provided to Lender is!and will be true end correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; (H) no litigation,claim,investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor Is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and IJI Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events.or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information. Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law. Guarantor waives any right to require Lender (Al to continue lending money or to extend other credit to Borrower; 181 to make any presentment, protest,demand,or notice of any kind,including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender,any surety,endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional COMMERCIAL GUARANTY Loan No:/hilt (Continued) . Page 2 loans or obligations; (Cl to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; IC)) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; IE) to give notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code: IF) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at anytime,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment of collateral including,but not limited 1o,any rights or defenses arising by reason of IAl any 'one action" or 'anti-deficiency"law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor. before or atter Lender's commencement or completion of any foreclosure action, either judicially or by exerciseof a power of safe: 10) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying,or discharging the Indebtedness; IC) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (01 any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any.collateral for the Indebtedness; (El any statute of limitations. If at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or IFI any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand. recoupment or similar right. whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by en assignment for the benefit of creditors,by voluntary liquidation, or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor ,agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing end signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts of law provisions. This Guaranty has been accepted by Lender In the State of Iowa. Choice of Venue. If there is a lawsuit. Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty;Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all Ip es, claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breech:A,Guarantor o the warranties,representations and agreements of this paragraph. • Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used In this Guaranty in the singu(evshell be deemed to have been used in the plural where the context and construction so require; end where there Is more then'.one Borrower `---`h named In this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' end 'Guarantor respectively shall mean all and any one or more of them. The words'Guarantor,''Borrower,"and'Lender'include theheirs,succefsors. _ —' assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not"be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce.the rest of the ----, provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If pny•one or more of L E Borrower or Guarantor are corporations,partnerships,limited Liability companies.or similar entities,it is not necessary for Lender to$fpulre --_-, into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or�BByyrpQ[ting td'3Ct on their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be glea}Bnfeed un5this Guaranty. .. Notices. Any notice required to be given under this Guaranty shall be given in writing,end, except for revocation notices by Guhcsptor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when depositpC,yvith a nationally recognized overnight courier,or,if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shell be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY." Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender Informed at all times of Guarantor's currant address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender, No delay or omission on the part of Lender in exercising any right shall operate as waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender end Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld In the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized word' id terms shall have the following meanings whe' ed In this Guaranty. Unless specifically stated to the.contrary,all references to dollar: jilts shall mean amounts in lawful money of the. ,ed States of America. Words and terms used in the singular shall include the plural,and the plural s all include the singular,as the context may require. Words and terms not otherwise COMMERCIAL GUARANTY Loan No:411111111.11111N (Continued) Page 3 defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word"Borrower"means Eastside Investors, L.L.C.and includes all co-signers and co-makers signing the Note and all their successors and assigns. Guarantor. The word'Guarantor"means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word'Guaranty"means this guaranty from Guarantor to Lender. Indebtedness. The word"Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. • Lender. The word"Lender"means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note" means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of.refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties,security agreements, mortgages,deeds of trust,security deeds,collateral mortgages,and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED OCTOBER 21.2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: Eugene W. ssley La,./IV 1.1.•x M o.r.,.,..d..,n..rw sr.+—...re..m r,w.•.—"... . XtK m.rw.w. • • rJ rF� m 12. • ;OMMERCIAL GUARANTY T. gigaiR, i, 1.:;04fC0axe• Maturity soar►Na Gan r cgik rials References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C.simmima. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa,City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: Eugene W.Nissley dimmip 1478 Cromwell Place • Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees lull and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word 'Indebtedness' as used in this Guaranty means Any and all promissory notes to Lender executed by Eastside Investors,L.L.C.. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY' UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY. ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower,and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation,the term"new Indebtedness"does not include the Indebtedness which at the time ol notice of revocation is contingent,unliquidated, undetermined or not due and which later becomes absolute, liquidated,determined or due. This Guaranty will continue to bind Guarantor for all the Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation,including any extensions,renewals,substitutions or modifications of the Indebtedness. All renewals, extensions,substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and atter Guarantor's death or Incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is andclpated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness,even to zero dollars 130.001.prior to Guarantor's written revocation of this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars(30.001. GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or atter any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to alter,compromise,renew.extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the Indebtedness;extensions may be repeated and may be for longer than the original loan term; ICI to take and hold security for the payment of this Guaranty or the Indebtedness,-and exchange,-enforce,waive,subordinate;fail or decide not to•perfect,and release any such security,with or without the substitution of new collateral; 101 to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (El to determine how, when and what application ol payments and credits shall be made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof,including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust,as Lender in its r1i retion may determine; (G) to sell,transfer,assign or grant participations in all or any part of the Indebtedness;and IHI to.assign or trari5er this Guaranty in whole or in part. '2 GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (Al Ito representesivns or .._� agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty;-IBN-this Guaranty is li executed at Borrower's request and not at the request of Lender: IC) Guarantor has full power,right anti authority to enter into this Guaranty; (Dl the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor '-an. and do not result in a violation of any law,regulation,court decree dr order applicable to Guarantor; (El Guarantor has not and will not,without '• the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein; (F) upon Lender's request,Guarantor will provide to Lender financial and credit Information in form o acceptable to Lender,and all such financial information which currently has been,and all future financial information which wiU be prolyded to _ Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the-dates the fljflncial — information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the dam:pf7hie mostsecent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's IinartPiaftonditio4 IHI no litigation,claim, investigation,administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is per=dWfor threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower;and LI) Guarantdr has este "ghed adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor a to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender IA) to continue lending money or to extend other credit to Borrower; (8) to make any presentment,protest,demand,or notice of any kind, including notice of any nonpayment of the Indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the part of Borrower, Lender, any surety, endorser,or other guarantor in connection with the Indebtedness or in connection with the creation of new or additional loans or obligations; (C) to resort for payment or to proceed directly or at once against any person,including Borrower or any other guarantor; ID) to proceed directly against or exhaust any collateral held by Lender from Borrower,any other guarantor,or any other person; (El to give notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (01 to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights or defenses based on suretyship or impairment.of collateral including,but not limited to,any rights or defenses arising by reason of (Al any "one action'or 'anti-deficiency'law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender's commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; 181 any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,including without limitation,any loss of rights Guarantor may suffer by reason of any law limiting, qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessati)n of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; 101 any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; (E) any statute of limitations,•: at any time arty action or suit brought by Lender against COMMERCIAL GUARANTY Loan No: 11111111111=111111 (Continued) Page 2 Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. s GUARANTOR'S UNDERSTANDING WITH RESPECT-TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's lull knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extent permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors,by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender lull payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor, from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand all of Lender's costs and expenses,including Lender's attorneys'lees and Lender's legal expenses,incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or Injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of lowe without regard to its conflicts of law provisions. This Guaranty hes been accepted by Lender In the State of Iowa. Choice of Venue. If there is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson County,State of Iowa. Integration. Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,damages,and costs lincluding Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the singular shall be deemed to have been used in the plural where the context and construction so require; and where there is mare than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' end 'Guarantor' respectively shall mean all and any one or more of them. The words'Guarantor," 'Borrower.'and"Lender"Include the heirs,successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce the rest o1 the provisions of-this Guaranty-even if a provision of this Guaranty may be found to be invalid or unenforceable. -If-any-one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers,directors,partners,managers, or other agents acting or purporting to ect.en their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under}Itis Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing, end,except for revocation notices by Guarantor, _ shall be effective when actually delivered,when actually received by telefecsimle(unless otherwise required by law),when deposited wy'Ji,h a nationally recognized overnight courier,or,if mailed.when deposited in the United States mail,as first class,certified or registered rtrf,il c J postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall b In .� writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled 'DURATION OF GUARANTY,' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the 77.1 purpose of the notice is to change the party's address. For notice purposes,Guarantor agrees to keep Lender informed at all times of i• 6 Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice oiveit by Len7er to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is gitrem.M'writingAlid signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of suchlright or any otter right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right other-Wise to deflated strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing betiaen Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors and Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shall be binding upon and inure to the benefit of the parties,their successors and assigns. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word'Borrower'means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note end all their successors and assigns. Guarantor. The word'Guarantor'means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and in each case, any signer's successors end assigns. Guaranty. The word'Guaranty"means this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness'means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word'Lender'means UNIVERSITY OF IOWA COMMUNITY CREOIT UNION.its successors and assigns. Related Documents. The words 'Related Documents' mean all promissory notes, credit anrsements, loan agreements, environmental agreements, guaranties, security agreem ,mortgages, deeds of trust.security deeds, col al mortgages, and all other instruments, agreements end documents.whether now_.hereafter existigg,executed in connection with ths..tdebtedness. • • COMMERCIAL GUARANTY Loan No: (Continued) Page 3 EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED"DURATION.OF GUARANTY"_ NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED DECEMBER 21,2005. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTOR: yy.. X Eugene .Nissley USIA MO too/Y..v..I..sm W.C....Nohow/n..w3*.Ye In,Iuos. wry,..sr.r. -u surwsa.nrc nssr 1414 a • -<r' ' rn 0;J cD • • • i5 COMMERCIAL GUARANTY Principal • loan Date Maturity Loan Np J. Call 1 Coy AccoUllt Officer 1 Initials I References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular Ivan or item. Any item above containing has been omitted due to text length limitations. Borrower: Eastside Investors,L.L.C. Lender: UNIVERSITY OF IOWA COMMUNITY CREDIT UNION PO Box 209 825 Mormon Trek Blvd Iowa City,IA 52244-0209 Iowa City,IA 52246 (319)339-1000 Guarantor: Eugene W.Nissley 1 1478 Cromwell Place Iowa City,IA 52240 CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration,Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection,so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness,this Guaranty or any other guaranty of the Indebtedness. Guarantor will make any payments to Lender or its order,on demand,in legal tender of the United States of America,in same-day funds,without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. INDEBTEDNESS. The word"Indebtedness'as used in this Guaranty means all of the principal amount outstanding from time to time and at any one or more times,accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,attorneys'fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others,owes or will owe Lender. 'Indebtedness'includes,without limitation,loans,advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,other obligations, and liabilities of Borrower, and any present or future judgments against Borrower,future advances,loans or transactions that renew,extend,modify,refinance,consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily incurred: due or to become due by their terms or acceleration;absolute or contingent;liquidated or unliquidated;determined or undetermined;direct or indirect;primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing;originated by Lender or another or others:barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, Insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated. If Lender presently holds one or more guaranties,or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not(unless specifically provided below to the contrary'affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this Guaranty and any such other unterminated guaranties. CONTINUING GUARANTY. THIS IS A 'CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM I IME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender,or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender,by certified mail,at Lender's address listed above or such other place as Lender may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term 'new Indebtedness' does not include the indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not dire and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new Indebtedness` does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation;incurred under a commitment that became binding before revocation; any renewals,extensions,substitutions,and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity,regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing,Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor-or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It Is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty,and Guarantor specifically acknowledges and agrees that reductions in the amount of the Indebtedness, even to zero dollars 190.001, shall not constitute a termination of this Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,successors and assigns so long as any of the Indebtedness remains unpaid and even though the Indebtedness may from time to time be zero dollars(90.001. . GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty,from time to time: (A) prior to revocation as set forth above,to make one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend additional credit to Borrower; 1131 to alter,compromise,renew,extend,accelerate,or otherwise change one or more times the time for payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest on the . ' - Indebtedness;extensions may be repeated and may be for longer than the original loan term; IC) to take and hold security for the payment of , this Guaranty or the Indebtedness,and exchange,enforce,waive,subordinate,fall or decide not to perfect, end release any such security:with or without the substitution of new collateral; ID) to release,substitute,agree not to sue,or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine how, when and what application of . i. payments and credits shall be made on the Indebtedness; IFI to apply such security and direct the order or manner of sale thereof, including without limitation,any nonjudicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part of the Indebtedness; and (H) to assign or.transtar-tris Guaranty in whole or in part. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations-or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (8) this Guaranis is executed at Borrower's request and not at the request of Lender; (CI Guarantor has full power,right and authority to enter into this Guaranty; (01 the provisions of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not result in a violation of any law,regulation,court decree or order applicable to Guarantor; IE) Guarantor has not and will not,without the prior written consent of Lender, sell, lease, assign, encumber. hypothecate, transfer, or otherwise dispose of all or substantially all of Guarantor's assets,or any interest therein: (FI upon Lender's request,Guarantor will provide to Lander financial and credit information in form acceptable to Lender, and all such financial information which currently has been,and all future financial Information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as tit the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor's financial condition since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect Guarantor's financial condition; IH) no litigation,claim,investigation, administrative proceeding or similar action(including those for unpaid taxes)against Guarantor is pending or threatened; Ill Lender has made no representation to Guarantor as to the creditworthiness of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding Borrower's financial condition. Guarantor agrees to keep adequately informed from such means of any facts,events,or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information. Lender shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of Its relationship with Borrower. GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender (A) to continue lending money or to extend other credit to Borrower; (B) to make any presentment, protest, demand,or notice of any kind, including notice of any nonpayment of the indebtedness or of any nonpayment related to any collateral,or notice of any action or nonaction on the pan of Borrower, Lender,any surety,endorser, or other guarantor in connection with the Indebtedness or in connection with the creation of now or additional loans or obligations: (CI to resort for payment or to proceed directly or at once against any person,including Borrower or any outer guarantor; IDI to proceed directly against or exhaust any collate heldrat by Lender from Borrower,any other guarantor,or any other person; (El to give COMMERCIAL GUARANTY Loan No:.i (Continued) Page 2 notice of the terms,time,and place of any public or private sale of personal property security held by Lender from Borrower or to comply with any other applicable provisions of the Uniform Commercial Code; (F) to pursue any other remedy within Lender's power;or (G) to commit any act or omission of any kind,or at any time,with respect to any matter whatsoever. Guarantor also waives any and all rights nr defenses based,on suretyship or impairment of collateral including,but not limited to,any rights or defenses arising by reason of IA1 any one action' or 'anti-deficiency'law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or atter Lender's commencement or completion of any foreclosure action. either judicially or by exercise of a power of sale; (B) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor's subrogation rights or Guarantor's rights to proceed against Borrower for reimbursement,including without limitation, any loss of rights Guarantor may suffer by reeton of any law limiting,qualifying,or discharging the Indebtedness; (C) any disability or other defense of Borrower,of any other guarantor,or of any other person,or by reason of the cessation of Borrower's liability from any cause whatsoever,other than payment in full in legal tender, of the Indebtedness; (D) any right to claim discharge of the Indebtedness on the basis of unjustified impairment of any collateral for the Indebtedness; IE) any statute of limitations, if at any time any action or suit brought by Lender against Guarantor is commenced,there is outstanding Indebtedness which is not barred by any applicable statute of limitations;or (F) any defenses given to guarantors at law or in equity other than actual payment and performance of the Indebtedness. If payment is made by Borrower, whether voluntarily or otherwise,or by any third party,on the Indebtedness and thereafter Lender is forced to remit the amount of that payment to Borrower's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, the Indebtedness shall be considered unpaid for the purpose of the enforcement of this Guaranty. Guarantor further waives and agrees not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any claim of setoff, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the Borrower,the Guarantor,or both. GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor's full knowledge of its significance and consequences and that,under the circumstances,the waivers are reasonable and not contrary to public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy,such waiver shall be effective only to the extant permitted by law or public policy. SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now existing or hereafter created,shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower,whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,by an assignment for the benefit of creditors,by voluntary liquidation,or otherwise,the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender end shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of Borrower;provided however,that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal tender of the Indebtedness. If Lender so requests,any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shell be delivered to Lender. Guarantor agrees,and Lender is hereby authorized,in the name of Guarantor,from time to time to file financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect,preserve and enforce its rights under this Guaranty. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Guaranty: Amendments. This Guaranty,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys'Fees;Expenses. Guarantor agrees to pay upon demand ell of Lender's costs and expenses,including Lender's attorneys'fees and Lender's legal expenses,Incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings(including efforts to modify or vacate any automatic stay or injunction),appeals,and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings In this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty. Governing Law. This Guaranty will be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa"without regard to its conflicts of law provisions. Choice of Venue. If there is a lawsuit. Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of Johnson.. County,State of Iowa. . ., Integration. Guarantor fur-thai agrees that Guarantor has readand fully understands the-terms of thisGuaranty;-Guarantor has had the opportunity to be advised by Guarantor's attorney with respect to this Guaranty;the Guaranty fully reflects Guarantor's intentions and parol.) evidence is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses;'l claims,damages,and costs(including Lender's attorneys'fees)suffered or incurred by Lender as a result of any breach by Guarantor of the warranties,representations and agreements of this paragraph. Interpretation. In all cases where there is more than one Borrower or Guarantor,then all words used in this Guaranty in the.singular shall— 'y be deemed to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this Guaranty or when this Guaranty is executed by more than one Guarantor, the words 'Borrower' and "Guarantor'--,_ respectively shall mean all and any one or more of them. The words"Guarantor,"'Borrower,'and'Lender'include the heirs,.sukcessors assigns,and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should not be enforced,that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will enforce thp-est.of the'.Z provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable. If any one or more of Borrower or Guarantor are corporations,partnerships,limited liability companies,or similar entities,it is not necessary for Lerner to inquirel.11 into the powers of Borrower or Guarantor or of the officers,directors,partners,managers,or other agents acting or purporting to act on= their behalf,and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Guaranty. Notices. Any notice required to be given under this Guaranty shall be given in writing,and,except for revocation notices by Guarantor, shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or.if mailed,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled'DURATION OF GUARANTY.' Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes, Guarantor agrees to keep Lender informed at all times of Guarantor's current address. Unless otherwise provided or required by law,if there is more than one Guarantor,any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender,nor any course of dealing between Lender and Guarantor,shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Guaranty,the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Successors end Assigns. Subject to any limitations stated in this Guaranty on transfer of Guarantor's interest, this Guaranty shell be binding upon end inure to the benefit of the parties,their successors and assigns. REPORTING REQUIREMENTS. Borrower and Guarantors agree to provide Lender with copies of their federal tax returns annually, and with updater guarantor personal financial statement upon Lender's request. Borrower will also provide Lender with copy of accountant prepared and consolidated financials for Frantz Construction Co.,Inc.when completed annually. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms not otherwise /7 COMMERCIAL GUARANTY Loan No:4.111■ . (Continued) Page 3 defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word"Borrower'means Eastside Investors,L.L.C.and includes all co-signers and co-makers signing the Note and all their successors and assigns. Guarantor. The word"Guarantor"means everyone signing this Guaranty,including without limitation Eugene W.Nissley,and in each case, any signer's successors and assigns. Guaranty. The word"Guaranty'means this guaranty from Guarantor to Lender. Indebtedness. The word'Indebtedness"means Borrower's indebtedness to Lender as more particularly described in this Guaranty. Lender. The word"Lender'means UNIVERSITY OF IOWA COMMUNITY CREDIT UNION,its successors and assigns. Note. The word "Note' means and includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender,together with all renewals of,extensions of,modifications of,refinancings of,consolidations of and substitutions for promissory notes or credit agreements. Related Documents. The words 'Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements,mortgages, deeds of trust, security deeds, collateral mortgages,and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION,EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED'DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED NOVEMBER 16,2007. GUARANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS COMMERCIAL GUARANTY AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. GUARANTO': X Eugene issley w..wa r...r.s.s.MCP tea."........f+..,....w..un.am...r.Plmwe.". -u.:,a,.nua,e 71.en.a, Is • .. ... • 0 c,' 1-71 aim —A 4 fir- a Y7 o73 - U • > Ln • II$' END OF CASE FILE CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE•PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319)356-6030 PLAINTIFF: HEGEMAN,ROBERT J Docket No 09-03078 j State 'IOWA vs. Court No EQCV070796 County ;JOHNSON DEFENDANT: CITY OF IOWA CITY Ref No Received 106/03/2009 DEFENDANT: CITY COUNCIL OF IOWA CITY 'ADVANCE FEES PAID Requestor(s) Phone HEGEMAN,ROBERT J (319)668-2722 Name CITY COUNCIL OF IOWA CITY Party Type [DEFENDANT Address 1-4:1-CTE WASHINGTON ST 1 ;IOWA CITY IIA Phone 1— E-Mail Fax Employer 1 Zone Comments 1 _ Documents Document Serve by Date OE PSR Description/Special Instructions jORIGINAL NOTICE AND U EPETITION __- Service Information Attempts Log � Date Time Server Notes Date ' �p 03'`c'c/ Time / p� Type C( -�-� c D 'r Party � � N j<AAL ( Relationship r �C r'-\--\/ C. ` C f Race W Sex P DOB Location L1 f O E SAS LA( "AD -f-cles- Miles \ .c.)62 Fee (S Officer ,S Notes: O c -{lD rn m -v to Printed:Wednesday,June 03, 2009 Page 1 of 1 In the District Court for Johnson County ROBERT JAMES HEGEMAN, ) q Plaintiff ) No. EQCUQ 7O� l to v. ) EQUITY The City of Iowa City ) The City Council of Iowa City, ) ORIGINAL NOTICE Defendants ) E 3O TO THE ABOVE NAMED DEFENDANTS: n c You are notified that a petition has been filed ih ..theto r office of the clerk of this court naming you as a defendant in this action. A copy of the petition and the attached-' 0 document is attached to this notice. The plaintiff is9 o y se, Robert James Hegeman. His address is 44 Tucson Place, v Iowa City, Iowa 52246. His telephone number is 319-338- 5818, cell 319-530-0553, facsimile number 319-668-2491 . You must serve a motion or answer within 20 days after service of this original notice upon you and, within a reasonable time thereafter, file your motion or answer with the Clerk of Court for Johnson County, at the county courthouse in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator 314 3x14" 3viala £,t-ff\t,ri -')y IOD° (If you are hearing impaired, call Relay Iowa TTY at 1-800- 735-2943) . (SEAL) C' ERK OF COUR ohnson County Courthouse Iowa City, Iowa 52242 IMPORTANT YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS. [Report 1976; Report 1978, April 30, 1987; October 31, 1997, November 9, 2001, effective February 15, 2002] 1 CVC76776, In the District Court for Johnson County Petition for Writ of Certiorari Robert James Hegeman, Plaintiff vs. c-s The City of Iowa City and the c�.)r 11 • City Council of Iowa City, :=7-7 n c) c= Defendants .__ cp cn w h .71:7) Plaintiff states: as crt n Count 1 1 . The City of Iowa City is a municipal corporation residing in Johnson County, Iowa. The city council of Iowa City is vested with authority of the City of Iowa City to amend or change the Iowa City zoning ordinance. Iowa Code 364 .2 2 . Plaintiff is a resident of Johnson County, Iowa, and is a landowner within 200 feet of the property described in the rezoning proposal REZ08-00011 . 3 . On February 17, 2009, the city council of Iowa City passed a motion to schedule a public hearing and provide statutory notice on an approximately 82 acre tract in southwest Iowa City, REZ08-00011. Attachment 1 . 4 . During the first day of the hearing on REZ08-00011..`-held March 10, 2009, plaintiff and more than 20% of surrounding landowners within 200 feet of the property delivered a 0 w rn properly executed petition protesting the rezoning. `rn i 373 E7q 1 9 v Attachment 2 . The delivery of the protest at the public hearing was confirmed on the city' s video tape of the March 10 hearing and later admitted by the city. 5 . As of March 10, 2009, the conditions of Iowa Code 414 . 5 were met and REZ08-00011 could not become effective except after a vote of three-fourths of all the members of the council: 414 . 5 Changes -- protest . The regulations, restrictions, and boundaries may, from time to time, be amended, supplemented, changed, modified, or repealed. . . In case, however, of a written protest against a change or repeal which is filed with the city clerk and signed . . .by the owners of twenty percent or more of the property which is located within two hundred feet of the exterior boundaries of the property for which the change or repeal is proposed, the change or repeal shall not become effective except by the favorable vote of at least three-fourths of all the members of the council. The protest, if filed, must be filed before or at the public hearing. The provisions of section 414 . 4 relative to public hearings and official notice apply equally to all changes or amendments . 6. The council voted 5-2 in favor of REZ08-00011 on April 6, April 20 and May 5, 2009. Even though the tally was short of the three-fourths required by Iowa Code 414 . 5, the city has proceeded as if they had passed REZ08-00011 . As of June 1, 2009, construction equipment has commenced work: on the land presumably rezoned. _ rn r-- -,0 rn 7 . The Iowa Supreme Court has treated the notice and -<r-; s 0 hearing requirements as conditions precedent to a city w council having jurisdiction to amend the zoning code. See OSAGE CONSERVATION CLUB, Appellant, vs. BOARD OF SUPERVISORS 2 OF MITCHELL COUNTY, IOWA, Appellee, 611 N.W.2d 294 (Iowa 2000) . Because three fourths of the city council has not voted in favor of REZ08-00011, the city council of Iowa City has lacked jurisdiction to rezone the area under Osage supra. WHEREFORE, because more than 20% of surrounding landowners delivered a properly executed petition and because the city council failed to pass REZ08-00011 by a three-fourths vote, plaintiff prays that the writ of certiorari be returned, that the writ be affirmed, and that the rezoning ordinance for REZ08-00011 be declared void for want of jurisdiction. Count 2 8 . Count 2 incorporates paragraphs 1-6 of Count 1 above. 9 . On the third and last day of the public hearing on April 6, City Planner Davidson announced a new conditional zoning agreement was reached with the developer, which created a large outlot D of approximately 20 acres, that would be excluded from REZ08-00011 . The description of the area being rezoned changed significantly, 18 . 58 acres was reduced to 0. 98 acres, 44 . 29 acres was reduced to 40 . 13 acres, and 79. 27 acres was reduced to 60 . 28 acres. (For purposes of argument, the area before this change will be referred to as the 82 acre tract, the area after the change will be the 60 acre tract. ) Up to this point, the last hour of the last day of the public hearing, there was no formal action by council stating either whether there wouldecv. definitely be an outlot D or whether it would be rezonedcc-< 1 r- n • to 10. This change, which occurred four weeks after the O w � N 3 plaintiff' s protest petition was duly filed at the hearing on March 10, was used by the city to invalidate the protest petition because when calculated for the new amended 60 acre tract, many signatories were excluded and those remaining no longer comprised the required 20% . Attachment 3 . From the time of the formal announcement of the new 60 acre tract to the closure of the public hearing was less than an hour. There was no possibility of obtaining notarized signatures to amend the original protest petition and file it before closure of the public hearing. 11. There was never a formal notice for rezoning the smaller 60 acre tract. 12 . There was never a separate public hearing on rezoning the smaller 60 acre tract. 13. The city attorney argued, and the council accepted, that notice for the 82 acre tract was sufficient notice for the 60 acre tract. 14 . The city conducted a public hearing for an 82 acre tract that it believed was sufficient for the 60 acre tract. 15. Having decided that the a notice and hearing on 82 acres was sufficient for both a notice and hearing on 60 acre tract, the city then ruled that a protest petition for the 82 acre tract was not sufficient for the 60 acre tract. Attachment 3 `' - c,: W r 16. After closing the hearing, the council voted 5-2 fill: - m favor of the rezoning measure on each of the three regii�-ed w 0 N considerations (April 6, April 20 and May 5, 2009) . y 4 17 . The plaintiff objected to the city' s rejection of the first protest petition. Plaintiff and others then filed a second petition on May 3 covering more that 20% of the new 60 acre tract, which the city also rejected because the public hearing had been closed. 18 . At the final consideration on May 5, plaintiff argued to the council that, insofar as the 60 acre tract was concerned, the city had not provided either prescribed notice nor the hearing prescribed by Iowa Code 414 . 4 : The notice of the time and place of the hearing shall be published as provided in section 362 . 3, except that at least seven days notice must be given and in no case shall the public hearing be held earlier than the next regularly scheduled city council meeting following the published notice. Iowa Code 414 . 4 Unless otherwise provided by state law: 1. If notice of an election, hearing, or other official action is required by the city code, the notice must be published at least once, not less that four days nor more that twenty days before the date of the election, hearing, or othe action. 2 . A publication required by the city code must be in a newspaper published at least once weekly having a general circulation in the city. . . Iowa Code -- 362 . 3 - - 19. Iowa Code 414 . 5 states clearly and with plain meanpi: w F m 2 The provisions of section 414 . 4 relative to public O hearings and official notice apply equally to all changes or amendments. The city provided proper notice and hearing on the 82 acre tract. A 60 acre tract is not the same as an 82 acre tract. The city provided no new notice and hearing for the 60 acre 5 • tract. The plain meaning of 414 . 5 is clear: the requirements of "public hearings and official notice apply equally to all changes or amendments, " not just some changes or amendments as the city would prefer. The city council failed to apply the notice and hearing requirements of 414 . 4 and 362. 3 to the new 60 acre tract, which came into being on the last day of the public hearing for the 82 acre tract . WHEREFORE, because the city council failed to give proper notice and hold a proper hearing on the 60 acres actually rezoned as required under the plain meaning of Iowa Code 414 . 4 and 414 . 5, under the rule set forth in Osage supra the council lacked jurisdiction to rezone the 60 acre parcel. Plaintiff prays that the writ of certiorari be returned and that it be affirmed: the ordinance the city council believed it had passed concerning REZ08-00011 should be voided by order of this court for lack of jurisdiction. Motion for a Stay Because REZ08-00011 would not have passed but for the City' s wrongful failure to recognize the protest petition in count 1 and the City' s wrongful failure to provide notice in count 2, Plaintiff requests a stay of the rezoning ordinance pertaining to REZ08-00011. Without the stay, irreparable harm will occur to plaintiff and other surrounding landowners whose signatures and rights under Iowa Code 414 . 5 have been wrongfully denied by the defendants . p v z — N � v 6 Under penalty of perjury, I swear that the above statements are a true and complete account. i/!- Robef J. egeman STATE of 10Vak.40knso()Count.a: = luc . 'lace on this 3 day d ,AD.20_C.12_,Wore me the undersigned,a Notary Public in and for toR,,,,,Q Iowa City, Iowa 52246 State otLowe,peraonahaPPaa� �'`�{4 • �aq Roberthe eman@mchsi .com to me known to be the identical person(s)vaned in and see asiculod g the within and'ongoing instrument.to wMd+this is dart, 391-338-5818 and acknowledged that he(lite)anciAed the same as their 319-530-0553 (cell) voluntary and te 319-668-2491 (fax) `1Ntiry Public n end for the d j4400 O r t --i n trri Original filed .-cam }? —23 Copies served on the defendants at the Office of the Cites Clerk of Iowa City, 410 East Washington Street, Iowa Citr, Iowa 52240 Copy served by US mail on a party in interest S&J Development LLC, 2231 East 45th St, Davenport, Iowa 52807 563-332-2123. n c_ cp m o 7.3 o r 4446.1,11 C-)CI 1 e'mx c)7.7 ;1:7o —0 ti CDto A pa O --i 7 CITY OF IOWA CITY g. y W(r i r • c " % ' g /\ 1 _— •icy% r y 1r PHOENIX DR i#. \\.. -7:,:%1V alp„ --L\ ThsSJ ' % ' \*`` ' \ kV 1111 . - ...._ _ _----' Irving MI \\\`\\\\\` '�\ Weber \ • \ \ School \,� \; \ -tz.N,• �\ '``R ` \`�\\• ' RS .; l'&\•. „,\..\\:., •—•: -..\• ' ". .. :\▪ \s's.\\\\.% ":>`'\:.•_.. ..\, ' \\\\-\\.,,,,\.: -,,-..\ ...,\ •\ \\.\\'‘ \'..\,.;:vs.. ' . i \ I \\•\\‘• '7 '`. \\\,▪ \\'‘', •••••• C . .' 'c•:—..--•••• f i \ \ i SITE LOCATION: Country Club Estates SUB08-00010/REZ08-00011 Affidavit of Robert James Hegeman On March 10, 2009, at the public hearing on REZ08-00011, I personally witnessed Larry Jewell deliver a signed protest petition bearing the signatures of surrounding landowners to a city official at the public hearing on the above proposal . I further swear that the allegations, statements , assertions contained in the petition for a writ of certiorari filed on June 3, 2009, are true and complete to the best of my knowledge . Under penalty of perjury, I swear that the above statements are a true and complete account . /lA----____ Robet .. es Hegeman 44 r Pl : ce Iow. y, I'.wa 52246 Sworn before me on the 3 Day of June, 2009, ,, -------AciAaota._.. 14-1 — :2(, c,—_,_. -ri =-i 0 `-' iii Notary. SANDRA K.MOSS194178MAN -G r o , = er My Commission Expires O 7) low /-5-Aoru w D N v SEAL Property Owners Protesting Proposed Zoning change for Country Club Estates IA 1 J,. .i ? U:: � Iv . .................... 0%.1Im/. Ippli • .: .r is.:.:.:, ... _ tiro.. - iliaT A . . . tolt,„„„.. ...aohlyttii wir-s ...,....:,........,:-.„,„,, .„,„....* - ip NI ill . .... . NV 111111111M ■�� #4_%,S 4 ..."..,. 44 la Hoa vix DR „z it.•::,.::::. . 1111/4 .''4;TIO r 1.„-„,j, --7...*.40kV . _ ..-:.....•:,,..,, --wilt*" '.....S:a:'.. .,,;-:i.." Mt it&r I. ilpi ;" 11_,_�.•.-'�:S};?';..',:?''?%}'�_?:..�'-'i: : 1111111111 A p r.A 11 ,•-.,vapik,TAW, F., c At iiih teitAA7liifrQ' _..,:i .. ,,,,,sst.,7:04,1 ;;:..,.:;.z.,,.,.:.,,,J:.,:. _,.. ..,,,a4zoll ,„;,,,,,,,.„?.,,,,,: ,:.,,,,,,. I It SY$a11�'CC\5r pi;if'; �� O s r �° s. T .o stw t - - O t,= 3 n "•. ,�,a TTY. i Z'rl = cuo G—t "� rProposed re-zoning area 8Z :E Hd r— Nill 60Z Area within 200'of rezoning area(47.5 acres) Percent of property within 200'area(7.7 acres=163%) CI 311 zil g CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE•PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319)356-6030 PLAINTIFF: HEGEMAN,ROBERT J Docket No 09-03078 State IOWA vs. Court No EQCV070796 County ,JOHNSON DEFENDANT: CITY OF IOWA CITY Ref No Received 06/03/2009 DEFENDANT: CITY COUNCIL OF IOWA CITY ADVANCE FEES PAID Requestor(s) Phone HEGEMAN,ROBERT J (319)668-2722 Name CITY OF IOWA CITY Party Type DEFENDANT I Address 410E WASHINGTON ST IOWA CITY IA 5224.0- 1 Phone (319)356-5030 E-Mail Fax Employer Zone I Comments Documents Document Serve by Date OE PSR Description/Special Instructions ORIGINAL NOTICE AND _ !PETITION Service Information Attempts Log c, Date Time Server Notes Date 6-03— U 1 Time /\ . ( Type C ' -y ( U VTAg4 Party l/V��r ,l- �>� /`� Relationship C _ I y C (ev�C.._ Race Sex F DOB I. 1 Location 4( o 6 (-4-<A1/4---,S) <tJ(o44, Miles Fee , Officer Notes: O a c--c r.. rn - r � N Printed:Wednesday,June 03,2009 Page 1 of 1 In the District Court for Johnson County ROBERT JAMES HEGEMAN, ) t�cUo 707 Plaintiff ) No. v. ) EQUITY N The City of Iowa City ) p �o The City Council of Iowa City, ) ORIGINAL NOTIC5O Defendants ) > _! E n , r_ CJ ',j TO THE ABOVE NAMED DEFENDANTS: w Na You are notified that a petition has been filed in the os. office of the clerk of this court naming you as a defendant in this action. A copy of the petition and the attached document is attached to this notice. The plaintiff is pro se, Robert James Hegeman. His address is 44 Tucson Place, Iowa City, Iowa 52246. His telephone number is 319-338- 5818, cell 319-530-0553, facsimile number 319-668-2491 . You must serve a motion or answer within 20 days after service of this original notice upon you and, within a reasonable time thereafter, file your motion or answer with the Clerk of Court for Johnson County, at the county courthouse in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator q7 31 °1-39k5Y- 7 ' T 11130 (If you are hearing impaired, call Relay Iowa TTY at 1-800- 735-2943) . (SEAL) OFERK OF t OURT 4;miliytkC Johnson County Courthouse Iowa City, Iowa 52242 IMPORTANT YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS. [Report 1976; Report 1978, April 30, 1987; October 31, 1997, November 9, 2001, effective February 15, 2002] 1 E-cvo7o77 In the District Court for Johnson County Petition for Writ of Certiorari 0 ---� Robert James Hegeman, Plaintiffrn vs . E5W The City of Iowa City and the City Council of Iowa City, Defendantsezi �. ro o cn W t _ Plaintiff states: Via, 4- > w -4 Count 1 1. The City of Iowa City is a municipal corporation residing in Johnson County, Iowa . The city council of Iowa City is vested with authority of the City of Iowa City to amend or change the Iowa City zoning ordinance. Iowa Code 364 .2 2 . Plaintiff is a resident of Johnson County, Iowa, and is a landowner within 200 feet of the property described in the rezoning proposal REZ08-00011 . 3. On February 17, 2009, the city council of Iowa City passed a motion to schedule a public hearing and provide statutory notice on an approximately 82 acre tract in southwest Iowa City, REZ08-00011 . Attachment 1. 4 . During the first day of the hearing on REZ08-00011 held March 10, 2009, plaintiff and more than 20% of surrounding landowners within 200 feet of the property delivered a properly executed petition protesting the rezoning. 1 Attachment 2 . The delivery of the protest at the public hearing was confirmed on the city' s video tape of the March 10 hearing and later admitted by the city. 5. As of March 10, 2009, the conditions of Iowa Code 414 . 5 were met and REZ08-00011 could not become effective except after a vote of three-fourths of all the members of the council: 414 . 5 Changes -- protest. The regulations, restrictions, and boundaries may, from time to time, be amended, supplemented, changed, modified, or repealed. . . In case, however, of a written protest against a change or repeal which is filed with the city clerk and signed . . .by the owners of twenty percent or more of the property which is located within two hundred feet of the exterior boundaries of the property for which the change or repeal is proposed, the change or repeal shall not become effective except by the favorable vote of at least three-fourths of all the members of the council. The protest, if filed, must be filed before or at the public hearing. The provisions of section 414 . 4 relative to public hearings and official notice apply equally to all changes or amendments . 6. The council voted 5-2 in favor of REZ08-00011 on April 6, April 20 and May 5, 2009. Even though the tally was short of the three-fourths required by Iowa Code 414 . 5, the city has proceeded as if they had passed REZ08-00011. As of June 1, 2009, construction equipment has commenced wort-on lJ `a the land presumably rezoned. ;-= � - w rn 7 . The Iowa Supreme Court has treated the notice and -(1- -v O nn hearing requirements as conditions precedent to a city p w council having jurisdiction to amend the zoning code. Sem OSAGE CONSERVATION CLUB, Appellant, vs. BOARD OF SUPERVISORS 2 • OF MITCHELL COUNTY, IOWA, Appellee, 611 N.W. 2d 294 (Iowa 2000) . Because three fourths of the city council has not voted in favor of REZ08-00011, the city council of Iowa City has lacked jurisdiction to rezone the area under Osage supra. WHEREFORE, because more than 20% of surrounding landowners delivered a properly executed petition and because the city council failed to pass REZ08-00011 by a three-fourths vote, plaintiff prays that the writ of certiorari be returned, that the writ be affirmed, and that the rezoning ordinance for REZ08-00011 be declared void for want of jurisdiction. Count 2 8 . Count 2 incorporates paragraphs 1-6 of Count 1 above. r- 9. On the third and last day of the public hearing on-; :2 m y` 0 April 6, City Planner Davidson announced a new condition Y4 zoning agreement was reached with the developer, which D N o.- created a large outlot D of approximately 20 acres, that would be excluded from REZ08-00011 . The description of the area being rezoned changed significantly, 18 . 58 acres was reduced to 0. 98 acres, 44 . 29 acres was reduced to 40. 13 acres, and 79. 27 acres was reduced to 60 . 28 acres . (For purposes of argument, the area before this change will be referred to as the 82 acre tract, the area after the change will be the 60 acre tract. ) Up to this point, the last hour of the last day of the public hearing, there was no formal action by council stating either whether there would definitely be an outlot D or whether it would be rezoned. 10. This change, which occurred four weeks after the 3 plaintiff' s protest petition was duly filed at the hearing on March 10, was used by the city to invalidate the protest petition because when calculated for the new amended 60 acre tract, many signatories were excluded and those remaining no longer comprised the required 20%. Attachment 3. From the time of the formal announcement of the new 60 acre tract to the closure of the public hearing was less than an hour. There was no possibility of obtaining notarized signatures to amend the original protest petition and file it before closure of the public hearing. 11 . There was never a formal notice for rezoning the smaller 60 acre tract. 12 . There was never a separate public hearing on rezoning the smaller 60 acre tract. 13. The city attorney argued, and the council accepted, that notice for the 82 acre tract was sufficient notice for the 60 acre tract . O -o 14 . The city conducted a public hearing for an 82 acres ..n tract that it believed was sufficient for the 60 acre tract. ' r rn ill 3 to 15. Having decided that the a notice and hearing on 82523 w acres was sufficient for both a notice and hearing on 6 CT- acre tract, the city then ruled that a protest petition for the 82 acre tract was not sufficient for the 60 acre tract. Attachment 3 16. After closing the hearing, the council voted 5-2 in favor of the rezoning measure on each of the three required considerations (April 6, April 20 and May 5, 2009) . 4 17 . The plaintiff objected to the city' s rejection of the first protest petition. Plaintiff and others then filed a second petition on May 3 covering more that 20% of the new 60 acre tract, which the city also rejected because the public hearing had been closed. 18 . At the final consideration on May 5, plaintiff argued to the council that, insofar as the 60 acre tract was concerned, the city had not provided either prescribed notice nor the hearing prescribed by Iowa Code 414 . 4 : The notice of the time and place of the hearing shall be published as provided in section 362 . 3, except that at least seven days notice must be given and in no case shall the public hearing be held earlier than the next regularly scheduled city council meeting following the published notice. Iowa Code 414 . 4 Unless otherwise provided by state law: 1. If notice of an election, hearing, or other official action is required by the city code, the notice must be published at least once, not less that four days nor more that twenty days before the date of the election, hearing, or othe action. 2. A publication required by the city code must be in a newspaper published at least once weekly having a general circulation in the city. . . Iowa Code 362. 3 ,7=3 19. Iowa Code 414 . 5 states clearly and with plain meaning: 2 T! r- mn The provisions of section 414 . 4 relative to public-�k: ..„1, 0 hearings and official notice apply equally to all 5;U changes or amendments. ": w Na o, The city provided proper notice and hearing on the 82 acre tract. A 60 acre tract is not the same as an 82 acre tract. The city provided no new notice and hearing for the 60 acre 5 tract. The plain meaning of 414 . 5 is clear: the requirements of "public hearings and official notice apply equally to all changes or amendments, " not just some changes or amendments as the city would prefer. The city council failed to apply the notice and hearing requirements of 414 . 4 and 362 . 3 to the new 60 acre tract, which came into being on the last day of the public hearing for the 82 acre tract. WHEREFORE, because the city council failed to give proper notice and hold a proper hearing on the 60 acres actually • rezoned as required under the plain meaning of Iowa Code 414 . 4 and 414 . 5, under the rule set forth in Osage supra the council lacked jurisdiction to rezone the 60 acre parcel . Plaintiff prays that the writ of certiorari be returned and that it be affirmed: the ordinance the city council believed it had passed concerning REZ08-00011 should be voided by order of this court for lack of jurisdiction. Motion for a Stay Because REZ08-00011 would not have passed but for the City' s wrongful failure to recognize the protest petition in count 1 and the City' s wrongful failure to provide notice in count 2, Plaintiff requests a stay of the rezoning ordinance pertaining to REZ08-00011 . Without the stay, irreparable harm will occur to plaintiff and other surrounding landowners whose signatures and rights under Iowa Code 414 . 5 have been wrongfully denied by the defendants . O0 — x u, ra o- 6 Under penalty of perjury, I swear that the above statements are a true and complete account. x.4 Arc- ohnsorl Robe J. egeman STATE of 10V4k Q Caa+i•ss l u c • 'lace On taps -3 day d 4u� AD.20 ` ,belon me the undersigned,a Wary Pubbc in and for the N� �,,,�,� Iowa City, Iowa 52246 sate of Iowa,personally 10P 'ad °'` 4 Roberthe eman@mchsi. com • to me known to be the identical persons)named in and who executed g the within and foregoing instrument.to which this is deed, 391-338-5818 and acknowledged tot he( )executed the same asMwu 319-530-0553 (cell) voluntary"`"f1d8°� 319-668-2491 (fax) rri c; Public in and$ot N df Q ,2,Xp /-S-o1O1 _z c:=1, oa c c' c� 6 x xt . 1 Original filed c UD --r Copies served on the defendants at the Office of the City Clerk of Iowa City, 410 East Washington Street, Iowa City, Iowa 52240 Copy served by US mail on a party in interest S&J Development LLC, 2231 East 45th St, Davenport, Iowa 52807 563-332-2123. r ~m o 0- • CITY OF IOWA CITY 0 • r g * ��._ '^! _.. ! )� ..._.� Lei, �..._ _ff \ \ `�� 1,. ..._____. ' t' `f • Akskir*IV 5 PROEM OR ' \ ''''*(‘...Nv..N. IF. I --- ;,44*'-' iPI I %,_ *"' \,` V I 7 J. t1ed — `\\% .k.\\. \ r " 1 _ Irving li \ ��,�, •s.,sifts // \Ii$. Weber .. \•,,.`•� \\ '. _..._-•-t, School . :„ . I Ii om. \ � ;, �:'`\\, �.\+\\ , i ' N \ ` � \tibN.,.,,,,:;.,...;\ `•: . \\ `\"\ \\:•:W ..�._ .. i t ± i i Z' rr-....._ ...— ..L i i \ 1 d-31° i SITE LOCATION: Country Club Estates SUB08-00010/REZ08-00011 4 Affidavit of Robert James Hegeman On March 10, 2009, at the public hearing on REZ08-00011, I personally witnessed Larry Jewell deliver a signed protest petition bearing the signatures of surrounding landowners to a city official at the public hearing on the above proposal . I further swear that the allegations, statements, assertions contained in the petition for a writ of certiorari filed on June 3, 2009, are true and complete to the best of my knowledge . Under penalty of perjury, I swear that the above statements are a true and complete account . ,A()- i - ll Robe .. es Hegeman 44 F �► Pl.: ce Iow. y, Iowa 52246 Sworn before me on the 3 Day of June, 2009, o ------Aafhoe/tict_ 117201fm_e2,A__ "--..„9, (a "Ti :74C) m Notary. z t C SANDRA K.MQSrS194176MAN -0-- - rn • My Commission Expires 0� . kg low I-5-Am N D v SEAL Property Owners Protesting Proposed Zoning change for Country Club Estates . I A �;,12) , , "4 . ,,r,/, St ...Itia-riak 4110„ 411111, _.., ,111 r. 441/r I-14*#„ititil,c, AilitA ist P:Alit !► rr toil aliiviime F ..,-a it ..." '� . *11 PHOENIX DR .4-0:11*''' 4e:ie,a, •... ■■ 4-. ...Ai _ ..,„,z,,,,„.N. , .01,,,,...• • q X55 fi „so ■�1 � :� Ill i7 9µ ��_ 1I -.....-..;---.--.---:.:---.?--.„<-::,. ...,.,,. ..„ , gi ' MN •,. ,.--,..-.0..-m ..........:.... .:.•:-_:.:. •: :.:. ,,,,,.._”, , — A.-::::-. ...:....?.:.-:.......-- - :. -. I' ,, •-$,.' ...-,',.-.1.,tw . .,. :. ---. 40111. , :A4 W.- x taii_Ril AD r A • , y0.70 am; j1:::::-' ,::.;,-,1;...;:_'-':- - - .4t:'wl II k I/AA 9 ill 1 . ,,','i'.f"01 Pitippp. ,..,, ,.., ,,,,_ ,.-_, ,,„,,,., ,, ' . - A k.Nr',:,,i,,,,,,,,... .�. 16 .. N W - . C--1 ••x3 J ana ' .C-6 3 CD aO W �° tlM41 1�!10 VM01 --+ )123?,T3 A110 ./ Proposed re-zoning area E- tn�' al`: Area within 200'of rezoning area(47.5 acres) LZ :€ wa ;:•.;,e:' :. Percent of property within 200'area(7.7 acres=l63%) 0311 N t4;/ei eer ('ed /441 C ‘-‘- ` CO Cry Robert James Hegeman, Plaintiff ) EQCV070796 vs. ) The City of Iowa City and the ) I City Council of Iowa City, ) 4.)04-/ —% Defendants ) CERTIFICATE OF SERVICE (PRIVATE) I certify that PLAINTIFF' S Statement of Undisputed Facts in Support of Petition for a Writ of Certiorari was served upon the City of Iowa City and the City Council of Iowa City in the cause of action Hegeman v. The City of Iowa City and the City Council of Iowa City, by depositing the file stamped copies in the US mail postage prepaid on June 10, 2009, addressed to the City of Iowa City and the City Council of Iowa City, Office of the Clerk of Iowa City, 410 East Washington Street, Iowa City, Iowa 52240. i / fry ( (::::117r -40 No fir-- rri O C D — f , C IT `l C D Ai ( IL -EO In the District Court for Johnson County 11? 43 10: 12 ,ITY CLERK Paintiff' s Statement of Undisputed Facts :A CITY. IOWA In support of Petition for Writ of Certiorari rn Robert James Hegeman, Plaintiff ) EQCVO7O796 � (J"n vs. ) <2-Ch. 4 The City of Iowa City and the ) G City Council of Iowa City, ) :� '• N Defendants ) c? Plaintiff states: Count 1 1 . On February 17, 2009, the city council of Iowa City passed a motion to schedule a public hearing and provide statutory notice on an approximately 82 acre tract in southwest Iowa City, REZ08-00011 . Attachment 1 : Voting Results, 2/24/09, p 7 .1 2 . During the hearing on March 10, 2009, Larry Jewell delivered a notarized protest petition to the city council containing the signatures of more than 20% of landowners within 200 feet of REZ08-00011 . Attachments 2, 3, 4 . (Original petition in defendant' s possession. ) 3. The City Council voted 5-2 in favor of REZ08-00011 on ' All council attachments available by date, page, at http: //www. icgov.org/default/apps/council/agendas.asp. April 6, April 20 and May 5, 2009, short of the 75% margin required by Iowa Code 414 . 5. Attachment 5, 6, 7, Voting Results . 4 . Construction on REZ08-00011 has commenced on or about June 1, 2009. Attachment 8, affadavit. Count 2 O 0 c_ 5. Count 2 incorporates facts 1-4 above. m C -< :710 Iv r- 6. m 6. On March 24, 2 two weeks after plaintiff' s protest _m petition was filed, city planners discussed the possibil_ty of changing REZ08-00011 by creating an outlot D, but no action was taken and the March 24 hearing was continued. Attachment 9, 10; Minutes & Voting Results respectively. 7 . The first written public description of the change to REZ08-00011 occurred in the Council Packet distributed on the last day of the hearing, April 6, 2009. Attachment 11 . 8 . Prior to April 6, the description of REZ08-00011 was always the same. Compare descriptions on February 24, March 10, and March 24 . Attachments 1, 12, 10 . 8 . The changes to REZ08-00011 confirmed on the last day of the public hearing did the following: The area being rezoned from Interim Development Single- Family Residential to Low Density Single Family Residential decreased from 18 . 58 acres to 0. 98 acres. The area being rezoned from Rural Residential to Low 2 All dates are 2009. 2 Density Single Family Residential decreased 44 .29 acres was reduced to 40. 13 acres. The area being rezoned from Low Density Single Family Residential to Planned Development Overlay Low Density Single Family Residential decreased from 79. 27 acres to 60.28 acres. Compare Attachments 1, 12, 10 with attachment 11 . 7 . In describing the potential change to REZ08-00011 on March 24th, City Planner Miklo admitted: "We believe this would need to go back to the Planning and Zoning Commission because the, this is a fairly significant change from...what they reviewed. " Attachment 9, bottom page 7, Minutes. 8 . On April 6 within an hour after Planner Davidson confirmed that REZ08-00011 would be changed, Mayor Bailey closed the public hearing. Attachments 13, 5. 10. The changes made to REZ08-00011 on April 10 were later used to invalidate plaintiff' s protest petition filed 4 weeks earlier by disqualifying many landowners adjacent to the original REZ08-00011 . Attachment 14 . v a "T1 11. There was never a formal notice for rezoning the °-< r- ni revised smaller 60 acre tract. Attachment 15, affidavit. 0' 12. There was never a separate public hearing on rezoning 5 the revised smaller 60 acre tract. Attachment 15, affidavit. 13. Within seven days after being notified that the original protest petition delivered March 10 was rejected, Plaintiff and surrounding landowners executed a second protest petition covering more that 20% of the new 60 acre tract, which the city rejected because the public hearing had been closed. Attachment 16, affidavit, Original in 3 defendant' s possession. 14 . The plaintiff and others objected to (1) the city' s rejection of the first protest petition, and (2) the city' s failure to provide a new notice and hearing on the revised 60 acre parcel . Attachment 17, 18 . 15. The City Council voted 5-2 in favor of REZ08-00011 on April 6, April 20 and May 5, 2009. Attachments 5, 6, 7 . Rob: J. H eman 44 T. :on Place Iowa City, Iowa 52246 Roberthegeman@mchsi.com 391-338-5818 319-530-0553 (cell) 319-668-2491 (fax) Original filed Copies served by US Mail on June 10, 2009 to the defendants by US Mail addressed to the Office of the City Clerk of Iowa City, 410 East Washington Street, Iowa City, Iowa 52240 Copy served by US Mail on June 10, 2009 addressed to S&J Development LLC, 2231 East 45th St, Davenport, Iowa 52807 563-332-2123 . 0 -ri (7) X 4 February 24,2009 City of Iowa City Page 7 END OF CONSENT CALENDAR. Approved, 7/0 ITEM 4. COMMUNITY COMMENT IT • e e • -HE AG ND: . NTIL 8 PM] Community Co ..- wi be continued, if necessary, prior to "City •.• it Information" item. ITEM 5. PLANNING AND ZONING MATTERS_ (Item's "a,b,c" will proceed as outlined in the City Attorney's memo of 2/28/07 entitled "Rezonings, Due Process and Ex parte communications.") a) CONSIDER A MOTION SETTING A PUBLIC HEARING FOR MARCH 10 ON AN ORDINANCE REZONING 18.58-ACRES OF LAND LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE FAMILY RESIDENTIAL (RS-5), 44.29 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE FAMILY RESIDENTIAL (RS-5), AND 82.3 ACRES FROM LOW DENSITY SINGLE FAMILY RESIDENTIAL (RS-5) TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE FAMILY RESIDENTIAL (OPD-5) (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Staff recommended approval in a report dated January 15. Approval will allow the development of Country Club Estates, Parts 3-8, a 170-lot, 82.3 acre single-family residential subdivision located on the north side of Rohret Road east of Slothower Road. Action: Set, 7/0 b) REZO` • - .97 - ACRES OF LAND LOCATED NORTHWEST OF_ INTERSECTION 0 • ' • - a _ -AI TM R LOW DENSITY SINGLE FAMILY ( RS-5 ) ZONE TO PLANNED DEVELOPMENT OVERLAY, MEDIUM DENSITY SINGLE FAMILY (OPD-8) ZONE. (REZ08-00012) Comment: At its January 15 meeting, by a vote of 6-0 (Koppes absent), the Planning and Zoning Commission recommended approval of this rezoning. Staff recommended approval in a report dated January 15. Approval will allow development of Hickory Pointe, a 3-lot residential subdivision with 18 townhouse-style dwelling units. 1. PUBLIC HEARING - �- Action: Closed ; r > W #6 Page 17 and they can't be developed,but yet they want to include that sensitive area in...in the individual plat,uh,the lots...each lot there. So basically you're further causing problems for the watershed. You're reducing the, uh,the effective transition and essentially we feel that it doesn't meet the Southwest District Plan. Urn, let's see... Bailey: Mr.Jewell,could you...conclude your remarks please? Jewell: Sure. Absolutely(both talking) Bailey: ...of the time. Jewell: Okay,so basically in conclusion,uh,I believe that I mentioned the majority of the neighbors are not opposed to the change. We actually are trying to embrace the change process. We're participating from all the planning meetings. Um,what we would like to request is, um,to ask the City Council to deny this current request for rezoning and the,uh, corresponding development proposal,um,based on the concerns raised in the packet,the concerns expressed here tonight,urn,we'd also ask that the City Council refuse to consider any further develo• , ;11 1 . s until the developer actually sits • • • o ows the good neighbor policy . . meets w. • .- - a • i rs,takes into consideration the concerns,and uh, •••r with us as we requested multiple times. Um,with that in mind, I have a petition signed by the majority of the homeowners,uh, impacted by this,that I would like to present tonight to the Council,um,with our concerns summarized as part of this meeting. Bailey: Thank you. And the City Attorney can take that petition. Thank you. Jewell: Thank you. Bailey: Others wishing to comment? Tokuhisa: Good evening,uh,Mayor Bailey,Members of the City Council. I'm Dave Tokuhisa. I live at 3305 Rohret Road SW. Uh,members of our family have been living,uh, in Iowa City for almost 25 years now. Uh,it's a community we really enjoy. Uh,we like the mixture of,uh,rural Iowa,a little bit of urbaness,but not too much,and uh,all the amenities offered by the,uh,Big Ten university. Uh,this is a cross-section. The lateral dimension is drawn to scale. It shows,uh, in the,uh,upper left hand side, the lower drawing there is a 66-foot right-of-way. On either side of the roadway are,uh,drainage ditches, and on the south side,uh,we have existing trees. Uh, in that section of Rohret Road there are a lot of old 3 evergreens,oak trees,walnuts,apples,and uh,they serve a number of ; purposes. They provide an excellent barrier to the winter winds that comm out of the north,uh,keep the area cool,uh,keep the bicyclists on Rohret N.) s i This represents only a reasonably accurate transcription of the special formal Iowa ni i City City Council meeting of March 10,2009. O-Al 3 Complete Description March 10, 2009 Page 2 CITY AND MIDWESTONE BANK, IOWA CITY, IOWA FOR PROPERTY LOCATED AT 1552 DICKENSON LANE, IOWA CITY, IOWA. Correspondence: JCCOG Traffic Engineering Planner regarding Installation of PARALLEL PARKING ONLY signs on the north side of B'jaysville Lane east of Dubuque Street and NO PARKING CORNER TO HERE signs at the intersection of B'jaysville Lane and the private driveway on the north side of the road; Charlotte Walker regarding Senior Center holidays [staff response included]; Gary Fairmont Filosa II regarding Street repair on Van Buren; Peter Ziegenhorn regarding Wal-Mart; Caitlin Lombardo regarding Landfill [staff response included]; School closing letters from David Gurwell, Marshall Poe and Julianna Tymoczko, David Wieseneck; Jonathan Kimmel regarding Litter; Mike Barker regarding Hilltop Mobile Park and Shelter House; Elias Zaharias regarding No Child Left Behind fallacies; Local Option Sales Tax letters from Chris Arch [staff response included], Peter Cram; Bob Saunders regarding Homeless Village on S. Riverside Drive. Affirmative roll call vote unanimous, 7/0, all Council Members present. The Mayor declared the motion carried. A public hearing was held on an ordinance conditionally rezoning approximately 18.58 acres of property located north of Rohret Road from Interim Development Single-Family Residential (ID-RS) to Low Density Single-Family Residential, 44.29 acres from Rural Residential (RR-1) to Low Density Single-Family Residential (RS-5) and 79.27 acres from Low Density Single-Family Residential to Planned Development Overlay Low Density Single-Family Residential (OPD-5) (REZ08-00011) (Country Club Estates, Parts 3-8). The Mayor requested the Council Members disclose ex parte communications. Individual Council Members shared communications, and expressed their views. The following individuals appeared: Robert Hegeman, 44 Tucson Place; Larry Jewell, 53 Tucson Place; Dave Tokuhisa, 3305 Rohret Rd. SW; Kolleen Shields, 3335 Rohret Rd. SW; Diana Thrift, 3329 Rohret Rd. SW; Dev. Brian Speer, S & J Development; Chester Schulte, 1812 Rohret Court; Ron Amelon, MMS Consultants; Sarah Jewell, 53 Tucson Place; Judy Tokuhisa, 3305 Rohret Rd. SW; PCD Dir. Davidson and Sr. Planner Miklo present for discussion. Moved by Wilburn, seconded by Wright, to accest correspondence from Larry & Sarah Jewel (2), Gordon Dyer, Raj and Re.: . okuhisa (3), Amanda, Adam & Jason Rohrer (2), Nancy Hitchon, Chester c- I -, udy and Dave Tokuhisa (3), Larry Jewell (2), Adam, A. Brittany & Jason Rohrer, and notarized petitions submitted by Larry Jewell. Moved by Wilbum, seconded by Wright, to continue the public hearing to March 24. The Mayor declared the motion carried unanimously, 7/0, all ouncil Members present. Nrov d by Champion, seconded by Wilburn, to defer to March 24 the first vote of ordinance conditionally rezoning approximately 18.58 acres of property located north of Rohret Road from Interim Development Single-Family Residential (ID-RS) to Low Density Single- Family Residential, 44.29 acres from Rural Residential (RR-1) to Low Density Single-Family Residential (RS-5) and 79.27 acres from Low Density Single-Family Residential to Planned Development Overlay Low Density Single-Family Residential (OPD-5) (REZ08-00011) (Country Club Estates, Parts 3-8). The Mayor declared the motion carried unanimously, 7/0, all Council Members present. Moved by Wilburn, seconded by Champion, that the rule requiring ordinances to be considered and voted on for final passage at two Council meetings prior to the meeting at —70 w u I Affidavit of Robert James Hegeman On March 10, 2009, at the public hearing on REZ08-00011, I personally witnessed Larry Jewell deliver a signed protest petition bearing the signatures of surrounding landowners to a city official at the public hearing on the above proposal . I further swear that the allegations, statements, assertions contained in the petition for a writ of certiorari filed on June 3, 2009, are true and complete to the best of my knowledge . Under penalty of perjury, I swear that the above statements are a true and complete account . :11 $11 /) Jw`n._________ Robe I. es Hegeman 44 r l Pl : ce Iow. y, �.wa 52246 il Sworn before me on the 3 Day of June, 2009, (cifir /iar i 7ha a SANA '=C7 • Notary. co„R,►DR�r�,NK.MOSSMAN 194176 .,.� _ -Tl HC) 7,.., G r rn SEAL m 3 7) " 0 *' o LA., April 6,2009 City of Iowa City Page 5 C:5) b) CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. At their March 30 informal meeting, it was the sense of the Planning and Zoning Commission that there is no need for a joint meeting if the Council decides to retain ID-RS and RR-1 zoning on Outlot D (The Commission will formally vote on the question at their April 2 meeting). Staff memorandum included in Council packet. 1. PUBLIC HEARING (CONTINUED FROM 3/10 AND 3/24) Action: Closed 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) (DEFERRED FROM 3/10 AND 3/24) Action: First consideration, 5/2, Wright and Correia voting "no" _ rJ o J K 0 < D 7 r�rte' N ..n rn LA.) April 20,2009 City of Iowa City Page 8 (6) b) CONSIDER A MOTION SETTING A PUBLIC HEARING FOR MAY 5 ON AN ORDINANCE AMENDING TITLE 14, ZONING, ESTABLISHING DEFINITIONS AND A USE CLASSIFICATION PROCEDURE FOR DRINKING ESTABLISHMENTS AND ALCOHOL SALES-ORIENTED RETAIL USES AND ESTABLISHING MINIMUM SPACING REQUIREMENTS FOR SAID USES. Comment: It is anticipated the Planning and Zoning Commission will make a recommendation regarding this ordinance at its April 16 meeting. Staff recommended approval in a report dated March 5. Approval will establish a minimum separation requirement between bars in all commercial zones that allow these uses and a minimum separation requirement in the Central Business Zones between retail establishments, such as liquor stores that sell a significant amount of alcoholic beverages for off-site consumption. The setting of this public hearing will impose a 60-day moratorium on the establishment of land uses that would be contrary to the proposed ordinance. Staff memorandum included in Council packet. Action: Set, 7/0 c) CONSIDER AN ORDINANCE CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08- 00011) (SECOND CONSIDERATION) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Correspondence included in Council packet. Action: Second consideration, 5/2, Correia and Wright voting "no" 3 7 ' =ate N m r-- • rn a O May 5,2009 City of Iowa City Page b) AMENDING TITLE 14, ZONING, ESTABLISHING DEFINITIONS AND A USE CLASSIFICATION PROCEDURE FOR DRINKING ESTABLISHMENTS AND ALCOHOL SALES-ORIENTED RETAIL USES AND ESTABLISHING MINIMUM SPACING REQUIREMENTS FOR DRINKING ESTABLISHMENTS THROUGHOUT THE CITY AND FOR ALCOHOL-SALES ORIENTED RETAIL USES IN THE CENTRAL BUSINESS SERVICE (CB-2), CENTRAL BUSINESS SUPPORT (CB-5), AND CENTRAL BUSINESS (CB-10)ZONES. Comment: At its April 16 meeting by a vote of 6-0 (Pluhutnik absent), the Planning and Zoning Commission recommended approval. Staff recommended approval in a report dated March 5. Approval will establish a minimum separation requirement between bars in all commercial zones that allow these uses and a minimum separation requirement in the Central Business Zones between retail establishments, such as liquor stores, that receive a significant amount (25% or more) of their gross income from the sale of alcohol and alcoholic beverages. Correspondence included in Council packet. 1. PUBLIC HEARING Action: Closed 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) Action: First consideration, 5/2, O'Donnell and Hayek voting "no" c) CONSIDER AN ORDINANCE CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08- 00011)(PASS AND ADOPT) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Correspondence included in Council packet. Action: Adopted, 5/2, Wright and Correia, voting "no" (7) — r- _.“) r~-3 111 In D w CO Affidavit of Robert James Hegeman I live adjacent to the land referred to in the rezoning proposal REZ08-00011 . On that property, I have personally observed surveyors marking the property and heavy earth moving equipment grading and leveling the land beginning on or about June 1, 2009 . Under penalty of perjury, I swear that the above statements are a true and complete account . Rober J. i -s H-geman 44 T cso- Plac- Iowa ' - y, Iow. 52246 Sworn befor- me on the 10 Day of June, 2009, Notary. rti SEAL ri,_.moyEs 'NurtibE 752710 (lExpMes #4b Page 5 (5)9 ITEM 4. PLANNING AND ZONING MATTERS. b. CONDITIONALLY REZONING APPROXIMATELY 18.58 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE- FAMILY RESIDENTIAL(ID-RS)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL,4429 ACRES FROM RURAL RESIDENTIAL(RR-1)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL(RS-5)AND 79.27 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL(OPD-5). (REZ08-00011) 1. PUBLIC HEARING(CONTINUED FROM 3/10) Bailey: This is a public hearing(bangs gavel)continued from March 10th. Davidson: Good evening,Madame Mayor and Members of Council. At your last' meeting,we discussed the proposed rezoning of Country Club Estates,,.ahock *: had,uh,a good discussion and a lot of uh,good public input. At the � conclusion of that meeting,uh,you deferred action and asked us to ..:.1 t,"; r address a couple of things specifically which we're...Bob Miklo and I,n r 1 Senior Planner Bob MlkIo and I are going to address with you this — 0 evening,and those items were specifically the location of Rohret Roa . c� and the impact...and importantly the impacts on mature trees on the senth — side of the road,when that is reconstructed,and secondly then,the notion ' � of clustering some density,having some multiple,uh,type dwelling units in the south portion of the subdivision,uh,which would then give the opportunity to create some open space. There was one,uh,person who, uh, provided comment indicating that the proposed outlot B. This is the plat you saw last week,and the proposed outlot B here,that it was too far removed from the south portion of the subdivision,and that there needed to be,uh,there needed to be...uh,some open space down in this area,uh, for the persons who live in this...in this area of the subdivision. Uh,we have addressed that with the subdivider. You will recall that outlot B,uh, recommendation from City staff,as well as the Planning and Zoning Commission,was to accept that as the open space,required open space, dedication for the subdivision. So,uh,Bob will get into the details of...of that in just a moment. Uh,I did want to point out to you that you will recall that...that we had the issue of the double-fronting lots,here along Slothower Road,uh,maybe if I use the mouse that will quit doing that. (noise on mic) I guess not. In this area here,these lots as proposed were, uh,double-fronting with,uh,Sloth...Slothower Road,which is a,uh, official public right-of-way,although it is not currently passable,urn,what we had indicated to the subdivider was...the developer,was that they needed to take action to get that vacated,uh,in order to not have those be This represents only a reasonably accurate transcription of the special formal Iowa City City Council meeting of March 24,2009. )#4b Page 6 4/ double-frontinl at has not been able to occur...timely with your cons'' - . ion of this, so there's been a revised plat, uh, filed,which you ee here,uh,and obviously you can see that the last two additions have been taken out and created as outlot D, so there are now four outlots in addition to outlots A and C,uh,which were in environmentally sensitive areas and outlot B,which is the proposed open space dedication. We now have outlot D,which is the large area you see,and Bob will provide,uh, our recommendation on...on how outlot D should be handled,um,with your consideration of the subdivision. So,with that,I will let Bob go into the details of the information that you asked for at the last meet' Miklo: Reg. i mg, ,clustering,uh, in the...in the subdivision. We did,uh, look at, uh,previous concept plans for the area and as I mentioned at the last meeting,the applicant at one time had submitted a concept plan showing clustered town houses along Rohret Road,uh,this street design is pretty much the same as the plat that's before you,but it included townhouses, urn, some of the townhouses here would have frontage onto one of the new streets. The other townhouses would have courtyards to provide pedestrian access and then rear lanes or alleys in the back to provide vehicle access,but there would be no streets in front of the units. When we reviewed this plan,we told the applicant that we felt it really wasn't compatible with the neighborhood. That it was too dense and did not provide enough open space. Um,we did look at the,uh,the Southwest District Plan that...that does indicate that some clustering of townhouses or condominiums,uh,might be appropriate along Rohret Road, if it's done in a manner that was compatible with the neighborhood and as we indicated,we didn't feel that this was,but there might be a design that would be. Uh, further,the Comprehensive Plan would support some clustering in this area, um, it's,uh, supports diversity of housing,uh, throughout our neighborhoods. It...if you look at the area west of 218, there are approximately 475 single-family housing units in this area. There are only three attached houses,or housing,um,developments here. Twelve units in three buildings,uh,to 218 and Rohret Road, so,uh, obviously this area does not have a lot of diversity in housing. So the Comprehensive Plan would support some clustering. So with that in mind,we did take the, uh,applicant's previous plan and their...their current plan,which shows all single-family in the area. Urn,and looked at how clustering might...might occur. Uh,the streets basically did not change in this plan,although what we did do is we took the 27 single- family housing units in this area and clustered them,and took 38 housing units, similar to the applicant's previous design over here. So there'd be a net gain of ten housing units,um,however,there would be three acres of open space,um,so if you compare that...we're looking at the previous, subdivision design. We're looking at this area in here. So again,we're basically clustering these units over to this area,and creating an open-`' -T1 space. Um,now this isn't the only way that clustering could be done,liu ; 171 a This represents only a reasonably accurate transcription of the special formal Vivi City City Council meeting of March 24,2009. #4b Page 7 just for discussion purposes,we put this down and...and shared it with the applicant. Uh,one,uh,the benefits of this plan is, it does,uh,provide for room to shift Rohret Road if that's determined to be necessary. Um,and it also provides,um,some open space across,uh, several of the existing,uh, housing units that are currently in the County. Uh,so rather than a view of the subdivision,they would have some open space. Urn,this type of design has been used very successfully in other subdivisions, such as Windsor Ridge. A similar plan is currently being built in the Cardinal Pointe subdivision,off of Camp Cardinal Boulevard. Uh,there may be other ways,uh,to do,uh,a clustering in this area,um,we did meet with Brian Spear,the applicant,uh,to discuss this,and he did indicate that he would consider, uh,putting some open space in this area. Um, if,uh,that would entail moving some of the required open space from the northern part of the subdivision down...down here. Uh,that would...that would make this public open space versus private open space,which is another possibility. Uh,that sort of change would need to go back to the Parks and Recreation,uh,Commission to accomplish that. Um,also as...as I noted,this concept plan or variation of this would allow Rohret Road to be shifted farther to the north, if that was determined necessary,and you do have a, uh,memo from the City Engineer,uh,regarding Rohret Road in relationship to the trees on the south side of the road. Ron Knoche is here to, if you have any questions regarding the specifics of that. Urn,at this point,the applicant still is requesting rezoning,uh,the area with outlot D, uh,to RS-5,and then the OPD. .•, ' e remainder of the subdivision ': . . .11 1 s. Uh, staff,we would recommend retaining the, •, '.•- and the'DRS zoning on...on outlot D,and this would preserve the City's ability to address Rohret Road situation,uh,to consider alternatives for open space,and possibly clustering, and...and also Slothower Road,um,the rezoning for the remainder of the subdivision, uh,Parts 3 through 6,urn,could be approved,uh,but at this point,we believe this would need to go back to the Planning and Zoning Commission because the,this is a fairly significant change from...from what they reviewed. Um,be happy to try to answer any questions. Hayek: With respect to, uh,Rohret Road and...and having the option in the event of green space and that one section of moving the road, it seems to me that's in the middle of a fairly straight stretch of road and...and what advantage is there to having only a portion of it available to move north? Miklo: That's a good question for...for Ron(laughter) Knoche: I don't think that we would shift the road just in that portion. We'd look at shifting it along the whole frontage. So,um,the idea with,uh,not rezoning the portion,we would be able to look at getting additional right- of-way at that time,when that rezoning would come before us. This represents only a reasonably accurate transcription of the special formal lowu m City City Council meeting of March 24,2009. 7'1 = 0 c�w #4b Page 8 . Hayek: Oh, I see,because you're talking about the entire southern boundary of outlot D,to take up all at once. All right. Would there be an impact to the single-family,uh,platted,uh, lot? They don't appear there,but they were in the original application. I assume those would have to be squeezed down. Knoche: There'd be the potential...if...if that original planner had come in,there would be the potential of having to squeeze those down,that's correct. Hayek: Okay. But the idea is that in the green space area,the impact is(both talking) Knoche: It would be minimal,that's correct. Champion: Ron,how wide is the road? Do roads have to be that wide? Knoche: The...the proposed road would match the existing width of Rohret Road to the east,which is 34-foot wide. But there would be the potential of...of,we'd have to look and see what our...what the growth potential is to the west of this,to see if we would,you know,need to maintain the 34- foot or...or the potential of narrowing down,um,but the issue of...of the trees along the south side still comes down to the fact that we would grade out the rural cross-section that's there,so the ditches that are there,up to the right of the line,would have to be filled in,so there would have to be some fill placed up along that,the right-of-way line anyways,urn,you know, so the potential of impacting the trees would be there, regardless if the road is,you know - - • - :- - - s -, • - -- .. '.e. -ta: Just so I'm clear,we're not considering this...tonight,this plan. We're considering the original,which is in our packet from two weeks ago,the original. Miklo: Well,the...the applicant has agreed to take outlot D out, so this,uh,urn, as I said,you would...we would suggest that you not rezone this,but even if you did decide to rezone this to RS-5,this probably should go back to the Planning and Zoning Commission for them to(both talking) Correia: The consideration for rezoning of the... Miklo: We're very comfortable recommending the rezoning to RS-5 in the planned development, for the remainder of the development. Correia: And that's based on Planning and Zoning Commission... : Miklo: Right,and...and the fact that Slothower Road is not a factor in that. C) We've been discussing with the applicant for a number of years the _;C� 1.3 This represents only a reasonably accurate transcription of the special formal 1E04 C? City City Council meeting of March 24,2009. w #4b Page 9 vacation of Slothower Road and just has not been able to accomplish that, and uh,we thought...when we were reviewing this at the staff level and at Planning and Zoning that that was on...on track,and apparently ifs not. An other 'uestioi . ii• Wright: Just a...one and...if we go ahead and take out,remove outlot D and a some point have some green space inserted there,perhaps the three acres as discussed here in some form,uh,outlot B would be reduced by about how much? Miklo: - Well,the...the neighborhood open space ordinance requires for all of Country Club Estates, including Parts 1 and 2, I believe it's 2.5 acres approximately of...of open space. This is actually more than that,and it's because of just the way it's located. It wasn't possible just to create an isolated two acres. In order to give it some street access it came down,so I think this may be over three acres. Wright: It looks like it's over four. I just can't...the print's too little. (laughter) So that...it might come down to the...somewhere around the standard minimum. Miklo: Yeah,we would have to review that with the Parks and Rec Commission. Hayek: As I understand it,the applicant is willing to shift green space to the south, but wants a reduction up north. Miklo: Right. Hayek: How do you approve the up north portion,which would include that outlot and green space,and then save for another day the southerly green space (mumbled) Miklo: That we probably should revisit with Parks and Rec Commission because this would be...then become subject to some sort of subdivision design, which would include housing units. Um,so that possibly could be approved as an outlot for open space,or future development,until we have that question . I y. - . . Di , - .. If you want to make the changes that Bob is...is discussing,you're going to have to continue the public hearing tonight,and defer the first consideration,to...to give,um,Planning and Zoning a chance to decide whether they want to have a consult with you. Urn, so you're not going to act on it tonight,either way. - �I r-- Champion: Well,we could act on the original plotting, if we wanted to. f1 o This represents only a reasonably accurate transcription of the special formal Iov d City City Council meeting of March 24,2009. w #4b Page10 iklo: (mumbled)you couldn't because it shows...um,these lots over here and part...our recommendation and Planning and Zoning was not to approve subdivision in this area until Slothower Road was resolved. Because if you did approve this,we'd end up with double fronting lots,a fairly poor subdivision design,uh,that doesn't meet our subdivision codes. Uh,the reason we felt a fairly large area needs to be set aside is because if this is going to be redesigned,we need to know how that's going to be done,with Slothower Road being in place,because the applicant hasn't been able to come to terms with the County and the adjacent property owner on Slothower Road we really cannot resolve this until that. Dilkes: Well, I think...what,the question I was answering was that you could act on the original proposal with the original signed CZA. Miklo: Right. Dilkes: As I understand it. Miklo: Not the plat, but the zoning. 6'lkes: Right. Staff is not recommending that,but that would be within your...(mumbled) Bailey: Others wishing to comment at the public hearing? Jewell: Hi, my name is Larry Jewell and I live at 53 Tucson Place,uh, I had an opportunity to speak,uh, at the last Council meeting. I appreciate the opportunity to speak again tonight. Urn,I had requested a couple pictures (mumbled)and maybe Bob can help me pull those up, urn,I wanted to expand on a couple of issues that I brought up, urn,at the last meeting. With these pictures here, urn,basically what I wanted to talk about is the area...right here,um,this is my property,which is bordered on both sides by this new planned development. Currently there's a 100-foot buffer, urn, indicated as part of the, uh,wetland buffering area. However, with the current proposal,urn,the proposal's to reduce that to 25-feet. Urn,the concerns that I raised, uh, last...at the last meeting was that this buffer not be reduced and the reasons, urn,are...are a couple here. First off, we have the zoning code that talks about extensive lands and features and within the zoning code it states specifically that, uh,these policies should be, urn, included or implemented as part of the Comprehensive Plan. And specifically it states that, urn,you know,we need to use reasonable, uh, urn, issues or take reasonable precautions against environmentally sensitive features and natural sources...resources,while rezoning environmentally sensitive areas, protecting such resources from destruction. The concern that I raised is the issue of water. You can see with this aerial view that this is a natural stream corridor here. You've got -n This represents only a reasonably accurate transcription of the special formal Iowa? — ril City City Council meeting of March 24,2009. . fez a O� � w March 24,2009 City of Iowa City Page8(19 b) CONDITIONALLY REZONING APPROXIMATELY 18.58 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 44.29 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 79.27 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Staff recommended approval in a report dated January 15. Approval will allow the development of Country Club Estates, Parts 3-8, a 170-lot, 82.3 acre single-family residential subdivision located on the north side of Rohret Road east of Slothower Road. Staff memorandum and correspondence included in Council packet. 1. PUBLIC HEARING (CONTINUED FROM 3/10) Action: Continued to April 6, 7/0 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) (DEFERRED FROM 3/10) Action: Deferred to April 6, 7/0 ITEM 5. AMENDING THE FY2009 OPERATING BUDGET Comment: This public hearing is being held to receive comment on amending the FY2009 budget. Included in the March 12, 2009 information packet (IP#3) is supporting documentation that is also available at the Library, Finance Department and City Clerk's office. a) PUBLIC HEARING Action: Closed • b) CONSIDER A RESOLUTION y Action: Approved, 7/0 "("1 April 6,2009 City of Iowa City Page 5 1 b) CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. At their March 30 informal meeting, it was the sense of the Planning and Zoning Commission that there is no need for a joint meeting if the Council decides to retain ID-RS and RR-1 zoning on Outlot D (The Commission will formally vote on the question at their April 2 meeting). Staff memorandum included in Council packet. 1. PUBLIC HEARING (CONTINUED FROM 3110 AND 3/24) Action: 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) (DEFERRED FROM 3/10 AND 3/24) Action: �3 . • d .a ,-, N) `gym 0 � w March 10,2009 City of Iowa City Page 4 l END OF CONSENT CALENDAR. Approved, 7/0 ITEM 5. COMMUNITY COMMENT (ITEMS NOT ON THE AGENDA). [UNTIL 8 PM] Community Comment will be continued, if necessary, prior to "City Council Information" item. ITEM 6. PLANNING AND ZONING MATTERS. (Item's "a, b," will proceed as outlined in the City Attorney's memo of 2/28/07 entitled "Rezonings, Due Process and Ex parte communications.") a) CONDITIONALLY REZONING APPROXIMATELY 18.58 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 44.29 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 79.27 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Staff recommended approval in a report dated January 15. Approval will allow the development of Country Club Estates, Parts 3-8, a 170-lot, 82.3 acre single-family residential subdivision located on the north side of Rohret Road east of Slothower Road. Correspondence included in Council packet. 1. PUBLIC HEARING Action: Continued to March 24, 7/0 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) Action: Deferred to March 24, 7/0 vJ J -{(� N 171 i I o w #6 Page 7 ITEM 6. PLANNING AND ZONING MATTERS. b. CONDITIONALLY REZONING APPROXIMATELY.98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE- FAMILY RESIDENTIAL(ID-RS)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL,40.13 ACRES FROM RURAL RESIDENTIAL(RR-1)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL(RS-5)AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL(OPD-5). (REZ08-00011) 1. PUBLIC HEARING Bailey: This is a public hearing continued from 3/10 and 3/24(bangs gavel). Public hearing is open,and let's open this, let's disclose ex parte communication before we go into the... Champion: I did,talk to Wally P about what Planning and Zoning's decision was on talking to us, so...they don't want to. They approve of what we thought (mumbled) Bailey: Okay. Others? O'Donnell: I talked with Bob Miklo today,specifically about the buffer area. That's it. Bailey: Okay. Any other... Hayek: I talked to Legal staff about the southern area and exactly what had happened between the last time we talked about it and where things stand tonight. Bailey: Okay. Anybody else? . • . alining staff about the buffrea, as well. •, . , a e wetlands buffer area. Okay. Davidso•. This is the third meeting that we've,uh,had discussion on this item. Uh, there's not a whole lot new from the last meeting. The significant item since the last meeting is we do have a signed CZA,uh,that does reflect the new out! f D,which you had described to you,urn,at the last meeting. You wirecall that our motivation for moving outlet,ah,excuse me- outlot D-was that the developer had not been successful,uh,in getting, um,the Slothower Road situation,uh,and the resulting double-fron • lots,um,we...we had suggested that they work with the C• • o gofrthat . .ted,. They weren't able to do so,so we ar- • : --•mg,uh,with a This represents only a reasonably accurate transcription of the special formal Iowa r.� i— City City Council meeting of April 6,2009. - iTI • #6 Page 8 possibility in the future that...that,uh,that will be vacated,and...and subsequently taken care-of. Also,the...the plat could be redesigned to include Slothower Road staying. That'll be determined in the future,but the time being,we've created outlot D. Uh,the other significant thing that this allows is that you...you discussed at your last meeting,uh,somewhat extensively the notion of,urn,multi-family development and offering some additional housing types from what was proposed by the developer, urn,and also the possibility of some open space,additional open space, either in conjunction with that clustered housing,or as a...as something set aside. I think you'll recall the developer indicated that,uh,they might be amenable to,um,adding some open space,public open space down here,but only if it was subtracted off of outlot B,which is right now designated for,uh, 'ark 1. . .••, - _ . •i ' • - . -' -d, uh, so. :. 4 at was the developer's thoughts on that. What we are s sing,the...the developer has requested RS-5 zoning for outlot D. Uh,and then of course OPDH-5 for...for parts 3 through 6,which is no change from your previous discussions. Uh, staffs recommendation for outlot D is to retain the current RR-1 and IDRS zoning, and basically force a rezoning in the future of outlot D. What that does is just give you . w- , • - -- ; xi.i i over r-- - - I g, •epending on how you might condition the RS-5 zoning. Urn,because the RR-1 and IDRS zoning would not allow the property to be developed,urn, without going through the rezoning process,what it does is it gives a future City Council,well,this City Council if it happens in the next eight months,or a future City Council,the ability to consider either the...the multi-family type units or the additional open space. That would occur during the rezoning process. If you were to rezone it RS-5 without any conditions, basically mandating those things,at that point then you have much less flexibility with the property and the developer would be able to come in with an RS-5,which is a single-family subdivision that meets our subdivision requirements and we would have very little ability to manipulate it any further,uh,there are rights once it is rezoned that...that the RS-5 would allow them to go ahead with a single-family development. So,that is our recommendation. Do you have any comments or questions before you continue your hearing? Bailey: Questions? Wilburn: Um,I like the possibility of being able to,uh,continue to try and work with,encourage,negotiate that because I think,uh, if I'm thinking of the right location in terms of open space or some multi-type unit,uh,the location that I'm thinking has some higher-end housing like this is out on the east side. I'm forgetting the name of it, uh, Windsor Ridge is,and that's kind of the prototype. This represents only a reasonably accurate transcription of the special formal IoW, , r.) City City Council meeting of April 6,2009. : Q A � #6 Page 13 (6) subdivision,uh,will that lot have to be adjusted if the roadway is moved 17 feet north in the future or would it not be better to do it now? Just - ing to consider. Uh, ladies and gentlemen,thank you v- • h. Bailey: Thank you. Anyone else wishing to comment? (bangs gavel) Public hearing is closed. I '11 I ANCE Karr: Motion to accept correspondence. Champion: So moved. Correia: Second. Bailey: Moved by Champion, seconded by Correia. Discussion? All those in favor say aye. Motion carries. Wilburn: Uh,Jeff,a question. I was,oh, I'm sorry. Bailey: Will you move first consideration? Wilburn: Move,urn, first consideration. Bailey: Okay, do I have a second? Wright: Second. Bailey: Moved by Wilburn, seconded by Wright. Discussion? Wilburn: Uh,Jeff,just refresh my memory about....I mean the terms about the quality of a wetland. That's Corps of Engineer stuff, urn... Davidson: Yeah, I...I apologize...all seven of you know I can't stand up here and speak as a wetland's expert. We do have a wetland expert on staff,Julie Tallman,who has reviewed this. I don't want to speak for her but...but it has been reviewed,and um,the...the issue of the quality of the wetlands and the compensatory mitigation has...has been reviewed by...by Julie, and she's asked us...she has not asked us to express any concerns to you regarding that. Wilburn: Okay. Thank you. Bailey: Other discussion? 0 L9 This represents only a reasonably accurate transcription of the special formal Iowa= ry City City Council meeting of April 6,2009. 0�� • RHegeman From: "Christina Kuecker" <Christina-Kuecker@iowa-city.org> To: "ICJewells"<ICJewells@mchsi.com> Sent: Thursday,April 23, 2009 9:22 AM Attach: protest_CountryClubEst.pdf Subject: CC estates-rezoning protest Larry, We have calculated the percentage of protests within 200'of the proposed rezoning. This is done by creating a 200'buffer around the rezoning and calculating the area of the buffer. We then map out the properties that have submitted a protest petition. We total the areas of the portions of these properties that fall within the 200' buffer and this area is what is used to calculate the percentage. According to our calculations,this percentage is 16.3%. A map is attached. Please let me know if you have any other questions. Christina Kuecker Associate Planner City of Iowa City 410 E. Washington St. Iowa City, IA 52240 (319)356-5243 christina-kuecker@iowa-city.org 0 0 o 6/10/2009 Property Owners Protesting Proposed Zoning change for Country Club Estates I _ . . . . . . . . . . . . . . . . . . . . . ::......,....i.j:...•:.:....'.:::..•.1.::.::.....:.::...::..•:.:..:..::.i.:E:...:..::.....:.::..i.s....i:#11,". . . .f;, i.i........................„...-........."......: Tittlillir ..-4011," sill al 111/"W4VA *,:,::4121. ..../mi,,,,,...11•3$ loprii. .............. ...........„. ... . . . . —.N._ a:,;ifinkillit muir J4F11111 ........ . . ....... . . . . . . . .. . . . . . . . .. . -:-.::••••:-.......::1•::.:-.. . . . • • . . . . ei..4 111161ir 4)-411, ar . . . . ....... .. . ...... . . . . . . ...•...•. ....... . . • • . elfratilirli 1111 4Alliir . . .. ....... .. ....... .. ..-...-.• ••-...• • :.....1',.."....:•••::1.•1,•......:•.i.,:::-11.r...:::":1.,I.:1.--:.:.::::.......:......s.s.:"..1.1...::.....::::•..:1•.::.1.:.r .........:...„...„ ir ---7,10111, ......:........:...:::::::.::::::-...:.....,...-.......:: ailiViiii67-41 :',..::•1.11.::.'::.......:1.1:::..::...::::•••••:.:..::::::.*::::...;:.::::::•...:1::::::•••••••••::::::..1.:::::"...::..::::.••••..1....1•:..::::•.i....... 111111.4pt.N.:3.,„Ito Vr,.*:-..',- -''-'. -;•at:,-A, . •_ I'..,....X•Aila's,••:V - - -116111 11111 A,opn':•.,,, c..--•-•,-,•;,, /...,0%-4.,:cx• :,,i, ..' 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I Will Illi l 1 I 1 1 i ' ' I i 1 ___L.__ _ L -•:;:,--':. :•,,-", ,,-,i.-. :::., - -D 71 MM..•-,0,,,,,,,, -- . :•,: f..,,,,- __I;..) 1"--) ni 0 17 4 — 0 ._ -—• .•'-.; (;) 17/7A Proposed re-zoning area = Area within 200 of rezoning area(47.5 acres) Riftla Percent of property within 200'area(7.7 acres=16.3%) N • Affidavit of Robert James Hegeman I live adjacent to the land referred to in the rezoning proposal REZ08-00011 . I have attended the public hearings on REZ08-00011 . I have never received nor have I been made aware of any formal notice from or formal hearing conducted by the City of Iowa City pertaining to a property first described in a City Council packet on April 6, 2009 . Attached. Under penalty of perjury, I swear that the above statements are a true and complete account . Rob- t Ja' e- He i,eman 44 sop P . ce Iowa City, Io, . 52246 Sworn before e on the 10 Day of June, 2009, SARAH MOVES Notary. • Commission Number 752740 • Commuion Expires i17-/2r p •o SEAL1-1 , f l ini o 610 Affidavit of Robert James Hegeman In late April , 2009, I personally participated in and observed Larry Jewell complete a signed protest petition bearing the signatures of more than 20% of surrounding landowners to the property constituting the revised REZ08-00011 (first described in City Council packet on April 6, 2009, ) which he delivered to the city clerk on May 4 , 2009 . Under penalty of perjury, I swear that the above statements are a true and complete account . Iti/ Rob- : es egeman 44 •n Pla - Iowa y, Iow_ 52246 Sworn before me on the 10 Day of June, 2009, Notary. 18.1%.1 snwa+""ops Carman Nuroer Ts27 41 tcan,m uIuA 6N SEAL 5 7 z n ?1 Ni r m 3. f 7q X 4 D jr-D May 4, 2009 RE: Country Club Estates- SUB08-00010/REZ08-00011 TO: HONORABLE MAYOR AND CITY COUNCIL IOWA CITY, IOWA At the public hearing on March 10, 2009, I presented a petition signed by more than 20% of the surrounding property owner's against the above rezoning proposal, which should have forced a supra-majority vote. On the last day of the public hearing, the rezoning proposal was changed. The city then recalculated the area and concluded that our protest petition now only included 17.1%of the surrounding landowners. We protest this recalculation by the city. We were given notice of one rezoning proposal only to have it changed at the last minute, depriving the surrounding landowners of their rights conferred by Iowa Code 414.5. For purposes of the pending proposal before the Council, the city must use the original proposal as the basis for calculating what constitutes 20%of the surrounding landowners. Any other conclusion would make a sham out of the notice requirements of Iowa Code 414.4 (below) and 362.3. Our position is supported by Iowa Code 414.5, which requires separate notice and hearing requirements for all changes and amendments that come up in the rezoning process: "The provisions of section 414.4 relative to public hearings and official notice apply equally to all changes or amendments. " The current process has been a continuation of the original rezoning petition. There has been neither a separate notice nor a separate public hearing regarding the amended proposal. For the current matter before the council, the city must accept our original protest petition and retroactively enforce our rights to a supra-majority vote. If the city chooses to discontinue the current process and comply with 414.4 and 414.5 by giving new notice and scheduling a new public hearing on the amended rezoning proposal, then we hereby submit the enclosed petition that will also require a supra- majority vote in that eventuality. Sincerely, 'll Larry Jewell n-< 111 "The council of the city shall provide for the manner in which the regulations and __m 0 restrictions and the boundaries of the districts shall be determined, established, anI enforced and from time to time amended supplemented, or changed However, the".;i regulation, restriction, or boundary shall not become effective until after a public hearing at which parties in interest and citizens shall have an opportunity to be heard The notice of the time and place of the hearing shall be published as provided in section 362.3, except that at least seven days notice must be given and in no case shall the public hearing be held earlier than the next regularly scheduled city council meeting following the published notice." Iowa Code 414.4 , #5c Page 65 ITEM 5. PLANNING AND ZONING MATTERS. c) CONSIDER AN ORDINANCE CONDITIONALLY REZONING APPROXIMATELY.98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE- FAMILY INGLYFAMILY RESIDENTIAL(ID-RS)TO LOW DENSITY SINGLE- FAMILY RESIDENTIAL,40.13 ACRES FROM RURAL RESIDENTIAL(RR-1)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL(RS-5),AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL(OPD- 5).(REZ08-00011)(PASS AND ADOPT) Wil burn: Move adoption of the resolution. Bailey: Moved by Wilburn. O'Donnell: Second. Bailey: Seconded by O'Donnell. Discussion? You had comments? Hegeman: Thank you,Mayor Bailey,and Council Members. I have an issue of procedural fairness that I think seriously needs to be raised,and...and considered. Um... Bailey: Would you please state your name for the record? Hegeman: The power,oh,I'm sorry. My name is Robert Hegeman. I live at 44 Tucson Place. Urn,the ability of 20%of surrounding landowners to protest a rezoning position,uh,petition,enforce a super-majority vote of Council is a right. It's a right conferred by Iowa Code 414.5. And it is a right that is buttressed by certain notice requirements. What happens here...in late February and early March,the first public hearing was held I believe on March 10th. Um,at which we were told to prepare,uh,a protest petition for a large area,uh,of approximately 90 or however many acres. Through the hearing process,the...the proposal evolved. And at the very last hearing,I believe,uh,on was it April 20th,there was a conclusion that in fact there would be an outlot D that would not be rezoned. The public hearing then ended within about an hour,or half hour. In other words,our protests that we deserved notice for,that exceeded 20%of the surrounding landowners,urn,was properly filed on April...on March 10th at the beginning, and then when the procedure changed,and the area that was going to be rezoned ended at the very end of the meeting,of the public hearing,uh, it changed,and then the City recalculated our area and said that we had only 17.1%of the area, because this is a new area. Okay? Now that's a problem. In that half hour we would have had to get notarized signatures of the 20%, a near impossibility.-:So i as this process unfolded,our rights conferred by the Iowa Code have been ii J 0 r� Ci N This represents only a reasonably accurate transcription of the Iowa City City Conniff; 0 regular formal meeting of May 5,2009. 3- - D #5c Page 66 / effect,uh...uh,defeated,and they were defeated in such a way that we could not possibly comply with. Okay? Um,I find this unfair. I hope that you find it unfair,but however we feel about it,we have to go back to the Iowa Code. The rezoning proposal was changed,a large outlot D was created in which there was not to be rezoning. In other words,our notice that we received before the public hearing began was for something very different than is being voted on tonight. Now,what does the Iowa Code say about this. Well,the provisions of Section 414,the Notice Provisions,relative to pubic hearings and official notice,apply equally to all changes or amendments. What are those requirements? And we go to 414,here,the last...the last sentence. The notice of time and place of the hearing shall be published as provided in Section 362.3,except that at least seven days notice must be given,and in no case shall a public hearing be held earlier than the next regularly scheduled City Council meeting,following the published notice. In other words,we had notice that this was changing in the last hour of the public hearing. And it was a public hearing really about something different than the public hearing that started it. We had no chance to meet the requirements,and we had certainly no notice,and certainly not the seven-day notice required. So when the City recalculated our rezoning protest,okay,they basically said,okay,you're told one thing but in fact another thing turned out. What was 20%and should have required a super-majority vote is now 17.1%and that was(mumbled)after the end of the public hearings. No possibility of meeting those. So,I find that unfair. Okay? And I hope that you do. Um,but most importantly,uh,there is no way that when you project one thing,and then it evolves into something quite differently you should go back and recalculate things and undercut people's rights inferred by the Iowa Code. And that's what's happened here. And I think it's an important right,and it must be protected. I hope that you will protect our rights inferred by the Iowa Code,and I will hope that you would protect our notice requirements. We had notice at the final hour of the fmal public hearing. No way could we comply. The City,uh,the State Code requires at least seven days. What should have properly have happened is the original hearing been closed,okay? The proposals shut down,and a new hearing started with the new notice. Um,but we do insist that the calculation,based on the original notice,be based on the original proposal as it was set up,that we should have had to comply with. We did meet that,and there should have been a super-majority vote in this process. These are rights that I think you should insist upon,and I think we will insist upon. Thank you. Bailey: Thank you. Hegeman: I would accept any questions. Thank you. 3 c1 r Correia: I have a question for Eleanor, or for anybody who remembers... > - 0"' Bailey: All.right. t' "' t a m Correia: We kept the public hearing open for over three meetings, is that correct? Q This represents only a reasonably accurate transcription of the Iowa City City Council regular formal meeting of May 5,2009. rn i /ed Cer1/.4 nT 1 9 C N/ th4V Robert James Hegeman, Plaintiff ) EQCV070796 vs. ) The City of Iowa City and the ) City Council of Iowa City, ) 11).i 04-9 J , I Defendants ) CERTIFICATE OF SERVICE (PRIVATE) I certify that PLAINTIFF' S Statement of Undisputed Facts in Support of Petition for a Writ of Certiorari was served upon the City of Iowa City and the City Council of Iowa City in the cause of action Hegeman v. The City of Iowa City and the City Council of Iowa City, by depositing the file stamped copies in the US mail postage prepaid on June 10, 2009, addressed to the City of Iowa City and the City Council of Iowa City, Office of the Clerk of Iowa City, 410 East Washington Street, Iowa City, Iowa 52240. ' / - Q O Q w N vf- >-U g* C 1-1--"/ a �DiAm C In the District Court for Johnson County FILED 12 AM 10: 14 Paintiff' s Statement of Undisputed Facts`-ITY CLERK CITY. IOWA In support of Petition for Writ of Certiorari Robert James Hegeman, Plaintiff ) EQCV070796 v s. ) pV The City of Iowa City and the ) °. yi k. City Council of Iowa City, ) V.)1 Defendants ) Plaintiff states: Count 1 1 . On February 17, 2009, the city council of Iowa City passed a motion to schedule a public hearing and provide statutory notice on an approximately 82 acre tract in southwest Iowa City, REZ08-00011. Attachment 1: Voting Results, 2/24/09, p 7 . 1 2 . During the hearing on March 10, 2009, Larry Jewell delivered a notarized protest petition to the city council containing the signatures of more than 20% of landowners within 200 feet of REZ08-00011. Attachments 2, 3, 4 . (Original petition in defendant' s possession. ) 3. The City Council voted 5-2 in favor of REZ08-00011 on ' All council attachments available by date, page, at http: //www. icgov.org/default/apps/council/agendas. asp. 1 April 6, April 20 and May 5, 2009, short of the 75% margin required by Iowa Code 414 . 5. Attachment 5, 6, 7, Voting Results. 4 . Construction on REZ08-00011 has commenced on or about June 1, 2009. Attachment 8, affadavit. Count 2 0 73 m 5 . Count 2 incorporates facts 1-4 above. — �; rn 6. On March 24,2 two weeks after plaintiff' s protest 0 petition was filed, city planners discussed the possibility - - of changing REZ08-00011 by creating an outlot D, but no action was taken and the March 24 hearing was continued. Attachment 9, 10; Minutes & Voting Results respectively. 7 . The first written public description of the change to REZ08-00011 occurred in the Council Packet distributed on the last day of the hearing, April 6, 2009. Attachment 11 . 8 . Prior to April 6, the description of REZ08-00011 was always the same. Compare descriptions on February 24, March 10, and March 24 . Attachments 1, 12, 10. 8 . The changes to REZ08-00011 confirmed on the last day of the public hearing did the following: The area being rezoned from Interim Development Single- Family Residential to Low Density Single Family Residential decreased from 18 . 58 acres to 0. 98 acres. The area being rezoned from Rural Residential to Low 2 All dates are 2009. 2 Density Single Family Residential decreased 44 .29 acres was reduced to 40. 13 acres. The area being rezoned from Low Density Single Family Residential to Planned Development Overlay Low Density Single Family Residential decreased from 79. 27 acres to 60 . 28 acres . Compare Attachments 1, 12, 10 with attachment 11 . 7 . In describing the potential change to REZ08-00011 on March 24th, City Planner Miklo admitted: "We believe this would need to go back to the Planning and Zoning Commission because the, this is a fairly significant change from...what they reviewed. " Attachment 9, bottom page 7, Minutes . 8 . On April 6 within an hour after Planner Davidson confirmed that REZ08-00011 would be changed, Mayor Bailey closed the public hearing. Attachments 13, 5. 10. The changes made to REZ08-00011 on April 10 were later used to invalidate plaintiff' s protest petition filed 4 weeks earlier by disqualifying many landowners adjacent to the original REZ08-00011 . Attachment 14 . v `4. "T1 o -- — 11 . There was never a formal notice for rezoning the -710N r-- revised smaller 60 acre tract. Attachment 15, affidavit-<in 12 . There was never a separate public hearing on rezoning Ln the revised smaller 60 acre tract. Attachment 15, affidavit. 13. Within seven days after being notified that the original protest petition delivered March 10 was rejected, Plaintiff and surrounding landowners executed a second protest petition covering more that 20% of the new 60 acre tract, which the city rejected because the public hearing had been closed. Attachment 16, affidavit, Original in 3 defendant' s possession. 14 . The plaintiff and others objected to (1) the city' s rejection of the first protest petition, and (2) the city' s failure to provide a new notice and hearing on the revised 60 acre parcel . Attachment 17, 18 . 15. The City Council voted 5-2 in favor of REZ08-00011 on April 6, April 20 and May 5, 2009. Attachments 5, 6, 7 . Rob: J. H eman 44 T. :on Place Iowa City, Iowa 52246 Roberthegeman@mchsi . com 391-338-5818 319-530-0553 (cell) 319-668-2491 (fax) Original filed Copies served by US Mail on June 10, 2009 to the defendants by US Mail addressed to the Office of the City Clerk of Iowa City, 410 East Washington Street, Iowa City, Iowa 52240 Copy served by US Mail on June 10, 2009 addressed to S&J Development LLC, 2231 East 45th St, Davenport, Iowa 52807 563-332-2123. Q rn U� U, 4 February 24,2009 City of Iowa City Page 7 END OF CONSENT CALENDAR. Approved, 7/0 ITEM 4. COMMUNITY COMMENT IT e e • - . NTIL 8 PM] Community Co u- wi be continued, if necessary, prior to "City •i • it Information" item. ITEM 5. PLANNING AND ZONING MATTERS. (Item's "a,b,c" will proceed as outlined in the City Attorney's memo of 2/28/07 entitled "Rezonings, Due Process and Ex parte communications.") a) CONSIDER A MOTION SETTING A PUBLIC HEARING FOR MARCH 10 ON AN ORDINANCE REZONING 18.58-ACRES OF LAND LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE FAMILY RESIDENTIAL (RS-5), 44.29 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE FAMILY RESIDENTIAL (RS-5), AND 82.3 ACRES FROM LOW DENSITY SINGLE FAMILY RESIDENTIAL(RS-5) TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE FAMILY RESIDENTIAL (OPD-5)(REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Staff recommended approval in a report dated January 15. Approval will allow the development of Country Club Estates, Parts 3-8, a 170-lot, 82.3 acre single-family residential subdivision located on the north side of Rohret Road east of Slothower Road. Action: Set, 7/0 b) REZO ` • - .*7 - ACRES OF LAND LOCATED NORTHWEST OF INTERSECTION 0 • • • a = - • • •M LOW DENSITY SINGLE FAMILY ( RS-5 ) ZONE TO PLANNED DEVELOPMENT OVERLAY, MEDIUM DENSITY SINGLE FAMILY (OPD-8) ZONE. (REZ08-00012) Comment: At its January 15 meeting, by a vote of 6-0 (Koppes absent), the Planning and Zoning Commission recommended approval of this rezoning. Staff recommended approval in a report dated January 15. Approval will allow development of Hickory Pointe, a 3-lot residential subdivision with 18 townhouse-style dwelling units. 1_ PUBLIC HEARING Action: Closed #6 Page 17 (Q.-) and they can't be developed,but yet they want to include that sensitive area in...in the individual plat,uh,the lots...each lot there. So basically you're further causing problems for the watershed. You're reducing the, uh,the effective transition and essentially we feel that it doesn't meet the Southwest District Plan. Um, let's see... Bailey: Mr.Jewell,could you...conclude your remarks please? Jewell: Sure. Absolutely(both talking) Bailey: ...of the time. Jewell: Okay, so basically in conclusion,uh,I believe that I mentioned the majority of the neighbors are not opposed to the change. We actually are trying to embrace the change process. We're participating from all the planning meetings. Um,what we would like to request is,um,to ask the City Council to deny this current request for rezoning and the,uh, corresponding development proposal,um,based on the concerns raised in the packet,the concerns expressed here tonight,um,we'd also ask that the City Council refuse to consider any further develo• i I • • •.• .Is until the developer actually sits • • . • o ows the good neighbor policy . meets ' ' -• - ? ••rs,takes into consideration the concerns,and uh, •••r with us as we requested multiple times. Urn,with that in mind,I have a petition signed by the majority of the homeowners,uh,impacted by this,that I would like to present tonight to the Council,um,with our concerns summarized as part of this meeting. Bailey: Thank you. And the City Attorney can take that petition. Thank you. Jewell: Thank you. Bailey: Others wishing to comment? Tokuhisa: Good evening,uh,Mayor Bailey,Members of the City Council. I'm Dave Tokuhisa. I live at 3305 Rohret Road SW. Uh,members of our family have been living,uh, in Iowa City for almost 25 years now. Uh, it's a community we really enjoy. Uh,we like the mixture of,uh,rural Iowa, a little bit of urbaness,but not too much,and uh,all the amenities offered by the,uh,Big Ten university. Uh,this is a cross-section. The lateral dimension is drawn to scale. It shows,uh, in the,uh,upper left hand side, the lower drawing there is a 66-foot right-of-way. On either side of the roadway are,uh,drainage ditches,and on the south side,uh,we have existing trees. Uh,in that section of Rohret Road there are a lot of old— evergreens,oak trees,walnuts,apples,and uh,they serve a number ofr� .) purposes. They provide an excellent barrier to the winter winds that come out of the north, uh,keep the area cool,uh,keep the bicyclists on Rohiet; =c= This represents only a reasonably accurate transcription of the special formal 8o City City Council meeting of March 10,2009. Complete Description March 10, 2009 ( 3_) Page 2 CITY AND MIDWESTONE BANK, IOWA CITY, IOWA FOR PROPERTY LOCATED AT 1552 DICKENSON LANE, IOWA CITY, IOWA. Correspondence: JCCOG Traffic Engineering Planner regarding Installation of PARALLEL PARKING ONLY signs on the north side of B jaysville Lane east of Dubuque Street and NO PARKING CORNER TO HERE signs at the intersection of B'jaysville Lane and the private driveway on the north side of the road; Charlotte Walker regarding Senior Center holidays [staff response included]; Gary Fairmont Filosa II regarding Street repair on Van Buren; Peter Ziegenhorn regarding Wal-Mart; Caitlin Lombardo regarding Landfill [staff response included]; School closing letters from David Gurwell, Marshall Poe and Julianna Tymoczko, David VVieseneck; Jonathan Kimmel regarding Litter; Mike Barker regarding Hilltop Mobile Park and Shelter House; Elias Zaharias regarding No Child Left Behind fallacies; Local Option Sales Tax letters from Chris Arch [staff response included], Peter Cram; Bob Saunders regarding Homeless Village on S. Riverside Drive. Affirmative roll call vote unanimous, 7/0, all Council Members present. The Mayor declared the motion carried. A public hearing was held on an ordinance conditionally rezoning approximately 18.58 acres of property located north of Rohret Road from Interim Development Single-Family Residential (ID-RS) to Low Density Single-Family Residential, 44.29 acres from Rural Residential (RR-1) to Low Density Single-Family Residential (RS-5) and 79.27 acres from Low Density Single-Family Residential to Planned Development Overlay Low Density Single-Family Residential (OPD-5) (REZ08-00011) (Country Club Estates, Parts 3-8). The Mayor requested the Council Members disclose ex parte communications. Individual Council Members shared communications, and expressed their views. The following individuals appeared: Robert Hegeman, 44 Tucson Place; Larry Jewell, 53 Tucson Place; Dave Tokuhisa, 3305 Rohret Rd. SW; Kolleen Shields, 3335 Rohret Rd. SW; Diana Thrift, 3329 Rohret Rd. SW; Dev. Brian Speer, S & J Development; Chester Schulte, 1812 Rohret Court; Ron Amelon, MMS Consultants; Sarah Jewell, 53 Tucson Place; Judy Tokuhisa, 3305 Rohret Rd. SW; PCD Dir. Davidson and Sr. Planner Miklo present for discussion. Moved by Wilburn, seconded by Wright, to acce.t correspondence from Larry & Sarah Jewel (2), Gordon Dyer, Raj and Re.- . okuhisa (3), Amanda, Adam & Jason Rohrer (2), Nancy Hitchon, Chester Sch udy and Dave Tokuhisa (3), Larry Jewell (2), Adam, A. Brittany & Jason Rohrer, and notarized ' petitions submitted by Larry Jewell. Moved by Wilbum, seconded by Wright, to continue the public hearing to March 24. The Mayor declared the motion carried unanimously, 7/0, all o unci) Members present._ —ivt v6y Champion, seconded by Wilburn, to defer to March 24 the first vote of ordinance conditionally rezoning approximately 18.58 acres of property located north of Rohret Road from Interim Development Single-Family Residential (ID-RS) to Low Density Single- Family Residential, 44.29 acres from Rural Residential (RR-1) to Low Density Single-Family Residential (RS-5) and 79.27 acres from Low Density Single-Family Residential to Planned Development Overlay Low Density Single-Family Residential (OPD-5) (REZ08-00011) (Country Club Estates, Parts 3-8). The Mayor declared the motion carried unanimously, 7/0, all Council Members present. Moved by Wilburn, seconded by Champion, that the rule requiring ordinances to be considered and voted on for final passage at two Council meetings prior to the meeting at 11 -<r- 1`J /1 /, 4i1 -6) Affidavit of Robert James Hegeman • On March 10, 2009, at the public hearing on REZ08-00011, I personally witnessed Larry Jewell deliver a signed protest petition bearing the signatures of surrounding landowners to a city official at the public hearing on the above proposal . I further swear that the allegations, statements, assertions contained in the petition for a writ of certiorari filed on June 3, 2009, are true and complete to the best of my knowledge . Under penalty of perjury, I swear that the above statements are a true and complete account . AO . )) lor i '> Robell! . es Hegeman 44 r Pl : ce Iow. y, lwa 52246 Sworn before me on the 3 Day of June, 2009, l 4d/161_, 7/ ate _ *c) cr _i 2- ii SANDRA K.MOSSMAN Notary. Commission Number 194178 -a n N 1 • • My Co fission Expires '‹r- n 'ow t-5'-alOic, _ri1 > oX 3 0 0 SEAL > _ 5)April 6,2009 City of Iowa City Page 5 _ b) CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. At their March 30 informal meeting, it was the sense of the Planning and Zoning Commission that there is no need for a joint meeting if the Council decides to retain ID-RS and RR-1 zoning on Outlot D (The Commission will formally vote on the question at their April 2 meeting). Staff memorandum included in Council packet. 1. PUBLIC HEARING (CONTINUED FROM 3/10 AND 3/24) Action: Closed 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) (DEFERRED FROM 3/10 AND 3/24) Action: First consideration, 5/2, Wright and Correia voting "no" -74 11 -10 N F I i 1 ram m7 April 20,2009 City of Iowa City Page 8 6 b) CONSIDER A MOTION SETTING A PUBLIC HEARING FOR MAY 5 ON AN ORDINANCE AMENDING TITLE 14,ZONING, ESTABLISHING DEFINITIONS AND A USE CLASSIFICATION PROCEDURE FOR DRINKING ESTABLISHMENTS AND ALCOHOL SALES-ORIENTED RETAIL USES AND ESTABLISHING MINIMUM SPACING REQUIREMENTS FOR SAID USES. Comment: It is anticipated the Planning and Zoning Commission will make a recommendation regarding this ordinance at its April 16 meeting. Staff recommended approval in a report dated March 5. Approval will establish a minimum separation requirement between bars in all commercial zones that allow these uses and a minimum separation requirement in the Central Business Zones between retail establishments, such as liquor stores that sell a significant amount of alcoholic beverages for off-site consumption. The setting of this public hearing will impose a 60-day moratorium on the establishment of land uses that would be contrary to the proposed ordinance. Staff memorandum included in Council packet. Action: Set, 7/0 c) CONSIDER AN ORDINANCE CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08- 00011)(SECOND CONSIDERATION) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Correspondence included in Council packet. Action: Second consideration, 5/2, Correia and Wright voting "no" ') J 9n ='> "71 ==sem N 111 _m May 5,2009 City of Iowa City Page b) AMENDING TITLE 14, ZONING, ESTABLISHING DEFINITIONS AND A USE CLASSIFICATION PROCEDURE FOR DRINKING ESTABLISHMENTS AND ALCOHOL SALES-ORIENTED RETAIL USES AND ESTABLISHING MINIMUM SPACING REQUIREMENTS FOR DRINKING ESTABLISHMENTS THROUGHOUT THE CITY AND FOR ALCOHOL-SALES ORIENTED RETAIL USES IN THE CENTRAL BUSINESS SERVICE (CB-2), CENTRAL BUSINESS SUPPORT (CB-5),AND CENTRAL BUSINESS (CB-10)ZONES. Comment: At its April 16 meeting by a vote of 6-0 (Pluhutnik absent), the Planning and Zoning Commission recommended approval. Staff recommended approval in a report dated March 5. Approval will establish a minimum separation requirement between bars in all commercial zones that allow these uses and a minimum separation requirement in the Central Business Zones between retail establishments, such as liquor stores, that receive a significant amount (25% or more) of their gross income from the sale of alcohol and alcoholic beverages. Correspondence included in Council packet. 1. PUBLIC HEARING Action: Closed 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) Action: First consideration, 5/2, O'Donnell and Hayek voting "no" c) CONSIDER AN ORDINANCE CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08- 00011)(PASS AND ADOPT) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Correspondence included in Council packet. Action: Adopted, 5/2, Wright and Correia, voting "no" t.? O n 1 :ti C) N.) M 7 fi Affidavit of Robert James Hegeman I live adjacent to the land referred to in the rezoning proposal REZ08-00011 . On that property, I have personally observed surveyors marking the property and heavy earth moving equipment grading and leveling the land beginning on or about June 1 , 2009 . Under penalty of perjury, I swear that the above statements are a true and complete account . 01 - Rober J. $ - s H-geman 44 T cso- Plac- Iowa ' y, Iow. 52246 Sworn befor- me on the 10 Day of June, 2009, , 1"11 Notary. • � 1� ►-;i'�+,�,. ,. I SEAL commisSARAH MOYES My commission EE '40 21i0 rn b ' #4b Page 5 ITEM 4. PLANNING AND ZONING MATTERS. b. CONDITIONALLY REZONING APPROXIMATELY 18.58 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE- FAMILY RESIDENTIAL(ID-RS)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL,44.29 ACRES FROM RURAL RESIDENTIAL(RR-1)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL(RS-5)AND 79.27 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL(OPD-5). (REZ08-00011) 1. PUBLIC HEARING(CONTINUED FROM 3/10) Bailey: This is a public hearing(bangs gavel)continued from March I Oth. Davidson: Good evening,Madame Mayor and Members of Council. At your last meeting,we discussed the proposed rezoning of Country Club Estates, and had, uh, a good discussion and a lot of uh, good public input. At the conclusion of that meeting, uh,you deferred action and asked us to address a couple of things specifically which we're...Bob Miklo and I, Senior Planner Bob Miklo and I are going to address with you this evening,and those items were specifically the location of Rohret Road, and the impact...and importantly the impacts on mature trees on the south side of the road,when that is reconstructed, and secondly then,the notion of clustering some density,having some multiple,uh,type dwelling units in the south portion of the subdivision,uh,which would then give the opportunity to create some open space. There was one,uh,person who, uh,provided comment indicating that the proposed outlot B. This is the plat you saw last week,and the proposed outlot B here,that it was too far removed from the south portion of the subdivision,and that there needed to be,uh,there needed to be...uh, some open space down in this area, uh, for the persons who live in this...in this area of the subdivision. Uh,we have addressed that with the subdivider. You will recall that outlot B,uh, recommendation from City staff,as well as the Planning and Zoning Commission, was to accept that as the open space,required open space, dedication for the subdivision. So,uh,Bob will get into the details of...of that in just a moment. Uh, I did want to point out to you that you will recall that...that we had the issue of the double-fronting lots,here along Slothower Road, uh,maybe if I use the mouse that will quit doing that. (noise on mic) I guess not. In this area here,these lots as proposed were, uh,double-fronting with,uh, Sloth...Slothower Road,which is a, uh, official public right-of-way,although it is not currently passable, um,what we had indicated to the subdivider was...the developer,was that they `'L - needed to take action to get that vacated, uh, in order to not have those be This represents only a reasonably accurate transcription of the special formal Iowa City City Council meeting of March 24,2009. DJ` c3 • #4b Page 6 double-front' _ at has not been able to occur...timely with your cons'. - : ion of this, so there's been a revised plat,uh, filed,which you -e here,uh,and obviously you can see that the last two additions have been taken out and created as outlot D,so there are now four outlots in addition to outlots A and C,uh,which were in environmentally sensitive areas and outlot B,which is the proposed open space dedication. We now have outlot D,which is the large area you see,and Bob will provide,uh, our recommendation on...on how outlot D should be handled,um,with your consideration of the subdivision. So,with that,I will let Bob go into the details of the information that you asked for at the last meetin. Miklo: Regan ing, ,clustering,uh,in the...in the subdivision. We did,uh,look at,uh,previous concept plans for the area and as I mentioned at the last meeting,the applicant at one time had submitted a concept plan showing clustered town houses along Rohret Road,uh,this street design is pretty much the same as the plat that's before you,but it included townhouses, urn, some of the townhouses here would have frontage onto one of the new streets. The other townhouses would have courtyards to provide pedestrian access and then rear lanes or alleys in the back to provide vehicle access,but there would be no streets in front of the units. When we reviewed this plan,we told the applicant that we felt it really wasn't compatible with the neighborhood. That it was too dense and did not provide enough open space. Um,we did look at the,uh,the Southwest District Plan that...that does indicate that some clustering of townhouses or condominiums,uh,might be appropriate along Rohret Road, if it's done in a manner that was compatible with the neighborhood and as we indicated,we didn't feel that this was,but there might be a design that would be. Uh, further,the Comprehensive Plan would support some clustering in this area,um,it's,uh, supports diversity of housing,uh, throughout our neighborhoods. It...if you look at the area west of 218, there are approximately 475 single-family housing units in this area. There are only three attached houses,or housing,urn,developments here. Twelve units in three buildings, uh,to 218 and Rohret Road,so,uh, obviously this area does not have a lot of diversity in housing. So the Comprehensive Plan would support some clustering. So with that in mind,we did take the,uh,applicant's previous plan and their...their current plan,which shows all single-family in the area. Um,and looked at how clustering might...might occur. Uh,the streets basically did not change in this plan,although what we did do is we took the 27 single- family housing units in this area and clustered them,and took 38 housing units, similar to the applicant's previous design over here. So there'd be a net gain of ten housing units,um, however,there would be three acres of open space,um,so if you compare that...we're looking at the previous subdivision design. We're looking at this area in here. So again,we're basically clustering these units over to this area, and creating an open 5 space. Urn,now this isn't the only way that clustering could be done,lila") , m This represents only a reasonably accurate transcription of the special formalIts ry City City Council meeting of March 24,2009. ' m �. *; tri D #4b Page 7 (5-0 just for discussion purposes,we put this down and...and shared it with the applicant. Uh,one,uh,the benefits of this plan is, it does,uh,provide for room to shift Rohret Road if that's determined to be necessary. Um, and it also provides,um,some open space across,uh,several of the existing,uh, housing units that are currently in the County. Uh, so rather than a view of the subdivision,they would have some open space. Urn,this type of design has been used very successfully in other subdivisions,such as Windsor Ridge. A similar plan is currently being built in the Cardinal Pointe subdivision,off of Camp Cardinal Boulevard. Uh,there may be other ways,uh,to do,uh,a clustering in this area,um,we did meet with Brian Spear,the applicant,uh,to discuss this,and he did indicate that he would consider,uh,putting some open space in this area. Um,if,uh,that would entail moving some of the required open space from the northern part of the subdivision down...down here. Uh,that would...that would make this public open space versus private open space,which is another possibility. Uh,that sort of change would need to go back to the Parks and Recreation,uh,Commission to accomplish that. Urn,also as...as I noted,this concept plan or variation of this would allow Rohret Road to be shifted farther to the north,if that was determined necessary,and you do have a,uh,memo from the City Engineer,uh,regarding Rohret Road in relationship to the trees on the south side of the road. Ron Knoche is here to, if you have any questions regarding the specifics of that. Urn,at this point,the applicant still is requesting rezoning,uh,the area with outlot D, uh,to RS-5,and then the OPD. . , is e remainder of the subdivision P: i . .1 • •. Uh, staff,we would recommend retaining the, , '.`- and the IDRS zoning on...on outlot D,and this would preserve the City's ability to address Rohret Road situation,uh,to consider alternatives for open space,and possibly clustering,and...and also Slothower Road,um,the rezoning for the remainder of the subdivision, uh,Parts 3 through 6,urn,could be approved,uh,but at this point,we believe this would need to go back to the Planning and Zoning Commission because the,this is a fairly significant change from...from what they reviewed. Urn,be happy to try to answer any questions. Hayek: With respect to,uh,Rohret Road and...and having the option in the event of green space and that one section of moving the road, it seems to me that's in the middle of a fairly straight stretch of road and...and what advantage is there to having only a portion of it available to move north? Miklo: That's a good question for...for Ron(laughter) Knoche: I don't think that we would shift the road just in that portion. We'd look at shifting it along the whole frontage. So,um,the idea with, uh,not rezoning the portion,we would be able to look at getting additional rig - ^` of-way at that time,when that rezoning would come before us. ; a --I c) ,.. This represents only a reasonably accurate transcription of the special formal I City City Council meeting of March 24,2009. o • #4b Page 8 /0\--) Hayek: Oh, I see,because you're talking about the entire southern boundary of outlot D,to take up all at once. All right. Would there be an impact to the single-family,uh,platted,uh,lot? They don't appear there, but they were in the original application. I assume those would have to be squeezed down. Knoche: There'd be the potential...if...if that original planner had come in,there would be the potential of having to squeeze those down,that's correct. Hayek: Okay. But the idea is that in the green space area,the impact is(both talking) Knoche: It would be minimal,that's correct. Champion: Ron,how wide is the road? Do roads have to be that wide? Knoche: The...the proposed road would match the existing width of Rohret Road to the east,which is 34-foot wide. But there would be the potential of...of,we'd have to look and see what our...what the growth potential is to the west of this,to see if we would,you know,need to maintain the 34- foot or...or the potential of narrowing down,urn,but the issue of...of the trees along the south side still comes down to the fact that we would grade out the rural cross-section that's there,so the ditches that are there,up to the right of the line,would have to be filled in, so there would have to be some fill placed up along that,the right-of-way line anyways,urn,you know,so the potential of impacting the trees would be there,regardless if the road is,you know - - ;- ,• . •I e. in 5 rem: Just so I'm clear,we're not considering this...tonight,this plan. We're considering the original,which is in our packet from two weeks ago,the original. Miklo: Well,the...the applicant has agreed to take outlot D out, so this, uh,urn, as I said,you would...we would suggest that you not rezone this,but even if you did decide to rezone this to RS-5,this probably should go back to the Planning and Zoning Commission for them to(both talking) Correia: The consideration for rezoning of the... Miklo: We're very comfortable recommending the rezoning to RS-5 in the 0 planned development, for the remainder of the development. `T1 Correia: And that's based on Planning and Zoning Commission... c7 rr. s�. r— lad Miklo: Right,and...and the fact that Slothower Road is not a factor in that. 5;0 =� 0 We've been discussing with the applicant for a number of years the x �? This represents only a reasonably accurate transcription of the special formal Iowa City City Council meeting of March 24,2009. • #4b Page 9 0—) vacation of Slothower Road and just has not been able to accomplish that, and uh,we thought...when we were reviewing this at the staff level and at Planning and Zoning that that was on...on track, and apparently it's not. An other I uestio • is- Wright: Just a...one and...if we go ahead and take out, remove outlot D and a some point have some green space inserted there,perhaps the three acres as discussed here in some form, uh,outlot B would be reduced by about how much?Miklo: Well,the...the neighborhood open space ordinance requires for all of Country Club Estates, including Parts 1 and 2, I believe it's 2.5 acres approximately of...of open space. This is actually more than that, and it's because of just the way it's located. It wasn't possible just to create an isolated two acres. In order to give it some street access it came down, so I think this may be over three acres. Wright: It looks like it's over four. I just can't...the print's too little. (laughter) So that...it might come down to the...somewhere around the standard minimum. Miklo: Yeah,we would have to review that with the Parks and Rec Commission. Hayek: As I understand it,the applicant is willing to shift green space to the south, but wants a reduction up north. Miklo: Right. Hayek: How do you approve the up north portion,which would include that outlot and green space, and then save for another day the southerly green space (mumbled) Miklo: That we probably should revisit with Parks and Rec Commission because this would be...then become subject to some sort of subdivision design, which would include housing units. Um, so that possibly could be approved as an outlot for open space,or future development, until we have that question a. . • - . DiI, -.: If you want to make the changes that Bob is...is discussing, you're going to have to continue the public hearing tonight,and defer the first consideration,to...to give,um, Planning and Zoning a chance to decide whether they want to have a consult with you. Um, so you're not going to act on it tonight, either way. Champion: Well,we could act on the original plotting, if we wanted to. This represents only a reasonably accurate transcription of the special formal Iowa- City City Council meeting of March 24,2009. to #4b Page 10 (9) iklo: (mumbled)you couldn't because it shows...um,these lots over here and part...our recommendation and Planning and Zoning was not to approve subdivision in this area until Slothower Road was resolved. Because if you did approve this,we'd end up with double fronting lots,a fairly poor subdivision design,uh,that doesn't meet our subdivision codes. Uh,the reason we felt a fairly large area needs to be set aside is because if this is going to be redesigned,we need to know how that's going to be done,with Slothower Road being in place,because the applicant hasn't been able to come to terms with the County and the adjacent property owner on Slothower Road we really cannot resolve this until that. Dilkes: Well,I think...what,the question I was answering was that you could act on the original proposal with the original signed CZA. Miklo: Right. Dilkes: As I understand it. Miklo: Not the plat, but the zoning. I.Ikes: Right. Staff is not recommending that,but that would be within your...(mumbled) Bailey: Others wishing to comment at the public hearing? Jewell: Hi,my name is Larry Jewell and I live at 53 Tucson Place,uh,I had an opportunity to speak,uh, at the last Council meeting. I appreciate the opportunity to speak again tonight. Urn,I had requested a couple pictures (mumbled)and maybe Bob can help me pull those up,um,I wanted to expand on a couple of issues that I brought up, urn,at the last meeting. With these pictures here, um,basically what I wanted to talk about is the area...right here,um,this is my property,which is bordered on both sides by this new planned development. Currently there's a 100-foot buffer,urn, indicated as part of the,uh,wetland buffering area. However,with the current proposal,um,the proposal's to reduce that to 25-feet. Urn,the concerns that I raised,uh, last...at the last meeting was that this buffer not be reduced and the reasons,um,are...are a couple here. First off,we have the zoning code that talks about extensive lands and features and within the zoning code it states specifically that,uh,these policies should be,um, included or implemented as part of the Comprehensive Plan. And specifically it states that,urn,you know,we need to use reasonable,uh, um,issues or take reasonable precautions against environmentally sensitive features and natural sources...resources,while rezoning environmentally sensitive areas,protecting such resources from destruction. The concern that I raised is the issue of water. You can sed; -' -n with this aerial view that this is a natural stream corridor here. You've ArOf _ i;7 This represents only a reasonably accurate transcription of the special formal Ion? City City Council meeting of March 24,2009. c? March 24,2009 City of Iowa City Page 1 9 b) CONDITIONALLY REZONING APPROXIMATELY 18.58 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 44.29 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 79.27 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Staff recommended approval in a report dated January 15. Approval will allow the development of Country Club Estates, Parts 3-8, a 170-lot, 82.3 acre single-family residential subdivision located on the north side of Rohret Road east of Slothower Road. Staff memorandum and correspondence included in Council packet. 1. PUBLIC HEARING (CONTINUED FROM 3/10) Action: Continued to April 6, 7/0 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) (DEFERRED FROM 3/10) Action: Deferred to April 6, 7/0 ITEM 5. AMENDING THE FY2009 OPERATING BUDGET Comment: This public hearing is being held to receive comment on amending the FY2009 budget. Included in the March 12, 2009 information packet (IP#3) is supporting documentation that is also available at the Library, Finance Department and City Clerk's office. a) PUBLIC HEARING Action: Closed b) CONSIDER A RESOLUTION Action: Approved, 7/0 N rn 11 D _ V7 April 6,2009 City of Iowa City Page 5f b) CONDITIONALLY REZONING APPROXIMATELY .98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 40.13 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. At their March 30 informal meeting, it was the sense of the Planning and Zoning Commission that there is no need for a joint meeting if the Council decides to retain ID-RS and RR-1 zoning on Outlot D (The Commission will formally vote on the question at their April 2 meeting). Staff memorandum included in Council packet. 1. PUBLIC HEARING (CONTINUED FROM 3/10 AND 3/24) Action: 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) (DEFERRED FROM 3/10 AND 3/24) Action: 0 c7 r,, m A i� March 10,2009 City of Iowa City Page 4 / END OF CONSENT CALENDAR. Approved, 7/0 ITEM 5. COMMUNITY COMMENT (ITEMS NOT ON THE AGENDA). [UNTIL 8 PM] Community Comment will be continued, if necessary, prior to "City Council Information" item. ITEM 6. PLANNING AND ZONING MATTERS. (Item's "a, b," will proceed as outlined in the City Attorney's memo of 2/28/07 entitled "Rezonings, Due Process and Ex parte communications.") a) CONDITIONALLY REZONING APPROXIMATELY 18.58 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE-FAMILY RESIDENTIAL (ID-RS) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL, 44.29 ACRES FROM RURAL RESIDENTIAL (RR-1) TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL (RS-5) AND 79.27 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL (OPD-5). (REZ08-00011) Comment: At its February 5 meeting, by a vote of 5-1 (Eastham voting no, Payne absent), the Planning and Zoning Commission recommended approval of this rezoning subject to a Conditional Zoning Agreement addressing improvement of Rohret Road to City standards, a phasing plan for the subdivision, the vacation of the southern portion of Slothower Road, approval of the wetland permit and a plan for the long-term maintenance of the wetland by a home owners' association. Staff recommended approval in a report dated January 15. Approval will allow the development of Country Club Estates, Parts 3-8, a 170-lot, 82.3 acre single-family residential subdivision located on the north side of Rohret Road east of Slothower Road. Correspondence included in Council packet. 1. PUBLIC HEARING Action: Continued to March 24, 7/0 2. CONSIDER AN ORDINANCE (FIRST CONSIDERATION) Action: Deferred to March 24, 7/0 —r c7 N f N. m 11 - D _ #6 Page 7 ITEM 6. PLANNING AND ZONING MATTERS. b. CONDITIONALLY REZONING APPROXIMATELY.98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE- FAMILY RESIDENTIAL(ID-RS)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL,40.13 ACRES FROM RURAL RESIDENTIAL(RR-1)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL(RS-5)AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL(OPD-5). (REZ08-00011) 1. PUBLIC HEARING Bailey: This is a public hearing continued from 3/10 and 3/24(bangs gavel). Public hearing is open,and let's open this,let's disclose ex parte communication before we go into the... Champion: I did,talk to Wally P about what Planning and Zoning's decision was on talking to us,so...they don't want to. They approve of what we thought (mumbled) Bailey: Okay. Others? O'Donnell: I talked with Bob Miklo today,specifically about the buffer area. That's it. Bailey: Okay. Any other... Hayek: I talked to Legal staff about the southern area and exactly what had happened between the last time we talked about it and where things stand tonight. Bailey: Okay. Anybody else? . -• • ' • am/mg staff about the , i ° = . ea, as well. , , i e wetlands buffer area. Okay. Davidso'. This is the third meeting that we've,uh,had discussion on this item. Uh, there's not a whole lot new from the last meeting. Thgnif cant item since the last meeting is we do have a signed CZA,uh,that does reflect the new outTo't D,which you had described to you,urn,at the lasteem ting. You will reca at our motivation for moving outlet,ah,excuse me- outlot D-was that the developer had not been successful,uh,in getting, urn,the Slothower Road situation,uh,and the resulting double-fron _ lots,um,we...we had suggested that they work with the Co • o get hat . .ted^Thy weren't able to do so,so we arg_pr: .r mg,uh,with ca`" :- m This represents only a reasonably accurate transcription of the special format Iowa City City Council meeting of April 6,2009. O x a O. . • #6 Page 8 possibility in the future that...that,uh,that will be vacated,and...and subsequently taken care-of. Also,the...the plat could be redesigned to include Slothower Road staying. That'll be determined in the future, but the time being,we've created outlot D. Uh,the other significant thing that this allows is that you...you discussed at your last meeting,uh, somewhat extensively the notion of,um, multi-family development and offering some additional housing types from what was proposed by the developer, um,and also the possibility of some open space,additional open space, either in conjunction with that clustered housing,or as a...as something set aside. I think you'll recall the developer indicated that,uh,they might be amenable to,um,adding some open space,public open space down here,but only if it was subtracted off of outlot B,which is right now designated for,uh, 'ark t . e .. : ---. .i : . a ' : .• ed, uh,so. :• $ at was the developer's thoughts on that. What we are .$sing,the...the developer has requested RS-5 zoning for outlot D. Uh,and then of course OPDH-5 for...for parts 3 through 6,which is no change from your previous discussions. Uh,staffs recommendation for outlot D is to retain the current RR-1 and IDRS zoning,and basically force a rezoning in the future of outlot D. What that does is just give you w- , = • .. - . •xi$1over - g, epending on how you might condition the RS-5 zoning. Um,because the RR-1 and IDRS zoning would not allow the property to be developed,urn,without going through the rezoning process,what it does is it gives a future City Council,well,this City Council if it happens in the next eight months,or a future City Council,the ability to consider either the...the multi-family type units or the additional open space. That would occur during the rezoning process. If you were to rezone it RS-5 without any conditions, basically mandating those things,at that point then you have much less flexibility with the property and the developer would be able to come in with an RS-5,which is a single-family subdivision that meets our subdivision requirements and we would have very little ability to manipulate it any further,uh,there are rights once it is rezoned that...that the RS-5 would allow them to go ahead with a single-family development. So,that is our recommendation. Do you have any comments or questions before you continue your hearing? Bailey: Questions? Wilburn: Um,I like the possibility of being able to,uh,continue to try and work with,encourage,negotiate that because I think,uh, if I'm thinking of the right location in terms of open space or some multi-type unit,uh,the location that I'm thinking has some higher-end housing like this is out on the east side. I'm forgetting the name of it,uh, Windsor Ridge is,and that's kind of the prototype. O This represents only a reasonably accurate transcription of the special formal I A City City Council meeting of April 6,2009. 0 • #6 Page 13 (6), subdivision,uh, will that lot have to be adjusted if the roadway is moved 17 feet north in the future or would it not be better to do it now? Just • - I mg to consider. Uh, ladies and gentlemen,thank you v- • •• h. Bailey: Thank you. Anyone else wishing to comment? (bangs gavel) Public hearing is closed. --2._CONS ' • 'I I I ANCE Karr: Motion to accept correspondence. Champion: So moved. Correia: Second. Bailey: Moved by Champion, seconded by Correia. Discussion? All those in favor say aye. Motion carries. Wilburn: Uh, Jeff, a question. I was, oh, I'm sorry. Bailey: Will you move first consideration? Wilburn: Move, um, first consideration. Bailey: Okay, do I have a second? Wright: Second. Bailey: Moved by Wilburn, seconded by Wright. Discussion? Wilburn: Uh, Jeff,just refresh my memory about....I mean the terms about the quality of a wetland. That's Corps of Engineer stuff, urn... Davidson: Yeah, I...I apologize...all seven of you know I can't stand up here and speak as a wetland's expert. We do have a wetland expert on staff,Julie Tallman, who has reviewed this. I don't want to speak for her but...but it has been reviewed,and um,the...the issue of the quality of the wetlands and the compensatory mitigation has...has been reviewed by...by Julie, and she's asked us...she has not asked us to express any concerns to you regarding that. O Wilburn: Okay. Thank you. Bailey: Other discussion? :{ - r"- r- l i1 O 3 This represents only a reasonably accurate transcription of the special formal Iowa a City City Council meeting of April 6,2009. abs. I %/I l RHegeman From: "Christina Kuecker" <Christina-Kuecker@iowa-city.org> To: "ICJewells"<ICJewells@mchsi.com> Sent: Thursday, April 23, 2009 9:22 AM Attach: protest_CountryClubEst.pdf Subject: CC estates - rezoning protest Larry, We have calculated the percentage of protests within 200'of the proposed rezoning. This is done by creating a 200' buffer around the rezoning and calculating the area of the buffer. We then map out the properties that have submitted a protest petition. We total the areas of the portions of these properties that fall within the 200' buffer and this area is what is used to calculate the percentage. According to our calculations, this percentage is 16.3%. A map is attached. Please let me know if you have any other questions. Christina Kuecker Associate Planner City of Iowa City 410 E. Washington St. Iowa City, IA 52240 (319)356-5243 christina-kuecker@iowa-city.org O fo z n c_ C7-� --i C) N -<r It ' ri 0 C? 6/10/2009 • Property Owners Protesting Proposed Zoning change for Country Club Estates ..„,,:-.......::::: ::::n•,:: :g..::-:-.:::::::::::.::.::::::: :::.... • ::::.::::::............:::::....::::.::.:.,::::::::::.....:.:::::....::.::.:•.11../':::'''''''''''.:: :':::''''''''''''''''::: ..''11114.1w -----.11111111 -11'.'" Iiiiiiiir )vs ,..... :.:::.....-::'...:...:.:::::::::.:::..::..:::.:::::.......--:::.:::.:::::'..,..•::•.::::::::::.:::::::':.:::.....:.1...:.....::::i:•.:.:"........ ,,,,a,_,..„ mistwilik. jpw..11.1 11":"111.11:1W:malir 4-4*'7117,,,,..: mil —Air_ tio, ft, Minim Elk •4> NII*1'44 A 43* It.,OF!. ..44L11.14f1 . ‘11% .$ti..- .r6'*OS.... 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P...a * C75 > ---. 177Z1Proposed re-zoning area ... ..... •••::• •.--::•:-.•••••• Area within 200of rezoning area(47.5 acres) •:•::-..•: :,,, plrol Percent of property within 200'area(7.7 acres=16.3%) 0 61 /) Affidavit of Robert James Hegeman I live adjacent to the land referred to in the rezoning proposal REZ08-00011 . I have attended the public hearings on REZ08-00011 . I have never received nor have I been made aware of any formal notice from or formal hearing conducted by the City of Iowa City pertaining to a property first described in a City Council packet on April 6, 2009 . Attached. Under penalty of perjury, I swear that the above statements are a true and complete account . al Rob- t Jar e - He i,eman 44 T. so► P . ce o a Iowa City, Io, . 52246y2 --1O N rm.` <m 71 Sworn before e on the 10 Day of June, 2009, o � ' a ,t* SARAH MOYES 2 Commission Number 752740 Notary. • Ify_Commission Expires SEAL 6:) Affidavit of Robert James Hegeman In late April, 2009, I personally participated in and observed Larry Jewell complete a signed protest petition bearing the signatures of more than 20% of surrounding landowners to the property constituting the revised REZ08-00011 (first described in City Council packet on April 6, 2009, ) which he delivered to the city clerk on May 4 , 2009 . Under penalty of perjury, I swear that the above statements are a true and complete account . ,i) ig ...1-"--•----- Rob- : es egeman 44 •n Pla - Iowa y, Iow. 52246 Sworn before me on the 10 Day of June, 2009, ,,-------______---44. ___ , 3 Notary. tcoristillAH MOYES r) nNUrtiDer 7527:anmheion E�inr' rt S1 `71 ,! i. SEAL "p o- May 4, 2009 RE: Country Club Estates- SUB08-00010/REZ08-00011 TO: HONORABLE MAYOR AND CITY COUNCIL IOWA CITY, IOWA At the public hearing on March 10, 2009, I presented a petition signed by more than 20% of the surrounding property owner's against the above rezoning proposal, which should have forced a supra-majority vote. On the last day of the public hearing,the rezoning proposal was changed. The city then recalculated the area and concluded that our protest petition now only included 17.1%of the surrounding landowners. We protest this recalculation by the city. We were given notice of one rezoning proposal only to have it changed at the last minute, depriving the surrounding landowners of their rights conferred by Iowa Code 414.5. For purposes of the pending proposal before the Council, the city must use the original proposal as the basis for calculating what constitutes 20%of the surrounding landowners. Any other conclusion would make a sham out of the notice requirements of Iowa Code 414.4 (below) and 362.3. Our position is supported by Iowa Code 414.5, which requires separate notice and hearing requirements for all changes and amendments that come up in the rezoning process: "The provisions of section 414.4 relative to public hearings and official notice apply equally to all changes or amendments. " The current process has been a continuation of the original rezoning petition. There has been neither a separate notice nor a separate public hearing regarding the amended proposal. For the current matter before the council, the city must accept our original protest petition and retroactively enforce our rights to a supra-majority vote. If the city chooses to discontinue the current process and comply with 414.4 and 414.5 by giving new notice and scheduling a new public hearing on the amended rezoning Q proposal, then we hereby submit the enclosed petition that will also require a supra-; majority vote in that eventuality. Sincerely, -< r Larry Jewell %' c± "The council of the city shall provide for the manner in which the regulations and restrictions and the boundaries of the districts shall be determined, established, and enforced and from time to time amended, supplemented, or changed However, the regulation, restriction, or boundary shall not become effective until after a public hearing at which parties in interest and citizens shall have an opportunity to be heard The notice of the time and place of the hearing shall be published as provided in section 362.3, except that at least seven days notice must be given and in no case shall the public hearing be held earlier than the next regularly scheduled city council meeting;following the published notice. " Iowa Code 414.4 • #5c Page 65 ` ITEM 5. PLANNING AND ZONING MATTERS. c) CONSIDER AN ORDINANCE CONDITIONALLY REZONING APPROXIMATELY.98 ACRES OF PROPERTY LOCATED NORTH OF ROHRET ROAD FROM INTERIM DEVELOPMENT SINGLE- FAMILY RESIDENTIAL(ID-RS)TO LOW DENSITY SINGLE- FAMILY RESIDENTIAL,40.13 ACRES FROM RURAL RESIDENTIAL(RR-1)TO LOW DENSITY SINGLE-FAMILY RESIDENTIAL(RS-5),AND 60.28 ACRES FROM LOW DENSITY SINGLE-FAMILY RESIDENTIAL TO PLANNED DEVELOPMENT OVERLAY LOW DENSITY SINGLE-FAMILY RESIDENTIAL(OPD- 5).(REZ08-00011)(PASS AND ADOPT) Wilburn: Move adoption of the resolution. r•J o Bailey: Moved by Wilburn. _C; O'Donnell: Second. n — r-- Bailey: Seconded by O'Donnell. Discussion? You had comments? _a 37. j Hegeman: Thank you,Mayor Bailey,and Council Members. I have an issue of procedur)l — fairness that I think seriously needs to be raised,and...and considered. Urn... Bailey: Would you please state your name for the record? Hegeman: The power,oh,I'm sorry. My name is Robert Hegeman. I live at 44 Tucson Place. Urn,the ability of 20%of surrounding landowners to protest a rezoning position,uh,petition,enforce a super-majority vote of Council is a right. It's a right conferred by Iowa Code 414.5. And it is a right that is buttressed by certain notice requirements. What happens here...in late February and early March,the first public hearing was held I believe on March 10th. Um,at which we were told to prepare,uh,a protest petition for a large area,uh,of approximately 90 or however many acres. Through the hearing process,the...the proposal evolved. And at the very last hearing,I believe,uh,on was it April 20th,there was a conclusion that in fact there would be an outlot D that would not be rezoned. The public hearing then ended within about an hour,or half hour. In other words,our protests that we deserved notice for,that exceeded 20%of the surrounding landowners,um,was properly filed on April...on March 10th at the beginning, and then when the procedure changed,and the area that was going to be rezoned ended at the very end of the meeting,of the public hearing,uh, it changed,and then the City recalculated our area and said that we had only 17.1%of the area, because this is a new area. Okay? Now that's a problem. In that half hour,we would have had to get notarized signatures of the 20%,a near impossibility. So as this process unfolded,our rights conferred by the Iowa Code have been in This represents only a reasonably accurate transcription of the Iowa City City Council regular formal meeting of May 5,2009. #5c Page 66 effect,uh...uh,defeated,and they were defeated in such a way that we could not possibly comply with. Okay? Urn,I find this unfair. I hope that you find it unfair,but however we feel about it,we have to go back to the Iowa Code. The rezoning proposal was changed,a large outlot D was created in which there was not to be rezoning. In other words,our notice that we received before the public hearing began was for something very different than is being voted on tonight. Now,what does the Iowa Code say about this. Well,the provisions of Section 414,the Notice Provisions,relative to pubic hearings and official notice,apply equally to all changes or amendments. What are those requirements? And we go to 414,here,the last...the last sentence. The notice of time and place of the hearing shall be published as provided in Section 362.3,except that at least seven days notice must be given,and in no case shall a public hearing be held earlier than the next regularly scheduled City Council meeting,following the published notice. In other words,we had notice that this was changing in the last hour of the public hearing. And it was a public hearing really about something different than the public hearing that started it. We had no chance to meet the requirements,and we had certainly no notice,and certainly not the seven-day notice required. So when the City recalculated our rezoning protest,okay,they basically said,okay,you're told one thing but in fact another thing turned out. What was 20%and should have required a super-majority vote is now 17.1%and that was(mumbled)after the end of the public hearings. No possibility of meeting those. So,I find that unfair. Okay? And I hope that you do. Um,but most importantly,uh,there is no way that when you project one thing,and then it evolves into something quite differently you should go back and recalculate things and undercut people's rights inferred by the Iowa Code. And that's what's happened here. And I think it's an important right,and it must be protected. I hope that you will protect our rights inferred by the Iowa Code,and I will hope that you would protect our notice requirements. We had notice at the final hour of the fmal public hearing. No way could we comply. The City,uh,the State Code requires at least seven days. What should have properly have happened is the original hearing been closed,okay? The proposals shut down,and a new hearing started with the new notice. Um,but we do insist that the calculation,based on the original notice,be based on the original proposal as it was set up,that we should have had to comply with. We did meet that,and there should have been a super-majority vote in this process. These are rights that I think you should insist upon,and I think we will insist upon. Thank you. Bailey: Thank you. Hegeman: I would accept any questions. Thank you. �7 O Correia: I have a question for Eleanor,or for anybody who remembers... 1�' n Bailey: All right. N •1 Correia: We kept the public hearing open for over three meetings, is that correct? 0 This represents only a reasonably accurate transcription of the Iowa City City Council regular formal meeting of May 5,2009. END OF CASE FILE CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE • PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319) 356-6030 PLAINTIFF: FREEDOM SECURITY BANK Docket No 109-01603 j State IIOWA vs. Court No EQCV070507 J County JOHNSON DEFENDANT: SULA, FALANGA Ref No j Received 03/24/2009 J Requestor(s) Phone WILLIS,NANCY B (319) 337-9621 Name CITY OF IOWA CITY Party Type DEFENDANT Address 1410 E WASHINGTON ST IOWA CITY IA 152240- Phone (319)356-5030 E-Mail J Fax Employer Zone Comments Documents Document Serve by Date OE PSR Description/Special Instructions ORIGINAL NOTICE AND 1 I I Lt PETITION Service Information Attempts Log 3 ^ ((,j Date Time Server Notes Date 109 Time 1 3 �,O Type t( Q re- to C Cit- Party I'YlaA'a,, fcciwii Relationship �� - c...1k//c. Race �,/- Sex i' DOB Location `' 10 - i, sg /tp /j Miles ` Fee Officer �,I Notes: 4O 9 n _ - f n -; m N) Printed:Tuesday, March 24,2009 Page 1 of 1 IN THE DISTRICT COURT OF IOWA IN AND FOR JOHNSON COUNTY Freedom Security Bank, ) Federal ID# 42-0246790 ) Plaintiff, ) Equity No. par (/O 7O 507 v. ) ORIGINAL NOTICE Falanga Sula, City of Iowa City, ) Iowa, Westwinds Management and GMT ) Enterprise LLC, Rick Woodburn aka ) Richard Alan Woodburn, Advance ) America Cash Advance Centers, ) Abdull Asadi aka Abdullah Asadi, ) Davis Heating and Air Conditioning, ) O Defendants. ) �o TO THE ABOVE-NAMED DEFENDANT(S) : :‹r- 111 -t, rn oa You are hereby notified that there is now on file in the offigk of tl]e clerk of the above court a petition in the above-entitled action, a copy u which petition is attached hereto. The plaintiff' s attorney is Nancy B. Willis, whose address is P.O. Box 143, 500 S. Dubuque Street, Iowa City, Iowa, 52244-0143 (319-337-9621) . You are further notified that unless, within 20 days after service of this original notice upon you, you serve, and within a reasonable time thereafter file a motion or answer, in the Iowa District Court for Johnson County, at the courthouse in Iowa City, Iowa, judgment by default will be rendered against you for the relief demanded in the petition. (SEAL) /yam K OF THE ABOVE COURT // Johnson County Courthouse f you require the assistance of auxiliary aidsIowa City, Iowa, 52240 3r services to participate in court because of a usability, immediately call your district AD,,, coordinator at 319-398-3920. Ext. 1100 (if y. .0 are hearing impaired, call Relay Iowa TTY at 1-800-735-2942). IN THE DISTRICT COURT OF IOWA IN AND FOR JOHNSON COUNTY Freedom Security Bank, ) Federal ID# 42-0246790 ) ) Plaintiff, ) Equity No. C./V ? Se,? v. ) FORECLOSURE PETITION Falanga Sula, City of Iowa City, ) Iowa, Westwinds Management and GMT ) Enterprise LLC, Rick Woodburn aka ) ry Richard Alan Woodburn, Advance ) r;r-' c ..- America Cash Advance Centers, ) Abdull Asadi aka Abdullah Asadi, ) Davis Heating and Air Conditioning, ) ^ T Defendants. ) ='v, C-.) =. NOTICE ;F THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION. THrg MEAN THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL TWELVE MONTHS (or SIX MONTHS if the petition includes a waiver of deficiency judgment) FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE- FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMILY DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED PROPERTY. YOU MAY PURCHASE AT THE SALE. COMES NOW the Plaintiff, by and through its attorney, Nancy B. Willis, and for cause of action states as follows: 1. That the Plaintiff is an Iowa corporation, authorized to transact business as a banking institution under the laws of the State of Iowa, engaged in business in part in Johnson County, Iowa. ,y 2. That Defendant, Falanga Sula is a resident of Johnson County,.1101a. ,1 V .77 /77` Y w 3. That on or about June 9, 2006, the Defendant, Falanga Sula executed and delivered to Freedom Security Bank a note in the principal sum of $136,700.00. Said Note is attached hereto as Exhibit "A" and by this reference incorporated herein. 4 . To secure payment of said note, said Defendant executed and delivered to Freedom Security Bank a mortgage dated June 9, 2006 and recorded June 9, 2006 in Book 4035, Page 344, Records of the Johnson County Recorder, covering the following described real estate: p •5n Lot 227 in Hollywood Manor Addition Part Five, to Iowa City, Iowa, according to the plat thereof recorded in Plat Book 130-< NJ Page 18, Plat Records of Johnson County, Iowa. -in r"" :Cm A copy of said mortgage is attached hereto as Exhibit "B" and by reference incorporated herein. N W 5. That on or about June 9, 2006, the Defendant, Falanga Sula, executed and delivered to Freedom Security Bank a note in the principal sum of $15, 137.09. Said Note is attached hereto as Exhibit "C" and by this reference incorporated herein. 6. To secure payment of the note, said Defendant executed and delivered to Freedom Security Bank a mortgage dated June 9, 2006 and recorded June 14, 2006 in Book 4037, Page 128, Records of the Johnson County Recorder, covering the following described real estate: Lot 227 in Hollywood Manor Addition Part Five, to Iowa City, Iowa, according to the plat thereof recorded in Plat Book 13, Page 18, Plat Records of Johnson County, Iowa. A copy of said mortgage is attached hereto as Exhibit "D" and by this reference incorporated herein. - 2 - 7 . That both of said mortgages provide that in a case of default, the holder may declare the entire principal and interest accrued thereon due and payable and the mortgages may be foreclosed. 8. That the Defendant, Falanga Sula, has failed to pay the notes and interest thereon as provided by the terms of the notes referred to on Exhibits "A" and "C" attached hereto. 9. By reason of the failure to pay the notes and interest, the Plaintiff has elected and does hereby elect in accordance with the terms and conditions of the notes and mortgages to declare the whole of the notes due and payable forthwith and to exercise its right to enforce payment of the entire notes as defined by the notes and to foreclose the mortgages given to O secure the same. O 10. That the unpaid balance due on the note attached as Exhibit " isr—' $136,390.76 plus interest accruing at the rate of $26.28 per day fr=44 December 9, 2008. n .. � N W 11. That the unpaid balance due on the note attached as Exhibit "C" is $13,455.26 plus interest accruing at the rate of $3.04 per day from December 9, 2008. 12. The Plaintiff gave notice of right to cure by notice mailed November 19, 2008 ; more than 30 days have elapsed since the notice was given. Said notices of right to cure are attached hereto and marked Exhibit "E", and by this reference made a part hereof. 13 . Under the terms of the mortgages, the Defendant, Falanga Sula, agreed to pay attorney fees and all costs in connection with the proceeding - 3 - to enforce or foreclose the mortgages. Attached is the Affidavit of Attorney Fees marked Exhibit "F" and by this reference made a part hereof. 14 . That Plaintiff affirmatively states that the real estate covered by the mortgages is less than 10 acres and is non-agricultural property. 15. That Plaintiff waives a deficiency judgment and does notEpeek 5 personam judgment against Defendants. C) NJ 16. That Westwinds Management and GMT Enterprise LLC may cla-iaCan r" f.7 -p al interest in the above-described real estate by virtue of Small Claiips LJ judgment entered in Cause No. SCSC049590. > N 17. That Rick Woodburn aka Richard Alan Woodburn may claim an interest in the above-described real estate by virtue of Small Claims judgments entered in Cause No. SCSC060818 and Cause No. SCSC060819. 18. That Advance America Cash Advance Centers may claim an interest in the above-described real estate by virtue of Small Claims judgment entered in Cause No. SCSC066245. 19. That Abdull Asadi aka Abdullah Asadi may claim an interest in the above-described real estate by virtue of Small Claims judgments entered in Cause No. SCSC064924 and in Cause No. SCSC064923. 20. That Davis Heating and Air Conditioning may claim an interest in the above-described real estate by virtue of Small Claims judgment entered in Cause No. SCSC067432 . 21. That the City of Iowa City, Iowa, may claim a lien on the above- described real estate by virtue of the mortgage recorded November 15, 2007 in Book 4236, Page 343, Records of the Johnson County Recorder. - 4 - WHEREFORE the Plaintiff, Freedom Security Bank, prays for judgment in rem in the amounts of $136,390.76 plus interest accruing at the rate of $26.28 per day from December 9, 2008; and for judgment in the amount of $13,455.26 plus interest accruing at the rate of $3 . 04 per day from December 9, 2008; plus attorney fees, costs and accruing costs and any advances made. Plaintiff further prays that its mortgage recorded in Book 4035, Page 344 be affirmatively declared by the Court and established as a first lien against the above-described real estate and that its mortgage recorded in Book 4037, Page 128 be affirmatively declared by the Court and established as a second lien against the above-described real estate, subject to only the unpaid real estate taxes due to Johnson County, Iowa. WHEREFORE the Plaintiff prays that the rights of any and all other parties who may claim an interest in the real estate including the Defendants and any parties in possession be forever barred and foreclosed. • AND WHEREFORE the Plaintiff further prays that special execution issue for the sale of the above-described mortgaged premises or so much thereof as may be necessary to satisfy the judgments of the Plaintiff together with interest, costs, attorney fees, accruing costs and advances, and the superior lien of unpaid real estate taxes. AND WHEREFORE the Plaintiff further prays for a writ of possession to be issued under the seal of this Court directed to the Sheriff okpJohns i County commanding him to put the purchaser at Sheriff's sale (or successor inNJ ..� interest) in possession of said premises. ;Cr m -, d7 } 5 D N AND WHEREFORE the Plaintiff further prays for such other and further relief as the Court may deem just and equitable under the circumstances. Dated this 2 3 day of March, 2009. WILLIS AND WILLIS 4` 1111 BY: ,-�� Nancy B. 11 s P.O. Box 143 500 S. Dubuque Street Iowa City, Iowa 52244 Ph: (319) 337-9621 / Fx: (319) 337-4581 ATTORNEY FOR PLAINTIFF a .77:0 D� .1 .n• NJ C) r— rn N - 6 - ADJUSTABLE RATE NOTE Loan No: 8026478 (1 Year Treasury Index-Rate Caps) THIS NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN MY INTEREST RATE AND MY MONTHLY PAYMENT. THIS NOTE LIMITS THE AMOUNT MY INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE I MUST PAY. June 9,2006 Iowa City • Iowa (Date] [City] O (State) a 2243 Russell Drivemovn n Iowa City, IA 52240 3y.:.1 a..- (Property Address] IV r- 1. BORROWER'S PROMISE TO PAY -l n -F 1Tl In return for a loan that I have received, I promise to pay U.S. $ 136,700.00 (thus folnouras.ca® "Principal"),plus interest,to the order of the Lender. The Lender is p X Freedom Security Bank,a Corporation z •• tJ • .1~ I will make all payments under this Note in the form of cash,check or money order. I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the"Note Holder." 2. INTEREST Interest will be charged on unpaid principal until the full amount of Principal has been paid. I will pay interest at a yearly rate of 7.200 %. The interest rate I will pay will change in accordance with Section 4 of this Note. The interest rate required by this Section 2 and Section 4 of this Note is the rate I will pay both before and after any default described in Section 7(B)of this Note. 3. PAYMENTS (A) Time and Place of Payments __. I will pay principal and interest by making a payment every month. I will make my monthly payment on the first day of each month beginning on August 1, 2006 I will make these payments every month until I have paid all of the principal and interest and any other charges described below that I may owe under this Note. Each monthly payment will be applied as of its scheduled due date and will be applied to interest before Principal. If, on July 1,2036 , 1 still owe amounts under this Note,I will pay those amounts in full on that date,which is called the "Maturity Date." I will make my monthly payments at 140 Holiday Road PO Box 5880 Coralville, IA 52241 or a different place if required by the Note Holder. (B) Amount of My Initial Monthly Payments Each of my initial monthly payments will be in the amount of U.S. $ 927.90 . This amount may change. (C) Monthly Payment Changes Changes in my monthly payment will reflect changes in the unpaid principal of my loan and in the interest rate that I must pay. The Note Holder will determine my new interest rate and the changed amount of my monthly payment in accordance with Section 4 of this Note. 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates The interest rate I will pay may change on the first day of July, 2011 , and on that day every 12th month thereafter. Each date on which my interest rate could change is called a"Change Date." MULTISTATE ADJUSTABLE RATE NOTE-ARM 5-2 -Single Family - FNMA/FHLMC Uniform Instrument Form 3502 1/01 Laser Forms Inc.(800)446-3555 LFI#FNMA3502 1/01 Page 1 of 4 Initials: Exhibit A, page 1 • (B) The Index Beginning with the first Change Date, my interest rate will be based on an Index. The "Index" is the weekly average yield on United States Treasury securities adjusted to a constant maturity of one year, as made available by the Federal Reserve Board. The most recent Index figure available as of the date 45 days before each Change Date is called the"Current Index." If the Index is no longer available, the Note Holder will choose a new index which is based upon comparable information. The Note Holder will give me notice of this choice. (C) Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Four Point Zero percentage points ( 4.000 %) to the Current Index. The Note Holder will then round the result of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D) below,this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient torrspay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at my R6intei t rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. (D) Limits on Interest Rate Changes -< The interest rate 1 am required to pay at the first Change Date will not be greater than 9.Ar6 210 or piss than 7.200 %. Thereafter, my interest rate will never be increased or decreased on any,-slle Changelrytp by more than two percentage points (2.0%) from the rate of interest I have been paying for the p �4 ing mot, My interest rate will never be greater than 13.200 %. �•.' (E) Effective Date of Changes N My new interest rate will become effective on each Change Date. I will pay the amount of my nitor monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given me and also the title and telephone number of a person who will answer any question I may have regarding the notice. 5. BORROWER'S RIGHT TO PREPAY I have-"the right to make payments of Principal at any time before they are due. A payment of Principal only is known as.a "Prepayment." When I make a Prepayment, I will tell the Note Holder in writing that I am doing so. I may not designate a payment as a Prepayment if I have not made all the monthly payments due under the Note. I may make a full Prepayment or partial Prepayments without paying a Prepayment charge. The Note Holder will use my Prepayments to reduce the amount of Principal that I owe under this Note. However, the Note Holder may apply my Prepayment to the accrued and unpaid interest on the Prepayment amount, before applying my Prepayment , to reduce the Principal amount of the Note. If I make a partial Prepayment, there will be no changes in the due dates of my monthly payment unless the Note Holder agrees in writing to those changes. My partial Prepayment may reduce the amount of my monthly payments after the first Change Date following my partial Prepayment. However, any reduction due to my partial Prepayment may be offset by an interest rate increase. 6. LOAN CHARGES If a law, which applies to this loan and which sets maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from me which exceeded permitted limits will be refunded to me. The Note Holder may choose to make this refund by reducing the Principal I owe under this Note or by making a direct payment to me. If a refund reduces Principal,the reduction will be treated as a partial Prepayment. 7. BORROWER'S FAILURE TO PAY AS REQUIRED (A) Late Charges for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of 15 calendar days after the date it is due, I will pay a late charge to the Note Holder. The amount of the charge will be MULTISTATE ADJUSTABLE RATE NOTE- ARM 5-2 -Single Family-FNMA/FHLMC Uniform Instrument Form 3502 1/01 Laser Forms Inc.(800)446-3555 LFI#FNMA3502 1101 Page 2 of 4 Initials: Exhibit A, page 2 5.000 % of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment. (B) Default If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. (C) Notice of Default If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal which has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is mailed to me or delivered by other means. (D) No Waiver By Note Holder B Even if, at a time when I am in default, the Note Holder does not require me to pay imtytdjiatelytin full as described above,the Note Holder will still have the right to do so if I am in default at a later time. y 11 (E) Payment of Note Holder's Costs and Expenses n-.; N If the Note Holder has required me to pay immediately in full as described above, the Note I Celer w.41 hav right to be paid back by me for all of its costs and expenses in enforcing this Note to the exteiic ft progibite applicable law. Those expenses include,for example,reasonable attorneys'fees. —0 7 8. GIVING OF NOTICES X Unless applicable law requires a different method, any notice that must be given to me und8'this Nt 3e will be given by delivering it or by mailing it by first class mail to me at the Property Address above or at a differrt address if I give the Note Holder a notice of my different address. Any notice that must be given to the Note Holder under this Note will be given by delivering it or by mailing it by first class mail to the Note Holder at the address stated in Section 3(A) above or at a different address if I am given a notice of that different address. 9. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that any one of us may be required to pay all of the amounts owed under this Note. 10.WAIVERS I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require the Note Holder to demand payment of amounts due. "Notice of Dishonor" means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 11.UNIFORM SECURED NOTE This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Note Holder under this Note, a Mortgage, Deed of Trust, or Security Deed (the "Security Instrument"), dated the same date as this Note, protects the Note Holder from possible losses that might result if I do not keep the promises which I make in this Note. That Security Instrument describes how and under what conditions I may be required to make immediate payment in full of all amounts I owe under this Note. Some of those conditions are described as follows: If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is.prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. MULTISTATE ADJUSTABLE RATE NOTE-ARM 5-2 - Single Family- FNMA/FHLMC Uniform Instrument Form 3502 1101 Laser Forms Inc.(800)446-3555 LFI#FNMA3502 1101 Page 3 of 4 Initials _ Exhibit A, page 3 To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender may also require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. WITNESS THE HAND(S)AND SEAL(S)OF THE UNDERSIGNED. �44- �C ��/ (Seal) (Seal) Falang Sula -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower [Sign Original Only] O0 n K .� —40 -< r- 0 o '" .. D fV MULTISTATE ADJUSTABLE RATE NOTE-ARM 5-2 - Single Family - FNMA/FHLMC Uniform Instrument Form 3502 1/01 Laser Forms Inc.(800)446-3555 LFI#FNMA3502 1/01 Page 4 of 4 Exhibit A, page 4 � �� IIIIIfIIIIIIIRII{III11.II11111.I111IIll1IIIIII!I Doc ID: 020557550017 Type: GEN Recorded: 08/09/2006 at 01:52:61 PM Fee Ant: $87.00 Pace 1 of 17 Johnson County Iowa Kim Painter County Recorder BK4035 PG344-360 Ispaca Above This Line For Recording Dau] MORTGAGE Loan No: 8026478 (Cover Sheet) After Recording Return To: Prepared By:Tiffany D.Leibold Freedom Security Bank Freedom Security Bank 140 Holiday Road PO Box 5880 140 Holiday Road PO Box 5880 Coralville,IA 52241 Coralville,IA 52241 (319)688-9005 This document is dated: June 9,2006 Taxpayer Name: Falange Z Sula 2023 Tenth Street Court,Coralville,IA 52241 Reconveyance Information: • The Grantor(s)is: Falanga Z Sula,a single person • Grantor's primary address is:2023 Tenth Street Court Coralville,IA 52241 The Grantee(s)is: Freedom Security Bank : Grantee's address is: 140 Holiday Road PO Box 5880 Coralville,IA 52241 l� N e-- Property Parcel/Tax Identification Number: m -O 0 The Property Address is: 2243 Russell Drive -- 3 Iowa City,IA 52240 d The Legal Description of the property is: D N Lot 227,in Hollywood Manor Addition Part Five,to Iowa City,Iowa,according to the plat thereof recorded in Plat Book 13,Page 18,Plat Records of Johnson County,Iowa. COVER SHEET FOR THE IOWA-Single Family-FannieMaelFreddie Mac UNIFORM INSTRUMENT Form 3016 1)01 Laser Fomes Inc-(800)4463555 LFI#FNMA3016 5105 vy . (F) "Loan"means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note,and all sums due under this Securiry Instrument,plus interest. IOWA-Single Family-FannleMae/FreddleMac UNIFORM INSTRUMENT Form 3016 1/91 Laser Forms Inc.180QI 4463555 LFI#FNMA3016 5/05 Pagel of 13 Initials:' EXHIBIT "Bt1, PAGE 1 When Recorded Return To: Freedom Security Bank 140 Holiday Road PO Box 5880 Coralville,IA 52241 (Space Above This Line For Recording Data] Loan No: 8026478 MORTGAGE IMPORTANT NOTE: For additional information,as required by Iowa Senate File 371,see page four. DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A) "Security Instrument"means this document, which is dated June 9, 2006 O , together with all Riders to this document. C7 (B) "Borrower"is >--{ "n CD-c Falanga Z Sula,a single person m til Borrower is the mortgagor under this Security Instrument. ";17 (C) "Lender"is Freedom Security Bank is _. D N . Lender is a Corporation L11 organized and existing under the laws of Iowa Lender's address is 140 Holiday Road PO Box 5880 Coralville, IA 52241 Lender is the mortgagee under this Security Instrument. (D) "Note"means the promissory note signed by Borrower and dated June 9,2006 The Note states that Borrower owes Lender One Hundred ThirtySix Thousand Seven Hundred DOLLARS and Zero CENTS Dollars (U.S. $ 136,700.00 ) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than July 1,2036 (E) "Property"means the property that is described below under the heading "Transfer of Rights in the Property." (F) "Loan"means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note,and all sums due under this Security Instrument,plus interest. IOWA-Single Family-Fannie Mae/Freddle Mac UNIFORM INSTRUMENT Form 30161/01 Laser Forms Inc.(600)4463555 LFI#FNMA3016 5/05 Pagel of 13 Initials: �7 _ EXHIBIT '''B", PAGE 2 1 • (G) "Riders"means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower[check box as applicable]: (-] Adjustable Rate Rider Condominium Rider n Second Home Rider Balloon Rider1 Planned Unit Development Rider n 1-4 Family Rider Biweekly Payment Rider n V.A.Rider Other(s) [specify] (H) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions. (1) "Community Association Dues, Fees, and Assessments" means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization. (J) "Electronic Funds Transfer"means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions,transfers initiated by telephone,wire transfers,and automated clearinghouse transfers. (K) "Escrow Items"means those items that are described in Section 3. (L) "Miscellaneous Proceeds"means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5)for: (i)damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (M) "Mortgage Insurance"means insurance protecting Lender against the nonpayment of, or default on, the Loan. (N) "Periodic Payment" means the regularly scheduled amount due for (i) principal and interest under the Note,plus(ii)any amounts under Section 3 of this Security Instrument. (0) "RESPA" means the Real Estate Settlement Procedures Act (12 U.S.C. §2601 et seq.) and its implementing regulation, Regulation X (24 C.E.R. Part 3500), as they might be amended from time to time, or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument, "RESPA" refers to all requirements and restrictions that are imposed in regard to a "federally related mortgage loan" even if the Loan does not qualify as a "federally related mortgage loan" under RESPA. (P) "Successor in Interest of Borrower"means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. s a .c, c) ,O - N IOWA -Single Family -FannieMae/Freddie Mac UNIFORM INSTRUMENT rti Form 3016 1101 0- 7 0 Laser Forms Inc.(800)446.3555 * 7. LFI#FNMA3016 5/05 Paget of 13 Initials:'T5 >-_ V7 EXHIBIT "B" PAGE 3 TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably mortgages, grants and conveys to Lender,with power of sale,the following described property located in the County of Johnson • [Type of Recording Jurisdiction] [Name of Recording Jurisdiction] Lot_227.,1n.Holiywood Manor-Addition-Part-Five,to-Iowa City,.lowa,according to the plet there of recordid in Plat Book 13,Page 18,Plat Records of Johnson County,Iowa. o O rpt 0 which currently has the address of 2243 Russell Drive 4 [street] Iowa City ,Iowa 52240 ("Property Address") [City] [Zip Code] •TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also . be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property." BORROWER COVENANTS that Borrower is•lawfully seised of the estate hereby conveyed.and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. IOWA -Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1101 Laser Forms Inc.(800]4463555 LFI#FNMA3016 5/05 Page 3 of 13 Initials: EXHIBIT "B"., PAGE 4 UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: I. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more..of the_fonowing_forms,__as selected-by-Lender: (a)cash;(b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity;or(d)Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority:. (a)interest due under the Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date,or change the amount,of the Periodic Payments. 3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum (the "Funds") to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance required by Lender under Section 5; and(d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term of the Loan, Lender may require that Community Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrowed, shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the5unds ford any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for nor all" Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver,? orrowet' -T1 shall pay directly, when and where payable, the amounts due for any Escrow Items for which Rayntent or" Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidetrcinI suci r" payment within such time period as Lender may require. Borrower's obligation to make such paymet}t -and to m IOWA -Single Family-Fannie MaclFreddle Mac UNIFORM INSTRUMENT f li Form 3016 1/01 0 Laser Forms Inc.(800)446-3555 LFI#FNIAA3016 5/05 Page4 of 13 Initials: D N lat EXHIBIT "Bt", PAGE 5 • provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument, as the phrase "covenant and agreement" is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Borrower shall pay to Lender all Funds,and in such amounts,that are then required under this Section 3. Lender may, at any time, collect and hold Funds in.art-amount_(a) sufficient.to permit-Lender--to apply-the Funds-at-tlie tithe specifed under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA,but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, it'any, and Community Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items,Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to thepayment of the obligation secured by the lien in a manner acceptable to Lender,• but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4. Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan. 5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice,which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a)a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification ser+aes and IOWA-Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT `d Form 3016//01 {� Forms Inc.(800)448-3555 D 11 LFI8FNMA30I8 505 Page 5 of 13 Initials: C)-C �. H :C r m o EXHIBIT "B", PAGE 6 I . t„!1 subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cast of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires . interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b)any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument,whether or not then due. 6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist r'., which are beyond Borrower's control. o 7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower sCa41)not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the ll?operty. Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order tDrevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pur-st nt t i"" IOWA-Single Family-Fannie Mae/FreddleMac UNIFORM INSTRUMENT 177 i� Form 3016 1101 o 0LaserFarms Inc(800)446-3555 _ LFIiFNMA3016 5d05 Page 6 of 13 Initials: t'`s 7" - — ►V 1.11 EXHIBIT "B", PAGE 7 --� I Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property it damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If(a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and_.sltall be payable,with such interest,upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold, Borrower shall comply withall the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. lf, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shallO>ontinue to pay to Lender the amount of the separately designated payments that were due when the insurance sgvrrage' ceased to be in effect. Lender will accept, use and retain these payments as a non=refundable loss 1esgtve iay lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that-Ate Loftily is ultimately paid in full, and Lender shall not be required to pay Borrower any interest or earningp sudlu loss reserve. Lender can no longer require loss reserve payments if Mortgage Insurance coveragg4in thre- amount and for the period that Lender requires) provided by an insurer selected by Lender again tb7ecomic rn available, is obtained, and Lender requires separately designated payments toward the premiums f®jdQortgage fir Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Br6Wver was �J required to make separately designated payments toward the premiums for Mortgage Insurance, Brower 1611 IOWA-Single Family.FannleMae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1101 laser Forms Inc.(800)446-3555 LFI#FNMA3016 5A5 Page 7 of 13 Initials: t'S EXHIBIT "B", PAGE 8 . 1 pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the Loan as agreed.Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, any other entity, or any affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive from (or might be characterized as) a portion of Borrower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer,the arrangement is often termed"captive reinsurance."Further: (a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance,and they will not entitle Borrower to any refund. (b) Any such agreements will not affect the rights Borrower has - if any - with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender. If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of prpgress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any,paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or grealy than g the amount of the sums secured by this Security Instrument immediately before the partial taking, dest. on, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this 4eurity Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following c Ion: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss-in value tV divided by(b)the fair market value of the Property immediately before the partial taking, destructionoss -� in value. Any balance shall be paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair mar5tgalue a of the Property immediately before the partial taking, destruction, or loss in value is less than the aTtlit of— the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrwer and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this,,, IOWA -Single Family-FannlGMae/FreddfeMac UNIFORM INSTRUMENT Form 3016 1101 Law Forms Inc.(800)448-3555 LFINFNMA3018 5x05 Page 8 of 13 Initials:i"5 EXHIBIT t'B"1 PAGE 9 • --1 I • - .. Security Instrument whether or not the sums are then due. if the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence)offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration hasoccurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a"co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) -agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. Subject to the provisions of Section 18, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20)and benefit the successors and assigns of Lender. 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights un is Yfees, property inspection and valuation Instrument, including, but not limited to, attorneys' fees:-{In - - -- regard to any other fees, the absence of express authority in this Security Instrument to charge a specifjc)fee to -0 i1 Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees-that t !" are expressly prohibited by this Security Instrument or by Applicable Law. r"" If the Loan-is subject to a law which sets maximum loan charges, and that law is finally interpreted so that rn the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge fd the- permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limit will bev refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the NoteVi or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under IOWA-Single Family-Fannie MaelFroddie Mac UNIFORM INSTRUMENT Form 3016 1101 Laser Forms Inc(800)448.3555 LFIWFNMA30t8 5105 Page9 of 13 Initials: EXHIBIT "B", PAGE 10 I - the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated noticeaddress under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. 16. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b)words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action. 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement,the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest.in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However,this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law: If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sate contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the-Note as if no acceleration had occurred; (b) cures any default of any other covenants oreements; c � ( ) pays all ercp eases•v incurred in enforcing this Security Instrument, including, but not limited to, reasonable attome ' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender' =i rest-— in the Property and rights under this Security Instrument; and(d)takes such action as Lender may reasonably� require to assure that Lender's interest in the Property and rights under this Security Instrurj nT and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged: laender. rim may require that Borrower pay such reinstatement sums and expenses in one or more of the followirig!]orms, IOWA-Single Family.Fannie Mae/FroddieMac UNIFORM INSTRUMENT J Form 3016 1/01 Laser Forms Inc.(800)446-3555 LFI1/FNMA3016 5/05 Page 10 of 13 Initials: i5 v V'1 EXHIBIT._'`B", PAGE 11 as selected by Lender: (a)cash; (b)money order; (c)certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However,this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note(together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class)that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 2I. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d) an "Environmental Condition" means a condition that can cause,contribute to,or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property(a)that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property(including,but not limited to,hazardous substances in consumer products). Borrower shall promptly give Lender written notice of(a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and(c) any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Su4kance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance J with Environmental Law. Nothing herein shall create any obligation on Lender for an Environment&l Cleanup. .71 t7 t IOWA -Single Family -FannieMae/Freddie Mac UNIFORM INSTRUMENT ;1 Form orms Inc (a (� 1 aser F orms c (B00)446-3555 0 ""� LFI#FNMA3016 5105 Page 11 of 13 Initials: lJt EXHIBIT "B", PAGE 12 • NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a)the default; (b) the action required to cure the default; (c)a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shallfurther inform Borrower of the right to reinstate after acceleration and the right to assert in theforeclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to,reasonable attorneys' fees and costs of title evidence. 23. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Instrument. Lender may charge Borrower a fee for releasing this Security Instrument, but only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law. 24. Waivers. Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to the Property.Borrower waives any right of exemption as to the Property. 25. HOMESTEAD EXEMPTION WAIVER. 1 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. alanga Z ula [Date] [Date] 26. Redemption Period. If the Property is less than 10 acres in size and Lender waives in any foreclokre n3 proceeding any right to a deficiency judgment against Borrower, the period of redemption from judicial:sale? shall be reduced to 6 months. If the court finds that the Property has been abandoned by Borrower and Lender; J waives any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shat) be reduced to 60 days. The provisions of this Section 26 shall be construed to conform to the provisions or r-- Sections 628.26 and 628.27 of the Code of Iowa. • I _� d IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.>NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED 1N THIS WRITTEN CONTRACT MAY O. BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. IOWA -Single Family -FannieMae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1101 Laser Forms Inc.(600)446.3555 LFI#FNMA3016 505 Page 12 of 13 Initials: EXHIBIT "B", PAGE 13 1 I BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. Witnesses: la (Seal) 7/8V . nga -Borrower (Seal) -Borrower — (Seal) -Borrower (Seal) -Borrower [Space Below This Line For Acknowledgment] STATE OF IOWA,COUNTY OF Johnson On this 9 th day of June,2006 , before me, a Notary Public in the State of Iowa, personally appeared Falanga Z Sula,a single person to me personally known to be the person(s) name(s) in and who executed the foregoing instrument and acknowledged that he/she/they executed the same as his/her/their voluntary act and deed- My Commission expires on: N.)11 Public in IRfor said County and State Nancy B.Willis Lo NANO 8 WILL! n+m,ssr�r S Cmrs�onber f73 34 arC ?2p9 rV 0 t -*-4' 1-17 -.a rl IOWA -Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT N Form 3016 1/01 Laser Forms Inc.(BOO)446-3555 LFI#FNMA3016 5/05 Page 13 of 13 EXHIBIT "B", PAGE 14 —T l • `©t When Recorded Return To: Freedom Security Bank 140 Holiday Road PO Box 5880 Coralville,IA 52241 ADJUSTABLE RATE RIDER (1 Year Treasury Index-Rate Caps) Loan No: 8026478 THIS ADJUSTABLE RATE RIDER is made this 9 th day of June,2006 and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Adjustable Rate Note(the"Note")to Freedom Security Bank, a Corporation (the "Lender") of the same date and covering the property described in the Security Instrument and located at: 2243 Russell Drive Iowa City,IA 52240 IProperty Address! THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE AMOUNT THE BORROWER'S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE THE BORROWER MUST PAY. ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument,Borrower and Lender further covenant and agree as follows: A. INTEREST RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial interest rate of 7.200 %. The Note provides for changes in the interest rate and the monthly payments,as follows: MULTISTATE ADJUSTABLE RATE RIDER-ARM 5-2 -Single Family-FNMA/FHLMC Uniform Instrument Form 3111 1/01 Laser Forms Inc.(800)446-3555 LFIMFNMA3111 1/01 Page 1 of 3 Initials; • EXHIBIT t1Bft PAGE 15 ..l I C.• I 19Y n � i ytq ',26 iO 41/ 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES 9 (A)Change Dates The interest rate I will pay may change on the first day of July, 2011 , and on that day every 12th month thereafter. Each date on which my interest rate could change is called a "Change Date." (B)The Index Beginning with the first Change Date, my interest rate will be based on an Index. The "Index" is the weekly average yield on United States Treasury securities adjusted to a constant maturity of one year, as made available by the Federal Reserve Board. The most recent Index figure available as of the date 45 days before each Change Date is called the"Current Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice. (C)Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Four Point Zero percentage points ( 4.000 %) to the Current Index. The Note Holder will then round the result of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D)below,this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the maturity date at my new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. (D)Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 9.200 % or less than 7.200 %. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than two percentage points (2.0%) from the rate of interest I have been paying for the preceding 12 months. My interest rate will never be greater than 13.200 %. (E) Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F)Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice. B. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER Section 18 of the Security Instrument is amended to read as follows: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. MULTISTATE ADJUSTABLE RATE RIDER-ARM 5-2 -Single Family -FNMAIFHLMC Uniform Instrument Form 3111 1101 Laser Forma Inc.(800)446-3555 LFI#FNMA3111 1/01 Page 2 of 3 Initials: EXHIBIT "B", PAGE 16 ...1 I • - • '� /#1 �F �' 6 2 0;1 4S4 4S4 If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender may also require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider. a s (Seal) (Seal) alanga ula -Borrower -Borrower (Seal) —— (Seal) -Borrower -Borrower MULTISTATE ADJUSTABLE RATE RIDER-ARM 5-2 -Single Family-FNMA/FHLMC Uniform Instrument Form 3111 1/01 Laser Forms Inc.(800)446-3555 LFI#FNMA3111 1/01 Page 3 of 3 EXHIBIT `1B1/, PAGE 17 . 1 PROMI•SSORY;NOTE ::::_:•:_.r i ..t ...:::-'4.dy_:.-:'_. is ....._..._.. .....:..:--:: - - - - -_ - ya�+may +� ...... ....._._...._... ...::::::.-.��:. .:..•::::::;�:�' ..�:.�.. - .=-- �iturtE :_...__--:--:.=L cin �)a::;::�—:�_::>;;_::r�c. ;; .- ::�.:...�.:.:._� ::..:...._.._ _ ...::::.-.< = ::.:.::•_-: ffk3 ._...:........... _ - References in the shaded area,�are for Lender's use-only and do not limjt the appjicabihty of this documenttaany particular loan.or item. • - .,Any item-above containing. "".has.been omitted, ue.to text lengt#r,limitat,ons. Borrower: ..Falaoga-Sula. -Lender: •FreedomS.ecurity Bank 2243 Russell Drive. 1, 0•Ho(rda�-.Road � Iowa City,IA 52240 PO Box 5880 ' ' Cora villg IA 57241 ' - — y�. . , .. , ,. .,Y',T.F l:d+ (,r,� {SBt ?� 7 .:S r�:,.'.�.� . •✓ -.. ; THIS IS'A'ctiNtliatittlfEb`tfi rtF NSA (bfir C' r- 3 1i ;, • , ,tam. 4s, ... nNrto > Dai'e o s?,pat' $1.5 137 cf9 E , t �fo I1 $?J � 6 1" • PROMISE TO PAY. I ("Borrower ) promise to pay to Freedom Security Bank ( Lender )iost q;ifarr lenlaw,¢gk,mgrieY.of.tfiec tajeS' America,the principal amount of Fifteen Thousand One Hundred Thirty-seven &09/100 Dollars ($15,137.091,together with inter mat the rare of 8.200% per annum on the unpaid principal balance from June 9, 2006,until paid in full. PAYMENT. I will pay this loan in 59 regular payments of $186.24 each and one irregular last payment estimated at $9,325.38. My first payment is due August 1, 2006,and all subsequent payments are due on the same day of each month after.that. My.final:payment will be due on July 1, 2011, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest;-: Utiless otherwise agreed'or required by applicable law, payments will be applied first to any unpaid credit insurance premiums, accrued•to the.date of'rece_ipt of payment;then to any accrued unpaid interest;thento principal;then to any unpaid collection costs;and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis;that is,by applying the ratio of the annual interest rate over the nurriber of days in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. I will pay Lender at°Lender's address n abnfie-or-at such other'place as tendermay-designate in writing; - - PREPAYMENT; MINIMUM FINANCE CHARGE. In any event, even upon full prepayment of this Note, I understand that Lender is entitled to a minimum finance charge of $7.50. In no event, however, will this-charge be more.than $7.50. Other than my obligation to pay any minimum • finance charge, I may pay without penalty all or a portion of•the amount owed earlier-than it is due. Early payments will not, unless agreed to by Lender in writing, relieve me of my obligation to continue to make payments under the payment schedule. Rather, early payments will reduce • the principal balance due and may result in my making fewer payments. I agree not to send Lender payments marked "paid in full", "without recourse", or similar language. If I send such a payment, Lender may accept it without losing any of Lender's rights under this Note, and I will - remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Freedom Security Bank, 140 Holiday Road, PO Box 5880, Coralville, IA 52241. LATE CHARGE. If a payment is 10 days or more late, I will be charged 5.000% of the regularly scheduled payment or $15.00, whichever is less. INTEREST AFTER DEFAULT. If Lender declares my entire loan immediately due after a default, or upon final maturity, then the total sum due under this Note willbear interest from the date of acceleration or maturity at the interest rate on this Note BALLOON PAYMENT. This Note has a balloon payment that is more than twice as large, as the average of all other regularly scheduled payments. The balloon payment is-due on July 1, 2011, in the amount of $9;325.38, assuming all payments are made exactly on the scheduled dates in the scheduled amounts. These provisions do not apply to•the extent that the payment schedule is adjusted to any of my income which is seasonal or irregular. DEFAULT. I will be in default if: (a) Payment Default. I.fail to make a payment within ten(10) days of when it is due; or (b)Other Defaults. I fail to observe any other covenant of this Note, breach of which materially impairs the condition, value, or protection of or Lender's right in any collateral securing the Indebtedness, or materially impairs my right to pay amounts due under this loan. LENDER'S RIGHTS. If I am in default, Lender may, in addition to any other rights Lender has and subject to any cure and notice provisions of the Iowa Uniform Consumer Credit Code, declare my entire loan-immediately due, without notice. I will then pay Lender the unpaid part of the Principal Amount, any interest that is earned but unpaid, and any reasonable collection costs. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if I do not pay. I wilt pay Lender that amount. This includes, subject to any limits under the Iowa Uniform Consumer Credit Code, Lender's reasonable attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including without limitation all reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, I also will pay_any court costs, in addition to all other sums provided by law.. GOVERNING LAW. This Note will-be governed by federal law applicable to Lender and,to the extent not preempted by federal law,the laws of the State of Iowa without regard to its conflicts-of law provisions. This Note has been accepted by Lender in the State of Iowa. - - a s checking,savings, or some other account). This includes all accounts.I hold jointly with someone else and all accounts I may open in the future. However, this does not include any.IRA or Keogh accounts, or any trust accounts for which.setoff would be prohibited by law. I authorize Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and,at Lender's option,to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph. COLLATERAL. I acknowledge this Note is secured by the following collateral described in the security instrument listed herein: a Mortgage dated June 9, 2006,to Lender on real property located in Johnson County, State of Iowa. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon me, and upon my heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any inaccurate information about your account(s)to a consumer reporting agency. Your written notice describing the specific inaccuracy(ies) should be sent to us at the following address: Freedom Security Bank PO Box 5880 Coralville, IA 52241. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. I and any other person who signs, guarantees or endorses this Avl„l,it f' . rnao•o• 1 PROMISSORY NOTE - Loan.No:.8.Q 6684. (Continued) Page_2 Note';.to thetxteiat-allowed.by=law.,..waive:preselritrnent, demand for.paymeriti•df?d:notice'Off-dishonor. Upon ariie chahge inthreterrtfs..ef:this. Note, and unless otherwise expies'sly-stated inlwriting, no party:who signs this!Note, whether as maker,.guarantor, accommodation maker or endor.ser,..shall be released frgrq a!aliility All;such parties that tender may renew_or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral. All such parties also agree that Lender may nitSdify--this'Ibari'without th'e.consent of or notice to anyone other than the party with'whnmtitt a modification is made. The obligations under this;'Note'are joint- and several. This means that the words "I", "me", anda°my"•mean eaot:and all of the persons signing below. =- '„ PRIOR TO SIGNING THIS NOTE,I lREAD11i 131IN .ERSTOOD ALL THE PROVISIONS OF THIS NOTE. I AGREE TO THE TERMS OF THE NOTE. I ACKNO_VW.LEDGE RECEIPT-QE A.COMPLET€D COPY OE,THIS,PROMISSORY,NO.TEAND:AU O,i)IER DOCUMENTS RELATING TO THIS,DEBT.. • • This Notice is required by Iowa law. In this,notiee,t le,itetm,"ylou"Yr eans,t�bef8orr�we rtarrie lAbovn. X11 �tTI E� O{CONSJU E ��l Do not sign thi47paper,before y4pgc. ad"it_ z,You areientitled to a copyrof,this paper. may p`r'epay t - paid balance at any tlrrie'witlio•ut -penalty and may be-entitled-to`receive ' refc(ri'd df iun athedscharge ,in accdrfl'aitoe with.law. A'., BORROWER: oat-. USER PRD L•nfnP.V...5.34.00.004 Copy.11srlsn0 E1ninWl Solutions.Inc.1337,1006 N RlphP'arvad. 711-S7l1• .i O •-i • • • • . . . . ,• , ' . .i` • • • • • Exhibit C, page 2 scot • HUHU 1 IIII II II�tIIIIIIIDIIIIIII Iti�IIiIII IBIIII Doc ID: 020561470013 Tvoe: GEN Recorded: 06/14/2006 at 11:26:08 AM Fee Amt: $67.00 Paoe 1 of 13 Johnson County Iowa Kim Painter County Recorder /� BK4037 PG 128140 5c0 Re..-f ettac\-,4 ,, FOR RECORDER'S USE ONLY Prepared By: Brent R. Hawkins, Branch Manager, Freedom Security Bank, PO Box 5880, Coralville, IA 52241, (319) 688-9005 U * -� WHEN RECORDED MAIL TO: ..< ur m Freedom Security Bank, 140 Holiday Road, PO Box 5880, Coralville, IA 52241 -Ill a Q o� MORTGAGE THIS IS A PURCHASE MONEY MORTGAGE THIS IS A CONSUMER CREDIT TRANSACTION The names of all Grantors (sometimes "Grantor") can be found on page 1 of this Mortgage. The names of all Grantees (sometimes "Lender") can be found on page 1 of this Mortgage. The property address can be found on page 1 of this Mortgage. The legal description can be found on page 1 of this Mortgage. The parcel identification number can be found on page 1 of this Mortgage. THIS MORTGAGE dated June 9, 2006, is made and executed between Falanga Sula; a single person (referred to below as "Grantor") and Freedom Security Bank, whose address is 140 Holiday Road, PO Box 5880, Coralville, IA 52241 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender and grants to Lender a security interest in all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; rents and profits; all easements, rights of way, and appurtenances; all water, water rights, watercourses and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in Johnson County, State of Iowa: Lot 227 in Hollywood Manor Addition Part Five, to Iowa City, Iowa, according to the plat thereof recorded in Book 13, Page 18, Plat records of Johnson County, Iowa. The Real Property or its address is commonly known as 2243 Russell Drive, Iowa City, IA 52240. The Real Property parcel identification number is 1023281021. EXHIBIT "D"7 PAGE 1 MORTGAGE Loan No: 8026684 (Continued) Page 2 Grantor presently assigns to Lender all of Grantor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. The lien on the rents granted in this Mortgage shall be effective from the date of the Mortgage and not just in the event of default. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor shall pay to -rg Lender all amounts secured by this Mortgage as they become due and shall strictly perform aR of Grantor's obligations under this Mortgage. rJ � POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession nd use of the Property shall be governed by the following provisions: None of the collateral fo'Rhe Indebtedness constitutes, and none of the funds represented by the Indebtedness wil . la used to purchase: (1) Agricultural products or property used for an agricultural purpose as deflrned in.Jgwa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section 9H1 (2) or 175.2 (14, or (3) Property used for an agricultural purpose as defined in Iowa Code Section 570.A.1 (2). Grantor represents and warrants that: (1) There are not now and will not be any wells situated on the Property; (2) There are not now and will not be any solid waste disposal sites on the Property; (3) There are not now and there will not be any hazardous wastes on the Property; (4) There are not now and there will not be any underground storage tanks on the Property. Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain, Grantor shall maintain the Property in good condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties EXHIBIT "D", PAGE 2 MORTGAGE Loan No: 8026684 (Continued) Page 3 contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel of .pck products without Lender's prior written consent. a Removal of Improvements. Grantor shall not demolish or remove any Improvements-froth the,Real Property without Lender's prior written consent. As a condition to the removal of-..)any =--- Improvements, Lender may require Grantor to make arrangements satisfactory to Lender,#o rel '(ace L � such Improvements with Improvements of at least equal value. - - Lender's Right to Enter. Lender and Lender's agents and representatives may enter &PO the_Beal Property at all reasonable times to attend to Lender's interests and to inspect the Real=Properffor purposes of Grantor's compliance with the terms and conditions of this Mortgage. p. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of ail governmental authorities applicable to theuse or occupancy of the Property. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, beneficial or equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Iowa law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: EXHIBIT "D" PAGE 3 MORTGAGE Loan No: 8026684 (Continued) Page 4 (,) Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxis, payroll � taxes, special taxes, assessments, water charges and sewer service charges levied against or•. n account of the Property, and shall pay when due all claims for work done on or .fbr_`serVtOs ;— rendered or material furnished to the Property. Grantor shall maintain the Property free_of-any liens 71 having priority over or equal to the interest of Lender under this Mortgage, except for the Existg 0 Indebtedness referred to in this Mortgage or those liens specifically agreed to in writing-lay:Lender, and except for the lien of taxes and assessments not due as further specified int '1 ighr'to Contest paragraph. y 'v o-• Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (1 5) days after the lien arises or, if a lien is filed, within fifteen (1 5) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and reasonable attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials and the cost exceeds $1,000.00. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Policies shall be written by such insurance companies and in such form as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of coverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of twenty (20) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain E Ei B T upti'? ?A{E 4 • r �A 0 MORTGAGE n+n s Loan No: 8026684 (Continued) 91Pa9�c 0 •such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property if the estimated cost of repair or replacement exceeds $1,000.00. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Compliance with Existing Indebtedness. During the period in which any Existing Indebtedness described below is in effect, compliance with the insurance provisions contained in the instrument evidencing such Existing Indebtedness shall constitute compliance with the insurance provisions under this Mortgage, to the extent compliance with the terms of this Mortgage would constitute a duplication of insurance requirement. If any proceeds from the insurance become payable on loss, the provisions in this Mortgage for division of proceeds shall apply only to that portion of the proceeds not payable to the holder of the Existing Indebtedness. LENDER'S EXPENDITURES. If Grantor fails (A) to keep the Property free of all taxes, liens, security interests, encumbrances, and other claims, (B) to provide any required insurance on the Property, (C) to make repairs to the Property or to comply with any obligation to maintain Existing Indebtedness in good standing as required below, then Lender may do so. If any action or proceeding is commenced that would materially affect Lender's interests in the Property, then Lender on Grantor's behalf may, but is not required to, take any action that Lender believes to be appropriate to protect Lender's interests. All expenses incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; {B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Mortgage also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of any default. Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that it otherwise would have had. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in the Existing Indebtedness section below or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender, and (c) the liens granted hereby are not the type of lien referred to in Chapter 575 of EXHIBIT ''`D`F, PAGE 5 MORTGAGE O Loan No: 8026684 O {Continued) 7,:pe9agi n-G N the Iowa Code Supplement, as now enacted or hereafter modified, amended or replaced.:. rantorp for itself and all persons claiming by, through or under Grantor, agrees that it claims no lien 0,t right to a lien of the type contemplated by Chapter 575 or any other chapter of the Code of land' further waives all notices and rights pursuant to said law with respect to the liens hereby .60nted,124 and represents and warrants that it is the sole party entitled to do so and agrees to indemnify and hold harmless Lender from any loss, damage, and costs, including reasonable attorneys' fees, threatened or suffered by Lender arising either directly or indirectly as a result of any claim of the applicability of said law to the liens hereby granted. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Promises. All promises, agreements, and statements Grantor has made in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature and shall remain in full force and effect until such time as Grantor's Indebtedness is paid in full. EXISTING INDEBTEDNESS. The following provisions concerning Existing Indebtedness are a part of this Mortgage: Existing Lien. The lien of this Mortgage securing the Indebtedness may be secondary and inferior to an existing lien. Grantor expressly covenants and agrees to pay, or see to the payment of, the Existing Indebtedness and to prevent any default on such indebtedness, any default under the instruments evidencing such indebtedness, or any default under any security documents for such indebtedness. No Modification. Grantor shall not enter into any agreement with the holder of any mortgage, deed of trust, or other security agreement which has priority over this Mortgage by which that agreement is modified, amended, extended, or renewed without the prior written consent of Lender. Grantor shall neither request nor accept any future advances under any such security agreement without the prior written consent of Lender. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after EXHIBIT "D", PAGE 6 747 .11 Cn 3 MORTGAGE Loan No: 8026684 (Continued) age 7�) payment of all reasonable costs and expenses incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Mortgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon ail or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Mortgage, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. 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 Grantor as set forth on the first page of this Mortgage and the name and address of the secured party is the name and address of Lender as set forth on the first page of this Mortgage. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. EXHIBIT "D", PAGE 7 • . • .11 0 MORTGAGE t� 3 Loan No: 8026684 (Continued) 0' - Pew 8 FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. DEFAULT. Grantor will be in default if: Payment Default. Grantor fails to make any payment within ten (10) days of when it is due under the Indebtedness. Other Defaults. Grantor fails to observe any other covenant of this Mortgage, breach of which materially impairs the condition, value, or protection of, or Lender's right in, any collateral securing the Indebtedness, or materially impairs Grantor's right to pay amounts due under this loan. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter but subject to any limitation in the Note or any limitation in this Mortgage, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option, after giving all required notices of default and after passage of any grace period, to declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Grantor would be required to pay without notice, except as may be expressly required by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as EXHIBIT "D", PAGE 8 4n Fp MORTGAGE Loan No: 8026684ge 9 (Continued) ` 7 C.) tJ Grantor's attorney-in-fact to endorse instruments received in payment thereof in the naYtie of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all orany part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Nonjudicial Foreclosure. Lender may exercise the right to non-judicial foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted or hereafter modified, amended or replaced. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or 12) vacate the Property immediately upon the demand of Lender. This paragraph is subject to any rights of Grantor, under Iowa law, to remain in possession of the Property during a redemption period. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the Property marshalled. In exercising its rights and remedies, Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender will give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Shortened Redemption. Grantor hereby agrees that, in the event of foreclosure of this Mortgage, Lender may, at Lender's sole option, elect to reduce the period of redemption pursuant to Iowa Code Sections 628.26, 628.27, or 628.28, or any other Iowa Code Section, to such time as may be then applicable and provided by law. Election of Remedies. All of Lender's rights and remedies will be cumulative and may be exercised alone or together. An election by Lender to choose any one remedy will not bar Lender from using any other remedy. If Lender decides to spend money or to perform any of Grantor's obligations EXHIBIT "D", PAGE 9 MORTGAGE Loan No: 8026684 (Continued) under this Mortgage, after Grantor's failure to do so, that decision by Lender will nap,affect Lender's right to declare Grantor in default and to exercise Lender's remedies. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including reasonable attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sent to Lender's address, as shown near the beginning of this Mortgage. Any person may change his or her address for notices under this Mortgage by giving formal written notice to the other person or persons, specifying that the purpose of the notice is to change the person's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. It will be Grantor's responsibility to tell the others of the notice from Lender. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. What is written in this Mortgage and in the Related Documents is Grantor's entire agreement with Lender concerning the matters covered by this Mortgage. To be effective, any change or amendment to this Mortgage must be in writing and must be signed by whoever will be bound or obligated by the change or amendment. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. This Mortgage will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Mortgage has been accepted by Lender in the State of Iowa. No Waiver by Lender. Grantor understands Lender will not give up any of Lender's rights under this Mortgage unless Lender does so in writing. The fact that Lender delays or omits to exercise any right will not mean that Lender has given up that right. If Lender does agree in writing to give up one of Lender's rights, that does not mean Grantor will not have to comply with the other provisions of this Mortgage. Grantor also understands that if Lender does consent to a request, that does not mean that Grantor will not have to get Lender's consent again if the situation happens again. Grantor further understands that just because Lender consents to one or more of EXHIBIT !D'" PAGE 10 MORTGAGE �C� V Loan No: 8026684 (Continued) 'Y --� ��. PB 11 Grantor's requests, that does not mean Lender will be required to consent to any of`rantor> future requests. Grantor waives presentment, demand for payment, protest, and419tice b dishonor. Grantor waives all rights of exemption from execution or similar law in the ProArty, and- 1 Grantor agrees that the rights of Lender in the Property under this Mortgage are prior to tremor's rights while this Mortgage remains in effect. Severability. If a court finds that any provision of this Mortgage is not valid or should not be enforced, that fact by itself will not mean that the rest of this Mortgage will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Mortgage even if a provision of this Mortgage may be found to be invalid or unenforceable. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Mortgage. 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 Property and waives all rights of exemption as to any of the Property. If a Grantor is not an owner of the Property, that Grantor executes this Mortgage for the sole purpose of relinquishing and waiving such rights. DEFINITIONS. The following words shall have the following meanings when used in this Mortgage: Borrower. The word "Borrower" means Falanga Sula and includes all co-signers and co-makers signing the Note and all their successors and assigns. Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Mortgage in the events of default section of this Mortgage. Existing Indebtedness. The words "Existing Indebtedness" mean the indebtedness described in the Existing Liens provision of this Mortgage. Grantor. The word "Grantor" means Falanga Sula. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any EXHIBIT !'DI', PAGE 11 MORTGAGE Loan No: 8026684 (Continued) Page 12 and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest and late fees, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means Freedom Security Bank, its successors and assigns. The words "successors or assigns" mean any person or company that acquires any interest in the Note. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. The word "Note" means the promissory note dated June 9, 2006, in the original principal amount of $15,137.09 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. The maturity date of this Mortgage is July 1, 2011. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. _ rJ O D_I 71 —I C) r rri -0 fir- rn o� EXHIBIT "D", PAGE 12 D ry • MORTGAGE Loan No: 8026684 (Continued) Page 13 GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS MORTGAGE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT. This Notice is required by Iowa law. In this Notice the term "you" means the Grantor named above. NOTICE TO CONSUMER: 1. Do not sign this paper before you read it. 2. You are entitled to a copy of this paper. 3. You may prepay the unpaid balance at any time without penalty and may be entitled to receive a refund of unearned charges in accordance with law. GRANTOR: x ({/4n ,��/9 a anga a Q INDIVIDUAL ACKNOWLEDGMENT n N =-+0 -= m STATE OF kVA, ) — O� ISS COUNTY OF ''.. )41460,-) ) D IV On this -I day of ► , A.D., 20 ap , before me, a Notary Public in and for said County and State, personally appeared Falange Sula, a single person, to me known to be the person named in and who executed the foregoing ins ument and acknowledged that he or she executed the same as his or her voluntary act and deed. '4,1,;-17 ....- V ++• TRENT Ro HAWKINS T otary Public in the State of 1�/� Gbmmiselon Number 719357 • °" • -t �I�°nrbFxQlres WEA AAO Lmning.Vs,5.30.00.004 Cop.H.1..d Fond,SPotion.,I,,.155>,2035. AA Aigho Argy. •P.CAMAALAAGtCFAIALIG33.FC 711.3713 AA.13 EXH B:3T T'ID"', PAGE 13 1 4001Freedom Coralville Banking Center • Security 140 Holiday Road•PO Box 5880 Coralville,IA 52241 Bank (319)688-9005•FAX(319)688-9828 Katona Banking Center November 19, 2008 402 Avenue B•PO Box 1206 NOTICE OF RIGHT TO CURE Katona, IA 52247 (319)656-2265•FAX(319)656-5416 Falanga Sula 2243 Russell Drive Iowa City,IA 52240 Dear Ms. Sula: • You are indebted to Freedom Security Bank under a promissory note with the current outstanding principal balance of$133,607.01 with accrued interest of$2,217.65 to November 19, 2008. Said note is secured by real estate mortgage on property described as: Lot 227 in Hollywood Manor Addition Part Five, to Iowa City,Iowa according to the plat thereof recorded in Plat Book 13, Page 18,Plat Records of Johnson County, Iowa. The property is commonly known as 2243 Russell Drive Iowa City,IA 52240 You are currently in default under said note for failing to make your payments due September 1, 2008, October 1, 2008 and November 1, 2008. You have a right to cure your default by paying the $3,293.95 for the payments referenced above. All of said paythents should be made to FREEDOM SECURITY BANK. The address of Freedom Security Bank is PO Box 5880, Coralville,IA 52241. The telephone number is.319-688- 9005. This letter is notice to you that Freedom Security Bank will require you to cure your'default by bringing your payments current on or before December 22,2008. (In addition, you must also pay$1,264.65 for December once it is due.) If you do not cure your default on or before December 22, 2008,Freedom Security Bank will proceed with their right to foreclose on the mortgage covering the above-described real estate. Sincer , Chris Baker Senior Vice President P.S. Attached is a list of agencies re: your right to counseling services 0 3 11 n-� �0 - Gr-- rn 6 73 D tom) V 1121 Exhibit E, page 1 EOUL HOUS G OPPORTUNITY Member FDIC • 4Freedon-i Coralville Banking Center Security 140 Holiday Road•PO Box 5880 Coralville,IA 52241 Bank (319)688-9005•FAX(319)688-9828 November 19, 2008 Kalona Banking Center 402 Avenue B•PO Box 1206 NOTICE OF RIGHT TO CURE Kalona,IA 52247 (319)656-2265•FAX(319) 656-5416 Falanga Sula 2243 Russell Drive Iowa City, IA 52240 Dear Ms. Sula: You are indebted to Freedom Security Bank under a promissory note with the current outstanding principal balance of$13,575.72 with accrued interest of$146.85 to November 19, 2008. Said note is secured by real estate mortgage on property described as: Lot 227 in Hollywood Manor Addition Part Five, to Iowa City,Iowa according to the plat thereof recorded in Plat Book 13, Page 18, Plat Records of Johnson County, Iowa. The property is commonly known as 2243 Russell Drive Iowa City,IA 52240 You are currently in default under said note for failing to make your payments due September 1, 2008, October 1, 2008 and November 1, 2008. You have a right to cure your default by paying the$558.72 for the payments referenced above. All of said payments should be made to FREEDOM SECURITY BANK. The address of Freedom Security Bank is PO Box 58-80, Coralville, IA 52241. The telephone number is 319-688- 9005. This letter is notice to you that Freedom Security Bank will require you to cure your default by bringing your payments current on or before December 22, 2008. (In addition,you must also pay$186.24 for December once it is due.) If you do not cure your default on or before December 22, 2008, Freedom Security Bank will proceed with their right to foreclose on the mortgage covering the above-described real estate. Sincere , Chris Baker O Senior Vice President n `a P.S. Attached is a list of agencies re: your right to counseling serviceso -C r •_fid Exhibit E, page 2 MAL HOUSING OPPORTUNITY Member FDIC • c � IN THE DISTRICT COURT OF IOWA IN AND FOR JOHNSON COUNTY Freedom Security Bank, Federal ID# 42-0246790 Plaintiff, ) Equity No. v. AFFIDAVIT OF PLAINTIFF'S Falanga Sula, City of Iowa City, ) ATTORNEY FOR ATTORNEY FEES Iowa, Westwinds Management and GMT .) Enterprise LLC, Rick Woodburn aka ) Richard Alan Woodburn, Advance America Cash Advance Centers, 8 O Abdull Asadi aka Abdullah Asadi, ) Davis Heating and Air Conditioning, ) Defendants. ) '< N r -< rn STATE OF IOWA ) m SS. O 2 JOHNSON COUNTY ) D N v I, Nancy B. Willis, being first duly sworn, do depose and state that I am an attorney of record for the Plaintiff in the above-entitled action and that the fee claimed herein is for services actually rendered in this cause. That there is no contract, agreement, or arrangement, either oral or written, express or implied, between myself and my client, or between myself and any other person, contemplating any division of compensation for services rendered in the above entitled proceedings except (if shown by these proceedings) other legal counsel in a regular bonafide law partnership with or associated with the undersigned in the above entitled matter, or jointly serving with her as attorney, in relation to this cause. That the Defendant, Falanga Sula, had information of the whereabouts of the notes sued upon, and reasonable opportunity to pay the same before the suit was brought herein. WILLIS & WI ,L,�� J of Nancy B. Wi( . 's P.O. Box 143 500 S. Dubuque Street Iowa City, Iowa 52244-0143 STATE OF IOWA SS. JOHNSON COUNTY Subscribed and sworn . before , e this 2 .:.•.. March, 109. 4 Si AL I � t& .vey-P •lic in and fore State of Iowa My •mm'ssion expires: t JA3ON$TAATS EXHIBIT "F" C.amn spin Eiq*ls kms 10.2011 END OF CASE FILE IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY FEDERAL HOME LOAN MORTGAGE �}, CORPORATION, CASE NO. C(.(;)QV U 7(%C7 Plaintiff, ORIGINAL NOTICE _, vs C- HORACE D. EVANS, SPOUSE OF -4 (-)-‹ N HORACE D. EVANS, AMANDA EVANS, n .a NATHANIEL CLARK, SPOUSE OF _;` - i NATHANIEL CLARK, CITY OF IOWA p x ' —1 CITY, STATE OF IOWA,IOWA s x Y:' DEPARTMENT OF HUMAN SERVICES, o AND PARTIES IN POSSESSION, Defendants. L TO THE ABOVE-NAMED DEFENDANT(S): C`+7 •f- i Id' 45 You are notified that a Petition has been filed in the office of the Clerk of this Court, naming you as a Defendant in this action. A copy of the Petition(and any documents filed with it) are attached to this notice. The attorney for the Plaintiff is Brian G. Sayer of the law firm of Dunakey & Klatt, P.C.,whose address is 531 Commercial St., Suite 250, P.O. Box 2363, Waterloo, Iowa 50704. That attorney's phone number is (319) 232-3304; facsimile number(319) 232-3639. You must serve a motion or answer within 20 days after service of this Original Notice upon you and, within a reasonable time thereafter, file your motion or answer with the Clerk of Court for Johnson County, at the Johnson County Courthouse, in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the Petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator at 319-398-3920. (If you are hearing impaired call Relay Iowa TTY(800) 735-2942). X 1 1_00 Q4,40,1_ , Cl of Court r "174-1- Johnson County Courthouse Iowa City, Iowa IMPORTANT: YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS. On — Cove,r-n' .J CA IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY FEDERAL HOME LOAN MORTGAGE CORPORATION, CASE NO. ` Plaintiff, 0-0 : N = ,, vs FORECLOSURE PETITION -^ HORACE D. EVANS, SPOUSE OF HORACE D. EVANS,AMANDA EVANS,NATHANIEL _ • c,� CLARK, SPOUSE OF NATHANIEL CLARK, CITY OF IOWA CITY, STATE OF IOWA,IOWA DEPARTMENT OF HUMAN SERVICES,AND PARTIES IN POSSESSION, Defendants. NOTICE THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION. THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE.IF YOU FILE A WRITTEN DEMAND,THE SALE WILL BE DELAYED UNTIL SIX MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO, MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR _n RESIDENCE OR IS YOUR RESIDENCE,BUT NOT A ONE-FAMILY OR TWO-FAMILY - Ec v DWELLING.YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE.TI ) PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OFr ro a MORTGAGED PROPERTY. YOU MAY PURCHASE AT THE SALE. c:c 0 • w COMES NOW the Plaintiff,and respectfully states to the Court the following as it?cause action against the Defendants: 1. The Plaintiff elects to foreclose without redemption pursuant to Iowa Code Section 654.20.The mortgaged property which is the subject of this action is not used for agricultural purposes.The mortgaged property is a one-family or two-family dwelling. 2. The Plaintiff is a company duly authorized to transact business in the United States of America. 3. The Defendants, Horace D. Evans and Spouse of Horace D. Evans, are a married couple. 4. The Defendants,Nathaniel Clark and Spouse of Nathaniel Clark,are a married couple and are residents of Johnson County,Iowa. 5. The Defendant,Amanda Evans, is joined as a party to this action because she may claim some right,title or interest in the property which is the subject of this action including, but not limited to, by virtue of a Judgment entered in DRCV069923 in the District Court in and for Johnson County. Any right or interest the Defendant may have in and to the property which is the subject of this action is junior and subordinate to the right and interest of the Plaintiff in and to the property. 6. The Defendants,Nathaniel Clark and Spouse of Nathaniel Clark,are joined as parties to this action because he may claim some right,title or interest in the property which is the subject of this action including,but not limited to, a Warranty Deed recorded in Book 4379,Page 909 in the Johnson County Recorder's Office. Any right or interest the Defendant may have in and to the property which is the subject of this action is junior and subordinate to the right and interest of the Plaintiff in and to the property. 7. The Defendant, City of Iowa City, is joined as a party to this action because it may claim some right,title or interest in the property which is the subject of this action including, but not limited to,by virtue of a Judgment entered in CISC071947 in the District Court in and for Johnson County.Any right or interest the Defendant may have in and to the property which is the subject of this action is junior and subordinate to the right and interest of the Plaintiff in and to the property. 8. The Defendant, State of Iowa, is joined as a party to this action because it may claim some right,title or interest in the property which is the subject of this action including, but not limited to, by virtue of a Judgment entered in STA0037105 in the District Court in and for Johnson County and a Judgment entered in DRCV069923 in the District Court in and for Johnson County. Any right or interest the Defendant may have in and to the property which is the subject of this action is junior and subordinate to the right and interest of the Plaintiff in and to the property. 9. The Defendants,Parties in Possession, are made parties to this cause of action because they may claim some right,title or interest in the property which is the subject of this action.Any right or interest the Defendants may have in and to the property which i5 the `"r"1 subject of this action is junior and subordinate to the right and interest of the-Plain ' f in - - and to the property. [. 10. On or about 01/11/2008,the Defendant,Horace D. Evans, executed and delivered tb Taylor,Bean& Whitaker one certain Promissory Note in the principal sum of w $215,000.00. CO 11. To secure payment of the Note,the Defendant,Horace D. Evans,executed and delivered to Mortgage Electronic Registration Systems,Inc. as nominee for Taylor,Bean& Whitaker one certain Purchase Money Mortgage dated 01/11/2008,which Mortgage was filed on 01/25/2008, in Book 4257,Page 259 in the records for Johnson County, upon the following described real estate,to-wit: Lot 232,Pepperwood Addition Part 10,an addition to the City of Iowa City,Iowa, according to the plat thereof recorded in the Book 31, Page 17,Plat Records of Johnson County,Iowa. Situated in Johnson County,Iowa. 12. A copy of the Mortgage together with the Recorder's Certificate thereon is attached hereto as Exhibit"A"and by this reference incorporated herein. 13. The Mortgage and Note provide that in the case of default,the holder may declare the entire principal, and the interest accrued thereon,due and payable and the Mortgage may be foreclosed. 14. The Defendant,Horace D.Evans,has failed to pay the principal and interest thereon as provided by the terms of the Note. 15. By reason of the failure to pay the principal and interest,the Plaintiff has elected and does hereby elect, in accordance with the terms and conditions of the Note and Mortgage,to declare the whole of the Note due and payable forthwith and to exercise its right to enforce payment of the entire Note as provided by the Note and to foreclose the Mortgage given to secure the same. 16. The unpaid balance due on the Note after allowing all credits due to the Defendants is the principal balance of$212,708.58,plus interest to 06/11/2009 in the amount of $5,171.13. Interest accrues on the said sum at the rate of$39.19 per day. 17. In order to commence this foreclosure proceeding the Plaintiff has expended the following costs: report of title costs $375.00, escrow advance of$360.61,other fees of $607.62, to all which sums the Plaintiff is entitled to judgment against the property with interest at the rate of 6.75%per annum,plus costs and accruing costs including,but not limited to,any and all advances made by the Plaintiff for taxes, insurance,property preservation and other costs between the time of the Foreclosure Decree and the time of Sheriff's Sale, including reasonable attorney's fees. 18. The Plaintiff is the Mortgagee in this action,due demand has been made for.payment, and payment has been refused. "T1 19. Under the terms of the Mortgage a receiver may be appointed. _ -; ,3 Y' 20. The Plaintiff,or its predecessor in interest or servicing agent, gave a Notic5 es Rigg to 0 Cure and more than 30 days have elapsed since the notice was given.A copPtif sail, Notice is attached hereto as Exhibit"C"and incorporated herein by this re.ference&A oo 21. The Plaintiff hereby waives its right to a deficiency judgment. 22. Under the terms of said Note and Mortgage,the Defendant, Horace D.Evans,has agreed to pay reasonable attorney's fees and all costs in connection with the proceeding to enforce or foreclose the Mortgage. Attached hereto as Exhibit"B",and incorporated herein by this reference, is an Affidavit of Attorney's Fees as required by Iowa Code §625.22(2005). 23. Pursuant to Iowa Code § 654.4B(1)a Demand for Payment was sent to the Defendant, Horace D. Evans. A copy of said Demand is attached hereto as Exhibit"C"and incorporated herein by this reference. 24. Pursuant to Iowa Code § 654.4B(2)a Mortgage Mediation Notice was sent to the Defendant,Horace D. Evans. A copy of said Notice is attached hereto as Exhibit"D" and incorporated herein by this reference. WHEREFORE,the Plaintiff,prays for judgment in rem against the real estate described above for the principal balance of$212,708.58,plus interest to 06/11/2009 in the amount of$5,171.13,plus continuing interest,which accrues on the said sum at the rate of 6.75%per annum and in the amount of $39.19 per day;for the costs of this action including report of title$375.00,escrow advance$360.61, other fees $607.62, plus reasonable attorney's fees and additional sums for continuing the abstract of title or other purposes authorized by said Note and Mortgage and by Iowa law; that said sums be declared a lien upon the premises above described from 01/11/2008,the date of the Plaintiffs mortgage,prior and superior to any right,title, lien or interest of the Defendants or any of them therein;that the Plaintiffs Mortgage be foreclosed;that any right,title, lien or interest of the Defendants or any of them in said property be declared junior and inferior to the lien of Plaintiff's Mortgage;that a special execution issue for the sale of the mortgaged premises or so much thereof as may be necessary to satisfy the judgment including interest,costs and accruing costs including, but not limited to,any and all advances made by the Plaintiff for taxes, insurance,property preservation and other costs between the time of the Foreclosure Decree and the time of Sheriff's sale,and that from and after said sale under special execution,the right,title, lien or interest of the Defendants in and to the mortgaged premises be forever cut off, barred and foreclosed,and the purchaser at said sale take free and clear of any right,title,lien or interest of the Defendants or any of them. The Plaintiff further prays for a Writ of Possession to be issued under the seal of this Court, directed to the Sheriff of Johnson County,Iowa,commanding him to put the purchaser at said sale under special execution,or a successor in interest, in possession of the premises; and that a receiver be appointed to take charge of the mortgaged premises during the period of foreclosure for the purpose of preserving the mortgaged premises for the benefit of all concerned. The Plaintiff further prays for such other and further relief as the Court may deem just and equitable under the circumstances. Respectfully submitted, DUNAKEY& KLATT, P.C. arn, IZ. /}P o ! Brian G.der AT 06893 Amy R. lash AT0008965 531 Commercial St., Ste. 250 P.O.Box 2363 Waterloo,IA 50701 319-232-3304 319-232-3639(fax) Attorneys for the Plaintiff -7 rTh • 1 "l1 r. wC- r- f.3 s O D �n co .33-7k5 IIII III VIII III I IIII I III II II I IIII III IIII I1I I it II Il III I l I IIIc Doc ID: 021067500015 Tvoe: 0EN Recorded: 01/25/2008 at 01:05:27 PM Fee Amt: $77.00 Paae 1 of 15 Johnson County Iowa Kim Painter County Recorder 4257 PG259-273 EXHIBIT a MORTGAGE • LENDER: Taylor, Bean & Whitaker • BORROWER: Horace D. Evans, a single person • LEGAL DESCRIPTION: Page 14 • PREPARED BY: Teresa Neeley IJ (312)207-3008 -‹r- iTI 1417 N. Magnolia Ave. M -t, Ocala, FL 34475 • V 1 .-- 0 h W > 111 . RETURN TO: SECURITY FIRST TITLE CO. 205 W. STEPHENSON. FREEPORT, IL 61032 90- I (05 -14 • Taylor,Bean&Whitaker Mortgage Corp. Prepared By: 1417 North Magnolia Ave Ocala,FL 34475 [Name) [Address) [Telephone No.) [Space Above This Line For Recording Data] MORTGAGE MIN: 100029500022608040 DEFINITIONS Words used in multiple sections of this document are defined below and other words arc defined in Sections 3,11,13,18,20 and 21.Certain rules regarding the usage of words used in this document arc also provided in Section 16. (A) "Security Instrument"means this document,which is dated January 11,2008 ,together with all Riders to this document. • (B) "Borrower"is Horace D Evans, a single person Borrower is the mortgagor under this Security Instrument. (C) "MERS"is Mortgage Electronic Registration Systems,Inc.MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns.MERS is the mortgagee under this Security Instrument MERS is organized and existing under the laws of Delaware,and has an address and telephone number of P.O.Box 2026,Flint,MI 48501-2026,tel.(888)679-MERS. (D) "Lender"is Taylor,Bean&Whitaker Mortgage Corp. Lender is a a Florida Corporation organized and existing under the laws of FL .Lender's address is 1417 North Magnolia Ave,Ocala,FL 34475 (E) "Note"means the promissory note signed by Borrower and dated January 11,2008 .The Note states that Borrower owes Lender Two Hundred Fifteen Thousand and no/100 Dollars(U.S.$215,000.00 )plus interest.Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than February 01,2038 (F) 'Property"means the property that is described below under the heading"Transfer of Rights in the Property." (G) "Loan"means the debt evidenced by the Note,plus interest,any prepayment charges and late charges due under the Note,and all sums due under this Security Instrument,plus interest. IOWA—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 38161/01 GREAT1ANn■ ITEM T2689L1(0011)—MERG (Page.1 of)3 pages) To Ode Dalt 1200.53 6 9393 Ohm 616-791.1131 1111111111IIIIIIII IIIIIIIIII11111IIII IIII III 11111 IDI 111111111111 _ '0240712260804' rn p�7 sx w • D v, //ft (H) "Riders"means all Riders to this Security Instrument that are executed by Borrower.The following Riders are to be executed by Borrower[check box as applicable]: I I Adjustable Rate Rider n Condominium Rider I I Second Home Rider l I Balloon Rider n Planned Unit Development Rider n Other(s)[specify] n 1-4 Family Rider ri Biweekly Payment Rider (I) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders(that have the effect of law)as well as all applicable final,non-appealable judicial opinions. (3) "Community Association Dues,Fees,and Assessments"means all dues,fees,assessments and other charges that are imposed on Borrower or the Property by a condominium association,homeowners association or similar organization. (K) "Electronic Funds Transfer"means any transfer of funds, other than a transaction originated by check,draft, or similar paper instrument,which is initiated through an electronic terminal,telephonic instrument,computer,or magnetic tape so as to order,instruct,or authorize a financial institution to debit or credit an account.Such term includes,but is not limited to, point-of-sale transfers, automated teller machine transoctions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (L) "Escrow Items"means those items that are described in Section 3. (M) "Miscellaneous Proceeds"moms any compensation, settlement, award of damages,or proceeds paid by any third party(other than insurance proceeds paid under the coverages described in Section 5)for:(i)damage to,or destruction of,the Property; (ii)condemnation or other taking of all or any part of the Property;(iii)conveyance in lieu of condemnation;or (iv)misrepresentations of,or omissions as to,the value and/or condition of the Property. (N) "Mortgage Insurance"means insurance protecting Lender against the nonpayment of,or default on,the Loan. (0) "Periodic Payment"means the regularly scheduled amount due for(i) principal and interest under the Note, plus (ii)any amounts under Section 3 of this Security Instrument. (P) "RESPA"means the Real Estate Settlement Procedures Act(12 U.S.C.§2601 et seq.)and its implementing regulation, Regulation X(24 C.F.R.Part 3500),as they might be amended from time to time,or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument,"RESPA"refers to all requirements and restrictions that are imposed in regard to a "federally related mortgage loan"even if the Loan does not qualify as a "federally related mortgage loan"under RESPA. (Q) "Successor in Interest of Borrower"means any party that has taken title to the Property,whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. tOWA—Single Funity—Fannie Mae/Freddie Mac UNIFORM INSTRUh1FSr t Form 3016 1/01 GREATLAND■ ITEM 128891210011)—MERS (Page 2 of 13 pager) To Ord.'Cal:143D-530-91.43 0 Fa 616-791.1131 — T11 .3 5 Z/. t�J D t1't"" TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender:(i)the repayment of the Loan,and all renewals,extensions and modifications of the Note;and(ii)the performance of Borrower's covenants and agreements under this Security Instrument and the Note.For this purpose,Borrower irrevocably mortgages,grants and conveys to MERS (solely as nominee for Lender and Lender's successors and assigns)and to the successors and assigns of MERS,with power of sale,the following described property located in the County of Johnson (Type of Recording Jurisdiction] Mane of Recording Jurisdiction] See Attached Exhibit A. which currently has the address of 2240 Balsam Ct [Street) Iowa City ,Iowa 52240 ("Property Address"): [City] [Zip Code] TOGETHER WITH all the improvements now or hereafter erected on the property,and all easements,appurtenances, and fixtures now or hereafter a part of the property.All replacements and additions shall also be covered by this Security Instrument.All of the foregoing is referred to in this Security Instrument as the"Property."Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument,but,if necessary to comply with law or custom,MERS(as nominee for Lender and Lender's successors and assigns)has the right:to exercise any or all of those interests,including,but not limited to,the right to foreclose and sell the Property;and to take any action required of Lender including,but not limited to,releasing and canceling this Security Instrument. BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered,except for encumbrances of record.Borrower warrants and will defend generally the title to the Property against all claims and demands,subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. UNIFORM COVENANTS.Borrower and Lender covenant and agree as follows: 1. Payment of Principal,Interest,Escrow Items,Prepayment Charges,and Late Charges.Borrower shall pay when due the principal of,and interest on,the debt evidenced by the Note and any prepayment charges and late charges due under the Note.Borrower shall also pay funds for Escrow Items pursuant to Section 3.Payments due under the Note and this Security Instrument shall be made.in U.S.currency. However,if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms,as selected by Lender:(a)cash;(b)money order;(c)certified check,bank check,treasurer's check or cashier's check,provided -11 any such check is drawn upon an institution whose deposits are insured by a federal agency,instrumentality,or entity;or ' J (d)Electronic Funds Transfer. t Payments arc deemed received by Lender when received at the location designated in the Note or at such other location {' as may be designated by Lender in accordance with the notice provisions in Section 15.Lender may return any payment or -< ( e partial payment if the payment or partial payments are insufficient to bring the Loan current.Lender may accept any payment (Ti k.A.) IOWA—Single Family—Fannie Mae/Freddte Mac UNIFORM INSTRUMENT Farm 3016 1/01 GREAnAND■ trl ITEM T2saa1.3 toot 1)---MERS (Page 3 of 13 pages) to Ordr G1:1A -sin-u393 OF.616701-1131 I �� or partial payment insufficient to bring the Loan current,without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future,but Lender is not obligated to apply such payments at the time such payments are accepted.If each Periodic Payment is applied as of its scheduled due date,then Lender need not pay interest on unapplied funds. Lender may bold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time,Lender shall either apply such funds or return them to Borrower. If not applied earlier,such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure.No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds.Except as otherwise described in this Section 2,all payments accepted and applied by Lender shall be applied in the following order of priority:(a)interest due under the Note; Co)principal due under the Note;(c)amounts due under Section 3.Such payments shall be applied to each Periodic Payment in the order in which it became due.Any remaining amounts shall be applied fust to late charges,second to any other amounts due under this Security Instrument,and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due,the payment may be applied to the delinquent payment and the late charge.If more than one Periodic Payment is outstanding,Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if,and to the extent that,each payment can be paid in full.To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments,insurance proceeds,or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date,or change the amount,of the Periodic Payments. 3. Funds for Escrow Items.Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full,a sum(the"Funds")to provide for payment of amounts due for:(a)taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property;(b)leasehold payments or ground rents on the Property,if any;(c)premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10.These items are called"Escrow Items."At origination or at any time during the term of the Loan,Lender may require that Community Association Dues,Fees,and Assessments,if any,be escrowed by Borrower,and such dues,fees and assessments shall be an Escrow Item.Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds frit- Escrow orEscrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items.Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time.Any such waiver may only be in writing.In the event of such waiver,Borrower shall pay directly,when and where payable,the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require.Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument,as the phrase"covenant and agreement"is used in Section 9.If Borrower is obligated to pay Escrow Items directly,pursuant to a waiver,and Borrower fails to pay the amount due for an Escrow Item,Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount.Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and,upon such revocation,Borrower shall pay to Lender all Funds,and in such amounts,that are then required under this Section 3. Lender may,at any time,collect and hold Funds in an amount(a)sufficient to permit Lender to apply the Funds at the time specified under RESPA,and(b)not to exceed the maximum amount a lender can require under RESPA.Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality,or entity (including Lender,if Lender is an institution whose deposits are so insured)or in any Federal Home Loan Bank.Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA.Lender shall not charge Borrower for holding and applying the Funds,annually analyzing the escrow account,or verifying the Escrow Items,unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge.Unless an agreement is made in _ writing or Applicable Law requires interest to be paid on the Funds,Lender shall not be required to pay Borrower any interest 'm 1 -0 I i 1 IOWA—Single Pnrnity—Fannie.Mae/FredJlc Mat UNIFORM INSTRUMPN'r Form 3016 1101 73 3 '' GAF.ITUND■ O�`� I1rM 126801$(0011t—MERs (Page 4 of 13 pages) To Ode,tan:1-400-530-9393❑rye 616.791-1131 X �� Pl • • or earnings on the Funds. Borrower and Lender can agree in writing,however, that interest shall be paid on the Funds. Lender shall give to Borrower,without charge,an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow,as defined under RESPA,Lender shall account to Borrower for the excess funds in accordance with RESPA.If there is a shortage of Funds held in escrow,as defined under RESPA,Lender shall notify Borrower as required by RESPA,and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA,but in no more than 12 monthly payments.If there is a deficiency of Funds held in escrow, as defined under RESPA,Lender shall notify Borrower as required by RESPA,and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA,but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security instrument,Lender shall promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument,leasehold payments or ground rents on the Property,if any, and Community Association Dues,Fees,and Assessments,if any.To the extent that these items are Escrow Items,Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower:(a)agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Burrower is performing such agreement;(b)contests the lien in good faith by,or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending,but only until such proceedings are concluded;or(c)secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument.If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument,Lender may give Borrower a notice identifying the lien.Within 10 days of the date on which that notice is given.Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4. Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan. 5. Property Insurance.Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire,hazards included within the term"extended coverage,"and any other hazards including,but not limited to,earthquakes and floods,for which Lender requires insurance.This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan.The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification land tracking services; or (b)a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification.Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above,Lender may obtain insurance coverage,nt Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore,such coverage shall cover Lender,but might or might not protect Borrower,Borrower's equity in the Property,or the contents of the Property,against any risk,hazard or liability and might provide greater or lesser coverage than was previously in effect.Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained.Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument.These amounts shall bear interest at the Note rate from the , . date of disbursement and shall be payable,with such interest,upon notice from Lender to Borrower requesting payment 3 All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove — such policies, shall include a standard mortgage clause,and shall name Lender as mortgagee and/or as an additional loss r...y, payee.Lender shall have the right to hold the policies and renewal certificates.If Lender requires,Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices.If Borrower obtains any form of insurance coverage,not _rv1 �+� otherwise required by Lender,for damage to,or destruction of,the Property,such policy shall include a standard mortgage f clause and shall name Lender as mortgagee and/or as an additional loss payee. :" r"' 171 1 In the event of loss,Borrower shall give prompt notice to the insurance carrier and Lender.Lender may make proof of ffl —o loss if not made promptly by Borrower.Unless Lender and Borrower otherwise agree in writing,any insurance proceeds, o whether or not the underlying insurance was required by Lender,shall be applied to restoration or repair of the Property,ifW IOWA—Single Family—Fanrile Maercreddle Mac UNIFORM INSTRUMENT Form 3016 1/01 GAE 7LAND■ ITEM 7268916(0011)—HERS (Page 5 of 13 pages) To Order Cat 1.oma Riv Oetc6167911171 'the restoration or repair is economically feasible and Lender's security is not lessened.During such repair and restoration period,Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction,provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed.Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds,Lender shall not be required to pay Borrower any interest or earnings on such proceeds.Fees for public adjusters,or other third parties,retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower.If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with the excess,if any,paid to Borrower.Such insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the Property,Lender may file, negotiate and settle any available insurance claim and related matters.If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim,then Lender may negotiate and settle the claim.The 30-day period will begin when the notice is given.In either event, or if Lender acquires the Property under Section 22 or otherwise,Borrower hereby assigns to Lender(a)Borrower's tights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument,and (b)any other of Borrower's rights(other than the right to any refund of unearned premiums paid by Borrower)under all insurance policies covering the Property,insofar as such rights are applicable to the coverage of the Property.Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument,whether or not then due. 6. Occupancy.Borrower shall occupy;establish,and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue tooccupy the Property as Borrower's principal residence for at least one year after the date of occupancy,unless Lender otherwise agrees in writing,which consent shall not be unreasonably withheld,or unless extenuating circumstances exist which are beyond Borrower's control. 7. Preservation,Maintenance and Protection of the Property;Inspections.Borrower shall not destroy,damage or impair the Property,allow the Property to deteriorate or commit waste on the Property.Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is.not economically feasible,Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage.If insurance or condemnation proceeds are paid in connection with damage to,or the taking of,the Property,Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes.Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed.If the insurance or condemnation proceeds are not sufficient to repair or restore the Property,Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections of the Property.If it has reasonable cause,Lender may inspect the interior of the improvements on the Property.Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application.Borrower shall be in default if,during the Loan application process,Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading,or inaccurate information or statements to Lender(or failed to provide Lender with material information) in connection with the Loan.Material representations include,but are not limited to,representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument.If(a)Borrower fails to perform the covenants and agreements contained in this Security Instrument,(b)there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument(such as a proceeding in bankruptcy,probate,for condemnation or forfeiture,for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations),or(c)Borrower has abandoned the Property,then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property,and securing and/or repairing the Property.Lender's actions can include,but are not limited to:(a)paying any sums secured by a lien which has priority over this Security Instrument; n t'._ '�{ �= (b)appearing in court;and(c)paying reasonable attorneys'fees to protect its interest in the Property and/or rights under this �� � Security Instrument,including its secured position in a bankruptcy proceeding.Securing the Property includes, but is not N limited to,entering the Property to make repairs,change locks,replace or board up doors and windows,drain water from pipes,eliminate building or other code violations or dangerous conditions, and have utilities turned on or off.Although ,<i— 1 1 1 rn U� IOWA—SiegleFernily—FannieMae/Freddle Mae UNIFORM INSTRUMENT Form 30161/01 0'a GREARAND■ iM rmeasts oro,mans (Page 6 of 13 pages) To ob. i-1oo-sramgsoFax a+easi.113r Vl ' Lender may take action under this Section 9,Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument.These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest,upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold,Borrower shall comply with all the provisions of the lease.If Borrower acquires fee title to the Property,the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance.If Lender required Mortgage Insurance as a condition of making the Loan,Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect.If,for any reason,the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance,Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect,from an alternate mortgage insurer selected by Lender.If substantially equivalent Mortgage Insurance coverage is not available,Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect.Lender will accept,use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance.Such loss reserve shall be non-refundable,notwithstanding the fact that the Loan is ultimately paid in full,and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve.Lender can no longer require loss reserve payments if Mortgage Insurance coverage(in the amount and for the period that Lender requires)provided by an insurer selected by Lender again becomes available,is obtained,and Lender requires separately designated payments toward the premiums for Mortgage Insurance.If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect,or to provide a non-refundable loss reserve,until Lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law.Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the Loan as agreed.Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements with other parties that share or modify their risk,or reduce losses.These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party(or parties) to these agreements.These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements,Lender,any purchaser of the Note,another insurer,any reinsurer,any other entity,or any affiliate of any of the foregoing,may receive(directly or indirectly)amounts that derive from(or might be characterized as)a portion of Borrower's payments for Mortgage Insurance,in exchange for sharing or modifying the mortgage insurer's risk,or reducing losses.If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer,the arrangement is often termed"captive reinsurance."Further: (a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance,and they will not entitle Borrower to any refund. (b) Any such agreements will not affect the rights Borrower has—if any—with respect to the.Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law.These rights may include the right-to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage ' Insurance terminated automatically,and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 11. Assignment of Miscellaneous Proceeds;Forfeiture.All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender. — If the Property is damaged,such Miscellaneous Proceeds shall be applied to restoration or repair of the Property,if the C) • restoration or repair is economically feasible and Lender's security is not lessened.During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Ptoceeds until Lender has had an opportunity to inspect such Property ._.t • to ensure the work has been completed to Lender's satisfaction,provided that such inspection shall be undertaken promptly. .- r'-= •-‘.) •m IOWA—Single Family—Fannie Mae/Freddle Mae UNIFORM INSTRUMENT Form 3016 trot O 71 CD GROAN.*■ =el.. ITEM T2689L7(0011)—MERS (Page 7 0.113 pages) To Order at 1-800-530-9393 0 k 616-791-1lat C l? D Ln • • ' Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened,the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with the excess,if any,paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking,destruction,or loss in value of the Property,the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with the excess,if any,paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking,destruction,or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking,destruction,or loss in value,unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction:(a)the total amount of the sums secured immediately before the partial taking,destruction,or loss in value divided by(b)the fair market value of the Property immediately before the partial taking,destruction,or loss in value.Any balance shall be paid to Borrower. In the event of a partial eking, destruction,or loss in value of the Property in which the fair market value of the Property immediately before the partial taking,destruction,or loss in value is less than the amount of the sums secured immediately before the partial taking,destruction,or loss in value,unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower,or if,after notice by Lender to Borrower that the Opposing Party(as defined in the next sentence)offers to make an award CO settle a claim for damages,Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the suns secured by this Security Instrument,whether or not then due."Opposing Party"means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding,whether civil or criminal,is begun that,in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument.Borrower can cure such a default and,if acceleration has occurred,reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that,in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower.Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including,without limitation,Lender's acceptance of payments from third persons,entities or Successors in Interest of Borrower or in amounts less than the amount then due,shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Several Liability;Co-signers;Successors and Assigns Bound.Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several.However,any Borrower who co-signs this Security Instrument but does not execute the Note(a"co-signer"):(a)is co-signing this Security Instrument only to mortgage,grant and convey the co-signer's interest in the Property under the terms of this Security Instrument;(b)is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify,forbear or crake any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. Subject to the provisions of Section IS, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing,and is approved by Lender,shall obtain all of Borrower's rights and benefits under IOWA—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1101 ..J GREAILAND■ ti 3 ITEM 12589' (0011)•-#AS (Page 8 of 13 pager) To smR t.ir 1-e00.580aSS5 OF.et&]a1•113T a • 'l1 • -I C) ra• r- 171 m -- U w > t,, this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing.The covenants and agreements of this Security Instrument shall bind(except as provided in Section 20)and benefit the successors and assigns of Lender. 14. Loan Charges.Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument,including,but not limited to,attorneys'fees,property inspection and valuation fees.In regard to any other fees,the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee.Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law_ If the Loan is subject to a law which sets maximum loan charges,and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits,then:(a)any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit;and(b)any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower.Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal,the reduction will be treated as a partial prepayment without any prepayment charge(whether or not a prepayment charge is provided for under the Note).Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices.All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by fust class mail or when actually delivered to Borrower's notice address if sent by other means.Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise.The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender.Borrower shall promptly notify Lender of Borrower's change of address.If Lender specifies a procedure for reporting Borrower's change of address,then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time.Any notice to Lender shall be given by delivering it or by mailing it by fust class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower.Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender.If any notice required by this Security Instrument is also required under Applicable Law,the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. 16. Governing Law;Severability;Rules of Construction.This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law.Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent,but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law,such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. As used in this Security Instrument(a)words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender;(b)words in the singular shall mean and include the plural and vice versa;and(c)the word"may"gives sole discretion without any obligation to take any action. 17. Borrower's Copy.Borrower shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18,"Interst in the Property"means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed,contract for deed,installment sales contract or escrow agreement,the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred)without Lender's prior written consent.Lender may require immediate payment in full of all sums secured by this Security Instrument However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option,Lender shall give Borrower notice of acceleration.The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument.If Borrower fails to pay these sums prior to the expiration of this period,Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration.If Borrower meets certain conditions,Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of:(a)five days before rJ a IOWA—Single Family—FannieMae/Freddie Mee UNIFORM sNST UMENT Form 30161/01 mat T26891.9(erost)—iEns (Page 9of13pages) Tooeduatu-800-530-9+33ora us0mfn13si •' .) pry i l l ai i) . ° l.�r. ' sale of the Property pursuant to any power of sale contained in this Security Instrument;(b)such other period as Applicable Law might specify for the termination of Borrower's right to reinstate;or(c)entry of a judgment enforcing this Security Instrument.Those conditions are that Borrower. (a)pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred;(b)cures any default of any other covenants or agreements; (c)pays all expenses incurred in enforcing this Security Instrument,including,but not limited to,reasonable attorneys'fees, property inspection and valuation fees,and other fees incurred for the purpose of protecting Lender's interest in the Property and rights wider this Security Instrument;and(d)takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument,and Borrower's obligation to pay the sums secured by this Security Instrument,shall continue unchanged.Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms,as selected by Lender: (a)cash;(b)money order;(c)certified check,bank check, treasurer's check or cashier's check,provided any such check is drawn upon an institution whose deposits are insured by a federal agency,instrumentality or entity;or(d)Electronic Funds Transfer.Upon reinstatement by Borrower,this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred.However,this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note;Change of Loan Servicer;Notice of Grievance.The Note or a partial interest in the Note(together with this Security Instrument)can be sold one or more times without prior notice to Borrower.A sale might result in a change in the entity(known as the"Loan Servicer")that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note,this Security Instrument,and Applicable Law.There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note.If there is a change of the Loan Servicer,Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer,the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing.If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence,join,or be joined to any judicial action(as either an individual litigant or the member of a class)that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of,or any duty owed by reason of,this Security Instrument,until such Borrower or Lender has notified the other party(with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken,that time period will be deemed to be reasonable for purposes of this paragraph.The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 21. Hazardous Substances.As used in this Section 21:(a)"Hazardous Substances"are those substances defined as toxic or hazardous substances,pollutants,or wastes by Environmental Law and the following substances:gasoline,kerosene, other flammable or toxic petroleum products,toxic pesticides and herbicides,volatile solvents,materials containing asbestos or formaldehyde,and radioactive materials;(b)"Environmental Law"means federal laws and laws of the jurisdiction where the Property is located that relate to health,safety or environmental protection;(c)"Environmental Cleanup"includes any response action,remedial action,or removal action,as defined in Environmental Law;and(d)an"Environmental Condition" means a condition that can cause,contribute to,or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence,use,disposal,storage,or release of any Hazardous Substances,or threaten to release any Hazardous Substances,on or in the Property.Borrower shall not do,nor allow anyone else to do, anything affecting the Property (a)that is in violation of any Environmental Law,(b)which creates an Environmental Condition,or(c)which,due to the presence,use,or release of a Hazardous Substance,creates a condition that adversely affects the value of the Property.The preceding two sentences shall not apply to the presence,use,or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property(including,but not limited to,hazardous substances in consumer products). Borrower shall promptly give Lender written notice of(a)any investigation,claim,demand,lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge,(b)any Environmental Condition,including but not limited to, any spilling,leaking,discharge,release or threat of release of any Hazardous Substance,and(c)any condition caused by the presence,use or release of a Hazardous Substance which adversely affects the value of the Property.If Borrower learns,or is IOWA—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMS`1P Form 30161/01 OREATUr1D■ (Pa10 o /3 es To Odor Can:1.900-570934]OFsc 616-791-1171 REM T261391.10(D011)—MErtS 8e f pages) r^i rn WI O _ m w D �n a.o ' notified by any governmental or regulatory authority,or any private party,that any removal or other remediation of any Hazardous Substance affecting the Property is necessary,Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law.Nothing herein shall create any obligation on Lender for an Environmental Cleanup. NON-UNIFORM COVENANTS.Borrower and Lender further covenant and agree as follows: 22. Acceleration;Remedies.Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument(but not prior to acceleration under Section 18 unless Applicable Law provides otherwise).The notice shall specify:(a)the default;(b)the action required to cure the default;(c)a date,not less than 30 days from the date the notice is given to Borrower,by which the default must be cured;and(d)that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument,foreclosure by judicial proceeding and sale of the Property.The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure.If the default is not cured on or before the date specified in the notice,Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding.Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22,including,but not limited to,reasonable attorneys'fees and costs of title evidence. 23. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Instrument.Lender may charge Borrower a fee for releasing this Security Instrument,but only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law. 24. Waivers.Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to the Property.Borrower waives any right of exemption as to the Property. 25. HOMESTEAD EXEMPTION WAIVER. 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,I VOLUNTARILY GIVE UP MY RIGHT TO.THIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE. 7`7&&edI ///-6 8 Horace D Evans D&e Date Date Date Dare Date 26. Redemption Period.If the Property is less than 10 acres in size and Lender waives in any foreclosure proceeding any right to a deficiency judgment against Borrower,the period of redemption from judicial sale shall be reduced to 6 months.If the court finds that the Property has been abandoned by Borrower and Lender waives any right to a deficiency judgment against Borrower,the period of redemption from judicial sale shall be reduced to 60 days.The provisions of this Section 26 shall be construed to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. COWA—Single Family—Fannie Ma e/Freddle Mac UNIFORM INSTRUMENT Form 3016 1101 GREATIAND■ REM T2669111(0011)_HEas (Page 11 of 13 pages) To OAa COL 1-80033093'30 Floc 616-791-1131 o � ill ▪ -.w .r r • Cr... I"C" > to 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. BY SIGNING BELOW,Borrower accepts and agrees to the terms and covenants contained in pages 1 through 13 of this Security Instrument and in any Rider executed by Borrower and recorded with it. /41?dee /14- Cearle))9 (Seal) (Seal) Horace D Evans -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower • (Seal) (Seal) -Borrower -Borrower • ' • • Witness: Witness: • -C N -'r� m rR 0 d;•7 O G) IOWA—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 I/01 GREKR.AN0■ TIN T2669L12(0011)—MERS (Page 12 of 13 pages) To Order Car 1-80O510-9393 O Fax 616-791-1131 State of VWAL ss. County of This instrument was acknowledged before me on , I (+ G(L (date)by (name[s]of person[s]). pAifikabok USA CLARK Notary Public Notarial Seal-IOWA Commleelon No.727156 My Commtsabn E1 piree 2.27-2t ) My commission expires: £7L C� After Recording Return To: SECURITY FIRST TITLE CO. 205 W.STEPHENSON STREET FREEPORT ,IL 61032 a • • amoor a *�gypp f... • in —� -_ Oa. a frD IOWA—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 3101 OREATIAI4D■ ITEM T2aa91.13(0o11)--MERS (Page 13 of 13 pages) To Oda cal:14D0-530-DM OF.616.701-1131 • /1& Fidelity National Title Insurance Company SECURITY FIRST TITLE CO. 205 WEST STEPHENSON STREET FREEPORT, IL 61032 Commitment Number: 92165IA SCHEDULE C PROPERTY DESCRIPTION The land referred to in this Commitment is described as follows: Lot 232,Pepperwood Addition Part 10,an Addition to the City of Iowa City, Iowa, according to the plat thereof recorded in Book 31, page 17, Plat Records of Johnson County, Iowa. Situated in Johnson County, Iowa. i a O ,cD D 11 c)- tv r— rte-- - a 0 D c� ALTA Commitment Schedule C C. t- 1 L (921651A.PFD1921651A131) IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY FEDERAL HOME LOAN MORTGAGE CORPORATION, CASE NO. Plaintiff, AFFIDAVIT FOR ATTORNEY FEES vs HORACE D. EVANS, SPOUSE OF HORACE D. EVANS, AMANDA EVANS, EXHIBIT NATHANIEL CLARK, SPOUSE OF NATHANIEL CLARK, CITY OF IOWA a CITY, STATE OF IOWA, IOWA DEPARTMENT OF HUMAN SERVICES, AND PARTIES IN POSSESSION, Defendants. STATE OF IOWA ) )ss. COUNTY OF BLACK HAWK ) I,Brian G. Sayer,being first duly sworn on oath,hereby depose and state that I am a member of the firm of Dunakey&Klatt,P.C.,the attorneys for the Plaintiff in the above-entitled cause;that the Note and Mortgage sued upon herein are in my possession as attorney for the Plaintiff;that I have read the foregoing Petition and am familiar with the contents thereof,and the allegations contained therein are true as I verily believe. I further depose and state that I am a regular practicing attorney in the Courts of the State of Iowa;that the attorney's fees prayed for herein are for services rendered and to be rendered by me as attorney for the Plaintiff in this action; that there has been no agreement, express or implied, between me and any other person or persons except other practicing attorneys engaged with me in this action, for a division or sharing of the attorney's fees prayed for herein. rti _t a`Y � ■ Brian Gryer -' Subscribed and sworn to before me this 27`" day of June, 009. 5,4 U fa, Notary Public in and for the State of Iowa "` • STACY L. ANDERSON * COMMISSION NO.756986 MY COMMISSION EXPIRES • DUNAKEY & KLATT, P.C. ATTORNEYS AT LAW DAVID D.DUNAKEY • CURTIS J.KLATT • DAVID P.ODEKIRK • CHARLES P.AUGUSTINE BRIAN G.SAYER • MICHAEL O.TREINEN • TERESA A.RASTEDE • AMY R.DOLLASH • C.MORGAN LASLEY WATERLOO OFFICE INDEPENDENCE OFFICE 531 COMMERCIAL STREET,SUITE 250 221 FIRST STREET WEST P.O.BOX 2363 P.O.BOX 484 WATERLOO,IOWA 50704-2363 INDEPENDENCE,IOWA 50644 TELEPHONE: (319)334-2590-0484 TELEPHONE: (319)232-3304 FACSIMILE: (319)334-5975 FACSIMILE: (319)232-3639 June 12,2009 EXHIBIT Horace Evans C 2240 Balsam Ct. a Iowa City,IA 52240 DEMAND FOR PAYMENT Re:Loan No. 0002260804 Property Address: 2240 Balsam Ct.,Iowa City,IA 52240 Name of current creditor/servicer: Sparta Special Servicing Address of current creditor/servicer: 1417 N.Magnolia Ave. Ocala,FL 34475 Deed of Trust/Mortgage Dated: January 11,2008 Accelerated Balance: $218,847.94 Dear MORTGAGOR(S): Sparta Special Servicing,on behalf of the owner and holder of your mortgage loan,and in accordance with the referenced Deed of Trust/Mortgage and applicable state laws,provides you with formal notice that your balance has been accelerated. Below is a summary of your accelerated balance: Principal: $ 212,708.58 Interest: $ 5,171.13 Escrow Advances $ 360.61 Other Charges: $ 607.62 Total Due $ 218,847.94 You must pay the accelerated balance of$218,847.94 within 14 days of the date of this letter or your property that is collateral for the Note may then be scheduled for foreclosure in accordance with the terms of the Deed of Trust/Mortgage and applicable state laws.If you have not cured the default by June 26, 2009 additional amounts may become due and payable under your Note and Deed of Trust/Mortgage. You have the right to reinstate your loan after acceleration and the right to bring a court action to claim that your loan is not in default or any other defense to acceleration and sale that you may have. This notice remains in effect until the default is cured.Payment must be in the form of cashier's check,money order,or bank certified funds. IF YOU ARE NOT OBLIGATED ON THE DEBT OR IF THE DEBT HAS BEEN DISCHARGED IN A BANKRUPTCY PROCEEDING,THIS IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN ATTEMPT TO ASSESS OR COLLECT THE DEBT FROM YOU PERSONALLY. -. This matter is very important. Please give it your immediate attention. ' —1 =' - 0"' p.,) .1 . Sincerely, -C r D1 -13 0 Default Administration Department O`�-� EXHIBIT ti b Mortgage Mediation Notice You are receiving this notice because (1) your lender believes that your mortgage is seriously delinquent, or (2) a foreclosure petition was recently filed against you. The purpose of this notice is to inform you that help is available through Iowa Mortgage Help, a State of Iowa-sponsored program. e 1 vat e Iowa Mortgage Help is a group of organizations partnering with the Iowa Attorney General's Office and the Iowa Finance Authority to offer all Iowans access to free, confidential mortgage counseling with local organizations located right here in Iowa. Iowa Mortgage Help is here to assist you in working through your situation. Please call 1-877-622-4866 as soon as possible. The earlier you call, the more options that are available to you. When you call, you will be referred to a trained, professional counselor who will listen to your situation and offer free, confidential advice through each step of the process. In some cases, we are able to work with lenders and borrowers to restructure mortgage terms. While we are not able ?, to help everyone, we are able to help the majority of homeowners who call Iowa Mortgage Help. The fact that a foreclosure petition may be or has been filed against you does not necessarily mean that you will lose your house. It is NOT too late. There is still time for help. Do Not Delay. This may be your best chance for saving your home from foreclosure. ;-.. ."� =. ` r9 N) Call 1-877-622-4866 today or go to IowaMortgageHelp.corl, fll This free call could save your home. : _ ',/,,,, A Iowa Mortgage Help ',.‘-'--11-877-622-4866 „, www.lowaMortgageHelp.com This notice is being provided as required by Iowa Code section 654.48(2). END OF CASE FILE CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE• PO BOX 2540,511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319)356-6030 PLAINTIFF: CITIMORTGAGE Docket No 09-02422 State IOWA vs. Court No EQCV070673 County JOHNSON DEFENDANT: VESS, SUSAN MARIE Ref No Received 05/04/2009 DEFENDANT: VESS, SUSAN SPOUSE OF DEFENDANT: CITY OF IOWA CITY DEFENDANT: IOWA, STATE OF ,Retluestor(s) w wPhone BOECKER,THEODORE R (515)222-9400 Name CITY OF IOWA CITY Party Type DEFENDANT Address 410 E WASHINGTON ST IOWA CITY IA 52240- Phone (319)356-5030 E-Mail Fax Employer Zone Comments Documents Document • Serve by Date OE PSR Description,/Special Instructions, ORIGINAL NOTICE AND ❑ ❑ PETITION MORTGAGE MEDIATION ❑ ❑ NOTICE rte' •--^-- ;Service Information Attempts Log Date Time Server Notes Date C Time Type G• }L1/4/-7 Party Tnvrq'ij knot Relationship C r -N C. c&U f Race ‘A./ Sex r- DOB Location V` 1b C lhAsA„`efac2,4-F Miles Fee Officer m` Notes: O -11 , r in m D N Printed:Monday,May 04,2009 Page 1 of 1 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY CITIMORTGAGE, INC. 13-2999081 : • EôC) • ORIGINAL NOTICE Plaintiff, : vs . SUSAN M. VESS AKA SUSAN • O MARIE VESS; T ASSET ACCEPTANCE LLC; • r,0 .11 CAPITAL ONE BANK; ().< 1 r' CITY OF IOWA CITY, IOWA; • i-n SPOUSE OF SUSAN M. VESS - M AKA SUSAN MARIE VESS, IF • -73 Q' N ANY; • N.) STATE OF IOWA, IOWA • DEPARTMENT OF REVENUE; • Defendants. : TO THE ABOVE NAMED DEFENDANTS: You are notified there is a petition now on file in the office of the clerk of the above court. A copy of this filing is attached hereto. The Plaintiff' s attorneys are Petosa, Petosa & Boecker, L.L. P. , by Theodore R. Boecker , whose address is 1350 NW 138th Street, Suite 100, Clive, Iowa 50325-8308 . The Plaintiff' s attorney' s phone number is (515) 222-9400, with a facsimile transmission number of (515) 222-9121 . You must serve a motion or answer, within 30 days after service of this original notice upon you and within a reasonable time thereafter file a motion or answer, in the Iowa District Court of Johnson County, at the county courthouse in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the petition. If assistance of auxiliary aids or services is required to participate in court due to a disability such as hearing impairment, call ,_gle Americans with Disabilities Coordinator at (319) 398-3920'<u1 you are in need of dual party telephone relay services, call Relay Iowa TTY at 1-80. 0-73$-2942 . - -(-;t2i/d/L/Zdf/t, C :k of the Above Court Jo son County Courthouse Iowa City, Iowa 522442510 YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS. AC - GV R- ()Nit �—i r�cz✓`C_-� 32347 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY CITIMORTGAGE, INC. 13-2999081 . J37OG75 • PETITION Plaintiff, . vs. SUSAN M. VESS AKA SUSAN • yi 4 . MARIE VESS; • ASSET ACCEPTANCE LLC; CAPITAL ONE BANK; • nen e ° ` CITY OF IOWA CITY, IOWA; • ; - ; i SPOUSE OF SUSAN M. VESS ^�' AKA SUSAN MARIE VESS, IF • n c) ANY; • yG, STATE OF IOWA, IOWA • DEPARTMENT OF REVENUE; • Defendants. . NOTICE THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION. THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL SIX MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY .OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMILY DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE - POSSESSION OF THE MORTGAGED PROPERTY. YOU MAY PURCHASE AT THE . : SALE. 0-< F rn37) N � N 1 Plaintiff, CitiMortgage, Inc. , for its cause of action states : 1 . That the Plaintiff is a corporation doing business in the United States of America . 2 . That on or about January 29, 2004, Susan M. Vess made, executed and delivered to Mortgage Electronic Registration Systems, Inc. , a promissory note in writing for the sum of $149, 205. 00 payable in installments, with interest at 6. 25% per annum from such date (the "Note") . A copy of the Note is attached hereto and made a part hereof as Exhibit "A" . 3. That on or about January 29, 2004 in order to secure the payment of the Note, Susan M. Vess (the "Mortgagor (s) ") made, executed and delivered to Mortgage Electronic Registration Systems, Inc. , a real estate mortgage (the "Mortgage") on the following described real estate (the "Mortgaged . Property") : 0j _ • , Lot B in Part Three Towncrest, an Addition to the City of Iowa City, Iowa, according to the plat 110 m -<r nn thereof recorded in Plat Book 6, Page 44 . m o J the Mortgage was filed for record January 30, 2004, in Bork 3692, Pages 2-9 in the Recorder' s Office of Johnson County, Iowa . A copy of the Mortgage is attached hereto and made a part hereof as Exhibit "B" . Said mortgage is a Purchase Money Mortgage. 2 4 . That the Mortgaged Property is and at all times relevant hereto was the homestead of the Mortgagor (s) . 5. That the Plaintiff is currently the holder of record of the Note and Mortgage. 6. That the Plaintiff is the sole and absolute owner of the Mortgage; that the Note and Mortgage provide that if default be made at any time in payment of any installment of principal or interest, at the election of the Plaintiff, all indebtedness, without notice of such election, shall become immediately due and payable; that the Plaintiff by reason of the failure of the Mortgagor (s) to pay said installments, declares the Note in default, that there is now due and owing the Plaintiff the sum of $132, 280. 47 with interest at 6. 25% per annum from :and including November 1, 2008 plus late fees, attorney fees, abstract expense, protective advances and costs. 7 . That the Plaintiff has given the Mortgagor (s) all required notices, including notice of right to cure said default and notice of acceleration required pursuant to Iowa. —n Code Section 654 . 4B (1) , and to date has received no respon o .� �"" rn thereto. -�o 0 � N 8 . That the time to cure the default under Iowa law his now expired. 9. That said Note and Mortgage provide that if suit be commenced thereon, Mortgagor (s) will pay reasonable attorneys ' 3 fees. An attorneys ' fee affidavit is attached hereto and made a part hereof as Exhibit "C" . 10. That the Plaintiff now hereby in writing waives any right or claim to a deficiency judgment against the Mortgagor (s) . That the Mortgaged Property is the residence of the Mortgagor (s) and is a one-family or two-family dwelling. The Plaintiff hereby elects to foreclose without redemption and the sale of the Mortgaged Property shall occur promptly after entry of judgment, unless the Mortgagor (s) , pursuant to the Notice set 'forth above, files a written demand to delay the sale, in which event the sale shall be delayed until six months after entry of judgment . 11 . That the following parties are named as Defendant (s) because they claim some right, title or interest in the Mortgaged Property, including, without limitation a right, title or interest as described below but any such right, title, O or interest is junior and inferior to the interest of 2 .n .rr Plaintiff: _40 -�r- w m -o • City of Iowa City, Iowa, Judgment, dated August g5 ` 2005, filed August 25, 2005, CISC062414, costs • Capital One Bank, $1, 068 . 87 Judgment, dated January 9 .4 2006, filed January 9, 2006, SCSC063216, plus interest and costs • City of Iowa City, Iowa, $250. 00 Judgment, dated November 2, 2007, filed November 2, 2007, CISC069198, fine and costs • City of Iowa City, Iowa, $250 . 00 Judgment, dated November 2, 2007, filed November 2, 2007, CISC069199, fine and costs 4 • State of Iowa, Iowa Department of Revenue, $43, 901 . 19 Tax Lien, dated May 31, 2008, filed June 4, 2008, Book 4306, page 776 • Asset Acceptance LLC, $2, 000. 00 Judgment, dated August 26, 2008, filed August 26, 2008, SCSC071249, plus interest and costs • Asset Acceptance LLC, $1, 500 . 00 Judgment, dated August 26, 2008, filed August 26, 2008, SCSC071250, plus interest and costs • Spouse of Susan M. Vess aka Susan Marie Vess, if any, for any interest in the subject property. 12 . That the Mortgage provides that any time after the proper commencement of an action in foreclosure or during the period of redemption, the Court having jurisdiction of the case shall, at the request of the Plaintiff, appoint a receiver to take immediate possession of the Mortgaged Property and of the rents and profits accruing therefrom, to rent the same as he may deem best for the interest of all parties concerned and shall be liable to account to the Mortgagor (s) only for the net profits after application of rents, issues and profits upon the _ ra cost of the expense of receivership and foreclosure and tine -n indebtedness, charges and expenses hereby secured and herein --r -"-- mentioned. ' r - nn 3�: PJ WHEREFORE THE PLAINTIFF PRAYS THE COURT: 3 Na V 1 . That the Plaintiff have judgment in rem against the Mortgaged Property for the amount of unpaid principal and interest on the Note, as provided in the Note and Mortgage and 5 for late fees, attorney fees, abstract expense, protective advances and costs . 2 . That a receiver be appointed immediately to take care of, manage, lease and collect the rents from the Mortgaged Property, and to apply the same in payment of costs and expenses of said receivership, repairs and expenses of said real estate, accrued and accruing taxes and special assessments, insurance premiums, and in partial payment of the judgment to be entered herein. 3 . That said judgment, together with interest, late fees, attorney fees, abstract expense, protective advances, costs and accruing costs be decreed a prior lien upon the Mortgaged Property from the date of the Mortgage, and that all rights, interests and equities of all Defendants to this suit be declared junior to the right, title and interest of the „9:o -I --� Plaintiff. 4 . That in the event Plaintiff is required to make ' m protective advances, including without limitation, advances fq taxes or insurance on the Mortgaged Property, the Plaintiff be given an additional lien thereon for such amounts so advanced, which shall be included in the judgment to be entered herein. 5 . That the Mortgage be foreclosed and the Defendant (s) ' equity of redemption be barred and foreclosed save as guaranteed by law. That special execution issue for the sale the Mortgaged Property to satisfy said judgment, interest, late 6 fees, attorney fees, abstract expense, protective advances and costs . 6. That special execution issue to satisfy said judgment, interest and attorneys ' fees, and accruing costs herein, and the Mortgaged Property be sold according to law to satisfy the amount due under the Decree issued by this Court and the Defendants herein or anyone claiming by, through or under them, be forever barred and foreclosed of any interest in the Mortgaged Property, except such rights of redemption as provided by law. 7 . That if the Mortgaged Property is sold and not redeemed, the Clerk of this Court shall issue to the Sheriff of said County, a writ of removal and possession, commanding him to put the grantee named in the Sheriff' s deed for said premises sold, or his grantee, in possession thereof, and to remove any Defendants, or persons claiming by, through or under any of them, or any person in possession thereof out of such possession: 8 . That the Plaintiff has elected foreclosure without redemption and the sale of the Mortgaged Property shall occur promptly after entry of judgment or in the alternative, i ,4 written demand for delay is filed, the sale shall occur six-: r- months after entry of judgment . rn 0 D N 7 9. That the Plaintiff be granted such further relief as may be just and equitable. PETOSA, PETOSA & BOECKER, L.L. P. By Theodore R. Boecker, AT0000872 1350 NW 138th Street, Suite 100 Clive, Iowa 50325-8308 Telephone: (515) 222-9400 Facsimile: (515) 222-9121 ATTORNEYS FOR PLAINTIFF O 2 - -n n- 1 r- 0 C) .= rn (T1 3 73 N 8 III1IIIBI 111la11E1113IIMIIMIMMIIIA( 111 110 6386892 NOTE FHA Case No. Multistate 161-2084318-703 January 29, 2004 Date' 2816 Wayne Ave, Iowa City, IA 52240 'Property Address' MIN 100026600063868926 • 1. PARTIES "Borrower" means each person signing at the end of this Note, and the person's successors and assigns. "Lender" means Principal Residential Mortgage, Inc. 0 71z m and its successors and assigns. =c 2. BORROWER'S PROMISE TO PAY; INTEREST r- In return for a loan received from Lender, Borrower promises to pay the principal sum of --t C) -= r i a One Hundred Forty Nine Thousand Two Hundred Five and 00/200 •_. Dollars(U.S. $ 149,205.00 ), plus interest, to the order of Lender. Interest will be charged on unpaid priticilal, from the date of disbursement of the loan proceeds by Lender, at the rate of Six and 250/1000 • percent( 6.250 %)per year until the full amount of principal has been paid. —4 3. PROMISE TO PAY SECURED Borrower's promise to pay is secured by a mortgage, deed of trust or similar security instrument that is dated the same date as this Note and called the "Security Instrument." The Security Instrument protects the Lender from losses which might result if Borrower defaults under this Note. 4. MANNER OF PAYMENT (A) Time Borrower shall make a payment of principal and interest to Lender on the first day of each month beginning on March 1 , 2004 .Any principal and interest remaining on the first day of February 2024 , will be due on that date, which is called the "Maturity Date." (B) Place Payment shall be made at Principal Residential Mortgage, Inc. , 711 High Street, Des Moines, IA 50392 or at such place as Lender may designate in writing by notice to Borrower. (C) Amount • Each monthly payment of principal and interest will be in the amount of U.S. $ 1,090.59 . This amount will be part of a larger monthly payment required by the Security Instrument, that shall be applied to principal, interest and other items in the order described in the Security Instrument. (D) Allonge to this Note for payment adjustments If an allonge=providing for payment adjustments is executed by Borrower together with this Note, the covenants of the allonge shall be incorporated into and shall amend and supplement the covenants of this Note as if the allonge were a part of this Note. [Check applicable boxyEl Graduated Payment Allonge nGrowing Equity Allonge i (Other[specify) 5. BORROWER'S RIGHT TO PREPAY Borrower has the right to pay the debt evidenced by this Note, in whole or in part, without charge or penalty, on the first day of any month. Lender shall accept prepayment on other days provided that Borrower pays interest on the amount prepaid for the remainder of the month to the extent required by Lender and permitted by regulations of the Secretary. If Borrower makes a partial prepayment, there will be no changes in the due date or in the amount of the monthly payment unless Lender agrees in writing to those changes. FILA Multistate Fixed Rate Note-10/95 � ®m-1R(02101 WAR MORTOAOE FORMS-18001621.7281 Popo 1 a()19608276 !Mush: y0yF/—' EXHIBIT ORROWER'S FAILURE TO PAY (A) Late Charge for Overdue Payments If Lender has not received the full monthly payment required by the Security Instrument, as described in Paragraph 4(u) of this Note, by the end of fifteen calendar days after the payment is due, Lender may collect a late charge in the amount of Four and 000/1000 percent( 4.000 %)of the overdue amount of each payment. (B) Default If Borrower defaults by failing to pay in full any monthly payment,then Lender may,except as limited by regulations of the Secretary in the case of payment defaults, require immediate payment in full of the principal balance remaining due and all accrued interest. Lender may choose not to exercise this option without waiving its rights in the event of any subsequent default. In many circumstances regulations issued by the Secretary will limit Lender's rights to require immediate payment in full in the case of payment defaults.This Note does not authorize acceleration when not permitted by HUD regulations. As used in this Note, "Secretary"means the Secretary of Housing and Urban Development or his or her designee. (C) Payment of Costs and Expenses If Lender has required immediate payment in full, as described above, Lender may require Borrower to pay costs and expenses including reasonable and customary attorneys' fees for enforcing this Note to the extent not prohibited by applicable law. Such fees and costs shall bear interest from the date of disbursement at the same rate as the principal of this Note.• 7. WAIVERS Borrower and any other person who has obligations under this Note waive the rights of presentment and notice of dishonor. "Presentment"means the right to require Lender to demand payment of amounts due. "Notice of dishonor"means the right to require Lender to give notice to other persons that amounts due have not been paid. S.GIVING OF NOTICES Unless applicable law requires a different method, any notice that must be given to Borrower under this Note will be given by delivering it or by-mailing it by first class mail to Borrower at the property address above or at a different address if Borrower has given Lender a notice of Borrower's different address. Any notice that must be given to Lender under this Note will be given by first class mail to Lender at the address stated in Paragraph 4(B) or at a different address if Borrower is given a notice of that different address. 9. OBLIGATIONS Old'PERSONS UNDER THIS NOTE If more than one person signs this Note,each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises made in this Note. Lender may enforce its rights under this Note against each person individually or against all signatories together. Any one person signing this Note may be required to pay all of the amounts owed under this Note. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Note. 9N' (Seal) (Seal) aon voao -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower (Seal) _ •B I -Borrower Q (Seal) C: -Borrower —!C) -Borrower • oin a 0 C) -IR 102101 l Pap 2of2 3� N m D N 1111311111111 -r ..l YLlllf 110 ADDENDUM TO NOTE (535.17 I.C.A. ) NOTICE 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. THE TERMS OF THIS AGREEMENT CAN BE CHANGED ONLY BY ANOTHER WRITTEN AGREEMENT. January 29, 2004 M Vess Date c33 - r" : m • N CA prg1054 • 69808279 • ( J II IGUIIll INI 1�I�III�uIId I��� Ill Doc ID: 016135440008 Tvoe: GEN Recorded: 01/30/2004 at 11:12:23 AM Fee Amt: $46.00 Pace 1 of 8 Johnson County Iowa Kimberly A. Painter County Recorder After recording return to: BK 3 6 9 2 a 2-9 Principal Residential Mortgage, Inc. c/o Affiliated Computer Svcs 4153 120 Sc, Urbandale, [A 50323-2314 Prepared by: Priscilla Loyd 699 Walnut, Dea Moines, IA 50392-0101 Phone Number: (888) 219-2330 ISpace Above This Line Fur Recording Data) FIIA Case No. State of Iowa MORTGAGE 161-2084318-703 IIINIIII M IIIIIIIIII11III111Ol111111111111111111111p MIN 100026600063868926 THIS MORTGAGE("Security Instrument")is given on January 29, 2004 The Mortgagor is Susan M Vess, an unmarried person O -n o-‹ ("Borrower"). This Security Instrument is given to Mortgage Electronic Registration Systems, Inc.*rIvIER (solely as nominee for Lender, as hereinafter defined, and Lender's successors and assigns), as mortgage. MER organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MT 48501-2026, tel. (888) 679-MERS. Principal Residential Mortgage, Inc. ("Lender")is organized and existing under the laws of the State of Iowa , and has an address of 711 High Street, Des Moines, IA 50392 . Borrower owes Lender the principal sum of One Hundred Forty Nine Thousand Two Hundred Five and 0Q/10Q Dollars( . $149,205.00 ). This debt is evidenced by Borrower's note dated the same date as this Security Instrument("Note"), which provides for monthly payments, with the full debt, if not paid earlier,due and payable on February 1, 2024 , . This Security Instrument secures to Lender: (a) the repayment of the debt evidenced by the Note, with interest, and all renewals, extensions and modifications of the Note; (b) the payment of all other sums, with interest, advanced under paragraph 7 to protect the security of this Security Instrument; and (c) the performance of Borrower's FHA Iowa Mortgage with NIERS-4196 u.1.1P •MIMI"-lin', Amended 2/01 IIII H1111 I� III i l 1111 Illi Papa 1 e u Initial¢. VMP MORTOAOE FORMS•18001621.7281 EXHIBIT covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower does hereby mortgage, grant and convey to MERS(solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS the following described property located in Johnson County, Iowa: Lot B in Part Three Towncrest,an Addition to the City of Iowa City,Iowa,according to the plat thereof recorded in Plat Book 6,Page 44. O 2C which has the address of 2 816 Wayne Ave, r Istree Iowa City ICity), Iowa 52240 IZIp Code)("Propert` irddress"-) Ln,) TOGETHER WITH all the improvements now or hereafter erected on the property, and al 'easemen appurtenances and fixtures now or hereafter a part of the property. All replacements and additions sl'iall also'* covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property. ' Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument; but, if necessary to comply with law or custom, MERS, (as nominee for Lender and Lender's successors and assigns), has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including,but not limited to, releasing or canceling this Security Instrument. BORROWER COVENANTS that Borrower is lawfully seized of the estate hereby conveyed and has the right to mortgage, grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. Borrower and Lender covenant and agree as follows: UNIFORM COVENANTS. 1. Payment of Principal, Interest and Late Charge. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and late charges due under the Note. 2. Monthly Payment of Taxes, Insurance and Other Charges. Borrower shall include in each monthly payment, together with the principal and interest as set forth in the Note and any late charges, a sum for(a)taxes and special assessments levied or to be levied against the Property, (b) leasehold payments or ground rents on the Property, and (c) premiums for insurance required under paragraph 4. In any year in which the Lender must pay a mortgage insurance premium to the Secretary of Housing and Urban Development ("Secretary"), or in any year in which such premium would have been required if Lender still held the Security Instrument, each monthly payment shall also include either: (i) a sum for the annual mortgage insurance premium to be paid by Lender to the Secretary, or(ii)a monthly charge instead of a mortgage insurance premium if this Security Instrument is held by the Secretary, in a reasonable amount to be determined by the Secretary. Except for the monthly charge by the Secretary, these items are called "Escrow Items"and the sums paid to Lender are called "Escrow Funds." Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the maximum amount that may be required for Borrower's escrow account under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. Section 2601 et seq. and implementing regulations, 24 CFR Part 3500, as they may be amended from time to time ("RESPA"), except that the cushion or reserve permitted by RESPA for unanticipated disbursements or disbursements before the Borrower's payments are available in the account may not be based on amounts due for the mortgage insurance premium. �nitcals;(/'/Kd ©-4N(IA)10102) Page 2 of 8 If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender shall account to Borrower for the excess funds as required by RESPA. if the amounts of funds held by Lender at any time are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to make up the shortage as permitted by RESPA. The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance remaining for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be credited with any balance remaining for all installments for items(a), (b), and(c). 3. Application of Payments. All payments under paragraphs 1 and 2 shall be applied by Lender as follows: First, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by the Secretary instead of the monthly mortgage insurance premium; Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard insurance premiums, as required; Third, to interest due under the Note; Fourth, to amortization of the principal of the Note; and Fifth, to late charges due under the Note. 4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether now in existence or subsequently erected,against any hazards, casualties, and contingencies, including fire, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shall also insure all improvements on the Property, whether now in existence or subsequently erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies approved by Lender. The insurance policies and any renewals shall be held by Lender and shall include loss payable clauses in favor of, and in a form acceptable to, Lender. In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment for such loss directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the order in paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of the damaged Property. Any application of the proceeds to the principal shall not extend or postpone the due date of the monthly payments which are referred to in paragraph 2, or change the amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto. In the event of foreclosure of this Security Instrument or other transfer of title to the Property that extinguishes the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser. 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after the execution of this Security Instrument (or within sixty days of a later sale or transfer of the Property) and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender determines that requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any extenuating circumstances. Borrower shall not commit waste or destroy, damage or substantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted. Lender may inspect the Property if the Property is vacant or abandoned or the loan is in default. Lender may take reasonable action to protect and preserve such vacant or 1 3 1ni[iale;t�i4 tt _; CP-4N11A1(01021 Patio 3 of 8 - r- o r"" m -2 cj r;.? co,40 abandoned Property. Borrower shall also be in default if Borrower, during the loan application process, gave materially false or inaccurate information or statements to Lender (or failed to provide Lender with any material information) in connection with the loan evidenced by the Note, including, but not limited to, representations concerning Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold, Borrower shall comply with the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title shall not be merged unless Lender agrees to the merger in writing. 6. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned and shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security Instrument. Lender shall apply such proceeds to the reduction of the indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the order provided in paragraph 3, and then to prepayment of principal. Any application of the proceeds to the principal shall not extend or postpone the due date of the monthly payments, which are referred to in paragraph 2, or change the amount of such payments. Any excess proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto. 7. Charges to Borrower and Protection of Lender's Rights in the Property. Borrower shall pay all governmental or municipal charges, fines and impositions that are not included in paragraph 2. Borrower shall pay these obligations on time directly to the entity which is owed the payment. If failure to pay would adversely affect Lender's interest in the Property, upon Lender's request Borrower shall promptly furnish to Lender receipts evidencing these payments. If Borrower fails to make these payments or the payments required by paragraph 2, or fails to perform any other covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights in the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do and pay whatever is necessary to protect the value of the Property and Lender's rights in the Property, including payment of taxes, hazard insurance and other items mentioned in paragraph 2. Any amounts disbursed by Lender under this paragraph shall become an additional debt of Borrower and be secured by this Security Instrument. These amounts shall bear interest from the date of disbursement, at the Note rate,and at the option of Lender, shall be immediately due and payable. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days of the giving of notice. 8. Fees. Lender may collect fees and charges authorized by the Secretary. 9. Grounds for Acceleration of Debt. (a) Default. Lender may, except as limited by regulations issued by the Secretary, in the case of payment defaults, require immediate payment in full of all sums secured by this Security Instrument if: (i) Borrower defaults by failing to pay in full any monthly payment required by this Security Instrument prior to or on the due date of the next monthly payment, or (ii) Borrower defaults by failing, for a period of thirty days, to perform any other obligations contained in this Security Instrument. (b) Sale Without Credit Approval. Lender shall, if permitted by applicable law (including Section 341(d) of the Garn-St. Germain Depository Institutions Act of 1982, 12 U.S.C. 1701j-3(d)) and with the prior approval of the Secretary, require immediate payment in full of all sums secured by this Security.,jnstrument+ if: 0 ff,b.fMi�r �-C t tD-0NITAI 101021 Page 4 of a —i ® -C r— o� 0 N D N CO (i) All or part of the Property, or a beneficial interest in a trust owning all or part of the Property, is sold or otherwise transferred(other than by devise or descent), and (ii) The Property is not occupied by the purchaser or grantee as his or her principal residence, or the purchaser or grantee does so occupy the Property but his or her credit has not been approved in accordance with the requirements of the Secretary. (c) No Waiver. If circumstances occur that would permit Lender to require immediate payment in full, but Lender does not require such payments, Lender does not waive its rights with respect to subsequent events. (d) Regulations of HUD Secretary. In many circumstances regulations issued by the Secretary will limit Lender's rights, in the case of payment defaults, to require immediate payment in full and foreclose if not paid. This Security Instrument does not authorize acceleration or foreclosure if not permitted by regulations of the Secretary. (e)Mortgage Not Insured. Borrower agrees that if this Security Instrument and the Note are not determined to be eligible for insurance under the National Housing Act within 60 days from the date hereof, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. A written statement of any authorized agent of the Secretary dated subsequent to 60 days from the date hereof, declining to insure this Security Instrument and the Note, shall be deemed conclusive proof of such ineligibility. Notwithstanding the foregoing, this option may not be exercised by Lender when the unavailability of insurance is solely due to Lender's failure to remit a mortgage insurance premium to the Secretary. 10. Reinstatement. Borrower has a right to be reinstated if Lender has required immediate payment in full because of Borrower's failure to pay an amount due under the Note or this Security Instrument. This right applies even after foreclosure proceedings are instituted. To reinstate the Security Instrument, Borrower shall tender in a lump sum all amounts required to bring Borrower's account current including, to the extent they are obligations of Borrower under this Security Instrument, foreclosure costs and reasonable and customary attorneys' fees and expenses properly associated with the foreclosure proceeding. Upon reinstatement by Borrower, this Security Instrument and the obligations that it secures shall remain in effect as if Lender had not required immediate payment in full. However, Lender is not required to permit reinstatement if: (i) Lender has accepted reinstatement after the commencement of foreclosure proceedings within two years immediately preceding the commencement of a current foreclosure proceeding, (ii) reinstatement will preclude foreclosure on different grounds in the future, or (iii) reinstatement will adversely affect the priority of the lien created by this Security Instrument. 11. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time of payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to any successor in interest of Borrower shall not operate to release the liability of the original Borrower or Borrower's successor in interest. Lender shall not be required to commence proceedings against any successor in interest or refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or Borrower's successors in interest. Any forbearance by Lender in exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or remedy. 12. Successors and Assigns Bound; Joint and Several Liability; Co-Signers. The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower, subject to the provisions of paragraph 9(b). Borrower's covenants and agreements shall be joint and several. Any Borrower who co-signs this Security Instrument but does not execute the Note: (a) is co-signing this Security Instrument only to mortgage, grant and convey that Borrower's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower may agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without that Borrower's consent. O -t ®-4N(IA) 021 rape Sof a o r 4.m rJ OD 13. Notices. Any notice to Borrower provided for in this Security Instrument shall be given by delivering it or by mailing it by first class mail unless applicable law requires use of another method. The notice shall be directed to the Property Address or any other address Borrower designates by notice to Lender. Any notice to Lender shall be given by first class mail to Lender's address stated herein or any address Lender designates by notice to Borrower. Any notice provided for in this Security Instrument shall be deemed to have been given to Borrower or Lender when given as provided in this paragraph. 14. Governing Law; Severability. This Security Instrument shall be governed by Federal law and the law of the jurisdiction in which the Property is located. In the event that any provision or clause of this Security Instrument or the Note conflicts with applicable law,such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. To this end the provisions of this Security Instrument and the Note are declared to be severable. 15. Borrower's Copy. Borrower shall be given one conformed copy of the Note and of this Security instrument. 16. Hazardous Substances. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property. Borrower shall promptly give Lender written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substances affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. As used in this paragraph 16, "Hazardous Substances" are those substances defined as toxic or hazardous substances by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. As used in this paragraph 16, "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 17. Assignment of Rents. Borrower unconditionally assigns and transfers to Lender all the rents and revenues of the Property. Borrower authorizes Lender or Lender's agents to collect the rents and revenues and hereby directs each tenant of the Property to pay the rents to Lender or Lender's agents. However, prior to Lender's notice to Borrower of Borrower's breach of any covenant or agreement in the Security Instrument, Borrower shall collect and receive all rents and revenues of the Property as trustee for the benefit of Lender and Borrower. This assignment of rents constitutes an absolute assignment and not an assignment for additional security only. If Lender gives notice of breach to Borrower: (a) all rents received by Borrower shall be held by Borrower as trustee for benefit of Lender only, to be applied to the sums secured by the Security Instrument; (b) Lender shall be entitled to collect and receive all of the rents of the Property; and (c) each tenant of the Property shall pay all rents due and unpaid to Lender or Lender's agent on Lender's written demand to the tenant. Borrower has not executed any prior assignment of the rents and has not and will not perform any act that would prevent Lender from exercising its rights under this paragraph 17. Lender shall not be required to enter upon, take control of or maintain the Property before or after giving notice of breach to Borrower. However, Lender or a judicially appointed receiver may do so at any time there is a breach. Any application of rents shall not cure or waive any default or invalidate any other right or remedy of Lender. This assignment of rents of the Property shall terminate when the debt secured by the Security Instrument is paid in full. trawls CMN(IA)(0102) Pape a of s `fl mama -t o . r ter' rn M tV _. _ _ D N 18. Foreclosure Procedure. If Lender requires immediate payment in full under paragraph 9, Lender may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this paragraph 18, including, but not limited to, reasonable attorneys'fees and costs of title evidence. If the Lender's interest in this Security Instrument is held by the Secretary and the Secretary requires immediate payment in full under Paragraph 9, the Secretary may invoke the nonjudicial power of sale provided in the Single Family Mortgage Foreclosure Act of 1994 ("Act") (12 U.S.C. 3751 et seq.) by requesting a foreclosure commissioner designated under the Act to commence foreclosure and to sell the Property as provided in the Act. Nothing in the preceding sentence shall deprive the Secretary of any rights otherwise available to a Lender under this Paragraph 18 or applicable law. 19. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Instrument without charge to Borrower. 20. Waivers. Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to the Property. Borrower waives any right of exemption as to the Property. 21. Redemption Period. If the Property is less than 10 acres in size and Lender waives in any foreclosure proceeding any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 6 months. If the court finds that the Property has been abandoned by Borrower and Lender waives any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 60 days. The provisions of this paragraph 21 shall be construed to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. 22. Riders to this Security Instrument. If one or more riders are executed by Borrower and recorded together with this Security Instrument, the covenants of each such rider shall be incorporated into and shall amend and supplement the covenants and agreements of this Security Instrument as if the rider(s) were a part of this Security Instrument. [Check applicable box(es)1. Condominium Rider ❑ Growing Equity Rider ❑ Other[specify) I Planned Unit Development Rider ❑ Graduated Payment Rider _ N a "T1 -<r ITI - r D N.) CO ©-4NIIA)10102) Pape 7 of& BY SIGNING BELOW, Borrower accepts and agrees to the terms contained in this Security Instrument and in any rider(s)executed by Borrower and recorded with it. Witnesses: 51fr/ 722%' ' ' '`� (Seal) Susan P4 Vese -Borrower (Seal) -Borrower (Seal) -(Seal) -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower STATE OF IOWA, �f�rl Hi County ss: n�( On this day of kp f , ��11111 1; , before me, a Notary Public in the State of Iowa, personally appeared "l Susan M Vess, an unmarried person to me personally known to be the person(s) named in and who executed the foregoing instrument, and acknowledged that she executed the same as her voluntary act and deed. My Commission Expires: 2/ti.1 Dip 4¢ TRACY A.DeKOTER �' koirj,--- I= F _TRACY NurnpM 720729 Rotary Public' nd for saki County and State My Commission res February 4, 2006 0 >� T --l0 m M ®4N(IA)10102) P.pe a of e —0 75 .c7 cV NJ CO AFFIDAVIT STATE OF IOWA SS COUNTY OF POLK I, Theodore R. Boecker, being first duly sworn on oath depose and state that I am one of the attorneys for the Plaintiff in this cause; that I am a regular practicing attorney engaged in this case; that there has been no agreement, express or implied, between myself and my client, or between myself and any other person except attorneys associated with me in this case, for any sharing or division of the attorney fees to be taxed herein. I further depose and state that true copies of the note and mortgage and any other documents declared upon in the foregoing Petition are now in my actual possession; that I have read the above and foregoing Petition, know the contents thereof, have personal knowledge of the facts therein stated, and that the statements and allegations therein are true as I verily believe. Theodore R. Boecker AT0000872 Subscribed and sworn to before me this 29th day of April , 2009 . A-4 ;gs,c:, r: -:r ? Notary Public in and for the • My Commission Expires June 17, 2011 State of Iowa N O r Exhibit "C" c7 111 :9 co -05 73 .. D co f 1 • ' 32347 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY CITIMORTGAGE, INC. 13-2999081 : . EQUITY NO. EQCV070673 MOTION FOR SUMMARY JUDGMENT Plaintiff, : vs. SUSAN M. VESS AKA SUSAN • MARIE VESS; _ ASSET ACCEPTANCE LLC; rte:; CAPITAL ONE BANK; CITY OF IOWA CITY, IOWA; --- SPOUSE OF SUSAN M. VESS • rn AKA SUSAN MARIE VESS, IF - m ANY; O Li N STATE OF IOWA, IOWA • DEPARTMENT OF REVENUE; Defendants . : COMES NOW the Plaintiff, CitiMortgage, Inc. , and moves the Court for summary judgment in its favor and against the Defendants herein named and for grounds states: 1 . That the Plaintiff, heretofore received and is the current holder of a promissory note (the "Note") executed by Susan M. Vess and real estate mortgage (the "Mortgage") executed by Susan M. Vess to Mortgage Electronic Registration Systems, Inc. . The Note and Mortgage established a first, prior real estate lien, on the following described premises situated in Johnson County, Iowa : Lot B in Part Three Towncrest, an Addition to the City of Iowa City, Iowa, according to the plat thereof recorded in Plat Book 6, Page 44 . (the "Mortgaged Property") CA-L (cJy 0/111) C A 1 Fi,uc �tL 32347 The Mortgage was properly recorded in the office of the Recorder of Johnson County, Iowa on January 29, 2004 in Book 3692, Pages 2-9, all as set out in the Plaintiff ' s Petition . 2. That after applications of all credits and adjustments to the Note of the Defendants, there remains due and owing to the Plaintiff the sum of $132, 280. 47 with interest at 6. 25% per annum from November 1 , 2008, plus accrued late charges, O protective advances, attorneys ' fees, abstract expense anti:) costs . r m 3. That all parties to this action have been accorc52 =c * tv their rights and notices in accordance with the laws of tie State of Iowa and have been served or entered their appearance in this matter. 4 . That all the Defendants claim some right, title and interest in the Mortgaged Property, but the liens, interest and rights of each of the Defendants in and to the Mortgaged Property are junior, subsequent and inferior to the lien of the Mortgage. 5. That the Plaintiff is entitled, as a matter of law, to the foreclosure of the Mortgage and it is the Plaintiff ' s belief that no good faith defense exists against said claim. 6. That attached hereto, marked Exhibit "A" and by reference made a part hereof is the Affidavit in support of this 2 32347 Motion for Summary Judgment signed by the agent and representative of the Plaintiff. 7 . That attached hereto is the supporting Statement of Facts and Memorandum of Authorities, marked Exhibits "B" and "C", respectively, and by reference made a part hereof as if fully set forth herein. WHEREFORE, the Plaintiff moves for summary judgment in it' s favor and against the Defendants in accordance with I .R.C. P. Rule 1 . 981, et seq, and that the Court set this matter down for hearing, and upon said hearing grant summary judgment in favor of the Plaintiff and against the Defendants and for such further and other relief as the Court deems just and equitable. PETOSA, PETOSA & BOECKER, L.L. P. By Theodore R. Boecker AT0000872 1350 NW 138th Street, Suite 100 Clive, Iowa 50325-8308 Telephone: (515) 222-9400 Facsimile: (515) 222-9121 ATTORNEYS FOR PLAINTIFF _ N O a74 o 71 =+0 :"41- m O, Ste. N D �n 3 32347 Copy to: Susan M. Vess aka Susan Marie Vess 2816 Wayne Avenue Iowa City, IA 52240 Capital One Bank c/o President or Officer 1680 Capital One Drive McLean, VA 22102 City of Iowa City, Iowa City Clerk 410 E Washington Street Iowa City, IA 52240 State of Iowa, Iowa Department of Revenue c/o Marcia Mason Assistant Attorney General -- Hoover State Office Building Second Floor - •1 Des Moines, IA 50319 "‹ 1 :- 515-281-5846 E_ I 515-281-4209 (fax) mmason@ag. state. ia. us G N v CERTIFICATE OF SERVICE The undersigned certifies that the foregoing instrument was served upon all parties to the above cause to each of the attorneys of record herein at their respective addddressss disclosed on the pleadings on _l 2009. tiU.S.Mail D FAX D Hand Delivered 0 Overnight Courier D Certified Mail D Other: Signature 8eir 4 AFFIDAVIT IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT STATE OF Missouri ) SS COUNTY OF St. Charles I, Steve Berra, being first duly sworn on oath depose and state that I am Assistant Vice President, for Plaintiff; that as such I have personal knowledge that the Defendants, Susan M. Vess, are in default of their obligations under the promissory note executed by Susan M. Vess and real estate mortgage executed by Susan M. Vess in favor of Mortgage Electronic Registration Systems, Inc. , now held by the Plaintiff and have personal knowledge of the amounts due and owing to the Plaintiff by said Defendants; that I have personal knowledge of and custody and control of the books and records of the Plaintiff; that there is presently due and owing to the Plaintiff under the promissory note and real estate mortgage lien the following: O Principal $132,280.47 i -n Interest through 8 /14/2009 $6,495.10 - ig ;la Late Fees $1,233.49zi Protective Advances $1,359.46 . _t; -{ O o�� together with attorneys' fees, abstract expense and costs; ant' part of said accounts and amounts have been paid by any person,—ands-4,J, v that the Plaintiff is still the owner and holder of the promissory note; and that it is my good faith belief that no defense exists against said claim. Steve Berra, Assistant Vice President Subscribed and sworn to before me this 11`° d y of August, 2009. ALEX C CROSSMAN Notary Public in and for the State Notary Public-Notary Seal of Missouri State of Missouri St.Charles County Our file # 32347 Commission 406672776 EXHIBIT •A- My Commission Expires 11/04/r: ;12 STATEMENT OF FACTS Plaintiff, CitiMortgage, Inc. , is a corporation doing business in the United States of America . The note (the "Note") and mortgage (the "Mortgage") , which are attached to the Plaintiff ' s Petition as Exhibits "A" and "B", respectively, evidence indebtedness of Defendants Susan M. Vess for money borrowed in regard to the purchase of th0 cn -11 > c7 following described real estate: n Lot B in Part Three Towncrest, an Addition to the Gi ma 0 of Iowa City, Iowa, according to the plat thereof 37,7 recorded in Plat Book 6, Page 44 . The Mortgage was recorded in the Office of Recorder of Johnson County, Iowa, on January 29, 2004 in Book 3692, Pages 2- 9. Said mortgage is a Purchase Money Mortgage. That the Plaintiff is currently the holder of record of the Note and Mortgage . The Note and Mortgage provide that if default is made at any time for failure of payment or interest that the holders of said note may cause the whole debt, including interest, to be due and payable immediately. The Mortgage further provides for attorney fees to be recovered. The Mortgage further provides that the Defendants pledge their rents and profits as additional security and that the mortgagee would be entitled to possession of said property and the appointment of a receiver upon EXHIBIT "B" foreclosure, who shall have authority to take and hold possession of the property and to collect rents and profits . That Defendants Susan M. Vess, have not made several monthly installment payments. The Plaintiff has complied with all conditions precedent for payment having demanded payment from the Defendants, and the same having been refused. O cn E'*G' m v Yn N L EXHIBIT "B" MEMORANDUM OF AUTHORITIES IN SUPPORT OF MOTION BRIEF POINT PLAINTIFF IS ENTITLED TO JUDGMENT AS PRAYED FOR IN ITS PETITION BECAUSE THE INDEBTEDNESS EVIDENCED BY THE NOTE AND MORTGAGE IS DUE AND DELINQUENT. Motion for Summary Judgment has been recognized as an appropriate procedure for Plaintiff where there is no genuine issue as to a material fact . Northwestern National Bank of Sioux City v. Steinbeck, 179 N.W. 2d 471 (Iowa 1970) . Also, a Motion for Summary Judgment is appropriate in this instance where the amount claimed is of a liquidated sum and for the foreclosure of the mortgage. Humboldt Livestock Auction, Inc. v . B & H Cattle Co. , 155 N.W. 2d 478 ( Iowa 1967) . O o ( I— • m 0 5i• N EXHIBIT "C" 32347 ==N THE IOWA DISTRICT COURT FOR JOHNSON COUNTY CITIMORTGAGE, INC. 13-2999081 : . EQUITY NO. EQCV070673 • NOTICE OF INTENT • TO FILE WRITTEN . APPLICATION FOR DEFAULT Plaintiff, : vs . SUSAN M. VESS AKA SUSAN • MARIE VESS; • ASSET ACCEPTANCE LLC; • CAPITAL ONE BANK; • CITY OF IOWF: CITY, IOWA; • SPOUSE OF SUSAN M. VESS �j AKA SUSAN MP.RIE VESS, IF "C> ANY; • STATE OF IOTA, IOWA - �v DEPARTMENT CF REVENUE; - .0 Defendants . : —M 0 O = Capital One Bank: City of Iowa City, Iowa : Spouse of Sisan M. Vess aka Susan Marie Vess, if any: DATE OF NOTICE: July 16, 2009 IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO TAKE ACTION REQUIRED OF YOU IN THIS CASE. UNLESS YOU ACT WITHIN TEN DAYS FROM THE DATE OF THIS NOTICE, A DEFAULT JUDGMENT WILL BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE YOUR PROPERTY OR OTHER IMPORTANT RIGHTS. YOU SHOULD SEEK LEGAL ADVICE AT ONCE . THIS COMMUNICATION IS FROM A DEBT COLLECTOR AND IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. PETOSA, PETOSA & BOECKER, L.L. P. By Theodore ' 72 1350 NW 138th Street, Suite 100 Clive, Iowa 50325-8308 Telephone: (515) 222-9400 Facsimile: (515) 222-9121 ATTORNEYS FOR PLAINTIFF OW- CA �`1 r'IzL.\C,2_. END OF CASE FILE CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE• PO BOX 2540, 511 S CAPITOL ST, IOWA CITY,IA 52244-2540 •(319) 356-6030 PLAINTIFF : LAREW COMPANY, INC Docket No 09-05968 State (IOWA 1 vs. Court No IEQCV071243 1 County 'JOHNSON 1 DEFENDANT: IOWA CITY CLERK Ref No Received 110115/2009 1 Requestor(s) Phone KROPF,PATRICIA G (319)338-9222 Name (IOWA CITY CLERK 1 Party Type (DEFENDANT I Address 1410 E WASHINGTON ST 1 I 1 IOWA CITY IA Phone I I E-Mail 1 I Fax I I Employer 1 1 Zone Comments (SERVE MARIAN KARR I Documents Document Serve by Date OE PSR Description I Special Instructions ORIGINAL NOTICE AND I I CI 111(PETITION Service Information • ` Date 1 G - I Sty - 0 `1 Time 1 5.'7 t i Type ( \ 'hv. Co u 4 1 C t C ` �iIc Party Off i i�tn k�rrRelationship✓ Race ,\—.7 Sex L- DOB Location \A 1 0 w(,) _S V h54.CA 54' Miles , Fee Officer Attempts Log Date Time Server Notes Date Time Server Notes Notes: _ O _ C) 3 _ -- i. Ur e -C.- dol fit '--i G e: Tr D U) O Page 1 of 1 Printed:Thursday,October 15.2009 • THE IOWA STATE BAR ASSOCIATION FOR THE LEGAL EFFECT OF THE USE OF Official Form No.301 Robert N. Downer THIS FORM,CONSULT YOUR LAWYER OFSTIlC d'f THE IOWA DISTRICT COURT n n ,,-GC ,Kso$ JOHNSON COUNTY Larew Company,Inc., LAW EQUITY © No. FtVO7/a13 Plaintiff(s), DATE PETITION FILED: IC-13-0 9 VS. Miron Construction Co.,Inc.;City of Iowa City,Iowa; and Continental Casualty Company, ORIGINAL NOTICE Defendant(s). TO THE ABOVE-NAMED DEFENDANT(S): You are notified that a petition has been filed in the office of the clerk of this court naming you as the defendant(s) in this action. A copy of the petition (and any documents filed with it) is attached to this notice. The name(s)and address(es)of the attorney(s)for the plaintiff(s) (is) (are) Robert N.Downer&Patricia G. Kropf,Meardon,Sueppel&Downer P.L.C., 122 S.Linn St.,Iowa City,IA 52240 3 • The attorney's(s')phone numberfs) (is) (afe) (319)338-9222 facsimile number(s) (319)338-7250 _ �n You must serve a motion or answer within 20 days after service of this original notice Lpo�you, nd } within a reasonable time thereafter, file your motion or answer with the Clerk of Court for Johns<iii County, at the county courthouse in Iowa City Iowa. If you do not,judgment by default may be rendered against you for the relief demanded in the petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator at (319)398-3920,ext. 1100 , (If you are hearing impaired, call Relay Iowa TTY at -t::1-735-29422x.) (SEAL) ( 03vU ► "`.' CLER F COURT Johnson ounty Courthouse Iowa City , Iowa 52244-2510 IMPORTANT:YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS ©The Iowa State Bar Association 2003 301 ORIGINAL NOTICE FOR PERSONAL SERVICE IOWADOCS® Revised January,1999 cc C1& (CV( ct-UI ) IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY LAREW COMPANY, INC., No. EQCV O 7/2�3 Plaintiff, v. PETITION IN EQUITY • MIRON CONSTRUCTION CO., c-5 INC.;CITY OF IOWA CITY,IOWA; and CONTINENTAL CASUALTY , -- r COMPANY, 1.11 Defendants. V. Plaintiff states: 1. Plaintiff is an Iowa corporation with its principal place of business in Johnson County,Iowa. 2. Defendant Miron Construction Co., Inc. (hereinafter "Defendant Miron") is a Wisconsin corporation operating and doing business in the State of Iowa. 3. Defendant City of Iowa City, Iowa (hereinafter "Defendant Iowa City"), is an Iowa municipal corporation with its principal place of business located at 410 E. Washington Street, Iowa City,Johnson County, Iowa. 4. In or around October of 2007, Defendant Iowa City entered into a written contract with Defendant Miron for construction of Fire Station #2, 301 Emerald greet, Iowa City, Iowa 52240 (hereinafter the"public improvement"). ;> -i '24 71 c) _ i.-- =,r- '-" o 11173 � w cc C, i (Cv.2OA (Li) 72:w -, , •a 5. Defendant Miron, as principal, and Defendant Continental Casualty Company, as surety, furnished a bond incident to the work on such contract, a copy of which is attached hereto as Exhibit"B." 6. Plaintiff furnished labor, material and services for performance of such contract. 7. Such labor,material and services were furnished under a subcontract with Defendant Miron, a copy of which is attached hereto as Exhibit "A" of attached Exhibit 8. On September 16, 2009, Plaintiff filed with Defendant Iowa City a written, itemized, verified claim that shows the items thus furnished by Plaintiff for the public improvement (hereinafter "Plaintiff's claim"). A copy of Plaintiff's claim is attached hereto as Exhibit"C." 9. Plaintiff's claim was filed within 30 days after the completion of the principal contract between Defendant Miron and Defendant Iowa City. 10. Subsequent to the filing of Plaintiff's claim, Plaintiff and Defendant Miron entered into an agreement whereby Plaintiff agreed to file a partial release of Plaintiff's claim in exchange for Defendant Miron making a payment of $23,811.00 to Plaintiff o upon the next release of funds from Defendant Iowa City in connection i#hhtheublirn uiimprovement. -<n0 m -n 11. Pursuant to such agreement, on September 18, 2009, Plaint t ile$-with � w Defendant Iowa City a partial release of Plaintiff's claim. In doing so, Plaintiff again made clear to Defendant Miron that such release was conditioned upon Plaintiff's 2 • receipt of $23,811.00 from Defendant Miron, upon the next release of funds from Defendant Iowa City in connection with the public improvement, and such release would be withdrawn if Defendant Miron failed to perform its part of the agreement. A copy of the partial release and letter from counsel for Plaintiff to Defendant Miron expressly conditioning the partial release upon receipt of the $23,811.00 in a timely manner is attached hereto as Exhibit"D." 12. Upon the first release of funds from Defendant Iowa City following the partial release by Plaintiff, Defendant Miron issued Plaintiff a check in the amount of only$5,629.31. 13. In failing to pay the entire $23,811.00 to Plaintiff in a timely manner, Defendant Miron breached its agreement with Plaintiff and, therefore, the partial release that was filed by Plaintiff is null and void. 14. Plaintiff has completed the subcontract with Defendant Miron, and performed all conditions thereof on Plaintiff's part. 15. This action is brought less than 60 days and more than 30 days after the completion and final acceptance of the public improvement by Defenda9t4ow 'City, �a -ii which occurred on August 18,2009. 16. Plaintiff's claim is the only claim that has been filed with De lanowip City in relation to the public improvement described herein. 17. Pursuant to Iowa Code section 573.21, the court may tax, as costs, a reasonable attorney fee in favor of Plaintiff if Plaintiff establishes its claim, either in whole or in part. An Affidavit regarding attorney fees is attached hereto as Exhibit"E." 3 WHEREFORE, Plaintiff prays for judgment against Defendant Miron Construction Co., Inc., and Defendant Continental Casualty Company in the amount of $22,328.50, plus interest, costs, and reasonable attorney fees; that the Court adjudicate the amount of the retained percentage in the hands of Defendant City of Iowa City, Iowa, and order it used to pay Plaintiff's claim; and for such other further relief as is equitable. MEARDON,SUEPPEL& DOWNER P.L.C. By: 1/4/ /10 Robe ' N. Downer AT0002090 bobd@meardonlaw.com By: Patricia G. Kropf AT0009364 122 South Linn Street Iowa City,IA 52240 (319) 338-9222 FAX: (319)338-7250 trishk@meardonlaw.com ATTORNEYS FOR PLAINTIFFS O r 0 (=, i1 C) -G r" 10� fi► s 0 x) D w 4 ' STATE OF IOWA ) ) ss: COUNTY OF JOHNSON ) I, Richard G. Bachelder, being first duly sworn, state that I am the President of Larew Company, Inc.; that Larew Company, Inc., is the Plaintiff in the above-entitled cause; that the above Petition was prepared at the request of Larew Company, Inc.; that I have read the same and know the contents thereof;and that the statements and allegations contained therein are true and correct as I verily believe. LAREW COMPANY, INC. By: �/ RICHARD G. BACHELDER,President Subscribed and sworn before me by Richard G. Bachelder, as President of Larew Company,Inc.,this_ /-3 ' day of October,2009. 0-Z715---- / , f . r--a. 27No Public In . d ••r the S to of Iowa •9MEAAGRADERT ,:44 Corot i n Number 191076 by Commission Expires 0 n -� -- oA › w ' PLAINTIFF'S • E„6 EXHIBIT . ORIGINAL R I G I 1Vi,AL y U Ilpll [3 • THE AMERICAN INSTITUTE OF ARCHITECTS p Bond No.929437693 • AIA Document A312 Performance Bond Any singular reference to Contractor, Surety, Owner or other party shall be considered plural where applicable. CONTRACTOR (Name and Address): SURETY (Name and Principal Place of Business): MIRON CONSTRUCTION CO., INC. CONTINENTAL CASUALTY COMPANY P.O.Box 509 • 333 S.Wabash Ave. Neenah,WI 54957-0509 Chicago, IL 60604 O G' OWNER (Name and Address): -1'''—i ..r CITY OF IOWA CIE. N, t ) `I I N — 410 Washington Street Iowa City,IA 52240 - .. - I ' I s 1 r----1 G' — k...1 CONSTRUCTION CONTRACT w... � C? Date: 10/2/07 T,3 Amount: Two Million Sixty One Thousand Six Hundred and Fifty Dollars ($2,061,650.00) Description (Name and Location): Fire Station#2 Demolitio0&Construction Project,City of Iowa City. BOND Date (Not earlier than Constructidn Contract Date):10/25/07 Amount: Two Million Sixty One Thousand Six Hundred Fifty and 00/100 Dollars($2,061,650.00) Modifications to this Bond: I 1 None 0 See Page 3 CONTRACTOR AS PRINCIPAL SURETY Company: ( . . :te Seal) Company: (Corpora e Seal) MIRON CONSTR -IN CO.,INC. ,� CONTINENTAL CASU 0 OMPANY Signature: L-41.11 ' ` Signature: Name and Title: David G. Voss,f r. Name and Title: Kelly .•y,Attorney-io- act, ...Q '� President .','� 0 (Any additional signatures appear on page 3) > w (FOR INFORMATION ONLY—Name, Address and Telephone) —" AGENT or BROKER: OWNER'S REPRESENTATIVE (Architect, Engineer or Aon Risk Services,Inc.of Wisconsin other party): 111 North Washington Street Green Bay,WI 54301 (920)437-7123 • AIA DOCUMENT A312•PERFORMANCE BOND AND PAYMENT BOND•DECEMBER 1984 ED. •AIA Qc THE AMERICAN INSTITUTE OF ARCHITECTS,1735 NEW YORK AVE.,N.W.,WASHINGTON, D.C.20006 A312-1984 1 THIRD PRINTING•MARCH 1987 1 The Contractor and the Surety, jointly and severally, which it may be liable to the Owner and, as bind themselves, their heirs,executors, administrators, soon as practicable after the amount is deter- successors and assigns to the Owner for the performance mined, tender payment therefor to the of the Construction Contract,which is incorporated herein Owner; or by reference. .2 Deny liability in whole or in part and notify the 2 If the Contractor performs the Construction Contract, Owner citing reasons therefor. the Surety and the Contractor shall have no obligation 5 If the Surety does not proceed as provided in Paragraph under this Bond, except to participate in conferences as 4 withreasonable promptness,the Suretyshall be deemed provided in Subparagraph 3.1. p p to be in default on this Bond fifteen days after receipt of an 3 If there is no Owner Default, the Surety's obligation additional written notice from the Owner to the Surety under this Bond shall arise after: demanding that the Surety perform its obligations under 3.1 The Owner has notified the Contractor and the this Bond,and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety proceeds as Surety at its address described in Paragraph 10 below provided in Subparagraph 4.4,and the Owner refuses the that the Owner is considering declaring a Contractor payment tendered or the Surety has denied liability, in Default and has requested and attempted to arrange a whole or in part,without further notice the Owner shall be conference with the Contractor and the Surety to be entitled to enforce any remedy available to the Owner. held not later than fifteen days after receipt of such notice to discuss methods of performing the Construe- 6 After the Owner has terminated the Contractor's right tion Contract. If the Owner, the Contractor and the to complete the Construction Contract, and if the Surety Surety agree,the Contractor shall be allowed a reason- elects to act under Subparagraph 4.1, 4.2. or 4.3 above, able time to perform the Construction Contract, but then the responsibilities of the Surety to the Owner shall such an agreement shall not waive the Owner's right,if not be greater than those of the Contractor under the any,subsequently to declare a Contractor Default;and Construction Contract, and the responsibilities of the 3.2 The Owner has a Contractor and Owner to the Surety shall not be greater than those of the the declared a Contractor aritoDefault and Owner under the Construction Contract.To the limit of the theformally terminatedSuchthe Contractor's shall to not y de- amount of this Bond, but subject to commitment by the Glared contract.arlier than twenty Contractordayr Defaultafter the hallConn t bebr and Owner of the Balance of the Contract Price to mitigation of Sure- the Surely have received notice as provided in Sub- iscosts and damages oothe ConstructionionContract,the Sure paragraph 3.1; and ty obligated without duplication for: 3.3 The Owner has agreed to pay the Balance of the 6.1 The responsibilities of the Contractor for correc- Contract Price to the Surety in accordance with the tion defective work and completion of the Construe- C terms of the Construction Contract or to a contractor tion Contract; selected to perform the Construction Contract in actor- 6.2 Additional legal, design professional and delay dance with the terms of the contract with the Owner. costs resulting from the Contractor's Default, and re- 4 When the Owner has satisfied the conditions of Para sulting from the actions or failure to act of the Surety under Paragraph 4; and graph 3, the Surety shall promptly and at the Surety's ex- pense take one of the following actions: 6.3 Liquidated damages, or if no liquidated damages are specified in the Construction Contract,actual dam- 4.1 Arrange for the Contractor, with consent of the ages caused by delayed performance or non-perfor- Owner, to perform and complete the Construction mance of the Contractor. Contract; or 4 2 Undertake to perform and complete the Construe 7 The Surety shall not be liable to the Owner or others for Con- tion Contract itself,through its agents or through inde- obligations ofthe t,Cand theer that are unrelated f eCnt the structlon Contract, and Balance of the Contract Price • pendent contractors; or shall not be reduced or set off on account of any such 4.3 Obtain bids or negotiated proposals from unrelated obligations. No right of action shall accrue on qualified contractors acceptable to the Owner for a this Bond to any person or entity other than the Owner or contract for performance and completion of the Con- its heirs, executors, administrators or successors. struction Contract, arrange for a contract to be pre- 8 The Surety hereby waives notice d any change,includ- pared for execution by the Owner and the contractor ing changes of time, to the Construction Cqa ract or to selected with the Owner's concurrence,to be secured with performance and payment bonds executed by a related subcontracts, purchase orders and other obT% qualified surety equivalent to the bonds issued on the tions. • _ Construction Contract, and pay to the Owner the 9 Any proceeding, legal or equitable iunderithis E44. amount of damages as described in Paragraph 6 in ex- may be instituted in any court of competent jtkadictidn'illi cess of the Balance of the Contract Price incurred by the the location in which the work or part-ofr a woifcis loc to Owner resulting from the Contractor's default; or and shall be instituted within two }Cel after Contractor 4.4 Waive its right to perform and complete,arrange Default or within two years after tl Contractor ceased For completion, or obtain a new contractor and with working or within two years afterthe$urety refteles or fails reasonable promptness under the circumstances: to perform its obligations under this Bond,whTthever oc- curs first. If the provisions of this Paragraph are void or .1 After investigation,determine the amount for prohibited by law,the minimum period of limitation avail- MA DOCUMENT A312•PERFORMANCE BOND AND PAYMENT BOND•DECEMBER 1984 ED.•AIA OS THE AMERICAN INSTITUTE OF ARCHITECTS,1735 NEW YORK AVE.,N.W..WASHINGTON,D.C.20006 A312-1984 2 THIRD PRINTING•MARCH 1987 able to sureties as a defense in the jurisdiction of the suit tractor of any amounts received or to be received by shall be applicable. the Owner in settlement of insurance or other claims for damages to which the Contractor is entitled, re- 10 Notice to the Surety,the Owner or the Contractor shall duced by all valid and proper r n made to or on be mailed or delivered to the address shown on the sig- behalf of the Contractor under the Construction Con- nature page. tract. 11 When this Bond has been furnished to comply with a 12.2 Construction Contract:The agreement between statutory or other legal requirement in the location where the Owner and the Contractor identified on the sig- the construction was to be performed,any provision in this nature page, including all Contract Documents and Bond conflicting with said statutory or legal requirement changes thereto. shall be deemed deleted herefrom and provisions con- forming to such statutory or other legal requirement shall 12.3 Contractor Default: Failure of the Contractor, be deemed incorporated herein. The intent is that this which has neither been remedied nor waived,to per- Bond shall be construed as a statutory bond and not as a form or otherwise to comply with the terms of the common law bond. Construction Contract. 12 DEFINITIONS 12.4 Owner Default: Failure of the Owner,which has neither been remedied nor waived, to pay the Con- 12.1 Balance of the Contract Price:The total amount tractor as required by the Construction Contract or to payable by the Owner to the Contractor under the perform and complete or comply with the other terms Construction Contract after all proper adjustments thereof. have been made, including allowance to the Con- MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: _ rV O c�-4 =tom %-11 r" r rn • rn O o� D w (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL SURETY Company: (Corporate Seal) Company: (Corporate Seal) Signature: Signature: Name and Title: Name and Title: ,Attorney-in-Fact Address: Address: A1A DOCUMENT A312-PERFORMANCE BOND AND PAYMENT BOND• DECEMBER 1984 ED. •AIA' THE AMERICAN INSTITUTE OF ARCHITECTS,1735 NEW YORK AVE.,N.W.,WASHINGTON, D.C.20006 A312-1984 3 THIRD PRINTING•MARCH 1987 THE AMERICAN INSTITUTE OF ARCHITECTS 0-,.F,t • Bond No.929437693 AIA Document A312 Payment Bond Any singular reference to Contractor, Surety, Owner or other party shall be considered plural where applicable. CONTRACTOR (Name and Address): SURETY (Name and Principal Place of Business): MIRON CONSTRUCTION CO.,INC. CONTINENTAL CASUALTY COMPANY P.O.Box 509 333 S.Wabash Ave. Chicago,IL 60604 Neenah,WI 54957-0509 O OWNER (Name and Address): C7 CITY OF IOWA CITY, D--1 c•-•) 11 410 E.Washington Street .,,.. Iowa City,IA 52240 C1 _ 1.11 m CONSTRUCTION CONTRACTa 0 5 23 Date:10/2107 �. .._ Amount:Two Million Sixty One Thousand Six Hundred and Fifty Dollars ($2,061,650.00) Description (Name and Location): Fire Station#2 Demolition&Construction Project,City of Iowa City. BOND Date (Not earlier than Construction Contract Date): 10/25/07 AmOUnt•Two Million Sixt One Thousand Six Hundred and Fifty Dollars`$2,061,650.00) Modifications to this yBond: ENone ❑ See Page 6 CONTRACTOR A PRINCIPAL SURETY Company: (Cifte Seal) Company: (Corporate Seal) MIRON CONSTRUC i CO.,INC. CONTINENTAL CAS OMP,9NY /L Signature: "f �t� Signature: Name and Title: David G. Voss, i . Name and Title: Kelly Cod ,Attorney-in- act President (Any additional signatures appear on *age 6) (FOR INFORMATION ONLY—Name, Address and Telephone) AGENT or BROKER: OWNER'S REPRESENTATIVE (Architect, Engineer or Aon Risk Services,Inc.of Wisconsin other party): 111 North Washington Street Green Bay,WI 54301 (920)437-7123 AIA DOCUMENT A312•PERFORMANCE BOND AND PAYMENT BOND•DECEMBER 1984 ED. •AIA THE AMERICAN INSTITUTE OF ARCHITECTS,1735 NEW YORK AVE.,N.W.,WASHINGTON,D.C.20006 A312-1984 4 THIRD PRINTING•MARCH 1987 . . . .. . . . . . . • :I T he coritractor and the Snrety,jointly end severally, e When the tf*aimant ./a.s, satsfieci the cr.snrkions of bind themselves, their-heir's,.6(ek-,-utors. adMinistratOri„ Paragraph 4, the Stkrely shall isrbinpffy .and it the skits ft.d assigns to ithe °Winer to pay 'for labPr, ti.041.y.N.eNirervii r..i•ske:the folloviing ai-,tibiks maierlafi and eouipMent furnished for we in theperfoii. 'Mance:Of the L'Ainstrlittion. blifract;which 15 ittcorPos 6,1 Send ari.answer to the Clairnatit,-.with a:COpy.te tilted heron by reference. the Owner,withitt 45 days after receipt(A-the claim, itatfng.the amtiiinu that are'undisPuted'and the basis 2- With.reSpect to.the Owner, this Obligation shall be fnr:Chailenging any.agiosoi. that Aro clisotect mall and void if the Contractor: 6.2 (say or arterige.for payment of any undisputed 2.1 ProMptly ii1;des paYnient;,drreCtly or indiftiktly. arnoUnis. for:all stn de Clairnaptk and 7 The Surety's tel ohligetion shall not exceed the 21 Defends, in-de/taffies and :holds harmless the amOunt of this Bond,and:the ametint of dais Bend Shall'be Qw ne-r from darnici demandslierts or.sults by Any orecfitetlifor any pay/tents made in goo4f*h by the Surety. PersOn or entity whole t1.41.MderfiOnd, lien or Wit-i, fOi.the payment for laberiimaterials or equipment fur, 8 Amcionts owed by the Ownerth the Contractor under niched for use in the performance Of the Construction the Construction tontrar .:t shall be used for the facifor, CbritfAci.:provided the Owner has promptly notified Mance of the ConOniction'Contract end to atisfy.e.lairts, the ('o-tractor .and the :Surety (at the address if ar.lt, under any.Construction PerforlitanCe Bend. described iri .Paragraph 12)of any claims, deinartd5. the Contractor ftim(shing and the Owner accepting:this tieri Or sciits and i..egi4ifed:(11.5!-kmse (if Welt dairni:. Bona'they agree that all kinds earned by the ConlviCtOr derfkiv1Pb, ligt1.1 or $1.1b to the ContrAtor and thi in the pet.'fobtanCe of the 'Construction t:ontact Aw Stirety, and provided there is no Owner Default. dedicated to latisfy obligatioiti. of the Ct>ntrac,tor and the Surety!...iO4eA.this Bend.subject to the.0Wher's prtot'- Mtn respect to Claimants, this obligation shill be ity to use-the funds for the completion OF the swork. ... r:13h. and void it the Contractor promptly makes pay- Merit,clireaiY or inelirer*, for all SUITS due. 1 TheSerrity shall not be liable th the Owner.Claimants 4 lilt sweilt 5ilail hav no: obligation to claimants Of ottivs for okiligadons of the Contractor that are isnrelate .: • ed to the Construction Contract.The Owner shall tint.be Linger-this Flopd until: liailii.,fai payrrientrtit anY.:eoStS:Or 4i4*(150 Of any CiAisrl- 431 Claimants Al am employed by of have a direct ant under this kind,and shall have under this:Bond no obli- contract with the:Contractor have given polite to the tiittibas to Make Oyfritlits to,give nOtite.,s'On behalf of,or Stirety(at the address described in Paragraph 2)anti otherWise have obligations to Claimants.under this Bond sent a copy; or otki•ce thereof,to the Owner, stating that a?-"lall, i's being°ade tiad6f thi', fli, )nd, and,with 10 The! Surety hereby waives notice -.4 •• It a any c-ange, substantial Atar4.cy, the iamount Of me ciatm. including changes oftirne, to the.Constrtiction Contract 4.2 Claimants who do riot hAv11, a direct contract or to related subcOntracai purchase orders and other writs the 'Contractor: obligatioft. ,1 Have furnished written notice to the Con.- 11 No suit iN action shallbe corArneriCed:bY a Clairn ant tat ..and sent a copy,or notice thereof to under this Bond other than in a court of:Ciarttpetent Itir/S- the:Owner,Within 90.44S:after having last: diction 10 the location in which the work or part Of the performed labor or last furnished rnateeais or 04.0*is lOr.:436?-d Or Of*.the'expiration of C14 year from the etit2, rorrientindiided lit the claint stair*,with date ti)On Which the Claimant gave the notice required by sisbritantial accUraw,tfirt`imount Of-the claim Subparagraph 4i .0:i Clause 4Z3..or(2)on which the last and the name of the peril/ .tp 1.Nhorn the labor'or sen.ire WO.s.r/OffOnted:bY 4r440fie or the last Plate- Materials were-furnished or sitiplied Of for 0?.4 or gquiint*ere furnished b' the ,,yhorn the labor was Oorieor penned,ii rid siructiOn Contract i whichever Of(1)or(4)iiist OcCio* Ft the proViskins of this Paragraph ate void Of prohibited•by.law, 2 Have either .received re*titc3P.invYhole Or, the minimumperiod'of limitation aVailable.to silreties as a in part;torn tne(ontractor?or not recanted ago*.0, the Jur/tat-don of ilse3iit shalt.1121.5 applic.abfe. Within It)days of forriishing the above ria- any cemrnunication from the Contractor• ,:, • •:-.7-i by ythitb the co hliaor has indicated . 12.NotiCe to the Surety, the Owner Or It cartalot Claim wilt be paid 4frectly orindi*tly,and $bait.be mailed or delivered to address show the signgure page. Actual receipt Of tiolicecN Surety the 3 Not having been paid within the above 30 Owner or the Cainkrattor,•IttivVeyer•-aCcoropli5 • 1 ,all hegl- days,have sent a written noca ttie:Sonny be sufficient corr./044pp?as of iti-q-daW reVi1r1 OR): fatithe address dimtribed in Paragrlph112).alicl: iiiiiii0s howl on the i sigriakire-pte. • sent a ropy,ornotiq ttvreot.to the Otiftw, .--7- ..!. ::, •statifIg mat a clihis 15:betng tnide under this i 3.Whets .this Bi;i" 31dhas been it,tied tommply with a Bond and erictO$4 a WO of the-prg%iiiu statutory or other legal re4iiireitinfirrtheation:where written notice fumshed to the Contractor: the cgostruction was to be performedk any provision in this , . Bond conflicting ivithsaiiiitatufory or legal rectUirereent S if a notice-required by Paragraph 4 is given by the shall be deemed deleted hirefrtfrn and'provisions On: Owner to the Contractor or to the Surety, that is 5tiffi* farming to such statttiory or other legal requiter/lent Shall eient:compliafke. be'deemed inCoeporattil herein. Theintent is that this MA pottisitytr NM*PtgfORMtst(CE aalft:ANOfArtyikfir ()tI)*ot:CErtinftllog f.:0.*Ale tric.:3:&itiatAi4 ksrmrri of ACIATECTli;17:fs tili'WYOTO:.AYK.N.V.,!:.Wg}:irimcirON,Ar-,2000 43121984 5 .1krigtr*ION)u;it,*,rtA,i4<iiir Bond shall he construed as a statutory bond and not as a Construction Contract,architectural and engineering common law bond. services required for performance of the work of the 14 Upon request by any person or entity appearing to be a Contractor and the Contractor's subcontractors, and potential beneficiary of this Bond, the Contractor shall as other items urifowhich a where the mechanic's labor,liemay be promptly furnish a copy of this Bond or shall permit a copy orssegted in the jurisdiction where the materials to be made. equipment were furnished. 15 DEFINITIONS 15.2 Construction Contract:The agreement between the Owner and the Contractor identified on the sig- 15.1 Claimant:An individual or entity having a direct nature page, including all Contract Documents and contract with the Contractor orwith a subcontractor of changes thereto. the Contractor to furnish labor, materials or equip- 15.3 Owner Default:Failure of the Owner,which has rnent for use in the performance of the Contract.The neither been remedied nor waived, to pay the Con- intent of this Bond shall be to include without limita- tractor as required by the Construction Contract or to tion in the terms'labor,materials or equipment"that perform and complete or comply with the other terms part of water, gas, power, light, heat, oil, gasoline, thereof. telephone service or rental equipment used in the MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: o • _r`;-- 73I 1 i _ell 1� D W (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL SURETY Company: (Corporate Seal) Company: (Corporate Seal) Signature: Signature: Name and Title:,, Name and Title: ,Attorney-in-Fact Address: Address: AIA DOCUMENT A312•PERFORMANCE BOND AND PAYMENT BOND•DECEMBER 1984 ED.-AIA® THE AMERICAN INSTITUTE OF ARCHITECTS,1735 NEW YORK AVE.,N.W.,WASHINGTON,D.C.20006 A312-1984 6 THIRD PRINTING•MARCH 1987 1 POWER OF ATTORNEY APPOINTING INDIVIDUAL ATTORNEY-IN-FACT J Know All Men By These Presents,That Continental Casualty Company,an Illinois corporation,National Fire Insurance Company of Hartford,an Illinois corporation,and American Casualty Company of Reading,Pennsylvania,a Pennsylvania corporation(herein called"the CNA Companies"),are duly organized and existing corporations having their principal offices in the City of Chicago,and State of Illinois,and that they do by virtue of the signatures and seals herein affixed hereby make,constitute and appoint Timothy J McKenna, Jeffrey R Meisinger, Kelly Cody, Kent Arps, Troy Carlson, Roxanne Jensen, Individually, of Green Bay,Wisconsin Trudy A Szalewski,Christopher H Kondrick,Brian L Krause,Cheryl Siem,Individually,of Milwaukee,Wisconsin their true and lawful Attorneys)-in-Fact with full power and authority hereby conferred to sign,seal and execute for and on their behalf bonds, undertakings and other obligatory instruments of similar nature -In Unlimited Amounts- and to bind them thereby as fully and to the same extent as if such instruments were signed by a duly authorized officer of their corporations and all the acts of said Attorney,pursuant to the authority hereby given is hereby ratified and confirmed. This Power of Attorney is made and executed pursuant to and by authority of the By-Law and Resolutions,printed on the reverse hereof,duly adopted,as indicated,by the Boards of Directors of the corporations. In Witness Whereof,the CNA Companies have caused these presents to be signed by their Senior Vice President and their corporate seals to be hereto affixed on this 15th day of October,2007. �PvGASUq�T} Isstm44, o OO'OP Continental Casualty Company �� n 41'.- °F +` N National Fire Insurance Company of Hartford cooPoaArt Q Q 440 ; Fy *carmRu., American Casualty Company of Reading,Pennsylvania ss x0 . g, i JULY 31, v SEAL c s � 1sQ2 �w a 1897 HART4D` b • Thomas P.Stillman Senior Vice President State of Illinois,County of Cook,ss: On this 15th day of October,2007,before me personally came Thomas P.Stillman to me known,who,being by me duly sworn,did depose and say: that he resides in the City of Chicago,State of Illinois;that he is a Senior Vice President of Continental Casualty Company,an Illinois corporation, National Fire Insurance Company of Hartford,an Illinois corporation,and American Casualty Company of Reading,Pennsylvania,a Pennsylvania corporation described in and which executed the above instrument;that he knows the seals of said corporations;that the seals affixed to the said instrument are such corporate seals;that they were so affixed pursuant to authority given by the Boards of Directors of said corporations and that he signed his name thereto pursuant to like authority,and acknowledges same to be the act and deed of said corporations. OFFICIAL SEAL ELIZA PRICE IJO'rmRY pUBL1Q,8'TATE OF ILLINOIS • MY COMMISSION EXPIRES: 09117/08 My Commission Expires September 17,2009 Price Ndtity Puyblie O.0 -� L_) CERTIFICATE z > w I,Mary A.Ribikawskis,Assistant Secretary of Continental Casualty Company,an Illinois corporation,National Fire Insuranceompany of Hartford,an Illinois corporation,and American Casualty Company of Reading,Pennsylvania,a Pennsylvania corporation do hereby certify that the Power of Attorney herein above set forth is still in force,and further certify that the By-Law and Resolution of the Board of Directors of the corporations printed on the reverse hereof is still iii force. In testimony whereof I have hereunto subscribed my name and affixed the seal of the said corporations this d-Cra day of CAA 6 ,Z-00-7 . .P�GASUgt.r} owsuR4 tow.0. Continental Casualty Company w� o <�e `F ��‘ ` , National Fire Insurance Company of Hartford coRP.AkTt; _ t `; �Nsaaeoa�rra .� American Casualty Company of Reading,Pennsylvania Z D o `al JULY 31. SEAL / sy < 4 �soz 4 S / ar 1897 HMO- o- ! �� >� Mary A. ika kis Assistant Secretary Form F6853-1/2007 EXHIBIT CO C • CLAIM UNDER IOWA CODE CHAPTER 573 To: City of Iowa City City Hall 410 East Washington Iowa City,IA 52240 The undersigned, LAREW COMPANY, INC., 1611 Willowcreek Drive, Iowa City, IA 52246, herewith files claim against MIRON CONSTRUCTION CO., INC., 1471 McMahon Drive, P.O. Box 509, Neenah, WI 54957-0509 (the "Prime Contractor") for labor, material and service furnished by the undersigned and used by said Prime Contractor in the construction of Fire Station #2, 301 Emerald Street, Iowa City, IA 52240, as per the attached itemized exhibit showing a net amount due of $27,957.81, plus interest commencing from due date to payment date. CLAIMANT'S AFFIDAVIT STATE OF IOWA ) ) ss. COUNTY OF JOHNSON ) I, Richard G. Bachelder, the President of Larew Company, Inc., do solemnly swear that the several items mentioned in the within statement and attached exhibit are just,true and wholly unpaid; that the Prime Contractor has been notified within 30 days after the materials were furnished or by itemized invoices rendered to the Prime Contractor during the progress of the work, of the amount, kind and value of the mat tial furnished and labor and services performed for use upon the said public im jjvem it. trffi p LAREW C MPANY,INC. Lk! c.. v By: G 'CHARD G. BACHELDER,Prestdent F rn 073 Subscribed and sworn to before me this 16th day of September,2009? N e,.;; MARILEiA.A CRADERT Not Public and for_.&fortState of Iowa Commisbron Number 191076 • My Commission Expires ,o.. - , SUMMARY: Balance per contract revision of 4/15/09, conditionally accepted by Mr. Bachelder $332,534.00 Addition of concrete protection(024) 1,439.05 Addition of week-end work(021) 450.00 Addition of cold weather pouring of concrete (022) 565.00 Overhead and profit on 11/3/08 change order 1,492.50 Addition per ITC#50 (enclosed) 1,258.95 Cleaning heat pump coils (enclosed) 200.00 Total Contract $337,939.50 Paid to date $309,981.69 Balance Due* $27,957.81 *Past due per contract as adjusted $11,060.83 Retainage 16,896.98 $27,957.81 rJ O .?-< _ 1 r %-n . m g 0 > w 2 EXHIBIT "A" • .i.'s�-13�::• o� �'�rlt�.nl�3;!_;- JOB 70225 DATED:4/1S/1 CONT : CIIa01-001 $" ` "elf CONTRACT REVISION TO: LAREW CO INC • PO BOX 2900 IOWA CITY IA 522.44 a- Tas tketa RE: Fire Station ##2 Demo & Co • hvNa witaov mad 301 Emerald St PM �� Iowa City IA 52240 VENDOR# 6586 °RIO CONTRACT DATE! 11/05/07 AMOUNT; $34)3, 560.00 DESCRIPTIO CO# CHANGE AMOUNT 001 MOD# 0005 / 00 ; ITC 05-Clarification to 1.2 $395.00 Pier Details P06 & P07, Increase of Sump Pit Depth. 002 MODI# 0006 / 00 ; ITC 06 - 1:1ec rica1 - 1.3 $.00 .-...... .. - •revisions. Circuits 367 35, & 40 shall be a 30/3 breaker to fccd VE-I. Circuits 98 & 100 shall he a 20/2 breaker to teed HP-2 , TOTAL CONTRACT AS OP 2/04/08 $348, 975. 00 003 MOD# 0001 / 00 ; ITC 01-Column location CO 02 $,00 dimensions and wall width. Clarifications of column dimensioning and foundation wall width are ., attached. p 004 MOD$ 0003 / 00 : ITC 03-Column line CO 02 $-0S 11 designation - clarifications E. : . u dimension revisions. Incorporate the following — changes into the drawings -77 N 005 MOD# 0007 / 00 1TC 07 - In response to C9 02 RFI 401, please see attached supplemental dwg • Corporate Q{fton P_O.Box 500 t1oenah.WI 54957-0509 MIRON CONSTRUCTION CO-, INC. 1411 Mcgzth,cin 06veIleannh,Vv1540E6 .!I I Excellente ghnna;02M69-7006 Pak 520(960-T399 www.mlrpn Pons!.coat JJ{1L LV LVVV ].JU Li 'Vv 1111 a,4 .v.. vv..ir..LVv. • "" "-' --- • d�ti v:14,ti s� 111a2Iu soan,i EAeerroe" CONTRACT REVISION LAVEtAl CO INC DATED: 4/15/09 Fire Station. #2 demo & Co PAGE#; 2 for louver dimensions. 006 MoD# 0012 / 01 : RFI 12-Add for sanitary CO 02 $995 .10 waste piping to connect S-1 in room 247_ 007 MOD# 0014 / 00 : ITC 11-Exterior Wall CO 02 $ .00 Revisions, Window Head, Jamb, and Sill Revisions. 008 MOD# 0015 / 00 : ITC 12-Sitework revisions CO 02 $. 00 009 MOD## 0021 / 01 r I'T'C#IS-Framing rev .a,ions. Co 02 $, 00 Sheet A9.00-Opening schedule, elevatio-ns and details_ Sheet A9 . 10- Details. Sheet A9.2 0- Details_ TOTAL CONTRACT AS OF 9/26/08 $349,970. 10 010 MOD# 0 013 / 01 : ITC 10-Mechanical Room CO# 3 $1, 119. 00 B101 Revisions. 0/1 MOD# 0027 / 01 : ITC 21R-Outdoor Air CO#3 $1,067.43 Ductwork in Apparatus Bay 012 MOD# 0031 / 00 : ITC 23-Provide concrete CO##3 $. 00 infill as detailed in Supplemental Drawing SD-S31 attached. 013 MOD# 0035 / 00 : ITC 26-Revise unisex CO#3 $317. 86 restroom 120 layout . 014 MOD# 0040 / 00 : ITC 30-Gas piping CO#3 _ $1,156,00 revisions and reset 0 --_ button additions. 0 c -11 015 MOD# 0043 / 00 ITC 31-Revise driveway CO43 - — $, elevations. Revise iti.ake "' rn rim elevations. -‹ -1'7 �• `0 W ' N Corporate Office �.� P,O,Box 509 Kaanah,W►54957-90S M(RON CONSTRUCTION CO.,INC. 1471 McMatoc 1iaNeenah.wi54956 Mglding EXC eIIe c e Pndne;9201'969-7000 FaX:920/959.7399 utwW.rrcJrctncoa5Lco€ti •09/09/2009 07:43 FAX 9209697389 MIRON. CONSTRUCTION j005/008 illaik*naliticolfetsce CONTRACT REVISION Lt. 2W CO INC DATED: 4(15/09 Fire Station #2 Demo FY Co PAGE*:. 3 016 MOD# 0048 / 00 : Added cost due to CO#3 $25, 000, 00 unsuitable soils for standard geothermal construction. Use sonic rig to drill geothermal holes. Coate agreed to at 10/28/08 meeting with Matt Welter and Shaun Bradbury. 017 MoD# 0051 / 00 : RFI#36-Move return duct CO#3 $369. 50 and grille in sleeping room 114. . 018 MOD# 0052 / 00 RFI#34-Grille location in COO $1,130. 67 IT/Controls B103 . 019 MOD# 0057 / 00 : RPI#32-Louver relocations Co#3 61, 005. 00 020 MOD# 0058 / 00 : RFI#37--Install takeoff to CO43 $433.49 supply diffuser in 14x10 duct at mezzanine floor level (in the north of supply riser) , drop thru mezzanine floor between floor supportsi & connect to supply diffuser in Cor 115. Diffuser may shift to the north of fixture. TOTAL CONTRACT AS OF 1/28/09 , . _ $381,777, 05 021 Charge to work week-ends BACIN $450. 00- due to geo thermal being behind and not having permanent heat on schedule. 022 Add cost to pour concrete METPV 0_ 65. in cold Breather, Metro '- CO # 2 . - c- oY .. > w Corporate Office P_O.Box 509 Neenah_Vdl 54957-0509 tUiIRON CONSTRUCTION CO_, INC. 1479 McMahon Drive NaBf13h,w1 64256 Building Excel/encs Phone:92!3 6$.7000 Fax:920/9697399 wr�w.mtroncoastcom 03/08%2009 07:43 FAX 9209697399 MIR0N. CONS IKM;IIUN 1 006/008 • 431FP .4 '.1": •t.Nli:t;.i eueelCONTRACT REVISION LAREW CO INC DATED: 4/15/09 Firs Station *2 Dnp E, Ca PAGE4_ 4 023 Replace masonry & frame MIRON $7B9.00, damage due to Larew's employee running lift into frame. TOTAL CONTRACT AS OF 2/10/09 X379,973 . 05 024 Concrete protection due NETPV ,439. 05- to cold weather ($2003.40 -$564.35 on previous contract revision. TOTAL CONTRACT A9 OP 2/24/09 $378,51440 025 Deducting $46000.00 from BA contract to to pay Environetjcs and their subcontractor direct for services performed for Larew on the Iowa City `-' Fire Station # 2. TOTAL CONTRACT AS OF 4/ : 19 . . $332,534 ,00 / J,� ** SUBCONTRACTOR SINATURE: �...r� � DATL- /2 MIRON S I GNA.TURE: _ DATE; The above work is to be performed under the same conditions as specified in the original contract. Please sin and return both copies of this Contract Revision. One fully executed copy will be returned to you for your records. Both signatures are required or work is not authorized. Should there be any discrepancies with this contract breakdown, plese inform Paul M Auer as soon as possible, a qtr CONTINGENT UPON AMOUNTS AGREED TO AS PER YOUR CONTRACT REVISION OFA;IIcgi "n FEBRUARY 10, 2009 AND IMPLE} NTED AMOUNTS STATED IN YOUR LETTER OF ,7 APRIL 16, ?009. Li - v, r- Corporate Of& P_0_BoY 509 Neenah,WI 54857-D509 MIRON CONSTRUCTION CO., INC. 1471 mcmarion Drive Necnab•WI 54956 Building Excel/once Phone:920(969-7000 Far 920/969-7399 VWkU.mloon co n s(.cpm PLAINTIFF'S EXHIBIT • MEARDON, SUEPPEL & DOWNER P.L.C. LAWYERS ROBERT N. DOWNER TELEPHONE: (3 1 9)335-9222 JAMES D. McCARRAGHER 122 SOUTH LINN STREET ow,'.coy p-.o.x: (319)338-7250 MARKT. HAM ER IOWA CITY, IOWA 52240-1802 CORALVILLE FAX.:(3 1 9)545-4055 THOMAS D. HOBART DOUGLAS D.RUPPERT 2431 CORAL COURT,SurrE 5 WWJV.MEARDONLAW.COM TIMOTHY J. KRUMM CORALVILLE, IOWA 5 224 1-2838 WILLIAM J. SUEPPEL WILLIAM L. MEARDON CHARLES A.MEARDON (1919-1997) DENNIS J. MITCHELL DAVID J. BRIGHT OF COUNSEL: PETER J. GARDNER WILLIAM F.SUEPPEL ANNE E. DANIELS MARGARET T. LAINSON ANDREW J. HOSMANEK JEAN BARTLEY PATRICIA G.KROPF CARRIE L. LATHROP September 18, 2009 Mr.Paul Auer Via Facsimile# (920) 969-7399 Miron Construction Co.,Inc. 1471 McMahon Drive Neenah, Wisconsin 54956 Re: Fire Station#2 Demolition and Construction Your Job #70225 Dear Mr. Auer: Enclosed herewith is a copy of the Partial Release of the claim filed by Larew Company, Inc., such Partial Release being in the amount of $23,811.00. This Release was filed upon your commitment that, from the next release of funds from the City of Iowa City in connection with this project, that amount would be forthwith paid to Larew Company,Inc. This Release has been filed with the City of Iowa City expressly predicated upon the foregoing understanding and, if this payment is not forthcoming, this Partial Release will be withdrawn. is y yours, l Robert N. Downer RND/mag p Enclosure D m cc: Richard Bachelder -- `n m Ori > w • • PARTIAL RELEASE OF CLAIM UNDER IOWA CODE CHAPTER 573 To: City of Iowa City City Hall 410 East Washington Iowa City,IA 52240 The undersigned, LAREW COMPANY, INC., 1611 Willowcreek Drive, Iowa • City, IA 52246, does hereby partially release the claim filed by it on September 16, 2009 against MIRON CONSTRUCTION CO., INC., 1471 McMahon Drive, P.O_ Box 509, Neenah, WI 54957-0509, such partial release being in the amount of $23,811.00, preserving and maintaining the claim filed to the extent of $4,146.81, plus interest commencing from due date to payment.date. CLAIMANT'S AFFIDAVIT 0 >- STATE OF IOWA }-< i l • 4..... ) ss. COUNTY OF JOHNSON ) M 0 4F I, Richard G. Bachelder, the President of Larew Company, Inc., go sol nnly swear that the above and foregoing Partial Release of Claim represents the voluntary act and deed of the Claimant,Larew Company,Inc.. LAREW COMPANY,INC. .41 By: A�aa ' CHARD G. BACHELDER,President o Subscribed and sworn to before me this 18th day of September,200 I Tl n O O17.� N tart'Public in and for the State of Iowa GO _. PLAINTIFF'S EXHIBIT nEn IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY LAREW COMPANY, INC., No. EQCV Plaintiff, v. AFFIDAVIT RE: ATTORNEY FEES MIRON CONSTRUCTION CO., INC.; CITY OF IOWA CITY, IOWA; and CONTINENTAL CASUALTY COMPANY, Defendants. STA FE OF IOWA ) ss: COUNTY OF JOHNSON ) We, Robert N. Downer and Patricia G. Kropf, being first duly sworn on this day of October, 2009, upon our oath depose and state that we are the attorneys filing the Petition in this action, and there has been no agreement between us,this law firm and the Plaintiffs, express or implied, nor between us and this law firm or any other person for any division or sharing of the fee to be taxed as a result of the events alleged in n_ the above-captioned matter, any such fees when taxed to be in favor of Meardon, Swppcl�, &Downer P.L.C. as compensation for services actually performed in this action. t,-, y i RI►BERT . DOWNER ,♦ PATRICIA G. KROPF A h Subscribed and sworn to before me by Robert N. Downer on this /3 day of October,2009. t MAMMA ART CommissionNumber 191076 • My Gommis�icme .. tires �" Not. ' Public in an, :or the St. - of Iowa Subscribed and sworn to before me by Patricia G. Kropf on this /-���` day of October,2009. 4pi.L MARUAA GRADERT 6.4-- CommissionNumber 191076 NotaPublic in . r the S S . of Iowa My Commission Expires y o -=a 0 .n 2 END OF CASE FILE CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE • PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319)356-6030 PLAINTIFF: HEGEMAN,ROBERT J Docket No 09-06388 - State IOWA vs. Court No'EQCV070796 County JOHNSON DEFENDANT: CITY OF IOWA CITY Ref No Received 11/02/2009 DEFENDANT: CITY COUNCIL OF IOWA CITY, 10'! Requestor(s) Phone JOHNSON CO CLERK OF COURT (319) 356-6060 Name CITY COUNCIL OF IOWA CITY, IOWA Zone Party Type DEFENDANT Phone Fax Address E-Mail Employer Comments I _ Documents Document Serve by Date OE PSR Description/Special Instructions WRIT OF CERTIORARI Service Information Date VC/3 /06 Time Q c1,3 O Type Party !Qr 4('5(\ (<a r r Relationship C-1 4-V C.1-er^(c Race Sex DOB Location,L., • C y f(q(( e iei'ks Gp. Miles Fee Officer S Attempts Log Date Time Server Notes Date Time Server Notes Notes. • � Q �O ?- -`J LL s • ‹ CIS Printed: Monday, November 02,2009 Page 1 of 1 , 4 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ROBERT JAMES HEGEMAN , ) Case 06521 EQCV070796 Plaintiff/Petitioner, ) WRIT vs . ) (XXXXX ) Without Bond CITY COUNCIL OF IOWA CITY IOWA CITY OF IOWA CITY , ) ( ) With Bond in the Defendant/Respondent, ) amount of $ ( ) Attachment ( ) Mandamus (*AY/4 Certiorari ( ) Possession ( ) Habeus Corpus ( ) Replevin ( ) Landlord' s Attachment (XXXXX) Other (Specify) SEE ATTACHED ORDER TO THE SHERIFF OF JOHNSON COUNTY: YOU ARE COMMANDED TO ATTACH: ( ) Bank Account ( ) Personal Property ( ) Body ( ) Real Estate ( ) Crops ( ) Other (Specify) Description (See attached court order) Date 11-02-09 LODEMA BERKLEY CLERK, IOWA DISTRICT COURT Requested by: ROBERT HEGEMAN By: kt-414/404-.12 RETURN OF SERVICE Date Received Fees -- ,.J o Date Served Mileage y7=q Q Who Served Total - :C) w r- -<r- m Address Served 0 0 Sheriff > w N By Deputy r • IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ROBERT JAMES HEGEMAN, Plaintiff, No. EQCV070796 i� '3 C7 vs. ..r ..v ,r--, CITY OF IOWA CITY AND THE WRIT OF CERTIORARI `:' -- CITY COUNCIL OF IOWA CITY, ;., Defendant. _:< _, J cri77. -- CO It is hereby ORDERED that the Johnson County Clerk of Court issue a writ of certiorari under its seal. The Writ shall command the defendant(s) to certify to the Johnson County District Court a transcript of so much of defendants' records and pleadings as are complained of in the Petition or as may be pertinent thereto, together with the facts of the case, describing or referring to them or any of them with reasonable certainty. The defendants shall make the return at the Clerk of Court's Office for the Johnson County District Court on or before November 25, 2009. Dated this 2nd day of November 200• L. VERN ROBINSON Senior Judge of the Sixth Judicial District State of Iowa .4 0 r '' _.i C w 9 r- 1 -5 x 0 3-6 S .D co 1 yr.4 c47 ri f- IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ROBERT JAMES HEGEMAN, No. EQCV070796 Plaintiff, = — .7 vs. v, _ N) 1-2 CITY OF IOWA CITY AND THE ORDERS "=? CITY COUNCIL OF IOWA CITY, o -1-1 c= c_ r- Defendant. =`' 6 71 Hearing was held on October 30, 2009. Robert Hegeman, Plaintff, '9 w appeared and represented himself without counsel. The City of Iowa City and City `V Council of Iowa City appeared by Attorney Sara Hektoen. Mr. Hegeman is challenging by way of certiorari the rezoning decision(s) in rezoning proposal REZ08-00011. The Petition For Writ of Certiorari was filed June 3, 2009. Included in the Petition was Plaintiff's Motion for a Stay. Typically, counsel for petitioners in certiorari actions will present the petition to a judge with a proposed writ for the court's review and potential approval. In this case, unfortunately, the Petition was filed and the City answered. The matter of the stay did not come to the Court's attention until Mr. Hegeman filed a formal motion in a separate pleading on September 23, 2009. Since the City's rezoning decision, the developer has begun work on a large project, and considerable expense has been incurred by the developer who is not a party to this action. If the Court were inclined to issue a stay order, it would require the plaintiff to post a bond in the millions of dollars. The Court, however, is not issuing a stay. Given the work and expenditures by a nonparty, the Court concludes a stay is not appropriate. A trial-setting conference is scheduled for November 19, 2009. The Court determines that, in advance of the conference, the writ of certiorari should issue. The requirements of the writ will conform to Iowa Rule of 'rccedure 1.1401. Dated this 2nd day of November 200:4 .,2 -Y. L. VERN ROBINSON .41ce Senior Judge of the Sixth Judicial District State of Iowa �c s D In the District Court for Johnson County Robert James Hegeman, Plaintiff ) EQCV070796 vs . ) The City of Iowa City and the ) PLAINTIFF' S REQUESZ City Council of Iowa City, ) FOR DOCUMENTS-TO BC r-- Defendants ) CERTIFIED ) ` Plaintiff requests that Defendants be ordered to make :Y available the following documents in response to the issuance of a writ of certiorari : , 1 . The original protest petition concerning REZ08-00011 delivered at the public hearing on or about March 10, 2009. 2 . All portions of the official agendas, transcripts, minutes and voting results of City Council hearings and meetings pertaining to REZ08-00011 or ordinance 09-43.36 for the following dates: February 24, March 10, March 24, April 6, April 20, and May 5, 2009. 3. Policies and procedures for handling protest petitions in rezoning matters, including any policies and procedures for calculating whether a protest petition meets the 20% threshold required by Iowa Code 414 . 5. 4 . All documents, e-mails and calculations pertaining to whether the protest petition against REZ08-00011 filed at the March 10, 2009, City Council hearing met the 20% O �- threshold of Iowa Code 414 . 5 . v j 5 . All official notices between February 24, 2009 and w April 6, 2009 pertaining to scheduling of a public hearing O x on REZ08-00011 . w N 1 6. The earliest known document describing the final boundaries of the property in REZ08-00011 as adopted in Ordinance No. 09-4336, including the earliest such document made available to the public . 7 . All conditional zoning agreements pertaining to REZ08- 00011 arrived at between February 24 , 2009, and May 5, 2009 . 8 . All documents, notes, or emails made by any city employee or council member between March 10, 2009, and June 1, 2009, pertaining to the protest petition against REZ08- 00011 filed at the March 10, 2009, City Council hearing. 9. The protest petition concerning REZ08-00011 filed on about May 4, 2009. Ro.ert egeman 44 Tucson Place Iowa City, Iowa 52246 Roberthegeman@mchsi.com 391-338-5818 319-530-0553 (cell) 319-668-2491 (fax) ca N - -71 sG c CJl VMOI ;.__ ci \'/\O! ZE :6 WV E- /ION oak, CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE• PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319) 356-6030 PLAINTIFF: HEGEMAN,ROBERT J Docket No 09-06388 State IOWA vs. Court No EQCV070796 County JOHNSON DEFENDANT: CITY OF IOWA CITY Ref No Received 11/02/2009 DEFENDANT: CITY COUNCIL OF IOWA CITY, IOV Requestor(s) Phone JOHNSON CO CLERK OF COURT (319) 356-6060 Name CITY OF IOWA CITY Zone Party Type DEFENDANT Phone (319) 356-5030 Fax Address 410 E WASHINGTON ST IOWA CITY IA 52240- E-Mail I Employer I • Comments .1 Documents Document Serve by Date OE PSR Description I Special Instructions WRIT OF CERTIORARI A Hi i] Service Information Date (V3 'o Time O4 3 C) Type t:3-1:=CS Party nc)CC f 1C('1 j<a(r Relationship CI I y CierK Race Sex DOB Location -E, �t 1 &jci f( (Le rI(c f`T Miles Fee Officer Attempts Log Date Time Server Notes Date Time Server Notes Notes: O • Ci 0-( 0 w Y�l CEN > w Printed:Monday, November 02,2009 Page 1 of 1 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ROBERT JAMES HEGEMAN , ) Case 06521 EQCV070796 Plaintiff/Petitioner, ) WRIT vs . ) (XXXXX ) Without Bond CITY COUNCIL OF IOWA CITY IOWA ) With Bond in the CITY OF IOWA CITY , ) ( amount of $ Defendant/Respondent, ) 1 ( ) Attachment ( ) Mandamus (XX)(-) Certiorari ( ) Possession ( ) Habeus Corpus ( ) Replevin ( ) Landlord' s Attachment (XXXXX) Other (Specify) SEE ATTACHED ORDER TO THE SHERIFF OF JOHNSON COUNTY: YOU ARE COMMANDED TO ATTACH: ( ) Bank Account ( ) Personal Property ( ) Body ( ) Real Estate ( ) Crops ( ) Other (Specify) Description (See attached court order) Date 11-02-09 LODEMA BERKLEY CLERK, IOWA DISTRICT COURT Requested by: ROBERT HEGEMAN By: 44^L^14-1Alt6L RETURN OF SERVICE Date Received Fees O .. Date Served Mileage ~;r` ;s em 7 Who Served Total - r --4 a w -. , rr - Address Served E-3, C .. .o Sheriff > w By Deputy 1' IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ROBERT JAMES HEGEMAN, Plaintiff, No. EQCV070796 vs. - CITY OF IOWA CITY AND THE ._WRIT OF CERTIORARI CITY COUNCIL OF IOWA CITY, ,.17; Defendant. 4. " ICG (Ji - c_.] It is hereby ORDERED that the Johnson County Clerk of Court issue a writ of certiorari under its seal. The Writ shall command the defendant(s) to certify to the Johnson County District Court a transcript of so much of defendants' records and pleadings as are complained of in the Petition or as may be pertinent thereto, together with the facts of the case, describing or referring to them or any of them with reasonable certainty. The defendants shall make the return at the Clerk of Court's Office for the Johnson County District Court on or before November 25, 2009. Dated this 2nd day of November 200•. L. VERN ROBINSON Senior Judge of the Sixth Judicial District State of Iowa O Yom) -..:H %,..) Ili ' rn .: 0 it- a-0 7 O ;,,,,j s l-4.c.kv :j 6 S D1 01Y-4 ca/-; f-- U V C rr n IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ROBERT JAMES HEGEMAN, Plaintiff, No. EQCV070796 T "' vs. vs !I j-.— CITY OF IOWA CITY AND THE ORDERS =� CITY COUNCIL OF IOWA CITY, . o 0 v Defendant. Hearing was held on October 30, 2009. Robert Hegeman, Plaintff, appeared and represented himself without counsel. The City of Iowa City and City 5 Council of Iowa City appeared by Attorney Sara Hektoen. n Mr. Hegeman is challenging by way of certiorari the rezoning decision(s) -� w in rezoning proposal REZ08-00011. The Petition For Writ of Certiorari was filed June 3, ni 0 2009. Included in the Petition was Plaintiff's Motion for a Stay. L.0 Typically, counsel for petitioners in certiorari actions will present the - -- - petition to a judge with a proposed writ for the court's review and potential approval. In this case, unfortunately, the Petition was filed and the City answered. The matter of the stay did not come to the Court's attention until Mr. Hegeman filed a formal motion in a separate pleading on September 23, 2009. Since the City's rezoning decision, the developer has begun work on a large project, and considerable expense has been incurred by the developer who is not a party to this action. If the Court were inclined to issue a stay order, it would require the plaintiff to post a bond in the millions of dollars. The Court, however, is not issuing a stay. Given the work and expenditures by a nonparty, the Court concludes a stay is not appropriate. A trial-setting conference is scheduled for November 19, 2009. The Court determines that, in advance of the conference, the writ of certiorari should issue. The requirements of the writ will conform to Iowa Rule of nrocedure 1.1401. Dated this 2nd day of November 200: L. VERN ROBINSON R , .t-�u, Senior Judge of the Sixth Judicial District State of Iowa TC. S D r.0u - `L","G In the District Court for Johnson County Robert James Hegeman, Plaintiff ) EQCV070796 G The City of Iowa City and the ) PLAINTIFF' S REQUEST, - City Council of Iowa City, ) FOR DOCUMENTS-11;.0 .14 w [9 Defendants ) CERTIFIED _' ill N •a —2aor/ Plaintiff requests that Defendants be ordered to make available the following documents in response to the issuance of a writ of certiorari: :1 1 . The original protest petition concerning REZ08-00011 delivered at the public hearing on or about March 10, 2009. 2 . All portions of the official agendas, transcripts, minutes and voting results of City Council hearings and meetings pertaining to REZ08-00011 or ordinance 09-4336 for the following dates: February 24, March 10, March 24, April 6, April 20, and May 5, 2009. 3 . Policies and procedures for handling protest petitions in rezoning matters, including any policies and procedures for calculating whether a protest petition meets the 20% threshold required by Iowa Code 414 . 5 . 4 . All documents, e-mails and calculations pertaining to whether the protest petition against REZ08-00011 filed at the March 10, 2009, City Council hearing met the 20% threshold of Iowa Code 414 . 5. 5 . All official notices between February 24, 2009 and April 6, 2009 pertaining to scheduling of a public hearing on REZ08-00011 . 1 6. The earliest known document describing the final boundaries of the property in REZ08-00011 as adopted in Ordinance No. 09-4336, including the earliest such document made available to the public. 7 . All conditional zoning agreements pertaining to REZ08- 00011 arrived at between February 24, 2009, and May 5, 2009. 8 . All documents, notes, or emails made by any city employee or council member between March 10, 2009, and June 1, 2009, pertaining to the protest petition against REZ08- 00011 filed at the March 10, 2009, City Council hearing. 9. The protest petition concerning REZ08-00011 filed on • about May 4, 2009. 4 Ro ert egeman 44 Tucson Place Iowa City, Iowa 52246 Roberthegeman@mchsi. com 391-338-5818 319-530-0553 (cell) - '� 319-668-2491 (fax) m - .a - 1 2 END OF CASE FILE In the District Court for Johnson County ,J Robert James Hegeman, Plaintiff ) EQCV070796 vs . ) > The City of Iowa City and the ) PLAINTIFF' S MOTION City Council of Iowa City, ) FOR ORDER THAT Q, i Defendants ) DEFENDANTS FULLY ) COMPLY WITH WRIT OF CERTIORARI Plaintiff requests an order that Defendants make a complete return of all documents referred to in Judge Robinson' s Writ of Certiorari ordered November 2, 2009. The Defendants' return filed November 25, 2009, is incomplete. Attached to Judge Robinson' s order is a list of specific documents requested. The following three items in that list have not been returned: 3 . Policies and procedures for handling protest petitions in rezoning matters, including any policies and procedures for calculating whether a protest petition meets the 20% threshold required by Iowa Code 414 . 5. 4 . All documents, e-mails and calculations pertaining to whether the protest petition against REZ08-00011 filed at the March 10, 2009, City Council hearing met the 20% threshold of Iowa Code 414 . 5. 8 . All documents, notes, or emails made by any city employee or council member between March 10, 2009, and June 1, 2009, pertaining to the protest petition against REZ08-00011 filed at the March 10, 2009 Cifi Council hearing. `8 -71 Argument ) �-- The central issue in this case is how the Defgfaann 7 dealt with the Plaintiff' s protest petition. There is rrow C'G : Cnti ((-✓r on C�r ) 1 G4 `J/ -1 _41 #1 C 2J clear evidence that the City staff mishandled Plaintiff' s protest petition. On April 16, 2009, five weeks after the protest petition was filed and after the first vote on the challenged ordinance, Christina Keucker of the City Planning Office, responding to a inquiry from Larry Jewell, wrote: "Was a protest petition filed with the City Clerk? We have no evidence of a protest petition being submitted for the current reaoning. " Attachment 1 . On April 20, Bob Miklo of the Planning Office wrote to Mr Jewell: "I could not find a copy of a petition in our files . Do you have a copy that you could email to me or give to Jeff Davidson at the meeting tonight?" Attachment 2 . On April 21, City Attorney Dilkes wrote: "The City Clerk has reviewed the record of March 10 meeting and located the rezoning protests you submitted on March 10 . . . Please accept my apologies for the confusion with the protests . . . Unfortunately, because the protests were attached to your letter of concerns and were not identified as zoning protests the Clerk' s office did not forward them to the Planning Dep' t. We will consider changes in procedure to assure that this does not happen again. " Attachment 3 . On April 21, City Clerk Marian Karr wrote: "Mr. Jewell, I wanted to personally apologize for the confusion over the rezoning protests filed at the City Council meeting on March 10, I can assure you that the procedure in my office for accepting correspondence at Council meetings will be handled differently in the future. " Attachment 4 . Finally, the original protest petition was never file stamped by the City Clerk. (Compare the original petition on pages 142-157 of Defendants' Return with a o second protest petition on pages 361-378 . Sample p X7.5 rrl and 362 attached) . n� The original documents are clearly needed for zip rin ma. nil complete understanding of how the Defendants' hand1th4r D to 2 Plaintiff' s protest petition. Plaintiff respectfully requests the court to order the Defendants to promptly comply as trial is scheduled January 20 . IIF J11/ Rob- J. Heg-man 44 ' . son ' . e Iowa City, Iowa 52246 Roberthegeman@mchsi . com 391-338-5818 319-530-0553 (cell) 319-668-2491 (fax) Original filed Copies served by US Mail on December 16, 2009 to the defendants addressed to the Office of the City Clerk of Iowa City, 410 East Washington Street, Iowa City, Iowa 52240 CERTIFICATE OF SERVICE (PRIVATE) I certify that PLAINTIFF' S Motion for Order that Defendants Fully Comply with Writ of Certiorari dated November, 2, 2009 was served on the City Council of Iowa City and the City of Iowa City by depositing 2 copies of the original in the US mail postage prepaid on December 16, 2009, addressed to Office of the City Clerk of Iowa City, 410 East Washington Street, Iowa City, Iowa 52240 N O Ca ///C (j)/14 4.* d 6 �r m rn E5- 10 = 0 3 Country Club Estates Rezoning Proposal Summary as of 4/27/09 3/10/09- 1st Council Meeting- consideration of original proposal * Initial public discussion opened * Public discussion continued at next meeting and deferred vote 3/24/09 -2nd Council Meeting- consideration of original proposal * Introduction of revised proposal * See Miklo memo dated 3/19/09 w/ revised proposal * Public discussion continued * Planning staff directed to go back to P&Z commission to see if they want to meet w/ council on revised proposal * Public discussion continued at next meeting and deferred vote 4/02/09 -P&Z Commission Meeting * Voted 7 to 0 to not confer with city council on revised proposal o .o 4/06/09 - 3rd Council Meeting - consideration of revised proposal *cp r� —T'' * Public discussion continued - new issues only c-s—< _ * Public discussion closed =+c% r- * 1st consideration -vote was 5 in favor, 2 opposed = r a M * See 4/14/09 email from Christina stating "The ordinance needs to be read ari voted n 3 times and all 3 votes count. It must pass all 3 votes in order to be adopted. If the — rezoning is adopted,then the Council can consider the preliminary plat. This is approved by resolution and only requires one reading and vote of the Council." * See 4/14/09 email from Larry requesting clarification regarding a. .licability of submitted petition. Remin. - ._• , . i = • esponse to my inquiry. ee 4/16/09 response from Christina - "Was a protest petition filed with the City Clerk? We have no record of a protest petition being submitted for the current rezoning. If a protest petition was filed for the proposal in 2006, it is no longer valid because this is a new application." * 4/16/09 Christina's response—"I'm checking with the City Attorney about the petition, but might not get an answer until Monday. If in fact she has a petition and it meets the 20%, all subsequent votes will need the super majority of Council's support. With the change in the area to be rezoned, it may effect who is within 200' of the proposed rezoning, which may effect the 20%. For example, many of the properties on Rohret Road are no longer within 200' of the proposed rezoning, so they would not count towards the 20%. I will let you know when I hear back from the City Attorney." * 4/16/09—Larry's response to Christina—"I would like to know as soon as possible if we do not meet the 20% requirement, including what the total required area is within 200' versus what the total is that have signed the petition." * 4/20/09—received email from Miklo—"Christina is out of the office this afternoon. She forwarded your email to me regarding a petition. I could not find a copy of a petition N__ in our files. Do you have a copy that you could email to me or give to Jeff Davidson at the meeting tonight?" I provided a copy of the petition to Jeff Davidson on 4/20/09. GT _. 4/20/09 - 4th Council Meeting - consideration of revised proposal * No public discussion allowed * Heard from city wetland specialist * Council stated that they "have faith in the staffs decisions" regarding ordinance adherence and other planning and zoning aspects * 2nd consideration -vote was 5 in favor, 2 opposed * 4/23/09—received initial confirmation from Christina that the petition did not meet the 20% required to force a super majority vote from council. She stated—"We have calculated the percentage of protests within 200' of the proposed rezoning. This is done by creating a 200' buffer around the rezoning and calculating the area of the buffer. We then map out the properties that have submitted a protest petition. We total the areas of the portions of these properties that fall within the 200' buffer and this area is what is used to calculate the percentage. According to our calculations, this percentage is 16.3%. A map is attached. Please let me know if you have any other questions." * 4/24/09—notified Christina that the map did not accurately reflect properties that had provided signatures (Lacina's and Hegeman outlot B). * 4/24/09—Christina acknowledged error and indicated she would provide a revised map. * 4/27/09—received revised map from Christina stating "Attached is the map with the changes you indicated. The percentage is now 17.10%" ****See attached map showing that we need at least an additional 1.372 acres within the 200' buffer to meet the required 20%. I think we can get this before the next council meeting. N O O ,..1:3d c) r9 ni D-t c) =in ' rn = > CO RHegeman --2 From: "ICJewells"<icjewellscmchsi.com> To: "Jim&Becky Hegeman"<RobertHegeman@mchsi.com> Sent: Sunday, December 06, 2009 10:42 AM Attach: citizen guide to rezoning.pdf Subject: [Fwd: RE: Follow-up Questions From Last Night's City Council Meeting] Jim, Here is the original email from the city attorney acknowledging the validity of the protest petition. In her response, she seems to indicate that it is my fault that the petition did not get handled correctly due to the inclusion of the specific objections (letter) attached to the petition. However, I am also attaching a copy of the "Citizen's Guide to Rezoning" that clearly indicates that "Specific objections to the proposed rezoning may be attached to the petition in a separate letter." Thanks, Larry Original Message Subject:RE: Follow-up Questions From Last Night's City Council Meeting Date:Tue, 21 Apr 2009 09:25:58 -0500 From:Eleanor M. Dilkes<Eleanor-Dilkes@iowa-citv.org> To:ICJewells<ICJewells@mchsi.com> CC:Jeff Davidson <Jeff-Davidson@iowa-city.org>,Bob Mildo<Bob-Miklo@iowa- city.org>,Marian Karr<Marian-Karr@iowa-city.org>, Sara Greenwood Hektoen <sara-hektoena iowa-city.org> References:<49EDC87E.9030101(a,mchsi.com> N C Mr. Jewell, D c) n-C The City Clerk has reviewed the record of the March 10 meeting and =lc, rlocated the rezoning protests that you submitted on March 10. Those.(f' protests are currently being reviewed by the planning staff to deter x. whether they are sufficient to trigger a requirement that the rezonite= - pass by a super-majority of the Council (6 votes) . See Iowa Code D Co Section 414.5 — Please accept my apologies for the confusion with the protests. Typically, protests that are not filed in the Clerk's office, but rather submitted at the public hearing, are considered to be timely filed and are provided to the planning staff for review and calculation. I have reviewed the videotape of the March 10 meeting and the letter you submitted and discussed the matter with the City Clerk. Unfortunately, because the protests were attached to your letter of concerns and were not identified as zoning protests the Clerk's office did not forward them to the Planning Dep't. We will consider changes in procedure to assure that this does not happen again. I have reviewed the issues raised by Mr. Hegeman's letter in some detail. I do not agree with his conclusion that an approval of the rezoning would violate the City Code. My role is to advise the City Council. Had I concurred with Mr. Hegeman I would have informed the Council and advised them accordingly. Because I did not I was simply prepared to respond to the Council last night had they asked for my response to Mr. Hegeman's letter. 12/16/2009 Please feel free to contact me if you have further questions. . Eleanor M. Dilkes City Attorney City Hall 410 East Washington Street Iowa City, IA 52240 319-356-5030 319-356-5008 Fax eleanor-dilkes@iowa-city.orq Notice: Since e-mail messages sent between you and the City Attorney's Office and its employees are transmitted over the internet, the City Attorney's Office cannot assure that such messages are secure. You should be careful in transmitting information to the City Attorney's Office that you consider confidential. If you are uncomfortable with such risks, you may decide not to use e-mail to communicate with the City Attorney's Office. Without written notification that you do not wish to communicate with the City Attorney's Office via e-mail communication, the City Attorney's Office will assume you assent to such communication. This message is covered by the Electronic Communication Privacy Act, 18 U.S.C. Sections 2510-2515, is intended only for the use of the person to whom it is addressed and may contain information that is confidential and subject to the attorney-client privilege. It should not be forwarded to anyone else without consultation with the originating attorney. If you received this message and are not the addressee, you have received this message in error. Please notify the person sending the message and destroy your copy. Thank you. Original Message From: ICJewells [mailto:ICJewells@mchsi.cam] Sent: Tuesday, April 21, 2009 8:22 AM To: Eleanor M. Dilkes Subject: Follow-up Questions From Last Night's City Council Meeting Dear Ms. Dilkes, I have a few follow-up questions that I am hoping you can answer regarding the council meeting last night. Regarding the letter submitted by Robert Hegeman, I am wondering if you provided a legal opinion to the City Council on the 2 issues raised related to the wetland ordinance violations? If so, can you please provide me with that information as well? Also, can you confirm my understanding regarding the passage of the rezoning request - does it need to pass all 3 considerations before it is considered officially passed? Where do I find that process or information on the city website related to the passing of 3 votes before it is finally approved? Thank you, Larry Jewell o co CD .11n n-< Ern > w 12/16/2009 R}Iegeman From: "ICJewells"<icjewells@mchsi.com> To: "Jim&Becky Hegeman"<RobertHegeman@mchsi.com> Sent: Sunday, December 06, 2009 10:44 AM Subject: [Fwd: RE: Follow-up Questions From Last Night's City Council Meeting] Jim, Here is a copy of the email from the city clerk indicating that the petition had been mishandled. Thanks, Larry Original Message Subject:RE: Follow-up Questions From Last Night's City Council Meeting Date:Tue, 21 Apr 2009 10:55:54-0500 From:Marian Karr<Marian-Karr@,iowa-city.org> To:ICJewells<ICJewells@mchsi.com> CC:Jeff Davidson <Jeff-Davidson @iowa-city.org>, Bob Miklo<Bob-Miklo@iowa- city.org>, Sara Greenwood Hektoen<sara-hektoen@iowa-city.org>, Eleanor M. Dilkes<Eleanor-Dilkes@iowa-city.ora> References:<49EDC87E.9030101 @mchsi.com> <9E66756AEF3 8EC4CBOD83937C76B4D6204CF323F@citymail 1> <49EDEAFE.5030000@mchsi.com> Mr. Jewell, I wanted to personally apologize for the confusion over the rezoning protests filed at the City Council meeting on March 10. I can assure you that the procedure in my office for accepting correspondence at Council meetings will be handled differently in the future. ra Marian K. Karrczy CD City Clerks fp -nCity of Iowa City D C, Population 62,380 C1-< _ (phone) 319-356-5041 (fax) 319-356-5497 fr*1 34 i ■ i Original Message SPC _ From: ICJewells [mailto:ICJewells@mchsi.com] >. w Sent: Tuesday, April 21, 2009 10:49 AM — To: Eleanor M. Dilkes Cc: Jeff Davidson; Bob Miklo; Marian Karr; Sara Greenwood Hektoen Subject: Re: Follow-up Questions From Last Night's City Council Meeting Ms. Dilkes, Thank you for your quick response. I look forward to a response regarding the protest petition, as well as an explanation of how the calculation is determined. Larry Jewell 12/16/2009 • but PROTEST OF REZONING CITY OF IOWA CITY TO: HONORABLE MAYOR AND CITY COUNCIL IOWA CITY, IOWA We, the undersigned, being the owners of property included in the proposed zoning change, or the owners of property which is located within two hundred feet of the exterior boundaries of the property for which the zoning change is proposed, do hereby protest the rezoning of the following property: Country Club Estates, Part Three—Eight, Rohret Road/Phoenix Drive (SUB08-00010/ REZ08-00011) This petition is signed and acknowledged by each of us with the intention that such rezoning shall not become effective except by the favorable vote of at least three-fourths of all the members of the council,all in accordance with 414.5 of the Code of Iowa. r By: 9 (-( TcsuiI Owner(s)of Property Address STATE OF IOWA ) g ss: o 0 JOHNSON COUNTY) On this VA= 01)(165 day of U ,20j ,before me, the undeied,—J a otary Public in and for said County and State, personally appeared :gym 1 and o� = C) to me known to be he identical persons named in and who executed the within an*� w foregoing instrument and acknowledged that they executed the same as their voluntary — act and deed. i4 ) , / l .,/, VDEii SANDIER i�o 4 Public in and for the State of Iowa Orig: Subd FolmissbnNumber714644 ',v commission Expires Cc: CA ow lerverY22,2011 PCD Council Media File 150 . r's PROTEST OF REZONING CITY OF 10WA CITY TO: HONORABLE MAYOR AND CITY COUNCIL IOWA CITY, IOWA We,the undersigned,being the owners of property included in the proposed zoning change,or the owners of property which is located within two hundred feet of the exterior boundaries of the property for which the zoning change is proposed,do hereby protest the rezoning of the following property: Country Club Estates,Part Three–Eight, Rohret Road/Phoenix Drive (SUB08-00010/REZ08-0001 l) Q CD This petition is signed and acknowledged by each of us with the intention that sumlac) F.7,3.1 " p rezoning shall not become effective except by the favorable vote of at least three m hs c" — of all the members of the council,all in accordance with 414.5 of the Code of rn By: /2/1"et t / }41 x =• ` 1f(A rtit-'oy �itt � at- 0,..f 114 1 , + JrAfai200w-fp 9 `11'�taa�y /"L Owner(s)of Property Address - 3 t� c? STATE OF IOWA ) D a ) ss: • JOHNSON COUNTY) On this 34 day of _,20 Oq , before me, the undersigned, �Notar Public • and for said County and State,personally appeared �N 9 4 . and to me known to be t identical persons named in and who executed the within and foregoing instrument and acknowledged that they executed the same as their voluntary act and deed. 404JAYNE rANDi �..j• 'Public /�l�. . / 1, � �,,,,,,; „H�EU » �COMMiSSial Wits � a Public in and for the,_State of..Iowa Orig:Subd Folder •�• Mrs ary zo Cc: CA PCD Council Media File 362 END OF CASE FILE • CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE • PO BOX 2540, 511 S CAPITOL ST, IOWA CITY. IA 52244-2540• (319) 356-6030 PLAINTIFF: LIBERTY BANK Docket No 09-07379 I State vs. Court No —1 County I DEFENDANT: IOWA, STATE OF Ref No Received 112/31/2009 DEFENDANT: FRANTZ, WENDY DENISE NOTICE OF NONJUDICIAL FORECLOSURE Requestor(s) Phone SINNARD,KARA M (515) 558-0107 Name CITY OF IOWA CITY Zone Party Type DEFENDANT Phone (319) 356-5030 Fax Address 410 E WASHINGTON ST IOWA CITY IA 52240- E-Mail Employer Comments Documents pocument Serve by Date OE PSR Description/Special Instructions NOTICE Service Information Date l - 0(1 Time 17-2) Type �`C 6e, V� C%� PQDCP14' C I Off& Party i.�1 i -� �'� � Relationship Race \1\/"-- 1/ Sex DOB Location _\ I 0 Sh'tNyf44 Miles \ Fee Officer Attempts Log Date Time Server Notes Date Time Server Notes Notes: 0 0 CJ N N Printed:Thursday,December31,2009 NOTICE OF NONJUDICIAL FORECLOSURE PURSUANT TO IOWA CODE CHAPTER 655A TO: Wendy D. Frantz a/k/a Wendy D. Cain 617 Brookside Drive o Iowa City, IA 52245 0 m D v t c-) Spouse of Wendy D. Frantz, if any 2-4 w r- 617 Brookside Drive -ice' -- r Iowa City, IA 52245x ��o N Parties in Possession > 617 Brookside Drive Q' Iowa City, IA 52245 City of Iowa City, Iowa Pursuant to that certain Mortgage dated June c/o Mayor or City Clerk 30, 2006, recorded June 30, 2006, in Book City Hall 4045, Page 967, in the amount of$34,250.00 410 E. Washington Street recorded in the office of the Johnson County Iowa City, IA 52240 Recorder Clarke-Jordan Financial, L.C. Pursuant to that certain judgment in the amount do Charles L. Litow, Its Registered Agent of$6,608.90, plus interest in the amount of Litow Law Office $2,339.37, plus interest at the statutory rate of 1847 E. Avenue NE 2.48% from the date of filing the Petition,plus PO Box 2165 court costs, which is dated August 28, 2009, in Cedar Rapids, IA 52406-2165 case no. LACV070710 filed with the Johnson County Clerk of Court State of Iowa Pursuant to that certain judgment for court do Attorney General costs in case no. LACV070710 dated August 1305 E. Walnut Street 28, 2009, entitled Clarke-Jordan Financial, Des Moines, IA 50319 L.C. vs. Wendy Cain filed with the John County Clerk of Court State of Iowa do Johnson County Attorney 417 S. Clinton Street Iowa City, IA 52244 You are hereby notified that Liberty Bank, F.S.B. ("Bank") has elected to commence nonjudicial foreclosure proceedings because of the default under the Mortgage dated June 30,2006, and recorded on June 30, 2006, in Book 4045, Page 953 of the Johnson County records, which secures a Note given to Bank dated June 30, 2006. The Mortgage was signed by Wendy Frantz, a Gc •. �'- M . .) I ` single person, with the Mortgage covering the below-described real estate located in Johnson County, Iowa: Commencing at the southeast corner of Lot 237 in Part Four Court Hill, an Addition to the City of Iowa City, Iowa, according to the plat thereof recorded in Book 5, Page 29, Plat Records of Johnson County, Iowa, thence north 75 feet, thence west 110.63 feet parallel with the south line of Lots 237 and 238, thence south 75 feet to a point on the south line of Lot 238, which point is 110 feet west of the place of beginning, thence east 110 feet to the place of beginning, locally known as 617 Brookside Drive, Iowa City, Iowa 52245. The default under the Mortgage and Note are as follows: Description Amount Failure to pay monthly installments due October 1, 2009 - December 1, $2,092.35 2009 in the amount of$697.45 each: Failure to pay late charges: $209.22 Failure to reimburse for legal fees and expenses incurred in connection with this proceeding: $500.00 Failure to reimburse for abstracting charges: $277.00 TOTAL to cure default: $3,078.57 N_ The above amounts necessary to cure the defaults under this mortgage loan slauld baaid,by certified funds, to: *-c r*i " i c-, -< ca Liberty Bank, FSB Attn: Ken Marotti =gym r 13523 University Avenue 57) N CI Clive, Iowa 50325 Phone: 515-224-3724 WITHIN THIRTY DAYS AFTER YOUR RECEIPT OF THIS NOTICE, YOU MUST EITHER CURE THE DEFAULTS DESCRIBED IN THIS NOTICE,OR FILE WITH THE RECORDER OF THE COUNTY WHERE THE MORTGAGED PROPERTY IS LOCATED A REJECTION OF THIS NOTICE AND SERVE A COPY OF YOUR REJECTION ON THE MORTGAGEE IN THE 2 MANNER PROVIDED BY THE RULES OF CIVIL PROCEDURE FOR SERVICE OF ORIGINAL NOTICES. IF YOU WISH TO REJECT THIS NOTICE, YOU SHOULD CONSULT AN ATTORNEY AS TO THE PROPER MANNER TO MAKE THIS REJECTION. IF YOU DO NOT TAKE EITHER OF THE ACTIONS DESCRIBED ABOVE WITHIN THE • THIRTY-DAY PERIOD,THE FORECLOSURE WILL BE COMPLETE AND YOU WILL LOSE TITLE TO THE MORTGAGED PROPERTY. AFTER THE FORECLOSURE IS COMPLETE, THE DEBT SECURED BY THE MORTGAGED PROPERTY WILL BE EXTINGUISHED. Dated: December 30, 2009 Liberty Bank, F.S.B. By: cidc--/W_A \ Kara M. Sinnard WHITFIELD & EDDY, PLC 317 Sixth Avenue, Suite 1200 Des Moines, Iowa 50309-4195 Telephone: (515) 288-6041 Facsimile: (515) 246-1474 Email: sinnard@whitfieldlaw.com ATTORNEYS FOR LIBERTY BANK, F.S.B. cc: Ken Marotti Subscribed and sworn to before me this 30th day of December, 2009. ec..,,, L.:p e8 e:WEGMAN *Comm• ` Commission Number 224124 Ci� V121 a te` • My CRRmmission Fomites ission 6��-.',�7Y/ NOTARY PUBLIC FO HE STATE OF IOWA IV 0 0 o .o mac) o -in =i < w =i0 - I— .<r -13 r m a 0 *X N 3 i END OF CASE FILE CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE • PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319)356-6030 PLAINTIFF : BANK OF NEW YORK Docket No 09-06005 State IOWA vs. Court No EQCV071254 County JOHNSON DEFENDANT: BRENNEMAN, DAWN R Ref No I Received 10/15/2009 DEFENDANT: BRENNEMAN, PATRICK D Requestor(s) Phone HOPKINS,BENJAMIN W (515) 222-9400 Name CITY OF IOWA CITY Zone Party Type DEFENDANT Phone (319)356-5030 Fax Address 410 E WASHINGTON ST IOWA CITY IA 52240- E-Mail Employer Comments Documents Document Serve by Date OE PSR Description/Special Instructions ORIGINAL NOTICE AND PETITION I - ------- -- — - -Service Information Date 6 " ( �j 0 Time Type r i G VT Party J(/\ 1r "e Vo c f," ! Relations ‘4 < 1.( E t (c Race \,V/ Sex DOB Location 10 5 U1,' . 1 rMC {c cj'\ Miles Fee Officer �, Attempts Log Date Time Server Notes Date Time Server Notes Notes. - o r-- �!• IV co Printed:Thursday,October 15,2009 Page 1 of 1 • • 34431 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY THE BANK OF NEW YORK 68-0391373 : OF MELNEW YORKLON FKA TAS TRUSTEE HE BANK . EQUITY NO. 15-r FOR . Ec -0_,\I -71a FOR THE BENEFIT ORIGINAL NOTICE OF THE .• CERTIFICATEHOLDERS • CWABS, INC. ASSET-BACKED O CERTIFICATES, ?C) o SERIES 2005-BC4 ''-• ` 11 Plaintiff, : - - -G r Ill vs. O� 0 IV PATRICK D. BRENNEMAN AND > OD DAWN R. BRENNEMAN; • CITY OF IOWA CITY, IOWA; . GREENWOOD MANOR NURSING • HOME; • UNITED STATES OF . AMERICA, INTERNAL • REVENUE SERVICE; . Defendants . : TO THE ABOVE NAMED DEFENDANTS : You are notified there is a petition now on file in the office of the clerk of the above court . A copy of this filing is attached hereto. The Plaintiff 's attorneys are Petosa, Petosa & Boecker, L.L. P. , by Benjamin W. Hopkins , whose address is 1350 NW 138th Street, Suite 100, Clive, Iowa 50325-8308 . The Plaintiff ' s attorney' s phone number is (515) 222-9400, with a facsimile transmission number of (515) 222-9121 . You must serve a motion or answer, within 20 days after service of this original notice upon you and within a reasonable time thereafter file a motion or answer, in the Iowa District Court of Johnson County, at the county courthouse in Iowa City, Iowa . If you do not, judgment by default may be rendered against you for the relief demanded in the petition. If assistance of auxiliary aids or services is required to participate in court due to a disability such as hearing impairment, call the Americans with Disabilities Coordinator at (319) 398-3920 ?“ you are in need of dual party telephone relay services, call Relay Iowa TTY at 1-800 4 - 42 . V Cler of the Above Court '44Johns n County Courthouse Iowa City, Iowa 52244-2510 YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS. G _ i\ C . rn - 00 Sly - r-' � �_ • • 34431 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY THE BANK OF NEW YORK 68-0391373 . MELLON FKA THE BANK • EQUITY NO. �( / OF NEW YORK AS TRUSTEE • \ 1N Q 71 p 7 FOR THE BENEFIT `(� OF THE • CERTIFICATEHOLDERS CWABS, INC. ASSET-BACKED • CERTIFICATES, • SERIES 2005-BC4 • Plaintiff, �- "' z V s . • z C>-rt Q PATRICK D. BRENNEMAN AND -7 DAWN DAWN R. BRENNEMAN; ` CITY OF IOWA CITY, IOWA; :<�-+ r�•4 co GREENWOOD MANOR NURSINGCD rn HOME; -- -A--i UNITED STATES OF AMERICA, INTERNAL • REVENUE SERVICE; • Defendants. . NOTICE THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION. THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL SIX MONTHS FROM ENTRY OF 71 JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A- r- ONE-FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR ; 7 N RESIDENCE OR IS RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMILY �o DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED PROPERTY. YOU MAY PURCHASE AT THE SALE. 1 4 • Plaintiff, The Bank of New York Mellon fka The Bank of New York as Trustee for the Benefit of the Certificateholders CWABS, Inc. Asset-Backed Certificates, Series 2005-BC4, for its cause of action states: 1 . That the Plaintiff is a corporation doing business in the United States of America. 2 . That on or about February 4, 2005, Patrick D. Brenneman made, executed and delivered a promissory note in writing for the sum of $136, 000 . 00 payable in installments, with interest at 8 .44% per annum from such date (the "Note") . A copy of the Note is attached hereto and made a part hereof as Exhibit "A" . Said Note provides for periodic changes in the interest rate and the current interest rate is 12 .44% . 3 . That on or about February 4 , 2005 in order to secure the payment of the Note, Patrick D. Brenneman and Dawn R. 1 Brenneman (the "Mortgagor (s) ") made, executed and delivered tiD it Mortgage Electronic Registration Systems, Inc . , a real e_sstate- '� o` i mortgage (the "Mortgage") on the following described real � m -1 0 O� estate (the "Mortgaged Property") : u, •o Lot One Hundred Three (103) in Part VI - Village Green, an Addition to Iowa City, Iowa, according to the plat thereof recorded in Plat Book 16, Page 8, Plat Records of Johnson County, Iowa. the Mortgage was filed for record February 8, 2005, in Book 3842 , Pages 420-435 in the Recorder' s Office of Johnson County, 2 Iowa. A copy of the Mortgage is attached hereto and made a part hereof as Exhibit "B" . Said mortgage is a Purchase Money Mortgage. 4 . That Mortgagor (s) subsequently executed a loan modification agreement wherein they agreed the unpaid principal balance on said mortgage was $156, 523 . 64 with interest at 12 .44% per annum from March 1, 2009. i� x.:sq cF'U V)p C') M 5 . That the Mortgaged Property is and at all timescj cz relevant hereto was the homestead of the Mortgagor(s) . : > -<-4 � 6 . That the Plaintiff is currently the holder of r¢ce,rd; of the Note and Mortgage. -j 7. That the Plaintiff is the sole and absolute owner of the Mortgage; that the Note and Mortgage provide that if default be made at any time in payment of any installment of principal or interest, at the election of the Plaintiffs all " indebtedness, without notice of such election, shall became ` "T1 immediately due and payable; that the Plaintiff by reasor2of o` ni m -o �1 cjthe failure of the Mortgagor (s) to pay said installment&, N declares the Note in default , that there is now due and owin0 the Plaintiff the sum of $155, 597 . 48 with interest at 12 .44% per annum from and including March 1, 2009 plus late fees, attorney fees, abstract expense, protective advances and costs . 8 . That the Plaintiff has given the Mortgagor(s) all required notices, including notice of right to cure said default and notice of acceleration required pursuant to Iowa 3 Code Section 654 .4B (1) , and to date has received no response thereto. 9 . That the time to cure the default under Iowa law has now expired. 10 . That said Note and Mortgage provide that if suit be commenced thereon, Mortgagor (s) will pay reasonable attorneys ' fees. An attorneys ' fee affidavit is attached hereto and made a part hereof as Exhibit "C" . 11 . That the Plaintiff now hereby in writing waives any right or claim to a deficiency judgment against the Mortgagor (s) . That the Mortgaged Property is the residence of the Mortgagor(s) and is a one-family or two-family dwelling. The Plaintiff hereby elects to foreclose without redemption and the sale of the Mortgaged Property shall occur promptly after entry of judgment, unless the Mortgagor (s) , pursuant to the Notice set forth above, files a written demand to delay the sale, in which event the sale shall be delayed until six months after entry of judgment . 12 . That the following parties are named as Defendant (s) • a because they claim some right, title or interest in the 1 Mortgaged Property, including, without limitation a right; ; D, title or interest as described below but any such right,-'.eitrs 0 r`) or interest is junior and inferior to the interest of Plaintiff : 4 • City of Iowa City, Iowa, $3, 675 . 00 Mortgage, dated January 4, 2006, filed January 13 , 2006, Book 3982, Page 804 • City of Iowa City, Iowa, $3, 675 . 00 Promissory Note, dated January 4, 2006, filed March 23, 2006, Book 4003, Page 49 • United States of America, Internal Revenue Service, $12, 058 . 15 Federal Tax Lien, dated April 14, 2009, filed April 22, 2009, Book 4424 , Page 580 (See attached) • United States of America, Internal Revenue Service, ., $307. 09 Federal Tax Lien, dated April 14, 2009, .- n �,.,, filed April 22, 2009, Book 4424, Page 581 (See ? c ` � attached) z • Greenwood Manor Nursing Home, $3, 633 .20 Judgment;;:'; c1' -Indated November 8, 2005, filed November 8, 2005, `_ . sin SCSC062735, Plus costs and interestItj CD u c CJ c7: 13 . That the Mortgage provides that any time after the proper commencement of an action in foreclosure or during the period of redemption, the Court having jurisdiction of the case shall, at the request of the Plaintiff, appoint a receiver to take immediate possession of the Mortgaged Property and of the rents and profits accruing therefrom, to rent the same as he may deem best for the interest of all parties concerned and shall be liable to account to the Mortgagor(s) only for the net profits after application of rents, issues and profits upon the `Z'1 cost of the expense of receivership and foreclosure and :the o- T1 m 0 indebtedness, charges and expenses hereby secured and hePe° n ry mentioned. •o 5 • WHEREFORE THE PLAINTIFF PRAYS THE COURT: 1 . That the Plaintiff have judgment in rem against the Mortgaged Property for the amount of unpaid principal and interest on the Note, as provided in the Note and Mortgage and for late fees, attorney fees, abstract expense, protective advances and costs. 2 . That a receiver be appointed immediately to take care of, manage, lease and collect the rents from the Mortgaged Property, and to apply the same in payment of costs and expenses of said receivership, repairs and expenses of said real estate, accrued and accruing taxes and special assessments, insurance premiums, and in partial payment of the judgment to be entered herein. 3 . That said judgment, together with interest, late fees, attorney fees, abstract expense, protective advances, costs and accruing costs be decreed a prior lien upon the Mortgaged 71 Property from the date of the Mortgage, and that all rights, _' interests and equities of all Defendants to this suit be- ;ii -c, rn declared junior to the right, title and interest of the A N Plaintiff. 4 . That in the event Plaintiff is required to make protective advances, including without limitation, advances for taxes or insurance on the Mortgaged Property, the Plaintiff be given an additional lien thereon for such amounts so advanced, which shall be included in the judgment to be entered herein. 6 5 . That the Mortgage be foreclosed and the Defendant (s) ' equity of redemption be barred and foreclosed save as guaranteed by law. That special execution issue for the sale the Mortgaged Property to satisfy said judgment, interest, late fees, attorney fees, abstract expense, protective advances and costs . 6 . That special execution issue to satisfy said judgment, interest and attorneys ' fees, and accruing costs herein, and the Mortgaged Property be sold according to law to satisfy the amount due under the Decree issued by this Court and the <2 „ Defendants herein or anyone claiming by, through or under a hey, t) —a s 71: be forever barred and foreclosed of any interest in the � -'� Mortgaged Property, except such rights of redemption asp 00 provided by law. —I 7. That if the Mortgaged Property is sold and not redeemed, the Clerk of this Court shall issue to the Sheriff: pf -n said County, a writ of removal and possession, commanding;hir� -a to put the grantee named in the Sheriff ' s deed for said370 0 premises sold, or his grantee, in possession thereof, ar�3c. to remove any Defendants, or persons claiming by, through or under any of them, or any person in possession thereof out of such possession. 8 . That the Plaintiff has elected foreclosure without redemption and the sale of the Mortgaged Property shall occur promptly after entry of judgment or in the alternative, if a 7 . written demand for delay is filed, the sale shall occur six months after entry of judgment . 9 . That the Plaintiff be granted such further relief as may be just and equitable. PETOSA, PETO BOECKER, L.L.P. 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BORROWER'S RIGHT TO PREPAY I have the right to make payments of Principal at any time before they are due.A payment of Principal only is known as a "Prepayment." When I make a Prepayment, I will tell the Note Holder in writing that I am doing so.I may not designate a payment as a Prepayment if I have not made all the monthly payments due under the Note. I may make a full Prepayment or partial Prepayments without paying any Prepayment charge.The Note Holder will use my Prepayments to reduce the amount of Principal that I owe under this Note. However,the Note Holder . may apply my Prepayment to the accrued. and unpaid interest on the Prepayment amount before applying my Prepayment to reduce the Principal amount of the Note. If I make a partial Prepayment, there will be no changes in the due dates of my monthly payments unless the Note Holder agrees in writing to those changes. My partial Prepayment may reduce the amount of my monthly payments after the first Change Date following my partial Prepayment. However, any reduction due to my partial Prepayment may be offset by an interest rate increase. 6. LOAN CHARGES If a law, which applies to this loan and which sets maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Me which exceeded permitted limits will be refunded to me.The Note Holder may choose to make this refund by reducing the Principal I owe under this Note or by making a direct payment to me. If a refund reduces-Principal, the reduction will be treated as a partial Prepayment. 7. BORROWER'S FAILURE TO PAY AS REQUIRED (A) Late Charges for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of FIFTEEN calendar days after the date it is due, I will pay a late charge to the Note Holder.The amount of the charge will be 5.0%of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment. (73) Default If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. (C) Notice of Default If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal which has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is mailed to me or delivered by other.means. (D) No Waiver by Note Holder Even if, at a time I am in default, the Note Holder does not require me to pay immediately in full as described above, the Note Holder will still have the right to do so if I am in default at a later time. (E) Payment of Note Holder's Costs and Elcpenses If the Note Holder has required me to pay in full as described above, the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include,for example, reasonable attorneys' fees. 8. GIVING OF NOTICES Unless applicable law requires a different method, any notice that must be given to me under this Note will be given by delivering it or by mailing it by first class mail to me at the Property Address above or at a different address if I give the Note Holder a notice of my different address. Any notice that must be given to the Note Holder under this Note will be given by delivering it or by mailing it by first class mail to the Note Holder at the address stated in Section 3(A)above or at a different address if I am given a notice of that different address. 9. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note,each person is fully and personally obligated to keep all of the promises made in this Note, including the promise•to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together.This means that any one of us may be required to pay all of the amounts owed under this Note. 10.WAIVERS I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require the Note Holder to demand payment of amounts due. "Notice of Dishonor" means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 11.UNIFORM SECURED NOTE 71 This Note is a uniform instrument with limited variations in some jurisdictions.In addition to the protections„gi4ven ' to the Note Holder under this Note, a Mortgage, Deed of Trust, or Security Deed(the "Security Instrunteilt"),.thted gj the same date as this Note, protects the Note Holder from possible losses which might result if I do not ke the m promises that I make in this Note. That Security Instruent describes how and under what condition I nial,be required to make immediate payment in full of all amounts I owe under this Note. Some of those-conditionsiare described as follows: �J • • MULTISTATE ADJUSTABLE RATE NOTE(LIBOR Index)-Sirgte Family—Freddie Mae MODIFIED INSTRUMENT Fonn 3590 1101 (page 2 ol3pager) • Transfer of the Proper) a Beneficial Interest in Borrower. If all my part of the Property or any Interest in the Property is sc,....,,transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However,this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee • as if a new loan were being made to the transferee; and(b)Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law,Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender may also require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument.Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full,Lender shall give Borrower notice of acceleration. The notice shall provide a, period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument.If Borrower fails to pay these sums prior to the expiration of this period,Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. WITNESS THE HAND(S)AND SEAL(S)OF THE UNDERSIGNED. • • G1-) titrY% '1)1 (Seal) PATRICK D.BRENNEMAN -Borrower (Seal) -Borrower (Seal) -Borrower • • (Sign Original Only) -n o-• i'tl rn • • • MULTISTATE ADJUSTABLE RATE NOTE(LIBOR Inder)—Singk Family—Freddie Mae MODIFIED INSTRUMENT Form 3590 1/01 Onge 3 of 3 pages) • • • • Loan',limbo PREPAYMENT RIDER TO NOTE THIS PREPAYMENT RIDER is made this 4TH day of FEBRUARY ,2005 , and is incorporated into and shall be deemed to amend and supplement the Note of the same date given by the undersigned(the "Borrower") in favor of Intervale Mortgage Corporation(the "Lender"). 5. BORROWER'S RIGHT TO PREPAY I have the right to make payments of principal at any time before they are due. A payment of principal only is known as a "prepayment". When I make a prepayment,I will tell the Note Holder in writing that I am doing so. I may not designate a payment as a Prepayment if I have not made all the monthly payments due under the Note. I may make a partial prepayment withbut paying any prepayment charge. If I make a full prepayment within one (1) year of the date of this Note, I agree to pay a prepayment charge of 5% of the original principal amount of the loan; if I make a full prepayment more than one(1)year but within two (2)years of the date of this Note, I agree to pay a prepayment charge of 5% of the original principal amount of the loan. The Note Holder will use my prepayments to reduce the amount of principal that I owe under this Note. However, the Note Holder may apply my Prepayment to the accrued and unpaid interest on the Prepayment amount, before applying my Prepayment to reduce the Principal amount of the Note. If I make a partial prepayment, there will be no changes in the due date or in the amount of my monthly payment unless the Note Holder agrees in writing to those changes. My partial prepayment may reduce the amount of my monthly payments after the first Change Date following my partial prepayment. However, any reduction due to my partial prepayment may be offset by an interest rate increase. BY SIGNING BELOW, Borrower accepts and agrees to the terms and provisions contained in this Prepayment Rider. PA CK D.BRENNEMAN -Borrower (Seal) -Borrower • (Seal) -Borrower." • ._I --1 i i) 1;� � • firItt flI lY-1 • IOWA PREPAYMENT RIDER-ADJUSTABLE RATE,FIRST MORTGAGE (Page 1 •of 16) 1 s,J`."rc�t c nd cotta C'L at ti,,11111111111111L1111111111 • Doc ID: 018478380018 7vos: GEN Recorded: 02/08/2008 at 03:10:37 PM Fee Amt: $82.00 Paos 1 of 18 Johnson County Iowa After Recording Return To: Kim Painter County Recorder Decision One Mortgage Company, LLC 0x3842 P0420-435 Servicing Agent for Intervale Mortgage Corporation 6060 J.A.Jones Drive, Suite 800 Charlotte, North Carolina 28287 c- €—.1-7.1 n _ Prepared By: JANET JONES, PARK PLACE W 6465 WAYZATA BLVD, STE 970. 6465 Wayzata Blvd.,�Suie 971ST. LOUIS PARK, MINNESOTA 55426 Phone: (952)225-1700 cj Li....; LJ. -r1 -'t �:,�.,.- is :'..-, [Space Above This Line For Recording Data) - 3 Pr Numbe 'r-) MIN: 10007791000337313% ( MORTGAGE 36 cn - N DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18,20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A) "Security Instrument" means this document, which is dated FEBRUARY 4, 2005, together with all Riders to this document. (B) "Borrower" is PATRICK D. BRENNEMAN AND DAWN R.BRENNEMAN,HUSBAND AND WIFE.Borrower is the mortgagor under this Security Instrument. (C) "MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O.Box 2026, Flint, MI 48501-2026,tel. (888)679-MERS. (D) "Lender" is Intervale Mortgage Corporation. Lender is a CORPORATION organized and existing under the laws of RHODE ISLAND. Lender's address is 815 RESERVOIR AVENUE,CRANSTON,RHODE ISLAND 02910. (E) "Note" means the promissory note signed by Borrower and dated FEBRUARY 4,2005.The Note states that Borrower owes Lender ONE HUNDRED THIRTY-SIX THOUSAND AND 00/100ths Dollars (U.S.$136,000.00) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than FEBRUARY 4, 2035. -. (F) 'Property"means the property that is described below under the heading "Transfer of Rights in the Property." (G) "Loan" means the debt evidenced by the Note,plus interest,any prepayment charges and late charges due under thL tote, _ 41 and all sums due under this Security Instrument, plus interest. �)-a; _ F (H) "Riders" means all Riders to this Security Instrument that are executed by Borrower. The following Riders tut to be rn executed by Borrower[check box as applicable]: O ti-, a 0 ®Adjustable Rate Rider 0 Condominium Rider OSecond Home Rider -77 C]Balloon Rider E1 Planned Unit Development Rider 0Other(s)[specify] > c3 0 ❑1-4 Family Rider 0 Biweekly Payment Rider ......?..-ir IOWA-Sile Family--Fannie Mae/Freddie Mac ' Form 3016 1/01 (page 1 of 11 pages) I 111111 11111 11111 1101 Illi IIIII 11111111111111 IM 111111111 I EXHIBIT (Page 2 'of 36) • (I) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and - administrative rules and orders(that have the effect of law)as well as all applicable final, non-appealable judicial opinions. (J) "Community Association Dues, Fees, and Assessments" means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association,homeowners association or similar organization. (K) "Electronic Funds Transfer" means any transfer of funds,other than a transaction originated by check,draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument,computer,or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes,but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (L) "Escrow Items"means those items that are described in Section 3. (M) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i)damage to,or destruction of,the Property; (ii) condemnation or other taking of all or any part of the Property; (iii)conveyance in lieu of condemnation;or(iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (N) "Mortgage Insurance"means insurance protecting Lender against the nonpayment of,or default on, the Loan. (0) "Periodic Payment" means the regularly scheduled amount due for(1)principal and interest under the Note, plus(ii)any amounts under Section 3 of this Security Instrument (P) "RESPA" means the Real Estate Settlement Procedures Act(12 U.S.C. §2601 et seq.)and its implementing regulation, Regulation X (24 C.F.R.Part 3500), as they might be amended from time to time,or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument, "RESPA"refers to all requirements and restrictions that are imposed in regard to a "federally related mortgage Ioan" even if the Loan does not qualify as a "federally related mortgage loan"under RESPA. (0J "Successor in Interest of Borrower" means any party that has taken title to the Property,whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender: (i)the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably mortgages, grants and conveys to MERS(solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS, with power of sale, the following described property located in the County of JOHNSON . [Type of Recording Jurisdiction] [Name of Recording Jurisdiction] Lot One Hundred Three (103) in Part VI-Village Green, an Addition to Iowa City,Iowa,according to the plat thereof recorded in Plat Book 16, _ p Page 8,.Flat Records of Johnson.County,Iowa. — ; } -� THIS IS A PURCHASE MONEY MORTGAGE0 r-.rn oS" ., n which currently has the address of 1132 VILLAGE FARM COURT [Street] IOWA CITY , Iowa 52240 ("Property Address"): [City] [Zip Code] IOWA--Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 2 of pages) (Page 3 •f 1.6) TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and . fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the"Property." Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument,but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including,but not limited to, releasing and canceling this Security Instrument. BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered,except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges,and Late Charges. Borrower shall pay when due the principal of,and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S.currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a)cash; (b)money order; (c)certified check,bank check,treasurer's check or cashier's check,provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality,or entity; or(d)Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date,then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lerk.er shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b)principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges,second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary preps rments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall nom extend or postpone the due date,or change the amount, of the Periodic Payments. 3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note,until Note is paid in full, a sum(the"Funds")to provide for payment of amounts due for: (a)taxes and assessments and othetc,item,4 which can attain priority over this Security lns+rument as a lien or encumbrance on the Property; (b)leasehold payments ot_ ground rents on the Property, if any; (c) premgums for any and all insurance required by Lender under_Section 5i-and (d) Mortgage Insurance premiums, if any,or any sums payable by Borrower to Lender in lieu of the payment of Mpytgage In prance IOWA—Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 3 of -pages) (Page 4 tf i5) premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term of the Loan, Lender may require that Community Association Dues, Fees, and Assessments, if any,be escrowed by Borrower, and such dues, fees 'and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable,the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require. Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument, as the phrase"covenant and agreement" is used in Section 9. If Borrower is obligated to pay Escrow Items directly,pursuant to a waiver, and Borrower fails to pay the amount due for art Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and,upon such revocation,Borrower shall pay to Lender all Funds, and in such amounts,that are then required under this Section 3. Lender may,at any time, collect and hold Funds in an amount(a)sufficient to permit Lender to apply the Funds at the time specified under RESPA, and (b)not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality,or entity (including Lender, if Lender is an institution whose deposits are so insured)or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing,however,that interest shall be paid on the Funds. Lender shall give to Borrower,without charge, an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow,as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA,and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA,and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA,but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security Instrument. Lender shall promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes, assessments,charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Community Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items,Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien vs hich has priority over this Security Instrument unless Borrower;(a)agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long-as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in,legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pendinOut only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to;a lien{which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 1,0 days lithe date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forsh:above to this Section 4. •- Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting-Service ul by Lender in connection with this Loan. IOWA—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1101 (page 4 of ages) (Page 5 of 34) • 5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured . against loss by fire,hazards included within the term"extended coverage," and any other hazards including,but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts(including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable,with such interest,upon notice from Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of,the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's seivrity is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction,provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurande proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to'a notice from Lender that the insurance carrier has offered to settle a claim,then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event,or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender(a)Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and(b)any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower)under all insurance policies .. covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or -., not then due. - : y i 6. Occupancy. Borrower shall occupy, estzblish, and use the Property as Borrower's principal residenc '{w,ithin 66-days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principalzeeidence;for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall note unreasonpbly withheld,or unless extenuating circumstances exist :vhich are beyond Borrower's control. '$ ' / IOWA--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 5 gill pages) (Page 6 Ee 7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy,damage or impair the Property,allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the Property,Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to,or the taking of,the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process,Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If(a)Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument(such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c)Borrower has abandoned the Property,then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes,but is not limited to,entering the Property to make repairs,change locks, replace or board up doors and windows,drain water from pipes, eliminate building or other code violations or dangerous conditions,and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest,upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan,Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantiaily equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage „1, insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available,Borrower shall continue to a pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to-be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such 1 loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be _ required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments if o.. Mortgage Insurance coverage (in the amount and for the period that Lender requires)provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage s Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to mire _ separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage j Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the ate provided in the Note. IOWA--Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 6 o I. ages) (Page 7 oar lj) • Mortgage Insurance reimburses Lender (or any entity that purchases the Note)for certain losses it may incur if Borrower does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties)to these agreements.These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available(which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, any other entity,or any affiliate of any of the foregoing, may receive(directly or indirectly)amounts that derive from(or might be characterized as)a portion of Borrower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk,or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer,the arrangement is often termed "captive reinsurance." Further: (a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance,or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance, and they will not entitle Borrower to any refund. (b) Any such agreements will not affect the rights Borrower has-if any-with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law.These rights may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance,to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 11. Assignment of Miscellaneous Proceeds; Forfeiture.All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender. If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened,the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due,with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking,destruction,or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any,paid to Borrower. In the event of a partial taking,destruction,or loss in value of the Property in which the fair market value of the Property immediately before the partial taking,destruction,or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a)the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower. In the event of a partial taking,destruction,'or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately:. before the partial taking,destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower,or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days . after the date the notice is given,Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration Or ' ' y repair of the Property or to the sums secured by this Security Instrument,whether or not then due. "Opposing Party" means thw third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to: Miscellaneous Proceeds. Co. IOWA--Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1101 (page 7 of i p ges) (Page 8 of 14) Borrower shall be in default if any action or proceeding,whether civil or criminal,is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and,if acceleration has occurred, reinstate as provided in Section 19,by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment,precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall-be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbearance By Lender Not a Waiver.Extension of the time for payment or modification of amortization of the sums secured by this Sectirity Instrument granted by Lender to Borrower or any Successor-in Interest,of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall nabe required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made 13.).t the ort lnal Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right,or ren dy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of$arrower or in amounts less than the amount then due,shall not be a waiver of or preclude the exercise of any right or ietnedy. 13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants tri agrees that Borrower's obligations and liability shall be joint and several. However,any Borrower who co-signs this Security Instrument but does not execute the Note(a"co-signer"): (a) is co-signing this Security Instrument only to mortgage,grant and convey the co-signer's interest in the Property under the ter.ns of this Security Instrument; (b)is not personally obligated to pay the sums secured by this Security Instrument;and(c)agrees that Lender and any other Borrower can agree to extend,modify,forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. Subject to the provisions of Section 18,any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind(except as provided is Section 20)and benefit the successors and assigns of Lender. 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including,but not limited to, attorneys' fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law. If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits,then: (a)any such loan charge shall be reduced by the amount necessaryto reduce the charge to the permitted limit; and(b)any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal,the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices. All notices given by Borrower or,Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address,then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. %'f► IOWA--Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 8 of II p is) (Page 9 cf Z ) 16. Governing Law; Severability; Rules of Construction.This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. AU rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent,but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. As used in this Security Instrument: (a)words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in be singular shall mean and include the plural and vice versa; and (c)the word "may" gives sole discretion without any obligation to take any action. 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower.As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including,but not limited to,those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in MI of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions,Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a)five days before sale of the Property pursuant to any power of sale contained in this Security Instrument;(b)such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or(c)entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower:(a)pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements;(c)pays all expenses incurred in enforcing this Security Instrument, including, NI not limited to, reasonable attorneys' fees,property inspection and valuation fees, and other fees incurred for the purpose o` protecting Lender's interest in the Property and rights under this Security Instrument; and(d)takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a)cash; (b)money order; (c)certified check,bank check,treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or(d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note;Change of Loan Servicer;Notice of Grievance.The Note or a partial interest in the Note(together wish " this Security Instrument)can be sold one or more times without prior notice to Borrower. A sale might result in a change irftlte entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan,Service% Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer„se-address. to which payments should be made and any other information RESPA requires in connection with a notice oftrartsfer qf� servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the'Note, the- mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. ik `, 1 IOWA—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1101 (page 9 11 pages) (Page 10 of 46) Neither Borrower nor Lender may commence,join,or be joined to any judicial action(as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breathed any provision of,or any duty owed by reason of, this Security Instrument,until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15)of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken,that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline,kerosene,other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection;(c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and(d)an "Environmental Condition"means a condition that can cause, contribute to,or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence,use,disposal, storage,or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do,nor allow anyone else to do,anything affecting the Property (a) that is in violation of any Environmental Law,(b)which creates an Environmental Condition, or(c) which, due to the presence, use,or release of a Hazardous Substance,creates a condition that adversely affects the value of the Property. The preceding two sentences shall no: apply to the presence,use,or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property(including,but not limited to,hazardous substances in consumer products). Borrower shall promptly give Lender written notice of(a)any investigation,claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b)any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and(c)any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party,that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify:(a)the default;(b) the action required to cure the default; (c)a date, not less than 30 days from the date the notice is given to Borrower,by which the default must be cured;and(d)that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foredosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Leilder shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including,11Th not limited to,reasonable attorneys' fees and costs of title evidence. 1 j 23. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Inst talent. Lender may charge Borrower a fee for releasing,this Security Instrument,but only if the fee is paid to a third pati,x for services rendered and the charging of the fee is permitted under Applicable Law. 24. Waivers. Borrower relinquishes all right of dower and waives all right of homestead and distributive share iiand to the Property. Borrower waives any right of exemption as to the Property. • IOWA-Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 10 of 11 Pages) (Page it of 46) K 25. HOMESTEAD EXEMPTION WAIVER. 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, I VOLUNTARILY GIVE UP MY RIGHT TO THIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE. c_ _, A-ctr)t( 1 e,--- -z_(? ,ja, ..c. a. i 41 OS-- PATRI K D.BRENNE [ ate] n v1►�,c k,c,i _ 4L1i DA R. B N atej 26. Redemption Period. If the Property is less than 10 acres in size and Lender waives in any foreclosure proceeding any right to a deficiency judgment against Borrower,the period of redemption from judicial sale shall be reduced to 6 months. If the court finds that the Property has been abandoned by Borrower and Lender waives any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 60 days. The provisions of this Section 26 shall be construed to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. 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. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. Witnesses: . -14-rey_ PATRI .,A,..0,,,..e.„ ---451.0) CD. BRE -Borrower `- rtQ (Seal) cr. NIYI`1A -Borrower (Seal) (Seal) -Borrower -Borrower State of IOWA ) ) ss. County of JOHNSON ) On this 4TH day of FEBRUARY, A.D. 2005, before me,a notary public in and for said county,personally appeared PATRICK D. BRENNEMAN AND DAWN R.BRENNEMAN, ' SBAND AND WIFE, to me personally known to be the person(s) named in and who executed the foregoing instrument, t• acknowledged that he/she/they executed the sage as his/her/their voluntary act and deed. tk.'1 ' - (Seal) o` LANE M.LAfLER ���� Commias�on Number 184960 Not-"�' r •in the State ofljZ z Aly C y�l _;_eS — - l�' i d ti `SD. ___ .♦( r. r _. _ .0 • C� • IOWA-Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 11 of 11 pages) (Page 12 ilf ) • Loan Numix PLANNED UNIT DEVELOPMENT RIDER THIS PLANNED UNIT DEVELOPMENT RIDER is made this 4TH day of FEBRUARY, 2005, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date, given by the undersigned(the "Borrower") to secure Borrower's Note to Intervale Mortgage Corporation (the "Lender") of the same date and covering the Property described in the Security Instrument and located at: 1132 VILLAGE FARM COURT,IOWA CITY, IOWA 52240 [Property Address] The Property includes, but is not limited to, a parcel of land improved with a dwelling, together with other such parcels and certain common areas and facilities, as described in (the "Declaration"). The Property is a part of a planned unit development known as VILLAGE GREEN [Name of Planned Unit Development] (the "PUD"). The Property also include(Borrower's interest in the homeowners association or equivalent entity owning or managing the common areas and facilities of the PUD(the "Owners Association")and the uses, benefits and proceeds of Borrower's interest. PUD COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. PUD Obligations. Borrower shall perform all of Borrower's obligations under the PUD's Constituent Documents. The "Constituent Documents" are the: (i) Declaration; (ii) articles of incorporation, trust instrument or any equivalent document which creates the Owners Association; and (iii) any by-laws or other rules or regulations of the Owners Association. Borrower shall promptly pay, when due, all dues and assessments imposed pursuant to the Constituent Documents. B. Property Insurance. So long as the Owners Association maintains, with a generally accepted insurance carrier, a "master" or "blanket" policy insuring the Property which is . satisfactory to Lender and which provides insurance coverage in the amounts(including deductible_:.' levels), for the periods, and against loss by fire, hazards included within the term "extended;.; __ _. coverage," and any other hazards,.including, but not limited to,earthquakes and floods, for which Lender requires insurance, then: (i) Lender waives the provision in Section 3 for the Periodic Payment to Lender of the yearly premium installments for property insurance on the Property; and (ii) Borrower's obligation under Section 5 to maintain property insurance coverage on the Property is deemed satisfied to the extent that the required coverage is provided by the Owners Association policy. What Lender requires as a condition of this waiver can change during the term of the loan. Borrower shall give Lender prom',t notice of any lapse in required property insurance coverage provided by the master or blanket policy. In the event of a distribution of property insurance proceeds in lieu of restoration or repair following a loss to the Property, or to common areas and facilities of the PUD, any proceeds payable to Borrower are hereby assigned and shall be paid to Lender. Lender shall apply the proceeds to the sums secured by the Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. I 1 MULTISTATE PUD RIDER—Single Family—Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 31501/01 / (page 1 of 2 pages) (Page 13 of 11) t C. Public Liability Insurance. Borrower shall take such actions as may be reasonable to insure that the Owners Association maintains a public liability insurance policy acceptable in form, amount,and extent of coverage to Lender. D. Condemnation. The proceeds of any award or claim for damages,direct or consequential, payable to Borrower in connection with any condemnation or other taking of all or any part of the Property or the common areas and facilities of the PUD, or for any conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. Such proceeds shall be applied by Lender to the sums secured by the Smurity Instrument as provided in Section 11. E. Lender's Prior Consent. Borrower shall not, except after notice to Lender and with Lender's prior written consent, eituer partition or subdivide the Property or consent to: (i) the abandonment or termination of the PUD,except for abandonment or termination required by law in the case of substantial destruction by fire or other casualty or in the case of a taking by condemnation or eminent domain; (ii) any amendment to any provision of the "Constituent Documents" if the provision is for the express benefit of Lender; (iii) termination of professional management and assumption of self-management of the Owners Association;or (iv) any action which would have the effect of rendering the public liability insurance coverage maintained by the Owners Association unacceptable to Lender. F. Remedies. If Borrower does not pay PUD dues and assessments when due, then Lender may pay them. Any amounts disbursed by Lender under this paragraph F shall become additional debt of Borrower secured by the Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable, with interest, upon notice from Lender to Borrower requesting payment. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this PUD Rider. La,Y' : 11102 _ PATRICK D.B' ' �N -Borrower 5 ,11 � k0/Wt� (Seal) DA R.BRENNEMAN -Borrower O� -Borrower,=j• m -o D o • ?fia- t• •. VA! MULTISTATE PUD RIDER—Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3150 I/01 (page 2 of 2 pages) (Page 14 Sr 16) ` Y Loan Numb' ADJUSTABLE RATE RIDER (LIBOR Index-Rate Caps) THIS ADJUSTABLE RATE RIDER is made this 4TH day of FEBRUARY,2005, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust,or Deed to Secure Debt(the "Security Instrument") of the same date given by the undersigned(the"Borrower")to secure the Borrower's Note to INTERVALE MORTGAGE CORPORATION (the "Lender") of the same date and covering the property described in the Security Instrument and located at: 1132 VILLAGE FARM COURT,IOWA CITY, IOWA 52240 iProperry Address] THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE AMOUNT THE BORROWER'S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE THE BORROWER MUST PAY. ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument,Borrower and Lender further covenant and agree as follows: A. INTEREST RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial inter est rate of 8.44%.The Note provides for changes in the interest rate and the monthly payments, as follows: 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates • The interest rate I will pay may change on the 4TH day of FEBRUARY,2007, and on that day every sixth month thereafter. Each date on which my interest rate could change is called a"Change Date." (B) The Index Beginning with the first Change Date, my interest rate will be based on an Index. The "Index" is the average of interbank offered rates for six-month U.S.dollar-denominated deposits in the London market ("LIBOR"), as published in The Wall Street Journal. The most recent Index figure available as of the fust business day of the month immediately preceding the month in which the Change Date occurs is called the"Current Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice. (C) Calculation of Changes Before each Change Date,the Note Holder will calculate my new interest rate by adding — r•a EIGHT AND 19/100THS percentage points(8.19%)to the Current Index. The Note Holder 9 will then round the result of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D)below,this rounded amount will be my c}_`I new interest rate until the next Change Date. _ The Note Holder will then determine the amount of the monthly payment that would be r sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full — on the maturity date at my new interest rate in substantially equal payments. The result of ©'7 this calculation will be the new amount of my monthly payment . Nof • MULTISTATE ADJUSTABLE RATE RIDER(LIBOR Index)—Single Family—Freddie Mac MODIFIED INSTRUMENT Form 3192 m (page 1 of 3 paggs) (Page 15 df 16) 4 (D) Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 11.44% or less than 8.44%.Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than ONE percentage point(1%)from the rate of interest I have been paying for the preceding six months. My interest rate will never be greater than 14.44% or less than 8.44%. (E) Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment I R:ginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice. B. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER Uniform Covenant 18 of the Security Instrument is amended to read as follows: Transfer of the Property or a Beneficial Interest in Borrower.As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed,contract for deed, installment sales contract or escrow agreement,the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if a Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not ry exercise this option if: (a)Borrower causes to be submitted to Lender information required by 0 Lender to evaluate the intended transferee as if a new loan were being made to the transferee; 0 and (b) Lender reasonablydetermines that Lender's securitywill not beby '-! `-' impaired the loan --, assumption and that the risk of a breach of any covenant or agreement in this Security 0-‹ Instrument is acceptable to Lender. —1 To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender may also require the transferee 073 to sign an assumption agreement that is acceptable to Lender and that obligates the transferee .. to keep all the promises and agreements made in the Note and in this Security Instrument. CD Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration: The notice shall provide a period of not Iess than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. \j,"MULTISTATE ADJUSTABLE RATE RIDER(LIBOR Index)-Single Family-Freddie Mae MODIFIED INSTRUMENT Form 3192 1101 (page 2 of 3 pa (Page 16 AE 16) 4r • BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider. PATRICK D.BRENNEMAN -Borrower ; ("14/1413C'C-v�. (Seal) DAWN R.B -Borrower (Seal) -Borrower • = 11 :G rrn _m l/• d .. u 1 • .,• itir• .i ;.- - ...:.j MULTISTATE ADJUSTABLE RATE RIDER(LIBOR Index)—Single Family.Thddl.Mac MODIFIED INSTRUMENT ram MFL VOL (page 3 of 3 pages) t. , . (Page 1 ob :) J 2447 . • Department of the Treasury - Internal Revenue Service • Form 668 (Y)(c) (Rev.February 2004) Notice of Federal Tax Lien • Area: Serial Number For Optional Use by Recording Office _ WAGE & INVESTMENT AREA #2 I �( I� EIAs provided byen Unit Phone: {section 6321, 6322, and 6323 of the internal Revenue 800) 82 9-76 50 535744209 iN11N1111N111111>I.111111111 NN1111111N1N11111 Code, we are giving a notice that taxes (including interest and penalties) RDocecorded: I0: 021448500001/ T0GEN Recorded: 04/22/2009 at 10:53:02 AM have been assessed against the following-named taxpayer. We have made Fee Amt: $7.00 PI= 1 of 1 a demand for payment of this liability, but it remains unpaid. Therefore, KimrPainternCounty Recorder there is a lien in favor of the United States on all property and rights to 8K 4 4 2 4 PG 5 8 0 property belonging to this taxpayer for the amount of these taxes, and additional penalties, interest, and costs that may accrue. 1• 1,`6\ Name of Taxpayer PATRICK D BRENNEMAN • Residence 1132 VILLAGE FARM CT IOWA CITY, IA 52240-2919 • • . IMPORTANT RELEASE INFORMATION: For each assessment listed below, •• ' . unless notice of the lien is refiled by tho date given in column(e),this notice shall, :f•::' •••`7'{ •= J'' ° ,fi: ,; . on the dayfollowingsuch:date, b r `"' "` `•6 "" Aerate as a certificate of release as defined � " •• in IRC 8325(a). Tax Period Date of Last Day for Unpaid Balance Kind of Tax Ending Identifying Number Assessment Refiling..- „or Assessment (a) (c) (d) (e) ,..., (0 ' 1040. 12/31/2003 XXX-XX-2932 08/21/2006 09/20/2016 12058. 15 f41. : : » " :. .:r, :. • a ...•.!!.:i•A••'7,:f-4:4,11114,0);,.1- f%4 r•1- Q •:-:.}.ti... ,• •• -4C o� i� :<r r o a 0 v . ..Plaoe'of F1ltlitp• . _ . .. .. Johnson County Recorder . • : •• -.:3:..;.,..--,-Johnson Courthouse Total $ . .-;.12058: 15-- Iowa City, IA 52240 This notice was prepared and signed at _ CHICAGO, IL , on this, 14th -: ..-.. ,-:the • _ theday.of.. April 2009 _ Signature A.• .' Gu Title ACS 12-00-0000 for DEBRA K. HURST (800) 829-7650 (NOTE: Certificate of officer authorized by law to take acknowledgment is not essential to the validityof Notice of Federal Tax lien Rev. Rul. 71-466, 1971 -2 C.B.409) Fpm 668(y}(c} {Rev. 2-20041 Part I -Kept By Recording Office • ' CAT. NO 60025X (Page 1 of ],0 . `24'4-7 . .. . Form 668'•:.-':. ' . _ " - • Department of the Treasury- Internal Revenue Servipe•::' - . (Bev.February 2064Notice of Federal Tax lien ,:-. • ' . Area: - - Serial Number For Optional tise by Recording Office, WAGE & INVESTMENT AREA #2 Lien Unit Phone: (800) 829-7650 As provided by section 6321, 6322, and 6323 of the Internal Re53574430 venue9 11111111111111111[11111111111111111111111111111111ltllll�f11111111111111111[11111111111111111111111111111111 Code, we are giving a notice that taxes (including interest and penalties) Recorded: oai2z%2oosoatTioe0i Art have been assessed against the following-named taxpayer. We have made Fee Amt: $7.00 pale 1 of 1 a demand for payment of this liability, but it remains unpaid. Therefore, K1mnPainternto 0ountvaReecorder there is a lien in favor of the United States on all property and rights to BK 4424 PQ 5 81 property belonging to this taxpayer for the amount of these taxes, and additional penalties, interest, and costs that may accrue. Name of Taxpayer PATRICK D & DAWN R BRENNEMAN Residence 1132 VILLAGE FARM CT • IOWA CITY, IA 52240-2919 :..IMPORTANT:RELEASE INFORMATION:For each assessment fisted below, :: s•s^ +••1;,�,:;. unless&tide tit tf :ieni. .refiileq by the date given in column(e),this notice shall, . •:-i"-i*-<c:.:••: i-...". •- -. on the 'day-following:suchrdete, operate as a certificate of release as defined •r`� '•''"'»'� "'""'"" in IRC 6325(a). .. Tax'Period - . • Date of last Daayy`for —, .. -..Unpaid Balance - l ntd of Tax .Endint ._. Identifying Number Assessment Refiling..;=.• :. ..>...:of Assessment •• (a) (b) (c) (d) (e) :. . :,.. : (f) i 1040:',r 12/-31/20.06 . .XXX-%X-2932 06/11/2007 07/11/2017 307. 09 - ,-..Y:•,',--•-•-4-47(1,4,:,•4..t til:,,'-t :ice-'s'. i,; - Y`... ... '•• • • • • • • > o `Place Of.Filing ,r1,'- ':=-, ._•_ --- - • : Yolirisoin County Recorder - _ . . :Johnaon..Courthouse .- Total;=:R..::.:• _..307:.09. Iowa• City, IA 52240 This notice was prepared'and'signed at CHICAGO, IL • ,:on thls, •' • the 14th.• day'of April _ 2009 : he day-f• o• A: • C /. t..:= -j, `:• %�► C Title ACS �.:' :3.2:-0.0'-000.0 for DEBRA K..• �-: QST�- � (800) 829-7650 . • �-- - - (NOTE:Certificate of officer authorized by law to take acknowledgment is not essential to the validity of Notice of Federal Tax lien Rev.Rut.71-466, 1971 -2 Cll.409> - •Part 1 -Kept By Recording Office F0 668(>n(c) May. 2-20041 CAT.NO 60025X 11 cf- AFFIDAVIT STATE OF IOWA ) SS COUNTY OF POLK ) I, Benjamin W. Hopkins, being first duly sworn on oath depose and state that I am one of the attorneys for the Plaintiff in this cause; that I am a regular practicing attorney engaged in this case; that there has been no agreement, express or implied, between myself and my client, or between myself and any other �a person except attorneys associated with me in this case, for arra, i ._gin sharing or division of the attorney fees to be taxed herein., — I further depose and state that true copies of the nat1 ara 1771 C)r-) '/- mortgage and any other documents declared upon in the foregoing:D Petition are now in my actual possession; that I have read the above and foregoing Petition, know the contents thereof, have personal knowledge of the facts therein stated, .nd that the statements and allegations therein are :s (verily believe. //id ... i Be / 7f o.ki s AT0003573 / Subscribed and sworn to before me ths • th day of October , 2009 . L) N.tary Public in and for the �ATRICIA 3• �L State of Iowa 2C3 G c✓s CJ7 Exhibit "C" :-...:: 3). w ti 7C k_L 'l C (�•• --.I END OF CASE FILE CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE• PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540•(319) 356-6030 PLAINTIFF : COUNTRYWIDE HOME LOANS Docket No 109-01882 1 State IOWA vs. Court No EQCV070570 County JOHNSON DEFENDANT: AUSMAN, KENNETH LEO Ref No Received 04/07/2009 DEFENDANT: LOCOCO-AUSMAN, JAIME L DEFENDANT: CITY OF CORALVILLE DEFENDANT: IOWA, STATE OF DEFENDANT: CITY OF IOWA CITY Requestor(s) Phone HOPKINS,BENJAMIN W (515) 222-9400 Name CITY OF IOWA CITY Party Type DEFENDANT Address 1410 E WASHINGTON ST IOWA CITY IA 52240- Phone (319)356-5030 E-Mail Fax Employer 1 -1 Zone Comments Documents Document Serve by Date OE PSR Description/Special Instructions ORIGINAL NOTICE AND jPETITION Service Information Attempts Log Date Time Server Notes - v7 �) ` (I/Date 41 � ���� Time ( Type l�+( l9 oL.' Party L-t t l C l/0 g-L(— Relationship OC ky C-C y C (71/C Race Lam- Sex DOB Location L/ (0 AsSktA0L, Miles ( Fee c-LAS Officer C V Notes: O B n m V -<r- m 23 co Printed:Tuesday,April 07,2009 Page 1 of 1 32103 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY COUNTRYWIDE HOME LOANS 13-2631719 : SERVICING, LP E U TY pO ORIGINAL NOTICE Plaintiff, : vs. . • KENNETH L. AUSMAN AND .• JAIME L. LOCOCO AUSMAN .• AKA JAMIE L. LOCOCO .• AUSMAN; - g CITY OF CORALVILLE, n IOWA; > 11 CITY OF IOWA CITY, IOWA; 0 < i r COLLINS COMMUNITY CREDIT r v rn UNION; O m 3 v STATE OF IOWA; : N Defendants. : y .= co TO THE ABOVE NAMED DEFENDANTS : You are notified there is a petition now on file in the office of the clerk of the above court . A copy of this filing is attached hereto. The Plaintiff ' s attorneys are Petosa, Petosa & Boecker, L.L.P. , by Benjamin W. Hopkins , whose address is 1350 NW 138th Street, Suite 100, Clive, Iowa 50325-8308 . The Plaintiff ' s attorney' s phone number is (515) 222-9400, with a facsimile transmission number of (515) 222-9121 . You must serve a motion or answer, within 20 days after service of this original notice upon you and within a reasonable time thereafter file a motion or answer, in the Iowa District Court of Johnson County, at the county courthouse in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the petition. If assistance of auxiliary aids or services is required to participate in court due to a disability such as hearing impairment, call the Americans with Disabilities Coordinator at (319) 398-3920,1Ctf you are in need of dual party telephone relay services, call Relay Iow 1'TY at 1-800-735-2942 . / r Cle of the Above Court / 44-1241 Joh son County Courthouse Iowa City, Iowa 52244-2510 YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS. • • 32103 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY COUNTRYWIDE HOME LOANS 13-2631719 . SERVICING, LP EQUITY NO. EoE!-\Io -70370 • PETITION Plaintiff, r vs . • (Pc, - ."y.' • KENNETH L. AUSMAN AND • a JAIME L. LOCOCO AUSMAN ->~ ' AKA JAMIE L. LOCOCO • AUSMAN; • N CITY OF CORALVILLE, • IOWA; • CITY OF IOWA CITY, IOWA; • COLLINS COMMUNITY CREDIT • UNION; STATE OF IOWA; • Defendants. . NOTICE THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION. THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL SIX MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR `, RESIDENCE OR IS RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMT4,Yj 1 !- DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THELE..-.4 rnTHE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE 51;1 -n 0 POSSESSION OF THE MORTGAGED PROPERTY. YOU MAY PURCHASE ATDTHE SALE. Cc- C ,k� \ NGV-„ 1 Plaintiff, Countrywide Home Loans Servicing, LP, for its cause of action states : 1 . That the Plaintiff is a corporation doing business in the United States of America. 2 . That on or about June 13, 2007, Kenneth L. Ausman and Jaime L. Lococo Ausman made, executed and delivered to Iowa State Bank and Trust Company, a promissory note in writing for the sum of $164, 000 . 00 payable in installments, with interest at 6% per annum from such date (the "Note" ) . A copy of the Note is attached hereto and made a part hereof as Exhibit "A" . 3 . That on or about June 13, 2007 in order to secure the payment of the Note, Kenneth L. Ausman and Jaime L. Lococo Ausman (the "Mortgagor(s) " ) made, executed and delivered to Iowa State Bank and Trust Company, a real estate mortgage (the "Mortgage") on the following described real estate (the O "Mortgaged Property") : :Z. > m Yi0 r Beginning at a point on the easterly line of Lot 24, .< -v rn Part Six Valley View Heights, an Addition to -052:1 y 0 Coralville, Iowa, according to the plat thereof ^� recorded in Book 9, Page 30, Plat Records of Johnson' co County, Iowa, said point being 80 . 00 feet southerly from the northeasterly corner of said Lot 24 ; thence southerly along said easterly line 24 . 52 feet to the southeasterly corner of said Lot 24 ; thence north 81°46' 18" West 113 . 78 feet along the southerly line of said Lot 24 to the southwesterly corner of said Lot 24; thence N 01°04 ' 00" East 19. 70 feet along the westerly line of said Lot 24 ; thence easterly to the point of beginning. And Lot 31 of Amendment to Revision of Part One of Valley View Heights, an Addition to Coralville, Iowa, 2 according to the plat thereof recorded in Book 6, Page 21, Plat Records of Johnson County, Iowa. the Mortgage was filed for record June 18, 2007, in Book 4174, Page 538 in the Recorder' s Office of Johnson County, Iowa. A copy of the Mortgage is attached hereto and made a part hereof as Exhibit "B" . Said mortgage is a Purchase Money Mortgage. 4 . That the Mortgaged Property is and at all times relevant hereto was the homestead of the Mortgagor (s) . 5 . That the Plaintiff is currently the holder of record of the Note and Mortgage. 6 . That the Plaintiff is the sole and absolute owner of the Mortgage; that the Note and Mortgage provide that if default be made at any time in payment of any installment of principal or interest, at the election of the Plaintiff, all indebtedness, without notice of such election, shall become immediately due and payable; that the Plaintiff by reason of the failure of the Mortgagor(s) to pay said installments, declares the Note in default, that there is now due and owing the Plaintiff the sum of $161, 812 . 75 with interest at 6% per annum from and including August 1, 2008 plus late fees, 0 attorney fees, abstract expense, protective advances andts ; Til 7 . That the Plaintiff has given the Mortgagor (s) note • m 7:i 3 of the right to cure said default and to date has receivedNa D response thereto. °D 3 8 . That the time to cure the default under Iowa law has now expired. 9. That said Note and Mortgage provide that if suit be commenced thereon, Mortgagor (s) will pay reasonable attorneys ' fees. An attorneys ' fee affidavit is attached hereto and made a part hereof as Exhibit "C" . 10 . That the Plaintiff now hereby in writing waives any right or claim to a deficiency judgment against the Mortgagor (s) . That the Mortgaged Property is the residence of the Mortgagor (s) and is a one-family or two-family dwelling. The Plaintiff hereby elects to foreclose without redemption and the sale of the Mortgaged Property shall occur promptly after entry of judgment, unless the Mortgagor (s) , pursuant to the Notice set forth above, files a written demand to delay the sale, in which event the sale shall be delayed until six months after entry of judgment . 11 . That the following parties are named as Defendant(s) 0 because they claim some right, title or interest in the Mortgaged Property, including, without limitation a right P m m 22 title or interest as described below but any such right, le or interest is junior and inferior to the interest of °o Plaintiff : • City of Iowa City, Iowa, Judgment, dated September 21, 1999, filed September 21, 1999, CSTIC092320, fine, surcharge and costs 4 • Collins Community Credit Union, $5, 319. 90 Judgment, dated December 2, 1999, filed December 2, 1999, LACV060253 , Plus costs and interest • State of Iowa, Judgment, dated May 2 , 2000, filed May 2, 2000, STCV011131, fine, surcharge and costs • State of Iowa, Judgment, dated September 28, 2000, filed September 28, 2000, STCV012238, fine, surcharge and costs • State of Iowa, Judgment, dated October 24 , 2000, filed October 24, 2000, STHP055832, fine, surcharge and costs • State of Iowa, Judgment, dated February 26, 2002 , filed February 26, 2002, STCV020158, fine, surcharge and costs • State of Iowa, Judgment, dated February 26, 2002 , filed February 26, 2002 , STCV020159, fine, surcharge and costs • State of Iowa, Judgment, dated February 26, 2002, filed February 26, 2002, STCV020160, fine, surchage and costs z n ro -n • City of Coralville, Iowa, Judgment, dated December' ' 27, 2004 , filed December 27, 2004 , COSTCV028139, -v. v r rn fine, surcharge and costs -<m OX ao 12 . That the Mortgage provides that any time after the proper commencement of an action in foreclosure or during the period of redemption, the Court having jurisdiction of the case shall, at the request of the Plaintiff, appoint a receiver to take immediate possession of the Mortgaged Property and of the rents and profits accruing therefrom, to rent the same as he may deem best for the interest of all parties concerned and shall be liable to account to the Mortgagor(s) only for the net profits after application of rents, issues and profits upon the cost of the expense of receivership and foreclosure and the 5 • indebtedness, charges and expenses hereby secured and herein mentioned. WHEREFORE THE PLAINTIFF PRAYS THE COURT: 1 . That the Plaintiff have judgment in rem against the Mortgaged Property for the amount of unpaid principal and interest on the Note, as provided in the Note and Mortgage and for late fees, attorney fees, abstract expense, protective advances and costs . 2 . That a receiver be appointed immediately to take care of, manage, lease and collect the rents from the Mortgaged Property, and to apply the same in payment of costs and expenses of said receivership, repairs and expenses of said real estate, accrued and accruing taxes and special assessments, insurance premiums, and in partial payment of the judgment to be entered herein. 3 . That said judgment, together with interest, late fees, attorney fees, abstract expense, protective advances, costs and accruing costs be decreed a prior lien upon the Mortgaged Property from the date of the Mortgage, and that all right 0 -y D.71 1 -I, interests and equities of all Defendants to this suit be ()-C i r- m declared junior to the right, title and interest of the M 0 �T. N Plaintiff. y .= 4*) 4 . 4 . That in the event Plaintiff is required to make protective advances, including without limitation, advances for taxes or insurance on the Mortgaged Property, the Plaintiff be 6 • given an additional lien thereon for such amounts so advanced, which shall be included in the judgment to be entered herein. 5 . That the Mortgage be foreclosed and the Defendant (s) ' equity of redemption be barred and foreclosed save as guaranteed by law. That special execution issue for the sale the Mortgaged Property to satisfy said judgment, interest, late fees, attorney fees, abstract expense, protective advances and costs. 6 . That special execution issue to satisfy said judgment, interest and attorneys ' fees, and accruing costs herein, and the Mortgaged Property be sold according to law to satisfy the amount due under the Decree issued by this Court and the N '3 Defendants herein or anyone claiming by, through or under them,. Ti be forever barred and foreclosed of any interest in the n-< I r' H n v rn Mortgaged Property, except such rights of redemption as 1.111 3 O N provided by law. — 7 . That if the Mortgaged Property is sold and not redeemed, the Clerk of this Court shall issue to the Sheriff of said County, a writ of removal and possession, commanding him to put the grantee named in the Sheriff ' s deed for said premises sold, or his grantee, in possession thereof, and to remove any Defendants, or persons claiming by, through or under any of them, or any person in possession thereof out of such possession. 7 8 . That the Plaintiff has elected foreclosure without redemption and the sale of the Mortgaged Property shall occur promptly after entry of judgment or in the alternative, if a written demand for delay is filed, the sale shall occur six months after entry of judgment . 9. That the Plaintiff be granted such further relief as may be just and equitable. PETOSA, PETOS, & BOECKER, L.L. P. BY 441 1 hI Benj :r I ,, n-. , •' I i 573 1350 0 s ;, 8th Street, Suite 00 Cli r , Iowa 50325-8308 Te -phone: (515) 222-9400 Facsimile : (515) 222-9121 ATTORNEYS FOR PLAINTIFF _ of En >7 , 11 o r- �r rn o37 -A 0 cL 7C N -o 8 NOTE • i"i�` :.•p�� ..•_... Iowa Stui2t ':a t ik it1[.it fit`. June 13,2007 Iowa City , Iowa [Date) (City) [State] 150510th St Coradville,IA 52241 (Property Address) 1. BORROWER'S PROMISE TO PAY In return for a loan that I have received.I promise to pay U.S.$164,000.00 (this amount is called'Principal").plus interest,to the order of the Lender. The Lender is Iowa State Bank and Trust Company . I will make all payments under this Note in the form of cash,check or money order. I understand that the Lender may transfer this Note.The Lender or anyone who takes this Note by transfer and who is entitled to receive,payments under this Note is called the"Note Holder." 2. INTEREST Interest will be charged on unpaid principal until the full amount of Principal has been paid. I will pay interest at a yearly rate of 6.000%. The interest rate required by this Section 2 is the rate,[will pay both before and after any default described in Section 6(B)of this Note. 3. PAYMENTS (A) Time and Place of Payments I will pay principal and interest by making a payment every month. I will make my monthly payment on the tet day of each month beginning on August 1st 2007 . I will make these payments every month until I have paid all of the principal and interest and any other charges described below that I may o ve under this Note. Each monthly payment will be applied as of its scheduled clue date and will.be applied to interest before Principal.If,on July 1st 2037 ,I still owe amounts under this Note,I will pay those amounts in full on that date,which is called the"Maturity Date." I will make my monthly payments at 325 S.Clinton St PO Box 1700 Iowa City,IA 52244 _ or at a different place if.required by the Note Holder. (B) Amount of Monthly Payments My monthly payment will be in the amount of U.S.$983.26 _ 4. BORROWER'S RIGHT TO PREPAY I have the right to make payments of Principal at any time before they are due. A payment of Principal only is known as aO "Prepayment."When I make a Prepayment,I will tell the Note Holder in writing that I am doing so.I may not designate a payment as:"7.(7 T, a Prepayment if I have not made all the monthly payments due under the Note. . I may make a full Prepayment or partial Prepayments without paying a Prepayment charge. The Note Holder will use my ; %U �.■ Prepayments to reduce the amount of Principal that l owe under this Note.However,the Note Holder may apply myPrepayment to the 7- accrued and unpaid interest on the Prepayment amount,before applying my Prepayment to reduce the Principal amount of the Note.If— v I make a partial Prepayment,there will be no changes in the due date or in the amount of my monthly payment unless the Note Holder agrees in writing to those changes. r 5. LOAN CHARGES If a law,which applies to this loan and which sets maximum loan charges,is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits,then: (a)any such loan.charge shall be O reduced by the amount necessary to reduce the charge to the permitted limit;and(b)any sums already collected from me which exceeded permitted limits will be refunded to me.The Note Holder may choose to make this refund by reducing the Principal 1 owe under this Note or by making a direct payment to me. If a refund reduces Principal,the reduction will be treated as a partial , .p Prepayment. 6. BORROWER'S FAILURE TO PAY AS REQUIRED (A) Late Charge for Overdue Payments • If the Note Holder has not received the full amount of any monthly payment by the end of 15 calendar days after the date it is due,I will pay a late charge to the Note Holder.The amount of the charge will be 5.000%of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment. (B) Default If I do not pay the full amount of each monthly payment on the date it is due,I will be in default. (C) Notice of Default If I am in default,the Note Holder may send mea written notice telling me that if I do not pay the overdue amount by a certain date,the Note Holder may require me to pay immediately the full amount of Principal which has not been paid and all the interest that I owe on that amount.That date must be at least 30 days after the date on which the notice is mailed to me or delivered by other means. (D) No Waiver By Note Holder B. if,at a time when I am in default,the Note Holder does not require me to pay immediately in full as described above,the Note Holder will still have the right to do so if I am in default at a later time. (B) Payment of Note Holder's Costs and Expenses If the Note Holder has required me to pay immediately in full as described above,the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include,for example,reasonable attorneys'fees. 7. GIVING OF NOTICES Unless applicable law requires a different method,any notice that must be given to me under this Note will be given by delivering i t or by mailing it by first class mail to me at the Property Address above or at a different address if I give the Note Holder a notice of my different address. Any notice that must be given to the Note Holder under this Note will be given by delivering it or by mailing it by first class snail to the Note Holder at the address stated in Section 3(A)above or at a different address if I am given a notice of that different address. 8. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note,each person is fully and personally obligated to keep all oldie promises made in this Note,including the promise to pay the full amount owed. Any on who is a guarantor,surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations,including the obligations of a guarantor,surety or endorser of this Note,is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note MULTISTATE FIXED RUTS NOTE--Single Rani 1y—ramie •.• I. vo 14 i 1: I•v�. I.,. Form 3200 U01(pose l o421nm) 9841.CV(4405) 4474324407 - Creative Thinking,Inc. EXHIBIT • ffi ^ GOTO(00221490 5 b • against each person individually or against all of us together.This means that any one of us maybe required to pay all of the amounts owed under this Note. - ' 9. WAIVERS I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. 'Pres entmenr means the right to require the Note Holder to demand payment of amounts due."Notice of Dishonor"means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 10. UNIFORM SECURED NOTE This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Note Holder under this Note,a Mortgage,Deed of Trust,or Security Dead(the"Security Instrument"),dated the same date as this Note, protects the Note Holder from possible losses which might result if I do not keep the promises which I make in this Note. That Security Instrument describes how and under what conditions I maybe required to make immediate payment in full of all amounts I owe under this Note. Some of those conditions arc described as follows: If all or any part of the Property or any Interest in the Property is sold or transferred(or ifBorrower isnot a natural person and a beneficial interest in Borrower is sold or transferred)without Lender's prior written consent,Lender may require immediate payment in full of all sums secured by this Security Instrument. However,this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option,Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument.If Borrower fails to ay these sums prior to the expiration of this period,Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. WITNESS THE HAND(S)AND SEAL(S)OF THE UNDERSIGNED. ~j. (Seal) Borrower Kenneth L.Ausman/� �st�% co LLud,...,J (Seal) B ower Jaime Lococo Ausman (Seal) Borrower (Seal) Borrower WITHOUT RECOURSE • [Sign Original Only] PAY TO THE ORDER OF Countrywide Bank,FSB Iowa State Bank and Trust Company all r/ Pe•,rf10e►ve,Vtce-P ��ant r-3 O n -n ,...4 n-< 1 - s4 rn -m co • ON • D� MUL'RSTATE FIXED RATE NOTE-Single Family—Fannie Mae/Fratdie Mae UNIFORM INSTRUMENT Form 3200 1,01 1pexe 2 nJ2 pager/ 9847.CV(4A5) 44747 Z4-007 Creative Thinking,Inc. GOTO(0022149,) • PURCHASE MONEY MORTGAGE MORTGAGE ti• • •al DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3,11,13,18,20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A) "Security instrument"means this document,which is dated June 13th . , 2007 ,together with all Riders to this document. (B) "Borrower"is Kenneth L.Ausman and Jaime L.Lococo Ausman,as husband and wife Borrower is the mortgagor under this Security Instrument. (C) "Lender"is Jnw.a.Sta• 1.,. :,, ,"•:, .Lender iss address is a Corporationoranized and existing under the laws ofthe State of Town LenderLender is the mortgagee under this Security Instrument. (1)) "Note"means the promissory note signed by Borrower and dated lune 13th , 2007 . The Note states that Borrower owes Lender One Hundred Sixty Four Thousand and 00/100 Dollars(U.S.$164,000.60 )plus interest.Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than July 1,2037 (E) "Property"meansthe property that is described below under the heading"Transfer of Rights in the Property." (F) "Loan"means the debt evidenced by the Note,plus interest,any prepayment charges and late charges due under the Note,and all sums due under this Security Instrument,plus interest. (G) "Riders"means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower[check box as applicable]: ❑ Adjustable Rate Rider ❑ Condominium Rider 0 Second Home Rider ra • Bal oon Rider ❑ Planned Unit Development Rider Ig Other(s)[specify]Tax Exempt Q O 1-4 Family Rider 0 BiweeklyPayenent.Rider Financing Rider 11 (H) "Applicable Law"means all controlling applicable federal,state and local statutes,regulations,ordinances and -'f>--1 :sts, administrative rules and orders(that have the effect of law)as well as all applicable final,non-appealable judicial opinions. 0—‹ (I) "Community Associa tion Dues,Fees,and Assessments"means all dues,fees,assessments and othercharges that are V imposed on Borrower or the Property by a condominium association,homeowners association or similar organization. m (J) "Electronic Funds Transfer"means any transfer of funds,other than a transaction originated bycheck,draft,or similar - rt7 3 paper instrument,which is initiated through an electronic terminal,telephonic instrument,computer,or magnetic tape so as 71,7 to order,instruct,or authorize a financial institution to debit or credit an account.Such term includes;but is not limited to, • .7 IJ point-of-sale transfers,automated teller machine transactions,transfers initiated by telephone,wire transfers,and automated ' clearinghouse transfers. (K) "Escrow Items"means those items that are described in Section 3. (L) "Miscellaneous Proceeds"means any compensation settlement,award of damages,or proceeds paid by anythird party (other than insurance proceeds paid under the coverages described in Section 5)for:(I)damage to,or destruction of,the Property;(ii)condemnation or other taking of all or any part of the Property;(iii)conveyance in lieu of condemnation;or (iv)misrepresentations of,or omissions as to,the value and/or condition of the Property. (M) "Mortgage Insurance"means insurance protecting Lender against the nonpayment of,or default on,the loan. (N) "Periodic Payment"means the regularly scheduled amount due for(i)principal and interest under the Note,plus(ii) any amounts under Section 3 of this Security Instrument. (0) "RESPA"means the Real Estate Settlement Procedures Act(12 U.S.C.§2601 et seq.)and its implementing regulation, Regulation X(24 C.F.R.Part 3500),as they might be amended from time to time,or any additional or successor legislation or regulation that governs the same subject matter.As used in this Security Instrument,"RESPA"refers to all requirements and restrictions that are imposed in regard to a"federally related mortgage loan"even if the Loan does not qualify as a "federally related mortgage loan"under RESPA. (P) "Successor in Interest of Borrower"means any party that has taken title to the Property,whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender:(i)the repayment of the Loan,and all renewals,extensions and modifications of the Note;and(ii)the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose,Borrower irrevocably mortgages,grants and conveys to Lender,with power of sale,the following described property located in the County of Johnson [Type of Recording Jurisdiction] [Name of Recording Jurisdiction) IOWA--Single F:unity—Fanale Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 2 of9 pages) 9742.CV(7105) 4474524.007 Creative Thinking,Inc. • GOTO(0022f49b) EXHIBIT lB 1110 Beginning at a point on easterly line of Lot 24, Part Six Valley view Heights, an Addition to Coralville, Iowa, according to the plat thereof • recorded in Book 9, Page 30, Plat Records of Johnson County, Iowa, said point being 80.00 feet southerly from the northeasterly corner of said Lot 24; thence southerly along said easterly line 24.52 feet to the 'southeasterly corner of said Lot 24; thence north 81'46'18" West 113.78 feet along the southerly line of said Lot 24 to the southwesterly corner of said 'Lot 24; thence North 01'04'00" East 19.70 feet along the westerly line of ' said Lot 24; thence easterly to the point of beginning. • and ' Lot 31 of Amendment to Revision of Part one of Valley View Heights, an • Addition to Coralville, Iowa, according to the plat thereof recorded in Book 6, Page 21, Plat Records of Johnson County, Iowa. • • 0 which currently has the address ofISOS 10th St. o x N [Street] C - Coralville ,Iowa 52241 ('Property Address"): '3> [City] [Zip Code] TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances,and fixtures now or hereafter a part of the property.All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Secunty Instrument as the'Property." BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered,except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands,subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. • UNIFORM COVENANTS. Borrower and Lender covenant and a as follows: 1.Payment of Principal,Interest,Escrow Items,Prepayment Charges,and Late Charges.Borrower shall pay when due the principal of,and interest on,the debt evidenced by the Note and anyprepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3.Payments due unddr the Note and this Security Instrument shalt be made in U.S.currency.However,if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid,Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms,as selected byLender.(a)cash;(b)money order;(c)certified check,bank check,treasurer's check orcashier's check,provided any such check is drawn upon an institution whose deposits are insured by a federal agency,instrumentality,or entity;or(d) Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current.Lender may accept any payment or partial payment insufficient to bring the Loan current,without waiver of any rights hereunder orprejudiceto its rights to refuse such payment or partial payments in the future,but Lender is not obligated to apply such payments at the time such payments are accepted.'leach Periodic Payment is applied as of its scheduled due date,then Lender need not pay interest on unapplied funds.Lender may hold such unapplied funds until Borrower makesayment to bring the Loan current. If Borrower does not do so within a reasonable period of time,Lender shall either apply such funds or return them to Borrower.If not applied earlier,such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument-or performing the covenants and agreements secured by this Security Instrument 2.Application of Payments or Proceeds.Except as otherwise described in this Section 2,all payments accepted and applied by Lender shall be applied in the following order of priority: (a)interest due under the Note;(b)principal due under the Note;(c)amounts due under Section 3.Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges,second to any other amounts due under this Security Instrument,and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due,the payment may be applied to the dehnquent.payment and the late charge. If more than one • Periodic Payment is outstanding,Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if,and to the extent that,each payment can be paid in full.To the extent that any excess exists after the pa nt is applied to the full payment of one or more Periodic Payments,such excess may be applied to any late charges due.Votary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments,insurance proceeds,or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date,pr change the amount,of the Periodic Payments. 3.Funds for Escrow Items.Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full,a sum(the"Funds")to provide for payment of amounts due for:(a)taxes and assessments and other items which can attain priority over this Secunty Instrument as a lien or encumbrance on the Property,(b)leasehold payments or ground rents on the Property,if any;(c)premiums for any and all insurance required byLender.under Section 5; and(d)Mortgage Insurance premiums,if any,or any sums payable by Borrower to Lender in lieu of theyment of Mortgage Insurance premiums in accordance with the provisions of Section 10.These items are called"Escrow Items."Atorigination or at any time during the term of the Loan,Lender may require that Community Association Dues,Fees,and Assessments,if any,be escrowed by Borrower,and such dues,fees and assessments-shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section.Borrower shall pay Lender the Funds for Escrow Items IOWA-Single Family-Farvda MnelFreddle Mac UNIFORM INSTRUMENT Form 3816 1N1 (pots 3 of 9 pages) 9742-CV(7/03) 4474524-007 Creative Thinking,Inc. GOTO(00221.49b) 1110 unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items.Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing.In the event of such waiver,Borrower shall pay directly,when and where payable,the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and,if Lender requires,shall furnish to Lender receipts evidencing such payment within such time period as Lender may require.Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument,as the phrase "covenant and agreement"is used in Section 9.If Borrower is obligated to pay Escrow Items directly,pursuant to a waiver, and Borrower fails to pay the amount due for an Escrow Item,Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and,upon such revocation, Borrower shall pay to Lender all Funds,arid in such amounts,that are then required under this Section 3, Lender may,at any time,collect and hold Funds in an amount(a)sufficient to permit Lender to apply the Funds at the time specified under RESPA,and(b)not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates ofexpenditures offuture Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency,instrumentality,or entity (including Lender,if Lender is an institution whose deposits are so insured)or in any Federal Home Loan Bank.Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA.Lender shall not charge Borrower for holding and applying the Funds,annually analyzing the escrow account,or verifying the Escrow Items,unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds,Lender shall not be required to pay Borrower any interest or earnings on the Funds.Borrower and Lender can agree in writing,however,that interest shall be paid on the- Funds. Lender shall give to Borrower,without charge,an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow,as defined under RESPA,Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow,as defined under RESPA,Lender shall notify Borrower as reQuired by RESPA,and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA,but in no more than 12 monthlypayments. If there is a deficiency of Funds held in escrow,as defined under RESPA,Lender shall notify Borrower asreq utred by RESPA,and Borrower shall paytoLender the amount necessary to make up the deficiency in accordance with'RESPA,but in no more than 12 monthly payments. Upon payment in full of all-sums secured by this Security Instrument,Lender shall promptlyrefund to Borrower any Funds held by Lender. 4.Charges;Liens.Borrower shall pay all taxes,assessments,charges,fines,and impositions attributable to the Property which can attain priorityover this Seetrrtylnstrument,leasehold payments or ground rents on the Property,if any, and Community Association Dues,Fees,and Assessments,if any.To.the extent that these items areEscrowltems,Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower:(a) r-7 agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender,but only so long as Borrower is performing such agreement;(b)contests the lien in good faith by,or defends against enforcement of the lien in, 0 legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are "rF.„, pending,but only until such proceedings are concluded;or(c)secures from the holder oldie lien an agreement satisfacloryto 0 1 1 Lender subordinating the lien to this Security Instrument.If Lender determines that any part of the Property is subject to a , ...� lien which can attain priority over this Security Instrument,Lender may give Borrower a notice identifying the lien. C)Within l 1 10 days of the date on which that notice is given,Borrower shall satisfy the lien or take one or more of the actions set forth --i,l v above in this Section 4. . rn Lender may require Borrower to pay a one-time charge for areal estate tax verification and/or reporting service '<t ' , used by Lender in connection with this Loan. rf1ci • 5.Property Insurance.Borrower shall keep the improvements now existing or hereafter erected on the Property — insured against loss by fire,hazards included within the term"extended coverage,"and any other hazards including,but not limited to,earthquakes and floods,for which Lender requires insurance.This insurance shall be maintained in the amounts (including deductible levels)and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by .p Borrower subject to Lenders right to disapprove Borrower's-choice,which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan,either: (a)a one-time charge for flood zone determination,certification and tracking services;or(b)a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which•reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above,Lender may obtain insurance coverage,at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore,such coverage shall cover Lender,but might or might not protect Borrower,Borrower's equity in the Property,or the contents of the Property,against any risk,hazard or liability and might provide greater or lesser coverage than was previously in effect Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained.Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable,with such interest,upon notice from Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies,shall include a standard mortgage clause,and shall name Lender as mortgagee and/or as an additional loss payee.Lender shall have the right to hold the policies and renewal certificates.If Lender requires,Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices.If Borrower obtains any form of insurance coverage,not otherwise required by Lender,for damage to,or destruction of,the Property,such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee. In the event of loss,Borrower shall give prompt notice to the insurance carrier and Lender.Lender maymake proof of loss if not made promptly by Borrower.Unless Lender and Borrower otherwise agree in writing,anyinsurance proceeds, whether or not the underlying insurance was required by Lender,shall be applied to restoration or repair of the Property,if the restoration or repair is economically feasible and Lender's security is not lessened.During such repair and restoration period,Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction,provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed.Unless au agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds,Lender shall not be required to pay Borrowerany interest or earnings on such proceeds.Fees for public adjusters,or other third parties,retained by Borrower.shall not be paid•out of the insurance proceeds and'shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened,the insurance proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due, with the excess,if any,paid to Borrower. Such insurance proceeds shall be applied in the order providedfor in Section 2. IOWA—Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Forth 3016 U01(purge I of 9 pates) 9742.CV(7N5) 4474524-007 Creat ire Thinking,Ire. 6OTO(0022fd9b) i • If Borrower abandons the Property,Lender may file,negotiate and settle any available insurance claim and related matters.If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim,then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event,or if Lender acquires the Property under Section 22 or otherwise,Borrower hereby assigns to Lender(a)Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and(b)anyother of Borrower's rights(other than the right to any refund of unearned premiums paid byBorrower)under all insurance policies covering the Property,insofar as such rights are applicable to the coverage of the Property.Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument,whether or not then due. 6. Occupancy.Borrower shall occupy,establish,and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy,unless Lender otherwise agrees in writing,which consent shall not be unreasonably withheld,or unless extenuating circumstances exist which are beyond Borrowers control. 7. Preservation,Maintenance and Protection of the Property;Inspections. Borrower shall not destroy, damage or impair the Property,allow the Property to deteriorate or commit waste on the Property.Whether or not Borrower is residing in the Property,Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible,Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage.If insurance or condemnation proceeds are paid in connection with damage to,or the taking of,the Property,Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property,Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property.Lender shalt give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8.Borrower's Loan Application. Borrower shall be in default if,during.the Loan application process,Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materiallyfalse, misleading,or inaccurate information or statements to Lender(or failed to provide Lender with material'information)in connection with the Loan. Material representations include,but are not limited to,representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a)Borrower fails to perform the covenants and agreements contained in this Security Instrument,(b)there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Secuntylnstnunent(such as a proceeding in bankruptcy,probate,for condemnation or forfeiture,for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations),or(c)Borrower has abandoned the Property,then Lender r. may do and pay for whatever-is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting andior assessing the value of the Property,and securing and/or repairing the a Property.Lender's actions can Include,but are not Limited to:(a)paying any sums secured by a lien which has priority over .. this Security Instrument;(b)appearing in court;and(c)paying reasonable attorneys'fees to protect its interest in the ,._. j Property and/or rights under this Security Instrument,including its secured position in a bankruptcy proceeding. Securing .2 IMO= the Property includes,but is not limited to,entering the Property to make repairs,change locks,replace or board up doors and windows,drain water from pipes,eliminate building or other code violations or dangerous conditions,and have utilities { . 1 turned on or off. Although Lender may take action under this Section 9,Lender does not have to do so and is not under any {C) v H"�'1 duty or obligation to do so.Itis agreed that Lender incurs no liability for not taking any or all actions authorized under this „<r- Section 9. —O B t t Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument.These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, Q N with such interest,upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold,Borrower shall comply with all the provisions of the lease.If Borrower acquires fee title to the Property,the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan,Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect.If,for any reason,the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance,Borrower shall pay thepremiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect,at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect,from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available,Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect.Lender will accept,use and retain these payments as a non-refundable loss reserve in lieu ofMortgage Insurance. Such loss reserve shall be non-refundable,notwithstanding the.fact that the Loan is ultimately paid in full,and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve.Lender can no longerrequire loss reserve payments if Mortgage Insurance coverage(in the amount and for the period that Lender requires)provided by an insurer selected by Lender again becomes available,is obtained,and Lender requires separately designated payments toward the premiums for Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was requircd.to make separately designated payments toward the premiums for Mortgage Insurance,Borrower shall pay the premiums required to maintain Mortgage Insurance in effect,or to provide a non-refundable loss reserve,until • Lender's requirement for Mortgagelnsurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is re9ulred by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender(or any entity that purchases the Note)for certain losses it may incur if Borrower does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time to time,and may enter into agreements with other parties that share or modify their risk,or reduce losses.These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party(or parties)to these agreements. These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements,Lender,any purchaser of the Note,another insurer,any reinsurer,any other entity, or any affiliate of any of the foregoing, may receive(directly or indirectly)amounts that derive from(or might be characterized as)a portion of Borrower's payments for Mortgage Insurance,in exchange for sharing or modifying the mortgage insurer's risk,or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer,the arrangement is often termed"captive reinsurance." Further: (a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance,or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance,and they will not entitle Borrower to any refund. • IOWA-Single Family--Fannie Mae/Freddle Mot UNIFORM INSTRUMENT Form 3016 1/01(rage Sof 9 pages) 9742.CV(7103) 4474324-007 Creative Thinking,Inc ' • GOTO(0022149b) 411 (b)Any such agreements will not affect the rights Borrower has-tinny-with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law.These rights may include the right to receive certain disclosures,to request and obtain cancellation of the Mortgage Insurance,to have the Mortgage Insurance terminated automatically,and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 11.Assignment of Miscellaneous Proceeds;Forfeiture.All Miscellaneous Proceeds arc hereby assigned to and shall be paid to Lender. lithe Property is damaged,such Miscellaneous Proceeds shall be applied to restoration or repair of the Property,if the restoration or repair is economically feasible and Lender's security is not lessened.During such repair and restoration period,Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction,provided that such inspection shall be undertaken promptly.Lender may ay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds,Lender shall not be required to pay Borrower any interest or earnings.on such Miscellaneous Proceeds.If the restoration or repair is not economically feasible or Lender's secerity would be lessened,theMrscellaneous Proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking,destruction,or loss in value of the Property,the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with the excess,if any,paid to Borrower. In the event of a partial taking,destruction,or loss in value of the Property in which the fair market value of the Property immediately before the partial taking,destruction,or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking,destruction,or loss in value,unless Borrower and Lender otherwise agree in writing,the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction:(a)the total amount of the sums secured immediately before the partial taking,destruction,or loss in value divided by(b)the fair market value of the Property immediately before the partial taking,destruction,or loss in value. Any balance shall be paid to Borrower. In the event of a partial taking,destruction,or loss in value of the Property in which the fair market value of the Property immediately before the partial taking,destruction,or loss in value is less than the amount of the sums secured immediately before the partial taking,destruction,or loss in value,unless Borrower and Lender otherwise agree inwriting, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower,or if,after notice by Lender to Borrower that the Opposing Party(as defined in the next sentence)offers to make an award to settle a claim for damages,Borrower fails to respond to Lender within 30 days after the date the notice is given,Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security instrument,whether or not then due. "Opposing Party"means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding,.whether civil or criminal,is begun that,in Lender's 0 jud t,could result in forfeiture of the Property or other material impairmentofLender'sinterest inthe Property orrights 5(') uneer this Security Instrument Borrower can cure such a default and,if acceleration has occurred,reinstate as provided in -0 T1 Section 19,by causing the action or proceeding to be dismissed with a ruling that,in Lender's judgment,precludes forfeiture ' -4 73 of the Property or other material impairment of lender's interest in the Property or rights under this Secuntylrs rument The -)-< proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are 1 hereby assigned and shall be paid to Lender, —"I C7 M All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. _f11 t7 12. Borrower Not Released;Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted byLe der to Borrower or an Successor - in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend C r • time for payment or otherwise modify amortization of the sums secured by this Security instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower.Any forbearance by Lender in exercising anyright or remedy including,without limitation,Lender's acceptance of payments from third persons,entities or Successors in Interest of Borrower or in amounts less than the amount then due,shall not be a waiver of or preclude the exercise of any right or remedy. 13.Joint and Several Liability;Co-signers;Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However,any Borrower who co-signs this Security Instrument but does not execute the Note(a"co-signer"):(a)is co-signing this Securitylnstrument only to mortgage,grant and convey the co-signer's interest in the Property under the terms of this Securitylnstrument;(b)is not personallyobligated to pay the sums secured by this Security Instrument;and(c)agrees that Lender and any other Borrower can agree to extend, modify,forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co- signers consent. Subject to the provisions of Section 18,any Successor in Interest ofBorrowerwho assumes Borrower's obligations tinder this Security Instrument in writing,and is approved by Lender,shall obtain alt of Borrower's rights and benefits under • this Security Instrument. Borrower shall not be released from,Borrower's obligations and liability under this Security Instrument unless lender agrees to such release in writing.The covenants and agreements of this Security.lnstmment shall bind(except as provided in Section 20)and benefit the successors and assigns of Lender. 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default,for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument,including, hut not limited to,attorneys'fees,property inspection and valuation fees.In regard to any other fees,the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee.Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law. If the Loan is subject to a law which sets maximum loan charges,and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits,then:(a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the perrriitted limit;and(b)any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower.Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal,the reduction will be treated as a partial prepayment without any prepayment charge(whether or nota prepayment charge is provided for under the Note).Borrower's acceptance of any such refund mode by direct paymentto Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. • IS. Notices. All notices given by Borrower or Lender in connection with this Security Instrument Must be in writing.Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by fust class mail or when actually delivered to Borrower's notice address if sent by other'means.Noticeto any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. IOWA-Single Family-Fannie Mae/Freddie Mar UNIFORM INSTRUMENT Farm 5016 llni (page 6 of 9 pasts) 9742,CV(MS) 4474724 007 Creative Thinking,Inc. GOTO(0022(49b) • Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time.Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lenders address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received byLender. If any notice required by this Security Instrument is also required under Applicable Law,the Applicable Law requirement will satisfy the corresponding requirement under this Secunty Instrument. 16. Governing Law;Severability;Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law.Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent,but such silence shall not be construed as a prohibition against agreement by contract.Inn the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law,such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. As used in this Security Instrument(a)words of the masculine gender shall mean and include correspondi ng neuter words or words of the feminine gender;(b)words in the singular shall mean and include the plural and vice versa;and(c)the word"may"gives sole discretion without any obligation to take any action. 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. 18.Transfer of the Property or a Beneficial Interest in Borrower.As used in this Section I8,"Interest in the Property"means any legal or beneficial interest in the Property,including,but not limited to,those beneficial interests transferred in a bond for deed,contract for deed,installment sales contract or escrow agreement,the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred)without Lender's prior written consent,Lender may require immediate payment in full of all sums secured by this Security Instrument, However,this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option,Lender shall give Borrower notice of acceleration.The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period,Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions,Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of:(a)five days before sale of the Property pursuant to any power of sale contained in this Security Instrument;(b)such other period as Applicable law might specify for the terrmnation of Borrower's right to reinstate;or(c)entryof ajudgment enforcing this Security Instrument. Those conditions are that Borrower:(a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred;(b)cures any default of any other covenants or agreements;(c)pays all expenses incurred in enforcing this Security Instrument,including,but not limited to,reasonable attorneys'fees,property ins ction and valuation fees,and other fees incurred for the purpose of protecting Lender's interest in the Property and rightsunder this Security Instrument;and(d)takes such action as Lender may reasonably require to assure that Lender's Interest in the Property and rights under this Security Instrument,and Q_ Borrower's obligation to pay the sums secured by this Security Instrument,shall continue unchanged.Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms,as selected by Lender: Zee (a)cash;(b)money order;(c)certified check,bank check,treasurer's check or cashier's check,provided any such check is > drawn upon an institution whose deposits are insured by a federal agency,instrumentality or entity;or(d)-Electronic Funds .D Transfer. Upon reinstatement by Borrower,this Security Instrument and obligations secured hereby shall remain fully C")"C effective as if no acceleration had occurred.However,this right to reinstate shall not apply in the case of acceleration under ""' I Section 18. —d CJ V 20. Sale of Note;Change of Loan Servicer;Notice of Grievance. The Note or a partial interest in the Note r I t I (together with this SecurityInstrument can be sold one or more times without prior notice to Borrower.A sale might result in a change in the entity(known as the 'Loan Servicer")that collects Periodic Payments due under the Note and this Security em,a "" 0 Instrument and performs other mortgage loan servicing obligations under the Note,this Security Instrument,and Applicable 7x N Law. There also might be one or more changes of the loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer,Borrower will be given written notice of the change which will state the name and address of the new D Loan Servicer,the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note,the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence,join,or be joined to any judicial action(as either an individual litigant or the member of a class)that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of,or any duty owed by reason of,this Security Instrument,until such Borrower or Lender has notified the other party(with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving ofsuch notice to take corrective action.If Applicable law provides a time period which must elapse before certain action can be taken,that time period will be deemed to be reasonable for purposes of this paragraph.The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 21. hazardous Substances.As used in this Section 21; (a)"Hazardous.Substances"are those substances defined as toxic or hazardous substances,pollutants,or wastes by Environmental Law and the following substances:gasoline, kerosene,other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde,and radioactive materials;(b) "Environmental Law"means federal laws and Jaws of the jurisdiction where the Property is located that relate to health,safety or environmental protection;(c)"Environmental Cleanup"includes any response action,remedial action,or removal action,as defined in Environmental Law;and(d)an "Environmental Condition'means a condition that can cause,contribute to,or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence,use,disposal,storage,or release of any Hazardous Substances,or threaten to release any Hazardous Substances,on or in the Property.Borrower shall not do,nor allow anyone else to do, anything affecting the Property(a)that is in violation of any Environmental Law,(b)which creates an Environmental Condition,or(c)which,due to the presence,use,or release of a Hazardous Substance,creates a condition that adversely affects the value of the Property.The preceding two sentences shall not apply to the presence,use,or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property(including,but not limited to,hazardous substances in consumer products). Borrower shall promptly give Lender written notice of(a)any investigation,claim,demand,lawsuit or otheraction by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b)any Environmental Condition,including but not limited to, any spilling,leaking,discharge,release or threat of release of any Hazardous Substance,and(c)any condition caused by the IOWA—Singlo Family—Fannie MaelFreetdle Mac UNIFORM INSTRUMENT Foran 3016 1/0I (page 7 of 9 pages) 9742.CV(7105) 4474524-007 Creative Thinking,Inc. GOTO(0025149b) • • • presence,use or release of a Haiardous Substance which adversely affects the value of the Property.IfBorrower learns,or is notified by any governmental or regulatory authority,or any private party,that any removal or other remediation of any Hazardous Substance affecting the Property is necessary,Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. NON-UNIFORM COVENANTS: Borrower and Lender further covenant and agree as follows: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument(but not prior to acceleration under Section 18 unless Applicable Law provides.otherwise). The notice shall specify:(a)the default;(b)the action required to cure the default;(c)a date,not less than 30 days from the date the notice is given to Borrower,by which the default must be cured;and(d)that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument,foreclosure by Judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice,Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses Incurred in pursuing the remedies provided in this Section 22,including,but not limited to,reasonable attorneys'fees and costs of title evidence. 23. Release. Upon payment of all sums secured by this Security Instrument,Lender shall release this Security Instrument. Lender may charge Borrower a fee for releasing this Security Instrument,but only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law. 24. Waivers.Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to the Property. Borrower waives any right of exemption as to the Property. 25.HOMESTEAD EXEMPTION WAIVER.I UNDERSTAND THAT HOMESTEAD PROPERTY IS IN MANY CASES PROTECTED FROM THE CLALMS OF CREDITORS AND EXEMPT FROM JUDICIAL SALE;AND THAT BY SIGNING THIS MORTGAGE,I VOLUNTARILY GIVE UP MY RICHT TO THIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE. .lune 13,2007 Kenneth L.Ausman [Date] _ rJ es / o !/Ge..,Zl,41,6 CO June 13,2007 � acme L.Lococo Ausman • . [Date) >: 11 26. Redemption Period.If the Property is less than 10 acres in size and Lender waives in any foreclosure pro- ceeding any right to a deficiency judgment against Borrower,the period of redemption from judicial sale shall be reduced to 6 months. If the court finds that the Property has been abandoned by Borrower and Lender waives any right to a deficiency - m judgment against Borrower,the period of redemption from judicial sale shall be reduced to 60 days. The provisions — of Otis Section 26 shall be construed to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ <` IV CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.NO OTHER TERMS > 0 OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY CD ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. • BY SIGNING BELOW,Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. Witnesses: (Seal) • Borrower Kenneth L Ausman (Seal) Bo ower Janne L.Lococo Ausman (Seal) Borrower (Seal) Borrower IOWA—Single Family—Fannie Mae/Fneddie Mac UNIFORM INSTRUMENT Form 3016 1101 (page 8 of 9 pager) 9742.CV(7105) 4474524-007 Creative Thinking,Inc. COTO(0022f49b) • [Space Below This Line For Acknowledgment] STATE OF Iowa )ss: COUNTY OF Johnson On this 13th day of June 2007 ,before me,the undersigned,a Notary Public in and for said county and state,personally appeared:Kenneth L.Ausman and Jaime L.Lococo Ausman.as husband and wife to me personally known to be the person(s)named in and who executed the foregoing instrument,and acknowledged that they executed the same as their voluntary act and deed. My commission expires:08/14/2010 • n CHRISi AAv commission 697834 . drorntyinte � Christine L Fehiberg [Space Below This Line Reserved For Lender and Recorder • p _ Se C) 71 r.r 7-7-1 "*..1 rn �r-- { 111 -o 7-1 D V't O IOWA-Single FendlyFannie Mae/Freddte Mae UNIFORM INSTRUMENT Fonn 3016 Uel (page 9 of 9 pages) 9742.CV OAS) 4474524007 Creative Thinking,Inc. G070(00221496) 41110 11110 lei,` : ►o. o; oft, • '' • Jovr$s} ,,.,r Trust a — x•. Prepared by and RETURN TO: Iowa State Bank PO Box 1700,Iowa City,IA 52244 .• telephone 319-35e-5960 • Tele of Document Rider to Mortgage Grantor: ( r($) Grantee: Iowa State Sank and Trust Co (lender) 0 - RIDER TO MORTGAGE "="L •--9 VZi rams This Tax-Exempt Financing Rider to Mortgage,made the date noted below,is Incorporated Into and shall be deemed to amend and supplement the Mortgage of the same date given by the undersigned(tire'Mortgagor)to secure the Mortgagor's '"< Nota to krwe State Bank 8 Trust Company �l . (herein,the"Lender)and covering the properly desatbed In the Mortgage(the'Property)to which this Rider Is attached. s The provisions hereof shall prevail notwithstanding any contrary provisions In any note or other instrument which evidences IT) -171 the obligations secured by the Mortgage. As long as the Mortgage Is held by the Iowa Finance,Authority or backs a mortgage-backed securfly held by the Iowa N Finance Authority,Countrywide Home Loans,Inc.(the'Servicer^)or such of he successors or assigns es may by separate Instrument assume responsibility for assuring compliance by the Malgagor with the provisions of this Rider,may dedaze all p sums secured by the Mortgage to be immediately due and payable It: (1)ail or part of the property is sold a otherwise transferred(other than by devise,descent or operation of law) by the Mortgagor to a purchaser or other transferee: a.who cannot reasonable be expected to occupy ma property as a principal residence within a reasonable time alter the sale or transfer,all as provided In Section 143(c)and(1)(2)of the Internal Revenue Code of 19e8,as emended(tire"Code");or b.who has had a present ownership Interest in a principal residence during any part of the three-year period ending on the date of the sate or transfer,all as provided M Section 143(d)end(I)(2)of the Code(except that the language'100 percent'shad be substituted for'95 percent or more'where the latter appears In Section 143(d)(t)),unless the properly Is in a Targeted Area;or c. at art acquisition cost which Is greater than 90 percent of the average area purchase price(greeter than 110 percent for Targeted Area maldarrces),all as provided In Section 143(e)and(0(2)of the Code;or d.who hes a gross family Income In excess of appffcabe median family Income;all as provided In Section 143(f)and(1)(2)of the Code;or (2)the Mortgagor tails,or ceases,to occupy the Property without the prior written consent of tire Mortgagee or its successors or assigns;or (3)the Mortgagor omits or misrepresente.a fact that Is material with respect to the*visions of Section t43 of the Code In the application for the Mortgage woch secures the Note. References are to the Code In effect on the date of the execution of the Mortgage and are deemed to Include the eppticable Implementing regulations. By signing below,the Mortgagor(s)accepts and agrees to the terms of the Rider to Mortgage. Date:• i- / � t'0 Borrower Borrower Kenneth L Ausman Jayne L Lo0oco Ausmen Typed Name Typed Name - ^-. CHRISTINE.L.FEHLf3ERG •/ This instrument was acknowledged before on f!O�/ '0 I�V~ ; a Coavn�;inssr�iicttnnnmtnNrorou��mber 197934 by Kenneth L Air man and Jaime L ••/• =d" f ' ; 1• ' FTwa3a9r"l • , Arica, ,e TA- PUBLIC in end .r ,Sidle AFFIDAVIT STATE OF IOWA ) SS COUNTY OF POLK ) I, Benjamin W. Hopkins, being first duly sworn on oath depose and state that I am one of the attorneys for the Plaintiff in this cause; that I am a regular practicing attorney engaged in this case; that there has been no agreement, express or implied, between myself and my client, or between myself and any other person except attorneys associated with me in this case, for any sharing or division of the attorney fees to be taxed herein. I further depose and state that true copies of the note and mortgage and any other documents declared upon in the foregoing Petition are now in my actual possession; that I have read the above and foregoing Petition, know the contents thereof, have personal knowledge of the facts therein stated, and that the statements and allegations therein are true as . verily believe. "IA Ben,` - 7 Hopki , ! : 573 Subscribed and sworn to before me this/ no day of April , 2009 . tr, i (,), f / 0. , . Notary Public in and or they,, ,,,, ,,„ PATRICIA S. WOLF State of Iowa 6 a ° T.Commission Number 732803 n s� My Commission Expires ---1 ii owl. 2."1:-11 riC) v m 673 Exhibit "C" > %.n 0 END OF CASE FILE • CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE • PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540 • (319) 356-6030 PLAINTIFF: HILLS BANK&TRUST CO Docket No P9-00074 State IOWA vs. Court No EQCV070208 I County JOHNSON DEFENDANT: HESSELTINE, MELISSA M Ref No Received 01/06/2009 DEFENDANT: CITY OF IOWA CITY Requestor(s) Phone TERPSTRA,H RAYMOND II IFi , (o61 (319) 364-2467 Name CITY OF IOWA CITY I Party Type DEFENDANT Address 410 E WASHINGTON ST IOWA CITY IA 52240- Phone (319) 356-5030 E-Mail Fax Employer Zone I— Comments !ATTY REQUESTS WE SERVE MAYOR LEHMAN • Documents Document Serve by Date OE PSR Description/Special Instructions ORIGINAL NOTICE AND ❑ 0 PETITION Service Information • - Attempts Log Date Time Server Notes Date b Time I S S�� Type Party �l�1J � JC'qtt Relationship ( 'AN< C,1 (lc- Race Sex k-- DOB 1 Location v\ ( 0 C— �4t6(1 'h5To( Miles Fee Officer Notes: O 9 -C I= `') Viv101 'A1I0 VMOI • D u' >11D-10 A/10 Ltd :j }fid 9— N`15(Jl Printed:Tuesday,January 06,2009 Page 1 of 1 - - Y IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY HILLS BANK&TRUST CO. ) Case No. EQCV C)-70CD P- Plaintiff, ) ) ORIGINAL NOTICE vs. ) MELISSA M. HESSELTINE, CITY OF IOWA CITY, IOWA ) Defendants. ) TO THE ABOVE-NAMED DEFENDANTS: You are notified there is a Petition on file in the office of the Clerk of the above Court. A copy of this filing is attached. The Plaintiffs attorney is H. Raymond Terpstra II,whose address is 3600 First Avenue NE, Suite 101, Cedar Rapids,Iowa 52402. The Plaintiffs attorney's phone number is (319) 364-2467, with a facsimile transmission number of(319) 364-0923. You must serve a motion or answer within 20 days after service of this Original Notice upon you, and within a reasonable time thereafter file your motion or answer, in the Iowa District Court for Johnson County, at the County Courthouse in Iowa City, Iowa. If you do not,judgment by default may be rendered against you for the relief demanded in the Petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator at 1-319-398- 3920. (If you are hearing impaired, call Relay Iowa TTY at 1-800-735-2942). X110 (SEAL) LODEMA BERT(L.,Y oc444,,,,64;:e. CL OF THE ABOVE COURT' 4:1A-T--cr Johns n County Courthouse Iowa City, IA 52240 C) .. IMPORTANT -� o \ _ -Ti YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT P.....YOUR INTERESTS. �..y J v m -b Ill >c 91:i ,1110 'o # > art u 'ii r 9- NW ,‘.:JZ CC : CM I B„d • F(N1kN C� IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY HILLS BANK& TRUST CO. ) ) Case No. EQCV a7 c'.. C* Plaintiff, ) ) PETITION IN EQUITY FOR vs. ) FORECLOSURE, WITHOUT MELISSA M. HESSELTINE, CITY OF ) REDEMPTION AND WITH IOWA CITY, IOWA, ) WAIVER OF IN PERSONAM JUDGMENT) ,..� Defendants. � r NOTICECr, _ . 1 THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT':= Q REDEMPTION. THIS MEANS THAT THE SALE OF THE MORTGA PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGM 1 N UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL TWELVE MONTHS (or SIX MONTHS if the petition includes a waiver of deficiency judgment) FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMILY DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO p ^ IMMEDIATE POSSESSION OF THE MORTGAGED PROPERTY. YOU MAW PURCHASE AT THE SALE. -_17 Q. r- COMES NOW the Plaintiff, Hills Bank and Trust Company, cou p Y� throu h g 1xs�, ands respectfully states as follows: D 1. Plaintiff, Hills Bank and Trust Company("the Bank"), is a state banking organization organized under Chapter 524, Iowa Code. o 2. Defendant Melissa M. Hesseltine, a single person, ("Borrower")wa 7 Tat a times materially hereto a resident of Johnson County, Iowa. , COUNT I—LOAN NO. 4778619 ("8619") 0„ - w 3. The Borrower made, executed and delivered to the Plaintiff her written adjustable rate note, Loan No. 4778619, dated June 5,2001 in the original principal sum of$44,200.00. The note required monthly payments and came to be in default. The balance due on the note as of November 21, 2008 is in the sum of$40,855.64. Interest accrues on the unpaid principal balance of$39,822.84 at the rate of 7.375%per annum. Per diem accrual is in the amount of$8.04639. A copy of the note is attached hereto as Exhibit "A"and is incorporated herein by reference. 4. Note No. 8619 is secured by a written real estate mortgage dated June 5, 2001 filed of record in the office of the Johnson County, Iowa Recorder on June 11, 2001 in Book 3074 at page 209. The mortgage encumbered the following non-agricultural residential real estate, to-wit: Lot Seven (7) in Block Two (2), in Sunnyside Addition to Iowa City, Iowa, according to the recorded plat thereof. (locally known as 1315 Lukirk St., Iowa City, IA 52240). The property was and may still be the homestead of the Borrower. A copy of the mortgage is attached hereto as Exhibit "B"and is incorporated herein by reference. 5. The Borrower was given a written cure notice on January 7, 20085 The 724 Plaintiff is not required to send out a second notice of right to cure defaults withip)one �-� iii year measured from the date of the first cure notice. A copy of the January 7, 200 Eure notice is attached hereto as Exhibit"C"and is incorporated herein by reference. -� 6. The promissory note and the mortgage permit recovery by the Plaintiff of collection costs and attorney's fees. The Plaintiff's attorney's Affidavit is attached horeto as Exhibit "D"and is incorporated herein by reference. -i0 COUNT II—LOAN NO. 8009956401 ("6401") 7. The Borrower made, executed and delivered to the Plaintiff her home equity line of credit agreement dated December 2, 2003 in the original credit limit amount of$3,000.00, Loan No. 6401. The credit agreement is in default. The balance due on the credit agreement is in the sum of$2,185.23 as of November 21, 2008. Interest accrues on the unpaid principal component of the balance due in the sum of$2,169.18 at the rate of 6.25%per annum from and after November 21, 2008. A copy of the home equity line of credit agreement is attached hereto as Exhibit"E"and is incorporated herein by reference. 8. Note No. 6401 is secured under a home equity line mortgage dated November 26,2003 filed of record in the office of the Johnson County, Iowa Recorder on December 3, 2003 in Book 3673 at page 747. The mortgage encumbers the same.real o estate as the mortgage described in paragraph 4 above. A copy of the mortgage ice: attached hereto as Exhibit"F"and is incorporated herein by reference. c^ 9. The Borrower was given a notice of right to cure default on Note 64Kon r_ September 11, 2008. A timely cure did not occur and the note has been accelerated and N is due and payable in full. A copy of the notice is attached hereto as Exhibit"G"a&is - incorporated herein by reference. :17 �It COMMON CONCLUDING ALLEGATIONS r km 10. The Plaintiff has expended the sum of$65.00 for abstracting fees v SQt► '.? amounts properly added to the judgment, as is prayed for below. The Plaintiff is entitled to be reimbursed for all abstracting expenses and other advancements, if any, made by the Plaintiff for insurance premiums, real estate taxes and/or other costs during the pendency • of this action to protect the real estate and/or improvements thereto. Any and all advancements should be included as part of the indebtedness awarded as a judgment herein and secured by the aforementioned mortgages. 11. The City of Iowa City, Iowa has been named as a Defendant on account of a mortgage dated December 9, 2005 filed of record in the office of the Johnson County, Iowa Recorder on December 12,2005 in Book 3971 at page 914. There is also a second mortgage dated June 8, 2006 filed of record in the office of the Johnson County, Iowa Recorder on June 16, 2006 in Book 4038 at page 299. Whatever right, title and interest is claimed by this Defendant as mortgagee under the two mortgages or otherwise is subordinate and junior to the mortgagee's lien of the Plaintiff and as such is subject to foreclosure. 12. The Plaintiff has requested foreclosure without redemption pursuant to §654.20, Iowa Code. The Plaintiff WAIVES AN IN PERSONAM JUDGMENT AGAINST THE BORROWER. WHEREFORE, the Plaintiff prays that: n A. The Court enter an in rem judgment against the Johnson County, Ic93.4sa1 estate described above in the sum of$43,040.87 plus interest at the `�w blended rate of 7.3168%per annum from and after November 21, 2t70$, on the unpaid principal balance of$41,992.02 plus abstracting char ) a m advanced by the Plaintiff with abstracting charges advanced to date b jng l in the sum of$65.00,plus additional advancements by the Plaintiffcl any, and for the costs of this action, including the Plaintiffs reasonable : attorney's fees which should be assessed as court costs pursuant to iv §625.22, Iowa Code, and for other court costs. B. The Court enter judgment declaring the Plaintiffs mortgages to constitute a valid first lien on the real estate described herein, prior to and superior to any claim or interest of the Defendants and to foreclose said mortgages upon the real estate described above. C. The Court direct that a special execution issue directing the sale of the Johnson County, Iowa real estate described above by the Johnson County Sheriff and that, at the time of said sale, the Sheriff shall issue to the purchaser of the real estate described above a Sheriff's Deed. D. That the Court recite in the Decree of Foreclosure that no third persons may obtain an interest in and to the real estate being foreclosed hereunder after this action has been indexed by the Clerk of Court pursuant to §617.11, Iowa Code. E. That the Court order that if the purchaser at Sheriff's sale of all or a portion of the real estate foreclosed upon should be denied possession of the property by any of the Defendants, after obtaining a Sheriff's Deed, then a writ issue from the Court on the filing of a praecipe and request for the issuance of the writ directing the Johnson County Sheriff to put the purchaser at Sheriff's sale in possession of the subject-real estate or so much thereof as has been sold to satisfy the Plaintiff's judgment. F. That the Court enters such other orders and relief as the Court deems just and equitable in the premises including the retention of jurisdiction through the date of Sheriff's sale if the mortgage note is reinstated by one or both of the Defendants and thereafter by the owner and holder of the Sheriff's deed for the purpose of clearing title objections, if any, arising in the future relative to this foreclosure proceeding. Respectfully submitted, - • T r-- .�`� iL-IKkay ..nd - ..stra II AT000786.6 co U TE'•' 'i & EPPING rsa G.. 3601 First Avenue NE, Suite 101 Cedar Rapids, IA 52402 Ph: (319)364-2467 Fax: (319)364-0923 ATTORNEY FOR PLAINTIFF VMO1 'h11:} °M01 }11:13-10 9— Mis 03113 r may, 0 dy km .,.�a. 1,, -JL—LIJJJ N/U 1315 Lukirk Street _ Iowa City-, I.A. 52240 AUTO DE TL'. ►148'5926 4778619 BDW/mdd L�j (� ,' 30 year amort. ADJUSTABLE RATE NOTE (3 Year Treasury Index - Rate Caps) THIS NOTE CONTAINS PROViSIONS ALLOWING FOR CHANGES IN MY INTEREST RATE AND MY MONTHLY PAYMENT. THIS NOTE LIMITS THE AMOUNT MY INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE I MUST PAY. June 5, 2001 Iowa City Iowa (Date) iCityl [State) 1315 Lukirk Street Iowa City Iowa 52240 (Property Address) O .7 r-- 1. BORROWER'S PROMISE TO PAY In return for a loan that I have received, I promise to pay U.S. $ 44,200.00 (this amigti t is'a - h "Principal"), plus interest, to the order of the Lender. The Lender is Hills Bank and Trust Com.an . I will make all payments under this Note in the form of cash, check or maw.)order. I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note .';;ttansfe)dand who is entitled to receive payments under this Note is called the "Note Holder." 2. INTEREST 1 v-� Interest will be charged on unpaid principal until the full amount of Principal has been paid. I will pay interest at a yearly rate of 7.000 %. The interest rate I will pay will change in accordance with Section 4 of this Note. The interest rate required by this Section 2 and Section 4 of^this Note is the rate I will pay both before and after any default described in Section 7(B) of this Note. Interest to begin to accrue as of June 5, 2001. 3. PAYMENTS (A) Time and Place of Payments I will pay principal and interest by making a payment every month. I will make my monthly payment on the first day of each month beginning on July 1st 2001 I will make these payments every month until I have paid all of the principal and interest and any other charges described below that I may owe under this Note. Each monthly payment will be applied as of its scheduled due date and will be applied to interest before Principal. If, on June 1st , 2031 , I still owe amounts under this Note, I will pay those amounts in full on that date, which is called the "Maturity Date." I will make my monthly payments at 131 Main Street Hills, Iowa 52235) --3 or at a different place if required by the Note Holder. --) (B) Amount of My Initial Monthly Payments Each of my initial monthly payments will be in the amount of U.S. $ 294.06 . This amocht-may ctiange. (C) Monthly Payment Changes _;C or Changes in my monthly payment will reflect changes in the unpaid principal of my loan and in the i tprest to thaLn I must pay. The Note Holder will determine my new interest rate and the changed amount of my "? Payment i j;-"�11 accordance with Section 4 of this Note. r; 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES -' (A) Change Dates N The interest rate I will pay may change on the first day of June 1st 2004 , and on that day every 36th month thereafter. Each date on which my interest rate could change is called a "Change Date." ; (B) The Index Beginning with the first Change Date, my interest rate will be based on an Index. The "Index" is ttfezweekly . average yield on United States Treasury securities adjusted to a constant maturity of three years, as rhadG availat by the- Federal Reserve Board. The most recent Index figure available as of the date 45 days before each Changt=Pate is .,1t7i,Iled `he "Current Index." P z If the Index is no longer available, the Note Holder will choose a new index which is balled;upon G�npar bl ef information. The Note Holder will give me notice of this choice. s ----.2 k?) 1--7 • ‘,.—r -~ N MULTISTATE ADJUSTABLE RATE NOTE - 3 YEAR-ARM - Single Family - Form 3504 1/01 Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (page 1 of 4 F16467.LMG (1/01) /^1pages) (C) Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Three and 000/1000 percentage points ( 3.000 %) to the Current Index. The Note Holder will then round the resOlt of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D) below;.this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at my new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. (D) Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 9.000 % or less than 5.000 %. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than two percentage points (2.0%) from the rate of interest I have been paying for the preceding 36 months. My interest rate will never be greater than 13.000 (E) Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice. 5. BORROWER'S RIGHT TO PREPAY I have the right to make payments of Principal at any time before they are due. A payment of Principal only is known as a "Prepayment." When I make a Prepayment, I will tell the Note Holder in writing that I am doing so. I may not designate a payment as a Prepayment if I have not made all the monthly payments due under the Note. I may make a full Prepayment or partial Prepayments without paying a Prepayment charge. The Note Holder will use my Prepayments to reduce the amount of Principal that I owe under this Note. However, the Note Holder may apply my Prepayment to the accrued and unpaid interest on the Prepayment amount, before applying my Prepayment to reduce the Principal amount of the Note. If I make a partial Prepayment, there will be no changes in the due dates of my monthly payment unless the Note Holder agrees in writing to those changes. My partial Prepayment may reduce the amount of my monthly payments after the first Change Date following my partial Prepayment. However, any reduction due to my partial Prepayment may be offset by an interest rate increase. 6. LOAN CHARGES If a law, which applies to this loan and which sets maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from me which exceeded permitted limits will be refunded to me. The Note Holder may choose to make this refund by reducing the Principal I owe under this Note or by making a direct payment to me. If a refund reduces Principal, the reduction will be treated as a partial Prepayment. 7. BORROWER'S FAILURE TO PAY AS REQUIRED (A) Late Charges for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of 15 calendar days after the date it is due, I will pay a late charge to the Note Holder. The amount of the charge will be 5.000 % of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment. (B) Default If I do not pay the full amount of each monthly payment on the date it is due: I will be in default. • VM01 A.110 V A%01 rn r 11 'f,1 'IIJ1 9— ii4 Jia�{ > x.11 MULTISTATE ADJUSTABLE RATE NOTE - 3 YEAR-ARM -single Family • Form 3504 1/01 Fannie Mae/Freddie Mac UNIFORM INSTRUMENT 0-311:1 (page 2 of 4 pages) F16467.LMG (1/01) • (C) Notice of Default If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal which has not been paid and\all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is mailed•to me or delivered by other means. (D) No Waiver By Note Holder Even if, at a time when I am in default, the Note Holder does not require me to pay immediately in full as described above, the Note Holder will still have the right to do so if I am in default at a later time. (E) Payment of Note Holder's Costs and Expenses If the Note Holder has required me to pay immediately in full as described above, the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example, reasonable attorneys' fees. 8. GIVING OF NOTICES • • Unless applicable law requires a different method, any notice that must be given to me under this Note will be given by delivering it or by mailing it by first class mail to me at the Property Address above or at a different address if I give the Note Holder a notice of my different address. Any notice that must be given to the Note Holder under this Note will be given by delivering it or by mailing it by first class mail to the Note Holder at the address stated in Section 3(A) above or at a different address if I am given a notice of that different address. 9. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that any one of us may be required to pay all of the amounts owed under this Note. 10. WAIVERS I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require the Note Holder to demand payment of amounts due. "Notice of Dishonor" means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 11. UNIFORM SECURED NOTE • This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Note Holder under this Note, a Mortgage, Deed of Trust, or Security Deed (the "Security Instrument"), dated the same date as this Note, protects the Note Holder from possible losses which might result if I do not keep the promises which I make in this Note. That Security Instrument describes how and under what conditions I may be required to make immediate payment in full of all amounts I owe under this Note. Some of those conditions are described as follows: If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by • Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. r ) 0 1'i�;0) }. 110 V I, A.,O 1 n '1/7 MULTISTATE ADJUSTABLE RATE NOTE - 3 YEAR-ARM -Single Family - a 9 r� 350471/01 Fannie Mae/Freddie Mac UNIFORM INSTRUMENT 3 or pages); F16467.LM4 (1/01) 03113 - - '' To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender may also require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. WITNESS THE HAND(S) AND SEAL(S) OF THE UNDERSIGNED. (Seat) e issa . Hesseltine Borrower (Seal) Borrower (Seal) Borrower (Seal) Borrower [Sign Original Only] • RIGHTS OF LENDER UPON CHANGE OF USE In the event all or any part of the property is used for other than the personal residence of the Borrower without Lender's prior written consent, Lender, may at its option (1) require immediate payment of all sums due under the Promissory Note; and (2) adjust the interest rate, monthly payments, amortization and maturity date of the Promissory Note to conform to Lender's loan policies then existing to be effective on the first day of the month following the use of the property for other than a personal residence. :: elissa M. Hesseltine VMOI k'AAvl 0 )i 1313 Aii3 ,.._,? - Z u :r kid 9— Nm t Lull �. MULTISTATE ADJUSTABLE RATE NOTE - 3 YEAR-ARM - Single Family - ,, � -'Ewan •01/01 Fannie Mae/Freddie Mac UNIFORM INSTRUMENT 0414 .1 ages) In F16467.LM6 (1/01) O"J Li ,J(1 lf1.,r,.3711 FILED N(31 8n0r`3 /74 PACE_._ 3.q 01 J!J; I I PH I2: 13 N �Ori COUNTY RECORDER IC CIT Prepared by Mary D. Deeds Hills Bank and Trust Company 131 Main Street Hills, Iowa IO52235 WA 319-351-8000 [Space Above This Line For Recording Data] MORTGAGE O n c` THIS IS A PURCHASE MONEY MORTGAGE. D ? CJ�'< C) ., I l) ♦ Y y DEFINITIONS f h iri TT7 0 Words used in multiple sections of this document are defined below and other words are defined 'O>)ions 3:9, 13, 18.20 and 21. Certain rules regarding the usage of words used in this document are also provided in Se. ton 16. Ln (A) "Security Instrument"means this document,which is dated June 5th , with all Riders to this document. 2001 •together (B) "Borrower" is Melissa M. Hesseltine , a single person Borrower is the mortgagor under this Security Instrument. (C) "Lender"is Hills Bank and Trust Company a Corporation Lender is P organized and existing under the laws of the State of Iowa Lender's address is 131 Main Street Hills, Iowa 52235 Lender is the mortgagee under this Security Instrument. (D) "Note"means the promissory note signed by Borrower and dated June 5th states that Borrower owes Lender Forty Four Thousand Two Hundred and 00/1100 01 . The Note Dollars(U.S.$ 44,200.00 )plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than June 1, 2031 (E) "Property"means the property that is described below under the heading "Transfer of Rights in the Property." (F) "Loan" means the debt evidenced by the Note,plus interest,any prepayment charges and late charges due under the Note,and all sums due under this Security Instrument,plus interest. (G) "Riders" means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower(check box as applicable): Adjustable Rate Rider 0 Condominium Rider 0 Second Home Rider ❑ Balloon Rider 0 Planned Unit Development Rider 0 Other(s)(specify) ❑ 1-4 Family Rider 0 Biweekly Payment Rider (H) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders(that have the effect of law)as well as all applicable final,non-appealable judicial opinions. (I) "Community Association Dues, Fees, and Assessments" means all dues, lees, assessments anti charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization. (J) "Electronic Funds Transfer"means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, Transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (K) "Escrow Items"means those items that are described in Section 3. • VMOI ',',J.I�� kitAO1 NSD-i) Ai_;0 l Cr: �..-. EO .f Wd 9- . r__4 70 ; ; IOWA-s:"9i•Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Fdrm6 o 11 -111 383 1/01 (vim. t.7J i or slot.y ) � 'r �.-''7. 1� 1 -. 000203 ry <7766:9 BOW _J • (L) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5)for: (i) damage to, or destruction of, the Property; (ii)condemnation or other taking of all or any part of the Property; (Hi)conveyance in lieu of condemnation; or(iv)misrepresentations of,or omissions as to,the value and/or condition of the Property. (M) "Mortgage Insurance"means insurance protecting Lender.against the nonpayment of, or default on, the Loan. (N) "Periodic Payment"means the regularly scheduled amount due for(i)principal and interest under the Note,plus (ii) • any amounts under Section 3 of this Security Instrument. (0) "RESPA" means the Real Estate Settlement Procedures Act(12 U.S.C. 52601 et seq.) and its implementing regulation, Regulation X (24 C.F.R.Part 3500), as they might be amended from time to time, or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument, "RESPA" refers to all requirements and • restrictions that are imposed in regard to a "federally related mortgage loan" even if the Loan does not qualify as a "federally related mortgage loan" under RESPA. (P) "Successor in Interest of Borrower"means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and(ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably mortgages, grants and conveys to Lender the following described property located in the County of Johnson [Type of Recording Jurisdiction] [Name of Recording Jurisdiction] Lot Seven (7) in Block Two (2), in Sunnyside Addition to Iowa City, Iowa, according to the recorded plat thereof. Rights of Lender Upon Change of Use: In the event all or any part of the Property is used for other than the personal residence of the Borrower without Lender's prior written consent, Lender may,at it's option (1)require immediate payment of all sums due under the Promissory Note; or (2) adjust the interest rate, monhtly payment, amortization and maturity date of the Promissory Note to conform to Lender's loan policies then existing to be effective on the first day of the month following the use of the Property for other than a personal resdence. _ N 0 r-• 9 which currently has the address of 1315 Lukirk Street [Street] Q Iowa City ,Iowa 52240 ("Property Address"ii::C) c_ [City) [Zip Code] 11 TOGETHER WITH all the improvements now or hereafter erected on the ro rti F' p petty,and all easemerjtvi appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions-s)lpljfatso betigovered'b this Security Instrument. All of the foregoing is referred to in this Security Instrument as the"Propert " 0 BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conve and has'the right to grant and convey the Property and that the Property is unencumbered,except far encumbrances of mord. Borr'or warrants and will defend generally the title to the Property against all claims and demands,subject to any encumbrances i:.r THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall gay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shah also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S.currency. However,if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order, (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or(d)Electronic Funds Transfer. IOWA-Single Fa",ay-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 2 el 9 pages) F18578.LM0(12/00) OOOZO 4778619 BOW Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note: (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if,and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. r') Any application of payments, insurance proceeds,or Miscellaneous Proceeds to principal 19 under thgote shall not extend or postpone the due date, or change the amount, of the Periodic Payments. C") 3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Oa is art• - und€r"F'? the Note, until the Note is paid in full, a sum (the "Funds") to provide for payment of amounts"due. (a-. es and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrence on 1 Property;y (b) leasehold payments or ground rents on the Property, it any; (c) premiums for any and all insuranee`'requ'-d..16' • der_....„, under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower tcy L.en.-r in lieu of t - ' Q payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These item='- e called?"Escror Items." At origination or at any time during the term of the Loan, Lender may require that Community 77sWation moues,Fee and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments sh tie.an Es!clow Item. Borrower shall promptly furnish to Lender ail notices of amounts to be paid under this Section. Borrovt shalt pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or alscrow Iter Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such wejy, •may only • be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable,Sloe amounts ape for .,:.., Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall Qnish to Lendbr rec; evidencing such payment within such time period as Lender may require. Borrower's obligation to mi3ke)uch paydlents ar to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this,S rity Ins sument,ast the phrase "covenant and agreement" is used in Section 9. If Borrower is obligated to pay Escrow Ite.1 sirecty, ursuant a waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its right under tion 9 aqd pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any suety'arr unt, ender mayfl revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Sec-dim-1'5 and,,A,tRon suc�i revocation, Borrower shall pay to Lender all Funds,and in such amounts,that are then required under this pection3C Lender may,at any time,collect and hold Funds in an amount(a)sufficient to permit Lenderto appy thp-Funds at the time specified under RESPA,and(b)not to exceed the maximum amount a lender can require unde{'Re6PA. Ceder shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenagltres of future Escrow Items or otherwise in accordance with Applicable Law. Yy w The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, c. , (including Lender, if Lender is an institution whose deposits are so insured)or in any Federal Home Loan Bank. Lender rnt!: apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower,without charge,an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA,and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escr- - •^ defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the i.....,_,. necessary to make up the deficiency in accordance with RESPA,but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes,assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Community Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items, Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a IOWA-single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 3 of 9 pages) F16576.LMG(12/00) 000211 4778619 sow lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4. Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan. 5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a)a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property,or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable,with such interest, upon notice from Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insuranc:z coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During sp./re r .: restoration period,Lender shall have the right to hold such insurance proceeds until Lender has hart)n opportunity to Inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that •Suoft)inspeption shall undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single pgjrme'jt or n series d progress payments as the work is completed. Unless an agreement is made in writing or Applicable_.aw•requires interest` be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interesf o�eamkg on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be p$9 bit of the insuraricil proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economicallyi.fgasible-e! Lend security would be lessened,the insurance proceeds shall be applied to the sums secured by this Se ityi,strurrf€nt, whet or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applf the o025 provided for in Section 2. If Borrower abandons the Property, Lender may file, negotiate and settle any available insakance claim' . matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offerky to a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the nice is given�.c3 In either event, or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns -•-Legder-(a) borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or: i .urit (pstr enq-,a and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums pard bq-Borro • • der aft insurance policies covering the Property, insofar as such rights are applicable to the coverage of the•PFdperty. -nder use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under tine ill to o t Secure Instrument,whether or not then due. (-- ^� ! .� 6. Occupancy. Borrower shall occupy, establish, and use the Property as BorroweP�t incipMesidenb'e�i within 60 days after the execution of this Security Instrument and shall continue to occupy the v}p.n rty as orrovw•' principal residence for at least one year after the date of occupancy,unless Lender otherwise agrees ri ng,wi oors�n. shall not be unreasonably withheld,or unless extenuating circumstances exist which are beyond Borro›r's control 7. Preservation, Maintenance and Protection of the Property; Inspections. Bd?P wer shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. IOWA-Sing/.Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01(peg.4 of 9 page.) F18S76.LMG(12/00) 000212 4775819 eow Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. It (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b)appearing in court; and (c)paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest,upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property,the leasehold and the tee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments it Mortgage Insurance coverage (in the amount and for the period that Lencls- requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires ear•ara'r designated payments toward the premiums for Mortgage Insurance. If Lender required Mortgage Insurance app cc::ula;.n making the Loan and Borrower was required to make separately designated payments toward(trip premiurra}jor Mortgage Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect, or,Ve itp{ovide El-Apo-refundable loss reserve, until Lender's requirement for Mortgage Insurance ends in accordance with any` Arun agreeLlent between Borrower and Lender providing for such termination or until termination is required by Applicable Loa"-_ •th',. .t'this Sin 10 affects Borrower's obligation to pay interest at the rate provided in the Note. r-, 7 Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for oeitain losse- may ipatitr.if Borrower does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance. C) Mortgage insurers evaluate their total risk on all such insurance in force from time-ti;ft'un- and may en r o agreements with other parties that share or modify their risk, or reduce losses. These a reeht- is a bn ter• I. d conditions that are satisfactory to the mortgage insurer and the other party (or parties) tot. e agrtrehents. 1These agreements may require the mortgage insurer to make payments using any source of funds alit - mort swe insurer?fiay have available(which may include funds obtained from Mortgage Insurance premiums.) ' ' As a result of these agreements, Lender, any purchaser of the Note, another insekr, and rdeattjrer, ;. .. entity, or any affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive trews (or rnt.,, characterized as) a portion of Borrower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer, the arrangement is often termed "captive reinsurance." Further: (a) Any such agreements will not affect the amounts that the Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan. Such agreements will-'not increase the amount Borrower will owe for Mortgage Insurance, and they Will not entitle Borrower to any refund. C) (b) Any such agreements will not affect the rights Borrower has -if any: with respect —� to the Mortgage Insurance under the Homeowners Protection Act of 1998 or an.yI other'aw. These rights may include the right to receive certain disclosures, to requ:ett and ribtsin cancellation of the Mortgage Insurance, to have the Mortgage Insurance-)ter: O automatically, and/or to receive a refund of any Mortgage Insurance premiums that n::rc a i-��l unearned at the time of such cancellation or termination. I 11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Osoe�ds are hereby 0 assigned to and shall be paid to Lender. 1 '' If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repyt of the Pr {rty,if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and ration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspec,such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. IOWA-sinyl.Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (page 5 on 9 pays.) FIE57E.LMG(12/00) 000213 4778919 BOW • In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument,whether or not then due,with the excess, if any, paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction,or loss in value. Any balance shall be paid to Borrower. in the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower, or it, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower es a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including,without limitation, Lender's acceptance of payments from third persons, entities or Successors in interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However,any Borrower who co-s`'-;r this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument c: mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) personally obligated to pay the sums secured by this Security Instrument;and(c)agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. CV Subject to the provisions of Section 18,any Successor in Interest of Borrower who assumes Borrower's obligations 1.nunder this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument Q� G unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20)and benefit the successors and assigns of Lender. 111 - 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's —1‘;" default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including,but C i not limited to, attorneys' fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by AC:.. •. Law. uo If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the 0 Interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. N,crts one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The not_s . • shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it • or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the G Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. 16. Governing Law; Severability; Rules of Construction. This Security Instrument shall be _ y governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained Ce'— in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or 1.07 implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohbition - against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. IOWA-single,Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (pogo 6 o1 9 pages) F16576.LMO(12/00) 000214 47766:9 BOW As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa;and (c)the word "may"gives sole discretion without any obligation to take any action. 17. Borrower's Copy. Borrower Shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or(c)entry of a judgment enforoinb this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements: (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees,property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms,as selected by Lender:(a)cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However,this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note(together with this Security Instrument)can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the "Loan Servicer")that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law.There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence,join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that N the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, unit such Borrower fir, _ or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective 6`' - — action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to a Ea— ILl Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to %J� ..J}" satisfy the notice and opportunity to take corrective action provisions of this Section 20. ,jU r— 21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those I substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides,volatile solver :. Z 1_Q materials containing asbestos or formaldehyde,and radioactive materials;(b) "Environmental Law" means federal laws and heves --) 0 of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cr- 0 Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d)_an_.. �._ "Environmental Condition"means a condition that can cause,contribute to, or otherwise trigger an Environmental Cleanup. C---• Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a)that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or(c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to•be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substances in consumer products). Borrower shall promptly give Lender written notice of(a)any investigation,claim, demand, lawsuit or other action t, any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmer:::.: Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release,of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with • Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. 4 NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: - 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration ('nG .j- 0 following Borrower's breach of any covenant or agreement in this Security Instrument (but not (� prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice l N))�yi shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less ,c,,,,., V than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may ` �' v p fir'1.. <, i �I '/'... IOWA-Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (p.a.7 m e p0000) i\>,." ` .-,, �� F18578.LMG(12!00) 000215 47,... result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs of title evidence. 23. Instrument. Lender mayscharge Borrrowerrna. Upon paymtofee f Il uforreleasing this ms secured bySecurity Instrument, butt onlydif this Security Instrumen,Lenerthea feee sapaid ftosaecthird • party for services rendered and the charging of the fee is permitted under Applicable Law. 24. Waivers. Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to the Property. Borrower waives any right of exemption as to the Properly. 25. HOMESTEAD EXEMPTION WAIVER. 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, I VOLUNTARILY GIVE UP MY RIGHT TO THIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BAS`;':; UPON THIS MORTGAGE. • eli sa M. Hesseltine [Date] [Date] 26. Redemption Period. If the Property is less than 10 acres in size and Lender waives in any foreclosure proceeding any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 6 months. If the court finds that the Property has been abandoned by Borrower and Lender waives any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 60 days. The provisions of this Section 26 shall be construed to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE PE.P.7 CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO -3' r;r_i, fh TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY O ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security 1 i" Instrument and in any Rider executed by Borrower and recorded with it. �O O r-- �U it= F— Witnesses: c�- O (Seal) rr° or Melissa M. Hesselt ne to Borrower (Seal) : W1 r . Ems.• f L �r {.ice 0 O`"� Borrower (Seal) Borrower (Seal) • IOWA•stngre Family Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01(page 8 of 9 pages) Ft 6576.LMG(12100) 00021, • 47786,9 BOW • [Space Below This Line For Acknowledgment] STATE OF IOWA COUNTY OF Johnson ss: On this 5th day of June 2001 , before me,the undersigned,a Notary Public in the State of Iowa ,personally appeared: Melissa M. Hesseltine , a single person • to me personally known to be the person(s)named in and who executed the foregoing instrument,and acknowledged that she executed the same as her voluntary act and deed. My commission expires: October 15, 2003 IFS���`•� Rebecca DaVlaard /� MY/COMMISSION EX=i' S �� ,, / ) ?' ,y Not -Pub c in and for rat• County and tate "����-�"' Re ecca DeWaard [Space Below This Line For Reserved For Lender and Recorder] N Q. v Ci- O 0 a- w,: (i! 0 A- /4e _C) 7 /.. #:‘ ,s ' `Q IOWA-Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3016 1/01 (pay.a of b page.) F18578.LMa(12/Ud) 0002'17 4776619 BOW ADJUSTABLE RATE RIDER (3 Year Treasury Index--Rate Caps) THIS ADJUSTABLE RATE RIDER is made this 5th day of June , 2001 ,and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Adjustable Rate Note (the "Note") to Hills Bank and Trust Company (the "Lender")of the same date and covering the property described in the Security Instrument and located at: 1315 Lukirk Street Iowa City Iowa 52240 (Properly AEEr•sst THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE AMOUNT THE BORROWER'S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE THE BORROWER MUST PAY. ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. INTEREST RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial interest rate of 7.000 %. The Note provides for changes in the interest • rate and the monthly payments as follows: 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates The interest rate I will pay may change on the first day of June on that day every 36th month thereafter. Each date on which my interest rate could changeiscalledna "Change Date." (B) The Index Beginning with the first Change Date, my interest rate will be based on an Index. The "Index" is the weekly average yield on United States Treasury securities adjusted to a constant maturity of three years, as made available by the Federal Reserve Board. The most recent Index fgure available as of the date 45 days before each Change Date is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new index which is based upon comparable information. The Note Holder will give me notice of this choice. (C) Calculation of Changes C•4 Before each Change Date, the Note Holder will calculate my new interest rate by adding Three and Lr 000/1000 percentage points ( 3.000 %)to the Current Index. The Note Holder p Ns.• will then round the result of this addition to the nearest one-eighth of one percentage point(0.125%). Subject v to the limits stated inSection 4(D) below, this rounded amount will be my new interest rate until Change Date. . [r 1 The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the maturity date at my— •Moom new interest rate in substantially equal payments. The result of this calculation will be the new amount of my }--�.. monthly payment. (D) Limits on Interest Rate Changes NCT. The interest rate I am required to pay at the first Change Date will not be greater than 9.000 %or 0 less than 5.000 %. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than two percentage points (2.0%)from the rate of interest I have been paying for the preceding 36 months. My interest rate will never be greater than 13.000 %. (E) Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my neer monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice. d tt`U rt, 0/. gyp. v i) NZ—, . MULTISTATE ADJUSTABLE RATE RIDER-•3 YEAR ARM-si•yt.Family Q •-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3114 1/01 F165sa.l.rdo t+o/Doll (P•9•I of 2 paps) VL 000218 •»8619 Bow • B. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER Section 18 of the Security Instrument is amended to read as follows: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement,the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial Interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b)Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that a risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender may also require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in lull, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider. 11 • (Seal) Mera M. Hessel i 7,7 Lne ecrrcw., U, ` C- —3)„ �+ 0 .� }L) (Seal) eorrower -- --i U j 0 N (Seal) Borrower Borrower [Sign Original Only] zs –3. • \>' MULTISTATE ADJUSTABLE RATE RIDER--3 YEAR ARM—slnple Family Form 3114 1/01 --Fannie Mae/Freddie Mac UNIFORM INSTRUMENT F 16506.I.MG(10/00) (page 2 of 2 papas) 000219 47756,9 eow • . Hills Bank 131 Main Street and Trust Company Hills, Iowa 52235 319-679-2291 January 7, 2008 NOTICE OF RIGHT TO CURE DEFAULT (Sent Certified and Regular Mail) Melissa M Hesseltine 1315 Lukirk St Iowa City IA 52240 This letter provides notice of your right to cure the default under a promissory note#4778619 dated June 5, 2001 with a current principal balance of$39,822.84 that is secured by a real estate mortgage on the property at 1315 LUKIRK ST, IOWA CITY IA as legally described under said mortgage. This default consists of the failure to make the following payments: $395.38 due on Oct. 1,2007 and payment of$402.69 due on Nov. 1 and Dec. 1, 2007 as well as on Jar.. 1, 2008. You have the right to cure this default by February 9,2008. You do so by bringing the payments current on this loan. You must pay the Total Amount Past Due of$1603.45 plus the next scheduled payment of$402.69 due on February 1,2008 for a grand total of 2006.14 by February 9,2008. Payments can be made to any of our offices in Iowa City, Coralville,North Liberty,Lisbon,Mt. Vernon, Cedar Rapids, Marion, Wellman, Kalona, or Hills. This letter is notice to you that Hills Bank and Trust Company requires you to cure this default by February 9,2008. If you do not, the Bank can then proceed to enforce its right to foreclose on the mortgage covering this proper!'. rr.-l:..5; for your reference is Iowa Code section 654.2D(see sub-section 3-7)which sets forth your right to cure. We recommend you contact your attorney. Iowa law may give you the right to counseling services. Here are some nearby agencies that may be able to help: Hawkeye Area Community Action Program, Inc. Family Management Credit Counselors, Inc. 1328 2"d Ave SE 1409 W 4th Street Cedar Rapids IA 52 406-0789 Waterloo IA 50702-2907 Ph 319 366-7631 Ph 319 234-6695 Muscatine's Center for Strategic Action Services for.Homeowners Program 312 Iowa Avenue 602 E 1s1 Street Muscatine IA 52761-0618 Des Moines IA 50309-1812 Ph 563-264-3278 Ph 515-283-4787 Or feel free to call HUD toll free @ 800-569-4287. c� - Tl u7 r , Sincerely, c_ .-,n Fi �i; Dan Widmer i i CICollection Of t cer y: ccopy -' N 11./4b\' ii� ', ,` 1✓ ' "'Oim . 640,s . I.wq ity •Arrlville • Mitt iberty• Kalona • Cedar Rap' s • Lisbon • Mount Vernon • Marion • '',-„iman i ' 0)' hillsbank.com 1-800-445-5725 y • 654.2D NONAGRICULTURAL LAND— NOTICE,RIGHT TO CURE DEFAULT 1. Except as provided in section 654.2A, a creditor shall comply with this section before initiating an action pursuant to this chapter or initiating the procedure established pursuant to chapter 655A to foreclose on a deed of trust or mortgage. 2. A creditor who believes in good faith that a borrower on a deed of trust or mortgage on a homestead is in default shall give the borrower a notice of right to cure as provided in section 654.2B. A creditor gives the notice when the creditor delivers the notice to the consumer or mails the notice to the borrower's residence as defined in section 537.1201, sub-section 4. 3. The borrower has a right to cure the default within thirty days from the date the creditor gives the notice. 4. a. The creditor shall not accelerate the maturity of the unpaid balance of the obligation, demand or otherwise take possession of the land, otherwise than by accepting a voluntary surrender of it, or otherwise attempt to enforce the obligation until thirty days after a proper notice of right to cure is given. b. Until the expiration of thirty days after notice is given,the borrower may cure the default by tendering either the amount of all unpaid installments due at the time of tender, without acceleration, or the amount stated in the notice of right to cure, whichever is less, or by tendering any other performance necessary to cure a default which is described in the notice of right to cure. 5. The act of curing a default restores to the borrower the borrower's rights under the obligation and the deed of trust or mortgage. 6. This section does not prohibit the creditor from enforcing the creditor's interest in the land at any time after the creditor has complied with this section and the borrower did not cure the alleged default. 7. A borrower has a right to cure the default unless the creditor has given the borrower a proper notice of right to cure with respect to a prior default which occurred within three hundred sixty-five days of the present default. 8. This section does not apply if the creditor is an individual or individuals,or if the mortgaged property is property other than a one-family or two-family dwelling which is the residence of the mortgagor. 9. An affidavit signed by an officer of the creditor that the creditor has complied with this section is deemed to be conclusiveevidence of compliance by all persons other than the creditor and the mortgagor. • 87 Acts, ch 142, § 14 ` b'NVO1 'All 0 Wit 0I •� }12:1T13I1iD 0 0,, h0 9- Nvr 6.k.2 t IN THE IOWA DISTRICT COURT IN AND FOR JOHNSON COUNTY HILLS BANK& TRUST CO. ) ) Case No. EQCV Plaintiff, ) ) AFFIDAVIT OF ATTORNEY'S vs. ) FEES ) MELISSA M. HESSELTINE, CITY OF ) IOWA CITY, IOWA, ) ) Defendants. ) STATE OF IOWA ) ) ss. COUNTY OF LINN ) I, H. Raymond Terpstra II,being first duly sworn on oath, depose and state: That I am the attorney for the Plaintiff in the foregoing cause of action and that, as part of the cause of action herein, there is a claim for attorney fees pursuant to the note between the Plaintiff and Defendant. That,pursuant to Iowa Code § 625.24, there has been and is no agreement between me as an attorney for the Plaintiff and Plaintiff, express or implied, nor between myself and any other person except practicing attorneys engaged with me as attorney in this cause, for any division or sharing of the fee to be taxed. When said fee is taxed, it shall only be in favor of me as a regular attorney and as compensation for services actually rendered in this action. That Defendants have had, to the best of my information and belief, notice and reasonable opportunity to pay the sums due the Plaintiff and as alleged in the Plaintiffs Petition 'in •uity for Foreclosure to which this Affidavit is attached. J, urther,Affiant sayeth not. - L + : 230 „;r VMO I 'vt.!t 3 of/`V'1 U I CT 3121 31° A 1.I UEXHIBIT «D„ v + E . . ; 2, b0 (I rid 9 NV1 6031U • p N Dated this J q day of � �(\��,C,�� , 2008.. Respectfully submitted f - H. aymond Terpstra II AT0007866 /77". TERPSTRA & EPPING 3600 First Avenue NE, Suite 101 Cedar Rapids, IA 52402 Ph: (319) 364-2467 Fax: (319) 364-0923 ATTORNEY FOR PLAINTIFF ubscribed and sworn to before me by H. Raymond Terpstra II this _J__ day of i Cwt U..CA-y\1 , 200$.°1 - YSY- Notary Public in and for the S ate of Iowa k-1COMMISSION 0 MICHELLE SMEJKAL Z COMMISSION O. 1 x.450 1 * MYCOligl SSiC J S„:...=S rowA -f-1l-'1 A- 6 ��, c , >113 A110 ho :II gad 9— N`r1 6 it tEiid � � �F"wBOROWER<:>>>: :;:%;> »,: E: <!tills ��� E,.sa::: : xa. ............. _ .._........ , ' M ' tMHasseltine and Trust Company • HOME EQUITY Member FDIC =',, LINE OF CREDIT inns Bank and Trust Company '`, 131 Main Street cS/"r AGREEMENT Bills,IA 52235 ® — (319 3514000 "LENDER" f. ax:. .., • :>. i°fs fukx. ` ::.tto s :< . :,»:.:.:<;<:'t >:: (This is a Consumer LUkirk Street Iowa City, IA 52240 Credit Transaction) WIE„P E1iE baE4?,:_4 .,01Co71F.I Ii lCif7: 'a:sr ;> ,'.'MS ,...�,;:r�:::.::,..�:N>.�:._ :.:..:. ....•' ......,.... :�.:.. �;�s>a��a1�_Nr MrruArs:� x .�>.; i. .H.: :i ...>s.: '$kx::.::...:..Y arca eaY.. .JGE. FICA:Ii>Ff•, :'fir:..,.:. .: <:, ... ,.. . . .: :.Y,.._, :.... ... •:x�: ,;� :.�u�:,;,;:;�;:":.iri tj'�,.le`rr>:;3:l.:oAN�"'.. �.o.,:.,j....r . ::::::... #ATE:, , ,"�'�;,., ,�, ......: ::!F`.,..�`....;:::.r�`bi �D. . `.:�,�<�'q+47E 'i'>�'�'i':3J4Ida aFt BLDEWA • 6.250 %- $3,000.00 12/02/03 _ 11/25/08 80099564-01 'RtfgE EOU1 ' ' • • • • •1' : is .greemen governs :orrowers 'ome qurry me o resit •ccount' wit en•er. e • coun establishes a line of credit for the Borrower with Lender to be used for consumer purposes. The Account will permit Borrower to request advances up'to the amount of thecredit limit indicated above: The Account is secured by Borrower's dwelling ("Borrowers Home'), any deposit accounts Borrower now or hereafter may have.with Lender, as well as any other property described in any other security instruments securing this Agreement or all of Borrower's obligations. Borrower will be asked to sign this Agreement and a deed of trust, mortgage and/or security agreement ('Security Instrument(s)') prior to opening the Account. The Security Instrument will grant Lender a.security interest in Borrower's Home and art of this Agreement. is ACCESS TO THE ACCOUNT: Advances on the Account may be obtained in the following manner: Credit line checks;is Written request for a loan advance; © Telephone request fora loan advance; QOther: Hills Bank Online and. or Push Button Banker upon completion of application. USE RESTRICTIONS: Advances will be honored subject to the terms of this Agreement, the Security Instrument, the Borrower's available credit on the Accdunt,and the following restrictions: Initial Minimum Advance Amount: $ Subsequent Minimum Advance Amount: S Other Restrictions: PROCESSING LOAN ADVANCES:Loan advances shall be:❑Deposited into account number. , Esther: SECURITY: In addition lo Borrower's Home,a secur interest has been granted in: ❑Collateral securing other loans with Lender may also secure this loan; ❑ Any deposit account maintained with Lender; UThegoods or property being purchased; ®Other: 1315 Lukirk Street, Iowa City, IA 52240 ANNUAL PERCENTAGE RATE: The ANNUAL PERCENTAGE RATE is determined in the manner described below and does not include costs other than interest:.. --_ _ E FIXED RATE:This Account has a fixed interest rate. The ANNUAL PERCENTAGE RATE for this Account is 6.250 %per annum with an initial 0 Daily Monthly Periodic Rate of 0.01712 %. VARIABLERATE:This'Account has a variable interest rate feature. The ANNUAL PERCENTAGE RATE may change if the Index Rate(as defined below) changes. The Index Rate shall be: • • The initial Index Rale is %per annum. - ,..-1 This Index Rate is readily available to Borrower,and is verifiable by Borrower at any of Lender's offices. The changes in the Index Rate are beyond the j control of Lender. If the Index Rate becomes unavailable, Lender will choose another index which is also readily available and verifiable by Borrower and which is beyond Lender's control. Lender may also change the Margin (as defined below) used as long as the historical fluctuations in the two indices ? •- r.— were substantially similar (if the new index has been in existence)and as long as the new index and margin will produce an ANNUAL PERCENTAGE j> RATE similar to the rate that was in effect at the lime the Index Rate became unavailable. If this happens, the substitute index will,for the purposes of this `�' • Agreement,be considered the'Index Rate.' C)-( ' ;,F..... MARGIN:The ANNUAL PERCENTAGERATE on this Account shall be calculated at a variable rate equal to %per annum {0 %-i 1 the Index Rate. INITIALRATE The initial ANNUAL PERCENTAGE RATE for this Account is . %per annum with an initial ❑Daily ❑Monthly Periodic .'i Rate of %. DISCOUNTED RATE:❑If checked, the initial ANNUAL PERCENTAGE RATE is not based on the initial Index Rate and _ Margin described above. The initial ANNUAL PERCENTAGE RATE will be in effect until Based on the Index Rate and O Margin described above,the initial ANNUAL PERCENTAGE RATE would be %percent with an initial ❑ Daily 111 Monthly Periodic A • Rate of %. MINIMUM/MAXIMUM RATE Subject to applicable law,the minimum ANNUAL PERCENTAGE RATE under this Agreement shall not be less than '' ‘...11 per annum. The maximum ANNUAL PERCENTAGE RATE shall not exceed %per annum, or the maximum ANNUAL W PERCENTAGE RATE Lender is permitted to charge bylaw,whichever is less. RATE CHANGES: If the Index Rate increases or decreases the corresponding ANNUAL PERCENTAGE RATE-and Periodic Rate will increase or decrease unless the minimum or maximum ANNUAL PERCENTAGE RATE has been reached. Borrower's Minimum Payment may also increase or decrease accordingly. The ANNUAL PERCENTAGE RATE will apply to Borrower's Account balance as of the effective date of the increase or decrease as well as to future Advances. Any change in the Periodic Rate and corresponding ANNUAL PERCENTAGE RATE resulting from a change in the Index Rate will be effective on: RATECHANGELIMITATIONS:❑If checked,the ANNUAL PERCENTAGE RATEwill not increase by more than % O ..,i) ANNUAL MAINTENANCE FEE: An annual maintenance fee of$ n/a will be assessed on the Account regardless of whether * t-- or not Borrower uses the Account _ tea- CHECK PROCESSING FEE: If a check for payment is resumed to Lender for any mason(for example, because there were insufficient funds in Borrower's " checking account), Lender will assess a-check processing fee of$ n/a ,which may be charged to the Account as a loan )- .o•,• permitted by law. . advance,as � < -.- . TRANSACTION FEE: ..`f-- m -7, 0 OTHER COSTS AND DISBURSEMENTS: - 0 M -2: Other fees,charges,or disbursements are itemized in the Schedule of Fees,Charges or Disbursements which Borrower acknowledges receipt of a copy and which is incorporated into this Agreement by this reference. D0 NOTICE TO CONSUMER: 1. DO NOT SIGN THIS PAPER BEFORE YOU READ IT. 2. YOU ARE ENTITLEDTO A COPY OF THIS PAPER. 3. YOU MAY - ,3 PREPAY THE UNPAID BALANCE AT ANY TIME'WITHOUT PENALTY AND MAY BE ENTITLED TO'RECEIVE A REFUND OF UNEARNED CHARGES IN ACCORDANCE WITH LAW. _ _ c_> ACKNOWLEDGMENT: THE UNDERSIGNEDACKNOWLEDG ETHAT THEY HAVE READ,UNDERSTAND,AND AGREETO THE TERMS AND CONDITIONS OF . THIS AGREEMENT INCLUDINGTHE PROVISIONSONTHE REVERSESIDEAND SUBSEQUENT PAGES,AND THEY ACKNOWLEDGERECEIPTOFANEXACT�� .•; fI COPY OF THIS AGREEM A Dated:November 26 2003 7x, BORROWt ]-• , elis M. Bess- 4 ine BORROWER: _. A< C/J CPI A< —•{ l M Vis= esseltine .` =.7 7-in t " 1 BORROWER: BORROWER: ""�C" —I N ..f, LPIA711 5 Harland Financial Solulior r,Inc(8/30/01)(800)9373799 Page I 914 • FINANCE CHARGES: All advances are subject to finance charges from the dale of the advance untilsuch advances are paid. There is no interest-free grace period on the Account. Lender determines the finance charge assessed on the Account in the manner checked below: X❑ Actual Daily Balance, Lender starts with the balance on the Account at the beginning of each billing cycle. Each day during the billing cycle,Lender adds new advances and debits and subtracts payments and credits D including unpaid finance charges. This determines the ending balance of the Account for each day of the billing cycle. Lender multiplies each ending balanceby the Daily Periodic Rate to determine the daily finance charge. These daily finance charges are added together to determine the finance charge for the billing cycle. ❑ Average Daily Balance. Lender starts with the balance on the Account at the beginning of each billing cycle. Each day during the bitting cycle,Lender adds new advances and debits and subtracts payments and credits ❑including unpaid finance charges. This determines the ending balance for the Account for each day of the billing cycle. Lender then adds up the ending balances for the billing cycle and divides the total by the actual number of days in the billing cycle to get the Average Daily Balance. Lender then multiplies the Average Daily Balance by the❑ Daily Periodic Rate and the actual number of days in the billing cycle ❑Monthly Periodic Rate. This product is the finance charge for the billing cycle. MINIMUM FINANCE CHARGE: A minimum FINANCE CHARGE of $.n/a may be assessed on the Account for each billing period in which there is an outstanding balance. BILLING CYCLE: Borrower shall be billed The 25th of each month with Payments due the 10th of each month. TERM: Borrower may request advances from the date any right of rescission expires until Ncrem.er 25, 2008 (the'Draw Period'). Lender may review Borrower's Account at the end of the Draw Period and, in Lender's sole discretion, may decide to extend the Draw Period. Lender will notify Borrower in writing of any extension of the Draw Period. Borrower may be required to make Minimum Payments during the Draw Period. Alter the Draw Period ends,Borrower.no longer will be able to request advances and must repay the outstanding balance on the Account during the period described below(this is known as the'Repayment Period'). The entire outstanding balance and all accrued finance and other charges must be paid immediately at the end of the Draw Period. The length of the Repayment Period is The length of the Repayment Period will depend on the balance outstanding at the beginning of it,but it will not he longer than _ MINIMUM PAYMENT: Borrower may pay all or a part of the outstanding balance at any time without penalty. Borrower's'payment must be made by the payment due date shown on the periodic statement described below. All Minimum Payments shall be applied by Lender in the manner determined by Lender as permitted by law. Borrower may pay either the Minimum Payment or any amount over that up to the unpaid balance. During the Draw Period the Minimum Payment will be: ❑ PRINCIPALBALANCE METHOD.The greater of$ or all accrued and unpaid finance charges and any past due principal plus of the outstanding principal balance for the current billing cycle. ® INTEREST ONLY METHOD. Borrower shall pay all accrued and unpaid finance and other charges for the current billing cycle. ❑ OTHER. During the Repayment Period the Minimum Payment will be: ❑ PRINCIPALBALANCE METHOD. The greater of$ or all accrued and unpaid finance charges and any past due principal plus of the outstanding principal balance for the current billing cycle. ❑ INTEREST ONLY METHOD. Borrower shalt pay all accrued and unpaid finance and other charges for each billing cycle,and then will pay the entire outstanding principal balance and all accrued and unpaid finance and other charges at the end of the Repayment Period. 0 ENTIRE BALANCE.The entire outstanding principal balance plus all accrued finance and other charges must be paid immediately at the end of the Draw Period. ❑ OTHER. 'rA�r��MORTIZATION/BALLOON PAYMENT: L'J During the g Draw :Repayment Period,the Minimum Payment will not reduce the principal that is outstanding on Borrower's fine. Borrower will then be required to ay the entire balance in a single balloon payment. • ❑ During the L Draw ❑Repayment Period,the Minimum Payment will not fully repay the principal that is outstanding on Borrower's line. Borrower will then be required to pay the entire balance in a single balloon payment. ❑ During the❑ Draw❑ Repayment Period, under some circumstances, Borrower's payments will not cover the finance charges that accrue and 'Negative Amortization' will occur. Negative Amortization will increase the amount Borrower owes Lender and reduce Borrower's equity in.Borrower's M Q Lf`. Home. AUTOMATIC PAYMENT DEDUCTION: ❑y Borrower authorizes Lender to deduct the Minimum Payment due under this Account from Borrower's Account Q-• 0 Number 4485926 with Lender. Automatic payment deductions are not required to obtain credit. LU LATE CHARGE: If a Minimum Payment is received more than 15 El %of the late Minimum Payment;❑ days late,Borrower will be charged a late charge of❑ $ %of the , J} late Minimum Payment or$ • whichever is❑ greater less, as permitted by law. No more than one late charge will be imposed on any single Minimum Payment or portion of any Minimum Payment. ...— .....1 . t —U Q .U- RENEWAL:❑II checked,this Agreement is in renewal of Loan Number G� 0 1. PROMISE TO PAY. Borrower promises to pay Lender the full amount of all advances under this Agreement plus all finance charges and lees provided for vir in this Agreement and the Security Instrument in the manner provided in this Agreement or the Security Instrument. 2. CREDIT LIMIT. Borrower's Credit Limit for this Account is indicated on the first page of this Agreement. Borrower agrees not to request loan advances on the Account that would cause the unpaid principal balance to exceed the Credit Limit. Although Lender may honor a loan advance request that exceeds the Credit Limit from time to time, Lender shall have no obligation to make such advances. Borrower agrees to hold Lender harmless from and against all losses of every nature related to such advances and any other circumstances in which the Credit Limit is exceeded by mistake or otherwise. 3. SECURITY AGREEMENT. In order to secure payment of all amounts due to Lender under this Agreement, Borrower grants to Lender a security interest in (a)Borrower's Home; and(b)all monies, instruments, and savings,checking or other deposit accounts(excluding IRA,Keogh and trust accounts and deposits subject to tax penalties it so assigned) that are now or in the future in Lender's custody or control; and (c)any other collateral described in any security J instrument executed in connection with this Agreement as well as any other property designated as security for this Agreement now or in the future. C'0 4. PROPERTY INSURANCE. Borrower is required to maintain property insurance on Borrower's Home. The requirements for property insurance are detailed in the Security Instrument. If checked, ❑Borrower also is required to maintain flood insurance in such amounts and for such term as required by Lender. 7 THIS INSURANCE MAY BE OBTAINED THROUGH A RESPONSIBLE INSURER OF BORROWER'S CHOICE SUBJECT TO LENDER'S REASONABLE RIGHT OF REJECTION. v5. INFORMATION ABOUT THE BORROWER AND BORROWER'S HOME. Borrower a "t� agrees to provide to Lender, upon request, the financial and credit related information necessary to establish this Account. Borrower understands that Lender will open the Account and make advances under this Account in a % \-� i'– reliance on that information. Borrower also will furnish to Lender promptly upon request such financial statements, updated credit reports and such other �' ,L",: j—.•r information with respect to Borrower's financial condition or Borrower's Home as Lender may require from time to lime. Lender reserves the right to reappraise ..-- O Borrower's Home and to order credit reports. Borrower promises that all information provided to Lender either now or in the future will be true and complete. Borrower agrees to notify Lender immediately of any adverse change in Borrower's financial or credit condition. Information concerning the Account may be reported to credit reporting agencies and will be made available when requested 4 by proper legal process. 6. PERIODIC STATEMENTS. Each billing cycle,Lender will forward to Borrower at the address indicated above a periodic statement of the Account. The periodic statement will include a summary of all transactions on the Account during the billing cycle,the previous balance, Advances,payments and credits, finance charges,the ending balance,and will specify the Minimum Payment amount and date that payment is due. VIA'116®Harland Financial Solutions.I.(a>30/01)(600)937-3)% Face 2 al a 7y,TERMINATION BY LENDER. Upon the occurre' 7r at any time during the continuance, of any one 're of the following events('Events of Default'), Borrov.eashall be in default and at Lender's option, ,a line of credit shall be terminated and the entire:"aid balance of Borrower's Account,including all finance charges and lees provided for in this Agreement, shall become immediately due and payable after sending Borrower any Notice of Right to Cure Default required by law.Lender may declare the Borrower to be in default if the Borrower: • commits fraud.or makes a material misrepresentation at any time in connection with this Agreement or the Security Instrument; • • fails to meet the repayment terms under this Agreement for any outstanding balance;or • by any action or inaction, adversely affects Borrower's Home, or any right of Lender in Borrower's Home, including, but not limited to,transfer of title to or sale of Borrower's Home without the permission of Lender,failure to maintain required insurance or to pay taxes on Borrower's Home, allowing the filing of a lien senior to that held by Lender, death of the sole Borrower obligated under the Agreement, allowing the taking of Borrower's Home through eminent domain, or allowing Borrower's Home to be foreclosed by a lienholder other than Lender. In addition, an Event of Default shall occur if, as a result of any of the following, the Borrower's Home, or any right of the Lender in Borrower's Home, is adversely affected: the Borrower commits waste or otherwise destructively uses or fails to maintain Borrower's Home, uses Borrower's Home in an illegal manner which may subject Borrower's Home to seizure,or moves from Borrower's Home; a judgment is filed against the Borrower;or one of two Borrowers obligated under the Agreement dies: Any of the foregoing shall constitute a default under the Iowa Consumer Credit Code. If a court should determine that one or more of the above do not constitute a default under the Iowa Consumer Credit Code,.Borrower agrees that reinstatement of the obligations shall be Borrower's sole remedy and Borrower shall not be entitled to any damages by reason of Lender's exercise of any of its remedies herein. In addition, Lender may exercise all rights on default of a secured party permitted under applicable law,and all rights under this Agreement and the Security Instrument. Lender may se!off and apply to amounts due under this Agreement monies and property now or hereafter in Lender's possession,including deposits. If this account may be accessed by a credit card as such is defined under the Truth-Lending-Lending Act,then Lender's right to offset is prohibited to the extent it is prohibited under the Truth-In-Lending Act. Borrower will pay all reasonable expenses, (other than attorneys fees)incurred by Lender in realizing on any security interest securing the.Borrower's obligations under this Agreement,including court costs. 8. TEMPORARY SUSPENSIONS OF CREDIT AND REDUCTION OF CREDIT LIMIT. Lender can refuse to make additional Advances or reduce Borrower's Credit Limit if any Event of Default occurs or during any period in which any one of the following conditions (hereinafter called 'Conditions of Suspension') arise: • The value of Borrower's Home declines significantly below its appraised value for purposes of the line of credit. For example, if the difference between the initial Credit Limit and the available equity (based on appraised value)is reduced by 50%,then the value of Borrower's Home has significantly declined. • Lender reasonably believes that Borrower will not be able to meet the repayment requirements of this Agreement due to a material change in Borrower's financial circumstances. • Borrower is in default of a material obligation in this Agreement. • Government action prevents Lender from imposing the agreed upon ANNUAL PERCENTAGE RATE or impairs Lender's security interest in Borrower's Home such that the value of the interest is less than 120 percent of the Credit Limit. • A regulatory agency has notified Lender that continued Advances would constitute an unsafe and unsound practice. • The maximum-ANNUAL PERCENTAGE RATE specified-above is-reached:- .If Lender refuses to make additional advances or reduces the credit limit because of the existence of a Condition of Suspension,it wit notify Borrower in writing after taking such action. Borrower must request reinstatement of the line of credit and show Lender that the Condition of Suspension which triggered the Lender's action no longer exists unless the Condition of Suspension is not within Borrower's knowledge or control. 9. TERMINATION BY BORROWER. Any Borrower may terminate this Agreement by notifying Lender in writing at the address indicated on this Agreement,. but no termination shall be effective until Lender has processed(at its option) all advances requested by any Borrower. Termination by any one Borrower shall terminate this Agreement for all Borrowers. Borrower's obligation to pay all amounts due to Lender shall continue until all amounts due and owing have been paid. If this Agreement is signed initially or subsequently by more than one Borrower,termination by any one terminates the line of credit for all. 10. AMENDMENT. Lender may amend this Agreement if Borrower specifically agrees to the amendment in writing at the time the amendment is made. Lender also may amend this Agreement without the Borrower's agreement thereto by notifying Borrower of the amendment if the amendment unequivocally benefits Borrower throughout the remainder of the plan or if the amendment is insignificant. All amendments will be made in accordance with applicable law. 11. TAX DEDUCTIBILITY. Borrower should consult a tax advisor regarding the deductibility of interest and charges on the Account. 12. JOINT ACCOUNT. II there is more than one Borrower,their obligations under this Agreement shall be joint and several.This liability exists regardless of which Borrower creates the debt, and in spite of any divorce, legal proceedings or agreement that may affect liability between the Borrowers. This joint and several liability shall continue until all obligations are paid in full. A release of one joint Borrower or a release of any collateral securing this Agreement shall not operate as a release of any other joint Borrower. . 13. MODIFICATION AND WAIVER.The modification or waiver of any of Borrower's obligations or Lender's rights under this Agreement must be contained in a writing signed by Lender. Lender may perform any of Borrower's obligations or delay or fail to exercise any of its rights without causing a waiver of those obligations or rights. A waiver on one occasion shall not constitute a waiver on any other occasion. Borrower's obligations under this Agreement shall not be affected if Lender amends, compromises, exchanges,fails lo exercise,impairs or releases any of the obligations belonging to any co-borrower or guarantor or any of its rights against any co-borrower,guarantor or collateral. 14. ASSIGNMENT. Borrower will not be entitled to assign any of its rights, remedies or obligations described in this Agreement without the prior written consent of Lender which may be withheld by Lender in its sole discretion. Borrower agrees that Lender is entitled to assign some or all of its rights and remedies described In this Agreement without notice to or the prior consent of Borrower in any manner. 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors„ assigns, trustees, receivers,administrators, personal representatives, legatees, and devisees. (The term 'Lender' shall mean the Lender specified in this Agreement,its successors and assigns,and subsequent holders of this Agreement). 16. NOTICES. Any notice or other communication to be provided under this Agreement shall be in writing and sent to the parties at the addresses described in this Agreement or such other address as the parties may designate in writing from time to lime. 17- APPLICABLE LAW. Interest,including rates,fees and charges which compensate Lender for the extension of credit to Borrower under this Agreement or for making the line of credit available to Borrower,or which compensate Lender for any default or breach by Borrower of the terms and conditions of this Agreement, shall be governed by federal-law the laws of the state of Iowa . All other terms and conditions of this Agreement shall be governed by the laws of the state of Iowa .unless otherwise preempted by federal law. 18. VENUE. Unless applicable law provides otherwise,Borrower consents to the jurisdiction and venue of any court located in Iowa selected by Lender,in its discretion, in the event of a legal proceeding under this Agreement. 19. SIGNATURES. The signature of the Borrower shall indicate that Borrower has read this Agreement,agreed to the terms and conditions of the Agreement, and received a completed copy of this Agreement and Billing Rights Statement. 20. SEVERABILITY. If any provision of this Agreement is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 21. MISCELLANEOUS. Borrower will provide Lender with current financial statements and other information upon request. All references to Borrower in this Agreement shall include all of the parties signing this Agreement as Borrower and this Agreement shall be binding upon the heirs,successors and assigns of Borrower and Lender. Borrower and Lender agree that time is of the essence. Borrower and any person who endorses this Agreement waive presentment, demand for payment, notice of dishonor and protest,except for Borrower's Right to Cure Default,as provided for under applicable law,and further waive any right(if any)to require Lender to proceed against anyone else before proceeding against Borrower or said person. This Agreement represents the complete ' and integrated understanding between Borrower and Lender with respect to the terms hereof. 22. ADDITIONAL TERMS: BY SIGNING THIS NOTE, BORROWER(S)ACKNOWLEDGE(S)THAT LENDER HAS NOT CONDITIONED THIS EXTENSION OF CREDIT UPON THE PURCHASE BY BORROWERrte • 4`10` (S)OF ANY INSURANCE OR ANNUITY PRODUCT ` H L:K E AGENCY. VP � 1 10 V ,old-1a i k`� tip :h• Wd 9_ C l Z e C5 • LPiA1110 0 Harland Financial Solutions.Inc 18/30ro1)(soo)537.3799 Pape 3 of 4 • a CREDIT LIFE AND CREDIT DISABILITY INSURANCE Credit Life Insurance and Credit Disability Insurance are not required to obtain credit, and will not be provided unless Borrower signs below and agrees to pay the additional costs. Credit Life insurance QX is not available. O Is available ata cost of$ per$ of the per billing period for single coverage and$ per$ of the per billing period for joint coverage(if available). Credit Disability Insurance®is not available. 0 Is available at a cost of $ per $ of the per billing pend . ELECTS INSURANCE: DE���URA //�/ Borrower requests Credit Life Insurance ., Borrower d clip Credi Life and re it fs�urance Borrower requests Credit Disability Insurance Co-Borrower requests Credit Life Insurance Co-Borrower declines Credit Life Insurance BILLING RIGHTS STATEMENT i'OUR(BORROWER'S)BILLING RIGHTS,KEEP THIS NOTICE FOR FUTURE USE. This notice contains important information about the Borrowers rights and the Lender's responsibilities under the Fair Credit Billing Act. NOTIFY LENDER IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR(BORROWER'S)BILL If Borrower thinks that a bill is incorrect or if Borrower needs more information about a transaction on a bill, Borrower should write to Lender as soon as possible at the address indicated on the bill. Lender must hear from the Borrower no later than sixty(60)calendar days after Lender sent Borrower the first bill on which the error or problem appeared. Borrower may telephone Lender,but doing so will not preserve the Borrower's rights. -- Borrower should provide the following information in the letter. Borrower's name and account number. The dollar amount of the suspected error. A description of the error and an explanation, if possible,why Borrower believes there Is an error. If Borrower needs more information, Borrower should describe the item Borrower is unsure about If Borrower has authorized Lender to pay the bill automatically from a savings or checking account, Borrower can stop payment on any amount that the Borrower believes is wrong. To stop payment the Borrower's letter must reach Lender at least three (3)business days before the automatic payment is scheduled to occur. BORROWER'S RIGHTS AND LENDER'S RESPONSIBILITIES AFTER LENDER RECEIVES WRITTEN NOTICE. Lender must acknowledge Borrower's letter within thirty(30)days,unless Lender has corrected the error by then. Within ninety (90)days,Lender must either correct the error or explain why Lender believes the bill is correct. Alter Lender receives Borrower's letter,Lender cannot try to collect any amount in question, or report the Borrower as delinquent. Lender may continue to bill ;he Borrower for the amount in question, including finance charges,and Lender may apply any unpaid amount against the Borrower's credit limit Borrower does not have to pay any questioned amount while Lender is investigating,but Borrower is still obligated to pay the parts of the bill that are not in question. If Lender finds that Lender has made a mistake on the bill, Borrower will not have to pay any finance charges related to the amount in question. If Lender did not make a mistake,Borrower may have to pay finance charges and Borrower will be required to make up any missed payments on the questioned amount. In either case,Lender will send Borrower a statement of the amount owed and the date it is due. If Borrower fails to pay the amount owed, Lender may report the Borrower as delinquent. However,if Lender's explanation does not satisfy Borrower and Borrower writes to Lender within ten (10)days telling Lender that Borrower still refuses to pay, Lender must tell anyone Lender reported Borrower to that Borrower has a question regarding Borrower's bills. Furthermore, Lender must tell Borrower the name of anyone that Lender reported Borrower to. Lender must tell anyone Lender reports Borrower to that the matter has been settled between us when it finally is. If Lender doesn't follow these rules,Lender cannot collect the first$50.00 of the questioned amount,even it the bill was correct VMOI 'All0 v'MOI V ,O1 ,t _13 l'J'tO1 >12:1910 },!iO -k1.I .6 17 0 :I Wd 9- U'i &UZ c. — Nor adz •`31Id O4IId i ale+tln m u..6M gn.nWJ CN,.in.,*i,n ratan,rani n57_'27f Cw•N 4 3 qt 8 41, 5 11I'°1111I I 111IIIIIII I 1110111111111 1 Ill III II 1 11 11 11 II • aD....£0: 015314290005 Tvoe: GEN Recorded: 12/03/2003 at 11:23:41 AM Fee Amt: $31.00 Page 1 of 5 Johnson County Iowa Kimberly A. Painter County Recorder BK3673 PG747-751 This document was prepared by: Connie Clark, Hills Bank & Trust Company, 319-679-5566, Ext. 5297 131 Main Street Hills, Iowa 52235 HOME EQUITY LINE MORTGAGE (This is a Consumer Credit Transaction) .-BORROWER'> . 1 MORTGAGOR W 'esseltine Melissa H. Nesseltine, as a single person 3 7) c-- ? 4D[1RI s `rut 5 ,a ADDR ss . .. t 'j - .. , :.># ?M #z • 1315 Lukirk Street 1315 Lukirk Street �.� Iowa City IA 52240 Iowa City, IA 52240 ,- 27EL,.t Ww0, ANI:4.. 0WON,ltd,Seftz m. .ANO.- <' IOENTFICATION NO. 2x..,.�,., " NS.�z3 i CE: THIS MORTGAGE SECURES CREDIT IN THE AMOUNT OF$ 3,000.00 . LOANS AND ADVANCES UP TO THIS AMOUNT, R1 '1'.'=T>IER WITH INTEREST,ARE SENIOR TO INDEBTEDNESS TO OTHER CREDITORS UNDER SUBSEQUENTLY RECORDED OR FILED 0 -.p MORTGAGES AND LIENS. Mortgagor hereby mortgages,grants,assigns and conveys to Hills Bank and Trust Company L V1 lAJ ('Lender'),the real property described in Schedule A,which is attached to this Mortgage and incorporated herein, together with all future and present improvements and fixtures;privileges,hereditaments, and appurtenances; leases,licenses and other agreements; rents,issues and profits;water,well, ditch,reservoir and mineral rights and stock,and standing limber and crops pertaining to the real property(cumulatively'Property'). 0 a Moreover,in further consideration, Mortgagor does,for Mortgagor and Mortgagor's heirs,representatives,successors,and assigns,hereby expressly ti(') t— warrant,covenant,and agree with Lender,Its successors and assigns as follows: *,=e .meq 1. OBLIGATIONS. This Mortgage shall secure the payment and g i.—i p y performance of all present and future indebtedness, liabilities, obligations and '� '�— covenants of Borrower or Mortgagor(cumulatively'Obligations')to Lender pursuant to: n..{ (a)this Mortgage and the following promissory notes and other agreements: • r-- _ tNTERST ,.,..' PR)NCIPAL AMOUNT(, UNDING! MATURITY CUSTOMER LOAN.. -.<r- 1 „ 'RP F a ,:OREDITLIMIT .. :-AGREEMENT DATE. ': %DATE i NUMBER • NUMBER-`: ; 17. EVENTS OF DEFAULT. An Event of Default will occur under this Mortgage in the event that Mortgagor, Borrower or any guarantor of any Obligation: • .(a",,--'commits fraud or makes a material mis, sentation at any time in connection with the Obligatic r this Mortgage; .(b) 1`ails to meet the repayment terms of the Obligations for any outstanding balance;or (c) by any action or inaction, adversely affects the Property, or.any'right of Lender in such Properly, including, but not limited to,transfer of title to or sale of the Property without the permission of Lender,failure to maintain required insurance or to pay taxes on the Property,allowing the filing of a lien senior to that held by Lender,death of the sole Borrower obligated under the Obligations, allowing the taking of the Property through eminent domain, or allowing the Property to be foreclosed by a lienholder other than Lender. In addition, an Event of Default shalt occur if,as a result of any of the following, the Property,or any right of the Lender in the Property,is adversely affected: the Borrower,Mortgagor or any guarantor of any Obligation commits waste or otherwise destructively uses or fails to maintain the Property, uses the property in an illegal manner which may subject the Property to seizure,or moves form the Property;a judgment is filed against the Borrower, Mortgagor or any guarantor of any Obligation;or one of two Borrowers obligated under the Obligations dies. Any of the foregoing shall constitute a default that materially impairs the condition, value,or the Lender's right in the Property,and shall evidence a material impairment of the Borrower's prospect of paying the Obligations. If a court should determine that one or more of the above do not constitute a default under the Iowa Consumer Credit Code, Mortgagor agrees that reinstatement of the Obligations shall be Mortgagor's sole remedy and Mortgagor shall not be entitled to any damages by reason of Lender's exercise of any of its remedies herein. 18. RIGHTS OF LENDER ON EVENT OF DEFAULT. Upon the occurrence of an Event of Default under this Mortgage, Lender shall be entitled to exercise one or more of the following remedies without notice or demand(except as required by law): (a) commits fraud or makes a material misrepresentation at any time in connection with the Obligations or this Mortgage; (b) fails to meet the repayment terms of the Obligations for any outstanding balance;or • (c) by any action or inaction, adversely affects the Property,or any right of Lender in such Property,including, but not limited to,transfer of title to or sale of the Property without the permission of Lender,failure to maintain required insurance or to pay taxes on the Property,allowing the filing of a lien senior to that held by Lender,death of the sole Borrower obligated under the Obligations, allowing the taking of the Property through eminent domain, or allowing the Property to be foreclosed by a lienholder other than Lender. In addition, an Event of Default shall occur if,as a result of any of the following, the Property, or any right of the Lender in the Property, is adversely affected: the Borrower, Mortgagor or any guarantor of any Obligation commits waste or otherwise destructively uses or fails to maintain the Property,uses the Property in an illegal manner which may subject the Property to seizure,or moves from the Property; a judgment is filed against the Borrower,Mortgagor or any guarantor of any Obligation;or one of two Borrowers obligated under the Obligations dies. (f) to pay any sums in any form or manner deemed expedient by Lender to protect the security of this Mortgage or to cure any default other than payment of interest or principal on the Obligations; (g) to foreclose this Mortgage; (h)to set-off Mortgagor's Obligations against any amounts owed Mortgagor by Lender including, but not limited to,monies, instruments, and deposit accounts maintained with Lender or any currently existing or future affiliate of Lender;and (i)to exercise all other rights available to Lender under any other written agreement or applicable law. Lender's rights are cumulative and may be exercised together, separately,and in any order. In the event that Lender institutes an action seeking the recovery of any of the Property by way of a prejudgment remedy in an action against Mortgagor, Mortgagor waives the posting of any bond which might otherwise be required. Lender or Lender's designee may purchase the Property at any sale. The Property or any part thereof may be sold in one parcel,_or in.such parcels,_manner_or order as Lender in its sole_discretion may_elect,end one or more exercises of the power herein granted shall not extinguish or exhaust the power unless the entire Property is sold or the Obligations are paid in full. 19. REDEMPTION PERIOD. Mortgagor hereby agrees that in the event of judicial foreclosure of this Mortgage, Lender may,at its sole option, elect (a) pursuant to Iowa Code§628.26 as now enacted or hereafter modified, amended or replaced, toreducethe period of redemption after sale on foreclosure to six months,or (b) pursuant to Iowa Code§628.27 as now enacted or hereafter modified, amended or replaced, to reduce the period of redemption after sale on foreclosure to sixty days,or M1� (c) pursuant to Iowa Code§ —.628.28 as now enacted or hereafter modified, amended or replaced,or any other Iowa Code Section,to reduce the 0 period of redemption after sale on foreclosure to such time as may be then applicable and provided by law,or t_ —p i (d) pursuant to Iowa Code &54.20 as now enacted or hereafter modified,amended or replaced,to foreclose without redemption.. _ -, �s 20. SECURITY INTEREST UNDER THE UNIFORM COMMERCIAL CODE. This Mortgage shall be considered a financing statement and a facture *.."' filing pursuant to the provisions of the Uniform Commercial Code(as adopted by the slate where the Property is located)covering fixtures,chattels, ti �,� and articles of personal property now owned or hereafter attached to or to be used in connection with the Property together with any and all - -, V1 Y i replacements thereof and additions thereto(the'Chattels'),and Mortgagor hereby grants Lender a security interest in such Chattels. The debtor is the "'• ' Mortgagor described above. The secured party is the Lender described above. Upon demand, Mortgagor shall make, execute and deliver such --.t . fa"'r security agreements (as such term is defined in said Uniform Commercial Code)as Lender al any time may deem necessary or proper or required to Ci �.Ji r grant to Lender a perfected security interest in the Chattels,and.upon Mortgagor's failure to do so,Lender is authorized to sign any such agreement as the agent of Mortgagor. Mortgagor hereby authorizes Lender to file financing statements (as such term is defined in said Uniform Commercial Code) 0-Y • with respect to the Chattels,at any time,without the signature of Mortgagor. Mortgagor will,however,Sc any time upon request of Lender,sign such r II-arcing statements. Mortgagor will pay all filing fees for the filing of such financing statements and for the refiling thereof at the times required, in 1,f1 ,;:ie opinion of Lender,by said Uniform Commercial Code. If the lien of this Mortgage is subject to any security agreement covering the Chattels,then .= r`,,.1 in the event of any default under this Mortgage, all the right,title and interest of Mortgagor in and to any and all of the Chattels is hereby assigned to Lender,together with the benefit of any deposits or payments now or hereafter made thereof by Mortgagor or the predecessors or successors in title of O j Mortgagor in the Property. t C) 21. REIMBURSEMENT OF AMOUNTS EXPENDED BY LENDER. Lender,at Lender's option, may expend funds(including attorneys'tees and legal ./2. s w expenses)to perform any act required to be taken by Mortgagor or to exercise any right or remedy of Lender under this Mortgage. Upon demand, g'"1 Mortgagor shall immediately reimburse Lender for all such amounts expended by Lender together with interest thereon at the lower of the highest rate .. �` ft... described in any Obligation or the highest rate allowed by law from the date of payment until the date of reimbursement. These sums shall be --i n included in the definition of Obligations herein and shall be secured by the beneficial interest granted herein. If the Obligations are paid after the ..<y' beginning of publication of notice of sale,as herein provided, or in the event Lender shall,at its sole option, permit Mortgagor to pay any part of the `�j Obligations after the beginning of publication of notice of sale,as herein provided, then,Mortgagor shall pay on demand all expenses incurred by the --r1 -D 1 Lender in connection with said publication, including reasonable attorneys'fees to the attorneys for the Lender,and this Mortgage shall be security for Q all such expenses and lees. D;17. Li 22. APPLICATION OF PAYMENTS. All payments made by or on behalf of Mortgagor may be applied against the amounts paid by Lender(including attorneys'fees and legal expenses)in connection with the exercise of its rights or remedies described in this Mortgage and then to the payment of the 0 remaining Obligations in whatever order Lender chooses. 23. POWER OF ATTORNEY. Mortgagor hereby appoints Lender as its attorney-in-fact to endorse Mortgagor's name on all instruments and other -� documents pertaining to the Obligations or Mortgage. In addition, Lender shall be entitled, but not required, to perform any action or execute any document required to be taken or executed by Mortgagor under this Mortgage. Lender's performance of such action or execution of such documents shall not relieve Mortgagor from any Obligation or cure any default under this Mortgage. The powers of attorney described in this Mortgage are coupled with an interest and are irrevocable. Notwithstanding the foregoing, Lender is not entitled to confess judgment on any claim on behalf of Mortgagor. 24. SUBROGATION OF LENDER. Lender shall be subrogated to the rights of the holder of any previous lien,security interest or encumbrance discharged with funds advanced by Lender regardless of whether these liens,security interests or other encumbrances have been released of record. • 25. COLLECTION COSTS. If Lender hires an attorney to assist in collecting any amount due or enforcing any right or remedy under this Mortgage, Mortgagor agrees to pay Lender's collection costs,other than attorneys'fees. 26. PARTIAL RELEASE. Lender may release its interest in a portion of the Property by executing and recording one or more partial releases without affecting its interest in the remaining portion of the Property. Nothing herein shall be deemed to obligate Lender to release any of its interest in the Property(except as required under Paragraph 34),nor shall Lender be obligated to release any part of the Property if Mortgagor is in default under this Mortgage. 27. MODIFICATION AND WAIVER.The modification or waiver of any of Mortgagor's Obligations or Lender's rights under this Mortgage must be contained in a writing signed by Lender. Lender may perform any of Borrower's or Mortgagor's Obfigations, delay or fail to exercise any of its rights or accept payments from Mortgagor or anyone other than Mortgagor without causing a waiver of those Obligations or rights. A waiver on one occasion shall not constitute a waiver on any other occasion. Mortgagor's Obligations under this Mortgage shall not be affected if Lender amends, compromises, exchanges,fails to exercise,impairs or releases any of the Obligations belonging to any Mortgagor, Borrower or third party or any of its rights against any Mortgagor, Borrower or third party or any of the Property. Lender's failure to insist upon strict performance of any of the Obligations shall not be deemed a waiver,and Lender shall have the right at any time thereafter to insist upon strict performance. 28. SUCCESSORS AND ASSIGNS. This Mortgage shall be binding upon and inure to the benefit of Mortgagor and Lender and their respective successors,assigns,trustees,receivers,administrators,personal representatives,legatees and devisees, 29. NOTICES. Except as otherwise required by law,any notice or other communication to be provided under this Mortgage shall be in writing and sent to the parties at the addresses described in this Mortgage or such other address as the parties may designate in writing from time to lime. Any such notice so given and sent by first class mail,postage prepaid, shall be deemed given the earlier of three(3)days after such notice is sent or when received by the person to whom such notice is being given. 30. SEVERABIUTY. Whenever possible, each provision of this Mortgage shall be interpreted so as to be effective and valid under applicable state law. If any provision of this Mortgage violates the law or is unenforceable,the rest of the Mortgage shall continue to be valid and enforceable. 31. APPLICABLE LAW.This Mortgage shall be governed by the laws of the state of Iowa. 32. NO THIRD-PARTY RIGHTS. No person is or shall be a third-party beneficiary of any provision of the Mortgage. All provisions of the Mortgage in favor of Lender are intended solely for the benefit of Lender,and no third party shall be entitled to assume or expect that Lender will waive or consent to the modification of any provision of the Mortgage,in Lender's sole discretion. LPIA508C p Harland Financial SoWtions,Inc.(5409!031(8001937-3799 Page 3 0l 5 STATE OF ( C( • • COUNTY OF �,JCY 11")� . ) SS: .. .. On this day of / bei ,20D-3 ,before me,the undersigned, a Notary Public in and for said county and state, personally appeared I a .. ..'s 1 I ' I _ A • . tuba to me personally known to be the identical person named in and who executed the within and foregoing instrument, and acknowledged� � that he[she) executed the same as his(her)voluntary act and deed. � ` j 'n'3=CCA DCWA, 3 1 4.1,40JJ !dr., k Cor,nissionNurner as.,u C�/.� ' 1/„ /L ,NotaryPublic Vitt' My Comm.Fes.Illy v� " in and for said County and Stale STATE OF ) ) SS: COUNTY OF On this day of ,before me,the undersigned, a Notary Public in and for said county and state, personally appeared to me personally known to be the identical person named in and who executed the within and foregoing instrument, and acknowledged that he[she] =:ecuted the same as his[her)voluntary act and deed. ,Notary Public in and for said County and Slate R„SS.CHEDli.LEX°;'a€ - The street address of the Property(if applicable)is: 1315 Lukirk Street Iowa City, Iowa 52240 The permanent tax identification number of the Property is: 1014344004 The following described real property located in the County of Johnson ,Slate of Iowa Lot Seven (7) in Block Two (2), in Sunnyside Addition to Iowa City, Iowa, according to the recorded plat thereof. 4 • —AO rn f:mo✓ I ...SCHEDULE O O s-c.) L. yO rn O XJ 177 j D LPIA8OSE l Harland Financial Solutions,Inc.(0c/25/03)18001537.3759 Pape 5of 8_...__-_ . . . . . • .. Hills Bank 131 Main Street Hills, Iowa 52235 and Trust Company 319-679-2291 September 11, 2008 NOTICE OF RIGHT TO CURE DEFAULT (Sent Certified and Regular Mail) Melissa M Hesseltine 1315 Lukirk St . Iowa City IA 52240 This letter provides notice of your right to cure the default under a promissory note#8009956401 dalc .peceber 2, 2003 with a current principal balance of$2146.74 that is secured by a real estate mortgage on the prrplrty a =t<315 Lukirk St., Iowa City, IA as legally described under said mortgage. This default consists of the fail€e-to map the following payments: payment of$10.86 due on July 10,2008, payment of$11.58 due on Aug. 10, , and:paym n"f'of $10:50 due on September 10, 2008. r,7 rri You have the right to cure this default by October 15,2008. You do so by bringing the payme urrei�on this loan. You must pay the Total Amount Past Due of$32.94 plus the next scheduled payments of$11.22 due* October 10, 2008 for a grand total of$44.16 by October 15,2008. Payments can he made to any of our offices in Iowa City, Coralville, North Liberty, Lisbon, Mt. Vernon, Cedar Rapids,Marion, Wellman, Kalona, or Hills. This letter is notice to you that Hills Bank and Trust Company requires you to cure this default by October 15,2008. If you do not, the Bank can then proceed to enforce its right to foreclose on the mortgage covering this property. Enclosed for your reference is Iowa Code section 654.2D(see sub-section 3-7) which sets forth your right to cure. We reconNend you • contact your attorney. 0 '' '4 —n Iowa law may give you the right to counseling services. Here are some nearby agencies that may 1 able .. elp: Neighborhood Housing Services of Davenport, Inc. -:r- 115-W. 6th Street - fTl __ Davenport, IA 52803 O i 563-324-1556 www.mvhs.or9 t-- Home Home Opportunities Made Easy, Inc 1111 Ninth Street, Suite 210 Des Moines IA 50314 515-243-1277 www.homeincdsm.org CCCS of Northeastern Iowa 1003 W. 4th Street N • 0 Waterloo, IA 50702-2803 -- �� 319-234-0661 www/cccsia.org t a ' C5 Or feel free to call HUD toll free @ 800-569-4287. = 1 Since•ely, � �-�-; Dan Widmer iro Collection Officer Hillsowa City Liberty Rapids VernonVernonMarion • Wellman hillsbank.com 1-800-445-5725 Hills Bank 131 Main Street Hills, Iowa 52235 and Trust Company 319-679-2291 654.2D NONAGRICULTURAL LAND -- NOTICE, RIGHT TO CURE DEFAULT I. Except as provided in section 654.2A, a creditor shall comply with this section before initiating an action pursuant to this chapter or initiating the procedure established pursuant to chapter 655A to foreclose on a deed of trust or mortgage. 2. A creditor who believes in good faith that a borrower on a deed of trust or mortgage on a homestead is in default shall give the borrower a notice of right to cure as provided in section 654.2B. A creditor gives the notice when the creditor delivers the notice to the consumer or mails the notice to the borrower's residence as defined in section 537.1201, sub-section 4. 3. The borrower has a right to cure the default within thirty days from the date the creditor gives the notice. _4. a. The creditor shall not accelerate the maturity of the unpaid balance of the obligation, demand or otherwise take possession of the land, otherwise than by accepting a voluntary surrender of it,or otherwise attempt to enforce the obligation until thirty days after a proper notice of right to cure is given. h. Until the expiration of thirty days after notice is given,the borrower may cure the default by tendering either the amount of all unpaid installments due at the time of tender, without acceleration,or the amount stated in the notice of right to cure, whichever is less, or by tendering any other performance necessary to cure a default which is described in the notice of right to cure. 5. The act of curing a default restores to the borrower the borrower's rights under the obligation and the deed of trust or mortgage. 6. This section does not prohibit the creditor from enforcing the creditor's interest in the land at any time after the creditor has complied with this section and the borrower did not cure the alleged default. 7. A borrower has a right to cure the default unless the creditor has given the borrower a proper notice of right to cure with respect to a prior default which occurred within three hundred sixty-five days of the present default. 8. This section does not apply if the creditor is an individual or individuals, or if the mortgaged property is property other than a one-family or two-family dwelling which is the residence of the mortgagor. 9. An affidavit signed by an officer of the creditor that the creditor has complied with this section is deemed to be conclusive evidence of compliance by all persons other than the creditor and the mortgagor. 87 Acts, ch 142, § 14 N O r O -4 o CO LI 1 r C 111E c= dM0I 110 rAOI N 00e2 112.12 v , .10 N -• O tic :6 old NVI 61131 Hills • Iowa City • Coralvilte • North iberty • Kalona • Cedar Rapids • Lisbon • Mount Vernon • Marion •Wellman hillsbank.com 1-800-445-5725 END OF CASE FILE CIVIL PROCESS WORKSHEET COUNTY SHERIFFS OFFICE • PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540 • (319) 356-6030 F. WELLS FARGO BANK Docket No 109-01086 State IOWA I vs. Court No IEQCV070389 County 1JOHNSON DEFENDANT: ALLEN, BRAD Ref No DEFENDANT: ALLEN, TYLLA Received 02/25/2009 W DEFENDANT: CITY OF IOWA CITY Requestor(s) Phone SARCONE,JAMES V JR (515) 283-4624 Name 1CITY OF IOWA CITY — Party Type DEFENDANT Address +410 E WASHINGTON ST IOWA ilA 1152240 Phone (319)356-5030 I E-Mail ! I Fax I I Employer 1 1 Zone 1 Comments Documents Document Serve by Date OE PSR Description/Special Instructions ;ORIGINAL NOTICE AND I (PETITION U U I =__--- -- Service Information Attempts Log Date � !35 Date Time Server Notes Time Type Party I. ' /�,�7 • J (O 1'Q V011, Relationshbre1 C ' ,p V X Race �� Sex i'-- DOB Location 410 L‘/Q .`,19 /\ Miles Fee Officer /2„� Notes: FII-,PD FEB 2 5 n09 r)-1 Printed:Wednesday, February 25 2009 Page 1 of 1 r • FTT ,FT) FEB 25 2009 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY WELLS FARGO BANK N.A.,TRUSTEE FOR ) EQUITY NO. EQe,v0703 ? CARRINGTON MORTGAGE LOAN,TRUST ) SERIES 2006-NC5 ASSET-BACKED PASS ) THROUGH CERTIFICATES ) ) ORIGINAL NOTICE Plaintiff ) ) v. ) BRAD ALLEN; TWYLLA ALLEN;ROTH ) JEWELERS LTD.;CITY OF IOWA CITY, IOWA ) Defendant(s). ) TO THE ABOVE-NAMED DEFENDANTS: You are notified that a petition has been filed in the office of the clerk of this court naming you as the defendant(s) in this action. A copy of the petition, and any documents filed with it, is attached to this notice. The name and address of the Plaintiffs attorney is James V. Sarcone, Jr., Belin Law Firm, The Financial Center, 666 Walnut Street Suite 2000, Des Moines, Iowa 50309-3989. The attorney's phone number is 515-283-4624;facsimile number 515-283-4653. You must serve a motion or answer within twenty (20) days after service of the Original Notice upon you. Within a reasonable time thereafter you must file your motion or answer with the Clerk of Court for Johnson County, at the County Courthouse in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the Petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator at 319-398-3920 ext. 1. (If you are hearing • impaired,call Relay Iowa TTY at 1-800-735-2943.) /1 Q" Loilia4 A UER:t,LEY `ter/V^ek_ • 4 ' II , , CL,41 OF THE ABOVE COURT / IMPORTANT: YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS L ', F. r__ ... Ci. S k_A-, FILTH) 12: `tSP -m , IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY FEB 2 5 ?nn9 City CTrk it c:_, rc,, WELLS FARGO BANK N.A.,TRUSTEE FOR ) EQUITY NO. CARRINGTON MORTGAGE LOAN,TRUST ) e0070 SERIES 2006-NC5 ASSET-BACKED PASS �.. THROUGH CERTIFICATES £c", <•'' ) PETITION(FOR MORTGAd '., Plaintiff ) FORECLOSURE AND RECEI �} ) v. ) BRAD ALLEN;TWYLLA ALLEN;ROTH ) JEWELERS LTD.; CITY OF IOWA CITY, IOWA ) `G) ., Defendant(s). ) COMES NOW the Plaintiff and for cause of action against the Defendant(s),the Plaintiff states: NOTICE THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION. THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL TWELVE MONTHS (OR SIX MONTHS IF THE PETITION INCLUDES A WAIVER OF DEFICIENCY JUDGMENT)FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMILY DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED PROPERTY. YOU MAY PURCHASE AT THE SALE. 1. That Plaintiff is a foreign corporation; Defendants Brad Allen and Twylla Allen are natural persons last known to reside in Johnson County, Iowa; Defendant Iowa City is a political subdivision of the State of Iowa; remaining Defendant is a corporation doing business in the State of Iowa. • FED 2 5 7009 Ir" ; iuv:a 2. That on or about the 25th day of October, 2006, the Defendant Brad Allen made, executed and delivered to New Century Mortgage Corporation one certain Promissory Note in writing bearing the date aforesaid in the principal sum of$140,800.00 bearing interest at the adjustable rate of 9.95 percent per annum after maturity, and Exhibit"A" hereto attached and by this reference incorporated herein and made a part hereof is a true and correct copy of said Promissory Note. 3. That at the time of the execution of said Promissory Note, Exhibit"A" aforesaid, and as a part of the same transaction for the purpose of securing said Note with interest thereon and other sums hereinafter mentioned,the said Defendants Brad Allen and Twylla Allen made, executed and delivered to Mortgage Electronic Registration Systems, Inc., as nominee for New Century Mortgage Corporation one certain Mortgage in writing, transferring and conveying unto Mortgage Electronic Registration Systems, Inc., as nominee for New Century Mortgage Corporation the following real estate situated in Johnson County,Iowa,to-wit: Lots One(1)and Two(2),Block Seven(7),Morningside Addition,Iowa City,Iowa,situated in Johnson County,Iowa. and Exhibit"B"hereto attached and by this reference incorporated herein and made a part hereof, is a true and correct copy of said Mortgage. 4. That on November 27, 2006, the said Mortgage was duly recorded in Book 4104, Page 960, of the records of the office of the Recorder of Johnson County, Iowa. 5. The aforesaid Mortgage has been assigned to the Plaintiff herein. 6. That the said Defendant Brad Allen, has defaulted in the monthly payment of interest and principal and has neglected and failed to pay the installments as provided in the written instrument aforesaid and is now in default of the said payments for several months last past, and the Plaintiff does now elect to and hereby does declare the whole of said Note and Mortgage due and payable forthwith. 7. That the balance due on said Note and Mortgage as of February 17, 2009, is $177,103.72, including principal and interest and advancements, after allowing due credit to the Defendant(s) for all payments made. FEB 25 ZOOS 8. That in the preparation of this Petition and cause of action for presentation to the Court, it was necessary for Plaintiff to employ an attorney to represent and serve it herein, and for this purpose Plaintiff has retained and employed Belin Lamson McCormick Zumbach Flynn, A Professional Corporation, Attorneys at Law of this Court. 9. That the Plaintiff is willing and now offers, upon payment of the amount due it as heretofore set forth, to cancel the Note declared on, discharge of record the Mortgage securing the same, and to do all things that equity and good conscience may require of it. 10. That the Defendants herein have or claim to have some lien upon or interest in the mortgaged premises, but the Plaintiff avers that whatever lien or interest they or any of them may have thereon or herein, the same is junior and inferior to the lien of Plaintiff's Mortgage, Exhibit"B" and the amounts hereinbefore set out. 11. That Plaintiff waives its rights to a deficiency judgment in this matter. 12. That a Notice of Right to Cure Default was mailed to the Defendant Brad Allen more than 30 days prior to the filing of this foreclosure action/Petition and the defaults set out therein have not been cured. 13. Twylla Allen is included as a Defendant herein because she is the spouse of the record titleholder herein of the above property and a party in possession of said property. 14. Roth Jewelers Ltd. is included as a Defendant herein because of a judgment rendered October 17, 2003 in the amount of$811.55 plus interest and costs, rendered in its favor against Brad Allen in SCSC057655 of the Johnson County, Iowa records. This judgment is inferior to Plaintiffs purchase money mortgage.. 15. City of Iowa City, Iowa is included as a Defendant herein because of the following mortgages covering the above property: a. Mortgage in an amount not shown and recorded December 13, 2006 in Book 4110, Page 124 of the Johnson County, Iowa records. b. Mortgage for $3,739.00 recorded January 26, 2007 in Book 4123, Page 901 of the Johnson County, Iowa records. • • c. Mortgage dated December 20, 2007 which secures promissory note flr $3,739.00 executed January 11, 2007; secures promissory note f&" $19,063.00 executed August 17, 2007; and secures promissory note < `+ P m . $2,532.00 executed December 20, 2007, recorded December 27, 200TF ' 5 2009 Book 4247, Page 619 of the Johnson County, Iowa records. C;;,.�I WHEREFORE,Plaintiff prays: FIRST: That a Receiver be appointed by the Court to take immediate possession of the mortgaged premises hereinbefore described, with power and authority and the duty to keep, repair, maintain and insure the premises,buildings and other improvements thereon; to lease the same and collect the rents, issues and profits arising which may be had therefrom, and to retain and dispose of said rents and profits as said Mortgage provides and as the Court may hereafter determine and direct. SECOND: (a) That the Plaintiff have judgment in rem, against the mortgaged premises in the sum of$177,103.72 with interest at 9.95 percent from February 17, 2009, and have such additional sum of sums as may hereafter be advanced for continuing the abstract of title or other purposes authorized by said Note and Mortgage and by Iowa law. (b) For reasonable attorney's fees upon the Note, interest and other sums advanced by the Plaintiff as set out above, and for the costs of this action. THIRD: That said judgment be declared to be a lien upon the mortgaged premises involved herein from and after the date of execution of said Mortgage, Exhibit"B", to-wit, October 25, 2006, and upon the rents, issues and profits arising and which may be had therefrom from and after the date of filing of this Petition, and that said lien be declared to be prior and paramount to the lien and interest of the Defendant(s)upon and in the said property. FOURTH: That Plaintiff's Mortgage aforesaid, Exhibit"B", be foreclosed, and that a special execution issue for the sale for the mortgaged premises,or so much thereof as may be necessary to satisfy the said judgment with interest and costs. FIFTH: That in the event the property aforesaid does not sell for sufficient to satisfy the judgment herein, the net proceeds from the rents, issues and profits which may be had therefrom, from and after this date,be applied upon said judgment until the same is fully satisfied. SIXTH: That after the Sheriff's sale of the above described premises pursuant to a special execution issued herein, a Writ of Possession issue herein under seal of this Court directed to the Sheriff of Johnson County, Iowa, commanding him to put the Grantee under Sheriff's Deed in possession of the premises deeded to him, and to remove any Defendant(s),or persons claiming by,through or under any of them,or any person in possession thereof,out of such possession of said premises. SEVENTH: That Plaintiff have such other and further relief as the Court may find it to be entitled to in equity. BELIN LAMSON McCORMICK ZUMBACH FLYNN A Professional Corporation BY • J S V. SARCONE,JR. The Financial Center 666 Walnut Street Suite 2000 Des Moines, IA 50309-3989 Telephone: 515-243-7100 AT0006913 FMED FEB 2 5 2009 D:W ewcentury\Al Ien\Petset.Doc JIiiIIjJjil1IllhII)IL1111 MIN: 1004889101e ADJUSTABLE RATE NOTE (L IBOR Six-Month Index (As Published In The Wall Street Journal)-Rate Caps) THIS NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN MY INTEREST RATE AND MY MONTHLY PAYMENT. THIS NOTE LIMITS THE AMOUNT MY INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE 1 MUST PAY. October 25, 2006 Iowa City Iowa [Date] [City] (State] S p.nn 122 S 7TH AVE, Iowa City, IA 52245 FEB 2 5 2009 [Property Address] 1. BORROWER'S PROMISE TO PAY In return for a loan that I have received,I promise to pay U.S. $140,800.00 (this amount is called "Principal"),plus interest,to the order of Lender. Lender is New Century Mortgage Corporation I will make all payments under this Note in the form of cash, check or money order. I understand that Lender may transfer this Note. Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the "Note Holder." 2. INTEREST Interest will be charged on unpaid principal until the full amount of Principal has been paid. I will pay interest at a yearly rate of 9.950 %. The interest rate I will pay may change in accordance with Section 4 of this Note. The interest rate required by this Section 2 and Section 4 of this Note is the rate I will pay both before and after any default described in Section 7(B)of this Note. • 3. PAYMENTS (A)Time and Place of Payments I will pay principal and interest by making a payment every month. I will make my monthly payments on the first day of each month beginning on December 1, 2006 I will make these payments every month until I have paid all of the principal and interest and any other charges described below that l may owe under this Note. Each monthly payment will be applied as of its scheduled due date and will be applied to interest before Principal. If, on 11/01/2036 , I still owe amounts under this Note,I will pay those amounts in full on that date, which is called the "Maturity Date." I will make my monthly payments at 18400 Von Kerman, Suite 1000, Irvine, CA 92612 or at a different place if required by the Note Holder. (B)Amount of My Initial Monthly Payments Each of my initial monthly payments will be in the amount of U.S. $1,230.43 .This amount may change_ (C)Monthly Payment Changes Changes in my monthly payment will reflect changes in the unpaid principal of my loan and in the interest rate that I must pay. The Note Holder will determine my new interest rate and the changed amount of my monthly payment in accordance with Section 4 of this Note. 1010552261 MULTISTATE ADJUSTABLE FATE NOTE-LIBORSIX-MONTH INDEX(AS PLIBIJ9-1ED IN THE WALL STREET JOURNAL)- Sirgle Family-Fannie Mae UNIFORM INSTRUMENT CD-838N gum) Form 3520 1/01 _ - VMP MORTGAGE FRMS-IBOO)521.T291 Pve i of 4 tmtteti: ((1 GGG P- 4. INTEREST RATE ANI) MONTHLY PAYMENT CHANGES FEB 2 2009 (A) Change Dates The interest rate I will pay may change on the first day of November, 2009 , and on that day every 6th month thereafter. Each date on which my interest rate could change is called a "Change Date." (B)The Index Beginning with the first Change Date, my interest rate will be based on an Index. The "Index" is the average of interbank offered rates for six month U.S. dollar-denominated deposits in the London market ("LIBOR"), as published in The Wall Street Journal. The most recent Index figure available as of the first business day of the month immediately preceding the month in which the Change Date occurs is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice. (C)Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Six And Fifty-five Hundredth(a) percentage points( 6.550 %) to the Current Index. The Note Holder will then round the result of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D)below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at my new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. (D)Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 11.950 % or less than 9.950%. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than One And One-half percentage point(s)( 1.500 %) from the rate of interest I have been paying for the preceding 6 months. My interest rate will never be greater than 16.950%. (E)Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice. 5. BORROWER'S RIGHT TO PREPAY I have the right to make payments of Principal at any time before they are due. A payment of Principal only is known as a "Prepayment." When I make a Prepayment, I will tell the Note Holder in writing that I am doing so. I may not designate a payment as a Prepayment if I have not made all the monthly payments due under this Note. I may make a full Prepayment or partial Prepayments without paying any Prepayment charge. The Note Holder will use my Prepayments to reduce the amount of Principal that I owe under this Note. However, the Note Holder may apply my Prepayment to the accrued and unpaid interest on the Prepayment amount before applying my Prepayment to reduce the Principal amount of this Note. If I make a partial Prepayment, there will be no changes in the due dates of my monthly payments unless the Note Holder agrees in writing to those changes. My partial Prepayment may reduce the amount of my monthly payments after the first Change Date following my partial Prepayment. However, any reduction due to my partial Prepayment may be offset by an interest rate increase. 6. LOAN CHARGES If a law, which applies to this loan and which sets maximum loan charges, is finally interpreted so that the interest or • other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from me that exceeded permitted limits will be refunded to me. The Note Holder may choose to make this refund by reducing the Principal I owe under this Note or by making a direct payment to me. If a refund reduces Principal, the reduction will be treated as a partial Prepayment. 1010552261 Form 3520 1/ 01 CD-838N (0210) P2g"2 of 4 ' • • i(+5p m . 7. BORROWER'S FAILURE TO PAY AS REQUIRED FEB 2 5 ?Mr (A)Late Charges for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of fifteen calendar days after the dale it is due, I will pay a late charge to the Note Holder. The amount of the charge will be 5.000 % of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment. (B)Default If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. (C) Notice of Default if I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal that has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is mailed to me or delivered by other means. (D)No Waiver By Note Holder Even if, at a time when I am in default, the Note Holder does not require me to pay immediately in full as described above, the Note Holder will still have the right to do so if I am in default at a later time. (E)Payment of Note Holder's Costs and Expenses If the Note Holder has required me to pay immediately in full as described above, the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include,for example, reasonable attorneys' fees. 8. GIVING OF NOTICES Unless applicable law requires a different method,any notice that must be given to me under this Note will be given by delivering it or by mailing it by first class mail to me at the Property Address above or at a different address if I give the Note Holder a notice of my different address. Unless the Note Holder requires a different method, any notice that must be given to the Note Holder under this Note will be given by mailing it by first class mail to the Note Holder at the address stated in Section 3(A)above or at a different address if I am given a notice of that different address. 9. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that any one of us may be required to pay all of the amounts owed under this Note. 10.WAIVERS I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require the Note Holder to demand payment of amounts due. "Notice of Dishonor" means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. • ll.UNIFORM SECURED NOTE This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Note Holder under this Note, a Mortgage, Deed of Trust, or Security Deed (the "Security Instrument"), dated the same date as this Note, protects the Note Holder from possible losses that might result if I do not keep the promises that I make in this Note. That Security Instrument describes bow and under what conditions I may be required to make immediate payment in full of all amounts I owe under this Note. Some of those conditions read as follows: 1020552261 Form 3520 1?01 4Z:)-838N 10210) Flue of 4 ® M1thK Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial • interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b)Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender also may require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. P" m . FEB 2 5 7nn9 WITNESS THE HAND(S) AND SEAL(S) OF THE UNDERSIGNED (Seal) _(Seal) lien -Borrower -Borrower � (Seal) (Seal) -Borrower -Borrower (Seal) (Seal) • -Borrower -Borrower (Seal) - (Seal) • -Borrower -Borrower [Sign Original Only] 1010552261 (-838N (0210) Page or. 33go .o1.11111111111111111111111911111111111 Doc ID: 020718220020 Floe: GEN Recorded: 11/27/2008 at 11:04:48 AM Fee Amt: 5102.00 Page 1 of 20 • Johnson County Iowa Kim Painter County Recorder • BK4104 PG960-979 rciB '25 7c3 r (Space Above This Lim For Recording DAtal �� "— Prepared By: New Century Mortgage Corporation 18400 Von Karman, Ste 1000 Irvine, CA 92612 800-967-7623 Return to After Recording: Return To: ALL-AMERICAN ESCROW & TITLE N. Cen ry Mortgage Corporation 103 West Main Street 84:0 •n Karman, Ste 1000 Freeport, IL 61032 rvi•= • •2612 F :al Description located on page 16 . -rider name located on page 2. MORTGAGE MIN 100488910105522618 DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A)"Security Instrument"means this document,which is dated October 25, 2006 together with all Riders to this document. (B)"Borrower"is Brad Allen and Twylla Allen, Husband and Wife, As Joint Tenants • Borrower is the mortgagor under this Security Instrument. 1010552261 IOWA-Single Family-Fannie Mae/Freddie Mac UNIRORM INSTRUMENT WITH MEWS Foim 3016 11 01 • ®-6A(IA}(0405).01 er </ Pagr 1 d 15 M+itislr VMP Monger Sdutions.Inc.(800)521- 291 . \#‘.f r5 1 1 • . t • 1�'• P-rn FEB 2 5 2009 (C) "MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI 48501-2026, tel. (888)679-MERS. (I)) "Lender"is New Century Mortgage Corporation Lender is a Corporation organized and existing under the laws of California Lender's address is 18400 Von Karman, Suite 1000, Irvine, CA 92612 • (E) "Note"means the promissory note signed by Borrower and dated October 25, 2006 The Note states that Borrower owes Lender ONE HUNDRED FORTY THOUSAND EIGHT HUNDRED AND 00/100 Dollars (U.S. $ 140,800.00 )plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than 11/01/2036 (F) 'Property"means the property that is described below under the heading "Transfer of Rights in the Property." (G) "Loan"means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note,and all sums due under this Security Instrument,plus interest. (H) "Riders"means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower[check box as applicable]: • ®Adjustable Rate Rider 0 Condominium Rider I I Second Home Rider n Balloon Rider Planned Unit Development Rider 11-4 Family Rider El VA Rider LI Biweekly Payment Rider �X.l Other(s) [specify] Arm Rider Addendum • (I) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders(that have the effect of law) as well as all applicable final, non-appealable judicial opinions. (J) "Community Association Dues, Fees, and Assessments"means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization. (K) 'Electronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer,or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (L) "Escrow Items"means those items that are described in Section 3. (M) "Miscellaneous Proceeds"means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (N) "Mortgage Insurance"means insurance protecting Lender against the nonpayment of, or default on, the Loan. (0) "Periodic Payment"means the regularly scheduled amount due for(i)principal and interest under the Note,plus(ii)any amounts under Section 3 of this Security Instrument. 1010552261 -6At1A)(0405).01 PAM 2 or 15 Form 3016 1/Dt • 10/1. 910E uuoj 51 pS 7 d rolsoro)(d11t/9 mi i9ZZSSOTOT •1E01 2uiraA00 1Qaanu1SU! Alunoas uuo !un a alnl!suo3 01 uoporSuadold � ps!rrrf Aq suo!leuew ppm!'qi!,h slueuanoo uuopun-uou pun asn [euogeu roj siueuano3 uuo;!un sauigwoo iNaw NI A.LRil1D3S SIILL -pro3ar jo sa3uesqurnaua Sue o1 13afgns'spueurap pus stump He isu!eSe Suadord aqi o1 app aq1 Sferauaa puolop [pm pue slueuem .ranMouog -pso3ar jo sa3ue1qum3ua 7oJ idaoxa `paragwnouaun s!Auadord aql leg)pue Arodard aqi Sanuoo pue 1uet: o11q�u aq1 seq pue paSanuo3 Aganq alma aq)3o pas!as AH[n[nte[s! lantoirog )eql S,LNVN3AO3 212MO2RIOg -luawnilsul Slunoas sup 2u![a3ueo pue Su!sea[a1 `oi paptuq tau inq `Su!pnotr! rapuaz;o parmbar uoii3e Sue a1[e1 o1 pun `Suadord alp Has pue aso oaroJ or iq$u aqi 401 paha![ lou inq `3u!pn[au! `sisara)ur asogl HE r0 SUE as!araxa o1 :1(14ru alp seq(su5!ssi:pue srossao,ns s rapua-I pue rapua-1 raj aau!wou se)Sggy�[ 'woisna 10 Mg give S[dtuo,01 ,fsEssaaau 3! `inq `)uaurrwsul Siun3as s!q1 u! raeno.uog Aq paluer3 sisaralnn am o1 ap!1 [eSa[ Apo sproq SN3[Innil regi wade pue spuelsrapun raMor.rog „•,Ciradord„ aqi se ivawnrisui Sigmas s!ql u! o1 pa.uajar sr 2wo3aroJ alp Jo HV •luaumuisul ,romans sial Aq parano3 aq os[n [rugs suop!ppe pun swawa)e[dar [pr •Saradord aqi jo ped e rajjna.raq io mou samrxg pue `sa3usuaundde `slrraruasea [[E pun `Suadord aql uo papas raijearaq ro mon sivauranordun 0111 Ile RLIM 2i3HJ2DO,L [2P0,d!z{ 56ZZS emu' `[G��1 :(„ssaLPPV£uadord�) JCgTO AOI [13a.l151 HAY H.L L S Z Z i jo ssarppe aq)seg Spuaun3 g3rq" 600-ZS6--TT-oi =ragwnN QI[ted • • goa=ag q=ed s epeil pun agoseH pagosg4y uoTgdz.xosaa Tnfe1 ees [uotucpsun f Sacproaag jo 3tcreN11 [uozucpsunr Su?pw jo odkii • uosugor Jo stqunoo am u! pale3o[ Suadord paq!r3sap Su!Mo[[o3 aqi `airs jo ramod gi!n% `SuaN jo suS!sse pun srossaaons am 01 pue (suS!sse pun sross330ns s,rapua-i pun spun-[ sof aauiwou se A[a[os) Su-dyq 01 srtanuoa pun sluita `saSeauow S[ge30na11n ram0r10g 'asodmd s!qi _rod 'atoN alp pun ivaunu sui S1►uaas sigl spun sluawaarae pun siueuan03 s,lantolrog;o a)uEruro;rad aq1 (n) pun `a10N aqi jo suogwg!pow pue suo!sualxa`sinntaual lie pue`ueo7 aqi;o luau/Cedar aql(!) :rapua-j 01 saunas luawnrlsul 4-1113aS srq 1, 1.1.113,1061 HILL All SIHDRI dO 1133SNVlLL luaureulsu[S)!mnas s!ql toipun glow am raptor suoneSggo s,raeaonog patunsse seq Sued regi lou JO raglagen `Arradord aq1 or awl ua3E-e1 seq regi Sued Sue suuaur„Jamoa nog Jo isarala[ a!JossaaonS,. 0) -Vdsau lapun„ural • aSe2uotu pomp., A[[Erapai„ E sn S;nnnb Iou scop ui0'i aql 3! uana „1.1e01 aSeSuow prep.! ([[elapai„ 1 01 pteSar u! pasodwr are ler[1 suo!13!11sar pue sluawannbar [[r 01 sra[a1 .VdSH2I. '1u3wnrlsul 4!m3as s!g1 u! pasn sV •ta11Ew pafgns awns aqr surano2 imp uope[nSar JO uorie[s!Sa[rosSa3ons 10 Ieuoprppe Sur 10 'awii • 01 awn[ w0r[ paprracre aq iq iw Sam se 100SE Ind -11'd-3 VZ) x uoliepSag `uo!ie[da1 2u!luawa[dwn si! pun ('bas >a I09Z uo!13aS '3'S-fl ZI) 13V sampa°ord ivaarappS allsH [m21 aql suww „Vasa., (d) 1 ) • 600Zggad FEB 2 5 2009 UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity;or(d)Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. L Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. if more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount,of the Periodic Payments. 3: Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum(the "Funds") to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term of the Loan, Lender may require that Community 1010552261 �nnials tFY -6A(IA)(oaos),ovme4 of 15 Form 3016 1/01 • FEB 2 5 2099 Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require. Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument,as the phrase "covenant and agreement" is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Borrower shall pay to Lender all Funds, and in such amounts, that are then required under this Section 3. Lender may,at any time, collect and bold Funds in an amount(a)sufficient to permit Lender to apply the Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity(including Lender, if Lender is an institution whose deposits are so insured)or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA_ Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds_ Lender shall give to Borrower, without charge, an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA, but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security Instrument, Lender shalljpromptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Community Association Dues, Fees,and Assessments, if any. To the extent that these items are Escrow Items,Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith 1010552261 Imliak.. U f�-6A(IA)toaosyot Paas 5 of 15 s Fonre 3016 1/01 as, • P rb,—) FEB 2 5 7nil9 by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or(c)secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4. Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan. 5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance chall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and chall name Lender as mortgagee and/or as an additional loss payee. � In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law 1010552261 1� -6A(IA)(0405).01 P210•18 d 15 (� Form 3016 1/01 y.5 P.m , FLP, 2 5 2099 • requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any,paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due. 6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control. 7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnationproceeds arepaid in connection with damage to,,or the takingof, the Property,g Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. • 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities'acting at the direction of Borrower or/with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If • (a)Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b)there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or 1010552261 Inkeh:% ®-GA(IA)toaos).or Page r or 15 Form 3016 1101 I . rem . FEB 2 5 2009 regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and isnot under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments if Mortgage Insurance coverage (in the amount and for the period that Lender requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the Loan as agreed_ Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties)to • these agreements. These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). • As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, any other entity, or any affiliate of any of the foregoing, may receive(directly or indirectly) amounts that derive from (or might be characterized as) a portion of Borrower's payments for Mortgage Insurance, in • exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. If such agreement 1010552261 milia Is 0g1-6A0A)(0405).D1 Pape 8 or IS Form 3016 1/01 • e r . FEB 25 21109 • provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer, the arrangement is often termed "captive reinsurance."Further: (a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan_ Such agreements will not increase the amount Borrower will owe for Mortgage Insurance, and they will not entitle Borrower to any refund. (b) Any such agreements will not affect the rights Borrower has - if any - with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender. If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower- Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any,paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking,destruction,or loss in value. Any balance shall be paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums • secured by this Security Instrument whether or not the sums are then due. • If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party"means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure suck a default and, if acceleration has occurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of 1010552261 !nit:al.:15)K t -6A0A)(orostoi sage 9 of 15 Form 3016 1/01 • • FEB 2 5 2009 any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrurnent by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However,any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. Subject to the provisions of Section 18, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20)and benefit the successors and assigns of Lender. 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees,property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not rharge fees that are expressly prohibited by this Security Instrument or by Applicable Law. If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit;and(b)any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. i 15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing_ Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in 1010552261 Initia Is -6A(IA)Ioao5).ol Page 10 of 15 Form 3016 1101 V connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument 16. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action. 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including,but not limited to, those beneficial interests transferred in a bond for deed,contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of 1 Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cm-es any default of any other covenants or agreements; (c)pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and • rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note ora partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to • 1010552261 Initials: -.SADA) osl.oi via 11 or is Form 3016 11 01 FEB 2 5 2009 Borrower. A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law- There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note_ If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence,join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of,or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law"means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d)an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or(c)which, due to the presence,use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to • maintenance of the Property(including,but not limited to,hazardous substances in consumer products). Borrower shall promptly give Lender written notice of(a)any investigation, claim,!demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to,any spilling, leaking,discharge,release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Property- If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or-other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary • remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. 1010552261 6A(IA)(o405).01 P2ge 12 of 15 'niliaIa �� Form 3016 1/01 . - l x'.45 p. Yr-1 , FEB 2 5 2909 NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b)the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration • and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs of title evidence. 23. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Instrument. Lender may charge Borrower a fee for releasing this Security Instrument, but only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law. 24. Waivers. Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to the Property. Borrower waives any right of exemption as to the Property_ 25. HOMESTEAD EXEMPTION WAIVER I UNDERSTAND THAT HOMESTEAD PROPERTY IS IN MANY CASES PROTECTED FROM I"RE CLAIMS OF CREDITORS AND EXEMPT FROM JUDICIAL SALE; AND THAT BY SIGNING THIS MORTGAGE, I VOLUNTARILY GIVE UP MY RIGHT TO TIIIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE. ,, l ( CI•(112€' D2 �r Brad Allen Date B wet' Dale 1laWI Borrower Date Borrower Date Borrower Date Borrower Date Borrower Date Borrower Date 1010552261 ®-6A(IA)totos).ot rue 13 of 15 Form 3016 1/01 FEB 2 5 nog 26. Redemption Period. If the Property is less than 10 acres in size and Lender waives in any foreclosure proceeding any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 6 months. If the court finds that the Property has been abandoned by Borrower and Lender waives any right to a deficiency judgment against Borrower, the period of redemption from judicial sale chall be reduced to 60 days. The provisions of this Section 26 shall be construed to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. 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 WRI IThN AGREEMENT. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. Witnesses1 � A 341 l:b i (Seal) Allen -Borrower AO U �-- /i , ( y) 1 • U (Seal) -Borrower (Seal) (Seal) -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower / (Seal) (Seal) -Borrower -Borrower 1010552261 ®-6A(IA)(0405).01 Pax.14 or 15 Foran 3016 1101 • - 0 e. rn FEB 25 2009 City Cie. STATE OF IOWA, COUDL}'ss: icy,a City,Iowa On this /d- day of d(,p .�� OV , before me,a Notary Public in the State of Iowa, personally appeared ignca. 11-Gc o--4 coui 1 I a M4-fr\ ouvi_ to me personally known t. le person(s) named in andi, r c executed the foregoing instrument, and acknowledged that he/she/li ey xecuted the same as his/her/i' it 'oluntary act and deed. • My Commission Expires: .,' I 1 /11: N. . .c in and for said County and State O{� LISA CLARK £ omm atlon Seitt aW,6 1My C� �mmlasommlasio ..es2-27.2+1 • 1010552261 Initials; /pc6A(IA)(04o5).O1 Page 16 of 15 Form 3016 1/01 Legal Description Lots One (1) and Two (2) Block Seven (7) , Morningside Addition, Iowa City, Iowa. Situated in Johnson County, Iowa. FFD 25 2nog • 4E 1 ■ • 1-D-',1-1-S. p •rr, FEB 2 5 2009 MIN: 100488910105522618 ADJUSTABLE RATE RIDER (LIBOR Six-Month Index(As Published In The Wall Street Journal)-Rate Caps) THIS ADJUSTABLE RATE RDER is made this 25th day of October, 2006 and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned ("Borrower") to secure Borrower's Adjustable Rate Note (the "Note") to New Century Mortgage Corporation ("Lender") of the same date and covering the property described in the Security Instrument and located at: 122 S 7TH AVE, Iowa City, IA 52245 [Property Address] THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE UMITS THE AMOUNT BORROa!HER'S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE BCRROWER MUST PAY. ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. INTEREST RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial interest rate of 9.950%. The Note provides for changes in the interest rate and the monthly payments, as follows: 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates The interest rate I will pay may change on the first day of November, 2009 and on t hat day every 6th month thereafter. Each date on which my interest rate could change is called a "Change Date." (B)The Index Beginning wit h the first Change Date, my interest rate will be based on an Index. The "Index" is the average of interbank offered rates for six month U.S. dollar-denominated deposits in the London market ("UBOR"), as published in The Wall Street Journal. The most recent Index figure available as of the first business day of the month immediately preceding the month in whic h the Change Date occurs is called the "Current Index." r If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice. • (C) Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Six And Fifty-five Hundredth(s) percentage points ( 6.550 %) to the Current Index. The Note Holder will then round the result of 1010552261 MULTISTATE ADJUSTABLE RATE RIDER - LIBOR SIX-MONTH INDEX (AS PUBLISHED IN THE WALL STREETJOURNAL)- Single Family- Fannie Mae Uniform Instrument (Z)-838R (0402) Form 3138 1/01 Page 1 of 3 !nit ials: /1 VMP Mortgage Solutions, Inc (800)521 -7291 • • • . . 12' ti-S e. FE2 2 5 2009 this addition to the nearest one-eighth of one percentage point (0.12 5%). Subject to the limits stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at my new interest rate in substantially equal payments. The result of this calculation wil I be the new amount of my mont hly payment. (D) Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 11.950 % or less than 9.950 %. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than One And One-half percentage points ( 1.500 %)from the rate of interest I have been paying for the preceding 6 months. My interest rate will never be greater than 16.950 %. (E)Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my mont hly payment changes again. (F)Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will • include information required by law to be given to me and also the title and telephone number of a person who will a nswer any question I may have regarding the notice. B.TRANSFER CF THE PROPERTY OR A BENEFCIAL INTEREST N BORRCWER Uniform Covenant 18 of the Security Instrument is amended to read as follows: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender also may require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. 1010552261 • •Initials: -83 8R (040 2) Page 2 of 34 Form 3138 1/01 ` o \'1 L4S F. FEB 2 5 nog • If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument wit hout further notice or demand on Borrower. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider. (Seal) �� `ti (Seal) B =d •1 len -Borrower 7 prt -Borrower (Seal) (Seal) -Borrower -Borrowe r (Seal) (Seal) -Borrowe r -Borrower • (Seal) (Seal) -Borrowe r -Borrower 1010552261 • -83 BR(040 2) Page 3 of 3 Form 3138 1/01 i • FEB 2 5 2009 MIN_100488910105522618 ADJUSTABLE RATE RIDER ADDENDUM (Libor Index-Rate Caps) This Adjustable Rate Rider Addendum is made this 25th day of October 2006 and is incorporated into and shall be deemed to amend and supplement the Promissory Note(the"Note")and Mortgage, Deed of Trust or Security Deed (the "Security Instrument") and Adjustable Rate Rider (the "Rider") of the same date given by the undersigned (the "Borrower")to secure repayment of Borrower's Note to (the"Lender"). New Century Mortgage Corporation Property securing repayment of the Note is described in the Security Instrument and located at 122 S 7TH AVE,Iowa City,IA 52245 (Property Address) To the extent that the provisions of this Adjustable Rate Rider Addendum are inconsistent with the provisions of the Note and/or Security Instrument and/or Rider, the provisions of this Addendum shall prevail over and supersede any sncb inconsistent provisions of the Note and/or Security Instrument and/or Rider. In addition to the covenants and agreements made in the Note,Security Instrument,and Rider,Borrower and Lender further covenant and agree as follows: 4. (D)LIMITS ON INTEREST RATE CHANGES The interest rate I am required to pay at the first change date•will not be greater than 11.95D% or less than 9.950%. Thereafter, my interest rate will never be increased or decreased on any singleoChange Date by 1.500%)morefrom One And One-half percentage Pm t() the rate of interest I have been paying for the preceding 6 months. My interest rate will never be greater than 16.950"A,or less than 9.950%. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider Addendum. • • :opt,len i • • MCMC 1010552261 Adjustable Rate Rider Addendum " Page 1 of i RE-103 (082296) END OF CASE FILE • CIVIL PROCESS WORKSHEET JOHNSON COUNTY SHERIFFS OFFICE • PO BOX 2540, 511 S CAPITOL ST, IOWA CITY. IA 52244-2540 • (319) 356-6030 PLAINTIFF : WELLS FARGO BANK Docket No 09-06812 -I State IOWA vs. Court No EQCV071408 County JOHNSON DEFENDANT: ALLEN, TWYLLA Ref No Received 11/24/2009 DEFENDANT: ALLEN, BRAD Requestor(s) Phone SARCONE,JAMES V JR (515)283-4624 I Name CITY OF IOWA CITY Zone Party Type DEFENDANT Phone (319) 356-5030 Fax Address 410 E WASHINGTON ST IOWA CITY IA 52240- E-Mail Employer Comments I Documents Document Serve by Date OE PSR Description/Special Instructions MORTGAGE MEDIATION I E LJ NOTICE ORIGINAL NOTICE AND I ❑ ❑ I `PETITION Service Information Date ) 1—)-y Time /(a• Ci Type G A Party iftk 10- V (L Relationship C (#)I C Race Sex DOB Location ` t r- Miles '("C5 Fee / ) CO Officer c c7 Attempts Log Date Time Server Notes Date Time Server Notes Notes -s:� .� Y • Cil i7 OT _� L''�e+ CD Printed:Tuesday, November 24,2009 Page 1 of 1 1 _ IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ) WELLS FARGO BANK N.A., TRUSTEE FOR ) EQUITY NO. CARRINGTON MORTGAGE LOAN,TRUST ) �O��V1 � 40?' SERIES 2006-NC5 ASSET-BACKED PASS ) THROUGH CERTIFICATES ) ) ORIGINAL NOTICE Plaintiff ) ) v. ) BRAD ALLEN;TWYLLA ALLEN;ROTH ) JEWELERS LTD.;CITY OF IOWA CITY,IOWA ) Defendants. ) �t1 ;� ,.. -� 77 r: p a :D TO THE ABOVE-NAMED DEFENDANTS: > D You are notified that a petition has been filed in the office of the clerk of this court naming you as the Defendants in this action. A copy of the petition, and any documents filed with it, is attached to this notice. The name and address of the Plaintiffs attorney is James V. Sarcone,Jr., Belin McCormick, P.C., 666 Walnut Street Suite 2000,Des Moines, Iowa 50309-3989. The attorney's phone number is 515-283- 4624;facsimile number 515-283-4653. You must serve a motion or answer within twenty (20) days after service of the Original Notice upon you. Within a reasonable time thereafter you must file your motion or answer with the Clerk of Court for Johnson County, at the County Courthouse in Iowa City, Iowa. If you do not,judgment by default may be rendered against you for the relief demanded in the Petition. If you require the assistance of auxiliary aids or services to participate in court because of a disability, immediately call your district ADA coordinator at 319-398-3920 ext. 2I. (If you are hearing impaired, call Relay Iowa TTY at 1-800-735-2943.) LCD7MA 'E UcLEY CLE OF THE ABOVE COURT / 4s-jt471ALC--' IMPORTANT: YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS LC : am_ (C./>z L) aA IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ) WELLS FARGO BANK N.A.,TRUSTEE FOR ) EQUITY NO. = r ' CARRINGTON MORTGAGE LOAN,TRUST ) Q.\) vr� _'/SERIES 2006-NC5 ASSET-BACKED PASS ) THROUGH CERTIFICATES ) PETITION(FOR MORTGA0-, Plaintiff ) FORECLOSURE AND RECE ) v. ) v c� BRAD ALLEN;TWYLLA ALLEN;ROTH ) y JEWELERS LTD.;CITY OF IOWA CITY,IOWA ) Defendants. COMES NOW the Plaintiff and for cause of action against the Defendants,the Plaintiff states: NOTICE m THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDE TION THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL OCCUR PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL TWELVE MONTHS (OR SIX MONTHS IF THE PETITION INCLUDES A WAIVER OF DEFICIENCY JUDGMENT)FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE-FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMILY DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED PROPERTY. YOU MAY PURCHASE AT THE SALE. 1. That Plaintiff is a foreign corporation; Defendants Brad Allen and Twylla Allen are natural persons last known to reside in Johnson County, Iowa; Defendant City of Iowa City, Iowa is a political subdivision of the State of Iowa; remaining Defendant is a corporation doing business in the State of Iowa. 2. That on or about the 25th day of October, 2006, the Defendant, Brad Allen made, executed and delivered to New Century Mortgage Corporation one certain Promissory Note in writing bearing the date aforesaid in the principal sum of$140,800.00 bearing interest at the adjustable rate of 9.95 percent per annum after maturity, and Exhibit "A" hereto attached and by this reference incorporated herein and made a part hereof is a true and correct copy of said Promissory Note. 3. That at the time of the execution of said Promissory Note, Exhibit"A" aforesaid, and as a part of the same transaction for the purpose of securing said Note with interest thereon and other sums hereinafter mentioned, the said Defendants, Brad Allen and Twylla Allen made, executed and delivered to Mortgage Electronic Registration Systems, Inc., as nominee for New Century Mortgage Corporation one certain Mortgage in writing, transferring and conveying unto Mortgage Electronic Registration Systems, Inc., as nominee for New Century Mortgage Corporation the following real estate situated in Johnson County, Iowa, to-wit: Lots One (1) and Two (2), Block Seven (7), Morningside Addition, Iowa City, Iowa, situated in Johnson County, Iowa. and Exhibit"B"hereto attached and by this reference incorporated herein and made a part hereof, is a true and correct copy of said Mortgage. 4. That on November 27, 2006, the said Mortgage was duly recorded in Book 4104, PageJ60, : i of the records of the office of the Recorder of Johnson County, Iowa. , M ii 5. The aforesaid Mortgage has been assigned to the Plaintiff herein. O 7a s_ 6. That the said Defendant, Brad Allen, has defaulted in the monthly payment of inter intera and principal and has neglected and failed to pay the installments as provided in the written instrument aforesaid and is now in default of the said payments for several months last past, and the Plaintiff does now elect to and hereby does declare the whole of said Note and Mortgage due and payable forthwith. 7. That the balance due on said Note and Mortgage as of November 9, 2009, is $187,397.49, including principal and interest and advancements, after allowing due credit to the Defendants for all payments made. 8. That in the preparation of this Petition and cause of action for presentation to the Court, it was necessary for Plaintiff to employ an attorney to represent and serve it herein, and for this purpose Plaintiff has retained and employed Belin McCormick, P.C.,Attorneys at Law of this Court. 9. That the Plaintiff is willing and now offers, upon payment of the amount due it as heretofore set forth, to cancel the Note declared on, discharge of record the Mortgage securing the same, and to do all things that equity and good conscience may require of it. 10. That the Defendants herein have or claim to have some lien upon or interest in the mortgaged premises, but the Plaintiff avers that whatever lien or interest they or any of them may have thereon or herein, the same is junior and inferior to the lien of Plaintiff's Mortgage, Exhibit"B" and the amounts hereinbefore set out. 1 1. That Plaintiff waives its rights to a deficiency judgment in this matter. -�— N r- 12. That a Notice of Right to Cure Default, Exhibit"C",was mailed to the Defendant Brad All more than 30 days prior to the filing of this foreclosure action/Petition and the defaults set ouHherein have not been cured. - 13. That a fourteen day demand for payment of the accelerated balance of this mortgage was mailed to the Defendants, Brad Allen, borrower herein, on November 9, 2009, Exhibit "D". This mailing was more than 30 days after the mailing of the Right to Cure Default referenced in Paragraph 12 of the petition. 14. Attached hereto is a Mortgage Mediation Notice, Exhibit "E", which was mailed to Brad Allen,owner of the above property on November 9, 2009. 15. Twylla Allen is included as a Defendant herein because she is the spouse of the record titleholder herein of the above property and a party in possession of said property. 16. Roth Jewelers Ltd. is included as a Defendant herein because of a judgment rendered October 17, 2003 in the amount of$811.55 plus interest and costs, rendered in its favor against • Brad Allen in SCSC057655 of the Johnson County, Iowa records. This judgment is inferior to Plaintiffs purchase money mortgage. 17. City of Iowa City, Iowa is included as a Defendant herein because of the following mortgages covering the above property: a. Mortgage in an amount not shown and recorded December 13, 2006 in Book 4110, Page 124 of the Johnson County, Iowa records. b. Mortgage for $3,739.00 recorded January 26, 2007 in Book 4123, Page 901 of the Johnson County, Iowa records. c. Mortgage dated December 20, 2007 which secures promissory note for $3,739.00 executed January 11, 2007; secures promissory note for $19,063.00 executed August 17, 2007; and secures promissory note for $2,532.00 executed December 20, 2007, recorded December 27, 2007 in Book 4247, Page 619 of the Johnson County, Iowa records. WHEREFORE, Plaintiff prays: : FIRST: That a Receiver be appointed by the Court to take immediate possession of them mortgaged premises hereinbefore described, with power and authority and the duty to_ keep, repair, . maintain and insure the premises, buildings and other improvements thereon; to lease the same and.collect the rents, issues and profits arising which may be had therefrom, and to retain and dispose of said rents and profits as said Mortgage provides and as the Court may hereafter determine and direct. SECOND: (a) That the Plaintiff have judgment in rem, against the mortgaged premises in the sum of$187,397.49 with interest at 9.95 percent from November 9, 2009, and have such additional sum of sums as may hereafter be advanced for continuing the abstract of title or other purposes authorized by said Note and Mortgage and by Iowa law. (b) For reasonable attorney's fees upon the Note, interest and other sums advanced by the Plaintiff as set out above, and for the costs of this action. THIRD: That said judgment be declared to be a lien upon the mortgaged premises involved herein from and after the date of execution of said Mortgage, Exhibit"B", to-wit, October 25, 2006, and upon the rents, issues and profits arising and which may be had therefrom from and after the date of filing of this Petition, and that said lien be declared to be prior and paramount to the lien and interest of the Defendants upon and in the said property. FOURTH: That Plaintiff's Mortgage aforesaid, Exhibit"B", be foreclosed, and that a special execution issue for the sale for the mortgaged premises, or so much thereof as may be necessary to satisfy the said judgment with interest and costs. FIFTH: That in the event the property aforesaid does not sell for sufficient to satisfy the judgment herein, the net proceeds from the rents, issues and profits which may be had therefrom, from and after this date, be applied upon said judgment until the same is fully satisfied. SIXTH: That after the Sheriff's sale of the above described premises pursuant to a special execution issued herein, a Writ of Possession issue herein under seal of this Court directed to the Sheriff of Johnson County, Iowa, commanding him to put the Grantee under Sheriff's Deed in possession of the premises deeded to him, and to remove any Defendants, or persons claiming by, through or under any of them,or any person in possession thereof, out of such possession of said premises. SEVENTH: That Plaintiff have such other and further relief as the Court may find it to be entitled to in equity. Belin McCormick,P.C. BY JA S V. SARCONE,JR. AT0006913 666 Walnut Street, Suite 2000 Des Moines, IA 50309-3989 Telephone: (515)283-4624 Fax No.: (515)283-4653 e-mail:jvsarcone@belinmccormick.com ATTORNEYS FOR PLAINTIFF D:1NewCentury\Al lenlpetset 11-09.docx :. i 1 j l i 0�� I j+ 1111111ININ MIN: 100489910205522619 NOTE ADJUSTABLE RATE NOTE (LIBOR Six-Month Index(As Published In The Wall Street Journal)-Rate Caps) THIS NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN MY INTEREST RATE AND MY MONTHLY PAYMENT. THIS NOTE LIMITS THE AMOUNT MY INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE I MUST PAY. October 25, 2006 Iowa City Iowa [pate] [City] Istatc] 122 S 7TH AVE, Iowa City, IA 52245 [Property Address] 1. BORROWER'S PROMISE TO PAY In return for a loan that I have received,I promise to pay U.S. $140,800.00 (this amount is called "Principal"),plus interest,to the order of Lender. Lender is New Century Mortgage Corporation I will make all payments under this Note in the form of cash, check or money order. I understand that Lender may transfer this Note. Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the "Note Holder." 2. INTEREST Interest will be charged on unpaid principal until the full amount of Principal has been paid. I will pay interest at a yearly rate of 9.950 %.The interest rate) will pay may change in accordance with Section 4 of this Note. The interest rate required by this Section 2 and Section 4 of this Note is the rate I will pay both before and after any default described in Section 7(B)of this Note. 3. PAYMENTS (A)Time and Place of Payments " { I will pay principal and interest by making a payment every month. r I will make my monthly payments on the first day of each month beginning on December 1, 2006 . I will make these payments every month until I have paid all of the principal and interest and any other charges described below that I may owe under this Note. Each monthly payment will be applied as of its scheduled due date and will be applied to interest before Principal. If, on 11/01/2036 , I still owe amounts under this Note, I will pay those amounts in full on that date,which is called the "Maturity Date." I will make my monthly payments at 18400 Von Karman, Suite 1000, Irvine, CA 92612 or at a different place if required by the Note Holder. (B)Amount of My Initial Monthly Payments Each of my initial monthly payments will be in the amount of U.S. $1,230.4 3 . This amount may change. (C)Monthly Payment Changes Changes in my monthly payment will reflect changes in the unpaid principal of my loan and in the interest rate that I must pay. The Note Holder will determine my new interest rate and the changed amount of my monthly payment in accordance with Section 4 of this Note. 1010552261 MULTISTATE ADJUSTABLE FATE NOTE-LIBORSIX-MONTH INDEX(AS PUBLISHED IN THE WALL STREET JOURNAL)- Single Family-Fannie Mae UNIFORM INSTRUMENT (ZD-838N (2,0) Form 3520 1/01 _ _ VMP MORTGAGE FORMS-R00521-7295 Pve t of 4 Idles r 1/1X00 • 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates The interest rate I will pay may change on the first day of November, 2009 ,and on that day every 6th month thereafter. Each date on which my interest rate could change is called a "Change Date." (B)The Index Beginning with the first Change Date, my interest rate will be based on an Index_ The "Index" is the average of interbank offered rates for six month U.S. dollar-denominated deposits in the London market ("LIBOR"), as published in The Wall Street Journal. The most recent Index figure available as of the first business day of the month immediately preceding the month in which the Change Date occurs is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice. (C)Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Six And Fifty-five Hundredth(s) percentage points( 6.550 %)to the Current Index. The Note Holder will then round the result of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to the limits stated in Section 4(D)below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at my new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. (D)Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 11.950% or less than 9.950%.Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than One And One-half percentage point(s)( 1.500 %) from the rate of interest I have been paying for the preceding 6 months. My interest rate will never be greater 1 than 16.950%. (E)Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F)Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information required by law to be given to me and also the title and telephone number of a person who will answer any question I may have regarding the notice. 5. BORROWER'S RIGHT TO PREPAY I have the right to make payments of Principal at any time before they are due. A payment of Principal only is known as a "Prepayment." When I make a Prepayment, I will tell the Note Holder in writing that I am doing so. I may not designate a payment as a Prepayment if I have not made all the monthly payments due under this Note. I may make a full Prepayment or partial Prepayments without paying any Prepayment charge. The Note Holder will use my Prepayments to reduce the amount of Principal that I owe under this Note. However, the Note Holder may apply my Prepayment to the accrued and unpaid interest on the Prepayment amount before applying my Prepayment to reduce the Principal amount of this Note. If I make a partial Prepayment, there will be no changes in the due dates of my monthly payments unless the Note Holder agrees in writing to those changes. My partial Prepayment may reduce the amount of my • • monthly payments after the first Change Date following my partial Prepayment. However, any reduction due to my partial Prepayment may be offset by an interest rate increase. 6. LOAN CHARGES - If a law, which applies to this loan and which sets maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b)any sums already = collected from me that exceeded permitted limits will be refunded to me. The Note Holder may choose to make this refund by reducing the Principal I owe under this Note or by making a direct payment to me. If a refund reduces Principal, the 1 reduction will be treated as a partial Prepayment. 1 1010552261 Form 3520 1/01 (0-838N toziot Pep"2d• P4,, 7. BORROWER'S FAILURE TO PAY AS REQUIRED (A)Late Charges for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of fifteen calendar days after the date it is due, l will pay a late charge to the Note Holder. The amount of the charge will be 5.000 %of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment_ (B)Default If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. (C)Notice of Default If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal that has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is mailed to me or delivered by other means. (D)No Waiver By Note Holder Even if, at a time when I am in default, the Note Holder does not require me to pay immediately in full as described above, the Note Holder will still have the right to do so if 1 am in default at a later time. (E)Payment of Note Holder's Costs and Expenses If the Note Holder has required me to pay immediately in full as described above, the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example, reasonable attorneys' fees. 8. GIVING OF NOTICES Unless applicable law requires a different method,any notice that must be given to me under this Note will be given by delivering it or by mailing it by first class mail to me at the Property Address above or at a different address if I give the Note Holder a notice of my different address. Unless the Note Holder requires a different method, any notice that must be given to the Note Holder under this Note will be given by mailing it by first class mail to the Note Holder at the address stated in Section 3(A)above or at a different address if I am given a notice of that different address. 9. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations Of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that any one of us may be required to pay all of the amounts owed under this Note. 10.WAIVERS I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require the Note Holder to demand payment of amounts due. 'Notice of Dishonor"means the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 11.UNIFORM SECURED NOTE This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Note Holder under this Note, a Mortgage, Deed of Trust, or Security Deed (the "Security Instrument"), dated the same date as this Note, protects the Note Holder from possible losses that might result if I do not keep the promises that I make in this Note. That Security Instrument describes how and under what conditions I may be required to snake immediate payment in fill of all amounts I owe under this Note. Some of those conditions read as follows: v1 1010552261 Foran 3520 1!01 42>.4338N to210) Ng.]oe 4 Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the • Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a)Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b)Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender also may require the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on'Borrower. _ J WITNESS THE HAND(S) AND SEAL(S) OF THE UNDERSIGNED 7-1 (Seal) (Seal) ,r# len -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower (Seal) - (Seal) -Borrower -Borrower • [Sign Original Only] 1010552261 C1)-838N p210) Pea w41 1• • 1101111111101111111111111111111111111 • Doc ID: 020718220020 Tvoe: GEN Recorded: 11/27/2008 at 11:04:48 AM • Fee Amt: 8102.00 Page 1 of 20 Johnson County Iowa Kim Painter County Recorder 8K4104 90964-979 m (Space Above This line For Recording Data( Prepared By: New Century Mortgage Corporation „ 18400 Von Harman, Ste 1000 �;.1 • Irvine, CA 92612 800-967-7623 Return to After Recording: Return To: ALL-AMERICAN ESCROW & TITLE N. Cen ry Mortgage Corporation 103 West Main Street 84:0 .n Harman, Ste 1000 Freeport, IL 61032 rvi•= •2612 - F gal Description located on page 16 nder name located on page 2. MORTGAGE MIN 100488910105522618 DEFINITIONS Words used in multiple sections of this document are defined below and other words are defined in Sections 3, II, 13, 18, 20 and 21. Certain rules regarding the usage of words used in this document are also provided in Section 16. (A)"Security Instrument"means this document,which is dated October 25, 2006 together with all Riders to this document. (B) "Borrower"is Brad Allen and Twylla Allen, Husband and Wife, As Joint Tenants Borrower is the mortgagor under this Security Instrument. 1010552261 IOWA-Single Family-Fannie Mae/Freddie Mac UNIRNIM INSTRUMENT WITH MERS Forth 3016 11 01 (§0-6A(IA)lo4os).o1 / � P291)1 of 15 ►,rosi>r VMP Mortgage Sdufon.Inc,(800)521- 291 A.-\A'i , L f A � • (C) "MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint,MI 48501-2026, tel. (888)679-MERS. (D) "Lender"is New Century Mortgage Corporation Lender is a Corporation organized and existing under the laws of California • Lender's address is 18400 Von Karman, Suite 1000, Irvine, CA 92612 (E)"Note"means the promissory note signed by Borrower and dated October 25, 2006 The Note states that Borrower owes Lender ONE HUNDRED FORTY THOUSAND EIGHT HUNDRED AND 00/100 Dollars (U.S. $ 140,800.00 )plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than 11/01/2036 (F) 'Property"means the property that is described below under the heading "Transfer of Rights in the Property.' (G) "Loan"means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note,and all sums due under this Security Instrument,plus interest. (H) "Riders"means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower[check box as applicable]: ®Adjustable Rate Rider 0 Condominium Rider I Second Home Rider 0Balloon Rider 1 1 Planned Unit.Development Rider 11-4 Family Rider n VA Rider 0 Biweekly Payment Rider Lxi Other(s) [specify] Arm Rider Addendum (I) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, _ ordinances and administrative rules and orders(that have the effect of law) as well as all applicable final, ' non-appealable judicial opinions. l_ • (J) "Community Association Dues, Fees, and Assessments"means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association or similar organization. (K) "Electronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer,or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account_ Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers. (L) "Escrow Items"means those items that are described in Section 3. (M) "Miscellaneous Proceeds"means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (N) "Mortgage Insurance"means insurance protecting Lender against the nonpayment of, or default on, the Loan. (0) "Periodic Payment"means the regularly scheduled amount due for(i)principal and interest under the Note,plus(ii)any amounts under Section 3 of this Security Instrument. / 1010552261 Mtla . -6ApA)(o4w}o+ Paoe2 at 1s Form 3016 1101 • • • (F) "RESPA"means the Real Estate Settlement Procedures Act (12 U.S.C. Section 2601 et seq.) and its implementing regulation, Regulation X (24 C.F.R. Part 3500), as they might be amended from time to i • time, or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument, "RESPA"refers to all requirements and restrictions that are imposed in regard to a "federally related mortgage loan" even if the Loan does not qualify as a "federally related mortgage loan"under RESPA. it (Q) "Successor in interest of Borrower"means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secures to Lender: (i)the repayment of the Loan,and all renewals,extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably mortgages, grants and conveys to MERS (solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS, with power of sale, the following described property located in the County of Johnson (Type of Recording Jurisdiction) (Name of Recording Jurisdiction] See Legal Description Attached Hereto and Made a Part Hereof J • 5 71 ( r l Parcel ID Number: 10-11-452-009 which currently has the address of 122 S 7TH AVE (S ) Iowa City ("Property Address"): [City], Iowa 52245 (zip Code) TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property." Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS(as nominee for Lender and Lender's successors and assigns)has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument. BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except foLencumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands,subject to any encumbrances of record. THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real Property. 1010552261 0i41-6A(IA)tst.or P '� oro ,te3 of 15 ��}. Form 3016 1101 t ' • • UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow Items pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity;or(d)Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future,but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring • the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply • such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument. 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note. If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding,Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments,such excess may be applied to any late charges due_ Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount,of the Periodic Payments. 3: Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum(the "Funds") to provide for payment of amounts due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term of the Loan, Lender may require that Community 1010552261 �"na►L:y`�iE� -6A(IA)tososlot Pe+o4 15 1 J Form 3016 .1101 .. • Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may require. Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument,as the phrase "covenant and agreement" is used in Section 9. If Borrower is obligated to pay Escrow hems directly, pursuant to a waiver, and • Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Borrower shall pay to Lender all Funds, and in such amounts,that are then required under this Section 3. Lender may,at any time,collect and hold Funds in an amount(a)sufficient to permit Lender to apply the Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity(including Lender, if Lender is an institution whose deposits are so insured)or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account,or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds,Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds as required by RESPA. If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA,Lender shall notify Borrower as required by RESPA,and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA, but in no more than 12 monthly payments. Upon payment in full of all sums secured by this Security Instrument, Lender shall/promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any,and Community Association Dues,Fees,and Assessments, if any. To the extent that these items are Escrow Items,Borrower shall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable , ;. to Lender, but only so long as Borrower is performing such agreement; (b)contests the lien in good faith k. 1010552261 ` _ Mite 6A(1A)maosyoi awe 5 or ISP Fon►3016. 1101 • by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or(c)secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a Tien which can attain priority over this Security Instrument,Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4. Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan. 5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance Shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower. If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to bold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee. / In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds,whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law �11 V 1010552261 rnxmb:' 1 m -6A(IA)0405).01 Nue 8 d t3 t A/a Fotm 3016 1/01 + 0 �J'1 • requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any,paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument,whether or not then due. 6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control. 7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is • determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or/with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a)Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b)there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument(such as a proceeding in bankruptcy,probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or • , • A / 1010552261 ►nit 1 ®-6ADA)toeos}o1 Pe r of is �f Form 3016 1101 - J • regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is - reasonable or appropriate to protect Lender's interest in the Property and rights under this Security • Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 9, Lender does not have to do so and isnot under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available,Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full, and Lender shall not be required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments if Mortgage Insurance coverage (in the amount and for the period that Lender requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance. Mortgage insurers evaluate their total risk on all such insurance in force from time/to time, and may enter into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements, Lender, any purchaser of the Note, another insurer, any reinsurer, any other entity, or any affiliate of any of the foregoing, may receive(directly or indirectly) amounts that derive from (or might be characterized as) a portion of Borrower's payments for Mortgage Insurance, in• exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. If such agreement 1010552261 @-6A¢A)Io4o5t.o i Pape e a15 Form 3016_1101 • � J — — — ---- - • • provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer, the arrangement is often termed "captive reinsurance." Further: (a) Any such agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan. Such agreements will not increase the amount Borrower will owe for Mortgage Insurance, and they will not entitle Borrower to any refund. (b) Any such agreements will not affect the rights Borrower has - if any - with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. II. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender. If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess,if any,paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instnnuent immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction,or loss in value. Any balance shall be paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given,Leder is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party"means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds. Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a-default and, if acceleration has occurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument The proceeds of 1010552261 1M11a k, -6A(QA)toaosm F 9 of 15 _ _ �O Form 3016 .-11p1 /r- _ .. -- _ any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2. 12. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However,any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent. Subject to the provisions of Section 18, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing,and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this. Security Instrument shall bind (except as provided in Section 20)and benefit the successors and assigns of Lender. 14. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees,property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law. If the Loan is subject to a law which sets maximum loan charges,and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and(b)any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in. 1010552261_. ., In�als J 1 )-6A(IA)mow., Pelle 10 or 15 Form 3016_ .1101 • connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. if any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. 16. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action. 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed,contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title-by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred(or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument_ However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instnunent discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and.the Note as if no acceleration had occurred; (b)cures any default of any other covenants or agreements; (c)pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged.Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federalagency, instrumentality or entity; or(d)Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration wider Section 18. 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to , I ^ 1010552261 i � J4 -6A(lA)yaospi mos 1 I of 15 Form 30$6 11 01 Borrower. A sale might result in a change in the entity (known as the "Loan Servicer") that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note_ If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing_ If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be transferred to a successor Loan Servicer and are not assumed by the Note purchaser unless otherwise provided by the Note purchaser. Neither Borrower nor Lender may commence,join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20. 21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law"means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup' includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d) an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances,or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a)that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or(c)which,due to the presence,use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property(including,but not limited to,hazardous substances in consumer products). Borrower shall promptly give Lender written notice of(a)any investigation, claim 'demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to,any spilling,leaking,discharge,release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a _ • Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified =a by any governmental or regulatory authority, or any private party, that any removal or-other remediation •y , • of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary • remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on F Lender for an Environmental Cleanup. rn /� `� 1010552261 -170 • Irma► , ` .. ®-6A(IA)toao5}o1 Pme 12 of 15 fJ�]/ Form 3016 1/01 . CD • NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b)the action required to cure the default; (c)a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument,foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration • and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs of title evidence. 23. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Instrument. Lender may charge Borrower a fee for releasing this Security Instrument,but only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law. 24_ Waivers. Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to the Property. Borrower waives any right of exemption as to the Property. 25. HOMESTEAD EXEMPTION WAIVER. 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, I VOLUNTARILY GIVE UP MY RIGHT TO THIS PROTECTION FOR THIS MORTGAGED PROPERTY WITH RESPECT TO CLAIMS BASED UPON THIS MORTGAGE. 10 - 2 L 1 : ( to/W Brad Allen Date wcr Date Borrower Date Borrower Date Borrower Date Borrower Date m Borrower Date Borrower - C. Date ' • 1010552261 • (g0-6A(IA)po4os).01 Pepe 13 of 15 Form 3016 1/01 • 26. Redemption Period. If the Property is less than 10 acres in size and Lender waives in any foreclosure proceeding any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 6 months. If the court finds that the Property has been abandoned by Borrower and Lender waives any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 60 days. The provisions of this Section 26 shall be construed to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. 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. BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it. W itnessesi I hi (Seal) ( sig Allen -Borrower 1. . 111 10 ;�,U - ae12011 -2 U (Seal) (0. j') -Borrower (Seal) (Seal) -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower :7 NO ram= _{ 0111 0 r 1 o1 C • 1010552261 • Oft-6A(IA)(o40501 Pup 14 of 15 form 3016 1/01 • • STATE OF IOWA, L County ss: On this a- day of � 000‘.1) , before me,a Notary Public in the State of Iowa,personally appeared tid 60(4I IQ 14- tk,uusuctivei, curt_ to me personally known t• •e person(s) named in and s .. executed the foregoing instrument, and acknowledged that he/she!li ey xecuted the same as his/her/ill •oluntary act and deed. • My Commission Expires: a-3-1,-(1 c in and for said County and State ugA CLARK }Loftus/SeNa tOW s J cwl. Commlaslon ity Commisslon Ex ;Otres 2-27.2 o r,a C? F r • 1010552261 • -6A(IA)(0405).01tnitia Pie 154415 Form 3016 1/01 • Legal Description Lots One (1) and Two (2) Block Seven (7) , Morningside Addition, Iowa City, Iowa. Situated in Johnson County, Iowa. f ;C) rn 3 a _ • • MIN: 100488910105522618 ADJUSTABLE RATE RIDER (LIBOR Six-Month Index (As Published In The Wall Street Journal)-Rate Caps) THIS ADJUSTABLE RATE RIDER is made this 25th day of October, 2006 and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned ("Borrower") to secure Borrower's Adjustable Rate Note (the "Note") to Neu Century Mortgage Corporation ("Lender") of the same date and covering the property described in the Security Instrument and located at: 122 S 7TH AVE, Iowa City, IA 52245 (Property Address) THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE AMOUNT BORROWER'S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE BCRRONER MUST PAY. ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. INTERESTRATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial interest rate of 9.950 %. The Note provides for changes in the interest rate and the monthly payments, as follows: 4. INTEREST RITE AND MONTHLY PAYMENT CHANGES (A)Change Dates The interest rate I will pay may change on the first day of November, 2009 and on that day every 6th month thereafter. Each date on whic h my interest rate could change is called a "Change Date." (B)The Index Beginning wit h the first Change Date, my interest rate will be based on an Index. The "Index" is the average of interbank offered rates for six month U.S. dollar-denominated deposits in the London market ("LIBOR"), as published in The Wall Street Journal. The most recent Index figure available as of the first business day of the month immediately preceding the month in whic h the Change Date occurs is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice. • (C) Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding Six And Fifty-five Hundredth(s) percentage points ( 6.550 %) to the Current Index. The Note Holder will then round the result of 1010552261 MULTISTATE ADJUSTABLE RATE RIDER - LIBOR SIX-MONTH INDEX (AS PUBLISHED IN THE WALL STREETJOURNAL)- Single Family- Fannie Mae Uniform Instrument ~I (0-838R(040 2) Fort 3138 1101 / Page 1 of 3 Initials: /1` ( VMP Mortgage Solutions, Inc ` a ' 71 (80 0)521 -7291 p 23 CJ r • t • this addition to the nearest one-eighth of one percentage point (0.12 5%). Subject to the limits = stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be, sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full: on the Maturity Date at my new interest rate in substantially equal payments. The result of this calculation wil I be the new amount of my mont hly payment. (D) omits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 11.950 % or less than 9.950 %.Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than one And One-half percentage points ( 1.500 %)from the rate of interest I have been paying for the preceding 6 months. My interest rate will never be greater than 16.950 %. (E)Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my mont hly payment changes again. (F)Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will • include information required by law to be given to me and also the title and telephone number of a person who will a nswer any question I may have regarding the notice. B.TRANSFER CF THE PROPERTY OR A BENEFCIAL INTEREST N BORRCRMER Uniform Covenant 18 of the Security Instrument is amended to read as follows: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) wit hout Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate tI(e intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Applicable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender also may require the transferee to sign an assumption agreement that Is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. 1010552261 !nit ials:VV 6gt-83 BR (040 2) Page 2 of 34 Form 3138 1/01 If Lender exercises the option to require immediate payment in full, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period Lender may invoke any remedies permitted by this Security Instrument wit hout further notice or demand on Borrower. _ BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider. t (Seal) . E & Seal ) B .d • len -Borrower 'T �(� 1(1 1 t „ N -Borrower (Seal) (Seal) -Borrowe r -Borrower (Seal) (Seal) -Borrower -Bon-owe r (Seal) (Seal) -Borrower -Borrowe r • 1010552261 • 6 )-83 BR(040 2) Page 3 of 3 Form 3138 1/01 o • MIN:100488910105522618 ADJUSTABLE RATE RIDER ADDENDUM (Libor Index-Rate Caps) This Adjustable Rate Rider Addendum is made this 25th day of October 2006 and is incotyu,ated into and shall be deemed to amend and supplement the Promissory Note(the"Note")and Mortgage, Deed of Trust or Security Deed (the "Security Instrument") and Adjustable Rate Rider (the "Rider") of the same date given by the undersigned (the "Borrower")to secure repayment of Borrower's Note to (the"Lender").New Century Mortgage Corporation Property securing repayment of the Note is described in the Security Instrument and located at 122 S TTH AVE,Iowa City,IA 52245 (Property Address) To the extent that the provisions of this Adjustable Rate Rider Addendum arc inconsistent with the provisions of the Note and/or Security Instrument and/or Rider, the provisions of this Addendum shall prevail over and supersede any such inconsistent provisions of the Note and/or Security Instrument and/or Rider. In addition to the covenants and agreements made in the Note,Security Instrument,and Rider,Borrower and Lender further covenant and agree as follows: 4. (D)LIMITS ON MEREST RATE CHANGES The interest rate I am required to pay at the first change date will not be greater than 11.950% or less than 9.950%. Thereafter, my interest rate will never be increased or decreased en any single Change Date bymore than One And One-half percentagepoint(s) 1.500 rom the rate of interest I have been paying for the preceding 6 months. My interest rate will never be greater than 16.950"fie or less than 9.950%- BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Adjustable Rate Rider Addendum. • -1--(MaUC6 OUP./1/ —/ J ! ?I MMC• 141OSr52261 a Adjustable Rate Rids Addendum Page at 1 RE-ICC (082296) CMS P.O.Box 54285,Irvine,CA 92619-4285 (888)561-4567 Fax(949)797-5310 05/11/2009 BRAD ALLEN 122 S TTH AVE — ' :1 IOWA CITY,IA 52245-4621 0 Property Address: 122 S 7TH AVEi IOWA CITY,IA 52245 i*i RE: Loan Number: 1010552261 U.ti � a NOTICE OF INTENT TO FORECLOSE Dear Mortgagor(s): The above referenced loan is in default because the monthly payment(s)due on and after April 01,2009 have not been received. The amount required to cure this delinquency, as of the date of this letter, is $3,142.59, less$0.00,monies held in Unapplied. SUBSEQUENT PAYMENTS, LATE CHARGES, AND OTHER FEES WILL BE ADDED TO THE ABOVE STATED REINSTATEMENT AMOUNT AS THEY ARE ASSESSED. Please remit the total amount due in CERTIFIED FUNDS,utilizing one of the following payment resources: OVERNIGHT MAIL: I WESTERN UNION QUICK COLLECT Carrington Mortgage Services,LLC I Any Western Union Location: ATTN:Cashiering Dept. I Code City :CARRINGTONMS 1610 E. Saint Andrew Place,Ste.B-150 I Code State:CA Santa Ana,Ca.92705 IF YOU ARE UNABLE TO BRING YOUR ACCOUNT CURRENT,PLEASE CONTACT CARRINGTON MORTGAGE SERVICES, LLC TO DISCUSS HOME RETENTION ALTERNATIVES TO AVOID FORECLOSURE AT (888)788-7306 OR BY MAIL AT 1610 E. SAINT ANDREW PLACE, SUITE B-150, SANTA ANA, CA 92705. YOU MAY ALSO CONTACT THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT(HUD)HOTLINE NUMBER AT(800)569-4287 OR YOU CAN VISIT THEIR WEBSITE AT http://www.hud.gov/foreclosure/index.cfm TO FIND OUT OTHER OPTIONS YOU MAY HAVE TO AVOID FORECLOSURE. Failure to cure the delinquency within 30 days of the date of this letter may result in acceleration of the sums secured by the Deed of Trust or Mortgage and in the sale of the property. You have the right to reinstate your loan after legal action has begun. You also have the right to assert in foreclosure,the non-existence of a default or any other defense to acceleration and foreclosure. Should you have any questions,please contact our office at 1-888-788-7306,5:00 AM to 9:00 PM Monday N0565 2219052142 Page 1ora /54 vi 1r - through Thursday, 5:00 AM to 5:00 PM Friday,and 6:00 AM to 11:00 AM Saturday,Pacific Time. Sincerely, Loan Servicing Department Carrington Mortgage Services,LLC ("`) -:r 73 O%� -CREDIT REPORTING- We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. -MINI-MIRANDA- This communication is from a debt collector and it is for the purpose of collecting a debt, and any information obtained from the trustor(s) will be used for that purpose. This notice is required by the provisions of the Fair Debt Collection Practices Act and does not imply that we are attempting to collect money from anyone who has discharged the debt under the bankruptcy laws of the United States. -HUD STATEMENT- Pursuant to Section 169 of the Housing and Community Development Act of 1987, you may have the opportunity to receive counseling from various local agencies regarding the retention of your home.You may obtain a list of HUD-approved housing counseling agencies by calling the HUD nationwide toll-free telephone number,(800)569-4287. -BANKRUPTCY PROCEEDINGS- If you have been discharged from personal liability on the mortgage because of bankruptcy proceedings and have not reaffirmed the mortgage,this letter is not an attempt to collect a debt from you,but merely provides informational notice that foreclosure proceedings to enforce the lien against the property to satisfy some or all of the debt are commencing. N0565 Page 2 of 2 2219052142 • BBELINI tCORMICK ATTORNEYS AT LAW Direct Dial(515)283-4624 Direct Fax: (515)283-4653 November 9, 2009 Brad Allen 122 S. 7th Avenue Iowa City, IA 52245 J Re: Creditor: Wells Fargo Bank N.A., Trustee for Carrington Mortgage Loan,Trust Series L� a 2006-NC5 Asset-Backed Pass Through Certificates; Loan No.: 1010552261_ ':J Property Address: 122 S. 7th Avenue, Iowa City, IA 52245 Dear Mr. Allen: We represent Wells Fargo Bank N.A., Trustee for Carrington Mortgage Loan,Trust Series 2006- NC5 Asset-Backed Pass Through Certificates in connection with a possible mortgage foreclosure action against your property at 122 S. 7th Avenue, Iowa City, Iowa. You have previously received from Wells Fargo Bank N.A., Trustee for Carrington Mortgage Loan,Trust Series 2006- NC5 Asset-Backed Pass Through Certificates a Notice of Right to Cure Default with the 30-day notice period expiring on June 10th, 2009. Under Iowa Code Section 654.4B it is necessary before filing the foreclosure action to provide you with a payoff of your mortgage indebtedness with Wells Fargo Bank N.A., Trustee for Carrington Mortgage Loan,Trust Series 2006-NC5 Asset-Backed Pass Through Certificates. With the expiration of the Notice of Right to Cure, your mortgage indebtedness has been accelerated and the entire amount of the Mortgage is due and owing. Attached hereto as Exhibit "A" is a payoff of the mortgage indebtedness. Unless you pay in full the entire amount shown on the payoff within fourteen (14) days of the mailing of this letter, a foreclosure action will be initiated against the above property. You are also advised that there is available to you counseling and mediation services which might be of assistance to you should you desire to explore options to keep your home. Enclosed is a Mortgage Mediation Notice developed by the Iowa Attorney General which provides information on help which is available. You are encouraged to contact the personnel at the number provided in the Notice for the free assistance which is available to you. Respectfully, JAMES V. SARCONE, JR. For the Firm • _ JVS/sw �h t r4 1 Td r r Nn D:WewcenturylAllen114 Day.Docx 13rr-INMcCorsrticn, P.C. 666 Walnut Street I Suite 2000 I Des Moines,Iowa 50309 P 515.243.7100 I BelinMcCormick.com MORTGAGE PAYOFF EXHIBIT "A" Principal Balance 177,508.66 Interest to 11/23/2009 8,387.52 Recording Costs 7.00 Other Unpaid Expenses 1,246.00 Late Charges 421.20 Escrow/Impound Shortage 269.65 TOTAL TO PAY OFF AS OF 11/23/09 $187,840.03 Per diem 31.61 :; -T1 a BwN MCCORMICK. P.C. 666 Walnut Street 1 Suite 2000 I Des Moines,Iowa 50309 P 515.243.7100 I BelinMcCormick.com r ;k-.',C' • }y , Mortgage Mediation Notice G: r,., i +. You are receiving this notice because (1) your lender believes that tt your mortgage is seriously delinquent, or (2) a foreclosure fi petition was recently filed against you. The purpose of this notice is to inform you that help is available through Iowa Mortgage Help, a State of Iowa-sponsored program. heI 1 ,.. able } 4 Iowa Mortgage Help is a group of organizations partnering with the »� Iowa Attorney General's Office and the Iowa Finance Authority to offer E.. all Iowans access to free, confidential mortgage counseling with local organizations located right here in Iowa. Iowa Mortgage Help is here to assist you in working through your situation. Please call 1-877-622-4866 as soon as possible. The earlier you call, the more options that are available to you. When you call, you will be referred to a trained, professional counselor who will listen F, to your situation and offer free, confidential advice through each sir step of the process. In some cases, we are able to work with lenders - and borrowers to restructure mortgage terms. While we are not able $" to help everyone, we are able to help the majority of homeowners w, who call Iowa Mortgage Help. The fact that a foreclosure petition may be or has been filed against you does not necessarily mean that you will lose your house. It is NOT . too late. There is still time for help. L- r; Do Not Delay. This may be your best chance for saving your Vihome from foreclosure. 4 : Call 1-877-622-4866 today or go to IowaMortgageHelp.com. This free call could save your home. t , k -4 % \ Iowa Mortgage Help _ 1-877-622-4866 5 www.lowaMortgageHelp.com tt 7. ii: This notice is being provided as required by Iowa Code section 654.4B(2). 4 I '.ss Mortgage Mediation Notice You are receiving this notice because (1) your lender believes that your mortgage is seriously delinquent, or (2) a foreclosure petition was recently filed against you. The purpose of this notice is to inform you that help is available through Iowa Mortgage Help, a State of Iowa-sponsored program. he/p Ls ava//abir . - Iowa Mortgage Help is a group of organizations partnering with the' Iowa Attorney General's Office and the Iowa Finance Authority to otter all Iowans access to free, confidential mortgage counseling with local • organizations located right here in Iowa. Iowa Mortgage Help is here, to assist you in working through your situation. Please call 1-877-622-4866 as soon as possible. The earlier you call, the more options that are available to you. When you call, you will be referred to a trained, professional counselor who will listen to your situation and offer free, confidential advice through each step of the process. In some cases, we are able to work with lenders and borrowers to restructure mortgage terms. While we are not able to help everyone, we are able to help the majority of homeowners who call Iowa Mortgage Help. The fact that a foreclosure petition may be or has been filed against you does not necessarily mean that you will lose your house. It is NOT too late. There is still time for help. Do Not Delay. This may be your best chance for saving your home from foreclosure. Call 1-877-622-4866 today or go to lowaMortgageHelp.com. This free call could save your home. Iowa Mortgage Help 1-877-622-4866 EXH` " E www.lowaMortgageHelp.com This notice is being provided as required by Iowa Code section 654.4B(2). END OF CASE FILE IOWA DISTRICT COURT FOR JOHNSON COUNTY THE SUMMIT RESTAURANT&BAR,INC., AND MIKE PORTER, CASE No.(.,V(.-11Q713RD PLAINTIFFS, VS. ORIGINAL NOTICE O _ CITY OF IOWA CITY, I DEFENDANT. w _ J- TO THE ABOVE-NAMED DEFENDANT(S): 5 '= You are notified that a petition has been filed in the office of the clerk of this cot t nami you as the defendant in this action. A copy of the petition (and any documents filed with it) is attached to this Notice. The plaintiffs attorney is Steven J. Havercamp, whose address is Stanley, Lande &Hunter, 900 U.S. Bank Center, 201 West Second Street, Davenport, Iowa 52801. That attorney's phone number is 563-324-1000; facsimile number 563-326-6266. You must serve a motion or answer within 20 days after the service of this Original Notice upon you and, within a reasonable time thereafter, file your motion or answer with the Clerk of Court for Johnson County, at the county courthouse in Iowa City, Iowa. If you do not,judgment by default will be rendered against you for the relief demanded in the Petition. If you require the assistance of auxiliary aids or services to participate in court because of a EXT1 1011 disability, immediately call your district ADA coordinator at 3//-3 4 g-3'.aU (If you are hearing impaired, call Relay Iowa TTY at 1-800-735-2942.) - 6.,•`" L G' L RK OF COURT U Johnson County Courthouse Iowa City, Iowa 52240 --IMPORTANT-- YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS. \\ Ca : 0_/1'Z (C Vg- Orr i J • IOWA DISTRICT COURT FOR JOHNSON COUNTY THE SUMMIT RESTAURANT&BAR,INC., AND MIKE PORTER, CASE No.G' V C-V 0-7I 3PD PLAINTIFFS, PETITION FOR TEMPORARY AND VS. PERMANENT INJUNCTIVE RELIEF, DECLARATORY JUDGMENT AND DAMAGES, CITY OF IOWA CITY, AND REQUEST FOR EXPEDITED HEARING DEFENDANT. c:+ C� ♦1� Plaintiffs,The Summit Restaurant&Bar, Inc.("The Summit") and Mike Pend ("Porter"),pursuant to Rules 1.1501 et. seq. (Injunctions)and 1.1101 (Declaratory J-u4mentT8f iFT-1 the Iowa Rules of Civil Procedure,petition this Court for: (A)temporary and permaii - stk N injunctive relief; (B)declaratory judgment that Iowa City Resolution 09-38 is uncon"stitittional— and(C)damages,and in support thereof state: Summary. Since 2001,The Summit has operated as a restaurant/bar. It is among a handful of restaurant/bars legally operating in the City that admit patrons 19 and older after 10:00 p.m., but which serve alcohol only to those 21 and older("19-year-old bars"). In 2007,the City proposed an initiative mandating that all restaurants/bars become"21-year-old bars",bars that admit only patrons 21 and older. The initiative was defeated. The City then enacted Resolution 09-38,which requires the Police Chief to recommend that the City deny a liquor license renewal application to any establishment allegedly exceeding a vague"PAULA/visit" citation ratio. In July 2009,the City,applying Resolution 09-38 ex post facto,voted to deny the liquor licenses of two 19-year-old bars (Etc. and The Fieldhouse). On November 3, 2009, the City notified The Summit that the Police Chief recommended denial of The Summit's liquor license renewal application based solely on Resolution 09-38. Resolution 09-39 is unconstitutional on its face and in its application. The City's actions are arbitrary, capricious and/or without - reasonable cause, have violated Plaintiffs' constitutional rights, and will ', result in irreparable harm to Plaintiffs. QD 1 • r ' T It I. PARTIES,VENUE&JURISDICTION 1. The Summit is an Iowa corporation doing business in the state of Iowa at all times relevant to this action. 2. Porter is the President and sole officer of The Summit. Porter has, at all relevant times, resided in Johnson County, Iowa. 3. The City of Iowa City, Iowa("City")is a municipal corporation organized and existing under the laws of the state of Iowa. 4. This Petition seeks declaratory and injunctive relief to prevent violations of Plaintiffs' rights,privileges and immunities under the Constitution of the United States(U.S. Const. amend. XIV)and Constitution of the State of Iowa (Iowa Const. art. I, § 9),and to prevent the City from exceeding its constitutionally granted authority(Iowa Const. art III, § 38A). The rights sought to be protected in this cause of action arise and are secured under the Fifth and Fourteenth Amendments to the United States Constitution and various federal statutes and the First and Third Articles of the Iowa Constitution. 5. This Court has jurisdiction and power to issue injunctions pursuant to Rules) Lk) r- 1.1505, 1.1506, 1.1101 and 1.1102 of the Iowa Rules of Civil Procedure. j 6. Venue is proper in the Iowa District Court for Johnson County as tie conduit complained of herein occurred within, and all parties are residents of, or have their principal place of business in,or are doing business in Johnson County, Iowa. 7. This action seeks a judicial determination of issues,rights and liabilities embodied in an actual and present controversy between the parties involving the constitutional validity and application of certain City resolutions. There are substantial bona fide disputes and questions to be resolved concerning provisions of the City resolutions that the City alleges apply to Plaintiffs. 2 V r ` 8. Plaintiffs seek to obtain temporary and permanent injunctions enjoining the City from enforcing any ordinances which act to illegally deny The Summit its substantive and procedural due process in renewing its liquor license. 9. Plaintiffs further seek a declaratory judgment specifically finding any resolution, ordinance or other regulation designed to prohibit, or which has the effect of wrongfully prohibiting Plaintiffs from renewing their liquor license is unconstitutional. Plaintiffs seek a declaration of unconstitutionality against any resolution, ordinance or other regulation which effectively wrongfully prohibits Plaintiffs from operating its lawful business. Such legislation denies Plaintiffs' substantive and procedural due process in that they unduly interfere with the use of real property, cause deprivation of a protected use, and are arbitrary, capricious and/or unreasonable. 10. The constitutional deprivations and irreparable harm that would result from following the administrative process would make judicial review of any final agency action an inadequate remedy. Agencies cannot decide issues of statutory validity or constitutional challenges, and The Summit's constitutional issues as to Resolution 09-38's validity are collateral to its substantive claims of its right to a liquor license. Regardless of the administrative agency ultimate finding regarding The Summit's liquor license, the issue of whether Resolution 09-38 is constitutional would remain ripe and subject to at least three challenges(The Summit,The Fieldhouse and Etc.). There is a significant public interest in reaching a final determination of the constitutional issues raised in this case. "71 11. Plaintiffs incorporate by reference the Affidavit of Mike Porter, the Affidavit'of "1 Dave Carey, and Exhibits 1 through 20. 3 1 H. STATEMENT OF FACTS 12. Approximately 110 establishments in the City currently hold Class"C" liquor licenses. The downtown area of the City is known for its eating, drinking, and live entertainment establishments,as well as retail and other stores. 13. The Summit holds a Class"C" liquor license, and has owned and operated a restaurant/bar at 10 S. Clinton St. in downtown Iowa City since December 2001. 14. The Iowa Alcoholic Beverages Division(the"Division")is tasked with enforcing Iowa Code Chapter 123, known as the"Iowa Alcoholic Beverage Control Act"(the"Act"). 15. The Administrator of the Division is required to issue a liquor license if the Administrator determines that the applicant complies with all requirements for holding a license. See Iowa Code Section 123.32(6). 16. To hold a liquor license,the applicant must be a"person of good moral character" as defined by [Iowa Code Chapter 123]." Iowa Code Section 123.30(1)(a) (2007). ;J Y; 17. Iowa Code Section 123.3(26)defines a"person of good moral character" as = _ "T person who meets the following requirements: i? . i.,, ;. a. The person has such financial standing and good reputation as will satisfy the administrator that the person will comply with this chapter and all laws, > w ordinances,regulations applicable to the person's operations under this chapter. However,the administrator shall not require the person to post a bond to meet the requirements of this paragraph. b. The person is not prohibited by section 123.40 from obtaining a liquor control license or a wine or beer permit. c. Notwithstanding paragraph"e", the applicant is a citizen of the United States and a resident of this state, or licensed to do business in this state in the case of a corporation. Notwithstanding paragraph "e", in the case of a partnership, only one general partner need be a resident of this state. d. The person has not been convicted of a felony. However, if the person's conviction of a felony occurred more than five years before the date of the 4 t application for a license or permit,and if the person's rights of citizenship have been restored by the governor,the administrator may determine that the person is of good moral character notwithstanding such conviction. 18. To guide a local authority or administrator in its determination of an applicant's "financial standing"and "good reputation"the Division adopted certain regulations. Iowa Administrative Code Section 185-4.2(4)provides: A local authority or the administrator may consider an applicant's financial standing and good reputation in addition to the other requirements and conditions for obtaining a liquor control license,wine or beer permit, or certificate of compliance, and the local authority or the administrator shall disapprove or deny an application for liquor control license, wine or beer permit, or certificate of compliance if the applicant fails to demonstrate that the applicant complies with the lawful requirements and conditions for holding the license,permit or certificate of compliance. a. In evaluating an applicant's "financial standing", the local authority or the administrator may consider the following: An applicant's"financial standing" may include,but is not limited to,verified sources(s) of financial support and adequate operating capital for the applicant's proposed establishment,a record of prompt payment of local or state taxes due, a record of prompt payment to the local authority of fees or charges made by local authority for municipal utilities or other municipal services incurred in conjunction with the proposed establishment, and a record of prompt payment or satisfaction of administrative penalties imposed pursuant to Iowa Code chapter 123. b. In evaluation an applicant's"good reputation,"the local authority or the administrator may consider such factors as,but not limited to,the following: pattern or practice of sales of alcoholic beverages to 19-and 20-year-old- persons for which the licenses or permittee, the licensee's or permittee's agents or employees, have pled or have been found guilty, pattern and practice by the licensee or permitee, or the licensee's or permittee's agents or employees, of violating alcoholic beverages laws and regulations for which corrective action has been taken since the previous license or permit was issued, sales to intoxicated person, licensee or permitee convictions for violations of laws relating to operating a motor vehicle while under the influence of drugs or alcohol,the recency of convictions under laws relating to operating a motor vehicle while under the influence of drugs or alcohol, licensee or permittee misdemeanor convictions,the recency of the ; misdemeanor convictions." _ •- _1 • (emphasis added). ~' — -i z w 5 `° f 1 19. Since 2001, the City has recommended to the Division that The Summit's liquor license renewal application be granted every year, and the Division renewed The Summit's liquor license in 2002, 2003, 2004, 2005, 2006, 2007 and 2008. See Exhibit 1. The Summit has never had a liquor license denied, suspended, or revoked. See Exhibit 1. 20. The City has, for quite some time, desired to change the make up of the downtown district. In particular, it wants to decrease the number of bars and either put the 19- year-old bars out of business or force them to convert to 21-year-old bars. As stated by Michael Lombardo, City manager, at an October 20, 2008 City Council work session: One of the things that I think is universally mentioned was that, urn, and I think this came up in our retreat, is that there's acknowledgement that the mix of use downtown has...the balance has tipped, and that there's a strong interest on behalf of Council to change that mix and find that balance. And I think...if I may, if that's correct, then one of the tools that we would suggest and we haven't really thought through the strategy, would be, uh, an effective way of reducing the number of licensed, uh, bars and so it would probably come as a recommendation that somehow we tighten up on the renewal process because if the interest is in getting it the mix back, we have to find a way of ferreting out the bad bars, if you will, and reducing that number, other than through zoning and some other things that we likely recommend to you all. It has to be a combination of...of approaches to get that number and that balance, uh, to where you're all comfortable. See Exhibit 3 (emphasis added). 21. The means chosen by the City to "change the mix" and"ferret[] out the bad bars" were twofold. First, the City adopted guidelines re-defining Iowa law's definition of"a person of good moral character." Second, the City added an initiative to the 2007 election ballot that "1 would prohibit 19-year-old bars. - w rt, -v 22. At least as early as 2001 the City had contemplated using PAULA (Possession of m�J y , 1 Alcohol Under Legal Age) citation ratios as a basis for determining good moral character. Even then, however, the City acknowledged that PAULA citations could not, in and of itself, be a basis for denial of a liquor license. See Exhibit 4 at pg. 3, line 3 (memorandum from then-and- 6 current City Attorney Eleanor Dilkes sent to the City Council addressing alcohol regulations stating that "ItJhe number of possession of alcohol under legal age charges (PAULAs) against under age persons is not in and of itself sufficient for administration of a civil penalty.") (emphasis added). 23. Enforcement and interpretation of the City's PAULA's standard proved problematic for the police department and in 2006 the City Police Chief requested that the City Council provide him with a set of guidelines or criteria to assist him with his obligations under Iowa City Ordinance 4-2-3(B) 1 in determining whether an applicant for a liquor license was "a person of good moral character." 24. On June 27, 2006, the City Council adopted Resolution No. 06-216, which set forth factors to be considered by the Chief of Police or designee when determining whether an applicant is "a person of good moral character." See Exhibit 5. One of the factors set forth in Resolution 06-216 provides: A pattern of convictions of persons within the establishment for PAULA (Possession of Alcohol Under Legal Age) and/or the local law prohibiting persons under 19 from being in the licensed establishments, which suggest that the licensee or permittee does not have measures in place to adequately control access of persons under legal age to alcohol. The Police Chief or Designee shall review the establishment's rate of PAULAs per visit. A rate of 1.5 PAULAs per visit may be grounds for disapproval of the application. Iowa City Ordinance Sec.4-2-3(B)provides: c y The Iowa City fire chief,the Iowa City building official, and the Iowa City chief of police must approve or , disapprove the application. The fire chief and building official must determine if the premises complies with all applicable state and local laws, rules, and regulations and will, if necessary to',make such determination, inspect the premises. The chief of police shall make an investigation to detetmine irfie applicant is of good moral character as defined in section 123.3(26)of the Iowa Code,the rules of the Iowa alcoholic beverages division and guidelines developed by the chief of police and approved by the city council. Each official must approve or disapprove a completed application and if applicable, provide a memo setting forth the reasons for disapproval no later than seven(7) calendar days prior to the expiration of the current license in the case of renewals, or within seven (7) days of completion of the application, including the state requirements, in the case of applications for a new license. Renewal applications will not be accepted more than seventy(70)days prior to expiration of the present license. The application must be reviewed and approved or denied by the city council. 7 See Exhibit 5 (emphasis added). 25. In 2007, the City added an initiative prohibiting 19-year-old bars to the November ballot. The initiative failed. 26. The City found that its PAULA standard was not having the intended effect of putting 19-year-old bars out of business or forcing them to convert to 21-year-old bars. As of December 31, 2008, it is verily believed that the Police Chief did not recommend any restaurant/bar be denied a liquor license based upon excessive PAULA citations. 27. On February 10, 2009, the City passed Resolution No. 09-38. Resolution 09-38 rescinded Resolution 06-216 and adopted new Guidelines for Police Chief's Review of Applications for Initial and Renewal Liquor Licenses. See Exhibit 6. 28. The new guidelines under Resolution 09-38 went into effect July 1, 2009. 29. The purported purpose of Resolution 09-38 was stated to adopt guidelines"to determine if the applicant is of'good moral character' as that term is defined in the State Code and Rules of the Iowa Alcoholic Beverages Division."See Exhibit 6, unnum. pg. 3). 30. Its actual purpose, however, was to change the definition of"good moral "character" and further the City's intent to shut down 19-year-old bars or force them to convert to 21-year-old bars. N 31. Resolution 09-38 revised the factors considered by the Chief as follows: w Citations issued on the premises for PAULA (Possession of Alcohol Under:Lgga1 0 Age) which indicate that the licensee or permittee knows that such activity`_is taking place on the premises and does not have measures in place to adequately -0 control access of persons under legal age to alcohol. The Police Chief or Designee shall review the establishment's rate of PAULAs per visit. For renewals after July 1, 2009, the Police Chief will recommend denial for any establishment with a rate of 1.0 or more PAULAs per visit assuming at least 18 visits in the 12 month renewal period. A rate of less than 1.00 or a rate based on less than 18 visits may be grounds for disapproval of the application. 8 See Exhibit 6 (emphasis added). The "rate of 1.0 or more PAULAs per visit assuming at least 18 visits in the 12 month renewal period" is hereinafter referred to as the "PAULA Ratio." 32. In sum, Resolution 09-38 made the following material revisions to Resolution No. 06-216: A. The numerator of the PAULA Ratio changed from"PAULA convictions" to"PAULA citations issued"; B. Only those citations "which indicate that the licensee or permittee knows that [PAULA] activity is taking place on the premises and does not have measure in place to adequately control access of persons under legal age to alcohol" are supposed to be considered; C. The PAULA Ratio was dropped from 1.5 to 1.0; and D. The Police Chief is now required, instead of permitted, to recommend denial of the renewal application for any establishment with a PAULA Ratio 1.0 or more per visit assuming at least 18 visits in the 12 month renewal period. 33. Unlike Resolution No. 06-216 and the failed 2007 initiative, Resolution 09-38 is well on its way of having its intended effect of putting 19-year-old bars out of business or forcing them to convert to 21-year-old bars. 34. On or about July 6, 2009, the Fieldhouse completed an application for renewal of its Class "C" liquor license as provided by the Division and City addendum.2 Although the Iowa City Fire Chief and Iowa City building official approved the Fieldhouse's application3, the Chief 1 2 Iowa City,Iowa Ordinance Sec.4-2-3(A)provides: It shall be the responsibility of the applicant for a liquor control license,beer permit,or wine ` —' -j permit, or a renewal of any of those,to complete the applications provided by the state alcoholic !" beverages division and the city addendum.The city's addendum shall require a listing of alt persons with an ownership or management interest in the applicant, identification of any administrative sanctions imposed,and authorization of each such person for an Iowa criminal history report from the division of criminal investigation. 3 Iowa City Ordinance Sec.4-2-3(B)provides: The Iowa City fire chief,the Iowa City building official,and the Iowa City chief of police must approve or disapprove the application.The fire chief and building official must determine if the 9 of Police disapproved the application stating "[biased on an excessive PAULA citation rate of 1.55 per visit I am mandated to recommend denial of The Field House liquor license renewal." See Exhibit 7. On July 28, 2009,the City Council disapproved the Fieldhouse's liquor license renewal application. 35. Likewise, on or about July 17, 2009, Etc. completed an application for renewal of its Class"C" liquor license. Although the Iowa City Fire Chief and Iowa City building official approved Etc.'s application, the Chief of Police disapproved the application stating"Per the GUIDELINES FOR POLICE CHIEF'S REVIEW OF APPLICATIONS FOR INITIAL AND RENEWAL LIQUOR LICENSES," PD must deny. Recommend denial [per PAULA rate standard]." See Exhibit 8. On July 28, 2009, the City Council disapproved Etc.'s liquor license renewal application. 36. The sole reason for the disapprovals was the PAULA Ratio as mandated by Resolution 09-38. See Exhibit 9 at pg. 37, lines 6-13 and pg. 43, line 23 —pg. 44, line 4. 37. As a result of the City's disapproval of the Fieldhouse's and Etc.'s liquor license renewal applications, these businesses have suffered severe economic loss. It is verily believed that The Fieldhouse's gross receipts decreased nearly 80% in the two months immediately following the City's disapproval of their liquor license renewal application. See Exhibit 2. . 7 -.S lJ L premises complies with all applicable state and local laws,rules,and regulations and will, if m -v necessary to make such determination, inspect the premises.The chief of police shall make an ^;U --- 0 investigation to determine if the applicant is of good moral character as defined in section .7: 123.3(26)of the Iowa Code,the rules of the Iowa alcoholic beverages division and guidelines 5 developed by the chief of police and approved by the city council. Each official must approve or `d disapprove a completed application and if applicable,provide a memo setting forth the reasons for disapproval no later than seven(7)calendar days prior to the expiration of the current license in the case of renewals, or within seven(7)days of completion of the application,including the state requirements,in the case of applications for a new license. Renewal applications will not be accepted more than seventy(70)days prior to expiration of the present license.The application must be reviewed and approved or denied by the city council. 10 38. In late October,2009,The Summit completed an application for renewal of its Class"C"liquor license. 39. In accordance with Iowa City Ordinance 4-2-3(B)2,the Iowa City Fire Chief and the Iowa City Building Inspector approved The Summit's application. 40. On November 3, 2009,the Chief of Police, however, disapproved the application stating"[b]ased on an excessive PAULA [Possession of Alcohol Under the Legal Age] citation rate of 1.925 per visit I am mandated to recommend denial of The Summit's liquor license renewal." See Exhibit 10. 41. The Police Chief further stated"[1]icense renewals after July 1, 2009 that have a rate greater than 1.0 require the Police Chief to recommend denial." See Exhibit 10. 42. Pursuant to Iowa City Ordinance 4-2-4, the City Council has scheduled a hearing on November 17, 2009 to vote on The Summit's liquor license renewal application.4 43. Based on the City's stated intention to put establishments such as The Summit out of business and the City's prior disapproval of the Fieldhouse's and Etc.'s liquor license renewal applications based solely on PAULA citations,it is a foregone conclusion that the City will deny The Summit's liquor license renewal application. 44. The actions taken by the City against Plaintiffs are willful, wanton and done with malice. 45. The Summit cannot suffer the same harms suffered by the Fieldhouse and.Etc.. (including,but not limited to economic loss and loss of good will sustained)when their 4 Iowa City Ordinance Sec.4-2-4 provides: 2` 77 D Ui The city council shall provide the licensee or permittee an opportunity to be heard prior to the imposition of `n a civil penalty,suspension or revocation or disapproval of an application for renewal.Notice may be given by personal service or first class mail directed to the manager or contact person of the applicant as listed on the application.Notice by personal service must be given at least five(5)days before the hearing.Notice by first class mail is effective on mailing and must be given at least six(6)days before the hearing. 11 respective liquor license renewal applications were denied and remain solvent. See Exhibit 1. The Summit and Mike Porter will be irreparably harmed if the City denies Plaintiffs' application for renewal of The Summit's liquor license. 46. The actions of the City are arbitrary, capricious and/or without reasonable cause and a denial of rights guaranteed by the Constitution of the United States (U.S. Const. amend. XIV), Constitution of the State of Iowa(Iowa Const. art. I, § 9; art III, § 38A). 47. Plaintiffs will suffer harm, including but not limited to economic harm in the form of a tangible loss of profits as well as the loss of good will and the harm from improper impingement upon its Constitutional rights,unless the Court temporarily and permanently enjoins the City from denying Plaintiffs' liquor license application and enjoins the City from enforcing Resolution 09-38. 48. The harm suffered by Plaintiffs, including,but not limited to economic and Constitutional harm, should the Court not intervene far outweighs any harm incurred by the City in being forced to grant the requested liquor license renewal application and being enjoined from enforcing an unconstitutional ordinance. 49. The rights of Plaintiffs under the Untied States Constitution and the Iowa Constitution are violated in the actions of the City, because, among other things,the City's actions: A. Are vague and indefinite and fail to set out distinct criteria,thus leaving persons of common intelligence to guess as to the meaning and differ as to its application; B. Violate Plaintiffs' procedural and substantive due process rights;:: rl,l C. Usurp statutorily grants of constitutionally limited authority;and F. Are unconstitutional as applied to the Plaintiffs. p w 12 50. The public interest clearly weighs in favor of intervening on behalf of Plaintiffs and"protecting the public from the dangers to liberty which lurk in insidious encroachment by men of zeal." Doctor John's, Inc. v. City of Sioux City, Iowa, 305 F. Supp.2d 1022, 1042 (N.D. Iowa 2004). 51. The grounds for the temporary, permanent injunctive relief, declaratory judgment and damages, argued in the alternative, are set out in the following paragraphs. COUNT I- REQUEST FOR DECLARATORY JUDGMENT A. Declaratory Judgment that the City's Conduct is Unconstitutional as Resolution 09-38 is Preempted by State Law and the Rules Promulgated by the Division. 52. Plaintiffs incorporate paragraphs 1 through 51, as applicable. 53. The City has illegally exceeded the scope of its authority when it defined the term "good moral character"to include a"PAULA Ratio"in Resolution 09-38. 54. While local authorities may regulate matters of local concern,they may do so only when those regulations are not inconsistent with the laws of the general assembly. 55. Resolution 09-38 is preempted by state law because the legislature reserved to itself the power to define"a person of good moral character", a term is expressly defined in the Act and rules promulgated by the Division. 56. The City has,however,through Resolution 09-38,unconstitutionally usurped the Division by purporting to re-define"a person of good moral character"as an applicant with a PAULA Ratio less than the arbitrary number 1.0 with at least 18 visits. 57. Moreover, the factors used in the definition of"a person of good mpTal chat Iter" in both the Act and the rules established by the Division relate specifically to criminal wrongdoing—"sales of alcoholic beverages to 19- and 20- year-old-persons" on the part Of'the applicant or its employees, for which they "have pled or have been found guilty.' - 13 58. The PAULA Ratio utilized by the City in Resolution 09-38,however,uses as its main criteria alleged possession by(not sales to) and citations issued to(not convictions)third persons through no culpability on Plaintiffs part. 59. Additionally unlike the Act, Resolution 09-38 has nothing to do with alleged violations by the applicant or its employees, but is instead based upon mere unsubstantiated allegations against third parties. B. Declaratory Judgment that Resolution 09-38 is Unconstitutionally Vague Violating Plaintil] 'Right to Due Process 60. Plaintiffs' incorporate paragraphs 1 through 59, as applicable. 61. An enactment is void for vagueness if its prohibitions are not clearly defined. 62. Persons of ordinary intelligence do not have fair notice of what is prohibited under Resolution 09-38. Among other things: A. The term"visit"is not defined in either Resolution 09-38 or any other document,nor has the City defined this term. B. The City Police Department does not have any written policy or guidelines as to what is defined as a visit for purposes of the PAULA Ratio. C. The City Police Department has a varying understanding of the word"visit" as used in Resolution 09-38,resulting in"visits"that are not uniformly recorded or enforced. Compare Exhibit 9,pg. 18,line 3—pg. 22, line 4 and pg. 67, line 2—pg.pg. 75, line 8 and pg. 85,line 24—pg. 97,line 2 and pg. 101,line 23—pg. 103, line 16 with Exhibit 11,pg. 20 line 1 —pg.25 line 20 and pg. 30,line 4—pg. 37,line 14. D. Resolution 09-38 clearly does not provide an explicit standard for Police ? Officers or the establishments' owners,resulting in unequal enforcement. 4- -71 w 3.m.. L,) 14 �' C. Declaratory Judgment that Resolution 09-38 is Unconstitutional as it Violates Plaintiffs'Substantive Due Process Rights Because it Does Not Require Any Culpability on Behalf of the Permittee or Licensee 63. Plaintiffs' incorporate by reference paragraphs 1 through 62, as applicable. 64. Iowa Code section 123.50(3) authorizes suspension of an establishment's liquor, wine or beer license for various reasons, including proof that an employee has been convicted of selling alcohol to a minor. 65. Under Resolution 09-38, the Police Chief must recommend denial of an establishment's liquor license if the PAULA Ratio exceeds 1.0 over at least 18 "visits." See Exhibit 6. 66. The numerator in the PAULA Ratio is"[c]itations issued on the premises for PAULA which indicate that the licensee or permittee knows that such activity is taking place on the premises and does not have measures in place to adequately control access of persons under legal age to alcohol." See Exhibit 6. 67. The City, however, admits that none of the PAULA citations allegedly issued due to activity "on the premises" at a business during the 12 month renewal period indicate that the licensee or permittee knows that such activity is taking place or that the licensee or permittee does not have measure in place to adequately control access to alcohol of persons under the legal age. See Exhibit 9 at pg. 52, line 10—pg. 53, line 1. 68. Resolution 09-38 does not contain any requirement that the City observe an underage patron in actual possession of alcohol or that the person was served alcohol by the 71 restaurant/bar. -;) 69. The Police Department has stated that if not mandated by Resolution 09'38 to_ recommend denial of a liquor license based on the PAULA Ratio, it would focus on the nun48er 15 of times the bar has been convicted of selling alcohol to a minor as a priority in its determination. See Exhibit 9 at pg. 37, lines 6-23. 70. During The Summit's twelve month review period, October 30,2008 through October 29,2009,not a single Summit employee was cited for selling alcohol to a minor. See Exhibit 10,pg. 2. There is no evidence of any culpability whatsoever on Plaintiffs' behalf pertaining to any of the PAULA citations. 71. Because there is no requirement of any culpability on Plaintiffs' behalf in Resolution 09-38, Resolution 09-38 denies Plaintiffs their due process rights. D. Declaratory Judgment that Resolution 09-38 is Unconstitutional as it Violates Plaintiffs'Substantive Due Process Rights Because it Does Not Require a PAULA Conviction, Only a Citation 72. Plaintiffs incorporate paragraphs 1 through 71, as applicable. 73. The PAULA Ratio utilized by the City in Resolution 09-38 uses as its main criterion citations—not convictions — issued to third persons allegedly on the premises. See Exhibit 6. 74. A criminal defendant, even in a quasi-criminal proceeding, is entitled to the presumption of innocence and must be proven guilty beyond a reasonable doubt. 75. A plain reading of the"good moral character"requirement of the Act supports the conclusion that it is the licensee's or permittee's behavior which must be analyzed. 76. The City's Legal Department has admitted that a conviction, and nota citation, is necessary to deny an initial or renewal application for liquor license. See Exhibit 12 at pg.a1 T] (Memo from City Attorney Linda Newman Gentry stating"The court does make cii that- R1 - 0 conviction,rather than a charge, of violating Chapter 123 or a comparable local ornce is required to trigger the revocation and suspension provisions. I think it must also be clea>lhat 16 a conviction would be required to deny an initial or renewal application.") (emphasis in original). 77. The City is denying Plaintiffs' liquor license based on unproven allegations in contravention of Plaintiffs' substantive due process rights. E. Declaratory Judgment that Resolution 09-38 is Unconstitutional because the City is Intentionally Targeting Certain Establishments for Enforcement at the Exclusion of Others. 78. Plaintiffs incorporate by reference paragraphs 1 through 77. 79. The City admits that it is"possible to find an underage drinker just about anywhere at any bar in Iowa City." See Exhibit 13 at pg. 28. 80. Yet,the Police Department does not have a policy or mandate that requires all bars to be"visited" for potential alcohol violations. See Exhibit 9 at pg. 25, lines 10-15. 81. The Police Department asserts that scheduled checks of establishments should be done evenly and has even designated an officer to see that every bar is checked and checks are done evenly. See Exhibit 9 pg. 26, line 18 and pg. 27, lines 19-24. However,fewer than 20 of the City's 110 businesses with Class"C"liquor licenses have been visited 18 or more times in 2009,meaning the PAULA Ratio could not even be used against more than 82%of the City's establishments under Regulation 09-38. See Exhibit 9 pg. 26, lines 7-10;Exhibit 20. 82. In 2009,45 establishments (41%of the City's 110 businesses with liquor licenses)have never been visited by the Police Department. See Exhibit 20. The City has visited the majority of its 110 establishments holding Class"C"liquor licenses three or fewer times4n 2009. See Exhibit 20. `" • m a CJ 17 83. In 2004, the City did not visit 47% of its establishments a single time. See Exhibit 15. This figure was 44% in 2005, 45% in 2006, 44% in 2007 and 49% in 2008. See Exhibits 16, 17, 18, 19, respectively. 84. From 2003 to 2009, the City had approximately 158 establishments holding Class "C" liquor licenses. See Exhibits 14-20. The City did not visit 48 of these establishments (30% of the total), a single time in the seven years from 2003 to 2009. See Exhibits 14-20. The City visited another 11 establishments only one time during this seven year period. See Exhibits 14-20. 85. Without clear standards and approximately equal policing of establishments, there is too much discretion left to officers to target certain establishments, including The Summit. See Exhibit 9 at pg. 27, lines 1-4. 86. The Police Department admits the City is targeting certain establishments. See Exhibit 9 at pg. 28, lines 19-23. 87. By impermissibly targeting only certain establishments—including The Summit— for enforcement the City has violated Plaintiffs' substantive due process rights. F. Declaratory Judgment that Resolution 09-38 is Void for being Unconstitutional as Applied 1. The Numerator of the PAULA Ratio is Inaccurate 88. Plaintiffs incorporate paragraphs 1 through 87, as applicable. 89. In Resolution 09-38 the numerator in the PAULA Ratio is supposed to be "[clitations issued on the premises for PAULA which indicate that the licensee or permittee —11 knows that such activity is taking place on the premises and does not have measures in place to :: W adequately control access of persons under legal age to alcohol." See Exhibit 6. :-r: �, ` rr 90. Despite the fact that Resolution 09-38 expressly requires citations 4H-the C premises, the City has used information that may have occurred outside the premises. See 6 23 >X o 18 Exhibit 10, pg. 3 (stating"Statistics were calculated by querying databases for the address, 10 S Clinton St. Some of these events possibly occurred outside the establishment.") 91. The PAULA Ratio,therefore, is unconstitutional as applied because the numerator includes citations for violations that may not have occurred"on the premises" at The Summit as mandated by Resolution 09-38. 2. The Denominator of the PAULA Ratio is Inaccurate 92. Plaintiffs incorporate paragraphs 1 through 91,as applicable. 93. The City admits that police officers are sometimes present in an establishment but do not record their"visit"because they use the terms"visit"and"bar check"interchangeably. See Exhibit 9 at pg. 19,lines 12— 17 and pg. 34,lines 8—20. 94. The City also admits that sometimes the"visits"are miscoded,and the City only finds out about a mis-coding if an establishment informs the Police Department of the miscoding. See Exhibit 9 at pg. 20,lines 13—24. 95. The PAULA Ratio is unconstitutional as applied because the denominator does not include all Police Department"visits"to The Summit. C. Declaratory Judgment that Resolution 09-38 is Unconstitutional Because it Punishes Plaintiffs Retroactively 96. Plaintiffs incorporate paragraphs 1 through 95, as applicable. 97. A statute or resolution is presumed to apply prospectively when a change in law is substantive. 98. Resolution 09-38 was adopted February 10, 2009 and it applies to 413license, renewal applications after July 1, 2009. See Exhibit 6. l D _ O 19 99. Resolution 09-38 requires the Police Department to consider the twelve months preceding an application for renewal for purposes of calculating the applicant's PAULA Ratio. See Exhibit 6. 100. Resolution 09-38 thus retroactively assess and punishes establishments for conduct occurring before the City announced and implemented the substantive change. 101. PAULA was an offense prior to February 10, 2009, yet a City licensee had no notice prior to that date that past PAULA citations(not convictions) issued in(or possibly outside)their establishments would be later used against them to deny their liquor license renewal application. 102. The Summit's PAULA Ratio is calculated based upon data for the twelve month period preceding the date of application, October 30,2008 through October 29, 2009. See Exhibit 10. The PAULA Ratio thus includes over three months of data for The Summit before the City Council adopted the new policy(October 30, 2008,through February 10, 2009). 103. By applying Resolution No. 09-38 in an ex post facto manner the City has violated Plaintiffs' due process rights. H. Declaratory Judgment that the City's Enforcement of Resolution 09-38 is Arbitrar l Capricious and/or Unreasonable. rn -72 0 104. Plaintiffs incorporate paragraphs 1 through 103, as applicable. > _ . 105. Resolution 09-38 re-defines"a person of good moral character" as an applicant with a PAULA Ratio less than the 1.0 with at least 18 visits. See Exhibit 6. 106. The City acknowledges that the PAULA Ratio of 1.0 and,potentially,the 18 "visit" minimum cutoff were arbitrarily selected. See Exhibit 9 at pg. 50,lines 2—3 and pg. 26, lines 5 —6. 107. The PAULA Ratio used by the City fails to take into account the following relevant considerations: 20 A. The number of officers involved in the "visit"; B. An establishment's capacity; C. The day of the visit; D. The duration of the visit; and E. The number of patrons the officers ask for identification during a visit. 108. The City has arbitrarily, capriciously and/or unreasonably enforced Resolution No. 09-98 against the Plaintiffs. COUNT II—THE CITY HAS VIOLATED PLAINTIFFS' PROCEDURAL AND SUBSTANTIVE DUE PROCESS RIGHTS. 109. Plaintiffs incorporate paragraphs 1 through 108, as applicable. 110. For the reasons outlined above,the City has violated Plaintiffs' procedural and substantive due process rights. 111. The City's conduct was a proximate cause of the Plaintiffs' damage. 112. The amount of damage sustained by Plaintiffs meets the jurisdictional limits of this Court. 71 COMMON REQUEST FOR RELIEF ti} , L.; 6" *r--:-; 3 m WHEREFORE,Plaintiffs The Summit Restaurant&Bar, Inc.and Mike Porgy;;; 0 respectfully pray that the Court award judgment against the City of Iowa City as folws: A. That this Court find that enforcements of the City or any of its subdivisions or administrative departments, agents, officials of City Resolution 09-38 would impose irreparable harm or injury or the threat of such irreparable harm or injury upon the Plaintiffs, arising from a violation of the Plaintiffs' rights under the United States Constitution and federal law,the Iowa Constitution and state law,and that the Court declare such resolutions and/or ordinances unconstitutional; 21 B. That this Court temporarily,preliminarily and permanently restrain and enjoin the City of Iowa City from enforcing the unconstitutional Resolution 09-38, from denying The Summit's application for a renewal of its liquor license, and from enforcing rules, resolutions, regulations or ordinances resulting in irreparable harm and damages to Plaintiffs; C. For damages in an amount to be proved at trial for arbitrary, capricious and/or unreasonable enactment and enforcement of rules, regulations and ordinances designed to unconstitutionally deprive Plaintiffs of their rights; D. Judgment against the City in a fair and reasonable monetary amount to be determined by the trier of fact, along with attorney fees as provided under federal and/or state law, interest as provided by law and the cost of this action; E. For lost profits and/or earnings; G. For incidental and consequential damages to be determined at trial; H. For exemplary and/or punitive damages; and I. For such other and further relief as this Court deems appropriate. STANLEY, LANDE&HUNTER A Professional Corporation Attorneys for Plaintiffs 900 U. S.Bank Center 201 West Second Street - m Davenport,Iowa 52801 w F Telephone: 563 '.1000 r- m Facsi l• s. • • • •• a • AT0003 4 22 • ri 4 IOWA DISTRICT COURT FOR JOHNSON COUNTY THE SUMMIT RESTAURANT&BAR,INC., AND MIKE PORTER, PLAINTIFFS, CASE NO. VS. AFFIDAVIT OF MIKE PORTER `t li CITY OF IOWA CITY, ry VJ Y 111 DEFENDANT. ' �'� "0 1,7 STATE OF IOWA ) o ss JOHNSON COUNTY ) I, Mike Porter, affirm that the following statements are true and correct, as I verily believe: 1. At all relevant times during this dispute I have resided in Johnson County, Iowa. 2. I am the president and sole officer of The Summit Restaurant& Bar, Inc. ("The Summit"), an Iowa corporation engaged in doing business in the State of Iowa at all times relevant to this action. 3. The Summit's address is 10 S. Clinton St. The Summit has been operated as a restaurant, bar, nightclub and place of assembly since 2001. 4. The Summit has held a Class "C" liquor license since 2001. 5. Since it opened in 2001,the City has recommended to the Iowa Alcoholic Beverages Division that The Summit's liquor license renewal application be granted every year. The Division has renewed The Summit's liquor license every year. 6. The Summit's liquor license has never been suspended, revoked, or denied by the Iowa City Council. EXHIBIT V . Y 7. I have spent a significant amount of money (nearly $2.0 million) remodeling The Summit to operate my business. 8. On February 10,2009,the City passed Resolution No. 09-38. Resolution No. 09- 38 mandates that for liquor license renewal applications after July 1, 2009,the Police Chief must recommend denial to the City Council for any establishment with a rate of 1.0 or more PAULAs per visit assuming at least 18 visits in the 12 month renewal period. 9. In October, I filed a liquor license renewal application with the City. The application was approved by the Fire Chief and Building Official. 10. On November 3,2009,however, I received notice that the Police Chief recommended denial of The Summit's liquor license. The Police Chief stated he was mandated under Resolution 09-38 to recommend denial. 11. The stated purpose of Resolution 09-38 was to adopt guidelines"to deteOmine the applicant is of'good moral character' as that term is defined in the State Code and tules o- �11 the Iowa Alcoholic Beverages Division." �.1 -0 12. However, as stated by the City Manager on October 20,2008,the City'*real -' purpose was to"tighten up on the renewal process"to "ferret out"what the City has deemed "bar bars" so the City can have fewer bars downtown and more non-bar establishments. 13. As the City has acknowledged, it is deliberately targeting certain bars for compliance checks, including The Summit. 14. Resolution 09-38 is vague, ambiguous and is being enforced against The Summit in an illegal manner. For example, for the 12 month period prior to the The Summit's liquor license renewal,the Police Department alleges that it"visited"The Summit only 80 times. This is inaccurate,the Police Department visited The Summit significantly more than 80 times during 2 ti . • • I this period. Moreover, during the same period the Police Department failed to"visit"over 40% of the other establishments holding a Class"C"liquor license. 15. Officers from the City's police department"visit"(are physically present at)The Summit on average seven to ten times per week. 16. Officers most often"visit"The Summit between the hours of 11:30 p.m. and 1:30 a.m. on Friday or Saturday nights. 17. There are almost always two or more officers participating in the"visit"at The Summit. 18. It is not uncommon for the Police Officers to stay at The Summit for more than one hour. 19. It is not uncommon for the Police Officers to ask for identification from 10 patrons at The Summit. 20. On September 20, 2009 the Cedar Rapids Gazette published an article written by an author who followed officers Kevin Prestegard and Bob Hartman around on their downtown beat on Friday, September 11,2009. The officers visited The Summit for approximately two hours and fifteen minutes that night. The Gazette article is consistent with the types of police incursion The Summit frequently receives from the Police Department. 21. I have been in other establishments holding a Class "C" liquor licenses where the Police Department does not check any patrons' identification. 22. The City is applying Resolution 09-38 retroactively and not affording me an opportunity to comport to the new regulations (to the extent vague and ambiguous laws can be followed). - ' 1 W O Fv 3 23. If the City recommends to the Division that my liquor license be denied I will appeal such denial. In the interim,however, my business will be materially,substantially and irreparably damaged. Based on the losses suffered by The Fieldhouse and Etc. and well as my own calculations,I anticipate The Summit will lose approximately 25-33%percent of its patrons (both restaurant and bar patrons)because, in part,the public will wrongfully think that The Summit is not open for business. This will likely result in The Summit becoming insolvent. 24. Iowa City currently allows restaurants/bars to permit persons who are 19 and 20 years of age in their establishments after 10:00 p.m. 25. I verily believe that the City is targeting my bar because of my successful outspoken advocacy against the City Council's previously proposed ordinances under which restaurants/bars in Iowa City would no longer be able to admit persons under the age of 21 for entrance after 10:00 p.m. 26. I have read Plaintiffs' Petition for Temporary and Permanent Injunctive Relief, Declaratory Judgment and Damages, and Request for Expedited Hearing and the statements contained therein are true and accurate. Dated this 17th day of November, 2009. Cyq\c.A. Mike Porter STATE OF IOWA,JOHNSON COUNTY,ss. This instrument was acknowledged bef ,/ olof • 17, I 9,by Mike Porter. Notary Public in and for the • • "' w CHAD D ND WS O 73 ' rtc0rn, M0a225 M — ci d1_0 , • 41 October 20,2008 City Council Work Session Page 1 October 20,2008 City Council Work Session 5:30 P.M. Council Present: Bailey,Correia,Hayek,O'Donnell,Wilburn,Wright,Champion(arrived at 6:20 P.M.) Staff: Lombardo,Helling,Hargadine,Goers,Dilkes,Karr,Davidson,Ford, Trueblood,Boothroy,Howard,Rocca,Ream -, Others Present: UISG Representatives L • Parks&Recreation Master Plan: i Bailey/Okay, let's get started. It's going to be a long night. : r- j O Trueblood/Okay. As you know,we've been working on a parks,recreation,trails master A plan for over a year,I guess,and uh,about three weeks ago,uh,the Parks and Recreation Commission saw a,uh, draft, a fmal draft. Rather than have our consultant come back and give another presentation to the Commission,they felt it was important for the Council to see it, so tonight's an abbreviated version. I would like to acknowledge that a couple of our Commission Members are here tonight in the audience—Jerry Raaz and John Westefeld...think anybody else sneaked in. Uh,so,anyway, I'd like to give you a PowerPoint presentation and uh, I'd like to introduce, uh,Pat O'Toole. Uh,we went through quite a selection process and ended up selecting the firm of GreenPlay, LLC,which is headquartered in Broomfield,Colorado,but Pat works out of the Lawrence, Kansas office,and so you won't have to mention it,Pat,I'll just say, 'Yes,that's the home of the reigning NCAA basketball champions.' (laughter and several talking) I don't have to...but(several talking)...so,Pat,the floor is yours. O'Toole/Thank you! Uh,tonight basically you got a couple of things in front of you,but I want to point out the...the bound copy is an Executive Summary that we've put together. Uh, as Terry said,we've been working on the...the master plan for about a year. Um,these are the highlights and then the PowerPoint is even more highlights out of this, so it does kind of follow this Executive Summary with more detail obviously in...in the Executive Summary. Try to get through the presentation here and then,uh,welcome any questions or...or comments concerning the,uh...draft report. The process we've gone through,uh,these are just some bullet points. Start-up meeting where we kind of set out the parameters of the schedule and...and set up,uh,particularly the community input process. Did a very extensive community input process with focus groups. We were basically here for the better part of a week. Looked at every park,every facility, uh,talked to...just tons of people from interest groups to citizens,um, likewise used that information to put a community survey together,uh, statistically valid survey that was sent out into the community. Looked at the demographics,um, and likewise projections of the demographics for Iowa City. As we were here we did the inventory and also an assessment and looked at level of service that each of the facilities and parks were delivering. Some being community-driven. Some This represents only a reasonably accurate transcription of the Iowa City City Council regular work session meeting of October 20,2008. EXHIBIT D � -� ; . October 20,2008 City Council Work Session Page 56 Bailey/Well,mine was purely punitive. They weren't...they were not conducting themselves at a high enough standard of behavior, and I didn't feel that that was appropriate. I mean, and the Chief, I mean, I'm respectfully disagreeing with your opinion here,but urn,but it was indicated to me by the rest of Council that it was compliance was our objective, and, and they had worked towards compliance and therefore we would take away that suggestion not to renew their liquor license. I mean, is that how we also want to proceed with these? I mean, is it our intent to get people complying, or is it our intent to send a different sort of message that you're,we have higher standards of expectations for your behavior as a bar owner. Correia/But shouldn't our expectations meet,be the same as what compliance is? Bailey/Well,but I mean it was a month later. I mean, they could have fixed this when they got the warnings. They chose not to. When they saw that we were serious, you know, it's kind of like grounding somebody. You know, when they see that you're not serious. So, I mean, I mean I think that that's something I would like us to consider as well. I mean, so they missed a month, they changed ownership, they changed their name, they're back in business. Hopefully they're conducting themselves at a higher standard of responsibility, but we...we're uncertain because we don't necessarily,hearing from the Police Chief, we don't necessarily have the, urn, you know, the staff to be able to check into that. So... Lombardo/One of the things that I think is universally mentioned was that, urn, and I think this came up in our retreat, is that there's acknowledgement that the mix of use downtown has...the balance has tipped, and that there's a strong interest on behalf of Council to change that mix and find that balance. And I think...if I may, if that's correct, then one of the tools that we would suggest and we haven't really thought through the strategy,would be, uh, an effective way of reducing the number of licensed, uh,bars and so it would probably come as a recommendation that somehow we tighten up on the renewal process because if the interest is in getting it the mix back,we have to find a way of ferreting out the bad bars, if you will, and reducing that number,other than through zoning and some other things that we likely recommend to you all. It has to be a combination of...of approaches to get that number and that balance, uh, to where you're all comfortable. Champion/I...no, I agree with what you're saying,but I do...I don't feel this horrible thing about downtown. I'm sorry. I think we have three downtowns. We have downtown from 8:00 in the morning to 7:00 at night. We have downtown from . 7:00 to 11:00. Then we have downtown from 11:00 to whatever time. And it's...as a business owner I can tell you that business is great downtown, and I'mrn not in the bar business. Maybe I should have been,but I'm not,but I would complain that the bars are ruining my business—they're not. I think they're43 ruining...I'm not downtown at 2:00 A.M. I keep thinking I'm going to go dovq: there,but you know what? I'm not going to. Um, but I...I don't want to hear,li, This represents only a reasonably accurate transcription of the Iowa City City Council regular work session meeting of October 20, 2008. City of Iowa City MEMORANDUM Date: January 10, 2001 To: City Council From: Eleanor Dilkes, City Attorney to Andy Matthews, Assistant City Attorney Re: Alcohol Regulations t- w m • A. Proposed Ordinances. i In accordance with earlier Council direction the ordinance we have prepared toes four basic things: a) Provides additional detail re: license application process; b) Outlines civil penalties in accordance with state law; c) Expands City Council provisions regarding persons under legal age; and d) Limits "Happy Hour" specials and out-of-sight-sales. 1. Application process. The current code does not specifically set forth who will review and comment on the license application. The revised ordinance does. The only actual change from current practice is that the County Attorney will now review renewal applications as well as initial applications and the County Sheriff will not review applications. In addition, with respect to renewals the ordinance specifically provides that prior operations under the license or permit will be considered. 2. Civil Penalties. As we have previously told you, the imposition of civil penalties, including suspension and revocation, by the licensing authority (City) is authorized by state law. Most of the text of the proposed ordinance is taken directly from state law. In addition to grounds available under state law, the proposed ordinance provides that violation of a city ordinance may be grounds for imposition of a civil penalty. In the case of sales to minors, the penalties available are constrained by state law. In the absence of a conviction, for a first time sale to minors, the civil penalty is in the amount of $300 in lieu of a suspension of the license or permit. Section 4-2- 5(4) sets forth the graduated civil penalties when there has been a criminal conviction for sale to minors. The ordinance provides, in accordance with state law, that notice shall be given to the licensee or permittee of the alleged violation and he or she shall be provided with an opportunity to be heard. This will be in the form of a "hearing" in front of the City Council. It is important to note that this is a due process hearing provided to the licensee or permittee prior to adverse action. The licensee or permittee is entitled to know the allegations against it and is entitled to the opportunity to respond to those allegations. Although this will be an open meeting of the Council, it will not be a "public hearing" in the way we normally use that term because members of the public should not be allowed to comment. It would not be fair for the licensee or .ermittee EXHIBIT 2 to have to respond to comments or criticism by the public of which he or she had not been given prior notice. We have also provided by ordinance that notice and opportunity to be heard will be given to the licensee prior to a City Council decision not to approve a renewal of a liquor license. 3. Expansion of City Code provisions regarding regulations of person under legal age. This ordinance makes it a city offense for an employer or agent of a licensee or permittee to "sell, give, or otherwise supply any alcoholic beverage, wine, or beer to any person, knowing or failing to exercise reasonable care to ascertain whether the person is under legal age, or permit any person, knowing or failing to exercise reasonable care to ascertain whether the person is under legal age, to consume any alcoholic beverage, wine, or beer." Selling alcohol to minors is already a state offense and the language is taken directly from state law. The proposed ordinance makes sales to minors a city offense as well. The City Attorney's office would prosecute city charges and the County Attorney would continue to prosecute the-state charges. By state law, this offense is a simple misdemeanor punishable as a scheduled violation in the amount of $500. Although prosecution of the actual licensee or permittee would be unusual. given that vicarious liability is not applicable in the criminal context, any such prosecution Would:W� have to be done by the state as the scheduled fine is $1500, in excess of the $500 maximum -` city fine. rr: O^� 4. Limitation on Specials and Out-of-Sight Sales. As directed by the City Council, the proposed ordinance puts in place a number of limitations concerning drink specials (2 for 1; all you can drink) and out-of-sight sales. The focus here will be on which exceptions the Council decides are appropriate. We have included a list of possible exceptions for your consideration. The exception itemized as #3 — selling pitchers, carafes or bottles of alcohol which are customarily sold in such manner and delivered to two or more persons at one time — will likely require a fair amount of discussion Although the sales of pitchers to groups of persons is arguably a primary problem, without an exception for pitchers, carafes, etc., it will not be permissible for one person to purchase a pitcher of beer. B. Plan for enforcement. We have met with representatives of the Police Department and discussed enforcement. The Police Department is developing procedures to focus on the serving of alcohol to persons who are intoxicated and/or are under the legal age to possess alcohol. The Police Department will employ a variety of techniques to identify and prosecute individuals and establishments that provide alcohol to under age and/or intoxicated persons including, but not limited to plain clothes or undercover observation and use of underage buyers. For example, the Police Department might use a person aged 18, 19 or 20 to determine whether that person is able to purchase alcohol in an establishment. It is our position, and we believe the position of the County Attorney, that the checking of I.D.s at the door is generally not sufficient. For example, if an underage person who is, by the mechanism at the door, identified as an underage person, orders a drink and is not checked at the time of ordering, we should be able to successfully prosecute the server for violating the prohibition on sales to minors. Initially, we intend to focus on criminal prosecution and subsequent administration of civil penalties. However, we must keep in mind that the standard of proof for a criminal conviction — beyond a reasonable doubt—is higher than the standard of proof for the administration of a civil penalty. It is clear under state law that a criminal conviction is not a prerequisite to the administration of a civil penalty. Therefore, if we are not able to successfully prosecute the 3 criminal charges we will turn our attention to gathering the evidence necessary to proceed with a civil penalty without a criminal conviction. The number of possession of alcohol under legal age charges (PAULAs) against under age persons is not in and of itself sufficient for administration of a civil penalty. However, the number of PAULAs at an establishment may be indicative of a problem. We may use such statistics in deciding where to focus our efforts. Also remember, that if the City Council enacts a limitation on specials and out-of-sight sales, we will proceed with prosecution of violations of the same and, in addition, violations of that ordinance would serve as a basis for administration of a civil penalty. Finally, the state law has recently changed to allow cities to provide a maximum penalty for simple misdemeanors of $500 — the maximum was previously $100. Therefore, we have prepared an ordinance which will increase the maximum to $500. If not specified or otherwise scheduled under state law (e.g. $500.00 for employee sale to minor), the judge will have discretion to sentence the Defendant as he or she sees fit up to $500. Please remember that it will take some time to determine whether these initiatives are having the desired effect. We assume, from the Council's previous discussions, that it desires to set a public discussion on its proposed ordinances. We will look for direction from the Council at its work session on January 16. cc: Steve Atkins Dale Helling Marian Karr R.J. Winkelhake Captain Widmer Sgt. Kevin Hurd eleanormemos\alcoholreg.doc rnrr- 0;u D � A ' W°6 16 Prepared by: Eleanor M.Dilkes,City Attorney,410 E.Washington St.,Iowa City,IA(319)356-5030 RESOLUTION NO. 06-216 RESOLUTION APPROVING THE POLICE CHIEF'S GUIDELINES FOR DETERMINING WHETHER APPLICANTS FOR INITIAL AND RENEWAL LIQUOR LICENSES, BEER PERMITS AND WINE PERMITS ARE OF "GOOD MORAL CHARACTER". WHEREAS, section 123.32 of the Code of Iowa provides that a local authority, such as the City, shall approve or disapprove applications for liquor licenses, beer permits and wine permits based, in part, on whether the applicant is of"good moral character"; WHEREAS, section 4-2-3 of the City Code requires that the Chief of Police determine if the applicant is of"good moral character;" WHEREAS, the Chief of Police, in collaboration with the City Clerk and the City Attorney, has developed a written policy for applications and renewals that includes criteria to determine good moral character; and WHEREAS, it is in the public interest to approve said policy as set forth in the attached . Iowa City Police Department Memo from the Chief of Police dated April 24, 2006. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF IOWA CITY, IOWA THAT: The Iowa City Police Department Memo from the Chief of Police dated April 24, 2006, a copy of which is attached, is approved. Passed and approved this 27th day of Ju3e 006. I t L....)J-L, MAYOR A,.•r,ved by: J ATTEST: `/��� �% ,k � 6 -/ / ^ 06 Ci,TY CLERK City Attorney's Office 3 • N �.. ^` : j Lo m rn --7 0 O^' D .= N EXHIBIT is FILF0 7m9 ,►YOV 23 PM I: 112 .• c �; CLERK c `;TY, IOWA 0 0 0 c g • a es c . E • m � b 0r - . es la .,c v5 $., Z w . t> . 00 Q . 0 v . a> a c 8 Cu 0 c Cn co ¢ . Z m rQi "" rl as 8 fit 3 PC O C x8. < a D -°o a> c o w . 03 o 00 0_ a � c • ca O.tA CiT/,- DEPARTMENT MEMO wifr 7.{ C. TO: Mr. Steve Atkins 11;� NJ FROM: Chief Sam Hargadine p m -� RE: Liquor License Applications ry DATE: April 24, 2006 In collaboration with the City Attorney's Office and the City Clerk's office the following policy has been developed to govern review of applications for liquor licenses, beer permits, wine permits and renewals by the Iowa City Police Department. I. PROCEDURE Prior to presentation of an application for a liquor license, beer permit or wine permit, or renewal of any of those to the City Council the Chief of Police or his or her designee will make an investigation to determine if the applicant is of "good moral character" as that term is defined in the State Code and rules of the Iowa Alcoholic Beverages Division. With respect to renewal applications any investigation will include any relevant Information about prior operations under the license or permit. Following such investigation the Chief or his designee will either approve or disapprove the application. Any disapproval will be in writing and will set forth the reasons for the disapproval. The investigation and, if applicable, the memo setting forth the reasons for disapproval, will be completed within 5 working days of the Chief's receipt of the application. In addition to a review of the application the Police Chief or his designee will perform a records check on the establishment's history and will review the DCI (Division of Criminal Investigation) criminal history reports provided by the applicant on each person with an ownership or management interest in the establishment. The following factors assume the establishment has been under continual ownership. II, FACTORS TO CONSIDER. In determining whether an applicant is of good moral character the factors to be considered by the Chief of Police ar designee will include, but are not limited to, the following: • Sales of alcoholic beverages to persons under the legal age by the licensee or - permittee or its employees or agents. Multiple occurrences will be considered as grounds for non-renewal. • Sales of alcoholic beverages to intoxicated persons by the licensee or permitee, or its employees or agents. Multiple occurrences will be considered as grounds for non-renewal, • Misrepresentation or withholding of any material fact in the license application or city addendums including, but not limited to the failure to identify management/supervisory staff and provide their DCI criminal histories. • Prior felony convictions of all persons with an ownership or management interest in the applicant will be reviewed. Per state code, a person with an ownership interest in the applicant, as defined by state code, may not have been convicted of a felony and the same rule should apply to those with a management interest. However, if the felony conviction occurred more than 5 years before the date of the application and the person's rights of citizenship have been restored by the governor, the Police Chief or designee may, after considering the nature of the crime and the person's history after the conviction, make a determination that the person is of good moral character notwithstanding the conviction. • Prior misdemeanor convictions of all persons, with an ownership interest or a management interest in the applicant will be reviewed, particularly those relating to use of alcohol or illegal substances, including operating a motor vehicle while under the influence of alcohol or drugs. The mere presence of a conviction would not exclude a person from a license or renewal; however, if there was evidence that alcohol was a factor in this conviction it would be grounds for denial. The length of time since the conviction will be considered. Misdemeanor convictions older than five years will not be considered. • Conditions imposed by a Court on a person with an ownership or management interest in the applicant relating to use of alcoholic beverages and/or presence in establishments that serve alcoholic beverages. • Any refusal, failure or neglect by a licensee, permittee or its employees or agents to cooperate with any law enforcement officer in the performance of the officer's duties, including, but not limited to, inspections of the establishment. • Reports of law enforcement officers of incidents within or adjacent to the • establishment, such as fighting, altercations and disorderly conduct, which suggest that the applicant does not have measures in place to adequately control the premises. • Over-occupancy • A pattern of convictions of persons within the establishment for PAULA (Possession of Alcohol Under Legal Age) and/or the local law prohibiting persons under 19 from being in licensed establishments, which suggest that the licensee or permittee does, not have measures in place to adequately control access of persons under legal age; to alcohol. The Police Chief or Designee shall review the establishment's rate of PAULAs per visit. A rate of 1.5 PAULAs per visit may be grounds for disapproval of_ 'TI the application. (See Attached) 1 wril • Violation of any law or regulation which jeopardizes the health, safety or welfare of' patrons of the establishment. y ry • Corrective action taken by the licensee / permittee in response to warnings by the Police Department, Throughout the license year when violations come to light or the police department makes sales to minor cases, 'PAULA arrests or any liquor law citation warning letters will be sent to the licensee or permittee. Copies of these letters will be retained by the police department and will be considered in determining whether to approve or disapprove the application. • in the event a person with an ownership interest or management interest in the applicant has previously had an ownership or management interest in another establishment, relevant operation at that establishment, including the above factors, may be considered. • • O C: O� N �2- • e• 20 Prepared by:Eleanor Dilkes,City Attorney,410 E.Washington St., Iowa City, IA 52240(319)356-5030 RESOLUTION NO. 09-38 RESOLUTION APPROVING THE POLICE CHIEF'S GUIDELINES FOR REVIEW • OF APPLICATIONS FOR INITIAL AND RENEWAL LIQUOR LICENSES, BEER PERMITS AND WINE PERMITS AND THE POLICE AND FIRE ON-PREMISES RENEWAL FORMS AND RESCINDING RESOLUTION NO. 06-216. WHEREAS, Resolution No 06-216, passed on June 27, 2006, approved the Police Chiefs guidelines for review of liquor license applications; and • WHEREAS, said guidelines have been revised to incorporate use of a standard form for on- premises renewals and a new standard for an establishment's PAULA rate per visit; and • WHEREAS, the Council has reviewed and approved use of forms for the Police and Fire reviews of applications for renewal of on-premises licenses; and WHEREAS, it is in the public interest to approve the attached revised guidelines for review of liquor license applications and forms for on-premises renewals. • NOW,THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY, IOWA, THAT: • 1. Resolution No.06-216 is hereby rescinded. 2. The attached guidelines for review of applications for initial and renewal liquor licenses, • beer permits and wine permits are hereby approved. 3. The attached forms for use by the police and fire departments in connection with the review of applications for renewal of on-premises licenses and permits are approved in • substance and may be revised by staff in form or to include additional information as necessary. 0; —__ • -n Passed and approved this_ 10th day of February , 20 09 - ? N - ! rn 0 ir doi 1 A oved by • • -?_.Q)7)C ATTEST: � . ✓ CITY City Attorneys Office Annanbrd&res\res approving gufdefines.doc EXHIBIT • 9 �� FILED . u . I c i 1; '. . ;I•:'�. IOWA . . m c =a, o . • :nmYcE .- - . ,r., o m� cgio � ' g Z A . Cl) • . . . . (1) V • . C • 8 • • . O co C UJ • hi Z L 3a, . p M l d a Z N O O . 7 CD o . O X (..1- = • • • • GUIDELINES FOR POLICE CHIEF'S REVIEW OF APPLICATIONS FOR INITIAL AND RENEWAL LIQUOR LICENSES PROCEDURE Prior to presentation of an application for a liquor license, beer permit or wine permit, or renewal of any of those to the City Council the Chief of Police or his designee will make an investigation to determine if the applicant is of "good moral character" as that term is defined in the State Code and rules of the Iowa Alcoholic Beverages Division. With respect to renewal applications any investigation will include any relevant information about prior operations under the license or permit. Following such investigation the. Chief or his designee will either approve or disapprove the application. Any disapproval will be in writing and will set forth the reasons for the disapproval. The investigation and, if applicable, the memo setting forth the reasons for disapproval, will be completed within 5 days of the Chief's receipt of the application. The attached "On-Premises Liquor License Renewal' form shall be completed for each on-premises renewal and shall be provided to the City Council as the memo setting forth the reasons for disapproval when the Police Chief recommends denial. • In addition to a review of the application the Police Chief or his designee will perform a records • check on the establishment's history and will review the DCI (Division of Criminal Investigation) • criminal history reports provided by the applicant on each person with an ownership or management interest in the establishment. • Il. FACTORS TO CONSIDER. In determining whether an applicant is of good moral character-the factors to be considered by the Chief of Police or designee will include, but are not limited to,-the following: A. On-premises Activity • • Sales of alcoholic beverages to persons under the legal age by the licensee or permittee or its employees or agents. Multiple occurrences will be considered as grounds for non-renewal. • Sales of alcoholic beverages to intoxicated persons by the licensee or permitee, or its employees or agents. Multiple occurrences will be considered as grounds for non-renewal. • Citations issued on the premises for PAULA (Possession of Alcohol Under Legal Age) which indicate that the licensee or permittee knows that such activity is taking place on the premises and does not have measures in place to adequately control access of persons under legal age to alcohol. The Police Chief or Designee shall review the establishment's rate of PAULAs per visit. For renewals after July 1, 2009, the Police Chief will recommend denial for any establishment with a rate of 1.00 or more PAULAs per visit assuming at least 18 visits in the 12 month renewal period. A rate of less than 1.00 or a rate based on less than 18 visits may be grounds for disapproval of the application • Citations issued on the premises for violation of Section 4-5-9 of the City Code prohibiting persons under 19 from being on the premises. • Citations issued for violation of Section 4-5-7 of the City Code prohibiting certain specials • Any other citations issued on-premises B. Level of cooperation extended to police by bar employees, including but not limited to: • Response to requests for improvement made by the Police Department • Calls for assistance where appropriate before the situation gets "out of hand" • • Attendance at TIPS training • Fake IDs turned over to the Police Department • • Number of nuisance calls in and around.the business during twelve-month • • renewal period C. Misrepresentation or withholding of any material fact in the license application including, but not limited to the failure to identify management/supervisory staff and provide their DCI criminal histories. D. Prior felony convictions of all persons with an ownership or management interest in the applicant will be reviewed. Per state code, a person with an ownership interest in the applicant, as defined by state code, may nothave been convicted of a felony and the same rule should apply to those with a management interest. However, if the felony conviction occurred more than 5 years before the date of the application and the person's rights of citizenship have been restored by the governor, the Police Chief or designee may, after considering the nature of the crime and the person's history after the conviction,.make a determination that the person is of good moral character notwithstanding the conviction. E. Prior misdemeanor convictions of all persons with an ownership interest or a management interest in the applicant will be reviewed, particularly those relating • to use of alcohol or illegal substances, including operating a motor vehicle while under the influence of alcohol' or drugs: The mere presence of a conviction • would not exclude aerson from a license or renewal; however, if there was p evidence that alcohol was a factor in this conviction it would be grounds for denial. The length of time since the conviction will be considered. Misdemeanor convictions older than five years will not be considered. F. Conditions imposed by a Court on a person with an ownership or management interest in the applicant relating to use of alcoholic beverages and/or presence in establishments that serve alcoholic beverages. G. Reports of law enforcement officers or other.third parties of incidents within or adjacent to the establishment, such as fighting, altercations and disorderly rn conduct, which suggest that the applicant does not have measures in place to o adequately control the premises. - H. Over-occupancy Violation of any law or regulation which jeopardizes the health, safety or welfare of patrons of the establishment. • • J. Corrective action taken by the licensee / permittee in response to warnings by the Police Department. Throughout the license year when violations come to light or the police department makes sales to minor cases, PAULA arrests or any liquor law citation warning letters will be sent to the licensee or permittee. Copies of these letters will be retained by the police department and will be considered in determining whether to approve or disapprove the application. K. In the event a person with an ownership interest or management interest in the applicant has previously had an ownership or management interest in another establishment, relevant operation at that establishment, including the above factors, may be considered. • • • • " • I • i . I .• • J 3 • J . _ ^ter ' N . _ ..) 1J • • -,r m O;J • . •.0 W • • Iowa City Police Department • On-Premises Liquor License Renewal • Establishment name: Address: • Review Period: A. On-premises Activity • : Number of PAULA citations issued during twelve-month renewal period Note: For renewals after July 1, 2009, if the PAULA rate is greater than 1.00 per visit with at least 18 visits during the twelve-month renewal period, the police department will recommend denial. A lower rate or a rate based on less than 18 visits combined with other factors may result in a recommendation of denial. : Number of citations issued for violation of section 4.5-7 of the City Code (Specials Restrictions) during twelve-month renewal period. : Number of under-19 on premises citations issued during twelve-month renewal period. : Number of sales to minor citations issued during twelve-month renewal period. Number of other citations issued on premises.during twelve-month renewal period. (Specify citations) •• =`ill • B. Level of cooperation extended to police by bar employees: o High o Medium a Low • Factors indicative of cooperation include, but are not limited to: • timely response to requests for improvementmade by Police Department • calls for assistance where appropriate before the situation gets "out of hand" • high attendance at TIPS training • fake IDs turned over to the Police Department Number of nuisance calls in and around the business during twelve-month renewal period • : Number of fake or altered IDs turned in during twelve-month renewal period. ! : Number of employees who have attended police TIPS training during twelve- month renewal period. • 1 • . C. Additional Comments(including any other relevant information re:guidelines for renewal approved by City Council): • i I I 1 I I i 1 I • i Police Department's liquor license renewal recommendation: 0 YES.! 0 NO Annenlcivilpenalties(FORM-ICPD liquor license renewal criteria • • • • I I • t rte,? 7,—„ r" i • 3 71 is J W - • • i 1 1 • I • I I• i i . , IOWA (Ilry . INTER-DEPARTMENT MEMO • !r roma: TO: Mayor Bailey and City Coun 'I 4, FROM: Chief Sam Hargadine ...." RE: The Field House Bar License Renewal DATE: July 15, 2009 . Based on an excessive PAULA citation rate of 1.55 per visit' am mandated to recommend denial of The Field House liquor license renewal, The establishment has been checked 92 times and there have been 143 violations. License renewals after July 1, 2009 that have a rate greater than 1.0 require the police chief to recommend denial. Additional factors to consider from previous 12 months: Pubic Intoxication Arrests: 64 Assault or Disorderly Conduct(fighting)Arrests 28 -, Obstruction, Interference or Assault on an Officer 9 — ,_9 Conclusion: 1 0 r) Y,,... The Field House has a variety of concerningissues including: Underage Consumption, --- w t 9 P � --;C77711, overconsumption, physically violent behavior by patrons and the apparent inability of staff to -‹.m __ adequately address these Issues. w Attachments: Memo from Sgt, Kelsey n .J On-Premises Liquor License Renewal Data Sheet c. -e,r' 311 1.1 v 7.m.., D co EXHIBIT Y 9 i r Hand delivered to applicant July 22, 2009 by Sgt. T. Kelsay Iowa City Police Departtnent On-Premises Liquor License Renewal Establishment name: The Field House Address: 1111 -1 113 E College St '`, Review Period: 07/10/2008 - 07/10/2009 ` y A. On-premises Activity =72 TO O w 143 : Number of PAULA citations issued durin• twelve-month renewal peri Bar Check = 92 PAULA/Visit= 1.55 Note: For renewals after July 1, 2009, if the PAULA rate is greater than 1.00 per visit with at least 18 visits during the twelve-month renewal period, the police department will recommend denial. A lower rate combined with other factors may result in a recommendation of denial. 0 : Number of citations Issued for violation of section 4-5-7 of the City Code (Specials Restrictions)during twelve-month renewal period. 10 : Number of under-19 on premises citations issued during twelve-month renewal period. 0 : Number of sales to minor citations issued during twelve-month renewal period. 120*: Number of other citations issued on premises during twelve-month renewal period. (Specify citations) *Attached as "Field House Arrests" _; B. Level of cooperation extended to police by bar employees: c High 1 Medium �Low F. Factors indicative of cooperation include, but arelnot limited to: .c • timely response to requests for improvement made by Police Department '-'-i • calls for assistance where appropriate beforathe situation gets"out of hand" • high attendance at TIPS training • fake IDs turned over to the Police Department 103*: Number of nuisance calls in and around the business during twelve-month renewal period *Includes: Assaults/Fights. Intoxicated Pedestrians, Narcotics, Out w/Subject (negative behavior)I and Unknown Problem. Total CFS =229 (attached as "Field House CFS") 0 : Number of fake or altered IDs turned in during twelve-month renewal period. 23 : Number of employees who have attended policaTIPS training during twelve- month renewal period. FILED HCEO 7r^,r) "n 23 P1 1: LI3 7 � Jill_ 22 , 3: 26 ° CLERK Cl-i CL` {.;i"i'!' �,i , h:< Z 1O1y,Y CI CY. IOWA zMI co o U) o w E } o o a • o .- 0 > o -n ° • ' 'a a)E E ,C 8 o a) > u ,- C i---, R to C• C +.+ C 2U ccaa ;.12 ✓ >, - a) c -•-• 4I C .�3 a) u) >,'a _ c • s E al = E o g o b ( v� • • ca U Q� � E. a� o m E E • a) E ca o C o. < a) Q U p a� v T:).U a. July 15,2009 Field House Summary-DENIAL I have reviewed the application, premises,and associated persons. In 2009,the police department has been applying new guidelines for liquor license review as formulated and approved by City Council. The new guidelines specifically state: • "For renewals after July 1,2009, if the PAULA rate is greater than 1.00 per visit with at least 18 visits during the twelve-month renewal period,the police department will recommend denial.° During the 12-month period reviewed,07/10/2008—07/10/2009,The Field House has amassed a rate of greater than 1.55 PAULA per visit, requiring a denial by the police department. • PAULA: 143 • Bar checks: Bar checks: 92 • PAULA per visit: 143/92 = 1.5543478 Other items also noted: • During the review period,there were a total of 273 arrests/charges associated with location: o PAULA: 143 o Public Intoxication: 64 o Assault or Disorderly Conduct(fighting): 28 o DUID offenses: 16 o Under 19 In Bar After 10pm: 10 o Obstruction, Interference, or Assault on a Police Officer: 9 o Open Container: 3 • There have been 229 calls-for service associated with•the establishment. These include (in part) 103 nuisance calls of one variety or another: • o Out with subject: 65 o Fight in progress: 21 —� �, o Assault: 9 rn o intoxicated Pedestrian: 3 o Unknown Problem: 3 3 7J _� 0 o Domestic Fight: 1 o Narcotics: 1 -• These numbers reflect only activity specifically occurring/associated with The Field House, 111- 113 E College St. This may include events that occurred Immediately outside of The Field House and were associated with the establishment by the original complainant, whether a caller or an officer. Likewise,other events that originated at The Field Hose may not be captured because the events had moved beyond the establishment prior to police notification/involvement. In conclusion, The Field House has a variety of concerning issues including: underageinability overconsumption, physically violent behavior by patrons, and the apparent of staff to adequately address these issues. Additionally and Critically, their PAULA rate of greater than 1.55 PAULA/visit is clearly outside the minimally acceptable rate(1.00)established by the Iowa City Council. Per the"GUIDELINES FOR POLICE CHIEF'S REVIEW OF APPLICATIONS FOR INITIAL AND RENEWAL LIQUOR LICENSES," PD must recommend ;. denial7] Recommend denial. = ``� j�l7 • (: ,e,, 0' TAKelsay Attachments: • "GUIDELINES FOR POLICE CHIEF..."(contains formalized guidelines to be used by police during liquor license review) • "Field House Liquor License Renewal Form"(containslcense renewal worksheet for The Field House) • "Field House Arrests'(contains all arrests, sorted by offense, associated with The Field House during the review period) • "Field House CFS"(contains all calls-for-service, sorted by activity, associated with The Field House during the review period) • "Disposition Codes"(contains key for interpreting disposition codes indicated in calls-for- service) rJ N r �st7 w r o 73 • e.".) , N .fl .Xt D , _y IOWA CITY F‘O tY INTER-DEPARTMENT MEMO ti ,7-- e -* , ._ * Sttay POLICE TO: Mayor Bailey and City Council /�•� FROM: Chief Sam Hargadine 9,...."-717..4"""'7 RE: ETC Bar License Renewal DATE: July 20, 2009 Based on an excessive PAULA citation rate of 1.38 per visit I am mandated to recommend denial of ETC's liquor license renewal. The establishment has been checked 92 times and there have been 69 violations. License renewals after July 1, 2009 that have a rate greater than 1.0 require the police chief to recommend denial. Additional factors to consider from previous 12 months: Under 19 on premises: 14 Pubic Intoxication Arrests: 18 Assault or Disorderly Conduct (fighting) Arrests: 02 Obstruction, Interference or Assault on an Officer: 03 Conclusion: The ETC Bar has a variety of concerning issues including: Underage Consumption, overconsumption, physically violent behavior by patrons and the apparent inability of staff to adequately address these issues. Attachments: FILED a:S5 PM SF' r--4 O Memo from Sgt. Kelsey JUL 2 0 2009 On-Premises Liquor License Renewal Data Sheet z n City Clerk (' -� Iowa City,lows 0 --NJ G r A , 370 � , *7-‘ b W O7 -:-.- > EXHIBIT .52 �I D " 5 L Iowa City Police Department On-Premises Liquor License Renewal Establishment name: Etc. FILED a:55 Pnn SF Address: 118 S Dubuque St JUL 2 0 2009 Review Period: 7/17/2008-7/1612009 City C1cik low_ a Iowa A. On-premises Activity 69 : Number of PAULA citations issued durin• twelve-month renewal period Bar Check= 92 PAULA/Visit= 1.38 Note: For renewals after July 1, 2009, if the PAULA rate is greater than 1.00 per visit with at least 18 visits during the twelve-month renewal period, the police department will recommend denial. A lower rate combined with other factors may result in a recommendation of denial. 1* : Number of citations issued for violation of section 4-5-7 of the City Code (Specials Restrictions) during twelve-month renewal period. See footnote in section "C" 14 : Number of under-19 on premises citations issued during twelve-month renewal period. 0 : Number of sales to minor citations issued during twelve-month renewal period. 43 : Number of other citations issued on premises during twelve-month renewal period. (Specify citations) Attached as "Etc—Arrests..." B. Level of cooperation extended to police by bar emplo ees: Medium Low Factors indicative of cooperation include, but are not limited to: • timely response to requests for improvement made by Police Department • calls for assistance where appropriate before the situation gets"out of hand" • high attendance at TIPS training • fake IDs turned over to the Police Department 18* : Number of nuisance calls in and around the business during twelve-month-- 76= —7-1 renewal period Includes: Disturbances, Fights, Suspicious r" Total Activity/Persons, Out w/Subject(negative behavior), and Welfare Checks. :0) Total CFS = 78 (attached as "Etc— CFS...") I 0 : Number of fake or altered IDs turned in during twelve-month renewal period 0 : Number of employees who have attended police TIPS training during twelve- month renewal period. C. Additional Comments (including any other relevant information re: guidelines for renewal approved by City Council): Comments attached separately as "Etc Summary— DENIAL" *Footnote: George Etre (50% owner)was charged with an alcohol service violation per City Ordinance 4-5-7 for a violation that occurred on 2/15/09 (redacted narrative attached). At trial,the charge was "dismissed by the Court" (directed verdict by Magistrate Goddard). Per Goddard, the server(not the owner) should have been charged. Police Department's liquor license renewal recommendation: ❑ YES ! I NO Attachments (supporting documents): • GUIDELINES FOR POLICE CHIEF... o Contains formalized guidelines to be used by police during liquor license review • Etc—Narrative p.1 o Contains p.1 of redacted narrative re: 2/15/09 incident resulting in Alcohol Sales Violation against G. Etre • Etc—Narrative p.2 o Contains p.2 of redacted narrative re: 2/15/09 incident resulting in Alcohol Sales Violation against G. Etre • Etc—Etre Court Ruling o Contains the Court's complete ruling/reasoning re: 2/15/09 Alcohol Sales Violation against G. Etre • Etc—Arrest... o Contains all arrests, sorted by offense, associated with Etc during review period • Etc— CFS... o Contains all calls-for-service, sorted by activity, associated with Etc during review period • Disposition Codes o Contains key for interpreting dispositions codes indicated in calls-for- service FILED a:s5 Prn sF JUL 20 2009 City Clerk Iowa City,Iowa ti iT :1 12 c c� 1—F-1 1— • July 20, 2009 I have reviewed the application, premises, and associated persons. In 2009, the police department has been applying new guidelines for liquor license review as formulated and approved by City Council. The new guidelines specifically state: • "For renewals after July 1, 2009, if the PAULA rate is greater than 1.00 per visit with at least 18 visits during the twelve-month renewal period, the police department will recommend denial." During the renewal period (07/17/2008-07/16/2009), Etc. has amassed a rate of 1.38 PAULA per visit, requiring a denial by the police department. • PAULA: 69 • Bar checks: Bar checks: 50 • PAULA per visit: 69/50= 1.38 Other items also noted: • George Etre is listed as manager and 50% owner. Lois Etre(his mother) is also a 50% owner. George Etre was charged per Iowa City ordinance 4-5-7 with an alcohol sales violation (unlimited servings for a fixed price)on 2/15/09. At trial, the charge was "dismissed by"Court" (directed verdict Magistrate Goddard). Per my conversation with IC Assistant Attorney Eric Goers, Magistrate Goddard remarked that the server(not the on-scene owner)should have been charged. • During the review period, there were a total of 128 arrests associated with establishment (there was one additional warrant arrest of an offender located at Etc): 0 o PAULA: 69 o Public Intoxication: 18 o DL/ID offenses: 16 o Under 19 In Bar After 10pm: 14 W �'• o Obstruction &/or Interference: 3 J-n o Assault&/or Disorderly Conduct(fighting): 2 —ITI o Theft: 2 O 0 o Alcohol Sales violations: 1 •• o PCS: 1 - u~ o Public Urination: 1 • There have been 78 calls-for service associated with the establishment. These include (in part) 18 nuisance calls of one variety or another: o Out with subject: 8 o Fight in progress: 6 o Disturbance: 2 o Suspicious activity/person: 1 o Welfare check: 1 These numbers reflect only activity specifically occurring/associated with Etc, 118 S Dubuque St. They do not include any spillage to nearby locations/addresses. In conclusion, Etc has a variety of minor issues; however, their PAULA rate of 1.38 PAULA/visit is clearly outside the minimally acceptable rate(1.00)established by the Iowa City Council. Per the "GUIDELINES FOR POLICE CHIEF'S REVIEW OF APPLICATIONS FOR INITIAL AND RENEWAL LIQUOR LICENSES," PD must deny. FILED denial[per PAULA rate standard]. FILED ,: S5 PM SP- JUL 2 0 2009 City Clerk Iowa City.Iowa l THE STATE OF IOWA BEFORE THE IOWA ALCOHOL AND BEVERAGES DIVISION In the Matter of ) Docket No. A-2009-00033 Iowa City Fieldhouse Co. Inc . ) d/b/a The Field House, ) Liquor License No. LC-34755 ) Appellant. ) ) In the Matter of ) Docket No. A-2009-00034 Etre, L.L.C . , ) d/b/a Etc . , ) Liquor License ) No. LC-32070 Appellant. ) COPLO DEPOSITION OF SAMUEL EMMITT HARGADINE, taken on Tuesday, October 6, 2009, commencing at 9 : 09 a.m. , at City Hall, 410 E. Washington Street, Iowa City, Iowa, before Jane A. Carson, Certified Shorthand Reporter of the State of Iowa, pursuant to the within stipulation. a Jane A. Carson, CSR, RPR, CRR E; y Carson Reporting, Inc. • 118 - 3rd Avenue, Southeast Suite 311 i Cedar Rapids, Iowa 52401 W (319) 366-7450 0�' EXHIBIT , IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. ' SAMUEL HARGADINE-October 6,2009 ' 18 20 1 A. Correct. It also reflects the number of 1 A. He's going to need a case number,which is 0 2 visits. 2 going to require that he radio in and tell dispatcher 3 Q. Okay. And what's a visit? 3 what he's doing,because they have to code it 4 A. It's when an officer calls out on the radio 4 somehow,and more than likely they're going to code 5 so that a log is generated that he's making an 5 it bar inspection. 6 Inspection of the particular establishment. 6 Q. They would code it bar inspection? 7 Q. Is anything else a visit? 7 A. I suspect they would,yeah. They've got to 8 A. It could be a team that they're on special 8 code it something,and absent anything else,he's 9 assignment and they are tasked with--with accounts 9 either going to say I'm out with a fight or I'm out 10 and they're tasked with looking for underage drinking 10 with a public intox,I'm out with a PAULA,and 11 and bartenders selling to underage people. 11 they're going to code it appropriately on what he's 12 Q. Okay. Anything else besides the tasks of 12 told them. 13 the special assignments or an individual officer 13 Q. Okay. If he codes it as out fora public 14 calling out that they're doing an inspection? 14 intox or out for a fight and he happens upon a bar, 15 A. I don't believe so. 15 would that count as a visit per your PAULA guidelines 16 Q. Now-- 16 that are in the revised resolution? 17 A. It's going to have to do something which 17 A. It could go either way. And there are times 18 generates a log of that activity. Otherwise It 18 when I know Sergeant Troy Kelsey,he goes through and 19 doesn't count. An officer simply walking into a 19 examines those to determine whether they should or 20 business to use the restroom is not going to trigger 20 not. There are times when they're miscoded,and I 21 a stat. 21 think there's been times when bar owners have looked 22 Q. Okay. What if that officer walked in to use 22 at that on the Internet and could tell it was 23 the restroom and noticed an underaged person 23 miscoded,and if they call in and we research it and 24 consuming alcohol and he wrote a PAULA citation for 24 they're correct,we change the coling. 25 that,would that constitute a visit? 25 Q. Okay. 19 21 1 A. I believe it would. 1 MR.GOERS: Gentlemen,just for youf own 2 Q. But that doesn't trigger any stat,does it? 2 information,as you know,Sergeant Kelsay is next, 3 A. He's going to have to call In and get a case 3 and would you agree,Chief,he does Most of tiro 4 number,and that would. 4 statistics with this? He ought to be able to answer 5 Q. So there are times when an officer could 5 these questions more thoroughly than Chief. Go ahead 6 visit a bar without predetermined inspect ion or 6 and feel free to ask him if you want. 7 special assignment and write a PAULA ticket? 7 Q. So,Chief,does your department have any ' 8 A. In theory that could happen. 8 written policy or guidelines as to what is defined as 9 Q. And would that be counted as a visit,if he 9 a visit for purposes of the PAULA ratio? 10 wrote a PAULA ticket in that particular circumstance? 10 A. Not at the officer level,they do not. 11 A. It should. 11 Q. So it's possible for officers to go into a 12 Q. And what if the officer doesn't write a 12 bar,write a citation and if it's miscoded or 13 PAULA ticket and just goes in to use the restroom, 13 whatever else,that would not reflect as a visit for 14 would that constitute a visit? 14 purposes of the PAULA ratio? 15 A. I doubt we're going to know about it, 15 A. The policy would dictate that they call out 16 because there's no log--it would depend on how he 16 and inform dispatchers as to what they're doing. 17 called out on the radio. 17 Depending upon what they've--they have told the 18 Q. Okay. Now let me ask you another 18 dispatcher is how it's going to be coded. They do 19 hypothetical,because I'm trying to understand what a 19 have to notify dispatch,which in turn notifies their 20 visit is. What if an officer,using the same 20 supervisors as to what their activities are,whether 21 example,walks into a bar to use the restroom and 21 it's a car stop or stopping out here at the building 22 cites an individual for public intoxication,the 22 or wherever. They're required to notify dispatch as 23 officer wasn't there for any inspection,wasn't there 23 to what they're doing. 24 for any special assignment,would that be defined as 24 Q. Okay. Is that policy in writing? 25 a visit? 25 A. I believe it is. Jane A. Carson, CSR,RPR, CRR CARSON REPORTING,INC. -319/366-7450 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. . SAMUEL HARGADINE- October 6, 2009 22 24 0 Q. And,again,I'm sorry,I forgot,in that 1 Q. Is the word bar check defined in your 2 written policy is there any direction on what is 2 written policy? 3 defined as a visit for purposes of the PAULA ratio? 3 A.WWhat is a bar check or how would you define 4 A. No,sir. 5 Q. I'm handing you Deposition Exhibit 3. This 5 bar check as used by your office? 6 is an incident calls by location for The Field House 6 A. It would be an Inspection of that business. 7 bar and it's for the time period,looks like, 7 Q. What are you inspecting the business for, 8 July 10,2008,through July 10 of 2009, Was this 8 anyytthi ginp Possible iiquor law violations,either from 9 generated by your office? 10 A. This would have been generated by 10 patrons or from the establishment itself. 11 Sergeant Kelsay. 11 Q. How is the decision made to check a bar? 12 Q. What I specifically am interested in is 12 A. They may--if it's a beat officer,they may 13 maybe your explanation on the coding. There's a 13 do it on their own as a self-initiated activity. The 14 column labeled type of call and were those the codes 14 supervisors may suggest to them that if there are no 15 you were referencing? 15 other activities going on,It's time to check some 16 A. Yes. 16 bars. It could be either way. There is one 17 Q. Okay. So could you explain the different 17 supervisor on evenings,evening watch,who is 18 codes that appear on this,specifically assault or 18 specifically tasked with organizing patrol units so 19 assist other agency,what would those be? 19 that the different establishments that have liquor 20 A. Assault could have been either as a result 20 licenses are visited throughout the year. But they 21 of someone calling in from the establishment or it 21 can also do this on their own initiative. 22 could have resulted from an officer walking by and 22 Q. Okay. So this one supervisor,who would 23 triggering it. I don't have the answer as to what 23 that be? 24 originated it. But it could have come from either 24 A. Sergeant Denise Brotherton. 25 one. Assist other agency,that could be a number of 25 Q. Denise Brotherton? l23 I things. Could be assisting the fire department. 1 A. Um-hm. J i 2 Could be assisting--I don't know what that is. 2 MR.BALLARD: Is that yes? _ _- 3 Q. Okay. 3 A. Yes. 4 A. Each of these you could go back to the 4 MR.BALLARD: Sorry. Excuse me,Matt. 5 incident number and pull up more information on each 5 MR.ADAM: No,that's fine. Thanks,State. 6 individual call,which,you know,there's hundreds of 6 Q. Now,does Sergeant Brotherton have a 7 calls here. 7 predetermined schedule of when bars are going to be 8 Q. Sure,there are. Let's talk about the bar 8 checked or visited? 9 check one. How is something labeled bar check in 9 A. Id oot know. s chief have any written policy or 10 your coding system? I mean,how does it become a bar 10 Q. y I 1 check versus an out with subject or out for 11 mandate that require all bars to be checked? 12 investigation? 12 A. Written on behalf of the department to the 13 A. This was probably the vernacular that the 13 agency? 14 officer used when he notified them by radio. 14 Q. To the officers,yes. 15 Q. And what training do your officers have in iS A. No. 16 deciding whether to code something a bar check or a 16 Q. Do you have an informal policy on how bars 17 public intoxication or fight in progress or any of 17 are checked or how you would like to see bars 18 the other codes that you guys utilize? 18 checked? 19 A. Well,it would be the common sense of 19 A. Informal in regards to guidelines from the 20 knowing the difference between what a tight looks 20 council,and in order for the PAULA rate to be held 21 like in front of you versus a normal bar check,they 21 against them,I believe they have to be checked a 22 would obviously look quite a bit different. The 22 minimum of 18 times. 23 fight in progress is usually going to get the 23 Q. Why 18 times? 24 attention of other officers as well. A bar check 24 A. I do not know. 25 would not. 25 Q. Was that your-- Jane A. Carson, CSR, RPR, CRR CARSON REPORTING, INC. - 319/366-7450 , IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. SAMUEL HARGADINE- October 6, 2009 . 26 28 1 A. Well,I believe I do know. I think they 1 beat officer would just code in a bar check and then 2 went back on past practice and when they were looking 2 go in and inspect a bar,how many officers would 3 at the average number of times bars were checked 3 usually be involved in that bar check,one,two, 4 throughout a year,18 I think was an average. 4 three? 5 Q. So there's no rhyme or reason as to why 18? 5 A. Could be one. It could be any number. 6 A. That's fairly correct. 6 Q. Okay. What about the more scheduled bar 7 Q. And if a bar has less than 18 visits or bar 7 checks,whether that be through a task force as you 8 checks-- 8 had talked about or an officer--well,specifically, 9 A. Their PAULA rate would not be used against 9 excuse me,a specially assigned scheduled bar check, 10 them in the recommendation. 10 how many would you normally send to do a check? 11 Q. So the PAULA rate all of a sudden becomes a 11 A. There's usually at least two-- 12 nonfactor if they have less than 18 visits? 12 Q. At least-- 13 A. That's correct. 13 A. --or maybe more. 14 Q. Does your office visit some bars more than 14 Q. Okay. I'm looking at the city council 15 others? 15 minutes from February 9th,2009. It looks like this 16 A. Yes. 16 is when the resolution was considered when revising 17 Q. And by visit I mean do scheduled bar checks. 17 the guidelines. Does that sound about right to you? 18 A. Scheduled bar checks should be done evenly. 18 A. Yes,it does. 19 Q. Okay. And you say should be done. Do you 19 Q. In looking at the communications,I'm 20 know if they are done evenly? 20 looking at an exchange between you and Councilman 21 A. Scheduled? 21 Hayek where the quote was made,we go fishing where 22 Q. Yes. 22 the fish are. Do you remember that? 23 A. I do not know. What throws that out of 23 A. Yes. 24 whack would be the unscheduled by the beat officers 24 Q. What was the context of that quote and what 25 that are walking by a particular establishment. 25 did you mean by that? 27 29 L. 1 Q. So it sounds like the beat officers have a I A. There are times when bars come to our 2 lot of discretion on what bars they check and which 2 attention through a variety of means as being a 3 ones they don't;is that correct? 3 problem bar or a bar that is being accused of 4 A. That Is correct. 4 violating the alcohol statutes. 11-' 5 Q. And if I wanted to get a copy of the S Q. Okay. v 6 scheduled bar checks,would that be something that- 6 A. And if we get a number of complalntsbn a 7 I'm sorry,Lieutenant Brotherton-- 7 bar,then it's more than likely going to be checked 111 8 A. Sergeant Denise Brotherton. 8 more often than others. 9 Q. Sergeant,I'm sorry. 9 Q. When you said go fishing,what did you mean 10 A. And as I said,I'm not aware that there is a 10 by fishing? _- I I schedule,but if there was--well,that would kind 11 A. To catch what one intends to catch. 12 of tip our hand,but--if there was. 12 Q. Okay. And you go fishing where the fish 13 Q. Sure. If there was a scheduled,it's not 13 are. What is the fish? Does that mean potential 14 something you want public,so... 14 criminals or-- I5 A. Correct. 15 A. Those violating the alcohol laws,if that's 16 Q. But you don't know if a schedule does exist? 16 what we're looking for. 17 A. That's correct. 17 Q. Okay. So it sounds like you target some 18 Q. Ail right. 18 bars more than other bars,would that be correct? 19 A. What she would be tasked with is if there 19 A. It could be,depending upon complaints we've 20 were a lot of unscheduled checks at a particular bar, 20 had or incidents that have been brought to our 21 yet there were some outlying establishments that 21 attention. 22 haven't been checked,her task is to determine that 22 Q. Do you have a policy,whether it be formal 23 and initiate some inspections so that it Is passed 23 or informal,that your beat officers or Sergeant i 24 around. 24 Brotherton target certain bars in downtown Iowa City ` 25 Q. Now,these unscheduled bar checks where the 25 more than others? Jane A. Carson, CSR,RPR,CRR , CARSON REPORTING,INC. -319/366-7450 I • IN THE MATTER OF IOWA CITY FIELDMOUSE CO. INC. SAMUEL HARGADINE- October 6,2009 . 34 36 1 you're referring to since my viewing of Depo 5 the 1 Q. Inevitably you made a recommendation to the C.) 2 first sentence includes both bar check and PAULA per 2 council that the Iowa City Fieldhouse's liquor 3 visit. If you just refer to which you're referring 3 license be denied. Can you tell me why or what your 4 to,I think he'll be able to understand your question 4 recommendation was based on? 5 better and he'll answer it. 5 A. It was based on the mandate that if it's 6 Q. Oh,sorry. Yes,in the form,paragraph A, 6 over 1.0 then I'm mandated to recommend a dental. 7 it says clearly bar check equals 92 and PAULA,slash, 7 Q. If what was over 1.0? 8 visit,equals 1.55. So it seems like the words bar 8 A. The PAULA citation rate. 9 check and visit are used interchangeably,is that-- 9 Q. So your reason for recommending denial was 10 A. I believe that's correct. 10 because the Iowa City Field House had a PAULA per 11 Q. So what should the ratio be,is it PAULA per 11 visit ratio in excess of 1.0? 12 visitor PAULA per bar check? 12 A. Correct. 13 A. It could be either,but the terminology here 13 Q. And prior to the revised guidelines being in 14 is PAULA per visit. 14 place,would you have been required to mandate that 15 Q. The terminology--when you say terminology 15 the liquor license be denied? 16 here,what are you pointing at? 16 A. I would not have been required. 17 A. The--well,as you asked me previously, 17 Q. And why not? 18 they're used interchangeable,they could be. 18 A. Because the PAULA rate was not in the 19 Q. Is a visit and a bar check different? 19 previous set of guidelines. 20 A. For this purpose,no. 20 Q. Okay. And was the mandate in the previous 21 Q. Isn't it possible to visit a bar without the 21 set of guidelines? 22 officer coding it as a bar check? 22 A. It was not. . 23 A. We discussed that. That's correct. 23 Q. So normally you have some discretion over .1 24 Q. Okay. So it's possible to have more visits 24 liquor license renewals? 25 at a bar than times that bar is checked? 25 A. That's correct. I_j -1- 35 . 35 1 A. It's possible for there to be visits that I Q. In your time as being chief,the last,— -. 2 aren't on the log,correct. 2 have you ever recommended a liquor I,isense be renewed 3 Q. Okay. If you would go back to the 3 to the council and then have the council go against-1 4 guidelines,I'm looking at subparagraph(J)and that 4 your recommendation and deny it? 5 references corrective action taken by the licensee in 5 A. They have not. 6 response to warnings by the police department. To 6 Q. If you weren't mandated to recommend denial 7 your knowledge did the Iowa City Police Department 7 for the Iowa City Field House,what would your 8 ever issue any warnings,letters,to the Iowa City 8 recommendation have been? 9 Fieldhouse in the past year? 9 A. Based on the lack of sales cases to a minor, 10 A. To my knowledge,I'm not aware of any. 10 1 would have probably recommended to renew. Prior to 11 Q. Could you describe for us what TIPS training 11 the guidelines,the second set of guidelines,the 12 is? 12 most scrutinized category would have been sales to 13 A. TIPS is a program that trains bartenders and 13 minors cases. 14 those that work in a liquor establishment on the 14 Q. So prior to the council--just so I 15 rules and statutes pertaining to the sale of alcohol. 15 understand,correct me if I'm wrong,prior to the 16 Q. Is this offered by your department? 16 council revising the guidelines in February of 2009 17 A. It is--One of my officers Is an Instructor 17 to mandate a denial fora PAULA ratio of greater than 18 in that,in the TIPS program. 18 1,you were more focused on the sales to minors 19 Q. Oh,okay. What officer is that? 19 cases? 20 A. Al Mebus. 20 A. Well,we looked at the totality of all of 21 Q. Do you know how to spell Mebus? 21 the different things,but,yes,sales to minors,that 22 A. M-e-b-u-s. 22 was the priority and there was one prior license 23 Q. Do you know how often Officer Mebus provides 23 denial based on that. 24 the TIPS training seminar? 24 Q. And that wasn't The Field House's license, 25 A. I do not. 25 was it? Jane A. Carson,CSR,RPR, CRR CARSON REPORTING, INC. - 319/366-7450 1 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. . SAMUEL HARGADINE-October 6,2009 42 44 1 that accurate? 1 PAULA rate greater than 1.0 per visit,but for that 0 2 (Exhibits 1 through 5 were marked for 2 policy,there wasn't anything that would have led you 3 identification by the reporter.) 3 to recommend denial of Etc.'s license;is that true? 4 Q. Chief Hargadine,you have now in front of 4 A. That is true. 5 you Exhibits 1 through 5 that the court reporter, 5 Q. I want to ask you sort of a big picture 6 Ms.Carson,has added her initials and the date of 6 question,Chief Hargadine. What's the presumption of 7 this deposition to. Do you see that? 7 innocence? 8 A. I do. 8 A. The presumption of innocence. 9 Q. Okay. The exhibits that are marked 1 9 Q. Have you ever heard of that phrase? 10 through 5 that Ms.Carson has added her initials and 10 A. You're presumed innocent until proven 11 the date of this deposition to,are those one and the 11 guilty. 12 same as the exhibits that you examined and were 12 Q. Is that important? 13 testifying to in the answers to questions from 13 A. It is. 14 Mr.Adam just moments previous? 14 Q. Why? 15 A. They are. 15 A. It's the cornerstone of our justice system. 16 MR.BALLARD: Okay. Thank you. Then I'd 16 Q. The notion that we're going to give every 17 like to take a break. 17 benefit of the doubt to the accused and not the 18 (A brief recess was taken.) 18 government,right? 19 MR.BALLARD: Before I continue with my 19 A. Correct. 20 questioning of Chief Hargadine,Counsel,may we 20 Q. So far as you're aware,I apologize to you, 21 stipulate that the depositions,although captioned in 21 I'm going to jump around in some of my questioning, 22 both--well,they are captioned in both proceedings, 22 because I don't want to repeat any more than 23 that we can use them in either proceeding? 23 necessary the questions that Mr.Adam asked you. So I 24 MR.GOERS: Yes,I agree to that. 24 far as you're aware is there anyone in the City of 25 MR.ADAM: Yes,I agree. 25 Iowa City's employ aside from yourself that makes an t 43 45 1 Q. (By Mr.Ballard) Chief Hargadine,I'll try 1 assessment of a liquor licensee'sgood moral' Tw 2 not to be repetitive and I'll fail,but I'll try. I 2 character? — 3 want to ask you the same question that Mr.Adam asked 3 A. I don't believe there Is. 4 about my client,this time Etc. Why did you 4 Q. If I wrote your testimony down corregtly,I'i I 5 recommend denial of Etc.'s application for renewal of 5 believe there was a point where you said ititnswer to,.) 6 its liquor license? 6 a question from Mr.Adam to the effect thatis it-- 7 A. Because of the mandate in the policy that an 7 is it you,meaning you the chief,who determines good 8 establishment--over 1.0 or higher by mandate Is to 8 moral character,I think that you said the cde says 9 recommend a denial. 9 that me individually,that you individually make that 10 Q. And but for that mandate,there's nothing 10 determination. 1 I about the Etc.history that would have led you to 11 A. The guideline gives the responsibility to 12 recommend denial;is that a fair statement? Let me 12 the chief. 13 have Ms.Carson mark this. Maybe that will help you. 13 Q. And that was my question. Are you talking 14 (Exhibits 6,7 and 8 were marked for 14 about the--when you said--I think the word you 15 identification by the reporter.) 15 used was code. We'll find out if I'm wrong,but 16 Q. Chief Hargadine,I'm going to hand you 16 that's what I wrote down. What were you referencing? 17 Exhibit 6 and I'll represent to you that that's the 17 A. A guideline that's been adopted by council, 18 inter-department memo from you to the council I8 I believe,turns It into a city code, 19 recommending denial on Etc. I believe it shows that 19 Q. And that was my question. You're talking 20 there weren't any sales to minors on page 2 and so 20 about the city code,not the state code? 21 forth? 21 A. Correct. 22 A. Yes. 22 Q. Okay. And how do you define good moral 23 Q. So my question is but for the council's 23 character,you yourself,in the context of a liquor 24 policy enacted in February of 2009 dictating that you 24 licensee's application for renewal? 25 as chief recommend denial of any applicant who has a 25 A. We look at past criminal behavior,but also Jane A. Carson,CSR, RPR,CRR CARSON REPORTING, INC. - 319/366-7450 , IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. SAMUEL HARGADINE- October 6,2009 . • 50 52 I to some other standard like.05 or.5? 1 with the PAULA rate. Do you see that? (...) 2 A. I do not know where the figure of 1.0 came 2 A. I do. 3 from. 3 Q. My sense is you've read this a time or two, 4 Q. It was not something that you came up with? 4 but I'd like you to take a look at it,you don't have 5 A. It was not. 5 to read it out loud,but 1'd like you to take a look 6 Q. But the 18 minimum is--one reason for that 6 at it one more time here and then I'd like to ask you 7 is in fairness to the applicant? 7 a couple questions about it. So let me know when 8 A. Correct. 8 you've reread this. 9 Q. I believe that you testified that with 9 A. I've read it. 10 respect to certain e-mails related to the Field 10 Q. Thank you. As you,as the chief of police, 11 House,you didn't have--the e-mails that began with II apply the guidelines,and particularly those set 12 the clerk--city clerk concerning The Field House 12 forth in this paragraph II(A),the third bullet 13 application worked itself through the applications of 13 point concerning PAULAs,what PAULAs do you use when 14 that procedure,that you didn't have the actual 14 you calculate the PAULA rate for a given 15 e-mails,but that you provided them to city legal in 15 establishment? 16 response to a public information request;is that 16 A. The PAULAs that have occurred within the 17 correct? 17 previous 12 months from the date of the application. 18 A. Yes 18 Q. All the PAULAs that have occurred in the 19 Q. Is the same true of an e-mail trail with 19 previous 12 months from the date of the application? 20 respect to Etc.? 20 A. I believe so. 21 A. Yes. 21 Q. You don't make any Independent effort to 22 Q. Can you tell me why you don't have the 22 determine those PAULAs that indicate that a licensee 23 e-mails yourself? 23 or permittee knows that underaged drinking activity 24 A. I may have them. I don't know for a fact. 24 is taking place versus those PAULAs that may not 25 Q. You don't know one way or another? 25 carry that sort of indication? 51 - 53 1 A. I don't. I know I had them at the time of 1 A. I do not. - — 2 the information request. 2 Q. Do you know why,from the 2006 pQl?ay to the 3 Q. Do you have--and when I say you in this 3 2009 policy,which I guess is another way of saying,` 4 sense,I mean you as the chief,do you have an e-mail 4 from Exhibit 1 to Exhibit 2--Well,let meit a,' 5 or electronic storage or destruction policy that you 5 different way. If you look at Exhibit,',do you have 6 follow? 6 the bullet point on Exhibit I that-talks about PAULA 7 A. It is regulated by the size of my in box. 7 rate,a pattern of convictions of persons,starts out i 8 Q. So at some point-- 8 that way? 9 A. IT says you got too much stuff,get rid of 9 A. Yes. 10 it. 10 Q. Okay. I want to ask you a question about 11 Q. But you don't have--you yourself--a 11 the use of a comma and the difference between a 12 periodic,every two weeks I delete everything or 12 restrictive clause and a nonrestrictive clause and 13 anything like that? 13 I'll be upfront with you right now. As I read this 14 A. I do not, 14 Exhibit 1 what it says is,the bullet,pattern,a I5 Q. Now,does the department,the Iowa City 15 pattern of convictions of persons within the 16 Police Department,have any such records destruction 16 establishment for PAULA and/or the local law 17 policy other than whatever IT might say in terms of 17 prohibiting persons under 19 from being in licensed 18 maximum size? 18 establishments,and then there's a comma,which 19 A. For all documents? 19 suggests that the licensee or permittee does not have 20 Q. I want to talk about e-mail,excuse me. 20 measures in place to adequately control access. Have 21 A. E-mail,no,it does not. We follow city 21 I read that correctly? 22 guidelines. 22 A. I believe so. 23 Q. I'd like you to turn to page 3 of Exhibit 2. 23 Q. Would you agree with me that that seems to 24 These are the guidelines adopted in 2009,and that 24 indicate that it's the--that this clause says that 25 third bullet point under section Il(A)that deals 25 the PAULAs,the conviction of persons with PAULA, Jane A. Carson, CSR, RPR, CRR CARSON REPORTING, INC. - 319/366-7450 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. SAMUEL HARGADINE-October 6,2009 66 68 0 1 where they are. 1 activity log. Do you know what I'm talking about? 2 Q. Is the ped mall,I think the phrase you 2 A. I'm aware of those as well. 3 used,it's the same one I use,is that a phrase that 3 Q. Okay. So how is that fair? 4 is in the vernacular of the beat officers that they 4 A. If we can document that,then we will-- 5 would use? 5 Sergeant Kelsay will generate one so that it does 6 A. They may give an exact block and street 6 count to the credit of the licensee. 7 name,but one or the other,yes. 7 Q. Okay. And I don't mean any disrespect,I'll 8 Q. Okay. And my question is for purposes of a 8 try not to show any--Go ahead. 9 dispatcher knowing the location and availability of 9 A. If it's the--for the purpose of just using 10 officers,if the dispatcher for the Iowa City Police 10 the bathroom and there was never an inspection,then 11 Department knows that the officer is in,quote,the II we would not count one. But lilt were something 12 ped mall,end quote,is that enough? 12 that were Just simply miscoded or accidently omitted 13 A. Yes,if their intent was foot patrol. 13 and we can verify that,then it's fair that we 14 Q. All right. Fair enough. And within that 14 generate a bar check ticket so that It would count 15 geographic description and that conduct description, 15 toward the credit of the bar owner. 16 that is,ped mall,foot patrol,if I understand your 16 Q. Well,could we agree that any time an 17 testimony,the officers--a given officer at any 17 Iowa City police officer is in a licensee's 18 given moment could be at a variety of places on 18 establishment in the City of Iowa City and checks 19 College Street or Dubuque Street or whatever. 19 anybody for an I.D.to see if they're old enough to 20 A. That's correct. 20 consume alcohol,that that ought to count as a bar 21 Q. And could be in and out of businesses 21 check? 22 including licensee's establishments,right? 22 A. Yes,we can agree on that. 23 A. That's correct. 23 Q. And that's true whether the person showing 24 Q. But the code would probably just say foot 24 the I.D.is of age or is not of age,right? 25 patrol,ped mall? 25 A. Yes. 67 69 1 A. Correct. I Q. The question I wanted to ask,and truly 71 2 Q. All right. And we're going to ask 2 meaning no disrespect,but,I mean,it seems to me r.,) F.-- 3 Sergeant Kelsay some questions,I'll suspect we'll 3 what I hear from your testimony is,hey,if a bar W I 4 ask him this question,but I want to ask you since 4 owner thinks the officers have been there and it - .- 5 you're the individual charged with this obligation. 5 didn't get logged as a check,they should follow up 6 How does the Iowa City Police Department go about 6 on that and we can make adjustments if that's 7 establishing--I shouldn't say establishing-- 7 appropriate. - 8 calculating the number of visits,to use the phrase, 8 A. We have had that happen. 9 the word of the policy,in computing a PAULA rate? 9 Q. Why would the burden--why under any view 10 A. Since that is Sergeant Kelsay's immediate 10 of what's right in life,why would a bar owner be I 1 task it would be best for him to ask hint that, But 11 required to follow upon that? 12 the obvious would be to count up the number of bar 12 A. They're not required to. 13 checks. That's the easiest. But there may be other 13 Q. Only if they want their numbers right? 14 activities that would have to be included in that. 14 A. It's a human--there Is a Inman element to 15 Q. And you were pointing to the incidents/ 15 this and the whys as to why something wasn't coded 16 calls by location,Exhibit-- 16 correctly,you know,I can't answer to that. But if 17 A. I believe It's 3. 17 we were to--if we find that an error has been made, 18 Q. --3;is that correct? 18 then we will make a good faith attempt to correct it, 19 A. Yes. 19 and have done so. 20 Q. So I've heard bar owners say,and I think 20 Q. What information--what information would 21 you testified,yeah,this could be true,that there 21 the Iowa City Police Department need to have to 22 were times where officers were in their 22 investigate--maybe that's too strong of a word-- 23 establishments, no citations-- they came in,they 23 but to consider whether an error has been made and an 24 looked around,no citations were issued,and it 24 adjustment appropriate? 25 didn't generate a bar check on an incident or 25 A. I'm aware of cases where we--this has come 1 Jane A. Carson, CSR,RPR, CRR CARSON REPORTING,INC. - 319/366-7450 1 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. . SAMUEL HARGADINE-October 6,2009 70 72 0 1 up and an officer was in and looking for a specific 1 A. How do they know that? 2 wanted person who was rumored to be In that 2 Q. Yeah. 3 establishment,walked in,the bar owner knew the 3 A. Because they--some have done it and it's 4 officer by name,so we knew that the incident 4 worked. 5 occurred because he was able to say,Officer X was in 5 Q. Okay. But the police department hasn't made 6 my establishment last night,but it doesn't show up 6 any effort to inform licensees that,hey,you know, 7 as a bar check. Well,it was actually a warrant 7 new policy,this ratio is going to be pretty darn 8 check and he was not there to make a PAULA case or 8 important for you,so if you think we have it wrong 9 any type of liquor law inspection,he was looking for 9 at any given moment,call us,we're doing our best. 10 a wanted person. So in that instance we didn't 10 That's my words. But the department's not making any 11 generate the requested,you know,statistic. 11 effort that way to communicate to the licensees, 12 But there have been other times when,if 12 correct? 13 they were--hey,cops were here and I know they 13 A. We communicate with licensees on a routine 14 checked I.D.'s,if Sergeant Kelsay checks the log and 14 basis,Sergeant Kelsey does. 15 for whatever reason can't verify that,then we'll 15 Q. Sure. 16 check back on the watch,did you guys go out and 16 A. So if there are issues,and there have been, 17 check that bar. If the answer's yes,then we attempt 17 then they're communicated at that point. 18 to correct that. 18 Q. But any sort-- 19 Q. Is that all you do? 19 A. En masse as a general education,you're 20 A. What else can you do besides correct it? 20 correct,that has not occurred. 21 Q. Tell the officers,look,you got to start 21 Q. Press release? 22 writing these things down,because it shouldn't be 22 A. There have not been any press releases. 23 the burden of the establishment or the kid that's 23 It's typically not an issue unless a bar owner is 24 running the bar that night,the gentleman that's 24 close or over. If they're close,then they're 25 running the bar that night,to call us to make sure 25 looking for inspections. They want favorbe '; 71 1 we get our numbers right. That's something else you 1 inspections. r 2 Q. Right. I would assume. So my guess is- J ,1 2 could do? a , 3 A. We don't know if it was the officer or maybe 3 maybe the bar owner's not going to call about the one _, _u, 4 dispatch,you know,simultaneous 911 call coining In. 4 I'm going to ask you about next,but let's say the-; — 5 There's a variety of things that potentially could 5 officer is in the establishment for any reason, 6 have caused it. And It's usually different in every 6 except the bar check,it's not coded as a bar check, o 7 case. It's not one particular officer that has a 7 and the officer issues a PAULA. How does that figure 8 history of just not calling those things in. It's 8 into the ratio calculation that the police department 9 different. But if we find out about it,we'll try to 109 does? That should be considered as a visit or an 10 make a good faith effort to be fair. 11 Q. How does a liquor license holder know that 11 inspection. 12 if the Iowa City Police Department finds out there 12 Q. Okay. And is there anything done to sort of 13 were people--officers in checking I.D.'s,didn't 13 ensure that it was considered as a visitor an 14 get logged as a bar check,that the police will make 14 inspection? 15 that right if that's the case? How does a person in 15 A. That's done by Sergeant Kelsey,because of 16 my client's shoes know that? 16 the fact that the PAULA now shows up,we know that a 17 A. hi the cases where it's occurred,they've 17 visit occurred. 18 gone on line and looked at the radio log,it's 18 Q. So any time there's a PAULA,obviously there 19 available. 19 was a visit? 20 Q. Well,they know that--if they go on line, 20 A. Correct. 21 they can say to themselves,Ivey,I saw them here 21 Q. Now,your hypothetical of--I guess it 22 checking I.D.'s,but it's not logged on line,but how 22 wasn't a hypothetical,but your description of the 23 do they know that if they bring that to the Iowa City 23 circumstance where the licensee called and said,hey, 24 Police Department's attention maybe it would be 25 and he wase he was in and thetanswer was,whem,I know ell,o lhee rs 25 corrected? Jane A. Carson,CSR,RPR, CRR CARSON REPORTING,INC. - 3191366-7450 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. • SAMUEL HARGADINE- October 6,2009 74 76 0 1 wasn't in to do a bar check,he was in on a warrant 1 when time permits. 2 check,you know what I'm talking about? 2 Q. So-- 3 A. Yes. 3 A. If they're busy,they're going from call to 4 Q. Well,let's say that while the officer was 4 call to call,I have no expectations of bar checks to 5 there--I mean--and I'm not a police officer,I'm 5 occur. But If there's 30 minutes with dead silence 6 not trained,I don't make any bones about that,but 6 on the radio,then Sergeant Brotherton's task is 7 let's say that it wasn't an exigent sort of 7 let's get them busy. 8 circumstance,them wasn't an emergent circumstance. 8 Q. And does the task--is it described in 9 I mean,it was a warrant,not that they weren't 9 terms of a number of times that particular bars ought 10 really looking for them,but maybe they walked in and 10 to be visited in a given year? 11 saw 20 people and they looked at them and said none 11 A. No. Other than we want to make sure that 12 of them is that guy. Let's just say that. He comes 12 they're all inspected throughout the city,not just 13 in,he's looking for a particular subject,subject 13 the ones in the downtown area. 14 isn't there and then he looks around and says,huh,I 14 Q. How often do you want them all inspected 15 wonder if these people am of age and initiates a 15 throughout the city? 16 check. Then how does that get coded? 16 A. If I had the staff,I wish we could do it 17 A. According to your scenario? 17 two or three times a day,but we don't have that kind 18 Q. Yeah. 18 of manpower. 19 A. That should be considered a visit or an 19 Q. Given the reality of the manpower 20 inspection. 20 limitations,what's your reasonable expectation of 21 Q. All right. And I guess for lack of a better 21 how often establishments should be checked? 22 way to say it,in a real world,you know,if that 22 A. It would be mice if they were checked at 23 officer just radios and gets coded I'm serving a 23 least once a month. That's--that does not exist 24 warrant and he's in them and does some checks of 24 anywhere in writing. That's just.nny answer to your 25 I.D.'s,I mean,do you--I don't know how to say 25 question. 75 , 77 1 this except the way 1 want to--do you think he's 1 Q. Sure. Have you told Sergeant Brotherton 2 really going to call and say,oh,by the way,now you 2 that? 3 need to mark this as a bar check because I did some 3 A. No. 4 other things,blah,blab,blab? 4 Q. Do you know whether Captai0ohnson has told 5 A. An officer who's going to make the jump from 5 Sergeant Brotherton that? • 6 a warrant to a license Inspection probably is also 6 A. I do not know. -' 7 familiar enough with the policies to call that In and 7 Q. Other than the order directive that you 8 make sure that It's logged. 8 provided to Captain Johnson,have you provided any 9 Q. Okay. So-- 9 sort of directive,order,instruction to Sergeant 10 A. Otherwise why would you do It? 10 Brotherton or anybody else about the number of times I I Q. So you would expect it? II bars ought to be checked or checking bars? 12 A. I would expect that. 12 A. No. 13 Q. The task to Sergeant Brotherton to ensure 13 Q. So this is sort of a loaded question,I'm 14 that all licensees are checked,is that a written 14 giving you a big heads-up,it is,but it seems to me 15 policy,a written task? 15 a certain part of this is rather arbitrary. If I'm a 16 A. I issued a written directive to the watch-- 16 licensee and I'm coming on renewal time and I'm 17 or to the operations captain,Captain Johnson,that 17 paying close attention to that ratio and I know it 18 this is what I wanted done. 18 would really be good if I had a visit in the next two 19 Q. Is that part of the general orders? 19 weeks,but it happens to be a time when there's more 20 A. No. 20 priority activity requiring police department 21 Q. Is that something that is a public record? 21 attention,I just might not get my visit because they 22 A. If it still exists. 22 didn't have time to come and visit. True? 23 Q. What did it say? 23 A. That's true. But lilt's under 18 visits, 24 A. That I wanted one supervisor tasked with 24 it's not going to count. If you're way over 18 and 25 ensuring that bar inspections occur when they're-- 25 have the rate higher than 1.0,then,yes,you're Jane A. Carson, CSR,RPR,CRR CARSON REPORTING,INC. - 319/366-7450 1 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. SAMUEL HARGADINE- October 6,2009 - • 82 84 1 received by the city clerk today. Sound fair? 1 questions that you have asked In what's a visit,and ) 2 A. Yes. 2 we've talked about that. I don't recall me ever 3 Q. Then what time frame specifically is the 3 informing the council that we could be wrong. But, 4 Iowa City Police Department going to use to calculate 4 yes,that was discussed in front of the council as to 5 the PAULA rate in accordance with Exhibit 2? 5 what constitutes a visit. 6 A. The previous 12 months from that stamped 6 Q. If I could reference this collaboration of 7 date. 7 city staff that you testified to that resulted in the 8 Q. Okay. So it's not the prior 12 months that 8 policy as shown by Exhibit 2,when did the discussion 9 have concluded. In other words,to use my example, 9 or collaboration start as best you remember? 10 October 6,the police department isn't going to start 10 A. The collaboration actually started as the 11 October of'08 and go through September of'09,the 11 creation of policy 1. 12 police department's going to start October 6th of'08 12 Q. Okay. 13 and go through October 6th of'09,or 5th,right? 13 A. And policy 2 is as a result of the council 14 A. Yes. 14 wanting to place a higher priority on businesses that 15 Q. It's to the day,not to the month? 15 have a pattern of high PAULA arrests. 16 A. I believe that's correct. 16 Q. Do you have any sense from a time standpoint 17 Q. Because I don't think that's what happened 17 when the council informed you in any way,we want to 18 with my client,but if I'm wrong about that,maybe I 18 start working on--we want to place a priority on 19 am. But that's the intent. Your intent in 19 this,we want to start working on a new policy? 20 discharging the police department's obligations in 20 A. It would have been In the immediate month or 21 Exhibit 2 is to go to the day that the application is 21 months prior to this. 22 actually filed,not just the prior month,not just 22 Q. So sometime late 2008 or early 2009;is that 23 the prior 12 months concluded? 23 fair? , 24 A. Correct. .24 A. When they issue a directive or staff to-- 25 Q. And that method of calculation has been true 25 Q. Yeah. . i 83 .A$ \` I since the time the policy set forth in Exhibit 2 has 1 A. --to do it,then,yeah,we place a high 9� 2 been put into place,correct,hasn't been any changes 2 priority on it. _-, 3 to that? 3 Q. I mean,as you recall it,this wasn't a 4 A. Correct. 4 this Exhibit 2,particularly the revision to the- 5 Q. When the policy set forth in Exhibit 2 was 5 policy related to PAULA rate,thitpwasn't something 6 under discussion and there was the collaboration that 6 that staff worked on for 12 months or somd Luing,was 7 you testified to,was there ever any discussion or 7 it? 8 observation by anyone that,hey,you know,maybe we 8 A. No. 9 ought to create a margin of error as opposed to a 9 Q. It was a pretty quick turnaround? 10 bright line 1.0 ratio because it could be that there 10 A. Quick turnaround. 11 were checks that didn't get logged? Was there any 11 Q. You recall how many times the council 12 discussion like that? 12 considered this policy,Exhibit 2,before it adopted 13 A. No. 13 it? And by that I mean was it like three readings 14 Q. Did you or has anybody on behalf of the Iowa 14 and then they finally adopted it,or do you know 15 City Police Department informed the city council that 15 about that? 16 in fact there could be visits that don't get logged, 16 A. I do not recall if it was three or whether 17 there's a human process here,we make mistakes,if a 17 they collapsed it. 18 bar owner calls and tells us that it thinks a mistake 18 MR.BALLARD: Thank you,Chief. Those are 19 has been made,we'll investigate it and try to 19 the questions that I have for you this morning. 20 correct it,but just so you all know as you make this 20 MR.ADAM: I have a few questions. I don't 21 decision that's pretty important to a licensee,you 21 think it will take that long. 22 know,we could be wrong. 22 REDIRECT EXAMINATION 23 A. I'm going to divide your question in half. 23 BY MR.ADAM: 24 Q. Sure. 24 Q. So based on what I've heard in your 25 A. The council did ask some of the same 25 testimony to Mr.Ballard,is it accurate--I mean, Jane A. Carson,CSR,RPR,CRR 1 CARSON REPORTING, INC. - 319/366-7450 • IN THE MATTER OF IOWA CITY F'1>,LDHOUSE CO. INC. SAMUEL HARGADINE- October 6,2009 86 88 l0 1 that it's difficult to get an accurate visits versus 1 A. Yes. 2 bar checks number given the coding errors and 2 Q. 92 bar checks. And that there were 143 3 officers may not call it in when they visit,it's 3 PAULAs issued during those bar checks,correct? It's 4 difficult to get an accurate number of bar visits;is 4 on the-- 5 that correct? 5 A. On the-- 6 A. I don't know if I'd agree with your word 6 Q. --third page of Exhibit 5. Sony. 7 difficult. I'd say there's potential of an 7 A. 143 PAULA citations,correct. 8 inaccuracy. 8 Q. Okay. For right now I want to focus on the 9 Q. Okay. Now,I can't recall your testimony 9 bar checks,that number 92. If you look at Exhibit 10 verbatim,I tried to write it down,but I believe you 10 Number 3,which is the incident calls by location, 11 said something along the lines,and correct me if I'm 11 pages 1,2 and 3 show the logs as bar checks. Now,1 12 wrong,along the lines that every time an officer 12 counted those and it counts to 92 bar checks,and 13 visits a bar,whether it be for a bar check or 13 that's the same number that shows up on Exhibit 14 serving an arrest warrant or whatever reason,that 14 Number 5 as the number of times The Field House was 15 should be considered a visit? 15 checked. Okay? 16 A. No. That should be a logged event. 16 A. I'm with you. 17 Q. A logged event. Okay. 17 Q. Assuming those numbers are correct,and I'll 18 A. That correlates to what it is they're doing. 18 ask--I understand Sergeant Kelsey actually prepared 19 Q. Okay. So when an officer has interaction 19 these reports,but assuming those numbers are 20 with a licensed establishment,whether that be a bar 20 correct,I want to go back to the arrest file,which 21 check,whether that be writing a public intoxication 21 is Exhibit Number 9,and the second individual,Scott 22 charge,whether it be an assault charge,wasn't your 22 Koehn Kyle or Kyle Scott Koehn,however you,say his 23 testimony that should be coded as a visit? 23 name,what is his arrest date? 24 A. If they end up--if they're there for one 24 A. According to this it's 04/16 of 2009. 25 particular thing that's not alcohol related but end 25 Q. Okay. Now,can you go back and look at the T i j . J Fitt 87 w a 1 incident calls bylocation,which is Exhibit -73 ri i 1 up doing it,I agree that it should be coded that 2 way,it should be considered a visit. 2 Number 3,and luckily for you thos(hareheckS'to 7 3 Q. So,for example,if the Iowa City Police 3 chronologically in order from July o7,'08'to Julynf 4 Department comes to a licensed facility and issues a 4 '09. Can you show me where there alas a bar check on 5 public intoxication charge,should that be considered 5 4/16 of 2009,the same time that Kyle Scott Korn was 6 a visit? 6 charged with assault causing injury? 7 A. I believe so. 7 A. I cannot match that arrest to a particular 8 Q. Now,if I were to go through the incident 8 call. 9 calls by location,which is Exhibit Number 3,I 9 Q. Okay. So if I were to tell you that looking 10 believe--That's Exhibit Number 3,incident calls by 10 at this arrest file report,Exhibit Number 9,that 11 location? 11 there were 63 citations issued on non bar check 12 A. Yes. 12 dates,shouldn't that increase the number of visits 13 Q. I'm going to hand you what's been marked as 13 for calculating the PAULA ratio? 14 Deposition Exhibit 9. Can you identify that 14 A. What if Kyle was arrested,say,in a dorm 15 particular document,Chief? 15 room two weeks after an incident that occurred? That 16 A. This looks like a summary of those arrested 16 would account for a date for his arrest that doesn't 17 between July 10th,2008,through July 10th,2009. 17 match up to a bar check. Or fight in progress. 18 Q. And is that the same time period referenced 18 Q. But looking at the arrest file in Exhibit 19 on the incident calls by location? 19 Number 9,doesn't it say the location of his arrest 20 A. Yes,it is. 20 was at 113 East College Street? 21 Q. Okay. And referring to Exhibit--sorry, 21 A. I don't know if it says that or that's where 22 you got your hands full,I know,but referring to 22 the offense occurred. That would be a question for 23 Exhibit Number S,which is the intradepartmental memo 23 Sergeant Kelsay. 24 regarding The Field House's liquor license renewal, 24 Q. Okay. I guess generally speaking,what I'm 25 it shows that there were 92 bar checks? 25 asking you is if I can establish that the arrest Jane A. Carson,CSR,RPR, CRR CARSON REPORTING,INC.-319/366-7450 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. SAMUEL HARGADINE-October 6, 2009 40 92 I file,Exhibit Number 9,that them were 63 or any I bar besides bar checks. 0 2 number,you pick the number,of citations issued at 2 Q. What I'm trying to get--I'm trying to ask 3 The Field House bar at 113 East College Street that 3 you is going back to the general statement,if an 4 do not correspond with dates of a bar check, 4 officer visits a bar for whatever the reason may be, 5 shouldn't those be counted as a visit? 5 an assault,public intoxication charge,disorderly 6 A. If they,under the terms that we've talked 6 conduct,whatever the charge is,when they walk in 7 about all day-- 7 that door is that a visit for calculating the PAULA 8 Q Yes. 8 ratio or is it not a visit for calculating the PAULA 9 A. --if that was the Intent,then,yeah,I 9 ratio? 10 think they should. 10 A. It depends. 11 Q. So if they were arrested at 113 East College 11 Q. Depends on what? 12 Street that should count as a visit for purposes of 12 A. It depends on whether or not he checks the 13 the PAULA ratio? 13 establishment for alcohol violations. If he's only 14 A. Well,we're talking about an assault arrest. 14 working on an assault,then no. 15 Q. Um-hm. 15 Q. So if he checks for alcohol violations,then 16 A. If he was sent there as an assault report or 16 it should constitute a visit? 17 a fight in progress,then why would It count as an 17 A, I believe it should. 18 alcohol compliance visit? 18 Q. If he's checking for disorderly charges, 19 Q. Well,that's what I'm asking you,because it 19 should that constitute a visit? 20 looks like from the incident calls by location that 20 A. If he was called there by the bar because 21 there were 92 bar checks and that Sergeant Kelsay 21 someone is--disorderly conduct and he goes and 22 used that exact number in calculating a PAULA ratio. 22 makes a disorderly conduct arrest,no. He has not I 23 So it looks to me like he only used the bar check 23 inspected any of the--he's not inspected the 1 24 visits as opposed to any other visits that might have 24 patrons or the establishment for any violations of 25 been an assault call or a public intoxication call or 25 the liquor laws,so why would you count that as a 91 - 93 1 a disorderly conduct call or any other reason that he I visit? ,. I 2 was there,it looks like he only used the dates of 2 Q. That's what I'm trying to figure out. Wee _. 3 bar checks when calculating the PAULA ratio,and 3 trying to be clear as to what your office uses in-) ; Ji 4 based on our discussion it seems to me that that's 4 calculating visits,because it seems to be a pretgr _, 5 not how you feel it should be done. 5 big factor in the ratio. Number of FAULAs issued I J 6 A. I've given a number of examples where I 6 think is pretty clear,but this numberbf visits is- 7 think it should go toward the benefit of the 7 not,and that's what we're trying to get nailed tce 8 licensee. 8 figure out. So quite honestly,not just for purses 9 Q. Okay. 9 of these proceedings,but so we can give our clients 10 A. But in this particular instance of an 10 notice as to what calculates a visit or what's 11 assault call,we don't know that that's got anything 11 considered a visit,excuse me. 12 to do with a bar check. 12 A. If there is a check,whether It be from the 13 Q. Well,that's my point. It has nothing to do 13 patrons or from bar staff on any of the liquor laws 14 with a bar check. 14 to include under 18,that should count as a visit. 15 A. So then it shouldn't count. 15 Q. Okay. A public intoxication charge,would 16 Q. But the officers were still on the premises 16 that count as a visit? 17 investigating-- 17 A. Possibly. 18 A. An assault, 18 Q. What about an open container charge? 19 Q. --an assault. Or they were on the premises 19 A. I think those--we're talking about liquor 20 at which time they could have written other 20 law violations,so--well,an open container in a 21 citations. 21 bar,they're all open containers. Walking around In 22 A. We're getting into could haves here, 22 the ped mall with an open container would be a 23 but... 23 violation of the liquor laws,but inside the bar it's 24 Q. Yes. 24 not. t 25 A. There are a lot of things that occur in a 25 Q. Well,that brings me to another question } 1 Jane A. Carson, CSR,RPR, CRR 1 CARSON REPORTING, INC. - 319/366-7450 1 . IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. SAMUEL HARGADINE- October 6,2009 94 96 0 1 that I'll go to since you brought it up. Flip to 1 testified previously,and I wrote this down so I 2 page 5 on Exhibit Number 9. The fourth,fifth and 2 think it's probably pretty close,that any time an 3 sixth incidents located on there were possession of 3 officer visits an establishment it should be a bar 4 open container in a public place. That somehow was 4 check. Is that accurate or in light of our recent 5 attributed to my client,The Field House. How could 5 discussion did you change your testimony on that? 6 that be if that were a requirement that that be in a 6 A. If it pertains to an inspection of the 7 public place? 7 liquor,I believe it should. 8 A. I can only theorize here. 8 Q. Okay. 9 Q. Sure. Yeah,I understand you weren't there, 9 A. But if he's investigating a criminal act 10 but... 10 that's,for example,fight in progress or anything 11 A. My guess is it occurred outside the 11 else,then possibly not. 12 establishment and they needed a place of reference. 12 Q. And you haven't written any policies to your 13 They looked up and it was 113. 13 officers or your staff as to what you believe a visit 14 Q. Okay. So let me ask you this. If I were to 14 should consist of,have you? 15 show to you alcohol-related offenses that were issued 15 A. No. 16 at 113 East College Street that did not include the 16 Q. After today do you think you might do that? 17 92 bar checks,would that--would you revise your 17 A. Probably not. 18 numbers and rerun the ratio? I8 Q. No? Wouldn't you agree it would be--it 19 A. Yes. 19 would lead to a more accurate depiction of what was a 20 Q. Okay. 20 visit for purposes of your PAULA ratio? 21 A. I believe that's fair. 21 A. Our policy manual's already that thick 22 Q. Similar question. If I were able to produce 22 (indicating). 23 evidence that my client witnessed officers entering 23 Q. How thick is that? 24 the bar and no citations were issued and it's not one 24 A. It's roughly a foot thick. I mean... - 25 of the 92 dates that a bar check was done,would you 25 Q. Okay. - . ` L 95 c. 97 1 revise your numbers? 1A. I believe they are most of the times-, ' r 2 A. If we could verify it,yes. Because we have 2 accurate and call out like they're"supposctto. 3 done that. 3 Q. I'm almost finished. Do you- all the-city 4 Q. When an officer codes something,whether it 4 council meeting on February 9th df-20097 That was 5 be bar check or out with subject,whatever the code 5 the one we referred to with the statement as Ring 6 may be,are those coded before a citation is issued 6 fishing where the fish are. 7 or after a citation is issued? 7 A. Vaguely. 8 A. Predominantly before. 8 Q. Do you recall Councilman Hayek stating that 9 Q. Okay. But sometimes it happens afterwards? 9 it's going to be,quote,extremely important to 10 A. If the officer hadn't called out and now lie 10 define visit as best we can so that the industry can 11 needs a case number to make a--to go with a 11 know what to expect? 12 citation and if dispatch had him available the whole 12 A. I believe I do. 13 time,then it could be coming after. 13 Q. To your knowledge have either you or the 14 Q. 1 think Mr.Ballard asked you a question as 14 council defined visit to put the industry on notice 15 to how do you calculate visits in computing the PAULA 15 of what they can expect? 16 rate and I believe your testimony was that you count 16 A. They have not. 17 up the bar checks. Is that right? 17 Q. Further in that meeting do you recall when 18 A. I don't. Sergeant Kelsey does. 18 Councilman Hayek said,quote,I think we've got to 19 Q. Sergeant Kelsey does. And then I think you 19 have some--some sort of guideline in place. I know 20 testified that that was the easiest way to do it. Is 20 that that maximizes the consistency. Do you 21 it--in light of the discussion we've just had,is 21 remember-- 22 it the most accurate way to do it? 22 A. I don't remember that quote,no. 23 A. That's a question best asked of 23 Q. Would you agree that if you had a guideline 24 Sergeant Kelsay. 24 in place that that would maximize consistency? 25 Q. Okay. I'll ask him. I believe you 25 A. I believe we did have a guideline in place. Jane A. Carson,CSR, RPR, CRR CARSON REPORTING,INC.-319/366-7450 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. • SAMUEL HARGADINE-October 6,2009 • : 98 100 1 That's what the council ended up passing. 1 Q. They're manufacturing these things,they're C) 2 Q. I'm sorry,when I was referring to 2 getting pretty good at it,aren't they? 3 guideline,and as I read that,I thought Councilman 3 A. Yes. 4 Hayek was referring to a guideline as to what 4 Q. Not only are they manufacturing them,but 5 constituted a visit,but I could be mistaken. 5 older people are giving younger people,underage 6 A. If that's what he meant,I would have 6 people,who look a lot like them,their 7 trouble... 7 identification card,correct? 8 Q. Okay. Now,I think you said that the reason 8 A. Correct. 9 the guidelines were revised was looking for a pattern 9 Q. Notwithstanding TIPS training wouldn't you 10 of violations or something along those lines. I 10 agree with the statement that a trained officer has 11 don't recall. So I'll ask the question again. Do 1 l much better ability to spot a fake I.D.than a bar 12 you remember why--what the impetus was for revising 12 owner who's been trained in TIPS training? 13 the guidelines in 2009? 13 A. No,I wouldn't agree with that. What the 14 A. The council wanted to place more weight on 14 officer has at his disposal is checking it against 15 businesses with a pattern of people underage drinking 15 the State's computer to see if it matches. 16 within those establishments. 16 Q. Okay. 17 Q. And did you say that there was some 17 A. But as far as the visual,I think bar owners 18 expectation that the bar owners would regulate 18 and specifically doormen are much better at it 19 underage consumption-- 19 because they do it far more often. 20 A. Yes. 20 Q. Okay. Would you agree that an underage 21 Q. --within their establishment? • 21 individual that's violating or attempting to violate 22 A. Yes. 22 the liquor laws by buying or possessing or consuming 23 Q. To the extent that you know,do you know 23 alcohol is more likely to give a fake I.D.to a __ 24 what steps The Field House bar has in place to 24 bouncer or a bar employee than they are to a police 25 regulate underage consumption? 25 officer? 101 99 "— i 1 A. I do not. 1 A. There have been those that tried to do It ' 2 Q. What would you recommend as chief of police 2 with a police officer. I mean,they're probably more 3 that a bar owner put in place to regulate underage 3 apt to do it with a bouncer,correct. . . __ 4 consumption? 4 Q. So when officers are doing bar checks and • 5 A. If you're going to allow people in that are 5 they ask people to give them an I.D.,there's a teal - 6 under 20,then you have to have sufficient enough 6 chance that this person's going to give them their 7 staff to go around and spot check to make sure that 7 real I.D.versus their fake I.D.? 8 those consuming are of'legal age. If'the police can 8 A. That could happen. 9 find people of underage drinking,then that bar 9 MR.ADAM: That's all I have. Thank you, 10 should be able to find it. 10 Chief. 11 Q. Anything else besides staff to spot check? 11 MR.GOERS: Gentlemen,ff.!could,it's 12 A. No. In regards to your question,that's all 12 about 12:20 and I'm late for a lunch meeting. Would 13 I can think of. Should--let's say,a hypothetical, 13 it be okay if we broke for lunch and returned with 14 if a bar--if there were PAULA arrests made within a 14 Chief Hargadine. 15 bar and that bar owner took corrective steps,either 15 MR.BALLARD: I have literally one question ' 16 firing the person that,you know,missed it,should 16 and then the chief wouldn't have to worry about 17 have been checking,whatever the steps that bar owner 17 having to come back. 18 has taken,it would--I would encourage that bar 18 MR.GOERS: Well,I have questions as well. 19 owner to articulate that to the police department 19 1 have more than one. 20 because that also goes as to the level of cooperation 20 (A luncheon recess was taken.) 21 that we have to report on. 21 REDIRECT EXAMINATION 22 Q. Okay. As chief of police,you're probably 22 BY MR.BALLARD: 23 well aware of the problem we have with--in ibis 23 Q. Chief Hargadine,I just have one question, 24 particular community with fake 1.D:s. 24 it has about 12 parts,seriously,but it's really one 25 A. Um-hm. 25 question. I understand your testimony,answer to Jane A. Carson, CSR,RPR, CRR CARSON REPORTING,INC. - 319/366-7450 IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. SAMUEL HARGADINE-October 6,2009 102 104 1 questions from me and from Mr.Adam that any time 1 '09 guidelines and the'06 guidelines or guideline "���--��� 2 that an Iowa City police officer is in a liquor 2 set number 1 and 2 or old and new. I think we've all 3 licensee's establishment with regard to alcohol 3 been characterizing them all in those various 4 violations that that's just counted as a visit;is 4 fashions. I want to turn your attention to 5 that right? 5 Exhibit 2,if I can find it. Do you have it before 6 A. It should be. 6 you? 7 Q. So I just want to make sure you and I are on 7 A. 1 and 2. 8 the same page in terms of what an alcohol violation 8 Q. You were asked a question about whether or 9 is. So is unlawful use of an I.D.or a driver's 9 not the'09 guidelines replace the'06 guidelines, 10 license a violation? 10 and I think your answer was that it did not. I want 11 A. I believe it is. 11 to draw your attention to the first page of Exhibit 12 Q. Use of an I.D.to obtain alcohol? 12 2,the first line here,and just ask if your reading 13 A. Yes. 13 of the sentence resolution number 06-2--I can't see 14 Q. Possession of a canceled or suspended I.D.? 14 if that's 216 on your copy or 218,is hereby 15 A. Yes. 15 rescinded,if that affects your answer as to whether 16 Q. Public intoxication? 16 or not the new guidelines replaced the old 17 A. Yes. 17 guidelines? 18 Q. On-premises alcohol sale limit violation? 18 A. They do replace the old guidelines. 19 A. Yes. 19 Q. Okay. This is kind of a broad question, 20 Q. Under 19 after 10 p.m.? 20 you've been asked a number of questions about visits 21 A. Yes. 21 and what constitutes visits and how the PAULA rate is 22 Q. Obstructing an officer? 22 calculated. Do you yourself do those calculations? 23 A. Maybe. 23 A. No,I do not. 24 Q. Okay. Have to know more facts? 24 Q. And who does? 25 A. Um-hm. 25 A. Sergeant Troy Kelsay. k103 105%---` 1 Q. Yes? 1 Q. Is Sergeant Kelsay in a better position to 2 A. Yes 2 describe how those figures are calculated than you, 3 Q. Public urination? 3 are? • - _=_- 4 A. I'd have to know more facts. 4 A. Yes,he is. c". 5 Q. Possession of alcohol under legal age? 5 Q. You were additionally asked a question about 6 A. Yes. 6 whether a PAULA rate of over 1.00 but made up of 7 Q. A disturbance or a loud party? 7 fewer than 18 visits would be a factor in your 8 A. Have to know snore facts. 8 consideration as to whether or not to approve or deny 9 Q. I don't really know what this means,but it 9 a liquor license renewal. I think you were asked 10 was coded as such,so I'm just going to ask it, 10 more specifically a question about whether or not it 11 community policing,if somebody's coded as being in 11 would be an automatic disqualification. Your answer 12 an establishment under community policing,would you 12 was no if I recall,correct? 13 say that's a visit? 13 A. That's correct. 14 A. Have to know a lot more facts. 14 Q. Could a rate of over 1.00 with 15 or 16 15 Q. And then something coded as liquor 15 visits,that is,less than—fewer than 18,still be 16 violation? 16 used as a factor in a determination whether or not to 17 A. That probably should be. 17 approve or deny a liquor license? 18 MR.BALLARD: All right. Thank you. That's 18 A. It could be used as a factor. It just 19 my only multi-part question. 19 wouldn't trigger the mandated response. 20 CROSS-EXAMINATION 20 Q. It wouldn't be automatic denial? 21 BY MR.GOERS: 21 A. Correct. 22 Q. All right,Chief. I have several matters I 22 Q. You were also asked a series of questions 23 wanted to take up with you again if I could. You 23 regarding the frequency with which liquor license 24 were asked,I don't recall by which attorney,some 24 establishments were checked. You've been quoted with 25 questions about the--what 1'11 characterize as the 25 the phrase,we go fishing where the fish are, Jane A. Carson, CSR, RPR, CRR CARSON REPORTING, INC. - 319/366-7450 NOV 04,2009 04:25P 3193547473 page 3 IOWA My :,. INTER-DEPARTMENT MEMO .,.,e. POLICE TO: Mayor Bailey and City Councity � FROM: Chief Sam Hargadine ; t. '� ,T , RE: The Summit Bar License Renewal _J DATE: November 3, 2009 Based on an excessive PAULA citation rate of 1.925 per visit I am mandated to recommend denial of The Summit liquor license renewal. The establishment has been checked 80 times and there have been 154 violations. License renewals after July 1, 2009 that have a rate greater than 1.0 require the police chief to recommend denial. Additional factors to consider from previous '12 months (10/30/2008— 10/29/2009): Pubic Intoxication Arrests: 70 Assault 04 Disorderly Conduct (fighting)Arrests 20 Obstruction, Interference or Assault on an Officer 07 Under 19 violations 33 Conclusion: The Summit has a variety of concerning issues including: Underage Consumption, overconsumption, physically violent behavior by patrons and the apparent inability of staff to adequately address these issues, Attachments: On-Premises Liquor License Renewal Data Sheet • •VMOl ( 1 H* EXHIBIT ( 0 NOV 04,2009 04:2513 3193547473 page 4 Iowa City Police Department On-Premises Liquor License Renewal Establishment name: The Summit Address: 10 S. Clinton St. Review Period: 10/30/2008 — 10/29/2009 • y; A. On-premises Activity ry• 154 : Number of PAULA citations issued during twelve-month renewal period Bar Check=80 PAULA/Visit= 1.925 Note: For renewals after July 1, 2009, if the PAULA rate is greater than:1.00 per visit with at least 18 visits during the twelve-month renewal period, the police;, department will recommend denial. A lower rate combined with other factors may result in a recommendation of denial. 0 : Number of citations issued for violation of section 4-5-7 of the City Code (Specials Restrictions) during twelve-month renewal period. 33 : Number of under-19 on premises citations issued during twelve-month renewal period. 0 : Number of sales to minor citations issued during twelve-month renewal period. 158 : Number of other citations issued on premises during twelve-month renewal period. (Specify citations) Public Intoxication = 70 DL/ID Violation = 52 Disorderly Conduct= 20 Interference = 7 Assault =4 Theft=3 Criminal Mischiof= I Public Urination = 1 B. Level of cooperation extended to police by bar employees: Medium Factors indicative of cooperation include, but are not limited to: • timely response to requests for improvement made by Police Department • calls for assistance where appropriate before the situation gets "out of hand" • • high attendance at TIPS training • fake IDs turned over to the Police Department 113*: Number of nuisance calls in and around the business during twelve-month renewal period Out with Subject =62 Assault/Fight = 38 Intoxicated Pedestrian = 5 Susvicious Activity/Person = 4 Disturbance = 2 Unknown Problem =2 (*There have been an additional 24 Calls-for-service for minor crimes. Theft= 13 Trespass = 9 Criminal Mischief= 2 NOV 04,2009 04:25P 3193547473 page 5 0 : Number of fake or altered IDs turned in during twelve-month renewal period. 0 : Number of employees who have attended police TIPS training during twelve- month renewal period. C. Additional Comments (including any other relevant information re: guidelines for renewal approved by City Council): Alan Eckhardt, one of the Summit's managers, has provided the Police Department with information regarding on-going criminal activity, i.e. bootlegging at private residences operating as de facto bars. As a direct result of the information provided, at least two such operations were investigated and the organizers were criminally charged. Adam Altman, a newly listed manager, has a history of Public Intoxication arrests in Iowa City. Since 2003, he has been charged and convicted of Public Intoxication four times with the most recent event occurring June 6, 2009. At the time of the 2003 arrest, he was also charged with interference with Official Acts. None of the events occurred at the Summit. The Summit's PAULA/Visit(i.a per Bar Check)is currently one of the two highest rates in Iowa City for establishments with the prerequisite eighteen or more visits. Per Council's mandate, the Summit's renewal is denied by the Police Department. Statistics were calculated by querying databases for the address, 10 S Clinton St. Some of these events possibly occurred outside the establishment. Police Department's liquor license renewal recommendation: Yrs_ ' , NO • .3 • Lb =I Wd Ei; i`� 1 0 THE STATE OF IOWA BEFORE THE IOWA ALCOHOL AND BEVERAGES DIVISION In the Matter of ) Docket No. A-2009-00033 Iowa City Fieldhouse Co. Inc. ) d/b/a The Field House, ) Liquor License ) No. LC-34755 Appellant . ) ) In the Matter of ) Docket No. A-2009-00034 Etre, L.L.C. , ) d/b/a Etc . , ) Liquor License No. LC-32070 Appellant. ) +°SIJ DEPOSITION OF TROY ALLAN KELSAY, taken on Tuesday, October 6, 2009, commencing at 2 : 09 p.m. , at City Hall, 410 E. Washington Street, Iowa City, Iowa, before Jane A. Carson, Certified Shorthand Reporter of the State of Iowa, pursuant to the within stipulation. Jane A. Carson, CSR, RPR, CRR Carson Reporting, Inc . 118 - 3rd Avenue, Southeast Suite 311 Cedar Rapids, Iowa 52401 (319) 366-7450 VMOi 0 :1 lid EL. ;;v. —{-- S EXHIBIT Qui a I ,5 r IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. TROY KELSAY - October 6,2009 • 18 20 I look at Los Cocos review that I had,and you don't 1 Q. So you would visit a bar for purposes of the 0 2 have that,for the 11 months that they were reviewed, 2 PAULA ratio—I'm trying to define what a visit is 3 because they were only open for 11 months of their 3 for a PAULA ratio. 4 12-month period,they had,I believe,one PAULA 4 A. Sure. 5 written in,I want to say,90 some bar checks,but I 5 Q. You would visit the bar and investigate 6 would need to refer to the stats to snake sure that 6 nonalcohol related offenses,but--and that would 7 that Is accurate. 7 stili constitute a visit? 8 Q. Let me stop you right there. Let me hand 8 A. A bar check is oversimplification. A 9 you Deposition Exhibit Number 4. That's been 9 proactive check by the police department,by a patrol 10 identified previously as the PAULA--1'm sorry,the 10 officer,of a liquor license establishment. It's not II PAULA report for July of 2009. 11 in response to a particular call for service, 12 A. Okay. 12 although that can happen if their call for service is 13 Q. Look at Los Cocos,if you would,it's on the 13 that there's a group of underage drinkers,for 14 second page. 14 example,but it's a proactive response--that's kind 15 A. Okay. 15 of--how can it be proactive and a response. But 16 Q. How many visits or bar checks did your 16 it's proactive by the police department in that we're 17 office conduct there? 17 going to address some perceived issue or we're just 18 A. This is--Do you want for July or do you 18 going to fulfill our duties. 19 want year to date? 19 For instance,like any other type of 20 Q. Year to date. 20 enforcement,speed enforcement,it might go on on 21 A. Year to date,2009 through the end of July, 21 North Dubuque Street where you have a high volume of 22 they conducted 84 bar checks. 22 speeders,it might go on in areas where problems have 23 Q. And those were,as your testimony was,not 23 been identified as far as accidents,it might go on 24 for alcohol-related--primarily not for 24 in response to specific complaints,citizen , , 25 alcohol-related offenses? 25 complaints,calls for service. Traffic enforcement. J 19121 ; I A. No,I didn't say that. They were notI It doesn't necessarily have to be specific tospeed,-,-, ' .': 2 primarily to look for underage--for possession of 2 but that's often what the officers will write: _.j 3 alcohol under legal age,for underage consumption. I 3 Bar checks don't have to be specitWlo 4 believe that alcohol probably did play a factor in 4 PAULAs,but,again,the officers are there because 5 the need for the officers to be there,but the 5 they're walking the bars,they're addressing a 6 officers'presence there had very little--their 6 concern,either one that's been called in or a 7 repeated presence there had very little to do with a 7 history,that there's a history of a problem there or 8 history of possession of alcohol under legal age 8 an issue there, I don't know if I'm making myself as 9 citations. It had to do with other activity, 9 clear as I should. 10 criminal activity and activity that just wasn't safe, 10 Q. No,you made it clear. 11 a public safety interest that officers--the police 11 A. Okay. 12 department and particularly the late night patrol 12 Q. Let me ask you this question. Is it 13 officers felt a need to be on scene as opposed-- 13 possible for an officer to visit a bar without it 1 14 proactively as opposed to responding to calls for 14 being categorized or coded as a bar check? 15 service. 15 A. Yes. 16 Q. So to put a--I don't know,to put a charge 16 Q. And do you include those visits in your 17 or kind of define those activities,would assaults be 17 ratio for calculating PAULAs? 18 included in those activities? 18 A. No. Every time an officer walks through the 19 A. They might be. Violence--In the case of 19 bars--I'm sorry,the doors of a bar,it is not 20 Los Cocos,if that's what you're talking about-- 20 coded as a bar check and when I do the PAULA per 21 Q. Yeah,Los Cocos. 21 visit ratio,that is specific to PAULA charges 22 A. --certainly there were assaults,there were 22 associated with bar check activity. 23 fights,there were weapons offenses reported. 23 Q. Okay. But in Los Cocos,it says on the 24 Q. Disorderly conduct? 24 PAULA report that you visited 84 times,and I 25 A. Yes. 25 understood your previous testimony to be that those Jane A. Carson, CSR,RPR, CRR CARSON REPORTING,INC. - 319/366-7450 IN THE MATTER OF IOWA CITY FIELDMOUSE CO. INC. - TROY KELSAY -October 6,2009 22 ?A 1 were for non PAULA-related activities. 1 something happens,if the officer becomes involved in 0 2 A. No,I'm sorry. Then I wasn't clear. The 2 a fight and his mike starts to be keyed or he hits 3 visits were,again,a proactive--it wasn't a 3 his emergency button,dispatch may not know what's 4 response,because it's proactive,but the officers-- 4 going on,but they know his location. So it would be 5 if we aren't out there and have presence at 5 unlikely to say I'm out with a subject and then go 6 Los Cocos,if we don't do bar checks,then there's a 6 into The Field House and find a subject to go out 7 high likelihood that we're going to be summoned there 7 with. 8 for violence-related issues. So the officers are 8 Q. Now,before we went on the record you had 9 calling out Pin at Los Cocos for a bar check. It's 9 provided me the--a breakdown of the 143 PAULAs that 10 not that they're there for a fight,it's that they're 10 were written for The Field House between July of 2008 11 there for a history of fights. They're going in 11 and July of 2009,and one of those PAULAs you 12 there proactively so they don't have to go there 12 identified as the person being out with subject,the 13 later,not waiting for the fight. 13 officer being out with subject,and that's how it was 14 In the case of The Field House,I will tell 14 coded. 15 you that the reason for the number of bar checks has IS A. Correct. 16 less to do with violence-related activities and more 16 Q. It wasn't coded as a bar check. 17 to do with repeated PAULAs. 17 A. Correct. He was never inside The 18 Q. Okay. I guess what I'm trying--I guess 18 Field House,or at least the officer wasn't in that 19 I'll ask it this way. Do you have a written policy 19 particular case. 20 or does your office have an unwritten policy that 20 Q. Okay. So that particular PAULA,did it show 21 defines what a visit is for purposes of the PAULA 21 upon your--it did show up as part of the numerator 22 ratio? 22 as 133,correct? __ 23 A. No. It's--for purposes of the PAULA 23 A. Correct. It was associated with The 24 ratio,it has to be coded as among those finite 24 Field House. - 25 activities,it has to be coded as a bar check. 25 Q. But the denominator being the--because you L. 23 25 I That's the only thing that I'm pulling for when I do 1 use bar check,the denominator was 92,correct,92 ' 2 the PAULA report. I'm not coding how many times we 2 bar checks for The Field House? 3 were out there for lights. I'm not coding how many 3 A. I want to be accurate. I believe so,'Siit 4 times we were out there for investigation. I'm not 4 let me double check. V 5 coding for bow many times we were out there for any 5 Thank you. Yes,that is correct. 6 other activity code,it is only bar checks that I am 6 Q. So I guess my question is why didn't you 7 pulling. 7 include the PAULA that was issued--why didn't you 8 Q. And so it's possible for an officer to be in 8 include the incident where that PAULA was issued as 9 an establishment,issuing citations,and that not be 9 part of the denominator? 10 coded as a bar check? 10 A. I didn't know it at the time,sir. Again, I I A. Issuing citations for PAULA? 11 I'm running a certain arrest category,PAULA,that 12 Q. For anything. 12 are associated with a certain address,in this case 13 A. Is it possible? Yes. 13 The Field House,113 East College Street,I'm then 14 Q. Because there's more than one way to code an 14 also running a statistical query as far as incidents 15 officer being on a premises,correct? 15 or calls for service to a specific location and 16 A. Correct. 16 looking for a specific activity,bar checks,during 17 Q. One example it looks like is out with 17 the same period of time associated with that same 18 subject. Is that a code that your office used? 18 address. When I ran that from July 10th of 2008 to 19 A. They did. Most of the time out with subject 19 July 10th of 2009,I come up with 143 PAULAs 20 would be something that isn't happening inside,and 20 associated with that address and 92-- 21 the reason I say that,sir,is that if I am out at 21 Q. Yeah,92. 22 The Field House and I'm using Field House because 22 A. --92 bar checks associated with that 23 that's the topic of discussion,If I'm out at The 23 address,and when you break that out and did the 24 Field House,the officer should already be notifying 24 PAULA per visit,it came up with 1.55 PAULA per 25 dispatch that they're out at The Field House,so if 25 visit. I don't examine in each case each of those Jane A. Carson, CSR,RPR, CRR CARSON REPORTING, INC. - 319/366-7450 ' IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. • TROY KELSAY-October 6,2009 30 32 `.�.+' 1 Q. With respect to the visits--Because the 1 A. Correct. For 110 establishments. But,yes, "`���'"' 2 guidelines use PAULA per visit,correct? 2 it is possible. 3 A. Correct. 3 Q. Now,why don't you count visits where PAULAs 4 Q. What is a visit to you? 4 are not issued? For example,a public intoxication. 5 A. A bar check. 5 If an officer goes into a bar and it's coded as out 6 Q. Okay. And where in the guidelines does it 6 with subject or some non bar check code and it's 7 say that a visit is defined as a bar check? 7 written--an officer writes a citation for public 8 A. It does not. 8 intoxication,why is that not counted as a visit? 9 Q. So how did you come up with that? Did the 9 A. It may be counted as a visit. May I show 10 chief tell you that? 10 you on one of the forms that I gave you,I don't know 11 A. No. The PAULA rate,the PAULA per bar 11 If It exists here,and if it does--that material 12 check--the PAULA report,if--you presented that, 12 that I presented you. How about this? This one will 13 that's Exhibit Number--sorry,Exhibit Number 4. 13 work. Exhibit Number 7--no,3. The 3 is smudged. 14 Q. Yes. 14 I included in the material I provided to you a code 15 A. This has existed,oh,I'd have to go back 15 of dispositions. 16 and look,but probably back to 2002. I say that 16 Q. Yes. 17 because I was promoted in 2001 and tasked with much 17 A. I'm going to refer to the dispositions that 18 of the alcohol stuff shortly after that. For some 18 are listed here on this. 19 time the report just included visits and arrests. 19 Q. Okay. 20 At some point,and I don't recall from who, 20 A. These are--well,let's go down to the bar 21 whether It was a city official even or whether it was 21 checks portion of it. So I'm beginning with bar 22 a public request,but there was interest In what the 22 checks. Code of B. Okay. That is charged and 23 PAULA per visit was. That is a very artificial 23 released,the code of B,disposition code of B. 1-- 24 number. In and of itself,it has maybe limited 24 without looking,I would lay money that that is a 25 usefulness,but it certainly is a good way to trend. 25 PAULA. If you go down to where it has an X.that 31 33 a .. 1 It's a good way to calculate the numbers calculated 1 means handled,the X means handled. -' 2 for each of the currently 110 establishments. It's 2If you get down here to this one that Is. J 3 been calculated the same since it came into existence 3 5 and 6 from the bottom that are cleared with an A, :,T 4 In two thousand whatever,and I can go back and find 4 those are actual custodial arrests.,There is 5 that out. 5 something beyond a PAULA thatls going on in those 6 So that existed prior to these 6 particular cases. Whether it's a public intio)t1, 7 conversations,and this was the number that these 7 whether it's an interference,I don't know. That is 8 conversations about PAULA per visit related to and 8 still counted as a bar check even though there's some 9 this number is drawn from PAULAs per bar check, 9 sort of other custodial arrest going on. Might there 10 Q. Okay. So 1 want to ask you another 10 be a PAULA associated with that custodial arrest? I1 question. Does it put--check that. Isn't it I 1 That is possible,I'd have to go back and look. 12 possible for an officer to be in a bar and code it 12 But I can tell you that that intox arrest 13 other than a bar check and write a PAULA? 13 that's taking place inside The Field House is not 14 A. Is it possible? Yes. 14 being coded as out with subject,because,again, 15 Q. And based on your calculations,the fact 15 they're already putting them out at The Field House 16 that it wasn't coded as a bar check means it's going 16 for some other activities,whether that be a fight In 17 to get missed,the visit won't get counted,I'll put 17 progress or whether that be a PAULA. And some of 18 it that way. 18 those bar checks can result in custodial arrests for 19 A. That's correct. The PAULA will be counted, 19 other offenses. 20 the visit would not,and short of me being asked very 20 Q. Okay. I don't mean to--not sure how else 21 specifically to go through however many PAULAs there 21 to ask this other than just to say why don't you 22 were,which wasn't part of the discussion,we talked 22 include all the visits when calculating the PAULA 23 about that would be labor Intensive at these--when 23 ratio? 24 I was asked that. 24 A. Oh,I'm sorry. I could. That's not what I 25 Q. Hard to do,wouldn't it? 25 was asked to do. I was asked to continue to do these Jane A. Carson,CSR,RPR,CRR CARSON REPORTING,INC. - 319/366-7450 ' IN THE MATTER OF IOWA CITY FIELDHOUSE CO. INC. TROY KELSAY- October 6,2009 • 34 36 _ I numbers and apply the same standards to them. And 1 something council told you to do? (...) 2 these numbers that I'm pointing to are Exhibit 4 from 2 A. No,not specifically. Again,I was 3 the PAULA report and those were PAULA charges which 3 generating the bar check,what you referred to as the 4 were written in relation to bar checks. That was 4 PAULA report,Exhibit Number 4,before I was ever in 5 just the nature of this report,and that's what I was 5 the position of sergeant in planning and research,I 6 asked to apply it to. 6 was generating this. It had..it had to do with 7 Q. And who asked you to--check that. Who 7 keeping track of alcohol statistics from queries from 8 asked you to limit the visits to bar checks? 8 the public and queries from city government,without 9 A. I don't know that anybody did initially. 9 recalling specifically who. This number then became, 10 This was something that I generated. But when it 10 when it was talked about,commonly referred to as the 11 became applicable to renewal criteria and something 11 PAULA per visit number. 12 that council or other parties became interested in, 12 Q. Did the chief of police,whose job it is to 13 this was the format that I was using,and they were 13 actually make the final recommendation to council, 14 looking at a number,again,that I was generating, 14 did he direct you to use the word--to use bar 15 based on the number of visits,which were bar checks 15 checks synonymous with visits as the word visits is 16 and arrests which were PAULA. This doesn't say PAULA 16 used in the guidelines? 17 arrest,it says arrests. It doesn't say bar checks, 17 A. He directed me to use these statistics,and 18 it says visits. 18 by these statistics,the PAULA report,which refers 19 Q. Right. That's the problem. 19 to PAULA per visit,and it's PAULA per bar check,I 20 A. I will tell you that they are PAULA arrests 20 mean,that was the understanding--I don't know that 21 and bar check visits. 21 he ever said specifically,Troy,do this,but,again, 22 Q. Maybe you don't know the answer to this 22 this was the number that it was directed that I was 23 question,but looking back at Exhibit Number 2,the 23 expected to apply toward this particular criteria. 24 guidelines,specifically subsection(A),the third 24 Q. Okay. So it seems to me that that puts a 25 bullet point,if the council meant bar checks,why 25 pretty big importance on how street officers code 35 37) \:" 1 their interactions with bars. -- i ' ' 1 did they put the word visits? ' 2 A. I don't know. That's something that's 2 A. Absolutely. _ __, �tJ 3 probably directed to the council. I can calculate-- 3 Q. Bar checks become pretty valuable thing!Oa , 4 They're just statistics, I can calculate it any way 4 license applicant,they'd rather have it all V 5 that an entity desires it to be calculated. I'm 5 designated--coded as a bar check,would you agree, 6 telling you this is the way that I was--and I can't 6 because it increases the denominator? 7 say who directed me to do it,but this is the way 7 A. If an officer's going to be present in an 8 that I calculate the stat and this is the stat that I 8 establishment and they're going to call out that 9 was then asked to apply the PAULA per visits to. 9 they're present at the establishment,then,yes,if 10 Q. Now,you would agree with me that the number 10 they were all coded as bar checks,like you said, f 11 of visits per the ratio,it would be the denominator 11 that would increase the denominator. I'm not sure if 12 of the fraction,correct? 12 that's what you mean or-- 13 A. Correct. 13 Q. Yeah,that's exactly what I meant. Thank 14 Q. And if you increase the denominator,that 14 you. 15 decreases the ratio,correct? 15 A. Okay. 16 A. If I increase the denominator without 16 Q. Now I'm going to have you flip back and 17 increasing the numerator,yes,absolutely. 17 forth between Exhibit 3 and Exhibit 9. Exhibit 3 is 18 Q. Thank you for clarifying that. Now,I want 18 the incident report,Exhibit 9 is the arrest file,to 19 you to take a look at Exhibit Number 3,if you would. 19 try to do some cross referencing here. 20 A. Okay. Set my stuff aside so I don't get it 20 A. Okay. 21 mixed in. 21 Q. Now,on January 11th of 2009,there was a 22 Q. Okay. In--forget about Number 3 for a 22 bar check at The Field House;is that correct? 23 second. I'm going back to Number 2. In your 23 A. These aren't sorted by order. I don't 24 decision to apply the bar checks as the denominator 24 believe they are. 25 rather than the number of visits to the bar,is that 25 Q. The dates are. Jane A. Carson, CSR,RPR,CRR CARSON REPORTING, INC. - 319/366-7450 • City of Iowa City MEMORANDUM Date: July 24, 1993 To: Linda Newman Gentry, City Attorney From: Anne G. Burnside, First Assistant City Attorney ]6 • _ Re: Legal Opinion Request: Grounds for Denial of Alcoholic Beverage I Permit/License; Renewal Circumstances r, in 3 !" 0 ISSUES: (1) Under what circumstances and upon what grounds may the city a5uncil deny an application to renew a license or permit issued for the sale of alcoholic beverages? (2) Upon what grounds may the city council deny the Fieldhouse's application to renew their Chapter 123 license/permit? CONCLUSION: (1) The city council should use the same criteria to review an application for renewal of a permit/license that it uses to consider an initial application. The Council's action is subject to review for being arbitrary, capricious or without reasonable cause. An applicant must meet the statutory definition of "good moral character". (2) The Fieldhouse or its owner was convicted in District Court for violation of §123.49(2)(b), selling or dispensing after hours, and the license/permit is presently subject to suspension/revocation proceedings before the alcoholic beverage control division of the State. The city council may deny the application for renewal for the underlying Chapter 123 offense. However, if the City Council has not treated other establishments similarly, or if the administrative hearing process ultimately exonerates the Fieldhouse and imposes no suspension or revocation, the action of the City Council to deny renewal may be open to a finding that the decision was arbitrary, capricious or without reasonable cause. DISCUSSION: I examined the statutes, cases and Attorney General opinions relevant to the questions. There are very few cases which shed light on the construction or application of Chapter 123. All authorities which bear upon the question are summarized below. All statutory citations are to the Code of Iowa (1993). §123.1 Public policy declared. The chapter shall be deemed an exercise of the police power of the state, for the protection of the people of the state, and all provisions shall be liberally construed to accomplish that purpose. Traffic in alcoholic liquors shall be so regulated as to prohibit all traffic except as provided in Chapter 123. §123.3(26) Definitions. "Person of good moral character" A person of such financial standing and good reputation as will satisfy the license/permit granting officer that the person will comply with all laws, ordinances and regulations applicable to Chapter 123; a person who is not subject to the license/permit revocation penalties of §123.40; a person who has not been convicted of a felony within the past five years, or who has had their rights of citizenship restored by the governor after such conviction. §123.31 Application contents. The applicant must complete and submit a verified application for the original issuance of a license/permit on a form provided by the EXHIBIT d � � I I administrator of the alcoholic beverage control division of the Department of Commerce. The applicant must state whether the owners of the business have ever been convicted of any offense, including violations of Chapter 123. §123.32 Action by local authorities and division on applications for licenses/permits. The application described at §123.31 shall be filed with the city council for premises within the corporate limits of a city. The city council ("local authorities") shall approve or disapprove issuance of the license/permit and shall endorse its decision on the application, and forward the application to the division. If the city council denies the initial application for a license/permit, the finding shall not be held to be arbitrary, capricious or without reasonable cause. If the city council disapproves an application, the administrator shall disapprove the application, with notice to the applicant. If the city council approves the application, the administrator shall conduct an investigation, as the administrator deems necessary. Any applicant for a license/permit may appeal the administrator's disapproval of an application. The appeal is to the division hearing board. If the hearing board determines the city council acted arbitrarily, capriciously or without reasonable cause in disapproving the application, or that the administrator's disapproval should be reversed, the board shall order issuance of the license/permit. This is the same right of appeal available to a licensee/permittee whose license/permit has been suspended or revoked. Judicial review of the board's decision is available according to Chapter 17A. The city council may appeal a finding by the board that the city acted arbitrarily, capriciously or without reasonable cause. §123.35 Simplified renewal procedure. When a licensee/permittee seeks renewal, a "short form" may be used provided the qualifications for issuance of a license/permit have not changed since the original document was issued. The applicant for renewal must verify under oath that the information contained in the original application remains current and no reason exists for the division to refuse to renew the license or permit as originally issued. The application for renewal is filed in the same manner as an initial application is filed. §123.39 Suspension or revocation of license or permit. Licenses and permits may be suspended or revoked upon any of these grounds: Misrepresentation of any material fact in the application; violation of any of the provisions of this chapter; any event which would have resulted in disqualification from receiving the license or permit originally issued. (This list must be considered modified by the limits on suspension/revocation created by operation of §§123.39(4) and 123.47A, as fully described in Kim's memorandum to you.) §185-4.26(123), Iowa Administrative Code. Timely filing of renewal applications. An application for renewal which is filed with the city at least fifteen (15) days before the license/permit expires is timely filed, and the license/permit will not expire until the renewal application is finally determined. §17A.18(3) Licenses. If the renewal application is denied, the license/permit does not expire until the last day for seeking judicial review of the denial, or such later date as the reviewing agency or court may set. Based upon these code sections, I conclude the city council should process initial applications and renewal applications in the same manner and by the same standards. The city council is acting in the police power of their office, and the standard for review is whether their actions are arbitrary, capricious or without reasonable cause. In the case of a denial of an initial license/permit application, there is a statutory presumption that the denial did not violate this standard. There is no such presumption for denial of a renewal. The city council should deny the initial or renewal application of any person who does not meet the definition, above, of "good moral character". The city council should carefully consider whether to issue an initial or renewal license/permit to a person who does not clearly satisfy the requirements of §§123.31 and 123.35. If the city council can articulate a rational, nondiscriminatory reason to deny the application, the council may do so. Again, the legislative exclusions §123.39(4) and §123.47A apply (no suspension or revocation for sale to 19-20 year olds). It is not reasonable to deny renewal on grounds which will not support suspension. I found three cases which deal with the grounds and procedures for denying a license/permit. One, Smith v. Iowa Liquor Control Commission, 169 N.W.2d 803 (Iowa 1969), is an "old law" case decided prior to the substantial code revisions of Chapter 123 in 1972. The court does make clear that a conviction, rather than a charge, of violating Chapter 123 or a comparable local ordinance is required to trigger the revocation and suspension provisions. I think it must also be clear that a conviction would be required to deny an initial or renewal application. Randall's International, Inc. v. Hearing Board of Iowa, 429 N.W.2d 163 (Iowa 1988) considered whether the vicarious liability aspect of Chapter 123, by which the conviction of a licensee/permittee's employee is imputed to the licensee/permittee, and supports the suspension or revocation of privileges. The Court upheld the provisions of §123.39 (suspension and revocation; penalties) and of §123.50(3) (vicarious liability for employees). In Dell Oil, Ltd., v. Beer and Liquor Control Dept., 406 N.W.2d 462 (la. App. 1987), the Court of Appeals affirmed a department suspension of a license where there was only one alleged violation of §123.49(2)(b), selling or dispensing after hours. While the court was divided in its decision, no justice argued that a suspension for only one violation was unreasonable. An Attorney General opinion from January 21, 1976 considered the same question you posed, and concluded that the city council can approve or disapprove the issuance of an initial application or an application for renewal of a license or permit. The opinion points out that the applicant must meet the definition of "good moral character', and the city cannot act arbitrarily or capriciously or without reasonable cause. There have been no,statutory changes or cases which would change the validity of this opinion, except the restrictions of §§123.39 and 123.47A. Regarding the Fieldhouse application for renewal, I understand that the business has been convicted of one or more violations of §123.49(2)(b). The city council could suspl7id a license/permit for this conviction, subject to administrative review. Dell Oil, at 463-464. The applicant for renewal must be of "good moral character", and one test is whether the person will comply with all laws, ordinances and regulations applicable to Chapter 123. !tit quite possible that a decision to deny renewal because of the §123.49(2)(b) conviction is lawful. Other factors should be considered, however. The existing license is presently subject to administrative suspension/revocation proceedings at the state level. If those proceedings terminate in a finding that no suspension or revocation is warranted, the city decision to deny renewal--an act tantamount to revocation--will certainly appear excessive and unreasonable. Further, if the city is not treating all establishments with a similar degree of harshness, the action to deny the application will certainly appear arbitrary. #8 Page 10 ITEM 8. RENEWAL OF A CLASS C LIQUOR LICENSE FOR ETRE LLC DBA ETC., 118 S. DUBUQUE STREET a) HEARING Bailey: This is a hearing, and the hearing is open (bangs gavel), and first we will hear from the, urn, Police Department, and then we will hear from the establishment. Hargadine: Good evening, Sam Hargadine with Iowa City Police Department. Sergeant Troy Kelsay, urn, is there....going to take one at a time? Is there a particular... Bailey: We're...we're discussing Etc. Item 7, or Item 8. Hargadine: Etc., the reason we're here is, uh, it's my understanding you received a briefing last night on the guidelines that I have and the things that we look at for renewals of liquor license. Uh,when we looked at the statistics for the Etc. bar license,they had been checked 50 times. It's a correction from 92. 50 times, and there had been 69 PAULA violations within their establishment. That sets a PAULA, a citation rate of 1.38 per visit. Based on that, I'm mandated to recommend a denial. They have other issues, as well. The things that we looked at were 14 different instances of under-19 being in the premise, uh, being on the premises. There's 18 public intoxication, uh, arrests, as well. Those go I think hand-in-hand with the PAULA rate in that there are, it's...it's clear that there are underage people in there, uh, drinking alcohol. Urn, if you have any specific questions of...of me or Sergeant, uh, Kelsay,we'd be happy to answer that. Kelsay: I'd just like to note that I did review, and you should have all the documents, uh,that I (mumbled)again, the summary page is correct (mumbled) Bailey: Sergeant Kelsay, I think you need to move closer to the microphone. Kelsay: I'm sorry,thank you. Uh, on the...the very first line of the, uh, summary report,that's the one that's the master document, uh, the PAULA, the number of PAULA is correct. The PAULA per visit number is correct, uh, but I failed to change the 92. That actually goes with the other one. �T 1 That should be, uh, as indicated 50 bar checks. 4 fU .w.. 4J r. •(— r, 1 Bailey: Okay, any questions for the Chief or Sergeant Kelsay? Wilburn: Urn, Chief, uh, could you comment on...um, the level of cooperation surrounding, um, the compliance checks and/or any other factors e3 concerning the, urn,the fight: that, uh, have happened on the premises at, This represents only a reasonably accurate transcription of the special formal Iowa City City Council meeting of July 28,2009. EXHIBIT I � #8 Page 28 visit. From February 4 to July 16,the end of the review period,25 PAULA from 23 bar checks, for a 1.086 PAULA per visit. Uh, both Mr. Ballard and Mr. Etre are absolutely correct. There has been a reduction, but that 1.0826 is over the bright line that Council has given Police Department to review. There was also comments towards...alluding to or flat out stating that, uh, it was difficult, uh, impossible, I can't guarantee that we could...that we could operate as a 18, you know, allowing underage persons into the bar. I have, I maintain a PAULA report,you all receive copies of it. The latest numbers through June, I don't believe, have yet been distributed to Council. Understand when I do liquor license reviews I look at a rolling 12-month period and this June data is only for the first six months of this year, but still it's a...indicator, if you will. When I look at this, of 110 places with liquor license, and again, appreciate that many of those are restaurants not bars, but of 110 places with liquor license for on-premise consumption, seven bars would fail to meet your criteria. They have 18 or more bar checks and they have a PAULA rate of greater than 1. One of those bars, uh,the 808 Restaurant and Nightclub, they actually...their review was just after July 1st. Their number on this is 1.043. When I looked back at that rolling 12-month period, they happen to come in just below the 1.0 rate. So there are six bars...that are at jeopardy,that need to do something to fix their numbers. Etc.'s is one of those six. The other bar that we'll talk about tonight is another one of those, but you have, uh,you have bar...you have PAULA rates indicated on this report as high as...as 1.95, uh, you know, that's...there's a very select few bars that struggle with this. Some bars do a very good job, uh, I...I agree with the sentiment expressed that it'd be possible to find an underage drinker just about anywhere at any bar in Iowa City, but not with the frequency and with the ease that...that at least seven of these bars indicate. The final thing that I wanted to point out...uh, maybe I have it here and maybe I don't. Well, that's good enough. I'll...I'll entertain... Bailey: Okay, any questions? Correia: The TIPS training, that is for any bar employee who serves alcohol. Soy for bartenders, as well as wait staff, anybody who... . Kelsay: Correct. Anybody can attend, but typically those are the persons that it would be useful for. Uh, Mr. Etre, Mr. Ballard are absolutely right. The TIPS certificate is good for three years before it expires, and again, the review period that I look at is for 12 months. That's especially going to become apparent in some of the other bars(both talking) Correia: I guess I just have a...um, a question for Mr. Etre that relates to that. So, uh, at Etc., are bartenders the only staff that deliver or hand drinks to patrons? This represents only a reasonably accurate transcription of the special formal Iowa City City Council meeting of July 28,2009. December 2003 Monthly Totals Year-to-Date Totals PAULA per Visit Business Name(occupancy) visits charges visits charges (year-to-date) Airliner[265] 56 56 1.000 American Legion [140] 1 0.000 Aoeshe Restaurant[156] Atlas World Grill [165] 25 12 0.480 Baldy's Wraps[47] B.P.O. Elks#590 Bob's Your Uncle[204*] 2 Bo-James[111] 3 81 41 0.506 Brothers Bar& Grill [456] 6 2 146 60 0.411 Brown Bottle[289] 4 0.000 Buffalo Wild Wings Grill & Bar[179] 11 1 0.091 Cage[257] 7 1 0.143 Carlos O'Kelly's [299] 1 0.000 China Moon [118] College St Billiard Club[250] 1 76 5 0.066 Colonial Bowling Lanes [502] 1 10 0.000 Cottage Bakery & Café[159] Dave's Fox Head Tavern[87] 5 0.000 Deadwood Tavern[218] 23 0.000 Devotay[45] 1 Diamond Dave's(Old Capitol) [203] 10 3 0.300 Diamond Dave's (Sycamore) [104] 2 4 Dublin Underground[57] 12 0.000 Duds'N Suds[132] Eagle's Lodge [315] 1 1 El Ranchero[161] i Et Cetera [178] 5 6 137 174 1.2701 Fieldhouse [420] 6 6 68 360.529 , First Avenue Club[500] 3 0.000 Fitzpatrick's/Brewery [394*] 26 78 3.00.0_ Gabe's[339] 1 George's Buffet[75] 2 10 0.000- Givanni's[187] 1 0.000 Godfather's Pizza[170] Green Room [144] 1 15 1 0.067 Gringos Mexican Bar&Grill [180] 3 0.000 Grizzly's South Side [265] 1 8 0.000 Ground Round Restaurant[192] Hanrahan's Pub[72] 1 5 0.000 Happy Joe's Pizza [84] Highlander Inn[971] Hilltop Lounge[90] 10 0.000 India Café[100] EXHIBIT 114 i , December 2003 Monthly Totals Year-to-Date Totals PAULA per Visit Business Name[occupancy] visits charges visits charges (year-to-date) Joe's Place [161] 2 37 1 0.027 Kitty Hawk[225] 1 5 0.000 La Casa [300] Lark Restaurant[289] Linn Street Café [80] 1 Malone's Irish Pub[176] 4 4 118 248 2.102 Martinis [166] 3 86 18 0.209 Masala[44] Mclnnerny's [154] 2 21 0.000 Memories[120] 3 0.000 Micky's [70] 19 1 0.053 Mike's Tap[56] 2 0.000 Mill Restaurant[325] 4 0.000 Minerva's Bar&Grill [220] 3 0.000 Mondo's (Downtown)[226] 8 1 0.125 Moose Lodge [476] Morgan's Bar&Grill (Sheraton)[214] 13 0.000 Motley Cow Café[25] 1 Mumm's Saloon &Eatery [2301 15 0.000 Okoboji Grill[222] 1 0.000 One-Eyed Jake's[355] 81 155 1.914 One Twenty Six[105] 5 0.000 Pagliai's Pizza [113] ,.a,ace Piz,: , & Bar . 16 20 1.250 Panchero's (Clinton St)[62] 1 0.000 Panchero's (Riverside Dr)[95] Parthenon [320] Pizza Hut[68] 1 0.000 Press Box [300] 20 0.000 Q Bar[458] 2 1 47 40 0.851 Quinton's Bar& Deli [149] 1 23 0.000 R.T.'s [270] 2 17 0.000 Sam's Pizza [94] Sanctuary Restaurant&Pub[132] Seoul Garden [73] Shakespeare's[120] 2 9 0.000 Sports Column[249] 6 15 140 319 2.279: Studio 13 [230] 2 28 5 0.179 Summit Restaurant& Bar[484] 5 8 110 126 1.145 Sushi Po Po[84] 2 . Thai Flavors [60] t li Thai Spice[91] — ]� Union Bar[725] 140 188 <;; 1.343 > .mow S • December 2003 Monthly Totals Year-to-Date Totals PAULA per Visit Business Name(occupancy] visits charges visits charges (year-to-date) VFW Post#3949[197] Vine Tavern [170] 8 4 0.500 Vito's[235] 4 7 167 203 1.216 Wig & Pen Pizza Pub[203*] 1 5 Yacht Club [119] 8 0.000 Yen Ching Restaurant[247] Zio Johno's Spaghetti House[94] Z'Mariks Noodle Café [47] Totals: I 67 I 49 I 1928 1797 I 0.932 Other PAULA at non-business locations: 9 305 PAULA Totals: 58 2102 current month year-to-date [includes outdoor area] 7.5 :) Lo m 0": ! r Iowa City Police Department P.A.U.L.A. Report -- December 2004 (PAULA=Possession of Alcohol Under the Legal Age) Monthly Totals Year-to-Date Totals PAULA per Visit Business Name[occupancy) visits arrests visits arrests (year-to-date) 808[176](opened June) 3 0 50 61 1.220 Airliner[265] 20 16 0.800 American Legion[140] 6 0 0.000 Aoeshe Restaurant[156] Atlas World Grill[165] 20 2 0.100 Baldy's Wraps[47] B.P.O.Elks#590[205] Bo-James[111] 2 0 68 8 0.118 Bob's Your Uncle[204*] Boneheads[226](opened August) 4 1 0.250 Brown Bottle[289] Buffalo Wild Wings Grill&Bar[179] 12 1 0.083 Café Z[56](licensed October) Carlos O'Kelly's[299] China Moon[118] College St Billiard Club[250] 3 j 0 78 2 0.026 Colonial Bowling Lanes[502] 7 0 0.000 Cottage Bakery&Café[156] Dave's Fox Head Tavern[87] Deadwood Tavern[218] 1 0 25 0 0.000 Devotay[45] Diamond Dave's(Old Capitol)[203] 6 0 0.000 Diamond Dave's(Sycamore)[104] 1 0 0.000 Dublin Underground[57] 21 3 0.143 Et Cetera[178] 62 54 0.871 El Ranchero[161] First Avenue Club[500] 4 0 -0.000 Fitzpatrick's/Brewery[394*](closed May) 3 0 0.000 Fitzpatrick's[116](issued November) <_i Fraternal Order of Eagle's[315] 1 0 0.000 ,�1, Gabe's[339] 11 1 0.091 `� x lJ General Japanese Restaurant[87] ' :'I George's Buffet[75] 1 0 .0.000 _ `^,+ Givanni's[187] - Godfather's Pizza[170] Green Room[144] 7 0 4.000 0 Gringos Mexican Bar&Grill[180] Grizzly's South Side[265] 1 0 20 0 0.000 Ground Round Restaurant[192] Hanrahan's Pub[72] 2 0 0.000 Happy Joe's Pizza[84] Hilltop Lounge[90] 3 0 0.000 India Café[100] Iowa City Yacht Club[119] 1 0 12 1 0.083 It's Brothers Bar&Grill[456] 88 35 0.398 Joe's Place[161] 2 0 29 1 0.034 Kandy Land[120](issued November) Kitty Hawk[225] 4 0 0.000 EXHIBIT , R Lark Restaurant[289] La Casa[300] Linn Street Café[80] Los Portales[161] 1 0 0.000 Loyal Order of Moose[476] Malone's Irish Pub[176](closed May) 30 52 1.733 Masala[46] Martinis[166] 1 0 53 4 0.075 Mclnnerney's[154] 14 0 - 0.000 Memories[120](closed November) 8 0 0.000 Mia Milano(opened August) Micky's[70] 1 0 16 3 - 0.188 Mike's Tap[56] 1 0 0.000 Mill Restaurant[325] 3 0 0.000 Minerva's Bar&Grill[220] 2 0 0.000 Mondo's(Downtown)[226](closed July) Motley Cow Café[25] Mumm's Saloon&Eatery[230*] 1 0 0.000 Yen Ching Restaurant[247] Okoboji Grill[222] Old Capitol Brew[394*](opened October) One-Eyed Jake's[355] 1 2 45 81 1.800 r One Twenty Six/Loft[105] 4 0 8:000 3 Pagliai's Pizza[113] Panchero's(Clinton St)[62] - . 71 Panchero's(Riverside Dr)[95] ,v - Parthenon[320] • t'1 Pizza Hut[68] : +1 Piano Lounge[65] 3 0 31 0 0.000 0 Quality Inn/Highlander[971] 1 0 0:Q00 Que Bar[458) 2 0 51 31 0.608 Quinton's Bar&Deli[149] 2 0 27 0 0:000 -3 Rick's Grille&Spirits[120](opened June) R.T.'s[270] 4 2 0.500 Sam's Pizza[94] Sanctuary Restaurant&Pub[132] Seoul Garden[73] Shakespeare's[120] 6 0 0.000 Sheraton/Morgan's Bar&Grill [214] 10 1 0.100 Siren[120](opened June) 1 0 8 0 0.000 Skybox[47](opened October) 3 9 3.000 Sports Column[249] 2 0 108 187 1.731 Studio 13[230] 24 1 0.042 Summit Restaurant&Bar[484] 2 0 86 178 2.070 Sushi Po Po[84] Takanami[148] Thai Flavors[60] Thai Spice[91] - Third Base/Fieldhouse[420] 2 3 114 88 0.772 Union Bar[725](closed May to July) 2 2 93 165 1.774 VFW Post#3949[197] - Vine Tavern[170] 2 2 1.000 Vito's[235] 2 0 74 76 1.027 Wig&Pen Pizza Pub[203*] Zio Johno's Spaghetti House[94) Z'Mariks Noodle Café[47] Totals: I 34 I 7 I 1385 1 1066 0.770 Other PAULA at non-business locations: 14 262 PAULA Totals: 21 1328 current month year-to-date rincludes outdoor area) :7-13 C.) —T1 pm. • 1 - 111 -0 co- 4 . t Iowa City Police Department P.A.U.L.A. Report -- December 2005 (Possession of Alcohol Under the Legal Age) Monthly Totals Year-to-Date Totals PAULA per Visit Business Name[occupancy] visits arrests visits arrests Airliner[265](open Sep) (year-to-date) 2 0 11 0 0.000 American Legion[140] 1 0 Aoeshe Restaurant[156] 0.000 Atlas World Grill[165] 10 0 Baldy's Wraps[47] 0.000 B.P.O.Elks#590[205] Bob's Your Uncle(Dodge)[#](open Apr) Bob's Your Uncle(M.Trek)[2041 1 0 Bo-James[111] 0.000 4 0 31 7 0.226 Boneheads[226] 1 0 Brown Bottle[289] 0.000 Buffalo Wild Wings Grill&Bar[179] Café Z[56] Carlos O'Kelly's[299] China Moon[118] Club Car[56] 1 0 8 1 W College St Billiard Club[250] 7 0 51 4 0.0780. 78 m--" Colonial Lanes[502] --p r 3 0 Q 0oo Cottage Bakery&Café[156] - Dave's Fox Head Tavern[87] 8 0 0.000. — •• Dawit's Restaurant[#](open Oct) - Deadwood Tavern[218] 1 0 16 CO Devotay[45] 0 0.000 Diamond Dave's(Old Capitol)[203] 2 _ 0 0.000 Donnelly's[#](open Nov) 1 0 2 0 0.000 Diamond Dave's(Sycamore)[104] Dublin Underground[57] 2 0 14 0 0.000 808 Restaurant&Nightclub[176] 1 2 74 115 El Ranchero[161] 1.554 ETC[178] 2 0 52 65 1.250 First Avenue Club[500] 4 1 Fitzpatrick's[116] 0.250 12 1 0.083 Fraternal Order of Eagle's[315] Gabe's[339] 1 0 7 3 General Restaurant[87](closed Mar) 0.429 George's Buffet[75] 12 0 Givanni's[187] 0.000 Godfather's Pizza[170] Green Room[144] 6 3 0.500 Grizzly's South Side[265] 38 5 0.132 Ground Round Restaurant[192] Gus'Roadhouse&BBQ[#](closed Mar) Hanrahan's Pub[72] 12 0 0.000 Happy Joe's Pizza[84] Hilltop Lounge[90] 9 0 0.000 India Café[100] Iowa City Yacht Club[119] 1 0 11 1 It's Brothers Bar&Grill[456] 5 0.0911 0 74 14 0.19 89 Jimmy Jack's Rib Shack[#](open Jul) Joe's Place[161] 22 2 0.091 Kandy Land[120] 7 0 0.000 EXHIBIT .I / V # 401.0__ t 1 Kitty Hawk[225] 9 1 0.111 Lark Restaurant[289] La Casa[300] Linn Street Café[80] Los Portales[161] Loyal Order of Moose[476] Masala[46] Martini's[166] 3 0 33 1 0.030 Mia Milano[49] Mclnnerney's[154] 2 0 15 0 0.000 Micky's[70] 6 0 0.000 Mill Restaurant[325] 3 0 0.000 Motley Cow Café[25] Mumm's Saloon[96*] 3 0 0.000 New Yen Ching Restaurant[247] Okoboji Grill[222] Old Capitol Brew Works[394*] 14 1 0.071 One-Eyed Jake's[355] 3 5 60 153 2.550 One-Twenty-Six/Loft[105] 2 0 0.000 Oyama Restaurant[87](open Apr) Pagliai's Pizza[113] Panchero's(Clinton St)[62] 1 1 1.000 Panchero's(Riverside Dr)[95] Piano Lounge[65] 2 0 10 0 0.000 Pit Smokehouse[#](open Nov) Pizza Hut[68] Quality Inn/Highlander[971] Que Bar[458] 6 1 3 34 21 0.618 Quinton's Bar&Deli[149] 2 0 13 0 0.000 Rack BBQ Rick's Grille&Spirits[120] 4 0 0.000 Riverside Theatre R.T.'s[270] _ 18 3 0.167 Sam's Pizza[94] Sanctuary Restaurant&Pub[132] 1 0 0.000 Seoul Garden[73] Shakespeare's[120] 11 0 0.000 Sheraton/Morgan's Bar&Grill[214] 1 0 0.000 Siren[120] 5 0 0.000 Skybox[47] 18 22 1.222 Speakeasy 9 0 50 1 0.020 Sports Column[249] 9 7 118 309 2.619 Studio 13[230] 1 0 13 0 0.000 Summit[484] 5 7 100 179 1.790 , : , l Sushi Po Po[84] Takanami[148] f Thai Flavors[60] . 1 1 Thai Spice[91] Third Base/Fieldhouse[420] 14 21 134 228 1.701 __ Union Bar[725] 6 5 118 215 1'.82 •• VFW Post#3949[197] 1 0 16 0 0:000 Venuto's World Grill[49] Vine Tavern[170] 15 8 0.533 Vito's[235] 11 11 114 141 1.237 Wig&Pen Pizza Pub[203*] 2 0 10 0 0.000 Zio Johno's Spaghetti House[94] Z'Mariks Noodle Café[47] Totals: I 104 I 61 I 1448 I 1506 1.040 Other PAULA at non-business locations: 4 193 PAULA Totals: 65 1699 current month year-to-date [*includes outdoor area] c 4 Iowa City Police Department P.A.U.L.A. Report -- December2006 (Possession of Alcohol Under the Legal Age) Monthly Totals Year-to-Date Totals PAULA per Visit Business Name[occupancy] visits arrests visits arrests (year-to-date) Airliner[265] 15 5 0.333 American Legion[140] 2 0 0.000 Aoeshe Restaurant[156] Atlas World Grill[165] 13 0 0.000 Baldy's Wraps[47] B.P.O.Elks#590[205] Bob's Your Uncle(Dodge)[#] Bob's Your Uncle(M.Trek)[2041 Bo-James[111] 1 0 35 1 0.029 Brown Bottle[289] Buffalo Wild Wings Grill&Bar[179] 3 1 0.333 Café Z[56] Carlos O'Kelly's[299] Club Car[56] 4 0 0.000 College St Billiard Club[250] 4 0 40 2 0.050 Colonial Lanes[502] 1 0 14 1 0.071 Cottage Bakery&Café[156] Dave's Fox Head Tavern[87] 2 0 0.000 David's Place[#] 5 0 0.000 Deadwood Tavern[218] 1 0 8 0 0.000 Devotay[45] Diamond Dave's(Old Capitol)[203] 1 0 0.000 Diamond Dave's(Sycamore)[104] Donnelly's[#](owner change Aug) 7 0 0.000 Dublin Underground[57] 8 0 0.000 808 Restaurant&Nightclub[176] 3 3 59 49 0.831 El Ranchero[161] . Englert Theatre[#] _ 0 ETC[178] 73 74 1.014 Fieldhouse[420](opened Aug) 4 4 32 28 0.875 First Avenue Club[500] 1 0 0.000 Fitzpatrick's[116] 12 0 0.000 ' Formosa Asian Cuisine[#J(opened Aug) 7 Fraternal Order of Eagle's[315] - --- Fuzion[120] 1 0 0.000 Gabe's[339](closed May) 4 0 0:000 -.7 George's Buffet[75] 2 0 0.000 Givanni's[187] C . Godfather's Pizza[170] Green Room[144](closed May) 2 0 0.000 Grizzly's South Side[265] 10 0 0.000 Ground Round Restaurant[192] Hanrahan's Pub[72](closed Jul) 5 0 0.000 Happy Joe's Pizza[84] Hilltop Lounge[90] 3 0 0.000 IC Ugly's[72](opened Jul) 1 0 0.000 India Café[100] Iowa City Yacht Club[119] 5 0 0.000 It's Brothers Bar&Grill[456] 7 0 88 36 0.409 Jimmy Jack's Rib Shack[#] Joe's Place[161] 1 0 21 0 0.000 Joseph's Steak House[#] Kandy Land[120] 7 0 0.000 Lark Restaurant[289](closed Mar) EXHIBIT 9 ` ! ' _ -4 I La Casa[300] Linn Street Café[80] Los Portales[161] Loyal Order of Moose[476] • Masala[46] Martini's[166) 1 0 23 0 0.000 Mclnnerney's[154) 9 0 0.000 Micky's[70] 4 0 0.000 Mill Restaurant[325] Motley Cow Café[25] New Yen Ching Restaurant[247] Okoboji Grill[222] Old Capitol Brew Works[394*] 11 0 0.000 One-Eyed Jake's[355] 4 1 76 136 1.789 One-Twenty-Six/Loft[105] Oyama Restaurant[87] Pagliai's Pizza[113] Panchero's(Clinton St)[62] Panchero's(Riverside Dr)[95] Piano Lounge[65] 6 0 0.000 Picador[339](opened May) 2 0 0.000 Pit Smokehouse[#] Pizza Hut[68] Quality Inn/Highlander[971) 1 0 0.000 Que Bar[458] 3 0 34 5 0.147 Quinton's Bar&Deli[149] 12 0 0.000 Rack BBQ[#] Rick's Grille&Spirits[120] 3 0 0.000 Riverside Theatre[#] Sam's Pizza[94] 3 0 0.000 Sanctuary Restaurant&Pub[132] 1 0 0.000 Shakespeare's[120] 9 0 0.000 Sheraton/Morgan's Bar&Grill[214] 1 0 0.000 Skybox[47](opened Aug) 6 0 0.000 Speakeasy[#] 2 0 37 0 0.000 Sports Column[249) 3 1 102 181 1.775 Studio 13[230] 1 0 10 0 0.000 Summit[484] 6 0 115 222 1.930 Sushi Po Po[84](surrendered Mar) Tait's Natural Foods[#](opened Mar) Takanami[148] Thai Flavors[60) Thai Spice[91] Third Base/Fieldhouse[420](closed Aug) 93 130 1.398 Union Bar[725] 6 5 94 136 1.447 VFW Post#3949[197] 9 0 0.000 Venuto's World Grill[49](closed Oct) 2 0 0.000 Verde[144?)(opened May) 4 0 0.000 Vine Tavem[170] 1 0 21 0 0.000 Vito's[235] 5 0 94 59 0.628 Wig&Pen Pizza Pub(2031 1 0 0.000 Zio Johno's Spaghetti House[94] Z'Mariks Noodle Café[47] Totals: 1 5414 I 1266 1 1066 I 0.842 Other PAULA at non-business locations: 5 220 PAULA Totals: 19 1286 current month year-to-date (5 11 ('includes outdoor area] —•�: W j o 0 , ..,AlIFF Iowa City Police Department P.A.U.L.A. Report - December 2007 (Possession of Alcohol Under Legal Age) Monthly Totals Year-to-Date Totals PAULA per Visit Business Name[occupancy] visits arrests visits arrests (year-to-date) Airliner[265] 34 5 0.147 American Legion[140] 1 0 0.000 Aoeshe Restaurant[156] Atlas World Grill[165] 12 0 0.000 Baldy's Wraps[47] Blackstone(licensed In Aug) 1 0 2 0 0.000 B.P.O.Elks#590[205] Bob's Your Uncle(Dodge)[#] Bob's Your Uncle(M.Trek)[204*] Bo-James[111] 19 0 0.000 [It's]Brothers Bar&Grill[456] 7 7 104 76 0.731 Brown Bottle[289] Buffalo Wild Wings Grill&Bar[179] 2 0 0.000 Café Z[56] Carlos O'Kelly's[299] Club Car[56] 2 0 0:000 College St Billiard Club[250] 3 0 27 2 0.074 Colonial Lanes[502] 10 0 0.000 -- Cottage Bakery&Café[156] ' i Dave's Fox Head Tavern[87] 1 0 0.000 David's Place[#] 2 0 0:000 W r DC's(licensed in Oct) 3 0 3 0 0.000- `T1 Deadwood Tavern[218] 6 0 0.00Q' a Devotay[45] 0X Diamond Dave's(Old Capitol)[203] . 'itDiamond Dave's(Sycamore)[104] r Donnelly's[#](MAR:new owner) 1 0 5 1 0.200 q Dublin Underground[57] 3 0 0.000 808 Restaurant&Nightclub[176] 1 0 50 44 0.880 El Ranchero[161] Englert Theatre[#] ETC[178] 49 40 0.816 Farra's 1 0 22 1 0.045 [The]Fieldhouse[420] 11 15 130 144 1.108 First Avenue Club[500] 1 0 0.000 Fitzpatrick's[116] 2 0 0.000 Formosa Asian Cuisine[#] 5 2 0.400 Fraternal Order of Eagle's[315] 1 0 0.000 George's Buffet[75] Givanni's[187] Godfather's Pizza[170] Graze[49](MAR:new] Grizzly's South Side[265] 3 0 0.000 Ground Round Restaurant[192] Hilltop Lounge[90] 6 0 0.000 IC Ugly's[72] 1 0 0.000 India Café[100] Iowa City Yacht Club[119] 1 0 11 0 0.000 Jimmy Jack's Rib Shack[#] Joe's Place[161] 1 1 17 1 0.059 Joseph's Steak House[#] EXHIBIT 1 vg Kandy Land[120] 3 0 0.000 La Casa[300] Linn Street Café[80] Los Portales[161] Loyal Order of Moose[476] Martini's[166] 42 6 0.143 Masala[46] Mclnnerney's[154] 2 0 0.000 Micky's[70] 1 0 3 0 0.000 Mill Restaurant[325] 1 0 0.000 Motley Cow Café[25] Okoboji Grill[222] Old Capitol Brew Works[3941 3 2 0.667 One-Eyed Jake's[355] 2 4 67 71 1.060 One-Twenty-Six/Loft[105] Oyama Restaurant[87] Pagliai's Pizza[113] Panchero's(Clinton St)[62] 1 1 1.000 Panchero's(Riverside Dr)[95] Piano Lounge[65] 8 0 0.000 Picador[339] 1 0 7 1 0.143 Pit Smokehouse[#] Pizza Hut[68] Quality Inn/Highlander[971] Que Bar[458] 19 2 0.105 Quinton's Bar&Deli[149] 10 0 0.000 Rick's Grille&Spirits[120] Riverside Theatre[#] Saloon[#](MAY:new) 1 0 3 0 0.000 Sam's Pizza[94] 3 1 0.333 Sanctuary Restaurant&Pub[132] 1 0 0.000 Shakespeare's[120] 11 0 0.000 SheratonNetro/Morgan's[2141 1 1 1.000 Skybox[47] 6 0 0.000 Speakeasy[#] 4 0 35 1 0.029 Sports Column[249] 3 14 98 142 1.449 Studio 13[230] 18 2 0.111 Summit[484] 3 1 75 105 1.400 Tait's Natural Foods[#] Takanami[148] Thai Flavors[60] Thai Spice[91] Union Bar[725] 7 5 124 96 0.774 VFW Post#3949[197] 5 0 0.000 Verde[144?] 1 0 0.000 Vine Tavern[170] 2 0 7 0 0.000 Vito's[235] 4 8 81 90 1.111 Wig&Pen Pizza Pub[2031 1 0 0.000 Zio Johno's Spaghetti House[94] Z'Mariks Noodle Café[47] Totals:I 58 I 55 J 1167 I 837 I 0.717 .., Other PAULA at non-business locations: 6 163 O PAULA Totals: 61 1000 '--� ..r1 current month year-to-date _ ("includes outdoor area) Ci- N ''`" -<r- r 41 Iowa City Police Department P.A.U.L.A. Report - December 2008 (Possession of Alcohol Under Legal Age) Business Name[occupancy] Monthly Totals Year-to-Date Totals PAULA Visit (occupancy loads updated Oct'08) visits arrests visits arrests (year-to-date) 808 Restaurant&Nightclub[176] 39 46 1.179 Airliner[223] 18 5 0.278 American Legion[140] 1 0 1 0 0.000 Aoeshe Restaurant[156] Atlas World Grill[165] 5 0 0.000 Blackstone[297) Bluebird Diner[82] Bob's Your Uncle[2601 Bo-James[200] 26 4 0.154 Bread Garden Market&Bakery[?] [It's]Brothers Bar&Grill[556] 5 0 107 76 0.710 [The]Brown Bottle[289] Buffalo Wild Wings Grill&Bar[189] 5 0 0.000 Café Z[56] Carl&Ernie's Pub&Grill[92] 5 0 0.000 Carlos O'Kelly's[299] Chipotle Mexican Grill[119] [The]Club Car[56] Club Furria[280] 1 0 10 0 0.000 Colonial Lanes[502] 6 0 0.000 Dave's Foxhead Tavern[87] 1 0 0.000 David's Place[73] 1 0 0.000 DC's[120] 29 4 0.138 [The]Deadwood[218] 9 0 0.000 , • Devotay[45] 1 • Donnelly's Pub[49] 1 0 7 0 0.000 • _� [The]Dublin Underground[57] 9 0 0.000 _i —71 [Fraternal Order of]Eagle's[315] 2 0 . 0.000 - �. El Dorado Mexican Restaurant[104] -' NJ [BPO]Elks#590[205] r in El Ranchero Mexican Restaurant[161] f.. —c7 Englert Theatre[838] 42 60 01 A29 Etc[178] -- Farras[200] 35 0 ;x.000 [The]Fieldhouse(aka Third Base)[420] 5 2 90 131 1.456 -.0 Firewater[114] 5 0 0.000 Formosa Asian Cuisine[149] George's Buffet[75] 1 0 1 0 0.000 Givanni's[158] Godfather's Pizza[170] Graze[49] Grizzly's South Side Pub[265] 1 0 10 0 0.000 Guido's Deli[20] [The]Hilltop Lounge[90] 2 0 0.000 IC Ugly's[72] 4 0 5 0 _ 0.000 India Café[100] [The]Industry[436] 14 0 0.000 Jimmy Jack's Rib Shack[71] Joe's Place[281] 21 1 0.048 Joseph's Steak House[226] Kandy Land[120] 2 0 0.000 La Casa[300] La Reyna Linn Street Café[80] EXHIBIT a I /IB t . /4 4 -- r Los Cocos[99] 7 0 37 1 0.027 Los Portales[161] Martini's[200] 2 0 16 0 0.000 Masala[46] Micky's[98] 6 0 0.000 [The]Mill Restaurant[325] [Loyal Order of]Moose[476] Monica's Italian Bistro&Pizzeria[160) [Sheraton]Morgan's[231] 3 1 0.333 Motley Cow Café[82] Okoboji Grill[222] Old Capitol Brew Works[294] 1 0 3 0 0.000 One-Eyed Jake's[299] 63 97 1.540 One-Twenty-Six[105] Oyama Sushi Japanese Restaurant[87] Pagliai's Pizza[113] Panchero's(Clinton St)[62] Panchero's Grill(Riverside Dr)[95] Piano Lounge[65] 9 0 0.000 [The]Picador[261] 4 1 0.250 Pit Smokehouse[40] I Pizza Hut[116] Quality Inn/Highlander[971] Quinton's Bar&Deli[149] 1 0 14 0 0.000 [The]Red Avocado[47] Rick's Grille&Spirits[120] 1 0 1 0 0.000 Riverside Theatre[118) Saloon[120] 6 1 0.167 Sam's Pizza[174] 1 0 2 0 0.000 [The]Sanctuary Restaurant[132] 1 0 0.000 Shakespeare's[90] 1 0 2 0 0.000 Short's Burger&Shine[56] 2 0 0.000 Skybox[47] 1 0 0.000 Speakeasy[311] 31 0 0.000 Sports Column[400] 1 0 86 124 1.442 Studio 13[206] 15 6 0.400 [The]Summit[736] 1 3 71 94 1.324 Sushi Popo[84] Takanami Restaurant[148] TCB[250] 3 0 24 0 0.000 Thai Flavors[60] Thai Spice[91] T.Spoons[102] Union Bar[854] 2 4 78 70 0.897 VFW Post#3949[197] 1 0 0.000 [The]Vine Tavern[170] 1 0 1 0 Vito's[320] 3 0 63 42 0.667 Wig&Pen Pizza Pub[154] [Iowa City]Yacht Club[206] 18 2 0.111 Zio Johno's Spaghetti House[94] Z'Mariks Noodle House[47] 1 — Totals: I 44 I 9 1065 766 0.719 T Other PAULA at non-business locations: 2 113 I-1 PAULA Totals: 11 879 current month year-to-ate NO q*+r *includes outdoor seating area �t(7 W -< — i1[ - m - o 0 � t' k ' Iowa City Police Department P.A.U.L.A. Report - September 2009 (Possession of Alcohol Under Legal Age) Business Name[occupancy] Monthly Totals Year-to-Date Totals PAULA Visit (occupancy loads updated Oct'08) visits I arrests visits arrests (year-to-date) 808 Restaurant&Nightclub[176] 4 1 35 36 1.029 Airliner[223] 6 1 2 32 20 0.625 American Legion[140] 3 0 0.000 Aoeshe Restaurant[156] Atlas World Grill[165] 7 0 0.000 Blackstone[297] 1 0 0.000 Bluebird Diner[82] Bob's Your Uncle[2601 Bo-James[200] 5 0 26 1 0.038 Bread Garden Market&Bakery[?] [It's]Brothers Bar&Grill[556] 11 0 70 29 0.414 [The]Brown Bottle[289] Buffalo Wild Wings Grill&Bar[189] 1 0 3 0 0.000 Café Z[56] Caliente Night Club[498](opened MAR) 4 0 29 0 0.000 Carl&Emie's Pub&Grill[92] 2 0 10 0 0.000 Carlos O'Kelly's[299] Chipotle Mexican Grill[119] [The]Club Car[56] 1 0 10 0 0.000 Colonial Lanes[502] Dave's Foxhead Tavern[87] 3 0 0.000 David's Place(aka Dawit's)[73] 1 0 6 0 0.000 DC's[120] 2 2 24 8 0.333 ihej Deadwood[218] 8 0 0.000 Devotay[45] Donnelly's Pub[49] 1 0 12 0 0.000 [The]Dublin Underground[57] 9 0 0.000 [Fraternal Order of]Eagle's[315] 2 0 0.000 El Dorado Mexican Restaurant[104] [BPO]Elks#590[205] El Ranchero Mexican Restaurant[161] - w Englert Theatre[838] • • Etc[178] 33 471.424 Fiesta Mexico(aka Farras)[200] 3 0 13 0 0.000 [The]Field House(aka Third Base)[420] 3 2 62 117 1.887 77 Firewater[114] 1 0 4 1 0.250 = Formosa Asian Cuisine[149] 6 5 0.833 -J George's Buffet[75] 5 0 0.000 Givanni's[158] Godfather's Pizza[170] Graze[49] 3 0 0.000 Grizzly's South Side Pub[265] 9 0 0.000 Guido's Deli[20] Hawkeye Hideaway[94] 2 0 7 0 0.000 [The]Hilltop Lounge[90] 1 0 7 0 0.000 IC Ugly's[72] 3 0 10 0 0.000 India Café[100] [The]Industry[436] 1 0 18 0 0.000 Jimmy Jack's Rib Shack[71] 3 0 0.000 Joe's Place[281] 2 0 18 0 0.000 Joseph's Steak House[226] Kamodo Klub[144] 1 0 8 1 0.125 Kandy Land[120] 2 0 8 0 0.000 Karaoke La Reyna[78] 1 0 0.000 EXHIBIT --) G, f ,�� 4 A, r La Casa[300] La Reyna[49] 1 0 0.000 Linn Street Cafe[80) Los Cocos[99] 86 0 0.000 Los Portales[161] Martini's[200] 2 0 16 0 0.000 Masala[46] Mekong Restaurant[89] Micky's[98] 1 0 7 0 0.000 [The]Mill Restaurant[325] 3 0 0.000 [Loyal Order of]Moose[476] Monica's Italian Bistro&Pizzeria[160] [Sheraton]Morgan's[231] 3 0 0.000 Motley Cow Cafe[82] Okoboji Grill[222] _ Old Capitol Brew Works[294] 2 0 5 0 0.000 One-Eyed Jake's[299] 4 5 29 33 1.138 One-Twenty-Six[105] Oyama Sushi Japanese Restaurant[87] Pagliai's Pizza[113] Panchero's(Clinton St)[62] Panchero's Grill(Riverside Dr)[95] Piano Lounge[65] 9 1 0.111 [The]Picador(261) 2 0 10 0 0.000 Pints[180] 4 0 39 11 0.282 Pit Smokehouse[40] Pizza Hut[116] Pizza Ranch[226] Quality Inn/Highlander[971] Quinton's Bar&Deli[149] 1 0 10 0 0.000 [The]Red Avocado[47] Rick's Grille&Spirits[120] 2 0 0.000 Riverside Theatre[118] Saloon[120] 1 0 9 1 0.111 Sam's Pizza[174] 1 0 4 0 0.000 [The]Sanctuary Restaurant[132] 3 0 0.000 Shakespeare's[90] 1 0 7 0 0.000 Short's Burger&Shine[56] 1 0 9 0 0.000 Sports Column[400] 6 7 50 71 1.420 Studio 13[206] 11 0 0.000 [The]Summit[736] 9 22 68 130 1.912 Sushi Popo[84] 1 0 1 0 0.000 Takanami Restaurant[148] 2 3 1.500 TCB[250] 1 0 25 0 0.000 Thai Flavors[60] Thai Spice[91] Tropicana(aka Club Furia)[280] 3 0 43 1 0.023 T. Spoons[102] Union Bar[854] 3 3 54 57 1.056 VFW Post#3949[197] [The]Vine Tavern[170] 2 0 6 0 0.000 Vito's[320) 3 0 32 7 0.219 Wig&Pen Pizza Pub[154] 3 0 0.000 [Iowa City]Yacht Club[206] 12 0 0.000 Zio Johno's Spaghetti House[94] Z'Mariks Noodle House[47] _ 0 iiii Totals:I 105 j 44 1064 I 580 X0.545 Other PAULA at non-business locations: 39 106 PAULA Totals: 83 686 0tV9 '�' *includes outdoor seating area current month year-to-date l l: W 1 1 1 1- ,o END OF CASE FILE r , CIVIL PROCESS WORKSHEET OHNSON COUNTY SHERIFFS OFFICE• PO BOX 2540, 511 S CAPITOL ST, IOWA CITY, IA 52244-2540 • (319) 356-6030 PLAINTIFF : US BANK Docket No ,09-01662 State IOWA A vs. Court No EQCV070407 County JOHNSON DEFENDANT : SENNEFF, MARY E., ET AL Ref No j Received 03/25/2009 J Requestor(s) Phone SARCONE,JAMES V JR (515)283-4624 Name CITY OF IOWA CITY ______I Party Type DEFENDANT j Address 1410 E WASHINGTON ST IOWA CITY IA 52240--1 Phone (319)356-5030 E-Mail , Fax L__________ Employer Zone 1 Comments Documents Document Serve e by Date OE PSR Description/Special Instructions ORIGINAL NOTICE AND IPETITION J — Service Information Attempts Log Date Time Server Notes Date ` e g Time ) 3c- ! 0 Type C (4I-V (/'1- Party Act \ apj kart Relationship C_Ay 1'( C-[C tr Race U'L/ Sex DOB Location Li 1 ( Likchti'refry Miles 1 Fee Officer 2 j Notes: O i n <� a r > w CO Printed:Wednesday, March 25,2009 Page 1 of 1 IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ) US BANK,N.A., SUCCESSOR BY MERGER TO ) EQUITY NO. EQCV070407 FIRST NATIONAL BANK IOWA ) ) Plaintiff ) ) ORIGINAL NOTICE _ V. ) O 8 n x MARY ELIZABETH SENNEFF; ARROW ) D—i m FINANCIAL SERVICES, LLC; CITY OF IOWA ) n--<2740 N CITY, IOWA o- r m Defendant(s). ) *7C 77 > W co TO THE ABOVE-NAMED DEFENDANTS: You are notified that a petition has been filed in the office of the clerk of this court naming you as the defendant(s) in this action. A copy of the petition, and any documents filed with it, is attached to this notice. The name and address of the Plaintiffs attorney is James V. Sarcone, Jr., Belin Law Firm, The Financial Center, 666 Walnut Street Suite 2000, Des Moines, Iowa 50309-3989. The attorney's phone number is 515-283-4624; facsimile number 515-283-4653. You must serve a motion or answer within twenty (20) days after service of the Original Notice upon you. Within a reasonable time thereafter you must file your motion or answer with the Clerk of Court for Johnson County, at the County Courthouse in Iowa City, Iowa. If you do not, judgment by default may be rendered against you for the relief demanded in the Petition. If you require the assistance of auxiliary aids or services to participate in court because of a 1100 disability, immediately call your district ADA coordinator at 319-398-3920 ext.§6. (If you are hearing impaired, call Relay Iowa TTY at 1-800-735-2943.) LO DEM E ! '( mk),/2/ CLE OF THE AB VE COURT 1 164.4(1/LI IMPORTANT: YOU ARE ADVISED TO SEEK LEGAL ADVICE AT ONCE TO PROTECT YOUR INTERESTS IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY ) US BANK,N.A., SUCCESSOR BY MERGER TO ) EQUITY NO. EQCV070407 FIRST NATIONAL BANK IOWA ) ) Plaintiff ) ) FIRST AMENDMENT TO PETITION v. j • �� MARY ELIZABETH SENNEFF;ARROW ) FINANCIAL SERVICES,LLC } ) Defendants. D` COMES NOW the Plaintiff and for its First Amendment to petition states: S").1,--:= ' 1. The following party is added as a Defendant herein: City of Iowa City,Iowa 2. The following Paragraph 15 is added to Plaintiff's Petition: 15. City of Iowa City, Iowa is included as a Defendant herein because of a mortgage in the sum of $48,000.00 executed by Greater Iowa City Housing Fellowship in favor of the City of Iowa City, Iowa covering the property legally described as: Lot 13,Village Green South,Part 3A,Iowa City, Iowa according to the plat thereof recorded in Book 34,Page 38, Plat Records of Johnson County, Iowa and recorded December 20, 1996 in Book 2202 Page 156 of the Johnson County, Iowa records. This mortgage has been subordinated to the leasehold interest of Defendant Mary Elizabeth Senneff in the above described property by Subordination Agreement filed May 8, 1998 in Book 2482 Page 1 of the Johnson County,Iowa records. WHEREFORE,Plaintiff prays as in its original petition as amended hereby. BELIN LAMSON McCORMICK ZUMBACH FLYNN A Professional Corporation By: 943411/1c1 > 53 1l JAMES V.SARCONE,JR. AT0006#13 r.) F The Financial Center —+n O. rn 666 Walnut Street Suite 2000 =`m 0 Des Moines,IA 50309 p 2 Telephone: 515-243-7100 r ATTORNEYS FOR PLAINTIFF co Copy to: Mary Elizabeth Senneff 3351 Wintergreen Street Iowa City, Iowa 52240 r-- CERTIFICATE OF SERVICE —� The undersigned certifies that the foregoing instrument was served upon all parties to the above cause to each cl i`.:-Comeys of record herein,at their reiSpeedvee addrAssea Ciscica::J cn the pleadings or ���J 20Q.4. - `_; Go r°". BCELU.S.Mall D FAX ; a 0 Hand Delivered 0 Ovemight Courier tl1 O" ❑ Ce Omer: c,t Signature` n ��� ci Cf; `i gam) a f• 7.24O 0 7Z= -n - -=4 r C�-< N `--+ o o- rn OPW 00 D:1Firstar'Senneff\First Amend Pet.Doc IN THE IOWA DISTRICT COURT FOR JOHNSON COUNTY n L) US BANK,N.A., SUCCESSOR BY MERGER TO ) E ITY NO. GL p� s R AV/ Q' s, / $ FIRST NATIONAL BANK IOWA ) e— I 0 Plaintiff ) • Q ) PETITION(FOR MORTWGE v. ) FORECLOSURE AND RtcEIVEk) -{ 'Tl MARY ELIZABETH SENNEFF; SPOUSE OF ) -< N r. MARY ELIZABETH SENNEFF; ARROW ) FINANCIAL SERVICES, LLC ) n -v 7)_ Defendants. -- D m COMES NOW the Plaintiff and for cause of action against the Defendants,ctt Pla#ntiff states: C.)''.. rt NOTICE fh . THE PLAINTIFF HAS ELECTED FORECLOSURE WITHOUT REDEMPTION;' s THIS MEANS THAT THE SALE OF THE MORTGAGED PROPERTY WILL URQ PROMPTLY AFTER ENTRY OF JUDGMENT UNLESS YOU FILE WITH THE COURT A WRITTEN DEMAND TO DELAY THE SALE. IF YOU FILE A WRITTEN DEMAND, THE SALE WILL BE DELAYED UNTIL TWELVE MONTHS (OR SIX MONTHS IF THE PETITION INCLUDES A WAIVER OF DEFICIENCY JUDGMENT) FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS YOUR RESIDENCE AND IS A ONE- FAMILY OR TWO-FAMILY DWELLING OR UNTIL TWO MONTHS FROM ENTRY OF JUDGMENT IF THE MORTGAGED PROPERTY IS NOT YOUR RESIDENCE OR IS YOUR RESIDENCE BUT NOT A ONE-FAMILY OR TWO-FAMILY DWELLING. YOU WILL HAVE NO RIGHT OF REDEMPTION AFTER THE SALE. THE PURCHASER AT THE SALE WILL BE ENTITLED TO IMMEDIATE POSSESSION OF THE MORTGAGED PROPERTY. YOU MAY PURCHASE AT THE SALE. 1. That Plaintiff is a foreign corporation; Defendants Mary Elizabeth Senneff and Spouse of Mary Elizabeth Senneff are natural persons last known to reside in Johnson County, Iowa; remaining Defendant is a corporation doing business in the State of Iowa. 2. That on or about the 27th day of March, 1998, the Defendant, Mary Elizabeth Senneff made, executed and delivered to First National Bank Iowa one certain Promissory Note in writing bearing the date aforesaid in the principal sum of$68,600.00 bearing interest at the adjustable rate of 6.95 percent per annum after maturity, and Exhibit"A" hereto attached and by this reference incorporated herein and made a part hereof is a true and correct copy of said Promissory Note. 3. That at the time of the execution of said Promissory Note, Exhibit"A"aforesaid, and as a part of the same transaction for the purpose of securing said Note with interest thereon and other sums hereinafter mentioned, the said Defendant, Mary Elizabeth Senneff made, executed and delivered to First National Bank Iowa one certain Mortgage in writing, transferring and conveying unto First National Bank Iowa a leasehold interest in the following real estate situated in Johnson County,Iowa, to-wit: Lot 13, Village Green South, Part 3A, Iowa City, Iowa, according to the Plat thereof recorded in Book 34, Page 38, Plat n Records of Johnson County, Iowa. ,_{ "n r and Exhibit"B"hereto attached and by this reference incorporated herein and made a gaihere@f, m r- - rn - rn is a true and correct copy of said Mortgage. C;J 77 4. That on March 30, 1998, the said Mortgage was duly recorded in Book 2452, Page 183,of the records of the office of the Recorder of Johnson County, Iowa. 5. U.S. Bank,N.A. is successor buy merger to First National Bank Iowa. 6. That the said Defendant, Mary Elizabeth Senneff, has defaulted in the monthly payment of interest and principal and has neglected and failed to pay the installments as provided in the written instrument aforesaid and is now in default of the said payments for several months last past, and the Plaintiff does now elect to and hereby does declare the whole of said Note and Mortgage due and payable forthwith. 7. That the balance due on said Note and Mortgage as of February 27, 2009, is $72,452.29, including principal and interest and advancements, after allowing due credit to the Defendants for all payments made. 8. That in the preparation of this Petition and cause of action for presentation to the Court, it was necessary for Plaintiff to employ an attorney to represent and serve it herein, and for this purpose Plaintiff has retained and employed Belin Lamson McCormick Zumbach Flynn, A Professional Corporation,Attorneys at Law of this Court. 9. That the Plaintiff is willing and now offers, upon payment of the amount due it as heretofore set forth,to cancel the Note declared on, discharge of record the Mortgage securing the same, and to do all things that equity and good conscience may require of it. 10. That the Defendants herein have or claim to have some lien upon or interest in the mortgaged premises, but the Plaintiff avers that whatever lien or interest they or any of them may have thereon or herein, the same is junior and inferior to the lien of Plaintiff's Mortgage, Exhibit"B"and the amounts hereinbefore set out. O o l 11. That Plaintiff waives its rights to a deficiency judgment in this matter. 12. That a Notice of Right to Cure Default was mailed to the Defendant Mary-Ellzabetm-<r ❑ Senneff, more than 30 days prior to the filing of this foreclosure action/Petition and tag afaults -77 set out therein have not been cured. D w co 13. Spouse of Mary Elizabeth Senneff is included as a Defendant herein because he is the spouse of the record titleholder of the above property and a party in possession of said property. 14. Arrow Financial Services, L.L.C. is included as a Defendant herein because of a judgment in the sum of$12,612.88 (plus interest and costs) rendered March 5, 2007, in its favor against Mary E. Senneff in LNLN008228 of the Johnson County,Iowa records. WHEREFORE, Plaintiff prays: FIRST: That a Receiver be appointed by the Court to take immediate possession of the mortgaged premises hereinbefore described, with power and authority and the duty to keep, repair, maintain and insure the premises, buildings and other improvements thereon; to lease the same and collect the rents, issues and profits arising which may be had therefrom, and to retain and dispose of said rents and profits as said Mortgage provides and as the Court may hereafter determine and direct. SECOND: (a) That the Plaintiff have judgment in rem, against the mortgaged premises in the sum of$72,452.29 with interest at 7.875 percent from February 27, 2009, and have such additional sum of sums as may hereafter be advanced for continuing the abstract of title or other purposes authorized by said Note and Mortgage and by Iowa law. (b) For reasonable attorney's fees upon the Note, interest and other sums advanced by the Plaintiff as set out above, and for the costs of this action. THIRD: That said judgment be declared to be a lien upon the mortgaged premises involved herein from and after the date of execution of said Mortgage, Exhibit"B",to-wit, March 27, 1998,and upon the rents, issues and profits arising and which may be had therefrom from and after the date of filing of this Petition, and that said lien be declared to be prior and paramouno U the lien and interest of the Defendants upon and in the said property. C) -n FOURTH: That Plaintiff's Mortgage aforesaid, Exhibit"B", be foreclosed, nd that r rn special execution issue for the sale for the mortgaged premises, or so much thereof as irnay Q o-;0 necessary to satisfy the said judgment with interest and costs. x w co FIFTH: That in the event the property aforesaid does not sell for sufficient to satisfy the judgment herein, the net proceeds from the rents, issues and profits which may be had therefrom, from and after this date,be applied upon said judgment until the same is fully satisfied. SIXTH: That after the Sheriff's sale of the above described premises pursuant to a special execution issued herein, a Writ of Possession issue herein under seal of this Court directed to the Sheriff of Johnson County, Iowa,commanding him to put the Grantee under Sheriff's Deed in possession of the premises deeded to him, and to remove any Defendants, or persons claiming by, through or under any of them, or any person in possession thereof, out of such possession of said premises. SEVENTH: That Plaintiff have such other and further relief as the Court may find it to be entitled to in equity. BELIN LAMSON McCORMICK ZUMBACH FLYNN A Professional Corporation BY JAIAS V. SARCONE,JR. The Financial Center 666 Walnut Street Suite 2000 Des Moines,IA 50309-3989 Telephone: 515-243-7100 AT0006913 O n C7`� r- M O?,, D W CO D:1Firstar\SennefflPctsct 02-2009.Doc • FIXED/ADJUSTABLE RATE NOTE (1 Year Treasury Index -Rate Caps) F HL A1C LN : 105575216 THIS NOTE PROVIDES FOR A CHANGE IN MY FIXED INTEREST RATE TO AN ADJUSTABLE INTEREST RATE. THIS NOTE LIMITS THE AMOUNT MY ADJUSTABLE INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE I MUST PAY. MARCH 27, 1998 IOWA CITY IOWA [Date] [City] [State] 3351 WINTERGREEN ST IOWA CITY, IA 52240 [Property Address] 1. BORROWER'S PROMISE TO PAY In return for a loan that I have received, I promise to pay U.S.$ 68,600.00 (this amount is called "principal"), plus interest, to the order of the Lender. The Lender is FIRST NATIONAL BANK IOWA I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the "Note Holder." 2. INTEREST Interest will be charged on unpaid principal until the full amount of principal has been paid. I will pay interest at a yearly rate of 6.950 %. The interest rate I will pay may change in accordance with Section 4 of this Note. The interest rate required by this Section 2 and Section 4 of this Note is the rate I will pay both before,avid after any default described in Section 7(B) of this.Note. O 3. PAYMENTS '` -n (A) Time and Place of Payments N I will pay principal and interest by making payments every month. I will make my monthly payments on the first day of each month beginning on MAY 1 . m199 I will make these payments every month until I havepaid all of the principal and interest ante,, other charges described below that I may owe under this Note. My monthly payments will be applied to interest befe a principal. If, on APRIL 1, 2028 , I still owe amounts under this Note, I will pay those arnountir'in full that date, which is called the "Maturity Date." I will make my monthly payments at PO BOX 1880, IOWA CITY, IA 52244 O m C— • or at a different place if required by the Note Holder. -C�a a O n CC) (B) Amount of My Initial Monthly Payments _ Each of my initial monthly payments will be in the amount of U.S.$ 454.10 . This amour y ch 1 e.j a� r (C) Monthly Payment Changes Changes in my monthly payment will reflect changes in the unpaid principal of my loan and in the interest it that renust pay.The Note Holder will determine my new interest rate and the changed amount of my monthly payment irriaccortRince with Section 4 of this Note. 4. ADJUSTABLEINTEREST RATE AND MONTHLY PAYMENTCHANGES (A) Change Dates The initial fixed interest rate I will pay will change to an adjustable interest rate on the first day of APRIL 2003 , and the adjustable interest rate I will pay may change on that day every 12th month thereafter. The date MULTISTATE FIXED/ADJUSTABLE RATE NOTE-1 YEAR TREASURY INDEX-Single Family-Fannie Mae Uniform Instrument C;1-843(9406 Form 3522 5/94 ARM3522 (10-18-94) VMP MORTGAGE FORMS-(800)521-7291 Distributed by FormAlion Technologies,Inc.(800)937-3799 Page 1 of 4 &A.-6'•12 • Ale on which my initial fixed interest rate changes to an adjustable interest rate, and each date on which my adjustable interest rate could change, is called a "Change Date." (B) The Index Beginning with the first Change Date, my adjustable interest rate will be based on an Index. The "Index"is the weekly average yield on United States Treasury securities adjusted to a constant maturity of 1 year, as made available by the Federal Reserve Board. The most recent Index figure available as of the date 45 days before each Change Date is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice. (C) Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding TWO AND 7 5 0/10 00 percentage point(s)( 2.750 %)to the Current Index. The Note Holder then round the result of this addition to the nearest one-eighth of one percentage point (0.125%).Subject to the limits stated in Section 4(D)below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be sufficient to repay the unpaid principal that I am expected to owe at the Change Date in full on the Maturity Date at my new interest rate in substantially equal payments. The result of this calculation will be the new amount of my monthly payment. (D) Limits on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 8.950 % or less than 4.950 %. Thereafter, my adjustable interest rate will never be increased or decreased on any single Change Date by more than two percentage points (2.0%) from the rate of interest I have been paying for the preceding 12 months. My interest rate will never be greater than 11.000 %. (E) Effective Date of Changes My new interest rate will become effective on each Change Date. 1 will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of the change in my initial fixed interest rate to an adjustable interest rate and of any changes in my adjustable interest rate before the effective date of any change. The notice will include the amount of my monthly payment, any information required by law to be given me and also the telephone number of a person who will answer any question I may have regarding the notice. 5. BORROWER'S RIGHT TO PREPAY I have the right to make payments of principal at any time before they are due. A payment of principal only is known as a "prepayment." When I make a prepayment, I will tell the Note Holder in writing that I am doing so. I may make a full prepayment or partial prepayments without paying any prepayment charge. The Note Holder will use all of my prepayments to reduce the amount of principal that I owe under this Note. If I make a partial prepayment, there will be no changes in the due dates of my monthly payments unless the Note Holder agrees in writing to those changes. My partial prepayment may reduce the amount of my monthly payments after the first Change Date following my partial prepayment. However, any reduction due to my partial prepayment may be offset by an interest rate increase. 6. LOAN CHARGES If a law,which applies to this loan and which sets maximum loan charges, is finally interpreted so that the interest or other loan charges collected or to be collected in connection with this loan exceed the permitted limits, then: (i) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (ii) any s ,already. collected from me that exceeded permitted limits will be refunded to me. The Note Holder may choose to makeis- efuntN by reducing the principal I owe under this Note or by making a direct payment to me. If a refund reduces priL4tal, t1 reduction will be treated as a partial prepayment. T VM01 1.110 Vh nu ���10 X110\01 �=; a•, cs xs t�1- - � W 6�1t 6E :I t4d 9 C5 it: -849(9406) Form-13522 t)094 ARM3522B 00-16-94t �a32 i v ' 7. BORROWER'S FAILURE TO PAY AS REQUIRED (A)Late Charges for Overdue Payments If the Note Holder has not received the full amount of any monthly payment by the end of 10 calendar days after the date it is due, I will pay a late charge to the Note Holder. The amount of the charge will be 5.000 % of my overdue payment of principal and interest. I will pay this late charge promptly but only once on each late payment. (B)Default If I do not pay the full amount of each monthly payment on the date it is due, I will be in default. (C) Notice of Default If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of principal that has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is delivered or mailed to me. 3 (D) No Waiver By Note Holder 0 Even if,at a time when I am in default, the Note Holder does not require me to pay immediately in fult as' .desct�bed above, the Note Holder will still have the right to do so if I am indefault at a later time. ivy"' o- 1 1l (E) Payment of Note Holder's Costs and Expenses , 0 r -v If the Note Holder has required me to pay immediately in full as described above, the Note Holder wilThe theright to paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by ap lfcable 3 w.Those expenses include, for example, reasonable attorneys' fees. y 8. GIVING OF NOTICES Unless applicable law requires a different method, any notice that must be given to me under this Note will be given by delivering it or by mailing it by first class mail to me at the Property Address-above or at a different address if I give the Note Holder a notice of my different address. Unless the Note Holder requires a different method, any notice that must be given to the Note Holder under this Note will be given by mailing it by first class mail to the Note Holder at the address stated in Section 3(A) above or at a different address if I am given a notice of that different address. 9. OBLIGATIONS OF PERSONS UNDER THIS NOTE If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that any oneAs me required to pay all of the amounts owed under this Note. z x a 10.WAIVERS I and anyother n— ""' person who has obligations under this Note waive the rights of presentment and noticCI dish6T�or.F "Presentment"means the right to require the Note Holder to demand payment of amounts due. "Notice of di ”..9r"rows Fri the right to require the Note Holder to give notice to other persons that amounts due have not been paid. 11.UNIFORM SECURED NOTE a oci tv This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given MS/the Note Holder under this Note, a Mortgage, Deed of Trust or Security Deed (the "Security Instrument"), dated the same date as this Note, protects the Note Holder from possible losses that might result if I do not keep the promises which I make in this Note. That Security Instrument describes how and under what conditions I may be required to make immediate payment in full of all amounts I owe under this Note. Some of those conditions are described as follows: (A)UNTIL MY INITIAL FIXED INTEREST RATE CHANGES TO AN ADJUSTABLEINTEREST RATE UNDER THE TERMS STATED IN SECTION 4 ABOVE, UNIFORM COVENANT 17 OF TILE SECURITY INSTRUMENT IS DESCRIBED AS FOLLOWS: 4-843 Woo) Form 3522 5/94 AAM3522C(1me-94) Page 3 of 4 • Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent, Lender may,at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of this Security Instrument. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. (B) WHEN MY INITIAL FIXED INTEREST RATE CHANGES TO AN ADJUSTABLEINTEREST RATE UNDER THE TERMS STATEDIN SECTION 4 ABOVE,UNIFORM COVENANTI7 OF THE SECURITY INSTRUMENT DESCRIBED IN SECTION 11(A) ABOVE SHALL THEN CEASE TO BE IN EFFECT, AND UNIFORM COVENANT 17 OF THE SECURITY INSTRUMENT SHALL INSTEAD BE DESCRIBED AS FOLLOWS: Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent, Lender may,at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of this Security Instrument. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably determines that Lender's security will not be impaired by the loan assumption and that the risk of a breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by applicable law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender also may require-the transferee to sign an assumption agreement that is acceptable to Lender and that obligates the transferee to keep all the promises and agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full,Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. WITNESS THE HAND(S)AND SEAL(S)OF THE UNDERSIGNED. , S i4 (Seal) "()ZLIZABETH S ar. -Borrower (Seal) -Borrower (Seal) -Borrower (Seal) -Borrower [Sign Originffk;( Iy] .--) zx tfM0i '},110 VMO co x. °,��1r . wa 9Z Win 6i x` CD f'iC' ggBt ) Fonr�A• 2 5/9�®ARM3522D tala ah 03114 -s eage4aa .31.-S/ NI v trage 1 or 11) 11110 ED 209 HAR 26 PI'S f: • • m CITY C 9 c."=5:-:-(1-7' • c.6-) -rt • �, CLERK if' 1011 r.A CITY. I 1: 39 0��. cr. 5G v W • 5742 o1910, 1993 HU 30 AN 10: 26 S JOfi)isC]i JIIY. ';i:,_COI:RER IOWA vI\'.IOWA Thie instrument prepared byr KAREN DAEDLOW 204 E WASHINGTON-STREET owA CITY, IA 51240 319) 356-9029 /Space Above This line For Recording bate] MORTGAGE THIS IS A PURCHASE MONEY MORTGAGE • THIS MORTGAGE(-Security Instrument")is given on MARCS! 17, 199B .The mortgagor is MARY ELIZABETH SENNEFP, A SINGLE PERSON • (-Borrower").This Security Instrument is given to FIRST NATIONAL BANK IOWA which is organized And existing under the laws of UNITED STATES OF AMERICA ,and whose address is PO BOX 1880, IOWA CITY, IA 52244 SIXTY-EIGHT THOUSAND SIX HUNDRED AND NO/200 (-Lender"). Borrower owes Lender the principal sum of Dollars(U.S.E 68,600.00 ). This debt is evidenced by Borrower's note dated the same date as this Security Instrument ('Nott"),which provides for monthly payments,with the full debt,if not paid earlier,due and payable on APRIL 1, 2028 • This Security Instrument secures to Lender: (a) the repayment of the debt evidenced by the Note, with interest, and all renewals, extensions and modifications of the Note; (b) the payment of all other sums, with interest, advanced under paragraph 7 to protect the security of this Security Instrument; and (c) the performance of Borrower's covenants and agreements under this Security Instrument and the Note.For this purpose,Borrower does hereby mortgage,grant and convey to Lender the following described property located in JOHNSON County,Iowa: LOT 13, VILLAGE GREEN SOUTH, PART 3A, IOWA CITY, IOWA, ACCORDING TO THE PLAT THEREOF RECORDED IN BOOK 34, PAGE 38, PLAT RECORDS OF JOHNSON COUNTY IOWA • • which has the address of 3351 WINTERGREEN ST, IOWA CITY (Street,City]. 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IOWA e1 C ' 5.Hazard or Property Insurance. Borrower shalt keep the improvements now existing or hereafter erected 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. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be unreasonably withheld.If Borrower fails to maintain coverage described above, Lender may.at Lender's option,obtain coverage to protect Lender's rights in the Property in accordance with paragraph 7. All Insurance policies and renewals shall be acceptable to Lender and shall include a standard nsortgage clause. Lender shall have the right to hold the policies and renewals. if Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. In the event of loss,Borrower shall give prompt notice to the insurance carrier and Lender.Lender may make proof of loss if not made promptly by Borrower. 0Unless Lender and Borrower 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 sums secured by this Security Instrument, whether or not then due, with arty excess paid to Borrower. If Borrower 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 sums secured by this Security Instrument, whether or not then due.The 30-day period will begin when the notice is given. Unless Lender and Borrower otherwise agree in writing,any application of proceeds to principal shall not extend or postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If under paragraph 21 the Property is acquired by Lender, Borrower's right to any insurance policies and proceeds resulting from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security Instrument immediately prior to the acquisition. 6.Occupancy,Preservation,Maintenance and Protection of the Properly;Borrower's Loan Application;Leaseholds. Borrower shall occupy,establish,and use the Property as Borrower's principal residence within sixty days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy,unless lender otherwise agrees in writing,which consent shall not be unreasonably withheld,or unless extenuating circumstances exist which are beyond Borrower's control. Borrower shall not destroy,damage or impair the Property, allow the Properly to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in Lender's good faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this Security Instrument or Lender's security I interest. Borrower may cure such a default and reinstate,as provided in paragraph 18,by causing the action or proceeding to he dismissed with a ruling that, in Lender's good faith determination, precludes forfeiture of the Borrower's interest in the Property or other material impairment of the lien created by this Security Instrument or Lender's security interest. Borrower shall also be in default if Borrower, during the loan application process, gave materially false or inaccurate information or S statements to Lender (or failed to provide Lender with any material Information) in connection with the loan evidenced by the Note, including,but not limited to, representations concerning Borrower's occupancy of the Property as a principal residence, If this Security Instrument is on a leasehold,Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 7.Protection of Lender's Rights in the Property.If Borrower fails to perform the covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights in the Properly (such as a proceeding in bankruptcy,probate, for condemnation or forfeiture or to enforce laws or regulations), then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender's rights in the Property. Lender's actions may include paying any sums secured by a lien which has priority over this Security Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although Lender may take action under this paragraph 7,Lender does not have to do so. Any amounts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable, with interest, upon notice from Lender to Borrower requesting payment. 8.Mortgage Insurance. If Lender required mortgage insurance as a condition of snaking the loan secured by this Security Instrument, Borrower shall pay the premiums required to maintain the mortgage insurance in effect. If, for any reason, the mortgage insurance coverage required by Lender lapses or ceases to be in effect, Borrower shall pay the premiums requited to obtain coverage substantially equivalent to the mortgage insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the mortgage insurance previously in effect,from an alternate mortgage insurer approved by Lender. If substantially equivalent mortgage insurance coverage is not available, Borrower shall pay to Lender each month a sum equal to one-twelfth of the yearly mortgage insurance premium being paid by Borrower when the insurance coverage lapsed or ceased to be in effect.Lender will accept, use and retain these payments as a loss reserve in ID -BnnA)°mot of " (4/3/Q01(4/3/Q01t , 018 �°°t Pro-3ae BE2'1S2 PACE 185 Form 3016 9/DO ;Page 4 of 11) • lieu of mortgage insurance. Loss reserve option of Lender, if mortgage insurance coverage(in the amount and for the period that Lender requires) provided by an insurer approved by Lender again becomes available and is obtained. Borrower shall 1111 pay the premiums required to maintain mortgage insurance in effect,or to provide a loss reserve, until the requirement for mortgage insurance ends in accordance with any written agreement between Borrower and Lender or applicable law_ 9.Inspection.Lender oris agent may make reasonable entries upon and inspections of the Property. Lander shall give Borrower notice at the time of or prior to an inspection specifying reasonable cause for the inspection_ 10.Condemnation.The proceeds of any award or claim for damages, direct or consequential, in connection with any • condemnation or other taking of any part of the Property,or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due,with any excess paid to Borrower. In the event of a partial taking of the Property in which the fair market value of thc Property immediately before the taking is equal to or greater than the amount of the sutns • secured by this Security Instrument immediately before the taking,unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the taking,divided by(b) the fair market value of the Property immediately before the taking. Any balance shall be paid to Borrower. In the event of a partial taking of the Property in which the fair market value of the Property immediately before the taking is less than the amount of the sums secured immediately before the taking, unless Borrower and Lender otherwise agree in writing or unless applicable law othetwise.provides,the proceeds shall Se applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower, or if,after notice by Lender to Borrower that the condemnor offers to make an award or settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the proceeds, at its option,either to restoration or repair of the Property or to the • sums secured by this Security Instrument,whether or not then due. Unless Lender and Borrower otherwise agree in writing,any application of proceeds to principal shall not extend or postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of such payments. 11.BorrowerNot Released;Forbearance By Lender Not a Waiver.Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to any successor in interest of Borrower shall � not operate to release the liability of the original Borrower or Borrower's successors in interest. Lender shall not be required to commence proceedings against any successor in interest or refuse to extend time for payment or otherwise modify z sr A amortization of the sums secured by this Security instrument by reason of any demand made by the original Borrower or C.0 Borrower's successors in interest. Any forbearance by Lender in exercising any right or remedy shall not be a waiver of or Ca�i G-) preclude the exercise of any right or remedy. —7� 12.Successors and Assigns Bound;Joint and Several Liability;Co-signers.'Che covenants and agreements of this Cavacl (Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower, subject to the provisions of (7_ paragraph 17. Borrower's covenants and agreements shall be joint and several. Any Borrower who co-signs this Security instrument but does not execute the Note:(a) is co-signing this Security Instrument only to mortgage, grant and convey that r-) Borrower's interest In the Property under the terms of this Security Instrument; (b) Is not personally obligated to pay the • O_n sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower may agree to extend, modify, •7 forbear or make any accommodations with regard to the terms of this Security instrument or the Note without that X) Borrower's consent. CD 13.Loan Charges.If the loan secured by this Security Instrument is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the loan exceed the permitted limits,then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit;and (b) any sums already collected from Borrower which exceeded permitted limits will be refundad to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal,the reduction will be treated as a partial prepayment without any prepayment charge under the Note. 14.Notices.Any notice to Borrower provided for in this Security Instrument shall be given by delivering it or by mailing it by first class mail unless applicable law requires use of another method. The notice shall be directed to the Property Address or any other address Borrower designates by notice to Lender. Any notice to Lender shall be given by first class mail to Lender's address stated herein or any other address Lender designates by notice to Borrower. Any notice provided for in this Security instrument shall be deemed to have been given to Borrower or lender when given as provided in this paragraph. 15.Governing Law; SEVERABILiTY.This Security Instrument shall be governed by federal law and the law of 410 the jurisdiction in which the Property is located. In the event that any provision or clause of this Security instrument or the Note conflicts with applicable law,such conflict shall not affect other provisions of this Security instrument or the Note which can be given effect without the conflicting provision.To this end the provisions of this Security Instrument and the Note are declared to be severable. 16.Borrowcr'sCopy-Borrower shall be given one conformed copy of the Note and of this Security Instrument. -6R(IA)pe pr ... �IA3076 Hryryqevpm-A.01P.9. d BGG'if.2e15`?(ACE 188 J Form 30115 9/DO O • N -fes as m - m o � w -43 • 1 • (Page 5 of 11) • FILED ED Gtr 7139 I':".'? 26 PIM I: 39 65 0 • • .—,-, Cr` CITY CLERK �� << IOWA CITY. IOWA Tc rs7 17.Transfer of the Property or a Beneficial Interest in Borrower,If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Leits Secnurity Instrument. her's prior written owever,thient, is optider on shalltnot be exercised require by Lendertate if exercise ns prohibittedall bysums federal secured by the this date of this Security Instrument. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not leu than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these surra prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 11110 lg. Borrower's Right to Reinstate. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earlier of:(a) 5 days(or such other period as applicable law may specify for reinstatement) before sale of the Property pursuant to any power of sale contained in this Security instrument; or(b) entry of a judgment enforcing this Security instrument. Those conditions arc that Borrower: (a) pays Lender all sures which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b)cures any default of any other covenants or agreements; (c)pays all expenses incurred in enforcing this Security Instrument, including,but not limited to, reasonable attorneys' fees; and (d) takes such action as Lender may reasonably require to assure that the lien of this Security instrument, Lender's rights in the Property and Borrower's obligation to pay the sums secured by this Security instrument shall continue unchanged. Upon reinstatement by Borrower, this Security Instrument and the obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the ease of acceleration under paragraph 17. 19.Sale of Note;Change of Loan Servicer.The Note or a partial interest in the Note (together with this Security Instrument) may be sold one or more times without prior notice to Borrower. A sale may result in a change in the entity (known as the 'Loan Servicer')that collects monthly payments due under the Note and this Security instrument. There also • may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Service, Borrower will be given written notice of the change in accordance with paragraph 14 above and applicable law.The notice will state the name and address of the new Loan Servicer and the address to which payments should be made. The notice will also contain any other information required by applicable law. 20.Hazardous Substances.Borrower shall not cause or permit the presence, use,disposal,storage, or release of any Hazardous Substances on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law.The preceding two sentences shall not apply to the presence, use,or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property. Borrower shall promptly give Lender written notice of any investigation,claim,demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any ilazardous Substance or Environmental 4110 Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. As used in this paragraph 20,"hazardous Substances" are those substances defined as toxic or hazardous substances by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents,materials containing asbestos or formaldehyde, and radioactive materials. As used in this paragraph 20,'Environmental Law"means federal laws and laws of the jurisdiction where the Property is located that relate to health,safety or environmental protection. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 21.Acceleration;Remedies.Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument(but not prior to acceleration under paragraph 17 unless applicable law provides otherwise).The notice shall specify: (a)the default;(b) the action required to cure the default;(c)a date,nut lees than 30 days from the date the notice is given to Borrower,by which the default must be cured;and(d) that failure to cure the default on or before the date specified in the notice may result In acceleration of the sums secured by this Security instrument,foreclosure by judicial proceeding and sale of the Property,The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure.If the default is not cured on or before the date specified In the notice,Lender,al its option,may require immediate payment in full of all slims secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding.Lender shall be entitled to collect all expenses Incurred in pursuing the remedies provided in this paragraph 21, including,but not limited to, reasonable attorneys'fees and costs of title evidence. 22.Retriu.Upon payment of alt surto secured by this Security Instrument, Lender shall release this Security Instrument without charge to Borrower. Borrower aba11 pay any recordation costa. -68(1A)Pomta+ p f r tA301(st•nr� r'w.saa 42 84 SPACE 1.U? Form 3016 9/90 • • (lave 6 or 11) 23.Waivers.Borrower relinquishes all right of dower and waives all right of homestead and distributive share in and to 0 the Property.Borrower waives any right of exemption as to the Property. 24.Redemption Period.If the Property is less than 10 acres in size and Lender waives in any foreclosure proceeding any right to a deficiency judgment against Borrower, the period of redemption from judicial sale shall be reduced to 6 months. If the court finds that the Properly has been abandoned by Borrower and Lender waives any right to a deficiency judgment against Borrower,the period of redemption from judicial sale shall be reduced to 60 days.The provisions of this paragraph 24 shall be corutnied to conform to the provisions of Sections 628.26 and 628.27 of the Code of Iowa. 25.Riders to this Security Instrument.If one or more riders are executed by Borrower and recorded together with this Security Instrument, the covenants and agreements of each such rider shall be incorporated into and shall amend and supplement the covenants and agreements of this Security Instrument as if the rider(s) were a part of this Security Instrument. ICheck applicable box(es)I I pAdjustable Rate Rider tot� Condominium Rider [1 1-4 Family Rider • Graduated Payment Rider L_Planned Unit Development Rider Li Biweekly Payment Rider Balloon Rider O Rate Improvement Rider D Second Home Rider 0 V.A. Rider I I Othcr(s)(specify, I BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument III and in any rider(s)executed by Borrower and recorded with it. Witnesses; rn 467(2.. (Seal) n = 4 Vi Borrower cn 17) IOWA CITY, IA 52240 -Atkins, 'rl --aCT Ol —11 (Seal) C=_T.' F__—_.•norrower .n „. r-I •Address -:- C--f CD (7:58 -Borrowe)r •B(Seal)rrerweO _ . •Address � CR) -Address —I OD STATE OF IOWA, County ss:JOHNSON On this 27TH day of MARCU, 1998 • before me,a Notary Public in the State of Iowa, • personally appeared MARY ELIZABETU SENNEFF, A SINGLE PF.RSON to me personally known to be the person( named in and who executed the foregoing instrument,and acknowledged THAT SUE executed the same ,S HER voluntary act and decd. III My Commission Expires: �B�1��roAi5>1Pa's ti a A�.�..J ill.i, t ,a1rt,�' }Nyyra`E Noury Public in a . • said C. and Sdre `– ' r ry Toc,o,,„\ DUANE SAARTZENDRUB • , :� ( FIRS 'ATIOIJAL DANK _ EHit2452PACE 1 ) 3 •ax Ds Iwo,2o4E.1MA9111b3TON �6RVNt°,aa.o, P.,.ede ;WACITY,bllx210 Form 3015 9/90 O \_ tA30l514nnas . T . K-/� • d D w . NO • II (Page 7 of 11) • • _ F • 1619:4R 26 PH I: 39 • C7'f C�ERI{ IOWAC1IT. IOWA- • n • o rn r,O -n C..) m -- r L r) —at) :I', ro� CP • FIXED/ADJUSTABLE RATE RIDER (1 Year Treasury Index -Rate Caps) • Loan $ 3321-260-2 THIS FIXED/ADJUSTABLE RATE RIDER is made this 27Th day of MARCH , 1998 , and is incorporated into and shall be deemed to and supplement the Mortgage; Deed of Trust or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Fixed/Adjustable Rate Note(the "Note") to 'IRST NATIONAL BANK IOWA (the "Lender") of the-same date and covering the Property described in the Security Instrument and located at: 3351 WINTERGREEN ST IOWA CITY, IA 52240 tPmpuiy Adrlrcssl THE NOTE PROVIDES FOR A CHANGE IN THE BORROWER'S FIXED II/ INTEREST RATE TO AN ADJUSTABLE INTEREST RATE. THE NOTE LIMITS THE AMOUNT THE BORROWER'S ADJUSTABLE INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE THE BORROWER MUST PAY. ADDITIONAL COVENANTS.In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. ADJUSTABLE RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial fixed interest rate of 6.950 %. The Note also provides for a change in the initial fixed rate to an adjustable interest rate, as follows: MULTISTATE FIXED/ADJUSTABLE RATE RIDER-I YEAR TREASURY INDEx-S'inpk Family-Fannls Mni Uniform Instrument • -543 (9.0VMP MORTGAGE verses-(DO)5.21-7291 Form 3182 5/94 r• Harland ARM3152 Adar .d by John KHarland Co.1sog9a2-a19s / 12/19/92 P,q.1as BHA 2115?PAGE 189 (Page 8 of 11) • • • 4. ADJUSTABLE INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates The initial fixed interest rate I will pay will change to an adjustable interest rate on the first day of APRIL 1003 and the adjustable interest rate I will pay may change on that day every 12th month thereafter. The date on which my initial fixed interest rate changes to an adjustable interest rate, and each date on which my adjustable interest rate could change, is called a "Change Date." (B) The Index Beginning with the first Change Date, my adjustable interest rate will be based on an Index. The "Index"is the weekly average yield on United States Treasury securities adjusted to a constant maturity of 1 year, as made available by the Federal Reserve 'Board. The most recent Index figure available as of the date 45 days before each Change .Date is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new Index that is • based upon comparable information. The Note Holder will give me notice of this choice. (C) Calculation of Changes p Before each Change Date, the Note holder will calculate my new interest rate by Om adding TWO AND 750/1000 percentage point(s) t ( 1.750%) to the Current Index. The Note Holder will then round the coo result of this addition to the nearest one-eighth of one percentage point (0.125%). m .Subject to the limits stated in Section 4(D) below, this rounded amount will be my new nr� m "r-1 interest rate until the next Change Date. 0 u 4 �—_ C T f I The Note Holder will then determine the amount of the monthly payment that =� 3=5 would be sufficient to repay the unpaid principal that 1 am expected to owe at the �C- Change Date in full on the Maturity Date at my new interest rate in substantially equal OO '"' payments. The result of this calculation will be the new amount of my monthly payment. v- a� (D) Limits on Interest Rate Changes co The interest rate I am required to pay at the first Change Date will not be greater than 8.950 % or less than 4.950%. Thereafter, my adjustable interest rate will never be increased or decreased on any single Change Date by more than two percentage points (2.0%) from the rate of interest 1 have been paying for the preceding 12 months. My interest rate will never be greater than 11.000 %• C> -e;3 t •ARM31 126 Form 3152 /9t w+./27t • P.p.l d 5 t+4 g65 2452PACf 190 o Y 0"< tv r' c rn • • • • • 11111 (Page 9 of 11) • i • • FILED •. . 7-79 NV 26 Pi I: 39 cr::\ y IOWA7C1CI-LI.' y o s � 1,VA • c ccp y C • (E) Effective Date of Changes My new interest rate will become effective on each Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of the change in my initial fixed interest rate to an adjustable interest rate and of any changes in my adjustable interest rate before the effective date of any change. The notice will include the amount of my monthly payment, any information required by law to he given me and also the telephone number of a person who will answer any question I may have regarding the notice. B.TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER I. UNTIL BORROWER'S INITIAL FIXED INTEREST RATE CHANGES TO AN ADJUSTABLE INTEREST RATE UNDER THE TERMS STATED IN SECTION A ABOVE,UNIFORM COVENANT 17 OF THE SECURITY INSTRUMENT SHALL BE IN EFFECT AS FOLLOWS: Transfer of the Property or a Beneficial Interest in Borrower.If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial • interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of this Security Instrument. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. ® -943 m AAM3t182C Form 3752 5/94 (2/'o/U7) Popo 3of5 8G6'f.24,52 PAGE 191. 41110 (page 10 of 11) • • 2. WHEN BORROWER'S INITIAL FIXED INTEREST RATE CHANGES TO AN ADJUSTABLE INTEREST RATE UNDER THE TERMS STATED IN SECTION A ABOVE, UNIFORM COVENANT 17 OF THE SECURITY INSTRUMENT DESCRIBED IN SECTION B1 ABOVE SHALL THEN CEASE TO BE IN EFFECT, AND THE PROVISIONS OF UNIFORM COVENANT 17 OF THE SECURITY INSTRUMENT SHALL BE AMENDED TO READ AS FOLLOWS: Transfer of the Property or a Beneficial Interest in Borrower.If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by [his Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited • • by federal law as of the date of this Security Instrument. Lender also shall not exercise this option if: (a) Borrower causes to be submitted to Lender information required by Lender to evaluate the intended transferee as if a new C2 - loan were being made to the transferee; and (b) Lender reasonably determines + that Lender's security will not be impaired by the loan assumption and that the :nrisk of a breach of any covenant or agreement in this Security Instrument is p G--)acceptable to Lender. -n To the extent permitted by applicable law,Lender may charge a reasonable fee as a condition to Lender's consent to the loan assumption. Lender also may c"r e. r----' require the transferee to sign an assumption agreement that' is acceptable to C Lender and that obligates the transferee to keep all the promises and r� agreements made in the Note and in this Security Instrument. Borrower will continue to be obligated under the Note and this Security Instrument unless © r^ Lender releases Borrower in writing. If Lender exercises the option to require immediate payment in full,Lender • shall give Borrower notice of acceleration. The notice shall provide a period of • not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. pol Map ,843 (9ax, Form 3182 5/94 AAM3182o ¢/1o/on • 4111/ Ege,2452PACE 192 p 0 .11 N �-- • m - � v w • •o • • • • • • 1110 ($age 11 Of 11) . 4111 FILED Z 9 f9AR 26 ppb �. � • CITY CLERK fOWA CITY, fOWA • •'O pyo otic <0" ,y • BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants P 8 contained in this Fixed/Adjustable Rate Rider. ffarq (51.(5P11/lp (Seat) (Seal) MARABETH SENNET? •Borrower _Bo�wr4 YIT IOWA CITY, IA 52240 (Seal) (Seal) -Borrower -Borrower • or zz xi xv. oc; cc-) L' "71 r— . . cn �.'" 7 rn O • -0q Form 3152 5/94 •ARM31B2E R/HAA Pap s e15 nad24 SPACE 193 • END OF CASE FILE