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First Amendment to Grant Agreement with Virtual Velocity, LLC for the Rehabilitation of 1199 Central Avenue Copyrighted October 2, 2023 City of Dubuque Action Items # 04. City Council Meeting ITEM TITLE: FirstAmendmentto GrantAgreementwith Virtual Velocity, LLC forthe Rehabilitation of 1199 Central Avenue SUM MARY: City Manager recommending City Council adopt the resolution approving a First Amendment to Grant Agreement with Virtual Velocity, LLC to provide the project a$300,000 loan to be amortized over 5 years at zero percent interest. RESOLUTION Approving the First Amendment to Grant Agreement between the City of Dubuque lowa, and Virtual Velocity, LLC SUGGESTED Suggested Disposition: Receive and File;Adopt Resolution(s) DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo Resolution Resolutions First Amendment Supporting Documentation E�ibit C - Promissory Note Supporting Documentation E�ibit D - Mortgage Supporting Documentation Dubuque THE CITY QF � All-Meriea Ciry DLT B E ; . � . � �� MaSt� Z�C� aYd t�Q Mt55ZSSZ Z zoa�•zoiz•�ai3 YP pp za��*zai� TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: First Amendment to Grant Agreement with Virtual Velocity, LLC for the Rehabilitation of 1199 Central Avenue DATE: September 28, 2023 Economic Development Director Jill Connors is recommending City Council adopt the attached resolution approving a First Amendment to Grant Agreement with Virtual Velocity, LLC to provide the project a $300,000 loan to be amortized over 5 years at zero percent interest. The City of Dubuque previously entered into a Grant Agreement, dated October 3, 2022, by Resolution No. 325-22. This property is the former Prescott elementary school. Virtual Velocity, LLC is a local organization entering into building preservation and rehabilitation. Lloyd Singletary, organizer, is restoring the building's fa�ade while creating 14 new market-rate rental units. In August 2022 and again in August 2023 at the City Council Annual Goal Setting sessions the City Council identified the Central Avenue Corridor revitalization as a priority. In August 2022 the City Council established Housing Incentives as a priority. Previously the City Council has directed that the City should work on not having former school sites stay vacant and become blighting influences on neighborhoods. A Brief History of the Third Ward Schoolhouse In 1856, a new building was constructed at 12t" and Clay Streets (now Central Avenue) to house the Third Ward School. The structure had a cross plan and was of the Italianate style, popular at the time. It had load bearing masonry brick walls with a strong Dubuque limestone foundation and watertable. The building had large windows affording light and ventilation for a healthy learning environment. The structure is a rare pre-Civil War public structure and eligible for the National Register of Historic Places based on Criterion C, due to its being a rare surviving early architectural type, and its association with Dubuque architect John Francis Rague (1799-1877). The cost for the structure was $25,000, constructed by builders Berry, Platert & Longhurst. It opened in January 1857, one month before construction began on nearby City Hall, which was also designed by Rague. By 1858 it also housed our first Dubuque Senior High School on the 3rd floor, with elementary grades below. The high school enrolled one hundred ten students and had a staff of two teachers and one principal. Students wishing to be admitted to the high school had to pass a test in arithmetic, geography, grammar and history. The first two floors were divided into four rooms each, with children separated by gender and the level of achievement. building was renamed to Prescott School after the American scientific historian William Hickling Prescott in 1889. In 1911, the old school housed 603 students from a 170 square block area in 19 rooms with 21 teachers. The high school had since moved to a new building kitty-corner to the northeast of the old school. In April 1912, merchants on Clay Street petitioned the board of education to close the school because it was unsafe. The noise distracted the pupils and the traffic was a hazard. A formal petition to build a new school was filed on August 8, 1912. In 1913 the "new" Prescott School made the first Prescott School obsolete. The listing in the city directories changes from "Prescott School" to "Prescott Apartments" between 1913 and 1915. In 2006, the current Prescott School was opened and demolition of the 1912 school ensued. Apartment rentals of 1199 Central tapered off in the early 21 St Century and ended by 2015 according to our city directories. It has been licensed as a vacant and abandoned building since 2019. The other ward school buildings that resembled this structure are all gone, including the school that predated the former Franklin School at 39 Bluff, and the schools that predated the existing Lincoln and Audubon Schools. 1199 Central bears many resemblances to the old St. Mary's Jackson Street School, now Francis Apartments, which was successfully restored and converted to twelve apartments in 2017, serving as a model for the work being done at the old Third Ward School. This building has been vacant for many years and was a blighting influence on the neighborhood. Lloyd Singletary took it upon himself to acquire the building and begin a redevelopment project to create the market rate apartments. Not only does this project hit several City Council priorities, but this rehabilitation project is very important to the city because it is in a strategic location for the city in that it is directly across the street from the existing Prescott Elementary School and it directly adjoins the Multicultural Family Center. The difficulties with this project are leading to the recommendation to include a $300,000 loan to be amortized over 5 years at zero percent interest. Funding for this loan will come from the Downtown Rehabilitation Loan Fund. 2 Since the initial Grant Agreement was executed, the City Council has given additional support to the creation of housing in the Greater powntown Urban Renewal Area. Multifamily housing creation projects are now eligible for either 10-years of tax abatement followed by 5-years of tax increment financing or 15-years of tax increment financing. That amendment to the Development Agreement requires a public hearing and will be on a future City Council agenda. I concur with the recommendation and respectfully request Mayor and City Council approval. v Mic ael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Jill Connors, Economic Development Director 3 Dubuque Economic Development Department THE CITY OF ' ' 1300 Main Street All-America City Dubuque,lowa 52001-4763 U� � n'�N",`�""""�� Office(563)589-4393 � � TTY(563)690-6678 � http://www.cityofdubuque.org 2007*2012�2013 Masterpiece on the Mississippi zoi�*zoi9 TO: Michael C. Van Milligen, City Manager FROM: Jill M. Connors, Economic Development Director SUBJECT: First Amendment to Grant Agreement with Virtual Velocity, LLC for the Rehabilitation of 1199 Central Avenue DATE: September 26, 2023 INTRODUCTION This memorandum requests City Council adopt the attached resolution approving a First Amendment to Grant Agreement with Virtual Velocity, LLC. BACKGROUND The City of Dubuque previously entered into a Grant Agreement, dated October 3, 2022 by Resolution No. 325-22. This property is the former Prescott elementary school. Virtual Velocity, LLC is a local organization entering into building preservation and rehabilitation. Lloyd Singletary, organizer, is restoring the building's fa�ade while creating 14 new market-rate rental units. DISCUSSION The dilapidated building is in a highly visible portion of the downtown area. As the building is located across the street from the current Prescott Elementary School, and adjacent to the Multicultural Family Center, it is critical to have this blight remedied. Substantial rehabilitation and adaptive reuse projects often operate under the constraints of large financing needs and material and labor shortages. Due to the critical need for housing throughout our community, as identified by City Council, a Frist Amendment has been drafted to further support the project. In August 2022 and again in August 2023 at the City Council Annual Goal Setting sessions the City Council identified the Central Avenue Corridor revitalization as a priority. In August 2022 the City Council established Housing Incentives as a priority. Previously the City Council has directed that the City should work on not having former school sites stay vacant and become blighting influences on neighborhoods. To this end, staff have drafted a First Amendment to the Grant Agreement to provide a $300,000 loan to the project. A Brief History of the Third Ward Schoolhouse In 1856, a new building was constructed at 12t'' and Clay Streets (now Central Avenue) to house the Third Ward School. The structure had a cross plan and was of the Italianate style, popular at the time. It had load bearing masonry brick walls with a strong Dubuque limestone foundation and water table. The building had large windows affording light and ventilation for a healthy learning environment. The structure is a rare pre-Civil War public structure and eligible for the National Register of Historic Places based on Criterion C, due to its being a rare surviving early architectural type, and its association with Dubuque architect John Francis Rague (1799-1877). The cost for the structure was $25,000, constructed by builders Berry, Platert & Longhurst. It opened in January 1857, one month before construction began on nearby City Hall, which was also designed by Rague. By 1858 it also housed our first Dubuque Senior High School on the 3rd floor, with elementary grades below. The high school enrolled one hundred ten students and had a staff of two teachers and one principal. Students wishing to be admitted to the high school had to pass a test in arithmetic, geography, grammar and history. The first two floors were divided into four rooms each, with children separated by gender and the level of achievement. building was renamed to Prescott School after the American scientific historian William Hickling Prescott in 1889. In 1911, the old school housed 603 students from a 170 square block area in 19 rooms with 21 teachers. The high school had since moved to a new building kitty-corner to the northeast of the old school. In April 1912, merchants on Clay Street petitioned the board of education to close the school because it was unsafe. The noise distracted the pupils, and the traffic was a hazard. A formal petition to build a new school was filed on August 8, 1912. In 1913 the "new" Prescott School made the first Prescott School obsolete. The listing in the city directories changes from "Prescott School" to "Prescott Apartments" between 1913 and 1915. In 2006, the current Prescott School was opened and demolition of the 1912 school ensued. Apartment rentals of 1199 Central tapered off in the early 2 21 St Century and ended by 2015 according to our city directories. It has been licensed as a vacant and abandoned building since 2019. The other ward school buildings that resembled this structure are all gone, including the school that predated the former Franklin School at 39 Bluff, and the schools that predated the existing Lincoln and Audubon Schools. 1199 Central bears many resemblances to the old St. Mary's Jackson Street School, now Francis Apartments, which was successfully restored and converted to twelve apartments in 2017, serving as a model for the work being done at the old Third Ward School. � ,.. r� �'�'` _ -_— _ �� -�' .i �\ � ' '� _ . .. � � ■ '' " � - . I �. - � - ' >�> ; !!� I� � A ,�'�' ;. � � � �}�}'�� ,�' �" F' r"' , "' � � 1 � �'� � � . -- 1 .:,,�,�„�_- ,(, -,�.��,.� ,�"Rx ._a �:.��A��, ,-�_ �, - - _ �� `.,�� .,�`�'�I ( �q.. � , 'l; -■ � ,l t � ,/ . 1 � , ` •, I ��fl I:� �� ■ . . 1 �� f'1 "� ' . :.. , . �, Y� � � '- �V _ `�� . ____. _ ` .. -��_. .._.` ��3. -�.�_ . _ � ' �'�. � ---�-�`.��- � • °�— .,.. .�. 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' ' ��1�l,l..kl�.i��7 �.-vs��'�,�. ,�, � F�'� �,s 1� .�,�,,,� , ��,� ,� .� � r t�� ' ;'��''�? t ��:,'�'11 � �'. �,��' 4�' ' :,`. ti� ��►�`.!9 e� � +tw��, �I � . i( -�ii i' iri; �'+ �i�1'�• ,` �t ��tl � '� �r � r � �'i, i,;�,�•, r � �-r � � �i' . " �� I,r ��1' � �� ' /�. liil�� .I t �� .,i � �� I,!,�'�� ,.F � +' i � ��. 1� � I.I' �. � :'I��.: � ,r• , 11 �! �. :1, i �tl�lif � � � i � �.��, �1: 4• i � '1' :' � �} �L , � ,�l � 1; ��.,�� r �;,. �� '•� - - �.1T' �„� �:I�� .��-171;E.,!,�I�- . �� h'.e� . nh:.t!�iKi��,.'-, �!I k 1872 Augustus Koch 1889 American Publishing Co. This building has been vacant for many years and was a blighting influence on the neighborhood. Lloyd Singletary took it upon himself to acquire the building and begin a redevelopment project to create the market rate apartments. Not only does this project hit several City Council priorities, but this rehabilitation project is very important due to its location directly across the street from the existing Prescott Elementary School, and it directly adjoins the Multicultural Family Center. The difficulties with this project lead to the recommendation to include a $300,000 loan to be amortized over 5 years at zero percent interest. Funding for this loan will come from the Downtown Rehabilitation Loan Fund. RECOMMENDATION/ ACTION STEP Based on this project's alignment with the City Council's goal of having a Robust Local Economy and Livable Neighborhoods and Housing, I recommend the City Council adopt the attached resolution approving the Downtown Rehabilitation Loan in the attached First Amendment to Grant Agreement. 5 Prepared by: Jill Connors, Economic Development, 50 W. 13th Street, Dubuque IA 52001, 563 589-4393 Return to: Jill Connors, Economic Development, 50 W. 13Lh Street, Dubuque IA 52001, 563 589-4393 RESOLUTION NO. 331-23 APPROVING THE FIRST AMENDMENT TO GRANT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND VIRTUAL VELOCITY, LLC Whereas, the City of Dubuque (City) and Virtual Velocity, LLC (Grant Recipient) entered into a Grant Agreement dated the 3rd day of October 2022, providing for a Façade Grant, a Planning & Design Grant, a Financial Consultant Grant, and a Housing Creation Grant; and Whereas, City and Grant Recipient desire to amend the Grant Agreement as set forth in the attached First Amendment to Grant Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1 . That the First Amendment to Grant Agreement between the City of Dubuque, Iowa and Virtual Velocity, LLC, a copy of which is attached hereto, is hereby approved. Section 2. That the Mayor is hereby authorized and directed to execute the First Amendment to Grant Agreement on behalf of the City of Dubuque and the City Clerk is authorized and directed to attest to his signature. Section 3. That the City Manager is authorized to take such actions as are necessary to comply with the terms of the First Amendment to Grant Agreement as herein approved. Passed, approved, and adopted this 2nd day of October, 2023. rad . C , Mayor Attest: Cs Trish L. Gleason, Assistant City Clerk FIRST AMENDMENT TO GRANT AGREEMENT BETWEEN THE CITY OF DUBUQUE, IOWA AND VIRTUAL VELOCITY, LLC This First Amendment to Grant Agreement, dated for reference purposes the day of_ , 2023, is made and entered into by the City of Dubuque, lowa, a municipality (City), established pursuant to the lowa Code and acting under authorization of lowa Code Chapter 403, as amended (the Urban Renewal Act), and Virtual Velocity, LLC (Grant Recipient). WHEREAS, City and Grant Recipient entered into a Grant Agreement dated October 3, 2022 (the Grant Agreement); and WHEREAS, City and Grant Recipient desire to amend the Grant Agreement as set forth herein. NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL TERMS AND COVENANTS CONTAINED HEREIN, CITY AND GRANT RECIPIENT AGREE AS FOLLOWS: Section 1. Section 1.2 of the Grant Agreement is hereby amended to read as follows: 1.2 Completion of Minimum Improvements. Grant Recipient shall complete construction of the Minimum Improvements by June 1, 2024. City shall determine in its sole discretion (following an inspection by City's Inspection and Construction Services Department and/or Housing & Community Development Department, and/or Planning Department) when the Minimum Improvements have been completed. In order to be considered completed, the Minimum Improvements must be constructed in accordance with the terms of this Agreement, in compliance with the regulations of the Downtown Rehabilitation Grant Program, and in substantial conformity with Grant Recipient's application to that Program and the Design Letter attached hereto. Section 2. Section 3 of the Grant Agreement is hereby amended by adding the following: 3.6 Downtown Rehabilitation Loan. (1) City agrees to loan to Developer (the Loan) on the terms and conditions set forth herein Three Hundred Thousand Dollars ($300,000) which shall consist of the Loan Program funds, if and only if such funds are available. Payments shall be based on work completed and expenses encumbered. The Loan proceeds will be disbursed upon approval by the Dubuque City Council. (2) The term of the Loan shall be five (5) years. Interest on the Loan shall be zero percent (0.0%) per annum. Monthly principal payments, amortized over a five-year period, shall become due and payable beginning the first day of the first month after issuance of the Certificate of Occupancy for the first unit of the Project and on the first day of each month thereafter until the entire balance of the Loan is paid. The entire balance of the Loan shall become due and payable not later than the 60th month after issuance of the Certificate of Occupancy for the first unit of the Project. At the time of the initial disbursement of Loan funds to Developer, Developer shall execute the Promissory Note in the form attached hereto as Exhibit C payable to the order of the City in the principal amount of Three Hundred Thousand Dollars ($300,000) and the Mortgage, attached as Exhibit D. (3) Loan funds shall be disbursed to Developer by City upon award of the Certificate of Occupancy for the first unit of the Project and Developer's written request for funds. Section 3. Except as modified herein, the Grant Agreement shall remain in full force and effect. CITY OF DUBUQUE, IOWA VIRTUAL VELOCITY, LLC By: By: rFrGj(�tf� rad M. Ca h, Mayor Lloyd 5' gl tary%, gwner Attest: Trish L. Gleason, Assistant City Clerk 2 EXHIBIT C City of Dubuque, lowa PROMISSORY NOTE Date: 2023 Loan Number: DRLP # 2 - 23 Fund Source: Downtown Rehabilitation Loan Program (TIF) $300,000 FOR VALUE RECEIVED, the undersigned, Virtual Velocity, LLC, 955 Washington Street, Unit 329, Dubuque, lowa, promises to pay to the order of the City of Dubuque, lowa, 50 W. 13th Street, Dubuque, lowa, 52001, or at such place as it may direct, the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000), together with interest at the rate of 0 % per annum, upon the unpaid balance, in monthly principal payments beginning on the first day of the first month following the issuance of a Certificate of Occupancy and on the first day of each month thereafter until paid in full. The entire outstanding principal balance, if not sooner paid, shall be paid in full on the first day of the 60'" month following the issuance of a Certificate of Occupancy. If a default occurs under this Promissory Note or any of the other agreements between the undersigned and the holder and is not cured within TEN (10) DAYS after written notice to the undersigned, then the holder may, as its right and option, declare immediately due and payable the principal balance of this Promissory Note and interest accrued hereon. The undersigned further agrees to pay all costs of collection, including reasonable attorneys'fees. The City of Dubuque may at any time renew this Promissory Note or extend its maturity date for any period and release any security for, or any party to this Promissory Note, all without notice to or consent of and without releasing any maker, accommodation maker, endorser or guarantor from any liability on the Promissory Note. Presentment or other demand for payment, notice of dishonor and protest are hereby waived by the undersigned and each endorser and guarantor. This Promissory Note is subject to the Loan Agreement of same date by and between the undersigned and the City of Dubuque (including but not limited to a reduction in the principal amount of this Promissory Note as authorized by paragraph 5 of said Loan Agreement) and any default under said Loan Agreement is a default under this Promissory Note. Signed, Virtual Velocity, LLC Lloyd Singletary, Owner EXHIBIT D Prepared bv: Jill M. Connors Citv Hall, 50 W. 13th Street, Dubuque, lowa 52001 Phone: 563-583-4213 Return to: same M ORTGAG E THIS MORTGAGE is made between Virtual Velocity, LLC("Mortgagor")and City of Dubuque, lowa("Mortgagee"). [ ]If this box is checked,this Mortgage is a Purchase Money Mortgage as defined in the lowa Code. 1.Grant of Mortgage and Security Interest. Mortgagor hereby sell,convey and mortgage unto Mortgagee,and grant a security interest to Mortgagee in the following described property: a.Land and Buildings. All of Mortgagor's'right,title and interest in and to the following described real estate situated in Dubuque County, lowa(the"Land"); The Northerly 87 feet 1.2 inches of Out Lot 447 in the City of Dubuque, lowa, according to the United States Commissioners'Map thereof. b.Personal Property. All fixtures and other personal property integrally belonging to,or hereafter becoming an integral part of the Land or Buildings.whether attached or detached,including but not limited to, light fixtures,shades, rods, blinds,Venetian blinds,awnings,storm windows,screens,linoleum,water softeners,automatic heating and air- conditioning equipment and all proceeds,products, increase, issue,accessions,attachments,accessories,parts, additions, repairs. replacements and substitutes of,to,and for the foregoing(the"Personal Property"). c. Revenues and Income. All rents,issues, profits, leases,condemnation awards and insurance proceeds now or hereafter arising from the ownership,occupancy or use of the Land,Buildings and Personal Property,or any part thereof (the"Revenues and Income"). TO HAVE AND TO HOLD the Land, Buildings,Personal Property and Revenues and Income(collectively called the "Mortgaged Property"),together with all privileges, hereditaments thereunto now or hereafter belonging,or in any way appertaining and the products and proceeds thereof, unto Mortgagee, its successors and assigns. 2.Obligations. This Mortgage secures the following(hereinafter collectively referred to as the"Obligations"): a.The payment of the loan made by Mortgagee to Virtual Velocity, LLC evidenced by a promissory note dated ,2023 in the principal amount of$300,000.00,any renewals,extensions,modifications or refinancing thereof and any promissory notes issued in substitution therefor;and b.All other obligations of Mortgagor to Mortgagee, now existing or hereafter arising,whether direct or indirect,contingent or absolute and whether as maker or surety, including,but not limited to,future advances and amounts advanced and expenses incurred by Mortgagee pursuant to this Mortgage. 3. Representations and Warranties of Mortgagor. Mortgagor represents,warrants and covenants to Mortgagee that(i) Mortgagors hold clear title to the Mortgaged Property and title in fee simple in the Land; (ii)Mortgagor has the right,power and authority to execute this Mortgage and to mortgage,and grant a security interest in the Mortgaged Property;(iii)the Mortgaged Property is free and clear of all liens and encumbrances,except for real estate taxes not yet delinquent and except as otherwise stated in subparagraph 1 a. herein;(iv)Mortgagor will warrant and defend title to the Mortgaged Property and the lien and priority of this Mortgage against all claims and demands of all persons,whether now existing or hereafter arising;and(v)all buildings and improvements now or hereafter located on the Land are,or will be, located entirely within the boundaries of the Land. 4. Payment and Pertormance of the Obligations. Mortgagor will pay all amounts payable under the Obligations in accordance with the terms of the Obligations when and as due and will timely pertorm all other obligations of Mortgagor under the Obligations.The provisions of the Obligations are hereby incorporated by reference into this Mortgage as if fully set forth herein. 5.Taxes. Mortgagor shall pay each installment of all taxes and special assessments of every kind,now or hereafter levied against the Mortgaged Property before the same become delinquent,without notice or demand,and shall deliver to Mortgagee proof of such payment within fifteen(15)days after the date in which such tax or assessment becomes delinquent. 6. Liens. Mortgagor shall not create, incur or suffer to exist any lien,encumbrance,security interest or charge on the Mortgaged Property or any part thereof which might or could be held to be equal or prior to the lien of this Mortgage,other than the lien of current real estate taxes and installments of special assessments with respect to which no penalty is yet payable. Mortgagor shall pay,when due,the claims of all persons supplying labor or materials to or in connection with the Mortgaged Property. 7.Compliance with Laws. Mortgagor shall comply with all present and future statutes, laws, rules,orders,regulations and ordinances affecting the Mortgaged Property,any part thereof or the use thereof. 8. Permitted Contests. Mortgagor shall not be required to(i)pay any tax,assessment or other charge referred to in paragraph 5 hereof, (ii)discharge or remove any lien,encumbrance or charge referred to in paragraph 6 hereof,or(iii)comply with any statute, law, rule, regulation or ordinance referred to in paragraph 7 hereof,so long as Mortgagor shall contest,in good faith,the existence,amount or the validity thereof,the amount of damages caused thereby or the extent of Mortgagor's liability therefor, by appropriate proceedings which shall operate during the pendency thereof to prevent(A)the collection of,or other realization upon the tax,assessment,charge or lien,encumbrances or charge so contested,(B)the sale,forfeiture or loss of the Mortgaged Property or any part thereof,and(C)any interference with the use or occupancy of the Mortgaged Property or any part thereof. Mortgagor shall give prompt written notice to Mortgagee of the commencement of any contest referred to in this paragraph 8. 9.Care of Property. Mortgagor shall take good care of the Mortgaged Property;shall keep the Buildings and Personal Property now or later placed upon the Mortgaged Property in good and reasonable repair and shall not injure,destroy or remove either the Buildings or Personal Property during the term of this Mortgage. Mortgagor shall not make any material alteration to the Mortgaged Property without the prior written consent of Mortgagee. 10. Insurance. a.Risks to be Insured. Mortgagor,at its sole cost and expense,shall maintain insurance on the Building and other improvements now existing or hereafter erected on the Land and on the Personal Property included in the Mortgaged Property against loss by fire,extended coverage perils and such other hazards as Mortgagee may from time to time require,such insurance to have a"Replacement CosY'endorsement attached thereto,with the amount of the insurance at least equal to the balance of the Obligations.Such insurance shall name Mortgagee as a loss payee. At Mortgagor's option,such policy may have a coinsurance clause of not less than 90%of replacement cost provided the policy contains an appropriate form of cost escalation endorsement. Mortgagor will at its sole cost and expense,from time to time,and at any time at the request of Mortgagee, provide Mortgagee with evidence satisfactory to Mortgagee of the replacement cost of Mortgaged Property.Mortgagor will maintain such other insurance as Mortgagee may reasonably require. b.Policy Provisions. All insurance policies and renewals thereof maintained by Mortgagor pursuant to this Mortgage shall be written by an insurance carrier satisfactory to Mortgagee,contain a mortgagee clause in favor of and in form acceptable to Mortgagee,contain an agreement of the insurer that it will not amend,modify or cancel the policy except 1 after thirty(30)days prior written notice to Mortgagee,and be reasonably satisfactory to Mortgagee in all other respects. c.Delivery of Policy or Certificate. If requested by Mortgagee,Mortgagor will deliver to Mortgagee original policies satisfactory to Mortgagee evidencing the insurance which is required under this Mortgage,and Mortgagor shall promptly furnish to Mortgagee all renewal notices and, upon request of Mortgagee,evidence of payment thereof.At least ten(10) days prior to the expiration date of a required policy,Mortgagor shall deliver to Mortgagee a renewal policy in form satisfactory to Mortgagee. d.Assignment of Policy. If the Mortgaged Property is sold at a foreclosure sale or if Mortgagee shall acquire title to the Mortgaged Property, Mortgagee shall have all of the right,title and interest of Mortgagor in and to any insurance policies required hereunder,and the unearned premiums thereon,and in and to the proceeds thereof resulting from any damage to the Mortgaged Property prior to such sale or acquisition. e.Notice of Damage or Destruction;Adjusting Loss. If the Mortgaged Property or any part thereof shall be damaged or destroyed by fire or other casualty, Mortgagor will,within five(5)calendar days after the occurrence of such damage or destruction,give written notice thereof to the insurance carrier and to Mortgagee and will not adjust any damage or loss which is estimated by Mortgagor in good faith to exceed$25,000 unless Mortgagee shall have joined in or concurred with such adjustment;but if there has been no adjustment of any such damage or loss within four(4)months from the date of occurrence thereof and if an Event of Default shall exist at the end of such four(4)month period or at any time thereafter, Mortgagee may alone make proof of loss,adjust and compromise any claim under the policies,and appear in and prosecute any action arising from such policies. In connection therewith, Mortgagor do hereby irrevocably authorize,empower and appoint Mortgagee as attorney-in-fact for Mortgagor(which appointment is coupled with an interest)to do any and all of the foregoing in the name and on behalf of Mortgagor. f.Application of Insurance Proceeds. All sums paid under any insurance policy required by this Mortgage shall be paid to Mortgagee,which shall,at its option,apply the same(after first deducting therefrom Mortgagee's expenses incurred in collecting the same including but not limited to reasonable attorney's fees)to the reduction of the Obligations or to the payment of the restoration,repair,replacement or rebuilding of Mortgaged Property that is damaged or destroyed in such manner as Mortgagee shall determine and secondly to the reduction of the Obligations.Any application of insurance proceeds to principal of the Obligations shall not extend or postpone the due date of the installments payable under the Obligations or change the amount of such installments. g.Reimbursement of Mortgagee's Expenses. Mortgagor shall promptly reimburse Mortgagee upon demand for all of Mortgagee's expenses incurred in connection with the collection of the insurance proceeds, including but not limited to reasonable attorneys fees,and all such expenses shall be additional amounts secured by this Mortgage. 11. Inspection. Mortgagee,and its agents,shall have the right at all reasonable times,to enter upon the Mortgaged Property for the purpose of inspecting the Mortgaged Property or any part thereof. Mortgagee shall, however, have no duty to make such inspection.Any inspection of the Mortgaged Property by Mortgagee shall be entirely for its benefit and Mortgagor shall in no way rely or claim reliance thereon. 12. Protection of Mortgagee's Security. Subject to the rights of Mortgagor under paragraph 8 hereof,if Mortgagor fails to perform any of the covenants and agreements contained in this Mortgage or if any action or proceeding is commenced which affects the Mortgaged Property or the interest of the Mortgagee therein,or the title thereto,then Mortgagee,at Mortgagee's option, may perform such covenants and agreements,defend against or investigate such action or proceeding,and take such other action as Mortgagee deems necessary to protect Mortgagee's interest.Any amounts or expenses disbursed or incurred by Mortgagee in good faith pursuant to this paragraph 12 with interest thereon at the rate of 10%per annum,shall become an Obligation of Mortgagor secured by this Mortgage.Such amounts advanced or disbursed by Mortgagee hereunder shall be immediately due and payable by Mortgagor unless Mortgagor and Mortgagee agree in writing to other terms of repayment. Mortgagee shall,at its option, be subrogated to the lien of any mortgage or other lien discharged in whole or in part by the Obligations or by Mortgagee under the provisions hereof,and any such subrogation rights shall be additional and cumulative security for this Mortgage. Nothing contained in this paragraph shall require Mortgagee to incur any expense or do any act hereunder,and Mortgagee shall not be liable to Mortgagor for any damage or claims arising out of action taken by Mortgagee pursuant to this paragraph. 13.Condemnation. Mortgagor shall give Mortgagee prompt notice of any action,actual or threatened, in condemnation or eminent domain and hereby assign,transfer and set over to Mortgagee the entire proceeds of any award or claim for damages for all or any part of the Mortgaged Property taken or damaged under the power of eminent domain or condemnation.Mortgagee is hereby authorized to intervene in any such action in the names of Mortgagor,to compromise and settle any such action or claim, and to collect and receive from the condemning authorities and give proper receipts and acquittances for such proceeds.Any expenses incurred by Mortgagee in intervening in such action or compromising and settling such action or claim,or collecting such proceeds shall be reimbursed to Mortgagee first out of the proceeds.The remaining proceeds or any part thereof shall be applied to reduction of that portion of the Obligations then most remotely to be paid,whether due or not,or to the restoration or repair of the Mortgaged Property,the choice of application to be solely at the discretion of Mortgagee. 14. Fixture Filing. From the date of its recording,this Mortgage shall be effective as a financing statement filed as a fixture filing with respect to the Personal Property and for this purpose the name and address of the debtor is the name and address of Mortgagor as set forth in paragraph 20 herein and the name and address of the secured party is the name and address of the Mortgagee as set forth in paragraph 20 herein. 15. Events of Default. Each of the following occurrences shall constitute an event of default hereunder("Event of DefaulY'): a.Mortgagor shall default in the due observance or performance of or breach its agreement contained in paragraph 4 hereof or shall default in the due observance or pertormance of or breach any other covenant,condition or agreement on its part to be observed or performed pursuant to the terms of this Mortgage. b.Mortgagor shall make an assignment for the benefits of its creditors,or a petition shall be filed by or against Mortgagor under the United States Bankruptcy Code or Mortgagor shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its properties or of the Mortgaged Property or shall not,within thirty(30) days after the appointment of a trustee,receiver or liquidator of any material part of its properties or of the Mortgaged Property, have such appointment vacated. c.A judgment,writ or warrant of attachment or execution,or similar process shall be entered and become a lien on or be issued or levied against the Mortgaged Property or any part thereof which is not released,vacated or fully bonded within thirty(30)days after its entry, issue or levy. d.An event of default,however defined,shall occur under any other mortgage,assignment or other security document constituting a lien on the Mortgaged Property or any part thereof. 16.Acceleration; Foreclosure. Upon the occurrence of any Event of Default and at any time thereafter while such Event of Default exists, Mortgagee may,at its option,after such notice as may be required by law,exercise one or more of the following rights and remedies(and any other rights and remedies available to it): a.Mortgagee may declare immediately due and payable all Obligations secured by this Mortgage,and the same shall thereupon be immediately due and payable,without further notice or demand. b.Mortgagee shall have and may exercise with respect to the Personal Property,all the rights and remedies accorded upon default to a secured party under the lowa Uniform Commercial Code. If notice to Mortgagor of intended disposition of such property is required by law in a particular instance,such notice shall be deemed commercially reasonable if given to Mortgagor at least ten(10)days prior to the date of intended disposition. c.Mortgagee may(and is hereby authorized and empowered to)foreclose this Mortgage in accordance with the law of the State of lowa,and at any time after the commencement of an action in foreclosure,or during the period of redemption, the court having jurisdiction of the case shall at the request of Mortgagee appoint a receiver to take immediate possession of the Mortgaged Property and of the Revenues and Income accruing there from,and to rent or cultivate the same as he may deem best for the interest of all parties concerned,and such receiver shall be liable to account to Mortgagor only for the net profits,after application of rents,issues and profits upon the costs and expenses of the receivership and foreclosure and upon the Obligations. 17. Redemption. It is agreed that if this Mortgage covers less than ten(10)acres of land,and in the event of the foreclosure of this Mortgage and sale of the property by sheriff's sale in such foreclosure proceedings,the time of one year for redemption from said sale provided by the statues of the State of lowa shall be reduced to six(6)months provided the Mortgagee, in such action files an election to waive any deficiency judgment against Mortgagor which may arise out of the foreclosure proceedings;all to be consistent with the provisions of Chapter 628 of the lowa Code. If the redemption period is so reduced,for the first three(3)months after sale such right of redemption shall be exclusive to the Mortgagor,and the time periods in Sections 628.5,628.15 and 628.16 of the lowa Code shall be reduced to four(4)months. It is further agreed that the period of redemption after a foreclosure of this 2 Mortgage shall be reduced to sixty(60)days if all of the three following contingencies develop:(1)The real estate is less than ten (10)acres in size;(2)the Court finds affirmatively that the said real estate has been abandoned by the owners and those persons personally liable under this Mortgage at the time of such foreclosure;and(3)Mortgagee in such action files an election to waive any deficiency judgment against Mortgagor or their successors in interest in such action. If the redemption period is so reduced, Mortgagor or their successors in interest or the owner shall have the exclusive right to redeem for the first thirty(30)days after such sale,and the time provided for redemption by creditors as provided in Sections 628.5,628.15 and 628.16 of the lowa Code shall be reduced to forty(40)days.Entry of appearance by pleading or docket entry by or on behalf of Mortgagor shall be a presumption that the property is not abandoned.Any such redemption period shall be consistent with all of the provisions of Chapter 628 of the lowa Code.This paragraph shall not be construed to limit or otherwise affect any other redemption provisions contained in Chapter 628 of the lowa Code. 18.Attorneys'Fees. Mortgagor shall pay on demand all costs and expenses incurred by Mortgagee in enforcing or protecting its rights and remedies hereunder,including, but not limited to, reasonable attorneys'fees and legal expenses. 19. Forbearance not a Waiver,Rights and Remedies Cumulative. No delay by Mortgagee in exercising any right or remedy provided herein or otherwise afforded by law or equity shall be deemed a waiver of or preclude the exercise of such right or remedy,and no waiver by Mortgagee of any particular provisions of this Mortgage shall be deemed effective unless in writing signed by Mortgagee.All such rights and remedies provided for herein or which Mortgagee or the holder of the Obligations may have otherwise,at law or in equity,shall be distinct,separate and cumulative and may be exercised concurrently, independently or successively in any order whatsoever,and as often as the occasion therefor arises. 20. Notices. All notices required to be given hereunder shall be in writing and deemed given when personally delivered or deposited in the United States mail, postage prepaid,sent certified or registered,addressed as follows: a. If to Mortgagor,Virtual Velocity,LLC,955 Washington Street, Unit 329, Dubuque, lowa 52001 b. If to Mortgagee,to: Economic Development Department;City Hall; 1300 Main St., Dubuque, lowa 52001 or to such other address or person as hereafter designated in writing by the applicable party in the manner provided in this paragraph for the giving of notices. 21.Severability. In the event any portion of this Mortgage shall,for any reason,be held to be invalid,illegal or unenforceable in whole or in part,the remaining provisions shall not be affected thereby and shall continue to be valid and enforceable and if,for any reason,a court finds that any provision of this Mortgage is invalid, illegal,or unenforceable as written, but that by limiting such provision it would become valid, legal and enforceable then such provision shall be deemed to be written,construed and enforced as so limited. 22. Further Assurances. At any time and from time to time until payment in full of the Obligations, Mortgagor will,at the request of Mortgagee, promptly execute and deliver to Mortgagee such additional instruments as may be reasonably required to further evidence the lien of this Mortgage and to further protect the security interest of Mortgagee with respect to the Mortgaged Property, including, but not limited to,additional security agreements,financing statements and continuation statements.Any expenses incurred by Mortgagee in connection with the recordation of any such instruments shall become additional Obligations of Mortgagor secured by this Mortgage.Such amounts shall be immediately due and payable by Mortgagor to Mortgagee. 23.Successors and Assigns bound; Number;Gender;Agents;Captions. The rights,covenants and agreements contained herein shall be binding upon and inure to the benefit of the respective legal representatives,successors and assigns of the parties.Words and phrases contained herein, including acknowledgment hereof, shall be construed as in the singular or plural number,and as masculine,feminine or neuter gender according to the contexts.The captions and headings of the paragraphs of this Mortgage are for convenience only and are not to be used to interpret or define the provisions hereof. 24.Governing Law. This Mortgage shall be governed by and construed in accordance with the laws of the State of lowa. 25. Release of Rights of Dower,Homestead and Distributive Share. Each of the undersigned hereby relinquishes all rights of dower, homestead and distributive share in and to the Mortgaged Property and waives all rights of exemption as to any of the Mortgaged Property. 26.Acknowledgment of Receipt of Copies of Debt Instrument. Mortgagor hereby acknowledge the receipt of a copy of this Mortgage together with a copy of each promissory note secured hereby. 27.Additional Provisions. Dated: ,2023. Virtual Velocity, LLC,Mortgagor Lloyd Singletary,Owner 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. Dated: STATE OF IOWA ss: COUNTY OF DUBUQUE On this day of ,2023, before me,the undersigned,a Notary Public, personally appeared Lloyd Singletary,to me known to be the identical person named in and who executed the foregoing instrument,and acknowledged that they executed the same as their voluntary act and deed. Notary Public 3