Loading...
00-08 HRA Resolution Resolution 00-08 November 14,2000 . Commissioner Bakken introduced the following and moved its adoption: RESOLUTION CONDITIONALLY APPROVING THE LEASE OF CERTAIN REAL PROPERTY IN THE GOLDEN HILLS REDEVELOPMENT AREA (Independent School District 270) WHEREAS, the Housing and Redevelopment Authority in and for the .city of Golden Valley (hereinafter "HRA") and the City Council for the City of Golden . Valley (hereinafter "City") have approved the Golden Hills Redevelopment Plan; and WHEREAS, the HRA negotiated a lease agreement with Independent School District 270 to lease property in the Golden Hills Redevelopment Area (hereinafter the "Lease Agreement"); and, WHEREAS, Independent School District 270 (hereinafter referred to as "Lessee or Developer ") has made a proposal for the development and lease of a Community Center facility of approximately 24,000 square foot in the Xenia Avenue extension area (hereinafter the "Development"); and . WHEREAS, The HRA has reviewed the terms of the proposal made by the Developer and they appear to be reasonable and within the overall guidelines for redevelopment of the Golden Hills Redevelopment Area as modified herein; and WHEREAS, the proposed use of the Development for gymnasium and community meeting space is public rather than private; and, WHEREAS, pursuant to Minnesota Statutes s469.029, the HRA has duly given notice in the form attached as Exhibit A of a public hearing on the proposed lease of the property legally described in Exhibit B attached hereto (hereinafter the "Subject Property") and has duly held said public hearing. NOW, THEREFORE, BE IT RESOLVED, that the HRA does hereby make the following findings and determinations: 1. Proper published notice of the proposed sale of the Subject Property described above has been given and a public hearing has been held thereon, all in accordance with the provisions of Minnesota Statutes s469.029; and 2. The use of the Subject Property proposed by the Development is reasonably within the overall guidelines of the Golden Hills Redevelopment Plan; and . Resolution 00-08 (Continued) November 14,2000 . 3. The requirements of Minnesota Statute 9 469.032 relating to a determination of use value are not applicable to the lease of the Subject Property because its proposed use is neither private nor for low rental housing; and 4. In consideration of the restrictions of the lease, the limitations on use of the Subject Property imposed by Minnesota Statute 9469.029 and the restrictions of the Golden Hills Redevelopment Plan, lease of the Subject Property to the Developer in the form attached hereto as Exhibit B is appropriate. BE IT FURTHER RESOLVED that: . 1. The lease of the Subject Property to the Developer on the terms and conditions set forth in the Lease Agreement attached hereto as Exhibit "B" at a rental rate sufficient to fully defease all bonds issued by the HRA or City in connection with the Development is hereby approved subject to determination of the rental rate, and its insertion into Exhibit C to the Lease Agreement, by the Director of the HRA in consultation with HRA's bond counsel, after conclusion of the bond sale in or about January 2001; and 2. The Chair of the HRA and the Director of the HRA are hereby authorized to execute the Lease Agreement and any other necessary documents and close the lease of the Subject Property to the Developer pursuant to the terms and restrictions provided hereby; and 3. The Director of the HRA is hereby authorized and empowered to perform the obligations imposed on the HRA under the Lease Agreement; and 4. The Golden Hills Redevelopment Plan is hereby amended to the extent that the Developer's proposal embodied in the Lease Agreement attached hereto as Exhibit "B" so modifies it. '<:..-.,.I . Motion for the d ption of the foregoing resolution was seconded by Commissioner L Suer; and upon a vote taken thereon, the following voted in favor thereof: Anderson, Bakken, Johnson, LeSuer and Micks; and the following voted against the same: none; whereupon said resolution was declared duly passed and adopted, signed by the Chair and her signature attested by the Director. . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT A NOTICE OF PUBLIC HEARING (APPROVAL OF LEASE OF REAL PROPERTY FOR MEADOWBROOK COMMUNITY CENTER) NOTICE IS HEREBY GIVEN that the Housing and Redevelopment Authority (HRA) of Golden Valley, Minnesota will meet at the Golden Valley City Hall, Council Chambers, 7800 Golden Valley Road, on Monday, June 12, at 6:30 PM and will then and there consider the terms of lease to Independent School District 270 of a community center to be located adjacent to the existing Meadowbrook School facility located at 5430 Glenwood Avenue in the City of Golden Valley, Minnesota. The leasehold property consists of a parcel of approximately 1-% acres located north of Glenwood Avenue, south and east of the extension of Xenia Avenue, and west of Meadowbrook School Addition. The proposal is to construct a community center of approximately 25,000 sq. ft. and related parking. All interested parties may appear in person or by counsel and be heard. BY THE HOUSING AND REDEVELOPMENT AUTHORITY Isl William S. Joynes, HRA Director ~~:':;,ii;.0_":-:r-_~~;"'i:,:o.:__ . . . Resolution 00-08 (Continued) EXHIBIT B LEASE Housin~ and Redevelopment Authority in and for the City of Golden Valley LESSOR Independent School District No. 270 LESSEE MIS 17301 V7. LEASE. HOPKINS MEADOWBROOK ADDmON.DOC November 14, 2000 ""'~'1\;-"&""'<:L"'<"'" . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B LEASE AGREEMENT This Lease entered into as of this _ day of November, 2000, by and between the Housing and Redevelopment Authority in and for the City of Golden Valley, a body corporate and politic under the laws of the State of Minnesota (hereinafter "Lessor"), and Independent School District No. 270, an independent school district created and existing under the laws of the State of Minnesota (hereinafter "Lessee"). Witnesseth that: 1. PREMISES. Lessor does hereby lease to Lessee, and Lessee does hereby take from Lessor, land and the Meadowbrook Community Center constructed in accordance with the Approved Plans hereinafter defined (the "Building") located on the real property situated in the City of Golden Valley, County of Hennepin, State of Minnesota and which is legally described on attached Exhibit A ("Property"), together with all improvements now located, or to be built, thereon, and all easements, hereditaments and appurtenances belonging thereto (hereinafter the "Leased Premises"). The Leased Premises are located adjacent to the Meadowbrook Elementary School, which is located at 5430 Glenwood Avenue, Golden Valley, Minnesota. 2. TERM. This Lease shall be for a term of243 months ("Term"), commencing as of the date hereof (the "Commencement Date") and ending on February 1, 2021, unless sooner terminated in accordance with the provisions hereof. 3. ANNUAL BASE RENT. a. Base Rent. During the Term, Lessee shall pay Lessor base rent for the Leased Premises, in installments due and payable on the 15th day of January and the 15th day of July (or the first business day thereafter if any of said dates is not a business day), commencing July 15,2001, in the amounts set forth opposite said dates on the Rent Payment Schedule attached hereto as Exhibit C. b. Credits. So long as no default exists and is continuing by Lessee hereunder, (i) any liquid funds held by the Trustee (as defined in subparagraph 1 Od hereof) in the Bond Fund created pursuant to the Indenture (as defined in subparagraph 10d hereof) immediately following each February 1 principal payment date for the Bonds (as defined in subparagraph 1 O( d) hereof) shall be credited against the next following July 15 base rent payment of the Lessee and (ii) funds held by the Trustee in the Debt Service Reserve Fund created pursuant to the Indenture shall be credited, in equal installments, against the final two base rent payments of the Lessee due and payable on July 15,2020 and January 15,2021. A:\N517)(l1 V7 . LEASE' HOPKINS MEADOWBROOK AoomON.DOC , -~'.;J..",-c'i;,::},::,,~: 4. . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B OPERATING COSTS. All costs and expenses, foreseeable or unforeseeable, and that may be necessary in or about the operation of the Leased Premises, including without limitation all hazard and liability insurance, utilities as set forth in Sections 8 and 9 of this Lease, taxes, exterior maintenance, replacements, and repairs, structural and nonstructural, ("Actual Operating Costs") shall be paid directly by Lessee as "Additional Rent". Landlord represents and warrants that so long as Lessee's use of the Leased Premises does not subject the property to real estate taxes ("Real Estate Taxes"), no Real Estate Taxes shall be due and payable on the Property for the duration of the Term. 5. REPAIRS AND MAINTENANCE. Lessee shall, during the Term of the Lease and at Lessee's expense, keep the interior of the Building and appurtenances and every part thereof in good order, condition, and repair. Except as otherwise herein provided, Lessee shall be solely responsible for all maintenance and repairs of the exterior of the Building, including, but not limited to all structural repairs, and maintenance of all landscaped areas of the Leased Premises. Notwithstanding the foregoing, Lessee shall not be responsible for such repairs and maintenance if the need for such repairs shall result from: (i) Lessor's failure to perform its obligations hereunder; (ii) the act or neglect of Lessor or those claiming by, through or under Lessor; or (iii) damage by fire or other casualty covered by Lessor's insurance; and in any such events, Lessor shall be responsible for such repairs. 6. MECHANICS LIENS. Lessee shall not suffer or permit any statements of mechanic's liens to be filed against the Leased Premises or any part thereof by reason of work , labor, services, or materials supplied or claimed to have been supplied to Lessee or anyone holding the Leased Premises or any part thereof through or under Lessee. Notwithstanding the foregoing, Lessee shall have the right in good faith, to contest any such liens provided that Lessee advises Lessor of such contest. Lessee agrees that in the event Lessee fails to remove any such liens, or fails to contest such liens in good faith, then the Lessor may remove such liens and Lessee shall immediately reimburse Lessor upon demand for all costs and expenses, including attorney fees, incurred by Lessor in removing such liens. 7. ALTERATIONS. Lessee will not make any alterations of or additions to the Leased Premises without the prior written approval of Lessor, which approval shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Lessee shall be permitted to make interior, non-structural alterations, additions and improvements costing less than $25,000.00 per calendar year at Lessee's own cost and expense without Lessor's prior consent. All work to be performed in the Leased Premises shall be performed by competent contractors and subcontractors, approved by Lessor, which approval shall not be unreasonably withheld or delayed by Lessor, except that Lessor may in any event condition its approval of such contractors and subcontractors on the Lessee's furnishing separate performance and payment surety bonds covering any work to be performed by such contractors or subcontractors on the Leased Premises. All alteration work performed by or for Lessee hereunder must be performed in such manner as to not unreasonably disrupt the A:\.SI7JIII V7. LEASE. HOPKINS MEADOWBROOK ADDITION.DOC 2 -'!.-;'''~'''>'"/-':''';;~;~D,,_; . . . Resolution 00-08 (Continued) November 14,2000 EXHIBIT B Building operations or unreasonably disturb other lessees or licensees in the Building. Any fixtures, business equipment, inventory, signs, counters, shelving, lighting fixtures and other removable personal property installed in or on the Leased Premises by Lessee at its expense ("Lessee's Property"), shall remain the property of the Lessee. Lessor agrees that Lessee shall have the right, at any time or from time to time, to remove any and all of Lessee's Property. Lessee at its expense shall immediately repair any damage occasioned by the removal of Lessee's Property and upon expiration or earlier termination of this Lease, shall leave the Leased Premises in a neat and clean condition, free of debris, normal wear and tear excepted. Lessee shall not be obligated at any time, including at expiration of the Term, to remove Lessee's Property or any improvements to the Leased Premises, and may in its discretion leave and abandon such Lessee's Property at the expiration of the Term; provided, however, Lessee may be required to remove Lessee's Property at the expiration of the Term in the event Lessor's consent to abandonment of such Lessee's Property has not first been obtained by Lessee. 8. SERVICES AND UTILITIES. Lessee shall directly payor cause to be paid, as Additional Rent hereunder, all charges for sewer and water services, electricity, light, gas, heat, air conditioning, power, telephone, or other services or utility used, rendered, or supplied upon or in connection with the Leased Premises (the "Utilities") during the Term hereof. Lessee shall contract for the Utilities in Lessee's own name and shall hold Lessor harmless from any liability or expense for any such charge. 9. USE AND INSURANCE RATING. Lessee shall use the Leased Premises for the following purposes and for no other purposes whatsoever: (i) a public school and all uses incidental thereto, including without limitation, all community education and recreational functions as may be performed by Lessee from time to time, or (ii) any use related to an assignment, sublease or license of the Leased Premises that is permitted in accordance with the terms of this Lease. Lessee will not conduct or permit to be conducted any activity or place any equipment in or about the Leased Premises, which will in any way be in violation of any applicable Federal, State or local laws, rules or regulations, or which increase the rate of fire insurance or other insurance on the Leased Premises; and if any increase in the rate of fire insurance or other insurance is stated by any insurance company or by the applicable insurance rating bureau to be due to activity or equipment of Lessee in or about the Leased Premises, such statement shall be conclusive evidence that such increase in such rate is due to such activity or equipment, and as a result thereof, Lessee shall be liable for such increase and shall reimburse Lessor therefor. 10. LEASEHOLD IMPROVEMENTS. Lessor and Lessee shall have the following rights and obligations with regard to leasehold improvements: 1. Lessee Construction: Lessee shall construct the Building in accordance with the Approved Plans, as such term is defined below, and pursuant to the Work Letter attached hereto as Exhibit B (the "Lessee's Work"). The Date of Completion of "':,*S 17301 V7 - LEASE. HOPKINS MEADOWBROOK ADDITION.DOC 3 - "~""~-r"'~"t:~L,~" Resolution 00-08 (Continued) EXHIBIT B November 14, 2000 . . . Lessee's Work shall occur no later than the expiration of one year from and after the date of the recording of the PUD Plat (the "Projected Completion Date"). Lessee shall comply with all bidding requirements imposed on Lessor under Minnesota Statutes. 2. Quality of Lessee's Work: Lessee agrees (unless otherwise provided in the Work Letter) to promptly and diligently perform Lessee's Work in a good and workmanlike manner substantially in accordance with the Work Letter. Lessee will utilize first quality new materials in compliance with all applicable laws, ordinances, rules and statutes. 3. Lessee's Construction Insurance: Lessee agrees, at Lessee's expense, to obtain and maintain, in addition to such insurance as is required by the Work Letter, such insurance adequate to fully protect Lessor as well as Lessee from and against any and all liability for death or injury to person or damage to property by reason of construction of Lessee's Work, all with an insurer and in amounts reasonably satisfactory to Lessor. 4. Improvement Allowance. Lessee shall be allowed a cash leasehold improvement allowance (the "Allowance") equal to the sum of (i) the net proceeds received by the Lessor fromthe sale of the Lessor's [$3,390,000] principal amount of Lease Revenue Bonds, Series 2000 (the "Bonds"), in accordance with the terms of the. Trust Indenture, dated as November 1,2000 (the "Indenture"), between the Lessor and the trustee designated therein (the "Trustee") (said net proceeds being not less than $3,000,000, which is equal to the principal amount of the Bonds less costs of issuance of the Bonds and deposit to Debt Service Reserve Fund), and (ii) the tax increment contribution of the Lessor in the amount of $851,403 (being equal to $1,000,000 total contribution less costs of Lessee's Work advanced and paid to date by Lessor out of said contribution). The costs payable by Lessor under the Allowance shall include all costs for the design and construction of the Lessee's Work, all of Lessee's and Lessor's architectural and engineering fees with respect to Lessee's Work, all of Lessee's and Lessor's consulting with respect to both Lessee's Work and this Lease, all of Lessee's and Lessor's legal costs associated with Lessee's work and this Lease, all of Lessor's land surveying costs (except those incurred in relation to the plat of Meadowbrook School 2nd Addition), and all financing costs reasonably incurred by Lessor solely to fund the foregoing costs or other costs reasonably incurred by Lessor in relation to Lessee's Work. The maximum amount payable under the Allowance for Lessor's architectural and engineering fees, consulting fees and legal costs shall be $25,000. Lessor agrees that the Allowance shall be due and payable as follows: (i) as to all contractors performing Lessee's Work, or professionals performing architectural, engineering, consulting or legal services with respect to this Lease, to such contractor(s): (A) following receipt of written approval by Lessee's architect; and (B) otherwise within the due dates specified in the A:\.SJ7JlIl V7 . LEASE. HOPKINS MEADOWBROOK ADDITION.DOC 4 ~-=-"kJ,"-';i>::F;'_':;~ Resolution 00-08 (Continued) EXHIBIT B November 14, 2000 . 11. . . applicable construction contract(s); (ii) as to all professionals performing architectural, engineering, consulting or legal services with respect to this Lease, to such professionals: (A) following receipt of written approval by Lessee; and (B), otherwise within the due dates specified in the applicable invoices; and (Hi) as to any and all invoices for construction work, architectural services, engineering services, consulting services, legal services or other work or services, payment for which is intended by Lessee to be funded out of the Allowance, and for which payment has been previously paid by Lessee, to Lessee within five (5) days following: (A) receipt of a copy of Lessee's Certificate of Occupancy; and (B) Lessee's occupancy of the Leased Premises. Nothing herein shall obligate Lessor to fund any amount greater than the Allowance. WARRANTIES I ACCEPTANCE OF PREMISES. Lessee shall, upon completion of the Lessee's Work, assign to Lessor any and all warranties and/or guaranties of third parties held by Lessee in relation to the Leased Premises; provided, however, that such assignments shall be made with all rights to enforce such warranties and/or guaranties for the benefit of Lessee; and, provided further, that to the extent such reservation to enforce is invalid or is otherwise held by Lessor, Lessor shall enforce the same for the benefit of Lessee. Neither Lessor nor any agents or employees of Lessor has made any representations or promises with respect to the Leased Premises or the Building, except as follows: 1. Covenant of Title and Quiet Enioyment. Lessor represents and warrants that (i) it is the owner in fee simple of the Leased Premises and the Property; (ii) Lessor has not received any notice and does not have any knowledge of any eminent domain or similar proceeding which would affect all or any portion of the Property or the Leased Premises, (iii) Lessor has the full right, power and authority to enter into this Lease, (iv) no restrictive covenant, easement, lease or other written agreement restricts, prohibits or otherwise affects Lessee's rights set forth in this Lease, including without limitation, construction rights, permitted use or ingress and egress to and from the Leased Premises and across the Building, and (v) that Lessee or any permitted assignee or sublessee of Lessee, upon the payment of rent and performance of the covenants hereunder, shall and may peaceably and quietly have, hold and enjoy the Leased Premises and improvements thereon during the term of this Lease. Additionally, Lessor shall take no action that will interfere with Lessee's intended use of the Leased Premises or ingress or egress to the Leased Premises or across the Property . 2. Environmental Matters. Lessor represents and warrants that any handling, transportation, storage, treatment or usage by Lessor of hazardous or toxic substances undertaken on the Property by Lessor shall be in compliance with all applicable federal, state and local laws, regulations and ordinances. Lessor further represents and warrants that, to the best of its actual knowledge, no leak, spill, discharge, A:\#SI7l01 V7. LEASE - HOPKINS MEADOWBROOK ADDmON.DOC 5 > ",'-C' "'C"_ . . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B emission or disposal of hazardous or toxic substances has occurred in, on or about the Leased Premises prior to the commencement of Lessee's Work. 12. LAWS AND ORDINANCES. Lessee agrees to comply with all laws, ordinances, orders and regulations applicable to the Leased Premises governing Lessee's manner of use of the Building and Property and the cleanliness, safety or operation thereof. Lessee agrees to comply with all laws, ordinances, orders and regulations regarding the use and occupancy of the Leased Premises. Lessee agrees to comply with the reasonable regulations and requirements of any insurance underwriter, inspection bureau or similar agency with respect to Lessee's Work, and any portion of the Leased Premises. Lessee agrees not to (i) permit any practice unlawful under state or federal laws or regulations to be carried on or committed on the Leased Premises; (ii) make use of or allow the Leased Premises to be used for any purpose that might invalidate or increase the rate of insurance therefor; (iii) keep or use or permit to be kept or used on the Leased Premises any flammable fluids, gases, or explosives without the prior written permission of Lessor except for normal cleaning products and petroleum products used for maintenance of the extension of the Leased Premises; (iv) use the Leased Premises for any purpose whatsoever which might create a public nuisance; (v) deface or injure the Leased Premises; (vi) overload the floor; (vii) commit or suffer any waste; or (viii) install any electrical equipment that over loads lines. 13. ASSIGNMENT AND SUB-LETTING. Lessee shall have the right to assign this Lease or sub-let all or any part ofthe Leased Premises with the prior written consent of the Lessor, which shall notbe unreasonably withheld or delayed, subject to the following qualifications: 1. Lessee may, without Lessor's prior consent, grant a license to the City of Golden Valley for the use and occupancy of the Leased Premises in accordance with the Joint Powers Agreement. 2. Lessee may, without Lessor's prior consent, grant short term licenses consistent with normal public school and community education and recreational functions. 3. Lessee shall (i) provide Lessor with notice of any assignment or sub-lease in writing together with a copy of such assignment or sub-lease, and Lessor shall have thirty (30) days from receipt thereof to make a decision concerning such assignment or sub- lease and (ii) obtain the opinion of Lessor's Bond Counsel that the tax exempt status is not adversely affected by the proposed assignment or sub-lease. 4. Such assignment or sub-lease shall not violate the reasonable rules and regulations, from time to time adopted by Lessor, for general application throughout the Building. 5. The financial condition and credit record of the assignee shall be reasonably acceptable to Lessor. A:\M;173111 V7 - LEASE - HOPKINS MEADOWBROOK ADOmON.DOC 6 =<j'd"<f,'t-<;':<',"-i>~, . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B 6. Any assignment or sub-letting made in violation of the provisions contained herein shall be ineffective. 14. WARRANTY AS TO SERVICES. Lessor shall not be liable to Lessee in damages or otherwise if utilities or services are interrupted or terminated because of necessary repairs, installations, or improvements, or any cause beyond the Lessor's reasonable control, provided, however, Lessor shall make reasonable efforts to cooperate with Lessee to cause such utilities or services to be reestablished as soon as possible. No such interruption or termination shall relieve Lessee of the performance of any of its obligations hereunder. 15. PERSONAL INJURY - LIMITATION OF LIABILITY AND INDEMNIFICATION OF LESSOR. Lessee hereby indemnifies and holds Lessor harmless, to the extent of its statutory immunity, from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from any breach or default on the part of Lessee in the performance of any covenant or agreement on the part of Lessee to be performed pursuant to the terms of this Lease, or arising from Lessee's use of the Leased Premises or any omission to act, in or about the Leased Premises or the Property by Lessee or its agents, employees, contractors, or students, or invitees or from any breach or default by Lessee of this Lease, except to the extent caused by Lessor's negligence or willful misconduct. In the event any action or proceeding shall be brought against Lessor by reason of any such claim, Lessee shall defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor. 16. PERSONAL INJURY - LIMITATION OF LIABILITY AND INDEMNIFICATION OF LESSEE. Lessor hereby indemnifies and holds Lessee harmless, to the extent of its statutory immunity, from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from any breach or default on the part of Lessor in the performance of any covenant or agreement on the part of Lessor to be performed pursuant to the terms of this Lease, or arising from Lessor's use of the Leased Premises or any omission to act, in or about the Leased Premises or Property by Lessor or its agents, employees, contractors, or invitees, or from any breach or default by Lessor of this Lease, except to the extent caused by Lessee's negligence or willful misconduct. In the event any action or proceeding shall be brought against Lessee by reason of any such claim, Lessor shall defend the same at Lessor's expense by counsel reasonably satisfactory to Lessee. 17. PROPERTY DAMAGE - MUTUAL WAIVER OF LIABILITY. Except for specific obligations to repair damage or destruction to the Leased Premises as set forth in this Lease, Lessor and Lessee are hereby mutually released from any and all claims of any nature now or hereafter arising from or on account of damage or destruction to the Leased Premises or the Building or to any personal property of any of the foregoing contained therein or thereon, covered or required hereunder to be covered by the claiming party in whole or in part by insurance, whether such damage or destruction is caused by, arises or results from fire, other perils or any other cause whatsoever. Lessor and Lessee each agree to look to their respective insurance carriers for protection against any such damage or destruction to any of A:\#5.7301 V7 - LEASE. HOPKINS MEADOWBROOK ADDmON.DOC 7 '-" '-'-='0'- . . . Resolution 00-08 (Continued) November 14, 2009_ EXHIBIT B their respective real or personal property and do hereby waive all rights of subrogation; provided, however, that the foregoing waiver shall not be operative in any case where the effect thereof is to invalidate any insurance coverage of the waiving party. Lessor and Lessee each agree to have their respective insurers waive in writing and for the express benefit of the other, any rights of subrogation that such insurers may have against either Lessor or Lessee, if permitted by insurers. 18. LESSEE INSURANCE. Lessee agrees to purchase, in advance, and to carry in full force and effect, adequate insurance with a carrier acceptable to Lessor including at a minimum the following insurance: 1. Commercial general liability insurance, naming lessor as an additional insured, with limits in accordance with those set forth in Minnesota Statutes Section 466.04, as amended. 2. "All Risk" fire and casualty insurance, including endorsements for extended coverage, vandalism and malicious mischief, and water damage covering 1 00% of the replacement value of all of Lessee's fixtures and personal property owned by Lessee that Lessee has a right to remove from the Leased Premises at the termination of the Lease. 3. Such policies of insurance shall, if permitted thereunder, include a waiver of subrogation endorsement. All such policies of insurance shall name Lessor as an additional insured and shall not be cancelable with less than thirty (30) days written notice to Lessor by the insurer. Certificates of all such policies of insurance shall be delivered to the Lessor prior to occupancy of the Leased Premises by Lessee and at least thirty (30) days prior to the termination date of any existing policy. 19. LESSOR INSURANCE. Lessor agrees to purchase, in advance, and to carry in full force and effect, adequate insurance with a carrier acceptable to Lessor including at a minimum the following insurance: 1. Lessor agrees to carry, or cause to be carried, during the Term hereof commercial general liability insurance (hereinafter, "Lessor's Liability Insurance"), naming Lessee as an additional insured, with liability limits in accordance with those set forth in Minnesota Statutes Section 466.04, as amended. Lessor, upon written request by Lessee, shall promptly deliver to Lessee a certificate of Less or's Liability Insurance. 2. Lessor also agrees to carry, during the Term hereof, "all risk" property insurance (hereinafter, "Lessor's Property Insurance") covering fire and extended coverage, A:\#S 17301 V7 - LEASE - HOPKINS MEADOWBROOK ADDITION. DOC 8 '''''*''~'';:ij'<6~", . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B vandalism and malicious mischief, sprinkler leakage and all other perils of direct physical loss or damage insuring the Building, and all improvements and betterments located in the Building or elsewhere on the Property (excluding Lessee's Property) for the full replacement value thereof. 3. Such policies of insurance shall, if permitted thereunder, include a waiver of subrogation endorsement. All such insurallce shall name Lessee as an additional insured and shall not be cancelable with less than thirty (30) days written notice to Lessee by the insurer. Certificates of all such insurance shall be delivered to Lessee upon Lessee's request. 20. DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS. 1. Damage, Destruction and Condemnation. If (i) the Leased Premises or any portion thereof is destroyed or is damaged by fire or other casualty or (ii) title to or the temporary use of the Leased Premises or any part thereof, or the interest of Lessee or Lessor in the Leased Premises or any part thereof, shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, Lessor shall have the rights specified in this Section with respect to the net proceeds of any insurance or condemnation award (excluding any insurance proceeds or condemnation award for Lessee's personal property or trade fixtures, and excluding any relocation costs or damages to which Lessee may be entitled under any insurance policies or appropriate statutes, ordinances or regulations) (collectively referred to herein as ''Net Proceeds"). Lessor shall apply such Net Proceeds to the repair, restoration, modification or improvement of the Leased Premises with such repair, restoration, modification or improvement to be completed within a reasonable time after the receipt by Lessor of the Net Proceeds, and Lessee shall be obligated to continue to pay the Annual Base Rent and other payments due hereunder. Lessor shall be obligated to have insurance which allows for the full replacement cost of the Leased Premises. In the event the Leased Premises continue to be occupied and used for the purposes contemplated by this Lease after any condemnation, then Lessor and Lessee shall share the remainder of the Net Proceeds of such condemnation over and above the cost of any repair, restoration or improvement,. if any, with Lessor receiving 25% of such remainder and Lessee receiving 75%. 2. Insufficiency of Net Proceeds. (1) If the Net Proceeds are insufficient to pay in full the cost of any repair and restoration, Lessor shall complete the work and pay any cost in excess of the amount of the Net Proceeds, and Lessor agrees that if, by reason of any such insufficiency of the Net Proceeds, Lessor shall make any payments pursuant A:\lSI73111 V7. LEASE. HOPKINS MEADOWBROOK ADDmON.DOC 9 --<'O"""i~.iiL~I;:~"..._ . . . Resolution 00-08 (Continued) November 14. 2000 EXHIBIT B to the provisions of this Section 20, Lessor shall not be entitled to any reimbursement therefor from the Lessee but Lessee shall not be entitled to any diminution of the Annual Base Rent due with respect to the Leased Premises. (2) In the event any condemnation renders the Leased Premises unusable by either party, then the proceeds from the condemnation shall first be applied to pay the Liquidated Damages Amount as defined under.Section 23 with the remainder of such proceeds, ifany, being distributed.75% to Lessee and 25% to Lessor and this Lease and all obligations hereunder shall be terminated; provided that if the Lessee is the condemning party, then the full remainder of such proceeds shall be distributed to Lessor. In the event the condemnation proceeds are not sufficient to pay the Liquidated Damages Amount, then Lessee shall be responsible for 75%, and Lessor shall be responsible for 25%, of the balance of such Liquidated Damages Amount; provided that if the condemning party is either the Lessor or the City of Golden Valley, then Lessor shall be responsible for the entire balance of such Liquidated Damages Amount. 3. Cooperation of Parties. Lessor and Lessee shall cooperate fully with each other, at their respective expense, in filing any proof of loss with respect to any insurance policy covering the casualties described in this Section 20 hereof and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Leased Premises or any part thereof. In no event will Lessor or Lessee voluntarily settle, or consent to the settlement of, any proceeding arising out of any prospective or pending condemnation proceeding with respect to the Leased Premises or any part thereof without the written consent of the other party, which shall not be unreasonably withheld or delayed. 4. Destruction or Condemnation of Other Property Owned by Lessor or Lessee/Relocation Damages. Lessor and Lessee shall each be entitled to keep and retain (i) the net proceeds of any insurance claim or condemnation award or portion thereof made for destruction of, damage to or taking of their respective property not included in the Leased Premises; (ii) any insurance proceeds or condemnation award or portion thereof made for destruction of, damage to or taking of their respective personal property or trade fixtures, whether included in the Leased Premises or otherwise; and (iii) any relocation costs or damages to which they may be separately entitled under appropriate statutes, ordinances or regulations. 21. SIGNS. Subject to compliance with all applicable law relating to buildings on local, state and federal historical registers, to the extent applicable to the Building, Lessee may, with Lessor's advance written consent, which consent shall not be unreasonably withheld or delayed, erect, affix or post such signs (including without limitation any such signage as may A:\#517301 V7 - LEASE - HOPKINS MEADOWBROOK ADDmON.DOC 10 >>,f-::~;;;!- . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B be reasonably necessary to direct Lessee's students or other invitees to the Leased Premises) in any part of the outside or the inside of the Building as Lessee deems necessary or appropriate in its reasonable discretion. Any such permitted signs shall be at the sole. expense and cost of Lessee. 22. HAZARDOUS SUBSTANCES. Neither Lessor nor Lessee shall cause or permit any Hazardous Substance, except such Hazardous Substances as reasonably necessary for maintenance of the Leased Premises or used in the ordinary course of Lessee's business, to be used, stored, generated, or disposed of on, in, or about the Leased Premises by the parties, their agents, employees, contractors, or invitees. If Hazardous Substances are used, stored, generated, or disposed of by either party on, in, or about the Leased Premises, or if the Leased Premises becomes contaminated in any manner, the responsible party shall indemnify and hold the other party harmless (and its agents and employees) for any and all claims, damages, fines, judgments, penalties, costs liabilities, or losses arising during or after the Term and arising as a result of any use, storage, generation or disposal of any Hazardous Substance or any such contamination by such party. This indemnification includes, without limitation, any and all costs incurred because of any investigation of the site or any cleanup, removal, or restoration mandated by a federal, state, or local agency or political subdivision. If either party causes or permits the presence of any Hazardous Substances on the Leas@d Premises that results in contamination, such party shall promptly, at its sole expense, take any and all reasonable and necessary actions to return the Leased Premises to the condition existing prior to the presence of any such Hazardous Substances on the Leased Premises. As used herein," Hazardous Substances" means any substance that is toxic, ignitable, reactive, or corrosive regardless whether same is regulated by any local government, the State of Minnesota, or the United States Government. "Hazardous Substances" includes, but is not limited to, any toxic or hazardous substance and any and all material or substances that are defined as "hazardous waste", "extremely hazardous waste", or a "hazardous substance" pursuant to state, federal or local governmental law. "Hazardous Substances" includes, but is not restricted to asbestos, polychlorobiphenyls ("PCBs"), petroleum and petroleum products. 23. EARLY TERMINATION. Notwithstanding any other provision of this Lease, Lessee shall have the following options to terminate this Lease: 1. Right to Terminate. Lessee may terminate this Lease ("Lessee's Termination") at any time following the completion of construction and furnishing of the Building upon delivery by Lessee to Lessor of written notice of termination, stating therein the effective date of such termination. As of the effective date of termination, the Lessee shall be obligated to pay to Lessor, in the manner provided in subparagraph b of this Section, the Liquidated Damages Amount (as defined in said subparagraph b). 2. Payment Upon Termination. If Lessee exercises its right of Termination, Lessee shall pay to Lessor each of the following amounts: A:\#SI7301 V7. LEASE. HOPKINS MEAOOWBROOK ADDITION.DOC 11 . ~:;."r""":'.;.i;'''\_'f-':.:''';~, . . . Resolution 00-08 (Continued) November 14,2000 EXHIBIT B (1) Unless Lessor or Lessee exercises its rights under subparagraph b(2) below, the Lessee shall be obligated to pay, as the Liquidated Damages Amount and notwithstanding such termination, the payments of Base Rent otherwise required under subparagraph 3a hereof, in the amounts and at the times specified pursuant to said subparagraph 3a and Exhibit C hereto. (2) At any time on or after the effective date of termination, if the Bonds are subject to redemption pursuant to Section 3.01 of the Indenture, either the Lessor or Lessee, upon 120 days notice to the other party and to the Trustee, may elect to have the Bonds called for redemption on a redemption date specified in said notice (said redemption date being on said 120th day or the first business day thereafter). On or before said redemption date, the Lessee shall deposit with the Trustee, as the remaining Liquidated Damages Amount, funds sufficient, with any amounts then held by the Trustee pursuant to the Indenture and available to be applied to the redemption of the Bonds, to pay the principal . amount of the Bonds, with accrued interest thereon, on the specified redemption date. 24. LESSEE TO SURRENDER PREMISES IN GOOD CONDITION. Upon the expiration or termination of this Lease, Lessee shall at its expense: 1. Remove Lessee's goods and effects and those of all persons claiming through Lessee; and 2. Quit and deliver up the Leased Premises to Lessor peaceably and quietly in as good order and condition as the same were on the date the Term commenced or were thereafter placed in by Lessor, reasonable wear and tear and damages from fire and other casualties excepted. Any property left in the Leased Premises with Lessor's prior consent after the expiration or termination of the Term shall be deemed to have been abandoned and shall be deemed the property of Lessor to be disposed, at Lessor's sole cost and expense, as Lessor sees fit. 25. HOLDING OVER. Lessee shall not hold over in the Leased Premises, or any part thereof, after the expiration or termination of the Term, without Lessor's consent. Such continued occupancy by Lessee without Lessor's consent shall be at the sufferance of Lessor and Lessee shall pay as rent therefor an amount equal to 110% of the amount of Annual Base Rent in effect for the last period prior to the date of termination or expiration of the Term, plus additional rent and all other amounts which would have been payable to the Lessor under this Lease for such additional period, had the Lease remained in effect, adjusted and calculated on a per diem basis. Lessee shall pay Lessor such amount for each day the Lessee retains A:\#517301 V7 - LEASE - HOPKINS MEADOWBROOK ADDmON.DOC 12 '~'fi~"""'_ . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B possession ofthe Leased Premises or any part thereof after such expiration or termination of the Term. Lessee's obligations with respect to the Leased Premises as a Lessee at sufferance upon holding over shall be in all respects the same as Lessee's obligations under the Lease during the Term. 26. DEFA UL TS BY LESSEE. The occurrence of any of the following events shall constitute a default by Lessee under this Lease: 1. If Lessee shall fail to pay any amounts to be paid by it hereunder, including but not limited to Base Annual Rent and additional rent and such default shall continue for a period of fifteen (15) days after Lessor has given Lessee written notice of such failure to pay; or 2. If Lessee fails to perform or observe any of Lessee's other obligations, covenants or agreements herein or hereunder, and such failure shall continue for a period of thirty (30) days after Lessor has given Lessee written notice thereof, except that this thirty (30) day period shall be extended for a reasonable period of time if the alleged default is not reasonably capable of cure within said thirty (30) day period and Lessee proceeds diligently to cure the default. Upon the occurrence of any of the foregoing defaults, Lessor may (i) cancel and terminate this Lease and immediately take possession of the Leased Premises, and to remove all persons and their property therefrom using such force and assistance as reasonably necessary to recover full and exclusive use of the Leased Premises, or (ii) reenter and take possession of the Leased Premises in the manner provided in (i) above without such reentry constituting a cancellation or termination of this Lease or forfeiture of any Base Annual Rent or other amounts payable hereunder or of the covenants, agreements and conditions to be kept and performed by Lessee for and during the remainder of the Term. In the event Lessor so re-enters and takes possession of the Leased Premises without terminating the Lease as set forth above, Lessor agrees to use reasonable efforts to re-Iet the Leased Premises for a commercially reasonable rate at the time of such re-Ietting. Lessor shall have the right to commence one or more actions to enforce the terms hereof, including payment of Base Annual Rent in accordance with the provisions of subparagraph 3a hereof, and the commencement and prosecution of one action shall not be deemed a waiver or an estoppel from commencing one or more actions from time to time in the future. Lessor may, in addition to the above, seek any other remedy available to it at law or in equity. 27. RIGHT TO CURE DEFAULTS. If Lessee defaults in the observance or performance of any of Lessee's covenants, agreements or obligations hereunder wherein the default can be cured by the expenditure of money, Lessor may, but without obligation, and without limiting any other remedies which it may have by reason of such default, cure the default, charge the cost thereof to Lessee and Lessee shall pay the same forthwith upon demand. If Lessor is required to commence a legal action to recover such sums from the Lessee, Lessor shall also A:\NS 17301 V7. LEASE. HOPKINS MEADOWBROOK ADDITION.DOC 13 . .. . ^~ 'h_,;;;.:.;,._ Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B have the right to recover all interest costs and attorney's fees in connection with such litigation. 28. DEFAULTS BY LESSOR. If Lessor should be in default in the performance of any ofits obligations under this Lease, which default continues for a period of more than thirty (30) days after receipt of written notice from Lessee specifying such default, or if such default is of a nature to require more than thirty (30) days for remedy and continues beyond the time reasonably necessary to cure (and Lessor has not undertaken procedures to cure the default within such thirty (30) day period and diligently pursued such efforts to complete such cure), Lessee may, in addition to any other remedy available at law or in equity, incur any expense necessary to perform the obligations of Lessor specified in such notice and seek reimbursement from Lessor for such expenses. 29. USE OF THE TERMS "LESSOR" AND "LESSEE". The terms "Lessor" and "Lessee" wherever used in this Lease, shall be construed to mean plural in all cases where there is more than one Lessor or Lessee and the necessary grammatical changes required to make the provisions hereof apply to corporations, partnerships or individuals men or women, shall in all cases be assumed as though in each case fully expressed. In addition, where relevant in this Lease and especially in connection with the provisions of this Lease relating to personal injury, limitation ofliability, indemnification, property damage and insurance, "Lessor" shall mean Lessor, its respective employees, agents, invites, licensees, customers, clients, partners and shareholders and "Lessee" shall mean its employees, agents, business invites, licensees, customers and clients, family members, guests, trespassers, partners and shareholders. 30. CAPITALIZED TERMS. All capitalized terms contained in this Lease, unless otherwise defined herein, shall be ascribed the same meaning as in the Joint Powers Agreement between the parties dated May 9, 2000, or in the Indenture. 31. CONSENTS. Unless it is expressly stated herein, as to any particular required consent, Lessor's and Lessee's consent, as appropriate, shall not be unreasonably withheld or delayed. 32. CONTINUANCE OF AGREEMENT. This Agreement shall be binding upon and inure for the benefit of the parties hereto and their respective heirs, successors and assigns. 33. SEVERABILITY. The provisions of this Lease are expressly severable, and the unenforceability of any provision or provisions hereof shall not affect or impair the enforceability of any other provision or provisions. 34. MEMORANDUM LEASE. Lessee and Lessor shall, upon the written request of the other, execute a memorandum or short form lease, in a form suitable for recording. Said Memorandum Lease shall be dated on the date and year of the execution of this Lease and shall disclose the parties, the terms of the Lease, the legal description of the Leased Premises A:\#SI7l01 V7 - LEASE. HOPKINS MEADOWBROOK ADDmON.DOC 14 . . . "-;."c;>L:<,:,_:~;;.;,,- 35. Resolution 00-08 (Continued) EXHIBIT B November 14,2000 and may contain, in addition to the foregoing, such other terms and conditions as Lessor or Lessee, as the case may be, may require. NOTICES. Any notice or demand which, under the terms of this Lease or under any statute must or may be given or made by th~ parties hereto, shall be in writing, and may be given or made by personal delivery or mailing the same by certified mail, addressed to the other party at the address herein below mentioned. Either party, however, may designate in writing such new or other address to which such notice or demand shall thereafter be so given, made or mailed. Any notice given hereunder by mail shall be deemed delivered when deposited in the United States mails, certified mail, return receipt requested, postage prepaid, and addressed as herein provided: a. If to Lessor: b. If to Lessee: 36. Housing and Redevelopment Authority 7800 Golden Valley Road Golden Valley, MN 55427 Attn.: Executive Director at the Leased Premises (unless notice of change of address is given pursuant to this section) or at the following address: Independent School District No 270 Hopkins School District Administrative Offices 1001 Highway 7 Hopkins, MN 55305-4723 Attn.: David H. Shapley AMENDMENTS. This Lease, and the License and Operating. Agreement, of even date herewith between the parties, contain all of the agreements of the parties hereto with respect to matters covered or mentioned in this Lease and no prior agreement,. letters, representations, warranties, promises, or understandings pertaining to any such matters shall be effective for any such purpose. This Lease may be amended only by a writing executed by both parties hereto, and subject to the provisions of Article XII of the Indenture. 37. FORCE MAJEURE. In the event that either party hereto shall be delayed or hindered in or prevented from the performance required hereunder by reason of strikes, lockouts, labor troubles, failure of power, riots, insurrection, war, acts of God, or other reason oflike nature not the fault of the party delayed in performing work or doing acts (hereinafter, "Permitted Delay" or "Permitted Delays"), such party shall be excused for the period of time equivalent to the delay caused by such Permitted Delay. Notwithstanding the foregoing, any extension of time for a Permitted Delay shall be conditioned upon the party seeking an extension of time delivering written notice of such Permitted Delay to the other party within ten (10) days of the event causing the Permitted Delay, and the maximum period of time which Lessor A:INSI7301 V7 . LEASE. HOPKINS MEADOWBROOK ADDmON.DOC 15 . . . ~\::q>:",. Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B may delay any act or performance of work due to a Permitted Delay shall be sixty (60) days. The provisions of this Section shall not apply to payments required to be made by the Lessee pursuant to paragraphs 3 and 23 hereof. 38. MISCELLANEOUS. There are no understandings or agreements not incorporated in this Lease except such understandings and agreements in the License and Operating Agreement. This is a Minnesota lease and shall be construed according to the laws of the State of Minnesota. The captions in this Lease are for convenience only, and are not part of this Lease. IN WITNESS WHEREOF, Lessor and Lessee respectfully have duly signed and sealed these presents the day and year first above written. LESSOR: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY \' By Its Chair By Its Director STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) The foregoing was acknowledged this day of , 2000, by Gloria L. Johnson and William S. Joynes, respectively the Chair and Director of the Housing and Redevelopment Authority in and for the City of Golden Valley, Minnesota, a public body corporate, on behalf of the corporation. NotaryPublic A:\#517301 Y7. LEASE - HOPKINS MEADOWBIlOOK ADDITION.DOC 16 . -' =, ::-;>;'J.c_L_~ . . . Resolution 00-08 (Continued) EXHIBIT B LESSEE: INDEPENDENT SCHOOL DISTRICT NO. 270 By Its STATE OF MINNESOTA ) ) COUNTY OF ) The foregoing was acknowledged this its , a , 2000, by on behalf of the DRAFTED BY: Rider Bennett Egan & Arundel 333 South Seventh St., Suite 2000 Minneapolis, MN 55402 A:IIIS17301 V7 . LEASE. HOPKINS MEADOWBROOK ADDmON.DOC day of November 14,2000 Notary Public 17 . . .,~y., ;~:'~'(~.-:". NOTES: 1, See civil sheets for paving material and details 2, See L500 for site details, Q ~ Q r--_L'd, I .....____....~..1 i i\"""'-'j 'I \_t~M') i i-I I ' I:) I I " ! " .<..:~\ - """':':- C\ ] \:-\ .-... ~ ,,' ," \ .....1 ;:1,,:.\ ,. J!~~ j ~~= .:", I. ~:~"TTl, .''':: -t' .-:J i II 1111" ' \\.-- 'Il I:'::~ :1 "t ~- ! L-=: .:::::1 r.-j 'l"j r .---.--.--- .....--- GLENWOOO ~...-_._--~ ........... ~ / .....-_._--_._----~_.-. /' --.-----..., <::l /' \ ~ I \~9: / !-oJ Yi I (f ero.. _.a. .... -- - =- - ~ - - 00 -. - ~ ~ - ~ = ~ ~ res - ~~ - --- --- --- --- --- - --- =" --- ~ --- --- ~ --- ~ --- ~ .........,............. rI.l ......""""'''..-.. ~ =='":.:J.~~.. =- - ~ ... ..,.,. ri -.. - a ..... 1t\..,.II\ ~~ -. .....", .......w rI.l -.. ~ MEADOWBROOK rI.l COMMUNITY CENTER AND REMODEL Golden Yalley. Klunot. 115" CD ESTIIIATE -- GEOMETRIC AND RlPERENCE SITE PLAN LlO.Q ~---_.. . I, :;:" . I;' :::0 (1) CJ) o c ..... O' :J o o I o 00 - () o :J ..... 5' c (1) Co -- I OJ z o < (1) 3 e- (1) .., ..a. ~ I\) o o o -"""');,,:"'i.'.; . . . Resolution 00-08 (Continued) EXHIBIT B Exhibit A-I Leeal Description of the Property November 14,2000 Lot 1, Block 1, Meadowbrook School P.U.D No. 90., Hennepin County, Minnesota A:\#SI7301 V7. LEASE. HOPKINS MEADOWBROOK ADDmON.OOC . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B Exhibit B LETTER AGREEMENT This Work Letter Agreement (IIW ork Letterll) is executed simultaneously with that certain lease (the "Lease") between Independent School District No. 270 as IILessee" and the Housing and Redevelopment Authority in and for the City of Golden V alley as "Lessor", relating to certain Leased Premises described in the Lease. Capitalized terms used herein, unless otherwise defined in this Work Letter, shall have the respective meanings ascribed to them in the Lease or in the Indenture (as defined in said Lease). For and in consideration of the agreement to lease the Leased Premises and the mutual covenants contained herein and in the Lease, Lessor and Lessee hereby agree as follows: 1. Work. Lessee, at its sole cost and expense, shall perform, or cause to be performed for and on behalf of Lessor, the work (the "Workll) on the Leased Premises provided for in the Approved Plans (as defined in Paragraph 2 hereof). Subject to Lessee's satisfaction of the conditions specified in this Work Letter, Lessee shall be entitled to disbursements of the Lessor's Contribution and other amounts in accordance with subparagraph 5(b) below. ,: 2. Pre-Construction Activities. (a) On or before , 2000 , Lessee shall submit the following information and items to Lessor for Lessor's review and approval: (i) A detailed critical path construction schedule containing the major components of the Work and the time required for each, including the scheduled commencement date of construction of the Work, milestone dates and the estimated date of completion of construction. (ii) An itemized statement of estimated construction cost, including fees for permits and architectural and engineering fees. (iii) The names and addresses of Lessee's Construction Manager, contractors (and said contractor's subcontractors) and materialmen to be engaged by Lessee for the Work (individually, a IILessee Contractor, II and collectively, "Lessee's Contractorsll). (iv) Certified copies of insurance policies or certificates of insurance as hereinafter described. Lessee shall not permit Lessee's Contractors to commence work until the required insurance has been obtained and certified copies of policies or certificates have been delivered to Lessor. A:\#5I73UI V7 - LEASE . HOPKINS MEADOWBROOK ADDmON.DOC 1 - -~<."-'~'"'.'~l;:::"~::k<;~;~.. _ . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B (v) The Plans (as hereinafter defined) for the Work, which Plans shall be subject to Lessor's approval in accordance with Paragraph 2(b) below. Lessee will update such information and items by notice to Lessor of any changes. (b) As used herein the term "Approved Plans" shall mean the Plans (as hereinafter defined), as and when approved in writing by Lessee and Lessor: . As used herein, the term "Plans" shall mean the full and detailed architectural and engineering plans and specifications covering the Work (including, without limitation, architectural, mechanical and electrical working drawings for the Work). The Plans shall be subject to Lessor's approval and the approval of all local governmental authorities requiring approval of the work and/or the Approved Plans. Lessor shall give its approval or disapproval (giving general reasons in case of disapproval) of the Plans within ten (10) working days after their delivery to Lessor. Lessor agrees not to unreasonably withhold its approval of said Plans. If Lessor notifies Lessee that changes are required to the final Plans submitted by Lessee, Lessee shall, within twenty (20) business days thereafter, submit to Lessor, for its approval, the Plans amended in accordance with the changes so required. The Plans shall also be revised, and the Work shall be changed, all at Lessee's cost and expense, to incorporate any work required in the Premises by any local governmental field inspector. (c) No Work shall be undertaken or commenced by Lessee in the Premises until (i) Lessee has delivered, and Lessor has approved, all items set forth in Paragraph 2(a) above, and (ii) all necessary building permits have been applied for and obtained by Lessee. 3. Change Orders. All changes to the Approved Plans requested by Lessee must be submitted to Lessor in advance of the implementation of such changes as part of the Work. All increases in the cost of the Work resulting from such change orders shall be borne by Lessee. 4. Standards And Conditions of Lessee's Performance. All work done in or upon the Leased Premises by Lessee shall be done according to the standards set forth in this Paragraph 6, except as the same may be modified in the Approved Plans approved by or on behalf of Lessor and Lessee. (a) Lessee's Approved Plans and all design and construction of the Work shall comply with all applicable statutes, ordinances, regulations, laws, codes and industry standards, including, but not limited to, requirements of Lessor's fire insurance underwriters. A:\NS 17301 V7 - LEASE. HOPKINS MEADOWBROOK ADOmON.DOC 2 '~"""'-\ii;'i~;:,.c".,,,,.., . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B (b) Lessee shall, at its own cost and eXIJ~nse, obt~in all required building permits and occupancy permits. (c) Lessee's Contractors shall be licensed contractors, possessing good labor relations, capable of performing quality workmanship and working in harmony with Lessor's contractors and subcontractors. (d) Lessee shall use only new, first-class materials in the Work, except where explicitly shown in the Approved Plans. All Lessee's Work shall be done in a good and workmanlike manner. Lessee shall obtain contractors' warranties of at leaSt one (1) year duration from the completion of the Work against defects in workmanship and materials on all work performed and equipment installed on the Leased Premises as part of the Work. (e) Utility costs or charges for any service to the Leased Premises shall be the responsibility of Lessee from the date Lessee commences the Work and shall be paid for by Lessee. Lessee shall pay for all support services provided by Lessor's contractors at Lessee's request, if any. (f) Lessee shall permit access to the Leased Premises, and the Work shall be subject to inspection by Lessor and Lessor's architects, engineers, contractors and other representatives, at all times during the period in which the Work is being constructed and installed, and following completion of the Work. (g) Lessee shall proceed with its work expeditiously, continuously and efficiently, and shall use its best efforts to complete the same on or before 180 days after the date of final approval and filing of the PUD plat. Lessee shall notify Lessor upon completion of the Work and shall furnish Lessor and Lessor's title insurance company and the Trustee with such further documentation as may be necessary under Paragraph 5(a) below. (h) Lessee shall have no authority to materially deviate from the Approved Plans in performance of the Work, except as authorized by Lessor and its designated representative in writing. (i) Lessee shall impose on and enforce all applicable terms ofthis Work Letter against Lessee's architect and Lessee's Contractors and Construction Manager. 4. Insurance And Indemnification. (a) In addition to any insurance which may be required under the Lease, Lessee shall secure, pay for and maintain or cause Lessee's Contractors and Construction Manager to secure, pay for and maintain during the continuance of construction and fixturing A:\OSI7lll' V7 - LEASE - HOPKINS MEADOWBROOK ADDmON.DOC 3 . """'4;d:"'fiii':'::':, Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B . work on the Leased Premises, payment and performance bonds in form and amount reasonably acceptable to Lessor, and insurance in the following minimum coverages and the following minimum limits of liability: (i) Worker's Compensation and Employer's Liability Insurance with limits of not less than such amounts as may be required from time to time by law. (ii) Comprehensive Automobile Liability Insurance, includ:lng the ownership, maintenance and operation of any automotive equipment, owned, hired, or non-owned in an amount not less than $500,000.00 for each person in one accident, and $1,000,000.00 for injuries sustained by two or more persons in anyone accident and property damage liability in an amount not less than$I,OOO,OOO.OO for each accident. Such insurance shall insure Lessee's Contractors and Construction Manager against any and all claims for bodily injury, including death resulting therefrom, and damage to the property of others arising from its operations under the contracts, whether such operations are performed by Lessee's Contractors and Construction Manager; or by anyone directly or indirectly employed by any of them. . (iii) "All-risk" builder's risk insurance upon the entire Work to the full insurable value thereof. This insurance shall include the interests of Lessor and Lessee (and their respective contractors and subcontractors of any tier to the extent of any insurable interest therein) in the Work and shall insure against the perils offire and extended coverage and shall include "all-risk" builder's risk insurance for physical loss or damage including, without duplication of coverage, theft, vandalism and malicious mischief. If portions of the Work are stored off the site of the Leased Premises or in transit to said site are not covered under said "all-risk" builder's risk insurance, then Lessee shall effect and maintain similar property insurance on such portions of the Work. Any loss insured under said "all-risk" builder's risk insurance shall be adjusted between Lessor and Lessee and made payable to Lessor, as trustee for the insureds, as their interests may appear. . All policies (except the worker's compensation policy) shall be endorsed to include as additional insured parties the parties listed on, or required by, the Lease, Lessor's contractors, Lessor's architects, and their respective beneficiaries, partners, directors, officers, employees and agents, and such additional persons as Lessor may designate. The waiver of subrogation provisions contained in the Lease shall apply to all insurance policies (except the worker's compensation policy) to be obtained pursuant to this paragraph. The insurance policy endorsements shall also provide that all additional insured parties shall be given thirty (30) days' prior written notice of any reduction, cancellation or non-renewal of coverage and shall provide that the A:\#SI7301 V7 - LEASE - HOPKINS MEADOWBROOK ADDITION.DOC 4 .-w:~,,.j.._:.,,.,.:,.<_:.._,<,,,-. . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B insurance coverage afforded to the additional insured parties thereunder shall be primary to any insurance carried independently by said additional insured parties. Additionally, where applicable, each policy shall contain a cross...' liability and severability of interest clause. (b) Without limitation of the indemnification provisions contained in the Lease, to the fullest extent permitted by law Lessee agrees to indemnify, protect, defend and hold harmless Lessor, and its respective beneficiaries, partners, directors, trustees, officers, employees and agents, from and against all claims, liabilities, losses, damages and expenses of whatever nature arising out of or in connection with the Work or the entry of Lessee or Lessee's Contractors or Construction Manager onto the Leased Premises, without limitation, mechanic's liens, the cost of any repairs to the Leased Premises or Building necessitated by activities of Lessee or Lessee's Contractors or Construction Manager, bodily injury to persons or damage to the property of Lessee, its employees, agents, invitees, licensees or others. It is understood and agreed that the foregoing indemnity shall be in addition to the insurance requirements set forth above and shall not be in discharge of or in substitution for same or any other indemnity or insurance provision of the Lease. 5. Lessor's Contribution: Excess Amounts. (a) Upon completion of the Work, Lessee shall furnish Lessor with full and final waivers ofliens and contractors' and architect's affidavits and statements, in such form as may be required by Lessor, Lessor's title insurance company and the Trustee, from all parties performing labor or supplying materials or services in connection with the Work showing that all of said parties have been compensated in full and waiving all liens in connection with the Leased Premises and Building. (b) Lessor shall make a dollar contribution in accordance with Section 4.03 of the Indenture for application to the extent thereof to the cost of the Work. If the cost of the Work exceeds the aggregate sum held by the Lessor in the Authority Project Account established and funded pursuant to Section 4.03 of the Indenture, Lessee shall have sole responsibility for the payment of such excess cost. 6. Construction Escrow. Prior to commencement of any construction or performance of any Work or payment to or by Lessee or to any of Lessee's Contractors, Lessor shall establish and fund the Authority Project Account in accordance with Section 4.03 of the Indenture and shall establish a mutually satisfactory payment procedure with Lessor providing for payment to Lessee's Contractors and payment of all other costs associated with the Work as the Work progresses, upon the satisfactory review of lien waivers and sworn statements from Lessee's Contractors and other applicable parties relating to Lessee's contracts and the Work to the date of each draw. A:I#,1730' V7 . LEASE. HOPKINS MEADOWBROOK ADDlTlON.DOC 5 ."",...."'-":;'.;:.;&>-;..:<'.,;,,-,:. . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B 7. Miscellaneous. (a) Time is of the essence of this Work Letter Agreement. (b) Lessee's failure to pay any amounts owed by Lessee hereunder when due or Lessee's failure to perform its obligations hereunder shall also constitute a default under the Lease and Lessor shall have all the rights and remedies granted to Lessor under the Lease for nonpayment of any amounts owed thereunder or f~i1ure by Lessee to perform its obligations thereunder. (c) Notices under this Work Letter shall be given in the same manner as under the Lease. (d) The headings set forth herein are for convenience only. (e) This Work Letter sets forth the entire agreement of Lessee and Lessor regarding the Work. This Work Letter may only be amended if in writing, duly executed by both Lessor and Lessee. (f) All amounts due from Lessee hereunder shall be deemed to be Rent due under the Lease. 8. Lease Provisions. The terms and provisions of the Lease are hereby amended and supplemented. In the event of any conflict between the provisions of the Lease and the provisions of this Work Letter with respect to the Work, the provisions of this Work Letter shall control. All amounts payable by Lessee to Lessor under this Work Letter shall be deemed to be Additional Rent under the Lease and, upon any default in the payment of same, Lessor shall have all of the rights and remedies provided for in the Lease. The pursuit of any remedies by Lessee in connection with any breach by Lessor of its obligations under this Work Letter shall be subject to the provisions of Paragraph 9(b) hereof and subject to any other limitations set forth in the Lease. THIS WORK LETTER AGREEMENT is executed as of the day of November, 2000. Lessee: INDEPENDENT SCHOOL DISTRICT NO. 270 By Its A:\NS11301 V7. LEASE - HOPKINS MEADOWBROOK ADOmON.DOC 6 ~ , '"~'" ~' ~ . . . Resolution 00-08 (Continued) November 14, 2000 EXHIBIT B 8T ATE OF MINNE80T A ) ) COUNTY OF ) The foregoing was acknowledged this its day of ,2000, by , a , on behalf of the Notary Public Lessor: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF GOLDEN VALLEY By Its Chair '. By 'Its Director 8T A TE OF MINNE80T A ) ) COUNTY OF HENNEPIN ) The foregoing was acknowledged this day of , 2000, by Gloria L. Johnson and William 8. Joynes, respectively the Chair and Director of the Housing and Redevelopment Authority in and for the City of Golden Valley, Minnesota, a public body corporate, on behalf of the corporation. Notary Public A:\#S 17301 V7 - LEASE - HOPKINS MEADOWBROOK ADDITION.DOC 7