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CR 2004-096 Hopkins Pavilion Addition Agreements ( OITY Or:: ) .~ . June 9, 2004 HOPKINS i Council Report 2004-096 Hopkins Pavilion Addition Agreements ' Proposed Action Staff recommends adoption of the following motion: Move to approve the Ground Lease Aareement and' Construction Disbursino Aoreement with Hopkins Youth Hockey Association and the Lease GuarantvAoreement with the Hopkins Hockev Boosters for the construction of an addition to the Hopkins Pavilion. Overview Phase II of the joint development of the Pavilion, to better serve our needs as well as the needs of the community and Hopkins School District, moves forward with the approval of these documents which will allow construction to beginon a locker room, , storage, and training room addition to the Hopkins Pavilion. After several months of meetings with Hopkins School District (HSD), Hopkins Youth Hockey Association (HYHA), and Hopkins Hockey Boosters Club (HHBC)representatives, staff anticipates thatthe HYHA Board, and the HHBC Board will agree to the terms of these ' agreements. . A final HYHA and HHBC decision is expected on Monday, June 21, 2004. The City would lease the land for ,the projecttb HYHA, loan the capital for the project to HYHA, a 501 (c) 3 corporation in good standing, and then HYHAwillcontract to have .; the addition built and repay the City. When the leaseTeaches the end of its terms the land and addition is then turned over to the City. Primary Issues to Consider . Scope and Schedule . Funding and Fund Disbursement . City Contribution to the Funding Supportina Information . Ground Lease Agreement . Construction Disbursing Agreement . Lease Guaran y Financial Impact: $50.000 Budgeted: Y/N--1;L Source: Park Dedication Fund Related Documents (CIP, ERP, etc.): Notes: Estimated in-kind contribution of $7.557.00 waived fees that will reduce the . $50.000 financial impact accordinolv. Council Report 2004-096 Page 2 . Analvsis of Issues . Scope and Schedule .. The Ground Lease Agreement will leaseanarea on the south side of the Hopkins Pavilion to HYHA for 1 0 years. An addition to the Pavilion will be built upon this leased ground. The anticipated project scope is the construction of a 2,518 square foot addition, on the south side bf the Pavilion, centered on the building in the area where .. the three large overhead doors are currently located. The addition will be constructed with materials to match the current exterior. The interior space will include two divided locker room areas, a coach's office,restrciom area, an open area for storage and dry land training. ' Preliminary work in design and approval of a Conditional Use P~rmitby the Zoning and Planning Commission has already been accomplished. The anticipated schedule is to complete the d~sign work as soon as these agreements are signed and break ground shortly there after. The completion goal is to have occupancy for the Hopkins High School Hockey team when they start practice the first week of November 2004. . Funding and Fund Disbursement .' Hopkins Youth Hockey Association, the Hopkins Hockey Booster Club, Hopkins School District 270, and the City of Hopkins will all contribute to the funding of this joint development of the Pavilion. HYHAhas committed to $50,000 over 1 0 years;HHBC - , . - '" , has committed to $50,000 over 10 years plus $25,000 in a lumpsumpayment. The total of these two organizations payments is $125,000. This is the amount ,specified in section 3a and 3b in the Ground Lease Agreement. Being the Ground Lease Agreement isan agreement between HYHA and the City, the HHBC will sign the Lease Guaranty that will demonstrate that organizations commitment to the payment of their portion of the project through the Ground Lease, The balance of the project funding will be attained through an. increase in ice rental rates for Hopkins High School Hockey over the next 10 years and a total commitment of $50,000 in cash and in-kind fee waiver from the City. ' Funds for the project will be.disbursed per the Construction Disbursing Agreement. HYHA, M.A. Mortenson Company, andCity representatives have reviewed the Construction Disbursing Agreement and are in agreement that the document addresses all parties needs. For the City, the Construction Disbursing Agreement seeks to assure that funds are disbursed based on work completed and that at the Completion Date the project is complete in accordance with the construction contract, free and clear of liens, with materials and workmanship of at least standard quality, . Council Report 2004-096 ' Page 3 . . City Contribution to Funding The City has agreed to commit $50,000 toward this project. A portiorl ofthis$50,OOO, _ estimated at $7,557, is an in-kind donation that is the Citywaivingofcertain City collected fees on the project. The Park Dedication Fund will support the cash funding of the project. The utilization offunds from the ParkDedication Fund could require a portion of the Valley Park improvements projected for 2005 to be moved to 2006. . .. . Draft of 6/7/04 GROUND LEASE AGREEMENT THIS GROUND LEASE AGREEMENT ("Lease"), is made this _ day of , 2004, by and between The City of Hopkins, ainunicipal corporation under the laws of Minnesota ("Landlord") and Hopkins Youth Hockey Association, a nonprofit corporation under the laws of Minnesota ("Tenant"); , RECITALS: A. The City is fee' owner of certain real,. property legally described it} Exhibit A attached hereto and incorporated herein(the "Real Estate"} TheReat Estateisimproved withan ice hockey and multi-purpose facility known as the Hopkins Pavilion ("PavlIion"): B. Tenant desires to construct and operate, ahapproximately 2,518 square foot addition to the Pavilion (the "Improvements") to be used, for storage, locker rooms and other uses related to tenants youth hockey activities, subject to the terms and conditions contained in this Lease. The Improvements are more particularly described in Paragraph 19 of this Agreement. Tenant proposes to construct and operate the Improvements onthatportiort of the Real Estate legally described.in Exhibit B attached hereto and incorporated herein (the "Leased Premises"). During the initial 10 year term of this Lease, the Leased Premises shall consist only of the land . legally described in Exhibit B attached hereto and shall not include any part of the Improvements. At the end of the initial 10 year term of this Lease, or upon its earlier termination, the Improvements, shall become the sole property of Landlord and part of the Leased Premises and, thereafter, all references in this Lease to the "Leased. Premises" shall include the land legally described in Exhibit B attached hereto and the Improvements. ,c. Landlord and Tenant have agreed the Leased Premises shall be leased to Tenant upon the terms and conditions stated in this Lease, and are entering into this Lease for that purpose. NOW, THEREFORE, in consideration of the, foregoing Recitals which are incorporated in this Lease; the terms and conditions stated below and other good and valuable consideration, Landlord and Tenant agrees as follows: 1. DEMISE AND PREMISES. Subject to the terms and conditions hereof, Landlord leases to Tenant, and Tenant hires and takes of and from Landlord the Leased Premises. 2. TERM AND EARLY TERMINATION OPTION. The Term of this Lease shall commence oil the 1st day of July, 2004, and shall terminate on the 30th day of June, 2014, unless . earlier terminated as hereinafter provided. . 3. BASE RENT. Tenant agrees to pay Landlord, at 1010 First Street South, Hopkins, .: Minnesota 55343 or such other place as Landlord may from time to time designate in writing, base rent ("Base Rent"), in the following amounts and payable on the dates stated below, namely: c:Hopcivil\Lease. Y out11Hockey . a) Tenant shan pay Landlord'the sum of Ten Thousand Dollars ($10,000.00) Base Rent, in cash, on February 1, 2005, and onthe first day of February of each year thereafter during the entire term of this Lease. , ' b) On February 1, 2006, Tenant shall pay Landiord an additional Base Rent payment in the amount of Twenty-five Thousartd Dollars ($25,000.00), in cash~ The above 'Base Rent payments shall'be payable on the dates stated above without demand' , therefor or deduction or setoff. ' . . 4. ADDITIONAL RENT. Landlord shall perform aU repair, maintenance, upkeep and replacement of the roof, outer walls and interior walls, structuralelemeIlts, heating, cooling, sewer, water artd utility systems, plumbing and electrical ,fiXtures of the Improvements during the entire term of this Lease without charge to Tenant, provided Tenantshallbesoldyresponsible for cleaning, janitorial services and refuse removal and for all repair or maintenance occasioned by the negligent or intentional act of Ten ant, any subtenant or the agents o~ invitees of Tenant or any, subtenant. Tenant shall also be responsible for all repair, maintenance, upkeep and replacement of the Improvements, any part or component thereof and any fixtures or personal property located within the Improvements that Landlord has not expressly assumed responsibility for pursuant to the terms of this Lease. Should Tenant fail to pay any of the costs and expensesclescribed in the preceding sentence or should Tenant otherwise fail to perform any obligation of Tenant under this '. Lease,. and as a .result, Landlord Sh. all incur .any"o.perating Expense. s," a~.defined below, during . the term of thIS Lease, Tenant agrees to pay to Landlord as AddItional Rent hereunder ("Additional Rent"), payable at the same time and location as the Base Rent, all such Operating. Expenses incurred by Landlord. When used in this Lease, the phrase "Operating Expenses" shall mean and refer to all costs and expenses which Landlord may incur with respect to the operation, maintenance, repair, upkeep or replacement of the Leased Premises or ,the, Improvements including, but not limited to, the costs of heat, cooling, sewer, water, utilities, insurance, landscaping; cleaning, . maintaining, resurfacing, stripirig, repairing and snoW . removal of walkways, driveways and parking areas; all maintenance and repair costs, including expenses related to maintenance of the ,roof, structural, and utility systems. Landlord shall be solely , responsible for all Operating Expenses incurred with respect to any obligation assumed by Landlord pursuant to the express terms of this Lease and Tenant shall be solely responsible for all other Operating Expenses. If Landlord' incurs any expense at liability arising from Operating Expenses for which Tenant is responsible during the term of this Lease, Tenant agrees to pay the Landlord as additional rent ("Additional Rent") hereunder, payable upon 30 days written notice from Landlord, all such Operating Expenses incurred by Landlord. 5. SERVICE AND UTILITIES. Landlord agrees that it shall pay all costs incurred in, operating, maintaining, repairing and replacing all heating, ventilating, air conditioning, plumbing and other utility systems serving the Improvements, with the exception of costs incurred as aresult of the negligence or intentional act of Ten ant, any permitted subtenant or their agents or invitees. Landlord agrees to pay all charges for heat, air conditioning, sewer and water services . fU, rnished to the Improvements ~uring the term of this Lease. . ~enant s.hall pay all charges for telephone, cable T.Y. and rubbIsh removal. Payments for utIlIty servIces payable by Tenant c:Hopcivil\Lease. Y outhHockey . hereunder shall be paid directly to the appropriate utility authorities, when due, if such utility , authorities permit or accept directpaynient. " , " ,', 6. USE OF 'PREMISES. Tenant agrees that it ,wiIruseand occupy the Leased Premises" and ,the Improvements solely for the following 'purposes: youth ice and high school hockey activities including training and dry land activities, equipment storage, locker rooms,toilet ,and shower facilities and coaches' offices. Tenant will not use or occupy the LeasedPremises or the Improvements for office purposes or for charitable gambling related uses or activities, for any use not described in the first sentence of this Section 6 or for any unlawful purpose and will comply with all present and future laws, ordinances, regulations and orders of all governmental units having jurisdiction over the Leased Premises or the Improvements. Tenant shall. be solely responsible for maintaining the security of the Improvements and all fixtures, equipment and personal property located or kept therein, and Landlord shall have no , " " , liability to Tenant or any employee, agent or invitee of Tenant for any loss or damage to any personal property or for any bodily Injury. Tenant shall also be responsible for supervising all activities conducting at or within the Improvements, shall ,see that all such activities are conducted in a safe, orderly and responsible manner and shall proteCt, indemnify and hold Landlord harmless from and against any and all costs,damages and liabilities, .including reasonable attorney's fees incurred by Landlord, as a result of Tenant's failure to properly supervise activities conducted at or within the Improvements by Tenant or by any agent, invitee or permitted 'subtenant. . 7. ASSIGNMENT AND SUBLETTING. Tenant will not assign, transfer, mortgage or encumber its interest in this Lease or sublet or rent dr permit occupancy or"use of the Leased Premises or the Improvements, or any part thereof by any third party; nOr shall any assignment or transfer of this Lease be effectuated by operation of law or otherwise,' without in each such ,case obtaining the prior written consent of Landlord. Tenant shall seeksuch consent of Landlord by a written request, setting forth such information' as Landlord may deem necessary and reimburse Landlord as Additional Rent hereunder for any costs Landlord may incur; including Landlord's attorney's fees, in reviewing and responding to Tenant's request. The consent by Landlord to any assignment or subletting shall not be construed as a waiver or release of Tenarit from the terms of any covenant or obligation under this Lease, nor shall the collection or acceptance of rent from any transferee under an assignment constitute an acceptance of the assignment or a waiver, or release of Tenant from any covenantor obligation contained in this Lease, nor shall any assignment ,be cOnstrued to relieve Tenant from the requirement of obtaining the consent in writing of Landlord of any further assighment or subletting. No assignment or sublease or other transfer of this Lease shall be effective unless the assignee, sublessee or transferee shall at the time of such assignment, sublease or transfer, assume in writing, all of the terms, covenants and conditions of this Lease to be performed by Tenant. Notwithstanding the prohibition of assignment and transfer of Tenant's interest in the previous paragraph, Landlord agrees Tenant may sublet or permit use of the locker room, toilet and' shower and coaches' office areas within the Improvements for use by the varsity and junior varsity ice hockey programs conducted by Hopkins Independent School District No. 270 or . sponsored by the Hopkins Hoc~ey Booster Club, provided such use shall at all times be subject to the terms and conditions of this Lease. 3 c:Hopcivil\Lease. Y outhHockey .' Whether or not Landlord has consented to an assignment or sublease, Tenant shall pay directly to Landlord the. amount by which the rent or other payments received by Tenant pursuant to such assignment or sublease exceed the Base Rent and Additional Rent payable by Tenant. Tenant agrees Tenant's access to and use of the Leased Premises and the Improvements shall be limited. to those hours established by Landlord during which the Pavilion is open for use by the public, and that Tenant shall not use or permit the use of the Leased Premises or the Improvements during hours that the Pavilion is not open for use by the pubiic,as established by Landlord from time to time.. 8. SUBORDINATION. Without. the necessity of any additional document being executed by Tenant for the, purpose of effecting a subordination, ,this Lease shall be subject and subordinate at all times to the lien of any mortgage now or hereafter placed on, against or affecting, the Real Estate, the Pavilion or Landlord's interest or ,estate therein; provided, however, that if the Landlord, any mortgagee or holder of any mortgage elects to have Tenant's interest in this Lease be superior to any such Mortgagel then by notice to Tenant, this Lease shall be.deemed superior, whether this Lease was executed before or after said mortgage. ,Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver upon demand such further instruments evidencing ,such subordination or superiority of this Lease as may be requited bye Landlord or any mortgagee. Tenant further agrees that in the event that any proceedings are brought for the foreclosure of any mortgage, Tenant shall attorn to theputchaser at such foreclosure sale and recognize such purchaser as the Landlord under this Lease, it requested to do so by such. ... ., p. urch,aser, ,pro~ided t. hat said purchaser. agrees that T.enant'spo. ssession of the L.. eased Premises shall not be dtsturbed so long as Tenant shall contmue to perform all of the covenants and conditions of this Lease, in which case Tenant's obligations to perform such covenants and conditions shall not be in any way diminished thereby. Tenant further waives the provisions of any statute or rule oflaw, now or hereafter in effect, which may give or purport to give Tenant any right to terininateor otherwise adversely affect this Lease and the obligations ,of Tenant hereunder in the event that any such foreclosure proceeding is prosecuted or completed. 9. SALE OR MORTGAGE OF THE REAL ESTATE. In the event ofasale. or transferof the Real Estate, Landlord shall be relieved of alLliability under this Lease accruing from and after the date of sale .. provided Landlord has obtained the written agreement of its transferee or assignee to aSsume and carry out all of the covenants and obligations of the Landlord hereunder. The Tenant agrees at any time and from time to time, upon not less than ten days prior written request by Landlord, to execute, acknowledge and deliver to Landlord a statement in writing certifying that the Lease is not modified (or if modified, stating the modification) that the Lease is in full force and affect,stating the dates to which the Base Rent and Additional Rent have been paid in advance and stating whether the Landlord is in default hereunder. It is intended that any such statement maybe relied upon by any prospective purchaser of the fee or mortgagee or assignee of any mortgage upon the Real Estate. . 10. ,TENANT INSURANCE. Tenant agrees that it shall purchase in advance and . carry the following insurance at is own expense: a) fire and extended coverage insurance insuring 4 c:HopciviJILease. Y outhHockey . Tenant's personal property, furniture, trade fixtures, inventory, business records against ,loss from 'all insurable events for the full replacement value thereof; b) comprehensive general liability insurance covering all aCts of Tenant, its employees, agents, representatives and guests and insuring against all claims arising from injury to persons or damage to property in or about the Leased Premises, Pavilion or Real Estate ina single limit amount of not less than$1,000,OOO.00 for personal injury Of death and not less than $1,000,000;00 for property damage and fire legal , liability; and c) at all times during construction of the Improvements, builder's risk insurance in commercially reasonable amounts. ' ' , All such insurance shall name Landlord as an additional insured and shall provide for' thirty (30) days written notice to Landlord prior to cancellation, non-renewal or material modification. Certificates of all such insurance shall be delivered to Landlord prior to occupancy , of the Leased Premises by Tenant and at least thirty (30) days prior to the termination date of any existing policy. Tenant shall pay to Landlord, upon demand, as Additional Rent the cost of securing such insurance in the event Tenant fails tofumish certificatesofinsurance to Landlord. However, it is not Landlord's duty nor obligation to secure such insurance forTenant. 11. FIRE OR OTHER CASUALTY. l(theLeasedPremises or the Irilprovements shall be damaged by fire or other cause,and at suchtiine as casualty insurance proceeds are made available for restoration or reconstruction of the Improvements, . Tenant shall undertake to restore such damage with all due diligence, (taking into account the time necessary to effectuate a satisfactory settlement with any insurance company and using normal construction methods . without overtime. or other premium), this Lease shall remain in full force and effect following such damage and thereshaU be no abatement or reduction of the Base Rent or Additional Rent payable ," to Landlord under this Lease 12. CONDEMNATION. If the whole or any part of the Leased Premises or the Improvements shall be taken or condemned' or purchased under threat of condemnation by any governmental authority, then the Term of this Lease shall cease and terminate as of the date when the interference with possession, enjoyment or value of the Leased Premises occurs and Tenant shall have no claim against the condemning authority, Landlord or otherwise for any portion cfthe amount that may be awarded as damages as a result of such taking or condemnation or for the ,value of any unexpired Term of this Lease, provided,however, that Landlord shall not be entitled to any award madeto Tenant for relocation benefits or the fair value of and the cost of Tenant's equipment and trade fixtures. 13. ALTERA TIONS AND SIGNS. Except as permitted by Paragraph 19 of this Lease, Tenant will not make or permit anyone to make any additions or improvements, structural or otherwise, in or to the Leased Premises or the Improvements without the prior written consent of Landlord which consent shall not be unreasonably withheld or delayed and provided Tenant is in compliance with applicable state and municipal statutes, codes, rules and regulations. As a condition precedent to written consent of Landlord hereunder, Tenant agrees to obtain and deliver to Landlord such security, in the form of a payment bond, against nonpayment of contractors as Landlord shall reasonably request. ,If any payment bond claim is filed for work claimed to have' . been done for or labor or materials claimed to have been furnished to or authorized by Tenant, such payment bond claim shall be discharged by Tenant at Tenant's sole costand expense, by the 5 c:Hopcivil\Lease. Y outhHockey . payment and satisfaction thereof. Should Tenant fail to discharge 'any payment qond claim within ten (10) days of the filing thereof, Landlord shall be entitled to obtain such discharge by whatever reasonable means Landlord deems expedient, ,and all costs incurred by Landlord in . obtaining, such discharge including reasonable attorneys fees, shall be paid by Tenant as Additional Rent hereunder. 14. WAIVER OF SUBROGATION. Notwithstanding any other provision in this Lease to the contrary, Landlord and Tenant hereby release one another, their respective officers, agents, partners and employees, from any and all liability or responsibility (tathe other or anyone claiming through or under them byway of subrogation or otherwise) for any loss' or damage covered by casualty insurance actually carried or covenlble by the insurance required by Section 10 hereof 15. WAIVER AND INDEMNITY. Tenant agrees that Landlord, its officers, agents, partners and employees shall not be liable to Tenant or those claiming through or under Tenant for any injury, death or property damage occurring in, on or about the Leased Premises, the Improvements, the Real Estate orthe Pavilion; Without limitation of the foregoing, Landlord shall not be liable to..Tenant tor any damage, compensation or claims arising from: ,loss or damage to books,. records, files, money, securities, negotiable instruments, or other papers in or about the Leased. Premises or the Improvements; the necessity of repairing any . portion' of the Improvements; the interruption in the use of the Leased Premises; accident or damage resulting from the use or operation by Landlord, tehant, or any other person or persons whatsoever of elevators, or heating, . cooling, electrical or plumbing equipment or apparatus; the termination, of this Lease by reason of the destruction or condemnation of the Real Estate or the Leased Premises; any fire, robbery, theft, or any other casualty; any leakage or bursting of pipes or water vessels or any ~ roofor wall leakage, in any part or portion 6fthe Leased Premises, the Improvements or the Pavilion; water, rain, snow or underground water that may leak into, flow on, or flow from, any part of the Leased Promises, the Improvements or the Pavilion. Landlord and Tenanfagree to indemnify and hold one another harmless from and against all claims (other than. claims based upon,a default by either party in the performance of the terms, covenants and conditions of this Lease) arising or resulting from any act, omission or negligence of Landlord or Tenant, or their respective officers, employees and agents in or about the Leased Premises,the Pavilion, the Real Estate or the Improvements or in connection with their use of the . ' - . Leased premises the Pavilion, the Real Estate or the Improvements and to indemnify and hold each other harmless against all costs, ,expenses and liabilities, including reasonable .attorneys fees, incurred in connection with any such claim or proceeding brought thereon, and the defense thereof 16.REP AIRS. With the exception of the obligations assumed by Landlord as provided in Sections 4 and 5 of this Lease, Tenaht shall' keep and maintairi the Leased, Premises and the Improvements at all times in a good, neat, clean and sanitary condition and state of repair, reasonable wear and tear excepted, free of debris and other similar obstructions, and shall repair and replace broken plate and window glass and damage caused by the negligence or intentional act .. of Tenant, its officers, employees and agents. ,Tenant shall allow Landlord access to the Leased Premises and the Improvements during all reasonable hours to make repairs required to be made 6 c:Hopcivil\Lease. Y outhHockey . by Tenant which Tenant fails or refuses'to make, and'shall pay'Landlord as Additional Rent the cost ,of such repairs made for Tenant by Landlord. Any cost of repairs or Improvements to the Pavilion which are occasioned by the negligence or default. of Tenant, its officers, employees, agents or invitees, or by requirements of law, ordinance ,or other govemmental'directive and which arise out of the nature of Tenant's use and occupancy of the Leased Premises and the Improvements shall be paid for by Tenant, as Additional Rent hereunder, immediately upon billing. 17. ENTRY AND INSPECTION. Tenant shall permit Landlord, its agents or representatives'to enter the Leased Premises and the Improvements at all reasonable' times to examine and inspect the same or to make such repairs to the Improvements as Landlord shall be entitled to performcaccordingto the terms of this Lease. Landlord shall not be required to give Tenant notice prior to Landlord's entry or inspection of the Leased Premises or the Improvements, provided Landlord shall not unreasonably interfere, except in the case of emergencies, with the conduct of Tenant's permitted activities under this Lease. ' ' 18. MAINTENANCE. Tenant shall keep the Leased Premises and the Improvements and the fixtures and equipment therein in' good; safe and, sanitary condition,' will suffer no waste or injury thereto and will, at the expiration or termination of the term of this Lease, surrender the same with all walls, floor coverings and other components in good condition and repair, reasonable wear and tear excepted. . 19. IMPROVEMENTS. Tenant shall complete the Improvements at Tenant's sole cost and expense and shall cause the Improvements to be completed in accordance with the Standard Form of Agreement Between Owner and Design Building between Tenant and M A Mortenson Company dated of even date herewith C' Construction Contract") and with all plans and specifications for the Improvementsprepared in accordance with the Construction Contract.. As soon as possible after the commencement date of the term of this Lease, Tenant shall cause construction to the Improvementsto be commenced and shall thereafter cause such construction to diligently proceed to c()mpletion in accordance with the . Construction Contract, the plans and specifications prepared pursuant to the Construction Contract. and with all applicable statutes, '. codes, ordinances and regulations. Tenant acknowledges that it has accepted the Leased Premises "as'is" and "where is" without any representation or warranty from Landlord as to the suitability of the Premises for construction of the Improvements, and Tenant assumes all risk of unsuitable soil conditions or other adverse conditions present on the Leased Premises. Payment by Tenant of the costs of construction of the Improvements shall be governed by and subj ect. to the terms of that certain Construction Disbursing Agreement between Landlord and Tenant of even date herewith. If Tenant fails to complete construction of the Improvements by April 1, 2005, such failure shall be a default under this Lease entitling Landlord to invoke Landlord's remedies under Section 22 hereof. ,At the end of the initial 10 year term of this Lease, or upon the, earlier termination of this Lease in accordance with its terms, the Improvements shall become the sole property of Landlord, and Tenant shall not remove any part of the Improvements from the Leased Premises or the Real Property. . 20. WAIVER. No waiver by either. party of any breach of any covenant, condition or agreement herein contained shall operate as a waiver of such covenant, condition, or agreement 7 c:Hopcivil\Lease. Y outhHockey .. itself, or of any subsequent breach thereof. No payment by Tenant or receipt by Landlord of a lesser amount than the,Base Rent and Additional Rent payments herein stipulated.shallbe deemed to be other than on account of the earliest stipulated rentrior. shall any endorsement or statement on any check or. letter accompanYIng a check for payment of rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent, to terminate this Lease, to repossess the Leased Premises or to pursue any other remedy provided in this Lease. No re-:-entry by Landlord, and no acceptance by Landlord of keys from Tenant, shall be considered an acceptance ofa surrender of the Lease. 21. COVENANTS OF LANDLORD. Landlord covenants that it has the right to make this Lease for the term aforesaid and covenants that if Tenant shall.pay the rent and perform all of the covenants, terms and conditions of this Lease tobepelformed by Tenant, Tenant shall, during the term of this Lease freely, peaceably and quietly occupy and enjoy the full possession of the Leased Premises without molestation or hindrance.' ' 22. DEFAULT. a) Anyone of the following events shall constitute an Event of Default: i) Tenant shall fail to pay any payment of Base Rent or Additional Rent as herein provided; ii) Tenant shall violate or fail to perform any of the other terms, covenants or . . conditions of this Lease and such default shall continue for thirty (30) days after notice from Landlord or such longer period of time' as, shall be necessary to cure such default with all reasonable diligence given the nature of the default; .Iii) Tenant shall file or have filed against it or any. guarantor of this Lease any bankruptcy or other creditor's action, ormake an assignment for the benefit of its creditors; b) . If an Event of Default shall have occurred and',be continuing, Landlord may at its sole option by written notice to Tenant terminate this Lease. Neither the passage of time after the occurrence of the Event of Default nor exercise by Landlord or ,any other remedy with regard to such Event of Default shall limit Landlord's right under this Paragraph 22, b). c) If an Event of Default shall have occurred and be continuing, whether or not Landlord elects to terminate this Lease, Landlord may enter upon and repossess the Leased Premises and the' Improvements (said repossession being hereinafter referred to as "Repossession") by force, eviction proceedings, ejectment or otherwise, and may remove Tenant and all other persons and property therefrom. d) From time to time after Repossession of the Leased Premises and the Improvements, whether or not this Lease has been terminated, Landlord may attempt to relet the Leased Premises and the Improvements for the account of Tenant in the name of Landlord or . otherwise, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the Term) and for such terms (which may include 8 c:Hopcivil\Lease. Y outhHockey .., , . concessions orfree rent) and forsuch uses as Landlord, inits sole and unqualified discretion, may determine; and may collect and receive the rent therefor. Landlord shaH not be obligated to relet the Leased Premises orthe Improvements and, if the Leased Premises are relet, Landlord shall not be responsible or liable for any failure to collect any rent due upon any such reletting. e) No termination of this Lease pursuant to Paragraph 22, b) and no Repossession of the Leased Premises or the Improvements pursuant to Paragraph 22, c) or otherwise shall relieve Tenant of its liabilities and obligations under this Lease, all of which shall survive any such termination or Repossession~ In the event of any such termination or Repossession~ wh~ther or not . the Leased Premises or' the Improvements. shall have been relet, Tenant shall pay to Landlord the Base Rent and other sums and charges to be paid by Tenant up to'the time'of such termination or Repossession, and thereafter Tenant, until the end of what would have been the term in the absence of such termination or Repossession, shall pay to Landlord, as and for liquidated and agreed current damages for Tenant's default, the equivalent' of the alllount of the. Base Rent, Additional Rent and such other sums arid charges which would be payable unde,r this Lease by Tenant 'if this Lease were still in effect, less the net 'proceeds, if any, of anyreletting effected pursuant to the provisions of Paragraph d) after deducting all of Landlord's expenses in connection with such reletting; including without limitation, all repossession costs, brokerage and management commissions, operating expenses, legal expenses, reasonable attorneys'" fees, alteration costs, and expenses of preparation for such reletting. ' Tenant shall pay such current damages to Landlord on the dates on which the Base Rent and Additional'Rentwould have been payable underthisLeaseifthis Lease were still in effect, and Landlord shall be entitled to recover .' the same from Tenant on each such day. At any time, after such termination or Repossession, whether or not Landlord shall have collected any current damages as aforesaid, Landlord shall be entitled to accelerate and recover from Tenant, and Tenant shall pay to Landlord on demand; as and for liquidated and agreed final damage for Tenant's default an amount equal to the total of the Base Rent, Additional Rent ,and .other sums dr charges due to Landlord under this Lease for the , . - , balance of the then unexpired.tenh of this Lease if the same had remained in effect. Said liquidated and agreed final damages' shall be payable, to Landlord, in full, after ten (10) days written notice to Tenant, and. shall bear interest at the rate stated in Section 25 of this Lease commencing ten (10) days after delivery of such written notic.e to. Tenant. f) , Upon the occurrence and continuance of an Event of Default, and until such default has been cured and th~ Landlord has received all amounts that may then be due Landlord under this Lease, 'Tenant agrees Tenant shall not be entitled to l~ase ice time in the Pavilion from Landlord. , g) If an Event of Default shall have occurred and Landlord places in the hands of an attorney the enforcement of all or any of the terms, covenants, agreements or conditions of this Lease, the collection of any rent due or to become due, or the recovery of possession of the Leased Premises or the Improvements, Tenant agrees to reimburse Landlord, as Additional Rent hereunder, forlandlordfs reasonable attorneys fees, together with the actual cost of maintaining any action commenced irtlaw or equity by said attorneys for the services of the attorneys, whether suit is actually filed ornot. Such reimbursement shall be payable within ten (10) days of demand . therefore. 9 c:Hopcivi1\Lease. Y outhHockey , , .' - " 23. SURRENDER. Tenant shall surrender the Leased Premises and the Improvements . to Landlord upon termination of this Lease, whether such termination occurs at the end of the lease termor sooner, together with all utility systems, replacements and decorations thereto and operating bulbs or tubes in all light fixtures, bfoomcIean and in good order, condition and repair except for ordinary wear and tear; Should Tenant failto surrender the Leased Premises and the Improvements in the condition required by this section,'Landlordshall be entitled, to take whatever steps ,may, in Landlord's sole discretion, 'be required to restore the Leased,Premises and the Improvements to said condition and, Tenant agrees that it shall pay to Landlord all costs incurred by Landlord in so restoring the 'Improvements. ' 24. HOLDING OVER. Should the Tenant continue to occupy theLeased}lremises or the Improvements, or any part thereof,' after the, expiration, of the Term of this Lease without' the written consent of the Landlord, such tenancy shall beffolllmonthto month and ,Tenant shall pay Landlord the Additional Rent set forth in Section 4 plus Base Rent payments of Three Thousand Five Hundred Dollars ($3,500.00) per month, ' 25. LA TE PAYMENT. Other remedies for nbnpayment of rent notwithstanding and without prejudice to such remedies, if Tenant fails to pay the monthly base rent, Additional Rent or any other payment due hereunder, within the ten (10), days immediately following, the date on which such payment is due, Tenant shall pay Landlord interest on all such past due payments at the rate of one percent (1 %)per month or at theniaximumrate permitted by law, whichever rate is lower. Interest shall accrue from the date each such late payment became due arid shall be payable " . . to the date of payment thereof by Tenant. , ' , , 26. HAZARDOUS SUBSTANCESIENVIRONMENTAL REGULATIONS. Tenant warrants, represents and agrees that: a) Its use of the Leased Premises and the Improvements shall not violate any law, statute, ordinance, rule, regulation, order or determination of any governmental authority pertaining to hazardous substances, toxic waste, asbestos, health or the, environment (hereinafter sometimes collectively called "Environmental Regulationslt) including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (ItCERCLA"),as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA") (collectively nCERCLNSARAn) and the Resource Conservation and Recovery Act of 1976 ("RCRAn) and the Minnesota Environmental Response and Liability Act C'.MERLN'); b) , Tenant has obtained and shall continue to maintain all permits, licenses or similar authorizations required by Environmental Regulations to conduct its business on the Leased Premises and the Improvements and; c) Tenant's use of the Leased Premises will not result inthe disposal or release of any hazardous substance, toxic waste, asbestos or other substance regulated by . Environmental Regulations (such hazardous substances, toxic waste, asbestos and , other substances being hereinafter collectively referred to( as "Hazardous 10 c:Hopcivil\Lease. Y outhHockey . Substances") on or about the Leased Premises, Improvements or the real property on which it is situated. In the event Tenant, its officers, agents or employees shall breach or fail to perform any of the warranties, representations and agreements contained in this Section: ' d) Upon notice from Landlord, Tenant shall remove from the Leased Premises, Improvements or the Real Property, at Tenant's sole expense, any Hazardous Substance which is not in compliance with Environmental Regulations or this Lease; , e) Landlord and such Environmental Engineers or consultants ,as it may employ shall be entitled to enter upon the Leased Premises . and, the Improvemerits for the purpose. of conducting .such' inspections and tests as Landlord" may deem necessary (provided that Landlord shall give Tenant reasonable notice . prior to' Landlord's inspection and' testing of the Leased Premises, except in the caSe of emergencies, and Landlord shall not unreasonably interfere with the conduct of Tenant's business) and the cost and expense, of such inspections and ,tests incurred by Landlord shall be paid by Tenant as Additional Rent, hereunder with the next installment of base rent; and' . , f) Tenant shall protect, indemnify and save Landlord hannless from all costs, fines, . claims, demands, actions, proceedings, judgments, and damages (including court costs and reasonable attorneys' fees) resulting from or arising out of any breach or nonperformance by Tenant of the representations, warranties and agreements contained in this Section including, without limitation, the cost of removal and/or remediation of any disposal, release or contamination or discharge of Hazardous Substances on or about the Leased Premises, the Improvements or ,the Real , Property. It is expressly acknowledged by' Tenant that' all of the terms, ,covenants and conditions of this Section 26 including, but not by way of limitation, the indemnifications herein provided shall survive the termination of this Lease; 28. MISCELLANEOUS. a) All notices or other communications hereunder shall be in writing and shall be hand delivered or sent by first class United States mail to the following address: Landlord: City of Hopkins Attention: City Manager 1010 First Street SOlith ,Hopkins, Minnesota55343 . 11 c:HopcivillLease. Y outhHockey . Tenant: Hopkins Youth Hockey Association Attention: President P. O. Box 117 Hopkins,MN 55343 Notices that are hand delivered are effective upon delivery. Mailed notice shall be effective the first business day following the date of mailing; b) This Lease is made and exe~uted in the, State 'of Minnesota, and shall be constructed according to the laws of Minnesota; c) The invalidity or unenforceability of any provision of this Lease shall not affect or impair the validity of any other provisions; and section titles and captions in this Lease ar,e for convenience only and do not define, limit or construe the contents of such paragraphs; d) If more than one person or entity shall sign thisLease as Tenant, the obligations set forth herein shall be deemed joint.and several obligations of eachsuchpaity;" e) This Lease shal1 be binding upon and inure to the benefit of the parties thereto and, subject to the restrictions and limitations herein contained, their respective heirs, successors. and assigns. , , . f) With the' exception of any eviction proceeding prosecuted by Landlord under Minnesota Statutes Chapter 504B or any successor statute, Landlord and Tenant agree any controversy or Claim arising out of or relating to this Lease, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association. under its commercial arbitration rules; and judgment on the award rendered by the arbitrator(s} may be entered in Hennepin CountyDistrict Court. 29. " ASSUMPTION OF LEASE BY HIGH SCHOOL ,HOCKEY ORGANIZATION. Uponthe occurrence of an Event of Default underthis Lease and Landlord's repossession of the Leased Premises and Improvements and termination of this Lease, Landlord agrees the Hopkins Hockey Booster Club, a nonprofit corporation under the laws of Minnesota, ("New Tenant") shall be entitled to enter into a Lease Agreement to lease the Leased Premises and Improvements from Landlord ("New Lease"), upon the following terms and conditions: a) The New Lease shall be for a term ending on the termination date of this Lease as stated in Section 2 hereof; ! b) New T emln! shall be a nonprofit corporation formed for the purpose of promoting the high school hockey activities described in the second paragraph of Section 7 of this Lease. c) As a condition of entering into the New Lease, the New Tenant shall cure any . Event of Default then existing under this Lease, including paying any delinquent and unpaid Base Rent or Additional Rent. 12 c:Hopcivil\Lease. Y outhHockey . d) The New Lease shall otherwise be identical to this Lease, except that' the New Tenant shall be substituted for Tenant. e) At the time of repossession of the Improvements in the Leased Premises and termination of this Lease by Landlord; Landlord shall notify the New Tenant of such termination and repossession. Such notice shall be given to New Tenant to the attention of the individual at the address stated below, ,namely: Hopkins Hockey Booster Club Attention: President .P. O. Box 5211 Hopkins,MN 55343 The notice from Landlord shall be accompanied by the New Lease to be executed by New Tenant. Tenant shall have a period of fifteen (15)businessdays from the date of delivery of the notice from Landlord accompanied by the New Lease to . accept Landlord's offer to enter into the New Lease by executing and returning to Landlord such New Lease. If New Tenant fails to execute and deliver the New Lease to Landlord within said fifteen (15) ,business days period, Landlord's obligation to lease the Leased Premises and the Improvements to New Tenant and New Tenant's option to lease the Leased Premises and the Improvements from . Landlord shall terminate and be of no further effect.. All notices, deliveries or other , .' communications under this Section 29 shall be given in the manner specified in Paragraph 27a of this Lease, except that notices and communications delivered to New Tenant shall be delivered to the person and address identified in this Section " 29. 30. TENANT'S NONPROFIT STATUS. Tenant represents to Landlord that it is duly qualified as a nonprofit corporatiori under Section 501(c)(3) of the Internal Revenue Code, and Tenant agrees that it shall maintain that status during the entire term of this Lease. Upon request by Landlord, Tenant shall provide Landlord with written evidence Tenant is maintaining its status as a 501(c)(3) nonprofit corporation. Tenant shall pay all real estate taxes or payments in . lieu of real estate taxes which are imposed on Landlord, Tenant; the Real Estate or the Leased Premises as a result of Tenant's use or occupancy of the Leased Premises or the Improvements, such payment by Tenant to be Additional Rent under Section 4 of this Lease. 31. OPTION TO EXTEND TERM OF LEASE. Provided Tenant is not in default under this Lease either at the time notice is given or at the expiration of the then current term of this Lease, Tenant shall have the right and option, exercisable by giving Landlord written notice ("Notice of Extension") thereof at least ninety (90) butnot more than one hundred fifty (150) days pri6r,the expiration of the then current term ofthisLease, to extend the term ofthis Lease for ten (10) successive one year renewal terms upon the following terms and conditions: . a) As provided in Section 19 of this Lease, the Improvements shall become the sole property of Landlord at the end of the initial ten (l0) year term of this Lease. 13 c:Hopcivil\Lease. Y outhHockey . Should Tenant exercise its option to extend the tenn of this Lease beyond its initial ten (1 0) year term, this Lease shall no longer bea ground lease, and all references in this Lease tothe "Leased Premises" shall thereafter refer to and include both that part of the Real Estate described in Exhibit.B attached hereto and the Improvements. , b) Each extended term. of this Lease shall be upon arid subject to all the terms, covenants, agreements, provisions and conditions state.din this Lease; except that: ,,' , " i) Tenant shall not be obligated to pay the Base Rent payments specified in Section 3 oft~isLease during the renewal term(s), but shall be obligated to lease ice, timeiri the Pavilion as provided in Paragraph c), below; ii) Effective on the first day of the first renewal term of this Lease, Section 11 of this L~ase shall be modified to read as follows: U. FIRE OR OTHER CASUALTY., If the Leased Premises or the Improvements shall be damaged by fire or other cause Landlord shall at its option either (a) undertake, to restore such damage with all due diligence, or (b) in the event the Leased Premises or the Improvements are damaged by fire or other cause to such extent that damage cannot; in Landlord's sole judgment, be ,economically repaired within 180 days after the date of such damage (taking into account the . time necessary to effectuate a satisfactory settlement with any insurance company and using normal construction methods without overtime or other premium), terminate this Lease, by notice given to Tenant within sixty (60) days after the date of the damage. In the event Landlord fails to give ,such notice to Tenant within sixty (60) daysaft,er the date of the damage, Landlord shall be deemed to have elected to undertake to restore such damage with all due diligence. Any termination hereunder by reason of damage to the Leased Premises shall be effective, as' of the . date of the damage. If Landlotd elects to restore, Landlord shall notbe obligated to restore any of Tenant's trade fixtures or equipment or any improvements in the Leased Premises which were not owned and constructed by Landlord. Upon substantial completion by Landlord of its work, Tenant shall undertake to restore its leasehold improvements and trade fixtures with all due diligenc~. This Lease shall, unless terminated by Landlord pursuant to this Section 11, remain in full force and effect following, such damage and the. Base Rent and Additional Rent, pro rated to the extent that the Leased Premises are rendered untenantable, shall be equitably , abated until such repairs are completed;. provided, however, that if Tenant does not restore its leasehold improvements and trade fixtures with due diligence~ abatement shall ceaSe, as of the date restoration could have been completed using due diligence. c) As a condition of such renewal, and prior'to the commencement of each renewal term, Landlord, Tenant, Independent School District No. 270 and any nonprofit . organization that is a permitted subtenant of Tenant shall have entered into an agreement. by which Tenant, Independent School District No. 270 and such 14 c:Hopcivil\Lease. Y outhHockey . permitted subtenant have agreed to 'lease ice time in the Pavilion for no less than 90.0. hours' per year during each extended term of this Lease at the per hour rate then est~blished by Landlord for the use of the Pavilion ice hockey rink. If no such agreement regarding ice time has been entered into,in writirig,' by the end of the then current term of this Lease, this Lease shall automatically terminate as of the end of the then current term, and Tenant shall have no further right or option to extend this Lease. If this Lease is extended in accordance with the terms. and conditions stated above, no further document or instrument evidencing extension shall be required, this Lease shallremain in effect in all of its terms and conditions and all references in this Lease to the "Leased Premis~s" shall mean and include the land described in Exhibit B attached hereto and the Improvements. In the event Tenant fails to give 'Notice of Extension to Landlord in the time and manner provided above, this Lease shall automatically terminate at the end of the current term, and Tenant shall hav~ no further right or option to extend this Lease. When used in this Lease, the phrase "term of this Lease" or similar phrases shall mean and refer to the original term of this Lease and the extended term thereof IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement this day of , 20.0.4. ' LANDLORD TENANT . THE. CITY OF HOPKINS HOPKINS YOUTH: HOCKEY ASSOCIATION By By Its Its By By Its Its , Date: Date: . 15 c:HopcivillLease. Y outbHockey .., . EXHmIT A . . 16 c:Hopcivil\Lease. Y outhHockey . EXHIBITB LEGAL DESCRIPTION OF LEASED PREMISES All that part of the Southwest Quarter of the Southwest Quarter of Section 24, Township 117, Range 22, Hennepin County, Minnesota,descrihed as follows: Commencing at the Southwest. corner of said Southwest Quarter of the Southwest Quarter; thence South 89 degrees 39 minutes 14 seconds East, assumed bearing along the South line of said Southwest Quarter of the Southwest Quarter, a distance of 469. 17 feet; thence North 00 degrees 44 minutes 16 seconds East a distance of214.81 feet to the point of beginning; thence North 01 degrees 17mihutes 01 seconds East a: distance of 37.00 feet; thence South 88.degrees 42 minutes 59 seconds East adistan(;eof88.6Tfeet; thence South 01 degrees 17 minutes 01 seconds West a dIstance of 37.00 feet; thence North 88 degrees 42 minutes 59 seconds West a distance of 88.67 feet to the point of beginning. ' . . 17 c:HopciviJ\Lease. Y outhHockey ., ,,~ ~ . Drafted 6/7/04 CONSTRUCTION DISBURSING AGREEMENT THIS CONSTRUCTION DISBURSING AGREEMENT (this "Agreement"), made and entered. into as of the _ day of , 2004, by and among Hopkins Youth Hockey Association, a ,Minnesota nonprofit corporation whose post office address IS , (hereinafter referred to as the "HYHA"); The City of Hopkins,' Minnesota, a muniCipal corpo~ation under the laws of Minnesota whose post office address is 1010 First Street South, Hopkins, Minnesota 55343 '(hereinafter referred to asthe "City"). RECITALS A. HYHA and the Cityhaye entered into a Ground Lease Agreement dated of even . date 'Yith this Agreement (the "Ground,Lease") by which HYHA as leased fronithe City the land legally described in Exhibit A attached hereto and incorporated herein (the "Premises"). HYHA has 'leased the Premises from the City for the purpose of constructing and operating an approximately 2,518 square foot addition to the Hopkins Pavilion facility owned by the City, which addition is herein referred'to as the "Improvements" and is to be used for storage, locker rooms and other uses related to tenants youth hockey activities,' subject to the terms and conditions contained in this Lease. B. Section 19 of the Ground Lease Agreement provides that HYHA is to construct the , Improvements.upon the Premises, and HYHA has assumed sole responsibility'for construction,of '. , the Improvements. HYHA has entered into a Standard Form of Agreement. Between Owner and Design Builder dated . , 2004 ("Construction Contract") by which it has retained . 'C: HopciviJ\ConstructionDisbAgt.Y outhHockey 1 .- 1 , ' . I . M. A. Mortenson Company ("Design Byilder")to act asa desigritbuilder and Design Builder-to complete the Improvements. The Improvements are to becomple~ed in accordance with the terms and conditions of the Construction Contract and of the plans a~d specifications therefor to be prepared in accordance with the Construction Contract. 1 C. The City has agreed to provide funding for const I, ction of the Improvements as described in Paragraph 2 of this Agreement, but subject toall the terms and conditions of this , , '., \ ' I Agreement, and HYHA and, the City.,'are entering into this Agreetnent for the purpose of stating the terms and conditions for . disbursement of the' funds to be adviJed by ~he City for construction of the Improvements. . NOW THEREFORE, in consideration'oCthe ~()ve recitals r.! of other good and valuable consideration, the receipt and sufficiency of which are hereby ackJ;1owledged by HYHA, the City " I .. and HYHAhereto agree as follows: \ 1. Recitals A. - C.are incorporated in and made, a dart of this Agreement ~n their " " I . , . entirety. I I I 2. As provided in the C~nstruction Contrac~the tot costs of completion of the Improvements shall be $292,443;00 (the "Contract Sum"), provided the Contract Sum is subject to adjustnientby additions to or deletions fromlhe scope of wol ,covered bylhe Construction Contract in accordance with its terms. The City agrees that it shal disburse the Contract Sum in accordance with and subject to the terms and conditions of this Agreement, provided the City shall in no event be obligated 10 disburse more than the originlll contracl Sum amount of $292,443.00, , , "J' and any increases in the Contract sum above that amount shall ,e paid by HYHA from other sources. The City shall, have no Obligation. to advance funds tl pay for construction of the . c: Hopcivi1\ConstructionDisbAgt. Y outhHockey .2 i ' ' I \ . Improvements except as specifically provided in this Agreement. HYHA 'and the' City , acknowledge that the amounts due to the City under the Ground :Lease are intended to in part repay the City for the funds advanced by the City under this Agreement in accordance with and as . , , , provided in the Ground Lease; Subject to HYHA'scompliance with all of the terms and conditions of this Agreement and the Ground Lease, the City has also agree~ that it shall waive certain fees that would otherwise be payable in connection with the 'construction of the Improvements. Specifically, the City shall waive the'SAC,WACandbuildingpermit fees for the Improvements. totaling approximately $7 ,557.00 ("City Fees"). 3. HYHA agrees' to make and complete, on or before April 1, 2005 (hereinafter referred to as the "Completion Date"), all of the Improvements. The Improvements shall be completed (a) in a good and workmanlike manner, (b) using materials of at least standard grade' . and quality, (c) free and clear of any claims or liens for labor or materials, (d) in accordance with , " the Construction Contract and with the ]>lans and Specifications, and (e) in compliance with all applicable statutes, codes, ordinances and regulations. The Contract Sum shall be disbursed to the Borrower in periodic advances no more frequently than every thirty (30) days, uponthe following terms and conditions: (a) Each request for an advance of the Contract Sum shall be made by an Interim or" Final Sworn Construction Cost Statement, certified by the Design Builder itemizing the work actually done, the costs of completing the same and, the names of all contractors, subcontractors and materialmen supplying services, labor or materials in connection with the Improvements, in form acceptable to the City and signed by the HYHA. Advances by the City, with the exception of the final advance, shall be made in an amount equal to 90% of the amount certified to in each request for an advance. . The final request for an. advance shall be accompanied by a Final Sworn Construction Cost Statement. (b) Each request for an advance of the Contract Sum shall be accompanied by partial or final written receipts and waivers of payment bond claims, in form acceptable to . c :HopCivil\ConstructionDisbAgt. Y outhHockey 3 , -'. ,- . the City, covering all work done and materials and services supplied for which payment was made from the previous payment period advance. (c) As a condition of the final disbursement of the Contract Sum, the City shall receive an unconditional certificate of completion with respect to the Improvements signed by the HYHA and the Design Builder and architect (if any), together with a Certificate of Occupancy issued by the City of Hopkins Inspections Department. (d) Asa condition of the final disbursement of the Contract Sum, HYHA and the Design Builder shall deliver such other documentation evidencing the completion of, and payment in full for, the Improvements as the City may reasonably require. (e) HYHA shall not be in default in the performance of any of its obligations under the Ground Lease at the time of any disbursement of the Contract Sum. (t) Prior to commencement of construction of the Improvements, and as a condition precedent to each disbursement of the Contract Sum, the Design Builder shall furnish the City with a payment bond in the fulLamount of the Contract Sum ("Payment. . Bond") to provide, security for ,payment of all contractors, subcontractors and material suppliers supplying services, labor or materials in connectiop with construction of the Improvements. Design Builder shall also deliver to the City, prior to commencement of construction, a performance bond . securing the performance by Design Builder of its agreement to construct. Such payment and performance bonds shall comply with all statutory req~irements applicable to construction of Improvements on municipally owed real property. Design Builder shall pay all premiums and costs for obtaining and maintaining such bonds, 'and the original bonds shall be,' delivered to the City prior to commencement of construction of the Improvements. (g)' If Borrower or Design Builder fail to provide proof of payment of subcontractors and material suppliers as required by this Agreement, the City shall, after ten (10, business days' notice to Design Builder, be entitled to disburse the Contract Sum directly to the Design Builder or its subcontractors or material suppliers as deemed appropriate by the City. (h) Such additional conditions as are stated elsewhere in this Agreement. If, on the Completion Date, the Improvements have not been fully completed, the City may, at City's sole discretion, retain the undisbursed portion of the Contract Sum orthe City may, at the City's option but without the obligation to do so, disburse the balance of the Contract Sum in "payment for the completionofthe Improvements. . c: HopciviJ\ConstructionDisbAgt. Y outhHockey' 4 . 4. ' If t~e final cost of completion of the Improvements is less than the $292,443.00 amount of the Contract Sum, the City shall' have no obligation to make any further advances, and the City may retain any savings or reduction in the final cost of the Improvements. ' 5. At all times during the construction of the Improvements, HYHA or the General Constructor, as applicable, shall maintain the followillg insurance coverage: (a) Worker's compensation insurance complying with statutory requirements; (b) Comprehensive general public liability insurance with policy limits of no less than . ' ..." $2,000,OOO.OO~ (c) Builder's risk insurance in commercially'reasonable limits; The above comprehensive public liability insurance and builder's risk policies shall name , \ - : . the City as an additional insured, and HYHA shaJI provide the City with certificates of insurance evidencing such insurance coverage prior to commencement of construction of the Improvements. . Such certificates of insurance shall provide for thirty (30) days notice of cancellation to the City. HYHA shall protect, indemnify and hold.the City harmless. from and against all claims, liabilities : and causes of action arising out of or resulting fr()m the construction pf the Improvements, including, but not limited to, any damages to or interruption of activities conducted at the Hopkins Pavilion located immediately adjacent to the Improvements. 6. It shall be a condition precedent,to any disbursement of the Contract Sum that there shall be .nodefault or event of default under the terms and conditions of the Ground Lease and all representations, warranties, c(wenants, terms, conditions and agreements therein shall be true and correct and shall have been complied with, as of .the date of any disbursement of the Contract 'Stirn. Upon the occurrence of a default' or an event of default by HYHAhereunder or under the, , . ' tenns and conditions of the Ground Lease, and provided such default has not been cured after .. c: Hopcivil\ConstrnctionDisbAgt Y outhHockey 5 .. . thirty (30) days' written notice to HYHA and Design Builder specifying the nature of the default, , ' , the City shall have no further obligation to make disbursements of the Contract Sum. 7. In the event the Improvements are not substantially completed by the Completion Date, all ,of the obligations of the City under this Agreement .or otherwise to disburse any part of the Construction Sum shall terminate, and HYHA shall be solely responsible for all costs of completing the Improvements unless the City, in its sole discretion, elects to make additional disbursements of the Contract Sum upon such terms and conditions as the City, in its sole discretion, shall determine. The Completion Date shall be extended if completion of the Improvements is delayed due to ,causes beyond the cantral ofHYHA .or the Design Builder; 8. The City and HYHA agree to fully caoperate with .one another in the completion of the Improvements, pravided such cooperation by the City shall be limited to allawing HYHA and . the Design Builder reasonable access to the Premises during. the course of constructian of the Improvements, su~ject t.o such reasonable terms and conditions as the City may imp.ose. 9. HYHA hereby assigns, sets aver and transfersto the City all .of its right, title and interest in and ta the C.onstructian Contract and the Plans and Specifications as security far the agreement of HYHA to camplete canstruction .of the Impravements by the Completion Date. Althaugh it isintended that this assignment be a present assignment of all afHYHA's rights under the'Canstruction Agreement and in and ta the Plans and Specificatians, unless and until and event .of default shall have .occurred under this Agreement .or the Ground Lease Agreement, HYHA shall retain all rights in and to the Constructian Cantract and the Plans and Specificatians until the .occurrence of an evellt .of default.' Upan the .occurrence .of an event of default under this Agreement or. the Graund Lease, and should such default nat be cured after twenty (20) days' . c: Hopcivil\ConstructionDisbAgt. Y outhHockey 6 . written notice to HYHA, or such additional period of time as is necessary to cure the default with reasonable diligence given the nature of the default, all rights in and to. the General Contract and the Plans ~nd Specifications shall be vested in the City andthe.City shall be entitled, but shall not be obligated, to enforce the Construction Contract and cause the Improvements to be completed in accordance with the Plans and Specifications. By consenting to:this Agreement? Design Builder consents to such assignment of the General Contract and the Plans, and Specifications to the City, , and agrees to recognize the City's rights under the General Contract following the occurrence of, , , . , an event 6fdefault and to complete performance of the General Contract as directed by the City " '" . should the City elect to enforce the ,assigi1l11ent of the General Contract and complete construction of the Improvements. However, the City shall not be obligated to assume the obligations of HYHA under the General Contract in the event of default, the election to do so being within the .: City's sole and exclusive discretion. 10. , In the ,event any party to this Agreement' iricursattomey's fees or other costs in order to enforce the provisions of this Agreement, the lionprevailing (and defaulting) party shall pay the other party' s reasonable attorney's fees, court costs and expenses. 11. The failure of the City to enforce strict performance of the terms and conditions of this Agreement or the Ground Lease shall not constitute' a waiver of its rights hereunder or the right to insist on strict compliance with or perfonnance of any of said terms and conditions in the future. 12. The City shall have no obligation to disburse the Contract Sum or to pay any costs '. of construction of the Improvements except as expressly stated in this Agreement. If the final Contract Sum is adjusted to an amount less than the amoUnt stated 'in Paragraph 2 of this . 7 c: Hopcivil\ConstructionDisbAgt. y outhHockey . . Agreement, the City shall be obligated only to disburse the' final reduced, Contract Sum. If the , " final Contract Sum is adjusted to an amount greater than the original Contract Sum stated in , ' , ' Paragraph 2 of this Agreement, the City shall have no obligation to disburse any amount in excess of the original Contract Sum. This Agreement may be enforced only by HYHA,and there are no third party beneficiaries of this Agreement. 13. This Agreement cannot be changed or amended orally, but only by written agreement executed by each oftheparties hereto. " 14. This Agreement and the ,rights' of 'HYHA hereunder may not be 'assigned or encumbered by HYHA. 15. Any notice or other communication which any party hereto may desire or may be required to give to any other party hereto shall be in writing, and shall be deemed to be duly given . when mailed by first class United States mail, postage prepaid, addressed to the parties'addresses as stated in the first paragraph of this Agreement or to such other addresses either party, by notice given as herein provide, shall designate. Mailed notice shallbe conclusivelydeemed to have been given one business day after the date of mailing. 16. This Agreement is made and executed under-the laws of the State ofMirmesota and is intended to be governed by the laws ofsaid State. 17. If any provision of this Agreement or the application thereof to any person or " : circumstances shall be determined invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected and the remainder of this Agreement shall remain enforceable in accordance with its ternis. This Agreement shall bind and inure to the benefit of the parties hereto and their respective . 8 c :Uopcivil\ConstructionDisbAgt. Y outhHockey . heirs, transferees, successors and assigns, provided, however, that the HYHA may not assign its rights under this Agreement without the prior written consent of the City, which consent may be withheld in the sole discretion of the City. IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as ofthe day and year, first above written. CITY OF HOPKINS HOPKINS YOUTH HOCKEY , ' ASSOCIATION By By". Its Its By 'By . Its Its " CONSENT The undersigned, l\1.A. Mortenson Company, a Minnesota corporation, hereby consents to the provisions of the foregoing Construction Disbursing Agreement and, specifically, agrees to recognize the assignment of the rights of Hopkins Youth'.Hockey Association in the General Contract a provided in Paragraph 9 ofthe foregoing Agreement. . c: Hopcivi1\ConstructionDisbAgt. YouthHockey 9 . M. A.MORTENSON COMPANY By Its i By I Its . . c: Hopcivil\ConstructionDisbAgt. Y outhHockey 10 . EXHIBIT A LEGAL DESCRIPTION OF LEASED PREMISES All that part of the Southwest Quarter of the Southwest Quarter of Section 24, Township 117, Range 22, Hennepin County, Minnesota, described as follows: .. Commencing at the Southwest corner of said Southwest Quarter of the Southwest Quarter; thence South 89 degrees 39 minutes 14 seconds East, assumed bearing along the South line of said Southwest Quarter of the Southwest Quarter, a distance of 469.17 feet; thence North 00 degrees 44 minutes 16 seconds East a distance of 214.81 feet to the point of beginning; thence North 01 degrees 17 minutes 01 seconds East a distance of 37.00 feet; thence South 88 degrees 42 minutes 59 seconds Eastadistanceof 88.67 feet; thence South 01 degrees 17 minutesOlsecortds West a distance of 37.00 feet; thence North 88 degrees 42 minutes 59 seconds West a distance of 88.67 feet to the point ofbegirining. '.' . c: Hopcivil\ConstructionDisbAgt. Y outhHockey 11 ., ! . -~ : p . LEASE GUARANTY The undersigned Hopkins HockeyBooster Club, a nonprofit corporation under the laws of Minnesota, ("Guarantor") in consideration of, and in order to induce the City of Hopkins, a municipal corporation under the laws of Minnesota ("Landlord") to .enter into the attached Lease with Hopkins Youth Hockey Association, a non-profit corporation under the' laws, of Minnesota ("Tenant"), does hereby unconditionally guarantee to Landlord and Landlord's heirs, successors and assigns the payment of rent and the performance of all obligations expressed as to be performed by Tenant under the terms and provisions of the attached Ground Lease Agreement between Landlord and Tenant, dated , 2004 ("Lease"), including payment of damages for any breach of the Lease, and any liability of Tenant ,accruing under the Lease for any period preceding as well as any period following the term of the Lease (collectively, the "Lease Obligations"). However, notwithstanding the provisions of the' , ' preceding'sentence, Guarantor's obligations under this Guaranty shall be limited to all of the $25,000.00 Base Rent payment due under Paragraph 3.b) of the Lease plus 50% of the remaining Lease Obligations, which portion 'of the Lease Obligations' is herein .referred to as the "Guaranteed Lease Obligations." Guarantor's obligations under this Guaranty shall extend through the term of the Lease, and any renewals, extensions or holdovers thereof, and shall be binding upon Guarantor's heirs, successors and assigns. . Whether or not ,any' existing relationship between the, Guarantor and Tenant has been changed or ended and whether or not this Guaranty has been revoked; Landlord'may, but shall not be obligat~d to,ente~ into transactions resulting in the modification, creation or continuance of Lease Obligations, without any consent or approval by Guarantor and without any notice to Guarantor. The liability of Guarantor shall not be affected or impaired by any 'of the following acts or things (which Landlord is expressly authorized toclo, omit or suffer from time to time, both before and after revocation of this Guaranty): (i) anyone or more extensions or renewals of the,Lease Obligations (whether or not for longer than the original period) or any modification of the contractual terms applicable to the Lease Obligations; (ii) any waiver or indulgence granted , ' ' to Tenant, any delay or lack of diligence in the enforcement of the Lease Obligations, or any . failure to institute proceedings, file a claim, give any required notices or otherwise protect any either person liable in respect of any of the Lease Obligations; (iii) the assertion by Landlord of any right or remedy available under the Lease, including without limitation the termination of the Lease or of Tenant's right of occupancy and possession of the Leased Premises described therein; (iv) any full or partial release of, settlement with, or agreement not to sue, Tenant or any other guarantor or other person liable in respect of any of the Lease Obligations; or (v) any release or discharge of Tenant in any creditors', receivership, bankruptcy or other proceeding; the impairment, limitation or modification of any liability of Tenant or remedy against Tenant in any such proceeding; or the rejection, disaffirmance, disallowance or the like of the Lease or this Guaranty in any such proceeding. Guarantor, acknowledges ,and agrees that the repossession of the Leased Premises and the . ' IJ1lprovements described in the Lease by Landlord and the termination of the Lease shall not affect, impair or diminish Guarantor's obligations under this Guaranty. , Further, this Guaranty -,<" . shall remain in' full force and effect if Guarantor does not. exercise its option to enter into the new <,' Lease as provided. in Section 31 of the Lease. Guarantor hereby waives notice of acceptance hereof, or any action taken or omitted in reliance hereof; or of any default of Tenant under the Lease. Guarantor hereby further waives any requirement that Landlord first exhaust or pursue tandlord',s remedies available under the Lease or any other guaranty or security for Tenant's obligations under the Lease before Landlord proceeds directly, and recovers, against the Guarantor. Guarantor will not exercise or enforce any rightofcontribution, reimbursement, recourse or subrogation available to Guarantor against any person liable for payment of the Lease Obligations, or as to any collateral security therefor, unless and until all of the Guaranteed Lease Obligations shall have been fuUypaidand discharged. Guarantor agrees to pay all costs and expenses, including reasonable attorney's fees, incurred by Landlord in connection with the protection, defense or enforcement of this Guaranty. HOPKINS HOCKEY BOOSTER CLUB .. ' Date: By .. Its . c:hopcivILeaseGuaranty.Hop Y outhHockeyBL -2-