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4.5 SR 09-05-2023 Request for Action To Item Number Mayor and City Council 4.5 Agenda Section Meeting Date Prepared by Consent Agenda September 5, 2023 Cal Portner, City Administrator Item Description Reviewed by Amended and Restated Ground Lease Amy K. L. Schmidt, City Attorney Agreement and Estoppel Certificate with the Reviewed by Boys and Girls Club of the Twin Cities Action Requested Approve, by motion, an Amended and Restated Ground Lease and Estoppel Certificate with the Boys and Girls Club of the Twin Cities Background/Discussion The Elk River branch of Boys & Girls Club previously belonged to the North Star Chapter. They own the building located in Lion John Weicht Park and have a land lease agreement with the City of Elk River. The North Star Chapter is dissolving and will be absorbed by the Twin Cities Chapter of the Boys & Girls Club. To accomplish the merger, the city and club ground lease agreement is amended and restated. The chapter has scheduled close on the building transfer in early October. The ground lease expires on March 15, 2030, at which time the Boys & Girls Club of the Twin Cities has an option for the first of two 10-year extensions so long as all lease conditions are met. Financial Impact N/A Mission/Policy/Goal Elk River Mission Attachments  Amended Ground Lease  Estoppel Certificate  Certificate of Insurance The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Updated: August 2020 AMENDED AND RESTATED GROUND LEASE AGREEMENT THIS AMENDED AND RESTATED GROUND LEASE AGREEMENT (“Lease th Agreement”) is made on this 5 day of September, 2023, and is by and between the CITY OF ELK RIVER, a Minnesota municipal corporation, as Lessor, whose principal place of business is 13605 Orono Parkway, Elk River, Minnesota 55330 (“Lessor” or “City”), and the BOYS AND GIRLS CLUBS OF THE TWIN CITIES, a Minnesota nonprofit corporation, as Lessee, whose principal place of business is 690 Jackson Street, St. Paul, Minnesota 55130 (“Lessee”). RECITALS th A. The City is the fee owner of that certain real property located at 905 – 6 Street Northwest, in the City of Elk River, County of Sherburne, State of Minnesota (PID: 75-134-2309), which is legally described as set forth in Exhibit A (the “Leasehold Property”); B. The City entered into that certain Ground Lease Agreement between the City and the Boys & Girls Club of the North Star, a Minnesota nonprofit corporation (f/k/a Boys & Girls Club of Elk River, Inc.) (the “Original Lessee”), dated March 16, 1999 (the “Original Lease”); C. The Original Lease was for a term of thirty (30) years, with the option for two (2) additional consecutive 10-year terms if certain conditions are met; D. Contemporaneous with the Original Lease, the City and the Original Lessee entered into that certain Memorandum of Ground Lease Agreement, which was recorded in the Office of the Sherburne County Recorder on March 24, 1999, as Document No. 386072; E. Contemporaneous with the Original Lease, the City granted to the Original Lessee an easement for parking and access purposes, which Parking and Access Easement was recorded in the Office of the Sherburne County Recorder on March 24, 1999, as Document No. 386073 (the “Easement Agreement”); F. Pursuant to the Original Lease, the Original Lessee constructed on the Property the improvements described and authorized in the Original Lease, and has occupied the Property and such improvements continuously since the commencement of the Original Lease; G. The Original Lessee and Lessee will enter into an Asset Transfer Agreement (the “Asset Transfer Agreement”), pursuant to which the Original Lessee will agree to assign, and Lessee will agree to assume, the Original Lessee’s right, title, and interest in and to the Original Lease and the Easement Agreement; H. As the successor in interest to the Original Lessee, Lessee intends to be bound to all the obligations, covenants, rights, and privileges of the Original Lease, as amended by this Lease Agreement; and I. Because certain obligations, covenants, rights and privileges of the Original Lease have been satisfied or have become moot, the City and Lessee wish to amend and restate the Original Lease, and replace it in its entirety with this Lease Agreement. 1 2067394.0015/184093281.2 NOW THEREFORE, the City and Lessee, intending to be legally bound, hereby covenant and agree as follows: ARTICLE 1 AMENDMENT, RESTATEMENT, AND DEFINITIONS Section 1.1 Agreement to Amend and Restate. The City and Lessee hereby agree to amend and restate the Original Lease. The City and Lessee further agree that the terms and conditions of the Original Lease are fully restated and replaced by the terms and conditions of this Lease Agreement. The terms and conditions of the Original Lease shall have no further force and effect, and the City and Lessee shall be bound by the terms and conditions of this Lease Agreement as of the Effective Date. The Easement Agreement is unchanged, and remains in full force and effect. Section 1.2 Definitions. In this Lease Agreement, unless a different meaning clearly appears from the context: A. “Additional Rent” means all sums payable by Lessee in connection with its occupancy of the Leasehold Property and the Easement Parcel in addition to the annual rental payments set forth in Section 2.3 of this Lease Agreement; B. “Building” means the primary structure that is located on the Leasehold Property and is used for the purposes set forth in Section 7.2 of this Lease Agreement; C. “City” has the meaning given to such term in the introductory paragraph hereof; D. “Easement Agreement” has the meaning given in the Recitals hereto and refers to the Easement Agreement assigned by the Original Lessee to Lessee; E. “Easement Parcel” means the real property adjacent to the Leasehold Property as to which the City has granted an easement to Lessee pursuant to the Easement Agreement; F. “Event of Default” means an action by Lessee listed in Section 12.2 of this Lease Agreement; G. “Hazardous Substances” means toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls, petroleum products including gasoline, fuel oil, crude oil and various constituents of such products, and any hazardous substance as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Sec. 9601-9657, as amended (“CERCLA”), or any similar federal, state or local law, regulation or ordinance; substances or conditions that may support a claim or cause of action under the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sec. 6901, et seq., as amended from time to time (“RCRA”), or any similar federal, state or local law, regulation or ordinance; pollutants, effluents or emissions subject to regulation pursuant the Federal Water Pollution Control Act, 33 U.S.C. Sec. 1251, et seq., or the Clean Air Act, 42 U.S.C. Sec. 7401, et seq., or any similar federal, state or local law, regulation or ordinance, or any substances or conditions, pollutants, effluents or 2 2067394.0015/184093281.2 emissions subject to regulation pursuant to the Minnesota Environmental Response and Liability Act, Minnesota Statutes, Chapter 115B (“MERLA”) or the Minnesota Petroleum Tank Release Cleanup Act, Minnesota Statutes, Chapter 115C; or any other state, federal or local environmental statutes, regulations, ordinances or other environmental regulatory requirements that are now or may in the future be enacted; H. “Improvements” means all improvements, including the Building, parking lots, utilities, landscaping, lighting and all other structures and improvements that are located on the Leasehold Property; I. “Leasehold Property” has the meaning given in the Recitals hereto. ARTICLE 2 DEMISE OF PROPERTY Section 2.1 Demise of Property. The City agrees to and hereby does demise and lease to Lessee, and Lessee agrees to and hereby does lease from the City, the Leasehold Property for the rental and pursuant to the terms of this Lease Agreement. Section 2.2 Term of the Lease. This Lease Agreement shall be dated and shall become effective upon its execution by the City and Lessee (the “Effective Date”). The leasehold estate created in this Lease Agreement shall begin and remain in full force and effect from the Effective Date and, subject to the terms, covenants, agreements, and conditions contained in this Lease Agreement, shall expire on the same date as the Original Lease, March 15, 2030 (the “Term”). At the end of the Term, so long as no Event of Default has occurred and remains uncured pursuant to this Lease Agreement, Lessee shall have the right to extend the Term for two (2) consecutive periods of ten (10) years each (each, a “Renewal Term”). Lessee may exercise its right to so extend the Term by providing to the City written notice of Lessee’s intent so to extend ninety (90) days prior to the expiration of the original Term, and thereafter upon providing the City such written notice within ninety (90) days prior to the expiration of the first Renewal Term. As long as this Lease Agreement and the leasehold estate created in this Lease Agreement have not expired or have not been terminated, the leasehold estate created in this Lease Agreement shall be subject to the terms, covenants, agreements, and conditions of this Lease Agreement. Section 2.3 Rental Payments for Leasehold Property. Unless already paid in advance by the Original Lessee at the commencement of the Original Lease, Lessee shall pay as and for the rental of the Leasehold Property annual rental payments in the sum of One Dollar ($1.00). Lessee shall pay the first rental payment beginning on or before January 1, 2024, and on January 1 of each remaining year of the Term, with the final payment being due on or before January 1, 2029. At Lessee’s option, the full rental amount for the Term may be payable by Lessee for the entire Term, or for any Renewal Term in advance of such Renewal Term in one lump sum. Lessee hereby waives any right to a refund or abatement of the rental payment(s) pursuant to this Lease Agreement, whether pursuant to the City’s default hereunder or termination of this Lease Agreement prior to the expiration of the Term or any Renewal Term. Section 2.4 Rent Abatement. The rental payments to be made by Lessee to the City pursuant to this Lease Agreement shall not be abated, either in whole or in part, by reason of any 3 2067394.0015/184093281.2 damage to or destruction of, the Leasehold Property, the Improvements, or any other improvement presently located on or to be constructed or placed on the Leasehold Property. Section 2.5 Waiver. It is understood by the parties to this Lease Agreement that the Leasehold Property is being leased by Lessee from the City “as is, where is.” The City makes no representations or warranties that the Leasehold Property will be suitable for the uses to which Lessee intends to put it. Lessee hereby waives all statutory, common law, or any other implied warranty of habitability or use and agrees that the City shall not be liable to repair, replace, or pay for any damage to the Leasehold Property or any improvements located on or to be constructed on such property, whether such damage has occurred prior to or occurs after the date of this Lease Agreement. Section 2.6 Surveys and Tests. In the event Lessee wishes to expand the Building during the Term or any Renewal Term, at that time and prior to proceeding with any plans or construction, Lessee shall obtain whatever surveys, soil tests, and other reports and analyses it deems necessary, including without limitation, any environmental analyses and reports referred to in Section 7.8 of this Lease Agreement, at its sole cost and expense. Lessee shall make all such surveys, tests and reports available to the City for examination, upon request and during normal business hours, in connection with and as an integral part of the City’s review and approval of any construction plans and the City’s inspection of the Improvements. ARTICLE 3 NET LEASE Section 3.1 Net Lease. It is the intention and purpose of the City and Lessee that this Lease Agreement shall be a “Net Lease” to the City. All costs and expenses of whatever character or kind, general and special, ordinary and extraordinary, foreseeable or unforeseeable, and of every kind and nature whatsoever that may be necessary in or about the operation of the Leasehold Property and Improvements, including, but not limited to, all hazard and liability insurance; taxes or payments required by any governmental authority in lieu of taxes; special assessments; utilities; and maintenance and repairs, except as may be otherwise expressly provided in this Lease Agreement, shall be paid by Lessee as “Additional Rent” under this Lease Agreement. Section 3.2 The City’s Right to Perform. Except as may be otherwise expressly provided in this Lease Agreement, Lessee covenants and agrees that if at any time Lessee fails to pay any amount required by this Lease Agreement, or to obtain, pay for, maintain, or deliver any of the insurance policies required by this Lease Agreement, or fails to make any other payment or perform any other act required to be made or performed by this Lease Agreement, then the City, without notice to or demand upon Lessee, without waiving or releasing Lessee from any obligation of Lessee contained in this Lease Agreement, and without any obligation to so do, may cause any such insurance coverage to become effective, and pay premiums for the same. The City may also make any other payment, or perform any other act on the part of Lessee to be made and performed as provided in this Lease Agreement, in such manner and to such extent as the City may deem desirable, and in exercising such right to pay necessary and incidental costs and expenses, employ counsel and incur reasonable attorneys’ fees. All sums so paid by the City and all necessary and incidental costs and expenses in connection with performance of any such act by the City, together with interest thereon at a rate of eight percent (8%) per annum from the date of making such 4 2067394.0015/184093281.2 expenditure by the City shall be payable to the City as Additional Rent and, except as otherwise provided for in this Lease Agreement, shall be payable on demand or, at the option of the City, may be added to any monthly rental payment then due or thereafter becoming due under this Lease Agreement. Lessee covenants to pay any such sum or sums with interest as aforesaid and the City shall have (in addition to any other right or remedy of the City) the same rights and remedies in the event of nonpayment by Lessee as in the case of default by Lessee in payment of rent. ARTICLE 4 TAXES AND ASSESSMENTS Section 4.1 Real Estate Taxes and Assessments. Lessee shall pay directly to the appropriate governmental authorities, as Additional Rent hereunder, before any fine, penalty, interest or costs may be added thereto for the nonpayment thereof, all real estate taxes or payments required by any governmental authority in lieu thereof and installments of special assessments payable during the Term of this Lease Agreement, which shall during the Term be laid, assessed, levied or imposed upon or become payable or a lien upon the Leasehold Property and the Improvements or any part thereof (“Impositions”). If, by law, any such Imposition is payable or may at the option of the taxpayer be payable in installments (whether or not interest shall accrue on the unpaid balance of such Imposition), Lessee may pay the same together with any accrued interest on the unpaid balance of such Imposition in installments as the same respectively become payable and before any fine, penalty, interest or cost may be added thereto for the nonpayment of any such installment and interest. Lessee, upon request, shall forward to the City written evidence of payment of the Impositions. Section 4.2 Right to Contest. Lessee shall have the right to contest or appeal any Imposition in Lessee’s or the City’s name, at Lessee’s sole cost and expense. If nonpayment of the Imposition creates a lien upon the Leasehold Property or Improvements, the City may, at its option, request Lessee to deposit with the City an amount equal to one hundred ten percent (110%) of the contested and unpaid Imposition. Such amount shall be returned to Lessee upon the successful appeal of the Imposition or upon payment of it. Lessee shall give the City written notice of Lessee’s intention to contest or appeal any Imposition at least twenty (20) days prior to the delinquency thereof. Lessee shall hold the City harmless against all loss, cost, expense, attorneys’ fees or damages resulting from such contest or appeal. Section 4.3 Other Taxes. Lessee shall pay directly to the appropriate governmental authorities, as Additional Rent under this Lease Agreement, before any fine, penalty, interest or costs may be added thereto for the nonpayment thereof, any tax or excise imposed or assessed on rent, on any leasehold interest, any right of occupancy, any investment of Lessee in the Leasehold Property and Improvements, any personal property of any kind owned, installed or used by Lessee, including Lessee’s leasehold improvements, any privilege tax, sales tax, gross proceeds tax, etc., however described, by any federal, state, county or municipal governmental authority or any subdivision thereof or other governmental authority. Lessee shall not be required to pay any federal or state or local income tax for which the City may become liable during the Term of the Lease Agreement. 5 2067394.0015/184093281.2 ARTICLE 5 UTILITIES Section 5.1 Utilities. Lessee shall directly pay or cause to be paid, as Additional Rent hereunder, all charges for cleaning and building services, steam, water, natural gas, sewer, electricity, light, heat, air conditioning, telephone or other telecommunications, internet, or other service or utility used, rendered, or supplied upon, or in connection with the Leasehold Property and Improvements (the “Utilities”) during the Term or any Renewal Term. Lessee shall contract for the Utilities in Lessee’s own name and shall indemnify and hold the City harmless from any liability or expense for any such charge. Upon the City’s request, Lessee shall furnish to the City paid statements, invoices or cancelled checks evidencing the payment of all obligations undertaken by Lessee under this Article 5. ARTICLE 6 INSURANCE Section 6.1 General Insurance Requirements. For the full Term and any Renewal Term, Lessee shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the City shall furnish proof of the payment of premiums on, insurance as follows: A. Property Insurance. Insurance against loss and/or damage to the Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing) fire, extended coverage, vandalism and malicious mischief, boiler explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than the full insurable replacement value of the Improvements. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent to such provisions in writing by the City. The term “full insurable replacement value” shall mean the actual replacement cost of the Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains, and other uninsurable items) and equipment. All policies evidencing insurance required by this Section 6.1.A., with respect to the Improvements, shall be carried in the names of Lessee and the City, as their respective interests may appear, and shall contain standard clauses which provide for any proceeds paid by an insurer to Lessee or the City and remaining after deducting all expenses, including fees and disbursements of legal counsel, incurred in the collection of the Net Proceeds resulting from claims for casualty thereunder to the Improvements for loss or damage covered thereby to be made jointly payable to Lessee and the City. B. General Liability. Lessee shall maintain Commercial General Liability Insurance in a minimum amount of $2,000,000 per occurrence; $4,000,000 annual aggregate. The policy shall cover liability arising from premises, operations, products-completed operations, personal injury, advertising injury, and contractually assumed liability. Lessee, including its elected and appointed officials, employees, and agents, shall be endorsed as additional insured. 6 2067394.0015/184093281.2 C. Automobile Liability. Lessee shall maintain Business Automobile Liability Insurance, including owned, hired, and non-owned automobiles, with a minimum combined single liability limit of $1,000,000 per occurrence. D. Professional (Errors and Omissions) Liability. Lessee shall maintain Professional Liability Insurance for all claims Lessee may become legally obligated to pay resulting from any actual or alleged negligent act, error, or omission related to Lessee’s services provided on or in the Leasehold Property. Lessee is required to carry the following minimum limits: $2,000,000 per occurrence; $4,000,000 annual aggregate. E. Workers’ Compensation. Lessee shall maintain Workers’ Compensation insurance for all its employees in accordance with the statutory requirements of the State of Minnesota. Lessee shall also carry Employer’s Liability insurance with minimum limits as follows:  $500,000 – Bodily Injury by Disease per employee  $500,000 – Bodily Injury by Disease aggregate  $500,000 – Bodily Injury by Accident Section 6.2 Insurance Policies. All insurance required by this Article 6 shall be in form and content satisfactory to the City and taken out and maintained in financially sound and responsible insurance companies selected by Lessee which are authorized under the laws of Minnesota to assume the risks covered thereby. Lessee will deposit annually with the City policies evidencing all such insurance, or a certificate or certificates of insurance or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article 6, each policy shall contain a provision that the insurer shall not cancel or modify it without giving written notice to Lessee and the City at least thirty (30) days before the cancellation or modification becomes effective or ten (10) days’ written notice for non-payment of premium. Not less than fifteen (15) days prior to the expiration of any policy, Lessee shall furnish the City evidence satisfactory to the City that the policy has been renewed or replaced by another policy conforming to the provisions of this Article 6, or that there is no necessity to do so under the terms of this Lease Agreement. In lieu of separate policies, Lessee may maintain a single policy, blanket, or umbrella policies, or a combination thereof, having the coverage required herein, in which event Lessee shall deposit with the City a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Improvements. Lessee’s policies shall be primary insurance and non-contributory to any other valid and collectible insurance available to the City with respect to any claim arising out of Lessee’s use of the Leasehold Property. Section 6.3 Insurance Proceeds. Lessee will notify the City immediately in the case of damage to, or destruction of, the Improvements or any portion thereof resulting from fire or other casualty. A. If the Improvements or any portion thereof are destroyed by fire or other casualty Lessee shall, within thirty (30) days after such damage or destruction, proceed forthwith to repair, reconstruct and restore the damaged Improvements to substantially the same condition or utility value as they existed prior to the event causing such damage or destruction and, to 7 2067394.0015/184093281.2 the extent necessary to accomplish such repair, reconstruction and restoration, Lessee will apply the Net Proceeds of any insurance relating to such damage or destruction received by Lessee from the City to the payment or reimbursement of the costs thereof. B. If Lessee is in compliance with the terms and conditions of this Lease Agreement, then any Net Proceeds of insurance relating to such damage or destruction received by the City shall be released from time to time by the City to Lessee upon the receipt of: 1. A certificate of an authorized representative of Lessee specifying the expenditures made or to be made or the indebtedness incurred in connection with such repair, reconstruction and restoration and stating that such Net Proceeds, together with any other moneys legally available for such purposes, will be sufficient to complete such repair, construction and restoration; and 2. If Net Proceeds equal or exceed Ten Thousand Dollars ($10,000) in amount, the written approval of such certificate by an independent engineer. C. Lessee shall complete the repair, reconstruction and restoration of the Improvements, whether or not the Net Proceeds of insurance received by Lessee for such purposes are sufficient to pay for the same. D. No destruction of or damage to the Improvements or any part thereof by fire or any other casualty shall permit Lessee to surrender this Lease Agreement or shall relieve Lessee from its liability to pay the full rent and Additional Rent and other charges payable under this Lease Agreement or from any of its other obligations under this Lease Agreement and Lessee waives any rights now or hereafter conferred upon it by statute or otherwise to quit or surrender this Lease Agreement or the Leasehold Property or any part thereof, or to any suspension, diminution, abatement or reduction of rent or Additional Rent on account of any such destruction or damage. E. Anything in this Lease Agreement to the contrary notwithstanding, if, during the last five (5) years of the Term, the Improvements are so damaged by fire or otherwise that the cost of replacement or restoration thereof shall exceed fifty percent (50%) of the then replacement value of the Improvements or portion thereof so damaged, then Lessee may decline to rebuild and this Lease Agreement shall terminate upon written notice by Lessee to the City. In the event of any such termination, this Lease Agreement and the term hereof shall end as of the effective date of such termination, the Net Proceeds shall be the property of the City and Lessee shall have no right or claim with respect thereto. No such termination shall release Lessee from any obligation hereunder for rent, Additional Rent, taxes and insurance premiums accrued or payable for or during any period prior to the effective date of such termination, and any prepaid rent, taxes and insurance premiums beyond the effective date of such termination shall be adjusted. ARTICLE 7 IMPROVEMENTS, OPERATION, AND USE Section 7.1 Other Improvements. Other than the Improvements that were built pursuant to the Original Lease, Lessee will not construct or reconstruct any other improvements or alter any 8 2067394.0015/184093281.2 existing improvements on the Leasehold Property without the express prior written consent of the City. Section 7.2 Operation and Use. At all times during the Term, or any Renewal Term, Lessee will operate and maintain the Improvements as a Boys and Girls Club for the purpose of providing educational, recreational, and social development opportunities to the youth of the city of Elk River and the surrounding area (“Permitted Use”). Lessee will not discriminate on the basis of race, color, creed, religion, national origin, sex, gender identity, marital status, disability, status with regard to public assistance, sexual orientation, or familial status in the sale, lease, rental, or in the use or occupancy of the Improvements or the Leasehold Property, or any part of the Improvements or Leasehold Property. Lessee will not use or operate the Leasehold Property in any manner that might interfere with the use and enjoyment of the adjacent real property for public park and recreational purposes, or for any other purpose than a Permitted Use or suspend or discontinue the use of the Leasehold Property, without the City’s prior written consent. Section 7.3 Covenants Running with the Leasehold Property. It is intended and agreed that the agreements and covenants set forth in this Article 7 shall be binding for the benefit and in favor of, and enforceable by, the City, its successors and assigns, and any successor in interest to the Leasehold Property, or any part thereof against Lessee, its successors and assigns, and every successor in interest to the Leasehold Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Leasehold Property or any part thereof, for the Term or any Renewal Term. In amplification, and not in restriction, of the provisions of this Article 7, it is intended and agreed that the City and its successors and assigns shall be deemed beneficiaries of the agreements and covenants provided herein, both for and in their own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the City without regard to whether the City has at any time been, remains, or is an owner of the Leasehold Property or interest therein to, or in favor of, which such agreements and covenants relate. The City shall have the right, in the event of any breach of any such agreement or covenant, to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled. Section 7.4 Liens. Lessee will: (a) duly and punctually pay for all labor performed and materials furnished in connection with the construction of any improvements; (b) keep the Leasehold Property and every improvement on the Leasehold Property free and clear from all liens for labor performed and materials furnished; provided, however, that Lessee shall not be required to pay any claim for labor performed or materials furnished so long as Lessee shall contest, in good faith, the existence, amount or the validity thereof by appropriate proceedings, which shall operate during the pendency to prevent a breach of this Section 7.4; (c) defend, at its own cost and expense, each and every lien asserted or filed against the Leasehold Property or any improvement thereon; and (d) indemnify and save the City harmless from all and every claim, demand, action or cause of action (including fees of attorneys) arising out of and connected with any act or omission occurring on the Leasehold Property or any improvements on the Leasehold Property. 9 2067394.0015/184093281.2 Section 7.5 Use in Compliance with Laws. Lessee shall not use or occupy the Leasehold Property and Improvements or knowingly permit the Leasehold Property and Improvements to be used or occupied contrary to any statute, rule, order, ordinance, requirement or regulation applicable to the Leasehold Property, or in any manner which would violate any certificate of occupancy affecting the same, or which would cause structural injury to the Improvements or cause the value or usefulness of the Improvements and Leasehold Property or any part thereof to substantially diminish (reasonable wear and tear excepted), or which would constitute a public or private nuisance or waste. Lessee shall promptly upon discovery of any such use take all necessary steps to compel the discontinuance of such use. Section 7.6 Permits. Lessee shall maintain in force and effect all permits, licenses and similar authorizations to use the Leasehold Property and Improvements for the Permitted Use required by any governmental authority having jurisdiction over the use of the Leasehold Property. Lessee’s failure to maintain such permits, licenses and similar authorizations shall not relieve Lessee from the performance of its obligations and covenants hereunder (except obligations and covenants as may be prohibited by law), nor from the obligations to pay rent or Additional Rent, as set forth herein. Lessee shall, at the City’s request, join with the City in executing, acknowledging and delivering any and all petitions, consents, subordinations, plats, or easement deeds that may be required for the installation of any utilities, public improvements, roads, water lines, sewer lines, storm drainage facilities, subdivision, rezoning, variance, special use, platting or other similar development of the Leasehold Property, which do not affect Lessee’s use of the Leasehold Property during the term of this Lease Agreement. Section 7.7 Compliance with Law. Lessee, at its sole expense, shall promptly comply with all laws, ordinances, and requirements or federal, state, county, and municipal authorities and with any lawful order or direction of any public officer relating to the use and occupation of the Leasehold Property and Improvements during the Term or any Renewal Term. Nothing contained in this Lease Agreement, however, shall prohibit Lessee from appealing from or contesting the validity or legality of such laws, ordinances, requirements, orders or directions and, notwithstanding the foregoing provisions of this Article 7, Lessee shall not be deemed to be in default under this Lease Agreement so long as Lessee diligently prosecutes such appeal or contest. Section 7.8 Environmental Matters. The City knows of no wells, individual sewage treatment systems, or above ground or underground tanks located on the Leasehold Property; and the City knows of no Hazardous Substances that have been generated, released, treated, stored, released or disposed of, or otherwise placed, deposited in or located on the Leasehold Property. Lessee shall make its own inspection of the Leasehold Property for Hazardous Substances and environmental matters, at its own cost and expense, and is not relying on any reports or information regarding environmental matters provided by the City. Lessee shall not, directly or indirectly, cause or permit the generation, treatment, storage, release, disposal, placement deposit or location on the Leasehold Property of any Hazardous Substances, or directly or indirectly undertake or permit activity on the Leasehold Property that would cause or contribute to (i) the Leasehold Property becoming a treatment, storage, or disposal facility within the meaning of, or otherwise bring the Leasehold Property within the ambit of, RCRA or any similar federal or state law, regulation or local ordinance, (ii) a release or threatened release or discharge of Hazardous Substances into any water source or system, (iii) the dredging or filling of any waters, or otherwise cause or permit, by act or omission of Lessee, its employees, agents, contractors, licensees, 10 2067394.0015/184093281.2 successors or assigns the violation of any present or future federal, state or local law, regulation or ordinance relating to Hazardous Substances or environmental matters. It is the intent of the parties hereto that Lessee shall enjoy the use and possession of the long-term leasehold estate created by this Lease Agreement, and shall be fully and solely responsible for all risks associated with the present and future regulation of and all claims by any parties whatsoever relating to environmental matters. ARTICLE 8 MAINTENANCE, REPAIRS AND ALTERATIONS Section 8.1 Maintenance, Repairs and Alterations. Except as provided in this Lease Agreement, during the Term or any Renewal Term, Lessee is required to, at its sole cost and expense, keep and maintain the Leasehold Property and Improvements and appurtenances, and every part of the Leasehold Property and Improvements and appurtenances, in good order, condition and repair, including without limitation, the sidewalks, parking lots, entrances, passages, courts, vestibules, stairways, corridors, halls, elevators, air conditioning equipment, heating equipment, water system, toilet facilities, all other machinery and equipment in the Building or located on the Leasehold Property, and interior and exterior painting. Except as provided in this Lease Agreement, Lessee is required to, at its sole cost and expense, make all repairs to the exterior of the Building; make all structural repairs; and keep and maintain parking lots and all landscaped areas in a neat, orderly, and trim condition. If Lessee does not keep and maintain the Leasehold Property and Improvements as required by this Lease Agreement, the City may, but need not, make such repairs and replacements, and Lessee will be obligated pay to the City the cost of such repairs or replacements immediately upon being billed by the City for the same. All damage or injury to the Leasehold Property or Building caused by Lessee moving property in or out of the Building or by installation, removal of furniture, fixtures, equipment, or other property by Lessee, its agents, contractors, servants, employees or volunteers, or resulting from any other cause of any other kind or nature whatsoever due to carelessness, omission, neglect, improper conduct or other causes of Lessee, its servants, employees, agents, volunteers, visitors, or licensees, shall be repaired, restored or replaced promptly by Lessee at its sole cost and expense to the satisfaction of the City. All repairs, restorations and replacements shall be in quality and class equal to the original work. If Lessee fails to make such repairs, restorations or replacements necessitated by such damage or injury, the same may be made by the City and the same shall be at the expense of Lessee and collectible as Additional Rent or otherwise, and shall be paid by Lessee to the City within five (5) days after rendition of a bill or statement for the same. Lessee shall also make all payments required for reimbursement of the City’s costs of maintenance and repair of the Easement Parcel and shall repair or rebuild the Easement Parcel as required under the Easement Agreement. All payments for the costs of such maintenance and repair or rebuilding that become payable by Lessee to the City under the Easement Agreement shall be collectible as Additional Rent, at the City’s option, and shall be payable by Lessee to the City within five (5) days after rendition of a bill or statement for the same. ARTICLE 9 CONDEMNATION Section 9.1 Participation in Award. If the Leasehold Property or any part of the Leasehold Property shall be taken in condemnation proceedings or by exercise of any right of 11 2067394.0015/184093281.2 eminent domain or by agreement between the City, Lessee, and those authorized to exercise such right (any such matters being hereinafter referred to as a taking), the City, Lessee and any person or entity having an interest in the award or awards shall have the right to participate in any such condemnation proceedings or agreement for the purpose of protecting their interests hereunder. Each party so participating shall pay its own expenses related to such participation. Section 9.2 Taking. If, at any time during the Term or any Renewal Term, there shall be a taking of the whole or substantially all of the Leasehold Property, this Lease Agreement shall terminate and expire on the date of such taking and the rent and Additional Rent hereunder shall be apportioned and paid to the date of such taking. For the purpose of this Article 9, “substantially all of the demised premises” shall be deemed to have been taken if the untaken part of the demised premises shall be insufficient for the economic and feasible operation thereof by Lessee for the purposes set forth in this Lease Agreement. A. If this Lease Agreement shall have terminated as a result of such taking: 1. The City shall be entitled to the award for the Leasehold Property and for consequential damages to and diminution of the assemblage or plottage value of the Leasehold Property not so taken. 2. The City shall be entitled to the award for the Leasehold Property, if such termination takes place during the last five (5) years of the Term or during either Renewal Term. B. If this Lease Agreement is not so terminated, it shall remain unaffected except: 1. The rent shall be reduced by an amount which bears the same proportion to the annual rent immediately prior to the partial taking as the rental value of the part of the Leasehold Property so taken bears to the rental value of the whole Leasehold Property immediately prior to such taking. 2. Lessee shall, promptly after such taking and at its expense, restore the Improvements to a complete architectural unit. 3. The City shall be entitled to the award for the Leasehold Property taken and for consequential damages to and diminution of the assemblage or plottage value of the Leasehold Property not so taken. 4. Lessee shall not be entitled to any payment based upon the value of the unexpired Term or Renewal Term, or consequential damages to the Leasehold Property not so taken, or the diminution of the assemblage or plottage value of the Leasehold Property not so taken. ARTICLE 10 CITY ACCESS Section 10.1 City Access. Lessee shall permit the City and the authorized representatives of the City to enter the Leasehold Property and Improvements at all reasonable times for the purpose of inspecting the same and making any necessary repairs to comply with any laws, 12 2067394.0015/184093281.2 ordinances, rules, regulations, or requirements of any public authority or of the Board of Fire Underwriters or any similar board. Nothing in this Lease Agreement shall imply any duty upon the part of the City to do any such work which, under any provision of this Lease Agreement, Lessee may be required to perform and the performance of any such by the City shall not constitute a waiver of Lessee’s default in failing to perform the same. The City may, during the progress of any work on the Leasehold Property and in the Improvements, keep and store on the Leasehold Property or in the Improvements all necessary materials, tools, and equipment. The City shall not in any event be liable for inconvenience, annoyance, disturbance, loss of business, or other damage to Lessee by reason of making repairs or the performance of any work on the Leasehold Property or in the Improvements, or on account of bringing materials, supplies, and equipment on the Leasehold Property or in the Improvements during the course of such work, and the obligations of Lessee under this Lease Agreement shall not be affected in any manner whatsoever by such work. The City shall, however, in connection with the doing of any such work cause as little inconvenience, annoyance, disturbance, loss of business, or other damage to Lessee as reasonably may be possible in the circumstances. ARTICLE 11 ASSIGNMENT AND SUBLETTING Section 11.1 Interests of the City. The City may convey its interest in the Leasehold Property to any person or entity at any time and by whatever means chosen by the City, including without limitation quit claim deed, contract for deed, or assignment of this Lease Agreement, without notice to or approval by Lessee, except as set forth in Section 11.2 below. Section 11.2 Right of First Refusal. For the additional consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, receipt of which is acknowledged, the City hereby grants to Lessee a contingent right of first refusal to purchase the Leasehold Property. Lessee’s contingent right of first refusal shall not arise unless and until the City has entered into a binding agreement to sell all of its right, title and interest in and to the Leasehold Property to a private, for-profit entity or organization, or to an individual or individuals, which agreement provides that the sale of the Leasehold Property will be consummated during the Term or any Renewal Term (a “Sale Agreement”). The terms of Lessee’s contingent right of first refusal and the procedures that Lessee must follow to exercise such right of first refusal are as follows: A. The City shall notify Lessee in writing within ten (10) business days of the date on which the City executes a Sale Agreement, and shall notify Lessee of all of the pertinent provisions of the Sale Agreement. Lessee shall have ten (10) business days from the date of delivery of the City’s notice, which shall be in the manner provided at Section 14.11 of this Lease Agreement, in which to exercise its contingent right of first refusal (the “Refusal Period”). B. Lessee may exercise its right of first refusal only by delivering to the City a noncontingent written offer, signed by Lessee, to purchase the Leasehold Property on the same terms as provided in the Sale Agreement (“Lessee’s Offer”). If Lessee does not deliver Lessee’s Offer within the Refusal Period for any Sale Agreement, Lessee’s right of first refusal with respect to that Sale Agreement shall expire automatically at midnight of the last day of the 13 2067394.0015/184093281.2 Refusal Period, and the City shall thereafter have the unrestricted right to sell the Leasehold Property pursuant to the Sale Agreement. C. The City and Lessee agree that Lessee shall have no right of first refusal in connection with any offer or agreement regarding (a) any transfer, pledge, assignment, conveyance, or sale of a part, but not all, of the City’s right, title or interest in and to the Leasehold Property; or (b) any transfer, pledge, assignment, conveyance, or sale of any part or all of the City’s right, title or interest in and to the Leasehold Property to a public body or state or federal political subdivision or agency, or any public or private nonprofit organization or entity; or (c) any such transfer, pledge, assignment, conveyance, or sale of any kind pursuant to an agreement providing that the consummation of the transaction will occur after the expiration of the Term or any Renewal Term of this Lease Agreement. D. Lessee’s contingent right of first refusal under this Lease Agreement shall expire and terminate automatically upon the first to occur of (a) the expiration of the Term or any Renewal Term, whether pursuant to its terms or as a result of the City’s exercise of its rights pursuant to Article 12 of this Lease Agreement, or (b) consummation of the City’s sale of the Leasehold Property pursuant to a Sale Agreement or pursuant to an agreement that is other than a Sale Agreement, or (c) the occurrence of an Event of Default. Upon such expiration of Lessee’s right of first refusal, Lessee shall have no further rights whatever to purchase the Leasehold Property. Section 11.3 Assignment by Lessee. Lessee shall not sell, assign, sublease, mortgage, pledge or hypothecate, or otherwise transfer all or any part of its interest in this Lease Agreement or the Improvements, including without limitation its Right of First Refusal described in Section 11.2 of this Lease Agreement, without the express written consent of the City. For the purpose of this Lease Agreement, any change in the control of Lessee shall be deemed to be an assignment which shall require the City’s consent. No such assignment or subleasing shall relieve Lessee from any of its obligations contained in this Lease Agreement, nor shall any assignment or transfer of this Lease Agreement be effective unless the assignee or transferee shall, at the time of such assignment or transfer, assume in writing all the terms, covenants, and conditions of this Lease Agreement to be performed after such assignment or transfer by Lessee and shall agree in writing to be bound by the same. In the event that Lessee grants to any third party a license for the use of all or any portion of the Improvements, which license shall be in writing and expressly and unilaterally revocable by either Lessee or the City for any reason, with or without cause, and which license shall be for no longer than three (3) consecutive days, such license shall not be deemed an assignment or transfer of Lessee’s rights in violation of this Section 11.3. Lessee agrees to pay on behalf of the City any and all costs of the City, including reasonable attorneys’ fees, occasioned by such any such assignment or transfer or by any such license. Section 11.4 Mortgaging. Lessee may not give any person or entity a mortgage deed to, or other security interest in, the Leasehold Property or Improvements, or any part of the Leasehold Property or Improvements, without the express written consent of the City, which consent shall not be unreasonably withheld. 14 2067394.0015/184093281.2 ARTICLE 12 EVENTS OF DEFAULT Section 12.1 Events of Default Defined. The following shall be “Events of Default” under this Lease Agreement and the “Event of Default” shall mean, whenever used in this Lease Agreement, any one or more of the following events: A. Failure by Lessee to pay any rental payments or Additional Rents due under this Lease Agreement; B. Construction of other improvements on the Leasehold Property without the express written consent of the City; C. Suspending or discontinuing the use of the Improvements for the Permitted Use specified in Section 7.3 without the express written consent of the City; D. Failure to keep the Leasehold Property free and clear from all liens for labor performed or materials furnished; E. Failure to pay any Impositions on the Leasehold Property; F. Failure to pay for two (2) consecutive months any charges for cleaning and building services, steam, water, natural gas, sewer, electricity, light, heat, air conditioning, telephone or other telecommunications, internet, or other service or utility used, rendered, or supplied to or in connection with the Leasehold Property and Improvements; G. Failure to permit an inspection by the City as required in Article 10 of this Lease Agreement; H. The execution of any transfer, conveyance, assignment, mortgage, contract, or sublease by Lessee in contravention of Article 11 of this Lease Agreement; I. Default by Lessee under any mortgage approved by the City pursuant to the terms of this Lease Agreement or under the Easement Agreement; or J. Failure to comply with any other term, recital, or condition of this Lease Agreement. Section 12.2 Remedies on Default. The City may, but shall have no obligation to, exercise any one or more of the following remedies after thirty (30) days’ written notice to Lessee of the occurrence of an Event of Default, but only if Lessee does not cure the Event of Default within such thirty (30) days, or in the case of an Event of Default that cannot be cured within thirty (30) days, does not commence curing the Event of Default within thirty (30) days and diligently prosecute such curing to completion: A. Terminate this Lease Agreement and the leasehold estate created in this Lease Agreement and exclude Lessee from possession of the Leasehold Property, the Improvements, and any other improvements on the Leasehold Property; 15 2067394.0015/184093281.2 B. Reenter and take possession of the Leasehold Property without terminating this Lease Agreement or the leasehold estate created in this Lease Agreement, sublease the Leasehold Property, the Improvements (and any other improvements on the Leasehold Property) for the account of Lessee, holding Lessee liable for any deficiency in rents; C. Cure any default by Lessee pursuant to any mortgage approved by the City pursuant to this Lease Agreement and charge any sums paid in connection with curing such default as Additional Rent payable by Lessee; or D. Take whatever action at law or in equity may appear necessary or appropriate to collect rental payments or Additional Rent due under this Lease Agreement, or to obtain performance and observance of any obligation, agreement, or covenant to be performed by Lessee under this Lease Agreement. Section 12.3 Exercise of Remedies. No remedy conferred upon or reserved to the City pursuant to this Lease Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any remedy shall be construed to be a waiver of the right to exercise such remedy. No waiver of the right to exercise any particular remedy shall be construed to be a waiver of the right to exercise any other remedy. No waiver of the exercise of all remedies with respect to an Event of Default shall be construed to be a waiver of any remedies with respect to any other Event of Default. ARTICLE 13 SURRENDER Section 13.1 Surrender. Except as is herein otherwise provided, Lessee shall on the last day of the Term or any Renewal Term, or upon any earlier termination of this Lease Agreement, surrender and deliver up the Leasehold Property and the Improvements to the possession and use of the City without delay and in good order, condition and repair, except for reasonable wear and tear after the last necessary repair, replacement, restoration or renewal made by Lessee, pursuant to its obligations hereunder, free and clear of all lettings and occupancies other than subleases then terminable at the option of the City, and free and clear of all liens and encumbrances other than those, if any, presently existing or created or suffered by the City, without any payment or allowance whatever by the City on account of any improvements which may be on the Leasehold Property. A. Where furnished by or at the expense of Lessee or any subtenant, furniture, trade fixtures, and business equipment may be removed by Lessee at or prior to the termination of this Lease Agreement or by such subtenant at or prior to the termination of its sublease, provided, however, that the removal of such furniture, trade fixtures, or business equipment will not injure the Leasehold Property or the Improvements or necessitate changes in or repairs to the same. Lessee shall pay or cause to be paid to the City the cost of repairing any damage arising from such removal and restoration of the Leasehold Property and Improvements to their condition prior to such removal. 16 2067394.0015/184093281.2 B. Any personal property of Lessee or any subtenant which shall remain in the Improvements or on the Leasehold Property after the termination of this Lease Agreement and the removal of Lessee or such subtenant from the Improvements or Leasehold Property may, at the option of the City, be deemed to have been abandoned by Lessee or such subtenant and either may be retained by the City as its property or be disposed of, without accountability, in such manner as the City may see fit, or if the City shall give written notice to Lessee to such effect, such property shall be removed by Lessee at Lessee’s sole cost and expense. C. If this Lease Agreement shall terminate pursuant to Section 6.3.E. or Section 9.2 of this Lease Agreement, then, notwithstanding Sections 13.1.A. and 13.1.B. of this Lease Agreement, Lessee or any subtenant shall have a reasonable time thereafter to remove any property which it shall be entitled to remove pursuant to Section 13.1.B of this Lease Agreement. D. The City shall not be responsible for any loss or damage occurring to any property owned by Lessee or any subtenant. ARTICLE 14 MISCELLANEOUS Section 14.1 Indemnification of the City. Except with respect to bad faith and willful misconduct by the City, its officials, employees or agents, Lessee will indemnify and hold harmless the City, its governing body members, officers, agents, and employees, from and against any claims, losses, or damages of any kind whatsoever (including fees of attorneys) arising from Lessee’s use of the Leasehold Property, Improvements, and Building (including any claims, losses or damages arising from any sublessee’s or occupant’s use of such property) or arising from any actions taken by any person or entity pursuant to this Lease Agreement. In particular, Lessee shall defend, indemnify and hold the City (and its governing body members, officers, agents and employees) harmless from and against any claims, losses, or damages arising from: any defect in the Leasehold Property; any act, failure to act, or negligence of any person resulting in damages or harm to any person on or about the Leasehold Property; any failure of Lessee to perform its obligations pursuant to Section 7.9 hereof; or any actions taken by the City (or its governing body members, officers, agents or employees) in good faith with respect to the Leasehold Property. In case any action or proceeding is brought against the City by reason of any such claim, Lessee upon notice from the City shall resist or defend such action or proceeding by counsel reasonably satisfactory to the City. Section 14.2 Estoppel Certificate. Lessee and the City shall, at any time and from time to time upon not less than twenty (20) days’ prior notice by one party to the other, execute, acknowledge, and deliver a statement in writing certifying that this Lease Agreement is unmodified and in full force and effect (or if there shall have been modifications that this Lease Agreement is in full force and effect as modified and stating the modifications), and the dates to which the rent and Additional Rent have been paid in advance, if any, and stating whether or not (to the best knowledge of the City and Lessee) the City or Lessee is in default in the performance of any covenant, agreement or condition contained in this Lease Agreement and, if so, specifying each such default of which the City or Lessee may have knowledge, it being intended that any such 17 2067394.0015/184093281.2 statement delivered pursuant to this Article 14 shall be in a form approved by and may be relied upon by any prospective assignee of the City’s or Lessee’s interest in this Lease Agreement or any mortgagee of the Leasehold Property or any assignee of any mortgage upon the Leasehold Property. Section 14.3 Subordination. This Lease Agreement, including without limitation Lessee’s Right of First Refusal pursuant to Section 11.2 of this Lease Agreement, shall be subject and subordinate to the terms and conditions of all mortgages which may now or hereafter encumber the Leasehold Property and to all renewals, modifications, consolidations, replacements and extensions of such mortgages. In confirmation of such subordination, Lessee shall promptly execute any certificate of subordination or other such documents which the City or its mortgagees may request. Section 14.4 Entire Agreement. This Lease Agreement contains the entire agreement between the parties, including the Original Lease, and there are no other terms, obligations, covenants, representations, statements, or conditions, oral or otherwise, of any kind whatsoever. Any agreement made after the Effective Date of this Lease Agreement shall be ineffective to change, modify, discharge, or effect an abandonment of this Lease Agreement in whole or in part unless such agreement is in writing and signed by the party against whom enforcement of the change, modification, discharge or abandonment is sought. Section 14.5 Release of the City. If the City sells or otherwise transfers all of its interest in the Leasehold Property, the City shall, without further action by any party, be released and discharged from any further obligations or duty under this Lease Agreement, and no claim or demand upon the City shall thereafter be made by Lessee arising out of any obligation or duty of the City hereunder. Upon request by the City, Lessee shall execute an attornment agreement with such transferee in form satisfactory to the City’s transferee. Section 14.6 Severability. If any term, condition, or provision of this Lease Agreement or the application of such term, condition, or provision of this Lease Agreement, to any person or circumstance shall, to any extent, be held to be invalid or unenforceable, the remainder of this Lease Agreement and the application of such terms, provisions, and conditions to persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this Lease Agreement and all of its terms, provisions, and conditions shall, in all other respects, continue to be effective and to be complied with to the full extent permitted by law. Section 14.7 Headings. The headings incorporated in this Lease Agreement are for convenience in reference only. They are not a part of this Lease Agreement and do not in any way limit or add to the terms and provisions of this Lease Agreement. Section 14.8 No Partnership or Joint Venture. The City and Lessee agree that this Lease Agreement is not intended to be nor shall it be construed as a joint venture or partnership between the City and Lessee, nor a loan from the City to Lessee. Nothing contained in this Lease Agreement, or in any other document or instrument made in connection with this transaction, shall be deemed or construed to create a partnership, loan, tenancy-in-common, joint tenancy, joint venture, other common enterprise, or co-ownership by or between the City and Lessee. The City 18 2067394.0015/184093281.2 and Lessee have been represented by experienced legal counsel who have advised on each of the rights and duties of a lessor and lessee. Section 14.9 Binding Effect. All of the covenants, conditions, and agreements contained in this Lease Agreement shall extend to, be binding upon, and inure to the benefit of the parties to this Lease Agreement, and to their respective successors and assigns. The City and Lessee expressly disclaim, on their own behalf and on behalf of their respective successors and assigns, any intent that a third party, claiming independently or by or under the City or Lessee, shall benefit from or have any rights whatsoever relating to the provisions in this Lease Agreement regarding a Mortgagee Agreement (as defined in the Original Lease) or any other or similar agreement that the City and Lessee may make after the effective date of this Lease Agreement. Section 14.10 Quiet Enjoyment. The City represents and warrants that it is the lawful owner of the Leasehold Property; that it has the full right and power to make this Lease Agreement; that if and so long as Lessee shall not be in default under the terms and conditions of this Lease Agreement, Lessee shall quietly hold, occupy and enjoy the Leasehold Property during all of the Term or any Renewal Term. Section 14.11 Notices. Any notice required or permitted to be given under this Lease Agreement shall be deemed to be given when mailed by United States registered or certified mail, postage prepaid, properly addressed to the address provided below. The City shall give Lessee a copy of any notice served, delivered or mailed to the City which, in any manner, affects Lessee’s interests in the Leasehold Property. Unless and until changed by notice as herein provided, notices shall be addressed as follows: To the City: City of Elk River 13065 Orono Parkway P.O. Box 490 Elk River, MN 55330 ATTN: City Administrator With a copy to: Campbell Knutson, PA Grand Oak Office Center I 860 Blue Gentian Road, Suite 290 Eagan, MN 55121 ATTN: Jared Shepherd To Lessee: Boys and Girls Club of the Twin Cities 690 Jackson Street, St. Paul, MN 55130 ATTN: Terryl Brumm With a copy to: Stinson LLP 50 South Sixth Street, Suite 2600 Minneapolis, MN 55402 ATTN: Todd M. Phelps 19 2067394.0015/184093281.2 Section 14.12 Memorandum of Lease. The City and Lessee shall, at the time of execution of this Lease Agreement, execute an Amended and Restated Memorandum of Lease setting forth all of the pertinent terms and provisions of this Lease Agreement, which shall be in a recordable form and recorded in the real property records of the County of Sherburne, State of Minnesota. Section 14.13 Consent to Assignment of the Easement Agreement. The City hereby consents to the assignment of the Easement Agreement from the Original Lessee to Lessee, pursuant to the terms of the Asset Transfer Agreement. The City further represents and warrants that the Easement Agreement is in full force and effect. Section 14.14 Incorporation of Recitals and Exhibits. The Recitals at the beginning of this Lease Agreement and the Exhibits attached to this Lease Agreement are all true and correct, and, by this reference, are incorporated into and made part of this Lease Agreement. \[Signature page follows\] 20 2067394.0015/184093281.2 IN WITNESS WHEREOF, the City and Lessor have caused this Lease Agreement to be executed as of the Effective Date. THE CITY OF ELK RIVER By: John J. Dietz, Mayor By: Tina Allard, City Clerk BOYS AND GIRLS CLUBS OF THE TWIN CITIES By: Terryl Brumm, President & CEO S-1 2067394.0015/184093281.2 EXHIBIT A Legal Description of the Leasehold Property That part of the North 95.00 feet of the South 420.00 feet, lying west of a line 495.00 feet west of, and parallel with, the centerline of Jackson Avenue (formerly known as “old Highway No. 169” and State Trunk Highway No. 201), and lying east of a line 713.00 feet west of, and parallel with, said centerline of Jackson Avenue; all as measured at right angles, and all being part of the Southwest Quarter of the Northwest Quarter of Section 34, Township 33, Range 26, Sherburne County, Minnesota. A-1 2067394.0015/184093281.2 (reserved for recording) AMENDED AND RESTATED MEMORANDUM OF GROUND LEASE AGREEMENT THIS AMENDED AND RESTATED MEMORANDUM OF GROUND LEASE th AGREEMENT (this “Agreement”) is made on this 5 day of September, 2023, and is by and between the CITY OF ELK RIVER, a Minnesota municipal corporation, as Lessor, whose principal place of business is 13605 Orono Parkway, Elk River, Minnesota 55330 (the “City”), and BOYS AND GIRLS CLUBS OF THE TWIN CITIES, a Minnesota nonprofit corporation, as Lessee, whose principal place of business is 690 Jackson Street, St. Paul, Minnesota 55130 (“Lessee”). All capitalized terms used herein and not defined have the meanings ascribed to them in the Amended and Restated Ground Lease Agreement (as defined below). The City and Lessee have, on September 5, 2023, entered into an Amended and Restated 1 Ground Lease Agreement pursuant to which the City has leased to Lessee the real property described below located in the City of Elk River, County of Sherburne, State of Minnesota: That part of the North 95.00 feet of the South 420.00 feet, lying west of a line 495.00 feet west of, and parallel with, the centerline of Jackson Avenue (formerly known as “old Highway No. 169” and State Trunk Highway No. 201), and lying east of a line 713.00 feet west of, and parallel with, said centerline of Jackson Avenue; all as measured at right angles, and all being part of the Southwest Quarter of the Northwest Quarter of Section 34, Township 33, Range 26, Sherburne County, Minnesota (the “Leasehold Property”). The Amended and Restated Ground Lease Agreement amends, restates, and replaces in its entirety that certain Ground Lease Agreement that was entered into by the City and the Boys & Girls Club of the North Star, a Minnesota nonprofit corporation (f/k/a Boys & Girls Club of Elk River, Inc.) (the “Original Lessee”), which was dated March 16, 1999 (the “Original Lease”), and for which a Memorandum of Ground Lease Agreement was recorded in the Office of the Sherburne 1 2067394.0015/184093281.2 County Recorder on March 24, 1999, as Document No. 386072 (the “Original Memorandum”). This Agreement likewise amends, restates, and replaces the Original Memorandum so recorded. The terms of the Amended and Restated Ground Lease Agreement include, without limitation, the following: 1. Term of the Amended and Restated Ground Lease Agreement. The term of the Amended and Restated Ground Lease Agreement expires on March 15, 2030, which is thirty (30) calendar years from the date of the Original Lease (the “Term”). At the end of the Term, so long as no Event of Default has occurred and remains uncured pursuant to the Amended and Restated Ground Lease Agreement, Lessee shall have the right to extend the term of the Amended and Restated Ground Lease Agreement for two (2) consecutive periods of ten (10) years each (each, a “Renewal Term”). Lessee may exercise its right to so extend the Term by providing to the City written notice of Lessee’s intent to extend ninety (90) days prior to the expiration of the original Term of the original Ground Lease Agreement, and thereafter upon providing the City such written notice within ninety (90) days prior to the expiration of the first Renewal Term. 2. Rentals. The Amended and Restated Ground Lease Agreement is a net lease. The base rent for the entire Term is One Dollar ($1.00). Lessee is responsible for payment, as additional rent, of all costs and expenses of whatever character or kind, general and special, ordinary and extraordinary, foreseeable and unforeseeable, and of every kind and nature whatsoever that may be necessary in or about the operation of the Leasehold Property and Improvements. 3. Permitted Use. The permitted use of the Leasehold Property is restricted to use of the Improvements as a Boys and Girls Club for the education, recreation, and social development of the youth of the City of Elk River and the surrounding area. 4. Covenants Running with the Leasehold Property. The agreements and covenants set forth in the Amended and Restate Ground Lease Agreement are binding upon and inure to the benefit of and are enforceable by the City, its successors and assigns, and any successor in interest to the Leasehold Property, or any part thereof, against Lessee, its successors and assigns, and every successor in interest to the Leasehold Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Leasehold Property or any part thereof, for the Term or any Renewal Term. 5. Assignment and Subletting. The City may convey its interest in the Leasehold Property without notice to or approval by Lessee, except as set forth pursuant to a contingent right of first refusal in Lessee to purchase the Leasehold Property which is in effect only in the event that the City has entered into a binding agreement to sell all of its right, title and interest in and to the Leasehold Property to a private, for-profit entity or organization or to an individual or individuals, which agreement provides that the sale of the Leasehold Property will be consummated during the Term or any Renewal Term. Lessee has no right of first refusal in connection with any offer or agreement regarding a transfer of part, but not all, of the City’s right, title or interest in and to the Leasehold Property, or any transfer of any part or all of the City’s right, title or interest in and to the Leasehold Property to a public body or state or federal political subdivision or agency, or any public or private nonprofit organization or entity, or any such transfer 2 2067394.0015/184093281.2 of any kind pursuant to an agreement providing that the consummation of the transaction will occur after the expiration of the Term or any Renewal Term. Lessee’s contingent right of first refusal expires automatically upon the first to occur of (a) the expiration of the Term or any Renewal Term, whether pursuant to its terms or as a result of the City’s exercise of its rights thereunder; or (b) consummation of the City’s sale of the Leasehold Property pursuant to an agreement as to which Lessee has no right of first refusal thereunder; or (c) the occurrence of an Event of Default as defined in the Amended and Restated Ground Lease Agreement. Upon expiration of Lessee’s contingent right of first refusal, Lessee shall have no further rights whatever to purchase the Leasehold Property. Lessee shall not sell, assign, sublease, mortgage, pledge, or hypothecate or otherwise transfer all or any part of its interest in the Amended and Restated Ground Lease Agreement, or the Improvements on the Leasehold Property, including without limitation its contingent right of first refusal, without the express written consent of the City, which consent shall not be unreasonably withheld. 6. Amended and Restated Ground Lease Agreement to Control. The parties intend this Agreement to operate solely as a recorded summary of certain provisions of the Amended and Restated Ground Lease Agreement. In the event that the provisions as stated herein contradict or are different from the terms and provisions of the Amended and Restated Ground Lease Agreement, the terms and provisions of the Amended and Restated Ground Lease Agreement shall control. 7. Consent to Assignment of the Easement Agreement. The Original Lessee assigned, and Lessee assumed, the Original Lessee’s right, title, and interest in and to that certain Parking and Access Easement, recorded in the Office of the Sherburne County Recorder on March 24, 1999, as Document No. 386073 (the “Easement Agreement”). The City hereby consents to such assignment of the Easement Agreement and certifies that the Easement Agreement is in full force and effect. \[Signature page follows\] 3 2067394.0015/184093281.2 IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Memorandum of Ground Lease Agreement as of the date first written above. THE CITY OF ELK RIVER By: John J. Dietz, Mayor By: Tina Allard, City Clerk BOYS AND GIRLS CLUBS OF THE TWIN CITIES By: Terryl Brumm, President & CEO S-1 2067394.0015/184093281.2 LANDLORD ESTOPPEL CERTIFICATE This LANDLORD ESTOPPEL CERTIFICATE (this “Certificate”) is delivered as of September \[●\], 2023 (the “Effective Date”), by THE CITY OF ELK RIVER, a Minnesota municipal corporation, whose address is 13065 Orono Parkway, P.O. Box 490, Elk River, Minnesota 55330, Attention: City Administrator (“Landlord”), based on these facts: A. Landlord owns the real property described in Exhibit A (“Landlord’s Premises”). B. Landlord has leased part of Landlord’s Premises (the “Leased Premises”) to the BOYS & GIRLS CLUB OF THE NORTH STAR, a Minnesota nonprofit corporation (f/k/a The Boys and Girls Club of Elk River, Inc.), whose address is 905 6th Street NW, Elk River, Minnesota 55330 (“Tenant”), by that certain Ground Lease Agreement dated as of March 16, 1999 (as amended, restated, renewed, modified, or supplemented from time to time as described below, the “Lease”). C. A true, correct and complete copy of the Lease is attached hereto as Exhibit B. All Section references in this Certificate refer to the Lease, unless another document is named. D. A memorandum of the Lease was recorded in the land records of the County of Sherburne, State of Minnesota, on March 24, 1999, as Document No. 386072. E. In connection with the Lease, Landlord and Tenant entered into that certain Parking and Access Easement dated March 16, 1999 (the "Easement") (the Lease and the Easement herein referred to collectively as, the "Agreements"), pursuant to which Landlord granted to Tenant an easement over a portion of the Landlord's Premises (the "Easement Parcel") to provide access to and adequate parking for the Leased Premises. F. A true, correct and complete copy of the Easement is attached hereto as Exhibit C. G. Tenant has proposed the following transactions affecting the Agreements (the “Transaction”): (a) an assignment of the Lease from Tenant to the BOYS AND GIRLS CLUBS OF THE TWIN CITIES, a Minnesota nonprofit corporation (“Purchaser"); and (b) an assignment of the Easement from Tenant to Purchaser. NOW, THEREFORE, Landlord certifies and acknowledges as follows, all as of the Effective Date: 1. Status. Except as the public record discloses, Landlord: (a) is landlord under the Lease; (b) is the grantor under the Easement; (c) has not conveyed, mortgaged, or assigned Landlord’s Premises or Landlord’s interest in the Lease or the Easement; and (c) has not agreed to do so. 2. Prior Assignments. To Landlord’s knowledge, Tenant is tenant under the Lease and grantee under the Easement. Landlord has received no written notice that Tenant has assigned the Lease or the Easement, except to Purchaser. 3. Full Force and Effect. The Agreements: (a) are in full force and effect; (b) have not been amended, cancelled, supplemented, surrendered, or terminated except as this Certificate states; and (c) contain the entire agreement between Landlord and Tenant (and any parties related to either of them) about the Leased Premises, the Easement Parcel, the Lease, and the Easement. 4. No Tenant Default. To Landlord’s knowledge, Tenant is not in default under the Agreements, nor has any event occurred that, with passage of time or giving of notice or both, would constitute such 1 a default. Landlord has given Tenant no notice of any uncured default. There are no legal proceedings pending (or threatened) against Tenant by Landlord. 5. No Termination. Landlord has no present right to terminate the Agreements. Landlord has neither given nor received any notice of termination of the Lease or the Easement. 6. Payments. Tenant is current in payment of: (a) all base rent due and payable under the Lease as of the Effective Date; (b) all other rent due under the Lease for which Landlord has billed Tenant pursuant to Sections 2.2 and 2.3 of the Lease; and (c) its pro rata share of maintenance and repair costs for the Easement Improvements (as defined in the Easement). Landlord holds no security deposit, \[prepaid rent,\] or other funds of any kind for the Lease. 7. No Defenses. Landlord has no defense, offset, claim, counterclaim, or right of recoupment against its obligations under the Agreements. 8. Transaction. Landlord has consented to the Transaction to the extent the Agreements require such consent. The Agreements require no payment to Landlord on account of the Transaction. 9. Approvals. Landlord approved the plans and specifications for construction of a building and other improvements for the operation of and use as a Boys and Girls Club (the “Project”), as Sections 7.1 and 7.2 of the Lease contemplate. Construction of the Project and related improvements began, and were completed, in a timely manner in compliance with Section 7.1 of the Lease. 10. No Landlord Default. To Landlord’s knowledge, Landlord is not in default under the Agreements. Landlord has received from Tenant no notice of default under the Agreements that has not been cured. 11. Due Authorization, Execution and Delivery. Landlord is duly authorized to execute, and has duly executed and delivered, this Certificate. No consent by any court, agency, bureau, or other third party, governmental or nongovernmental (except any such consents that have been obtained), is required for Landlord to execute and deliver this Certificate. 12. Inconsistency with the Agreements. To the extent that this Certificate conflicts with the Agreements, this Certificate modifies and supersedes the Agreements. Any such conflict shall be resolved in favor of this Certificate. This Certificate is made and delivered as of the Effective Date. This Certificate may be relied upon (but only as of the Effective Date) by Purchaser, \[Lender,\] the successors and assigns of each of them (including any trust, trustee, servicer, and rating agency for any securitization that includes Lender’s loan), any future leasehold mortgagee of Purchaser, and any title insurance company. This Certificate binds Landlord and its legal representatives, successors, and assigns. THE CITY OF ELK RIVER By: John J. Dietz, Mayor By: Tina Allard, City Clerk 2 Attachments: Acknowledgment Exhibit A = Legal Description Exhibit B = Copy of Lease Exhibit C = Copy of Easement 3 EXHIBIT A Legal Description (a) Leased Premises: That part of the North 95.00 feet of the South 420.00 feet, lying west of a line 495.00 feet west of, and parallel with, the centerline of Jackson Avenue (formerly known as "old Highway No. 169" and State Trunk Highway No. 201), and lying east of a line 713.00 feet west of, and parallel with, said centerline of Jackson Avenue; all as measured at right angles, and all being part of the Southwest Quarter of the Northwest Quarter of Section 34, Township 33, Range 26, Sherburne County, Minnesota (b) Easement Parcel: 4 EXHIBIT B Copy of Lease 5 EXHIBIT C Copy of Easement 6 DATE (MM/DD/YYYY) CERTIFICATE OF LIABILITY INSURANCE 10/27/2022 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). CONTACT PRODUCER Kristin Chase NAME: FAX PHONE Christensen Group(952) 653-1000(952) 653-1100 (A/C, No): (A/C, No, Ext): E-MAIL 9855 West 78th Street, Ste 100kchase@christensengroup.com ADDRESS: INSURER(S) AFFORDING COVERAGENAIC # Eden PrairieMN55344Philadelphia Indemnity Ins Co18058 INSURER A : INSURED Dakota Truck Underwriters34924 INSURER B : BOYS & GIRLS CLUBS OF THE TWIN CITIES INSURER C : 690 Jackson Street INSURER D : INSURER E : Saint PaulMN55130 INSURER F : 22-23 LIABILITY COVERAGESCERTIFICATE NUMBER:REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ADDLSUBR INSRPOLICY EFFPOLICY EXP TYPE OF INSURANCELIMITS POLICY NUMBER LTR(MM/DD/YYYY)(MM/DD/YYYY) INSDWVD COMMERCIAL GENERAL LIABILITY 1,000,000 EACH OCCURRENCE$ DAMAGE TO RENTED 1,000,000 CLAIMS-MADEOCCUR$ PREMISES (Ea occurrence) 20,000 MED EXP (Any one person)$ APHPK248211211/01/202211/01/20231,000,000 PERSONAL & ADV INJURY$ 3,000,000 GEN'L AGGREGATE LIMIT APPLIES PER:GENERAL AGGREGATE$ PRO- 3,000,000 POLICYLOCPRODUCTS - COMP/OP AGG$ JECT $ OTHER: COMBINED SINGLE LIMIT AUTOMOBILE LIABILITY 1,000,000 $ (Ea accident) ANY AUTOBODILY INJURY (Per person)$ OWNEDSCHEDULED APHPK248211211/01/202211/01/2023 BODILY INJURY (Per accident)$ AUTOS ONLYAUTOS HIREDNON-OWNEDPROPERTY DAMAGE $ (Per accident) AUTOS ONLYAUTOS ONLY $ UMBRELLA LIAB 5,000,000 OCCUREACH OCCURRENCE$ A EXCESS LIAB PHUB83839111/01/202211/01/20235,000,000 CLAIMS-MADEAGGREGATE$ 10,000 DEDRETENTION$$ PEROTH- WORKERS COMPENSATION STATUTEER AND EMPLOYERS' LIABILITY Y / N 1,000,000 ANY PROPRIETOR/PARTNER/EXECUTIVE E.L. EACH ACCIDENT$ B N / A WC010-0026038-2022A11/01/202211/01/2023 OFFICER/MEMBER EXCLUDED? 1,000,000 (Mandatory in NH) E.L. DISEASE - EA EMPLOYEE$ If yes, describe under 1,000,000 DESCRIPTION OF OPERATIONS belowE.L. DISEASE - POLICY LIMIT$ DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) CERTIFICATE HOLDERCANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. EVIDENCE OF COVERAGE ONLY AUTHORIZED REPRESENTATIVE © 1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03)The ACORD name and logo are registered marks of ACORD