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Execution Copy FACILITIES USE AGREEMENT between CITY OF EDINA, MINNESOTA and INDEPENDENT SCHOOL DISTRICT NO. 273 (EDINA), MINNESOTA Dated January 12, 2005 FACILITIES USE AGREEMENT THIS FACILITIES USE AGREEMENT (the "Agreement ") made this 12th day of January, 2005 by and between the CITY OF EDINA a Minnesota municipal corporation (the "City "), and INDEPENDENT SCHOOL DISTRICT NO. 273 ( EDINA), MINNESOTA, an independent school district created and existing under the laws of the State of Minnesota (the "District "). RECITALS WHEREAS, the City and the District have determined that it is in the best interests of the residents of the City and the District to undertake, in a cooperative fashion, the construction of two new gymnasiums (the "Facilities ") on the District's Community Center Campus; WHEREAS, the City and the District have determined that it is more economical and efficient for the District to operate the Facilities for the benefit of both parties rather than for each to operate their own facilities separately; WHEREAS, the City and the District agree that the Facilities will be used for educational, recreational, athletic programs, and community -based activities, and other related activities as more fully described herein; WHEREAS, the City and the District have entered into a Joint Powers Agreement the "Joint Powers Agreement ") regarding the scope, financing, construction, and ownership of the Facilities; WHEREAS, the City and the District desire to maximize the use of the Facilities by all residents of the City and the District; WHEREAS, this Agreement sets forth the rights and obligations of the City and the District relating to the joint use of the Facilities; WHEREAS, the City and the District have authority to enter into this Agreement and to take all actions required of it hereby, and has taken all actions necessary to authorize the execution and delivery of this Agreement. WITNESSETH THAT, in the joint and mutual exercise of their powers, and in consideration of the mutual covenants herein contained, the parties hereto recite and agree as follows: ARTICLE I Joint Use 1.01. Joint Use. The City and the District shall jointly use the Facilities in accordance with the terms and conditions set forth herein. 1.02. Term. This Agreement shall be for a term of 30 years commencing on the date of substantial completion of the Facilities. 1.03. Use and Scheduling. a. The District shall be responsible for allowing access to the Facilities. All access will be based on approved building permits from the District. The intent of the District and City is to allow a wide variety of user groups access to the Facilities. For all City - sponsored groups, requests for space will be directed to the City, which in turn will prepare a calendar of activities and programs for each six month period ending on June 30 and December 31. Such calendar shall be prepared no later than 45 days prior to the commencement of such six month period. Upon receipt of the calendar, the District will prepare a single building permit for each of the two Facilities covering a six month period. Once the permit is signed, the City will be responsible for payment of the user fee for all dates and times indicated. There may be additions in the form of new building permits if space is available, but there will be no deletions or cancellations. b. The prioritization to be followed by the City and the District for the use of the Facilities in establishing the semi - annual calendar on all days that are not in the District's school year and on all days during the District's school year that classes are scheduled to not be session shall be as follows: (1) City- sponsored events; (2) jointly- sponsored events; (3) District- sponsored events and (4) other programs /private rentals. On days classes are scheduled to be in session during the District's school year, the following prioritization shall be followed by the City and District for establishing the semi - annual calendar: FOR THE EDINA COMMUNITY CENTER GYMNASIUM Prior to 6:00 P.M. District - sponsored events Jointly sponsored events City- sponsored events Other programs /private rental After 6:00 P.M. City- sponsored events Jointly- sponsored events District - sponsored events Other programs /private rental 2 FOR THE SOUTH VIEW MIDDLE SCHOOL GYMNASIUM Prior to 4:00 P.M. District - sponsored events Jointly sponsored events City- sponsored events Other programs /private rental After 4:00 P.M. City- sponsored events Jointly- sponsored events District - sponsored events Other programs /private rental C. In order to maximize the use of the Facilities, the City and the District agree that the other party may schedule use of the Facilities during the other party's priority hours, with the other party's consent. Such consent may not be unreasonably withheld if time is available. If the City desires to schedule an event during the District's priority time specified in a. above, the Director of Community Education Services may deny use of the Facilities if he concludes that such use would be incompatible with the educational use of the school. d. Notwithstanding anything herein to the contrary, the District with not less than 30 days prior written notice to the City may preempt a City- sponsored event during the City's priority time for District - sponsored events of a special nature not being held in the Facilities such as athletic contests, tournaments, concerts, community service activities, proms and graduation exercises, if the District determines that because of the District - sponsored event sufficient parking will not be available on the Community Center Campus for users of the Facilities during the City's priority time. e. Subject to other provisions of the Agreement, the City will have reasonable access to the Facilities during its priority use time. f. Subject to the other provisions of the Agreement, the District agrees to make the Facilities available for community use on a year round basis and permit scheduling of community activities seven days a week, including national legal and District holidays. For purposes of this Agreement, District holidays are defined as those annual holidays observed by the District that result in District clerical and/or custodial staff holidays, which fluctuate from year to year as negotiated by union contract. g. The expected hours for community use of the Facilities will extend to at least 10:30 P.M. every day, except holidays. h. The City reserves the right to also schedule the Facilities on Sunday mornings; however, the intent is to schedule the Facilities on Sunday mornings only for tournament play. If it is deemed necessary to have a District custodian present in either of the gymnasiums included as part of the Facilities in an overtime capacity during a City- sponsored event, the City will be billed for such time. 3 1.04. Parking and Roads. The District will permit the City, and its employees, agents and invitees to use the internal roadway systems and parking lots for access to the Facilities, and to use the parking lots of the District adjacent to the Facilities for parking purposes, subject to the District's reasonable rules and regulations. 1.05. Meetin . The City and the District shall meet at least annually to review the permitting and scheduling of the Facilities. 1.06. Alcohol and Tobacco Policy. The Facilities shall be treated as "school ground" as contemplated by the alcohol control provisions of Minnesota Statutes, Section 624.701; that the District's alcohol and tobacco policies and regulations, and any additions or amendments thereto, shall apply to the Facilities; that the area should be appropriately posted; and that the City shall withhold access from groups for alcohol or tobacco violations. ARTICLE II Ownership, Operation, and Maintenance of Facilities 2.01. Ownership. The District will be the owner of the Facilities, subject to the rights and obligations of the parties set forth in this Agreement and in the Joint Powers Agreement. 2.02. Maintenance and Upkeep. The District will be responsible for all maintenance, repairs, replacement and upkeep of the Facilities necessary to keep the Facilities in good repair and clean condition; however, all costs of the District associated with maintenance (including labor), utilities, insurance repairs, replacement and upkeep of the Facilities (except costs which are to be paid by the District as provided in the following sentence) will be paid or reimbursed from revenues derived by the District from the Facilities or from payments made by the City under Section 3.02 hereof, provided that any costs of replacement and upkeep over $5,000 must be approved in advance by the City. The City shall not withhold any such consent unreasonably, and any decision to withhold consent shall be subject to the dispute resolution procedures in Article VI hereof. The District at its expense shall also maintain the internal roadway systems, parking areas, associated common areas and HVAC system used in connection with the Facilities, including snow plowing, to the same standards as provided by the District to other District gymnasiums. The District shall determine standards of maintenance. 2.03. Set -up and Access. The District will be responsible for any set -up, such as volleyball standards, lowering basketball backboards, bleacher set -up, as well as, ensure the Facilities are unlocked and accessible for all scheduled uses. With the intent to minimize set -up, minimal maintenance, and access expenses, whenever possible, the City may, with the consent of the District, assume the responsibilities of set -up, minimal maintenance, and access on Saturdays, Sundays, and holidays, and not rely on District staff for those job functions. The District, however, agrees to provide those functions on Saturdays, Sundays and holidays when the City is unable to assume those responsibilities. 2.04. Operating Cost and Utilities. The District will provide for all electric, heat, phone, water, sewer, trash removal and other utilities and services for the Facilities, the costs of which will be paid by the City as provided in Section 3.02 hereof. The District will maintain temperatures in the Facilities during the City's use time similar to the temperatures provided by the District for other District gymnasiums; provided, the District is not required to provide air conditioning. El 2.05. Insurance. The District will be responsible to insure the Facilities, fixtures, and furnishings therein against loss or damage by fire and loss or damage by such other risks and in such amounts, with such deductible provisions, in accordance with prevailing community standards and the District shall carry and maintain, and pay timely the premiums for, with respect to the Facilities, fixtures and furnishings therein, direct damage insurance covering all risks of loss on a replacement cost basis in an amount equivalent to the full insurable value thereof. The costs of such premium will be paid by the City as provided in Section 3.02 hereof. Each party will obtain and maintain during the term of this Agreement a comprehensive liability insurance policy in at least the amounts specified as to the extent of liability under Minnesota Statutes, Section 466.04. The District will be named as an additional insured on the City's policy and the City will be named an additional insured on the District's policy. Each party shall furnish to the other party a certificate of insurance documenting the required coverage. 2.06. Damage or Destruction. Upon any damage or destruction of any of the Facilities by fire or other casualty, the District shall within one hundred twenty (120) days after such damage or destruction, commence the process required to repair, reconstruct and restore the damaged Facilities to substantially the same condition or utility value as existed prior to the event causing such damage or destruction and shall diligently pursue such repair, reconstruction and restoration. ARTICLE III Charge for Use of the Facilities 3.01. User Fees. The District will charge user fees for the use of the Facilities for District and City- sponsored activities, as well as jointly sponsored activities, and personal and private activities. The hourly rate for City- sponsored activity uses of the Facilities shall be the same rate charged by the District to use all other gyms owned by the District. The charge for District use of the Facilities will also be the same hourly rate charged by the District to use all other gyms owned by the District. However, the District agrees to pay the same additional priority access user fee per participant as requested of all other City- sponsored priority access user groups. The District's priority access users shall pay the priority access user fee per participant once per year. For example, Kid's Club participants shall be considered priority access users and will pay the fixed dollar amount (as established annually by the City Council) once per year. All District and City non - priority access users will not be subject to the priority access user fee. However, the intent is to minimize the expense per hour for City- sponsored and District - sponsored events and to charge all other private rentals at market value rates. The District reserves the right to charge all other private rentals a higher hourly market value rate. 3.02. Payments by City to District. On a semiannual basis the City shall pay to the District the amount by which the costs of operation, maintenance replacement and upkeep of the Facilities paid by the District, excluding any costs of maintenance which is to be done by the District at the expense of the District under Section 2.02 hereof, exceeds the user fees and rentals received by the District with respect to the Facilities. As provided in Section 2.02 hereof, any costs of replacement and upkeep of the Facilities in excess of $5,000 must be approved in advance by the City. Such amount shall be determined by the District as of each June 30 and December 31 for the six -month period then ended and upon such determination the District shall determine the amount required to be paid by the City under this Section 3.02 and shall submit to the City an invoice for such amount together with supporting information showing how such amount was determined by the District. 5 ARTICLE IV Use of Other District Gymnasiums The City and District agree that they shall endeavor to the extent feasible to schedule activities in the Facilities and in other District gymnasiums such that the Facilities and other District gymnasiums are utilized in an equitable manner recognizing that many City- sponsored events in gymnasiums are conducted by independent athletic associations for which the City provides support but does not control where its activities are scheduled. The goal of the District and City shall be to maximize the use of the Facilities while still maintaining the use of the existing District gymnasiums at their current levels. The City and District shall meet annually to ensure that the scheduling of access to all District gymnasiums is being conducted in an equitable manner. Any dispute over compliance with this Article IV shall be subject to the dispute resolution procedures in Article VI hereof. ARTICLE V Indemnification 5.01. Indemnification by the District. To the extent permitted by law, the District hereby indemnifies and holds the City harmless from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from the District's use of the Facilities, or from any act permitted, or any omission to act, in or about the Facilities by the District, or its officers, employees, independent contractors, agents, or invitees, or from any breach or default by the District of this Agreement, except to the extent caused by the City's gross negligence or willful misconduct. In the event any action or proceeding shall be brought against the City by reason of any such claim, the District shall defend the same at the District's expense by counsel reasonably satisfactory to the City. The provisions of this Section 5.01 shall survive any termination of this Agreement. 5.02. Indemnification by City. To the extent permitted by law, the City hereby indemnifies and holds the District harmless from and against any and all claims, demands, liabilities, and expenses, including, attorney's fees, arising from the issuance by the Edina Housing and Redevelopment Authority of bonds to finance the Facilities, the City's use of the Facilities, or from any act permitted, or any omission to act, in, or about the Facilities by the City, or its officers, employees, independent contractors, agents, or invitees, or from any breach or default by the City of this Agreement, except to the extent caused by the District's gross negligence or willful misconduct. In the event any action or proceeding shall be brought against the District by reason of any such claim, the City shall defend the same at the City's expense by counsel reasonably satisfactory to the District. The provisions of this Section 5.02 shall survive any termination of this Agreement. ARTICLE VI Dispute Resolution 6.01. Negotiation. If a dispute arises between the City and the District regarding this Agreement or the operation or maintenance of the Facilities, the District Superintendent and the City Manager, or their designees, must promptly meet and attempt in good faith to negotiate a resolution of the dispute. 6.02. Mediation and Arbitration. If the City and the District have not negotiated a resolution of the dispute within 30 days after this meeting, the parties may jointly select a mediator to facilitate further discussion. If a mediator is not used or if the parties are unable to resolve the dispute within 30 2 days after first meeting with the selected mediator, the dispute will be submitted to binding arbitration before a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association, except that disputes involving a monetary dispute in an amount less than $25,000 will be submitted to a single arbitrator. The parties will equally share the costs of conducting any mediation or arbitration, excluding each party's cost for preparation of its own case. 6.03. Specific Performance. In addition to the dispute resolution mechanisms contained in this section, each party may seek specific performance of the other party's obligations under this agreement. ARTICLE VII Miscellaneous 7.01. Relationship of Parties. The City and the District agree that it is their intention hereby to create only the relationships of licensor and licensee, and no provision hereof, or act of either party hereunder, shall ever be construed as creating the relationship of lessor and lessee, principal and agent, or a partnership, joint venture or enterprise between the parties hereto. ARTICLE VIII Administrative Provisions 8.01. Rights Cumulative. The rights and remedies of the City and the District under this Agreement, whether provided by law or by this Agreement, shall be cumulative, and the exercise by either party of any one or more of such remedies shall not preclude the exercise by such party, at the same or different times, of any other remedy for the same default or breach or of any of its remedies for any other default or breach of the party. No waiver made by either such party with respect to the performance or the manner or time thereof, of any obligation under this Agreement, shall be considered a waiver with respect to the particular obligation of the other party or a condition to its own obligation beyond those expressly waived in writing and to the extent thereof, or a waiver in any respect in regard to any other rights of the party making the waiver of any obligations of the other party. Delay by a party hereto instituting or prosecuting any cause of action or claim hereunder shall not be deemed a waiver of any rights hereunder. 8.02. Notices. All notices, certificates or other communications required to be given to the City and the Developer hereunder shall be sufficiently given and shall be deemed given when delivered or deposited in the United States mail in registered or certified form with postage fully prepaid and addressed as follows: If to the City: City of Edina 4801 W. 50`h Street Edina, Minnesota 55424 -1330 Attn: City Manager 7 If to the District: Independent School District No. 273 5701 Normandale Road Edina, MN 55424 Attn: Superintendent The City and the District, by notice given hereunder, may designate different addresses to which subsequent notices; certificates or other communications should be sent. 8.03. Amendments, Changes and Modifications. This Agreement may be amended or any of its terms modified only by written amendment authorized and executed by the City and the District. 8.04. Assigninent. The City and the District may not assign their rights or obligations under this Agreement without the prior written consent of the other party. 8.05. Binding Effect. ffect. All of the covenants, conditions and agreements herein contained shall extend to, be binding upon, and inure to the benefit of the parties hereto and their respective permitted successors and assigns. 8.06. Severability. If any provisions of this Agreement shall be declared invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect. 8.07. Execution CounteKparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 8.08. Governing Law. This Agreement shall in all respects be governed by and interpreted under the laws of the State of Minnesota. 8.09. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope of intent of any provisions or sections of this Agreement. IN WITNESS WHEREOF, the City and the District have subscribed their names as of the day and year first above written. CITV (1F PnWA And Its City anager INDEPENDENT SCHOOL DISTRICT NO. 273 (EDINA), MINNESOTA By_ Its Chairperson And Its Clerk 0 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) 1 The 7A46v7a--,4,eand oing instent was acknowledged before me this % - day of , 2005 b�� �1�'Uv�.,yttE;s, respectively, the May and City ager of the City of Edina, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) I-(—. The foregoing instrument was acknowledged before me this d7 day of , 2005 by -Ti*,_ l yg.1,5i and kedJ,--� y- , the Chairperson of tW School Board and the Clerk of the School Board of Independent School District No. 273, a Minnesota independent school district, on behalf of the school district and pursuant to the authority granted by its School Board. This document was drafted by: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, Minnesota 55402 10 Notary Public LINDA K. WILLER NOTARY PUBUC - MINNESOTA '- MY COMMISSION EXPIRES JAN. 31, 2005 Execution Copy JOINT POWERS AGREEMENT Dated as of January 12, 2005 This Agreement is made on January 12, 2005, between Independent School District No. 273, a Minnesota public corporation (the "District "), and the City of Edina, a Minnesota municipal corporation (the "City "). 1. PURPOSE The District and the City have determined that is in the best interests of the residents of the District and the City to undertake in a cooperative fashion the construction of two new gymnasiums on the District's Community Center Campus (the "Project "). The goal of the District and the City is to provide for the use of the facilities by members of the community in a manner that is more cost effective and accessible than if such facilities were duplicated by the District and the City. The purpose of this agreement is to set forth the terms governing the design and construction of the Project and the ownership, operation, maintenance, and sale of the resulting facilities. The overall guiding principle embodied in this agreement is the mutual desire of the District and the City to maximize the use of the facilities resulting from the Project by all members of the District's and City's respective constituencies. This agreement is made pursuant to Minnesota Statutes, Section 471.59. 2. JOINT POWERS OVERSIGHT COMMITTEE 2.1 To assist with the design and construction of the Project the District and the City agree to establish a committee to be known as the Edina Joint Powers Oversight Committee (the "JPOC "). 2.2 The JPOC shall consist of eight members. The District and the City shall each appoint two members of its governing body to serve as voting members. The District and the City shall each appoint two ex officio members to the Board, who need not be members of their governing bodies. 2.3 The officers of the JPOC shall elect a Chair who shall be one of the governing body representatives. 2.4 The duties of the JPOC shall consist of advising the City and District on design, contracts, payments of bills and other construction issues that may arise. 2.5 The JPOC shall terminate upon the final completion of the construction of the Project and payment of all costs thereof or upon such earlier date as this Agreement shall terminate pursuant to Section 12.2 hereof. 3. PROJECT 3.1 The Project shall consist of the facilities identified in Exhibit A hereto, subject to modification as provided herein. 3.2 The costs of the Project will be paid by the City as provided in Section 6.1 hereof. The District acknowledges that the cost of the Project will be financed by the City through the issuance by the Edina Housing and Redevelopment Authority (the "HRA ") of Lease Revenue Bonds (the "Bonds "). In connection with the Bonds the District agrees to enter into a ground lease under which it will lease to the HRA those District lands on which the Project will be constructed together with other property rights related to the construction and operation of the Project pursuant to a Ground Lease in the form attached as Exhibit B hereto (the "Ground Lease "), and the City will make rental payments to the HRA pursuant to a Lease Agreement between the HRA and City (the "Lease Agreement ") in amounts sufficient to pay the principal and interest on the Bonds. The obligation of the City to make such rental payments is subject to annual appropriation by the City Council and if the City Council determines not to make an appropriation for the payment of the rental payments the City shall have no further obligation to make such rental payments. However, the City shall continue to be liable for payment of costs under Section 7. 1, and under the Facilities Use Agreement, notwithstanding any action to cancel the Lease Agreement. The Bonds will be issued by the HRA under a Trust Indenture between the HRA and trustee to be named (the "Trustee "), and the rights of the HRA in the Ground Lease and the Lease Agreement will be assigned to the Trustee as security for the purpose of the Bonds. The obligation of the HRA to make the principal and interest on the Bonds will be limited to the rental payments to be received from the City under the Lease Agreement. The principal amount of the Bonds will be based on the estimated amount of the cost of the Project plus (i) bond discount, bond counsel fees, financial advisory fees, rating agency fees and other costs and expenses incurred by the HRA and City in issuing the Bonds and (ii) if required in connection with the marketing of the Bonds, to fund a debt service reserve fund for the Bonds. The decision to issue the Bonds and any bonds to refund the Bonds and the timing and structure thereof rests solely with the HRA and City; provided however, that the final maturity of the Bonds and any bonds to refund the Bonds shall be on or before February 1, 2028. However, the Bonds shall be sold on a schedule that assures that funds are available to the City to adequately pay bills as costs are incurred in design and construction of the Project. The District shall enter into the Ground Lease with the HRA simultaneously with the execution and delivery of this Agreement. 4. OWNERSHIP 4.1 The facilities to be constructed as part of the Project will be owned by the District subject to the rights of the City, the HRA and the Trustee under the Ground Lease and Lease Agreement, and the District will make the facilities available for community use as provided in the Facility Use Agreement between the District and the City attached as Exhibit C hereto (the "Facilities Use Agreement ") to be executed by the City and the District simultaneously with the execution and delivery of this Agreement. -2- 5. DESIGN 5.1 The City will promptly proceed to retain Rozeboom Miller Architects, Inc. for the purpose of preparing preliminary plans and design development drawings for the Project. The preliminary plans and design development shall be submitted to the City and District for approval. Following completion of these drawings and approval thereof by the City and District, the City will file an application for a conditional use permit pursuant to the Edina City Code. If the conditional use permit is approved, the City will authorize the project architects to proceed with construction plans and specifications. The construction plans will also include a cost estimate. The final cost estimate will include all costs associated with the Project, including, but not limited to, design fees as well as a contingency budget for unforeseeable circumstances associated with the construction. Final construction plans, specifications and cost estimates will be submitted to both the City and the District for City Council and School Board approval. The City will comply with any requirements of Minnesota law with respect to approvals of such plans and specifications by the Commissioner of Education, since the facilities to be constructed as part of the Project will take place on property of the District. The District shall cooperate with the City in obtaining any such approvals. The City may charge its customary fees for the review of plans and specifications, the issuance of permits and inspection of work on the Project in accordance with the Uniform Building Code. 6. CONSTRUCTION 6.1 If final construction plans and specifications are approved by the City Council and School Board, the HRA and City have authorized the issuance of the Bonds sufficient to fund the Project, and state and local approvals have been obtained, then the City shall proceed with construction of the Project. The City will advertise forbids in accordance with the requirements of the municipal contracting law. The City shall retain an independent construction manager for the Project who will oversee all construction bidding and processing of payments. 6.2 Prior to awarding construction contracts the City will review the bids received with the District and JPOC. If the contracts exceed the cost estimates contained in the construction plans (including a contingency budget) previously approved by the District and the City, the City, with the approval of the District, shall eliminate or modify the proposed contracts in order that the contracts awarded do not exceed the costs estimates contained in the construction plans previously approved by the District and the City. If the District and City are unable to agree upon such contract elimination or modifications, the City shall so decide and the City shall thereupon proceed with the Project as modified by the City. However, any such modification of the Project by the City shall be subject to the following limitations: (a) The City may not, without the District's consent, make Project modifications that would adversely impact the District's instruction of students; (b) The City may not, without the District's consent, make Project modifications that would adversely impact the health, safety, or security of District students or staff, and Qcis (c) The City may not, without the District's consent, make Project modifications that change the exterior appearance of the buildings to be constructed as part of the Project. Any disputes regarding the application of (a), (b) or (c) above shall be resolved through the dispute resolution process contained in Article 7 hereof. 6.3 The City will be the contracting party and will use ordinary and prudent efforts to require that the Project is constructed in compliance with approved plans and specifications and completed with all reasonable promptness in accordance with the schedule prepared by the architect. During construction, representatives of the City will be given access to the construction site at all reasonable times. 6.4 The JPOC must review any change order which increases the cost of any individual construction contract for the Project by more than $5,000 of the original amount thereof or which materially changes the scope of the Project. The City shall then consider the recommendation of the JPOC and obtain the written authorization of the District prior to approving any change order. However, prior written authorization is not necessary if the change order presents imminent health/safety issues making prior authorization impractical. In such cases, the change order shall be seasonably presented to the District for ratification. The District must not unreasonably withhold its consent to change orders resulting from unforeseen circumstances arising from the construction. 7. PAYMENT OF COSTS OF PROJECT 7.1 All costs of the Project will be paid by the City. Project costs include, but are not limited to, costs of the preparation by the Project architects of the construction plans and specifications for the Project, construction management costs, all costs related to obtaining all necessary permits and approvals for the Project, legal costs incurred in connection with agreements, and any and all other costs associated with the Project. All invoices or requests for payment will be approved by the JPOC and then forwarded to the City for payment. Portions of the Project may be bid by the City together with other District facilities which are not part of the Project that are being constructed by the District. If reasonably possible, the Project shall be bid so that the cost of these facilities is separately identified. If not possible to separately identify the cost, the construction manager for the Project will make a determination of the allocable cost of the Project and such District facilities, and furnish such determination to the District and the City for approval. Any disputes regarding the determination of allocable costs of the Project and such District facilities shall be resolved through the dispute resolution process contained in Article 8 hereof. If this Agreement is terminated under Section 12.2 hereof the City shall nevertheless be liable for the payment of such Project costs which are incurred up to the date of termination of this Agreement, or as a result of termination of this Agreement. The District shall submit to the City invoices for any costs billed to the District that are to be paid by the City under this Section 7.1. in 8. DISPUTE RESOLUTION 8.1 If a dispute arises between the District and the City regarding this agreement or the construction of the Project, the District Superintendent and the City Manager, or their designers, must promptly meet and attempt in good faith to negotiate a resolution of the dispute. 8.2 If the City and District have not negotiated a resolution of the dispute within 30 days after this meeting, the District and the City may jointly select a mediator to facilitate further discussion. 8.3 If a mediator is not used or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, the dispute will be submitted to binding arbitration before a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association, except that disputes involving an amount less than $25,000 will be submitted to a single arbitrator. 8.4 The District and the City will equally share the costs of conducting any mediation or arbitration, excluding each party's cost for preparation of its own case. 8.5 In addition to the dispute resolution, mechanisms contained in this section, each party may seek specific performance of the other party's obligations under this agreement. 9. GROUND LEASE 9.1 The District shall lease to the HRA those lands on which the Project is to be located pursuant to the terms of the Ground Lease. 10. LIABILITY, INSURANCE 10.1 The City will obtain sufficient insurance (in accordance with prevailing community standards) to protect the parties' exposures to loss and liability during the time of facility construction. This insurance and payment of any deductibles will be part of the cost of the Project. 10.2 Once the facility is constructed and occupied, the District will obtain sufficient property and casualty insurance (in accordance with prevailing community standards) to cover the replacement cost of the resulting facilities and its contents. 11. SALE OR TRANSFER OF FACILITY 11.1 Except as provided in Section 11.2 hereof, in consideration of the contribution by the City for the capital costs of the Project, the District agrees that it may not sell its interest in the resulting facilities, render them unusable or unavailable for community use or materially alter the facilities during the term of the Facilities Use Agreement without the City's prior approval. 11.2 If the School Board has declared the school facility in which a facility resulting from the Project is located as surplus property, and authorized the sale of the school facility, then the District may sell the facility, provided that no such sale may occur prior to February 1, 2015. -5- Upon any such sale the District shall reimburse the City for the Project costs of the facility resulting from the Project sold amortized over a 30 -year period commencing upon the completion of the construction of such facility. For example for a sale occurring 15 years after the completion of the construction of the facility the District shall be required to reimburse the City for 50% of the cost of construction of such facility. Upon the payment of such amount by the District to the City the City shall obtain the release of the facility with respect to which such payment is made for the Ground Lease and the Lease Agreement. 11.3 Any dispute regarding matters covered by Sections 11.1 or 11.2 will be resolved pursuant to the dispute resolution procedures in Section 8. 12. GENERAL PROVISIONS 12.1 All notices under this agreement must be delivered personally or sent by first class mail addressed to: If to the District: Superintendent I.S.D. No. 273 5701 Normandale Boulevard Edina, MN 55424 If to the City: City Manager City of Edina 4801 West 50`h Street Edina, MN 55424 or addressed to such party at such other address as such party shall hereafter furnish by notice to the other party. 12.2 This Agreement shall terminate if either the District or the City fails to approve the construction plans for the Project. 12.3 This Agreement may be amended only in writing, executed by the proper representatives of both parties. 12.4 This Agreement must be interpreted under the laws of the State of Minnesota. M Date: i 10-7 1 © s-- INDEPENDENT SCHOOL DISTRICT NO. 273 By: Its Boa d Chair Date: -7- EXHIBIT A The Project consists of two new gymnasiums that will be located on the Edina Community Center Campus. One gymnasium will adjoin the south end of the Edina South View Middle School building. The other gymnasium will be adjoin the south side of the Edina Community Center. Both gymnasiums will be roughly the same square footage, will be large enough to accommodate a gym floor that is 50 feet wide and 84 feet long with a minimum of 10 feet of clearance around the floor perimeter and will have an interior height that will accommodate volleyball. Bleacher seating capacity in each gymnasium will be approximately 100. The gymnasiums will be designed to allow easy access to the adjoining building and with the ability to secure and limit access to the adjoining building from the gymnasiums during school days. A -1 EXHIBIT B GROUND LEASE BETWEEN INDEPENDENT SCHOOL DISTRICT NO. 273 ( EDINA), MINNESOTA, AS LESSOR AND EDINA HOUSING AND REDEVELOPMENT AUTHORITY, AS LESSEE Dated as of 1, 2005 This instrument drafted by: Dorsey & Whitney LLP (JPG) 50 South Sixth Street Suite 1500 Minneapolis, Minnesota 55402 GROUND LEASE THIS GROUND LEASE is made and entered into as of 1, 2005 between the INDEPENDENT SCHOOL DISTRICT NO. 273 ( EDINA), MINNESOTA, a Minnesota independent school district, as lessor ( "District ") and the EDINA HOUSING AND REDEVELOPMENT AUTHORITY, MINNESOTA, a body corporate and politic and a political subdivision of the State of Minnesota, as lessee (the "Authority "). 1. Premises. District does hereby demise and lease to the Authority, and the Authority does hereby hire and take from District, all that certain tracts or parcels of land situated in the City of Edina, and State of Minnesota more particularly described on Exhibit A attached hereto and made a part hereof, together with all rights, privileges, easements and appurtenances belonging or in any way appertaining thereto (the "Premises "). 2. Term. The term of this Ground Lease (the "Term ") shall be for thirty (30) years commencing 1, 2005; provided that at the Term shall automatically expire without the necessity of further documentation on such earlier date as no Bonds (the "Bonds ") remain Outstanding pursuant to the terms of the Trust Indenture (Gymnasium Facilities) (the "Trust Indenture ") dated as of 1, 2005, and between the Authority and , as Trustee (the "Trustee "). 3. Rent. The Authority shall pay to District, during the Term, rent in the amount of $1.00 per year, commencing on the first day of the Term and on each anniversary of the first day of the Term. 4. Lease Agreement. To provide for the payment of the Bonds the Authority will enter into the Lease Agreement, dated as of January 1, 2002 (the "Lease "), between the Authority, as lessor, and the City of Edina (the "City "), as lessee, relating to the Premises and the Facilities (as defined in Section 5 hereof) to be constructed thereon. The District and the City have entered into a Joint Powers Agreement, dated 1, 2005 (the "Joint Powers Agreement ") which provides for the construction of the Facilities by the City. Under the Trust Indenture all right, title and interest of the Authority in this Ground Lease and the Lease will be assigned to the Trustee as securities for the payment of the Bonds. 5. Title to Improvements. The improvements located upon the Premises constructed by the City in accordance with the Joint Powers Agreement (the "Facilities ") shall be and remain the property of the District subject to the rights of the Authority under this Ground Lease and the City under the Lease until the expiration of the Term. Upon the expiration of the Term, and rights of the Authority or City in the Facilities shall automatically and without further act on the part of the Authority, City or District shall terminate. Such termination shall not terminate any rights and obligations the City may have with respect to the Facilities under the Facilities Use Agreement, dated 1, 2005, between the District and the City. 6. Assignment and Subletting. Other than the assignment of this Ground Lease and the Lease by the Authority to the Trustee pursuant to the Trust Indenture, so long as the Lease has not been terminated in accordance with its terms by either the Authority or the District, the Authority shall not assign this Ground Lease, or sublet the Premises, or mortgage, pledge or hypothecate any interest in this Ground Lease, voluntarily or involuntarily, by operation of law or otherwise, without the prior written consent of District, which consent may be withheld for any reason or for no reason. If the Lease has been terminated, and the Term of this Ground Lease has not expired pursuant to the provisions of Section 2 hereof, the Authority may freely assign this Ground Lease, sublet the Premises, or mortgage, pledge or hypothecate any interest in this Ground Lease. 7. Assignment by District. The District's interest in this Ground Lease shall be assignable, and thereafter the obligations of District arising or accruing under this Ground Lease after an assignment by District shall be enforceable only against the assignee. Any such assignment shall be subject to the rights of the Authority hereunder and the rights of all persons or entities claiming through the Authority. 8. Default. For purposes of this Ground Lease, the term "Event of Default" shall mean and include any of the following: A. Rent. A default in the payment of any rent when due hereunder, which default continues for a period of 10 days after written notice of such default from District to the Authority. B. Other Defaults. A default in the performance or observance by the Authority of any of the covenants, obligations, agreements or conditions of this Ground Lease not described in paragraph A, which default continues for a period of 30 days after written notice of such default by District to the Authority, or if such default cannot reasonably be cured within a period of 30 days, which default is not cured within the time reasonably necessary to cure such default. Upon occurrence of an Event of Default, the District may take whatever action at law or in equity may appear necessary or desirable to collect the amounts then due or to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Authority under this Ground Lease, but this Ground Lease shall not terminate except in accordance with Section 2 hereof. 9. Quiet Enjoyment. The District hereby represents and warrants that it is the lawful owner of the Premises and that it has full right and power to make this Ground Lease. The District further represents and warrants that the Premises is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the construction of the Facilities on the Premises or the use and operation of the Facilities for its intended purposes after completion of construction. The District further covenants and represents that (i) no dangerous, toxic or hazardous pollutants, contaminants, chemicals, waste, materials or substances, as defined in or governed by the provisions of any federal, state or local law, statute, code, ordinance, regulation, requirement or rule relating thereto (collectively, "Environmental Regulations "), and also including urea - formaldehyde, polychlorinated biphenyls, asbestos, -2- asbestos containing materials, nuclear fuel or waste, radioactive materials, explosives, carcinogens and petroleum products, or any other waste, material, substance, pollutant or contaminant which would subject the owner of the Premises to any damages, penalties or liabilities under any applicable Environmental Regulation (collectively, "Hazardous Substances ") are now or have been stored, located, generated, produced, processed, treated, transported, incorporated, discharged, emitted, released, deposited or disposed of in, upon, under, over or from the Premises in violation of any Environmental Regulation; (ii) no threat exists of a discharge, release or emission of a Hazardous Substance upon or from the Premises into the environment; (iii) the Premises has not been used as or for a mine, a landfill, a dump or other disposal facility, industrial or manufacturing facility, or a gasoline service station; (iv) no underground storage tank is now located in the Premises or has previously been located therein but has been removed therefrom; (v) no violation of any Environmental Regulation now exists relating to the Premises, no notice of any such violation or any alleged violation thereof has been issued or given by any governmental entity or agency, and there is not now any investigation or report involving the Premises by any governmental entity or agency which in any way relates to Hazardous Substances; (vi) no person, party or private or governmental agency or entity has given any notice of or asserted any claim, cause of action, penalty, cost or demand for payment or compensation, whether or not involving any injury or threatened injury to human health, the environment or natural resources, resulting or allegedly resulting from any activity or event described in (i) above; (vii) there are not now any actions, suits, proceedings or damage settlements relating in any way to Hazardous Substances, in, upon, under, over or from the Premises; (viii) the Premises is not listed in the United States Environmental Protection Agency's National Priorities List of Hazardous Waste Sites or any other list of Hazardous Substance sites maintained by any federal, state or local governmental agency; and (ix) the Premises is not subject to any lien or claim for lien or threat of a lien in favor of any governmental entity or agency as a result of any release or threatened release of any Hazardous Substance. 10. No Personal Liability. It is agreed that the members, directors, officers, managers, employees, agents or representatives of the District and the Authority shall have no personal liability to pay any indebtedness hereunder or to perform any covenant contained herein, and that no personal liability or personal responsibility of any sort is assumed by, nor shall at any time be asserted or enforceable against, said members, directors, officers, managers, employees, agents or representatives. Each party and all persons claiming by, through or under such party hereby expressly waive and release all such personal liability. 11. Release of Portion of Premises From Ground Lease. Upon any sale by the District of a portion of the Facilities pursuant to the provisions of Section 11.2 of the Joint Powers Agreement and payment by the District of the amount required to be paid to the City under Section 11.2 of the Joint Powers Agreement, the portion of the Premises on which the portion of the Facilities so sold is located shall be released from this Ground Lease and the District and Authority shall enter into an amendment to this Ground Lease evidencing such release of a portion of the Premises. 12. Notices. Any notice or election herein required or permitted to be given or served by either party hereto upon the other, shall be deemed given or served in accordance with the provisions of this Ground Lease if delivered to an officer of such other party hereto and his or -3- her receipt obtained therefor, or if mailed in a sealed wrapper by United States registered or certified mail, postage prepaid, properly addressed to such other party at the address hereinafter specified or if delivered to a nationally recognized overnight courier service. Unless and until changed by notice as herein provided, notices and communications shall be addressed as follows: If to District: Independent School District No. 273 5701 Normandale Road Edina, MN 55424 Attn: Superintendent If to the Authority: Edina Housing and Redevelopment Authority Edina District Hall 4801 West 501" Street Edina, Minnesota 55424 Attn: Executive Director Each such mailed notice or communication shall be deemed to have been given to, or served upon, the party to which addressed, on the date one day after the same is deposited in the United States registered or certified mail, postage prepaid, or overnight express, or to such nationally recognized overnight courier service, properly addressed in the manner above provided. Each such delivered notice or communication shall be deemed to have been given to, or served upon, the party to whom delivered upon delivery thereof in the manner above provided. Either party may change the address and/or person to whom directed to which mailed notice is to be sent to it by giving to the other party hereto not less than 10 days advance written notice thereof. 13. Captions. The paragraph headings incorporated in this Ground Lease are for convenience only, are not a part of this Ground Lease, and shall not be considered in the interpretation of this Ground Lease. 14. Recordation of Ground Lease. District or the Authority may, at its option and expense, cause this Ground Lease or a memorandum hereof to be filed for record in the office of the County Recorder for County of Hennepin. 15. Modifications. None of the covenants, provisions, terms or conditions of this Ground Lease to be kept or performed by District or the Authority shall be in any manner modified, waived or abandoned, except by written instrument duly signed and delivered by District and the Authority with the same formalities as this Ground Lease has been executed. 16. Severability. If any term, condition or provision of this Ground Lease or the application thereof to any person or circumstance shall, to any extent, be held to be invalid or unenforceable, the remainder thereof and the application of such term, provision and condition to persons or circumstances other than those as to whom it shall be held invalid or unenforceable shall not be affected thereby, and this Ground Lease and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and to be complied with to the full extent permitted by law. 17. Binding` Effect. All of the terms, covenants, provisions and conditions of this Ground Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. -5- 18. Counterparts. This Ground Lease may be executed by the parties hereto in separate counterparts each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. EDINA HOUSING AND REDEVELOPMENT AUTHORITY LM Chair And Secretary INDEPENDENT SCHOOL DISTRICT NO. 273 ( EDINA), MINNESOTA Chairperson And Clerk sm STATE OF MINNESOTA) ) SS. HENNEPIN COUNTY ) This instrument was acknowledged before me on this _ day of , 2005, by and as the Chair of the Board of Commissioners and Secretary, respectively, of the EDINA HOUSING AND REDEVELOPMENT AUTHORITY, a body corporate and politic and a political subdivision of the State of Minnesota. Notary Public (Notarial Seal) STATE OF MINNESOTA) )SS. HENNEPIN COUNTY ) The foregoing instrument was acknowledged before me this day of , 2005 by and , the Chairperson of the School Board and the Clerk of the School Board of Independent School District No. 273, a Minnesota independent school district, on behalf of the school district and pursuant to the authority granted by its School Board. (Notarial Seal) Notary Public -7- 13WR WMA [Insert legal description of proposed gyms, together with rights of ingress and egress to Facilities and use of parking facilities] A -1 EXHIBIT C FACILITIES USE AGREEMENT between CITY OF EDINA, MINNESOTA and INDEPENDENT SCHOOL DISTRICT NO. 273 (EDINA), MINNESOTA Dated January 12, 2005 FACILITIES USE AGREEMENT THIS FACILITIES USE AGREEMENT (the "Agreement ") made this 12`h day of January, 2005 by and between the CITY OF EDINA a Minnesota municipal corporation (the "City"), and INDEPENDENT SCHOOL DISTRICT NO. 273 ( EDINA), MINNESOTA, an independent school district created and existing under the laws of the State of Minnesota (the "District "). RECITALS WHEREAS, the City and the District have determined that it is in the best interests of the residents of the City and the District to undertake, in a cooperative fashion, the construction of two new gymnasiums (the "Facilities ") on the District's Community Center Campus; WHEREAS, the City and the District have determined that it is more economical and efficient for the District to operate the Facilities for the benefit of both parties rather than for each to operate their own facilities separately; WHEREAS, the City and the District agree that the Facilities will be used for educational, recreational, athletic programs, and community -based activities, and other related activities as more fully described herein; WHEREAS, the City and the District have entered into a Joint Powers Agreement the "Joint Powers Agreement ") regarding the scope, financing, construction, and ownership of the Facilities; WHEREAS, the City and the District desire to maximize the use of the Facilities by all residents of the City and the District; WHEREAS, this Agreement sets forth the rights and obligations of the City and the District relating to the joint use of the Facilities; WHEREAS, the City and the District have authority to enter into this Agreement and to take all actions required of it hereby, and has taken all actions necessary to authorize the execution and delivery of this Agreement. WITNESSETH THAT, in the joint and mutual exercise of their powers, and in consideration of the mutual covenants herein contained, the parties hereto recite and agree as follows: ARTICLE I Joint Use 1.01. Joint Use. The City and the District shall jointly use the Facilities in accordance with the terms and conditions set forth herein. 1.02. Term. This Agreement shall be for a term of 30 years commencing on the date of substantial completion of the Facilities. 1.03. Use and Scheduling. a. The District shall be responsible for allowing access to the Facilities. All access will be based on approved building permits from the District. The intent of the District and City is to allow a wide variety of user groups access to the Facilities. For all City - sponsored groups, requests for space will be directed to the City, which in turn will prepare a calendar of activities and programs for each six month period ending on June 30 and December 31. Such calendar shall be prepared no later than 45 days prior to the commencement of such six month period. Upon receipt of the calendar, the District will prepare a single building permit for each of the two Facilities covering a six month period. Once the permit is signed, the City will be responsible for payment of the user fee for all dates and times indicated. There may be additions in the form of new building permits if space is available, but there will be no deletions or cancellations. b. The prioritization to be followed by the City and the District for the use of the Facilities in establishing the semi - annual calendar on all days that are not in the District's school year and on all days during the District's school year that classes are scheduled to not be session shall be as follows: (1) City- sponsored events; (2) jointly- sponsored events; (3) District- sponsored events and (4) other programs /private rentals. On days classes are scheduled to be in session during the District's school year, the following prioritization shall be followed by the City and District for establishing the semi - annual calendar: FOR THE EDINA COMMUNITY CENTER GYMNASIUM Prior to 6:00 P.M. District - sponsored events Jointly sponsored events City- sponsored events Other programs /private rental After 6:00 P.M. City- sponsored events Jointly- sponsored events District - sponsored events Other programs /private rental 2 FOR THE SOUTH VIEW MIDDLE SCHOOL GYMNASIUM Prior to 4:00 P.M. District - sponsored events Jointly sponsored events City- sponsored events Other programs /private rental After 4:00 P.M. City- sponsored events Jointly- sponsored events District - sponsored events Other programs /private rental C. In order to maximize the use of the Facilities, the City and the District agree that the other party may schedule use of the Facilities during the other party's priority hours, with the other party's consent. Such consent may not be unreasonably withheld if time is available. If the City desires to schedule an event during the District's priority time specified in a. above, the Director of Community Education Services may deny use of the Facilities if he concludes that such use would be incompatible with the educational use of the school. d. Notwithstanding anything herein to the contrary, the District with not less than 30 days prior written notice to the City may preempt a City- sponsored event during the City's priority time for District- sponsored events of a special nature not being held in the Facilities such as athletic contests, tournaments, concerts, community service activities, proms and graduation exercises, if the District determines that because of the District - sponsored event sufficient parking will not be available on the Community Center Campus for users of the Facilities during the City's priority time. e. Subject to other provisions of the Agreement, the City will have reasonable access to the Facilities during its priority use time. f. Subject to the other provisions of the Agreement, the District agrees to make the Facilities available for community use on a year round basis and permit scheduling of community activities seven days a week, including national legal and District holidays. For purposes of this Agreement, District holidays are defined as those annual holidays observed by the District that result in District clerical and/or custodial staff holidays, which fluctuate from year to year as negotiated by union contract. g. The expected hours for community use of the Facilities will extend to at least 10:30 P.M. every day, except holidays. h. The City reserves the right to also schedule the Facilities on Sunday mornings; however, the intent is to schedule the Facilities on Sunday mornings only for tournament play. If it is deemed necessary to have a District custodian present in either of the gymnasiums included as part of the Facilities in an overtime capacity during a City- sponsored event, the City will be billed for such time. 1.04. Parking and Roads. The District will permit the City, and its employees, agents and invitees to use the internal roadway systems and parking lots for access to the Facilities, and to use the parking lots of the District adjacent to the Facilities for parking purposes, subject to the District's reasonable rules and regulations. 1.05. Meeting. The City and the District shall meet at least annually to review the permitting and scheduling of the Facilities. 1.06. Alcohol and Tobacco Policy. The Facilities shall be treated as "school ground" as contemplated by the alcohol control provisions of Minnesota Statutes, Section 624.701; that the District's alcohol and tobacco policies and regulations, and any additions or amendments thereto, shall apply to the Facilities; that the area should be appropriately posted; and that the City shall withhold access from groups for alcohol or tobacco violations. ARTICLE II Ownership, Operation, and Maintenance of Facilities 2.01. Ownership. The District will be the owner of the Facilities, subject to the rights and obligations of the parties set forth in this Agreement and in the Joint Powers Agreement. 2.02. Maintenance and Upkeep. The District will be responsible for all maintenance, repairs, replacement and upkeep of the Facilities necessary to keep the Facilities in good repair and clean condition; however, all costs of the District associated with maintenance (including labor), utilities, insurance repairs, replacement and upkeep of the Facilities (except costs which are to be paid by the District as provided in the following sentence) will be paid or reimbursed from revenues derived by the District from the Facilities or from payments made by the City under Section 3.02 hereof, provided that any costs of replacement and upkeep over $5,000 must be approved in advance by the City. The City shall not withhold any such consent unreasonably, and any decision to withhold consent shall be subject to the dispute resolution procedures in Article VI hereof. The District at its expense shall also maintain the internal roadway systems, parking areas, associated common areas and HVAC system used in connection with the Facilities, including snow plowing, to the same standards as provided by the District to other District gymnasiums. The District shall determine standards of maintenance. 2.03. Set -up and Access. The District will be responsible for any set -up, such as volleyball standards, lowering basketball backboards, bleacher set -up, as well as, ensure the Facilities are unlocked and accessible for all scheduled uses. With the intent to minimize set -up, minimal maintenance, and access expenses, whenever possible, the City may, with the consent of the District, assume the responsibilities of set -up, minimal maintenance, and access on Saturdays, Sundays, and holidays, and not rely on District staff for those job functions. The District, however, agrees to provide those functions on Saturdays, Sundays and holidays when the City is unable to assume those responsibilities. 2.04. Operating Cost and Utilities. The District will provide for all electric, heat, phone, water, sewer, trash removal and other utilities and services for the Facilities, the costs of which will be paid by the City as provided in Section 3.02 hereof. The District will maintain temperatures in the Facilities during the City's use time similar to the temperatures provided by the District for other District gymnasiums; provided, the District is not required to provide air conditioning. El 2.05. Insurance. The District will be responsible to insure the Facilities, fixtures, and furnishings therein against loss or damage by fire and loss or damage by such other risks and in such amounts, with such deductible provisions, in accordance with prevailing community standards and the District shall carry and maintain, and pay timely the premiums for, with respect to the Facilities, fixtures and furnishings therein, direct damage insurance covering all risks of loss on a replacement cost basis in an amount equivalent to the full insurable value thereof. The costs of such premium will be paid by the City as provided in Section 3.02 hereof. Each party will obtain and maintain during the term of this Agreement a comprehensive liability insurance policy in at least the amounts specified as to the extent of liability under Minnesota Statutes, Section 466.04. The District will be named as an additional insured on the City's policy and the City will be named an additional insured on the District's policy. Each party shall furnish to the other party a certificate of insurance documenting the required coverage. 2.06. Damage or Destruction. Upon any damage or destruction of any of the Facilities by fire or other casualty, the District shall within one hundred twenty (120) days after such damage or destruction, commence the process required to repair, reconstruct and restore the damaged Facilities to substantially the same condition or utility value as existed prior to the event causing such damage or destruction and shall diligently pursue such repair, reconstruction and restoration. ARTICLE III Charge for Use of the Facilities 3.01. User Fees. The District will charge user fees for the use of the Facilities for District and City- sponsored activities, as well as jointly sponsored activities, and personal and private activities. The hourly rate for City- sponsored activity uses of the Facilities shall be the same rate charged by the District to use all other gyms owned by the District. The charge for District use of the Facilities will also be the same hourly rate charged by the District to use all other gyms owned by the District. However, the District agrees to pay the same additional priority access user fee per participant as requested of all other City- sponsored priority access user groups. The District's priority access users shall pay the priority access user fee per participant once per year. For example, Kid's Club participants shall be considered priority access users and will pay the fixed dollar amount (as established annually by the City Council) once per year. All District and City non - priority access users will not be subject to the priority access user fee. However, the intent is to minimize the expense per hour for City- sponsored and District - sponsored events and to charge all other private rentals at market value rates. The District reserves the right to charge all other private rentals a higher hourly market value rate. 3.02. Payments by to District. On a semiannual basis the City shall pay to the District the amount by which the costs of operation, maintenance replacement and upkeep of the Facilities paid by the District, excluding any costs of maintenance which is to be done by the District at the expense of the District under Section 2.02 hereof, exceeds the user fees and rentals received by the District with respect to the Facilities. As provided in Section 2.02 hereof, any costs of replacement and upkeep of the Facilities in excess of $5,000 must be approved in advance by the City. Such amount shall be determined by the District as of each June 30 and December 31 for the six -month period then ended and upon such determination the District shall determine the amount required to be paid by the City under this Section 3.02 and shall submit to the City an invoice for such amount together with supporting information showing how such amount was determined by the District. ARTICLE IV Use of Other District Gymnasiums The City and District agree that they shall endeavor to the extent feasible to schedule activities in the Facilities and in other District gymnasiums such that the Facilities and other District gymnasiums are utilized in an equitable manner recognizing that many City- sponsored events in gymnasiums are conducted by independent athletic associations for which the City provides support but does not control where its activities are scheduled. The goal of the District and City shall be to maximize the use of the Facilities while still maintaining the use of the existing District gymnasiums at their current levels. The City and District shall meet annually to ensure that the scheduling of access to all District gymnasiums is being conducted in an equitable manner. Any dispute over compliance with this Article IV shall be subject to the dispute resolution procedures in Article VI hereof. ARTICLE V Indemnification 5.01. Indemnification by the District. To the extent permitted by law, the District hereby indemnifies and holds the City harmless from and against any and all claims, demands, liabilities, and expenses, including attorney's fees, arising from the District's use of the Facilities, or from any act permitted, or any omission to act, in or about the Facilities by the District, or its officers, employees, independent contractors, agents, or invitees, or from any breach or default by the District of this Agreement, except to the extent caused by the City's gross negligence or willful misconduct. In the event any action or proceeding shall be brought against the City by reason of any such claim, the District shall defend the same at the District's expense by counsel reasonably satisfactory to the City. The provisions of this Section 5.01 shall survive any termination of this Agreement. 5.02. Indemnification by City. To the extent permitted by law, the City hereby indemnifies and holds the District harmless from and against any and all claims, demands, liabilities, and expenses, including, attorney's fees, arising from the issuance by the Edina Housing and Redevelopment Authority of bonds to finance the Facilities, the City's use of the Facilities, or from any act permitted, or any omission to act, in, or about the Facilities by the City, or its officers, employees, independent contractors, agents, or invitees, or from any breach or default by the City of this Agreement, except to the extent caused by the District's gross negligence or willful misconduct. In the event any action or proceeding shall be brought against the District by reason of any such claim, the City shall defend the same at the City's expense by counsel reasonably satisfactory to the District. The provisions of this Section 5.02 shall survive any termination of this Agreement. ARTICLE VI Dispute Resolution 6.01. Negotiation. If a dispute arises between the City and the District regarding this Agreement or the operation or maintenance of the Facilities, the District Superintendent and the City Manager, or their designees, must promptly meet and attempt in good faith to negotiate a resolution of the dispute. 6.02. Mediation and Arbitration. If the City and the District have not negotiated a resolution of the dispute within 30 days after this meeting, the parties may jointly select a mediator to facilitate further discussion. If a mediator is not used or if the parties are unable to resolve the dispute within 30 in days after first meeting with the selected mediator, the dispute will be submitted to binding arbitration before a panel of three arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association, except that disputes involving a monetary dispute in an amount less than $25,000 will be submitted to a single arbitrator. The parties will equally share the costs of conducting any mediation or arbitration, excluding each party's cost for preparation of its own case. 6.03. Specific Performance. In addition to the dispute resolution mechanisms contained in this section, each party may seek specific performance of the other party's obligations under this agreement. ARTICLE VII Miscellaneous 7.01. Relationship of Parties. The City and the District agree that it is their intention hereby to create only the relationships of licensor and licensee, and no provision hereof, or act of either party hereunder, shall ever be construed as creating the relationship of lessor and lessee, principal and agent, or a partnership, joint venture or enterprise between the parties hereto. ARTICLE VIII Administrative Provisions 8.01. Rights Cumulative. The rights and remedies of the City and the District under this Agreement, whether provided by law or by this Agreement, shall be cumulative, and the exercise by either party of any one or more of such remedies shall not preclude the exercise by such party, at the same or different times, of any other remedy for the same default or breach or of any of its remedies for any other default or breach of the party. No waiver made by either such party with respect to the performance or the manner or time thereof, of any obligation under this Agreement, shall be considered a waiver with respect to the particular obligation of the other party or a condition to its own obligation beyond those expressly waived in writing and to the extent thereof, or a waiver in any respect in regard to any other rights of the party making the waiver of any obligations of the other party. Delay by a party hereto instituting or prosecuting any cause of action or claim hereunder shall not be deemed a waiver of any rights hereunder. 8.02. Notices. All notices, certificates or other communications required to be given to the City and the Developer hereunder shall be sufficiently given and shall be deemed given when delivered or deposited in the United States mail in registered or certified form with postage fully prepaid and addressed as follows: If to the City: City of Edina 4801 W. 50t" Street Edina, Minnesota 55424 -1330 Attn: City Manager 7 If to the District: Independent School District No. 273 5701 Normandale Road Edina, MN 55424 Attn: Superintendent The City and the District, by notice given hereunder, may designate different addresses to which subsequent notices; certificates or other communications should be sent. 8.03. Amendments, Changes and Modifications. This Agreement may be amended or any of its terms modified only by written amendment authorized and executed by the City and the District. 8.04. Assignment. The City and the District may not assign their rights or obligations under this Agreement without the prior written consent of the other party. 8.05. Binding Effect. All of the covenants, conditions and agreements herein contained shall extend to, be binding upon, and inure to the benefit of the parties hereto and their respective permitted successors and assigns. 8.06. Severability. If any provisions of this Agreement shall be declared invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect. 8.07. Execution Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 8.08. Governing Law. This Agreement shall in all respects be governed by and interpreted under the laws of the State of Minnesota. 8.09. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope of intent of any provisions or sections of this Agreement. IN WITNESS WHEREOF, the City and the District have subscribed their names as of the day and year first above written. CITY OF EDINA By Its Mayor And Its City Manager INDEPENDENT SCHOOL DISTRICT NO. 273 ( EDINA), MINNESOTA By Its Chairperson And Its Clerk 0 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2005 by and , respectively, the Mayor and City Manager of the City of Edina, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2005 by and , the Chairperson of the School Board and the Clerk of the School Board of Independent School District No. 273, a Minnesota independent school district, on behalf of the school district and pursuant to the authority granted by its School Board. This document was drafted by: Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, Minnesota 55402 10 Notary Public