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HomeMy WebLinkAbout013-R-21 Authorizing the City Manager to Sign Harbert Park Canal Shores Lease Extension1 /19/21 13-R-21 A RESOLUTION Authorizing the City Manager to Enter Into A Lease Extension With the Metropolitan Water Reclamation District of Greater Chicago ("Harbert Park") WHEREAS, the City of Evanston currently leases property located along the North Shore Channel of the Chicago River (the "Premises") from the Metropolitan Water Reclamation District of Greater Chicago ("MWRD"); and WHEREAS, the Premises provides natural and recreational benefits to the residents of Evanston; and WHEREAS, the parties agree that it would be beneficial to continue the leasing arrangement between the parties; and WHEREAS, the City Council has determined that the best interest of the City would be served by extending said lease on the property, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EVANSTON, COOK COUNTY, ILLINOIS: SECTION 1: The City Council hereby adopts the foregoing recitals as its findings, as if set forth fully herein. SECTION 2: The City Manager is hereby authorized to sign the "Lease Agreement," attached hereto as Exhibit 1 and incorporated herein by reference. 13-R-21 SECTION 3: The City Manager is hereby authorized and directed to negotiate any additional conditions of the Lease Agreement as she may determine to be in the best interests of the City and in a form acceptable to Corporation Counsel. SECTION 4: This Resolution shall be in full force and effect from and after its passage, approval, and publication in the manner provided by law. Attest: G\ Devon Reid, City Clerk Adopted: January 25 , 2021 Stephen H. Hagerty, Mayor Approved as to form: Kelley A. Gandurski, Corporation Counsel -2- 13-R-21 EXHIBIT 1 ffcll DOCUMENT PREPARED BY (AND AFTER RECORDING RETURN TO): Metropolitan Water Reclamation District Of Greater Chicago Law Department/Real Estate Division 100 E. Erie St. Chicago, IL 60611 Attn: Brendan J. Dailey, Principal Attorney P.I. N .s : 10-23-206-015-0000 10-23-206-007-0000 10-23-206-010-0000 This space reserved for recorder's use only. REV. 5-7-20 LEASE AGREEMENT (Governmental Form) THIS INDENTURE, made this 71h day of May, 2020, by and between the MET- ROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO, a body corpo- rate and politic organized and existing under the laws of the State of Illinois, with principal offices at 100 East Erie Street, Chicago, Illinois 60611 (hereinafter desig- nated "District" or "Lessor"), and the City of Evanston, a local municipality orga- nized and existing under the laws of the State of Illinois, with principal offices at 2100 Ridge Avenue, Evanston, Illinois 60201 (hereinafter designated "Lessee"). WITNESSETH THAT: ARTICLE ONE 1.01 PREMISES LEASED Lessor, for and in consideration of the rents hereinafter reserved and of the covenants and agreements hereinafter contained, does hereby demise and lease un- to said Lessee all of the Demised Premises legally described and depicted in the plat of survey in Exhibit "A" which is attached hereto and made a part hereof, located east of the North Shore Channel between Dempster Street and Main Street in Evans- ton, Illinois, known as North Shore Channel Parcel 4.01 ("Demised Premises'j, for those purposes, as more specifically described in Article Three, Paragraph 3.07 hereof, pursuant to 70 ILCS 2605/8 and 8c, consisting of 16.4f acres. For the purposes of this Lease, the terms "Leased Premises, Leasehold Prem- ises, Demised Premises;' or similar terms may be used interchangeably, and shall be used synonymously to mean the real property which is the subject hereof and any improvements located thereon at the time of leasing or placed thereon by Lessee during the term of this Lease. 1.02 TERM OF LEASE The term of this Lease is twenty-five (25) years, beginning on the 7th day of May A.D., 2020, and ending on the 6th day of May, A.D., 2045, unless said term shall end sooner under the provisions hereof. ANYTHING CONTAINED IN THIS LEASE TO THE CONTRARY NOTWITHSTAND- ING, THIS LEASE IS TERMINABLE BY LESSOR IN ACCORDANCE WITH SERVICE UP- ON LESSEE OF A ONE-YEAR NOTICE TO TERMINATE AFTER DETERMINATION BY THE BOARD OF COMMISSIONERS AND EXECUTIVE DIRECTOR OF LESSOR THAT THE DE- MISED PREMISES (OR PART THEREOF) HAS BECOME ESSENTIAL TO THE CORPO- RATE PURPOSES OF LESSOR. IN SUCH EVENT, ANY RENT DUE SHALL BE ABATED IN DIRECT PROPORTION TO THE AREA RECOVERED HEREUNDER AS COMPARED TO THE AREA OF THE ORIGINAL LEASEHOLD. The parties hereto agree that the existing lease agreement between the par- ties pertaining to the Demised Premises, dated September 16, 1965, as amended, is hereby terminated as of the date this lease agreement becomes effective. The Les- sor and Lessee's rights and obligations with respect to the Demised Premises arising or accruing after the commencement of the lease term shall be as set forth in this Lease. 1.03 LEASE EXECUTED BY LESSOR WITHOUT WARRANTIES It is expressly covenanted and agreed by the parties hereto that Lessor exe- cutes and delivers this Lease without representation or warranties concerning Les- sor's title to the Demised Premises and authority to execute this Lease, the size of the Demised Premises, the useable areas of the Demised Premises, and building and zoning laws affecting the Demised Premises. Lessee has examined the title to the Demised Premises and Lessor's authority to enter into this Lease, the size of the Demised Premises, and the useable areas of the Demised Premises, and is satisfied therewith. Lessee has further examined the building and zoning laws concerning the Demised Premises and is satisfied that it may construct the improvements which are hereinafter set forth in Section 6.01 of this Lease and that said Lessee may use the Demised Premises in accordance with the uses set forth in Section 3.07 of this Lease: A. In the event on the date hereof or any time hereafter, the build- ing and zoning laws do not permit the use set forth in Section 2 3.07 hereof or the construction set forth in Section 6.01 hereof, Lessee agrees, at its own expense within one (1) year of the date of this Lease, to take such action as may be necessary to obtain such zoning change and building permits; B. The failure of Lessee to obtain such zoning change as may be necessary and/or such building permit within one (1) year of the date of this Lease, shall be cause for immediate cancellation of this Lease, at the option of Lessor, provided, however, in this event, all rents due or coming due hereunder shall abate as of the date of the cancellation of this Lease pursuant to this subsec- tion. 1.04 EFFECT OF CONDEMNATION OF DEMISED PREMISES It is expressly covenanted by the parties hereto that in the event of any con- demnation of the Demised Premises herein leased, or any part thereof, the entire condemnation award shall be the sole property of Lessor, except for the actual value of the improvements made by Lessee during this Lease as of the date of the final judgment order in said condemnation proceedings; that Lessee shall be entitled only to a decrease in the rent reserved by percentage in relation to the whole tract to the part taken; and in the event the whole tract is taken or so much of the tract is taken as to prohibit the operation or use of the Demised Premises by Lessee for the pur- pose set forth in Section 3.07 hereof on the portion remaining impracticable, Lessee shall be entitled to the cancellation of this Lease. ARTICLE TWO 2.01 RENT AND ADDITIONAL COMPENSATION Lessee covenants and agrees, in consideration of the leasing of the Demised Premises aforesaid, to pay to Lessor as rent for the said Demised Premises: A. Lessee covenants and agrees, in consideration of the leasing of the Demised Premises aforesaid, to pay to Lessor, as annual rent for the Demised Premises, $1,500.00 per year until May 31, 2032. The District will issue invoices for said rental payment, which shall be payable on the 1st day of September of each and every year. Lessee shall have up to 60 days to make the payment to obtain the necessary City Council approvals. After May 31, 2032, the annual rent shall be a one-time nominal fee in the amount of Ten and No/100 Dollars ($10.00). B. ADDITIONAL COMPENSATION -- (NON -RENT): (1) Cash: In addition to the foregoing cash rent to be paid by Lessee to Lessor, Lessee shall pay in cash to 3 Lessor 25 percent (25%) of the net revenues gen- erated by Lessee's use of or activities on the De- mised Premises. On each anniversary of the effective date of this Lease, Lessee shall furnish to Lessor an audited and certified statement of all items of income attributa- ble to Lessee's use of the Demised Premises and simultaneously remit its check to Lessor in an amount equal to the aforesaid percentage multi- plied by the audited and certified statement for that one-year period. All such audited and certified statements shall be subject to confirmation by Les- sor. Lessee shall furnish all original books and rec- ords or certified copies thereof necessary to confirm such statements, upon reasonable demand by Les- sor, at no cost to Lessor. C. In addition, Lessee shall pay all administrative and legal costs incurred by Lessor in collecting any arrearage in rent including, but not limited to, payment for legal work for the preparation of lawsuits and for the issuance of notices. ARTICLE THREE GENERAL PROVISIONS 3.01 INTEREST ON RENT NOT PAID WHEN DUE Lessee agrees that any and all installments of rent accruing under the provi- sions of this Lease, which shall not be paid when due, shall bear interest at the rate of two percent (1%) per annum in excess of the prime rate charged by a principal bank in Chicago, Illinois, to its commercial borrowers as determined on the first date of a delinquency from the day when the same is or are payable by the terms of this Lease, until the same shall be paid; provided if any installment or installments of said rent shall become due on a Sunday or legal holiday the same shall be paid without interest on the next succeeding regular business day. 3.02 RENT RESERVED TO BE LIENS ON ALL BUILDINGS, ETC. ERECTED ON DEMISED PREMISES It is agreed by Lessee that the whole amount of rent reserved and agreed to be paid for the Demised Premises and each and every installment thereof shall be and is hereby declared to be a valid lien upon all buildings and other improvements on the Demised Premises or that may at any time be erected, placed, or put on the 4 Demised Premises by Lessee and upon the interest of said Lessee in this Lease and in the Demised Premises hereby leased. 3.03 FORCIBLE COLLECTION OF RENT BY LESSOR NOT TO AFFECT RELEASE OF OBLIGATIONS It is expressly understood and agreed that the forcible collections of the rent by any legal proceedings or otherwise by Lessor or any other action taken by Lessor under any of the provisions hereof, except a specific termination or forfeiture of this Lease, shall not be considered as releasing Lessee from its obligation to pay the rent as herein provided for the entire period of this Lease. 3.04 WAIVER OF COUNTERCLAIM In the event Lessor commences any legal proceedings for non-payment of rent, forcible detainer, or violation of any of the terms hereof, Lessee will not inter- pose any counterclaim or set off of any nature or description in any such proceed- ings. 3.05 RIGHT OF LESSOR TO RE-ENTER DEMISED PREMISES UPON EXPIRATION OF NOTICE It is understood and agreed by and between the parties hereto that if Lessee shall default in the payment of any of the rent herein provided for upon the day the same becomes due and payable, and such default shall continue for thirty (30) days after notice thereof in writing given by Lessor or its agent or attorneys to Lessee in the manner hereinafter provided, or in case Lessee shall default in or fail to perform and carry out any of the other covenants and conditions herein contained, and such default or failure shall continue for sixty (60) days after notice thereof and provided that Lessee has not initiated corrective action with respect to the default which is the subject of said notice within the initial thirty (30) days of said notice in writing given in like manner, then and in any and either of such events, it shall and may be lawful for Lessor, at its election, at or after the expiration of said thirty (30) days or said sixty (60) days (as the case may be) after the giving of said notice to declare said term ended, either with or without process of law, to re-enter, to expel, re- move, and put out Lessee or any other person or persons occupying the Demised Premises, using such force as may be necessary in so doing, and repossess and re- store Lessor to its first and former estate, and to distrain for any rent that may be due thereon upon any of the property of Lessee located on the Demised Premises, whether the same shall be exempt from execution and distress by law or not; and Lessee, for itself and its assigns, in that case, 'hereby waives all legal right, which it now has or may have, to hold or retain any such property, under any exemption laws now in force in this State, or any such property, under any exemption laws now in force in this State, or in any other way; meaning and intending hereby to give Lessor, its successors and assigns, a valid lien upon any and all the goods, chattels or other property of Lessee located on the Demised Premises as security for the 5 payment of said rent in a manner aforesaid. And if at the same time said term shall be ended at such election of Lessor, its successors or assigns, or in any other way, Lessee for itself and its successors and assigns, hereby covenants and agrees to sur- render and deliver up said Demised Premises and property peaceably to Lessor, its successors or assigns, immediately upon the termination of said term as aforesaid; and if Lessee or the successors or assigns of Lessee shall remain in possession of the same on the day after the termination of this Lease, in any of the ways above named, it shall be deemed guilty of a forcible detainer of the Demised Premises un- der the statutes and shall be subject to all the conditions and provisions above named, and to eviction and removal, forcible or otherwise, with or without process of law, as above stated. 3.06 LESSEE TO PAY TAXES, ASSESSMENTS AND WATER RATES As a further consideration for granting this Lease, Lessee further covenants, promises and agrees to bear, pay and discharge (in addition to the rent specified) on or before the penalty date, all water rates, taxes, charges for revenue and other- wise, assessments and levies, general and special, ordinary and extraordinary, of any kind whatsoever, which may be taxed, charged, assessed, levied or imposed up- on the Demised Premises or upon any and all of which may be assessed, levied or imposed upon the Demised Premises estate hereby created and upon the reversion- ary estate in said Demised Premises during the term of this Lease. And it is further understood, covenanted and agreed by the parties hereto that all of said water rates, taxes, assessments and other impositions shall be paid by said Lessee before they shall respectively become delinquent, and in any case within adequate time to prevent any judgment, sale or forfeiture. Lessee shall sub- mit to Lessor proof of payment of the real estate tax applicable to the Demised Premises property within sixty (60) days of the date said tax is due. 3.07 USE OF DEMISED PREMISES It is understood that the Demised Premises is to be used by said Lessee for the sole and exclusive purpose of public recreational use, including park and play- ground equipment and related improvements, and for no other purpose whatsoever. 3.08 PROHIBITED USES AND ACTIVITIES Lessee specifically agrees not to use the said Demised Premises or any part thereof, or suffer them to, be used for tanneries, slaughter houses, rendering estab- lishments, or for any use of similar character or for gambling in any form, or for the conducting thereon of any business which shall be unlawful. Lessee also specifically agrees that no alcoholic beverages of any kind shall be sold, given away, or con- sumed with the knowledge and consent of Lessee on the Demised Premises unless this Lease is for a term of more than twenty (20) years and then only with the prior 6 written consent of Lessor's Board of Commissioners and the furnishing of dram shop insurance or other applicable insurance protection, with respect to such activities with policy limits, form and carrier approved by Lessor and naming Lessor, its Com- missioners, officers, agents and employees as additional insureds, said insurance shall provide that said policy shall not be canceled without twenty (20) days ad- vance written notice thereof, in addition to any insurance provided pursuant to par- agraph 4.03 for which Lessor is the named insured. Hunting and the manufacture, sale, distribution, discharge, and unauthorized use of guns and firearms on the De- mised Premises is expressly prohibited. 3.09 LESSEE TO YIELD UP DEMISED PREMISES, ETC., UPON EXPIRATION OF LEASE AND DEMOLISH ANY IMPROVEMENTS IF NOTIFIED BY LESSOR Based on a Phase I Environmental Assessment prepared by Integrated Envi- ronmental Solutions, Inc. dated August 2020, and a Phase II Environmental As- sessment prepared by GZA Geoenvironmental, Inc. dated November 30, 2020, the Demised Premises meets TACO Tier I Residential Standards at the time of execution of this Agreement. Lessee agrees at the expiration of the term hereby created or the termination of this Lease under the provisions hereof, to yield up said Demised Premises, together with any buildings or improvements which may be constructed or placed upon the Demised Premises, to Lessor in as good condition as when said buildings or improvements were constructed or placed thereon, ordinary wear and tear excepted. Lessee agrees to remove any and all storage tanks from the Demised Premises including aboveground and belowground storage tanks and restore the Demised Premises to TACO Tier I Residential Standards set forth in 35 IAC 742.500 and as may be amended prior to the expiration of the Lease. Lessee agrees to re- move any and all asbestos contained on Demised Premises, prior to the expiration of the Lease, including but not limited to, asbestos contained in any fixture, improve- ments or buildings located on the Demised Premises. At least one -hundred -twenty (120) days prior to the expiration of this Lease, Lessor will determine which, if any, improvements, including, but not limited to, buildings, bridges, storage tanks, scales, docks, pipelines, green infrastructure, roads, and other related facilities, on the Demised Premises shall be demolished and/or removed. Upon receipt of ninety (90) days advance written notice, Lessee shall demolish and remove at Lessee's sole cost and expense the improvements identified by Lessor. It is expressly understood that Lessor's failure to make said determination one -hundred -twenty (120) or more days prior to the expiration of this Lease, or provide notice herein within said ninety (90) days, shall in no way act as a waiver of Lessee's obligation to demolish or re- move such improvements at Lessee's sole cost and expense upon receiving written notice from Lessor. Should Lessee fail to demolish the improvements after notice, Lessor will have these improvements demolished and Lessee will be required to pay all costs therefor. These requirements survive expiration or termination of this Lease Agreement. 3.10 FAILURE OF LESSOR TO INSIST ON PROVISIONS NO WAIVER 7 Lessee covenants and agrees that if Lessor shall one or more times waive its right to insist upon prompt and satisfactory performance according to the terms of this Lease of any of the obligations of Lessee, no such waiver shall release Lessee from its duty promptly and strictly to satisfy at all times after such waiver each and every obligation arising under the provisions of this Lease, and especially any of such provisions with respect to which such waiver may previously have been made by Lessor as aforesaid; and Lessee covenants and agrees that if Lessor shall for any length of time waive any right or rights accruing to Lessor under the provisions of this Lease, such waiver shall be construed strictly in Lessor's favor and shall not es- top Lessor to insist upon any rights, subsequently accruing to it under this Lease not in terms specifically waived; and Lessee covenants and agrees that if Lessee vio- lates any of the obligations under this Lease, no waiver by Lessor of its right to take advantage of such violation shall estop Lessor from insisting upon its strict rights in case of and as to any subsequent violation by Lessee of the same or any other obli- gation; and Lessee covenants and agrees that this provision of this Lease shall apply especially (but not exclusively) to the right of Lessor to require prompt payment of the rent in this Lease and that neither acceptance by Lessor of any payment of any other unpaid installment or installments of rent, nor any endorsement or statement on any check or letter accompanying any check or payment be deemed an accord and satisfaction and Lessor may accept such check or payment without prejudice to Lessor's right to recover the balance of rent or pursue any other remedy provided in this Lease. 3.11 VARIOUS RIGHTS, CUMULATIVE, ETC. Lessee agrees that the various rights and remedies of Lessor contained in this Lease shall be construed as cumulative, and no one of them as exclusive of the other or exclusive of any rights or remedies allowed by law, and that the right given in this Lease to Lessor to collect any additional rent, monies or payments due under the terms of this Lease by any proceedings under this Lease or the right herein giv- en Lessor to enforce any of the terms and provisions of this Lease, shall not in any way affect the right of Lessor to declare this Lease terminated and the term hereby created ended, as herein provided, upon the default of Lessee, or failure of Lessee to perform and carry out, all of the provisions in this Lease provided to be performed and carried out by Lessee. 3.12 RIGHT TO MORTGAGE LEASEHOLD PREMISES INTEREST A. Lessee is hereby expressly given the right at any time and from time to time, to mortgage its leasehold interest in the Demised Premises, by mortgage or trust deed, but any such mortgage or trust deed shall in no way create any lien or encumbrance on the fee of the Demised Premises and the interest of Lessor therein and the interest of Lessor in any improvements which may be placed on the Demised Premises by Lessee; and it is further mu- tually covenanted and agreed that the mortgagee or trustee in 8 any such mortgage or trust deed and the holder or owner of the indebtedness secured by said mortgage or trust deed shall not personally liable upon the covenants in the Lease unless and un- til it or its assignee(s) shall acquire the Demised Premises estate created by this Lease. It is further covenanted and agreed that any mortgage or trust deed must be paid in full and a duly exe- cuted and recordable release thereof issued therefor prior to the expiration of the term of said Lease. B. DEMISED PREMISES MORTGAGEE - TAX ESCROW: If any De- mised Premises Mortgagee while the holder of any Leasehold Mortgage with respect to the Demised Premises shall require Lessee to deposit with such Demised Premises Mortgagee the amounts necessary to pay the general real estate taxes and/or special assessments against the Demised Premises pursuant to Paragraph 3.06 hereof, Lessee may make such deposits directly with said Mortgagee, provided, however, that such Demised Premises Mortgagee or Lessee shall notify Lessor of said re- quirement in advance of Lessee's making the first such deposit and Lessee or Lessee's Mortgagee documents to Lessor's satis- faction the fact of the establishment and annual maintenance of the required escrow deposits hereunder. In any event, where Lessee is required to deposit with the Demised Premises Mort- gagee the amounts necessary to pay the general real estate tax- es and/or special assessments, the same to be paid as and when the same become due and payable, and Lessee shall cause to be delivered to Lessor the receipted bills or photostatic copies thereof showing such payment within thirty (30) days after such receipted bills shall have been received by Lessee. 3.13 DISCLOSURE OF LEASE TO COUNTY TAX ASSESSOR AND RECORDING OF LEASE WITH THE RECORDER OF DEEDS Within thirty (30) days from the effective date of this Lease, Lessee shall de- liver to the Assessor of the County in which the Demised Premises are situated a copy of this Lease so that said Assessor can take such steps as he determines neces- sary to subject the interest of Lessee to general real estate taxation and will record this Lease with the Recorder of Deeds of the county in which the Demised Premises are situated. 3.14 NO NUISANCE PERMITTED Lessee covenants and agrees not to maintain any nuisance on the Demised Premises or permit any noxious odors to emanate from the Demised Premises which shall be in any manner injurious to or endanger the health, safety and comfort of the persons residing or being in the vicinity of the Demised Premises. 9 3.1S DEMISED PREMISES TO REMAIN CLEAN AND SANITARY Lessee covenants and agrees to keep the Demised Premises in a clean and sanitary condition in accordance with all applicable laws, ordinances, statutes and regulations of the county, city, village, town, or municipality (wherein the Demised Premises are located), the State of Illinois, the United States of America, and the Metropolitan Water Reclamation District of Greater Chicago. 3.16 LESSEE SHALL ABIDE BY LAW Lessee covenants and agrees that it shall abide by any and all applicable laws, ordinances, statutes and regulations of the county, city, village, town, or municipali- ty (wherein the Demised Premises are located), the State of Illinois, the United States of America, and enforcement and regulatory agencies thereof and the Metro- politan Water Reclamation District of Greater Chicago which regulate or control the Demised Premises, Lessee and/or Lessee's use of the Demised Premises, including the permit requirements for site development under the District's Watershed Man- agement Ordinance. ARTICLE FOUR 4.01 INDEMNIFICATION Lessee for itself, its executors, administrators, successors and assigins agrees to and does hereby expressly assume all responsibility for and agrees to defend, in- demnify, save and keep harmless Lessor, its Commissioners, officers, agents, serv- ants, and employees against any claim (whether or not meritorious), loss, damage, cost or expense which Lessor, its Commissioners, officers, agents, servants and em- ployees may suffer, incur or sustain or for which it may become liable, growing out of any injury to or death of persons or loss or damage to property which shall at any time during the term of this Lease be caused by or in connection with the use, occu- pancy or possession of the Demised Premises, and for any such loss, damage, cost or expense which shall at any time during the term of this Lease be caused by or in the performance of any work or construction, installation, maintenance, removal or repair of any buildings or structures placed upon the Demised Premises, whether the same be caused by the negligence of Lessee, any contractor employed by Les- see, or by the negligence of Lessor, its Commissioners, officers, agents, employees or contractors or as a penalty or claim for the sale or giving away of any intoxicating liquors on or about the Demised Premises, or the use of the Demised Premises for illegal or immoral purposes. In case any action, suit or suits shall be commenced against Lessor growing out of any such claim, loss, damage, cost or expense, Lessor may give written notice of the same to Lessee, and thereafter Lessee shall attend to the defense of the same and save and keep harmless Lessor from all expense, coun- sel fees, costs, liabilities, disbursements, and executions in any manner growing out of, pertaining to or connected therewith. 10 4.02 INDEMNIFICATION AGAINST MECHANICS LIENS Lessee agrees to indemnify, save and keep harmless Lessor of and from any claims for mechanics' liens by reason of any construction work, repairs, replace- ments or other work or for any improvements made to or placed upon the Demised Premises by or in behalf of Lessee or at Lessee's instance. 4.03 INSURANCE A. Lessee, prior to entering upon the Demised Premises and using the same for the purposes for which this Lease is granted, shall procure, maintain and keep in force at Lessee's expense, public liability property damage insurance in which Lessor, its Commissioners, officers, agents, and employees are a named in- sured and fire and extended coverage and all risk property insurance in which Les- sor is named as the Loss Payee from a company to be approved by Lessor. ("CLAIMS MADE" policies are unacceptable). Each afore -referenced policy shall have limits of not less than: COMPREHENSIVE GENERAL LIABILITY Combined Single Limit Bodily Injury Liability Property Damage Liability (Including Liability for Environmental Contamination of Adjacent Properties) in the amount of not less than $4,000,000.00 per occurrence and ALL RISK PROPERTY INSURANCE (Including Coverage for Environmental Contamination of Demised Premises) in the amount of not less than $4,000,000.00 per occurrence INCLUDING FIRE AND EXTENDED COVERAGE in an amount not less than the replacement cost of improvements located on the Demised Premises Prior to entering upon said, Demised Premises, Lessee shall furnish to Lessor certificates of such insurance or other suitable evidence that such insurance cover- age has been procured and is maintained in full force and effect. Upon Lessor's writ- ten request, Lessee shall provide Lessor with copies of the actual insurance policies within ten (10) days of Lessor's request for same. Such certificates and insurance policies shall clearly identify the Demised Premises and shall provide that no change, modification in or cancellation of any insurance shall become effective until the expiration of thirty (30) days after written notice thereof shall have been given by the insurance company to Lessor. The provisions of this paragraph shall in no wise limit the liability of Lessor as set forth in the provisions of 4.01 above; or 11 B. If Lessee is a self -insurer, Lessee, prior to entering upon said Demised Premises and using the same for the purposes for which this Lease is granted, shall prepare and transmit to the District an acknowledged statement that Lessee is a self -insurer, and that it undertakes and promises to insure the District, its Commis- sioners, officers, agents, servants and employees on account of risks and liabilities contemplated by the indemnity provisions of this Agreement (Article Four, para- graph 4.03) above; and that such statement is issued in lieu of policies of insurance or certificates of insurance in which the District, its Commissioners, officers, agents, servants and employees would be a named or additional insured, and that it has funds available to cover those liabilities in the respective amounts therefor, as set forth as follows: COMPREHENSIVE GENERAL LIABILITY Combined Single Limit Bodily Injury Liability Property Damage Liability (Including Liability for Environmental Contamination of Adjacent Properties) in the amount of not less than $4,000,000.00 per Occurrence and ALL RISK PROPERTY INSURANCE (Including Coverage for Environmental Contamination of Demised Premises) in the amount of not less than $4,000,000.00 per Occurrence. This statement shall be signed by such officer or agent of Lessee having suffi- cient knowledge of the fiscal structure and financial status of Lessee, to make such a statement on behalf of Lessee and undertake to assume the financial risk on be- half of Lessee and will be subject to the approval of the District. The provisions of this paragraph shall in no wise limit the liability of Lessor as set forth in the provi- sions of 4.01 above. 4.04 INSURANCE ON IMPROVEMENTS Lessee shall keep any buildings and improvements erected, constructed or placed on the Demised Premises fully insured to the replacement cost thereof against loss by explosion, fire and/or windstorm or other casualty loss for their full replacement cost at Lessee's own expense at all times during the term of this Lease by an insurance company or companies approved by Lessor. Lessor shall be a named insured on all of said insurance policies and a certificate of insurance evidencing same shall be provided to Lessor and kept current at all times throughout the term of this Lease. All policies of insurance indemnifying against such loss by explosion, fire and/or windstorm so insured shall be payable to Lessor, as additional security for the payment of rent and the performance by Lessee of the covenants herein; 12 said policy or policies to be delivered to Lessor as soon as issued, provided, howev- er, that in the event of loss to or destruction of said buildings and other improve- ments, the insurance proceeds received by Lessor in excess of the amounts then due for rent and charges under the provisions of this Lease shall be held in trust by Les- sor for the repair, restoration or rebuilding of such damaged or destroyed buildings and other improvements, and shall be disbursed therefor by said Lessor only on ar- chitect's certificates after Lessee has, at its own expense, without charge or lien up- on said buildings or other improvements, restored, rebuilt or repaired the same to an extent that will enable Lessor, with the insurance money remaining in its hands after the payment of the rent and charges due it, to complete said buildings or other improvements in as good condition as they were in before the said loss or damage by explosion, fire and/or windstorm. 4.05 FAILURE OF LESSEE TO INSURE IMPROVEMENTS In the event Lessee should at any time neglect, fail or refuse to insure or to keep insured the buildings and other improvements on said Demised Premises as above provided, then Lessor at its election may procure or renew such insurance and the amount paid therefor shall be repaid by Lessee to Lessor with the rents next thereafter falling due under this Lease, together with interest thereon at the rate of two percent (2%) in excess of the prime rate charged by the principal bank in Chi- cago, Illinois, to its commercial borrowers as determined on the first date of a de- linquency from the respective dates of any such payments. 4.06 RIGHT OF LESSEE TO RECOVER PROCEEDS It is covenanted and agreed by and between the parties hereto that Lessor shall not be held responsible for the collection or non -collection of any of said insur- ance money in any event but only for such insurance money as shall come into its hands. Lessee, however, shall have the right in the name of Lessor to sue for and recover any and all sums payable under any of said policies for losses arising there- under provided it shall indemnify and save harmless Lessor from any costs or attor- ney's fees in connection with any such proceeding to recover such insurance money. However, all sums so recovered shall be paid to Lessor to be applied as herein pro- vided. 4.07 APPLICATION OF INSURANCE PROCEEDS It is covenanted and agreed by and between the parties hereto that in case of damage to the buildings and improvements to be erected, constructed or placed on the Demised Premises, as aforesaid, or the destruction thereof (or loss or damage to any buildings or other improvements thereafter standing upon the Demised Premis- es) Lessee shall repair, restore or rebuild the same within one year from such de- struction or damage, and in such case the insurance money received by Lessor pur- suant to the terms of this Lease under said policies, after deducting therefrom the reasonable charges of Lessor for handling such insurance and all costs and expenses of collecting the same, including attorney's fees, and all unpaid and overdue rental 13 payments shall be paid in whole or in part by Lessor to the contractor or contractors (employed by Lessee) upon the delivery to the Executive Director of Lessor of certif- icates of the architects of Lessee properly endorsed by Lessee and accompanied by waivers of lien and release for the cost and expense of repairing, restoring or re- building said buildings or other improvements as the work of repairing, restoring, or rebuilding progresses. 4.08 INSURANCE PROCEEDS DEFICIENCY It is understood and agreed between the parties hereto that in case the in- surance money collected by Lessor shall not be sufficient to fully pay for the repair, restoration or rebuilding of said buildings and other improvements as aforesaid, then Lessee shall be required to pay such sums of money, in addition to said insur- ance money so collected by Lessor as aforesaid as may be necessary to pay for the complete repair, restoration or rebuilding of said buildings and other improvements; it being understood, however, that Lessor shall not be required to pay such insur- ance money so collected until the Executive Director of Lessor is satisfied that such sum will complete the repair, restoration and rebuilding of said buildings and other improvements, free of mechanics' liens for labor or material, in which event such monies shall be paid by Lessor to the contractor or contractors employed by Lessee to complete the repair, restoration or rebuilding of said buildings and other im- provements, upon delivery to the Executive Director of Lessor of certificates of the architects of Lessee properly endorsed by Lessee accompanied by waiver of lien and release as the work of repairing, restoring or rebuilding of said buildings and other improvements shall progress. It is expressly understood that nothing herein shall prevent Lessee from replacing any building or structure destroyed or damaged with other buildings or structures of different design and construction of at least equal value on any part of the Demised Premises. 4.09 LESSOR NOT RESPONSIBLE FOR RESTORATION OF IMPROVEMENTS It is covenanted and agreed that Lessor shall not be liable to contribute or pay any sum of money toward the restoration, repair or rebuilding of said buildings or other improvements. In the event of the termination of this Lease by lapse of time, or by reason of any default by Lessee in any of its payments, or a breach by Lessee of any of the covenants and agreements of this Lease before the repair, res- toration, replacement or rebuilding of said buildings or other improvements shall be completed, as aforesaid, then in any of said cases the insurance money collected by Lessor shall belong absolutely to Lessor. 4.10 EXCESS INSURANCE PROCEEDS It is understood and agreed that after the work of any such repairs, restora- tion, or rebuilding by Lessee shall have been completed and paid for, any excess of insurance money then remaining on deposit with Lessor shall belong to Lessee and in that event, Lessor shall pay to Lessee the balance of said insurance money upon 14 its written request. The provisions of this paragraph as well as those of paragraphs numbered 4.04 to 4.09, inclusive, shall apply whenever and so often as any build- ings or other improvements erected and completed on the Demised Premises, under any of the provisions of this Lease, shall have been damaged or destroyed by fire or windstorm. 4.11 SECURITY DEPOSIT Lessee as further consideration for the granting of this Lease, agrees that in addition to the payment of any rents hereinabove required, and to further secure the performance by it of all of the covenants herein contained, shall deposit with Lessor, prior to its occupancy of the Demised Premises a sum of money equal to n a months' rent. Said security deposit shall be returned to Lessee upon its satis- factory performance of all the covenants and conditions herein contained. Provided, however, in the event of a default in the performance of any such covenant by Les- see, Lessor shall use said security deposit to satisfy and discharge any such cove- nant. Any unused portion of said security deposit shall be returned to Lessee upon the termination or expiration of this Lease. Said security deposit shall be maintained at no less than its initial funded balance at all times during the term of the Lease. ARTICLE FIVE 5.01 GENERAL ENGINEERING RESERVATIONS AND REQUIREMENTS A. Lessor has heretofore executed various agreements with govern- mental agencies, public utility companies, private corporations and individuals for the installation of pipelines, duct lines, sewers, cables, electric transmission lines and other surface and subsur- face structures, constructions and improvements. Pursuant to those agreements, the various grantees have installed and are op- erating their respective surface and underground plant facilities which may lie within or otherwise affect the Demised Premises. Lessee shall, at its own initiative, inquire and satisfy itself as to the presence or absence of all such facilities on the Demised Prem- ises, and waives all claims which it might otherwise have against Lessor on account of the presence of such facilities on the De- mised Premises as same may affect Lessee's use and enjoyment of the Demised Premises. B. Lessee expressly agrees that within an area delineated by a line parallel with and 250 feet distant from the top of the edge of the water of any waterway which traverses or is adjacent to the De- mised Premises (Corporate Use Reserve Area) and all areas within the Demised Premises below the lowest elevation of development thereon as reflected in Lessee's approved development plans for the Demised Premises, Lessor and anyone acting under its au- thority shall have the right, without payment therefor, to con - is