LAND LEASE AGREEMENT
THIS AGREEMENT is entered into this day of , 2010, by and between the City of Lawrence, Kansas, a municipal corporation, (hereinafter referred to as “Lessor”) and LWC Partners, LLC, a Kansas limited liability company, its successors and assigns (hereinafter referred to as “Lessee”).
WHEREAS, Lessor owns, controls and operates the Lawrence Municipal Airport in Lawrence, Kansas, an Airport which includes aeronautical navigation facilities, and Lessor desires to lease to Lessee and Lessee desires to lease from Lessor certain premises hereinafter more fully described and located on said Airport (the “Leased Premises”) upon the terms and conditions stated herein; and
WHEREAS, Lessee (and/or Lessee’s principals, members and affiliates) will engage in the business of transmission and pipeline inspection services, and the maintenance, operation, service, repair and storage of aircraft, and related activities, and desires to lease said Leased Premises and rights from the City of Lawrence, Kansas, on and at said Airport.
NOW, THEREFORE the parties agree to the following:
1. LEASED PREMISES. In consideration of the rents, covenants and agreements herein contained, Lessor hereby leases to Lessee the Leased Premises described in Exhibit A attached to this Agreement and, by reference, made a part hereof as if fully set forth herein.
2. USE OF LEASED PREMISES. Lessee shall use and occupy the Leased Premises for aviation purposes including, without limitation, the maintenance, operation, service, repair and storage of aircraft, and related activities, and Lessee shall have the right to:
(a) The non-exclusive use, in common with others, of the Airport, parking areas, appurtenances, and improvements thereon;
(b) The right to install, operate, maintain, repair, store, subject to approval of Lessor in the interests of safety and convenience of all concerned (which approval shall not be unreasonably delayed or withheld), all equipment, fuel, oil, solvents, parts and inventory necessary for the conduct of Lessee's business;
(c) The right of ingress and egress from the Leased Premises, which right shall extend to Lessee's employees, passengers, guests, invitees, and patrons;
(d) The right in common with others authorized so to do, to use common areas of the Airport, including runways, taxiways, aprons, roadways, floodlights, landing lights, signals, and other conveniences for the takeoff, flying and landing of aircraft of Lessee; and
(e) Subject to the prior written approval of Lessor and the FAA, to erect a hangar or hangars on said Leased Premises pursuant to the terms of this Agreement.
3. TERM. The term of this Agreement shall be for twenty (20) years commencing on the substantial completion of the Hangar (as defined below) (the “Commencement Date”), and ending on the last day of the final month twenty (20) years following the Commencement Date. As used herein, the phrase “substantial completion of the Hangar” shall mean the date that Lessee is issued an occupancy permit by Lessor for the Hangar.
4. OPTION TERMS. Lessee may extend the term of this Agreement for four (4) additional successive five (5) year option periods (individually, an “Option Period” and collectively, “Option Periods”) upon the express condition that Lessee shall be in material compliance with all the terms, conditions and covenants of this Agreement at the time it elects to renew and extend the term of this Agreement. If Lessee elects to exercise any one of said Option Periods, Lessee shall do so by giving written notice of such election to Lessor at any time and from time to time during the term (including any Option Periods) on or before the date which is sixty (60) days before the beginning of the Option Period for which the term hereof is to be renewed by the exercise of such option. If Lessee elects to exercise any one of said Option Periods, the term shall be automatically extended for the Option Period covered by the option so exercised without execution of an extension or renewal agreement. The term of any Option Period shall be upon the same terms and conditions as are in effect hereunder immediately preceding the commencement of such Option Period, Lessee shall only be permitted to exercise one option at a time. Such right of renewal hereunder may be assigned or otherwise transferred as collateral security to the holder of a leasehold mortgage. Except as expressly provided herein, holding over by Lessee after the termination of the initial term or any Option Periods, with or without the assent of Lessor, shall not serve to extend this Agreement, and Lessee shall be a tenant at sufferance during such hold over period.
5. RENT. In consideration of the leasing of said Leased Premises, Lessee agrees to pay to Lessor the annual amount of Ten Thousand Five Hundred Eighty-Five Dollars ($10,585.00), payable in equal monthly installments of Eight Hundred Eighty-Two Dollars and 09/100 ($882.09). Said rent shall be due on or before the first day of each month, commencing on the Commencement Date. Beginning on the first day of the first full month of the second year of this Agreement, and continuing on the anniversary date of each additional year thereafter, the monthly rent shall increase or decrease by one half the rate of inflation. The following formula shall be used to calculate the adjustment:
Rn = RI [1 + .5(CPIC-CPII)/ CPII]
Where: RI = Initial annual rent of $10,585.00
Rn = New annual rent
CPII = Consumer Price Index (CPI) - All Urban Consumer, US, All items, Not Seasonally Adjusted, for the First Year of the Agreement
CPIC = Consumer Price Index (CPI) - All Urban Consumers, US, All Items, Not Seasonally Adjusted, for the Current year of the Agreement.
6. JOB CREATION CREDIT BY SEPARATE INSTRUMENT. Rent payments due pursuant to this Agreement shall be reduced in years one (1) through (10) of this Agreement in accordance with a separate agreement (the “Job Creation Credit Agreement”) between Lessor and Lessee, except as may be otherwise provided in paragraph 8 below. The separate Job Creation Credit Agreement shall be attached hereto as an Exhibit.
7. LESSEE’S RIGHT TO CONDUCT BUSINESS. Notwithstanding any other provisions in this Agreement restricting or prohibiting any assignment or subletting, Lessee shall have the right, without Lessor’s consent, to conduct Lessee’s business activities and to enter into supply contracts, service contracts, maintenance contracts, storage agreements and sublease agreements with Lessee’s vendors, customers, the members and affiliates of Lessee, and with other aircraft owners, operators and vendors, consistent with Lessee’s permitted use and occupancy of the Leased Premises for aviation purposes and the maintenance, operation, service, repair and storage of aircraft, and related activities. The term or terms of any such agreements shall not exceed the term of this Agreement, and any extensions and renewals thereof, without Lessor's written consent.
8. PROPERTY TAXES. During the term of this Agreement Lessee, in addition to the rent, shall pay all ad valorem property taxes and assessments upon the Leased Premises, and upon the Hangar and any improvements thereon, which are not otherwise exempted. If the term of this Agreement expires on a date other than the last day of a calendar year (the tax fiscal year), then Lessee and Lessor shall each pay its pro rata share of the taxes, if any, on a pro rata basis, for the initial and final partial tax years of the term hereof based on the number of days of the partial tax year falling within the term. Lessee shall not be obligated to pay any portion of taxes which become actually due and payable during any period prior to or subsequent to the term of this Agreement.
On or before the Commencement Date of this Agreement, Lessor shall request the applicable taxing authority to classify the Leased Premises as a separate ad valorem property tax parcel, and Lessor shall cause the tax statements to be mailed by the taxing authority directly to Lessee. Otherwise, Lessor shall promptly forward to Lessee the tax statements received by Lessor so that Lessee may pay such taxes to the taxing authority on a timely basis. Notwithstanding anything herein to the contrary, if Lessor shall fail to provide any tax statements in Lessor’s possession to Lessee in time to avoid assessment of a penalty or interest, Lessor shall be solely responsible for any such penalty or interest.
During the term of this Agreement, Lessee shall have the right, at Lessee's sole cost and expense, to (i) contest the amount or validity of any taxes, (ii) seek a reduction in the valuation of the Leased Premises, (iii) seek an exemption of any taxes, and/or (iv) prosecute any proceedings to that end, and shall give written notice thereof to Lessor. Lessee may postpone or defer payment of the taxes pending the outcome of such proceedings if the Leased Premises would not be in danger of being forfeited. Lessor shall not be required to join in any proceedings unless the provisions of any law, rule or regulation shall require such proceedings to be brought by or in the name of Lessor, in which event Lessor shall join in such proceedings or permit the same to be brought in its name. Lessor hereby appoints Lessee as its attorney-in-fact for the purpose of, and agrees to reasonably cooperate in, any such contest or application for the reduction of valuation and the reduction of taxes, which may be undertaken by Lessee. Lessee shall be entitled to the refund or recovery of any taxes, penalties or interest thereon received by Lessor that were paid by Lessee, or that were paid by Lessor but previously reimbursed in full by Lessee. Any such refund or recovery shall be the exclusive property of Lessee. Lessor shall not, without the prior approval of Lessee, make, enter into, or agree to any settlement, compromise or other disposition of any contest, or discontinue or withdraw from any contest, or accept any refund, adjustment or credit with respect to any taxes which Lessee shall have contested.
If Lessee applies for and receives an ad valorem property tax exemption on the Leased Premises or its Hangar (as defined below), then during the term of such property tax exemption Lessee shall, within thirty (30) days following the approval of such property tax exemption, elect in writing to either (i) make comparable payments in lieu of property taxes (“Pilot Payments”) to the applicable taxing jurisdictions, in which event the City shall continue to perform and honor the terms and provisions of the Job Creation Credit Agreement, or (ii) not make Pilot Payments, in which event the City shall be excused from any further performance under the Job Creation Credit Agreement. Any Pilot Payments made hereunder by Lessee shall be apportioned and distributed in the same manner as general property taxes for any or all years of the Lease Term.
9. UTILITIES. Lessee shall pay for all electricity, gas, and water used upon the Leased Premises through direct payment to the appropriate utility companies. Notwithstanding anything herein to the contrary, Lessor shall, at Lessor’s expense extend and provide sanitary sewer and water utility service lines to the boundary line of the Leased Premises suitable for Lessee’s intended use, and Lessee shall have the right to connect to such utility service lines without cost or payment of any connection fees or other system development charges, except that Lessee shall pay the cost of any standard water meter charge and shall pay the cost of all standard charges for utility services used upon the Leased Premises.
10. MAINTENANCE. Lessee shall, at Lessee’s expense, maintain the Leased Premises and any improvements, landscaping, and mowing thereon as provided herein. Maintenance shall be of a quality consistent with the rules and regulations of the Airport. Lessee shall keep the Leased Premises clean and shall dispose of all debris and other waste matter which may accumulate, and shall provide containers for waste within any building or buildings to be erected on said Leased Premises. Lessee agrees to provide portable fire extinguishers approved for electrical, gasoline and/or grease fires.
Lessor shall, at Lessor’s expense, maintain and keep in good repair, including removing snow, all runways and taxi-ways, tie-down areas and other City maintained facilities. Lessor agrees to install, maintain, and operate proper obstruction lights as required by the FAA.
11. FIRE AND POLICE PROTECTION. Lessor agrees to extend to Lessee the same fire and police protection extended to other tenants and facilities at the Airport.
12. HANGAR CONSTRUCTION AND ANY SUBSEQUENT ALTERATIONS OR IMPROVEMENTS SUBJECT TO CITY APPROVAL. Lessee shall construct and occupy a hangar (the “Hangar”) no smaller than 15,000 square feet on the Leased Premises no later than twenty-four months (24 months) after the effective date of this Agreement. Lessee’s Hangar construction, and any accompanying improvements, as well as any subsequent alterations or improvements shall be approved in advance by Lessor, both as landlord and land use regulator and shall comply with the Airport’s approved minimum standards. Lessee shall submit the Hangar plans and specifications for proposed construction, reconstruction or alteration to Lessor and shall obtain all necessary land use approvals, building permits and other permits. Following Lessor’s approval of Lessee’s plans and specifications for the Hangar, Lessor shall grant Lessee and Lessee’s contractors, subcontractors, engineers, agents and employees reasonable access to the Leased Premises for the purpose of constructing the Hangar. Lessor, in its capacity as landlord, shall not unreasonably deny or withhold approval of Lessee’s plans and specifications for the Hangar. Upon the expiration or sooner termination of this Agreement, Lessor shall have the first right of refusal to purchase from Lessee the Hangar and any alterations, additions and improvements (referred to collectively as the “Property”) made by Lessee to the Leased Premises. If Lessor elects to exercise the first right of refusal, Lessor shall do so by giving written notice of such election to Lessee on or before the date which is thirty (30) days before the expiration or sooner termination of this Agreement. If Lessor does not exercise such first right of refusal to purchase the Property, Lessee and Lessee’s successors, grantees and assigns shall have the right, but not the obligation, at Lessee’s expense, to remove any or all of the Property from the Leased Premises for a period of sixty (60) days following such expiration or termination of this Agreement. If Lessor shall exercise such first right of refusal to purchase the Property, the purchase price shall be the Fair Market Value of the Property as of the date of Lessor's exercise of the first right of refusal, excluding the value of Lessor’s interest in the real estate. The term "Fair Market Value" shall be determined by the mutual agreement of Lessor and Lessee. In the event Lessor and Lessee are unable to mutually agree on the Fair Market Value of the Property within thirty (30) days, the Fair Market Value shall be determined by three appraisers who shall be experienced and knowledgeable real estate appraisers familiar with the valuation of commercial real estate in the City of Lawrence, Kansas, and who shall have attained the designation of MAI or a similar designation requiring advanced study in real estate appraisal, valuation procedures, and valuation methodology, as follows: Within thirty (30) days following the exercise of the first right of refusal by Lessor, Lessor and Lessee shall each select an appraiser. Each party's selection of an appraiser shall be by a written notice delivered to the other party. Within ten (10) days after the two appraisers shall have been selected, the two appraisers so selected shall select a third appraiser. The panel of three (3) appraisers shall, within twenty (20) days after the selection of the third appraiser, each appraise the Property as of the date of Lessor's exercise of the first right of refusal, which appraisal shall be determined independently of the rent paid by Lessee to Lessor during the term of the Agreement. The Fair Market Value shall be the average of the three appraisals, unless either the highest or lowest appraisal(s) shall be more than twenty percent (20%) higher or lower than the middle appraisal. In such event, the appraisal(s) which is more than twenty percent (20%) higher or lower than the middle appraisal shall be disregarded, and the remaining appraisal or appraisals shall be averaged as the Fair Market Value. Lessor and Lessee shall share all appraisal costs and fees equally. If either Lessor or Lessee fails to appoint a qualified appraiser within the first 30-day period specified above, the appraiser appointed by the other shall be the sole appraiser and the price shall be as determined by him or her alone.
13. DEFAULT. Upon Lessee’s failure to pay rent when due or to perform any of the other terms and conditions of this Agreement, Lessor shall deliver written notice of default to Lessee. If Lessee shall cure the notice within 30 days of its receipt, the default shall be deemed cured, otherwise Lessor shall have those remedies available under the law, including termination of this Agreement, reentering and repossessing the Leased Premises.
In the event Lessor defaults in the performance of any of its obligations, covenants, and warranties hereunder and if such default continues for a period of 30 days after written notice to Lessor specifying the nature of such default, or if Lessor fails to initiate a cure within such 30-day period and pursue the same to completion with diligence, Lessee may deduct the reasonable cost to cure such default from the rents due hereunder. The foregoing shall not limit or preclude Lessee from any other rights and remedies available at law or in equity.
14. LAWRENCE MUNICIPAL AIRPORT PROVISIONS
a. It is hereby agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right prohibited by Section 308 of the Federal Aviation Act of 1958, as amended, and Lessor reserves the right to grant to others the privilege and right of conducting any one or all of the aeronautical activities listed herein, or any other activity of an aeronautical nature.
b. Lessor reserves the right to develop, improve, or maintain the landing area and all publicly owned air navigation facilities of the Airport as it sees fit, regardless of the desires or view of Lessee, and without interference or hindrance, except as shall be hereinafter provided.
c. Lessee agrees that Lessor has the right to adopt and enforce reasonable rules and regulations regarding the use and operation of said Airport and that Lessee and all its employees, agents, and servants will faithfully observe and comply with all rules and regulations as may be promulgated by Lessor, the United States of America, or any Department or Agency thereof, and the State of Kansas. Lessee shall monitor the enforcement of said rules and regulations and will cooperate with Lessor in such enforcement.
d. Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent Lessee from erecting, or permitting to be erected, any building or other structure on the Airport which in the opinion of Lessor would limit the usefulness of the Airport or constitute a hazard to aircraft.
e. During time of war or national emergency, Lessor shall have the right to enter into an agreement with the United States government for military or naval use of part or all of the landing area, the publicly owned air navigation facilities and/or other areas or facilities of the Airport. If any such agreement is executed, the provisions of this instrument insofar as they are inconsistent with the provisions of the agreement with the government, shall be suspended. In the event that an agreement between Lessor and the United States relative to the maintenance, operation or development of the Airport materially affects the Agreement between Lessor and Lessee, Lessee may at its option, terminate this Agreement on thirty (30) days written notice.
f. This Agreement shall be subordinate to the provisions of any outstanding agreement between Lessor and the United States relative to the maintenance, operation, or development of the Airport.
g. Lessee will not, on the grounds of race, color, sex, or national origin, discriminate or permit discrimination against any person or group of persons in any manner prohibited pursuant to 49 CFR, Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and as said Regulations may be amended. Lessor reserves the right to take such action as the United States government may direct to enforce this covenant.
h. This Agreement shall be subordinate to the provisions of any existing or future agreement between Lessor and the United States and the State of Kansas relative to the operation or maintenance of the Airport, the execution of which has been or may be required as a condition precedent to the expenditure of Federal funds for the development of the Airport
15. NON-DISCRIMINATION.
Lessee, its representatives, successors in interest, and assigns, covenant
and agree as a covenant running with the land that (a) No person on the grounds
of race, color, or national origin shall be excluded from participation in,
denied the benefits of, or be otherwise subjected to discrimination in the use
of said facilities, (b) That in the construction
of any improvements on, over, or under such
land
and the furnishing of services thereon, no person on the grounds of race,
color, or national origin shall be excluded from participation in, denied the
benefits of, or otherwise be subjected to discrimination; and (c) that Lessee
shall use the Leased Premises in compliance with all other requirements imposed
by or pursuant to 40 CFR, Part 21, Nondiscrimination in Federally Assisted
Programs of the Department of Transportation, and as said Regulations may be
amended.
Lessee assures that it will undertake an affirmative action program as required by 14 CFR, Part 152, Subpart E, to insure that no person shall on the grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR, Part 152, Subpart E. Lessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Lessee assures that it will require that its covered suborganizations provide assurances to Lessee that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, as required by 14 CFR, Part 152, Subpart E, to the same effect.
16. PARTIES REPRESENTATIVES / NOTICES. Lessor hereby designates its City Manager as its official representative, with full power to represent Lessor in all dealings with Lessee in connection with the Leased Premises herein leased. Lessor may designate by notice in writing, addressed to Lessee, other representatives from time to time and such notice shall have the same effect as if included in the terms of this Agreement. Notice to Lessor as herein provided shall be sufficient if sent by registered mail, postage prepaid, to the City Manager of the City of Lawrence, at Six E. 6th Street, Lawrence, Kansas, 66044.
Lessee hereby designates Lessee’s Co-mangers, as its official representatives, with full power to represent Lessee in all dealings with Lessor in connection with the Leased Premises herein leased. Lessee may designate by notice in writing, addressed to Lessor, other representatives from time to time and such notice shall have the same effect as if included in the terms of this Agreement. Notice to Lessee shall be sufficient if addressed to Lessee at the Leased Premises, or such other addresses as may be designated by Lessee in writing from time to time.
17. INDEMNIFICATION AND INSURANCE. Lessee agrees to indemnify and hold Lessor free and harmless from loss from each and every claim and demand of whatever nature, made on behalf of or by any person or persons, for any wrongful act or omission on the part of Lessee, its agents, servants, and employees. Lessee shall not be obligated to pay damages on any claim or demand of whatever nature, made on behalf of or by any person or persons resulting from neglect by Lessor in the maintenance by Lessor of runways, or in the maintenance of buildings on said Leased Premises not erected by Lessee. During the term of this Agreement or any renewal, Lessee will procure and maintain insurance of the type and amount required by the Airport approved minimum standards. Said policies shall name Lessor as an additional insured. Lessee shall keep all improvements on the Leased Premises insured against loss from fire and other hazards covered by extended coverage.
18. SIGNS. Lessee is
hereby authorized and empowered to erect and install signs identifying its
corporate identity, commodities and services which it affords the public at the
Airport, provided, however, that the type, quality, location, and construction
of said signs shall be subject to approval by Lessor. Said signs shall not be
erected until written approval from Lessor shall have been procured.
19. AIRPORT MANAGER. The City Manager may appoint an Airport Manager. The Airport Manager shall be responsible for enforcing all rules and regulations established by the governing body of the City of Lawrence, Kansas.
20. LIENS. Lessee shall not allow any mechanics or materialman’s liens to be placed on the Leased Premises as a result of its activity on the Leased Premises.
21. LESSOR’S RIGHT TO INSPECT. Lessor reserves the right to enter upon the Leased Premises at any reasonable time for the purpose of making any inspection it deems expedient. Except in the event of an emergency involving the safety of persons or threat to property, Lessor’s inspections shall be conducted during Lessee’s normal hours of business operation, and Lessee’s representative shall be notified prior to any such inspections and shall have the right to accompany Lessor during the inspections. Lessor shall not unreasonably interfere with Lessee’s business operations or Lessee’s security in the making of said inspections.
22. ASSIGNMENT AND SUBLETTINGS. Except as otherwise expressly provided in this Agreement, Lessee shall not transfer, assign, sublet or pledge this Agreement without the prior written consent of Lessor. Lessor’s consent of such transactions shall not be unreasonably withheld or delayed.
23. FORUM. The laws of the State of Kansas shall govern the validity, performance and enforcement of this Agreement.
24. ENTIRE AGREEMENT. The parties agree that this Agreement is the entire agreement between the parties and no earlier statements or prior written matter have any force and effect. Neither party is relying on any representations or agreements other than those contained in this Agreement.
25. PORTION INVALID. In the event that any portion of this Agreement shall be declared invalid by a court of competent jurisdiction, the parties agree that the remaining terms and provisions of this Agreement shall remain in full force and effect.
26. QUIET ENJOYMENT. If Lessee shall perform its obligations under this Agreement, Lessor and Lessor’s successors, grantees and assigns shall warrant and defend Lessee in the quiet enjoyment and peaceful possession of the Leased Premises during the entire term of this Agreement.
27. HOLDOVER TENANCY. Except as otherwise expressly provided in this Agreement, in the event Lessee shall remain in possession of the Leased Premises, or any part thereof, after the expiration of the term of this Agreement, or any Option Period, such occupancy shall be deemed a month-to-month tenancy at a rental in the amount of one-twelfth of the annual rent paid by Lessee upon the expiration of the term, plus all other charges payable by Lessee hereunder, and upon all of the terms hereof, unless inapplicable to a month-to-month tenancy.
28. LESSOR’S TITLE AND AUTHORITY. Lessor hereby represents and warrants to Lessee that Lessor is the owner of the Leased Premises, and has the power and authority to execute and deliver this Agreement and to carry out and perform all covenants to be performed by Lessor under this Agreement. Lessor further represents and warrants to Lessee that the Leased Premises are adjacent to a public street or roadway providing non-exclusive access to the public right-of-way, and that the Leased Premises are free from all encumbrances, liens, defects in title, violations of law, leases, tenancies, easements, and restrictions, except as expressly disclosed to Lessee in this Agreement.
29. TITLE INSURANCE POLICY. Upon the execution of this Agreement by Lessor and Lessee, Lessor shall, at Lessor's expense, obtain and provide to Lessee a commitment for a standard policy of leasehold title insurance, in the face amount of $800,000.00, issued by a title insurance company licensed in the state of Kansas (the "Leasehold Policy"). Lessee shall have twenty (20) days following receipt of the Leasehold Policy to object, in writing, to any exceptions, conditions, restrictions, liens, encumbrances, easements, or covenants set forth in the Leasehold Policy (the "Objections"), provided that any such Objection is one that would materially interfere with Lessee's use and enjoyment of the Leased Premises for Lessee's permitted use as set forth in this Agreement. Lessor shall have thirty (30) days from the date Lessee notifies Lessor of such Objections to make a good faith effort to cure such objections and to furnish a revised title commitment showing that such Objections have been cured or removed. If such Objections are not so cured within such thirty (30) day period, Lessee may, at its option, elect to extend the period for curing Objections or to terminate this Agreement. Any Objections or other title matter not specifically described in Lessee's written notice to Lessor shall be deemed permitted (the "Permitted Title Exceptions"). On or before the Commencement Date, Lessor shall cause the title insurance company to issue and deliver the policy of title insurance to Lessee, subject only to the Permitted Title Exceptions.
30. LEASEHOLD MORTGAGE. Lessee may from time to time during the term of this Agreement and the Option Periods, without further consent of Lessor, mortgage Lessee's leasehold estate and rights under this Agreement to a mortgagee as security for payment of an indebtedness (the "Leasehold Mortgage"), provided (a) any such Leasehold Mortgage shall be subordinate to Lessor's fee interest in the Leased Premises and to Lessor's rights under this Agreement; and (b) the proceeds derived from the note or other obligations secured by such Leasehold Mortgage shall be applied, except for reasonable costs and expenses of obtaining such proceeds, to the construction, repair, alteration, or replacement of the Hanger and other improvements on the Leased Premises. Any such Leasehold Mortgage shall be a lien only upon Lessee's leasehold estate under this Agreement, and shall not be a lien upon the fee title or upon Lessor's reversionary interest in the Leased Premises. Lessee shall comply with all requirements under such Leasehold Mortgage and the note or other obligation it secures and Lessee's obligation to so comply shall be a part of Lessee's obligations under this Agreement. The leasehold mortgagee or its assigns may enforce such Leasehold Mortgage and acquire title to the leasehold estate in any lawful way, and pending foreclosure of such Leasehold Mortgage may take possession of and rent the Leased Premises in accordance with and subject to the terms of this Agreement, and upon foreclosure of such Leasehold Mortgage may, without further consent of Lessor, sell and assign the leasehold estate hereby created, subject, however, to all of the terms of this Agreement. The sale or assignment of the leasehold estate hereby created by the leasehold mortgagee shall in no event discharge or otherwise release the party who, at the time of foreclosure of such Leasehold Mortgage, was responsible for Lessee's obligations under this Agreement in accordance with the provisions of this Agreement.
31. UTILITY EASEMENTS. Lessor shall at the request of Lessee grant such non-exclusive easements as may be necessary to enable the Leased Premises to be adequately served by gas, electricity, water, sewer, telephone and other utility services.
32. PERSONS BOUND. This Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of Lessor and Lessee.
IN WITNESS WHEREOF, the parties have hereunto set their hands this_____ day of
_______________________, 2010.
CITY OF LAWRENCE, KANSAS
David L. Corliss, City Manager
Lessor
ATTEST:
Jonathan M. Douglass, City Clerk
LWC PARTNERS, LLC,
a Kansas limited liability company
By:
John D. Scott, Co-manager
By:
Douglas J. Compton, Co-manager
Lessee
STATE OF KANSAS )
COUNTY OF DOUGLAS )
BE IT REMEMBERED, that on this day of , 2010, before me, the undersigned, a Notary Public in and for the County and State aforesaid, came John D. Scott, Co-manger, on behalf of LWC Partners, LLC, a Kansas limited liability company, who is personally known to me to be the same person who executed the within and foregoing instrument of writing and duly acknowledged the execution of the same on behalf of said limited liability company.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
Seal: Notary Public
STATE OF KANSAS )
COUNTY OF DOUGLAS )
BE IT REMEMBERED, that on this day of , 2010, before me, the undersigned, a Notary Public in and for the County and State aforesaid, came Douglas J. Compton, Co-manger, on behalf of LWC Partners, LLC, a Kansas limited liability company, who is personally known to me to be the same person who executed the within and foregoing instrument of writing and duly acknowledged the execution of the same on behalf of said limited liability company.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
Seal: Notary Public
EXHIBIT A
[Legal Description]
EXHIBIT B
Job Credit Agreement for
LWC Partners, L.L.C.