GROUND LEASE
ADDENDUM
THIS GROUND LEASE ADDENDUM (this “Addendum”) made this _____ day of December 2010, by and between the City of Lawrence, a municipal corporation organized under the laws of the State of Kansas (the “City”) and The Bowersock Mills & Power Company (which is one and the same company as “The Bowersock Mills and Power Company” and “Bowersock Mills and Power Company”), a corporation organized under the laws of the State of Kansas (the “Lessee”).
WHEREAS, by that certain agreement titled “Ground Lease” and dated November 24, 2010 (hereinafter the “Ground Lease”), the City leased to Lessee and Lessee leased from City certain land legally described on Exhibit A, attached hereto and incorporated herein by reference (hereinafter the “Leased Premises”).
WHEREAS, the City and Lessee enter into this Addendum to provide Lessee with an option to extend the Ground Lease beyond its current expiration dates of April 5, 2097 (the foregoing expiration date assumes Lessee exercises its existing option to extend the term for one 20-year period provided for in Section 4 of the Ground Lease).
NOW, THEREFORE, in consideration of the mutual premises, covenants and agreements contained herein, the parties to this Addendum agree as follows:
1. Renewal Periods. If Lessee exercises its option to extend the Ground Lease for the 20-year period provided for in Section 4 of the Ground lease, Lessee shall have 4 additional successive options to renew and extend the Ground Lease from the date upon which it would otherwise expire, for separate renewal periods of 10 years each (each a “Renewal Period”) (the 20-year extension provided for in Section 4 of the Ground Lease plus the four 10-year Renewal Periods give a total possible extension of 60 years), with the first 10-year Renewal Period to commence on the day after the expiration of the 20-year extension provided for in Section 4 of the Ground Lease. If Lessee elects to exercise any one of said 10-year options, it shall do so by giving notice of such election to City. If Lessee elects to exercise any one of said options to renew, the term shall be automatically extended for the 10-year Renewal Period covered by the option so exercised. The terms and conditions of any Renewal Period shall be upon the same terms and conditions as are in effect hereunder immediately preceding the commencement of such Renewal Period, except that the fixed rent for the Renewal Period shall be as provided in Section 2. The right of renewal under this Section may be assigned or otherwise transferred as collateral security in connection with any leasehold mortgage.
2. Renewal Rental Rate. If Lessee exercises any option under Section 1 to extend the term of the Ground Lease, the annual rent during any applicable Renewal Period shall be the fair market rental rate of the Leased Premises, considered without the benefit or burden of any of the Ground Lease or any of Lessee’s improvements installed or constructed on or adjacent to the Leased Premises, valued consistent with the highest and best use of the Leased Premises as of the first day of the applicable Renewal Period. To determine the fair market rental value, each party shall designate an appraiser who shall be a member of the American Institute of Real Estate Appraisers (or any successor association or body of comparable standing if such institution is not then in existence) and shall have been actively engaged in the appraisal of real estate situated in the vicinity of the Leased Premises for a period of not less than 5 years immediately preceding his appointment. If the two appraisers agree upon the fair market rental rate of the Leased Premises, that amount shall govern. If the two appraisers cannot agree, their appraisals shall be averaged and that average amount shall govern. The annual rent for the first year of each Renewal Period shall be paid in one lump sum on the first day of the Renewal Period or the date the annual rent for the Renewal Period is finally calculated, whichever is later. The annual rent for each subsequent year of each Renewal Period shall be paid in one lump sum on the anniversary of the Renewal Period.
3. Reaffirmation. Provisions in the Ground Lease contrary to the provisions of this Addendum are amended and superseded. Except as clarified and amended by this Addendum, the Ground Lease is reaffirmed.
4. Counterparts. This Addendum may be executed in any number of counterparts (delivered by U.S. mail, fax, overnight delivery service or electronic mail), each of which shall be deemed to be an original and all such counterparts taken together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, this Addendum is executed by the parties on dates set forth below, effective as of the date first above written.
City: Lessee:
City of Lawrence, Kansas The Bowersock Mills & Power Company
By: _________________________ By: _________________________
Name: David L. Corliss Name: Stephen H. Hill
Title: City Manager Title: President
EXHIBIT A
(Legal Description of Leased Premises)
All of Lots 10, 12, 14, 16, 18, 20, 22, 24, 26, 28, 30, 90, 92, 94, 96 and 98, and all that part of
Lots 95, 97, 99, 101, 103, 105, 107, 100, 102, 104, 106, and 108, all lying in Block 13, North
Lawrence, and all that part of the Southwest Quarter of Section 30, Township 12 South, Range
20 East, all lying in Douglas County, Kansas, described as follows:
COMMENCING at the Northeast corner of Lot 117, Block 13, North Lawrence; thence South 88
degrees 14 minutes 39 seconds West along the North line of said Block 13 a distance of 299.04
feet to the Northeast corner of Lot 30 of said Block 13, the POINT OF BEGINNING; thence
South 1 degree 46 minutes 12 seconds East along the East line of Lots 30, 28, and 26 of said
Block 13 a distance of 76.37 feet to a point; thence North 88 degrees 14 minutes 09 seconds East
a distance of 71.14 feet to a point; thence North 88 degrees 15 minutes 35 seconds East a
distance of 103.31 feet to a point on the East line of Lot 107 of said Block 13; thence South 1
degree 45 minutes 55 seconds East along the East line of Lots 107 and 108 of said Block 13 a
distance of 142.34 feet to a point; thence North 36 degrees 05 minutes 29 seconds West a
distance of 44.20 feet to a point on the East line of Lot 106 of said Block 13; thence South 86
degrees 38 minutes 35 seconds West a distance of 50.06 feet to a point on the East line of Lot
102 of said Block 13; thence South 65 degrees 27 minutes 19 seconds West a distance of 54.01
feet to a point on the East line of Lot 98 of said Block 13; thence South 1 degree 49 minutes 13
seconds East along the East line of said Lot 98 and its Southerly prolongation a distance of
182.85 feet to a point; thence South 66 degrees 10 minutes 57 seconds West a distance of 112.39
feet to a point; thence North 74 degrees 37 minutes 47 seconds West a distance of 207.08 feet to
a point; thence in a Northwesterly direction along a curve to the right, having a radius of 950.00
feet, through a central angle of 20 degrees 33 minutes 42 seconds, an arc distance of 340.93 feet
to a point; thence North 35 degrees 55 minutes 55 seconds East a distance of 119.28 feet to a
point; thence North 64 degrees 43 minutes 46 seconds East a distance of 141.50 feet to a point;
thence South 39 degrees 55 minutes 36 seconds East a distance of 54.22 feet to a point; thence
South 69 degrees 27 minutes 11 seconds East a distance of 69.95 feet to a point; thence South 77
degrees 39 minutes 24 seconds East a distance of 56.65 feet to a point; thence North 70 degrees
43 minutes 18 seconds East a distance of 57.73 feet to the Southwest corner of Lot 22 of said
Block 13; thence North 2 degrees 13 minutes 09 seconds West along the West line of Lots 22,
24, 26, 28 and 30 of said Block 13 a distance of 127.29 feet to the Northwest corner of said Lot
30; thence North 88 degrees 14 minutes 39 seconds East along the North line of said Lot 30 a
distance of 143.30 feet to the POINT OF BEGINNING;
LESS AND EXCEPT that portion of the foregoing (i) lying within Lots 5, 7, 9, 11, 13, 15, and 17 on Bridge Street, and Lot 17 on Massachusetts Street, in North Lawrence, and other property The Bowersock Mills & Power Company owns pursuant to that certain deed recorded in the Office of the Douglas County Register of Deeds on April 10, 1967 at Book 250, Page 82; (ii) lying within the land that “Bowersock Mills Power Co.” (which is one and the same as The Bowersock Mills & Power Company) owns pursuant to that certain deed recorded in the Office of the Douglas County Register of Deeds on September 10, 1924 at Book 110, Page 273; and (iii) lying within the bed of the Kansas River.