LEASE AGREEMENT
THIS Lease Agreement is made this 1st day of January, 2012, by and between the City of Lawrence, Kansas, a municipal corporation, and Community Wireless Communications Co., a Kansas corporation.
RECITALS
A. The City of Lawrence, Douglas County, Kansas, (“the City”) is a municipal corporation that owns and holds various property interests within the City, including, currently, a multi-conduit fiber-optic communication system.
B. Community Wireless Communications Co. (“CWC”), is a Kansas corporation that provides Internet access to Kansas communities. In order to provide Internet access to City residents, CWC wishes to lease certain optical fiber from the City and to have that optical fiber installed at certain locations in the City’s conduit.
C. In April, 2011, CWC formerly proposed that, among other things, the City lease to it certain optical fiber and to install that optical fiber at certain locations in the City’s conduit.
D. At its May 24, 2011, regular public meeting, after considering CWC’s proposal in detail, the City Commission directed and authorized the preparation of an agreement between the City and CWC, whereby, in exchange for the payment of certain money and the giving of other good and valuable consideration, CWC would be leased a certain amount of optical fiber and that optical fiber would be installed at certain locations in the City’s conduit.
E. The City and CWC agree that the lease of optical fiber and the installation of that optical fiber at certain locations in the City’s conduit, all as described in more detail herein, is contingent, inter alia, upon the execution of this Lease Agreement and compliance with its terms.
AGREEMENT
NOW, THEREFORE, in light of the mutual promises and obligations contained herein, and in exchange for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties agree as follows:
SECTION 1. Adoption of Recitals. The Recitals set forth above are hereby adopted and incorporated herein by reference as if set forth in full.
SECTION 2. Lease of Optical Fibers. The City hereby agrees that, in exchange for the payment of the fee and the giving of other good and valuable consideration, as described in Sections 4 and 5, infra, it will to lease to CWC one (1) buffer tube containing twelve (12) single mode strands of optical fiber (“CWC’s Fibers”).
SECTION 3. Installation and Location of CWC’s Optical Fibers. The City also agrees that, in exchange for the payment of the fee and the giving of other good and valuable consideration , as described in Sections 4 and 5, infra, CWC’s Fibers shall be installed at certain locations in the City’s underground conduit, to-wit: commencing approximately at the intersection of U.S. Route 24 and U.S. Route 40, running south to the intersection of Sixth Street and Massachusetts Street, thence west to the intersection of Sixth Street and Iowa Street, thence south to the intersection of 23rd Street and Iowa Street, and thence east to the present terminus of the City’s multi-conduit fiber-optic communication system, located approximately at the intersection of 23rd Street and Harper Street. A map of the City’s underground conduit, showing the exact route of the conduit and the location of CWC’s Fibers is affixed hereto as Exhibit A.
SECTION 4. CWC’s Fee. As consideration for this Lease Agreement, CWC shall pay to the City, in the form of a rent, a one-time, non-recurring fee of $30,000.00. CWC shall pay the $30,000.00 rental fee to the City on or before June 29, 2012, which is one hundred eighty (180) days after the Commencement Date (January 1, 2012) of this Lease Agreement.
SECTION 5. Other Consideration.
(a) CWC also agrees to provide in this Lease Agreement, consistent with Section 26(g) of the contemporaneous “Lease and License Agreement” between it and the City, the following consideration:
CWC will offer free service to households with a net income at or below 140% of the net income eligible for food assistance as defined and published by the Kansas Department of Social and Rehabilitation Services. CWC will provide equipment to households qualifying under those guidelines at its sole cost and expense and is committed to donating the equipment when possible. The availability of free services for qualifying households is dependent upon the financial resources available to CWC. However, CWC shall endeavor to provide services to low income households equal to ten percent (10.0 %) of its total paid residential subscriber base.
(b) In accordance with Section 26(i) of the contemporaneous “Lease and License Agreement, CWC agrees to permit the City reasonable access to CWC records in order to perform, at the City’s sole cost and expense, audits to ensure compliance with Section 26(g) of the “Lease and License Agreement.” Any such audit may only be requested and conducted once per calendar year.
SECTION 6. Term of the Agreement. This Lease Agreement will expire at midnight (12:00 o’clock a.m.) on December 31, 2037.
SECTION 7. Use.
(a) CWC shall use the CWC Fibers to provide Internet access to residents of the City who desire to enter into contracts with CWC for the provision of Internet access, all at CWC’s sole cost and expense, and all as subject to the terms and conditions established in this Lease Agreement.
(b) CWC further agrees that it shall use the CWC fibers in accordance with all applicable federal, state, and local laws.
(c) This Lease Agreement does not grant CWC the authority or right to provide “Cable Service” or “Local Exchange Service.” For the purposes of this Lease Agreement, “Cable Service” is defined as the one-way transmission to subscribers of video programming or other programming services, and subscriber interaction, if any, which is required for the selection of such video programming or other programming service.
(d) This Lease Agreement is not a franchise agreement under K.S.A. 12-2001 et seq. CWC hereby acknowledges, however, its obligation to enter into a contract franchise with the City before using the CWC Fibers, which are located in the City’s conduit in the public rights of way, for the provision of “Cable Services,” “Local Exchange Service,” or other Telecommunications Services to the City or its inhabitants.
(e) The grant of this Lease Agreement shall not convey title, equitable or legal, to CWC in any property of the City, including CWC’s Fibers, the City conduit, or the City’s public rights of way, and shall only give to CWC the right to use the CWC Fibers for the purposes and for the period of time stated in this Lease Agreement.
SECTION 8. Inter-connection.
(a) Subject to the terms and conditions of this Lease Agreement, the City will bring CWC’s Fibers to the demarcation points described in Exhibit B to this Lease Agreement. CWC may only inter-connect with CWC’s Fibers at and outside the described demarcation points. Exhibit B is hereby adopted and incorporated herein by reference as if set forth in full.
(b) Any and all CWC inter-connections with CWC’s Fibers, including equipment, labor, etc., shall be at the sole cost and expense of CWC.
(c) CWC may request, in writing, access to CWC’s Fibers at additional demarcation points in the future. The City agrees to cooperate, to the extent that it is feasible, with such requests. All costs and expenses, including equipment, labor, etc., of additional inter-connections shall be borne solely by CWC. In the event, additional demarcation points are created, the parties agree to amend Exhibit B to show the actual location of all demarcation points.
(d) CWC may not have access to CWC’s Fibers, except outside the demarcation points described in Exhibit B or any writing amending Exhibit B. CWC is also prohibited from having access to or any physical contact with the City conduit or optical fibers located in the City conduit.
SECTION 9. Maintenance and Repair.
(a) Upon delivery of the CWC Fibers, CWC shall have the opportunity, at its sole cost and expense, to test the CWC Fibers to ensure that they meet its reasonable standards and specifications. If the CWC Fibers do not meet those reasonable standards and specifications, then the parties agree to work together to determine if it is possible to meet those requirements and, if so, to provide CWC with a bundle of optical fibers that satisfy CWC’s reasonable standards and specifications. If it is not possible, then CWC agrees to accept what the City can provide or it may, at its option, cancel this Lease Agreement.
(b) Once CWC approves the CWC Fibers, it will be responsible, at its sole cost and expense, for the routine maintenance and upkeep of the CWC Fibers. However, at no time, in the course of maintaining or repairing the CWC Fibers shall CWC have access or physical contact with the City conduit or any other optical fibers located in the City conduit. If such maintenance or repair requires CWC to have contact with the City conduit or anything within the City conduit, it shall notify the City and the City shall, at CWC’s sole cost and expense, contract to have said maintenance or work done.
(c) In the event of an emergency, the parties agree to work together to restore service as quickly as possible. The City agrees to follow its standard procedure in making emergency maintenance or repair. At the time of this contract, standard procedure is (i) to visit the site, to survey the situation, and to identify what work needs to be done, (ii) to hire a contractor to have the necessary work completed, and (iii) to have the contractor repair the active optical fibers, including CWC’s active fibers, first. It would be the goal of the City to have any emergency disruption in service corrected within forty-eight (48) hours, but the City cannot guarantee that such will be the case as it would depend on the availability of the contractor and the extent of the emergency.
SECTION 10. Default. If either the City or CWC fails to perform or observe any material term, covenant, provision, or condition of this Lease Agreement, then that party will be in default under this Lease Agreement.
SECTION 11. Right to Cure. From the date of written Notice of Default from the other party, the party in default shall have thirty (30) days to cure any default.
SECTION 12. Failure to Cure. If the party in default fails to cure the default in the time prescribed by Section 11, supra, then the other party shall have the right to terminate this Lease Agreement and may, at its discretion, pursue any other remedies that may be available to it at law or in equity not otherwise proscribed by the terms of this Lease Agreement.
SECTION 13. Force Majeure.
(a) A “Force Majeure Event” is any event or cause beyond the reasonable control of the party claiming relief, including any action by or omission of a governmental agency or authority (including any government-imposed moratorium on activities related to this Lease Agreement or any subsequent change in government rules, regulations, codes, ordinances, or laws), material shortages, third-party labor disputes, floods, earthquakes, fires, lightning, epidemic, war, riot, civil disturbance, act of public enemy or enemies, terrorist act, sabotage, or any act of God.
(b) Neither the City nor CWC will be considered in default under this Lease Agreement if such party’s performance is delayed by virtue of a Force Majeure Event. Upon the occurrence of such event, the parties agree to confer in good faith and to agree upon an equitable, reasonable action to continue performance under this Lease Agreement. The City and CWC will use commercially reasonable efforts to minimize the delay caused by any Force Majeure Event and to resume affected performance when reasonably possible.
(c) In the event that a Force Majeure Event prevents either party from performing under the contract for a period of 180 days, then either party, upon written notice to the other, may terminate this Lease Agreement. Upon such termination, all parties will be relieved of performance under this Lease Agreement, except that a party will continue to be liable for any breaches that occurred and were not cured prior to termination.
SECTION 14. Rights upon Expiration or Termination of the Agreement. Upon the expiration or termination of this Lease Agreement, CWC’s rights to CWC’s Fibers shall terminate and CWC’s Fibers shall revert to the City. Upon expiration or termination of this Lease Agreement, CWC shall have no continuing rights or obligations hereunder, except that any uncured defaults or any other obligations that are stipulated in this Lease Agreement shall survive the expiration or termination of this Lease Agreement. Any and all equipment furnished or supplied by CWC to inter-connect to CWC’s fibers shall remain the property of CWC. Any and all equipment furnished or supplied by the City under this Lease Agreement shall remain the property of the City.
SECTION 15. Insurance.
(a) CWC agrees to obtain and maintain the following insurance: (i) Commercial General Liability, including coverage for (A) premises/ operations, (B) products/completed operations, (C) personal and advertising injury, and (D) contractual liability, with a combined single limit of not less than $1,000,000.00 each occurrence or the equivalent; (ii) Workers’ Compensation in amounts required by applicable law and Employer’s Liability with a limit of at least $1,000,000.00 each accident; (iii) Automobile Liability, including coverage for owned/leased, non-owned, or hired automobiles with combine single limit of not less than $300,000.00 each accident; and (iv) umbrella coverage with a limit of at least $1,000,000.00.
(b) CWC will obtain and maintain “all risk” property insurance in an amount equal to the full replacement cost of all electronic, optronic, and other equipment that CWC will utilize in connection with its inter-connection with and use of the CWC Fibers.
(c) Unless otherwise agreed upon by the parties in writing, all insurance policies obtained and maintained by CWC shall be with companies rated A or better by Best’s Key Rating Guide and CWC will, upon request, provide the City with insurance certificate(s) confirming compliance with the terms of this Section.
(d) Notwithstanding anything to the contrary in this Lease Agreement, the City and CWC mutually waive their rights of recovery against each other, including against officers, directors, shareholders, partners, joint venturers, employees, agents, customers, invitees, or business visitors, for any loss arising from any cause covered or that would be covered by fire, extended risk, “all risk,” or other insurance required to be carried under this Lease Agreement or currently or hereafter existing for the benefit of the respective parties. CWC will obtain from the insurance company providing the coverage required by this Lease Agreement, a waiver of subrogation against the City.
(e) In the event that CWC fails to maintain the insurance coverage required by this Lease Agreement and a claim is made or an injury is suffered, CWC agrees, in addition to what is set forth in Section 16, infra, to indemnify and to hold harmless the City from any and all claims for which the required insurance would have provided coverage.
(f) With respect to all activities under this Lease Agreement, the City will be self-insured.
SECTION 16. Indemnification.
(a) CWC, and any successor or assign, agrees to indemnify, defend, save, and hold harmless the City, its officers, commissioners, agents, employees, grantees, and assigns, from and against all claims, actions, liabilities, damages, costs, expenses, and judgments, including attorneys’ fees, which relate to, arise out of, or are in any way associated with the CWC’s use of CWC’s Fibers and activities taken in the public rights of way under the terms of this Lease Agreement on account of any injury to persons (including death) or any damage to property. This indemnification clause shall not apply to any injury or damage caused by the City’s own negligence or the City’s intentional conduct. This indemnity provision shall extend beyond the termination or expiration of this Lease Agreement.
(c) The City and CWC shall promptly advise the other in writing of any known claim or demand against CWC or the City related to or arising out of CWC’s activities under this Lease Agreement.
SECTION 17. Limitation of Liability. Neither party shall be liable to the other for lost profits, special, incidental, punitive, exemplary, or consequential damages, including but not limited to frustration of economic or business expectations, loss of profits, loss of capital, cost of substitute product(s), facilities, or services, or down time costs, even if advised of the possibility of such damages. Further, the liability of one party to the other for damages under this Lease Agreement, excluding liabilities relating to a party’s indemnification obligations as set forth in Section 16, supra, or any other damages permitted under this Lease Agreement, is limited to the total amount payable by CWC to the City under this Lease Agreement to which the dispute relates.
SECTION 18. Assignment. This Lease Agreement may not be sold, assigned, transferred, or sublet without the prior written approval or consent of the City’s governing body.
SECTION 19. Authorization. Each of the persons executing this Lease Agreement, in behalf of the respective parties, represents and warrants that he or she has the authority to bind the party in behalf of whom he or she has executed this Lease Agreement, and that all acts required and necessary for authorization to enter into and to execute this Lease Agreement have been completed.
SECTION 20. Notice. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed given if personally delivered or mailed by first class mail:
If to the City, to:
City of Lawrence, Kansas
Attn: City Clerk
6 East 6th
P. O. Box 708
Lawrence, KS 66044
With a copy to:
City of Lawrence, Kansas
Attn: Director, Legal Department
6 East 6th
P. O. Box 708
Lawrence, KS 66044
If to CWC, to:
President
Community Wireless Communications Co.
P. O. Box 3532
Lawrence KS 66047
Either party may change where notices, requests, demands, or other communications are to be given by giving written Notice to the other party of any said change.
SECTION 21. Successors and Assigns. This Lease Agreement shall be binding upon and inure to the benefit of the parties, their respective heirs, personal representatives, successors, and assigns.
SECTION 22. Non-waiver. Failure of either party to insist on strict performance of any of the conditions, covenants, terms, or provisions of this Lease Agreement or to exercise any of its rights hereunder shall not waive such rights, but the party shall have the right to enforce such rights at any time and to take such action as might be lawful or authorized hereunder, whether in law or equity.
SECTION 23. Personal Immunities. No personal recourse shall be had for the creation of this Lease Agreement, for any claim arising out of this Lease Agreement, nor for any representation, obligation, covenant, or agreement set forth in this Lease Agreement, against any past, present, or future officer, member, employee, or agent of the City, under any rule of law or equity, any statute or constitution, or by the enforcement of any assessment or penalty, or otherwise, and any liability of any such officer, member, employee, or agent is hereby expressly waived and released by CWC as a condition of and in consideration for the execution of this Lease Agreement. Furthermore, CWC agrees that no past, present, or future officer, member, employee, or agent of the City shall be personally liable to CWC, or any successor in interest of CWC, for any default or breach under this Lease Agreement by the City.
SECTION 24. Severability. If any section, sentence, clause, or phrase of this Lease Agreement is found to be invalid by any court of competent jurisdiction, it shall not affect the validity of any remaining provision of this Lease Agreement.
SECTION 25. Governing Law. This Lease Agreement shall be governed by the laws of the State of Kansas.
SECTION 26. Miscellaneous.
(a) This Lease Agreement supersedes all prior discussions and negotiations and contains all agreements and understandings between the City and CWC with respect to the subject matter hereof. This Lease Agreement may only be amended by a writing signed by all parties.
(b) Exhibits “A” and “B” are incorporated into this Lease Agreement by reference.
(c) The provisions of the Lease Agreement relating to indemnification shall survive any termination or expiration of this Lease Agreement. Any provision of this Lease Agreement that would require performance subsequent to the termination or expiration of this Lease Agreement shall likewise survive any such termination or expiration.
(d) This Agreement is contingent upon CWC, or any successor or assign hereunder, obtaining all necessary governmental approvals, permits, or licenses.
(e) This Agreement is contingent upon CWC being a corporation in good standing with the Kansas Secretary of State. Any corporate successor or assign hereunder must also be a corporation in good standing with the Kansas Secretary of State
(f) This Lease Agreement may be executed in duplicate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The signature pages from one (1) or more counterparts may be removed from such counterparts and such signature pages all attached to a single instrument.
(g) The prevailing party in any litigation arising hereunder shall be entitled to reimbursement from the other party of its reasonable attorneys’ fees and court costs, including the prosecution of any appeal.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have caused this Lease Agreement to be executed as of the date noted above.
CWC: COMMUNITY WIRELESS COMMUNICATIONS C0., a Kansas corporation
__________________________ __
President
STATE OF KANSAS )
) ss:
COUNTY OF DOUGLAS )
The foregoing Lease and License Agreement was acknowledged before me this ____ day of ________________, 2011, by _______________________, ____________________ of Community Wireless Communications Co., in behalf of the Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal on the day and year last above written.
_____________________________________
Notary Public
My commission expires:
CITY: CITY OF LAWRENCE, KANSAS, a municipal corporation
__ ______________________________
Aron Cromwell, Mayor
ATTEST:
______________________________
Jonathan M. Douglass, City Clerk