CONTRACT FOR THE SALE AND PURCHASE OF REAL ESTATE

CONTRACT FOR THE SALE OF REAL ESTATE

This Contract for the Sale and Purchase of Real Estate commonly known as 1106 Rhode Island, (this “Contract”) is made and entered into this ____ day of October, 2014 by and between 1106 Rhode Island, LLC, (“Purchaser”), a Kansas limited liability corporation, and the City of Lawrence, Kansas, a municipal corporation (“Seller”), and their respective assigns.

WHEREAS, Seller is the Owner of that certain tract of real property located in the City of Lawrence, Douglas County, Kansas, legally described as:

LOTS 118 AND 120 RHODE ISLAND STREET, IN THE ORIGINAL TOWNSITE, CITY OF LAWRENCE, DOUGLAS COUNTY, KANSAS.

with a common street address of 1106 Rhode Island, Lawrence, Kansas together with all existing buildings, structures and improvements thereon situated and all easements and other rights appurtenant to such thereto the (“Real Estate”) and certain furnishings, fixtures and equipment described herein, the (“Property”); and

WHEREAS, Purchaser desires to purchase and Seller desires to sell, upon the terms and conditions hereinafter set forth, the Real Estate and Property.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, promises and conditions hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

1. Agreement to Sell and Purchase. Subject to the terms and conditions of this Contract, and subject to the representations and warranties made in this Contract, on the date of Closing Seller will sell, assign, transfer and convey to Purchaser all of Seller’s right, title and interest in and to the real estate legally described as follows:

LOTS 118 AND 120 RHODE ISLAND STREET, IN THE ORIGINAL TOWNSITE, CITY OF LAWRENCE, DOUGLAS COUNTY, KANSAS.

together with all appurtenant easements benefiting the real estate, the existing buildings, structures, improvements and fixtures located on the real estate, and any personal property of the Seller (together the “Property”). The purchase price (”Purchase Price”) for the Property shall be NINETY THOUSAND DOLLARS ($90,000.00), which shall be payable as follows:

(a) $100.00 earnest money deposited with the Escrow Agent, or the Title Company, Kansas Secured Title within seven (7) business days after full execution of this Contract (the “Earnest Money”).

(b) The balance of the Purchase Price (subject to pro-rations and adjustments as provided herein) shall be payable on the date of Closing, in cash, certified or cashier’s check or by wire transfer.

2. Contract Contingencies. This Contract is subject to and contingent upon all of the following:

a. Approval of the Contract for the Sale and Purchase of Real Estate by the governing body of the City of Lawrence, Kansas, at a regular public meeting of the governing body;

b. Execution of a Neighborhood Revitalization Act Performance Agreement for 1106 Rhode Island which shall occur at the closing of this contract.

3. Conditions of Sale. The Seller warrants that the above-described real estate is not now, and will not be at the time of closing, subject to a tenancy of any kind. The Buyer hereby desires to purchase the above real estate "as is" as of the date of closing.

4. Conveyance.

(a) At the Closing, Seller will convey the Real Estate to Purchaser by recordable general warranty deed (the “Deed”) conveying good and marketable fee simple title to the Real Estate to Purchaser, free of all liens, security interests, defects, rights of possession, leases, tenancies, reservations, easements, restrictions, assessments and encumbrances of record. The Deed shall further be subject to the following matters: (1) the lien for current ad valorem property taxes, which shall be prorated pursuant to Section 6 hereof; and (2) any other exceptions or permitted encumbrances approved by Purchaser in accordance with Section 4 hereof. Seller further agrees to convey all right, title and interest it may have in and to any and all streets, roads, alleyways and easements adjacent or appurtenant to the Real Estate, any mineral and mineral rights and water and riparian rights appurtenant to the Real Estate. Possession of the Real Estate shall be delivered upon the date of the Closing and immediately after delivery of the Deed to the City, and upon full and complete performance of all Purchaser’s obligations under this Contract. Seller will convey to Purchaser at Closing the Real Estate and any personal property.

(b) Prior to the Closing, a copy of the proposed form of the Deed referred to in Section 4 hereof shall be submitted by Seller to Purchaser for review and approval or revision by Purchaser’s legal counsel. The Escrow Agent, or the Title Company, Kansas Secured Title, at Purchaser’s option, shall prepare an appropriate closing statement (“Closing Statement”). At or before the Closing, Seller, shall sign and deliver all such affidavits and agreements and all other standard affidavits, agreements, and documents that the Escrow Agent or Title Company requires and are necessary in connection with the Closing and issuance of the Title Policy.

5. Title to the Property.

(a) Prior to the Closing, Purchaser shall obtain a commitment for title insurance through Kansas Secured Title for the Real Estate (the “Title Commitment”). The Title Commitment shall (i) commit to insure title to the Real Estate, (ii) commit to insure title to all easements and rights-of-way appurtenant to the Real Estate, (iii) commit to insure against physical damage to the surface of the Real Estate or any appurtenant easements or rights-of-ways resulting from the production of minerals incident to any outstanding mineral interests in the Real Estate or any such easement or right-of-way, (iv) commit to issue an owner’s title insurance policy in favor of the Purchaser, and (v) be in the amount of $90,000. Seller shall provide, simultaneous with the Title Commitment, evidence satisfactory to Purchaser that there are no UCC financing statements affecting the Real Estate or any appurtenant easements or rights-of-way. Purchaser and Seller shall share equally in the cost for the fee charged for obtaining the Title Commitment and any associated title searches and charges.

6. Taxes, Assessments and Pro-rations.

(a) Seller shall pay all taxes and special assessments, including any penalties and interest, to the date of the Closing. Ad valorem taxes and special assessments shall be prorated as of the date of the Closing, based on a three hundred sixty-five (365) day year and on the most recently available tax rate and valuation. It is understood and agreed that the ad valorem taxes will be prorated as of the date of the Closing on an estimated basis.

(b) No provision has been made for the proration of water charges, fuel charges or utility charges (including without limitation, telephone, gas and electricity) as Seller shall terminate its account (but not the service itself) with the providers of all such services as of the Closing date. Purchaser shall make application to the providers of such services for the continuation of such services in the name of the Purchaser or its designee, and be responsible for all such services and charges from the Closing, and indemnify, defend and hold Seller harmless from any further claims for said services and charges.

7. Operations Pending Closing.

(a) Seller will maintain the Property in the same manner as it operated the same prior to the date of Closing and will keep the Property in its present state of repair subject to normal wear and tear, exercising the same degree of care in such matters as Seller has previously exercised. Seller shall not remove any fixture from the Property without replacing the same with property of equal or greater value.

(b) Seller shall not enter into or record any easement, covenant, license, permit, agreement or other instrument against the Property or record any portion thereof except as may be required to enable Seller to perform its obligations under this Contract.

8. Closing and Default. The Closing shall be held on or before December 31, 2014, unless the parties agree to a different date (“Closing”). The Closing shall be held at Kansas Secured Title. If Purchaser fails or is unable to close this transaction for any cause other than: the act or omission of Seller, then Seller shall have the option to terminate this Contract by giving notice thereof to Purchaser and all other rights and duties hereunder shall terminate and this Contract shall be of no further force or effect and Seller shall receive the Earnest Money. In addition, in the event that this transaction fails to close due to a refusal or default on the part of either Party, then and in such event, either Party will have such rights, and may proceed against the other in such manner as it determines advisable, either in law or in equity, including, but not limited to suits for specific performance or damages,.or both. The parties shall each be responsible for their own attorney’s fees and costs, including fees and costs on any appeal.

9. Closing Costs. Closing costs of the closing agent, recording fees and transfer taxes, if any, shall be divided equally between the Purchaser and the Seller. Other expenses incurred by Seller and Purchaser with respect to the Closing shall be paid exclusively by the party incurring such expenses, except to the extent otherwise specifically provided in this Contract.

10. Casualty Loss and Risk of Loss. If the Property, or any part thereof, or any improvements thereon, shall be substantially or fully damaged or destroyed by casualty, Seller shall immediately give notice of the same to Purchaser. Upon the occurrence of any casualty that results in damages to the Property, Purchaser shall have the right, at its option, to terminate this Contract by giving notice thereof to Seller at any time prior to the Closing. If Purchaser does not so terminate this Contract, then this Contract shall continue in full force and effect. The risk of loss, damage, or destruction of the Property by fire or otherwise, until the Closing shall be borne by Seller. After the Closing, Purchaser shall assume all risk of loss to the Property and contents.

11. Condemnation. In the event of the institution of any proceeding, judicial, administrative or otherwise, relating to the taking, or to a proposed taking, of any portion of the Property by eminent domain, condemnation, or otherwise, prior to any Closing, or in the event of the taking of any portion of the Property by eminent domain, condemnation, or otherwise, prior to any Closing, Purchaser will have the right and option to terminate this Contract by giving Seller written notice to such effect any time after receipt by it of notification of such occurrence or occurrences and prior to the Closing. Seller hereby agrees to furnish to Purchaser written notice in respect thereof promptly after Seller’s receipt of knowledge or notification of such an occurrence. If less than all of the Property is taken or proposed to be taken by eminent domain, condemnation or otherwise, then Purchaser will have the further option to proceed to close in accordance with the provisions of this Contract, subject to the taking by eminent domain, condemnation, or otherwise. In such event, Purchaser will be entitled to receive, the entire award for damage to the Property by reason of such taking.

12. Seller’s Representations and Warranties. In addition to the representations, warranties, covenants and agreements contained in other Sections hereof, Seller makes the following representations and warranties to Purchaser to the best of its knowledge and belief:

(a) Seller (i) has the authority and power to enter into this Contract and to consummate the transactions provided for herein; and (ii) has good, marketable and insurable fee simple title to the Property and the person who executes and delivers this Contract and all documents to be delivered to Seller under this Contract is and shall be duly authorized to do so;

(b) No parties are in possession of any portion of the Property as lessees, tenants at will, tenants at sufferance, trespassers or adverse possessors;

(c) There are no actions, suits, proceedings, investigations or audits pending or threatened against Seller related to the Property at law or in equity or before any federal, state, county, municipal, or other court, department or agency;

(d) Seller shall not cause or allow the execution, delivery and/or recordation of any conveyances, easements, covenants, restrictions, leases, deeds of trust, mortgages, liens or other instruments or agreements pertaining to the Property without the prior written consent of Purchaser;

(e) To the best of Seller’s knowledge, all records and documents relating to the Property that Seller has delivered or will deliver or make available to Purchaser hereunder are or will be true and accurate in all material respects.

13. Purchaser’s Representations. Purchaser makes each of the following representations to the best of Purchaser’s knowledge, each of which shall constitute a material part of the consideration for this Contract, be accurate and true as of the date of this Contract and as of the Closing, and survive the Closing:

(a) Purchaser has full right, title, authority and capacity to execute and perform this Contract and to consummate all of the transactions contemplated in this Contract, and the person who executes and delivers this Contract and all documents to be delivered to Seller under this Contract is and shall be duly authorized to do so.

14. Recordation. Seller and Purchaser agree not to record this Contract.

15. Miscellaneous. It is further agreed by Seller and Purchaser as follows:

(a) Time is of the essence as to all terms and conditions of this Contract. In the event that any time period hereunder shall end on a Saturday, Sunday or a national holiday, then such time period shall be deemed to be automatically extended to end on the next regular business day (i.e., Monday through Friday).

(b) This Contract may be executed in several counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

(c) All written notices required hereunder shall be served by certified mail, return receipt requested, postage prepaid, or by overnight express mail by any nationally recognized courier service, to the following address identified for each party:

SELLER:

City of Lawrence, Kansas

City Hall

Attn: City Manager

6 East 6^th Street

Lawrence, Kansas 66044-0708

PURCHASER:

1106 Rhode Island, LLC

Attn: Stanely C. Hernly, Manager

1071 E 1479 Rd.

Lawrence, KS 66046

Notice will be deemed to have been given upon receipt of said notice or upon receipt of actual knowledge of the information contained in said notice by any means. The addresses for the purposes of this subsection may be changed by giving notice hereunder. Unless and until notice of a change of address is given and received hereunder, the last addresses as provide herein will be deemed to continue in effect for all purposes hereunder.

(d) This Contract constitutes the entire agreement between Seller and Purchaser for the purposes stated herein, and no other covenants, agreements, understandings, warranties, or representations, exist among Purchaser and Seller. No presumption shall be deemed to exist in favor of or against Seller or Purchaser as a result of the negotiation and preparation of this Contract.

(e) Neither this Contract, nor any provision hereof, shall be waived, modified, amended, discharged, or terminated, except by an instrument signed by the party against whom the enforcement of such waiver, modification, amendment, discharge, or termination is sought and then only to the extent set forth in such instrument.

(f) Purchaser reserves the right to waive, in whole or in part, any of the covenants and conditions stated herein that have been inserted for the benefit of Purchaser and to require the closing of this transaction on the date of Closing at any time upon not less than five (5) days prior notice to Seller, notwithstanding failure of any condition or contingency hereunder.

(g) In the event any litigation between the parties hereto prior to or after the Closing with respect to any rights or obligations hereunder, to the extent permitted by law, the unsuccessful party to any such litigation shall pay to the successful party therein all cost, expenses and reasonable attorney’s fees (including all reasonable attorney’s fees and court costs and other expenses at trial and appellate levels) incurred therein by such successful party, which costs, expenses and reasonable attorney’s fees shall be included in, and as a part of, any judgment rendered in such litigation.

(h) The terms, warranties, representations and provisions of this Contract shall survive the Closing and delivery of the Deed.

(i) This Contract shall be binding upon, and inure to the benefits of, Seller and Purchaser and their respective heirs, executors, legal representatives and successors.

(j) This Contract may not be assigned by either Party without the prior written consent of the other Party.

(k) This Contract shall be governed by, construed in accordance with the laws of the State of Kansas.

(l) This Contract may be executed in any number of counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. Facsimile, electronic or scanned imaged signatures transmitted to a Party shall be good and sufficient evidence to enforce the Contract and bind the Parties thereto,

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IN WITNESS WHEREOF, the parties hereto have executed this Contract and agree that it shall be effective as of the latest date of execution of this Contract by Seller as set forth beside the signature of Seller.

ON BEHALF OF THE SELLER: CITY OF LAWRENCE, KANSAS

Date:_____________ _________________________________________

By: Mike Amyx, Mayor

STATE OF KANSAS )

):SS

COUNTY OF DOUGLAS )

BE IT REMEMBERED, that on this _____ day of , 2014, before me, the undersigned, a Notary Public in and for the County and State aforesaid came Mike Amyx, acting in his capacity as Mayor of the City of Lawrence, Kansas, a Kansas Corporation, 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.

IN TESTIMONY WHERE, I have hereunto set my hand and affixed my official seal the day and year last above written.

Notary Public

My Commission Expires:

ON BEHALF OF THE PURCHASER: