LEASE AGREEMENT

THIS LEASE AGREEMENT is made this ____ day of July, 2015, by and between the City of Lawrence, Kansas, a municipal corporation, and Lawrence Memorial Hospital, a charitable trust established pursuant to K.S.A. 12-1615.

RECITALS

A. The City of Lawrence, Kansas ("City"), a municipal corporation, owns that real property and structure, commonly known as Sports Pavilion Lawrence, located at 101 Rock Chalk Lane, Lawrence, Douglas County, Kansas.

B. The City operates Sports Pavilion Lawrence as a public athletic and recreational facility.

C. Within Sports Pavilion Lawrence, there exists approximately 4,007 square feet of multipurpose space.

D. Lawrence Memorial Hospital ("LMH"), a charitable trust established pursuant to K.S.A. 12-1615, is a not-for-profit community hospital that provides medical and health-related services to the residents of Lawrence, Douglas County, and surrounding areas.

E. Among its many medical and health-related services, through its LMH Therapy Services, LMH offers Sports Performance Training.

F. LMH wishes to lease from the City approximately 4,007 square feet of Sports Pavilion Lawrence multipurpose space for the purpose of locating and operating at Sports Pavilion Lawrence Sports Performance Training, as well as other health and wellness services and activities.

G. The City wishes to lease to LMH approximately 4,007 square feet of Sports Pavilion Lawrence multipurpose space to facilitate LMH's location and operation of Sports Performance Training, as well as other health and wellness services and activities, at Sports Pavilion Lawrence, subject to LMH's execution of this Lease Agreement and compliance with its terms.

TERMS

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 are hereby acknowledged by the City and LMH, the City and LMH agree as follows:

1. Lease of Space. The City hereby agrees that, in exchange for the payment of Rent and the giving of other good and valuable consideration, as described in Sections 2 and 5, infra, it will to lease to LMH approximately 4,007 square feet of multipurpose space as shown on Exhibit A attached hereto ("leased space") within Sports Pavilion Lawrence for its exclusive use, location, and operation of services, including Sports Performance Training and other health and wellness services and activities.

2. Rent.

(a) In consideration for the leased space and other good and valuable consideration, as described in Section 4, infra, LMH shall pay to the City Rent, on a quarterly basis, per “Contract Year,” meaning beginning on the first “Commencement date” and ending Ten (10) years later, according to the following schedule:

Contract Year 1: $50,000.00

Contract Year 2,3 &4: $50,000.00 annually ($12,500.00 quarterly)

Contract Year 5 & 6: $51,500.00 annually ($12,875.00 quarterly)

Contract Year 7 & 8: $53,045.00 annually ($13,261.25 quarterly)

Contract Year 9 & 10: $54,636.00 annually ($13,659.00 quarterly)

(b) Rent shall be payable to the City in equal quarterly installments, due on the first days of January, April, July, and October of each year during the Term of this Agreement, provided that Rent for the quarter in which this Lease Agreement commences shall be pro-rated. Rent payments shall be made payable to the City of Lawrence, Kansas, and shall be delivered to the City of Lawrence, Kansas, Parks and Recreation Department, Office of the Director.

3. Term of the Lease. The lease shall commence upon the First day of the first calendar quarter following the completion of the City’s build out obligations described in Section 4(g) hereof (the “Commencement Date”) and will expire at 11:59 p.m. Ten (10) years after the Commencement Date, unless earlier terminated as provided herein.

4. The City's Covenants. In addition to granting to LMH the leased space at Sports Pavilion Lawrence, the City agrees to the following:

(a) All restrooms/change rooms at Sports Pavilion Lawrence shall be made available for the use of LMH staff and patrons during regular operating hours and, when agreed upon in advance by the City and LMH, outside regular operating hours.

(b) Before making any major repairs or schedule changes at Sports Pavilion, Lawrence, the City agrees to inform LMH of such proposed action.

(c) The City will pay all utility costs for Sports Pavilion Lawrence, including all ordinary utility costs for the leased space, including water, sewage, trash removal, electricity, gas, and all other utilities serving Sports Pavilion Lawrence and the leased space. If the City believes that the utility costs for the leased space are extraordinary or unreasonable, the parties shall meet to discuss separately metering the leased space for utilities, which shall be City’s sole remedy in such an event.

(d) The City will pay all taxes related to Sports Pavilion Lawrence. For the purposes herein, taxes shall mean all taxes, impositions, assessments, and all other governmental charges, if any, which are levied, assessed, or imposed upon or which become due and payable in connection with Sports Pavilion Lawrence during the term of this Lease Agreement.

(e) LMH staff and patrons shall have free use of the parking lot to the extent that it is available to the City under the City/RCP agreement.

(f) LMH staff shall have the right to use WiFi at the Lawrence Sports Pavilion for work purposes.

(g) The City shall design and install, at its sole cost and expense, a dividing wall between LMH's leased space and City space and stub all utilities to the wall. The City shall be responsible for its side of the wall.

(h) The City shall at its sole cost and expense, maintain, repair and replace all structural components of the Sports Pavilion Lawrence (including, but not limited to, the foundation, bearing walls and roof structure), the exterior walls (including doors and windows), the floor slab (and, to the extent repair is required due to the condition of the slab or conditions under the slab, the floor coverings), any sprinkler system, the roof and roof membrane, the HVAC systems, all plumbing, wiring and other utility facilities within or under the floor slab of the leased space, and all plumbing, wiring and other utility facilities serving the leased space, in each case as necessary to keep the same in good order, condition and repair, ordinary wear and tear and damage by casualty excepted, and otherwise keep the roof free of leaks. The City will further maintain, repair and replace all common areas and all exterior areas of the Sports Pavilion Lawrence, including, but not limited to, open areas, landscaping areas, drainage facilities, parking areas, driveways, sidewalks, lighting equipment and facilities, and the exterior of the Sports Pavilion Lawrence, including gutters, downspouts, and canopies, in good order, condition and repair and will keep the common areas and such exterior areas clean and free from rubbish, ice and snow and cause the common areas and such exterior areas to be well lit during at least such hours as LMH is operating in the leased space. The City will maintain and repaint any directional signs, markers and parking space lines as often as necessary. The City will maintain surfaces of sidewalks and parking areas, in a level and smooth condition. The City shall use reasonable efforts to minimize disruption to LMH’s operations in and at the leased space during the performance of the City’s maintenance. Notwithstanding the foregoing, Tenant shall be responsible for any maintenance or repairs required as a result of Tenant's negligence or intentional misconduct.

5. LMH's Covenants. In addition to paying rent to the City for the leased space, LMH agrees to the following:

(a) LMH shall be responsible, at its sole cost and expense, for the build-out design and construction costs related to the leased space, including but not limited to wall finishing on the LMH side of the shared dividing wall, connecting to the water supply, sewer discharge and constructing outside entrance and sidewalk leading into the leased space, in accordance with the City Code and this Agreement.

(b) LMH shall obtain all permits required by federal, state, and local law and shall receive permission from the City before undertaking construction or making any physical change to the leased space.

(c) LMH, shall take good care of the interior of the leased space, shall at all times keep the leased space in a clean and sanitary condition, and will not commit or permit or suffer to be done any waste, damages, disfigurement, vandalism, destruction, fire, or injury to or of the Premises or any part thereof to the extent reasonably practical. LMH shall be responsible for procuring its own janitorial services in the leased space. LMH shall be responsible for any routine repairs or maintenance to the interior of the leased space.

(d) LMH may create, purchase, install, and maintain appropriate exterior signage, advertising its location at the leased space, provided that such signage complies with City Code, is approved in advance by the City, and does not refer to Sports Pavilion Lawrence by any other name than "Sports Pavilion Lawrence Presented by Lawrence Memorial Hospital and [pending Presenting Sponsor] and [pending Presenting Sponsor]," subject to the City changing the name of the Sports Pavilion. LMH agrees that the City shall have the right to approve the type and location of any such signage.

(e) LMH agrees to provide to the City a schedule of planned programs at Sports Pavilion Lawrence. LMH recognizes and understands that providing the City with up-to-date and current schedules of events is necessary for the City's operation of Sports Pavilion Lawrence and the coordination of LMH events with other events at the facility.

(f) LMH agrees that the City retains all rights to revenues from concession sales and operation of the surrounding parking lots at Sports Pavilion Lawrence and that its lease of space does not entitle it to any portion of those revenues.

(g) LMH agrees to limit its programs and events to the leased space, unless otherwise mutually agreed upon by the parties.

(h) LMH agrees to be bound by and to comply with all terms of the License Agreement, effective January 1, 2014, by and between the City and the University of Kansas, a copy of which is affixed hereto as Exhibit B and incorporated herein by reference.

6. Use. LMH may use the leased space for health and wellness services and activities, including but not limited to Sports Performance Training. LMH and City shall collaborate during the term of this Agreement to minimize duplication of programming at the Sports Pavilion Lawrence, classes, and services offered by City and LMH. Notwithstanding the foregoing, the parties acknowledge and agree that nothing in this Agreement shall apply outside of the context of the Sports Pavilion Lawrence and shall not in any way restrict, limit, or otherwise affect LMH’s activities unrelated to the Sports Pavilion Lawrence.

7. Default. If either the City or LMH 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. In the case of default, the other party shall send to the party in default a Notice of Default.

8. 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. If the City defaults on any obligation hereunder, LMH may, at its option, cure the City's default and the City shall thereafter, upon written demand of LMH, be responsible to LMH for the payment of any costs of such cure.

9. Failure to Cure. If the party in default fails to cure the default in the time prescribed by Section 9, 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 and not otherwise proscribed by the terms of this Lease Agreement. If LMH terminates this Lease Agreement for City’s failure to cure a default, City shall refund to LMH a pro-rated portion of the rental payment paid by LMH for the quarter in which the default occurs.

10. 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, epidemic, war, riot, civil disturbance, act of public enemy or enemies, terrorist act, sabotage, any act of God, or any damage as a result of fire, floods, earthquakes, lightning, or other casualty.

(b) Neither the City nor LMH 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, provided, however, that the rent payable by LMH to the City shall abate for any period during which LMH's use of the leased space is limited as a result of a Force Majeure Event. The City and LMH will use commercially reasonable efforts to minimize the delay caused by any Force Majeure Event and to resume affected performance when reasonably possible. The City will be solely responsible for all repairs and reconstruction -- which repairs and construction will be at its discretion -- of the Sports Pavilion Lawrence and the lease spaced following a Force Majeure Event.

(c) In the event that a Force Majeure Event prevents either party from performing under the Lease Agreement for a period of 180 days, then either party, upon written notice to the other, may terminate this Lease Agreement. In such event, the City shall pay to LMH a pro-rated share of the Rent paid by LMH for the quarter in which the Force Majeure Event occurred. Upon such termination and the refund of any Rent, if any, 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.

11. Fixtures. Subject to the City's prior approval, LMH may install such equipment and business and trade fixtures, as it deems necessary, and such items shall remain the property of LMH and shall be removed by LMH prior to the termination of this Lease Agreement. LMH shall repair any damage occasioned by removal.

12. Subordination. This Lease Agreement shall be subject to and subordinate to any mortgage or deed of trust ("Mortgage") now or at any time hereafter constituting a lien or charge upon the leased space or Sports Pavilion Lawrence. LMH shall, at any time hereafter, on demand, execute any instruments, releases, or other documents that may be required by any mortgagee for the purpose of subjecting and subordinating this Lease Agreement to the lien of any such Mortgage; provided that the City shall use commercially reasonable efforts to obtain from the holder of the Mortgage a nondisturbance agreement.

13. Eminent Domain. If the leased space is rendered untenantable by reason of a condemnation (or by a deed given in lieu thereof), including but not limited to loss of access or sufficient parking, then either party may terminate this Lease by giving written notice of termination to the other party within thirty (30) days after such condemnation, in which event this Lease Agreement shall terminate effective as of the date of such condemnation. If such condemnation does not render the leased space untenantable, this Lease Agreement shall continue in full force and effect and the City shall promptly restore the portion not condemned to the extent reasonably possible to the condition existing prior to the condemnation.

14. Insurance.

(a) LMH agrees to procure and maintain, at its sole costs and expense, from responsible companies authorized to do business in the State of Kansas 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 $500,000.00 each occurrence or the equivalent; and (ii) Workers’ Compensation in amounts required by applicable law.

(b) LMH shall, as a material condition of this Lease Agreement, prior to the commencement of any work, deliver to the City Clerk a certificate or certificates of insurance that the above insurance is in force, that the City has been named as an additional insured, and that said policies of insurance will not be cancelled or materially changed with respect to areas and entities covered without first giving the City thirty (30) days prior written notice. LMH shall make available to the City, on request, the policies declarations pages and a certified copy of the policies in effect so that limitations and exclusions can be evaluated for appropriateness of overall coverage.

15. Indemnification.

(a) During the time that this Lease Agreement is in effect, LMH 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 related to LMH's use of the leased space or any portion thereof or the maintenance thereof, on account of any injury to persons or damage to property. This indemnification clause shall not apply to any injury or damage caused by the City’s own negligent, reckless, or intentional actions, or that of its agents.

(b ) During the time that this Lease Agreement is in effect, the City agrees to indemnify, defend, save, and hold harmless LMH, its officers, trustees, 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 related to LMH's use of the leased space or any portion thereof or the maintenance thereof, on account of any injury to persons or damage to property. This indemnification clause shall not apply to any injury or damage caused by LMH’s own negligent, reckless, or intentional actions, or that of its agents.

16. Quiet Possession. The City covenants that LMH, on paying the Rent and performing the covenants herein required, shall and may peaceably and quietly have, hold, and enjoy the leased space during the term of this Lease Agreement, free from any disturbance by the City, its agents or employees, or others acting within the control of the City.

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 LMH to the City under this Lease Agreement to which the dispute relates.

18. Termination. During the first three (3) years of this Lease Agreement it may only be terminated for a default as described herein. At any time after the first three (3) years of the term of this Lease Agreement, either party may terminate this Lease Agreement for any reason by giving the other party written Notice of Termination at least ninety (90) days written notice of such termination, except that the City may, at the City’s election, by exercise of its police powers, terminate this Lease Agreement immediately without such notice if LMH's continued use or occupancy of the leased space presents a health or safety hazard to the residents of Lawrence or users of Sports Pavilion Lawrence.

19. Assignment. This Lease Agreement may not be sold, assigned, transferred, or sublet without the prior written approval or consent of both parties.

20. 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.

21. Notice. Notice under this License Agreement shall be provided in writing to the parties at the following addresses:

Notice to the City: Notice to LMH:

City of Lawrence, Kansas Lawrence Memorial Hospital

City Manager’s Office Attn: President and CEO

6 East 6th Street 325 Maine Street

P.O. Box 768 Lawrence, Kansas 66044

Lawrence, Kansas 66044

22. 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.

23. 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.

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.

25. Governing Law. This Lease Agreement shall be governed by the laws of the State of Kansas.

26. Miscellaneous.

(a) This Lease Agreement supersedes all prior discussions and negotiations and contains all agreements and understandings between the City and LMH with respect to the subject matter hereof. This Lease Agreement may only be amended by a writing signed by all parties.

(b) 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.

(c) 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.

(d) 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

(e) The recitals are incorporated herein by reference as if set forth herein in full.

IN WITNESS WHEREOF, the undersigned have caused this Lease Agreement to be executed as of the date noted above.

CITY:

CITY OF LAWRENCE, KANSAS, a municipal corporation

________________________________

Diane Stoddard

Interim City Manager

ACKNOWLEDGMENT

THE STATE OF KANSAS )

) ss:

THE COUNTY OF DOUGLAS )

BE IT REMEMBERED, that on this ____ day of _______, 2015, before me the undersigned, a notary public in and for the County and State aforesaid, came Diane Stoddard, as Interim City Manager of the City of Lawrence, Kansas, who is personally known to me to be the same person who executed this instrument in writing, and said person fully acknowledged this instrument to be the act and deed of the aforementioned entity.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last written above.

________________________________

Notary Public

My Appointment Expires:

LMH:

LAWRENCE MEMORIAL HOSPITAL, a charitable trust established pursuant to K.S.A. 12-1615

________________________________

Eugene W. Meyer

President and CEO

ACKNOWLEDGMENT

THE STATE OF KANSAS )

) ss:

THE COUNTY OF DOUGLAS )

BE IT REMEMBERED, that on this ____ day of ______, 2015, before me the undersigned, a notary public in and for the County and State aforesaid, came Gene Meyer, President and CEO of Lawrence Memorial Hospital, who is personally known to me to be the same person who executed this instrument in writing, and said person fully acknowledged this instrument to be the act and deed of the aforementioned entity.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last written above.

________________________________

Notary Public

My Appointment Expires: