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05. Golf Course LeaseGolf Course Summary September 12, 1996 va ll Current agreement for an additional 13 years Current terms generating an average of $5,355 ('85-'95) KGA Proposal - 25 year term Manager's Proposal- 20 year term (anything over 10 years is against my better judgement) 20 years was laid on the table by the City previously - 20 years is needed for long term financing Rent KGA Proposal - $10,000 base - 15% of net profits Z% increase every 5 years; annual payment $10,000-? Manager's Proposal- $15,000 base - 1.5% of gross (golf) revenues (defined in agreement) based on rolling 5 year average - projected payment - $27-26,000 annually KGA Proposal - Approval for improvements over $25,000 Manager's Proposal- Reporting for improvements under $25,000 KGA Proposal - Increase of up to 10% for fees without Council approval Manager's Proposal- Increase of up to 10% for fees without Council approval KGA Proposal - Review of financial records Manager's Proposal- Review of financial records and right to audit at City's costs KGA Proposal - Fire Insurance -credit to City rent payment Manager's Proposal- Fire Insurance paid by KGA in addition to rent KGA Proposal - Five year increment dispute resolution -with arbitrator Manager's Proposal- Five year increment dispute resolution -without possibility of arbitration KGA Proposal - Lower rent Longer term Arbitrator No audit potential Based upon "net increased assets" Fire insurance deductibility Manager's Proposal- Higher rent 1 Shorter term Five year rolling average Based upon gross golf revenues City audit capability Fire insurance premium reimbursement 100% Evens out the fluctuation of revenue to City Allows better budget projections for City and for KGA Manager's Proposal- More equitable to City More accuracy More predictable More control by City/KGA rather than third - party arbitrator Shorter term arrangement will allow for adjustment in a "reasonable" period 2 01 �Jl!v Incorporated 1892 Telephone (406) 758-7700 Douglas Rauthe FAX (406) 758-7758 Mayor Post Office Box 1997 Kalispell, tilontana Clarence W. Krepps Zip 59903-1997 City Manager City Council Members: September 10, 1996 Gary W. Nystul Ward I Cliff Collins wards Mr. Steve Dunfee Manager Norbert F. Donahue Buffalo Hill Golf Course Ward11 Post Office Box 1116 Dale Haarr Kalispell, MT 59901 Ward 11 Dear Steve, Jim Atkinson Ward III on July 12, 1996 the City received from your association a Lauren Granmo counter -proposal of the lease that was presented by Mr. Thelen. Ward III I have reviewed the proposal and have discussed the terms with Pamela B. Kennedv Council members, Mayor, and Staff. To be frank, it will not be Wardle approved. Therefore, I wish to present some alternatives for your consideration. M. Duane Larson Ward IV As I am sure you already know, the City Council must approve the lease terms by 2/3 vote (6) and it must then be presented to the voters for a majority approval. It is in our (City and Golf Association) best interest to make the fairest deal for both parties. There apparently is some strong perception that the association has not been paying a "fair share" to the City. Whether this is true or not depends upon the side of the table one is sitting on. In an effort to bring all sides of the table to the center, I would recommend the following major factors be included within the lease term. These reference changes are incorporated within the proposed lease form I have enclosed for your review and consideration: 1. Section 2 - Change term to 20 years from the proposed 25 years. The shorter term will have a better chance for approval. If the City had not already offered twenty, I would recommend only a ten year, term because of my general philosophy that opposes long-term agreements. 2. Section 3 - Rent - Change base rent from $10,000 to $15,000 and from 15% of net increase in assets to 1.5% of annual gross receipts (derived from golf only - includes green fees, membership fees, punch tickets, driving range) based upon the most immediate 5 years rolling averages. (See definition of gross receipts in prior City proposal.) Steve Dunfee September 10, 1996 Page 2 Section 3, Paragraph 1 - delete entire paragraph. 3. Section 12 - add - Association's financial records will be subject to an annual audit conducted by the City (internal staff or contracted auditor). The cost of such audit would be entirely paid by the City. 4. Section 14 - City shall pay Fire insurance for the facility but the association shall reimburse City 100% for the annual cost of such insurance. In the event the City cannot obtain fire insurance for the facility, the Association will accept the responsibility to do so. 5. Section 17 - Leave in the reopener for dispute resolution but delete all references to arbitration. 6. Section 18 - Upon agreement of a new lease, all "old" lease items will be terminated. This proposal will allow the City to share in the good and/or bad years in terms of golf course receipts. The "rolling" five year average gross receipts clause protects both parties from large "spikes" in terms of rent payment. Instead, it will dictate "incremental" changes to the payments to the City and allow the association to be able to more realistically predict and budget for the City's payment. The audit will assure protection of the citizen interest (if and/or when it is deemed necessary). The elimination of an arbitrator will assure both parties that we will be making the final decision for "our" golf course - not some third party that has no interest in the good of the City or golf members. If these changes are acceptable to the Association, I will be comfortable in presenting a recommendation to the Council/Mayor that would request their approval. If you have any further concerns or questions, please feel free to contact me. Respectfully, D1-1----Z Clarence W. Krepps City Manager CWK/ksk LEASE THIS LEASE, made and entered into as of the by and between the City of Kalispell, Montana, a Municipal Corporation, hereinafter referred to as LESSOR, and the Kalispell Golf Association, a Montana Corporation, hereinafter referred to as LESSEE, W I T N E S S E T H: For and in consideration of the mutual covenants and promises hereinafter set forth, the parties hereto agree as follows: 1. PROPERTY: LESSOR hereby leases to LESSEE and LESSEE hereby leases and hires from LESSOR those certain premises and all appurtenances thereto situated in Kalispell, Flathead County, Montana, as follows: All of that property owned by LESSOR and commonly known, referred to and utilized as the Kalispell City Golf Course. Attached as Exhibit "A" is a map with the subject premises outlined. Attached is Exhibit "B" which identifies the boundary and fence line between the golf course and the north portion of the old Lawrence Park.. The total area consists of approximately 240 acres. 2. TERM: TO HAVE AND TO HOLD the above rented premises during the full term of twenty (20) years, which term shall begin upon the date of approval of this lease as required by section 7-8- 4201 (2)(b) MCA, and shall terminate upon the expiration of said 1 full twenty year term, unless terminated sooner as hereinafter provided. 3. CR05S RECEIPTS: For purpose of this Lease "Gross Receipts" shall be defined as all gross receipts obtained by LESSEE from the operation of the driving range (golf ball rentals), membership fees (season passes), the sale of green fee punch cards and other green fees. All other receipts shall not be defined as gross receipts under the provisions of this lease and shall be and remain the sole income of LESSEE. The definition of "Gross Receipts" as specified herein, shall be subject to renegotiation under paragraph #18 of this lease. 4. RENT: LESSEE shall pay to LESSOR, as rent, a sum to be determined annually as herein provided payable on or before the 30th day of June, commencing with June 30, and continuing on the 30th day of June throughout the term of this Lease. The annual rent for the full term of this lease, shall be the sum of: (1) a base rent of $15,000 and (2) 1 5% of the Gross Receipts (as defined above)based upon the most current five 51 year rolling average. Said rent payment shall be mailed or delivered to LESSOR at the Kalispell City Hall. All prior rents due by LESSEE to LESSOR under that certain lease dated July 1, 1988 are hereby deemed and agreed to be paid in full and let it be known and agreed that this lease dated supersedes any and all Leases between the Kalispell Golf Association and the City of Kalispell. Pq 5. USE OF LEASED PREMISS: LESSEE shall use the leased premises for the primary purpose of operating a municipal golf course; however, LESSEE shall also encourage members of the general public to utilize said premises for such other purposes as cross- country skiing, sledding and jogging, subject however, to reasonable rules and regulations regarding the conduct of such activities as may be promulgated from time to time by LESSEE. LESSEE agrees to observe all Federal, State and municipal laws and regulations including those related to human and equal rights and in particular Bureau of Outdoor Recreation regulations. 6. MAINTENANCE AND REPAIR OF PREMI E: LESSEE agrees to maintain the above described premises in as good a condition as the same are in at this time, or as good as they may be put by LESSOR during the term hereof in case of a casualty loss causing repair or reconstruction by LESSOR; and to return said property to LESSOR at the expiration of said lease in said condition, reasonable wear and tear and damage by the elements alone excepted. In the event LESSEE refuses or neglects to keep the above -mentioned premises in such order and condition hereinabove mentioned, LESSOR shall have, after first giving ninety (90) days written notice to repair, the right to declare this lease null and void and of no further force and effect. In this case the annual payments of rent shall terminate and LESSEE shall not in any way be responsible for any future rent payments, over the prP-millisess shall. LESSEE agrees to maintain and keep in 3 repair all water lines and pumps on said golf course, and to attend to the shutting off of the water supply and draining of all pipe lines in the fall, and to turn the water in to said system in the spring. 7. ALTERATIONS AND IMPROVEMENTS: LESSEE shall not make any alterations or improvements to the premises or the appurtenances located thereon in excess of twenty-five Thousand Dollars ($25,000.00) at any one time without having first received approval from the LESSOR of the intended alteration or improvement. LESSEE shall report to LESSOR annually on alterations and improvements costing less than $25,000.00. 8. UTILITIES: During the entire term of this lease LESSEE shall pay when due for required utilities serving the leased premises, including but not limited to, electrical, gas, telephone, water, sewer and garbage services. LESSEE shall also be entitled to continue use of LESSOR's appropriated water right of the Stillwater River adjacent to the golf course premises without charge. LESSEE in using the water from the Stillwater River under said water rights shall operate and maintain the system and pump for such purposes. 9. PERSONAL PROPERTY AND FIXTURES: All personal property hereinbefore or hereinafter obtained in connection with the operation and maintenance of the Kalispell City Golf Course shall be the property of LESSEE; provided, however, that all fixtures that have been or may be installed on the premises and attached thereto have or will become part of the premises and are the 4 property of LESSOR. 10. CST OF OPERATION: All costs of operation including the cost or providing supplies, equipment, tools, labor and other such items and the entire cost of maintaining and operating the golf course, the club house and other appurtenances shall be the sole responsibility of LESSEE. 11. USE OF CLUBHOUSE BY LESSOR: Although LESSEE shall have the exclusive use and supervision of all buildings on said premises including that structure known as the clubhouse, it is agreed that LESSOR shall be entitled to use of the clubhouse at any convenient time to LESSEE upon adequate notice with LESSOR reimbursing LESSEE for all actual expenses incurred by LESSEE for the reason of any such use by LESSOR. 12. GOLF COURSE FEES: A schedule of membership fees (season passes), green fees punch cards and other green fees shall be presented by LESSEE to LESSOR prior to the first day of April of each year of this Lease. The schedule for such fees for the 1996 golfing season is attached hereto as Exhibit "C", and by this reference made a part hereof. LESSEE, at its discretion, may from year to year, during the term of this Lease, increase or decrease its Schedule of Fees, then in effect, up to ten percent (10%) without prior approval of such an increase from LESSOR. LESSOR shall not unreasonably withhold its approval of any proposed Fee Schedule for which its approval may be required under this Lease. 13. LESSEE'S FINANCIAL REPORTS: Annually, on or before the 5 first day of November, in conjunction with the payment of the annual rent, LESSEE shall present to LESSOR for review a copy of LESSEE's annual financial report completed in accordance with generally accepted accounting principles. The Association's financial records will be subject to an audit conducted by, and at the option of, the City (internal staff or contract auditor). —The cost of such audit shall be paid by the City. 14. _LES2EE'S LIABILITY INSURANCE: LESSEE shall obtain and keep in full force and effect during the term of this lease, full general liability insurance in the amount of One Million, Five Hundred Thousand Dollars ($1,500,000.00) with a company licensed to do business in the State of Montana; and said policy of insurance shall name LESSOR as additional named insured. LESSOR shall be furnished with a certificate that such insurance is in force and the same shall provide for reasonable notification to LESSOR prior to the same being cancelled. LESSEE agrees to hold LESSOR harmless from any and all liability of any nature, whatsoever, arising from or out of LESSEE's possession, use, maintenance, improvement or occupancy of the property herein described; LESSEE further agrees to defend, at LESSEE's expense, any action brought against LESSOR arising out of LESSEE's possession, use, maintenance, improvement or occupancy of said property. 15. FIRE INSURANCE: During the full term of this lease, LESSOR shall maintain its own fire insurance adequate to cover replacement costs on the improvements on said premises. LESSEE shall pay the annual premium cost of such insurance whiciY 2 de-termirred—in Sectix-M-4v Should the premises during the term of this lease suffer damages which are covered by said fire insurance policy, LESSOR agrees to utilize all insurance reimbursements therefore, towards rebuilding or repairing the damaged premises, or towards providing adequate replacement facilities. The contents of buildings and fixtures located on the premises shall be insured by LESSEE and shall be in such amounts as to assure replacement. The parties mutually agree as to waiver of subrogation rights each with the other. 16. DEFAULT AND BANKRUPTCY: In the event that: (a) LESSEE shall default in the payment of any installment of rent or other sum herein specified and such default shall continue for thirty (30) days after written notice thereof; or (b) LESSEE shall default in the observance or performance of any other of LESSEE's covenants, agreements, or obligations hereunder and such default shall not be corrected within ninety (90) days after written notice thereof; or (c) LESSEE shall be declared bankrupt or insolvent according to law, or, if any assignment shall be made of LESSEE's property for the benefit of creditors; LESSOR shall have the right thereafter, when such default continues, to re-enter and take complete possession of the leased premises, according to law, and to declare the term of this lease 7 ended, and to remove LESSEE's effects, without prejudice. In doing so no additional rent payments may be collected from LESSEE; however, if LESSEE shall default, after reasonable notice thereof, in observance or performance of any conditions or covenants on LESSEE's part to be observed or performed by virtue of any of the provisions in any article of this lease, LESSOR, without being under any obligation to do so and without thereby waiving such default, may remedy such default for the account and at the expense of LESSEE. 17. NOTICE: No notice from LESSOR to LESSEE relating to the leased premises or the occupancy thereof, shall be deemed duly served unless personally served upon or mailed to LESSEE, registered or certified mail, return receipt requested, postage prepaid, and addressed to LESSEE at its address as follows: Manager, Kalispell City Golf Course Post Office Box 1116 Kalispell, Montana 59903 Any notice from LESSEE to LESSOR relating to the leased premises or the occupancy thereof, shall be deemed duly served, if personally served upon or if mailed to LESSOR by registered or certified mail, return receipt requested, postage prepaid, and addressed to LESSOR at the address as follows: Mayor City of Kalispell Drawer 1997 Kalispell, Montana 59903-1997 18. FIVE YEAR DISPUTE RESOLUTION: At the end of each five years of this lease it is hereby agreed that either party may upon written notice given to the other ninety (90) days prior to 8 I September 30 of the fifth year, tenth year and fifteenth year, specify in writing that there are matters contained in the lease (other than the percentage of gross and the length of term) which because of a sense of urgency and import require discussion and possible renegotiation. agreed—be-tween the parties heret.- the the terms and provisions and in ft2i! force and C. ect throuqhc,�� r-emd r of th erms of hat agre L�-Ikt U1L.L1Z;Z3.-> OL1perSed1__ _CXIM replaced -by this lease tpon approval bry the electors of the E!ity of R-a���escribed i-e in. 20. TIME OF ESSENCE AND BINDING EFFECT: It is mutually agreed by and between the parties hereto that the time of payment shall be an essential part of this lease agreement, and that all of the covenants and agreements herein contained shall extend to and be binding upon the parties hereto, and their successors and assigns. 0 IN WITNESS WHEREOF, the parties have executed this lease as of the date first above written. ATTEST: CITY OF KALISPELL Clerk Mayor ATTEST: KALISPELL GOLF ASSOCIATION Association Secretary President W 1 t t P.O. Box 1116 KaGspeq, Montana SMI Phone (406) 7W.4545 September 11, 1996 Mr. Clarence Krepps City Manager P.O. Box 1997 Kalispell, MT 59903 Dear Clarence, Thank you for your lease proposal dated September 10, 1996. After thorough review of this offer, the Kalispell Golf Association Lease Negotiation Committee has concluded that in the best interest of the association, the terms of this offer cannot be accepted. As we have discussed Clarence, severely declining revenues over the past several years, 54 new golf holes built in the Flathead Valley in the last five years, (27 more scheduled to open next year) and declining tourism in our area presents a very challenging economic scenario for Buffalo Hill Golf Course. More than ever, we must remain price competitive in order to compete for local and guest players. At the same time, Buffalo Hill is in dire need of new greens and tee boxes at an estimated cost of $875,000. Unless these improvements are made, Buffalo Hill will continue to lose play to newly constructed local golf courses. The Kalispell Golf Association Board of Directors respectfully request our offer dated 7-10-96 be considered by the City Council at the September 23, 1996 City Council meeting as originally agreed by Interim City Manager Al Thelen. This proposal, as described in my letter of 7-11-96, correctly ties the lease payment required by the KGA to the ability to pay based on results of operation for any given year. Thank you in advance Clarence for your cooperation. If you need any additional information please feel free to give me a call at 756-4549. Sincerely, Stephen C. Dunfee Operations Manager enclosure: KGA lease proposal of 7-10-96. THIS LEASE, made and entered into as of the 1st day of I by and between the City of Kalispell, Montana, a Municipal Corporation, hereinafter referred to as LESSOR, and the Kalispell Golf Association, a Montana Corporation, hereinafter referred to as LESSEE, W I T N E S E T H: For and in consideration of the mutual covenants and promises hereinafter set forth, the Parties hereto agree as follows: . 1. PROPERTY: LESSOR hereby leases to LESSEE and LESSEE hereby leases and hires from LESSOR those certain premises and all appurtenances thereto situated in Kalispell, Flathead County, Montana, as follows: All of that property owned by LESSOR and commonly known, referred to, and utilized as the Kalispell City Golf Course. Attached as Exhibit "All is a map with the subject premises outlined. Attached is Exhibit "B" which identifies the boundary and fence line between the golf course and the north portion of the old Lawrence Park.. 2. TERM: TO HAVE AND TO HOLD the. above rented premises during the full term of twenty-five (25) years, which term shall begin upon the date of the approval of this lease as required by section 7-8-4201(2) (b) MCA, and shall terminate upon the expiration of said full twenty-five year term, unless terminated sooner as hereinafter provided. 3. RENT: LESSEE agrees to pay LESSOR, as rent, the sum of 1 Ten Thousand Dollars ($10, 000. 00) plus fifteen percent (15. 00%) of Lessee's annual Net Increase in Assets as defined by generally accepted accounting principles, payable in arrears, on or before the 30th day of June, commencing with June 30, _ and continuing on the 30th day of June throughout the term of this Lease. The full term of this Lease shall be divided into five ( 5 ) equal five year segments. At the end of the first five year period, and at the end of each subsequent five year period, the Parties shall review the financial situation of LESSEE for the purpose of determining the amount of rent to be paid for the next five year period. It is agreed that in no event shall the amount of rent be raised or lowered for any subsequent five year period by more then one-half of one percent (0.5?,;) of said annual Net Increase in Assets. Once raised or lowered, that rent will apply for the next five year period. Said rent payment shall be mailed or delivered to LESSER at the Kalispell City Hall. All prior rents due by LESSER to LESSOR under that certain Lease, dated July 1, 1988, are hereby deemed and agreed to be paid in full, and let it be known and agreed that this Lease, dated supersedes any and all Leases between the Kalispell Golf Association and the City of Kalispell. 4. USE OF LEASED PREMISES: LESSEE shall use the leased premises for the priinary purpose of operating a municipal golf course; however, LESSEE shall also encourage members of the general public to utilize said premises for such other purposes as cross-country skiing, sledding and jogging, subject however, to 2 reasonable rules and regulations regarding the conduct of such activities as may be promulgated from time to time by LESSEE. LESSEE agrees to observe all Federal, State, and municipal laws and regulations, including those related to human and equal rights, and in particular Bureau of Outdoor Recreation regulations. 5. MAINTENANCE AND REPAIR OF PREMISES: LESSEE agrees to maintain the above described premises in as good a condition as the same are in at this time, or as good as they may be put by LESSOR during the term hereof in case of a casualty loss causing repair, or reconstruction by LESSOR; and to return said property to LESSOR at the expiration of said Lease in said condition, reasonable wear and tear and damage by the elements alone excepted. In the event LESSEE refuses or neglects to keep the above mentioned premises in such order and condition hereinabove mentioned, LESSOR shall have, after first giving ninety (90) days written notice to repair, the right to declare this Lease null and void and of no furtherr force and effect. In this case the annual payments of rent shall terminate and LESSEE shall not in any way be responsible for any future rent payments. LESSEE agrees to maintain and keep in repair all water lines and pumps on said golf course, and to attend to the shutting off of the water supply and draining of all pipe lines in the fall, and to turn the water in to said system in the spring. 6. ALTERATIONS AND IMPROVEMENTS: LESSEE shall not make any alterations or improvements to the premises or the appurtenances located thereon in excess of. Twenty Five Thousand Dollars ($25,000.00) at any one time without having first received approval 3 from the LESSOR of the intended alteration or improvement; which said approval shall not be unreasonably withheld by Lessor. 7. UTILITIES: During the entire term of this Lease, LESSEE shall pay when due for required utilities serving the leased premises, including but not limited to, electrical, gas, telephone, water, sewer, and garbage services. LESSEE shall also be entitled to continue use of LESSOR's appropriated water right of the Stillwater River adjacent to the golf course premises without charge. LESSEE, in using the water from the Stillwater River under said water rights, shall operate and maintain the system and pump for such purposes. 8. PERSONAL PROPERTY AND FIXTURES: All personal property hereinbefore or hereinafter obtained in connection with the operation and maintenance of the Kalispell City Golf Course shall be the property of LESSEE; provided however, that all fixtures that have been or may be installed on the premises and attachedithereto have or will become part of the premises and are the property of LESSOR. 9. COST OF OPERATION: All costs of operation, including the cost of providing supplies, equipment, tools, labor, and other such items and the entire cost of maintaining and operating the golf course, the club house and other appurtenances shall be the sole responsibility of LESSEE. 10. USE OF CLUBHOUSE BY LESSOR: Although LESSEE shall have the exclusive use and supervision of all buildings of said premises including that structure known as the club house, it is agreed that LESSOR shall be entitled to use of the club house at any convenient time to LESSEE upon adequate notice with LESSOR reimbursing LESSEE for all actual expenses incurred by LESSEE for the reason of any such use by LESSOR. 11. GOLF COURSE FEES: A schedule of membership fees (season passes) , green fee punch cards and other green fees shall be presented by Lessee to Lessor prior to the first. day of April of each year of this Lease. The schedule of such fees for the 1996 golfing season is attached hereto as Exhibit "C", and by this reference made a part hereof. LESSEE, at its discretion, may from year to year, during the term of this Lease, increase or decrease its Schedule of Fees, then in effect, up to ten percent (10W) without prior approval of such an increase from Lessor. LESSOR shall not unreasonably withhold its approval of any proposed Fee Schedule for which its approval may be required under this Lease. z All fees other than those included on Exhibit "C" shall be established at LESSER's sole discretion. 12. LESSEE'S FINANCIAL REPORTS: Annually, on or before the 30th day of June, in conjunction with the payment of the annual rent, LESSEE shall present to LESSOR for review, a copy of LESSEEEIs annual financial report completed in accordance with generally accepted accounting principles. 13. LESSEE'S LIABILITY INSURANCE: LESSEE shall obtain and keep in full force and effect during the term of this Lease, full general liability insurance in the amount of One Million, Five 5 Hundred Thousand Dollars ($1, 500, 000. 00) with a company licensed to do business in the State of Montana; and said policy of insurance shall name LESSOR as additional named insured. LESSOR shall be furnished with a certificate that such insurance is in force and the same shall provide for reasonable notification to LESSOR prior to the same being canceled. LESSEE agrees to hold LESSOR harmless from any and all liability of any nature, whatsoever, arising from or out of LESSEE's possession, use, maintenance, improvement, or occupancy of the property herein described; LESSEE further agrees to defend, at LESSEE'S expense, any action brought against LESSOR arising out of LESSEE's possession, use, maintenance, improvement, or occupancy of said property. 14. FIRE INSURANCE: During the full term of this Lease, LESSOR shall maintain its own fire insurance adequate to cover replacement costs on the improvements of said premises. LESSEE shall pay the annual premium cost of such insurance which cost shall be credited to LESSEE'S annual rental obligation as determined in Section 3, hereof. Should the premises during the term of this Lease suffer damages which are covered by said fire insurance policy, LESSOR agrees to utilize all insurance reimbursements therefore, towards rebuilding or repairing the damaged premises, or towards providing adequate replacement facilities. The contents of buildings and fixtures located on the premises shall be insured by LESSEE and shall be in such amounts as to assure replacement. The Parties mutually agree as to waiver of subrogation rights each with the other. A 15. DEFAULT AND BANKRUPTCY: In the event that: (a) LESSEE shall default in the payment of any installment of rent or other sum herein specified and such default shall continue for thirty (30) days after written notice thereof, or (b) LESSEE shall default in the observance or performance of any other of LESSEE's covenants, agreements, or obligations hereunder and such default shall not be corrected within ninety (90) days after written notice thereof; or (c) LESSEE shall be declared bankrupt or insolvent according to law, or, if any assignment shall be made of LESSEE's property for the benefit of creditors; LESSOR shall have the right thereafter, when such default continues, to re-enter and take complete possession of the leased premises, according to law, and to declare the term of this Lease ended, and to remove LESSEE Is effects, without prejudice. In doing so no additional rent payments may be collected from LESSEE; however, if LESSEE shall default, after reasonable notice thereof, in observance or performance of any conditions or covenants on LESSEE's part to be observed or performed by virtue of any of the provisions in any article of this Lease, LESSOR, without being under any obligation•to do so and without thereby waiving such default, may remedy such'default for the account and at the expense of LESSEE. 16. NOTICE: No notice from LESSOR to LESSEE relating to the 7 leased premises or the occupancy thereof, shall be deemed duly served unless personally served upon or mailed to LESSEE, registered or certified mail, return receipt requested, postage prepaid, and addressed to LESSEE at its address as follows: Manager, Kalispell City Golf Course Post Office Box 1116 Kalispell, Montana 59903 Any notice from LESSEE to LESSOR relating to the leased premises or the occupancy thereof, shall be deemed duly served, if personally served upon or if mailed to LESSOR by registered or certified mail, return receipt requested, postage prepaid, and addressed to LESSOR at the address as follows: Mayor City of Kalispell Drawer 1997 Kalispell, Montana 59903-1997 10 17. FIVE YEAR DISPUTE RESOLUTION: It is hereby agreed that either Party may, upon written notice given to the other ninety (90) days prior to the end of the fifth year, tenth year, fifteenth and twentieth year of this Lease specify in writing that there are matters contained in the Lease (other than the annual rent and the length of term provided herein) which because of a sense of urgency and import require discussion and possible renegotiation. It is further agreed that any such discussions and renegotiations shall take place and be concluded within sixty (60) days from the date of the notice; otherwise they shall be 91 arbitrated within the last thirty (30) day period of the notice (in other words, thirty days prior to end of the Lease year involved)• Arbitration shall involve three arbitrators with one being chosen by each of the Parties and the two of those arbitrators selecting a third. Results of the arbitration shall be binding and have the effect of a District Court judgment as though rendered by a District Court Judge in Flathead County, Montana. 18. EXISTING LEASE: It is mutually understook and agreed between the parties hereto that no actions taken or not taken by either party in the negotiation or execution of this agreement shall constitute a waiver of any rights that either party may now have or hereafter have relating to or arising out of the existing Lease between the City of Kalispell and the Kalispell Golf Association dated July 1, 1988; and, each party specifically reserves the right to present any claim or defense to any claim relating to or arising out of said Lease. 19. TIME OF ESSENCE AND BINDING EFFECT: It is specifically understood that the time of payment shall be an essential part of the Lease Agreement, and that all of the covenants and agreements herein contained shall extend to and be binding upon the Parties hereto, and their successors and assigns. IN WITNESS WHEREOF, the Parties have executed this Lease as of the date first above written. ATTEST: CITY OF KALISPELL Clerk -Treasurer Mayor ATTEST: KALISPELL GOLF ASSOCIATION Association Secretary President m 10 -.J 2 Q (A W V) Q CL Q a Rl 00 O CAM O M 0p0 lam. N .-. 64 69 64 EA O 00 O M O! N qI cc in .-. b+4 69 64 6O} ®p ~ N r.. 64 69d 6� iii 6R N Obis v�'� ... 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