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Gross to KAA/Hangar Site 9 and Hangar Site 10ASSIGNMENT OF HANGAR LEASE By a lease dated the 3rd day of June, 2006 (the "Lease") the City of Kalispell, the Assignor, as Landlord leased to J. Peter Gross, tenant, for a term (the "Term") of one year, commencing on the 1st day of July, 2006, certain premises (the "Premises") located at the Kalispell City Airport, in Kalispell, Montana, and as further described as: Improvement No. 1038 on Hangar Site No. 9 and Improvement No. 1010 on Hangar Site No. 1, each located at the Kalispell City Airport in the Northwest Quarter of the Northwest Quarter of Section 20, Township 28 North, Range 21 West, P.M.M., Flathead County, Montana The Assignor has agreed to assign the Lease to the Kalispell Airport Association, Inc., a Montana corporation, as Assignee subject to the terms and conditions herein set out. NOW THEREFORE THIS ASSIGNMENT WITNESSES that in consideration of the mutual covenants and agreements herein contained and the sum of One Dollar ($1.00) paid, the receipt and sufficiency of which hereby acknowledged, the parties hereby agree as follows: Assignment as of and from April 1, 2018, the Assignor transfers, sets over and assigns the Lease, the right to enter into a month to month lease and all privileges and appurtenances belonging thereto, together with the unexpired residue of the Term, and the Premises and all benefits and advantages to be derived therefrom, to the Assignee. TO HAVE AND TO HOLD the same unto the Assignee, subject to the obligations of the Assignor under the terms of the Lease and the observance and performance of the covenants and conditions in the Lease to be observed and performed on the part of the Landlord. In the event of default by Assignee of Master Lease, the Lease shall revert to Assignor. CITY PFICkLISPELL By:-= Do g Ru 1J City Manager STATE OF MONTANA ) ) ss. County of Flathead ) On this '2:Z day of March, 2018, before me, a Notary Public for the State of Montana, personally appeared Doug Russell, City Manager of the City of Kalispell and proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year hereinabove first written. AIMEE BRUNCKNORST ��gpUNCKy�9 apTAA(, '-.,P NOTARY PUBLIC for the State of Montana *; ' $EALe Residing at Lakeside, Montana N�9r �e2 My Commission Expires FOP MON December 4, 2020 NOTARY PUBLIC State of Montana Printed Name: Residing at: My Commission expires: AIRPORT HANGAR LEASE This lease and Operating Agreement (the "Agreement") entered into as of the Srday of June, 2006, by and between the City of Kalispell, a body politic and corporate created by Montana State Statutes ("Lessor"), and J. Peter Gross of Kalispell, MT 59901, ("Lessee"). "TNESSETH: WHEREAS, Lessor now owns, controls, and operates the Kalispell City Airport (the "Airport") in the City of Kalispell, County of Flathead, State of Montana; WHEREAS, Lessee has sold its hangar facilities, described below, to Lessor; and WHEREAS, Lessor desires to continue to operate the hangar facilities and Lessee is qualified, ready, willing and able to manage the business of the hangar facilities. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement, the parties hereby agree as follows: ARTICLE I TERM The term of this Agreement shall be for a period of one (1) year, commencing on the I st day of July, 2006, and continuing through the 301h day of June, 2007 (the "Termination Date"), unless earlier terminated under the provisions of this Agreement. At the termination date and in the event the Lessor determines that the airport expansion project will not begin within the following twelve months, the lease term shall be extended for an additional year. ARTICLE II LEASED PREMISES Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the following premises Improvement No. 1038 on Hangar Site No. 9 and Improvement No. 1010 on Hangar Site No. 1, each located at the Kalispell City Airport in the Northwest Quarter of the Northwest Quarter of Section 20, Township 28 North, Range 21 West, P.M.M., Flathead County, Montana together with the right of ingress and egress for both vehicles and aircraft. ARTICLE III RIGHTS AND OBLIGATIONS OF LESSEE Required Services. Lessee is hereby granted a leasehold in the above -described premises, and Lessee agrees to engage in the business of subletting the available hangar space in the facility and generally managing the hangar facility to provide the Lessor with a reasonable return on its investment. Lessee shall provide to Lessor, copies of all leasehold agreements and submit any changes or new leases to the Lessor at the time it submits its lease payments to the Lessor. Lessee shall comply with all federal, state and local laws, rules and regulations which may apply to the conduct of the business contemplated, including rules and regulations promulgated by Lessor, and Lessee shall keep in effect and post in a prominent place all necessary and/or required licenses or permits. AIRPORT HANGAR LEASE - Page 1 of 8 Lessee shall be responsible for the maintenance and repair of the Premises and shall keep and maintain the Premises in good condition, order and repair, and shall surrender the same upon the expiration of this Agreement, in the condition in which they are required to be kept, reasonable wear and tear and damage by the elements not caused by Lessee's negligence excepted. Salvage of Improvements. In the event and at such time as the Lessor determines that the subject improvements are to be removed from the Kalispell City Airport property, it shall give such notice to the Lessee. Lessee shall then have the right to elect to salvage the structures. Lessee shall notify Lessor within ten days of receiving notice of removal to advise the Lessor of its election. If Lessee elects to salvage the structures, Lessee shall have 90 days thereafter to remove the structures. Lessee shall also be obligated to demolish and remove the foundations, restore the ground to the appropriate grade and reseed the ground. These tasks may be accomplished beyond the 90-day requirement if weather conditions are not appropriate for such work. ARTICLE IV APPURTENANT PRIVILEGES Use of Airport Facilities. Lessee shall be entitled, in common with others authorized, to the use of all facilities and improvements of a public nature which now are or may hereafter be connected with or appurtenant to the Airport, including the use of landing areas, runways, taxiways and aircraft parking areas designated by Lessor. ARTICLE V PAYMENTS A. Rent and Fees. In consideration of the rights and privileges granted by this Agreement, Lessee agrees to pay to Lessor during the term of this Agreement the sum equal to fifty percent of all rents due and owing but not less than $500.00 per month in addition to the appropriate commercial fees for the operation of a hangar leasing business at the airport. Lessee shall provide Lessor with copies of all effective subleases. B. Payments. The rental payment specified above shall be paid no later than the 15t' day of each month, the first payment, being prorated from the date of sale, being paid on the �O day of S4e, 2006. C. Delinquency Charge. A delinquency charge of 5% per month shall be added to payments required which are rendered more than ten (10) days delinquent. D. Place of Payment. All payments due Lessor from Lessee shall be delivered to the City of Kalispell at P.O. Box 1997, Kalispell, MT 59903-1997. ARTICLE VI UTILITIES Lessee shall have the right to use the utility service facilities located on the Premises at the commencement of the term of this Agreement. In the event Lessee fails to pay any utility bills when due, Lessor may, at its option, pay the same and collect from Lessee the amounts so disbursed, plus interest at the rate of 1 % per month or fraction thereof. AIRPORT HANGAR LEASE - Page 2 of 8 ARTICLE VII INSURANCE A. Required Insurance. Lessee shall obtain and maintain continuously in effect at all times during the term of this Agreement, at Lessee's sole expense, Aviation General Liability coverage in the minimum amount of $1,000,000.00. Lessee may require his tenants to obtain and maintain such coverage and in such event that such proof is given to the Lessor, shall thereby meet this obligation. B. Notice. Lessor agrees to notify Lessee in writing as soon as practicable of any claim, demand or action arising out of an occurrence covered hereunder of which Lessor has knowledge, and to cooperate with Lessee in the investigation and defense thereof. C. Property Insurance. Lessor shall obtain and maintain continuously in effect at all times during the term of this Agreement, at Lessor's sole expense, property insurance on the respective hangars, including fire insurance. The minimum coverage shall be equal to the value of replacing the structures thereon. Additionally, Lessor shall include this property on its liability insurance as to any liability which may arise either by the Lessor's actions, or the actions or inactions of Lessor's agents or employees, or from the Lessor's property. ARTICLE VIII INDEMNIFICATION To the extent not covered by insurance carried in favor of Lessor, Lessee shall keep and hold harmless Lessor from and against any and all claims, demands, suits, judgments, costs and expenses asserted by any person or persons, including agents or employees of Lessor or Lessee, by reason of death or injury to persons or loss or damage to property, resulting from Lessee's operations; or anything done or omitted by Lessee, under this Agreement except to the extent that such claims, demands, suits, judgments, costs and expenses may be attributed to the acts or omissions of Lessor or its agents or employees. ARTICLE IX LESSEE AS INDEPENDENT CONTRACTOR In conducting its business hereunder, Lessee acts as an independent contractor and not as an agent of Lessor. The selection, retention, assignment, direction and payment of Lessee's employees shall be the sole responsibility of Lessee, and Lessor shall not attempt to exercise any control over the daily performance of duties by Lessee's employees. ARTICLE X ASSIGNMENT This agreement, or any part thereof, may not be assigned, transferred or subleased by Lessee, by process or operation of law or in any other manner whatsoever, without the prior written consent of Lessor, which consent shall not be withheld unreasonably. ARTICLE XI NON-DISCRIMINATION Notwithstanding any other or inconsistent provision of this Agreement, during the performance of this Agreement, Lessee, for itself, its heirs, personal representatives, successors in interest and assigns, as part of the consideration for this Agreement, does hereby covenant and agree, as a covenant running with the land, that: A. No person on the grounds of race, color, religion, sex, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination AIRPORT HANGAR LEASE - Page 3 of 8 in; the use of the Premises. B. In the construction of any improvement on, over or under the Premises, and the furnishing of services therein or thereon, no person on the grounds of race, color, religion, sex or national origin shall be excluded from participation in, denied the benefit of, or otherwise be subjected to discrimination; C. Lessee shall use the Premises in compliance with all other requirements imposed by pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation -Effectuation of Title VI of the Civil Rights Act of 1964, and as said regulations may be amended. D. In the event of breach of any of the above non-discrimination covenants, Lessor shall have the right to terminate this Agreement and to reenter and repossess the Premises and hold the same as if said Agreement had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 have been followed and completed, including expiration of appeal rights. ARTICLE XII REQUIREMENTS OF THE UNITED STATES This Agreement shall be subject and subordinate to the provisions of any existing or future agreement between Lessor and the United States, or any agency thereof, relative to the operation or maintenance of the Airport, the execution of which has been or may be required as a condition precedent to the expenditure of federal funds for the development or operation of the Airport provided, however, that Lessor shall, to the extent permitted by law, use its best efforts to cause any such agreements to include provisions protecting and preserving the rights of Lessee in and to the Premises, and to compensation for the taking thereof, interference therewith and damage thereto, caused by such agreement or by actions of Lessor or the United States pursuant thereto. ARTICLE XIII DAMAGE OR DESTRUCTION OF PREMISES If any part of the premises leased by Lessee hereunder is partially damaged by fire, the elements, the public enemy, or other casualty, such premises shall be repaired, with due diligence by Lessor and at its own cost and expense. If the damage is so extensive as to render the leased premises untenantable, but capable of being repaired within 60 days, the building shall be repaired, with due diligence by Lessor, at its own cost and expense, and the rent payable hereunder shall be proportionately paid up to the time of such damage and shall thenceforth cease until such time as the space shall be fully restored. If the space is completely destroyed or is so damaged that it will remain untenantable for more than 60 days, Lessor shall have the option to repair or reconstruct the space, with due diligence and at its own cost and expense with rent for said space being adjusted as set forth above; provided, however, that Lessee may, at his option, cancel so much of this Agreement as relates to the untenantable building, such cancellation to be effective as of the date the space was damaged or destroyed. ARTICLE XIV DEFAULT AND TERMINATION A. Termination by Lessee. This Agreement shall be subject to termination by Lessee in the event of anyone or more of the following events: AIRPORT HANGAR LEASE - Page 4 of 8 I . The abandonment of the Airport as an airport or airfield for any type, class or category of aircraft. 2. The default by Lessor in the performance of any of the terms, covenants or conditions of this Agreement, and the failure of Lessor to remedy, or undertake to remedy, to Lessee's satisfaction, such default for a period of thirty (30) days after receipt of notice from Lessee to remedy the same. 3. Damage to or destruction of all or a material part of the Premises or Airport facilities necessary to the operation of Lessee's business. 4. The lawful assumption by the United States, or any authorized agency thereof, of the operation, control or use of the Airport, or any substantial part or parts thereof, in such a manner as to restrict substantially Lessee from conducting business operations for a period in excess of ninety (90) days. B. Termination by Lessor. This Agreement shall be subject to termination by Lessor in the event of anyone or more of the following events: 1. The default by Lessee in the performance of any of the terms, covenants or conditions of this Agreement, and the failure of Lessee to remedy, or undertake to remedy, to Lessor's satisfaction, such default for a period of thirty (30) days after receipt of notice from Lessor to remedy the same. 2. Lessee files a voluntary petition in bankruptcy, including a reorganization plan, makes a general or other assignment for the benefit of creditors, is adjudicated as bankrupt or if a receiver is appointed for the property or affairs of Lessee and such receivership is not vacated within thirty (30) days after the appointment of such receiver. C. Exercise. Exercise of the rights of termination set forth in Paragraphs A and B, above, shall be by notice to the other party within thirty (30) days following the event giving rise to the termination. D. Removal of Property. Upon termination of this Agreement for any reason, Lessee, at its sole expense, shall remove from the Premises all signs, trade fixtures, furnishings, personal property equipment and materials, which Lessee was permitted to install or maintain under the rights granted herein. If Lessee shall fail to do so within thirty (30) days, then Lessor may effect such removal or restoration at Lessee's expense, and Lessee agrees to pay Lessor such expense promptly upon receipt of a proper invoice therefore. E. Causes of Breach; Waiver. 1. Neither party shall be held to be in breach of this Agreement because of any failure to perform any of its obligations hereunder if said failure is due to any cause for which it is not responsible and over which it has no control; provided, however, that the foregoing provision shall not apply to failures by Lessee to pay fees, rents or over charges to Lessor. 2. The waiver of any breach, violation or default in or with respect to the performance or observance of the covenants and conditions contained herein shall not be taken to constitute a waiver of any such subsequent breach, violation or default in or with respect to the same or any other covenant or condition hereof. AIRPORT HANGAR LEASE - Page 5 of 8 ARTICLE XV ARBITRATION Except as provided in Paragraph I of Article V of this Agreement, all claims or disputes arising out of or relating to this Agreement shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then obtaining. Notice of the demand for arbitration shall be filed in writing with the other party to the Agreement and with the American Arbitration Association and shall be made within a reasonable time after the claim or dispute has arisen. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Except by written consent of the person or entity sought to be joined, no arbitration arising out of or relating to the Agreement shall include, by consolidation, joinder or in any other manner, any person or entity not a party to the Agreement, unless it is shown at the time the demand for arbitration is filed that (1) such person or entity is substantially involved in a common question of fact or law; (2) the presence of such person or entity is required if complete relief is to be accorded in the arbitration; and (3) the interest or responsibility of such person or entity in the matter is not insubstantial. The agreement of the parties to arbitrate claims and disputes shall be specifically enforceable under the prevailing arbitration law. Pending final decision of the arbitrator or arbitrators, the parties shall proceed diligently with the performance of their obligations under this Agreement. ARTICLE XVI MISCELLANEOUS PROVISIONS A. Entire Agreement. This Agreement constitutes the entire understanding between the parties, and as of its effective date supersedes all prior or independent agreements between the parties covering the subject matter hereof. Any change of modification hereof must be in writing signed by both parties. B. Severability. If a provision hereof shall be finally declared void or illegal by any court or administrative agency having jurisdiction, the entire Agreement shall not be void, but the remaining provisions shall continue in effect as nearly as possible in accordance with the original intent of the parties. C. Notice. Any notice given by one party to the other in connection with this Agreement shall be in writing and shall be sent by registered mail, return receipt requested, with postage and registration fees prepaid: 1. If to Lessor, addressed to: City Manager P.O. Box 1997 Kalispell, MT 59903-1977 2. If to Lessee, addressed to: J. Peter Gross P.O. Box 7276 Kalispell, MT 59904-7276 AIRPORT HANGAR LEASE - Page 6 of 8 Notices shall be deemed to have been received on the date of receipt as shown on the return receipt. D. Headings. The headings used in this Agreement are intended for convenience of reference only and do not define or limit the scope or meaning of any provision of this Agreement. E. Governing Law. This Agreement is to be construed in accordance with the laws of the State of Montana. F. Subsequent Lease Documents. The Lessee will provide the City of Kalispell Airport Manager a photocopy of each negotiated lease for each separate unit as the leases are signed. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. LESSOR: CITY OF KALISPELL B 4Jas. Patrick, City Manager T TLYCTT _ AIRPORT HANGAR LEASE - Page 7 of 8 STATE OF MONTANA ) ) ss. County of Flathead ) On this day of CA, 2006, before me, a Notary Public for the State of Montana, personally appeared Janes-H. Patrick, City Manager of the City of Kalispell and proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year hereinabove first written. NOTARY PUBLIC State of Montana Printed Name: Pt Residing at: My Commission expi er s:1. ' S pC STATE OF MONTANA ) ) ss. County of Flathead ) On this l day of _r'����2006, before me, a Notary Public for the State of Montana, personalty appeared J. P er Gross, proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year hereinabove first written. @�lllE8.11{d/ V -A 4 cq'A.(pO4. NOTARY PUBLIC State of Montana Printed Name: �y \', i�r Residing at: \6z��, My Commission expires:_ AIRPORT HANGAR LEASE - Page 2 of 8