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HomeMy WebLinkAboutE- Packet 06-11-2007_Authorize City Manager to sign Parking Lot Lease A_3 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Finance Director Chris Kukulski, City Manager SUBJECT: CONSENT: Authorize City Manager to sign Parking Lot Lease Agreement, subject to review and approval of legal counsel (Rosenberry) MEETING DATE: June 11, 2007 BACKGROUND: The Parking Commission seeks to lease parking lot space for City Parking Permit holders who are displaced by the construction of the Downtown Parking Garage in the Tracy and Pownderhorn parking lots. The attached lease provides the needed spaces at a location less than one block away from the city’s existing parking lots, behind the existing Kenyon Noble building. Because the City’s liability insurance will provide coverage for the leased property (as currently occurs for all City parking lots), the Commission’s authorization is needed. RECOMMENDATION: Authorize the City Manager to sign the Parking Lot Lease Agreement, subject to any changes made by legal counsel. FISCAL EFFECTS: City Parking Funds will pay for the costs of the lease, expected to be recovered through the sale of parking lot permits. 5 ALTERNATIVES: As suggested by the City Commission. Respectfully submitted, _________________________________ ____________________________ Anna Rosenberry, Finance Director Chris A. Kukulski, City Manager Report compiled on June 5, 2007 Attachments: Parking Lot Lease Agreement 6 PARKING LOT LEASE AGREEMENT This Parking Lot Lease Agreement (the “Agreement" and "Lease") is made and entered into this 12th day of June, 2007, by and between KENYON-NOBLE LUMBER COMPANY, a Montana corporation, with mailing address of ______________ (“Leasor”) and the City of Bozeman, with mailing address of PO Box 1230, Bozeman, Mt. 59771 ("Lessee"). WHEREAS, Lessor is the owner of certain real property located in the City of Bozeman, Gallatin County, Montana, which property is more specifically described as Parcel 1 and Parcel 2 on the attached Exhibit “A", which incorporated herein; WHEREAS, Lessee is desirous of leasing Parcels 1 and 2 from Lessor for the temporary parking needs of the Lessee's Downtown Parking Permit Holders during the period of construction on the downtown parking garage; and WHEREAS, Lessor is desirous of leasing Parcels 1 and 2 to Lessee, subject to the terms and conditions contained herein. NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows: 1. DESCRIPTION OF LEASED PREMISES Lessor leases to Lessee Parcel and Parcel 2 as each is described on Exhibit B (the "Leased Premises") subject to the terms and conditions of this Agreement. 2. PURPOSE OF LEASE; USE The Leased Premises shall only be used for the limited purpose of providing for the temporary parking needs of City of Bozeman Downtown Parking Permit Holders (the "Permitted Use"). Lessee may not change this use without the written consent of Lessor, which consent Lessor may withhold in its complete discretion. Lessee shall not engage in any other activity on the Leased Premises, any unlawful activity on the Leased Premises nor any activity which would result in an increase in Lessor's insurance coverage or costs or result in cancellation of such insurance, other than the aforementioned Permitted Use. Lessee shall, at its sole cost, comply with any and all laws, governmental regulations and requirements pertaining to its use of the Leased Premises. Lessee is solely responsible for ensuring that the Leased Premises and the use of the Leased Premises complies in all respects with the requirements of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. ("ADA") as such may apply to the Permitted Use. Lessee agrees to indemnify and hold harmless Lessor from any and all claims, liabilities, damages, and judgments, plus all costs and expenses (including attorneys fees) suffered or incurred by Lessor in connection with any ADA-related claim involving the Leased Premises. 7 3. TERM The term of this Lease shall commence on June 12, 2007 (the "Lease Commencement Date"). This Lease shall end at midnight on the day before the first (1st) anniversary of the Lease Commencement Date unless Lessee validly exercises its option right as set forth in Section 5. Lessee shall surrender the Leased Premises to Lessor immediately upon expiration of this Lease or any renewal of it. 4. RENTAL RATE Lessee shall pay to Lessor, at the address provided above or at such other place designated by Lessor, rent in the amount of FIFTEEN THOUSAND and 00/100 DOLLARS ($15,000.00) per year, payable in advance in equal quarterly installments of THREE THOUSAND SEVEN HUNDRED FIFTY and 00/100 ($3,750.00), with the first such payment being due and payable on the Lease Commencement Date, and subsequent payments due on September 1, 2007, December 1, 2007, and March 1, 2008. The parties acknowledge and understand that the rental rate set forth herein is based upon Lessee's use of forty-one (41) parking spaces on or about the Leased Premises, at $30/per parking space. In the event Lessee configures its use of the Leased Premises to include more than fifty (50) parking spaces, the parties agree that the rental rate set forth herein shall be raised by a dollar amount equal to the number of parking spaces used by City of Bozeman Downtown Parking Permit Holders (less) Forty-One, multiplied by twelve (12), and then multiplied by thirty (30). (By way of example and not limitation, if 50 spaces were used the increase in the yearly rent would be {[(50-41) = 9 x 12] = 108 x $30} = $3,240 increase in yearly rent). 5. OPTION TO RENEW Provided Lessee is not in default under this Lease, Lessee has the option to renew this Lease for one (1) additional term of six (6) months (the "Renewal Term"). This Renewal Term shall begin on the first (18t) anniversary of the Lease Commencement Date and end six (6) thereafter. Lessee may exercise the option to renew for the Renewal Term only by delivering written notice of its exercise to Lessor no earlier than ninety (90) days before the original lease term ends, and no later than sixty (60) days before the original lease term ends. During any renewal period, all terms and conditions of this Lease shall remain in full force and effect except that the rent shall be adjusted as follows: Provided the Lessee is not in default under this Lease, Lessee has the option to renew this Lease for six (6) additional consecutive terms of one (1) month each (the “renewal terms”). The first of these renewal terms shall begin on the first (1st) anniversary of the Lease Commencement Date and end on the 10th day of the following month. Lessee may exercise the option to renew for each consecutive renewal term by delivering written notice of its exercise to the Lessor by the 1st day of the month prior to the term end date. For example, the renewal notice for the first renewal term would be due to the Lessor by May 1st, 2008; the renewal notice for the second renewal term would be due to the Lessor by June 1st, 8 2008, etc. During any renewal period, all terms and conditions of this Lease shall remain in full force except that the rent shall be adjusted as follows: During the first (1st) Renewal Term, the rent shall be increased by five percent (5%) over the monthly rent payable during the initial term of this lease. This increased rent amount will be the same amount for any of the five remaining renewal terms. During the Renewal Term, the rent shall be increased by five percent (5.0%) over the rent payable during the initial term of this Lease. 6. ABANDONING LEASED PREMISES OR PERSONAL PROPERTY Lessee shall not vacate or abandon the Leased Premises at any time during the original or Renewal Term, nor shall it cease to operate the Permitted Use on the Leased Premises for a consecutive period of fifteen (15) days. Abandonment, vacating the Leased Premises, or ceasing operations shall be a default of this Lease. If Lessee does vacate or abandon the Leased Premises, or is dispossessed by process of law or ceases operation of the Permitted Use, any personal property belonging to Lessee and left on the Leased Premises shall be deemed abandoned at the option of Lessor and shall become the property of Lessor. 7. UTILITIES; SERVICES Lessee shall be responsible for and pay for any and all utilities and services (such as, for example, snow removal, grounds keeping, tree maintenance, towing and garbage collection) required or used on or in connection with the Leased Premises. Any electricity charges relating to any lighting present on the Leased Premises as of the Lease Commencement Date shall be paid for by Lessor to the extent Lessor has any responsibility therefore. Lessor shall have no responsibility to provide additional lighting for Lessee’s use of the Leased Premises. 8. CONDITION OF THE LEASED PREMISES Lessee has examined and knows the condition of the Leased Premises, has received the Leased Premises in good condition, and accepts the Leased Premises "as is." No representation, statement, or warranty, express or implied, has been made by or on behalf of Lessor as to such condition or as to the use that may be made of Leased Premises. In no event shall Lessor be liable for any defect in such property or any limitations on its use. Lessor shall not be liable for any loss or damage to persons or to the property of Lessee or its sub-lessees or of its employees, permitees, or invitees occasioned by, or resulting from, defects (except those attributable to Lessor's negligence) in or upon the Leased Premises, the natural condition of any tree and other shrubbery on or about the Leased Premises or any other improvement on or about the Leased Premises; nor any damage occasioned by water, snow, ice, or anything being upon or coming about the Leased Premises. 9. ALTERATIONS AND IMPROVEMENTS 9 All alterations, additions, or changes to the Leased Premises, whether permanent or temporary, must be approved by Lessor in writing before work is commenced. Lessor shall not unreasonably withhold permission for such changes. Lessor's permission does not relieve Lessee from its obligation that all such matters comply with all applicable laws and regulations. Lessee agrees that all alterations, additions, and changes made by it to the Leased Premises will be made in a first-class, workmanlike manner, paid by Lessee, and anything in this Lease to the contrary notwithstanding, Lessor and Lessee agree that Lessee shall not have the right, at the end of the term of this Lease or any extension thereof, to remove the same or restore the Leased Premises to the condition in which it was originally, unless required by Lessor. In this regard, Lessor, in its sole discretion, shall have the right to demand that Lessee remove all or part of the improvements made by Lessee to the Leased Premises and Lessee agrees to remove the improvements or remediate the Leased Premises per Lessor's demand. Lessee further agrees that to the extent Lessor does not demand removal or remediation thereof, all alterations and additions undertaken by Lessee shall become at once a part of the realty and belong to Lessor, but Lessee shall have full use thereof during the term of the Lease and the Renewal Term. 10. SIGNS AND AUCTIONS Lessee is responsible for all signage costs incurred and required for the orderly and safe operation of the Permitted Use. Lessor and Lessee shall mutually agree upon the size, design, and location of Lessee's signage, such approval not to be unreasonably withheld or delayed by Lessor. All such signs must be in compliance with all laws and regulations concerning such signage. At Lessor's discretion at the termination of this Lease, all signs shall be “removed from the Leased Premises at Lessee's expense. Lessor shall have the right to prohibit any advertising by Lessee which, in Lessor's reasonable opinion, tends to impair the reputation of Lessor or the Leased Premises and, upon written notice from Lessor, Lessee shall refrain from such advertising. Lessee is specifically prohibited from conducting any public meetings, auctions or other public events on the Leased Premises without the prior written permission of Lessor. 11. LIABILITY OF LESSOR AND INSURANCE Lessee hereby expressly waives all claims against Lessor for damages to goods or for injuries to persons on or about the Leased Premises from any cause arising at any time, except those caused by the negligence of Lessor. Lessee will indemnify and hold Lessor harmless on account of all costs, attorney's fees, and expenses arising from any claims, actions, causes of actions, damage, or injury to any person, including death, or to the personal property of any person, or damage to the Leased Premises, arising from the use of the Leased Premises by Lessee or anyone else other than Lessor, or arising from the failure of Lessee to keep the Leased Premises in good condition, or from any 10 breach or default in the performance of any obligation on Lessee's part, as provided herein. The indemnity provision herein is intended to be a full indemnity of Lessor by Lessee regardless of any statutory enactments on comparative negligence. In the case of such claim, action, damage, or injury, Lessee, upon notice from Lessor, shall defend the same at Lessee's expense with counsel satisfactory to Lessor. Neither party shall be liable to the other party for any damage by, or from, any act or negligence by any owner or occupant of adjoining or contiguous property. Nothing contained herein shall be deemed to limit the claims or causes of action which either Lessor or Lessee may have against third parties for damage arising from the act or negligence of said third parties. Lessee agrees to pay for all damages to the Leased Premises, as well as all damage or injury suffered by users or occupants thereof, caused by misuse or neglect of the Leased Premises by Lessee. Provided, however, that Lessor agrees to execute a waiver of any subrogated rights against Lessee under any fire and extended coverage insurance to the extent of any insurance benefits paid under a policy in the event of loss. Lessee shall purchase and maintain in force throughout the original and Renewal Term of this Lease a public liability insurance policy from a responsible insurance company licensed in the state of Montana, with a minimum of $1,000,000.00 liability protection for loss of property arising out of anyone incident, $1,000,000.00 for bodily injuries or death to anyone person, and $2,000,000.00 in the case of injury to more than one person in the same accident. Lessor shall be named as an additional named insured under the terms of this policy. Lessee shall purchase and maintain in force throughout the original and renewal term(s) of this Lease a public liability insurance policy from a responsible insurance company licensed in the state of Montana, with a minimum of $750,000 for any one claim per any one occurrence as a result of any occurrence because of bodily injury, personal injury, property damage, public officials errors and omissions, or any combination thereof and, $1,500,000 for any one occurrence as the result of any occurrence because of bodily injury, personal injury, Property Damage, Public Errors and Omissions, or any combination thereof. Lessor shall be name as an additional insured under the terms of this policy. Lessor will purchase fire and extended insurance coverage for itself on the Leased Premises, as may be applicable. In addition to the above insurance requirements, Lessee shall carry such other insurance as Lessee may determine in its own discretion, without looking to Lessor for any participation in the payment of such insurance premium. 12. REPAIRSAND MAINTENANCE In addition to the rent payable hereunder, Lessee shall be responsible for, and maintain in good condition the Leased Premises at its own expense. Specifically, Lessee shall be responsible for, undertake and pay for all parking lot signage and striping, all snowplowing and other debris removal, all towing and parking enforcement (including removal of abandoned cars and other property), all Permitted Use administration, and 11 all repairs of defects in parking surface occurring during Lessee's use of the Leased Premises. Lessee shall keep the Leased Premises in a clean and sanitary condition. Lessee shall maintain the Leased Premises in as good and safe state of condition as exists at the time Lessee takes possession, reasonable wear and tear excepted. In the event that Lessee fails to timely cause such repairs, maintenance, and replacements to be made to the Leased Premises, Lessor shall not be responsible to Lessee for any loss or damage that may accrue by reason thereof, and if Lessor makes or causes such repairs, maintenance, and replacements to be made, Lessee agrees that it will, upon demand, pay to Lessor the cost thereof, plus ten percent (10%) for overhead. Lessee agrees that it will not cause or allow any disposal of any oil, gasoline, solvents, or any other toxic or hazardous waste by dumping or disposing of the same on or about the Leased Premises or in any manner prohibited by or contrary to any applicable law or regulation, including, but not limited to, laws prohibiting dumping of such materials into the sewer. Lessee agrees to indemnify Lessor and hold Lessor harmless from any and all claims, damages, and expenses, including reasonable attorney's fees, incurred by Lessor as a result of Lessee's violation of its obligations in accordance with this subparagraph. 13. LIENS AND ENCUMBRANCES Lessee will, during the term of this Lease and all renewals, keep the Leased Premises and improvements thereon, free and clear of any and all liens, mortgages, or other encumbrances. In the event Lessee should allow any lien or encumbrance of any type or nature to be placed upon the real property constituting the Leased Premises, or improvements thereon, and should fail, refuse, or neglect to discharge, satisfy, pay, and/ or remove any such lien or encumbrance from the Leased Premises within fifteen (15) days of the notice of filing of the same, Lessor may, at Lessor's option, elect to pay, discharge, satisfy, and/or remove any said lien or encumbrance. Any money paid by Lessor in connection with the payment, satisfaction, or litigation of any lien or encumbrance, plus all expenses and attorney's fees incurred in connection therewith, shall be billed to Lessee by Lessor on a monthly basis and shall be due and payable to Lessor within fourteen (14) days after Lessee receives such bill. Any unpaid sums shall bear interest at the rate of fifteen percent (15%) per annum until paid. Lessor's remedy to pay, discharge, satisfy, and/or remove any lien or encumbrance placed upon the Leased Premises, and improvements thereon, is not exclusive, and Lessor may, at Lessor's option, exercise any and all other remedies available at law or in equity to remove said lien or encumbrance, the cost of which, including reasonable attorney's fees, shall be chargeable to and payable by Lessee within fourteen (14) days of receipt of any bill for it. In the event Lessee should allow any lien or encumbrance of any type or nature to be placed upon the Leased Premises, and improvements thereon, and Lessee should 12 fail, refuse, or neglect to discharge, satisfy, or remove any such lien or encumbrance within fifteen (15) days of the notice of filing of the same, Lessor may, at Lessor's option, declare a default of this Lease. In the event such a default is declared, Lessee shall have fifteen (15) days from the date of service of written notice of default to pay, satisfy, discharge, or remove any such lien or encumbrance from the Leased Premises, and in the event Lessee fails to do so, this Lease will be breached and Lessor shall have all remedies provided for herein. Notwithstanding Lessor's rights as set forth above, Lessee hereby covenants, warrants, and agrees that Lessee will, within fifteen (15) days of the notice of filing of a lien upon the Leased Premises, or any improvement thereon, payor discharge the same or, in the alternative, at Lessee's option, post a bond with the Clerk of the Eighteenth Judicial District Court of the County of Gallatin, Montana, as allowed by the laws of the State of Montana, as the same exist from time to time, so as to effectively remove the lien from Lessor's property, all of which is provided in § 71-3-551, Montana Code Annotated. 14. PERSONAL PROPERTY TAXES Lessee shall pay all personal property taxes on inventory, fixtures, furnishings, equipment, and all other personal property owned by Lessee situated on the Leased . Premises, or used upon the Leased Premises, by Lessee, and shall not look to Lessor for any participation in the payment for such personal property taxes. 15. LESSOR TO HAVE ACCESS Lessee shall allow Lessor, or its duly authorized representative, free access to the Leased Premises for the purpose of examining the same or to make any needful repairs or alterations of the Leased Premises which Lessor may see fit to make. Lessor shall provide Lessee twenty-four (24) hours' notice of Lessor's intention to make any such repairs or alterations, unless an emergency situation exists which requires immediate action. 16. DESTRUCTION OF THE LEASED PREMISES Should the Leased Premises be destroyed by some casualty, and if the damage is so extensive as to amount to practically a total destruction of the Leased Premises, this Lease shall cease, and the rent shall be apportioned to the time of the damage. In cases where the Leased Premises are partially damaged by a casualty, Lessor shall repair the damage with insurance proceeds with reasonable dispatch, and, if the damage has rendered the Leased Premises untenable, in whole or in part, there shall be an apportionment of the rent until the damage has been repaired. In determining what constitutes reasonable dispatch, consideration shall be given to delays caused by strikes, adjustment of insurance, and other causes beyond Lessor's control. When the Leased Premises have been repaired, the obligation to pay rent shall resume. 17. LESSEE'S ASSIGNMENT AND SUBLEASE 13 Lessee's right and power to sub-lease under this Lease shall be limited to issuing Downtown Parking Permits, which permits shall be subject to the terms and conditions of this Lease. No other sub-lease or division of this Lease by Lessee is allowed under this Agreement without the express written consent of Lessor, which consent may be withheld by Lessor in Lessor's sole discretion. 18. SUBORDINATION AND LESSOR'S ASSIGNMENT At Lessor's option, this Lease shall be and is subordinated to any existing mortgage or trust indenture covering the Leased Premises, any extension or renewal thereof, or to any new mortgages or trust indentures which may be placed thereon from time to time; provided, however, anything to the contrary contained herein notwithstanding, every such mortgage or trust indenture shall recognize the validity of this Lease in the event of a foreclosure of Lessor's interest as long as Lessee shall not be in default under any of the terms of this Lease. Lessee shall execute whatever instruments may be reasonably required to effect such subordination. Upon Lessor's written request, and provided Lessee can do so truthfully, Lessee will certify in writing to all persons designated by Lessor: (a) that Lessor has performed all of its obligations and is not in default under this Lease; (b) that this Lease is in full force and effect; (c) that each person receiving such certification may rely thereon for all purposes; (d) the amount of rent paid and prepaid by Lessee; and (e) such other information as Lessor may reasonably request. Lessor may assign this Lease without consent of Lessee and may, without notice to Lessee, assign the rent from this Lease as security to secure an indebtedness incurred by Lessor. 19. DEFAULT If Lessee defaults in the payment of the rent, or any part thereof, or any other monetary amounts due under the terms of this Lease, and fails to make payment within ten (10) days after written notice of the amount of rent or other charges owing, or if Lessee defaults in the performance of any other term or condition of this Lease and fails to correct such default within the time specifically described herein, or within fifteen (15) days if no time is prescribed, after written notice from Lessor describing the default, Lessee will be considered to have materially breached this Lease and to be in default. In that event, Lessor shall have the right, besides other rights and remedies Lessor may have, to: (a) Re-enter the Leased Premises without demand or further notice, remove any property of Lessee found on the Leased Premises, perform such maintenance and repairs as may be required, and re-let the Leased Premises. Such property removed may be stored in a public warehouse or elsewhere at the 14 cost of, and for the account of, Lessee. Re-entry shall not release Lessee from the obligation to make the rental payments at the time and in the manner set forth herein. The proceeds derived from any re-letting shall be applied first to the payment of any expenses incurred in re-letting (including, but not limited to, remodeling or alteration expenses), then to the payment of rents as such becomes due, and finally toward the fulfillment of other terms and conditions of the Lease. Lessee shall pay to Lessor any loss or difference of rent for the remainder of the term if Lessor shall retake possession of the Leased Premises and is unable to re-Iet the same under the terms provided herein; or (b) Terminate the Lease, such termination to be effective ten (10) days following the date of the written notice of intention to terminate is sent to Lessee. Should Lessor at any time so elect to terminate this Lease, in addition to any other remedies it may have, Lessor may recover from Lessee all damages incurred by Lessor by reason of such breach, including the cost of recovering the Leased Premises, and the difference, if any, between the rent and all other payments that would have been due Lessor for the remainder of this Lease and the payments Lessor actually receives from any re-letting of the Leased Premises for the remainder of the term of this Lease. Notwithstanding the foregoing terms of default, Lessee shall have the right, upon written notice delivered to Lessor within thirty (30) days of the Lease Commencement Date, to terminate this Lease as to one (1) or both of Tracts 1 or 2. In the event Lessee validly exercises its right to terminate the Lease as to Tract I, the rent due hereunder shall be reduced by 40% and Lessee shall pay a rate equal to 60% of the rental rate as computed under Section 4, however, the number of parking spaces necessary for a rental adjustment, as described above, shall also be adjusted by the same percentage. In the event Lessee validly exercises its right to terminate the Lease as to Tract 2, the rent due hereunder shall be reduced by 60% and Lessee shall pay a rate equal to 40% of the rental rate as computed under Section 4, however, the number of parking spaces necessary for a rental adjustment, as described above, shall also be adjusted by the same percentage. In the event Lessee makes an election to terminate this Lease as to Tract 1 or 2, Lessor shall be free to use or lease out said Tract and Lessee shall forfeit all rights under this Lease to the same. 20. SURRENDER AND HOLDING OVER Lessee shall surrender the Leased Premises to Lessor upon the expiration of this Lease or upon termination of the Lease as provided for herein. At the time of surrender, the Leased Premises shall be in the same condition as when received, with the exception of any alterations approved by Lessor, normal wear and tear excepted. Lessee shall not make any claim in the Leased Premises against the interest of Lessor. If Lessee holds the Leased Premises after expiration or termination of the Lease, a tenancy from day-to-day s be created thereby at a daily rental in the amount of three hundred dollar ($200.00 $300.00), payable in advance. The acceptance of this daily rental by Lessor will not extend the term of, or renew, this Lease in any manner. 15 21. EMINENT DOMAIN If the whole or any part of the Leased Premises shall be taken under the power of eminent domain, this Lease shall terminate as of the date of such taking. All monies paid by or due from Lessee to Lessor shall be prorated as of that date. No part of any award for said eminent domain or condemnation shall be the property of Lessee. The term "eminent domain" shall include the exercise of any similar governmental power and any purchase or other acquisition in lieu of condemnation. 22. NOTICE Any notice required by this Lease shall be deemed received by the party to whom it is directed when such notice is personally served or is deposited with the United States Postal Service as Certified Mail, return receipt requested, and addressed as follows: (a) To Lessor: Bozeman, MT 59715 Business hours telephone number: _ Emergency after-hours telephone number: -1 (b) To Lessee: City of Bozeman, City Clerk, PO Box 1230, Bozeman, MT 59771 Business hours telephone number: 406-582-2300 Emergency after-hours telephone number: 406-582-2000 A party wishing to change its designated address shall do so by notice in writing to the other party. Rejection or other refusal to accept, or the inability to deliver because of changed address of which no notice was given, shall be deemed to be receipt of the notice. 23. REMEDIES CUMULATIVE The remedies herein given to either party hereunder shall be cumulative, and the exercise of anyone remedy by either party shall not be to the exclusion of any other remedy. 24. COVENANT OF QUIET ENJOYMENT Lessor agrees that Lessee, so long as it performs all of the covenants contained herein, shall have peaceful and quiet enjoyment of the Leased Premises, free from interference by Lessor at all times during the initial lease term and any renewal term. 25. UNLAWFUL DETAINER AND ATTORNEY'S FEES In case suit shall be brought for an unlawful detainer of the Leased Premises, legal action is undertaken for the recovery of any rent due.under the provisions of this Lease, or for Lessee's breach of any other condition herein, Lessee shall pay to Lessor a reasonable attorney's fee which shall be fixed by the court, and such attorney's fee shall be deemed to have accrued on the commencement of the action/ suit and shall be paid upon successful completion of such action/ suit by Lessor. Lessee shall be entitled to attorney's fees in the same manner if judgment is rendered for Lessee. 16 In addition, Lessee agrees to reimburse Lessor for all of Lessor's legal fees and costs incurred in negotiating and drafting this Agreement. Lessee's obligation in this regard shall not exceed the sum of ONE THOUSAND FIVE HUNDRED and 00/100 DOLLARS ($1,500.00). Payment of such costs shall be made to Lessor prior to the Lease Commencement Date. Lessor agrees to submit its legal invoices in this regard upon Lessee's request. 26. LESSOR'S TRANSFER If Lessor should sell or otherwise transfer its ownership of the Leased Premises upon an undertaking by the purchaser or transferee to be responsible for all of the covenants and undertakings of the Lessor herein, Lessee agrees that Lessor shall thereafter have no liability to Lessee under the Lease except for liabilities that might have occurred prior to the date of such sale or transfer. 27. ACCORD AND SATISFACTION No payment by Lessee or receipt by Lessor of a lesser amount than the rent as herein stipulated shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Lessor may accept such check or payment without prejudice to Lessor's right to recover the balance of such rent or pursue any other remedy as provided in this Lease. 28. TIME OF ESSENCE Each of Lessee's covenants herein is a condition, time is of the essence with respect to the performance of every provision of this Lease, and the strict performance of each shall be a condition precedent to Lessee's rights to remain in possession of the Leased Premises or to have this Lease continue in effect. 29. RULES AND REGULATIONS Lessee shall observe faithfully and comply strictly with rules and regulations, including sign restrictions, as Lessor may from time to time reasonably adopt for the safety, care, and cleanliness of the Leased Premises and for the preservation of good order therein. 30. FORCE MAJEURE In the event that either party shall be delayed, hindered, or prevented from performing any act required hereunder by reason of any strike; lock-out; civil commotion; war-like operation; invasion; rebellion; riot; hostility; military or usurped power; sabotage; governmental restrictions or regulations; inability to obtain any services, materials, or financing; or for any cause beyond the control of Lessor, the performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for the period necessary to complete performance after the end of the period of such delay. 31. MISCELLANEOUS TERMS A. Covenant for Further Assurance. It is agreed and understood by and 17 between the parties hereto, and Lessor and Lessee covenant, each with the other, their respective agents, representatives, and assigns, that when and so often as may be necessary, the parties, their agents, representatives, and assigns, will execute, do such reasonable things, and give such assurances as may be reasonably required to perfect the implied and expressed covenants, warranties, and conditions herein set forth, reserved, and contained to be kept and performed on the part of the parties hereto. B. Interpretation. This Lease shall be deemed to be made, and shall be construed in accordance with, the laws of the state of Montana. Whenever the context of this Lease so requires, the singular shall include the plural, the plural shall include the singular, the whole shall include any part thereof, and any gender shall include the other gender. C. Severability. It is agreed and understood by and between the parties hereto that in the event anyone or more of the provisions of this Agreement as herein set forth, reserved, and contained are found and determined to be unenforceable by a court of competent jurisdiction, or through the act or actions of the legislature of this state, the remaining provisions of this Lease shall nevertheless continue in full force and effect and be binding on the parties hereto, their agents, representatives, and assigns until such time as Lessee has fully paid the total amount of the rental payments due hereunder, together with any assessments due therewith, as hereinabove set forth. D. Integration. This Lease, including any attached exhibits, is the entire integrated agreement between the parties. This Lease supersedes all prior and contemporaneous oral or written promises, representations, or negotiations of the parties. E. Modification by Writing Only. No alterations, modifications, or additions to this Lease shall be binding unless reduced to writing and signed by the parties to be charged herewith. No covenant, term, or addition to this Agreement shall be deemed waived by Lessor and Lessee unless such waiver shall be reduced to writing and signed by Lessor and Lessee. F. Counterparts. It is agreed and understood by and between the parties hereto that this Lease may be executed in two (2) or more counterparts, each of which shall be deemed an original document, but all of which together shall constitute one (1) and the same instrument, provided that each such counterpart must be signed by all of the parties hereto. G. Waiver. It is agreed and understood by and between the parties hereto that a waiver by Lessor of any breach of any term, covenant, 'or condition herein set forth, reserved, and contained to be kept and performed on the part of Lessee shall not act as a bar or a precedent, nor shall any of the other terms, covenants, and conditions herein set forth, reserved, and contained, be waived by any subsequent action by Lessor. 18 H. Caption Headings. It is agreed and understood by and between the parties hereto that the caption headings in this Lease are for convenience only, and do not apply to, or affect, the construction or interpretation of any of the terms hereof. 1. Binding Effect. It is agreed and understood by and between the parties hereto that all of the terms, covenants, and conditions herein set forth, reserved, and contained on the part of the parties to be kept and performed shall be binding upon, inure to the benefit of, and be enforceable by, the agents, assigns, successors, and representatives of the parties hereto. J. Emergency Access. In case of an emergency, if Lessee shall not be present to permit entry, Lessor or its representatives may enter the Leased Premises forcibly without rendering Lessor or its representatives liable therefore or affecting Lessee's obligations under this Lease. K. Status of Parties. Neither the method of computation of rent nor any other provision of this Lease shall be deemed to create any relationship between the parties hereto other than that of Lessor and Lessee. L. Facsimile Signatures. Facsimile signatures on this Lease are acceptable and shall be treated in all respects as originals. M. Third Party Beneficiary. Nothing in this Lease is intended to create any third party beneficiary rights in any person or entity. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date set forth above. LESSOR: KENYON-NOBLE LUMBER COMPANY By: ______________________________ Its: ______________________________ LESSEE: CITY OF BOZEMAN By: ______________________________ Its: ______________________________ 19