GARO Golf Course Addendum
REBECCA SEEMAN
REGISTER ΠDEEDS Co.
SlUt£ IXUITY KIWSAS N+
Book-Page: 1019-139
Receipt I: 4382 Total Fees: $68. øø
Date Recorded: 8/15/2882 11:56:19 AM
ADDENDUM TO OIL AND GAS LEASE
This Addendum to Oil and Gas Lease is entered into this 1St day of July, 2002 between
the CITY OF SALINA, Saline County, Kansas, a municipal corporation ("the City"), and GARO
INC" a Kansas corporation ("GARO").
Recitals
A.
The City is the owner and Lessor of property situated in Saline County, Kansas,
more particularly described as follows:
The West Forty (40) acres of the East One-half of the Northwest Quarter
(EYzNWY4) of Section Twenty (20), Township Fourteen (14) South, Range Two
(2) West of the 6th p.m, and containing Forty (40) acres; ("the Property")
B,
GARO is the Lessee of the Property under a certain Oil and Gas Lease recorded
on February 18, 1963 in 0, & G. Book 25, p, 197-198 in Saline County, Kansas (the "Lease").
C.
GARO now operates an oil well ("the Well") on the Property,
D,
The City has improved and developed the Property surrounding the Well into a
six-hole, par-three municipal golf course (including an on-site drainage retention structure)
depicted on Exhibit A ("the Golf Course"),
E.
The construction of the Golf Course required the relocation of the oil line running
from the Well, prompting the need for the grant of (1) an easement by the City to GARO for the
relocated oil line running north-northwesterly from the Well to the Crawford Street right-of-way
and (2) a license agreement by the City to GARO for the relocated oil line running easterly along
the south side of the Crawford Street right-of-way to the point of the intersection of the relocated
oil line with the pre-existing oil line.
F.
GARO contends the presence of the Golf Course has impaired the fair market
value ofthe Well, which the City denies,
Book-Page: 1019-140
G.
The parties enter into this Addendum as a final compromIse settlement of
GARO's claim of impaired value of the Well and to provide for the continuing amicable co-
existence and operation of the Well and the Golf Course on the Property.
The parties agree as follows:
1.
Well Operations, The City agrees that day to day operations of the Well will be
continued in the manner currently conducted by GARO, without restriction or any adverse
impact on the operation, subject to any commitments undertaken by GARO as set forth in this
Addendum,
2.
Royalty Payments. Under the Lease, the City currently has a one-eighth (118)
royalty interest in the oil produced from the Property, The parties agree that:
(a)
The City shall account and pay to GARO within ten (10) days
following signature of this Addendum by both parties that sum equal to one half (112) of
the one-eighth (1/8) of the royalty payments actually received by the City from and after
May 1, 2000 through the date of signature of this Addendum by both parties; and,
(b)
The Lease is amended to provide that the City's royalty interest be
reduced from one-eighth (1/8) to one-sixteenth (1/16) for the remainder of the term of the
Lease,
3.
Access Drive, The City and GARO acknowledge that the existing access drive to
the Well is passable under all weather conditions. The City agrees that it will maintain the
access drive in such a manner that it will be passable in all weather conditions,
4.
Well Maintenance and Damage to Golf Course, At those times GARO must
"pull" the well for servicing, the City agrees to suspend play on the golf hole adjacent to the
Well and to hold GARO and its agents harmless for any damage to the Golf Course resulting
2
Book-Page: 1019-141
from accidental blowing of oil or salt water onto the Golf Course so long as GARO satisfies the
following preconditions:
(a)
GARO's agent shall provide the City with no less than four (4) hours
notice before the Well is to be "pulled." Notice shall be given by telephone to the office
of the maintenance superintendent for the Golf Course. If notice must be given during
non-business hours, notice shall be given by telephone to police dispatch,
(b)
GARO's agents and contractors shall take all reasonably necessary
precautions to avoid damage to the Golf Course resulting from the blowing of oil or salt
water onto the Golf Course. GARO's agents and contractors shall be regarded as having
taken all reasonably necessary precautions to avoid damage to the Golf Course if they
conduct themselves in the usual and customary manner of conducting their particular
business,
5,
Negligent or Intentional Acts. "GARO's negligent or intentional acts" as referred
to in the following paragraphs 6, 7, and 8 shall refer to the negligent or intentional acts of GARO
or its officers, directors, employees, or agents but shall not include those acts recognized in the
oil well operating industry as the usual and customary acts performed during the operation and
maintenance of the Well, unless any such allegedly usual and customary act or omission on the
part of GARO or its directors, officers, employees, or agents is determined by a United States or
State of Kansas court or regulatory authority to be in violation of applicable Federal or State
statutes, rules, or regulations.
6,
Injury to Person and Damage to Property, The City agrees to take all reasonably
necessary precautions to prevent the occurrence of any injuries to persons and damage to
property resulting from the City's operation and maintenance of the Golf Course. The City shall
3
Book-Page: 1019-142
indemnify and hold GARO harmless from any and all liability, loss or damage GARO may
suffer as a result of damage or injury to the person or property of others resulting from the City's
operation or maintenance of the Golf Course, unless the damage or injuries were caused in whole
or in part by GARO's negligent or intentional acts. In those cases where injuries to the person or
property of others results in whole or in part from GARO's negligent or intentional acts, the City
agrees to indemnify and hold GARO harmless only for that liability, loss or damage attributable
to the City's operation or maintenance of the Golf Course.
7.
Injury to GARO Property, The City shall reimburse GARO for expense incurred
in an amount equal to the lesser of the actual replacement cost or actual repair cost of GARO
property that is damaged or destroyed by the City's operation or maintenance ofthe Golf Course
unless the damage or destruction is caused in whole or in part from the negligent or intentional
acts of GARO or its agents, In those cases where the damage or destruction is caused in whole
or in part from the negligent or intentional acts of GARO or its agents, the City agrees to
reimburse GARO for expense incurred only for that part of the lesser of the actual replacement
cost or actual repair cost which is caused by the City's operation or maintenance of the Golf
Course.
8,
Environmental Contamination, The City further agrees to indemnify and hold
GARO harmless from and against any claims, demands, liabilities, damages or expenses arising
out of any alleged contamination of water, land, or air on or about the Property resulting from the
City's operation or maintenance of the Golf Course unless caused in whole or in part by GARO' s
negligent or intentional acts. In those cases where such claims, demands, liabilities, damages or
expenses result in whole or in part from GARO's negligence or intentional acts, the City agrees
4
Book-Page: 1019-143
to indemnify and hold GARO harmless only for that which is attributable to the City's operation
or maintenance of the Golf Course.
9.
City's Insurance Coverage. The City agrees, at its discretion, to either:
(a)
name GARO on the City's applicable liability policy to cover any
claims made pursuant to the indemnification provisions of this Agreement; or,
(b)
provide an alternative form of coverage at the City's expense
which affords GARO equal or greater coverage as naming GARO on the City's
applicable liability policy would afford.
In either case, the City agrees to provide GARO with documented proof of ongoing coverage.
10,
Grant of Easement and License for Relocation of Oil Line. As a result of the need
to relocate the oil line running from the Well as a result of the City's construction of the Golf
Course, the parties shall execute simultaneously with the execution of this Addendum (1) an
easement from the City to GARO for the relocated oil line running north-northwesterly from the
Well to the Crawford Street right-of-way, in the form attached and incorporated as Exhibit Band
(2) a license agreement for the relocated oil line running easterly along the south side of the
Crawford Street right-of-way to the point of the intersection of the relocated oil line with the
pre-existing oil line, in the form attached and incorporated as Exhibit C.
11.
Dispute Resolution. The parties shall attempt to resolve any dispute arising out of
this Addendum through negotiation between representatives of the parties with authority to settle
the dispute, If a dispute has not been resolved within 60 days, the parties shall engage in assisted
Alternative Dispute Resolution (ADR) proceedings, the ADR method to be determined by the
mutual agreement of the parties.
5
Book-Page: 1019-144
12.
Assignment. The indemnity provisions of this Addendum to Oil and Gas Lease
shall not be assignable by GARO except to successors or assigns of its interest in the Well upon
the precondition that the City receives no less than thirty (30) days advance written notice of the
proposed assignment. The notice shall be sent via certified mail in care of the City Clerk, P.O,
Box 736, Salina, KS 67402-0736,
13,
Not for Benefit of Third Parties. No provision of this Addendum to Oil and Gas
Lease is included for the benefit of third parties nor is to be interpreted as creating any right or
privilege for third parties not already available to them by operation of law, except for successors
to or assigns ofGARO's interest in the Well pursuant to Section 12 above.
14,
Binding Effect. This Addendum to Oil and Gas Lease shall be binding on and
inure to the benefit of the parties, their successors and assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands the day and year
first above written.
CITY OF SALINA, KANSAS
By
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oaL-
i III M. Seaton, May
A~~fb¡J
Lieu Ann Nicola, City Clerk
By:
G
6
Book-Page: 1019-145
STATE OF KANSAS, SALINE COUNTY, ss:
/.5 -¡- ---- /
BE IT REMEMBERED, that on this --L- day of J ~' 2002, before me, the
undersigned, a notary public in and for the county and state afores , came Kristin M, Seaton,
Mayor of the City of Salina, Kansas, and Lieu Ann Nicola, City Clerk, who are personally
known to me to be the same persons who executed as such officers the within instrument of
writing on behalf of the City of Salina, Kansas, and such persons duly acknowledged the
execution of the same to be the act and deed of said City,
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year last above written.
.... eAABARA R. WEBER
NOI'AIW fUU)
srA1ECF
. _._~
STATE OF KANSAS, SALINE COUNTY, ss:
BE IT REMEMBERED, that on this~ ~~y o£ , 2002, before me, the
undersigned, a notary public in and for the county and state a resai , came Gary Ray, President
of GARO, Inc., who is personally known to me to be the s e p. son who executed the within
instrument of writing on behalf of GARO, Inc., and such erson duly acknowledged the
execution of the same to be the act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year last above written,
7
Book-Page: 1019-147
EASEMENT
THIS INDENTURE, made this - day of July, 2002, by and between CITY OF
SALINA, KANSAS, a municipal corporation (the "City"), and GARO INC., a Kansas corporation
(the "Grantee").
WITNESSETH: The City for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, does hereby grant, bargain, sell, and convey unto Grantee, an
easement in, through, over, and across a certain portion of land owned by the City, as legally
described on the attached and incorporated Exhibit A and as depicted on the Engineering Drawing
attached and incorporated as Exhibit B for all rights of ingress and egress of the Grantee, its
servants, officers, employees, and contractors, for purposes of constructing, installing, repairing,
replacing, and maintaining an oil line for the term of that certain Oil and Gas Lease recorded on
February 18,1963 in O. & G, Book 25, p. 197-198 in Saline County, Kansas.
IN WITNESS WHEREOF, the duly authorized officers of the City have signed this
easement the day and year first above written.
CITY OF SALINA, KANSAS
By
Kristin M. Seaton, Mayor
ATTEST:
Lieu Ann Nicola, City Clerk
STATE OF KANSAS, SALINE COUNTY, ss:
BE IT REMEMBERED, that on this - day of July, 2002, before me, the
undersigned, a notary public in and for the county and state aforesaid, came Kristin M. Seaton,
Mayor of the City of Salina, Kansas, and Lieu Ann Nicola, City Clerk, who are personally
known to me to be the same persons who executed as such officers the within instrument of
writing on behalf of the City of Salina, Kansas, and such persons duly acknowledged the
execution of the same to be the act and deed of said City,
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year last above written.
Notary Public
[A real estate sales validation questionnaire is not required pursuant to KS.A. 79-1437e(a)(13)]
Exhibit B
Book-Page: 1019-148
OJL LINE EASEMENT
A oil line easement located in the Northeast Quarter (NE ¥4) of the Northwest Quarter (NW ~) of Section
Twenty (20), Township Fourteen (14) South, Range Two (2) West of the Sixth Principal Meridian in the City of
Salina, Saline County, Kånsas, said easement being Five (5) feet each side of the following described
centerline:
Commencing at the Northeast comer of said Northwest Quarter (NW ~) of Section Twenty (2m;
thence South 89 degrees 14 minutes 50 seconds West (S 89° 14' 50" W), along the Ì9"orth line of said
Northwest Quarter (NW ~), a distance of Nine hundred and Seventy-seven hundredths (900.77) feet;
thence South 00 degrees 45 minutes 10 seconds East (S 00° 45' 10" E), a distance of Fifty (50.00) feet to
the South right-of-way line of Crawford Street and the Point of Beginning; .
thence South 14 degrees 26 minutes 51 seconqs West (S 14° 26' 51" W), a distance of Nine and Forty-
five. hundredths (9.45') feet;
thence South 20 degrees 41 minutes 45 seconds East (S 20° 41' 45" E), a distance of Forty-one and
Fifty-fourhundredths (41.54') feet; ..
thence South 34 degrees 37 minutes 33 seconds East (S 34° 3.7' 33" E), a distance of Two .1Undred
Si~-six and Sixty-two hundredths (266.62') feet. .
The above described easement contains 3176 square feet, more or less andis shown on Exhibit "N\
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Exhibit A
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Section Line . 45.00'
CRAWFORD L . '_~~o14J5°.:w---- ST~EE~T-
----~- -~ 900.77'
. Point ot Beginning'. 'SOOO45'10ftE' NE Cor., NW 1/4. 50.00'
. 50.00' Sec. 20, T 14 S, R 2 W t
451 Right-ot-way Section Line
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S20041'45ftE
41.54'
Oil Line Easement
Scale 1. = 60'
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Book-Page: 1019-149
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50' Right-ot.way section line
Exist. Fence
OIL LINE EASEMENT
Exhibit ftN
Exhibit B
Book-Page: 1019-150
LICENSE AGREEMENT
This License Agreement is entered into this - day of July, 2002, by and between the
CITY OF SALINA, KANSAS (the "City") and GARO, INC., a Kansas corporation, ("GARO"),
Recitals
A. The City is the owner and Lessor of property situated in Saline County, Kansas,
more particularly described as follows:
The West Forty (40) acres of the East One-half of the Northwest Quarter (EY2NWY4)
of Section Twenty (20), Township Fourteen (14) South, Range Two (2) West of the
6th p,m. and containing Forty (40) acres; ("the Property")
B, GARO is the Lessee of the Property under a certain Oil and Gas Lease recorded on
February 18, 1963 in O. & G. Book 25, p. 197-198 in Saline County, Kansas (the "Lease"),
c.
GARO now operates an oil well ("the Well") on the Property.
D, The City has improved and developed the Property surrounding the Well into a six-
hole, par-three municipal golf course ("the Golf Course").
E, The construction of the Golf Course required the relocation of the oil line running
from the Well, prompting the need for this license agreement for the relocated oil line running
easterly along the south side of the Crawford Street right-of-way to the point of the intersection of
the relocated oil line with the pre-existing oil line, as depicted on the attached and incorporated
Exhibit A.
THE PARTIES THEREFORE AGREE:
1. Grant of License. The City grants a license to GARO for the construction and
maintenance an oil line as depicted on Exhibit "A" (the "License").
2. Term of License. The License shall commence upon execution of this License
Agreement and shall continue for the term of the Lease.
3. Maintenance of Relocated Line. GARO shall be responsible for maintenance of the
relocated oil line.
4. Future Relocation. If for any reason the further relocation of the relocated oil line is
required at the direction of the City, the City shall be responsible for all costs associated with the
proper relocation of the oil line.
Exhibit C
Book-Page: 1019-151
5, Binding Effect. This License Agreement shall be binding upon the parties, their
successors and assigns.
Executed the day and year first above written,
CITY OF SALINA, KANSAS
By:
Kristin M. Seaton, Mayor
ATTEST:
Lieu Ann Nicola, City Clerk
GARO, Inc.
By:
Gary Ray, President
STATE OF KANSAS; COUNTY OF SALINE, SS:
On this day of July, 2002, before me a Notary Public in and for said state,
personally appeared Kristin M. Seaton, Mayor, and Lieu Ann Nicola, City Clerk, for the City of
Salina, Kansas, known to me to be the persons who executed the within License Agreement on
behalf of the City of Salina, and acknowledged to me that they executed the same for the purposes
therein stated,
Notary Public
My appointment expires:
STATE OF KANSAS, COUNTY OF SALINE, SS:
On this day of July, 2002, before me a Notary Public in and for said state,
personally appeared Gary Ray, President of GARO, Inc., known to me to be the person who
executed the within License Agreement on behalf of the corporation and acknowledged to me that
he executed the same for the purposes therein stated,
Notary Public
My appointment expires:
-2-
Book-Page: 1019-152
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L 45' Right-of-way Section Line
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~ N£. Cor., NW 1/4 - I
18i - CRAWFORD. -:- - (sec~on Line - - - ¿sec. 20, T 14 ~ R 2 W 45.00'
- -~ - - - - - - - - - - ~ Existing ~~~ ~ Curb~.5:!: So. of Section Line) STREET I .
g~- -= - -- - - ~- - - ---=----=----==---==---=----=-=-=-=----- T-~--=----- SOtO
- "-- -- -- -- -- -- 0-
~ 50' Right-of-way Section Line CO ~ \
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\ ~ Relocated Oil Line : ~ E . t'
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~ Relocated Oil Line Measures - ~
Relocated Oil Line 3.5' to 4.7' So. of Bock of Curb -
to Oil Well
Oil Line
OIL LINE LOCATION
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Exhibit A