HomeMy WebLinkAboutRes1981-034
r
I
I
!
..
8/20/81
RM/s
8/24/81 REV
FBA:JES/jes
CITY OF SEWARD, ALASKA
RESOLUTION NO. 81- 34
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA,
AUTHORIZING A DOCK PERMIT TO VECO OFFSHORE, INC.,
SUBJECT TO APPROVAL BY THE QUALIFIED ELECTORS
OF THE CITY OF SEWARD, ALASKA
WHEREAS, the City of Seward plans to construct a major public
port facility at the Seward Marine Industrial Terminal, and
WHEREAS, the City of Seward has received appropriations from
the State of Alaska for the construction of a portion of the Seward
Marine Industrial Terminal in the vicinity of 4th of July Creek on
Resurrection Bay, and
WHEREAS, the construction and the future operation of the
Marine Industrial Terminal is of vital concern to the citizens of the
City of Seward in that the construction and operation of the terminal
will provide employment, economic growth, and services and facilities
needed by the citizens of Seward and maritime industries, and
WHEREAS, the City of Seward has agreed to lease to VECO
Offshore, Inc., certain property in the Seward Marine Industrial Terminal
for use by VECO Offshore, Inc., as a ship building and repair facility
and for other purposes in accordance with a proposed Lease Agreement
as described in City of Seward, Alaska, Resolution No. 81-13, and
WHEREAS, the City of Seward desires to arrange for the operation
of a portion of the major public port facility to be constructed by a
qualified operabDr, and
WHEREAS, the City of Seward has solicited various proposals
from local, national and international firms, which efforts have resulted
in a proposal by VECO Offshore, Inc., to lease lands and to operate a
portion of the public port facility as set forth above, which proposals
have been the subject of extensive negotiations for over a year, and
and
WHEREAS, the negotiations described above have been concluded,
WHEREAS, the Dock Permit by which VECO Offshore, Inc., will
operate a portion of the public port facility will be submitted to the
qualified electors of the City of Seward for approval at the regular election
to be held on Tuesday, October 6, 1981, and
WHEREAS, a public hearing on the proposed Dock Permit was held
on August 10, 1981, and
r
I
I
I
I
!
I
I
I
I
I
I
I
I
I
..
8/20/81
RM/s
8/24/81 REV
FBA:JES/jes
CIIT OF SEWARD, ALASKA
RESOLUTION NO. 81-34
A RESOLUTION OF THE CIIT COUNCIL OF THE CIIT OF SEWARD, ALASKA,
AUTHORIZING A DOCK PERMIT TO VECO OFFSHORE, INC.,
SUBJECT TO APPROVAL BY THE QUALIFIED ELECTORS
OF THE CIIT OF SEWARD, ALASKA
WHEREAS, the City of Seward plans to construct a major public
port facility at the Seward }wrine Industrial Terminal, and
WHEREAS, the City of Seward has received appropriations from
the State of Alaska for the construction of a portion of the Seward
Marine Industrial Terminal in the vicinity of 4th of July Creek on
Resurrection Bay, and
WHEREAS, the construction and the future operation of the
Marine Industrial Terminal is of vital concern to the citizens of the
City of Seward in that the construction and operation of the terminal
will provide employment, economic growth, and services and facilities
needed by the citizens of Seward and maritime industries, and
WHEREAS, the City of Seward has agreed to lease to VECO
Offshore, Inc., certain property in the Seward Marine Industrial Terminal
for use by VECO Offshore, Inc., as a ship building and repair facility
and for other purposes in accordance with a proposed Lease Agreement
as described in City of Seward, Alaska, Resolution No. 81-13, and
WHEREAS, the City of Seward desires to arrange for the operation
of a portion of the major public port facility to be constructed by a
qualified operator, and
WHEREAS, the City of Seward has solicited various proposals
from local, national and international firms, which efforts have resulted
in a proposal by VECO Offshore, Inc., to lease lands and to operate a
portion of the public port facility as set forth above, which proposals
have been the subject of extensive negotiations for over a year, and
and
WHEREAS, the negotiations described above have been concluded,
WHEREAS, the Dock Permit by which VECO Offshore, Inc., will
operate a portion of the public port facility will be submitted to the
qualified electors of the City of Seward for approval at the regular election
to be held on Tuesday, October 6, 1981, and
WHEREAS, a public hearing on the proposed Dock Permit was held
on August 10, 1981, and
J
..
.'
)
I
~;:~'2;:F;F;n~
t:~ -. .
~
,!oa ~!O.
date
originator
1- 54
8-l~-S.1
CL!4
LEGAL DESCRIPTION
August 19, 1981
BOAT RAMP AND FLOATING DOCKS
A tract of land situated in fractional Section 18
T1S R1E of the Seward Meridian, Third Judicial District,
State of Alaska, the boundary of said tract being defined
herein by both provisions and geometry, these provisions
being exactly:
1. That said tract boundary encompasses the
area of the proposed license and operation of a boat ramp
and dock facility defined by preliminary concept; and,
I'
2. That the basis of local geometric bearing
is ~rtesian and suitably defined as the South Line of United
State Survey (U.S.S.) Number 4827, with a local bearing of
West, and finally,
3. That said tract is contained completely
by the actual bounds of said U.S.S. 4827 and by areas of
intermittently submerged tidelands and tidal accretions
contiguous to said U.S.S. 4827, and within the North and
;;
"
South lines of said U.S.S. 4827 extended westerly; said
tract being more particularly defined as follows:
,.
~ I
commencing from Corner Number Three of the
aforementioned U.S.S. 4827, thence, West and along the South
line thereof a distance 1200.00 feet; thence, North a distance
685.00 feet; thence West a distance 630.00 feet to the
1:
"
,
True Point of Beginning,
thence, North a distance 525.00 feet;
thence, West a distance 185.00 feet;
thence, South a distance 520.00 feet;
thence, West a distance 120.00 feet;
-1-
r
,
~
t'
~
'J
~
. '.i": ~
.i
::
~ .
I:
,]
,
i!
"
I'
~
~ "
.< !I
"
I,
thence, South a distance 100.00 feet;
thence, East a distance 120.00 feet;
thence, South a distance 250.00 feet;
thence, East a distance lB5.00 feet to a point
on the line of the first course extended;
thence, North, and along said extension a distance
345.00 feet
to The True Point of Beginning, said tract containing
in all, inclusive of tidal accretions and intermittently
submerged tidelands, 3.97 acres, more or less; EXCEPT,
possible future additions or deletions of areas mandated by
modifications to existing plans and documents governing the
length, location, or physical nature of the proposed boat
ramps, docks and other facilities contained by concept
herein or otherwise mandated by FUTURE AS-BUILT CONDITIONS.
"
,:
if
;1
';
II
-2-
r
I
8/6/81 Rev
l'BA/lsa
.'
"
HUGHES THORSNESS
GArHZ POWi:LL6BRUNDI~;
ATTORNEYS "T ~w
50tWUT'HlllO"'VUWl
A'lCIlORAGE. AK 9950 I
(907) 114.1522
r
'\
DOCK PERMIT
This agreement made this
, 19B1, is
day of
between the City of Seward, a municipal corporation of the State
of Alaska ("CITY"), and VECO OFFSHORE, INC., a Delaware corpora-
tion with head offices in Alaska ("VECO").
WHEREAS, CITY has leased to VECO property in the Seward
Marine Industrial Terminal for use by VECO as a shipbuilding and
repair facility, and for other purposes in accordance with that
certain Lease Agreement attached hereto as Exhibit A and incorpo-
rated herein by reference, and
WHEREAS, CITY plans to construct a major Public Port Facility
at the Seward Marine Industrial Terminal adjacent to the land
leased to VECO, and
WHEREAS, City has agreed to grant to VECD the exclusive
right and privilege to occupy for a term of years and extensions
thereof and to use, in accordance with the provisions of this
agreement, a portion of the public Port' Facility for the CITY,
and
WHEREAS, this agreement has been determined to be in the
public interest by the City Council of the City of Seward in
Resolutions numbered 81-____ and Bl-____,
NOW, THEREFORE, for and in consideration of the mutual
promises and covenants hereinafter contained, the parties agree
as follows:
1. Grant of Right
CITY does hereby grant to VECD the exclusive right and
privilege to occupy, for a term of years and extensions thereof,
in accordance with the provisions of this agreement a portion of
the Public Port Facility to be constructed by CITY and VECD does
hereby accept the responsibility for operating a portion of the
Public Port Facility according to the terms of this agreement.
-1-
~,
~
,I
~
~
~ ,
,
i'
;
i,:
HUGHES THORIHESS
JANT%POWElUBRU~DIN
ATTORNI:'rtI AT LAW
10. WlSfTM1RDA'IlfllUE
ANCHORAGE. Ate 'ISOI
(107) 174-1521
r"
:' ~,
The portion of the Public Port Facility to be operated by
VECO (hereafter referred to as "VECO Portion") is outlined in red
on the attached Exhibit B which is incorporated herein by refer-
ence and the VECO Portion of the Public Port Facility consists of
two sub-portions, that outlined in green (hereafter referred to
as "ship lift"), and that outlined in blue (hereafter referred to
as "general dock").
VECO shall service all members of the public seeking the
services offered on the VECO Portion of the Public Port Facility
pursuant to any adopted tariff; that is, where a party is willing
to pay for a service offered by VECO to members of the public on
the VECO Portion of the Public Port Facility in accordance with
any adopted tariff, VECO shall perform any work pursuant to such
tariff for any member of the public seeking the services offered
provided the party seeking the services complies with any then
applicable tariff provisions.
2. Construction of Public Port Facility
Prior to the time VECO is to begin operation of the VECO
Portion of the Public Port Facility, electrical, sewer and water
utilities sufficient in size or volume to support VECO's opera-
tion of the VECO Portion of the Public Port Facility will be made
available to VECO by CITY.
CITY shall promptly and subject only to availability and
receipt of public funds from the state of Alaska or the United
states construct the Public Port Facility such that the VECO
Portion of the Public Port Facility is ready for use by the
public and operation by VECO.
CITY shall provide VECO with monthly progress reports con-
cerning the design and construction of the Public Port Facility
commencing on the first of the month following the date hereof
and continuing throughout the construction period.
-2-
r
I
i
i
!
'j
J
.i
~,"_, :i,.~'';!~~'~:!,~7rf,~
.' .','.'11." I..~ "1
':':.'~{';.>y,~
HUGHES THORSNE5S
iANTZ POWELLaBRUNDrN
ATTORNEYS AT LAW
5a,WUTTHIIIIDIl.VltiUE
ANCHORAGE. AI( 99501
(I0112U.7522
,)
--j
,"'
3, Force Majeure
Any other provisions of this agreement to the contrary
notwi thstanding, in the event CITY is delayed from beginning or
completing construction of the Public Port Facility, or if VECO
is prevented from operation of the VECO Portion of the Public
Port Facility or otherwise delayed in performing any of the
obligations under this agreement, due to acts of God, strikes, or
other concerted acts of workmen, unavailability of labor or
materials, fires, floods, explosions, war, an unreasonably fore-
seeable delay in the issuance of any approvals' or permits from
local, state or federal agencies, or other causes beyond CITY or
VECO'S reasonable control, the time period wherein such construc-
tion or operation is to occur shall be extended by that amount of
time necessary to compensate for the delay.
Any extension of
time to City pursuant to the provisions of this paragraph shall
be 'deemed, ipso facto, to constitute a "Force Majeure" under
paragraph 6.l(g} of the Lease Agreement and VECO shall receive a
sufficient extension of time to compensate for the delay.
4. Compatibility of Facilities
CITY intends to build a public dock and ship lift capable of
efficiently docking, loading and transferring vessels at the
Public Port Facility. When such facility is designed, CITY will
make available to VECO engineering specifications and will co-
ordinate to the extent possible the interface or use of such
facilities by VECO and the connection of such facilities to
facilities constructed by VECO on land leased from CITY adjacent
to the VECO Portion of the Public Port Facility.
5. Definitions
As used in this agreement, the following terms or variations
thereof, shall, unless otherwise provided, have the following
-3-
r
~
:j
.'
"
'!
,
{~r,;;::!'~;Y!;;j:~
~
HUGHES THOR'NISS
;AHnPOwELuBRUNDIN'
ATTOltNCvt; AT LAW
st. WIST TH'..II AVIMUE
ANCHORAGE. AI(. "501
('07) Z74.JSZZ
respective meanings.
Certain other additional terms as defined
in other paragraphs of this agreement shall have the respective
meanings therein attributed to them.
(a) "Public Port Facility" means the dock and related
port facilities to be constructed at the 4th of July Creek
on Resurrection Bay.
(b) "Product" means any and all goods, equipment and
materials transported across the Public Port Facility into
the hold or hull of a Ship.
(c) "Selling price" means the commodity purchase
price, shipping costs, storage, treatment, or other costs
associated with any commodity or product prior to loading
into a vessel, and also the costs of loading into a vessel,
wi thout reduction for federal and state income taxes. The
selling price shall exclude all costs incurred after loading
into the hold or hull of a ship-at the Public Port Facility,
such as transportation by sea and subsequent processing or
preparation for ultimate use.
(d) "Sale" means the transfer of title or custody of
products at dockside Seward.
(el . "Service" means charges made by VEce for port
and/or dock services performed on the VEce Portion of the
Public Port Facility and shall include, but not be limited
to, charges for crane, forklift, handling of products,
stevedoring, storage of products and boats, lift and dry
dock and vessel repair work.
(f) "Wharfage" means a charge on any cargo placed in
transit sheds, storage areas, at shipside or on the wharf,
passing over or under the facilities or transferred between
-4-
"
HUGHES THORSNESS
iANn POWELLaBAUNDIN
ATTO",Nr:VII AT UW
'UWUlllltIlD""tNU(
ANCHOItAGE. .ilK 11501
1'07>> 214.152%
! '
vessels. wharfages may be due even if cargo is not handled
to or from a vessel, and whether or not the wharf is used.
Wharfage does not include charges for any other services.
(g) "Wharf or wharves" means any wharf, pier, bulkhead,
or other waterfront structure, mooring dolphins, or bank.
6. Monthly Payments
The monthly payments to be made by VECO to CITY with respect
to the VECO Portion of the Public Port Facility shall be as set
forth below:
(a) Sales
CITY shall receive two percent (2%) of the selling
price received by VECO for any products of VECO or any
affiliated entity where the products are sold on or from the
ship lift area of the VECO Portion of the public Port Facil-
ity as outlined in green on the attached Exhibit B.
shall receive five percent (5%) of the price
sold on or'from the general dock area of the
CITY ,
i
for such products:
I
VECO Portion of !
I
I
i
i
,
i
i
of the monies I
the Public Port Facility as outlined in blue on Exhibit B.
(b)
services
CITY
shall
receive
(2%)
two
percent
collected by VECO for services rendered on or from the ship
lift area of the VECO Portion of the Public Port Facility as
outlined in green on the attached Exhibit B.
(c) Wharfage
CITY shall receive twenty percent (20%) of the gross
wharfage charges received by VECO related to use of the ship
lift area of the VECO Portion of the Public Port Facility as
outlined in green on the attached Exhibit B. CITY shall
receive eighty percent (80%) of the gross wharfage charges
-5-
r
~ i
tj\{i:.;:\i:<:':;\,;~~
'!
HUGH~S THORS'HESS
iANTZ POWELL.BRUNDIN
ATTOltNEYS AT LAW
50. WESfTMlaoAVIMUl
ANCHORAGE, AK 11501
(,on %7".7522
. ~. J ','
received by VECO related to use of the general dock area of
the VECO Portion of the public dock as outlined in blue on
the attached Exhibit B.
(d) Dockaqe
CITY shall receive twenty percent (20%) of the gross
dockage charges received by VECO related to use of the ship
lift of the VECO Portion of the Public Port Facility as
outlined in green on the attached Exhibit B.
CITY shall
receive eighty percent (BO%) of the gross dockage charges
received by VECO related to use of the general dock area of
the VECO Portion of the Public Port Facility as outlined in
blue on the attached Exhibit B.
(e) No products, whether owned by VECO or any affil-
iated entity or any other party except the CITY will be
voluntarily moved across the VECO Portion of the Public Port
Facili ty or stored thereon free of the charges of subpara-
graph (a) -through (e).
VECO and the CITY shall prepare a
port tariff in accordance with the provisions of paragraph 7
hereof and shall submit it to the Federal Maritime Commission
if required not later than six (6) months after VECO com-
mences construction of the VECO Service Facility as defined
in paragraph 2.2 of the Lease Agreement between the parties.
In the event that a product of VECO or any other entity is
sUbject to a tariff or charge which is less than eighty
percent (80%) of the published tariff of the Port of Anchor-
age, VECO shall pay the CITY an amount equal to the amount
which CITY would have received if the tariff had been equal
to eighty percent (BO%) of the applicable published tariff
of the Port of Anchorage whether or not VECO collects a
tariff or charge.
In the event the said Port of Anchorage
-6-
r
I
I
i
,,",
. ;""~.,' ',"
,....
tariff does not include published charges for such item, the
term "published tariff of the Port of Anchorage" as used in
this paragraph shall be replaced by the term "the median of
~
the most current published charges or tariffs on such product
at the three geographically nearest ports in existence as of
the creation of this permit which have a published charge or
"6
tariff on such product."
(f) VECO shall give CITY a monthly report of all
service and sales activities on the VECO Portion of the
~
,j
~
Public Port Facility sufficient to allow CITY to determine
VECO'S monthly payment for each particular month of the term
of this agreement. The report for a particular month shall
be delivered to the City Manager's office not later than ten
( ~
,
(10) days after the close of the particular month.
The
',~~ ~;I :.:t ~'-.~,~~~~~?:~~;~~~
~ ".'~ . '.
I~
!:
monthly payment for a particular month shall accompany. the
report for that particular month.
7.
Tariffs and Audit
VECO and the City Manager or his staff shall jointly prepare
a Tariff of rates and charges to be collected from, and conditions
to be imposed upon and observed by, users of the VECO Portion of
the Public Port Facility ("Tariff").
The Tariff so prepared
shall be submitted, with the City Manager's recommendation for
its approval, to the City council of the City of Seward. If the
City Manager and VECO cannot agree upon a Tarriff and jointly
recommend its adoption to the City Council, the last proposals of
~
the City Manager and VECO shall be submitted to the City Council.
In reviewing either a jointly-submitted Tariff, or the last
1 proposals for such a Tariff, the City Council may accept, reject
HUGHES THO,,"ES' or modify any such proposals.
3ANTl. POWELL.6SRUHOIN
ATTO,",NEYS AT LAW
50.WUlTHIRDAVlMUt
ANCHORAGE. AK "501
(907) :Z70C.752Z
-7-
f'
M
:1
~
I
..
" '.f~;~,,'~:_l~~tr'f
.. .,. ~
HUGHES THORSNESS
GANnPOWELLIBRUr.OIN
ATTOftNlI:Y. AT LAW
ID'WESTTM'.DAVlNUE
ANCHORAGE. AI( 9"01
(907) 274.7512
/ "
If VECO disputes whether a Tariff adopted by or approved by
the ci ty Council is reasonable, it may submit the issue of the
reasonableness of the specific portions of the Tariff to which it
objects to arbitration in accordance with the rules of the Ameri-
can Arbitration Association. The Arbitration Panel shall consist
of three members, two of which shall have experience and expertise
with respect to the operation, tariff structures, and financial
affairs of public port facilities.
The Tariff shall remain in effect until such time as any
.
portions challenged by VECO are determined to be unreasonable by
the Arbitration Panel.
The Arbitration Panel's authority shall
be limited to determining that a particular provision challenged
by VECO is unreasonable and its substitution therefore, effective
no earlier than the date of its decision, of a substitute provi-
sion. The Arbitration Panel (or the American Arbitration Associ-
ation, where appropriate) may, in its 'discretion, award costs,
attorneys I fees and compensation to the arbitrators (based on
their expertise) to either party.
Nothing contained herein is intended to deprive the City
Council of the City of Seward of responsibility for protecting
the public interest by setting reasonable tariffs, nor to deprive
the Federal Maritime Commission of any jurisdiction it might have
over the establishment of tariffs and the operation of the Public
Port Facility.
If this arbitration provision is declared by a court of
competent jurisdiction to be an illegal divestiture by the City
of its authority to establish tariffs for the Public Port Facil-
ity (subject to any requirements of the Federal Maritime Commis-
sion) or to control the operation of the Public Port Facility,
then the remainder of this agreement shall remain in effect and
-B-
r
I
I
4
"
~
o
-,
~
, '~8;.~':;.~r;'~;~
. ,. ~ ~." .~::\
;':.
the City Council shall have ultimate authority and responsibility
to set tariffs in the public interest.
CITY shall at all times during the term hereof and for a
period of two (2) years after the termination hereof, have the
right to have the business records of VECO audited by a certified
public accounting firm, at the sole expense of CITY, and to the
extent necessary to determine the accuracy and validity of the
records and accounting for payments.
B. Term
The term of this agreement shall be for a primary term of
ten (10) years commmencing on the date determined in accordance
with paragraph 6.I(f) of the Lease Agreement between the parties
and, at VECO'S option, for up to two additional five (5) year
terms upon the same terms and conditions as are contained in this
agreement. The option to renew an expiring term for an additional
term shall be considered exercised by VECO and binding on VECO
and CITY unless_VECO gives CITY, within a period of not less than
one hundred and eighty (lBO) days prior to the date that the then
existing term is to expire, written notice sent by registered
mail, that VECO is not exercising its option to renew the agree-
ment for an additional term.
Unless prohibited by law or the
charter of City, VECO shall have the option to renew this agree-
ment for eight (B) additional five (5) year terms, to be exercised
in the same manner as set forth above.
9. Acts of Default
The following shall be "acts of default" under this agreement
and the terms "act of default" and "default" shall mean, whenever
they are used in this permit, anyone or more of the following
HUGHES THonSNESS events:
jAHTZ PowEllaBRUNOIN
",TTORNltYS AT ~w
50tWUTTHIRDAYJI1U(
ANCHORAGE. Ale: 99501
(901) 274.7522
-9-
r
~
l'
f;
~!
I
.,
"
~
"
"
HUGHES THORSNESS
iANnPOWELLaBRUNDIN
A'TOln"IEV. AT LAW
$llI WnTYHUID"ltI'lIIUI
ANCHORAGE. Ak 99501
(9071 274.7521
r ,
(a) Failure by VECO to pay when due the payments
required to be paid under paragraph 7 hereof, and the contin-
ued failure for a period of more than thirty (30) days after
written notice of such failure has been given to VECO by the
CITY.
(b) Failure by VECO to observe and perform any cove-
nant, condition or agreement on its part to be observed or
performed under this agreement, other than as referred to in
Section (a) above, for a period of sixty (60) days after
written notice specifying such failure, requesting that it
be remedied, and stating that it is a notice of default, has
been given to VECO by the CITY; provided, however, if said
defaul t is such that it cannot be corrected wi thin the
applicable period, it shall not constitute an act of default
if corrective action is instituted by VECO within the appli-
cable period and diligently pursued until the default is
corrected. .
(c) The'making by VECO of an assignment for the benefit
of creditors, the filing of a petition in bankruptcy by
VECO, the adjudication of VECO as insolvent or bankrupt, the
petition or application by VECO to any tribunal for any
receiver of or any trustee for itself or for any substantial
part of its property; or the commencement of any proceeding
relating to VECO under any bankruptcy, insolvency, reorgani-
zation, arrangement or readjustment of debt law or statute
or similar law or statute of any jurisdiction, whether now
or hereafter in effect which shall remain undismissed for a
period of six (6) months from the date of the commencement
thereof.
-10-
:'
r.
HUGHES THORSNESS
iASTZ POWElL6.BRONQtli
ATTOf<NtVS AT \.AW
'0' WFST THIRD ~YlNUE
,."'CMORAGE. AI( 9950\
(!I071274.1522
(d) violation by VECO of any law of the United states
or the State of Alaska with respect to the operation of the
VECO Portion of the Public Port Facility for a period of
sixty (60) days after written notice of such violation has
been given to VECO by the agency charged with the enforcement
of such laws; provided, however, if said violation be such
that it cannot be corrected within the applicable period, it
shall not constitute an act of default if corrective action
is instituted by VECO within the applicable period and dili-
gently pursued until the violation is ended. Furthermore,
if VECO shall contest such alleged violation through appro-
priate judicial or administrative channels, the time period
specified herein shall not commence until such proceedings
are finally determined; provided, however, that such exten-
sion due to appeal of agency or judicial decisions shall not
be effective if the effect of the interim administrative or
judicial action is to cause a stoppage of any of the activi-
ties for which the new service facility or related Seward
port facility were constructed including cargo loading and
offloading, cargo storage, vessel berthing and docking,
vessel servicing, vessel construction, vessel repair, metal
fabrication and any activity which is an integral support
function of any of these named activities; provided further,
that if such a stoppage occurs it shall not be deemed a
default if VECO promptly pays the City for any loss suffered
directly or by reason of such stoppage.
(e) violation by VECO of any conditions of any permits
issued by agencies of the State of Alaska or of the United
states government pursuant to the regulations of such agen-
des for a period of sixty (60) days after written notice
-11-
.
~
~
D
~
HUGHES THORSNE$S
iANTZ POWUl.aBRUNDIN
ATTOJ.lNEVS AT LAW
$O'WUT 'MIIlD AYIIIU[
ANCHORAGE. AK 19501
(907) 2.14.7522
specifying such violation has been given by such agency to
VECO; provided, however, if such violation be such that it
cannot be corrected wi thin the applicable period, it shall
not constitute an act of default if corrective action is
instituted by VECO within the applicable period and dili-
gently pursued until the violation is corrected. Further-
more, if VECO shall contest such alleged violation through
appropriate judicial or administrative channels, the time
period specified herein shall not commence until such pro-
ceedings are finally determined; provided, however, that
such extension due to appeal of agency or judicial decisions
shall not be effective if the effect of the interim admini-
strative or judicial action is to cause a stoppage of any of
the activities for which the new service facility or related
Seward port facility were constructed including cargo loading
and offloading, cargo storage, vessel berthing and docking,
vessel servicing, vessel construction, vessel repair, metal
fabrication and any activity which is an integral support
function of any of these named activities; provided further,
that if such a stopp.age occurs it shall not be deemed a
default if VECO promptly pays the City for any loss suffered
directly or by reason of such stoppage.
10. Remedies for Default
Whenever any event of default referred to above shall have
occurred, and the applicable period for giving notice and an
opportunity to cure shall have expired, CITY shall have the
-12-
~
\1
:j
~Y:7i:1~6iB/;~
"
'!
HUGHES THORSNESS
3ANTZ PowELLaBRUN DIN
ATfORNIEYS AT LAW
so,wurTIllllDAYIMUE
ANCHORAGE. AK 99501
1907127..7522
/~
following rights and remedies all in addition to any rights and
remedies that may be given to CITY by statute, common law or
otherwise:
(a) Distraint for Payments. This remedy shall include
the right of CITY to dispose of property distrained in any
commercially reasonable manner.
It shall be conclusively
presumed that compliance with provisions of the Alaska
Uniform Commercial Code (AS 45.05.7BB) with respect to sale
of property shall be a commercially reasonable disposal.
(b) Take possession of the VECO Portion of the Public
Port Facility and remove all personal property of VECO
therefrom. Such personal property may be removed and stored
in a public warehouse or elsewhere at the cost of VECO all
without service of notice or resort to legal process, all of
which VECO expressly waives, and without CITY becoming
liable for any loss or damage which may be occasioned to
VECO thereby.
(c) Declare the term of this agreement terminated.
(d) Enter into an agreement with another operator for
all or part of the VECO Portion of the Public Port Facility
for a period equal to or greater or less than the remainder
of the term of this agreement, for any sum which CITY may
deem reasonable.
(e) Collect any payments due or to become due from
users, shippers, other occupants of the VECO Portion of the
Public Port Facility.
(f) Declare an amount equal to all amounts then due
and payable to be immediately due and payable under this
agreement whereupon the same shall become immediately due
and payable.
-13-
r
~
;/
,;
)1i':yt~:,:,:i.Y".t,1~
:~:f ,: :..
HUGHES THOR$NESS
:;A,':rzPowELL,9RUfIDIN
ATTORNEY5 AT LAW
50'WUllHIRD,l'/[r;U(
ANCHORAGE. AK it50 I
non 27.4.7522
~' ,,~..' ,-,i ':",;.. -,.\ ""f"-
(g) Recover from VECO, whether this agreement be
terminated or not, reasonable attorney's fees and all other
expenses incurred by CITY by reason of the breach or default
by VECO.
(h) Recover an amount to be due immediately on breach
equal to the difference between the amounts set forth in
this agreement and the fair and reasonable monthly payments
for the remainder of the agreement.
In the computation of
such damages, the difference between the installments of
monthly payments due and the fair and reasonable value of
the monthly payments for the privileges granted hereunder
for the period of which such installments is payable shall
be discounted to the date of such breach at the rate of
eight percent (B%) per year.
If any portion of the privi-
leges under this agreement are assigned by CITY for the
unexpired term of this agreement, or any part thereof,
before presentation of proof of damages, the amount of
payments reserved upon such assignment, in the absence of
evidence to the contrary, shall be deemed to be the fair and
reasonable payments.
(i) If VECO does not immediately surrender possession
of the VECO Portion of the Public Port Facility upon demand
by CITY, CITY may forthwith enter into and upon the VECO
Portion of the Public Port Facility, expel VECO or those
claiming under VECO without being deemed guilty in any
manner of trespass and without prejudice to any remedies
which might otherwise be used for arrears of rent or breach
of covenant.
(j) No expiration or termination of this agreement
shall relieve VECO of its liability and obligations under
-14-
r
I
I
I
!
'. "I '-'"'r''' .~, I "
,~
this agreement, and such liability and obligations shall
survive any such expiration or termination.
(k) The remedies conferred on or reserved to CITY in
section 10 hereof are intended to be cumulative and exclusive
of any other remedy or remedies for acts of defaults; pro-
vided, however, that the limi tations and remedies for de-
faults or acts of default shall not preclude CITY from
bringing any action to seek remedy by reason of any misrepre-
sentation arising out of this agreement.
The foregoing
tl
~,
!
~'I
rights of CITY in the event of default are in lieu of and
;.
preclude any claims against VECO for specific performance.
No delay or omission to exercise any right or power accruing
"
under any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such
right and power may be exercised from time to time and as
often as may be deemed expedient.
If either party hereto shall deem the other to be in
default under any terms or conditions hereof and shall incur
legal expenses or other costs in the successful enforcement
of such right or rights, the defaulting party shall pay
c
reasonable legal expenses and costs. In the event the party
alleged to have been in 'default is found not to have been in
defaul t, the party making the allegation shall pay any
reasonable costs incurred in the successful defense of such
claim.
11.
Transfer of Facility
Improvements constructed by VECO which become permanently
affixed to the land such as concrete foundations, buildings,
HUGHES THORSNESS steel warehouses, ditches, sewer lines, water lines, dikes, or
:;ANTZ POVlELLaBRUNDIN
ATTOFlN:5:VS AT LAW
10. WUT TlUROAYEMUl berms, and similar improvements, shall become the property of
ANCHORAGE. .U: U501
('011 274.7512
-15-
r
I
,
i
,~
CITY at the termination of this agreement for any reason except
purchase of the VECO Portion of the Public Port Facility by VECO.
All fixtures, machinery, and equipment including without limita-
tions, storage tanks, compressors, radio towers, radio equipment,
cranes, winches, conveyor belts, engines and machines constructed
by VECO shall be deemed to be personal property and the property
of VECO even though affixed to the land or to a building and VECO
shall have the right to move the same at any time during the
I'
,1
,I
period of this agreement is in effect or wi thin a period of
ninety (90) days following the termination of this agreement.
'f:
Upon removal of any item or items, VECO shall have no obligation
to remove any concrete foundations, pilings or similar improve-
ments, except those which are deemed hazardous by the CITY. Any
item not removed by VECO during the period this agreement is in
effect or wi thin the perIod of ninety (90) days following the
termination of this agreement, shall become the property of CITY.
, ~
All costs for repair and maintenance on any improvements con-
structed by VECO on the VECO Portion of the Public Port Facility
shall be paid by VECO and CITY shall have no obligation to pay
any repair or maintenance costs Witll respect to the VECO Portion
of the Public Port Facility.
12. Transfer by VECO
VECO shall have no right to assign its rights under this
agreement unless the Seward City Council, in its sole discretion,
agrees to such assignment or transfer. Any transferee shall be
bound by all of the terms and conditions of this agreement. Not-
wi thstanding the foregoing, VECO may trans fer or assign this
~
agreement to VECO Maritime, Inc., an affiliated corporation
HUGHES TH.",'ESS provided that VECO Offshore, I nc., shall guarantee each and every
GANTZ POWELlaBRUNDIN
I::T~:~~:~II::Y~:~( obligation of VEeo Maritime, Inc., under this agreement and VEeO
ANCHORAGE. Ale. 9ISOI
liD'} 274.7522
-16-
r
I
I
!
1
I
1
~
~
,
l~
HUGHES THORSNESS
GANTZ POWELLaBRU N DIN
ATTORNEYS AT u.w
sa. WUTTHlItOaVrtiU[
ANCHORAGE. AI( 9$501
(9011 214.7522
Maritime, InG., shall guarantee each and every obligation of VECO
Offshore, Inc., under the terms of the Lease Agreement.
VECO
Maritime, Inc., and VECO Offshore, Inc., agree to execute written
guarantees in the event of any transfer of this agreement by VECO
Offshore, Inc., to VECO Maritime, Inc.
13. Indemnification
VECO agrees to hold CITY harmless and defend CITY from all
claims for personal injuries and property damage of every kind
and character relating to the VECO Portion of the Public Port
Facili ty or VECO' S use of the Public Port Facility by VECO' S
sublessees, agents or contractors or the public.
VECO shall procure and maintain, at VECO' S sole cost and
expense, comprehensive general liability insurance, with limit of
liability of not less than Five Million Dollars ($5,000,000.00),
for all injuries and/or deaths resulting to anyone person or
from anyone occurrence.
The limi t of liability for property
damage
shall' be
Five
Million
less
than
not
Dollars
($5,000,000.00) for each occurrence and aggregate.
Coverage
under such insurance shall also include insurance of any explo-
sion, collapse and underground property damage hazards.
Such
insurance shall include a broad-form contractual endorsement.
!
!
i
I
I
,I
VECO agrees to provide, at its sole cost and expense, ade-
Any "watercraft exclusion" in the comprehensive liability insur-
ance policy shall be eliminated or protected and indemnity insur-
ance shall be provided with the same limits as the comprehensive
liability insurance for the use of watercraft.
quate types and amounts of insurance to completely cover any
potential liability of the CITY arising out of this agreement or
the use or operation of the Public Port Facility by VECO, or
VECO'S operations which are not on the VECO Portion of the Public
Port Facility. The parties recognize that VECO'S use or operation
-17-
r
I
'.
~
~!
~
.'
;:
...
HUGHES THORSNESS
:iANTZ POWELL.BRUNDIH
ATTO''''II:Y. AT U.W
sa'WUT'"IIIDA\lIMU(
ANCHORAGE. Ale !!I9,OI
(1071 2".7522
hereunder may change during this agreement. The minimum amounts
and types of insurance provided by VECO shall be subject to
revision in accordance with standard insurance practices, in
order to provide continuously throughout the term of this agree-
ment and any extensions hereof, a level of protection consonant
with good business practice and accepted standards in the industry.;
Such factors as increases in the cost of living, inflationary
pressures, and other considerations shall be utilized in assessing
whether the minimum insurance requirements should be increased.
CITY shall notify VECO of any requested' increase in insurance
coverages at least sixty (60) days prior to the effective date of
such increases.
If VECO and CITY disagree as to whether the
increased coverages are reasonable, the increases shall be effec-
tive but VECO may submit the issue of the reasonableness of the
increases to binding arbitration under the Rules of American
Arbitration Association.
All insurance policies shall provide for thirty (30) days'
notice of cancellation and/or material change to be sent to CITY
at the address designated in paragraph 17 of this agreement. All
such policies shall be written by insurance companies legally
authorized and licensed to do business in the state of Alaska,
and acceptable to CITY (Best's Rating Triple A or better). VECO
shall furnish CITY, on forms supplied by CITY, certificates
evidencing that it has procured the insurance required herein
prior to the operation by VECO. Nothing herein contained shall
prevent VECO or CITY from placing and maintaining at VECO I S or
CITY'S own individual cost and expense, additional or other
insurance as may be desired.
At least annually throughout the term of this agreement VECO
shall procure and submit to CITY a written report from a reputable
-18-
r
I
I
.'
li
I
:!
?
E
HUGHES THORSNtSS
:;ANTZ PowtLLaBRUNDIN
ATfOqNEY(; '.T LAW
SO. .....U'TKlROAV[~U[
"NCHOU.Gr, AX: 99501
(90712:14.7522
insurance Broker that the Broker has reviewed the types and
amounts of coverage of insurance obtained by VECO and the opera-
tions of VECO and has determined that insurance coverage is
adequate and complete.
All of the insurance policies required above as well as any
insurance carried by VECO, or those holding under or through
VECO, for the protection of its or their property on or about the
public dock, or their operations, shall provide that the insurers
waive their rights of subrogation against CITY and VECO and their
respective officers, servants, agents or employees. VECO further
agrees to waive and agrees to have its insurers waive any rights
of subrogation (whether by loan receipts, equitable assignment or
otherwise), wi th respect to deductibles under such poliGies and
wi th respect to damage to equipment including the loss of use
thereof, whether insured or not. VECO shall also name CITY as a
named insured on each insurance policy.
14. Condemnation
If all or any part of the VECO Portion of the Public Port
Facility are condemned for a public use by any government agency
or other duly authorized entity, CITY and VECO shall each make
claim against the condemning or taking authority for the amount
of any damage incurred by or done to them respectively as a
result of the taking.
Neither CITY nor VECO shall have any
rights in or to any award made to the other by the condemning
authority; provided, that in the event of a single award to CITY
which includes specific damages for loss of VECO'S interest, CITY
shall transmit to VECO the amount of such specific damages so
found, if any.
If part, but not all of the VECO Portion of the Ptililic Port
Facility is condemned for public use, VECO shall make a good
-19-
t;
"j
)
~
HUGHES THORSNtsS
;!\N:UPOWELl.t.BP.UltOtN
ATTORNlI;Y5 AT LJi.W
"'IWnfyttIIlOllVINUI
PoMC"ORMiE. Po~ .'t~,
(ton 274.152%
r-
I
!
faith determination as to whether or not the taking of the part
of the VECO Portion of the Public Port Facility designated for
condemnation will prevent it from continuing to operate on the
remainder of the VECO Portion of the Public Port Facility. If
VECO determines in good faith that the condemning of such part
will prevent it from continuing to operate, then VECO shall
notify CITY in writing to this effect, and this agreement shall
then terminate for all purposes effective fifteen (15) days from
the date VECO sends such notice to CITY and such termination
shall be tre'ated in the same manner as a termination at the
expiration of one of the terms provided for in paragraph B hereof.
15. Sale of Public Port Facility
CITY shall not sell. assign or transfer all or any part of
the VECO Portion of the Public Port Facility during the term of
this agreement unless such sale, assignment or transfer is express-
ly made subject to all of the terms of this agreement.
If CITY
desires to sell, assign or transfer the VECO Portion of the
Public Port Facility in whole or in part, CITY shall be required
to notify VECO of the proposed purchase price, terms and condi-
tions at which CITY proposes to sell.
VECO shall have ninety
(90) days after receiving the notice of such proposal to decide
whether VECO wishes to purchase upon such price, terms and condi-
tions.
If VECO elects to purchase the property upon such price,
terms and conditions, it shall notify CITY of this election, and
CITY shall thereupon promptly enter into a contract of sale with
VECO for sale of such property upon such price, terms and condi-
tions. If VECO does not notify CITY that VECO wishes to purchase
upon such price, terms and conditions, then CITY shall have the
right to sell to the purchaser named in the Notice of Proposal to
Sell which was sent to VECO upon the same price, terms and condi-
-20-
t!
~
~
HUGHES THORSNESS
iA&tt POWELL6.BltUNO\~
ATTO"'NI>V5 AT LAW
utI'lUTTlllFlo"lIlrHI[
A!iC140RAGE. "It 99501
(901) 214.15t2:
tions contained in such notice at any time wi thin ninety (90)
days after the ninety (90) day notice period to VECO has expired.
After the expiration of such one hundred eighty (lBO) day period,
CITY shall not be entitled to sell to any party unless it again
notifies VECO of the name of the purchaser and the proposed
price, terms and conditions of sale, and VECO shall again have
the right to meet such price, terms and conditions within ninety
(90) days after receiving such notice as provided above.
In the event VECO elects to purchase pursuant hereto it
shall not be required to compensate the CITY for the improvements
constructed by VECO.
16. Maintenance and Inspection
(a) With respect to the ship lift, its adjacent docks
and the ship transfer system, all of which are outlined in
green on the attached Exhibit B, VECO shall have the follow-
ing responsibilities:
(1) VECO shall maintain the premises in a neat
and orderly manner and except as otherwise herein
provided VECO shall not permit any waste, destruction,
defacement, or other injury to the ship lift other than
normal wear and tear and CITY shall have the right to
inspect the property from time to time;
(2) VECO shall maintain the highest housekeeping
standards, and maintain the premises in clean and
sani tary condition. VECO shall promptly and continu-
ously remove dunnage, debris and waste material from
railroad tracks, dock aprons, open storage areas and
other areas included wi thin the ship lift sub-portion
of the VECO Portion of the Public Port Facility;
-21-
r'
I
",.,....,-,~'," 7;'~:~'.)' ,;
(3) VECO shall assume the expense of general
repainting of the facility, repair or replacement of
dock timbers, general masonry repairs, general dock
repairs, and lift repairs;
(4) VECO shall assume the responsibility of snow
removal;
(5) VECO shall repair any damage to the dock
platform,
or other facilities.
VECO specifically
f1
~
'.I
;j
agrees to supervise operation of mechanized equipment,
lift trucks and the like to minimize damage, and to
assure the preservation of the facilities;
(6) All maintenance and repair work required to
be done by VECO under the provisions of this section
shall be performed by VECO to the satisfaction of CITY.
If VECO shall fail to make repairs which are its obli-
'gation under this subsection after ten (10) days'
notice from City such repairs shall be performed by
persons approved or designated by the CITY, and the
cost of such repairs shall be collectable from VECO;
(7) In the event that the CITY shall retain or
employ outside contractors or parties to accomplish
maintenance or repair services under this section, VECO
agrees to reimburse the CITY for the actual cost of
such outside repair or maintenance service, plus twenty
percent (20%) as overhead charge;
(B) It is further specifically understood and
agreed that VECO shall submit to the CITY for approval,
any special equipment or installations,
inclUding
HUGHES THORSNESS
~ANTZ PowELLaBRUN DIN
ATTORNEYS AT LAW
n.wnfTlUltDAVlr.U(
ANCHORAGE. Ar; t9501
(.011 274.7521
arrangements for storage and servicing of mechanical
equipment and facilities for personnel other than those
-22-
&
~
(J
"
~
;,
'.:
j'
~
u
r::;;:~'}i;:f(~:::~
"
'.,\' :'
HUGHES THORSNESS
:;ANTZ PowElLaBRUNOIN
.o.TTOHNE'fS '" \.-AW
50'WIIurTHIRDA"ENUE
ANCHORAGE. Ale 99501
1907) 274.7522
provided by CITY. VECO agrees to maintain the highest
standards of safety and to conform to the requirements
of CITY and of the State government with respect to
storage and servicing of mechanical equipment;
(9) VECO agrees not to make any major altera-
tions, additions or improvements to or upon the ship
lift without the written consent of the CITY first
having been obtained;
(10) Any improvements which may be made by VECO,
except the installation of removable partitions, coun-
ters, shelving, machinery or other trade fixtures, or
other readily removable equipment, shall become the
property of the CITY upon the termination of this
agreement unless otherwise agreed in writing;
(11) The docks are designed to sustain a weight of
five hundred pounds per square foot. The CITY does not
guarantee that the general dock facilities will sustain
specific weights per square foot in excess of the
designed load, and VECO shall indemnify and save harm-
less the CITY from any damage which the CITY may sus-
tain by reason of overloading of the general dock
facili ties.
(b) With respect to the general dock, all of which is
outlined in blue on the attached Exhibit B, VECO shall have
the following maintenance responsibilities:
(1) To avoid waste. destruction. defacement or
other injury to the wharf. To bear all expense related
to repairs to the wharf where injury was caused by VECO
or any of its agents. To pursue and collect from other
parties responsible for damage to the wharf;
-23-
r
Ii
;1
;1
A: ~.>::~~~~~i~j?~~
HUGHES THORSNES$
iArnZPOWELL6SRUNDIN
"YTONNE,.. AT IJI,W
SO,WfSTTMUtDA"'MUt
ANCHORAGE. AK 19501
lton 274.7522
I
(2) To keep the premises in a clean and sanitary
condition. VECO shall promptly and continuously remove
dunnage, debris and waste wherever located on the
premises;
(3) All other maintenance shall be the responsi-
bility of CITY.
17. Notices
All notices under this agreement shall be sent by registered
mail, postage prepaid, as follows:
If to VECO:
\~CO Offshore, Inc.
5151 Fairbanks Street
Anchorage, Alaska 99503
Attention: Rod Christ
and if to CITY:
City of Seward
P.O. Box 167
Seward, Alaska 99664
Attention: City Manager
18. Computation of Time
The time in which any act provided by this agreement is to
be done by shall be computed by excluding the first day and
including the last, unless the last day is a Saturday, Sunday or
a holiday, and then it is also excluded.
19. Successors in Interest
Each and all of the terms, covenants and conditions in this
agreement shall inure to the benefit of and shall be binding upon
the successors in interest of CITY and VECO.
20. Entire Aqreement
This agreement and the exhibits hereto contain the entire
agreement of the parties with respect to the matters covered by
-24-
r
I
I
I
I
i
~
~
"
,
,1
iX(~;"!?i~f~1;~~~1
<..'1
','
~
"
HUGHES THORSNt:55
GANTZ POWELLa BRU N DIN
ATTORNEYS ^T LAW
U'WESTTHllIOA'IthUi
ANCHORAGE. AK 99!101
(.07)27..7522
l
!
i
this agreement, and no other agreement, statement or promise made
by any party which is not contained in this agreement shall be
binding or valid.
21. Governinq Law
This agreement shall be governed by, construed and enforced
in accordance with the laws of the state of Alaska.
22. Partial Invalidity
It is the purpose and intention of the parties to this
agreement to provide for the lawful operation by VECO of the VECO
Portion of the Public Port Facility.
This agreement shall be
construed so as to uphold the existence of a legally enforceable
contract between the parties, even though such construction shall
make it necessary for a court to supplant or modify certain
provisions, substitute additional provisions, provide for regula-
tion not provided for herein or deem the rights granted herein to
constitute a franchise. Nevertheless, it is the express purpose
and intention of the parties to cause this agreement, insofar as
it is lawfully possible, to be enforced as written and in accord-
ance with its terms.
In case any provision of this agreement
shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby unless such construction is
manifestly unreasonable.
If a court shall find that this agree-
ment provides for a term greater than that permitted by law or
the Charter of the CITY, then, in such event, the term shall be
deemed to be the longest term permitted by law or the Charter of
the CITY.
23. Interpretation
The language in all parts of this agreement shall in all
cases be simply construed according to its fair meaning and not
-25-
Ii
,I
:,
<I
"
"
HUGHES THORSNltSS
G"NnPOWELL6BRUNDIN
ATTOfllNIEVS AT LAW
10' 'll'tsT1MIIlDA'IINUI
Al'lCHOltAGt.. AK 11501
(.07) 27&.7522
,.-.....
for or against CITY or VECO as both CITY and VECO have had the
assistance of attorneys in drafting and reviewing this agreement.
24. Number and Gender
In this agreement, the neuter gender includes the masculine
and the feminine, and the singular number includes the plural;
the word "person" includes corporation, partnership, firm or
association wherever the context so requires.
25. Mandatory and Permissive
"Shall", "will" and II agrees II are mandatory; lImay" is permis-
sive.
26. Captions
captions of the paragraphs and subparagraphs and the title
of this agreement are for convenience and reference only, and the
words contained therein shall in no way be held to explain,
modify, amplify or aid in the interpretation, construction or
meaning of the provisions of this agreement.
27. Amendment
This agreement is not subject to amendment except in writing
executed by both parties thereto.
IN WITNESS WHEREOF the parties hereto have caused this
agreement to be executed by their duly authorized representatives
in duplicate, each copy of which shall be deemed to be an original
for all purposes.
MADE AND EXECUTED on the date hereinabove set forth.
CITY OF SEWARD
VECO OFFSHORE, INC.
By:
By:
C.E. Johnson
City Manager
-26-
r
I
I
It
~
\I
~
~
, ~
,
ri
.
;'
"
~
, .
TRACT 1
EXHIBIT A
~
b :;
~
o ..
co ..
0"",
- co
- III
~~~
~O
.....VZ
~,
1,897.50'
NO"34' 1S"W
42.89 acres
1,317.50'
SO'34' 1S"E
J.-,
;"
..
o .
o :::
ci III
V
-
True Poinl
of 8eginning
COR 3
U$S 4827
w
o ~
o
o :
~ -OJ
..
- z
;r
"
~
580.19'
50'34' 1S'E
Scale: 1. 300'
:-.'.....,.,'#.~.........-
-".. ~
r
"
<I
I'
o!
". '1
(-
\.,o~
Tract One Legal Description:
A tract of land situated in the fractional Section 18 TlS
RIE of the Seward Meridian, Third Judicial District, State
of Alaska, more particularly described as follows:
Commencing from the Southeast Corner of said Section 18 TIS
RIE Seward Meridian, Alaska, thence, a grid bearing
N 77"Sl'S6"W a grid distance 2147.12 feet, more or less, to
Corner Number 3, United States Survey 4827, sai~ corner
being also the True Point'of Beginning;
thence, a grid bearing N 0"34'lS"W and along the East Line
of the aforementione~ U.S.S. 4827 a grid distance 1,897.S0
feet to the Northeast Corner of said U.S.S. 4827; thence,
a grid bearing S 89"2S'47"1-1 and along the Morth Line of
said U.S.S. 4827 a grid distance 1,060.00 feet; thence, a
grid bearing S 0"34'lS"E a grid distance l,3l7.S0 feet;
thence a grid bearing S 89"2S'lO"W a grid distance 140.00
feet; thence, a grid bearing S 0"34'lS"E a grid distance
S80.19 feet to a point on the South Line of said U.S.S 4827;
thence a grid bearing N 89"2S'lO"E and along said South
Line a grid distance 1,2~0.00 feet to the True Point of
Beginning; ---- ----- --
EXCEPT the North 200 feet of land adjacent to and parallel
with the North Line or the aforementioned U.S.S. 4827, said
tract exclusive of this exception containing, in all,
42.89 acres, more or less.
\
-
,
~
~
~
, \ .-.J" r' ,~~' /'",', ,'-'~
. ..."~ )' -:::'., \- ,g "~ ,?=,''''''''''''t''?~''''''''''"'='~~
, . :1 / .. Y ,:::0 ...)
, i ,< ,,,' \ 1?0) - ,'\ ' · .
, ({' ". \ ,'~o/\, ~ )
./ (W' ill,,,,,,,'-J "
"
,
: '1 .-' S \j"'"
,/i i." " ~ \ " , ,--'
'-r- ''1-
I ,0 /" -
, .
: l " ~
I ,\
, ",,,,'" \,
I "
, '
, '
..... . ,l
I
,
I
'l~:o:"Y:~{\
'. "
; .. ~
_'"i
(,
'J .. :_:_' . .' / 0 o.
\
=-
r
I
I
,
I
I
,
~
" 'TRACT 2
EXHIBIT A
True Point
of Beginning
.....,
472.39'
50'34. 13'E
COR 3
USS 4827
.i
(I U)
;~ G)
"
w ... ~
0 . " "
0 0
0 ~ ca C! ~
ci ;" I'- 0 ;.
0 .. 0 ..
CI> .
.. 'It CI> '"
- co co
z . .. III
0
C'\I
~~~
~o
ll.'-z
472.39'
NO' 34' U'W
,---'
Scale
....-;..: - ..... ~ ........., :--~.,"""" "...-.
1"
300
r
I
ti
:)
:!
,
t ~
"
,
j:\
(,-....
t --.,
Tract Two Legal Description:
A tract of land situated in the fractional Section 18 TlS
Rl~ of the Seward Meridian, Third Judicial District, State
of Alasl:a, more particularly described as follows:
Commencing from the Southeast Corner of said Section l8 TIS
RIE Seward Meridian, Alaska, thence a grid bearing
N 77"Sl'56"W a grid distance 2l47.l2 feet, more or less, to
Corner Number 3, United States Survey Number 4827, said
corner being also the True Point of Beginning;
thence, a grid bearing S 0"34'13"E and along the extention
of the East Line of the aforementioned U.5.S. 4827 a grid
distance 472.39 feet, more or less, to the Corporate
Boundary, presently existing of the Incorporated City of
Seward, Alaska; thence, a grid bearing S 89"Z5'lO"N and
along said existing Corporate Boundary to the Mean High
Water Line and continuing beyond such that this course has
a total grid distance 1,900.00 feet; thence, a grid bearing
N 0"34'l3"W and across presently submerged tidelands a
grid distance 472.39 feet, more or less, to a point on the
extention of the South Line of said U.SoS. 4827; thence,
a grid bearing N 89"2S'10"E and along the aforementioned
South Line extended and, subsequently, a grid bearing
N 89"25'10" and along the South Line proper a grid distance
1,900:00 feet to the ~ Point of Beginning; and said
tract including tidal accretions and presently submerged
tidelands, having an area of 20.47 acres, more or less.
.,t~i~.~:.:\::.t~:1
;/
r
~i
i
~
.'
"
!
'1
HUc;HES THORSNESS
iAfHZ POWELL.BRUNDIN
ATTORNEY. AT U.w
~o'\IIur"nItOA"u'UI:
ANCHORAGE. Ale 9ISOl
(9071 Z14-1SZZ
(
EXHIBIT A
The VECa Service Facility is intended to be developed into a
ship repair yard with steel fabrication faci li ties that can be
expanded for new boat building or other industrial fabrication
purposeso The VEca Service Facility is also intended to be used
for purposes including, but not limited to, fabrication of indus-
tri al items such as onshore or offshore oi 1 and gas production
equipment,
exploration or production drilling rigs,
li ving
quarters, miscellaneous steel structures such as buildings,
bridges, etc 0' and any other items that can be constructed or
fabricatedo
The above description of the intended uses of the
VEca Service Facility is for illustration only and is not meant
to limit, restrict or forbid other uses.
The uses described
above should be broadly and liberally construed to include all
preparatory, accessory,
ancillary and related uses and all
associated activities of any kind which might appear necessary or
convenient. The uses of the VECO Service Facility may change in
whole or in part at any time and from time to time 0 In addi tion
to the foregoing, the VECO Service Facility may be used for such
other purposes, whether or not presently planned or foreseeable,
as may appear actually or potentially profi table.
-30-
~.
~
I;
,I
,j
?
~~iU~:W~~.~~,;,,:~:.,::~'~:,:':.t~~,
~<.'.
~:)
?
~
ii
.', if "'. ----,
Ii
HUGHES THORSN[5S
iAtm: PO~'1ElL.8RUrlDIH
ATTONHEV. AT LAW
~O",USTnll.O"'''INUI
ANCHORAGE. AIC 99501
(ton 274.7522
EXHIBIT B
"The following minimum expenditure requirements by VECO shall be
determined after the date computed in accordance with paragraph
6.1(f) of the lease agreement. They are as follows:
(l) Wi thin two years of the date determined in accordance
with paragraph 6.l(f) VECO shall expend at least $1,000,000000 in
actual construction costs, as that term is defined in the lease
agreement 0
(2) Wi thin 3 and 1/2 years from the date established in
paragraph 601(f) of the lease agreement, VECO shall have expended
at least $3,000,000.00 in actual construction costs 0
(3) Wi thin 5 years of the date determined in accordance
wi th paragraph 601 (f) of the lease agreement, VECO shall have
expended at least $5,000,000.00 in actual constructiono
Dated this \,,[0, daYOf''''\,LI ,198l.
'\
LESSOR: LESSEE:
CITY OF SEWARD
~, #:/ '/;
,,~ c;: c "/ ~t,-1'tl,,'L' ..
By: ' v
CoEr ohnson
Ci tanager
VECO OFFSHORE, INCo
~I
.; ..'.
By: f: ~ 'tiL.. '
STATE OF ALASKA
SSo
THIRD JUDICIAL DISTRICT
Before me, the undersigned, a Notary Public in and for the
State of Alaska, on this day personally appeared Co Eo JOHNSON
known to me to be the City Manager of Seward, Alaska, whose name
is subscribed to be the foregoing instrument and, being duly
sworn, acknowledged to me that the same was the act of the said
City of Seward, and that he executed the same as the act oi the
City of Seward, for the purposes and consideration therein expres-
sed, and in the capacity therein statedo
day Of~,
r/ J:!u. ~ .-1-- L-u E UH_Y .G
'Notary p!b1i~Lin and for Alpska-
My commission expires: C/ v,ll'/;
SUBSCRIBED AND SWORN to before me this .~ I
19810
STATE OF ALASKA
ss.
THIRD JUDICIAL DISTRICT
Before me, the undersigned, a Notary Public it' and for the
State of Alaska, on thi s day personally appeared . () C.t r, s r
known to me to be the person and officer of VECO
-31-
r
a
~
;,
(I
'.ly,'Y:0:~
:;
II
,I
I:
Ii
I'
II
ii
I
!, OFFSHORE, INCo, whose name is subscribed to be the foregoing
instrument and, being duly sworn, acknowledged to me that the
same was the act of the said corporation, and that he executed
the same as the act of the said corporation, for the purposes and
consideration therein expressed, and in the capacity therein
statedo
{
(
SUBSCRIBED AND SWORN to before me this
1981.
/5d day Ofn'
QLf ~~
Notary Public in and for Alaska
My commission expires: /O-5-f-'2--
HUGHES THORSNESS
;,\NTZ PO\VElLll: BRUNOIN
ATTOItNI[YS AT 1..AW
$0' WfST t'HIIDAvtNUl
#.\CI!ORAGE. All. '9501
U07JZ74.75H
-32-
r
I
I
,
I
,
~;
;1
~
~
.
;
.' ~
_..
.1
....'---
"- "-~ ""'"
-....'~-
;'
JOB NO. 1- 34-
date 8-1"'-81
originator Cu.4
LEGAL DESCRIPTION
August 19, 1981
SHIPLIFT, TRANSFER CARRIAGE AND PIT,
DRY BERTHS WEST OF TRANSFER PIT AND BREAKWATER
A tract of land situated in fractional Section l8
TIS RlE of the Seward Meridian, Third Judicial District,
State of Alaska, the boundary of said tract being defined
herein by both provisions and geometry, these provisions
being exactly:
1. That said tract boundary encompasses the
area of proposed license and operation of a shiplift, transfer
carriage and pit, dry berths west of the transfer pit, and
a breakwater, being all facilities defined by preliminary
concept: and,
2.
That the basis of local geometric bearing
is Cartesian and suitably defined as the South Line of
United States Survey IU.S.S.l Number 4827, with a local
bearing of West, and finally,
3. That said tract is contained completely
by the actual bounds of said U,S.S. 4827 and by areas of
intermittently submerged tidelands and tidal accretions
contiguous to said U.S.S. 4827, and within the North and
South lines of said U.S.S. 4827 extended westerly; said tract
"
being more particularly defined as follows:
Commencing from Corner Number Three of the
aforementioned U.S.S. 4827, thence, West and along the South
line thereof a distance 1200.00 feet to the True Point of
Beginning:
thence, continuing West along said South Line
extended across submerged tidelands, a distance 1,365.00 feet;
:::x.., ; '"1 ,/ -' /((~
-1- "-i.- ) "
, A J, ,^ ./- " '0
i' J
r'
,
i:l
"
.,
::':/~~
r---,
-'
thence, these following seven courses across intermittently
submerged tidelands:
N-20-00-00-W a distance 540.00 feet;
N-70-00-00-E a distance l40.00 feet;
S-20-00-00-E a distance 44l.97 feet;
East a distance 216.97 feet;
North a distance 200.00 feet;
East a distance 420.00 feet;
North a distance 345.00 feet;
thence, East a distance 630.00 feet; thence, South
a distance 685.00 feet to a point on the South Line of said
U.S.S. 4827, said point being also The True Point of Beginning,
said tract inclusive of tidal accretions and presently or
intermittently submerged tidelands, containing l6.30 acres,
more or less, EXCEPT, possible future additions or deletions
of areas mandated by modifications to existing plans and
documents governing the length, location, or physical nature
of the proposed facilities contained by concept herein or
otherwise maridated by FUTURE A~-BUILT CONDITIONS.
-2-
r
I
I
I
I
~
.~
,!
r
ri
HUGHES THOR$NESS
;AI-;U POIVELLaBRUNOIN
"'TTO~NEYS AT LAW
~'n ..U! INI"DA.VINU!
A7.CHORAGE. At;. U501
1107) 274.1$2.2.
-
"'."..;--'
: ;'"'~""; ....
!~tJ~ t , I ,rl
LEASE AGREEMENT
This agreement made and entered into effective as of -L.5..-E:::'day
of ~~, 1981, by and between the City of Seward, a municipal
'\
corporation located in the Kenai Peninsula Borough, State of
Alaska, hereinafter referred to as "LESSOR" and "CITY" and VECO
Offshore, Inco, a Delaware corporation with head offices in
Anchorage, Alaska, hereinafter referred to as "VECan.
!:i 1. 1; ~ !,; ~ ~ E; 1; ~:
WHEREAS, LESSOR has agreed to lease to VECO and VECO has
agreed to lease from LESSOR 61 acres, more or less, of properties
within the boundary limits of the City of Seward, Alaska, herein-
after referred to as the" leased land"; and
WHEREAS, LESSOR intends to construct on adj acent land a
public port facility in order to assist in development of the
economy of Seward and provide employment for residents of the
Ci ty of Seward; and
WHEREAS, VECO has agreed to construct certain vessel repair
and construction faci li ties adj acent to the public port and on
the leased land; and
WHEREAS, the City Council of the City of Seward has deter-
mined that a lease of the leased land and construction thereon of
a vessel repair and construction facility would be in the public
interest in that such a facility would be compatible with the
public's use of the public port facility and would provide employ-
ment for the residents of the City of Seward, and promote the
growth and stability of the economy of Seward all as set forth
more fully in Resolution 81-1 adopted by the Ci ty of Seward;
NOW, THEREFORE, for and in consideration of the mutual
-1-
,
I
I
I
r
!
I
I
!
~
a
I:
~j
~ j
';..
~
I
HUliHES THOItSNESS
.ANTZ POWELL,BRUNDI..
ATtORNEY. AT LAW
'O'....UlflUlIOAVUIUI
Ai'tCHORAGE.AIt '9501
('071 274.7SZZ
'.,.","
"
~
"'A<;.":""
i
I: promises and covenants hereinafter contained, the parties hereto
I,
I'
Ii
Ii
i!
I'
II
,I
Ii
I'
Ii
Ii
!I
I;
I
agree as follows:
ARTICLE I - ~
1.l
Except as otherwise provided hereinbelow,
the following described leased land:
Tract One
A tract of land situated in the fractional
Section 18 TIS RIE of the Seward Meridian,
Alaska, more particularly described using
grid bearings as follows:
Commencing from the Southeast corner.of said
Section 18 TIS, RIE, Seward Meridian, Alaska,
thence, N 770S1'33"W a distance 2,l47.12
feet, to Corner Number 3, United States
Survey 4827, said corner being also the True
Point of Beginning;
thence, a bearing N 0034' lS"W and along the
East Line of the aforementioned U.SoSo 4827 a
distance l. 897 0 50 feet to the Northeast
Corner of said UoSoS. 4827; thence, a bearing
S 8902S'47"W and along the North Line of said
UoSoS. 4827 a distance 1,200.00 feet; thence,
a bearing S 0034'lS"E a distance 1897.72 feet
to a point on the South Line of said UoS.S.
4827; thence, a bearing N 8902S'10''E and
along said South Line a distance l,200000
feet to the True Point of Beginning;
EXCEPT the North 200 feet of land adjacent to
and parallel with the North Line of the
aforementioned U. S. So 4827. Said tract
exclusive of this exception containing, an
area of 46077 acres, more or less.
and,
Tract Two
A tract of land situated in the fractional
Section l8 TlS RIE of the Seward Meridian,
Third Judicial District, State of Alaska,
more particularly described as follows:
Commencing from the Southeast Corner of said
Section l8 TIS RIE Seward Meridian, Alaska,
thence NIO-46-33W a distance 2,221.33 feet,
more or less, to Corner Number 3, Uni ted
States Survey Number 4827, said corner being
also the True Point of Beginning;
-2-
LESSOR owns
r
I
I
I
I
I
--
~
'J
,
~
thence, South and along the extention of the
East Line of the aforementioned UoS.S. 4827 a
distance 415000 feet, more or less, to the
Corporate Boundary, presently existing, of
the Incorporated City of Seward, Alaska;
thence, West and along said existing Corporate
Boundary to the Mean High Water Line and
continuing beyond such that this course has a
total distance 1,900000 feet; thence, North
and across presently submerged tidelands a
distance of 415.00 feet, more or less, to a
point on the extention of the South Line of
said U.SoS. 4827; thence, East and along the
aforementioned South Line extended and,
subsequently, East and along the South Line
proper a di stance 1,900000 feet to the True
Point of Beginning; and said tract including
tidal accretions and presently submerged
tidelands, having an area of 18.10 acres,
more or less.
,~
!
1.2
y^.-
The leased land is not now owned, in fee simple, by the
City of Sewardo Some of the leased land may be considered tide-
lands and is leased subject to any interest the United States or
the State of Alaska may have because of its classification as
tidelands.
The City agrees to apply for and make reasonable
efforts to obtain any necessary Tidelands permits or leases to
such land and upon receipt to further lease to VECO by whatever
means are necessary, the City's interest in such land in accor-
dance with the provisions of this agreemento
103 The parties recognize that the City is in the process
of obtaining ownership of the leased land from other governmental
enti ties including the United States and the State of Alaskao
The City agrees to pursue such applications, selections, permits
and other steps required to obtain ownership however VECO agrees
that the leased land is now and may in the future be subject to
restrictions of record or reservations in patent which may affect
VECO's quiet enjoyment0
The City makes no representations or
warranties as to the title of the leased land other than those
HUGHES THORSNESS
,ANTZPOWELLaBRUNDIN specifically contained herein. VECO agrees to join with the City
,\TTOlltNEYS AT lAW
~DI Wts, TKIIlD AV1MUI
AriCHORAGE.AIt ,n01
(907)Z74.7H2
-3-
r
I
I
.:
~i
.1
'!
~
q
,
HUGHI:S THORSNE5S
:;ANTZPOWUL.IRUHOIN.
ATTOIllNEVS AT ......W
5O'wlI"MIIOA".NUI
ANCHOHAGt. AK USO I
1101127..7522
',. ;
II
Ii
"
I
Ii
II
II
I: and assist the City
II
Ii
'I
I
1.
,
in
obtaining title
to the
leased
land by
executing
such
documents
consents
be
or
as
may
necessary
or
convenient in applications or proceedings before any federal
or
state agency,
including the Bureau of Land Management, to enable
the Ci ty to obtain ti tle to the leased land.
1.4 LESSOR does hereby lease the above-described parcel to
VECO for the establishment and operation of a vessel repair and
construction faci li ty more particularly described on Exhibit A
which is incorporated herein by reference 0 VECO may engage in
such other lawful acti vi ties on the leased land as shall be
determined from time to time to be advisable in the discretion of
VECO subject to any existing or hereafter lawfully enacted pro-
visions of state law, or municipal charter or ordinance pro-
visions.
105 This lease is part of a set of agreements under which
LESSOR has granted VECO the right (l) to hold the leased land
described in this lease agreement and (2) to operate a portion of
the Seward port facility in accordance with the terms of that
certain Dock Permit referred to in paragraphs 2.3 and 13.6 herein.
I f the Dock Permit should terminate by reason of a default by
i
VECO thereunder, this lease agreement shall also terminate simul-
taneously therewitho
ARTICLE I I - DEFINITION
201 As used in this agreement the following term, in any
form or variation thereof, shall, unless otherwise provided, have
the following respective meanings.
In addition, certain other
terms as defined in other Articles of this agreement shall,
unless otherwise specifically provided, have the
respective
meanings hereinafter attributed to them.
202 "VECO SERVICE FACILITY" means the office,
warehouse,
-4-
r
I
I
"
,;.~
':.::~ .:/~,.tt:!~~
'."
,;.."
HUGHES THOR$N[S5
;ANTl POWELL&: BRUNOIN
ATTOIllNE.... AT Ul.W
SO. IHSTfMIIID.l.VI"UI
ANCHORAGE. Ale. U50 I
(9011 274.1522
r-
.,
I!
'vessel repair and vessel construction buildings and related
facilities necessary for the conduct of VECO's vessel repair and
construction business and more particularly described on Exhibit
"AtI.
203 "SEWARD PORT FACILITY: means the public dock facility
and adj acent structures constructed by the City a portion of
which is operated by VECO in accordance wi th the Dock Permi to
204 "DOCK PERMIT" means that certain agreement between the
City and VECO wherein VECO is the operation of all or a portion
of the Seward Port Facility.
ARTICLE III - CONSTRUCTION BY LESSEE
3.1 Lessee and its tenants shall have the right (subject to
any necessary finding by the City Counci 1 of Seward that such
action is in the public interest) to erect, maintain, alter,
remodel, reconstruct, rebuild, build and/or replace buildings and
other improvements on the leased land, and correct and cl1ange the
contour of the leased land subj ect to the following condi tions:
(a) The cost of any such construction, reconstruction,
demolition, or of any changes, alterations or improvements, shall
be borne and paid for by VECO 0
(b) The leased land shall at all times be kept free of
mechanics and materialmen's liens.
(c) VECO shall supply LESSOR with a copy of all build-
ing plans and specifications and a site plan or plans for the
leased land.
(d) Any general contractor employed by Lessee or its
sub-lessees shall be appropriately bonded by use of performance
and labor and material payment bonds in the customary form when
cost of the work is over $20,000. Copies of all such bonds shall
be furnished to LESSOR prior to commencement of construction. In
-5-
r
I
~
(,
~l
"J
'!
c
~
, ..;,.:~\;.~:::!~.~~i~:,;':~~
HUaHES THORSNESS
:;ANTZ POWELL' BRUNOI"
"nORMa. AT LAW
'0' WUl Tttlllll AVlMUI
ANCHOIllAGE. AIt U501
!ton %74-7512
J
(
the event that VECO elects to construct the facility with its own
personnel and equipment, or the personnel and equipment of any
corporation or person that is an "affiliate" of VECO as such term
is defined in AS lO.OS.825(18), a performance bond shall not be
required 0
(e) LESSOR may, as contemplated by Alaska Statutes,
give notice of non-responsiblity for any improvements constructed
or effected by Lessee on the leased lando
302 In order to provide for the more orderly development of
the leased land, it may be necessary, desirable or required that
street, water, sewer, drainage, gas power line and other easements
and dedications and similar rights be granted or dedicated over
or within portions of said leased land. As additional considera-
tion to VECO for the execution of this lease LESSOR shall, upon
request of VECO, join with VECO in executing and delivering such
documents from time to time and throughout the leased term as may
be appropriate, necessary, or required by the several governmental
agencies, public utilities and companies for the purpose of
granting such easements and dedications.
3.3 In the event that at any time VECO deems it necessary
or appropriate to obtain use, zoning or subdivision and precise
plan approval and permits for the leased land, or any part there-
of, LESSOR agrees from time to time upon request of VECO to
execute such documents, petitions, applications and authorizations
as may be appropriate or required to obtain conditional use
permits, zoning and re-zoning, tentative and final tract approval
and precise plan approval.
3.4 At the request of VECO, LESSOR shall, from time to
time, execute and deliver or join in execution and delivery of
such documents as are appropriate, necessary or required to
-6-
r
-
~
.~
i.' ," i "ii'C'~
'.~ ':~:(,~:'::.;~r\.:;
':""
"
---1
.
Exhibi t "B" shall be considered a violation or breach of this
lease agreement and shall entitle LESSOR to any and all remedies
provided for on defaulto
LESSOR, its agents, attorneys and accountants shall have
! reasonable access, at all times throughout the period of construc-
tion by VECO, to any and all accounting records of VECO to verify
expenditures made by VECOo Such records shall be made available
Ii to LESSOR in Seward, Alaska for inspection by LESSOR, its agents,
attorneys and accountants.
It is understood and agreed that a primary consideration for
the execution of this lease agreement by LESSOR in favor of VECO
is VECO's covenant to undertake and develop the property in
accordance with Exhibit "B" which development has been determined
by the City Council of LESSOR to be in the public interesto
In computing the amounts expended by VECO for construction
as herein provided, no allowance shall be made for indirect
overhead expenses 0 The term "indirect overhead expenses" means
any and all expenses, charges, credits to account, expenditures,
trade-outs, or other costs which are not directly related to and
necessary for the construction of the facili tieso
By way of
illustration, and without limitation, such indirect overhead
expenses include such items as public relations, marketing
studies, promotion expenses, entertainment, travel and other
expenses to negotiate with contractors, financing institutions,
general off-site overhead and expense of VECO and other similar
costs.
VECO shall provide LESSOR with quarterly written reports not
~ later than thirty (30) days following the close of the calendar
HUGHES THORSHESS quarter detailing VECO' s progress on its construction project.
jANTZ POWELL&BRUNDIN
ATTORNEYS AT LAW
SOl WlSlTHIROAVINUI
ANCHORAGE. AI'. 91501
(9011 274.7'522
-8-
t-
.,
B
11
r
~I
:t
~
r:
<I
"
HUGHES THORSNESS
';AtliTZ POWElL,BRUNDIN
ATTORNEY. AT LAW
'0' WilT TlIIIlDo\\I'INUI
Ai'lCHOR"'GI. All: '950 I
Ito7) 274.7522
.~
.
ARTICLE IV - RENTAL
4.l The rental payment on the premises shall be one dollar
($1.00) per year per acre payable in advance commencing on the
date hereof and thereafter to the date determined in accordance
with paragraph 60l(f) hereof and thereafter for an additional
period of ten years. The initial term from the date hereof until
ten years after the commencement of construction shall be called
the primary term. Thereafter, the rental shall be paid by VECO
in equal monthly installments commencing on or before the first
day of each month. The annual rental due and payable on the
premises shall be adjusted at the conclusion of the primary term
hereof, and upon the anniversary date every five years thereafter.
The adjusted annual rental shall be the fair rental value of the
premises as determined below and shall be the annual rental
amount for each of the five years following the effective date of
that particular rental adjustment 0 "Fair rental value" as used
in this lease shall mean eight percent (8%) of appraised fair
market value.
Not more than ninety (90) days before the anniversary date
of the agreement at which time a rental adjustment is to be made
LESSOR shall employ at its own expense an independent MIA certi-
fied appraiser to determine the fair rental value of the premises;
such determination shall not take into account the capital
improvements to the premises constructed by VECO, but shall take
into account the premi ses exclusive of such improvements 0
Not more than sixty (60) days before the effective date of a
rental adjustment LESSOR shall notify VECO of the amount of the
rental adjustment and shall furnish VECO with a copy of the
appraiser's written appraisal reporto Failure of LESSOR to meet
the deadline for engaging the appraiser and notifying VECO of the
-9-
r
I
I
I
I
,
,
,
,
.~
Ii
,I
~
..
~::::"~; ; ~.~i.t'?~ i- ..,~(:'" ;:'
J<i"!'V:':'1j~ ~~,,,,r~l
:~,~,/.,::~,':';::~':~;"~' ~..;" ,\:';,~
,~,:. i
HUGHES THORSNESS
iANTZ PowuLaBRUNOIH
AT'tOIlNI!VS AT l.4W
SQ'V,U"Il'IOAVlllll1
ANCHORAGE. AI( U501
(107) 27..7522
. ',.,Li' ":..~;..,,-.\...:
rental adjustment shall not prevent the rental adjustment from
becoming effective on the prescribed anniversary date.
If VECO does not object to the rental adjustment, that
rental adjustment shall applyo If VECO objects to the amount of
the rental adjustment, it must give LESSOR written notice of
objection on or before the effective date of the adjustment.
VECO shall then engage a second independent MIA certified
apprai ser at its own expense to make a second apprai sal of the
fair rental value of the premiseso
VECO's objection to the rental adjustment and engagement of
a second appraiser shall not postpone VECO's obligation to pay
the annual rental as described in LESSOR' s notice of rental
adjustment based on the first appraisal.
LESSOR shall deposit
into a separate trust account the amount of rental increased as
fixed by the first appraisal until the question of rental adjust-
ment is finally resolvedo
If the second appraisal reflects a fair rental value which
varies from the first appraisal by no more than ten percent
(10%), then the rental adjustment as set forth in LESSOR's notice
of rental adjustment shall be the adjusted rental for the five
year periodo However, if the second appraisal reflects a fair
rental value which varies from the first appraisal by more than
ten percent (10%), then the rental adjustment for the five year
period shall be determined by arbitration under the Rules of the
American Arbitration Association. Each party shall bear its own
attorney's fees.
ARTICLE V - TERM
This lease shall be for a primary term commencing on the
date hereof and extending to the date determined in accordance
wi th paragraph 6.l (f) hereof and thereafter for ten (lO) years.
-10-
,
,j
,"
'~.~.: ~'~~:T~./,l'~'t'~
.. ,..'........
.: ~.~ t .
HUGHES THoR5Nns
3ANn POWELLaBRUHD1H
ATTOl't',..:VS AT LAW
n'IHUTMIIlDAU,.UI
A."jCHOAAGE.AK 11501
!t01l 274.7521
.("
r
Thereafter the lease shall continue, at VECO's option, for up to
ten (10) additional five (5) year terms upon the same terms and
conditions as are contained in this lease agreement. The option
to renew an expiring term for an additional term shall be con-
sidered exercised by VECO and binding on VECO and LESSOR unless
VECO gives LESSOR written notice sent by registered mail of its
intent not to exercise an option to renew within a period of not
less than one hundred and eighty (180) days prior to the date
that the then existing term is to expire.
ARTICLE VI - ACTS OF DEFAULT
601 The following shall be an "act of default" under this
lease and the terms "acts of default" and "default" shall mean,
whenever they are used in this lease, anyone or more of the
following events:
(a) Fai lure by VECO to. pay when due the rentals
required to be paid under Article IV hereof, and the continued
failure for a p~riod of more than, ninety (90) days after written
notice of such failure has been given to VECO by the LESSORo
(b) Failure by VECO to observe and perform any coven-
ants, conditions or agreement on its part to be observed or
performed under this lease, other than as referred to in Section
6.1(a) hereof, for a period of one hundred twenty (120) days after
wri tten notice specifying such failure, requesting that it be
remedied, and stating that it is a notice of default, has been
given to VECO by the LESSOR; provided, however, that if said
default is such that it cannot be corrected within the applicable
period, it shall not constitute an act of default if corrective
action is instituted by VECO wi thin the applicable period and
diligently pursued until the default is corrected.
(c) The making by VECO of an assignment for the benefit
-11-
r
I
I
I
I
~
I'
J
~
?
e
HUGHES THOflSNESS
;ANTl POwELlaBRUNDIN
AlrrORNI!:YS AT LAW
'01 "'Uf IHlItDAVH,UI
ANCHOR,l.G[. AlC 19501
lOOn 214.1522
of creditors, the filing of a petition in bankruptcy by VECO, the
adjudication of VECO as insolvent or bankrupt, the petition or
application by VECO to any tribunal for any receiver or any
trustee for itself or for any substantial part of its property;
or the commencement of any proceeding relating to VECO under any
bankruptcy, insolvency, reorganization, arrangement or readjust-
ment of debt law or statute or similar law or statue of any
jurisdiction, whether now or hereafter in effect which shall
remain undismissed for a period of six (6) months from the date
of commencement thereof.
(d) Violation by VECO of any law of the United States
or the State of Alaska with respect to the construction and
operation of the port facility for a period of one hundred twenty
(120) days after written notice of such violation has been given
to VECO by the agency charged with the enforcement of such laws;
provided, however, if said violation be such that it cannot be
corrected within'the applicable period, it shall not constitute
an act of default if corrective action is instituted by VECO
wi thin the applicable period and di ligently pursued unti 1 the
violation is ended.
Furthermore, if VECO shall contest such
alleged violation through appropriate judicial or administrative
channels, the time period specified herein shall not commence
until such proceedings are finally determined; provided, however,
that such extension due to appeal of agency or judicial decisions
shall not be effective if the effect of the interim administrative
or judicial action is to cause a stoppage of any of the activities
for which the new service facility or related Seward port facility
were constructed including cargo loading and offloading, cargo
storage, vessel berthing and docking, vessel servicing, vessel
construction, vessel repair, metal fabrication and any activity
-12-
f'
HUGHES THOR$NESS
:;ANTZ PowELLaBRUNOIH
ATTOIIII""". AT LAW
SD.wnfTIIIIOAVIJIUr
ANCHORAGE. All: "501
U071 Z7..75Zl
~
,-
which is an integral support function of any of these named
activities; provided further, that if such a stoppage occurs it
shall not be deemed a default if VECO promptly pays the City for
any loss suffered directly or by reason of such stoppage 0
(e) Violation by VECO of any conditions of any permits
issued by agencies of the City of Seward, the Kenai Peninsula
Borough, the State of Alaska or of the United States Government
pursuant to the regulations of such agencies for a period of one
hundred twenty (120) days after written notice specifying such
violation has been given by such agency to VECO; provided, how-
ever, if such violation be such that it cannot be corrected
wi thin the applicable period, it shall not constitute an act of
default if corrective action is instituted by VECO within the
applicable period and diligently pursued until the violation is
corrected.
Furthermore, if VECO shall contest such alleged
violation through appropriate judicial or administrative channels,
the time period ~pecified herein shall commence until such proce-
edings are finally determined; provided, however, that such
extension due to appeal of agency or judicial decisions shall not
be effective if the effect of the interim administrative or
judicial action is to cause a stoppage of any of the activities
for which the new service facility or related Seward port facility
were constructed including cargo loading and offloading, cargo
storage, vessel berthing and docking, vessel servicing, vessel
construction, vessel repair, metal fabrication and any activity
which is an integral support function of any of these named
activities; provided further, that if such a stoppage occurs it
shall not be deemed a default if VECO promptly pays the City for
any loss suffered directly or by reason of such stoppage 0
(f) Failure by VECO to commence construction of the
-13-
r
I
I
,
.,
HUGHES THOR$NESS
iANTZ POWELLItBRUNOIN
ATTORNEYS AT LAW
'01 WtU THIRD AYlfllUI
MICHORAGE. AK 99501
HlO7J 2.74.7522
r--
VECO service faci li ty wi thin six (6) months after all of the
following have occurred:
(1) Construction by City of a road to the demised
premises such that motor vehicles may safely transport personnel
and equipment over it.
(2) City's installation of electric lines to the
demised premies.
(3) City's completion of filling and rough grading.
(4) City's giving wri tten notice to VECO of the
occurrence of the events set out in the three preceding subpara-
graphs,
(S) (i) Receipt by VECO of all permits required
by federal and state agencies as a condition precedent to con-
struction of the VECO service facility. VECO shall make a good
faith and timely application for permits on essential local,
state and federal agencies immediately upon LESSOR's commencement
of dredging, filling or clearing. of any portion of the leased
premises or any portion of uplands or submerged land upon which
the Seward port facility is to be constructedo Failure to obtain
such permit or permits within eighteen (l8) months following the
date upon which VECO must apply for such permits, shall cause
this agreement to terminate without further action of either
party unless failure to obtain such permit is beyond the control
of VECOo
(ii) Construction will be deemed to have been
commenced when the general contract for such construction has
been executed, the contractor has workmen and materials on the
bui lding si te, and construction pursuant to such contract has
commenced with the intention that such construction will continue
to completion.
-14-
i
I
~i
~
~j:}~;:.~';j~~;'~.~;5~\:~
:: . .~
':1'-'~ ...
"
-..'"
,.
,
(6)
Receipt by the City of patent and tideland
permits to the leased lando
(g) Failure by VECO to substantially complete construc-
tion of the VECO service facility within the five year period
following the date upon which all of the events outlined in
paragraph (f) above have occurred 0
The date set forth in the
preceding sentence shall be changed by extending the date thereof
to include the actual number of days during which construction
could not continue or the period reasonably required to replace
construction destroyed due to a force majeureo
"Force Majeure"
as used in the preceding sentence means, without limitation, acts
of God; acts of public enemies; orders or restraints of any kind
of the United States or of the State of Alaska or any of their
departments, agencies, subdivisions or officials or any civil or
military authority (including any orders or restraints exercised
pursuant to any agreement to which LESSOR is a party but excluding
orders or restraints related to or as a as result of of any of
the permits referred to in paragraph (S)(i) above); insurrections;
riots; strikes; lockouts; labor stoppages or disturbances; land-
slides; icebergs; adverse weather conditions; tidal waves; earth-
quakes; fires; storms; droughts; floods; explosions; breakage;
malfunction or accident to facilities, machinery or such other
causes or events also not reasonably wi thin the control of VECO 0
6.2 Whenever any event of default referred to above shall
have occurred, and the applicable period for giving notice and an
i opportunity to cure shall have expired, LESSOR shall have the
following rights and remedies all in addition to any rights and
remedies that may be given to LESSOR by statute, common law or
HUGHES THQRSHESS othe rwi se :
iAHTZ POWELLaBRUNOI"
ATTORNEYS AT LAW
U'WUTTHlltD..nNUl
ANCHORAGE. AI( IISO I
llOrl Z7..7!522
-lS-
r
I
i
.'
,1
:1
/
y--
(a) Distraint for Rent Due 0 This remedy shall include
the right of LESSOR to dispose of property distrained in any
commercially reasonable mannero It shall be conclusively presumed
that compliance with provisions of the Alaska Uniform Commercial
Code (AS 45005.788) with respect to sale of property shall be a
commercially reasonable disposal.
(b) LESSOR may re-enter the premises and take posses-
sion thereof and remove all personal property of VECO from the
premises. Such personal property may be removed and stored in a
public warehouse or elsewhere at the cost of VECO all without
service of notice or resort to legal process, all of which VECO
expressly waives, and without LESSOR becoming liable for any loss
or damage which may be occasioned to VECO therebyo
(c) Declare the term of this lease terminated.
(d) Relet the premises in whole or in part for any
period equal to or greater or less than the remainder of the term
of this lease, for any sum which LESSOR may deem reasonable 0
(e) Collect any and all rents due or to become due
from sub-tenants or other occupants of the premises.
(f) Declare an amount equal to all amounts then due
and payable to be immediately due and payable as rentals under
this lease whereupon the same shall become immediately due and
payable.
(g) Recover from VECO, whether this lease be terminated
or not, reasonable attorneys fees and all other expenses incurred
by LESSOR by reason of the breach or default by VECOo
~ equal to the difference between the rent and the fair and reason-
(h) Recover an amount to be due immediately on breach
HUGHES THOR'Nm able rental value of the premi ses for the remainder of the lease
;,.,NTZ PowELlaBRUNDIN
ATTOII,,"E'l'S AT LAW
!O'\'iESlTIIIIlDAvthUI
A:>tCHORAGE. All: 99501
19071274.7512
-l6-
r
~
,j
~
il.'..
HUGHES THORSHfSS
:;AHn POWELLIOItUHDIN
ATTOJtNI:VS AT LAW
SO'WISllIIIIIDO\VlNUl
ANCHORAGE. All: .UOt
ttO" 2U.7521
,
---;
'"
term. In the computation of such damages, the difference between
the installments of rent thereafter becoming due and the fair and
reasonable value of the premises for the period of which such
"installments is payable shall be discounted to the date of such
i breach at the rate of 8% per year. If the premises or any part
thereof be re-Iet by LESSOR for the unexpired term of this lease,
or any part thereof, before presentation of proof of damages, the
amount of rent reserved upon such re-Ietting, in the absence of
evidence to the contrary, shall be deemed to be the fair and
reasonable rental value for the premises.
(i) If VECO does not immediately surrender possession
of the premises upon demand by LESSOR, LESSOR may forthwith enter
into and upon and repossess the leased land and expel Lessee or
those claiming under Lessee (except for sub-tenants who have
complied with the provisions of Article VIII of this lease)
without being deemed'guilty in any manner of trespass and without
prejudice to any remedies which. might otherwise be used for
arrears of rent or breach of covenant.
(j) No expiration or termination of this lease shall
relieve VECO of its liability and obligations under this lease,
and such liability and obligations shall survive any such expirat-
ion or termination.
(k) Each right and remedy of LESSOR provided for in
this lease shall be cumulative and shall be in addition to every
other right or remedy provided for in this lease or now or here-
after existing at law or in equity or by statute or otherwise,
and the exercise or beginning of the exercise by LESSOR of any
one or more of the rights and remedies provided for in this lease
or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise
-17-
r
I
]
I
I
,
I
f~ij:J';i~)qi:;:f;~~,
f'
~ ,I',
HUGHES THORSHESS
;ANTZ POWELL'" BnUN DIN
ATTORNCYS AT lAW
50' WUT fHIRO "VUiUE
A.NCHORAGE. AKI!l501
19071274.7522
".."..;"
'-
\
by LESSOR of any or all other rights or remedies provided for in
this lease or now or hereafter existing at law, or in equity or
by statute or otherwise.
6.3 The remedies conferred on or reserved to LESSOR in
Section 6.2 hereof are intended to be cumulative and exclusive of
any other remedy or remedies for acts of defaults; provided,
however, that the limitations and remedies for defaults or acts
of default shall npt preclude LESSOR from bringing any action to
seek remedy by reason of any misrepresentation arising out of
thi s lease 0
The foregoing rights of Lessor in the event of
default are in lieu of and preclude any claims against VECO for
specific performance. No delay or omission to exercise any right
or power accruing under any default shall impair any such right
or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as
often as may be deemed expedient.
6.4 If ei ther party hereto 'shall deem the other to be in
default under any terms or conditions hereof and shall incur
legal expenses or other costs in the successful enforcement of
such right or rights, the defaulting party shall pay reasonable
legal expenses and costs. In the event the party alleged to have
been in default is found not to have been in default, the party
making the allegation shall pay any reasonable costs incurred in
the successful defense of such claim.
ARTICLE VII - TRANSFER OF VECO SERVICE FACILITY
Improvements constructed by VECO which become permanently
affixed to the land such as concrete foundations, buildings,
steel warehouses, ditches, sewer lines, water lines, dikes, or
berms, and similar improvements, shall become the property of
LESSOR at the termination of this lease agreement for any reason
-18-
~-.c;_
r
~
1
,::!j.r!;nl
HUGHES THOltSNESS
'iAtlTI POWELL.SRUNDIN
ATTO"Nl:YS AT LAW
5atV;U""111DIoVl"UI
ANCHORAGE. "K. "'0 I
(ton 174.'521
except purchase of the leased premises by VECO. All fixtures,
machinery, and equipment including without limitations, storage
tanks,
radio towersl
radio equipment,
cranes,
compressors,
'; winches, conveyer belts, engines and machines shall be deemed to
be personal property and the property of VECO even though affixed
to the land or to a bui lding and VECO shall have the right to
move the same at any time during the period of this lease is in
effect or within a period of ninety (90) days following the
termination of this leaseo Upon removal of any item or items,
VECO shall have no obligation to remove any concrete foundations,
, pilings or similar improvements, except those which are deemed
hazardous by the LESSOR. Any item not removed by VECO during the
period this lease is in effect or within the period of ninety
(90) days following the termination of this lease, shall become
the property of LESSORo All costs for repair and maintenance on
any improvements constructed by VECO on the leased premises shall
be paid by VECO' and LESSOR shall' have no obligation to pay any
repair or maintenance costs with respect to the leased premises.
ARTICLE VII I - SUBLEASE
VECO shall have the right to sublease for any lawful purpose
and subject to any existing or hereafter lawfully enacted provis-
ions of state law, or municipal charter or ordinance provisions
unto any person any portion of the leased premises provided,
however, that despite any such sublease VECO shall sti II be
responsible for the performance of all the covenants under this
lease agreement with respect to the portion of the leased premises
which is subleased. Any sublease entered into by VECO with a sub-
lessee for any part of the leased premises shall be subject to all
of the terms of this lease agreement. Neither party shall assign
its interest in this lease agreement without prior written consent
-l9-
~-<(:
r
I
I
~
~
~ .
~
r
HuaHES THORSNESS
;ANTZ POWElL6 BRUNDIN
ATTORNnli AT LAW
'01 WUT THIIlD AVIMUl
"NCHORAGE. AK 99501
(301) 274.7S1:!
,
of the other party hereto but such consent shall not be unreason-
" ably withheld. Any assignee shall be bound by all of the terms
and conditions of this lease agreement. During the first ten
years of this lease, VECO shall pay to City as rental an amount
equal to one half of the subrents collected with respect to the
subleased parcelo VECO shall be entitled to all remaining sub-
rents. After the end of such ten year period, all subrents shall
belong to VECOo
VECO shall have the right at any time and from time to time
to subject its leasehold interest and all improvements which it
has placed upon its leasehold interest to one or more mortgages
or deeds of trust as security for a loan or loans or other obli-
gations of VECO ari sing from its construction of faci,li ties on
the leased land, provided that:
(a) The mortgage or deed of trust and all rights
acquired under it shall be subject to each and all of the coven-
ants, conditions- and restrictions stated in this lease and to all
rights and interests of LESSOR except as otherwise provided in
this lease.
(b) VECO shall give LESSOR prior notice of any such
mortgage or deed of trust or other encumbrance; and shall accomp-
any the notice with a true copy of such mortgage, deed of trust
or other encumbrance and note.
(c) If VECO should default on its payment of such loan
or loans, the holder of any such mortgage or other encumbrance
shall have the right to enter and take the leasehold interest of
VECO and to operate the VECO service facility or to sell such
leasehold interest to a third party; however, any such successor
to the interest of VECO shall be subject to and bound by all of
the condi tions and terms of thi s agreement 0
-20-
r
~
J
g
t
HUGHES THOll:SNUS
;ANTZ POWELL6BRU"DIH
ATTOIINI[YS AT LAW
ntwUTTHIIl04VfMUE
ANCHORAGE. AIt 91501
I,on 174.7522
......,
"
(d) The lender under any mortgage or any deed of trust
shall give LESSOR written notice of any loan default by VECO and
LESSOR shall have the right to (but need not) cure any such
default within 30 days of receipt of such notice by LESSOR with
respect to any default that can be cured by the payment of money
or to cure any other default by taking reasonable steps to com-
mence the remedy of such default wi thin 30 days of receipt of
notice thereof and diligently pursuing the curing of the same to
completion. Any such curative action by LESSOR shall be deemed
addi tional rent under Articles IV and VI 0
(e) Any mortgage or deed of trust or other encumbrance
shall require notice of any default thereof be given to LESSOR
prior to the institution of any proceeding, remedy or other
action by the lender under such mortgage or deed of trust or
other encumbrance 0
(f) VECO shall, within a reasonable time, notify
LESSOR of the execution of delivery of any and all deeds of
trust, mortgages or other encumbrances of VECO's leasehold inter-
est entered into by VECO pursuant to thi s Article and furnish
LESSOR conformed or reproduced copies thereof.
(g) VECO shall not mortgage or encumber any part or
" all of the fee estate of the leased land during the term of this
lease.
(h) All costs and expenses which VECO assumes or
agrees to pay pursuant to this lease or to any mortgage or other
encumbrance upon VECO's leasehold interest shall at LESSOR's
election be treated as additional rent and, in the event of
non-payment LESSOR shall have all rights and remedies herein
provided for in the case of non-payment of rent or of a breach of
this agreement.
If VECO shall default in making any payments
-21-
r
I
, ~
,
"
"
"
"
,t/'~~<~
, .' ~
HUGHES THOR5tiESS
GAN.TZ POWELL68RlJNOfN
"YTOIINEY$ AT LAW
5O~""UJTIU_D"''''U'UI
ANCHORAGE. AK 99501
190712:74.7522
('
required to be made by VECO, or shall default in performing any
term, covenant or condition of this lease or of any such mortgage
or other encumbrance on the part of VECO to be performed which
i, shall involve the expenditure of money by VECO, LESSOR at LESSOR's
option may, but shall not be obligated to, make such payment or,
on behalf of VECO expend such sum as may be necessary to perform
and fulfill such term, covenant or condition, and any all sums so
expended by LESSOR, with interest thereon at eight percent (8%)
from the date of such expenditure until repaid, shall be (and
shall be deemed to be) additional rent and shall be repaid by
VECO to LESSOR on demand, but no such payment or expenditure by
LESSOR shall be deemed a waiver of VECO's default nor shall
effect any other remedy of LESSOR by reason of such defaulto
ARTICLE IX - INDEMNIFICATION
9. 1 VECO agrees to hold LESSOR harmless and defend LESSOR
from all claims for personal injuries and property damage of
every kind and character relating,to the leased land or arising
out of VECO's use of the leased land or the use of the leased
land by VECO' s sublessees, agents or contractors or the public.
902 VECO shall procure and maintain, at VECO's sole cost
and expense, comprehensive general liability insurance, with
limit of liability of not less than Five Million Dollars
($5,000,000000), for all injuries and/or deaths resulting to any
one person or from anyone Occurrence. The limit of liability for
property damage shall be not less than Five Million Dollars
($5,000,000000) for each occurrence and aggregate 0 Coverage under
such insurance shall also include insurance of any explosion,
collapse and underground property damage hazards. Such insurance
shall include a broad-form contractual endorsement 0 Any "water-
craft exclusion" in the comprehensive liability insurance policy
-22-
r
I
I
I
I
~
~
?
.>;;;~:~'~~~1f'~i:j'~
"j
HUGHES THOItSNESS
:iANTZ POWEI,L.BRUND1N
...TTOlltNE.... AT LAW
'0..151 TlIIIID 4...I/lUI
,ANCHORAGE. Ate 951501
lton 274.7522
".(
shall be eliminated or protection and indemnity insurance shall
be provided with the same limits as the comprehensive liability
insurance for the use of watercraft.
9.3 VECO agrees to provide, at its sole cost and expense,
adequate types and amounts of insurance to completely cover any
potenti al li abil i ty of the LESSOR ari sing out of thi s lease
agreement or the use of the leased premises by Lessee, or Lessee's
operation which are not on the leased premises.
The parties
recognize that VECO's use of the property may change during this
agreement 0 The minimum amounts and types of insurance provided
by VECO shall be subject to revision in accordance with standard
insurance practices, in order to provide continuously throughout
!_ the term of this agreement and any extensions hereof, a level of
protection consonant with good business practice and accepted
standards in the industry 0 Such factors as increases in the cost
of living, inflationary pressures, and other considerations shall
be uti lized in ,",ssessing whether the minimum insurance require-
ments should be increasedo
LESSOR shall notify VECO of any
requested increase in insurance coverages at least 60 days prior
to the effective date of such increaseso
If VECO and LESSOR
disagree as to whether the increased coverages are reasonable,
the increases shall be effective but VECO may submit the issue of
; the reasonableness of the increases to binding arbitration under
the Rules of American Arbi tration Associationo
9.4 All insurance policies shall provide for thirty (30)
days' notice of cancellation and/or material change to be sent to
LESSOR at the address designated in Article XIV of this agreement 0
All such policies shall be written by insurance companies legally
authorized and licensed to do business in the State of Alaska,
and acceptable to LESSOR (Best's Rating Triple A or better).
-23-
r
I
I
,
~
~
"
"
r
i'
HUGHES THORSNES$
iANTZ POWELLIBRUNDIH
ATTORNEYS AT LAW
~lt'WUTTMIIID"'n"1I1
AN.CHORAGE. At< 91501
(U7l174.7522
VECO shall furnish LESSOR, on forms supplied by LESSOR, certifi-
cates evidencing that it has procured the insurance required
herein prior to the occupancy of the premises or operation by
VECO. Nothing herein contained shall prevent VECO or LESSOR from
placing and maintaining at VECO's or LESSOR's own individual cost
and expense, additional or other insurance as may be desiredo
9.5 At least annually throughout the term of this lease
VECO shall procure and submit to LESSOR a written report from a
reputable insurance Broker (Best's Rating Triple A or better)
that the Broker has reviewed the types and amounts of coverage of
insurance obtained by VECO and the operations of VECO and has
determined that insurance coverage is adequate and complete 0
9.6 All of the insurance policies required above as well
as any insurance carried by VECO, or those holding under or
through VECO, for the protection of its or their property on or
about the public dock, or their operations, shall provide that
the insurers waive their rights of subrogation against LESSOR and
VECO and their respective officers, servants, agents or employeeso
VECO further agrees to waive and agrees to have its insurers
waive any rights of subrogation (whether by loan receipts, equit-
able assignment or otherwise), with respect to deductibles under
such policies and with respect to damage to equipment including
the loss of use thereof, whether insured or not. VECO shall also
name LESSOR as a named insured on each insurance policy 0
ARTICLE X - CONDEMNATION
1001 If all or any part of the leased land are condemned for
a public use by any government agency or other duly authorized
entity, LESSOR and VECO shall each make claim against the condemn-
ing or taking authority for the amount of any damage incurred by
or done to them respectively as a result of the taking. Neither
-24-
r
!
i
~i
'j
.i
.'
~
':.~;::~ ~:):'~~~
'.
HUlilUS THORSNESS
;ANnPOwELuBItUNDIN
AnOI'tNlEVS AT LAW
U.,HU'Nt.DAI/(IIUl
A....CHOR...GI!. A" "501
(ton 27...1521
LESSOR nor VECO shall have any rights in or to any award made to
the other by condemning authority; provided, that in the event of
a single award to LESSOR which includes specific damages for loss
of VECO's leasehold interest, LESSOR shall transmit to VECO the
amount of such specific damages so found, if anyo
1002 If part, but not all of the leased land is condemned
for public use, VECO shall make a good faith determination as to
whether or not the taking of the part of the leased land desig-
nated for condemnation will prevent it from continuing to operate
on the leased land. If VECO determines in good faith that the
condemning of such part of the leased land will prevent it from
continuing to operate on the leased land, then VECO shall notify
LESSOR in writing to this effect, and this lease agreement shall
then terminate for all purposes effective fifteen (15) days from
the date VECO sends such notice to LESSOR and such termination
shall be treated in the same manner as a termination at the
expiration of one of the terms provided for in Article V hereof.
VECO shall as a condition precedent to such termination remove
all encumbrances, debts and liens to which the leased land is
subject. If at the time of such partial taking for public use,
VECO determines that such partial taking will not prevent it from
continuing to operate, then there shall be a partial abatement in
the leased land rental payment beginning on the actual date of
taking and the amount of the partial abatement shall be based on
square footage taken as compared to total square footage of the
leased land.
ARTICLE XI - SALE OF LEASED LAND
11.1 LESSOR shall not sell, assign or transfer all or any
part of the leased land during the term of this lease unless such
sale, assignment or transfer is expressly made subject to all of
-25-
r
I
I
,
I
,
1
,I
.1
;
(1
'~
'!
t,
'. :'i, :{,~;~~;~::~
, ,;
r ~ t;
HUGHES THORSNE5S
;ANTZ POWELlaBRUNOIN
ATTORNEYS AT LAW
SO, onST T"'~O .......IIUI
ANCHORAGE. AK !lUG I
(g01l 274-752:2.
,-
,
,
\
the terms of this lease agreement. If LESSOR desires to sell,
assign, or transfer this property in whole or in part, LESSOR
shall be required to notify VECO of the proposed purchase price,
terms and conditions at which LESSOR proposes to sell the leased
lando
VECO shall have ninety (90) days after receiving the
notice of such proposal to decide whether VECO wishes to purchase
the leased land upon such price, terms and conditionso If VECO
elects to purchase the property upon such price, terms and condit-
ions, it shall notify LESSOR of this election, and LESSOR shall
thereupon promptly enter into a contract of sale with VECO for
sale of such property upon such price, terms and conditions. If
VECO does not notify LESSOR that VECO wishes to purchase the
leased land upon such price, terms and conditions, then LESSOR
shall have the right to sell the leased land to the purchaser
named in the Notice of Proposal to Sell which was sent to VECO
upon the same price, terms and conditions contained in such
notice at any time within ninety (90) days after the ninety (90)
day notice period to VECO has expiredo After the expiration of
such one hundred eighty (180) day period, LESSOR shall not be
'entitled to sell the leased land to any party unless it again
notifies VECO of the name of the purchaser and the proposed price,
terms and conditions of sale, and VECO shall again have the right
to meet such price, terms and conditions within ninety (90) days
after receiving such notice as provided above.
11.2 In the event VECO elects to purchase the property
pursuant hereto it shall not be required to compensate the LESSOR
for the improvements placed upon the property by VECO.
ARTICLE XII - MAINTENANCE AND INSPECTION
VECO shall maintain the leased land in a neat and orderly
manner and except as otherwise herein provided shall not permit
-26-
r'
-,.--
~
..%-
'}
,.'
I
HUGHES THORSNESS
iANT! PowELlaBRuNDIH
"'TTOR"'~YS AT ~W
UtWUTTHIIlllAlI1HUr
Ai'tCHORAGE. AK 91501
It01)2H.7S2Z
"""
any waste, destruction, defacement, or other injury to the leased
land other than normal wear and tear and LESSOR shall have the
right to inspect the property from time to time.
ARTICLE XI I I - CONTINGENCIES
l3. 1 Thi s Agreement has been negotiated and executed in
advance of receipt by LESSOR of necessary funds from the State of
Alaska, permits from various federal, state and local agencies,
and compliance with necessary federal, state and local laws,
ordinances and regulations, all or some of which must be obtained
in order to construct the public port faci li ty adj acent to the
, leased land. Either party may, in its sole discretion, terminate
I this Agreement, which will automatically also terminate the Dock
Permi t upon the occurrence of any of the following:
lJ.2 Fai lure of LESSOR to receive, before July 1, 1982,
funds from the State of Alaska sufficient, as determined by
LESSOR, to commence construction of a public port facility as
generally described in that certain Environmental Impact Assess-
ment prepared by LESSOR and dated March 3, 1981, and that certain
Project Description prepared by CenturyjQuadra Engineers in
December, 19800
l3.3 Failure of LESSOR to receive any necessary environ-
mental or other permits required as a condition precedent to the
commencment of construction before July l, 1982, of the public
port facility.
lJ.4 Failure of LESSOR to make in a reasonable time (and in
any event before any required commencement of construction of the
VECO facility) any changes to its Charter or Ordinances required
to make this agreement or the accompanying Dock Permit valid and
enforceable 0
13.5 Compliance with all applicable federal, state and local
-27-
r
I
I
I
:i
I
p
4
~!
, ,~j;:z'~:;...:.'~":;,:..!I;:-~!~
~t;.." r',"!f.,t-",;..t:~~.~;~
:~:~:".:; \-(:'.-:;' ',}:..'~:.:"
,
~
HUGHES THORSNESS
.ANTZ POW(LLa8RUNDIN
"'TTO"N~YS AT LAW
'OtI'lUltlllJ10AvtNU!
A~CHORAGE. AK U501
(907) Z7.tl.7522
statutes, regulations and ordinances by either party, provided,
however, that both LESSOR and VECO shall have the right to contest
and resolve any disputes concerning such compliance by submission
American Arbitration Association.
to binding arbitration in accordance with the rules of the
13.6 Failure of the parties to reach agreement as to the
form of the Dock Permi t referenced in paragraph 2.4.
13.7 Opinion by the City Attorney that the lease does not
violate the Seward Charter or Ordinances and with respect to the
ARTICLE XIV - NOTICES
Charter and Ordinances is valid, binding and enforceable.
All notices under this agreement shall be sent by registered
mail, postage prepaid, as follows: If to VECO:
VECO Offshore, Inco
5151 Fairbanks Street
Anchorage, Alaska 99503
Attention:
Rod Christ
and if to LESSOR:
City of Seward
P.Oo Box 337
Seward, Alaska 99664
Attention: City Manager
IN WITNESS WHEREOF the parties hereto have caused this
agreement to be executed by their duly authorized representatives
for all purposes.
in duplicate, each copy of which shall be deemed to be an original
MADE AND EXECUTED on the date hereinabove set fortho
CITY OF SEWARD
tl c::r:gZ~v p ,
By: ' ~? / J 1-<11-.
C.Et/Johnson
City Manager
By:
"j:' ) , / I
, /'/'/', ,.'.' ,:... '-.." ',,',' "',
Joanne E. Shanley
City Clerk
-28-
VECO OFFSHORE, INC.
By:
.; j' /
, "/- '/,
/,.i ,(,/,~,> T
APPROVED AS TO FORM:
HUGHES, THORSNESS, GANTZ
POWELL & BRUNDIN
/' I, ,~
/,,:01/ )j( t: ."L-~
City Attorney
.1
~
i
~
,~
':f
.!
<I
~
'~'~<S::i":~:-~-;~
HUGHES THOItSNESS
~"NTZ POWELLIBRUNDIH
"TTO"N~Y. AT LAW
!.OIWl!lTTMIIIOllYlHlIl
A~CHO""GE. AI: U50 1
(9071 274-75ZZ
1-..
,
~,
STATE OF ALASKA
SSo
THIRD JUDICIAL DISTRICT
Before me, the undersigned, a Notary Public in and for the
State of Alaska, on this day personally appeared C.Eo JOHNSON
and JOANNE E. SHANLEY, known to me to be the City Manager and
City Clerk, respectively, of Seward, Alaska, whose names are
subscribed to be the foregoing instrument and, being duly sworn,
acknowledged to me that the same was the act of the said City
of Seward, and that they executed the same as the act of the City
of Seward, for the purposes and consideration therein expressed,
and in the capacity therein statedo
SUBSCRIBED AND SWORN to before me this ;?c
19810
day of J"!,,
I
--u. ~
j'") I A .// ,,-
Notary Pub ic
My commission
u/ J.'? CUL2:.~
in and for ~t~
expires: ~~'i
STATE OF ALASKA
SSo
THIRD JUDICIAL DISTRICT
Before me, the undersigned, a Notary Public in and for the
State of Alaska, on this day personally appeared If. t/ (' j, r" c;1-
, known to me to be the person and officer of VECO
OFFSHORE, INC., whose name is subscribed to be the foregoing
instrument and, being duly sworn, acknowledged to me that the same
was the act of the said corporation, and that he executed the
same as the act of the said corporation, for the purposes and
consideration therein expressed, and in the capacity therein
stated.
SUBSCRIBED AND SWORN to before me this /5,;t{
1981.
day of 0 ,,/'.,
f/ I
Q.<~( ~-<>~
Notary Public in and for Alaska
My commission expires: /0 -5-5"1--
-29-
~ ~NERAL DOCK
(80. .t.* .,.,." RAMP AND FLOATING
DOgS)
SHIPUFT:
JSHIP"IFT, TRANSFEiR CARRIAGE AND
PIT, DRY BERTH$ WES~,OF TRANSFER
PIT AND BREAKW A TE'UJ
I I)
r
".,C"?i",,w>>"""h"',*,''<'''''-'-'->'''''''''"
",.-,
@~
''''!
~'\
<Q
.O~
'\.'
0v
~~
roV
~0
t
r''"
t.
'\..
a:
ow
ZLL;
i&('0
Z
We(
Oa:
:!I-
a:LL;
a:O y
e( y;t ,
Om~
a:wW
W~I-
lL:>e(
(l)cn:=
ZZ~
e(1-e(
a:a:W
"'!.I.Ia:
MID ID
I-
LL;>-O
~ a: z
Q.Oe(
i":l-
(1)--
-.Q. Q.
~"-"
100.00'
1:
.~
I ~~ERAL DOCK
I (8.0* ~AMP AND FLOATING
_DO~~S~
r"
~~
<Q
.O~
,-'
0v
~~
r:,V-
~0
,~~
""~
DOCK LICENSE
4th of July Creek Marine Industrial Park
Prepared For City of Seward by Quadra/Century J.V.
LEGAL DESCRIPTIONS