HomeMy WebLinkAboutRes1981-013
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CITY OF SEWARD, ALASKA
RESOLUTION NO, 81-13
A RESOLUTION OF
SEWARD, ALASKA,
OFFSHORE, INC,
THE CITY COUNCIL OF THE CITY OF
LEASING CERTAIN LAND TO VECO,
WHEREAS, for in excess of five years the City of Seward has
been attempting to attract industrial companies to Seward in
order to create employment opportunities and stimulate the econ-
omy, 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 certain
lands in the vicinity of 4th of July Creek and adj acent to the
Marine Industrial Terminal being developed by the City of Seward,
and
WHEREAS, the proposal of VECO OFFSHORE, INC., to lease cer-
tain lands has been the subject of extensive negotiations for
over a year, and
WHEREAS, the City Council has determined in Resolution No,
81-1 that the disposition of certain land by way of sealed bid
would not be in the public interest for the reasons set forth in
Resolution No. 81-1, and
WHEREAS, negotiations with VECO OFFSHORE INC" have con-
cluded, and
WHEREAS, pursuant to notice as required by the Seward Code a
public hearing on the proposed lease was held on May 11, 1981,
and
WHEREAS, in accordance with Section 2-83 of the City Code
the Ci ty attorney has endorsed the lease agreement, and
WHEREAS,
recei ved from
that it is in
OFFSHORE INC.,
no
the
the
adverse comments to the proposed have been
public and the City Council remains convinced
public interest to lease certain lands to VECO
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
Ci ty of Seward, Alaska, that:
Section 1. In accordance with Section 12.3 (b) of the
City Charter this resolution shall be on file in the office
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RESOLUTION NO. 81-13
of the City Clerk for thirty days and shall be posted in
accordance wi th Section 2-84 of the Ci ty Code.
Section 2. Upon the expiration of thirty days as set
forth in Section 1 above, this resolution shall become
automatically effective and the Mayor is instructed to
execute that certain lease agreement, a copy of which is
attached hereto as Exhibi t A and incorporated herein by
reference, leasing the lands described therein to VECO OFF-
SHORE INC.
PASSED AND APPROVED by the City
Seward, Alaska, this 11th day of June
Council of
, 1981.
the
Ci ty of
CITY OF SEWARD
AYES:
NOES:
ABSENT:
CAMPBELL, GILLESPIE, SORIANO
NONE SWARTZ
CRIPPS, HUGLI & O'BRIEN
!t :J, ~
n F, Gillespie .
& , M
lce- ayor
Q~ S~a~
JoAnne E. Shanley
City Clerk-Treasurer
Approved As To Form
HUGHES, THORSNESS, GANTZ
POWELL & BRUNDIN, Attorneys
for the Ci ty of Seward
~/lt~
Fred B. Arvidson
(Ci ty Seal)
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HU:;Hts THO~SNESS
,iANUPOWELl,aBRUNOIN ,',
ATTO~NF.Y5 AT LAW
~o, Vif\; TMIIIO ,WElIU~
At\CftORAGE. Ak. 99501
t901l 274.1522
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LEASE AGREEMENT
This agreement made and entered into effective as of I,r;"i!,day
ofi~,d" , 1981. by and between t:he City of Sev,ard, a municipal
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corporation located in the Kenai Peninsula Borough, State of
Alaska, hereinafter referred to as "LESSOR" and "CITY" and VECO
:}ffshore. Inc" a Delaware corporation wi th head offices in
Anchorage, Alaska, hereinafter referred to as nVECO".
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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 adjacent land a
public port faci li ty in order to assi st in development of-t;he
economy of Seward and provide employment for residents of the
Ci ty of Seward; and
WHEREAS, VECO has agreed to construct certain yessel 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 yessel repair and construction facility would be in the public
interest in that such a faci li ty 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 City of Seward;
NOW, THEREFORE, for and in consideration of the
mutual
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HUGHES THORSNESS L
;ANTZ POWI:LLaBRUND1N J
ATTORNEV. AT LAW 11
so~ Wfn TllIJtD "'VSHU~
ANCHORAGE. AK 9~50 I
('071274.7522.
promises and covenants hereinafter contained, the parties hereto
1\ agree as follows:
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ARTICLE I - LEASE
1.1
EKcept as otherwise proYided hereinbelow, LESSOR owns
the following described leased land:
Tract One
A tract of land situated in the fractional
Section 18 T1S R1E of the Seward Meridian,
Alaska, more particularly described using
grid bearings as follows:
Commencing from the Southeast corner of said
Section 18 T1S, R1E, Seward Meridian, Alaska,
thence, N 770S1'33"W a distance 2,147,12
feet, to Corner Number 3, United States
Suryey 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,S,S, 4827 a
distance l,897,SO feet to the Northeast
Corner of said U.S,S, 4827; thence, a bearing
S 8902S'47"W and along the North Line of said
U,S,S, 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 u, S, s,
4827; thence, a bearing N 8902S'10"E and
along said South Line a di stance 1,200,00
feet to the ~ Point of Beginning;
EXCEPT the North 200 feet of land adjacent to
and parallel with the North Line of the
aforementioned U, S. S, 4827, Said tract
exclusive of this exception containing, an
area of 46.77 acres, more or less.
and,
Tract Two
A tract of land si tuated in the fractional
Section 18 TiS R1E 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 R1E Seward Meridian, Alaska,
thence Nl0-46-33W a distance 2,221.33 feet,
more or less, to Corner Number 3, United
States Suryey Number 4827, said corner being
also the True ~ of Beqinning;
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HUGHES THOASNESS i:
~ANrZ POWELL6BI'!UNOlN ;i
"TTOluutvs AT LAW I
50' wnr rlURD AYlrlU1 ,:
Ai'iCHORAGE. AK 9"0'
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thence, South and along the extention of the
East Line of the aforementioned U,S,S, 4827 a
distance 415,00 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 1,900.00 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.S,S. 4827; thence, East and along the
aforementioned South Line extended and,
subsequently, East and along the South Line
proper a distance 1,900,00 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 The leased land is not now owned, in fee simple, by the
City of Seward, 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 haye 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 agreement,
1,3 The parties recognize that the City is in the process
of obtaining ownership of the leased land from other governmental
enti ties inc'luding the United States and the State of Alaska,
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 enjoyment,
The City makes no representations or
warranties as to the ti tIe of the leased land other than those
specifically contained herein. VECO agrees to join with the City
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HUGHES THORSNESS
iANTZ PowELLaBRUNOIN
ATTORN.". AT LAW
50tWUTTlUIloAVtNlII
ArtCHORAli(. AI( "SOl
(907127...7522
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and assi st the City in obtaining title to the leased land by
executing such consents or documents as may be necessary or
conyenient in applications or proceedings before any federal or
state agency, including the Bureau of Land Management, to enable
the Ci ty to obtain title 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 facility more particularly described on Exhibit A
which is incorporated herein by reference, VECO may engage in
such other lawful activities 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-
yisions of state law, or municipal charter or ordinance pro-
visions.
1,5 This lease is part of a set of agreements under which
LESSOR has granted VECO the right (1) to hold the leased land
described in thi~ lease agreement,~nd (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
VECO thereunder, this lease agreement shall also terminate simul-
taneously therewi th,
ARTICLE I I - DEFINITION
2.1 As used in this agreement the following term, in any
form or yariation thereof, shall, unless otherwise provided, haye
the following respective meanings, In addition, certain other
terms as defined in other Articles of this agreement shall,
unless otherwise specifically proYided, haye the respective
meanings hereinafter attributed to them.
2,2 "VECO SERVICE FACILITY" means the office, warehouse,
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HUGHES THORSNESS I:
:.iANTZPOWELLaBRUNOIH i
ATTOlltNllVS AT LAW
10) WEst THIRD AVENU~
ANCHORAGE. AK 9950 I
(g07l Z,..7512
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vessel repair and yessel construction buildings and related
facilities necessary for the conduct of VECO's vessel repair and
construction business and more particularly described on Exhibit
"A" .
2,3 "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 with the Dock Permit,
2.4 "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 Council 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 change the
contour of the leased land subject t'? the following conditions:
(a) The cost of any such construction, reconstruction,
demolition, or of any changes, alterations or improvements, shall
be borne and paid for by VECO,
(b) The leased land shall at all times be kept free of
mechanics and materialment 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
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HUGHES THORSf'tESS II
:;ANnPOWELLIBR'JNDIN !i
,.:rTOltNEYS AT LAW II
JO'WnrrIlIIlO"VINUl I'
ANCHORAGE. AI( 99S0 I I
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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 10,05.825(18), a performance bond shall not be
required,
(e) LESSOR may, as contemplated by Alaska Statutes,
give notice of non-responsiblity for any improvements constructed
or effected by Lessee on the leased land,
3,2 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, ?ecessary, or required by the seyeral 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 subdiyision and precise
plan approyal 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 deliyer or join in execution and deliyery of
such documents as are appropriate, necessary or required to
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HUGHES THORSNESS "
;,,~TZ POWELLaBll:UNOIN :
ATTORNEY3 AT LAW':
50,-..;UrTHIIIDA't11IOUE
ANCHORAG!:. AK 99501
(g07) 274-75ZZ
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impose upon the leased land,
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covenants, conditions and restrict-
ions proYiding for the granting of exclusive uses of the leased
land, or any part thereof,
the establishment of party walls, the
establishment of mutual and reciprocal parking rights or rights
of ingress or egress, or other like matters, all of which are for
the purpose of the orderly development of the leased land
as a
commercial uni t, subject, however to the following condi tions:
(1) .All such matters shall be limi ted to the lease
term and shall terminate upon termination of the lease for what-
ever reason;
(2) Any such matters of a permanent nature extending
beyond the lease term shall not be granted without the prior writ-
ten approval of LESSOR.
3,5 In each of the foregoing instances referred to in this
Article III, LESSOR shall be without expense therefore, the cost
and expense thereof to be borne solely by VECO,
3,6 At the expiration of tl:1e lease term, (including any
extended period), all buildings on the leased land shall become
the property of LESSOR without the payment of any compensation to
VECO or its tenants. Until the expiration of such lease term,
title to and ownership of all bUildings and improvements shall be
in the name of VECO,
3,7 VECO shall construct at its sole expense the VECO
service facility on or about the leased premises and shall expend
for on-site construction on such project within five (5.) years
after commencement of construction as that term is defined in
Section 6,l(f)(S)(ii) herein, an amount not less than Five Million
Dollars
($5,000,000.).
An expenditure schedule is attached
hereto as Exhibit "B" and incorporated herein by reference, Any
failure by VECO to meet or exceed the expenditures required in
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shall be considered a violation or breach of
this
lease agreement and shall entitle LESSOR to any and all remedies
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provided for on default,
LESSOR,
its
agents,
attorneys
and
accountants
shall
have
reasonable access, at all times throughout the period of construc-
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tion by VECO, to any and all accounting records of VECO to verify
expenditures made by VECO, Such records shall be made available
to LESSOR in Seward, Alaska for inspection by LESSOR, its agents,
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attorneys and accountants,
It is understood and agreed that a primary consideration for
the execution of this lease agreement by LESSOR in fayor of VECO
is VECO's coyenant to undertake and develop the property in
accordance with Exhibit "B" which deyelopment has been determined
by the Ci ty Counci 1 of LESSOR to be in the public interest,
In computing the amounts expended by VECO for construction
as herein provided, no allowance shall be made for indirect
overhead expense_so 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 facilities,
By way of
illustration, and without limitation, such indirect overhead
expenses include such items as public relations, marketing
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HUGHES THORSNESS :
:;A:HZPOWELLIBRUNOIN ;
ATTORNEY. AT I.AW II
utWIUTMI.OAVINUI I:
ANCHORAGE. AI!: 9950 I i
(901) 27.4.7522 ii
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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
quarter detailing VECO' s progress on its construction proj ect.
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HUGIiES THORSNE:OS I
~ANTZ POWEL.L.&BRUNDIN L
"'TTQIUI~YS AT LAW r
It:~H:;:;;;:-:,t;:~~(1 I'
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<9071 114.1522
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III ($1.00) per year per acre payable
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ARTICLE IV - RENTAL
4.1
The rental payment on the premises shall be one dollar
in advance commencing on the
date hereof and thereafter to the date determined
in
accordance
wi th paragraph 6, 1 (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 VEca
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 eyery five years thereafter,
The adjusted annual rental shall be the fair rental value of the
premises
determined below
and
shall
the
be
annual
as
rental
amount for each of the five years following the effective date of
II that particular rental adjustment,
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"Fair rental value"
as used
in this
lease
shall mean eight percent (8%) of appraised fair
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market yalue.
Not more than ninety (90) days before the
anni versary 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
take
not
into
the
account
capital
improvements to the premises constructed by VECO, but shall take
into account the premises exclusive of such improvements.
Not more than sixty (60) days before the effectiye date of a
rental adjustment LESSOR shall notify VECa of the amount of the
rental adjustment and shall furni sh VECO with a copy of the
appraiser's written appraisal report, Failure of LESSOR to meet
the deadline for engaging the appraiser and notifying VECO of the
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HUGHES THORSNESS II
~ANTlPOWELLaBRUNOIN !
,ft,TTDRNI!YS AT LAW
SO'.....ISTTH'ItDAYUiUI
ANCHORAGE. AK 8950 I
(9071 274.7SZl
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"rental adjustment shall not prevent the rental adjustment from
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Ii becoming effective on the prescribed anniversary date,
Ii If VECO does not object to the rental adjustment, that
II rental adjustment shall apply, If VECO objects to the amount of
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the rental adjustment, it must giye LESSOR written notice of
objection on or before the effective date of the adjustment,
,
I' VECO shall then engage a second independent MIA certified
II'
appraiser at its own expense to make a second appraisal of the
il ,." ,om'" "'00 "' 'ho "om"o.
Ii VECO's objection to the rental adjustment and engagement of
Ii a second appraiser shall not postpone VECO's obligation to pay
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,I the annual rental as described in LESSOR's notice of rental
I adjustment based on the first appraisal. LESSOR shall deposit
I into a separate trust account the amount of rental increased as
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fixed by the first appraisal until the question of rental adjust-
ment is finally resolved,
If the secolld appraisal reflects a fair rental value which
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i yaries from the first appraisal by no more than ten percent
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Ii (10%), then the rental adjustment as set forth in LESSOR' s notice
II of rental adjustment shall be the adjusted rental for the five
I year period, Howeyer, if the second appraisal reflects a fair
I
I 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' 5 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
with paragraph 6,I(f) hereof and thereafter for ten (10) years,
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HUGHF.S THOASI1ESS ..
:;ANTZPOWELLaBRUNDIN!
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1:~:[~~~:~A::Y~~l I:
ANCHORAGE. A" 91501 I.
1'(7) 214.7522 (:
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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
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i lease and the terms "acts of default"
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The following shall be an "act of default" under this
and "defaultll
shall mean,
wheneyer they
used in this lease,
anyone or more of the
are
folloWing events:
(a)
Failure
by
VECO
to
when
due
the
rentals
pay
required to be paid under Article IV hereof,
and the continued
failure for a Period of more than,ninety (90) days after written
notice of such failure has been given to VECO by the LESSOR,
(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,I(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
gi ven to VECO by the LESSOR; proYided, howeyer, 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-
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Ii of creditors, the filing of a petition in bankruptcy by VECO, the
I 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;
proYided, howeyer, if said yiolation 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
wi thin the applicable period and diligently pursued until the
violation is ended,
Furthermore, if VECO shall contest such
alleged violation through appropriate judicial or administratiye
channels, the time period specified herein shall not commence
until such proceedings are finally determined; proYided, 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 seryice facility or related Seward port facility
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HUGHES THOHSNESS Ii
;A''H'2POWELL,8Ru~OIN ,I
"'TTORNl!:VS AT LAW I'
~Ot"UTTKlll.D AYII(UE '
ANC(~~~~~~'~~~5~~50 I Ii
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were constructed including cargo loading and offloading, cargo
storage, yessel berthing and docking, yessel serYicing, yessel
construction, vessel repair, metal fabrication and any activity
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GA~~:~=I::;;~~R~:OIN Ii
50'WUT TNlltO AV[NUl ,~
~NCHORAGE. AI( U501
li07) 274.1522 Ii
I'
which is an integral support function of any of these named
actiYities; 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 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 wri tten notice specifying such
violation has been given by such agency to VECO; proYided, how-
ever, if such violation be such that it cannot be corrected
within the applicable period, it shall not constitute an act of
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corrective action
is instituted by VECO wi thin the
applicable period and diligently pursued until the violation is
such
alleged
if
VECO
shall
contest
corrected,
Furthermore,
violation through appropriate judicial or administrative channels,
the time period ~pecified herein shall commence until such proce-
provided,
however,
that
such
edings
are
finally
determined;
extension due to appeal of agency or judicial decisions shall not
administrative
interim
of
the
if
the
effect
be
effectiye
or
judicial action is to cause a stoppage of any of the activities
for which the new service facility or related Seward port facility
loading and offloading,
were constructed
including cargo
cargo
vessel
servicing,
yessel
storage, vessel berthing and docking,
construction,
vessel repair I
metal fabrication and any actiyity
of
these
named
function of
integral
support
which is an
any
actiYities; 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,
(f) Failure by VECO to commence construction of the
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IlUGHES THORSN[SS I:
:;ANn POWF.LLaBRUNOIN II
ATTORNEYS AT LAW II
'O~WnT'MlIlD""'I"'UE I
AtIC(~~~~G2;'4~~':'2501 Ii
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VECO service facility within 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 written notice to VECO of the
occurrence of the eyents set out in the three preceding subpara-
graphs,
(5) (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
'fai th 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 constructed, Failure to obtain
such permit or permits wi thin eighteen (18) 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 VECO,
(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
building site, and construction pursuant to such contract has
commenced with the intention that such construction will continue
to completion,
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HUGHES THORSNE:SS ,I
:>,\rlTZ PowEL.LaBRUNOIN ['
"'Tl'QRN~Y$ 14.T L.AW II
50'WESfTt'IROAVIItUE I
ANClloRAGE. AK 9950 I ii
1907) 27A.7522, I
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(6) Receipt by the City of patent and tideland
permits to the leased land,
(g) Failure by VECO to substantially complete construc-
tion of the VECO serYice facility within the five year period
following the date upon which all of the events outlined in
paragraph (f) above have occurred.
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 majeure,
"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, subdiYisions or officials or any ciYil 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 (5)(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 within the control of VECO,
6,2 Whenever any eyent of default referred to aboye shall
haye occurred, and the applicable period for giving notice and an
opportuni ty to cure shall have expired, LESSOR shall haye the
following rights and remedies all in addition to any rights and
remedies that may be given to LESSOR by statute, common law or
otherwise:
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HU(;HES THORSNESS
;ANTt POWl::LLaBaUNOIH
AT-rORNEYa AT LAW
'01 wur TMIRO AUJoIUE
ANCHORAGE. Ale 9150 I
{901121.4.1521
"
(a) Distraint for Rent Due, This remedy shall include
the right of LESSOR 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 45,05,788) 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
seryice 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 thereby,
(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, fo: any sum which LESSOR may deem reasonable,
(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) Recoyer 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 defaul t by VECO,
(h) Recover an amount to be due immediately on breach
equal to the difference between the rent and the fair and reason-
able rental yalue of the premises for the remainder of the lease
-16-
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'3ANUPOWE;llIBRUt:DIN -,
...TTORNIYS AT LAW
'(1, wt,T Tt<lRO IoVIIOUI
A~.eHOR"GE. Ale 91150 I
(07) 214.75.2.2
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
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 eyery
other right or remedy proYided 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-
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HUGHES THORSNE5S II
::;MHZPOwELLaBRUNOIN II
",TTORNItYB AT LAW II
)0' WISTTMIIID AVINUI I;
ANCHORAGE. AK "501 1
(1071 274.7522 Ii
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by LESSOR of any or all other rights or remedies proYided for in
this lease or now or hereafter existing at law, or in equity or
by statute or otherwi se,
6,3 The remedies conferred on or reserved to LESSOR in
Section 6,2 hereof are intended to be cumulative and exclusiye of
any other remedy or remedies for acts of defaults; proYided,
however, that the limitations and remedies for defaults or acts
of default shall not preclude LESSOR from bringing any action to
seek remedy by reason of any misrepresentation arising out of
thi s lease,
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 waiyer 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 either party hereto shall deem the other to be in
defaul t 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 haye
been in default is found not to haye 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 improyements, shall become the property of
LESSOR at the termination of this lease agreement for any reason
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\, except purchase of the leased premises by VECO, All fixtures,
i:
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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 building and VECO shall have the right to
move the same at any time during the period of this lease is in
effect or wi thin a period of ninety (90) days following the
termination c!f this lease. Upon removal of any item or items,
VECO shall have no obligation to remoye 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 ~ESSOR, 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 VI I 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,
howeyer, that despite any such sublease VECO shall still 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
HUGHES THORSNESS 1I
GANTZ PowEu.aBRUfrtDIH i:
...TTORNCVS AT LAW Ii
$C1IWUTTKIRDA'IEIlUE I:.
ANCHORAGE. AI( "!l0 I ,
1907) 2U.7SZZ :
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of the terms of this lease agreement. Neither party shall assign
its interest in this lease agreement without prior written consent
-19-
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GANTZ POWELLaBRUNDIN I~
ATTOIIIINI!:Va AT LAW I"~'.
SO.WUTTHlItD"YINU!
ANCHORAGE. AK "50 I
(1071 Z74.7!5ZZ
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,.....,
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 condi tions of thi s 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 parcel, VECO shall be entitled to all remaining sub-
rents, After the end of such ten year period, all subrents shall
belong to VECO,
VECO shall haye 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 arising from its construction of facilities 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
thi s 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 VEca should default on its payment of such loan
or loans, the holder of any such mortgage or other encumbrance
shall haye the right to enter and take the leasehold interest of
VEca and to operate the VEca 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 conditions and terms of this agreement.
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HUGHES THORSNESS Ii
CANnPOWEL.L6BRUl'IbIN:
ATTORNEYS AT l.AW '
~t), WIST THUIO AVlflUi
ANCHORAGE.....: 99501
190') 274.752.2
"""
(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 haye 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,
(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,
(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 this 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 haye 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-'
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;ANTZ PowELLaBRUtiDIN I,
"TYO"'NnS AT LAW I'
~O. WUTTHIIlDA'IIHUE I
ANCHORAGE. AK 99501 I'
"071 "',"" Ii
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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
shall inyolve 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 defaul t,
ARTICLE IX - INDEMNIFICATION
9,1 VECO agrees to hold LESSOR harmless and defend LESSOR
from all claims for personal injuries and property damage of
eyery 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,
9,2 VECO shall procure and maintain, at VECO's sole cost
and expense, comprehensive general liability insurance, with
limit of liability of not less than Fiye Million Dollars
($5,000,000,00), 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
($5,000,000,00) for each occurrence and aggregate, Coyerage 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. Any "water-
craft exclusion" in the comprehensive liability insurance policy
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:JA!. rZPOWELLaBRUNDIN I:
"'TTORNEYS AT LAW I;
511.'r;U1THIRD"VlNU[ I!
MCHORAQE. AK 91501 I',':,,'
19071 2.1".7522 ,
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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
potential liability of the LESSOR arising out of this 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. 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, Such factors as increases in the cost
of living, inflationary pressures, and other considerations shall
be utilized in assessing whether the minimum insurance require-
":
ments should be increased,
LESSOR shall notify VECO of any
requested increase in insurance coverages at least 60 days prior
to the effective date of such increases.
If VECO and LESSOR
disagree as to whether the increased coyerages are reasonable,
the increases shall be effectiye but VECO may submit the issue of
the reasonableness of the increases to binding arbitration under
the Rules of American Arbi tration Association.
9,4 All insurance policies shall provide for thirty (30)
II,""
days' notice of cancellation and/or material change to be sent to
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LESSOR at the address designated in Article XIV 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
(Best's
or
better) .
Triple
LESSOR
Rating
to
A
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;ANUPOwELLaBRUNOIN !.
ATTOF"N~Y. AT U.W Ii
UIWUTTMllIOAVlNUI Ii
A:'tCHORAGE:. All: 99501 :
(107) n".75ZZ I
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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 desired,
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 coyerage is adequate and complete,
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 waiye their rights of subrogation against LESSOR 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, 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.
ARTICLE X - CONDEMNATION
10,1 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
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LESSOR nor VECO shall haye 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 any,
10.2 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 proYided for in Article V hereof.
VECO shall as a condi tion precedent to such termination remoye
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 preyent 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
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ATTORN&YS AT LAW ,
50lwUrfHIIlD4VIMUl i
ANCHORAGE. Ale 1950 I I
(901) 274.7~22
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,
tc,'ms and conditions at which LESSOR proposes to sell the leased
land,
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 conditions, 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 ti~e within ninety (90) days after the ninety (90)
day notice period to VECO has expired. After the expiration of
such one hundred eighty (180) day period, LESSOR shall not be
enti tled 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 otherwi se herein proYided shall not permit
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:iANTZ POWELL.BftUHOIN :
ATTOltN-tYS AT LAW I'
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any waste, destruction, defacement, or other injury to the leased
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,I right to inspect the property from time to time.
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I Alaska, permi ts from various federal,
ARTICLE XI II - CONTINGENCIES
13 ,1 Thi s
Agreement
has
been
negotiated
and
executed
in
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
this Agreement, which will automatically also terminate the Dock
Permi t upon the occurrence of any of the following:
13.2 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 descriged 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, 1980,
13,3 Failure of LESSOR to receiye any necessary enYiron-
mental or other permits required as a condition precedent to the
commencment of construction before July 1, 1982, of the public
port facility.
13,4 Failure of LESSOR to make in a reasonable time (and in
any event before any required commencement of construction of the
VEca facility) any changes to its Charter or Ordinances required
to make this agreement or the accompanying Dock Permit yalid and
enforceable,
13,5 Compliance with all applicable federal, state and local
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;ANTZ POWElLa,BRUNOIN
ATTORNEYS AT LAW
50' 'HST TI"IlI)AV~NUt
AroiCHORAGE. AI( 99501
(907) .214.752:2
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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 Permit 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, Inc,
5151 Fairbanks Street
Anchorage, Alaska 99503
Attention:
Rod Christ
and if to LESSOR:
City of Seward
P,O, 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 forth,
CITY OF SEWARD
d~~' 1!tJ//
By: f-4/-v
C,E Johnson
City Manager
By:
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Joanne E. Shanley 0
City Clerk
-28-
VECO OFFSHORE, INC,
By:
;:~{i:.~7
APPROVED AS TO FORM:
HUGHES, THORSNESS, GANTZ
POWELL & BRUNDIN
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City Attorney
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;A~nz POWELl6BRUNOlN
ATrORN~YS AT LAW
~O, 1'0'(51 1111110 I\VEIlU[
ANCHORA.GE. AK 99501
(9071 :l1.c.7!>ZZ
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I: STATE OF ALASKA
"
Ii THIRD JUDICIAL DISTRICT
II
'I Before me, the undersigned, a Notary Public in and for the
I: State of Alaska, on this day personally appeared C.E. JOHNSON
I; and JOANNE E, SHANLEY, known to me to be the Ci ty Manager and
!: City Clerk, respectiyely, of Seward, Alaska, whose names are
I', subscribed to be the foregoing instrument and, being duly sworn,
I acknowledged to me that the same was the act of the said City
I: of Seward, and that they executed the same as the act of the Ci ty
: of Seward, for the purposes and consideration therein expressed,
[, and in the capacity therein stated,
,
F
I,: SUBSCRIBED AND SWORN to before me this ,;? (j
" 1981.
ss,
day of Jl{/Y ,
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Notary Pub ic
My commission
Ll/ "l? CU.L2'tf..
in and for A!-~
expires: ~).1Ly
STATE OF ALASKA
ss,
THIRD JUDICIAL DISTRICT
Before me, the undersigned, a Notary Public in and ~or the
State of Alaska, on this day personally appeared If L/ (, ), r" ~--;-
, 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~( day of Oe".f:', ,
1981. rT
Q~~~
Notary Public in and for Alaska
My commission expires: /0-5-.5- 2--
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ATTOR...nS AT LAW !
'01 WUT tlUItO AVIMU[
ANCHORAGE. AI( 9950 I
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EXHIBIT A
The VECO Seryice Facility is intended to be developed into a
ship repair yard with steel fabrication facilities that can be
expanded for new boat building or other industrial fabrication
purposes, The VECO Service Facility is also intended to be used
for purposes including, but not limited to, fabrication of indus-
trial items such as onshore or offshore oil and gas production
equipment, exploration or production drilling
rigs,
li Ying
quarters, miscellaneous steel structures such
as buildings,
bridges, etc" and any other items that can be constructed or
fabricated,
The above description of the intended uses of the
VECO 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 actiyities 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, In addition
to the foregoing, the VECO Seryice Facility may be used for such
other purposes, whether or not presently planned or foreseeable,
as may appear actually or potentially profi table,
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ATTORNEYS "T u..W
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A"CHOR~GE. AK 99501
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!i The following minimum expenditure requirements by VECO shall be
I; determined after the date computed in accordance wi th paragraph
" 5,1 (f) of the lease agreement, They are as follows:
I,
i: (1) Wi thin two years of the date determined in accordance
ii with paragraph 5,l(f) VECO shall expend at least $1,000,000,00 in
,: actual construction costs, as that term is defined in the lease
agreement.
EXHIBIT B
" (2) Wi thin 3 and 1/2 years from the date established in
I: paragraph 5,l(f) of the lease agreement, VECO shall have expended
Ii at least $3,000,000,00 in actual construction cost.s,
I;
(3) Wi thin 5 years of the date determined in accordance
wi th paragraph 5 .l( f) of the lease agreement, VECO shall have
expended at least $5,000,000,00 in actual construction,
Dated this \ .~,b day o/\Cd' \ , 1981.
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LESSOR: LESSEE:
By:
VECO OFFSHORE, INC,
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By: !:., llc",;
STATE OF ALASKA
ss,
THIRD JUDICIAL DISTRICT
Before me, the undersigned, a Notary Public in and for the
State of Alaska, on this day personally appeared C,E, 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 of the
City of Seward, for the purposes and consideration therein expres-
sed, and in the capaci ty therein stated,
day of ~+,
,---~-<" ,L L-v ;& UUe- y -G
'Notary p!b1i;--in and for Alaska
My commission expires: l!.--;I &,/cPf;
SUBSCRIBED AND SWORN to before me this .;? rJ
1981.
STATE OF ALASKA
ss,
THIRD JUDICIAL DISTRICT
Before me, the undersigned, a Notary Public i;p and for the
State of Alaska, on this day personally appeared . () 0),..; sf-
known to me to be the person and officer of VECO
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:iANTZPowElLaBRUND1N i
ATTORNEVS AT LAW I
5()9 WUT 1I11~O AY.I;NUl
ANCHORAGE. AK 99501
(9071274.1522
, '\
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 I
consideration therein expressed, and in the capacity therein I
stated,
SUBSCRIBED AND SWORN to before me this /s;t1 day of (),J!." ,
1981. rr
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Notary Public in and for Alaska
My commission expires: IO-__S-y-J-
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