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Home My WebLink AboutRes1991-113 . . . Sponsored by: Schaefermeyer CITY OF SEWARD, ALASKA RESOLUTION NO. 91-113 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE LONG TERM LEASE OF PUBLIC LANDS WITHIN AND ADJACENT TO ATS 174 TO SEWARD MARINE SERVICES WHEREAS, Seward Marine desire to lease from the associated uplands adjacent Lowell Point Road; and Services, Inc., has indicated its city certain vacant tidelands and to its current marine business on WHEREAS, Seward Marine Services, Inc., desires to lease the land for associated uses with its existing fish processing facility and to relieve space congestion along Lowell Point Road; and WHEREAS, the city desires to accommodate Seward Marine Services' need for additional space; and WHEREAS, the proposed lease site has limited utility for other uses and can most appropriately be developed by Seward Marine Services, Inc., because of the location of their existing opera- tions; and WHEREAS, because of the limited value return of the undevel- oped tidelands and the availability of appraised values of adjoining tidelands, it would not be in the public interest to expend public funds for an appraisal of the property; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Manager is authorized to execute a lease agreement with Seward Marine Services, Inc., a copy of which is attached and incorporated herein by reference, for the lease of public lands and tidelands within and/or adjacent to ATS 174, south of the Lowell Tunnel outfall along Lowell Point Road. Section 2. It is in the public interest to waive appraisal of the subject property as required by the City Code. Section 3. This resolution shall take effect thirty (30) days following passage and posting as required by law. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 23rd day of September, 1991. . CITY OF SEWARD, ALASKA RESOLUTION NO. 91-113 AYES: NOES: ABSENT: ABSTAIN: ATTEST: THE CITY OF SEWARD, ALASKA U><_o ,f -/: .;Lc~_ David L. Hilton, Mayor Burgess, Dunham, Hilton, Krasnansky, Meehan & Sieminski None Simutis None APPROVED AS TO FORM: Perkins Coie, Attorneys for the city of Seward, Alaska . . (City Seal) ~ (I/~ Fred B. Arvidson City Attorney -2- . LEASE AGREEHEN'l' BE'rlfEEB SEWARD MARINE SERVICES AND CITY OF SEWARD . september 6, 1991 . . . . CONTENTS ARTICLE 1.--LEASED LAND............................. 1.1--Description of Leased Land................ 1.2--Survey of Leased Land..................... 1.3--Covenant of Quiet Enjoyment............... 1.4--Petitions for Zoning...................... 1.5--Party Walls, Restrictions and Third Party Improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6--Future Easements.......................... 1. 7--Plattinq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 2. --LEASE TERM.............................. 2.1--Initial Term.............................. 2. 2--Constructionll&tvl~.M.n+s. . . . . . . . . . . . . . . . . . . . . 2.4.--Possession During Arbitration............ 2.5--LESSEE option to Terminate................ ARTICLE 3. --RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1--Initial Rental Rate....................... 3.2--Rental Adjustments........................ 3.3--Procedure for Rental Adjustment........... ARTICLE 4.--USE OF LEASED LAND...................... 4.1--Use of Leased Land........................ 4.2--No Preferential Rights to Use Public 2 2 2 3 3 4 5 6 6 6 7 7 8 8 8 9 9 10 10 Facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.3----0ther Users of Public Facilities........ 10 4.4--Adequacy of Public Facilities............. 11 4.5--Tariffs and Other Service Fees............ 11 4.6--Risk to Adjacent Facilities Including Lowell Canyon Diversion Tunnel, Access Road and Easements........................ ARTICLE 5.--DELAY IN PERFORMANCE.................... ARTICLE 6.--CITY'S BREACH OF ITS OBLIGATION......... ARTICLE 7.--REMEDIES FOR CITY'S ACTS OF DEFAULT..... ARTICLE 8.--LESSEE'S ACTS OF DEFAULT................ ARTICLE 9.--REMEDIES FOR DEFAULT BY LESSEE.......... [AA911970,029) -i- 11 12 13 14 15 16 9/6/91 . . . ARTICLE 10.--TITLE TO IMPROVEMENTS INSTALLED BY LESSEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1--Real Property Improvements............... 10.2--Personal Property........................ ARTICLE 11.--SUBLEASE OR ASSIGNMENT................. ARTICLE 12.--INDEMNIFICATION........................ ARTICLE 13. --INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 14.--HAZARDOUS SUBSTANCES................... ARTICLE 15. --CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 16. --ARBITRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 17.--MAINTENANCE AND REPAIRS................ 17.1--Normal Maintenance....................... 17.2--Safety Issues............................ 17.3--Cost of Repairs.......................... ARTICLE 18.--FIRE PROTECTION........................ ARTICLE 19.--ESTOPPEL CERTIFICATES.................. ARTICLE 20.--CONDITIONS AND COVENANTS............... ARTICLE 21.--NO WAIVER OF BREACH.................... ARTICLE 22.--TIME OF ESSENCE........................ ARTICLE 23.--COMPUTATION OF TIME.................... ARTICLE 24.--SUCCESSORS IN INTEREST................. ARTICLE 25.--ENTIRE AGREEMENT....................... ARTICLE 26. --GOVERNING LAW.......................... ARTICLE 27.--PARTIAL INVALIDITy..................... ARTICLE 28.--RELATIONSHIP OF PARTIES................ ARTICLE 29.--INTERPRETATION......................... ARTICLE 30.--NUMBER AND GENDER...................... ARTICLE 31.--MANDATORY AND PERMISSIVE............... ARTICLE 32. --CAPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 33. --AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 34.--DELIVERY OF NOTICES - METHOD AND TIME.. ARTICLE 35. --NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 36.--CHANGE OF ADDRESS...................... [AA911970,029] -ii- 18 18 19 19 20 21 23 26 27 28 28 29 29 30 31 31 31 31 32 32 32 32 32 32 33 33 33 33 33 33 34 34 9/6/91 . . . LEASE AGREEMENT WITH SEWARD MARINE SERVICES THIS AGREEMENT mad~J~nd entered into effective as of the 2~'.Yl day of 6cro6~ II"'; 1991, by and between the CITY OF SEWARD, ALASKA, a home rule municipality located in the Kenai Peninsula Borough, state of Alaska, hereinafter referred to as "CITY", and SEWARD MARINE SERVICES, INC., an Alaskan corporation, hereinafter referred to as "LESSEE". WHEREAS, LESSEE has indicated its desire to lease from CITY approximately I 1z Jtf:C-f{;; of vacant tidelands adjacent to LESSEE's current marine business operation on Lowell Point Road (which property shall be hereinafter referred to as the "Leased Land")i and WHEREAS, LESSEE desires to lease the Leased Land for immediate use associated with its existing fish processing facilities located adjacent to the Leased Land at fair market value ratesi and WHEREAS, LESSEE qesires to explore the financial and engineering feasibility of expansion of its existing operations including improvements on the Leased Landi and WHEREAS, CITY desires to accommodate LESSEE's immediate needs for additional space for use with existing facilities adjacent to the Leased Landi and WHEREAS, CITY wishes to encourage the development and expansion of fish processing facilities within the City of Sewardi and WHEREAS, the Leased Land has limited utility for other uses and can most appropriately be developed by LESSEE because of LESSEE's existing operations adjacent to the Leased Landi and WHEREAS, both CITY and LESSEE recognize the risks associated with industrial development on the Leased Land, and also, the on-going efforts of CITY and the Army Corps of Engineers to re-build, re-locate, or in some other way provide -1- . . . for the construction of flood control facilities for the community currently being serviced by the Lowell Canyon Diversion Tunnel located near the Leased Land; and WHEREAS, CITY is actively pursuing feasibility and engineering studies with the Corps of Engineers in efforts to identify potential sites and flood control projects, including appropriate environmental and cost/benefit studies; and WHEREAS, LESSEE recognizes it is in the public interest not to impair the ability of CITY or the Corps of Engineers to develop and construct flood control; and WHEREAS, neither LESSEE nor CITY are aware of any current plans to develop or repair the Lowell canyon Diversion Tunnel which would adversely impair LESSEE's ability to develop the Leased Land in accordance with this lease. NOW, THEREFORE, for and in consideration of the mutual promises and covenants hereinafter contained, the parties hereto agree as follows. ARTICLE 1.--LEASED LAND. 1.1--Description of Leased Land. The land subject to this lease (the "Leased Land") consists of two (2) parcels, both situated in Seward, Alaska, and located adjacent to USS 1806 but within or adjacent to Alaska Tideland Survey (ATS) 174, on the north and south sides of the Seward Marine Services, Inc., easement as recorded in Book 21 at Pages 182 and 183, Seward Recording District, Third Judicial District, Alaska. In addition to land within ATS 174, the Leased Land includes lands lying between the east ~~ boundary of the Lowell Road right-of-way and the west boundary of ATS 174 as depicted on Exhibit A. 1.2--Survey of Leased Land. within 90 days from the date of this Lease Agreement, LESSEE, at its sole cost and direction, will have a survey of lAA91J 970,029] -2- 9/6/91 . . . the Leased Land prepared by a registered land surveyor and the description of the land thus prepared shall be attached to this Lease Agreement as Exhibit B and shall be incorporated herein by reference. That new description shall be considered the correct description of the Leased Land for all purposes under this Lease Agreement. The intent of the parties in providing for an interim description of the Leased Land on Exhibit A is to sufficiently identify the Leased Land for purposes of public hearing and approval of the Lease Agreement by the city council of the City of Seward, and further, to enable LESSEE to have immediate access to the Leased Land for commencement of construction and site preparation. 1.3--Covenant of Quiet Enjoyment. Subject only to restrictions of title, provisions of this lease and applicable provisions of law (including state and federal tidelands restrictions), CITY hereby covenants that LESSEE shall have the quiet enjoyment and possession of the Leased Land for any use authorized hereunder for the full term of this lease. CITY will cooperate with LESSEE in the execution of any additional documents, including necessary applications for tidelands transfer, permits, or other documents reasonably required by LESSEE to assure LESSEE that CITY has title to the property free and clear of all encumbrances. CITY warrants and represents that it is fully empowered to enter into this lease subject only to the restrictions contained in this lease. SUbject to the provisions of Section 1.3 of this lease Agreement, CITY agrees not to take action which would adversely affect LESSEE's quiet enjoyment of the Leased Land. CITY is unaware of any prior conflicting use of the Leased Land which would adversely affect LESSEE's intended use of the Leased Land. 1.4--petitions for zoning. CITY represents that the current zoning classification of the Leased Land is Resource Management. In the event that at [AA911970,029] -3- 9/6/91 . . . any time LESSEE deems it necessary or appropriate to obtain use, zoning or subdivision and precise plan approval for the Leased Land, or any part thereof, CITY agrees from time to time upon request of LESSEE to execute such documents, petitions, applications and authorizations as may be appropriate or required to obtain from the agency or public body responsible therefor any conditional use permits, zoning and re-zoning, tentative and final tract approval and precise plan approval. LESSEE shall promptly apply for a conditional use permit. LESSEE shall have a period of 90 days from the effective date of this lease to obtain that permit, and shall have the right to terminate this lease without further obligation if LESSEE fails to obtain the permit by January 1, 1992. This section shall impose no duty or responsibility on the City to assist LESSEE in obtaining any other permits or approvals for operation or construction, such as those required by the U.S. Army Corps of Engineers (wetland fill permits) or the Environmental Protection Agency (Clean Air Act permits), etc. CITY shall cooperate with LESSEE in LESSEE's efforts to promptly obtain any required permits for construction or operation of LESSEE's facilities. If, LESSEE is unable to obtain required conditional use permits or other zoning approvals, then LESSEE may terminate this lease. 1.5--party Walls, Restrictions and Third Party Improvements. At the request of LESSEE, CITY shall, from time to time, execute and deliver or )01n in execution and delivery of such documents as are appropriate, necessary or required to impose upon the Leased Land and in accordance with the terms of this Agreement covenants, conditions and restrictions providing for the granting of 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 (herein called "third-party lAA911970,029l -4- 9/6/91 . . . improvements"), all of which are for the purpose of the orderly development of the Leased Land as a commercial unit subject, however, to the conditions that: a) all such matters shall be limited to the lease term and shall terminate upon termination of the lease for whatever reason, and b) any such matters of a permanent nature extending beyond the lease term shall not be granted without the prior written approval of CITY. In any of the foregoing instances referred to in this Section, CITY shall be without expense therefor, and the cost and expense thereof shall be borne solely by LESSEE. c) At the expiration of the lease term (including any extended period) third party improvements on the Leased Land other than portable equipment shall become the property of CITY without the payment of any compensation to LESSEE. 1.6--Future Easements. In order to provide for the more orderly commercial development of the Leased Land and the public and other use of adjacent land and land located along the existing Lowell Point Road for flood control, park and public recreational uses, sewage treatment facilities and lines, it may be necessary, desirable or required, to grant easements to public utilities; provided, however, that such easements and dedications and similar rights do not unreasonably interfere with LESSEE's efficient operation or quiet enjoyment. The costs of locating or relocating any public easements or restrictions of record including any relocation of public road, utility, or other easement shall be at the sole cost and expense of the party requesting the relocation. CITY shall not refuse reasonable requests by LESSEE for such relocations. Any easements or rights of access granted to LESSEE by CITY need not be exclusive to LESSEE. This lease grants no additional right of public access to or across the Leased Land other than those [AA9 11 970,0291 -5- 9/6/91 . '7 . that may already exist by applicable law or title restrictions. 1.7--Platting. Should it become necessary to plat the Leased Land, CITY and LESSEE agree to cooperate in such platting effort and proportionately share in the cost of the preparation and filing of any replat. If only the leased land is platted, then LESSEE will bear the cost of platting. ARTICLE 2.--LEASE TERM. Pf" 2.1--Initial Term. The term of this lease shall be for a period of thirty (30) years, commencing on October 1, 1991, and ending on September 30, 2021, subject to early termination of this lease as follows: if LESSEE fails to comply with Section 2.2 of this lease then this lease will terminate in its entirety on August 31, 1997. 1..2-- CONS,....UCnoN P-EQvll.f,.MeN-t'S'. By August 31, 1997, LESSEE shall have constructed on the Leased Land a "level" (provisions for drainage)gravel pad on Parcel A with elevations approved in consultation with the city engineer; bulkhead to contain the gravel pad; some reasonable method of delineating the Leased Land from the adjacent Lowell Point Road whether by fence, guardrail or otherwise. The design and all plans for construction shall be supplied to and approved by CITY and the city's engineer prior to the commencement of construction. From time to time during construction CITY may, and upon completion shall have, the improvements inspected by an engineer of its choosing who shall certify that they are being constructed in a workmanlike manner and according to the approved design and plans. The engineer shall give notice to LESSEE of any deviation from lAA911970.029l -6- 9/6/91 . . . such design and plan and LESSEE shall immediately correct them at its sole expense. LESSEE may utilize on-site materials for construction and may include the cost of moving those materials in its calculation of its costs of construction. If those materials are unsuitable for use by LESSEE in construction, LESSEE shall make them available to CITY at no cost to CITY. LESSEE agrees to submit periodic progress reports to CITY advising of the status of it construction activities and compliance with such schedule. It is understood and agreed that a primary consideration for the execution of this Lease Agreement by CITY in favor of LESSEE is LESSEE's covenant to undertake and develop the property which development has been determined by the City Council of the city of Seward to be in the pUblic interest. LESSEE shall provide CITY with annual written reports not later than 10 days following the close of the calendar year detailing LESSEE's progress on its construction project. 2.3--Failure to construct/operate. If CITY and LESSEE cannot agree as to whether LESSEE has complied with the terms of the provisions of section 2.2 of this Lease, then the parties agree to submit the dispute to arbitration in accordance with ARTICLE 13 of this Lease. 2.4.--Possession During Arbitration. If either party submits a dispute to arbitration under ARTICLE 13, LESSEE shall have the right to remain in possession of the Leased Land pending final resolution of the arbitration. LESSEE's possession of the Leased Land under this section shall be governed by the terms and conditions of this Lease, and for the right to possession of the Leased Land during this period LESSEE shall pay rent equal to that specified in ARTICLE 3 of this Lease. Acceptance by CITY of [AA911970,029] -7- 9/6/91 . . . rent and other amounts due CITY during this period of possession shall not constitute a waiver of any breach of any term, covenant or condition of the Lease, including termination provisions. At the conclusion of the arbitration, if the arbitrators determine LESSEE did not comply with the requirements of section 2.2, LESSEE shall have a period of 90 days from the date of the arbitrator's decision to further action or notice by CITY or to cure any default determined by the decision; provided, that if LESSEE is unable to cure said default despite best efforts, the period of time to cure shall be extended. 2.5--LESSEE option to Terminate. Notwithstanding other provisions of this lease to the contrary, LESSEE may terminate this agreement by giving notice of its intent to do so by August 31, 1993. LESSEE shall not be entitled to the refund or repayment of any sums paid to CITY, nor may LESSEE seek reimbursement from CITY of any costs associated with LESSEE's development of either Parcel A or Parcel B of the Leased Land. Promptly upon termination under this section, LESSEE shall transfer all engineering, surveys, and other data prepared by LESSEE or under contract to LESSEE in connection with development of Parcel B of the Leased Land without charge therefor to CITY. The right to terminate under this section may not be transferred or assigned by LESSEE to any third party except in accordance with ARTICLE 11 of this Lease, it being intended by the parties hereto to provide LESSEE and LESSEE alone with the right to terminate this lease prior to August 31, 1993. ARTICLE 3.--RENT. 3.1--Initial Rental Rate. Through June 30, 1995, the annual rental rate shall be $.04 per square foot. The rent shall be payable quarterly in advance in equal installments on or before the January 30, [AA911970,029) -8- 9/6/91 . . . April 20, June 20 and October 20. The anniversary date of this lease shall be the date it is signed. The first quarterly payment shall be due on or before January 30, 1992. 3.2--Rental Adjustments. Effective July 1, 1995, and once each five years thereafter, the total annual rental due and payable shall be adjusted to the fair market value at the highest and best use of the Leased Land as it was on october 1, 1991, as shown in the photographic depiction attached as Exhibit C, and exclusive of improvements placed thereon by LESSEE but inclusive of all improvements made by CITY (including those made before or subsequent to this Lease Agreement). As an aid to future appraisals the parties have attached a photographic record collectively referenced to as Exhibit C demonstrating the condition of the Leased Land prior to this Lease Agreement. The annual rent shall be at the fair market value at the highest and best use of the Leased Land, without consideration to LESSEE's intended or actual use of the land unless that use is coincidentally the highest and best use of the land. 3.3--Procedure for Rental Adjustment. If LESSEE objects to the appraiser's determination of the fair market rental value within 30 days of receipt of the report, it shall give written notice of its objection and the LESSEE shall then engage a second independent MAI certified appraiser at its expense to make a second appraisal of the fair market rental value as set forth in Section 3.2 above. If the second appraisal reflects a fair market rental value which raises from the first appraisal by no more than 10%, then the two appraisal values shall be averaged. If the second appraisal reflects a fair market rental value which varies from the first appraisal by more than 10% then, unless CITY and LESSEE agree on a value themselves, the value of the [AA911970,029] -9- 916191 . . . rent shall be determined in accordance with the arbitration provisions contained in ARTICLE 3 of this lease. ARTICLE 4.--USE OF LEASED LAND. 4.1--Use of Leased Land. LESSEE will only use the Leased Land to construct and use a gravel pad and bulkhead for its fish processing facilities and related uses including storage, and parking of equipment and vehicles related to the business of LESSEE's current operations on adjacent land, and for uses necessary and incidental thereto. LESSEE will not use the land in any other manner or construct any facilities thereon for any other purpose without a finding by the City Council of the City of Seward that such uses/construction are in the public interest. The parties recognize that one of the principal reasons for finding by the Cit~, Council of the City of Seward in Resolution 91-Jljl"t~this lease is in the pUblic interest and is the commitment of LESSEE to develop and operate a fish processing facility which will promote the development of industry in the City of Seward and diversify the local economy. 4.2--No Preferential Rights to Use Public Facilities. This Lease Agreement shall not be construed to grant any exclusive rights of use to LESSEE of any public port facilities constructed or maintained by the city of Seward other than those on the Leased Land. Insofar as use of those facilities is concerned, LESSEE will be subject to any required tariffs, procedures, rules and regulations of the city of Seward as they may now exist or from time to time be amended and LESSEE shall not be entitled to any exclusive use. 4.3----0ther Users of Public Facilities. This Lease Agreement shall not preclude the City of Seward from actively seeking other and additional LESSEE for [AA911970,029] -10- 916/91 . . . public lands, including those who would be in competition with LESSEE or who might be interested in leasing the premises leased to LESSEE should this lease be terminated for any reason. 4.4--Adequacy of Public Facilities. The city makes no representations or warranties as to any particular part or the whole of CITY's public facilities with respect to their fitness for the uses intended by LESSEE. In particular, LESSEE has had an opportunity to review CITY's Reconnaissance Studies for repair and upgrade of the Lowell Canyon Diversion Tunnel project. CITY makes no representations or warranties of any kind with respect to the present adequacy of the Lowell Canyon Diversion Tunnel facilities including the spillway and outfall located near the Leased Land, nor does CITY hereby undertake any special obligations to repair, replace, or refurbish that facility in order to provide flood and disaster protection for LESSEE's operations from and near the Leased Land. LESSEE has examined the plans and specifications of those facilities and has satisfied itself that the capacities of the facilities are sufficient for the intended uses of the Leased Land by LESSEE. 4.5--Tariffs and other Service Fees. CITY shall have the right to make amendments to its tariffs, regulations and scheduled fees from time to time even if those adjustments shall cost LESSEE more for its operations or use of public facilities and CITY is free to do so provided only that it does not pose any greater burden or higher rate upon LESSEE than upon any other similar user of the public facilities. 4.6--Risk to Adjacent Facilities Including Lowell canyon Diversion Tunnel, Acc.s. Road and Easements. LESSEE will not use the land in any manner or construct any facilities thereon which would inhibit the use of adjacent [AA911970,029) -11- 9/6/91 . . . or other lands including the existing Lowell Canyon Diversion Tunnel, the existing Lowell Point access road and easements (including the sewage line to the Seward sewage lagoon). If any operation or construction by LESSEE might adversely affect the safety of nearby public lands and facilities or pose a risk to the public health or safety, CITY may engage an independent engineering consultant who shall furnish to CITY a comprehensive survey and report for the purpose of establishing whether the work by LESSEE poses an unreasonable risk to the public, and if that survey discloses an unreasonable risk then LESSEE shall pay the costs of the survey and immediately take whatever remedial steps are reported as necessary to eliminate that risk or reduce it to an acceptable level. If LESSEE disputes the CITY's selection of an engineer, then it shall promptly, and within 10 days of such selection provide CITY with the names of three independent engineering consultants and CITY may utilize anyone of the three listed by LESSEE, or in the alternative, CITY may submit the names of two additional engineers. The parties then shall promptly meet and mutually agree on an acceptable engineer. If they are unable to agree within five days of the date LESSEE has submitted its list, then both parties shall promptly and confidentially rank their choice of engineers in the same manner as that utilized by the American Arbitration Association to select a single arbitrator. The engineer with the lowest composite score (i.e., most preferred or least objectionable) shall be the engineer. ARTICLE 5.--DELAY IN PERFORMANCE. In the event either LESSEE or CITY is delayed from performance of any of its obligations under this Lease, due to acts of God, enemies of the United States of America, war, blockade, insurrection, epidemic, fires, floods, explosions, earthquakes/tsunami, the time period wherein such performance [AA9\1970,029] -12- 9/6/91 . . . is to occur shall be extended by that amount of time necessary to compensate for the delay. ARTICLE 6.--CITY'S BREACH OF ITS OBLIGATION Each of the following shall be a "CITY Act of Default" under this lease and the terms "acts of default" and "default" shall mean, when they are used in this lease, anyone or more of the following events. a) Failure by CITY to fulfill, observe or perform any covenants or agreements on its part to be observed or performed under this lease for a period of 30 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 CITY by LESSEE; 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 CITY within the applicable period and diligently pursued until the default is corrected. b) violation by CITY of any applicable laws or regulations of the united states, the state of Alaska, the Kenai Peninsula Borough, or the City of Seward or 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 60 days after written notice specifying such violation has been given by the agency to CITY; provided, however, if such 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 CITY within the applicable period and diligently pursued until the violation is corrected. Furthermore, if CITY shall contest such alleged violation through appropriate judicial or administrative channels, the time period specified lAA911970.029) -13- 9/6/91 . . . herein shall not commence until such proceedings are finally determined, provided such proceedings are diligently pursued. ARTICLE 7.--REMEDIES FOR CITY'S ACTS OF DEFAULT. Whenever an act of default by CITY shall have occurred, and any applicable period for giving notice and any opportunity to cure shall have expired, LESSEE shall have the following rights and remedies in addition to any rights and remedies that may be given to LESSEE by statute, common law or otherwise: a) withhold payment of any rental otherwise due CITY, b) refuse to proceed with any of LESSEE's other performance obligations under this lease, c) recover, whether this lease be terminated or not, from CITY reasonable attorney's fees and all other expenses incurred by LESSEE by reason of the default by CITY, d) declare this lease terminated, e) no expiration or termination of this lease shall expire or terminate any liability or obligation to perform of CITY's which arose prior to the termination or expiration except insofar as otherwise agreed to in this lease, f) each right and remedy of LESSEE provided for in this lease shall be cumulative and shall be in addition to every other right or remedy provided for in this lease, now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by LESSEE of anyone or more of the rights and remedies provided for in this lease, shall not preclude the simultaneous or later exercise by LESSEE of any or all other rights or remedies provided for in this lease, now or thereafter existing at law or in equity or by statute or otherwise, and g) no delay or omission to exercise any right or power accruing following an act of default shall impair any [AA911970.029] -14- 9/6/91 . . . 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. ARTICLE 8.--LESSEE'S ACTS OP DEPAULT. Each of the following shall be a "LESSEE 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) failure by LESSEE to pay promptly when due, and in no event later than twenty (20) days from the due date thereof, the rentals required to be paid under this Lease; b) failure by LESSEE to observe, fulfill or perform any covenants, conditions or agreements on its part to be observed or performed under this Lease for a period of thirty (30) days after written notice specifying such failure, requesting that it be remedied, and stating that a notice of default has been given to LESSEE by CITY; 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 LESSEE within the applicable period and diligently pursued until the default is corrected; c) the making by LESSEE of an assignment for the benefit of creditors, the filing of a petition in bankruptcy by LESSEE, the adjudication of LESSEE as insolvent or bankrupt, the petition or application by LESSEE 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 LESSEE under any bankruptcy, insolvency, reorganization, arrangement or readjustment of debt law or statute or similar law or statute of any jurisdiction, whether now or hereafter in effect which shall lAA911970,029] -15- 9/6/91 . . . remain undismissed for a period of six (6) months from the date of commencement thereof; d) violation by LESSEE of any laws or regulations of the united states or of the State of Alaska, or 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 sixty (60) days after written notice specifying such violation has been given by the agency charged with the enforcement of such laws, regulations or permits to LESSEE; provided, however, if such 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 LESSEE within the applicable period and diligently pursued until the violation is corrected. Furthermore, if LESSEE 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 such proceedings are diligently pursued; provided, however, that any such extension of time shall not be effective if the effect of the interim administrative or judicial action is to cause a stoppage, interruption or threat to the activities of any person or entity other than those of LESSEE; e) failure to promptly pay when due any use, wharfage, or other charges by the City of Seward and associated with the SMIC; or f) failure of LESSEE to promptly pay when due any real or personal property taxes or any sales taxes assessed by the Kenai Peninsula Borough. ARTICLE 9.--REMEDIES FOR DEFAULT BY LESSEE. Whenever an act of default by LESSEE shall have occurred, and any applicable period for giving notice and any IAA911970,029] -16- 9/6/91 . . . opportunity to cure shall have expired, CITY shall have the 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) CITY may distrain for rent due any of LESSEE's personal property which comes into CITY's possession. This remedy shall include the right of CITY to dispose of personal property distrained in any commercially reasonable manner. It shall be conclusively presumed that compliance with the procedures set forth in the Alaska Uniform Commercial Code (AS 45.09.504) with respect to sale of property shall be a commercially reasonable disposal; b) CITY may re-enter the premises and take possession thereof and, except for any personal property of LESSEE which CITY has waived its right to distrain under sub- part (a) above, remove all personal property of LESSEE from the Leased Land. Such personal property may be stored in place or may be removed and stored in a public warehouse or elsewhere at the cost of LESSEE all without service of notice or resort to legal process, all of which LESSEE expressly waives; c) declare this Lease terminated; d) collect any and all rents due or to become due from sub-tenants or other occupants of the Leased Land; e) recover an amount to be due immediately on breach equal to the rent reserved under this Lease discounted to the date of such breach at the rate of eight percent (8%) per year. If the Leased Land or any part thereof be re-let by CITY for the unexpired term of this Lease, CITY shall reimburse to LESSEE upon receipt an amount not to exceed the amount received by CITY under this section; g) if LESSEE does not immediately surrender possession of the Leased Land after termination by CITY and upon demand by CITY, CITY may forthwith enter into and upon [AA911970,029] -17- 9/6/91 . . . and repossess the Leased Land and expel LESSEE 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; h) no expiration or termination of this Lease shall expire or terminate any liability or obligation to perform of LESSEE's which arose prior to the termination or expiration except insofar as otherwise agreed to in this Lease; i) each right and remedy of CITY 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 hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by CITY of anyone 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 by CITY of any or all other rights or remedies provided for in this Lease or now or thereafter existing at law, or in equity or by statute or otherwise; and j) no delay or omission to exercise any right or power accruing following an act of 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. ARTICLE 10.--TITLE TO IMPROVEMENTS INSTALLED BY LESSEE. 10.1--Real Property Improvements. All improvements constructed by LESSEE on the Leased Land or on easements to or from same, such as buildings, warehouses, ditches, sewer lines, water lines, dikes or berms, and similar improvements, shall become the property of CITY upon the termination of this lease; provided, that LESSEE may lAA91197Q,029] -18- 9/6/91 . . . remove any improvements installed or constructed by LESSEE; provided, however, that LESSEE shall repair any damage to the Leased Land caused by such removal. 10.2--Personal Property. Any other provisions of this lease to the contrary notwithstanding, LESSEE, upon termination of this lease for any reason, may, but need not promptly, remove, and in no event later than 90 days from the termination of the lease, trade fixtures and equipment from the Leased Land provided that LESSEE shall repair any damages to the Leased Land caused by such removal. ARTICLE 11.--SUBLEASE OR ASSIGNMENT. 11.1--Assiqnment of Lease. The parties recognize that a material reason for the findinq by the City Council of the City of Seward that it is in the public interest to lease the Leased Land to LESSEE is LESSEE's reputation and expertise in construction and operation of facilities similar to the major facility. LESSEE shall have no right to sublease or assign any portion or all of the Leased Land without written permission of CITY, which permission shall not be unreasonably withheld. 11.2--Assiqnment for Security. Notwithstanding section 11.1 above, LESSEE may assign, encumber, or mortgaqe its interest in this Lease or improvements on the Leased Land, by deed of trust or other security instrument; provided, that the security instruments state that the lender shall be subject to all of the provisions of this Lease. A lender of LESSEE shall have the right to cure any breach of the Lease by LESSEE without being required to do so, and without thereby assuming the obligations of LESSEE. 11.3--Assiqnment to Affiliate or Purchaser. [AA911970,029] -19- 9/6/91 . . . a) LESSEE may assign this Lease to an affiliate of LESSEE as that term is defined in AS 10.05.825(1); provided, however, that LESSEE's full faith and credit shall remain obligated under the Lease as though no transfer had taken place. b) Notwithstanding any other provision of this Lease to the contrary, LESSEE shall have the right to assign this Lease to a third party non-affiliated purchaser of LESSEE's seafood processing/marine services operation which is conducted by LESSEE on the property adjacent to the Leased Land. For purposes of this provision, purchase shall mean and include a purchase of all or substantially all of the assets of LESSEE's business operation, or a purchase of all or a controlling interest in the stock of LESSEE's corporation(s) which own and operate LESSEE's business operations. LESSEE shall be entitled to be released form any further obligation under this Lease Agreement if at the time of the assignment to the third party purchaser, CITY approves the creditworthiness of the purchaser applying usual and customary creditworthiness criteria. CITY's good faith rejection of the creditworthiness of the proposed purchaser shall not affect the legality of the assignment of this Lease, but shall only mean that LESSEE shall remain secondarily liable on this Lease Agreement. ARTICLE 12.--INDEMNIFICATION. The use of the Leased Land by LESSEE, its agents, employees and guests shall be at their own risk. LESSEE agrees that it shall at all times with respect to the Leased Land use due care for public safety and shall indemnify, defend and save harmless CITY, its successors and assigns, tenants, lessees, and licensees against loss or damage to property of CITY or to the property of others from all claims, costs, and liabilities for injury to or death of persons or when such loss, damage, injury, or death arises or results [AA911970,029] -20- 9/6/91 . . . from any acts or omissions of LESSEE, its officers, agents, employees, contractors, and guests (including invitees and licensees) in connection with the use or occupance of the Leased Land or any operation from adjacent land including LESSEE's existing and future business operations on Lowell Point Road. ARTICLE 13.--INSURANCE. Prior to commencement of construction of any facilities on the Leased Land, LESSEE shall procure and maintain, at LESSEE's sole cost and expense, comprehensive general liability insurance, with limits of liability of $1,000,000 for all injuries and/or deaths resulting to anyone person and $1,000,000 from anyone occurrence. The limit of liability for property damage shall be $500,000 for each occurrence and aggregate. Coverage under such insurance shall also include explosion, collapse and underground property damage hazards. Such insurance shall include a broad form contractual endorsement. Protection and indemnity insurance shall be provided with the same limits as the comprehensive liability insurance for the use of LESSEE-owned watercraft. LESSEE shall also provide fire and extended coverage insurance for any buildings, equipment, machinery, vessels of customers or any other property stored or being worked on by LESSEE upon the Leased Land at replacement value rather than original cost. LESSEE shall provide Workmen's Compensation Insurance and insurance under the Harbor Workers and Longshoremen's Compensation Act, and warehouse and motor vehicle insurance and any other insurance required under any permit or tariff of the City of Seward, Alaska. The minimum amounts and types of insurance provided by LESSEE 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 lAA91197Q,Q29] -21- 9/6/91 . . . 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 may notify LESSEE of any requested increase in insurance coverages. All insurance policies shall provide for 30 days' notice of cancellation and/or material change to be sent to CITY at the address designated in ARTICLE 36 of this lease. All such policies shall be written by insurance companies legally authorized or licensed to do business in the State of Alaska, and acceptable to CITY (Best's Rating A or better). LESSEE shall furnish CITY, on forms supplied by CITY, certificates evidencing that it has procured the insurance required herein prior to the occupancy of the Leased Land or operation by LESSEE. Nothing herein contained shall prevent LESSEE or CITY from placing and maintaining at CITY's or LESSEE's own individual cost and expense, additional or other insurance as may be desired. At least every three years, commencing on the third anniversary date of this lease and every third year thereafter throughout the term of this lease, LESSEE shall procure and submit to CITY a written report from a reputable insurance broker acceptable to CITY that the broker has reviewed the types and amounts of coverage of insurance obtained by LESSEE and the operations of LESSEE and in the opinion of the broker the coverage complies with LESSEE's obligations under this lease. All of the insurance policies required above as well as any other insurance carried by LESSEE or CITY shall provide that the insurers waive their rights of subrogation against CITY and LESSEE and their respective officers, servants, agents or employees. LESSEE further agrees to waive and agrees to have its insurers waive any rights of subrogation (whether [AA911970,029] -22- 9/6/91 . . . by loan receipts, equitable 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. LESSEE shall also name CITY as an additional insured on the general liability insurance policy maintained by LESSEE as required above, excluding coverage for claims resulting from CITY's sole negligence. ARTICLE 14.--HAZARDOUS SUBSTANCES. LESSEE shall have a period of 120 days from the effective date of this Lease, if it desires, to conduct an environmental base line assessment. If that assessment demonstrates in LESSEE's judgment an unreasonable risk, LESSEE may terminate this Lease during that period. LESSEE shall provide CITY with copies of all reports produced. LESSEE's failure to conduct an assessment or failure to terminate because of that assessment shall conclusively determine that: LESSEE has duly investigated the present and past uses of the Leased Landi has made due inquiry of federal, state and local governmental agencies having jurisdiction over the Leased Landi and has examined or been advised of the laws regulating the environment, as to whether any Hazardous Substances have contaminated or been stored on the Leased Land or any adjacent land. LESSEE agrees to immediately notify CITY if LESSEE becomes aware of a) any Hazardous Substances or other environmental problem or liability with respect to the Leased Land or any Other PropertYi or b) any lien, action or notice resulting from violation of any laws, regulations, ordinances or orders described in this Article. At its own cost, LESSEE will take all actions which are necessary or desirable to clean up any Hazardous Substances affecting the Leased Land, including removal, containment or any other remedial action required by governmental authorities. [AA911970,029] -23- 9/6/91 . . . LESSEE shall indemnify, defend and hold CITY harmless from and against any and all claims, demands, damages, losses, liens, liabilities, penalties, fines, lawsuits and other proceedings and costs and expenses (including attorneys' fees and disbursements), which accrue to or are incurred by LESSEE and arise directly or indirectly from or out of, or in any way connected with a) the inaccuracy of the certifications contained herein, b) any activities on the Leased Land during LESSEE's occupancy, possession or control of the Leased Land which directly or indirectly result in the Leased Land or any Other Property becoming contaminated with Hazardous Substances, c) the discovery of Hazardous Substances on the Leased Land, the cleanup of Hazardous Substances from the Leased Land or any Other Property. LESSEE acknowledges that it will be solely responsible for all costs and expenses relating to the clean-up of Hazardous Substances from the Leased Land or from any Other Property. LESSEE's obligations under this Article are personal, unconditional and shall not be limited by any non-recourse or other limitations of liability. The representations, warranties and covenants of LESSEE set forth in this Article (including, without limitation, the indemnity provided for above) a) are separate and distinct obligations from LESSEE's obligations under this Lease Agreement, b) are not secured by any security documents and shall not be discharged or satisfied by foreclosure of the liens created by any such security documents, and c) shall continue in effect after any transfer of the Leased Land, including without limitation transfers pursuant to foreclosure proceedings (whether judicial or nonjudicial), or by any transfer in lieu of foreclosure. As used in this Article, "Hazardous Substances" means any chemical, substance, material, or waste defined, classified, listed or designated as hazardous, toxic or radioactive, or lAA91197Q,Q29] -24- 9/6/91 . . . other similar term, by any federal, state or local environmental statute, regulation, or ordinance presently in effect or that may be promulgated in the future, and as they may be amended from time to time, including but not limited to: Federal Resource Conservation and Recovery Act of 1976, 42 U.S.C. S 6901 et sea. Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. S 9601 et sea. Federal Clean Air Act, 42 U.S.C. SS 7401-7626 Federal Water Pollution Control Act, Federal Clean Water Act of 1977, 33 U.S.C. S 1257 et sea. Federal Insecticide, Fungicide, and Rodenticide Act, Federal Pesticide Act of 1978, 7 U.S.C. Paragraph 13 et sea. Federal Toxic Substances Control Act, 15 U.S.C. S 2601 et sea. Federal Safe Drinking Water Act, 42 U.S.C. S 300(f) et sea. Alaska Environmental Conservation Act, AS 46.03 et sea. Alaska oil Pollution Control Act, AS 46.04 et sea. Alaska Oil and Hazardous Substance Releases Act, AS 46.08 et sea. Alaska Hazardous Substance Release Control Act, AS 46.09 et sea. As used in this Article, "Other Property" means any real or personal property which becomes contaminated with Hazardous Substances as a result of construction, operations or other activities on, or the contamination of, the Leased Land. lAA91197Q,029l -25- 9/6/91 . . . ARTICLE 15.--CONDEKNATION. If all or any part of the Leased Land is condemned for a public use by any government agency or other duly authorized entity, CITY and LESSEE shall each make a 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. If CITY is the condemning authority, then LESSEE shall have a claim for the value of its leasehold interest. Neither LESSEE nor CITY shall have any rights in or to any award or to compromise or settle the claim of the other by the condemning authority; provided, that in the event of a single award to CITY which includes specific damages for loss of LESSEE's leasehold interest, CITY shall transmit to LESSEE the amount of such specific damages so found, if any. If part, but not all of the Leased Land is condemned for public use, LESSEE shall make a good faith determination as to whether or not the taking of the part of the Leased Land designated for condemnation will prevent if from continuing to operate on the Leased Land. If LESSEE 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, LESSEE may notify CITY in writing to this effect, and this lease shall then be terminated for all purposes effective 15 days from the date LESSEE sends such notice to CITY as though ._ the lease had been terminated under A/die. /e Z- of this Lease ,?tl/.~ Agreement, or at such other later date as LESSEE shall specify in its notice, and such termination shall be treated in the same manner as a termination at the expiration of the term of this lease. LESSEE 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, LESSEE determines that such partial taking will not prevent it from continuing to operate, then LESSEE and CITY shall negotiate an equitable and partial [AA911970.029] -26- 9/6/91 . . . abatement of the rent beginning to be effective on the actual date when LESSEE is effectively prevented from utilizing the condemned land. ARTICLE 16.--ARBITRATION. Any dispute between CITY and LESSEE with respect to any provision of this lease or the rights and obligations of the parties hereunder shall be decided by arbitration, in accordance with the provisions of this paragraph. a) Consent Panel. The party desiring arbitration of a dispute shall give written notice to that effect to the other party specifying in such notice the name and address of a person to serve as an arbitrator on its behalf. within 15 days after receipt of such notice the other party shall give written notice to the first party specifying the name and address of a person designated to serve as an arbitrator on its behalf. If neither party has objected to the others designation within 15 days of the notice by the second party of its representative of an arbitrator, then the two chosen arbitrators (called the "consent panel") shall select a third person agreeable to both to become the third member of the consent panel. The consent panel may utilize informal techniques and hold informal hearing without reference or adherence to the rules or procedures of the American Arbitration Association. Promptly and within 30 days of concluding any proceeding the consent panel shall render its written decision. It is the intent of this subparagraph to provide for a speedy and inexpensive resolution of disputes provided the parties agree to such a procedure. b) Formal Arbitration. If either party objects, within 15 days of the second party's designation of an arbitrator to the others choice of an arbitrator pursuant to paragraph (a) above, or the first party initially decides not [AA91197Q,Q29] -27- 9/6/91 . . . to use the consent panel procedure, then the matter shall be promptly referred to the American Arbitration Association in accordance with the then existing rules of the American Arbitration Association. c) Arbitration Awards. Any award by either a consent panel or as a result or proceedings before a panel pursuant to the rules of the American Arbitration Association shall be enforceable in accordance with Alaska statutes. Any award shall include an award of costs, interest and attorney fees. ARTICLE 17.--MAINTENANCE AND REPAIRS. 17.1--Normal Maintenance. After the commencement of construction and during the entire remaining term of this lease and every renewal or extension hereof, LESSEE shall, at LESSEE's sole cost, risk and expense, maintain the Leased Land, including any improvements placed thereon by LESSEE, in as good condition as received or constructed by LESSEE, ordinary wear and tear excepted. CITY, at CITY's sole option and expense, may, prior to the commencement of construction by LESSEE, perform maintenance and preventative work on the Leased Land, exclusive of improvements placed thereon by LESSEE, in order to prevent erosion, mitigate damage to plants and animals, or prepare the Leased Land for eventual development by LESSEE or others by grading, filling or contouring the Leased Land. Any such work performed by CITY shall be at CITY's sole expense and risk unless LESSEE agrees, in advance and in writing, to share such expense and risk. LESSEE shall prevent the discharge of any pollutants to any public sewer system beyond those for which the system was designed. LESSEE shall maintain in first class condition at all times all fire, pollution and other protective equipment. [AA911970,029) -28- 9/6/91 . . . CITY may periodically inspect the Leased Land and facilities constructed thereon in order to ascertain the condition of the public portion of the premises but the exercise of this right shall not imply any obligation to do so nor any obligation to do so in any particular way. 17.2--Safety Issues. CITY may notify LESSEE in writing of any deficiencies in the performance of LESSEE's maintenance responsibilities as they relate to public health or safety and LESSEE shall promptly within 30 days of receipt of such notice advise CITY in writing of its proposed schedule for performance of any work necessary to cure such deficiencies. If such deficiencies relate to the safety of LESSEE's operation such that the surrounding land or public uses (including any Lowell Creek flood control project) are exposed to risk, unnecessary potential hazards, or a risk to the pUblic interest (as distinguished from a business risk), or if CITY is not satisfied with the proposed schedule of repairs either because of the delays therein or the scope of the repairs, then CITY may engage an independent engineering consultant who shall furnish to CITY a comprehensive survey and report for the purpose of establishing both the need and urgency to perform such maintenance work. As soon as practicable following receipt of said engineer's determinations and recommendations, if the report requires repair then LESSEE shall pay the cost of the report and perform such work in accordance therewith at LESSEE's cost, risk and expense. 17.3--Cost of Repairs. Should LESSEE dispute the necessity of any maintenance work as being necessary or advisable or reasonable to protect the surrounding land or public facilities (including any Lowell Creek flood control project or Lowell Point Road), it [AA911970,029] -29- 9/6/91 . . . may submit the matter to arbitration; provided, however, that pending the decision of the arbitrators it shall fully comply with the maintenance requests. If an arbitration award (which shall include costs, interest and attorneys' fees) should ultimately find that the repairs were not necessary then LESSEE may either deduct from future rental payments the cost of such repairs or be reimbursed therefor. In deciding whether repairs requested by CITY or required by an engineering report are necessary the arbitration panel is to give primary consideration to the safety and welfare of the city of Seward port facilities and the citizens of the City of Seward to the highest standards in the industry. If any facility or service provided by CITY to the Leased Land shall become inadequate due to changes in environmental control standards or should any facility require updating or improvement by reason of a change in LESSEE's use of the Leased Land or operations therefrom, LESSEE shall either construct such improvements at LESSEE's own cost or reimburse CITY for such work at the option of CITY. ARTICLE 18.--FIRE PROTECTION. LESSEE shall at its sole cost, risk and expense provide fire protection to its operations on the Leased Land and fire prevention to industry standards for risks to adjacent facilities such that those risks are minimized. LESSEE shall continue to provide and maintain industry accepted standards of fire protection such that the City of Seward ISO rating is not degraded by reason of LESSEE's operation. The parties agree that with the rapid expansion of technology in the field of fire prevention and control LESSEE's obligations hereunder may vary during the term of this lease and CITY may submit LESSEE's compliance with its obligation hereunder to arbitration not more frequently than once each five years. [AA911970,029] -30- 9/6/91 . . . ARTICLE 19.--ESTOPPEL CERTIFICATES. Either party shall at any time and from time to time upon not less than 10 days' prior written request by the other party, execute, acknowledge, and deliver to such party, or to its designee, a statement in writing certifying that this lease is unamended and in full force and effect (or, if there has been any amendment thereof, that the same is in full force and effect as amended and stating the amendment or amendments), that there are no defaults existing (or, if there is any claimed default, stating the nature and extent thereof); and stating the dates to which the rent and other charges have been paid in advance. ARTICLE 20.--CONDITIONS AND COVENANTS. All the provisions of this lease shall be deemed as running with the land, and shall be construed to be "conditions" as well as "covenants", as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. ARTICLE 21.--NO WAIVER OF BREACH. No failure by either CITY or LESSEE to insist upon the strict performance by the other of any term, covenant or condition of this lease or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of such terms, covenant or condition. No waiver of any breach shall affect or alter this lease, but each and every term, covenant and condition of this lease shall continue in full force and effect with respect to any other then existing or subsequent breach. ARTICLE 22.--TIME OF ESSENCE. Time is of the essence of this lease and of each provision. [AA911970,029] -31- 9/6/91 . . . ARTICLE 23.--COMPUTATION OF TIME. The time in which any act provided by this lease 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. ARTICLE 24.--SUCCESSORS IN INTEREST. Each and all of the terms, covenants and conditions in this lease shall inure to the benefit of and shall be binding upon the successors in interest of CITY and LESSEE. ARTICLE 25.--ENTIRE AGREEMENT. This lease contains the entire agreement of the parties with respect to the matters covered by this lease, and no other agreement, statement or promise made by any party which is not contained in this lease shall be binding or valid. ARTICLE 26.--GOVERNING LAW. This lease shall be governed by, construed and enforced in accordance with the laws of the state of Alaska. ARTICLE 27.--PARTIAL INVALIDITY. If any provision of this lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated. ARTICLE 28.--RELATIONSHIP OF PARTIES. Nothing contained in this lease shall be deemed or construed by the parties or by any third person to create the relationship of principal and agent or of partnership or of joint venture or of any association between CITY and LESSEE; and neither the method of computation of rent, nor any other provisions contained in this lease nor any acts of the parties, shall be deemed to create any relationship between lAA91197Q,Q29] -32- 9/6/91 . . . CITY and LESSEE other than the relationship of lessee and lessor. ARTICLE 29.--INTERPRETATION. The language in all parts of this lease shall in all cases be simply construed according to its fair meaning and not for or against CITY or LESSEE as both CITY and LESSEE have had the assistance of attorneys in drafting and reviewing this lease. ARTICLE 30.--NOMBER AND GENDER. In this lease, 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. ARTICLE 31.--MANDATORY AND PERMISSIVE. "Shall", "will" and "agrees" are mandatory; "may" is permissive. ARTICLE 32.--CAPTIONS. Captions of the sections and Subsections of this lease 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 lease. ARTICLE 33. --AHENDHENT. This lease is not subject to amendment except in writing executed by both parties hereto. ARTICLE 34.--DELIVERY OF NOTICES - HETHOD AND TIHE. All notices, demands or requests from one party to another shall be delivered in person or be sent by mail, certified or registered, postage prepaid, to the addresses lAA911970,029) -33- 9/6/91 . . . stated in section 33 and shall be deemed to have been given at the time of delivery or mailing. ARTICLE 35.--NOTICES. All notices, demands and requests from LESSEE to CITY shall be given to CITY at the following address: City Manager City of Seward P.O. Box 167 Seward, Alaska 99664 All notices, demands or requests from CITY to LESSEE shall be given to LESSEE at the following address: Seward Marine Services P.O. Box 87 Seward, Alaska 99664 ARTICLE 36.--CHANGE OF ADDRESS. Each party shall have the right, from time to time, to designate a different address by notice given in conformity with this Article. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the date first hereinbefore set forth. CITY: CITY OF SEWARD BY~ J.ty Manager K-lr-- /~~ - ATTEST: ,;.:.a~ ~ '''''' ">1.'.. "'...- . ....l' 1, \~~.., ,.. [AA9119;()~' A~"'~+- -34- 9/6/91 . . . LESSEE: SEWARD MARINE SERVICES APPROVED AS TO FORM: PERKINS COIE Attorneys for the City of Seward By: 7.t J1j f2,~ Fred B. Arvidson STATE OF ALASKA ) ) SSe THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this ~~day Of~) 1991, before me, the undersigned, a Notary- Publi~~i~a~d for the State of Alaska, personally appeared~Y~V~~~ of Seward Marine Services, known to me and t~e known to be the individual named in and who executed the foregoing document, and he acknowledged to me that he was authorized to execute the foregoing document by authority granted him in the Bylaws or by resolution of the Board of Directors of said corporation for the uses and purposes therein set forth. WITNESS my hand and notarial seal the day and year first hereinabove written. ~~n~n~~- My Commission Expires: \ d.. - \ '). -q~ [AA911970,029] -35- 9/6/91 J1 r1 u ~ ;). ~ . 7 ,., "':,'!o"'ft't.... ,,:"~~~ 'V..~ 't' o ~ , ..:~ ''\ " ' " ~~ " , / .1/ "- , , ":.;.~ ;\;;~ , ". , -~ . ~~ .' :~ ~ ;. --- \;:' -\~ ~.t..~ .. . c- O' 1: m ~ "' '" ~ . l ~ z. --I . ,,~.. .....lE ",." tS ~ . J::i~ 0, " ~~~ '" Ii. ~ " . i. .., . . ! . ti , ~! ~ 1 t,o:,r,: ~ "'l. ,... t. ~ '1; ~ ~ """ I\ti \ " ~ ~ ~ > , . . I . i " 1 1t. 'i.... I ~; 1:/ ~ ' Ii ~ '\ ( \ " I \ ~ :'\ / I / I .- i r'1 " " " '\ :> ~ I I I I / / I "=' I..... ,,/ ~ 0'>/~~" SEWARD MARINE SERVICES eHIBIT / , l 'r -J] I 1-:." //7,.... ,: t-' . / --- (" ,;1 ,/ ~/ y - - r -!- --t. I / /. Ie '-' / . "e" / -7 / I +--1 ..J'~ v /" ?~) _ ..;, CITY OF SEWARD TIDELAND LEASE ~"~~?--">-'< ,,.",.-- "" "ij'I'M'"." ... .~-.:.8t""'..........,;:~ ---..,.;;......._~_.- .....~. ~-", - l I '\ \. ~ ;~ \ \.;, \ \ r\ /" t\ \ ,.\ ,~ , <. \ t\ \ \, \ \ \1\ jl / " :' <: I -r/ . u( . "' / / ,,' ~/, -- / C- O / v :' I'w l , ~ I ,- , ." ..-J C.''" J/ -, ~ ----,--" ~ I ~. ./< t? ? . p~"yl :\"~ : \ nD\'.\" I'.' .- -~ - ~...::-- -- ------""::;:;;... ~ ..: 7;'---~: J~~ ..- , - - '. - .,reel . ,rom doe> 10Jln. .0nCb . .,cee' . fro' be,ch '00"0' norCb co doe> .,rce' . ,rom DOc> 100>ln. souC" EXUIBI~ C LEASE RE-070 'U010S SUOUIUG CO.DI110N O' 1..AS< A~ ~UE ~1~\E Of LEASE l>A:lD > . ~ l'at:cel !\ ft:o\l\ b,idge loo,ing ,oucb co."d TnE Tl~E OF ~E!\S~ dock l'at:cel !\ ft:o\l\ EXn1"BlT C dolphin looking ~E!\SE Rf,-070 e,e.k 100,ing ,ou,b '0 doe' ,.,eel A f'o" no"n ,ide of south to dock 11 ~ E!\S E ~!\~D !\ T l'nOTOS sno~l~G Co~DITION 0 ~oad looking south to dock l'at:cel h ft:o\l\ . y"cel A ,,0' do1..io 10~Og ,ouch ,0 doc' k lOO"iUg soutU to dOC\<. parcel ~ trOm beac" ~ E"K1:llB11' C: 5E""" ,,,,<1"5 ,,<,lCES LEA" <<_010 rtO~t' "om cbe dOC' co."d do1ybi. l' arc e 1 ~ 100 \<. i u g ,. L Sl1'E ~1' Tl~l~ O~ ~E~SE ..010S SDO.,.G co"nll10R 0' LEASE dOC" loo\<.iuo uortU to tUe dol?uiu parcel A trOm ~ eo ==-------- ~,>~~ 10/28/91 seward Marine north tOward the services Inc. ~ease RE-070 fa"" . "om ,be ,oo'b 100kiOg dOc~ E1.1:\IBI'f C :<.."".,>''''. .:;\1 ~, -, "'(o1i -