HomeMy WebLinkAboutRes1998-001
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Sponsored by: Gifford
CITY OF SEWARD, ALASKA
RESOLUTION NO. 98-001
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE ACTING CITY MANAGER TO EXECUTE
A TWENTY-YEAR LEASE WITH ALASKA HERITAGE TOURS, INC.
FOR A PORTION OF ALASKA TIDELAND SURVEY 174, A PARCEL
SOUTH AND SEAWARD OF TRACT 2A, WATERFRONT TRACTS,
ACCORDING TO PLAT NO. 95-13, SEWARD RECORDING DISTRICT,
STATE OF ALASKA, CONTAINING 34,500 SQUARE FEET, MORE OR
LESS
WHEREAS, pursuant to City Council direction in Resolution No. 97-170, the City
Administration has concluded its negotiations with Alaska Heritage Tours, Inc., known locally as
Kenai Fjords Tours, for its proposal to lease a parcel within the tidal and submerged lands adjacent
to and seaward of the Alaska SeaLife Center; and
WHEREAS, the purpose of the lease is to install a floating passenger dock to accommodate
tour boats having visitors desiring to embark or disembark at the Alaska SeaLife Center; and
WHEREAS, the City Council has determined that a lease of the lease site to Alaska Heritage
Tours, Inc. for the purposes described in the lease would be in the public interest; and
WHEREAS, the City is authorized to dispose of interests in its real property by means of
auction, sealed bid or negotiation; and
WHEREAS, the City finds that the public interest will not be served by first requiring a City
appraisal of the lease site because, under the terms of the lease, the potential uses for the lease site
are limited, there is little information on comparable tideland lease valuations, and the appraisal
process may unnecessarily delay the project, which the Lessee hopes to complete by May 1, 1998,
and which must be completed no later than May 1, 1999. Furthermore, although the highest and best
use ofthe property has not been determined by means of a City appraisal, the lease will require rental
adjustments to fair market rental value in the year 2000 and every five (5) years thereafter; and
WHEREAS, the essential terms and conditions ofthe lease are:
1. Lease Site, The initial size (approximately 34,500 square feet) and location of the lease
site are estimated in the lease document for the purpose of public hearing and approval of the lease.
The exact size and location will be finally determined when the dock anchors are actually put in
place. Such placement shall be verified by a tideland surveyor certified engineer's statement
provided by Alaska Heritage Tours, Inc. within ninety days after the installation of the dock.
CITY OF SEWARD, ALASKA
RESOLUTION NO. 98-001
2. Lease Term. The initial term ofthe lease is twenty years with the option for two five-
year extensions, provided that Alaska Heritage Tours, Inc. is in good standing and in compliance
with all terms and provisions of its sublease agreement with Alaska SeaLife Center for supporting
uplands within the parcel leased from the City by Alaska SeaLife Center.
3. Rental Rate. The annual estimated lease rate is $1,380. After the anchors are actually
placed and the lease site dimensions are determined by tideland surveyor certified engineer's
statement, the rental rate will be adjusted to an amount based on FOUR CENTS ($.04) per square
foot. On July 1,2000, and every five years thereafter, the lease rate will be further adjusted to reflect
the fair market value of the site as established by appraisal.
4. Operations of Lessee. Alaska Heritage Tours, Inc., as the owner ofthe dock, is solely
responsible to construct, operate, manage, and maintain the facility as follows:
a. Alaska Heritage Tours, Inc. will keep the dock clean and in good repair.
b. Alaska Heritage Tours, Inc. will make reasonable accommodations to allow
other qualified users to access the dock. A "qualified user" shall (i) furnish
the City with evidence of insurance in the appropriate amounts with the City
and Alaska Heritage Tours, Inc. named as additional insureds; (ii) agree, in
writing, to defend, indemnify and hold the City and Alaska Heritage Tours,
Inc. harmless from any and all liability or claims for damages with regard to
such other user's use of the dock; and (iii) be in good standing and
compliance with other terms and conditions as determined by Alaska
Heritage Tours, Inc. for use of the facility.
5. User Fees. Alaska Heritage Tours, Inc. is permitted to charge other qualified users for
their use of the floating dock. User fees shall not exceed TWO DOLLARS ($2.00) per passenger,
not including any per-passenger assessment that Alaska SeaLife Center may assess Alaska Heritage
Tours, Inc. for use of the uplands.
6. Improvements on Lease Site. The floating dock shall be constructed on the lease site
by no later than May 1, 1999.
7. Insurance. Alaska Heritage Tours, Inc. is required to carry insurance coverage at a
minimum of$500,000 per person for bodily injury and up to $5,000,000 per occurrence, naming the
City as an additional insured.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 98-001
Section 1. The City Council finds that the lease transaction described in this resolution is
in the public interest. One of the purposes of the lease is to accommodate the movement of the
public through the city, a floating dock at this location will further this goal and assist with the
public's ability to embark or disembark at the Alaska SeaLife Center. The City Council also finds
that it is not in the public interest to complete an appraisal prior to leasing the property because
potential uses for the lease site are limited, comparable tideland lease information is limited, the
appraisal process may unnecessarily delay the project, and, by the terms of the lease, the rental rate
will be adjusted to the fair market rental value by appraisal on July 1,2000, and each five years
thereafter.
Section 2. The City Council authorizes the Acting City Manager to execute a twenty-year
lease with Alaska Heritage Tours, Inc., with the option of two five-year extensions, for a parcel
within the tidal and submerged lands south and seaward of the Alaska SeaLife Center and depicted
on Exhibit A to the lease agreement.
Section 3. The lease agreement between Alaska Heritage Tours, Inc. and the City, a copy
of which is attached as Exhibit A hereto and incorporated herein by reference, is hereby approved
in substantial form, and the Acting City Manager is authorized to sign the lease agreement in
substantial form as attached hereto on behalf of the City of Seward. The Acting City Manager is also
authorized to sign such other documents on behalf of the City as are necessary to complete the lease
transaction including, but not limited to, a lease memorandum.
Section 4. This resolution shall take effect thirty days after passage and posting.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 26th
day ofJanuary, 1998.
~~~~
Lowell R. Satin, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
Blatchford, Callahan, Clark, Gage, King, Orr, Satin
None
None
None
ATTEST:
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LEASE AGREEMENT
between
CITY OF SEWARD, ALASKA
and
ALASKA HERITAGE TOURS, INC.
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Effective Date: February 26, 1998
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TABLE OF CONTENTS
ARTICLE 1 - LEASE SITE .......................................... 1
1.1 Description of Lease Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Covenant of Quiet Enjoyment; Warranty of Title . . . . . . . . . . . . . . . . . . . . 2
1.3 Survey of Lease Site ....................................... 2
1.4 Property Accepted "As-is" ...................................2
1.5 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.6 Platting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE 2 - LEASE TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Initial Term ............................................. 3
2.2 Interim Right to Possession .................................. 3
2.3 Lease Subject to Referendum ................................. 4
2.4 Options to Extend .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 3 - RENTAL RATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3.1 Initial Rental Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3.2 Rental Adjustments ........................................5
3.3 Procedure for Rental Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Effect of Late Appraisal by CI1Y .............................. 6
3.5 Appraisal by LESSEE ......................................6
3.6 Effective Date of Adjusted Rental Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.7 Late Payment Charge ......................................7
ARTICLE 4 - USE OF LEASE SITE ................................... 7
4.1 Use of Lease Site ......................................... 7
4.2 Obligations of LESSEE ..................................... 7
4.3 Operations of LESSEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4 User Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4.5 No Preferential Rights to Use Public Facilities . . . . . . . . . . . . . . . . . . . . . 9
4.6 Adequacy of Public Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 Tariffs and Other Service Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.8 Time for Payment of Utilities and Taxes ......................... 9
4.9 Other Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4.10 Use of Public Docks and Port Facilities ......................... 9
ARTICLE 5 - UTILITIES AND RIGHTS OF ACCESS . . . . . . . . . . . . . . . . . . . .. 10
5.1 Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Third-Party Improvements .................................. 10
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February 26, 1998
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ARTICLE 6 - CONSTRUCTION BY LESSEE ........................... 11
6.1 Improvements on Lease Site ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 City Review of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 7 - RETURN OF LEASE SITE/SITE CONDITIONS. . . . . . . . . . . . . .. 12
7.1 Return of Lease Site in Original Condition . . . . . . . . . . . . . . . . . . . . . .. 12
7.2 Return of Lease Site in Different Condition ...................... 12
ARTICLE 8 - FORCE MAJEURE .................................... 13
ARTICLE 9 - CITY ACTS OF DEFAULT .............................. 13
ARTICLE 10 - REMEDIES FOR CITY'S ACTS OF DEFAULT .............. 13
ARTICLE 11- LESSEE'S ACTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 12 - REMEDIES FOR DEFAULT BY LESSEE .................. 16
ARTICLE 13 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE. . . . . .. 17
13.1 Improvements........................................... 17
13.2 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 14 - SUBLEASE OR ASSIGNMENT .......................... 17
14.1 Assignment of Lease or Subleasing ............................ 17
14.2 Assignment of Lease for Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.3 Assignment to Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 15 - LESSEE'S DUTY TO DEFEND/lNDEMNIFY ................ 19
ARTICLE 16 - CITY'S DUTY TO DEFEND/lNDEMNIFY .................. 19
ARTICLE 17 - INSURANCE ......................................... 19
17.1 Minimum Insurance Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
17.2 Subrogation Rights Waived. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 18 - CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 19 - ARBITRATION ...................................... 21
ARTICLE 20 - MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . 22
20.1 Normal Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
20.2 Safety Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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February 26, 1998
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20.3 Cost of Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 21 - ENVIRONMENTAL CONCERNS. . . . . . . . . . . . . . . . . . . . . . . . . 23
21.1 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
21.2 Permits and Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 22 - ESTOPPEL CERTIFICATES ............................ 26
ARTICLE 23 - CONDITIONS AND COVENANTS . . . . . . . . . . . . . . . . . . , . . . . . 26
ARTICLE 24 - NO WAIVER OF BREACH ............................. 26
ARTICLE 25 - TIME OF THE ESSENCE .............................. 27
ARTICLE 26 - COMPUTATION OF TIME. . . .... . . .. . . . . . ... . . . . ... . . .27
ARTICLE 27 - SUCCESSORS IN INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 28 - ENTIRE AGREEMENT ................................ 27
ARTICLE 29 - GOVERNING LAW .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 30 - PARTIAL INVALIDITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 31- RELATIONSHIP OF PARTIES .......................... 27
ARTICLE 32 - INTERPRET A TION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 33 - NUMBER AND GENDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 34 - MANDATORY AND PERMISSIVE ....................... 28
ARTICLE 35 - CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 36 - AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 37 - NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 38 - FIRE PROTECTION .................................. 29
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made by and between the CITY OF
SEWARD (the "CITY"), a municipal corporation located in the Kenai Peninsula Borough,
State of Alaska and whose mailing address is PO Box 167, Seward, Alaska 99664, and
ALASKA HERITAGE TOURS, INC. (the "LESSEE"), whose mailing address is PO Box
1889, Seward, Alaska 99664.
WHEREAS, LESSEE has indicated its desire to lease a parcel located within the tidal
and submerged lands adjacent to and seaward of the Alaska SeaLife Center, an area of
approximately 34,500:t square feet in size (the "Lease Site"); and
WHEREAS, the City Council of CITY has determined that a lease of the Lease Site
to LESSEE for the purposes described herein would be in the public interest; and
WHEREAS, it is the intent of this Lease to transfer from CITY to LESSEE the entire
burden of compliance with present or future environmental regulations or controls with
respect to LESSEE's operations on the Lease Site during the lease term.
NOW THEREFORE, for and in consideration of the mutual promises and covenants
hereinafter contained, the parties hereto agree as follows:
ARTICLE 1- LEASE SITE
1.1
Description of Lease Site. The Lease Site is located in the City of Seward, Alaska.
The Lease Site is described as follows:
A portion of Alaska Tideland Survey 174, a parcel south and seaward
of Tract 2A, WATERFRONT TRACTS, according to Plat No. 95-13,
Seward Recording District, State of Alaska;
Containing 34,500 square feet, more or less, including the (proposed)
floating dock structure (" ASC Floating Dock") that covers 3,000 square
feet, more or less, plus connecting gangway, four attached securing
chains and anchors, the farthest extent of which mark the corners of the
site, all as depicted on Exhibit A, which is incorporated herein by
reference.
The parties intend that Exhibit A serve as an description of the Lease Site to identify
the Lease Site sufficiently for purposes of public hearing and approval of this Lease
by the City Council of CITY, and for purposes of the revocable license granted to
LESSEE in Section 2.2.
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1.2 Covenant of Quiet Enjoyment; Warranty of Title. Subject to the encumbrances of
record as of the date hereof, any reasonable restrictions imposed on the Lease Site as
part of recording of a plat or tidelands survey by the CITY, and the provisions of this
Lease, CITY hereby covenants and warrants that:
a) LESSEE shall have the quiet enjoyment and possession of the Lease Site for
the full term of this Lease, subject to public access as required by law;
b) CITY owns the Lease Site in fee, and, subject to the conditions described in
Section 2.3, is fully empowered to enter into this Lease.
c) CITY is unaware of any prior conflicting use of the property that would
adversely affect LESSEE's intended use of the subject parcel.
1.3 Survey of Lease Site. Within ninety (90) days from the date of this Lease, LESSEE, at
its sole cost, will cause the Lease Site to be surveyed and platted by a land surveyor
registered in the State of Alaska. A copy of the drawing and description of the Lease
Site based upon this survey shall be attached to this Lease as Exhibit B and shall be
incorporated herein by reference. The description of the Lease Site in Exhibit B shall
supersede the description in Exhibit A, and shall be considered the correct description
of the Lease Site for all purposes under this Lease. LESSEE shall provide CITY a
copy of any and all surveys within ten (10) days of LESSEE's receipt of any and all
surveys. CITY shall have the right to comment upon any and all surveys, but the
exercise of this right shall not imply any obligation to do so or any obligation to do so
in any particular way. If CITY objects to the surveyor's conclusions in the survey,
CITY may give written notice to LESSEE of CITY's objection within thirty (30) days
of receipt of the survey. CITY shall then engage a second land surveyor registered in
the State of Alaska at CITY's expense to make a second survey of the Lease Site.
CITY shall provide LESSEE a copy of the second survey within ten (10) days of
CITY's receipt of the second survey. Unless CITY and LESSEE agree which survey
is acceptable, the acceptable survey shall be determined in accordance with the
arbitration provisions contained in Article 19 of this Lease.
1.4 Property Accepted "As-is". LESSEE acknowledges that it has inspected the Lease
Site and accepts the same "as-is" and without reliance on any expressed or implied
representations or warranties of CITY, or agents of CITY, as to the actual physical
condition or characteristics thereof, including but not limited to the description of the
Lease Site found in Section 1.1 and Exhibit A.
1.5 Permits. LESSEE, at its sole cost, shall obtain all permits necessary to the
construction and operation of its facilities on the Lease Site. CITY agrees from time
to time, upon request of LESSEE, to execute such documents, petitions, applications
and authorizations as may be necessary to obtain from the agency or public body
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responsible therefor any conditional use permits, zoning and re-zoning, tentative and
final tract approval and precise plan approval that is required for the lawful
construction and operation of the facilities of LESSEE permitted on the Lease Site by
the terms of this Lease. Nothing in this Section imposes any duty or responsibility on
CITY to assist LESSEE in obtaining any other permits or approvals, including without
limitation those required by the U.S. Army Corps of Engineers (e.g., wetland fill
permits) or the Environmental Protection Agency (e.g., Clean Air Act permits).
1.6
Platting. In the event CITY elects to replat, CITY agrees to include the Lease Site in
such replat in accordance with the description prepared by LESSEE under Section 1.3
herein. If LESSEE requests a replat of the Lease Site prior to that time, CITY shall
assist LESSEE in the preparation and filing of the re-plat, and LESSEE shall
reimburse CITY for the CITY's direct costs in assisting in the preparation and filing of
the re-plat. LESSEE agrees to sign the plat and any other documents necessary to
complete the platting or re-platting of any area including all or a portion of the Lease
Site. LESSEE shall accept reasonable restrictions, easements, or plat notes as may be
required by the CITY or other governmental authorities as a condition to record the
plat of the Lease Site or the plat of CITY -owned real property adjacent to the Lease
Site.
ARTICLE 1 - LEASE TERM
2.1
Initial Term. The term of this Lease (the "Lease Term") shall be in accordance with
CITY's authorization Resolution No. 98- (the "Resolution"). The Lease Term
shall commence with the effective date of the Resolution, and that date shall be the
effective date of this Lease (the "Effective Date"). The Lease Term shall run for
approximately twenty (20) years, ending February 25, 2018, provided LESSEE is in
good standing and in compliance with all terms and provisions of its sublease
agreement with Alaska SeaLife Center for supporting uplands within the parcel leased
from CITY by Alaska SeaLife Center and provided LESSEE shall continue to operate
a floating dock on the Lease Site. In the event LESSEE (or its permitted successors
and assigns) ceases to operate a floating dock on the Lease Site for a period of two (2)
years or LESSEE gives CITY notice of intent to permanently cease operations,
whichever occurs first, this Lease shall terminate and LESSEE shall pay to CITY an
amount equal to that calculated in Section 12(3)(d).
2.2 Interim Right to Possession. LESSEE is hereby granted a revocable license to enter
upon the Lease Site prior to the expiration of 30 days from the date of passage and
posting of the Resolution, subject to the terms of this Section.' The granting of a
revocable license to LESSEE under this Section is for the convenience of LESSEE
only and does not grant any interest in the Lease Site. During the term of this
revocable license, LESSEE shall not engage in any storage of materials, clearing,
grading, excavation or construction of improvements on the Lease Site. CITY may
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February 26, 1998
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revoke the license granted by this Section at any time, including without limitation
upon the filing with the Clerk of CITY a petition for referendum on the Resolution.
2.3 Lease Subject to Referendum. LESSEE understands and assumes the risk that under
the Charter and Code of CITY this Lease may be voided by referendum. The
revocable license granted in Section 2.2 shall not affect or reduce the right of the
voters of the City of Seward to reject this Lease by referendum. LESSEE agrees that
if the Resolution is the subject of a referendum petition filed with the Clerk of CITY
during the term of the revocable license granted by Section 2.2, LESSEE shall have no
rights under this Lease unless and until the Resolution is approved by the voters of the
City of Seward, and LESSEE shall not be entitled to any damages or any other relief
against CITY in the event the Resolution is not so approved.
2.4 Options to Extend. LESSEE shall have the right to extend the initial term of this
Lease for two additional five- (5) year periods (cumulative extensions not to exceed
ten years), provided that:
a) LESSEE exercises any applicable option to extend at least one hundred and
eighty (180) days prior to the expiration of the then current lease term;
b) LESSEE is not in default under any term or provision of this Lease;
c) LESSEE shall exercise its options to renew by sending written notice thereof in
accordance with the provisions of Article 37 of this Lease; and
d) The City Council of CITY, at the time each option is exercised, approves the
extension by resolution or ordinance.
ARTICLE 3 - RENTAL RATE
3.1 Initial Rental Rate. Commencing on the Effective Date of this Lease, the initial
annual rental rate for the Lease Site shall be set at ONE THOUSAND THREE
HUNDRED EIGHTY DOLLARS ($1,380). After the anchors are actually placed,
such work to be accomplished by no later than May 1, 1999, and the Lease Site
dimensions are verified as set forth below, an adjusted rental rate shall be calculated at
a rate of FOUR CENTS ($.04) per square foot based on the true dimensions of the
Lease Site, as determined by LESSEE's actual placement of anchors securing the ASC
Floating Dock. Such placement shall be in accordance with a plan or design
established by a professional engineer qualified to perform such work. A copy of
such plan, along with a tideland survey performed after the completion of the work or
a certified engineer's statement that the ASC Floating Dock and anchors were placed
in strict adherence to the plan, shall be furnished to CITY within ninety (90) days after
the final placement of the anchors, but in no event later than August 1, 1999. Rent
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shall be payable quarterly in advance upon the Effective Date of this Lease and
thereafter on or before the 20th day of the month following the beginning of each
calendar quarter: January 20, April 20, July 20 and October 20. The amount of each
quarterly payment shall be one-quarter (1/4) of the annual rental rate as initially
established or later adjusted under this Article 3.
3.2
Rental Adjustments. The annual rental payment shall be adjusted on July 1,2000,
and on the same date every five years thereafter (each a "Rental Adjustment Date").
The adjusted annual rental payment to be paid under the terms of this Lease shall be
eight percent (8 %) of the appraised Fair Market Value of the Lease Site at the highest
and best use of the Lease Site. CITY shall, at its own expense, retain an independent
MAl-certified appraiser, who shall determine the "Fair Market Value" of the Lease
Site, exclusive of improvements placed thereon by LESSEE but inclusive of all
improvements made by CITY (including those made before or subsequent to this
Lease). The highest and best use of the Lease Site shall be determined without regard
to LESSEE's intended or actual use of the Lease Site unless that use is coincidentally
the highest and best use of the Lease Site. CITY shall complete such appraisal and
deliver a copy of the appraisal report to LESSEE not less than ninety (90) days before
each Rental Adjustment Date.
3.3
Procedure for Rental Adjustment. To adjust the rent as of any successive Rental
Adjustment Date, CITY may at its own expense, retain an independent MAl-certified
appraiser who shall determine the adjusted annual rental rate at eight percent (8%) of
the Fair Market Value of the Lease Site in accordance with Section 3.2 The
appraiser's report shall be delivered to LESSEE not less than ninety (90) days before
the Rental Adjustment Date. The appraiser's determination of Fair Market Value of
the Lease Site shall constitute a final binding determination of the Fair Market Value
and the adjusted annual rental rate until the next Rental Adjustment Date, unless
LESSEE gives notice of objection. If LESSEE objects to the appraiser's determination
of the Fair Market Value, LESSEE shall give written notice to CITY of its objection
within thirty (30) days of receipt of the appraiser's report, and LESSEE shall then
engage a second independent MAl-certified appraiser at LESSEE's expense to make a
second appraisal of the Fair Market Value in accordance with Section 3.2.
If the second appraisal determines a Fair Market Value that varies from that
determined by the first appraisal by no more than twenty percent (20%), then the
adjusted rental rate shall be the average of the rental rates determined by the
appraisals. If the second appraisal determines a Fair Market Value that varies from
the first appraisal by more than twenty percent (20%), then, unless CITY and LESSEE
agree on a rate themselves, the Fair Market Value and the adjusted annual rental rate
of the Lease Site shall be determined in accordance with the arbitration provisions
contained in Article 19 of this Lease.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 5
3.4 Effect of Late Appraisal by CITY. If, for any reason, CITY does not complete the
appraisal or deliver a copy of the appraisal report to the LESSEE ninety (90) days
before the Rental Adjustment Date, CITY may proceed to complete the appraisal or
deliver a copy of the appraisal report to LESSEE at any time thereafter. However,
any such adjusted annual rental rate shall not be effective until the quarterly payment
due date immediately following the date CITY delivers the appraisal report to
LESSEE.
3.5 Appraisal by LESSEE. If for any particular Rental Adjustment Date, CITY fails to
obtain an appraisal of the Fair Market Value or fails to deliver the appraisal report to
the LESSEE by the Rental Adjustment Date, LESSEE may engage an independent
MAl-certified appraiser at LESSEE's expense to make an appraisal under the terms of
Sections 3.2 and 3.3 and submit a copy to CITY before the next quarterly rental
payment due date. However, LESSEE must notify CITY in writing within thirty (30)
days following the Rental Adjustment Date of LESSEE's election to obtain an
appraisal. If CITY objects to the appraiser's determination of the Fair Market Value,
CITY shall give written notice to LESSEE of its objection within thirty (30) days of
receipt of the appraiser's report, and CITY shall then engage a second independent
MAl-certified appraiser at CITY/s expense to make a second appraisal of the Fair
Market Value as of the Rental Adjustment Date and in accordance with Section 3.2.
If the second appraisal determines a Fair Market Value that varies from that
determined by the first appraisal by no more than twenty percent (20%), then the
adjusted rental rate shall be the average of the rental rates determined by the two
appraisals. If the second appraisal determines a Fair Market Value that varies from
the first appraisal by more than twenty percent (20%), then, unless CITY and LESSEE
agree on a rate themselves, the Fair Market Value and the adjusted annual rental rate
of the Lease Site shall be determined in accordance with the arbitration provisions
contained in Article 19 of this Lease.
3.6 Effective Date of Adjusted Rental Rate. The adjusted annual rental rate established by
this Article 3 shall apply as of the Rental Adjustment Date if the CITY provided a
copy of the appraisal report to LESSEE ninety (90) days before the Rental Adjustment
Date. If the adjusted annual rental rate is based on CITY's late appraisal or late
delivery of the appraisal report to LESSEE, the adjusted rental rate shall be effective
beginning with the quarterly rental payment due date immediately following the date
the CITY delivers the appraisal report to LESSEE. Notwithstanding the above, the
exercise by either CITY or LESSEE of the objection procedure relating to rental
adjustment described in Article 3 shall not postpone LESSEE's obligation to pay rent
at the rate established by CITY. LESSEE shall pay the amount of rent as established
or adjusted by CITY until the question of objection to the rental rate is finally
resolved. At such time the objection to the rental rate is resolved, an appropriate
credit or adjustment shall be made retroactive to the date the new rental rate was
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 6
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established by CITY or in cases where CITY failed to obtain an appraisal or deliver
the appraisal report to the LESSEE, to the Rental Adjustment Date.
3.7
Late Payment Charge. Rental payments not received by the due date shall bear
interest until paid at a rate of 10.5% per annum, or the maximum rate permitted under
Alaska law, whichever is less, plus a flat monthly late fee of $2.50, or such amount as
may be established from time to time by city ordinance or resolution and relating to
late fees for city leases generally.
ARTICLE 4 - USE OF LEASE SITE
4.1 Use of Lease Site. CITY has limited land available for lease. Use of the Lease Site
by LESSEE for a floating dock facility has been determined by the City Council of
CITY to be in the public interest. No ticket sales of any kind shall occur on the ASC
Floating Dock or on any other improvements located or constructed on the Lease Site.
4.2 Obligations of LESSEE. LESSEE may use the Lease Site only in accordance with
applicable city zoning code provisions and provided the following conditions are met:
a) Site is to be completely restored to its present condition or better upon
termination of this Lease.
b)
LESSEE agrees to prohibit the use, keeping, storage, or disposal of hazardous
materials on the Lease Site, except as otherwise provided in this Lease.
c) LESSEE shall not use the Lease Site in any manner or construct any facilities
thereon which would inhibit the use of adjacent or other potential lease sites.
4.3 Operations of LESSEE.
a) LESSEE shall be solely responsible to construct, in accordance with Article 6,
own, furnish, maintain, operate, and manage the ASC Floating Dock, gangway,
and all related equipment essential to the operation of the facility.
b) LESSEE shall at all times maintain the facility in good condition and repair,
and in so doing shall keep it clean and clear of unnecessary potential hazards
that may develop as a result of LESSEE's business operations, or of its agents,
officers, employees, customers, or contractors. Any such hazards that appear or
exist on the facility from the sole negligence or willful acts or omissions of a
user, its agents, employees, customers, or contractors, other than LESSEE, shall
be reported immediately by LESSEE to CITY, when such hazardous condition
comes to the attention, knowledge, or information of LESSEE.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 7
c) LESSEE shall make a reasonable effort to accommodate other Qualified Users
desiring to use the ASC Floating Dock. Such use shall be on a scheduled basis
only and in accordance with such reasonable terms and conditions as
determined by LESSEE. For the purpose of this Section, "Qualified User"
shall mean:
i) Prior to its use of the ASC Floating Dock, Qualified User shall furnish
the CITY and LESSEE with a certificate of insurance evidencing:
(a) Bodily injury liability insurance in an amount not less that Five
Hundred Thousand Dollars ($500,000) for anyone person and
not less than Five Million Dollars ($5,000,000) for anyone
accident or occurrence.
(b) Standard workers' compensation, social security, unemployment,
employers' liability insurance and longshoremen's and harbor
workers' compensation insurance as may be required by state or
federal law.
(c) Property damage liability, which shall include any and all
property whether or not in the care, custody or control of user,
in an amount of not less than Five Million Dollars ($5,000,000)
on account of anyone accident.
ii) The insurance obtained pursuant to this Section shall name CITY and
LESSEE as additional insureds, and provide for written notice of any
termination, cancellation, or expiration of the insurance to be delivered
to the same no less than thirty (30) days before the effective date
thereof.
Hi) Qualified User shall agree, in writing and in form acceptable to CITY
and LESSEE, to defend, indemnify and hold CITY and LESSEE
harmless from any and all liability or claims for damages, including
personal injuries, environmental claims, death, and property damage
arising out of or resulting from use of the improvements on the Lease
Site by such Qualified User, its agents, employees, contractors or
customers, except for damages arising from the sole negligence or
willful ac~ or omissions of CITY or LESSEE, their agents, employees,
or contractors. LESSEE shall promptly provide CITY with a copy of
such Qualified User's written agreement to defend and indemnify. If
any action or proceeding is brought against any Qualified User by
reason of any such occurrence, that Qualified User shall notify CITY
and LESSEE promptly in writing of such action or proceeding.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 8
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iv) Qualified User shall be in good standing and compliance with other
terms and conditions as determined by LESSEE for use of the facility.
4.4
User Fees. LESSEE is permitted to charge other Qualified Users for their use of the
ASC Floating Dock at any time during the term of this Lease. User fees shall
compensate the LESSEE for its construction, maintenance, and operation expenses
plus a reasonable return on its investment, but shall in no event exceed TWO
DOLLARS ($2.00) per passenger, not including any per-passenger assessment that
ASC may assess LESSEE for use of the uplands.
4.5 No Preferential Rights to Use Public Facilities. This Lease does not grant to LESSEE
any exclusive rights to use any public port public facilities constructed or operated by
CITY. LESSEE will be subject to any tariffs, procedures, rules and regulations of
CITY concerning the use of such facilities as they may now exist or from time to time
be amended, and LESSEE shall not be entitled to any exclusive use.
4.6 Adequacy of Public Facilities. CITY makes no representations or warranties as to the
fitness of any particular part or the whole of CITY's public facilities for the uses
intended by LESSEE, and LESSEE has inspected those facilities and has satisfied
itself that the facilities are sufficient for the intended uses by LESSEE. CITY makes
no representations or warranties of any nature with respect to the commercial
practicability or accuracy of any information provided by CITY.
4.7
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 impose any greater burden or higher rate upon
LESSEE than upon any other similar user of the public facilities.
4.8 Time for Payment of Utilities and Taxes. LESSEE will pay for utilities and taxes
related to operations on the Lease Site and LESSEE's interest in this Lease, if any,
before such obligations become delinquent; provided, that LESSEE may, in good faith
and before such delinquency, contest any such charge or assessment.
4.9 Other Uses. This Lease shall not preclude the CITY from actively seeking other and
additional tenants for space including those who would be in competition with
LESSEE or who might be interested in leasing the Lease Site should this Lease be
terminated for any reason.
4.10 Use of Public Docks and Port Facilities. Public docks are subject to port and harbor
rules and regulations as adopted by City Council.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 9
ARTICLE 5 - UTILITIES AND RIGHTS OF ACCESS
5.1 Utilities. LESSEE, at LESSEE's sole cost and expense, may provide for the extension
of public utilities to the Lease Site sufficient for LESSEE's intended operations. In so
doing, LESSEE shall comply with all city regulations and requirements, and the tariffs
of the affected utilities, with respect to the construction of those utilities. CITY agrees
to cooperate and assist the LESSEE in LESSEE's planning and engineering of those
improvements. All utilities will be located and sized in accordance to CITY's Master
Plan for the area leased. CITY adopted the Uniform Building Code, 1994 edition, and
all construction will be in compliance thereto. Utilities constructed by the LESSEE
within the public right-of-ways or within public utility easements will normally be
accepted and maintained by CITY or utility companies may be used to serve other
customers of LESSEE's without payment of fees or reimbursement of construction cost
to the LESSEE. However, this does not preclude several lessees from agreeing to
share the cost of constructing a utility to serve their facilities. CITY or other utility
company may determine that it would be to their benefit to oversize the utility or
install special fittings or equipment in order to serve other existing or future users.
The additional direct costs of oversizing shall be borne by CITY or other utility
company. Such costs shall be limited to the supplier's cost of the additional fittings,
equipment, direct labor, and equipment costs to complete the installation. The costs of
oversizing pipe or electrical conduit shall be limited to the difference between the
supplier's price to provide the size required to serve its facility and the price of the
oversized material required by the CITY or utility company.
LESSEE shall not be entitled to any refund, rebate, or payments from CITY for any
rent, investment, or costs incurred by LESSEE with respect to any required permits for
construction or operation of LESSEE's facilities on the Lease Site, it being the intent
of the parties that the risk of obtaining required permits be solely a risk undertaken by
LESSEE.
5.2 Third-Party Improvements. At the request of LESSEE, CITY shall, from time to time,
execute and deliver, or join in execution and delivery of, such documents as are
appropriate, necessary, or required to impose upon the Lease Site in accordance with
the terms of this Lease covenants, conditions and restrictions providing for the
granting of uses of the Lease Site, 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 improvements"), all of which
are for the purpose of the orderly development of the Lease Site 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 this Lease for whatever reason.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 10
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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 Lease Site other than portable equipment shall become
the property of CITY without the payment of any compensation to LESSEE.
ARTICLE 6 - CONSTRUCTION BY LESSEE
6.1 Improvements on Lease Site. LESSEE shall have the right and responsibility to plan,
engineer, construct, transport, install, situate, secure, equip, repair, refurbish, and
maintain a floating dock facility on the Lease Site, subject to the following conditions:
a) LESSEE shall cause to be constructed on and/or furnished to the Lease Site a
floating dock, gangway, and all related equipment essential to the operation of
the facility, by May 1, 1999.
b) The cost of any such construction, reconstruction, demolition, or of any
changes, alterations or improvements, shall be borne and paid for by LESSEE.
c)
The Lease Site shall at all times be kept free of mechanic's and materialmen's
liens.
d) LESSEE shall supply CITY with a copy of all building plans and specifications
and a site plan or plans for the Lease Site prior to commencement of
construction.
e) On completion of the improvements, LESSEE shall provide CITY a copy of an
as-built survey depicting the improvements as completed.
f) 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 equal to or exceeds
FIFTY THOUSAND DOLLARS ($50,000). Copies of all such bonds shall be
furnished to CITY prior to commencement of construction. If the cost of the
work is less than FIFTY THOUSAND DOLLARS ($50,000.00), LESSEE shall
provide CITY, if no performance and labor and material bonds are provided by
LESSEE, any necessary assurance or guarantees that the contemplated work
will be performed by the general contractor or by LESSEE. In the event that
LESSEE elects to construct the facility with its own personnel and equipment,
or the personnel and equipment of any corporation or person that is an
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 1 I
"affiliate" of LESSEE as such term is defined in AS 10.06.990(2)1, a
performance bond shall be required when the cost of the work is equal to or
exceeds FIFTY THOUSAND DOLLARS ($50,000).
g) CITY may, as contemplated by Alaska Statutes, give notice of non-
responsibility for any improvements constructed or effected by LESSEE on the
Lease Site.
h) LESSEE shall comply with all federal, state and local statutes and regulations
with respect to such construction including any required finding by the City
Council of Seward that such action is in the public interest.
6.2 City Review of Construction. CITY shall have the right to review initial plans,
including those supplied to CITY under Section 6.1 above, and any future changes or
additions to LESSEE's facilities on the Lease Site, by reviewing the design thereof
prior to the commencement of construction. CITY shall have the right to comment
upon that design and to require LESSEE to make reasonable changes so as to avoid
interference with public operations, but the exercise of these rights shall not imply any
obligation to do so nor any obligation to do so nor any obligation to do so in a
particular way. LESSEE shall construct the facility in accordance with final design
specifications approved by CITY. CITY's representatives may monitor the work and
shall have access to the site at all reasonable times. LESSEE shall be solely
responsible for completing all improvements according to LESSEE's plans and
specifications and shall bear all risk, responsibility, and liability for properly surveying
the Lease Site before construction and to place all improvements on the Lease Site
without encroaching upon any easements, rights-of-way, or setback requirements.
LESSEE shall obtain the usual and customary performance guarantees from its
contractors, and CITY shall be named as an additional insured.
ARTICLE 7 - RETURN OF LEASE SITE/SITE CONDITIONS
7.1 Return of Lease Site in Original Condition. Subject to the provisions of Article 13.1
herein, upon termination of this Lease for any reason, LESSEE shall return the Lease
Site to CITY in the same condition as at the commencement of this Lease, subject to
normal, nonabusive use. The Lease Site shall be free of all Hazardous Materials and
contamination arising out of or resulting from LESSEE's operations.
7.2 Return of Lease Site in Different Condition. Notwithstanding the provisions of Section
7.1 above, upon termination of this Lease for any reason LESSEE may return the
Lease Site in a re-contoured or graded condition different from its original condition
1 Affiliate means a person that directly or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, a corporation subject to the Alaska Corporations Code.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 12
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provided CITY has granted written approval of LESSEE's plans for development of
the Lease Site contours, including its plans for material extraction and final grade.
ARTICLE 8 - FORCE MAJEURE
In the event either LESSEE or CITY is delayed from performance of any of its
obligations under this Lease, due to acts of God, acts of the enemies of the United States of
America, sabotage, war, blockade, insurrection, riot, epidemic, fire, flood, explosion,
earthquake/tsunami, civil disturbance or war, the time period wherein such performance is to
occur shall be extended by that amount of time necessary to compensate for the delay.
ARTICLE 9 - CITY ACTS OF DEFAULT
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:
9.1
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 thirty (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.
9.2 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 sixty (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 herein shall not commence until such proceedings are finally
determined, provided such proceedings are diligently pursued.
ARTICLE 10 - REMEDIES FOR CITY'S ACTS OF DEFAULT
10.1 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
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 13
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 rent otherwise due CITY;
b) Refuse to proceed with any of LESSEE's other performance obligations under
this Lease;
c) Recover from CITY, whether this Lease be terminated or not, reasonable
attorney's fees and all other expenses incurred by LESSEE by reason of the
default by CITY; and
d) Declare this Lease terminated.
10.2 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.
10.3 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, now or hereafter existing at law or in equity or by statute
or otherwise, 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.
10.4 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 11 - LESSEE'S ACTS OF DEFAULT
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, any
one or more of the following events:
11.1 Failure by LESSEE to pay promptly when due, and in no event later than twenty (20)
days from the due date thereof, the rent required to be paid under this Lease.
11.2 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
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 14
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thirty (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 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.
11.3
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 remain
undismissed for a period of six (6) months from the date of commencement thereof.
11.4 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
applicable to LESSEE's use of the Lease Site, 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.
11.5 Failure by LESSEE to construct, in accordance with Article 6 hereof, a floating dock
complex on the Lease Site and place the facility in service by May 1, 1999.
11.6 Failure by LESSEE to obtain and maintain in effect a sublease agreement with Alaska
SeaLife Center for the supporting uplands within that parcel leased from CITY by
Alaska SeaLife Center.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 15
ARTICLE 12 - REMEDIES FOR DEFAULT BY LESSEE
Whenever an act of default by LESSEE shall have occurred, and any applicable period
for giving notice and any 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:
12.1 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.
12.2 CITY may re-enter the Lease Site and take possession thereof and, except for any
personal property of LESSEE which CITY has waived its right to distrain under sub-
paragraph 12.1 above, remove all personal property of LESSEE from the Lease Site.
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.
12.3 In addition to the above, CITY may:
a) Declare this Lease terminated;
b) Collect any and all rents due or to become due from sub-tenants or other
occupants of the Lease Site;
c) Recover from LESSEE, whether this Lease be terminated or not, reasonable
attorney's fees from LESSEE and all other expenses incurred by CITY by
reason of the breach or default by LESSEE;
d) 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 Lease Site or any part thereof be re-Iet 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
paragraph.
12.4 If LESSEE does not immediately surrender possession of the Lease Site after
termination by CITY and upon demand by CITY, CITY may forthwith enter into and
upon and repossess the Lease Site and expel LESSEE without being deemed guilty in
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 16
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any manner of trespass and without prejudice to any remedies which might otherwise
be used for arrears of rent or breach of covenant.
12.5 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.
12.6 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.
12.7 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 13 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE
13.1 Improvements. All improvements constructed by LESSEE on the Lease Site or on
easements to or from the same, such as docks, gangways, and similar improvements,
shall be removed by LESSEE without cost to CITY.
13.2 Personal Property. Any other provisions of this Lease to the contrary
notwithstanding, LESSEE, upon termination of this Lease for any reason shall
promptly remove, in no event later than ninety (90) days from the termination of the
Lease, trade fixtures and equipment from the Lease Site, and LESSEE shall repair any
damages to the Lease Site caused by such removal.
ARTICLE 14 - SUBLEASE OR ASSIGNMENT
14.1 Assignment of Lease or Subleasing. The parties recognize that this Lease has been
determined to be in the public interest by the City Council of CITY for the reasons set
forth in the Resolution. LESSEE may only assign or sublease this Lease or any part
of the Lease Site with CITY's prior written consent which shall be granted if:
a) The use of the Lease Site by the proposed assignee or sublessee is compatible
with the use of adjacent lands;
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 17
b) The use is a permitted use under the then existing zoning regulations and
comprehensive land use plan;
c) The use is found to be in the public interest by the City Council of CITY to
such assignment or subletting;
d) The assignee assumes and agrees in writing to pay and perform all of the
obligations of LESSEE hereunder including, without limitation, Article 21 _
Environmental Concerns; and
e) The assignee has a credit-worthiness demonstrated to be equal to or better than
LESSEE and has operating experience suitable to manage any facilities located
on the Lease Site.
14.2 Assignment of Lease for Security. Notwithstanding Section 14.1 above, LESSEE may
assign, encumber or mortgage its interest in this Lease or improvements on the Lease
Site, by deed of trust or other security instrument, to an institutional lender ("Lender")
for development of or operations on the Lease Site, provided that Lender shall be
subject to all obligations of LESSEE under the terms of this Lease upon foreclosure.
CITY shall furnish Lender, at the address provided to CITY by Lender in writing,
with notice of any default or breach of LESSEE under this Lease. Lender shall have
the right (without being required to do so and without thereby assuming the
obligations of LESSEE under this Lease) to make good such default or breach within
thirty (30) days after written notice specifying such breach. Notwithstanding the
provisions of Article 12 above, no "LESSEE Act of Default" shall exist until
expiration of thirty (30) days after such notice is furnished to Lender; provided,
a) If Lender, with respect to any default or breach other than a failure to make
any required payment of rent or other money, shall undertake within thirty (30)
days after notice to cure the default or breach and shall diligently and in good
faith proceed to do so, CITY may not terminate this Lease or relet the Lease
Site unless Lender fails to cure the default or breach within a reasonable period
of time thereafter; and
b) If the default for which notice is given is a breach of Section 11.3, CITY shall
not exercise any of the remedies afforded to it under Article 12 above so long
as LESSEE or Lender remains in possession of the Lease Site and satisfies
LESSEE's obligations under the tenns of this Lease. Upon foreclosure or other
assertion of its security interest, Lender may further assign, transfer, or dispose
of its interests, provided that any subsequent assignee, purchaser or transferee
shall remain bound by each and every term of this Lease.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 18
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14.3 Assignment to Affiliate. LESSEE may assign this Lease to an affiliate of LESSEE as
that term is defined by AS 10.06.990(2); provided, however, that LESSEE's full faith
and credit shall remain obligated under this Lease as though the assignment had not
taken place.
ARTICLE 15 - LESSEE'S DUTY TO DEFEND/lNDEMNIFY
LESSEE shall defend, indemnify and hold CITY harmless from any and all liability or
claims for damages, including personal injuries, death and property damage arising out of or
resulting from LESSEE's use of the Lease Site or the use of the Lease Site by LESSEE's sub-
lessees, agents or contractors or the public, except for damages arising from the sole
negligence or willful acts or omissions of CITY, its agents, employees, or contractors. If any
action or proceeding is brought against LESSEE by reason of any such occurrence, LESSEE
shall notify CITY promptly in writing of such action or proceeding.
ARTICLE 16 - CITY'S DUTY TO DEFEND/lNDEMNIFY
CITY shall defend, indemnify and hold LESSEE harmless from any and all liability or
claims for damages, including personal injuries, death and property damage arising from the
sole negligence or willful acts or omissions of CITY, its agents, employees, or contractors or
from conditions existing or activities occurring on the Lease Site prior to the Effective Date
of this Lease.
ARTICLE 17 - INSURANCE
17.1 Minimum Insurance Requirements. Prior to commencement of the Lease Term,
LESSEE shall procure and maintain, at LESSEE's sole cost and expense, commercial
general liability insurance, with limits of liability of FIVE HUNDRED THOUSAND
DOLLARS ($500,000) for all injuries and/or deaths resulting to anyone person and
FIVE MILLION DOLLARS ($5,000,000) limit from anyone occurrence. Coverage
under such insurance shall also include explosion, collapse and underground property
damage hazards. Such insurance shall include contractual liability. 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 Lease 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. CITY may notify LESSEE of any requested increase in
illsurance coverage.
All insurance policies shall provide for thirty (30) days' notice of cancellation and/or
material change to be sent to CITY at the address designated in ARTICLE 37 of this
Lease. All such policies shall be written by insurance companies legally authorized or
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 19
licensed to do business in the State of Alaska, and acceptable to CITY (Best's Rating
B+ 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 Lease Site 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;
17.2 Subrogation Rights Waived. 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 each other and their respective officers, servants,
agents or employees. LESSEE and CITY further agree to waive and agree to have
their insurers waive any rights of subrogation (whether 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 18 - CONDEMNATION
If all or any part of the Lease Site 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. Neither LESSEE nor CITY shall have any rights
in or to any award made to the other by the condemning authority; provided, that in the event
of a single award to CITY which includes specific damages for loss of 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 Lease Site is condemned for public use, LESSEE shall make
a good faith determination as to whether or not the taking of the part of the Lease Site
designated for condemnation will prevent it from continuing to operate on the Lease Site. If
LESSEE determines in good faith that the condemning of such part of the Lease Site will
prevent it from continuing to operate on the Lease Site, LESSEE may notify CITY in writing
to this effect, and this Lease shall then be terminated for all purposes effective fifteen (15)
days from the date LESSEE sends such notice to CITY, 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 Lease
Site 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 abatement of the rent beginning to be effective on the
actual date when LESSEE is effectively prevented from utilizing the condemned land.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26. 1998
Page 20
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ARTICLE 19 - ARBITRATION
19.1 Disputes between the parties with respect to the performance of this Lease that cannot
be resolved by the parties, shall be submitted to an independent arbitrator for a
settlement pursuant to the provisions of the Alaska Uniform Arbitration Act (AS
09.43.010 et. sea.), as it now exists or may hereafter be amended from time to time,
and judgment on the award may be entered in any Superior Court in the State of
Alaska. Notwithstanding the foregoing, arbitration shall not be applicable to claims or
disputes involving a requested remedy having a value of more than $50,000 (exclusive
of interest and costs). All demands for arbitration and all answering statements thereto
that include any claim must contain a statement that the total sum or value in
controversy, as alleged by the party making such demand or answering statement, is
not more than $50,000. The arbitrator will not have jurisdiction, power, or authority
to consider or make findings (except to deny jurisdiction) concerning any claim,
counterclaim, dispute or other matter in question where the amount in controversy of
any such claim, counterclaim, dispute or matter is more than $50,000. The costs and
expenses of arbitration shall be shared equally by the parties, and each party shall bear
its own attorney's fees and costs.
19.2 Arbitration procedures shall be applicable only to contract, negligence, and similar
claims arising from or related to this Lease, and shall not be used to resolve or
determine any claim based upon fraud, intentional misrepresentation, nor any claim
based on conduct that is a felony crime in the State of Alaska.
19.3 Written notice of requests for arbitration of disputes may be served by either party to
this Lease upon the other party. Arbitration of any dispute or claim shall be
determined by a single arbitrator selected from a list of not less than five arbitrators
obtained from the presiding Superior Court Judge or other appropriate judicial officer
in Anchorage, Alaska. The arbitrator shall be a person who (a) has not less than five
(5) years legal experience in the State of Alaska prior to appointment; and (b) such
legal experience includes substantial experience with long-term commercial real
property transactions. Each party shall be provided with a copy of the list and shall be
afforded a maximum of ten (10) working days to become familiar with the
qualifications of the prospective arbitrators. The arbitrator shall be selected by each
party, commencing with the party demanding the arbitration, striking one name from
the list until only a single name remains.
19.4 Arbitration hearings shall be conducted in Anchorage, Alaska. Each party shall
produce at the request of the other party, at least 30 days in advance of such hearing,
all documents to be submitted at the hearing and such other documents as are relevant
to the issues or likely to lead to relevant information.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 21
19.5 In deciding the claim or dispute, the arbitrator shall follow applicable Alaska law, and
the written decision shall be supported by substantial evidence in the record. Failure
to apply Alaska law, or entry of a decision that is not based on substantial evidence in
the record, shall be additional grounds for modifying or vacating an arbitration
decision.
ARTICLE 20 - MAINTENANCE AND REPAIRS
20.1 Normal Maintenance. During the entire term of this Lease and every renewal or
extension hereof, LESSEE shall, at LESSEE's sole cost, risk and expense, maintain the
Lease Site, including any improvements placed thereon by LESSEE, in as good
condition as received or constructed by LESSEE, subject to normal, nonabusive use.
CITY, at CITY's sole option and expense, may, prior to the commencement of
construction by LESSEE, perform maintenance and preventative work on the Lease
Site, exclusive of improvements placed thereon by LESSEE, in order to prevent
erosion, mitigate damage to plants and animals, or prepare the Lease Site for eventual
development by LESSEE or others by grading, filling or contouring the Lease Site.
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 maintain in first class condition at all times all fire, pollution and other protective
equipment, if any are placed on Lease Site.
20.2 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 thirty (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 and port facilities 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 well-versed and experienced 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.
20.3 Cost of Repairs. Should LESSEE dispute the necessity of any maintenance work as
being necessary or advisable or reasonable to protect the public facilities on adjacent
land, it may submit the matter to arbitration; provided, however, that pending the
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 22
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decision of the arbitrators it shall fully comply with the maintenance requests. If an
arbitration award 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 Seward port facilities and the citizens of Seward in
light of the highest standards in the industry.
If any facility or service provided by CITY to the Lease Site 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 Lease Site 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 21 - ENVIRONMENTAL CONCERNS
21.1 Hazardous Materials.
a) Condition of Site. LESSEE has had full opportunity to examine the site for the
presence of any Hazardous Material and accepts the site in "as is" condition.
b)
Release of CITY. Any other provision of this Lease to the contrary notwith-
standing, LESSEE releases CITY from any and all claims, demands, penalties,
fines, judgments, liabilities, settlements, damages, costs or expenses (including,
without limitation, attorney's fees, court costs, litigation expenses, and
consultant and expert fees) arising during and after the term of this Lease, and
resulting from the use, keeping, storage or disposal of Hazardous Material on
the site by LESSEE, or arising out af or resulting from LESSEE's operations at
the site except for those arising out of the CITY's sole negligence or intentional
misconduct. This release includes, without limitation, any and all costs
incurred due to any investigation of the site or any cleanup, removal or
restoration mandated by a federal, state or local agency or political subdivision
or by law or regulation.
c) Use of Hazardous Materials on the Site.
i) LESSEE shall not cause or permit any Hazardous Material to be
brought upon, kept or used in or about the Lease Site except for such
Hazardous Material as is necessary to conduct LESSEE's authorized use
of the Lease Site.
ii) Any Hazardous Material permitted on the Lease Site as provided in this
paragraph, and all containers therefor, shall be used, kept, stored and
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 23
disposed of in a manner that complies with all Environmental Laws or
other laws or regulations applicable to such Hazardous Material.
iii) LESSEE shall not discharge, leak or emit, or permit to be discharged,
leaked or emitted, any material into the atmosphere, ground, ground
water, sewer system or any body of water, if such material (as
reasonably determined by the City, or any governmental authority) does
or may, pollute or contaminate the same, or may adversely affect the (a)
health, welfare or safety of persons, whether located on the Lease Site
or elsewhere; or (b) condition, use or enjoyment of the Lease Site or
any other area or personal property.
iv) LESSEE hereby agrees that it shall be fully liable for all costs and
expenses related to the use, storage and disposal of Hazardous Material
kept or brought on the Lease Site by LESSEE, its authorized
representatives and invitees, and LESSEE shall give immediate notice to
CITY of any violation or potential violation of the provisions of this
subparagraph.
d) Indemnification of CITY. Any other provision of this Lease to the contrary
notwithstanding, LESSEE shall defend, indemnify and hold CITY harmless
from and against any claims, demands, penalties, fines, judgments, liabilities,
settlements, damages, costs or expenses (including, without limitation, attorney,
consultant and expert fees, court costs and litigation expenses) of whatever kind
or nature, known or unknown, contingent or otherwise, arising out of or in any
way related to:
i) The presence, disposal, release or threatened release of any such
Hazardous Material which is on or from the Lease Site, soil, water,
ground water, vegetation, buildings, personal property, persons, animals
or otherwise;
ii) Any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous Material or
any use of the Lease Site;
iii) Any lawsuit brought or threatened, settlement reached or government
order relating to such Hazardous Material or any use of the Lease Site;
and/or
iv) Any violation of any laws applicable thereto.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 24
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v)
Section 21.1(d) shall apply only if the acts giving rise to the claims,
demands, penalties, fines, judgments, liabilities, settlements, damages,
costs or expenses (1) occur during the term of this Lease; and (2) arise
in whole or in part from the use of, operations on, or activities on the
Lease Site by LESSEE or their employers, employees, agents, invitees,
contractors, subcontractors, authorized representatives, or any other
persons. The provisions of this subparagraph shall be in addition to any
other obligations and liabilities LESSEE may have to CITY at law or
equity and shall survive the transactions contemplated herein and shall
survive the termination of this Lease.
e) Facility Operator. For all purposes, LESSEE shall be deemed the operator of
any facility on the Lease Site.
f)
Hazardous Material Defined. As used in this Lease, Hazardous Material is any
substance which is toxic, ignitable, reactive, or corrosive or which is regulated
by any Environmental Law. Hazardous Material includes any and all material
or substances which are defined as "hazardous waste", "extremely hazardous
waste" or a "hazardous substance" under any Environmental Law.
Notwithstanding any statutory petroleum exclusion, for the purposes of this
Lease, the term Hazardous Material includes, without limitation, petroleum,
including crude oil or any fraction thereof, petroleum soaked absorbent material
and other petroleum wastes.
g)
Environmental Law Defined. As used in this Lease, Environmental Laws
include any and all local, state and federal ordinances, statutes, and regulations,
as now in force or as may be amended from time to time, relating to the
protection of human health and the environment, as well as any judgments,
orders, injunctions, awards, decrees, covenants, conditions, or other restrictions
or standards relating to same. Environmental Laws include, by way of
example and not as a limitation of the generality of the foregoing, the Resource
Conservation and Recovery Act of 1976, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Clean Water Act, and
the Superfund Amendments and Reauthorization Act of 1986.
21.2 Permits and Reporting.
a) Permits Required by Other Governmental Agencies. LESSEE shall obtain all
permits or approvals required by any applicable law or regulation. Copies of
all such permits shall be provided to CITY prior to LESSEE commencing work
under this Lease. LESSEE shall comply, and shall remain in compliance
during the term of this Lease, with all stipulations, requirements, and
conditions, within it~ power to perform, of any permit of any governmental
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 25
agency having jurisdiction with regard to the LC,N
Dock, including but not limited to the Army Corps ot .
LESSEE shall promptly make all reports to UjlY fede~'
government or agency required by any permit or Env
reports of any spill or discharge of HazardOl. Matcri,
may order LESSEE to immediately cease an, operath
Lease Site if the same is being carried out w;thout lie:
violation of the terms of any permit or Environmental
Lease.
b) Correspondence With and Reports to Environmental A.
immediately provide CITY with copies of all correspc,
including copies, of all reports between LESSEE and
government or agency regulating Hazardous Materia! ..
LESSEE's operations on or use of the Lease Site.
ARTICLE 22 - ESTOPPEL CERTIFICA'j
Either party shall at any time and from time to time upon n<
prior written request by the other party, execute, acknowledge, and '.
its designee, a statement in writing certifying that this Lease is una;
and effect (or, if there has been any amendment thereof, that the SOl
effect as amended and stating the amendment or amendments), that
existing (or, if there is any claimed default, stating the nature and e.
the dates to which the rent and other charges have been paid in ad,. .
ARTICLE 23 - CONDITIONS AND COVEI'.
All the provisions of this Lease shall be deemed as running .
construed to be "conditions" as well as "covenants," as though the \,
expressing or imparting covenants and conditions were used in each
ARTICLE 24 - NO WAIVER OF BREAC-,
No failure by either CITY or LESSEE to insist upon the strict
other of any term, covenant or condition of this Lease or to exercise a..
consequent upon a breach thereof, shall constitute a waiver of any suc\i
terms, covenants or conditions. No waiver of any breach shall affect"
each and every term, covenant and condition of this Lease shall contiI,'
effect with respect to any other then existing or subsequent breach.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
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ARTICLE 25 - TIME OF THE ESSENCE
Time is of the essence of this Lease and of each provision.
ARTICLE 26 - 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 27 - 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 28 - 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 29 - GOVERNING LAW
This Lease shall be governed by, construed and enforced in accordance with the laws
of the State of Alaska. The terms of this Lease are subject in all respects to the Charter and
Code of Ordinances of CITY in effect on the date of this Lease, including without limitation,
Chapter 7.05 of the Seward City Code.
ARTICLE 30 - 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 31- 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 CITY and LESSEE other than the
relationship of lessee and lessor.
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 27
ARTICLE 32 - 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 counsel in drafting and reviewing this Lease.
ARTICLE 33 - NUMBER 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 34 - MANDATORY AND PERMISSIVE
"Shall," "will" and "agrees" are mandatory; "may" is permissive.
ARTICLE 35 - CAPTIONS
Captions of the articles, paragraphs and subparagraphs 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 36 - AMENDMENT
This Lease is not subject to amendment except in writing executed by both parties
hereto.
ARTICLE 37 - NOTICES
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 stated in
this Article and .to such other persons and addresses as either party may designate. Notice by
mail shall be deemed to have been given at the time of mailing.
All notices, demands and requests from LESSEE to CITY shall be given to CITY at
the following address:
City Manager
CITY OF SEWARD
PO Box 167
Seward, Alaska 99664
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 28
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All notices, demands or requests from CITY to LESSEE shall be given to LESSEE at
the following address:
Thomas C. Tougas
ALASKA HERITAGE TOURS, INC.
PO Box 1889
Seward, Alaska 99664
Each party shall have the right, from time to time, to designate a different address by
notice given in conformity with this Article.
ARTICLE 38 - FIRE PROTECTION
LESSEE shall at its sole cost, risk and expense provide fire protection to its operations
on the Lease Site 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's 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.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the dates
herein set forth.
CITY:
LESSEE:
CITY OF SEWARD
ALASKA HERITAGE TOURS, INC.
if! Gi'il~M,",g~
Date: 3) 3 J 1 g
~c;/.
Thomas C. Tougas, President
Date:
ATTEST:
SUBMITTED BY:
/~~
Patrick Reilly\~~t! Ir#"
~~~ _I OF E~ '"
~ ~"' ........ ~A."
(City Sea>> c):....o~po~~..-:>'() <::.
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LEASE A;~J~1ESEAL j. 5
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February 26, 1998
Page 29
STATE OF ALASKA )
) SS.
THIRD JUDICIAL DISTRICT )
THIS IS TO CERTIFY that on this ~ day of ~1998, before me, the
undersigned, a Notary Public in and for the State of Alaska, personally appeared Rick L.
Gifford, known to me and to me known to be the acting. city manager for the City of Seward,
Alaska, and authorized to execute documents on its behalf, and is the individual named in and
who executed the foregoing document on behalf of the City of Seward for the uses and
purposes therein set forth.
WITNESS my hand and notarial seal the day and year first hereinabove written.
OFfiCIAL "',AI.
Statl! of Alaska
YVETTE G. WELSH
NOlAR'I' !'UBLI,:
X
ary Public in and for Alaska h J.
y Commission Expires: ~ 'Z-Z; if,:!'
STATE OF ALASKA )
) SS.
THIRD JUDICIAL DISTRICT )
tI. /7 '
THIS IS TO CERTIFY that on this .3 0 day o~ 1998, before me, the
undersigned, a Notary Public in and for the State of Alaska, personally appeared Thomas C.
Tougas, known to me and to me known to be the president of Alaska Heritage Tours, Inc.,
and authorized to execute documents on its behalf, and is the individual named in and who
executed the foregoing document on behalf of the corporation for the uses and purposes
therein set forth.
~ITNESS my hand and notarial seal the day and year first hereinabove written.
R~ ;;; [L
Notary Public in and for Alaska
My Commission Expires: ,/0 -oJ-or
LEASE AGREEMENT
City - Alaska Heritage Tours, Inc. (Floating Dock)
February 26, 1998
Page 30
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Exhibit A
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