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HomeMy WebLinkAboutRes1987-096• Sponsored by: Garzini CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING A LONG-TERM LEASE OF SMALL BOAT HARBOR BOARDWALK SITE NO. 8 TO KENAI FJORDS TOURS, INC. WHEREAS, the city has requested proposals for develop- ment of a ±5,000 square foot Small Boat Harbor Boardwalk site adjacent to F float ramp; and WHEREAS, the city has selected the proposal made by Kenai Fjords Tours, Inc., from among the three proposals submitted because of its potential investment, creation of jobs and utilization of the site; and WHEREAS, the proposed development meets the criteria set forth in the city's request for proposals and it is complimentary to the overall development of the Small Boat Harbor waterfront; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The appraisal rate of $0.40 per square foot per year, established for a similar, nearby site for the Coast Guard, reflects a fair market lease rate for the proposed lease; therefore, the public interest would not be served by expending funds for a new appraisal. Section 2. The city manager is authorized to execute a long-term lease agreement, attached and incorporated herein by reference, with Kenai Fjords Tours, Inc., for a ±5,000 square foot parcel lying within Block 6, Oceanview Subdivi- sion and Alaska Tideland Survey 174. Section 3. The request for proposal procedure followed in selecting the lessee meets the requirements of the city code regarding disposal of city property. Section 4. In accordance with Section 2-89 of the City Code, the Council finds that the public interest will be served by the negotiated disposition of the subject property as set forth in the attached lease document. • Section 5. This resolution shall take effect thirty (30) days following its adoption. -1- CITY OF SEWARD, ALASKA • RESOLUTION NO. 87-096 PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, this 12th day of October , 19 87 . THE CITY OF SEWARD, ALASKA HARRY E ESELER, MAYOR AYES: DUNHAM, GIESELER, HILTON, MEEHAN, NOLL, O'BRIEN & SIMUTIS NOES: NONE ABSENT: NONE ABSTAIN: NONE ATTEST: APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, POWELL & BRUNDIN, Attorneys • for the City of Seward, AK l Y Gam?� nda urphy, C Fred B. Arvidson ity Jerk City Attorney (City Seal) -2- RESOLUTION NO. 87-096 Attachment "A" • GROUND LEASE BETWEEN CITY OF SEMARD, ALASKA AND Ij KENAI FJORDS TOURS, INC. CONTRACT NO. RE-062 ARTICLE I. DEMISE (legal description) ARTICLE II. CITY'S WARRANTY OF QUIET ENJOYMENT ARTICLE III. LEASED LAND ACCEPTED "AS IS" ARTICLE IV. USE OF LEASED LAND 1. Use 2. Assignment/Sublease ARTICLE V. LEASE TERM 1. Commencement and Expiration 2. Options and Extensions 3. Holdover 4. Surrender of Possession ARTICLE VI. RENT 1. Due 2. Determination of Rental 3. Additional Rent and City's Right to Cure Lessee's Defaults 4. Late Payment Penalty ARTICLE VII. TAXES AND ASSESSMENTS 1. Lessee to Pay Taxes 2. Lessee to Pay Assessments 3. Pro -ration of Taxes and Assessments 4. Contest 5. Lessee to Pay Utility Charges ARTICLE VIII. CONSTRUCTION BY LESSEE 1. Lessee's Right to Build - General Conditions a. Cost of Construction b. Kept Free of Liens c. Contractor Bonding d. Construction Diligence and Continuity 2. Lessee's Ownership of Trade Fixtures, Machinery and Equipment 3. Lessee's Right to Remove Improvements and Ownership Thereon ii RESOLUTION NO. 87-096 Attachment "A" • • RTICLE IX. LIENS 1. Prohibition of Liens on Fee or Leasehold Interest. 2. Removal of Liens by Lessee 3. Notice of Non-responsiblity ARTICLE X. INDEMNITY ARTICLE XI. INSURANCE AND RESTORATION 1. Liability Insurance a. Limits b. Determination of Adequacy C. Cancellation Notice d. Waive Rights of Subrogation e. Forms f. Change of Minimum Requirements 2. Fire and Extended Coverage Insurance 3. Blanket Insurance 4. Additional Named Insured; Rights of Mortgagees (Lenders) 5. Restoration of Buildings and Improvements ARTICLE XII. CARE OF LEASED LAND, ACCESS OF THE CITY 1. Care of Leased Land 2. Other Access Rights of the City 3. Avoidance of Prescriptive Rights ARTICLE XIII. COMPLIANCE WITH LAWS 1. Compliance with Laws 2. Contest ARTICLE XIV. EMINENT DOMAIN 1. Interest of Parties in Condemnation 2. Partial Taking - Continuation of Lease ARTICLE XV. ARBITRATION ARTICLE XVI. DEFAULT AND REMEDIES 1. Default and Termination a. Rents b. Covenants c. Bankruptcy d. Creditor Assignment e. Insolvency f. Abandonment iii 40k 2. Reletting 3. Damages a. Equivalent Amount b. Net Proceeds 4. Accumulation of Remedies 5. Appointment of Receiver ARTICLE XVII. GENERAL PROVISIONS 1. Estoppel Certificates 2. Conditions and Covenants 3. No Waiver of Breach 4. Time of the Essence 5. Computation of Time 6. Successors in Interest 7. Entire Agreement 8. Governing Law 9. Partial Invalidity 10. Relationship of Parties 11. Interpretation a. Number and Gender b. Mandatory and Permissive c. Captions 12. Amendments 13. a. Delivery of Notices and Rent Method and Time b. Payment of Rent Address c. Notice to the City Address d. Notices to Lessee e. Change of Address 14. Broker's Commission 15. Attorneys' Fees 16. Records 17. Minerals 18. Good Faith 19. Election to Terminate by City 20. Election to Terminate by Lessee a. Notice b. Payments c. Releasing City's Fee from Encumbrances ARTICLE XVIII. RECORDING, EXECUTION, COUNTERPARTS 1. Recording 2. Counterparts 3. Execution is iv RESOLUTION NO. 87-096 Attachment • LEASE AGREEMENT This Lease Agreement made and entered into this day of , 19 .._......, between the CITY OF SEWARD, a home rule municipal corporation located in the Kenai Peninsula Borough, State of Alaska, LESSOR, hereinafter referred to as "City", and KENAI FJORDS TOURS, INC., hereinafter referred to as "Lessee." W I T N E S S E T H: WHEREAS, THE City and Lessee are mutually interested in the devel- opment of the Small Boat Harbor waterfront within the city of Seward, Alaska; and WHEREAS, Lessee has demonstrated to City an intention to develop a waterfront charter service/shopping complex to serve the people of Seward; and WHEREAS, City has determined that Lessee's intentions and general is development plans coincide with the public interest of the city and will provide increased tax revenues and rental income to City; NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE RENTS, COVENANTS, AND CONDITIONS HEREIN CONTAINED, CITY AND LESSEE AGREE AS FOLLOWS: ARTICLE I, DEMISE. City leases to Lessee, and Lessee leases from City that certain real property herein called "Leased Land," situated in Seward, Alaska, consisting of approximately 5,000 square feet, as shown on Exhibit "At' attached hereto and as more particularly described as follows: A +5000-foot unsurveyed parcel covering a portion of Block 6, Oceanview Subdivision and Alaska Tidelands Survey 174, within protracted Section 3, Township 1, South, Range 1 West, S.M., both recorded in Seward Recording District, Third Judicial District, State of Alaska, and more pre- cisely shown on Exhibit "A" attached hereto. gRTICL,E,II.....CITYtS.WARRANTY. OF QUIET ENJOYMENT. Lessee, upon paying the rent and other charges herein provided for and observing and keeping the covenants, conditions and terms of this Lease on Lessee's part • to be kept or performed, shall peacefully and quietly enjoy possession of the Leased Land during the term of this Lease without hindrance by, from or through City, subject, however, to any encumbrances created or caused by Lessee. CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. &RTICLE,.III.,,,LEASED .LANQ.ACCEPTED ."AS IS". Lessee acknowledges that he has inspected the Leased Land and accepts the same "as is" and without reliance on any representations or warranties of City, or agents of i City, as to the physical condition thereof, except as expressly herein ?�i provided. Lessee, at his sole cost and expense, shall have the right to i raze, tear down or remove any buildings, structures or improvements ', presently situated on the Leased Land. All funds and proceeds, if any, 11 obtained by Lessee from the disposition of such buildings, structures or Improvements* may be retained by Lessee. Lessee is aware of the easements �! as shown on the attached Exhibit "A" and agrees to lease the property subject thereto. ART,IQLE It, U,SE _ QF . ,4EASED. LANA . 1. Lessee may use the Leased Land for the construction and operation of a charter service/retail complex. Lessee understands that construction and operation of such a facility is a major consideration for City's agree- ment to lease the Leased Land. Lessee agrees that he will not operate any other business on the Leased Land without the consent of City, and City may withhold its consent if Lessee has not constructed and commenced operation of a charter service/retail complex by September 1, 1988. Moreover, City may withhold its consent as to any proposed busines— or activity which, in City's sole discretion, is not desirable or compatibl with the city's Small Boat Harbor. 2. No assignment or sublease shall be permitted, unless approved in writing by the City. Any sublease shall be expressly subject and subordinate to this lease and the rights of the City hereunder. The City may elect to disapprove any proposed assignment or sublease which may result in a business or activity which, in the City's sole discretion, is undesirable and/or incompatible with the City's Small Boat Harbor area. ARTICLE Y,. LEASE .TERM. 1. Cpmmencement anO.ExpIration. The term of this Lease shall be thirty (30) years, commencing the day of ._ , 1987, and ending the day of ...... ....... , 2017, provided construc- tion of plans, approved by City, has commenced prior to June 1, 1988. 2. Qptigns.. and Extensions. There are no renewal options extending to Lessee under this Lease, but by inaction of the parties, the Lease shall be deemed to continue from month to month. This Lease will not terminate until notice in writing is given by either party to the other, not later than six (6) months prior to the expiration of the Lease Term. -2- CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJORDS TOURS, INC. Attachment "A" • 3. $4rrep4er.of_Possession. (a) Subject to the provisions of Article XI below with respect to restoration of buildings and improvements, upon expiration of the Lease Term, whether by lapse of time or otherwise, Lessee shall promptly and peacefully surrender the Leased Land. (b) Upon the expiration of the Lease term or any sooner termination of this Lease, Lessee agrees to execute, acknowledge and deliver to City a proper instrument in writing, releasing and quit -claiming to City all right, title and interest of Lessee in and to the Leased Land and all improvements thereto not removed by Lessee as provided herein. T1CL,E, Al,..•. RENT. The rental for the Leased Land shall be determined and paid as follows: 1. Any and all rental due under this Lease shall be paid in advance upon commencement of this Lease in quarterly installments on or before commencement of this Lease and on or before January 1, April 1, July 1 and October 1 of each succeeding year. 2. The rental shall be determined as follows: • Beginning the y. day of , 19,. ., and for the be FORTY ($.40) CENTS succeeding five (5) years, the rental rate will per square foot per year. Not less than ninety (90) days prior to the expiration of every fifth lease year City, at its own expense, shall employ an independent MAI certified appraiser to determine the fair market rental value of the Leased Land, exclusive of Lessee's improvements, at the highest and best use of the Leased Land and without consideration of Lessee's intended use of the land, unless that use is coincidentally the highest and best use of the Land. Within forty-five (45) days after receipt of any such appraisal, City shall provide Lessee a copy of the appraiser's written appraisal report. If Lessee does not object in writing to that appraisal within ten (10) days, the stated rental rate determined by such appraisal shall apply for the next succeeding five lease years. The rental rate shall thus be adjusted every five lease years. If Lessee gives City written notice of objection to the appraised rental rate within ten (10) days of receipt of the appraisal conclusion, Lessee shall then engage a second independent MAI certified appraiser, at his sole expense, to make an appraisal of the fair market rental value of the Leased Land at its highest and best use, exclusive of Lessee's improvements. Lessee shall furnish City a copy of the second appraisal report within ten (10) days of its receipt by Lessee. -3- CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. If the second appraisal reflects a fair market rental value which varies from the first appraisal by no more than twenty (20%) percent, then the new rental rate shall be the average of the first and second appraisal conclusions. If the second appraisal reflects a fair market value which varies from the first appraisal by more than twenty (20%) percent, then, unless City and Lessee agree on a rate among themselves, the new rental rate shall be determined in accordance with the arbitration provisions contained in Article XV. Lessee's objection to the rental rate and engagement of a second appraiser shall not postpone Lessee's obligation to pay the annual rental as described in City's notice of rental rate based on the first appraisal. Lessee shall pay City the amount of rental rate as fixed by the first appraisal until the question of rental adjustment is finally resolved, at which time an appropriate adjustment will be made, if needed. 3. A00t,ional. Rent _and-CItyls Right to .Cure ,Lessee!s_Dgfaults. All costs and expenses which Lessee assumes or agrees to pay pursuant to this Lease or to any mortgage or other encumbrance upon the Leased Land or Lessee's leasehold interest shall, at City's election, be treated as additional rent and, in the event of non-payment.. City shall have all rights and remedies herein provided for in the case of non-payment of rent or of a breach of condition. If Lessee shall default in making any payment required to be made by Lessee, or shall default in performing any term, covenant c condition of this Lease or of any such mortgage or other encumbrance on the, part of Lessee to be performed which shall involve the expenditure of money by Lessee, City, at City's option, may, but shall not be obligated to, make such payment or, on behalf of Lessee, expend such sum as may be necessary to perform and fulfill such term, covenant or condition, and any and all sums so expended by City with interest thereon at the maximum rate under the laws of the State of Alaska from the date of such expenditure until repaid, shall be (and shall be deemed to be) additional rent and shall be repaid by Lessee to City, on demand, but no such payment or expenditure by City shall be deemed a waiver of Lessee's default, nor shall it affect any other remedy of City by reason of such default. 4. Lai;@..P_ayment Penalty,. Rental payment due, but not received, by the due date shall accrue interest at the rate of twelve (12%) percent per annum until paid or the maximum permitted rate under Alaska law, whichever is higher. ARTICLE VII._, TAXES.AND.ASSFSSMENTS. 1. L,e.SSee_ to ,PAY ..TaxQs,. Lessee agrees to pay prior to delinquency and directly to the taxing authorities in which the Leased Land is located all real property taxes (plus all personal property taxes on personal property situate on the Leased Land and placed thereon by Lessee or under Lessee's authority), sales taxes, or other business or use taxes . levied or assessed upon or against the Leased Land or any improvements -4- CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJOFDS TOURS, INC. Attachment "A" • i thereon or Lessee's business during the Lease Term. Lessee agrees to indemnify and hold City harmless from liability for any other tax, charge, or assessment of any kind or nature. Lessee shall, within sixty (60) days after any such tax assessment or other charge constituting a lien on the Leased Land becomes due and payable, produce and exhibit to City satisfac- tory evidence of payment. 2. hessee,..tp,pay..Asses$ments. Lessee, during the Lease Term, agrees to pay directly to the public authorities charged with collection thereof any and all assessments levied on the Leased Land for a part of or all of the cost of any public work or improvement assessed according to benefit found by the levying authority to accrue therefrom to the Leased I' Land, including any charges for anti -pollution, environmental, ecological or any other public purposes. If an option is given to pay such assessment(s) in installments, Lessee may elect to pay the same in installments, and in such case Lessee shall be liable only for such installments as shall accrue li during the Lease Term. 3. Pro-ration.Qf.Taxes,and.Assessments. If Lessee's obligation to pay taxes or assessments commences or ends during a tax year, such obligation shall be appropriately pro -rated, with City bearing the remaining cost (or its pro-rata share) thereof. 4. Qont s . Lessee shall have the right to contest or review any tax, assessment, levy, fee, water or sewer charges or rents, or any other governmental charges which Lessee is obligated to pay. Such proceedings shall, if instituted, be conducted promptly at Lessee's own expense and free from all expense to City. Before instituting any such proceedings, Lessee shall pay under protest such tax, assessment, levy, fee, water or sewer rents or charges or any other governmental charges, or shall furnish to City a surety company bond in a company acceptable to City, or other security reasonably satisfactory to City, sufficient to cover the amount of the contested item or items, with interest for the period which such proceedings may be reasonably expected to take, and costs securing the payment of such contested item or items and all interest and costs in connection therewith when finally determined. Notwithstanding the furnishing of any such bond or security, Lessee shall pay all such items at least twenty (20) days before the time when the Leased Land or any part thereof might be forfeited. The legal proceedings herein referred to shall include appropriate certiorari proceedings and appeals from any orders and judgements therein, but all such proceedings shall be begun as soon as reasonably possible after the imposition or assessment of any contested items and shall be prosecuted to final adjudication with reasonable dispatch. In the event of any reduction, cancellation or discharge, Lessee shall pay the amount that shall be finally levied or assessed against the Leased Land or adjudicated to be due and payable and, if there shall be any refund payable by the governmental authority with respect thereto, Lessee shall be entitled to receive and retain the same, subject, however, to apportionment as provided in Paragraph • 3 above during the first and last years of the Lease Term. City, at City's option, may, but shall not be obligated to, contest or review by legal I -5- CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. proceedings, or in such other manner as may be legal, and at City's own expense any tax, assessment, levy, fee, water or sewer rents or charges, or any other governmental charge aforementioned, which shall not be contested or reviewed as aforesaid, and, unless Lessee shall promptly join in such contest or review and pay all costs therein, City shall be entitled to ii receive and retain any refund payable by the governmental authority with respect thereof. j 5. LeSSQR to , PAy,,.Util JtY Charges. Lessee shall pay or cause to I be paid all charges for water, heat, gas, electricity, sewers, and any and ;i all other utilities used upon the Leased Land throughout the Lease Term, !i including any connection fees. i I. LQssee1s..Ri9ht,..to,_50.ld-7Generoj, Conditions. Lessee shall have the right at any time and from time to time during the Lease Term to erect, maintain, alter, remodel, reconstruct, rebuild and replace j; building(s) and other improvement(s) on the Leased Land, subject to the ji following conditions: �! (a) The cost of any construction, reconstruction, demolition, or of any change, alteration or improvements, shall be borne an I paid for by Lessee. (b) The Leased Land shall, at all times, be kept free of mechanic's, materialmen's and any other liens, as hereinafter more specifically provided. (c) Any building contractors employed by Lessee or its sub -lessees shall be appropriately bonded for one hundred (100%) percent of the contract amount(s) by use of performance and labor and material payment bonds in the customary form when cost of the work is over $10,000.00. Copies of all such bonds shall be furnished to City prior to commencement of construction. (d) Lessee, upon commencement of permissible building or construction activities on the Leased Land, shall continue such activities through to completion with diligence and continuity. 2. Les$Q_ s Ownership of Trade Fixtures, Machinery and-E4u.ipment. It is expressly understood and agreed that any and all trade fixtures, machinery and equipment of whatsoever nature at any time constructed, placed or maintained upon any part of the Leased Land by Lessee shall be and remain the property of Lessee or its tenants as their interests may appear and may be removed or replaced at any time during the lease term, provided Lessee or its tenants repair any and all damage to the Leased Land resulting from such -- removal or replacement. -6- • • CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. RESOLUTION NO. 87-096 Attachment "A" 3. LnS1!A_Rig,ht .to Remoye .Improvements.. and. -Ownership Thereof. Lessee shall have the right to remove any buildings or improvements constructed or placed upon the Leased Land by Lessee, prior to the expiration of the Lease. Any buildings or improvements not removed prior to expiration of the Lease shall become the property of City without the payment of any compensation to Lessee. ARTICLE. zN,.....LI.E.NS. I. PrOibiti.9n. 4f,,,0eps ,on Fee,,or Leasehold Interest. Lessee shall not suffer or permit any liens to be filed against the fee of the Leased Land, nor against Lessee's leasehold interest in the Leased Land, nor against any buildings or improvements on the Leased Land by reason of any work, labor, services or materials supplied or claimed to have been supplied to Lessee or anyone holding the Leased Land or any part thereof through or under Lessee. 2. Rem4v.al„ of. Liens, by, Lessee. If any lien shall be recorded against the Leased Land, or any improvements thereof, Lessee shall cause the same to be removed, or, in the alternative, if Lessee in good faith desires to contest the same, Lessee shall be privileged to do so, but in such case Lessee hereby agrees to provide a surety bond, from a surety licensed to do business in Alaska, in a penal sum equal to one and one-half times the amount of the claim of lien, which bond shall guarantee the payment of the sum which the lien claimant has claimed, together with the lien claimant's reasonable cost of suit in the action. Lessee further agrees to indemnify, defend, and save City harmless from all liability for damages occasioned thereby and shall, in the event of a judgement of foreclosure upon said lien, cause the same to be discharged and removed prior to the execution of such judgement. 3. Rptipe..pf... lyon-responsibility. City may, as contemplated by Alaska Statutes 34.35.065 (as now enacted or hereinafter amended) give notice of non -responsibility for any improvements constructed or made by Lessee on the Leased Land. ARTICLE,,Zi., ...,INDEMNITY. Except for claims arising out of acts caused by the negligence of City or its representatives, Lessee agrees to protect, indemnify, defend and save harmless City from and against any and all liability arising from acts or omissions of any nature whatsoever of Lessee's officers, servants, employees, contractors, tenants, agents or invitees causing injury to or death of persons, or loss of or damage to property during the Lease Term, and from any expense incident to defense of and by City therefrom. If any action or proceeding is brought against City by reason of any such occurrences, City shall notify Lessee in writing of such action or proceeding, whereupon Lessee, at Lessee's expense, may elect to resist or defend such action or proceeding by counsel approved in writing by City, such approval not to be withheld unreasonably. -7- CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. ARTIQ�E, XI,. INSURANCE_ AND REMRATION. 1. Liability .I1neurapFe. This Lease will not become effective until such time as the City of Seward has received the following: A. A policy or policies of insurance with the following coverage limits: 1) General Liability (Environment Impairment Liability) ................. $ 300P000 2) Workmen's Compensation ................ STATUTORY B. A determination by the City of Seward's Insurance Broker that the insurance offered by the Lessee is of such type and has such provisions as will permit it to serve as the underlying coverage for any City Excess Policy and an acknowledgement from that Broker that the City Excess Policy or policies will be in effect during the term of the Lease. NOTE TO LESSEE: This means that a Binder for insurance is NOT sufficient to obtain this permit. You wil need to coordinate your insurance coverages with the City's broker. C. All insurance policies shall provide for thirty (30 days' notice of cancellation and/or material change to be sent to the City. All insurance policies shall contain the following or equivalent clauses: 1) The City, its officers, employees and agents are added as additional insureds as respects operations of the named insured performed under the terms of this Lease with the City. 2) It is agreed that any insurance maintained by the City shall apply in excess of, and not contribute to, insurance provided by this policy. D. All of the required insurance policies shall provide that the insurers waive their rights to subrogation against the City and the Lessee and their respective officers, servants, agents or employees. Lessee further agrees to waive, and agrees to have its insurers waive, any rights of subrogation with respect to deductibles under such policies and with respect to damage to equipment, including the loss of use thereof, whether i insured or not. E. The general liability endorsement, and Workers Compensation/Employer's Liability Endorsement shall be in substantially the form available from the City. CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJORDS TOURS, INC. Attachment "A" • E. The minimum requirements in this section may be q Y increased from time to time by City in accordance with customs and usage for comparable property in the Seward metropolitan area. 2. F1re,an4Extended Cgx6raQq.jp pyrance. Lessee, during the Lease Term, shall keep all buildings and improvements insured, at his expense, against loss or damage by fire and such other risks as may be included in the customary form of broad form extended coverage (which may exclude earthquakes), in an amount, over and above any deductibles in the governing policies, of not less than the unpaid balance(s) due under any existing I' deed(s) of trust or mortgage(s) encumbering the buildings or improvements or City's fees. 3. Elanket Insurance. Lessee may provide any insurance required by this Lease in the form of a blanket policy, provided Lessee furnishes evidence satisfactory to City, indicating the coverage thereunder is at least equal to the coverage obtainable under a separate policy covering the Leased Land only. 4. Additional .Named, .Insured; Rights of Aortquees_ (Lenders); Waiver_ gf,Sub,rggation. All insurance policies required to be maintained by Lessee shall name Lessee and City as the insureds, as their respective • interests may appear. All policies shall contain an agreement by the insurers that such policies shall not be cancelled without at least thirty days' prior written notice to City, and certificates or copies of all such insurance policies shall be furnished to City promptly after the issuance thereof. 5. Restoration .of _Euildings .and Improvements. In the event of damage to or destruction of any of the buildings or improvements situated on the Leased Land, then from the insurance proceeds payable to Lessee, Lessee shall, within ninety (90) days after payment of the insurance proceeds, commence restoration of the buildings and improvements to their condition prior to such damage, provided, however, Lessee's obligation to restore will be limited to the insurance proceeds available to Lessee. All such insurance proceeds shall be deposited and held in trust with such bank having offices in Seward and/or Anchorage, Alaska, as Lessee may designate, or with Lessee's mortgagee of the damaged property, and shall be made available to Lessee for its use in restoration or repair, as the case may be, of any damage or destruction to the buildings and improvements on the Leased Land. The proceeds of insurance shall be paid out by such trustee or mortgagee from time to time on certification, by the person having supervision of the work, that the amount certified is being applied to the payment of the reasonable cost of such work, CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. LAND, ACCESS. OF CITY. 1. Cdre,of,Leas�d,.Lap�. Lessee, at his own cost and expense, shall keep the entire Leased Land and all buildings and improvements which at any time may be situated thereon in good, clean and tidy condition and repair during the Lease Term. 2. Qthe_r,.1c0eSs.Ri,ghls,of.Gi.ty. City and its agents or represen- tatives shall have the right to enter into and upon the Leased Land during reasonable hours for the purpose of inspecting the Leased Land and all buildings and improvements thereon. 3. Ay.0-0 ce..gf,.Prescriptive Rights. Lessee shall take such action as may be necessary to preserve City's title and ownership of the Leased Land free and clear of any public or private rights -of -way, easements or other interests acquired by prescriptive use or otherwise than as permitted under this Lease, including, but not limited to, the posting of thoroughfares, walkways and parking areas so as to preserve the right of private ownership therein and prevent any adverse rights thereto accruing through prescriptive use or otherwise than as permitted hereunder. ARTIC� COMPt,IANCE WITH _LAWS. 1. GOmAli.an0e,wjth,L4ws. Lessee shall comply with all applicablc, laws, ordinances and regulations of duly constituted public authorities now or hereafter in any manner affecting the Leased Land or any buidings, structures or improvements situated thereon, whether or not any such laws, ordinances or regulations which may be hereafter enacted involve a change of policy on the part of the governmental body enacting the same. Lessee further agrees it will not permit any unlawful occupation, business or trade to be conducted on said premises or any use to be made thereof contrary to any law, ordinance or regulation as aforesaid with respect thereto. 2. Contest. Lessee may, by appropriate proceedings conducted at Lessee's own expense, contest in good faith the validity or enforcement of any law, ordinance or regulation, provided Lessee diligently pursues such contest to a final determination by a court, department or governmental authority or body having jurisdiction thereof; provided that, if City may become liable in any manner for damages, penalties, fines or costs by reason of Lessee's failure to comply with any such law, ordinance or regulation during Lessee's contest thereof, then, as a condition precedent to the commencement and continuation of such proceedings, Lessee shall furnish City such bond with corporate surety as City shall reasonably request to save harmless and indemnify City against liability for any such damages, !' penalties, fines or costs. At the option of City, it may, at its expense, contest the validity or enforcement of any such law, ordinance or regulation. i� -10- • E CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. ARTICLE XIV.. EMINENT.DQMAIN. RESOLUTION NO. 87-096 Attachment "A" 1. Znterest,of.Parti,es,.in Condemnation. In the event the Leased Land or any part thereof shall be taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, or shall be transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, the interests of City and Lessee in the award of consideration for such transfer and the effect of the taking or transfer upon this Lease shall be as provided by law. In the event the extent of the taking makes impracticable the continued operation of the charter service/retail complex, upon written notification by Lessee, this Lease and all of the right, title and interest thereunder of Lessee shall cease on the date title to such Land so taken or transferred vests in the condemning authority. 2. P.dCti.al.. Taking- GQntin,uatioR, of,..l.ease. In the event the taking or transfer of a part of the Leased Land leaves the remainder of the Leased Land in such location and in such form, shape or size, or so accessible as to be effectively and practicably usable in the opinion of the Lessee and City for the purpose of operation thereon of Lessee's business, this Lease shall terminate and end as to the portion of the Leased Land so taken or transferred as of the date title to such portion vests in the condemning authority and the condemning authority enters into possession, but shall continue in full force and effect as to the portion of the Leased Land not so taken or transferred. ARTICLE Xy. . _ARBITRATI.QN. Any controversy or claim arising out of or relating to this Lease, or the breach thereof, shall be settled by arbitration in accordance with the Uniform Arbitration Act of Alaska, and Judgement upon the award may be entered in any court having jurisdiction thereof. Any arbitration proceedings hereunder shall be held before a panel of three arbitrators in the City of Seward, Alaska, or with the consent of both parties in Anchorage, Alaska. ARTICLE Xvi.._ DEFAQLT AND REMEDIES. 1. Default, and.Termination. (a) If the rent or any other charge shall be in arrears for a period of thirty (30) days; or (b) If Lessee fails to take reasonable steps to keep and perform any of the covenants or conditions of this Lease within thirty (30) days after written notice of default; or (c) If Lessee files a voluntary petition in bankruptcy, or for reorganization under the bankruptcy laws, or is adjudged a bankrupt by a court of competent jurisdiction; or i -11- CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. (d) If Lessee makes an assignment for the benefit of its creditors; or (e) If a receiver is appointed by a court of competent jurisdiction for Lessee's business and it be established in the receivership proceedings that Lessee is insolvent; or (f) If the leasehold interest hereunder is abandoned by Lessee, then City may, at City's option, at once, without further notice to Lessee or any other person, terminate this Lease. Upon termination of this Lease as aforesaid, or at the expiration of this Lease and upon the termina- tion of said Lease by its terms, Lessee shall at once surrender possession of the Leased Land to City and remove all Lessee's effects therefrom, and may remove all Lessee's buildings and other improvements, and Lessee shall have no further rights hereunder or with respect to the Leased Land. If such possession be not immediatley surrendered.. City may forthwith enter into and upon and repossess the Leased Land and expel Lessee, or those claiming under Lessee, without being deemed guilty in any manner of trespass and without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenant, and in such event Lessee expressly waives the service of notice of any intention so to terminate this Lease or to retake the Leased Land and waives service of any demand for payment of rent, or for possession, and for any and every other notice or demand prescribed by any law, and hereby waives any claim for damages b_ reason of such repossession. 2. Rel,etting. At any time, or from time to time, after any such expiration or termination, City may relet the Leased Land, or any part thereof, and any unleased buildings and improvements, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the term of this Lease) and on such conditions (which may include concessions or free rents) as City may, in its discretion, determine and may collect and receive the rents therefor. City shall in no way be responsible or liable for any failure to relet the Leased Land, or any part thereof, or for any failure to collect any rent due upon any such reletting. 3. Damaaos. No such expiration or termination of this Lease shall relieve Lessee of his liability and obligations under this Lease, and such liability and obligations shall survive any such expiration or termination. In the event of any expiration or termination, whether or not the Leased Land, or any part thereof, shall have been relet, Lessee shall pay to City the net rent and all other charges required to be paid by Lessee up to the time of such expiration or termination of this Lease, and thereafter Lessee, until the end of what would have been the term of this Lease in the absence of such expiration or termination, shall be liable to City for, and shall pay to City, as and for liquidated and agreed curreent damages for Lessee's default, -12- CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJORDS TOURS, INC. Attachment "A" • (a) the equivalent of the amount of the rent and charges which would be payable under this Lease by Lessee if this Lease were still in effect, less (b) the net proceeds received by City from leasing or reletting the Leased Land and improvements thereon after deducting all of City's expenses in connection with such leasing and reletting, including, without limitation, all repossession costs, brokerage commissions, legal expenses, reasonable attorney fees, alteration costs, and expenses of preparation for such reletting. Lessee shall pay such current damages (herein called "deficiency") to City monthly, and City shall be entitled to recover from Lessee each monthly deficiency as the same shall arise. At any time after any such expiration or termination, whether or not City shall have collected any monthly deficiencies as aforesaid, City shall be entitled to recover from Lessee, and Lessee shall pay to City, on demand, as and for liquidated and agreed final damages for Lessee's default, an amount equal to the difference between all rent reserved hereunder for the unexpired portion of the Lease Term and the then -fair -and -reasonable net rental value to City of the Leased Land for the same period. In the computation of such damages, the difference between an installment of rent becoming due hereunder after the • date of termination and the fair and reasonable rental value to City of the Leased Land for the period for which such installment was payable shall be discounted to the date of termination at the rate of six (6%) percent per annum. If the Leased Land, or any part thereof, be leased or relet by City for the unexpired portion of the Lease Term, or any part thereof, before presentation of proof of such liquidated damages to any court, commission or tribunal, the amount of rent reserved upon such leasing or reletting shall be prima facie evidence of the fair and reasonable rental value for the part or the whole of the premises so leased or relet during the term of the leasing or reletting. Nothing herein contained shall limit or prejudice the right of City to prove and obtain as liquidated damages by reason of such termination an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which such damages are to be proved, whether or not such amount be greater, equal to, or less than the amount of the difference referred to above. 4. /{cumulation. ,of Remedies. 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 any one or more of the rights or 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 hereafter existing at law or in equity or by statute • or otherwise. -13- CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. is 5. Appointment of Receiver. Upon the commencement of any suit or action by City against Lessee, pursuant to any remedy available to City upon Lessee's default hereunder, or at any time hereafter and during the pendency iof such suit or action, any court of competent jurisdiction, upon the li application of City, may at once and without notice to Lessee, its successors or assigns, or any person or persons, or tenant or tenants, or mortageee or i person claiming any security interest through Lessee, appoint a receiver to collect the rents and profits arising out of the Leased Land, the buildings and improvements thereon and the subleases pertaining thereto and apply such rents and profits to the payment and satisfaction of Lessee's obligations !� under this Lease, including, without limitation, the payment of the rent due City hereunder, first deducting all proper charges and expenses attending I� the execution of such trusts, and to have any balance remaining held by such receiver for disposition in accordance with any judgement or decree entered therein, or as may be from time to time directed by said court. ARTIC(.E.A II.. GENERAL. PRQVI.$IQNS. 1. Fsto,ppol..Certificates. Either party shall, at any time and from time to time, upon not less than thirty (30) days' prior written request by the other party, execute, acknowledge, and deliver to such party, or to its designee, a statement in writing certifying that this Lease i- unamended and in full force and effect (or, if there has been any amendmer thereof, that the same is in full force and effect as amended and stating the amendment or amendments), that there are no defaults existing (or, if there is any claimed default, stating the nature and extent thereof), and stating the dates to which the rent and other charges have been paid in advance. It is expressly understood and agreed that any such statement delivered pursuant to this section may be relied upon by any prospective assigneee or tenant of the Leasehold Estate, or estates, or Lessee or any prospective purchaser of the estate of City, or any lender or prospective assigneee of any lender on the security of the Leased Land or the fee estate, or any part thereof, and any third person. 2. Qonditipns. and Covenants. All the provisions of this Lease shall be deemed as running with the Land, and shall be construed to be "conditions" as well as "covenants," as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. 3. No Waiyer,.pf.Breach. No failure by either City or Lessee to insist upon the strict performance by the other of any covenant, agreement, term or condition of this Lease or to exercise any right or remedy conse- quent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, term or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition, agreement and term of this Lease shall continue in full force and effec with respect to any other then -existing or subsequent breach. -14- I; CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJOP& TOURS, INC. Attachment "A" • 4. P.me.of,EsseRcq. Time is of the essence of this Lease and of each provision. 5. Qomputat.jon ..of. -Time. The time in which any act provided by this Lease is to be done is 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. The term "holiday" shall mean all holidays as defined by the statutes of Alaska. 5. �wgcessors In, Interest. Each and all of the covenants, conditions and restrictions in this Lease shall inure to the benefit of, and shall be binding upon, the successors in interest of City and the authorized assignees, transferees, tenants, licensees and other successors - in -interest of Lessee. 7. E.ntire.Ag.repment. 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, or to any employee, officer, or agent of any party, which is not contained in this Lease shall be binding or valid. 8• GoXerning..L,4w. This Lease shall be governed by, construed and • enforced in accordance with the laws of the State of Alaska. 9. Partial Ipvalidity. If any term, covenant, condition or 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. 10. Pel,ationshi,p_ 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 relation- ship between City and Lessee, other than the relationship of lessor and lessee. 11. I_nU rpretation. The language in all parts of this Lease shall In all cases be simply construed according to its fair meaning, and not strictly for or against City or Lessee. Unless otherwise provided in this Lease, or unless the context otherwise requires, the following rules of construction shall apply to this Lease: (a) 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. -15- j CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. f �I (b) MAn.04Q.ry..,,dnA.Permi!5s1YQ. "Shall," "will" and "agrees" i are mandatory; "may" is permissive. (c) C.dPt.iPAS. Captions of the Articles, Sections and subsections of this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Lease. i 12. d ent. This Lease is not subject to amendment, except in writing executed by all parties hereto. 13(a). Relivery.,.af..Notices...And., Rent --Method ..and., Time. 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 Section, and shall be deemed to have been given at jthe time of delivery or making. j (b). Payrment., o.f,.:Rent. All rents and other sums payable by Lessee to City shall be by check, payable to City, delivered in person or mailed to City at the following address: CITY CLERK CITY OF SEWARD P. 0. Box 167 Seward, AK 99664 and shall be deemed to have been paid when received at such address. (c). NQtices,_tQ City. All notices, demands and requests from Lessee to City shall be given to City at: CITY CLERK CITY OF SEWARD P. 0. Box 167 Seward, AK 99664 and to such other persons at such additional addresses as City may specify, but not exceeding four in the aggregate. (d). Noticm,to. L.eSsee. All notices, demands or requests from City to Lessee shall be given to Lessee at: KENAI FJORDS TOURS, INC. P. 0. Box 1889 Seward, AK 99664 CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJORDS TOURS, INC. Attachment "A" • (a) the equivalent of the amount of the rent and charges which would be payable under this Lease by Lessee if this Lease were still in effect, less (b) the net proceeds received by City from leasing or reletting the Leased Land and improvements thereon after deducting all of City's expenses in connection with such leasing and reletting, including, without limitation, all repossession costs, brokerage commissions, legal expenses, reasonable attorney fees, alteration costs, and expenses of preparation for such reletting. Lessee shall pay such current damages (herein called "deficiency") to City monthly, and City shall be entitled to recover from Lessee each monthly deficiency as the same shall arise. At any time after any such expiration or termination, whether or not City shall have collected any monthly deficiencies as aforesaid, City shall be entitled to recover from Lessee, and Lessee shall pay to City, on demand, as and for liquidated and agreed final damages for Lessee's default, an amount equal to the difference between all rent reserved hereunder for the unexpired portion of the Lease Term and the then -fair -and -reasonable net rental value to City of the Leased Land for the same period. In the computation of such damages, the difference between an installment of rent becoming due hereunder after the • date of termination and the fair and reasonable rental value to City of the Leased Land for the period for which such installment was payable shall be discounted to the date of termination at the rate of six (6%) percent per annum. If the Leased Land, or any part thereof, be leased or relet by City for the unexpired portion of the Lease Term, or any part thereof, before presentation of proof of such liquidated damages to any court, commission or tribunal, the amount of rent reserved upon such leasing or reletting shall be prima facie evidence of the fair and reasonable rental value for the part or the whole of the premises so leased or relet during the term of the leasing or reletting. Nothing herein contained shall limit or prejudice the right of City to prove and obtain as liquidated damages by reason of such termination an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which such damages are to be proved, whether or not such amount be greater, equal to, or less than the amount of the difference referred to above. 4. Accurnulation..,of Remedies. 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 any one or more of the rights or 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 hereafter existing at law or in equity or by statute • or otherwise. -11L CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. 5. I{ppgintment.of RQG-eiyer. Upon the commencement of any suit or action by City against Lessee, pursuant to any remedy available to City upon Lessee's default hereunder, or at any time hereafter and during the pendency of such suit or action, any court of competent jurisdiction, upon the application of City, may at once and without notice to Lessee, its successors or assigns, or any person or persons, or tenant or tenants, or mortageee or person claiming any security interest through Lessee, appoint a receiver to collect the rents and profits arising out of the Leased Land, the buildings and improvements thereon and the subleases pertaining thereto and apply such rents and profits to the payment and satisfaction of Lessee's obligations under this Lease, including, without limitation, the payment of the rent due City hereunder, first deducting all proper charges and expenses attending the execution of such trusts, and to have any balance remaining held by such receiver for disposition in accordance with any judgement or decree entered therein, or as may be from time to time directed by said court. ARTIC4E.X.VII., GENERAL,PROVISIONS. 1. Estoppal..CQ.rt.ifiCdieS. Either party shall, at any time and from time to time, upon not less than thirty (30) days' prior written request by the other party, execute, acknowledge, and deliver to such party, or to its designee, a statement in writing certifying that this Lease IF' unamended and in full force and effect (or, if there has been any amendmen thereof, that the same is in full force and effect as amended and stating the amendment or amendments), that there are no defaults existing (or, if there is any claimed default, stating the nature and extent thereof), and stating the dates to which the rent and other charges have been paid in advance. It is expressly understood and agreed that any such statement delivered pursuant to this section may be relied upon by any prospective assigneee or tenant of the Leasehold Estate, or estates, or Lessee or any prospective purchaser of the estate of City, or any lender or prospective assigneee of any lender on the security of the Leased Land or the fee estate, or any part thereof, and any third person. 2. Conditions and._Cov_enants. All the provisions of this Lease shall be deemed as running with the Land, and shall be construed to be "conditions" as well as "covenants," as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. 3. No Waiver of Breach. No failure by either City or Lessee to insist upon the strict performance by the other of any covenant, agreement, term or condition of this Lease or to exercise any right or remedy conse- quent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, term or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition, agreement and term of this Lease shall continue in full force and effec+ with respect to any other then -existing or subsequent breach. -18- CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJORDS TOURS, INC. Attachment "A" • 4.T,me of Essence. Time is of the essence of this Lease and of each provision. 5. Gomputation..Qf ,Time. The time in which any act provided by this Lease is to be done is 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. The term "holiday" shall mean all holidays as defined by the statutes of Alaska. S. Successors ,in Interest. Each and all of the covenants, conditions and restrictions in this Lease shall inure to the benefit of, and shall be binding upon, the successors in interest of City and the authorized assignees, transferees, tenants, licensees and other successors -in -interest of Lessee. 7. 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, or to any employee, officer, or agent of any party, which is not contained in this Lease shall be binding or valid. 8. Goyerning ,Law. This Lease shall be governed by, construed and • enforced in accordance with the laws of the State of Alaska. 9. Parti.al, Invdl.idity. If any term, covenant, condition or 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. 10. Relationship .of .Pasties, 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 relation- ship between City and Lessee, other than the relationship of lessor and lessee. 11. Interpretation. The language in all parts of this Lease shall in all cases be simply construed according to its fair meaning, and not strictly for or against City or Lessee. Unless otherwise provided in this Lease, or unless the context otherwise requires, the following rules of construction shall apply to this Lease: (a) 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. -19- CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJOi]W TOURS, INC. (b) Man0atRrY..an0..P9,rn1Jssive. "Shall," "will" and "agrees" are mandatory; "may" is permissive. (c) CAp:"9nq. Captions of the Articles, Sections and subsections of this Lease are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Lease. 12. AMpnqMept. This Lease is not subject to amendment, except in writing executed by all parties hereto. 13(a). Qeltvery of Nottces and Nent--Method-and. Tim 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 Section, and shall be deemed to have been given at the time of delivery or making. (b). Pdymept..of .Rent. All rents and other sums payable by Lessee to City shall be by check, payable to City, delivered in person or mailed to City at the following address: CITY CLERK CITY OF SEWARD P. 0. Box 167 Seward, AK 99664 and shall be deemed to have been paid when received at such address. (c). Notices, to.Gity. All notices, demands and requests from Lessee to City shall be given to City at: CITY CLERK CITY OF SEWARD P. 0. Box 167 Seward, AK 99664 and to such other persons at such additional addresses as City may specify, but not exceeding four in the aggregate. (d). Not.iFes_to.Lessee. All notices, demands or requests from City to Lessee shall be given to Lessee at: KENAI FJORDS TOURS, INC. P. 0. Box 1889 Seward, AK 99664 -20- CITY OF SEWARD, ALASKA RESOLUTION NO. 87-096 GROUND LEASE - KENAI FJORDS TOURS, INC. Attachment "A" • (e). Chanoe of Address. Each party shall have the right, from time to time, to designate a different address by notice given in conformity with this Section. 14. Br4ker._!s_ Qommission. Each of the parties represents and warrants that there are no claims for brokerst commissions or finders, fees In connection with the execution of this Lease. 15. Aiftorneys!.FeeS. If either party hereto institutes any suit, action or arbitration proceeding to collect the rent reserved, or to enforce any covenant or agreement hereof, or to obtain any of the remedies herein provided, the prevailing party shall be entitled to such sum of money as the court or the arbitration board may adjudge reasonable as costs and attorney fees in such suit, action or arbitration proceeding, including any appeal taken by either party in such suit, action or arbitration proceeding. 16. Re.GArds. Lessee shall, at all times, keep or cause to be kept proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of, or in relation to, the Leased Land. 17. Minerals. Nothing in this Lease shall authorize Lessee to exercise any rights in regard to oil, oil rights, minerals, mineral rights, . natural gas, natural gas rights, and/or other hydrocarbons by whatsoever name that may be within or under the Leased Land. City reserves the right to whipstock, or directionally drill, and mine from land other than the Leased Land oil or gas wells, tunnels and shafts into, through or across the subsurface of the Leased Land, and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such wells or mines, without, however, the right to disturb the use of the surface or to drill or mine through the upper 500 feet of the subsurface of the Leased Land. 18. Good. Faith. The terms of this Lease impose an obligation of good faith on City and Lessee in the performance and enforcement thereof. 19. Elec'.O.on to_Terminate.by City. Lessee, as partial considera- tion for this Lease, expressly undertakes to complete construction of such a facility not later than September 1, 1988; construct a boardwalk or other walkway to allow uninterrupted pedestrian traffic along the Small Boat Harbor waterfront; have final building design approved by the City for architectural compatibility with the waterfront boardwalk development. If Lessee fails to timely meet any of these requirements, City may, by giving written notice to Lessee, elect to terminate this Lease. All further rights, duties and obligations hereunder shall cease upon receipt by Lessee of such notice. -21- �i CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. 20. El;ection—to-T,ermingte .,.by., Lessee. If an earthquake occurs during the term hereof, making the construction, financing, maintenance or operation of an improvement(s), building(s) or other structure(s) on the Leased Land impractical or impermissible, then in such event, provided the Lessee be in good standing hereunder, Lessee may, in his uncontrolled discretion, elect to terminate this Lease upon: (a) giving written notice to City; and (b) making payment to City of a sum equal to fifty (50%) ' percent of the rents payable to City for the twelve calendar months immediately preceding the notice under (a); and (c) satisfying or otherwise releasing City's fee from any encumbrance(s) created as the result of Lessee's actions. All further rights, duties and obligations hereunder shall cease upon receipt by City of such notice of election to terminate and the fulfilling conditions (b) and (c). ARTIML,.XYII.I, RECORDING, EXECVTION,.COUNTERPARTS. 1. R.ecQrdinA. The parties may, concurrently with the executic of this Lease, execute, acknowledge and record a memorandum of lease. Following recording, the memorandum lease shall be attached to this Lease. 2. CQuDterParts. This Lease has been executed by the parties in two counterparts, each of which shall be deemed to be an original. 3. Execjytjqp. This Lease has been executed by the parties on the day and year first above written. LESSOR: LESSEE: CITY OF SEWARD, ALASKA RONALD A. GARZINI, City Manager j -22- 11 • I CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. ATTEST: Linda S. Murphy, City Clerk (City Seal) STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) RESOLUTION NO. 87-096 Attachment "A" APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, POWELL AND BRUNDIN, Attorneys for the City of Seward, Alaska Fred B. Arvidson, City Attorney THIS IS TO CERTIFY That, on the day of 31 19 , before me, the undersigned, a Notary Public in and for the state of Alaska, duly commissioned and sworn as such, personally appeared _ known to me and to me known to be the . City Manager of the city of Seward, Alaska, and acknowledged to me that the foregoing instrument was executed as a free and voluntary act and deed. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year hereinabove written. NOTARY PUBLIC FOR STATE OF ALASKA My Commission Expires:. STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY That on this day of , 19 , before me, the undersigned, a Notary Public in and for the state of Alaska, duly commissioned and sworn as such, personally appeared , known to me and to me known to be the person(s) who executed the foregoing instrument, and who acknowledged that (t)he(y) signed the same freely and voluntarily for the uses and purposes therein contained. -23- CITY OF SEWARD, ALASKA GROUND LEASE - KENAI FJORDS TOURS, INC. IN WITNESS WHEREOF, I have hereunto set my hand and seal on the day and year first hereinabove written. NOTARY PUBLIC FOR STATE OF ALASKA My Commission Expires: STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY That on this ., day of - , 19 before me, the undersigned, a Notary Public in and for the state of Alaska, duly commissioned and sworn as such, personally appeared known to me and to me known to be the person(s) who executed the foregoing instrument, and who acknowledged that (t)he(y) signed the same freely and voluntarily for the uses and purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and seal on th day and year first hereinabove written. NOTARY PUBLIC FOR STATE OF ALASKA My Commission Expires:. -24- C1 RESOLUTION NO. 87-096 Attachment "A" d&SA A AJAV SWOWT P.O. Box 229. Seward, At. 99664 Ph. (907) 224-3026 439 Sth Ave. (Carer Sth do Madison) RAYMOND M. BURGESS Registered Professionall.and Surveyor - Ak. Calif. Nev. Idaho Sept. 29, 1987 Job No. 1 130-87 LEGAL DESCRIPTION OF BOARDWALK, SITE NO. 8 All that real property situate in the City of Seward, Kenai Peninsula Borough, State of Alaska, being more particularly described as follows, - COMMENCING at the centerline monument located at the intersection of South Access Road (South Harbor Road) and Fourth Avenue as shown on that certain plat of Marina Subdivision, recorded as Plat 76-1, Seward Recording Office, Seward, Alaska; THENCE along the centerline of Fourth Avenue as shown on said plat, N. 00*00' 15" W., 153.60 feet; THENCE at a right angle to said centerline, N. 89'59'45" E., 123.00 feet to the TRUE POINT OF BEGINNING; THENCE parallel to aforesaid centerline N. 00000' 15" W., 100.00 feet; THENCE at a right angle, N. 89'59'45" E., 50.00 feet; THENCE at a right angle, S. 00'00' 15" E., I WOO feet; THENCE at a right angle, S. 89059'45" W., 55.00 feet to the TRUE POINT OF BEGINNING. Containing 5,000 square feet, more of less. I .SCALE 1=30 33' .3 ' I rR&C Po/NT Or BEG/NN/N4 saurH_I ACCESS Ab. (SOvr# hw)?A R RD) 45r..,".00• 5, 000 Sf Axe 2' .59.a5 •W, PLAT TO ACCOMPANY DESCRIPTION OF City of Seward, Alaska Sept. 1987 ALASKA LAND SURVEYS Box 228, Seward, Alaska 99664 439 5th Ave (Cor. 5th & Madison) Phone 907-224-3026