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Res2022-001 Vertical Air Lease
Sponsored by: Bower Public Hearing: January 10, 2022 CITY OF SEWARD, ALASKA RESOLUTION 2022-001 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONSENT ASSIGNMENT TO VERTICAL AIR LLC, TO THE LEASE AGREEMENT L06-008 WITH JURIS MINDENBERGS, FOR LOT 5B, BLOCK 1, SEWARD SMALL BOAT HARBOR SUBDIVISION, CITY OF SEWARD, KENAI PENINSULA BOROUGH PLAT 2000-19, SEWARD RECORDING DISTRICT, THIRD JUDICIAL DISTRICT, STATE OF ALASKA TO EXTEND THE TERM OF THE LEASE FOR 16 YEARS AND TO ADD TWO FIVE-YEAR OPTIONS TO EXTEND WHEREAS, Juris Mindenbergs ("Lessee") has requested an assignment of lease to Vertical Air, LLC of the existing lease agreement with the City of Seward for 4,250 square feet, more or less of Lot 5B, Block 1, City of Seward, Seward Small Boat Harbor Subdivision, Kenai Peninsula Borough, Plat No. 2000-19 recorded in the Seward Recording District, Third Judicial District, State of Alaska; and WHEREAS, Article 12 of the Lease provides that the Lessee shall have the right to assign the lease upon findings by the Council that use is found to be in the public interest; and WHEREAS, the lease site will continue to be utilized as a retail shop and is consistent with current zoning and land use regulations; and WHEREAS, the current lease has been in effect since February 24, 2006; and WHEREAS, the current lease will expire February 24, 2036; and WHEREAS, Vertical Air LLC is requesting to extend the lease term by sixteen years and to add two five-year options to extend. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City Manager is hereby authorized to enter into Consent to Lease Assignment to Vertical Air, LLC, in substantially the form as attached hereto. Section 2. The recitals set forth above are incorporated herein by reference and adopted as findings of the City Council. For the reasons stated, an assignment to Vertical Air LLC, in the form presented at this meeting is found to be in the public interest. Section 3. The City Manager is hereby authorized to amend and extend the lease with CITY OF SEWARD, ALASKA RESOLUTION 2022-001 Vertical Air LLC, in substantially the form as presented at this meeting. Section 4. This resolution shall take effect 30 days from the date and posting of adoption, or on the date of closing of the sale of the improvements on the lease site to Vertical Air LLC, whichever is later. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 10ffi day of January, 2022. Terry, AYES: NOES: ABSENT: ABSTAIN: ATTEST: Brenda J. Ball , MMC City Clerk C f •n ,g {City Seal} ..erg, ... •tee.., WARD, ALASKA City Council Agenda Statement Meeting Date: January 10, 2022 To: City Council Through: Janette Bower, City Manager From: Norm Regis, Harbormaster Agenda Item: Resolution 2022-001: Authorizing the City Manager to Enter into a Consent Assignment to Vertical Air LLC, to the Lease Agreement L06-008 with Juris Mindenbergs, for Lot 5B, Block 1, Seward Small Boat Harbor Subdivision, City of Seward, Kenai Peninsula Borough Plat 2000-19, Seward Recording District, Third Judicial District, State of Alaska to Extend the Term of the Lease for 16 Years and Add Two Five-year Options to Extend Background and justification: Juris Mindenbergs currently has Lease L06-008 for 4,250 square feet more or less of Lot 5B Block 1 Seward Small Boat Harbor Subdivision, City of Seward, Alaska and recorded as Plat No.2000-19 in Seward Recording District, Third Judicial District, State of Alaska. Juris Mindenbergs has requested approval to assign the lease to Vertical Air, LLC, which will continue to use the leased land for a retail shop. Article 12 of the lease allows lease assignments upon findings by Council that use is found to be in the public interest. Vertical Air has been subleasing from Mr. Mindenbergs since October 2019. The current lease L06-008 will expire on February 24, 2036. Vertical Air LLC requests a sixteen -year extension of the lease, which would make the lease term ending date February 24, 2052. Vertical Air LLC is also requesting two five-year options to extend. This (exercising the extension options as one and adding two further five-year options) is consistent with the methodology used in previous lease actions approved by the Council. Comprehensive and Strategic Plan Consistency Information This legislation is consistent with (citation listed): Comprehensive Plan: (page I-12, 3.1.1) Attract new business and industry to the greater Seward area Strategic Plan: (page 5) Attract New Industry: Develop an aggressive marketing campaign which highlights the diverse resources, and quality of life that make Seward a great place to live and establish a business or industry. Other: Certification of Funds Total amount of funds listed in this legislation: $ 6,755.80 annual This legislation (✓): ✓ Creates revenue in the amount of: $ 6,755.80 Creates expenditure in amount of: $ Creates a savings in the amount of: $ Has no fiscal impact Funds are (✓): ✓ Budgeted Line item(s): Not budgeted 11000-2000-5000 Lands Rents & Leases Additional fiscal notes: The lease rate including CPI adjustments from 2021 is $6,755.80 annually per the 2020 appraisal and adjusted for inflation. This parcel will also be reappraised in 2025. Finance Director Signature: -,34,, 4 Attorney Review✓ Administration Recommendation Yes ✓ Adopt Resolution ✓ Not applicable Other: a MM Small Boat Harbor Lot 5B Block 1 Due to different data sources property lines and aerial imagery do not overlay correctly. Map is to be used for orientation and reference purposes only. R 1317 Fourth Ave N Drawn By: Selena Soto 0 20 40 80 Feet Mapping Assistance by Alaska Map Company, LLC LEASE AGREEMENT t en C�7Y OF ALA SIK"A and JU R -�', S AINDENB ERGS Effective Date: TABLE OF CONTENTS ARTICLE 1- LEASED LAND.............................................................................................. 1 1 J Description of Leased Land.................................................................................... 1 1.2 Covenant of Quiet Enjoyment; Warranty of Title ................................................... 1 1.3 Survey of Leased Land ............................................................................................ 2 1.4 Property Accepted ............................... 1.5 Permits ...................................... ......... ....... .............................................................. 2 1.6 Platting ........... ......................................................................................................... 3 ARTICLE2 - LEASE TERM..................................................................................................... 3 2ALease Term.................................................................................................... .......... 3 2.2 Lease Subject to Referendum..................••-••....................._....••••••......•-----•----•--------- 3 2.3 Options to Extend.................................................................................................... 3 ARTICLE 3 - RENTAL RATE................................................................................................... 4 3.1 Initial Rental Rate ................................................. ..•-----•--••-•....--•----------•-----••----.----. 4 3.2 Rental Adjustments........................................................................................--•....••. 4 3.3 Procedure for Rental Adjustment............................................................................ 4 3.4 Effect of Late Appraisal by CITY ........... -................................................................ 5 3.5 Appraisal by LESSEE............................................................................................. 5 3.6 Effective Date of Adjusted Rental Rate ............... 3.7 Interim Rental Adjustments ..................................... :..............••.-----......................... 6 3.8 Late Payment Charge-------•---•--•------------•------------------------••-•----•....--•--••---.................. 6 ARTICLE 4 - USE OF LEASED LAND..----•-----------.•----••-----•---•.------•••---•....--------•..................... 6 4.1 Use of Leased Lund............................................................_.................................... 6 4.2 Obligations of LESSEE ........................................................................................... 6 4.3 No Preferential Rights to Use Public Facilities..................................................... 7 4.4 Adequacy (#'Public Facilities................................................................................. 7 4.5 Tariffs and Other Service Fees ............................... ....................... ......................... 7 4.6 Time, for Payment of Utilities and Taxes................................................................. 7 4.7 Other- Uses...............•--•-.••.......---.•---................................................................. 7 ARTICLE 5 - UTILITIES AND RIGHTS OF ACCESS.......................................................... 8 5.1 Utilities................................................•..•••-•-...........................................................8 5.2 Third -Party Improvements .................. 5.3 Easements............................................................................................................... 9 ARTICLE 6 - CONSTRUCTION BY LESSEE......................................................................... 9 6.1 Improvements on Leased Land........................••--•-••--------.•------•....------•...........•--•--•. 9 6.2 City Review of Construction.................................................................................. 10 ARTICLE 7 - RETURN OF LEASED LAND/SITE CONDITIONS .................................... 11 7.1 Return of Leased Land in Original Condition...................................................... 11 7.2 Return of Leased Land in Different Condition..................................................... 11 ARTICLE 8 - FORCE MAJEURE........................................................................................... 11 LEASE AGREEMENT BE WFEN THE Cl`1'Y OF SEWARD AND JURTS MiNDENBERGS FEBRUARY 1006 -PAGE i - ARTICLE 9 - LESSEE'S ACTS OF DEFAULT ..... ............................................ I ......... I......... 11 ARTICLE 10 - REMEDIES FOR DEFAULT BY LESSEE .................................................. 12 ARTICLE 11 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE ....................... 14 11.1 Real Property Improvements................................................................................ 14 11.2 Personal Property ................................ ................................................................. 14 ARTICLE 12 - ASSIGNMENT OR SUBLEASE.................................................................... 14 12.1 Assignment of Lease or Subleasing ................................................ 15 12.2 Assignment of Lease for Securir x................................................... .... 15 12.3 Assignment to Affiliate ...........................•••............••_--.-----..----.------•-----.•-----.------....15 ARTICLE 14 - CITY'S DUTY TO DEFEND/INDEMNIFY ................................................. 16 ARTICLE 15 - INSURANCE.................................................................................................... 16 15.1 Minimum Insurance Requirements ............... 15.2 Subrogation Rights Waived ................................................................................... 17 ARTICLE 16 - CONDEMNATION ......................................................................................... . 17 ARTICLE 17 - ARBITRATION.......................•------•--•------------••-.---------•.---------...............----...... 19 17.1 Arbitration ........................ .......................................---••---........-----•----------....---......19 ARTICLE 18 - MAINTENANCE AND REPAIRS................................................................. 20 18.1 Normal Maintenance ................ 18.2 Safety Issues . ............... ........................... ................. :............................................. 20 18.3 Cost of Repairs ...................................................................................................... 21 ARTICLE 19 - ENVIRONMENTAL CONCERNS---------------------------------------------------------------- 21 19.1 Hazardous Materials............................................................................................ 21 19.2 Permits and Reporting.......................................................................................... 23 ARTICLE 20 - ESTOPPEL CERTIFICATES........................................................................ 24 ARTICLE 21- CONDITIONS AND COVENANTS.............................................................. 24 ARTICLE 22 - NO WAIVER OF BREACH........................................................................... 24 ARTICLE 23 - TIME OF THE ESSENCE... ............................ ...................................... ARTICLE 24 - COMPUTATION OF TIME........................................................................... 25 ARTICLE 25 - SUCCESSORS IN INTEREST....................................................................... 25 ARTICLE 26 - ENTIRE AGREEMENT..................................................................... ............ 25 ARTICLE 27 - GOVERNING LAW........................................................................................ 25 ARTICLE 28 - PARTIAL INVALIDITY ................................................................................. 25 ARTICLE 29 - RELATIONSHIP OF PARTIES.................................................................... 25 ARTICLE 30 - INTERPRETATION..................................................... ............. .......... ............ 26 ARTICLE 31- CAPTIONS....................................................................................................... 26 ARTICLE 32 - AMENDMENT... .............................................................................................. 26 ARTICLE33 - NOTICES.......................................................................................................... 26 ARTICLE 34 - FIRE PROTECTION....................................................................................... 27 LEASE AGREEMENT BFTWEEN THE CITY OF SEWARI] AND JURIS MINDE,NBERGS FE13RUAIZY 2006 -PAGF? ii - 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, whose mailing address is P.O. Box 167, Seward, Alaska 99664 and Juris Mindenbergs (the "LESSEE"), whose mailing address is 4128 148"' Avenue NE, Redmond, Washington 98052. WHEREAS, LESSEE has indicated his desire to lease Lot 5B, Block I Seward Small Boat Harbor Suhdivi5iou. according to Plat 2000-19, Seward Recording District, Third Judicial District, State of Ala�i.a_ WHEREAS, the City Council of CITY has determined that lease of the Leased Land (as defined below) 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 Leased Land 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 - LEASED LAND 1.1 DF s cription of Leased Lund. The Leased Land is located in the City of Seward, Alaska. The Lc�i,cd Land is described as follows: LAN 513, Block ] Seward Small Boat Harbor Subdivision, according to Plat 2000-19, Seward Recording District, Third Judicial District, State of Alaska, containing 4250 square feet, more or less (the "Leased Land"). The Leased Land is also depicted on the attached Exhibit A, which is incorporated herein by reference. 1.2 Covenant of Quiet Enjoyment; Wa."-anty of Title. Subject to the encumbrances as of the date hereof, any reasonable restrictions imposed on the Leased Land as part of recording of a plat by CITY, and the provisions of this LEASE, CITY hereby covenants and warrants that: a) LESSEE shall have the quiet enjoyment and possession of the Leased Land for the full terra of this LEASE; LEASE AGREEMENT I31-TWEEN THE CrFY of SEWARD AND JURIS MINDENBERGS ITBRUARY 2006 -PAGE I - b) CITY is unaware of any prior conflicting use of the Leased Land that would adversely affect LESSEE's intended use of the subject parcel. 1.3 Survey of Leased Land. If not completed prior to execution of this LEASE, within ninety (90) days from the date of this LEASE, LESSEE, at its sole cost, will cause the Leased Land to be surveyed and replatted by a land surveyor registered in the State of Alaska. A copy of the drawing and description of the Leased Land based upon this survey shall be attached to this LEASE as Exhibit B and shall be incorporated herein by reference. In such event, the description of the Leased Land in Exhibit B shall supersede the description in Exhibit A, and shall be considered the correct description of the Leased Land 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 oblj,.,a t Jon to do so or any obligation to do so in <i ny particular way. If CITY objects to the slu-v t: -"ti conclusions in the survey, CITY may gi � .: written notice to LESSEE of CITY's objection within thirty (30) days of receipt of the sun ,;y. 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 Leased Land. 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 Leased Land and accepts the same "as -is" and without reliance on any expressed or implied representations or warranties of CITY (other than the representations in Section 1.2 hereof), or agents of CITY, as to the actual physical condition or characteristics thereof and the legal description or depiction of the Leased Land in Section 1.1 or Exhibit A hereto. 1.5 Permits. LESSEE, at its sole cost, shall obtain all permits necessary to the construction and operation of its facilities on the Leased Land. CITY may from time to time, upon request of LESSEE, execute such documents, petitions, applications and authorizations as may be necessary, as the underlying fee owner, to file with an agency or public body responsible therefore an application for conditional use permits, zoning and re -zoning, tentative and final tract approval, or precise plan approval that may be required for the lawful construction and operation of the facilities of LESSEE permitted on the Leased Land by the terms of this LEASE. However, nothing in this Section shall be construed as requiring CITY to support or approve any such application or permit requests. If the agency or public body responsible to approve or grant such application or permit request is a City of Seward agency, department, or board, LESSEE shall follow all City of Seward procedures, the same as any other applicant making similar requests of the City of Seward, according to the Charter, I -EASE AGKHEMENT BETWEEN THE CITY OF SEWARD AND SURIS MINDENBERGS FIBRUARY 2006 -PAGE 2 - ordinances, resolutions. or any regulation, rules or procedures of the City of Seward. Nothing in this Section iiiiposcs 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), the Environmental Protection Agency (e.g., Clean. Air Act permits), the Alaska Department of Public Facilities and Transportation (e.g., right-of-way permits), the Alaska Department of Fish and Game, and the Alaska Department of Environmental Conservation. 1.6 Platting. In the event CITY elects to replat, CITY agrees to include the Leased Land in such replat in accordance with the description prepared by LESSEE under Section 1.3 herein. If LESSEE requests a replat of the Leased Land prior to that time, CITY shall assist LESSEE in the preparation and filing of the replat, and LESSEE shall reimburse CITY for CITY's costs in assisting with the prep�inii ion and filing of the replat. LESSEE agrees to sign the plat and any other documents 10 complete the platting or replatting of any area Including all or a portion of the Leased Land. LESSEE shall accept reasonable restrictions. �.:asenients, or plat notes as may be required by CITY or other governmental authorities as a condition to Filing the plat of the Leased Land or the plat of CITY -owned real property adjacent to the Leased Land. ARTICLE 2 - LEASE 'PERM 2.1 Lease Term. The term of this LEASE (the "Lease Term") shall be in accordance with CITY's authorization Resolution No. 2006-8 (the "Resolution"). The Lease Term shall commence on the date this LEASE is signed by CITY and that date shall be the effective date of this LEASE (the "Effective Date"). The Lease Term shall run for 30 years from the Effective Date, ending at midnight on -re_6,_Jq_; 2036. Except for extensions as provided in Section 2.3 below, this LEASE is not subject to renewal. 2.2 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. LESSEE agrees that if the Resolution approving this LEASE is the subject of a referendum petition filed with the Clerk of CITY, 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. 2.3 Options to Extend. LESSEE shall have the right to extend the term of this LEASE for two (2) additional five (5) year periods (cumulative extensions not to exceed ten (10) years), provided that: a) LESSEE exercises any applicable option to extend at least one hundred and eighty LEASE AGREEMENT BETWFEN THE CITY OF SEWARD AND .IIIRIS MIN D NBERGS FEBRUARY 2006 -PAGE 3 - (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; and c) LESSEE shall exercise its options to extend by sending written notice thereof in accordance with the provisions of Article 33 of this LEASE.. ARTICLE 3 - RENTAL RATE 3.1 Initial Rental Rate. Commencing on the Effective Date of this LEASE through June 30, 2006, the annual rental rate for the Leased Land shall be set at Five Thousand Six Hundred Eighty dollars ($5,680.00). Rent shall be payable quarterly in advance upon the Effective Date of this Lease (prorated for the balance of the current quarter) and thereafter on or before the 20th day of the month beginning each calendar quarter: January 20, April 20, July 20 and October 20. The amount of each quarterly payment shall be one -quarter 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, 2010, 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 the appraised fair market rental value (the "Fair Market Rental Value") of the Leased Land at the highest and best use of the Leased Land. The highest and best use of the Leased Land shall be determined without regard to LESSEE's intended or actual use of the Leased 1,md unless that use is coincidentally the highest and best use of the Leased Land. C1T)' 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 fbr Rental Adjustment. To adjust the rent as of any successive Rental Adjustment Date, CITY shall, at its own expense, retain an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute), who shall determine the "Fair Market Rental Value" of the Leased Land in accordance with this Article 3, exclusive of improvements placed thereon by LESSEE but inclusive of all improvements made by CITY (including those made bef-oiv or sub,�egtww to this LEASE). The appraiser's report shall be delivered to LESSEE not loss than uinety (90) days before the Rental Adjustment Date- The appraiser's deter) nination of Fair Market. Rental Value of the Leased Land shall constitute a final binding determination of the Fair Market Rental Value and the adjusted annual rental rate until the next Rental Adjustment Date, unless LESSEE objects to CITY's appraiser's determination of the Fair Market Rental Value. In that case, 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 an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at LESSEE's expense to make an appraisal of the Fair Market Rental Value in accordance LEASE AGREEMENT BF."TWEEN THE CITY OF SEWARl7 AND ATRIs MINDENBERGS FEBRUARY 2006 -PACE: 4 - with this Article 3. If LESSEE'S appraisal determines a Fair Market Rental Value that varies from that determined by CfTY's 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 LESSEE'S appraisal determines a Fair Market Rental Value that varies from CITY's appraisal by more than twenty percent (20%), then, unless CITY and LESSEE agree on arate themselves, the adjusted annual rental rate of the Leased Land shall be determined in accordance with the arbitration provisions contained in Article 19 of this LEASE. 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 LESSEE ninety (90) days �)cfore 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 Rental Value or fails to deliver the appraisal report to the LESSEE by the Rental Adjustment Date, LESSEE may engage an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at LESSEE's expense to make an appraisal under the terms of this Article 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 oh.1(cts to LESSEE'S appraiser's determination of the Fair Market Rental Value, CITY shall give written notice to LESSEE of its abjection within thirty (30) days of receipt of the appraiser's report, and CITY shall then engage an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at CITY's expense to make an appraisal of the Fair Market Rental Value as of the Rental Adjustment Date and in accordance with this Article 3. If the CITY's appraisal determines a Fair Market. Rental Value that varies from that determined by LESSEE'S 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 CITY's appraisal determines a Fair Market Rental Value that varies from LESSEE'S appraisal by more than twenty percent (20%), then, unless CITY and LESSEE agree on a rate themselves, the adjusted annual rental rate of the Leased Land 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 CITY provided a copy of the appraisal report to LESSEE no later than ninety (90) days before the Rental Adjustment Date. LEASE AGREEMENT BETWEEN THE CITY 01 SE WARD AND JUR1S MiNDGNBERGS FFBRUARY 2()06 -PAGF, 5 - 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 this 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 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 Interim Rental Adjustments. For each year in the period between each Rental Adjustment Date, excepting the Rental Adjustment Dates, the annual rental payment shall be increased beginning July 1, 2006, and on July 1 of every year thereafter (each on "Interim Rental Adjustment Date") in an amount that reflects the increase, if any, in the cost of living for the previous year as stated in the Consumer Price Index, All Urban Consumers, Anchorage, Alaska Area, All Items 1967=100 ("CPI"), as published by the United States Department of Labor, Bureau of Labor Statistics for the most recent period published immediately prior to the Interim Rental Adjustment Date. In no event shall the rent be less than the previous year. If the CPI is revised or ceases to be published, the CITY shall instead use such revised or other index as most nearly approximates the CPI for the relevant period, and make whatever adjustment in its application as may be necessary, in the CITY's sole discretion, to accomplished as nearly the same result as if the CPI had not been revised or ceased to be published. 3.8 Late Payment Charge. Rental payments not received by the due date shall bear interest until paid at a rate of ] c ).>(%' per annum, or the maximum rate permitted under Alaska law, whichever is less, p? �i,, 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 LEASED LAND 4.1 Use of Leased Land. CITY has limited land available for lease_ Use of the Leased Land by LESSEE has been determined by the City Council of CITY to be in the public interest. 4.2 Obligations of LESSEE. LESSEE may use the Leased Land only in accordance with applicable. CITY zoning code provisions and provided the following conditions are met: a) The Leased Land is to be completely cleaned and restored to its original condition, LEASE AGREEMENT BETWEEN THE MY DP SHWARD AND .IURIS MINDENBERGS FEBRUARY 2006 -PAGE 6 - that is, the condition existing prior to this LEASE or in better condition upon termination of this LEASE- b) LESSEE agrees to prohibit the use, keeping, storage, or disposal of Hazardous Materials on the Leased Land except as permitted in Article 19 of this LEASE. c) LESSEE shall not use the Leased Land in any manner or construct any facilities thereon which would inhibit the use of adjacent or other lands. d) LESSEE shall continue to operate a retail enterprise on the Leased Latid. Any changes to this site require CITY approval, through the City Manager, prior to additional construction. LESSEE's failure to obtain CITY approval of any changes to the site development plan or LESSEE's failure to install the improvements according to the site development plan shall be a LESSEE Act of Default under this LEASE. 4.3 No Pre er(,wial Rights to Use Public Facilities. This LEASE does not grant to LESSEE any exclusi v e s i ,hts to use any public port facilities constructed or operated by CITY. LESSEE will be sui){Gct 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. 4.4 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. 4.5 Tariffs and Other Service Fees. CITY shall have the right to make amendments to its tariffs, regulations and scheduled fees from time to time even if those adjustments shall cost LESSEE more for its operations or use of public facilities, and CITY is free to do so provided only that it does not impose any greater burden or higher rate upon LESSEE than upon any other similar user of the public facilities. 4.6 Time for Payment of Utilities and Taxer. LESSEE will pay for utilities and taxes related to operations on the Leased Land and LESSEE's interest in this LEASE and improvements thereon, if any, before tiiich obligations become delinquent; provided that LESSEE may, in good faith and before such delinquency, contest any such charge or assessment. 4.7 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 LEASE AGREEMENT BETWEEN THE CITY OF SEWARD AND JURIs MINDENBERGS FEBRUARY 2006 -PAGE 7 - who might be interested in leasing the Leased Land should this LEASE be terminated for any reason. iE f Yt17 OF ACCESS 5.1 Utilities. LESSEE, at LESSEI-:'s sole cost and expense, Shall provide for the extension of public utilities to the Leased Land 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, through consultation and review, 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. All such construction shall be in compliance with all applicable building, mechanical and fire codes. Utilities constructed by the LESSEE within the public right-of-ways or within public utility easements willnormally he 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 sucl, >ver sizing shall be borne by CITY or other utility company. Such costs shall be l' inited to .he supplier's cost of the additional fittings, equipment, direct labor, and equiplv)C�I i- costs to complete the installation. The costs of over sizing 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 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 Leased Land, it being the intent of the parties that the risk of obtaining required permits be solely a risk undertaken by LESSEE. 5-2 Third -Parry 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 Leased Land in accordance with the terms of this LEASE covenants; conditions and restrictions providing for the granting of uses of the Leased Land, or any part thereof, the establishment of party walls, the establishment of mutual and reciprocal parking rights or rights of ingress or egress, or other like matt (herein called "third -party improvements"), all of which are for the purpose of thw order r� development of the Leased Land as a commercial unit subject, however, to the l;'•.t(z_.ti that - LEASE AGREEMENT BETWEEN THE CITY OF SEWARD AND Jt=klS MINUl lfl;I'],Qi FEBRUARY 2(X)6 -PAGE 9 - a) All such matters shall be limited to the Lease Term and shall terminate upon termination of this LEASE for whatever reason. b) Any such niltm r,� of a permanent nature extending* beyond the Lease Term shall not be granted V ithiAlt the prior written approval of CITY. In any of the foregoing Jnsi ance-,rc I'trred to in this Section, CITY shall be without expense therefore, and the cost and expense thercol shall be borne solely by LESSEE. c) At the expiration of the Lease Term (including any extended period) third -party improvements on the Leased Land other than portable equipment shall become the property of CITY without the payment of any compensation to LESSEE. 53 Easements. In order to provide for the orderly development of the Leased Land and adjacent lands, it may be necessary, desirable or required that street, railroad, water, sewer, drainage, gas, power line and other easements and dedications and similar rights be granted or dedicated over or within portions of the Leased Land. As additional consideration for this LEASE, CITY and LESSEE each shall, at the request of the other, join with each other in executing and delivering such documents from time to time and throughout the Lease Term as may be appropriate, necessary, or required by the several governmental agencies (including the City of Seward), public utilities and other users or tenants of CITY land for the purpose of granting such easements and dedications; provided, howeN r-. that such easements and dedications and similar rights do not unreasonably interf?rc 1� iih LESSEE's operations. The c<lsts of locating or relocating any public easements or restrictions of record including any rt, I}cation of public road, railroad, utility, or other easements shall be at the sole cost and expense of the party requesting the relocation. CITY shall not refuse reasonable requests for such relocations provided those relocations do not interfere with or inhibit the overall development of CITY property or other public property. Airy easements or rights of access granted to LESSEE by CITY need not be exclusive to LESSEE. ARTICLE 6 - CONSTRUCTION BY LESSEE 6.1 Improvements on Leased Leval. LESSEE shall have the right to erect, maintain, alter, remodel, reconstruct, rebuild, build and/or replace buildings and other improvements on the Leased Land, subject to the following conditions: a) LESSEE shall cause to be operated on the Leased Land a retail enterprise by June 1, 2006. b) The cost of any construction, reconstruction, demolition, or of any changes, alterations or improvements, shall be borne and paid for by LESSEE. LEASE AGREE-MENr BETWL-1-N THE CrrY OF SFWARD AND .IUMS MJNDENBERGS FEBRUARY 2006 -PAGE 9 - C The Leased Land shall at all times be kept free of mechanic's and materialmen's liens. d) LESSEE shall provide CITY with a copy of all building plans and specifications and a site development plan or plans (based on a recent survey) for the Leased Land prior to commencement of construction. e) LESSEE is solely responsible for resurveying and locating improvements on the Leased Land in such manner not to violate building setback requirements or encroach into rights -of -ways or casements. On completion of any improvements. LESSEE shall provide CITY a copy of an as -built survey depicting the improvements as completed on the Leased Land. f) Any general contractor employed by LESSEE or its, sublessees 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 THOUSAN1) 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 Fit-TY THOUSAND DOLLARS ($50,000.00), LESSEE shall provide CITY, if no performance and labor and material bonds are provided by LESSEE, any necessary assurances or guarantees that the contemplated work will be performed by the general contractor or by LESSEE. g) CITY may, pis conic inplated by Alaska Statutes, give notice of non -responsibility for any improveuierit,, constructed or effected by LESSEE on the Leased Land. h) LESSEE shall comply with all federal, state and local statutes and regulations with respect to such construction, including but not limited to all applicable building, mechanical, and fire codes. 6.2 City Review of Constl-m-fion. CITY shall have the right to review initial plans, including those supplied to CITY under Section 6.1 hereof, and any future changes or additions to LESSEE's facilities on the Leased Land, 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 Leased Land before construction and to place all improvements on the Leased CEASE AGREF.MENI" BETWEEN THE GI"IY OF SEW ARD AND J URiS M1ND1,NBERGS FEBRUARY 2006 -PAGE 10 - Land without encroaching upon any land, 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 LEASED LAND/SITE CONDITIONS 7.1 Return of Leased Land in Original Condition. Subject to the provisions of Article I Ll herein, upon termination of this LEASE for any reason, LESSEE shall return the Leased Land to CITY M t31c ,ime condition as at the commencement this LEASE, subject to normal, non -abusive use. The Leased Land shall be free of all Hazardous Materials and contamination arising out of or resulting from or occurring during LESSEE's operations or use of the Leased Land during this LEASE. 7.2 Return of'Leased Land in Different Condition. Notwithstanding the provisions of Section 7.1 above, upon termination of this LEASE for any reason LESSEE may return the Leased Land in a re -contoured or graded clean, safe, and stable condition different from its original condition provided CITY grants written approval of LESSEE's plans for development of the Leased Land contours, including its plans for material extraction and final grade. ARTICLE S - 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 nature, acts of the enemies of the United States of America, sabotage, 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 - LESSEE'S ACTS OF DEFAULT Each of the following shall be a"LESSEE Act of Default" under this LEASE and the teens "acts of default" and "default" shall mean, whenever they are used in this LEASE, any one or more of the following events; 9.1 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. 9.2 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 thirty (30) days after written notice specifying ,tichfailure, requesting that it be remedied, and stating that it is a notice of default, has bec11 ,l ven 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 LEASE ACRE-EMENT BETWEEN THE MY OF SEWAR© AND JURIS MiNIIENBERGS F EBRUARY 2006 -PAGE 11 - default if corrective action is instituted by LESSEE within the applicable period and diligently pursued until the default is corrected. 9.3 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 orbankrupt, 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. 94 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 Leased Land, 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. 9.5 Failure by LESSEE to operate a retail enterprise on the Leased Land and place the facilities in service by June 1, 2006. 9.6 Failure of LESSEE to maintain its operations within the Leased Land or to keep the public rights of way clear. ARTICLE 10 - 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: L ASE AGREEMENT BETWEEN IHE crrY of SEWARD AND JURIS MINDENBERGS FGBRUARY 2006 -PAGE 12 - 10.1 CITY may distain 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 distained in any commercially reasonable manner. It shall be conclusively presumed that compliance with the procedures set forth in the Alaska Uniform Commercial Code (AS 45.29.601-.628) with respect to sale of property shall be a commercially reasonable disposal. 10.2 CITY may re-enter the Leased Land and take possession thereof and, except for any personal property of LESSEE which CITY has waived its right to distain under Section 10.1 above, remove all personal property of LESSEE from the Leased Land. Such personal property may be stored in place or may be removed and stored in a public warehouse or elsewhere at the cost of LESSEE all without service of notice or resort to legal process, all of which LESSEE expressly waives. 1.0.3 In addition to the above, CITY may: a) Declare this LEASE terminated; b) Collect any and all rents due or to become due from subtenants or other occupants of the Leased Land; c) Recover from LESSEE, whether this LEASE be terminated or not, reasonable attorney's fees and all other expenses incurred by CITY by reason of the breach or default by LESSEE; d) Recover from LESSEE an amount to be due immediately on breach equal to the unpaid rent for the entire remaining term of this LEASE provided that if the CITY relets the Leased Land for the unexpired term of this LEASE, the CITY will refund such excess amounts, if any, after deducting all of the CITY's expenses in or in connection with reletting (including without Iinritation all repossession costs, brokerage commissions, legal expenses, administrative expenses, costs of advertising, and preparations for reletting) as such excess amounts are received by the CITY, but in no event shall the refund exceed the amount recovered from LESSEE; e) Recover all damages incurred by CITY by reason of LF.:`-,SEE's default or breach including, but not limited to, the cost of recovering possr ;ion of the Leased Land, expenses of reletting including costs of necessary rcno �!tion and alteration of the premises, reasonable attorney's fees and any real estate commissions actually paid. f) Remove or require the removal of any improvements constructed without CITY approval or constructed contrary to site development plans approved by CITY and recover all costs and expense incurred by CITY to remove violating improvements. LC�ASE AORHEMENr BETMZEN TI-I6i CITY OF SEWARD AND WRIS MINDENBERGS FFBRUARY 206 -PAGE 13 - 10.4 If LESSEE does not immediately surrender possession of the Leased Land after termination by CITY and upon demand by CITY, CITY may forthwith enter into and upon and repossess the Leased. Land and expel LESSEE without being deemed guilty in any manner of trespass and without prejudice to any remedies which might otherwise be used for arrears of rent or breach of covenant. 10.5 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. 10.6 Each right and remedy of CITY provided for in this LEASE shall be cumulative and shall be m iddition to every other right or remedy provided for in this LEASE or now or hereafter at law or in equity or by statute or other �� ise, and the exercise or beginning of the exci-cise by CITY of any one or more of the rights and remedies provided for in this LEASE or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise 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. 10.7 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 11 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE 1 L I Real Property Improvements. All improvements constructed by LESSEE on the Leased Land or on easements to or from the same, such as buildings, warehouses, conveyor systems, ditches, sewer lines, water lines, dikes or berms and similar improvements, shall become the property of CITY upon termination of this LEASE for any reason, provided, however, that CITY may require LESSEE to remove any improvements designated by CITY and without cost to CITY. 11.2 Personal Property. Any other provisions of this LEASE to the contrary notwithstanding, LESSEE, upon termination of this LEASE for any reason, may, but need not, promptly remove, in no event later than ninety (90) days from the termination of the LEASE, trade fixtures and equipment from the Leased Land provided that LESSEE shall repair any damages to the Leased Land caused by such removal. ARTICLE 12 - ASSIGNMENT OR SUBLEASE UiASE AGUE,MENT BETWEEN THE CITY OF SEWARD AND IURIS MINDI-NBERGS FEBRUARY 2006 -PAGT: 14 - 12.1 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 approving Resolution. The rights and duties created by the LEASE are personal to LESSEE and CITY has granted the LEASE in reliance upon the individual character and financial capability of LESSEE. Therefore, LESSEE shall not assign or sublease this LEASE without CITY's prior written consent, in CITY's sole discretion. 12.2 Assignment of Lease for Security. Notwithstanding Section 12.1 above, LESSEE may assign, encumber or mortgage its interest in this LEASE or improvements on the Leased Land, by deed of trust or other security instrument, to an institutional lender ("Lender") for development of or operations on the Leased Land, 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 10 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 Leased Land 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 9.3, CITY shall not exercise any of the remedies afforded to it under Article 1.0 above so long as LESEE or Lender remains in possession of the Leased Land and satisfies LESSf-�E's obligations under the terms of this LEASE. Upon foreclosure or other asserti;)r, of its security interest, Lender may further assign, transfer, or dispose of its u-'erests, provided that any subsequent assignee, purchaser or transferee shall remain bound by each and every term of this LEASE. 12.3 Assignment to Affiliate. Notwithstanding Section 12.1 above, LESSEE may assign this LEASE to an affiliate of LESSEE as that term is defined by AS 10.06.990(2) or Alaska limited liability company in which LESSEE maintains a substantial membership interest'; provided, however, that LESSEE's full faith and credit shall remain obligated under this 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 subjcct to the Alaska Corporation Code. LEASE AGREEMENT BETWEEN 'rife CTT'Y OF SEWARD AND JURIS MINDENBERGS F'EBRUARY 2006 -PAGE 15 - LEASE as though the assignment had not taken place. ARTICLE 13 - LESSEE'S DUTY TO DEFENDANDEMNIFY LESSEE shall defend, indemnify and hold harmless CITY, its officials, employees, agents, and contractors from any and all liability or claims for damages, including personal injuries, environmental damage, death and property damage arising out of or resulting from LESSEE's use of the Leased Land or the use of the Leased Land by LESSEE'S sublessees, assignees, agents, contractors or the public, except for damages arising from the sole negligence or willful acts or omissions of CITY, its officials, employees, agents, 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 14 - CITY'S DUTY TO DEFENJ)/LNDEIVINIFY 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 officials, employees, agents, or contractors. ARTICLE 15 - INSURANCE 15.1 Minimum Insurance Requirements. Prior to commencement of the Lease Term or LESSEE'S occupancy of the Leased Land, LESSEE shall procure and maintain, at LES SEE's sole cost and expense, comprehensive commercial general liability insurance with limits of liability of not less than TWO MILLION DOLLARS ($2,000,000) for all injuries and/or deaths resulting to any one person and TWO MILLION DO] LARS ($2,000,000) limit from any one occurrence. The comprehensive commercial general liability insurance shall include coverage for personal injury, bodily injury, and property damage or destruction. Coverage under such policies of insurance shall include collapse and underground property damage hazards. Contractual liability insurance coverage in the amount of not less than TWO MILLION DOLLARS ($2,000,000) is also required. LESSEE shall obtain owned and non -owned automobile liability insurance with limits of liability of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence combined single limit for bodily injury and property damage. LESSEE shall also maintain workers' compensation insurance as required under Alaska law. The minimum amounts and types of insurance provided by LESSEE, shall be subject to revision at the sole discretion of CITY in accordance with standard insurance practices, in LEASE ACREEMENT BETWEEN THE CITY OF SEWARD AND JURIS MINDENBERGS FEBRUARY 2006 -PAGE, 16 - 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 stanttrds in the industry. Such factors as changes in the type of or extent of use of the Lease Lanf.l, increases in the cost of living, inflationary pressures, and other considerations, shall be utilized in assessing whether the minimum insurance requirements should be increased. CITY shall notify LESSEE of any required increase in insurance 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 33 of this LEASE. All such policies shall be written by insurance companies legally authorized or licensed to do business in the State of Alaska, and acceptable to CITY (Best's Rating Bf or better). CITY shall be listed as an additional insured under all insurance policies. LESSEE shall furnish CITY, on forms approved by CITY, certificates evidencing that it has procured the insurance required herein prior to the occupancy of the Leased Land or operation by LESSEE. Insurance policy deductibles are subject to approval by CITY. 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. The minimum insurance requirements under this LEASE shall not act to limit LESSEE's liability for any occurrence and shall not limit LESSEE's duty to defend and indemnify CITY for claims related to this LEASE or the Leased Land. 15-2 Subrogation Rights Waived. To the extent permitted bylaw, LESSEE hereby releases CTVY, its elected and appointed officials, employees and volunteers and others working on behalf of CITY from any and all liability or responsibility to LESSEE or anyone claiming through or Linder LESSEE by way of subrogation or otherwise, for any loss of any kind (including damage to property caused by fire or any other casualty), even if such loss shall have been caused by the fault or negligence of the CITY, its elected or appointed officials, employees or volunteers or others working on behalf of the CITY. This provision shall be applicable and in full force and effect only with respect to loss or damage occurring during the time of LESSEE's occupancy or use (including LESSEE's occupancy or use prior to the Effective Date of this LEASE), and LESSEE's policies of insurance shall contain a clause or endorsement to the effect that such release shall not adversely affect or impair such policies or prejudice the right of LESSEE to recover thereunder except as against CITY (including its elected and appointed officials, employees and volunteers and others working on behalf of CITY) during the time of LESSEE's occupancy or use. LESSEE agrees that its policies of insurance will include such a clause or endorsement. ARTICLE 16 - CONDENINAT ION If all or any part of the Leased Land is condemned for a public use by any government agency or other duly authorized entity, CITY and LESSEE shall each make a claim against the condemning LEASE: AGREEMENT BiTWE :N THE MY OF SEWARD AND 7URIS MINDENBERGS FEBRUARY 2006 -PAGE. t7 - 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 Leased Land is condemned for public use, LESSEE shall make a good faith determination as to whether or not the taking of the part of the Leased Land designated for condemnation will prevent it from continuing to operate on the 1-cased Land. If LESSEE determines in good faith that the condemning of such part of the Leased Lan(: will prevent it from continuing to operate on the Leased Land, LESSEE may notify CITY in writir- 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 Leased Land is subject. If at the time of such partial taking for public use, LESSEE determines that such partial taking will not prevent it from continuing to operate, then LESSEE and CITY shall negotiate an equitable and partial abatement of the rent beginning to be effective on the actual date when LESSEE is effectively prevented from utilizing the condemned land. LEASE AGREEMENT BETWEEN 'rHE CITY OF SEWARD AND JURIS MIINDENEERGS FEBRUARY 2006 PAGE 18 - ARTICLE 17 - ARBITRATION 17.1 Arbitration. a) 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. sect.), as it now exists or may hereafter be amended from time to time, and judgment on the ,iv and may be entered in any Superior Court in the State of Alaska. Notwithst:Tntling the foregoing, arbitration shall not be applicable to claims or disputes involviii , ,i requested remedy having a value of more than Fifty Thousand Dollars and No/100s (S50,000) (exclusive of interest and costs). All demands for arbitration and all ans\� Bring 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 Fifty Thousand Dollars and No/100s ($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 Fifty Thousand Dollars and No/100s ($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. b) 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. c) 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 .fudge 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 include 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. d) Arbitration hearings shall be conducted in Anchorage, Alaska or such other location LEASE AGRELMEN`r BETWEEN THE CITY of SEWARD AND 1URT5 MINDENBERGS FEBRUARY 2006 -PAGE 19 - as the parties may agree. Each party shall produce at the request of the other party, at least thirty (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. e) 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 18 - MAINTENANCE AND REPAIRS 18.1 Normal Maintenance. During the entire term of this LEASE and every extension hereof, if any, LESSEE shall, at LESSEE's sole cost, risk and expciise, maintain the Leased Land, including any improvements placed thereon by LESSEE, in as good condition as received or constructed by LESSEE, subject to normal, non -abusive use. CITY, at CITYY's sole option and expense, may, prior to the commencement of construction by LESSEE, perform maintenance and preventative work on the Leased Land, exclusive of improvements placed thereon by LESSEE, in order to prevent erosion, mitigate damage to plants and animals, or prepare. the Leased Land for eventual development by LESSEE or others by grading, filling. or contouring, ilic Leased Land. Any such work performed by CITY shall be at CITY's sole expense and risk unless LESSEE agrees, in advance and in writing, to share such expense and risk. LESSEE shall maintain in first class condition at all times all fire, pollution and other protective equipment, if any are placed on Leased Land. 18.2 ,Sufei)- 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. LVASI A{ M 1 AWN l BETWEEN THE CITY OF SEWARD AND JURIS MINDS NBERGS FEBRUARY 2006 -PAGE 20 - 18.3 Cost of Repairs. Should LESSEE dispute the necessity of any maintenance work as being ne:-,essary or advisable or reasonable to protect the public facilities on adjacent land, it may su'bri,;t the matter to arbitration; provided, however, that pending the decision of the arbitrator 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 therefore. 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 Leased Land shall become inadequate due to changes in environmental control standards or should any facility require updating or improvement by reason of a change in LESSEE's use of the Leased Land or operations there from, LESSEE shall either construct such improvements at LESSEE's own cost or reimburse CITY for such work at the option of CITY. it R' 1 1 C LE 1.9 - ENVIRONMENTAL CONCERNS 19.1 Hazardous Uai,-rials. 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. LESSEE may elect, at LESSEE's sole cost, to conduct a baseline soils test prior to execution of this LEASE. b) Release of CITE. 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 prior to, during, and after the term of this LEASE, and resulting from the use, keeping, storage or disposal of Hazardous Material on the Leased Land by LESSEE or its predecessors in interest, or arising out of or resulting from LESSEE's operations at the Leased Land or the operations of its predecessors in interest at the Leased Land except for those claims arising out of CITY's sole negligence or intentional misconduct. This release includes, without limitation, any and all costs incurred due to any investigation of the Leased Land 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. LEASE AGREEMENT BETWEEN THE CITY Or SEWARD AND 7URIs MfNDENBERGS FEBRUARY 2006 -PAGE 21 - i) LESSEE shall not cause or permit any Hazardous Material to be brought upon, kept or used in or about the Leased Land except for such Hazardous Material as is necessary to conduct LESSEE's authorized use of the Leased Land. ii) Any Hazardous Material permitted on the Leased Land as provided in this paragraph, and all containers therefore, shall be used, kept, stored and 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 Leased Land or elsewhere; or (b) condition, use or enjoyment of the Leased Land 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 Leased Land 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 note it islanding, 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 Leased Land, 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 Leased Land; in) Any lawsuit brought or threatened, settlement reached or government order LEASE AGREEMFNT BETWEEN THE MY of SEWARD AND JURIs MFNDENBERGS FEBRUARY 2006 FACIE 22 - relating to such Hazardous Material or any use of the Leased Land; and/or iv) Any violation of any laws applicable thereto; provided, however, that this Section 19.1(d) shall apply only if the acts giving rise to the claims, demands, penalties, fines, judgments, liabilities, settlements, damages, costs or expenses (1) occur prior to or during the term of this LEASE; and (2) arise in whole or in part from the use of, operations on, or activities on the Leased Land by LESSEE or LESSI~E's predecessors in interest, employees, agents, invitees, contractors, subcontractors, authorized representatives, subtenants 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 t.ertnination of this LEASE. e) Operator_ For all purposes, LESSEE shall be deemed the operator of any facility on the Leased Land_ 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 industrial waste 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, Alaska Statutes Title 46, 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_ 19.2 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 LEASE AGREEMENT BETWEEN THE CITY OF SEWARD AND JURIS MINDUNB RG5 FM- RUARY 2006 -PAGE 23 - shall be provided to CITY prior to LESSEE commencing work under this LEASE. LESSEE shall promptly make all reports to any federal, state or local government or agency required by any permit or Environmental Law, including reports of any spill or discharge of Hazardous Material. The CITY, through the City Manager, may order LESSEE to immediately cease any operations or activities on the Leased Land if the same is being carried out without necessary permits, in violation of the terms of any permit or Environmental Law, or contrary to this LEASE. b) Correspondence With and Reports to Environmental Agencies. LESSEE shall immediately provide CITY with copies of all correspondence and notice, including copies, of all reports between LESSEE and any state, federal or local government or agency regulating Hazardous Material which relates to LESSEE's operations on or use of the Leased Land. ARTICLE 20 - ESTOPPEL CERTIFICATES Either party shall at any time and from time to time upon not less than ten (10) days' prior written request by the other party, execute, acknowledge, and deliver to such party, or to its designee, a statement in writing certifying that this LEASE is unamended and in full force and effect (or, if there has been any amendment thereof, that the same is in full force and effect as amended and stating (lie amendment or amendments), that there are no defaults existing (or, if there is any claimed default. Mating the Mature and extent thereof); and stating the dates to which the rent and other charges have been paid in advance. ARTICLE 21- CONDITIONS AND COVENANTS All the provisions of this LEASE shall be construed to be "conditions" as well as "covenants," as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. ARTICLE 22 - NO WAIVER OF BREACH No failure by either CITY or LESSEE to insist upon the strict performance by the other of any term, covenant or condition of this LEASE or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or of such terms, covenants or conditions. No waiver of any breach shall affect or alter this LEASE, but each and every terra, covenant and condition of this LEASE shall continue in full force and effect with respect to any other then existing or subsequent breach. LEASE AGREEMENTBETWEEN THE CITY OF SEWARD AND JURIS MfNDLNBJ-'1K(.;S FEBRUARY 2005 -PAGE 24. ARTICLE 23 - TIME OF THE ESSENCE Time is of the essence of this LEASE and of each provision_ ARTICLE 24 - 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 25 - 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 26 - 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 27 - 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, and as they may be hereafter amended, including without limitation, Chapter 7.05 of the Seward City Code. /:]� � [y Il_�►�f;1�7.�-Il /'_fib. �:`�'/�1i! I �II`� If any provi s 11 i f' his LEASE is held by a court of competent jurisdiction to be invalid, void or unenforceable, th, ,-, r <m �:Jc r of the provisions shall remain in full force and effect and shall in no way be affected, l or invalidated. ARTICLE 29 - RELATIONSHIP OF PARTIES Nothing contained in this LEASE shall be deemed or construed by the parties or by any thud 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 AGRI"EM) NT BETWEEN THE CITY of SEWARD AND JUJUS MINDENBERGS FEBRUARY 2006 -PAGE 2-5 - ARTICLE 30 - INTERPRETATION The language in all parts of this LEASE shall in all cases be simply consttlied according to its fair meaning and not for or against CITY or LESSEE as both CITY and LESSEE have had the opportunity to seek assistance of counsel in drafting and reviewing this LEASE_ ARTICLE 31 - 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 32 - AMENDMENT This LEASE is not subject to amendment except in writing executed by both parties hereto. ARTICLE 33 - 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 All notices, demands or requests from CITY to LESSEE shall be given to LESSEE at the following address: 1 uris Mindenbergs 4128 148`t' Avenue NE Redmond, Washington 98052 Each party shall have the right, from time to time, to designate a different address by notice given in conformity with this Article. LEASE: AGREEMENT BETWEEN THE CITY of SEWARD ANDJURIS MJNDENBERGs F EBRUARY 2006 -PAGE 26 - ARTICLE 34 - FIRE PROTECTION LESSEE shall at its sole cost, risk and expense provide fire protection to its operations on the Leased Land and fire prevention to industry standards for risks to adjacent facilities such that those risks are minimized. LESSEE shall continue to provide and maintain industry accepted standards of fire protection such that the City of Seward'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' 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: CITY OF SEWARD 64A C4 By: Clark Corbridge Its: City Manager Date: Z — / Q — d L ATTEST: L Je Lewis, M Cify Clerk T T Y1 Ed : r.�a tie �� •fie. t -n�_; �r r _ LESSEE: Juris.lindenber s Dat�/ -Z,` u I-FASE AGREEMENT BETWFF,N THE CITY OF SEWARD AND JURIS MINI}ENBERGS FEBRUARY 2006 -PAGE 27 - STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this 10 fA day of Yt� 006, before me, the undersigned, a Notary Public in and for the State of Alaska, personally appearrl Clark Corbridge, known to me and to me known to be the 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 East hereinabove written. P otary Public in and for Alaska My Commission Expires:_a7- f4f�C9 STATE OF ALASKA ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this'--"-6 day of w k 2006, before me, the undersigned, a Notary Public in and for the State of Alaska, personally appeared Juris Mindenbergs, known to me and to nle known to be the individual named in and who executed the foregoing document for the uses and purposes therein set. forth. WITNESS my hand and notarial seal the day and year first hereinabove written. -VNbta Pulic in and for Klaska myt#ee *fission Expires: > -t/ �i te LL-ASF AGREFMENT BETW14ENT THE CrrY OF SEWARD AND JURIS MiNDENBERGS EEBRUARY 2006 -PAGE 28 - LEASE EXTENSION AMENDMENT (RE-06-008) THE CITY OF SEWARD, ALASKA, a home rule municipal corporation, organized and existing under the laws of the State of Alaska, hereinafter referred to as "CITY," whose address is PO Box 167, Seward, Alaska 99664 and Vertical Air LLC., P.O. Box 2032 Seward, Alaska 99664, hereby agree that the lease agreement 06-008, dated February 24,2006, as amended, for Lot 5B, Block 1, Seward Small Boat Harbor Subdivision, City of Seward, Alaska and recorded as Plat No. 2000-19 in the Seward Recording District, Third Judicial District, State of Alaska is hereby amended as follows: ARTICLE 2. LEASE TERM and OPTIONS TO EXTEND The term of this lease shall be extended for sixteen (16) years and shall terminate on February 24, 2052. LESSEE shall have the right to extend the tern of this LEASE for Two additional Five year (5) year periods, provided that: a) LESSEE exercises its 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; and c) LESSEE shall exercise its options to extend by sending written notice in accordance with the provisions of Article 37 of this LEASE. ARTICLE 4.1 USE OF LEASED LAND LESSEE shall continue to operate a retail shop throughout the term of the lease, and failure to do so constitutes a condition of default. In all other respects, the Lease is to remain unchanged and in full force between the undersigned parties. ARTICLE 5.4 LIMITED ACCESS EASEMENT The City reserves a limited easement across the West fifteen (15) feet of the lease land, for limited use of and by the City for emergency and utility access, and for access by other shop owners or lessees of parcels on Block 1, Marina Subdivision and Seward Small Boat Harbor Subdivision for the limited purposes of emergency use, deliveries and owners/employee parking. LESSEE agrees to keep this easement clear of obstructions, but LESSEE assumes no responsibility for snow removal. Page 1 of 3 LESSOR: CITY OF SEWARD - hfAe�- Jane ower, City Manager Date: (City Seal) STATE OF ALASKA THIRD JUDICIAL DISTRICT r �cc-UT7- Linda Chichester, Member THIS IS TO CERTIFY that on this --I,_ day of �,�,(AnyAvr4., 2022, before me, the undersigned, a Notary Public in and for the State of Alaska, pea onally appeared Janette Bower, known to me and to me known to be the 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. flll WITNESS my hjp9� seal the day and year first hereinabove written. 0TAP, y LIC = (�401af) y`'` 't za2° ' P �� NOTAR P L AND FO A ASKA O 1f111� �5\ My Commission Expires: Page 2 of 3 STATE OF ALASKA ) )ss THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this day of CCc�r� 2021, personally appeared before me the undersigned, a Notary Public in and for the State of Alaska, to me known to be Member Cliff Krug theindividual that executed the foregoing instrument and acknowledged to me the said instrument to be the free and voluntary act and deed, for the uses and purposes therein mentioned of the Limited Liability Company and on oath stated that he is authorized to execute said instrument on behalf of the Limited Liability Company. WITNESS my hand and notarial seal the day and year first hereinabove written. �`��lltlJl�!!!�///U tj������ Notary ublic C and for !NOTARY! AlaskaMy Commission • A.RY 'P.PrJ$ C Expires: � � q ��� �•-----...•�. - \tea /1,;� STATE OF ALASKA ) )ss THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this 2 9 day ot P ,-Q 2021, personally appeared beforeme the undersigned, a Notary Public in and for the State of Alaska, to me known to be Member, Linda Chichester the individual that executed the foregoing instrument and acknowledged to me the saidinstrument to be the free and voluntary act and deed, for the uses and purposes therein mentioned ofthe Limited Liability Company and on oath stated that he is authorized to execute said instrument on behalf of the Limited Liability Company . WITNESS my hand and notarial seal the day and year first hereinabove written. 1111ttliEllrrll/ . .. .kV //�', Notary P is in and for � 'ct °" �'y� AlaskaMy Commission 'NOTARY. Expires: `..PUBLIC;*0 OF NV Page 3 of 3 CONSENT TO ASSIGNMENT This CONSENT TO ASSIGNMENT is made and entered into by the City of Seward Ccit ill\. RECITALS A. The City and Juris Mindenbergs are parties to that certain Lease Agreement L06- 008; dated as of 2/24/2006, as evidenced in that certain Memorandum of Lease recorded March 2, 2006 as Serial No.2006-000309-0; and B. The legal description of the leased property is: Lot 5B Block 1 Seward Small Boat Harbor Subdivision, City of Seward, Alaska and recorded as Plat No.2OOO-19 in Seward Recording District, Third Judicial District, State of Alaska. and C. Juris Mindenbergs has asked that the City consent to the assignment of all of right, title, and interest in and to the Agreement to Vertical Air LLC. CONSENT 1. City hereby consents to the assignment of Juris Mindenbergs right, title and interest in and to the Agreement to Vertical Air LLC's assumption of all of the obligations of Juris Mindenbergs (the assignment and assumption of the Agreement is collectively referred to herein as the "Assignment"). Following the Assignment, the Agreement shall continue in full force and effect with Vertical Air LLC, substituted for Juris Mindenbergs as applicable. The undersigned has executed this Consent to Assignment as of the date set forth below. City of Seward Date: ,,01%ro4apsecds_ae Ja , e Bower, City Manager SEAL ° ATTEST: i m .Q .....:... Can OF �sssessessrroro�ro Brenda Ballou, ty Clerk