HomeMy WebLinkAboutRes1992-121
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Sponsored by: Schaefermeyer
CITY OF SEWARD, ALASKA
RESOLUTION NO. 92-121
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, APPROVING AN AGREEMENT WITH
SEWARD SHIP'S DRYDOCK, INC., FOR THE LEASE OF
22.647 ACRES OF REAL PROPERTY LOCATED WITHIN THE
SEWARD MARINE INDUSTRIAL CENTER, INCLUDING THE
SYNCROLIFf PLATFORM, THE ADJACENT DOCK AND
ASSOCIATED RAILS AND TRANSFER SYSTEM AND CALLING
A SPECIAL ELECTION TO SEEK VOTER APPROVAL OF THE
DISPOSAL OF THE SHIPLIFf FACILITY
WHEREAS, since 1980, the City of Seward has provided for development of the
Seward Marine Industrial Center (SMIC) and the City has expended over $40 million in
construction of improvements to the area; and
WHEREAS, the City has sought development and diversification of the Seward
economy by the construction of the above facilities and other projects at the Seward
Marine Industrial Center including financing and construction of the Spring Creek
Correctional Center which has over 200 full-time people employed, the construction by
Chugach Alaska of a sawmill operation with a value in excess of $10 million on land
leased from the City of Seward, construction of a dock by Inlet Salmon in exchange for
lease of uplands in the harbor, and the purchase and operation of other facilities
including a 250 ton travelift, barge unloading facility, and the North Dock, all of which
represent investment by the City or private parties; and
WHEREAS, the City has consistently encouraged the development of a marine
repair and construction facility at SMIC; and
WHEREAS, by lease agreement dated August, 1988, the City leased approximately
two acres of land to James Pruitt/d/b/a Seward Ship's Chandlery for the construction and
operation of a marine repair facility; and
WHEREAS, the City and Seward Ship's Chandlery are in the process of arbitrating
whether the tenant has defaulted in the terms of the original lease, and the amount of
rent due; and
WHEREAS, by Request for Proposal dated December, 1990, the City sought
interest in the construction of additional repair facilities adjacent to the existing leased
land to Seward Ship's Chandlery, in order to promote a multiple user concept for SMIC;
and
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 92-121
WHEREAS, Todd Shipyards, Inc., withdrew its proposal for a multiple-user lease
for land adjacent to that leased by Seward Ship's Chandlery before negotiations could
commence; and
WHEREAS, James T. Pruitt has indicated his desire to lease additional land,
including the entire shiplift platform system, the shiplift dock, rail and transfer facilities
under the name Seward Ship's Drydock, Inc.,; and
WHEREAS, the City and James T. Pruitt have negotiated a lease agreement in the
form attached hereto as Exhibit A; and
WHEREAS, the City Council finds that it would not be in the public interest to
appraise the value of the property being leased; and
WHEREAS, the City Council finds that a negotiated lease without public bidding
is in the public interest; and
WHEREAS, a portion of the land to be leased includes public facilities that are
within the definition of a city utility as described in the Seward City Charter Section
1.5(k), and
WHEREAS, pursuant to Section 13.4 of the Seward City Charter, a disposal by
lease or sale or otherwise of property used or useful in the operation of a utility must be
approved by three-fifths of the electors voting on a proposition to approve the same; and
WHEREAS, in order to allow Pruitt to move forward with the lease of the
property during the current construction season, the City Council finds it in the public
interest to call a special election for the purpose of seeking voter approval of the lease of
the shiplift dock and the Syncrolift shiplift platform;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The city manager or his designee is authorized to execute the lease
agreement attached as Exhibit A to this resolution.
Section 2. An election shall be held on Tuesday, August 18, 1992, in and for the
city of Seward for the purpose of submitting to the qualified voters of the city the
question of approval of a lease agreement with Seward Ship's Drydock, Inc., for the lease
of 22,647 acres of real property located within the Seward Marine Industrial Center
including the Syncrolift Platform, the adjacent dock and associated rails and transfer
system. An affirmative vote of three-fifths of the qualified electors voting on the
proposition shall be required for approval of the lease agreement.
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 92-121
Section 3. The proposition shall be substantially in the following form:
PROPOSITION NO.
LEASE AGREEMENT WITH SEWARD SHIP'S DRYDOCK, INC.
Do you approve the lease of 22.647 acres of real property located within the Seward
Marine Industrial Center, including the syncrolift platfonn, the adjacent dock and
associated rails and transfer system, as approved by City Council Resolution No.
92-121, to Seward Ship's Drydock, Inc.?
Section 4. The foregoing proposition shall be printed on a ballot which may set
forth other propositions. The proposition set forth in Section 3 above shall be printed in
full, and the following words shall be added as appropriate and next to a space provided
for marking the ballots:
PROPOSITION NO.
YES
NO
Section 5. A person may vote at this election who (a) is qualified to vote in state
election sunder AS 15.05.010, (b) has been a resident of the City for at least 30 days
immediately preceding the election, (c) is registered to vote in state elections at a
residence address within the city at least 30 days before the election, and (d) is not
disqualified under Article V of the Alaska Constitution. The election shall be conducted
in compliance with the procedures established in Title 4 of the Seward City Code.
Section 6. Publication of this resolution shall be made by posting a copy hereof
on the City Hall bulletin board and one other public place for a period of at least 20 days
prior to the date of the election, and notice shall be published in a newspaper of general
circulation within the city at least 20 days prior to the election. In addition, copies of the
resolution shall be made available at the City Clerk's Office from the date of passage until
the date of the election.
Section 7. The lease agreement shall not be effective until it has been
approved by three-fifths of the electors voting on a proposition to approve the same.
Section 8. This resolution shall become effective immediately upon its adoption.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this
27th day of July, 1992.
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 92-121
AYES:
NOES:
ABSENT:
ABSTAIN:
A TIEST:
THE CITY OF SEWARD, ALASKA
( '/
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/1/ tf'I'lUCd:..d ~ - -'7 YL
Donald W. Cripps, ~yor
Bencardino, Cripps, Dunham & Swartz
Crane
Krasnansky & White
None
APPROVED AS TO FORM:
Perkins Coie, Attorneys for the city of
Seward, Alaska
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(City Seal)
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Fred B. Arvidson
City Attorney
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LEASE AGREEMENT
BETWEEN
SEWARD SHIP'S DRYDOCK, INC.
AND
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CITY OF SEWARD
, 1992
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ARTICLE 1.
ARTICLE 2.
2.1.
2.2.
2.3.
ARTICLE 3.
3.1.
ARTICLE 4.
4.1.
4.2.
4.3.
4.4.
4.5.
4.6.
4.7.
ARTICLE 5.
5.1.
5.2.
5.3.
5.4.
ARTICLE 6.
6.1.
6.2.
6.3.
6.4.
ARTICLE 7.
7.1.
7.2.
7.3.
7.4.
ARTICLE 8.
8.1.
8.2.
ARTICLE 9.
9.1.
CITY OF SEWARD AND SEWARD SHIP'S DRYDOCK. INC.
LEASE AGREEMENT
CONTENTS
LEASED LAND.................................. 2
CONDITION OF LEASED LAND AND UNLEASED
BUT MAINTAINED FACILITIES.................... 3
Opportunity to Become Informed. .............. 3
Acceptance of Leased Land and unleased
but maintained facilities "as is". ........... 3
Adequacy of Public Facilities for
Intended Use by Lessee....................... 4
COVENANT OF QUIET ENJOyMENT.................. 5
Exceptions to CITY's covenant. ............... 5
UTILITIES AND RIGHTS OF ACCESS............... 5
LESSEE's Right to Access Leased Land. ........ 5
Utilities Provided to the Leased Land. ....... 5
Extension or Additional Utility Services
at LESSEE's Expense.......................... 6
Disruptions and Adequacy of utility
Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Access to Public utilities. .................. 6
LESSEE Responsible for Utility
Disruptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
CITY Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PLATTING AND LAND USE REQUIREMENTS........... 7
Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Platting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Land Use Petitions. .......................... 8
Future Easements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
LEASE TERM................................... 9
Conditions Precedent to Commencement of
Lease Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Relation to Existing Lease. .................. 11
Transfer of Possession. ...................... 11
Primary Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12
CONSTRUCTION BY LESSEE....................... 12
General Construction Provision. .............. 12
Construction Related to Publicly Owned
Facilities--Generally. ....................... 13
Work on Specific Publicly Owned
Facilities. .................................. 13
Required Construction. ....................... 14
USE OF LEASED LAND........................... 14
Permi tted Uses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
Compliance with Applicable Law. .............. 15
RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16
Rent Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16
Lease Agreement/1992
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9.2.
9.3.
ARTICLE 10.
10.1.
10.2.
10.3.
10.4.
10.5.
10.6
ARTICLE 11.
11. 1.
11. 2.
11.3.
11.4.
11. 5.
11. 6.
11. 7.
11. 8.
ARTICLE 12.
12.1.
12.2.
12.3.
12.4.
12.5.
12.6.
12.7.
ARTICLE 13.
ARTICLE 14.
ARTICLE 15.
ARTICLE 16.
16.1.
16.2.
16.3.
16.4.
16.5.
16.6.
Cost of Living Adjustment to Minimum
quarterly rent. .............................. 17
Base Rate Adjustments by City. ............... 18
MAINTENANCE AND REPAIR. . . . . . . . . . . . . . . . . . . . . .. 18
General Obligation to Maintain and
Repair. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18
specific standards of Maintenance. ........... 19
Annual Inspections........................... 20
Regular Maintenance, Repair and
Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 21
Unusual Maintenance Requirements,
Accidents, Damage. ........................... 21
Notice of Discovery of Condition. ............ 22
ENVIRONMENTAL eONCERNS....................... 22
Condition of Leased Land. .................... 22
Release of CITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . " 23
Use of Hazardous Materials on the Leased
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23
Indemnification of CITY. ..................... 24
Facility Operator............................ 25
Hazardous Material Defined. .................. 25
Environmental Law Defined.................... 25
Permits and Reporting. ....................... 25
USE OF ADJACENT LAND/PUBLIC FACILITIES. ...... 26
No Preferential Rights to Use Public
Facilities. .................................. 26
Other Users of SMIC. ......................... 26
Adequacy of Public Facilities. ............... 27
Tariffs and Other Service Fees. .............. 27
Time for Payment of Utilities, Taxes. ........ 27
Use of the Dock. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 27
Risk to Adjacent Facilities.................. 28
TITLE TO IMPROVEMENTS INSTALLED BY
LESSEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 28
FORCE MAJEURE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 29
INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 29
INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 29
General Obligation to Insure. ................ 29
Required Insurance. . . . . . . . . . . . . . . . . . . . . . . . . " 30
Self-Insured Retention or Deductible. ........ 32
Adjustments to Insurance Coverage. ........... 32
Policy Provisions. ........................... 33
Sub-contractors or Work on Leased Land
by Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 34
Lease Agreement/1992
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ARTICLE 17. ACTS OF DEFAULT.............................. 34
ARTICLE 18. REMEDIES FOR DEFAULT......................... 36
ARTICLE 19. SUBLEASE OR ASSIGNMENT....................... 37
ARTICLE 20. CONDEMNATION................................. 38
ARTICLE 21. CASUALTIES................................... 39
ARTICLE 22. DISPUTES BETWEEN PARTIES..................... 39
ARTICLE 23. FIRE PROTECTION.............................. 40
ARTICLE 24. ESTOPPEL CERTIFICATES........................ 40
ARTICLE 25. CONDITIONS AND COVENANTS..................... 41
ARTICLE 26. NO WAIVER OF BREACH.......................... 41
ARTICLE 27. TIME OF ESSENCE.............................. 41
ARTICLE 28. COMPUTATION OF TIME.......................... 41
ARTICLE 29. SUCCESSORS IN INTEREST....................... 41
ARTICLE 30. ENTIRE AGREEMENT... . . . . . . . . . . . . . . . . . . . . . . . . .. 41
ARTICLE 31. GOVERNING LAW................................ 41
ARTICLE 32. PARTIAL INVALIDITy........................... 42
ARTICLE 33. RELATIONSHIP OF PARTIES...................... 42
ARTICLE 34. INTERPRETATION............................... 42
ARTICLE 35. NUMBER AND GENDER............................ 42
ARTICLE 36. MANDATORY AND PERMISSIVE..................... 42
ARTICLE 37. CAPTIONS..................................... 42
ARTICLE 38. AMENDMENT.................................... 42
ARTICLE 39. DELIVERY OF NOTICES - METHOD AND TIME........ 43
ARTICLE 40. NOTICES...................................... 43
ARTICLE 41. CHANGE OF ADDRESS............................ 43
Lease Agreement/1992
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LEASE AGREEMENT
CITY OF SEWARD AND SEWARD SHIP'S DRYDOCK, INC.
THIS AGREEMENT, made and entered into this day of
, 1992, and is between the CITY OF SEWARD, a home
rule municipality located in the Kenai Peninsula Borough,
state of Alaska, hereinafter referred to as "CITY", and SEWARD
SHIP'S DRYDOCK, INC., hereinafter referred to as "LESSEE".
LESSEE is a successor in interest to James T. pruitt, d/b/a
Seward Ship's Chandlery.
RECITALS.
1. WHEREAS, on August 17, 1988, LESSEE and CITY
executed a lease agreement leasing certain lands at the Seward
Marine Industrial Center, which lease was approved by the City
Council of the City of Seward by Resolution 88-084, and which
lease is hereafter referred to as "the existing lease "; and
2. WHEREAS, LESSEE desires to expand its current
operations from the existing lease to include additional
investment and business expansion; and
3. WHEREAS, LESSEE desires to undertake, and CITY
desires to be relieved from all maintenance responsibilities
with respect to the pUblic facilities constructed on the
leased land and, in addition the public facilities adjacent or
near the leased land which are to be maintained by LESSEE
(hereafter referred to as "the unleased but maintained
facilities"); and
4. WHEREAS, LESSEE desires to maintain the public
facilities on the leased land and the unleased but maintained
facilities without cost or obligation by CITY; and
5. WHEREAS, CITY has invested substantial pUblic monies
in the construction of public port facilities adjacent to and
on the Leased Land in order to provide opportunities for the
development of a ship repair and construction industry in the
City; and
6. WHEREAS, the City Council of the City of Seward has
determined that a lease of the Leased Land would be in the
public interest in that such a lease would be compatible with
the pUblic'S use of the public port facilities and would
provide employment for the residents of the City of Seward,
and would promote the growth and stability of the economy of
Seward all as set forth more fully in Resolution 92-
adopted by the City Council of the City of Seward, Alaska; and
7. WHEREAS, LESSEE will offer comprehensive marine
repair services including, but not limited to, steel and other
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metal work, marine pipe fitting, marine electrical repair,
waste handling, sand blasting, painting and other marine and
heavy industrial services; and
8. WHEREAS, the City has obtained partial funding for
the construction of a rail transfer facility from the EDA and
the parties desire to obtain an EDA determination that this
lease agreement does necessitate repayment of the grant;
NOW, THEREFORE, for and in consideration of the mutual
promises and covenants contained herein, the parties agree as
follows:
ARTICLE 1.
LEASED LAND
The Leased Land granted by CITY under this Lease
(hereinafter referred to as "Leased Land") consists of 22
acres more or less, and is located within USS 4827, Tract A of
the Fourth of July Creek Tracts according to Plat 84-6, and
ATS 1222 according to Plat 84-2, and more specifically
described on the attached Exhibit A, which is incorporated
into this Lease by reference.
1.1. All of the Leased Land is not now owned in fee
simple by CITY. Some of the Leased Land may be considered
tidelands and is leased subject to any interest the United
States or the State of Alaska may have because of its
classification as tidelands. CITY agrees to apply for and
aggressively pursue any necessary tidelands permits or leases
to such land and upon receipt to further lease to LESSEE, by
whatever means necessary, CITY's interest in such land in
accordance with the provisions of this Agreement. LESSEE
agrees to join with CITY and assist CITY in obtaining title to
the Leased Land by executing such consents or documents as may
be necessary or convenient in applications or proceedings
before any federal or state agency, including the Bureau of
Land Management (BLM), to enable CITY to obtain title to the
Leased Land. In the event CITY fails to obtain title to these
lands within eighteen months from the approval of this lease
agreement by the city Council of the City of Seward, and
failure to obtain such title adversely affects LESSEE's quiet
enjoyment,in the same manner and to the same extent as set
forth in paragraph 2 of Article 20, then LESSEE shall have as
his only remedy the right to terminate this lease.
1.2. CITY does hereby lease the above-described parcel to
LESSEE for the establishment and operation of a comprehensive
marine repair and construction facility as more particularly
described in Section 8.1. of this Lease Agreement.
1.3. The pUblic facilities adjacent or near the Leased
Land which are to be maintained pursuant to Article 10 are
Lease Agreement/1992
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hereafter referred to as "the unleased but maintained
facilities" and are identified on the attached Exhibit B.
ARTICLE 2.
CONDITION OF LEASED LAND AND UNLEASED BUT
MAINTAINED FACILITIES
2.1.
opportunity to Become Informed.
Under the terms of the existing lease with Seward Ship's
Chandlery, and even prior to the effective date of that
agreement, the predecessors in interest to LESSEE have been in
operation in the Seward Marine Industrial Center and
particularly from the Leased Land and the unleased but
maintained facilities. LESSEE has had ample opportunity to
avail itself of this operating experience and CITY agrees to
provide, prior to the commencement of the Lease Term, any
information in possession of CITY and requested by LESSEE
concerning the construction, design, operation, maintenance,
or other matters affecting the Leased Land or the unleased but
maintained facilities.
2.2.
Acceptance of Leased Land and unleased but
maintained facilities "as is".
LESSEE accepts the Leased Land, and its responsibilities
for the unleased but maintained facilities "as-is". LESSEE
has not relied upon, and CITY specifically declines to make
any representations, warranties, or statements that might in
any way be construed to imply that the Leased Land and the
unleased but maintained facilities, including the facilities
constructed or operated thereon by CITY, are designed,
constructed, maintained, or in conformance with any
particular standard or condition. Rather, LESSEE has had full
opportunity to inform itself as to the conditions of the
Leased Land and the facilities thereon and the unleased but
maintained facilities and LESSEE solely accepts that
responsibility. LESSEE assumes the following risks insofar as
they might affect its intended use of the Leased Land, or its
business operations from the Leased Land or otherwise:
(a) The risk that any underlying permits, approvals
or consents by governmental agencies are void or voidable,
invalid, or expired.
(b) The risk that any design of any of the
facilities, including those unleased but maintained, is
improper, or not to generally accepted standards, including
failure of any design to provide for:
(i) risks from unknown natural causes;
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(ii) risks from geological influences such as
subsidence, glacial stream deposits or erosion, underwater
tidal currents and other forces that may act on or affect the
breakwater, syncrolift, dock and other facilities;
(iii) inadequate or inaccurate baseline
information upon which design parameters may have been
developed, including rainfall, flooding, tidal wave, tide
elevation, wave, storm surge, and other events; and
(iv) prior use of the Leased Land or adjacent
lands and waters by others, including unknown military
activities, historic native uses, or other factors.
(c) Risk that construction of any of the Leased
Land facilities or the unleased but maintained facilities was
improper, not to accepted standards, or other defects,
apparent or hidden. These risks include at least the risk
that:
(i) improper materials were used in
construction, including improper grades, quality of steel,
welding materials or others,
(ii) improper welding, pile driving, dredging
or other techniques were used in construction, and
(iii) the construction process was not
adequately inspected or monitored by CITY or its agents.
If one or a combination of events, the risk of which is
assumed by Lessee as provided above, occurs and prevents
Lessee from continuing its operations on the Leased Land,
LESSEE shall have as its sole remedy against CITY the right to
terminate this Lease Agreement in the manner set forth in
section 20. LESSEE has no expectations of any right or
ability to recover from CITY or others for any future damages,
problems, occurrences, or other losses that may in any way be
caused by, or related to, prior activities of CITY, its
agents, contractors, engineers or consultants as set forth
above.
(d) Encumbrances, damage, pOllution or other
restrictions on use discoverable by inspection including the
environmental baseline study referenced in Section 11.1 of
this lease.
2.3.
Adequacy of pUblic Facilities for Intended
Use by Lessee
CITY makes no representations or warranties as to any
particular part or the whole of the Leased Land including the
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facilities constructed thereon by CITY or others, and the
unleased but maintained facilities with respect to their
fitness for the uses intended by LESSEE, and LESSEE has
inspected those facilities and has satisfied itself that they
are adequate and sufficient for the intended uses by LESSEE.
ARTICLE 3.
COVENANT OF QUIET ENJOYMENT
Subject only to restrictions of title including those
contained in patent to any portion of the Leased Land, and the
provisions of this lease, including those in this Article,
CITY hereby covenants that LESSEE shall have the quiet
enjoyment and possession of the Leased Land for the uses
authorized hereunder for the full term of this lease. Subject
to the other provisions of this lease, including Section 3.1
below and section 22, LESSEE may terminate this lease for a
substantial breach of this covenant.
3.1.
Exceptions to CITY's covenant.
The following are exceptions to CITY's covenant of quiet
enjoyment contained in Section 3.0 above:
(a) Any disturbances to quiet enjoyment resulting
from rights of the Federal Government, the State of Alaska,
tribal or Native group, or the public; provided, CITY in good
faith uses its best efforts to minimize such disturbances.
(b) Any disturbances to quiet enjoyment resulting
from conditions imposed by the Kenai Peninsula Borough
platting authority provided that CITY in good faith uses its
best efforts to minimize such disturbances.
ARTICLE 4.
UTILITIES AND RIGHTS OF ACCESS
4.1.
LESSEE's Right to Access Leased Land.
In addition to the rights of possession and use conferred
herein upon LESSEE to the Leased Land, LESSEE shall have all
rights of access to and egress from the Leased Land necessary
to construct and operate LESSEE'S facilities (including any
easements necessary for access to public streets); however,
CITY does not warrant the adequacy of access affected or
disrupted by failure, damage, maintenance, or other cause
related to the unleased but maintained facilities.
4.2.
utilities Provided to the Leased Land.
CITY provides utility services to the Leased Land within
the locations cross-hatched on Exhibit A. CITY shall retain
ownership of those improvements including electrical primary
transformers.
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4.3.
Extension or Additional utility Services at
LESSEE's Expense.
Any additions, improvements, or increase to capacities of
any of the utilities now provided to the Leased Land, or to
the unleased but maintained facilities, shall be at the sole
cost and expense of LESSEE. CITY shall have no obligation to
supply increase utility services beyond those responsibi-
lities contained in the Seward City Code utilities provisions.
CITY does not provide special treatment or handling facilities
for vessel waste (from holding tanks, bunker, or otherwise),
industrial or hazardous wastes of any type.
4.4.
Disruptions and Adequacy of utility services.
LESSEE is thoroughly familiar with the existence and
services provided by the existing utilities by reason of the
existing lease, and LESSEE's use of the unleased but
maintained facilities. LESSEE recognizes that utility
services provided to the Leased Land and the unleased but
maintained facilities are periodically subject to disruptions
of service. In particular, electrical outages in Seward are
commonplace and may have a direct effect on the ability of
LESSEE to operate normally, including operations of the
shiplift. LESSEE is assuming all risk of loss for disruption
of utilities to the Leased Land or the unleased but maintained
facilities. LESSEE may, if it desires, install stand-by
generation equipment, but the interconnection of that
equipment to existing utility lines must be coordinated and
approved by the city engineer. CITY shall have no
responsibility, in case of an outage of utility service, to
afford any special priority to the Leased Land or the unleased
but maintained facilities.
4.5.
Access to Public utilities.
CITY shall be entitled to reasonable access to all such
utilities for the purpose of accomplishing inspection,
maintenance, repair and replacement of such utilities.
4.6.
LESSEE Responsible for utility Disruptions.
LESSEE shall protect against and be responsible for any
loss, cost, expense, damage, or injury which is caused by any
damage or injury to such utilities resulting from the use,
occupation, activities or operations of LESSEE, or by its
employees, tenants, leases, contractors, agents, customers,
licensees, invitees, representatives, or other persons allowed
to enter upon, use, possess or occupy the Leased Land, and
LESSEE shall promptly coordinate with CITY and repair any such
damage or injury to such utilities at no cost or expense to
CITY. Responsibility of LESSEE shall specifically include
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reasonable costs to CITY in restoring utility service
increased operational expenses incurred because of an
for which LESSEE is responsible under this paragraph.
costs may include employee costs, increased electrical
generation costs and other costs associated with disrupted
service or restoration thereof.
or
outage
Such
4.7.
CITY Access.
LESSEE will not unreasonably deny access, upon request at
any time, to city employees, including police, fire (paid and
volunteer), safety (ambulance corps, medics, etc.),
engineering, public utility or other employees of the City who
in the normal course of their duties have need for access to
any part of the Leased Land. Under no circumstances will
LESSEE deny access at any time to city employees including
police, fire (paid or volunteer), safety (ambulance corps,
medical, etc.), engineering, public utility or other employees
during a time of emergency which may endanger city-owned
property or the public safety. LESSEE shall control access to
the Leased Land in cooperation with the Seward harbormaster.
ARTICLE 5.
PLATTING AND LAND USE REQUIREMENTS
5.1.
Survey.
CITY shall retain a professional registered land surveyor
who will conduct a survey of the Leased Land. The survey
shall include dedicated easements for utilities, roads, and
other requirements for platting approval. LESSEE and CITY
shall each be responsible for, and shall promptly pay, 50% of
the cost of the survey. Other survey work, such as as-built
surveys, engineering and survey work for permits or other
governmental requirements, shall be at the sole cost and
expense of LESSEE. That new description shall be considered
the correct description of the Leased Land for all purposes
under this Lease Agreement. The intent of the parties in
providing for an interim description of the Leased Land on
Exhibit A is to sufficiently identify the Leased Land for
purposes of public hearing and approval of the Lease Agreement
by the City Council and electorate of the City of Seward and,
further, to enable LESSEE to have access as herein provided
for commencement of maintenance, operations and/or
construction.
5.2.
Platting.
CITY, at its expense, shall prepare a plat of the Leased
Land, and LESSEE shall cooperate with CITY's preparation and
in the submission of that plat for approval.
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5.3.
Land Use Petitions.
CITY represents that the current zoning classification of
the Leased Land is zoned industrial and that the Seward
Comprehensive Plan does not restrict the use of the Leased
Land and Premises as a marine repair and construction facility
or other uses related thereto. In the event that at any time
LESSEE deems it necessary or appropriate to obtain use, zoning
or subdivision and precise plan approval for the Leased Land,
Premises, or any part thereof, CITY agrees from time to time
upon request of LESSEE to execute such documents, petitions,
applications and authorizations as may be appropriate or
required to obtain from the agency or public body responsible
therefor any conditional use permits, zoning and re-zoning,
tentative and final tract approval and precise plan approval.
This section shall impose no financial obligation on the city
of Seward to assist LESSEE in obtaining any other permits or
approvals for operation or construction, such as those
required by the Environmental Protection Agency (Clean Air Act
permits), etc. However, CITY shall cooperate and assist
LESSEE in connection therewith. 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 and, in
accordance with the terms of this agreement, covenants,
conditions and restrictions providing for the granting of uses
of the Leased Land, Premises, or any part thereof, the
establishment of party walls, the establishment of mutual and
reciprocal parking rights or rights of ingress or egress, or
other like matters, all of which are for the purpose of the
orderly development of the Leased Land as a commercial unit,
subject, however, to the conditions that:
(a) All such matters shall be limited to the Lease
Term and shall terminate upon termination of the lease for
whatever reason.
(b) Any such matters of a permanent nature
extending beyond the Lease Term shall not be granted without
the prior written approval of CITY. In any of the foregoing
instances referred to in this section, CITY shall be without
expense therefore, and the cost and expense thereof shall be
borne solely by LESSEE.
(c) At the expiration of the Lease Term (including
any extended period) third party improvements on the Leased
Land other than trade fixtures and portable equipment shall
become, at the option of CITY, the property of CITY without
the payment of any compensation to LESSEE, except as may be
otherwise agreed.
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Nothing in this section is intended to suggest that any
such approvals or documents are necessary for LESSEE's use of
the Premises. CITY represents and warrants that no such
approvals or documents are needed for LESSEE's operation of
the Premises.
5.4.
Future Easements.
In order to provide for the more orderly commercial
development of the Leased Land and adjacent lands including
publicly owned facilities at the Seward Marine Industrial
Center, it may be desirable or required that street, water,
sewer, drainage, gas, power line and other easements and
dedications (including public water, sewer, electrical and
other utilities,) be granted or dedicated over or within
portions of the Leased Land. As additional consideration for
this lease, both CITY and LESSEE 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 others for the purpose of granting such
easements and dedications; provided, however, that such
easements and dedications and similar rights do not
unreasonably interfere with LESSEE's efficient operation or
LESSEE's rights hereunder. The costs of locating or
relocating any public easements or restrictions of record
including any relocation of public road, railroad, utility, or
other easement shall be at the sole cost and expense of the
party requesting the location or relocation. CITY shall not
refuse reasonable requests for such relocations provided those
relocations do not interfere with or inhibit the overall
development of the Seward Marine Industrial Center. Any
easements or rights of access granted to LESSEE by CITY need
not be exclusive to LESSEE.
ARTICLE 6.
LEASE TERM
6.1.
Conditions precedent to Commencement of Lease
Term.
The following are conditions precedent to commencement of
the Lease Term and LESSEE'S right to possession:
(a) Approval of this lease agreement by the
electorate of CITY in accordance with City of Seward Charter
section 13.4.
(b) Preparation by September 15, 1992, of the
Baseline Assessment referenced in Section 11.1 of this Lease
and the absence of an election by a party and notification of
that election pursuant to section 11.1.
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(c) A written determination by the Economic
Development Administration that Grant 070103904 dated 8/86
from the EDA for the construction of the rail transfer system
located on the Leased Land need not be re-paid by reason of
this Lease Agreement. Immediately after Council approval of
this Lease Agreement and before August 1, 1992, LESSEE and
CITY, through their respective counsel, shall jointly prepare
and submit a request for such a determination.
(d) LESSEE shall provide CITY, in form acceptable
to CITY'S counsel, signed released waivers, or consents by any
third parties who claim an interest in any portion of the
Leased Land by reason of the existing lease. LESSEE shall
provide CITY with a listing of those entities and copies of
the documentation by which they claim an interest by September
1, 1992, and shall warrant the accuracy and completeness of
that list.
(e) The exchange of mutual releases in a form
acceptable to counsel for both LESSEE and CITY of the
following claims and disputes arising under the existing
lease:
(i) The amount or payment of rent due under
the existing lease.
(ii) The alleged failure of the tenant under
the existing lease to have constructed one or more
improvements in a timely manner.
(iii) The alleged breaches by the Landlord
under the existing lease through the Landlord's adoption of
Amendment Number Two to the Seward Marine Industrial Center
Shiplift System Tariff No.1. and the Tenant's alleged failure
to abide by the terms and conditions of that amendment.
(iv) Those claims in addition to the above, if
any, that have been submitted to the American Arbitration
Association under Case 75-115-0208-91.
(v) Attorneys fees and costs incurred in
connection with disputes under the existing lease, the
negotiation of this Lease Agreement and those agreed to be
incurred in performance of the obligations of this section.
(f) A stipulation to dismiss signed by the parties
to the existing lease of the above referenced arbitration
proceeding and a request that the deposits previously made by
the parties be returned to the parties after deduction of AAA
fees and expenses pro-rated equally between the parties.
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The Lease Term shall commence on the date the last of the
above occurs, but in no event later than October 1, 1992. In
the event all of the above conditions have not occurred prior
to October 1, 1992, this Agreement shall be null and void
without further liability hereunder for either party. None of
the terms and conditions of this Lease Agreement shall survive
beyond October 1, 1992, and the existing Lease Agreement and
all of its terms and provisions shall thereafter continue as
though this Lease Agreement, and the negotiations leading up
to it, had never taken place. The terms and conditions of
this Lease Agreement, or the Agreement approved by the city
Council of the City of Seward on July 13, 1992, shall not be
an admission or admissible in any proceeding under the
existing Lease Agreement, including the pending arbitration.
The October 1, 1992, deadline for the occurrence of the
above conditions may be extended ONLY upon written agreement
by LESSEE and CITY acting through the Seward City Council.
6.2.
Relation to Existing Lease.
Upon commencement of the Lease Term as provided in
section 6.1 above, the existing lease shall be deemed to have
been terminated by consent of the parties; provided, however,
that notwithstanding the provisions of the existing lease with
respect to the transfer to CITY of leasehold improvements, any
improvement made by the Tenant under the existing lease shall
be deemed to be the property of James T. Pruitt, who may, in
his discretion, transfer any or all of those improvements to
LESSEE.
6.3.
Transfer of Possession.
On the date of the commencement of the Lease Term as
determined in Section 6.1 above, the following shall occur:
(a) All utility accounts relevant to CITY's
operation of the syncrolift, the public dock, the rail
transfer system and other facilities on the Leased Land shall
be transferred on the effective date.
(b) All insurance policies to be required under
Section 16.2 of this Lease Agreement shall be in full force
and effect as of the date of the commencement of the Lease
Term.
(c)
shiplift as of
responsibility
Any vessels on the shiplift or
that date shall be informed of
for operation of the shiplift.
upland of the
the transfer of
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6.4.
Primary Term.
The primary term of this lease shall be for a period of
30 years, beginning on the date of the commencement of the
Lease Term as determined in section 6.1 above and continuing
until midnight of the day preceding the thirtieth anniversary
thereof. The first day of the month during which the
commencement of the Lease Term occurs shall be the anniversary
date for purposes of this Lease Agreement.
ARTICLE 7.
CONSTRUCTION BY LESSEE
7.1.
General Construction Provision.
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) The cost of any such construction, reconstruc-
tion, demolition, or of any changes, alterations or improve-
ments, shall be borne and paid for by LESSEE.
(b) The Leased Land shall at all times be kept free
of mechanics and materialmen's liens.
(c) LESSEE shall supply CITY with a copy of all
building plans and specifications and a site plan or plans for
the Leased Land.
(d) 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 over SEVENTY FIRVE
THOUSAND DOLLARS ($75,000.00) adjusted in the same manner and
at the same time as the rental adjustments required in Section
9.2. Copies of all such bonds shall be furnished to CITY
prior to commencement of construction. LESSEE shall provide
CITY, if no performance and labor and material bonds are
provided by LESSEE, any necessary assurance or guarantees that
the contemplated work will be performed by the general
contractor or by LESSEE. In the event that LESSEE elects to
construct the facility with its own personnel and equipment,
or the personnel and equipment of any corporation or person
that is an "affiliate" of LESSEE as such term is defined in
AS 10.05.825(18), a performance bond shall be required when
the cost of the work is over SEVENTY FIVE THOUSAND DOLLARS
($75,000.00)as adjusted.
(e)
give notice of
constructed or
CITY may, as contemplated by Alaska Statutes,
non-responsibility for any improvements
effected by LESSEE on the Leased Land.
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(f) LESSEE shall comply with all federal, state and
local statutes and regulations with respect to such
construction including any required finding by the City
Council of the City of Seward that such action is in the
public interest.
7.2.
Construction Related to Publicly OWned Facilities-
-Generally.
In addition to the requirements set forth in Section 7.1
above, LESSEE shall only have the right to alter, remodel,
reconstruct, rebuild and/or replace publicly owned facilities
located on the Leased Land or unleased but maintained
facilities where such work shall reasonably exceed FIFTY
THOUSAND DOLLARS ($50,000.00) in cost, by first submitting
plans for the work to CITY. CITY shall have the right to
review LESSEE's preliminary design, to comment upon it and to
require LESSEE to make reasonable changes to conform to safety
considerations and so as to avoid interference with other
publicly owned facilities or substantial devaluation of the
publicly owned facilities, but the exercise of these rights
shall not imply any obligation to do so nor any obligation to
do so in a particular way. LESSEE shall submit a preliminary
design to CITY at least sixty (60) days prior to commencement
of such substantial work and shall finalize that design within
thirty (30) days after receiving CITY's comments. LESSEE
shall perform the work in a workmanlike manner and in
accordance with the final design specifications as approved by
CITY. CITY's engineer may monitor the work and shall have
access to the site at all reasonable times. LESSEE shall
obtain the usual and customary performance guarantees from its
contractors as set forth in section 7.1 above, and CITY shall
be named as an additional insured on any policies of insurance
or performance bonds or guarantees. LESSEE shall complete
construction no later than one (1) year after commencement of
construction. LESSEE will submit a proposed construction
schedule together with final design plans and shall diligently
pursue the work in accordance with such schedule.
7.3.
Work on specific Publicly OWned Facilities.
LESSEE shall have the right to alter, remove, remodel,
reconstruct, rebuild, build, place and/or perform any work or
construction, remodel, repair, or extension to the syncrolift
shiplift, ship transfer system including all rails and
platforms and attendant equipment only after first having
satisfied all of the following conditions:
(a) LESSEE has caused to be prepared a written
design of the work and has submitted and received Lloyds'
Registry approval of the design as meeting all the
requirements for continued Lloyds' class rating or for an
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expanded Lloyds' class rating, if the proposed construction is
new to the site.
(b) LESSEE has submitted the design to NEI
syncrolift and/or Lloyds' and has received written approval of
the design as not causing any harm to CITY's syncrolift or
ship transfer improvements.
(c) LESSEE has received the formal approval of the
Seward City Council after submission of Lloyds' and NEI
approvals as noted above.
(d) The construction is continuously monitored by
representation of Lloyds' Registry and/or NEI syncrolift
sufficient to meet the requirements of Lloyds' class rating
with Maltese Cross designation. It is the intent of the
parties to strictly adhere to any class certification
requirements and to fully comply with all provisions and
standards of Lloyds' and/or NEI syncrolift.
7.4.
Required Construction.
Promptly, and in no event later than ninety (90) days
from the date of the commencement of the Lease Term as
determined in Section 6.1 above, LESSEE shall construct and,
throughout the term of this lease maintain, an eight (8) foot
industrial grade chain link fence around that portion of the
Leased Land which is used for any of LESSEE'S operations,
including storage. This obligation to construct fencing shall
be a continuing obligation as LESSEE's area of operations
expands upon the Leased Land. The fence shall include
adequate gates and access points for public access, emergency
fire and police access, and other necessary health and safety
access.
ARTICLE 8.
USE OF LEASED LAND
8.1.
Permitted Uses.
During the term of this Lease LESSEE will not use or
allow or permit any use of the Leased Land for any purpose
other than the following without having first obtained the
express written permission and a finding by the City Council
of the City of Seward that such use is in the pUblic interest.
(a) The Leased Land shall be used by LESSEE for the
operation of a shipyard, to include new boat and barge
construction, maintenance, repairs and modifications to
existing vessels and all other related activities; marine pipe
fitting, machine work, electrical, installation and repair;
waste oil management; vessel haul-out and launching; lofting
and pattern making, canvas and plastic work, sandblasting and
Lease Agreement/1992
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painting. Such work may include bidding competitively for
annual maintenance and repair contracts for the Alaska Marine
Highway System, other state of Alaska agencies, the U. S.
Coast Guard, U. S. Navy, NOAAjNMFS, and private operators of
vessels in Alaskan waters, including passenger and cargo
vessels, tugs and barges, offshore supply vessels, and larger
fishing vessels.
(b) Providing a full range of other commercial
maintenance and repair services for the available market of
marine vessels.
(c) Providing such complementary and related
services as new construction of vessels, fabrication of
fishing gear and other marine equipment, general steel
fabrication, and the general repair of machinery and equipment
compatible with the maintenance and repair of marine vessels.
Developing and maintaining the unimproved areas
Land for long-term commercial and industrial use
third parties compatible with the above
(d)
of the Leased
of LESSEE and
paragraphs.
LESSEE shall continuously throughout the term of this
lease conduct the activities described above to a degree and
in an amount reasonably commensurate with the capabilities of
the facility unless CITY's written approval is obtained.
8.2.
Compliance with Applicable Law.
Throughout the Lease Term, LESSEE shall not engage in any
activity, or allow any activity which violates any applicable
federal, state, or local law including, but not limited to the
following:
Federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. S 9601 et
sea.
Federal Clean Air Act, 42 U.S.C. Sections 7401-7626
Federal Water Pollution Control Act, Federal Clean Water
Act of 1977, 33 U.S.C. S 1257 et sea.
Federal Insecticide, Fungicide, and Rodenticide Act,
Federal Pesticide Act of 1978, 7 U.S.C. Paragraph 13 et sea.
Federal Toxic Substances Control Act, 15 U.S.C. S 2601 et
sea.
sea.
Federal Safe Drinking Water Act, 42 U.S.C. S 300(f) et
Alaska Environmental Conservation Act, AS S 46.03 et sea.
Alaska oil Pollution Control Act, AS S 46.04 et sea.
Alaska oil and Hazardous Substance Releases Act,
AS S 46.08 et sea.
Lease Agreement/1992
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Alaska Hazardous Substance Release Control Act,
AS S 46.09 et seq.
ARTICLE 9.
RENT.
9.1.
Rent Payments.
For, and in consideration of, the use and occupancy of
the Leased Land, and in addition to performance of such
further and additional terms and conditions as are provided
herein, LESSEE shall pay rent in the form of payments as
follows:
(a) LESSEE shall pay all rents without deduction, set
off or demand. Rent shall be paid in quarterly installments
due on January 20, April 20, July 20, and October 20.
Quarterly payments shall be in an amount of TWELVE THOUSAND
FIVE HUNDRED DOLLARS ($12,500.00) (as adjusted pursuant to
Section 9.2 below) or greater, as determined in subsection (b)
below.
The first quarterly payment shall be TWELVE THOUSAND FIVE
HUNDRED DOLLARS ($12,500.00) and shall be pro-rated from the
date of the commencement of the Lease Term.
(b) Additional rent: In addition to the quarterly rent
required under subsection (a) above, LESSEE shall pay, as
additional rent, an amount equal to product of the Gross
Rental Percentage and gross receipts in excess of SIX HUNDRED
TWENTY FIVE DOLLARS ($625,000.00) (adjusted in the same manner
as the minimum rent is adjusted pursuant to Section 9.2)
during the preceding calendar quarter.
(c) The Gross Rental Percentage shall initially be 2%.
The Gross Rental Percentage shall be adjusted upward annually
on the first anniversary date of this lease and annually
thereafter at the rate of 1.75% of the 2%, (i.e., year one,
2.00%; year two, 2.035%; year three, 2.0706%; year four,
2.10684%, etc.) throughout the term of the lease.
LESSEE shall on or before the twentieth (20th) day
following the end of each quarter (i.e., January 20, April 20,
July 20, and October 20) during the term hereof, submit to
CITY a detailed statement showing gross receipts hereunder for
the preceding quarter.
(d) LESSEE shall at all times during the term of this
lease keep complete and accurate books of accounts and other
records pertaining to all LESSEE's subtenants or others that
in any way relate to, rent or generate any other income or
activity related to the Leased Land.
Lease Agreement/1992
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CITY reserves the right, at CITY's expense, to audit
LESSEE's books and records of receipts, and those of its
assigns or those of any sublessee or subtenant, at any time
for the purpose of verifying the gross receipts hereunder.
If, as a result of such audit, it is established that gross
receipts have been understated by three percent (3%) or more,
the entire expense of said audit shall be borne by LESSEE.
Any additional percentage fee due shall forthwith be paid by
LESSEE to CITY. In the event LESSEE does not make available
all necessary books, records, and other data at the offices of
CITY, LESSEE agrees to pay all necessary expenses incurred by
CITY for inspection and audit at the location where said books
and records are maintained.
(e) Definitions: "Gross Receipts" means all monies,
barter and other consideration for all sales, services, rents
and other activities generated by LESSEE, and all subtenants,
assignees, permittees, licensees, franchisees, and agents of
LESSEE activities on, at, from or arising out of the use of
the Leased Land (or in the water adjacent to the Leased Land),
including without limitation: ship repair, construction or
maintenance billings, material or equipment rental/sales,
labor supply services, dockage fees, dry docking and lifting
charges, dry dock utilization charges, and/or miscellaneous
charges.
Activities on the Leased Land which are also included in
the definition of "gross receipts" include sublease rents and
fees and all other fees, charges, rents and revenues collected
under LESSEE's tariffs, use agreements, subleases, or other
arrangements permitting use or occupancy of all or any part of
the Leased Land. For purposes of this Lease, Permittee does
not mean non-LESSEE related individuals or companies that are
performing ship repair/construction activities for the direct
account of the vessel owner. Activities on the Leased Land
which are also included in the definition of "gross receipts"
include: sublease rents and fees and all other fees, charges
and revenues collected under LESSEE's tariffs, use agreements,
subleases, or other arrangements permitting use or occupancy
of any or part of the Leased Land.
For purposes of this Lease, vessel operating
supplies and provisions purchased directly by a vessel from a
related entity of LESSEE shall not be included in the
determination of "gross receipts".
9.2.
Cost of Living Adjustment to Minimum
quarterly rent.
The minimum quarterly rent set forth above shall be
subject to annual adjustments beginning with the calendar
quarter commencing after the first anniversary date and each
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and every year thereafter throughout the entire term of this
lease (the "Adjustment Date") as follows:
(a) The base for computing the adjustment shall be
the Anchorage Average Consumer Price Index for All Urban
Consumers for All Items issued by the Bureau of Labor
statistics of the United states Department of Labor (the
"Index"), which is published for the month nearest, but
preceding, the date of the commencement of the term of this
Lease (the "Beginning Index"). If the Index published
nearest, but preceding, any Adjustment Date (the "Extension
Index") has increased over the Beginning Index, the minimum
quarterly rent for the following year (until the next
Adjustment Date) shall be set by multiplying the minimum
quarterly rent set forth in section 9.l(a) above by a
fraction, the numerator of which is the Extension Index and
the denominator of which is the Beginning Index. In no case
shall the minimum quarterly rent be less than TWELVE THOUSAND
FIVE HUNDRED DOLLARS ($12,500.00).
(b) If the Index is changed so the Base Year differs
from that used as of the month with respect to which the
Beginning Index is published, the Index shall be converted in
accordance with the conversion factor published by the Bureau
of Labor statistics of the United States Department of Labor.
If the Index is discontinued or revised during the term of
this Lease, such other government index or computation with
which it is replaced shall be used in order to obtain
substantially the same result as would have been obtained if
the Index had not been discontinued or revised.
9.3.
Base Rate Adjustments by city.
The parties recognize and agree that the minimum
quarterly rent exclusive of the other obligations of LESSEE
under this Lease Agreement is substantially less than the fair
market value of the Leased Land, and has been approved by the
City Council for the reasons set forth in Resolution
ARTICLE 10. MAINTENANCE AND REPAIR.
10.1. General Obligation to Maintain and Repair.
LESSEE shall, at it's sole cost and expense, maintain all
areas of the Leased Land and the unleased but maintained
facilities in good condition and repair. LESSEE shall
maintain all buildings, structures, improvements, fixtures,
and facilities constructed on the Leased Land, or the unleased
but maintained facilities, in good condition and repair.
LESSEE shall keep the Leased Land in a clean, neat, sanitary,
sightly and orderly condition commensurate with reasonable
industry standards for publicly owned and operated facilities.
Lease Agreement/1992
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It is the intent of the parties to maintain all of the
Leased Land, including the facilities located thereon, and the
unleased but maintained facilities at a high level of
maintenance, appearance, public health, safety and
environmental protection reflecting and commensurate with the
standard for publicly owned and operated facilities. In
addition to its obligation to provide cathodic protection for
the leased facilities, Lessee shall be responsible to provide
and pay for cathodic protection of the unleased but maintained
facilities. CITY and LESSEE fully anticipate that at the
termination of this Lease Agreement, the public facilities,
including the syncrolift and platform, the rail and rail
transfer system, the dock, and all the unleased but maintained
facilities will be in fully operable condition, as received by
LESSEE, less normal wear and tear as occurring at other
publicly owned and operated facilities. It is the expectation
of the parties that the improvements constructed on the Leased
Land by CITY, and those renovated, installed, maintained and
constructed by LESSEE during the term of this lease, will be
returned to CITY in good operating condition and repair, with
many useful years of operation left. The parties do not
intend to use a financial depreciation concept for the
purposes of determining LESSEE's obligation to maintain the
facilities but, rather, that at the end of the Lease Term CITY
will have possession of a fully functional ship repair yard
maintained in accordance with the standards of this Lease
Agreement.
10.2.
specific standards of Maintenance.
In addition to the general requirements set forth in
Section 10.1 above, LESSEE shall operate and maintain the
syncrolift shiplift, transfer rails, transfer platform and
transfer cradles to a standard at least sufficient to maintain
the Maltese Cross designation on syncrolift shiplift, transfer
rails, transfer platform, transfer cradles and Lloyds'
Register of Shipping, 1981 standards for mechanical lift
docks. LESSEE agrees to promptly, and without specific
request therefore by CITY, supply CITY with copies of any
information and correspondence concerning all maintenance or
work on these particular facilities by LESSEE, its
contractors, agents, employees, or others performing work or
service.
Should the Lloyds' Register of Shipping amend or change
the classification and inspection requirements during the term
of this Lease Agreement (including any extensions hereof),
LESSEE agrees to continually, throughout the term of this
lease, maintain the facilities to the then-applicable
standards of the Lloyds' Register of Shipping.
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10.3.
Annual Inspections.
(a) Lloyds' and NEI inspection and report. For
those facilities for which a Lloyds' Register Class rating is
available, and specifically including the syncrolift shiplift,
transfer rails, transfer platform and transfer cradles, LESSEE
shall, at its sole expense, provide for an annual inspection
during each year of the Lease Term, including any extensions
thereof. The inspection shall be conducted on behalf of CITY,
as owner of the facilities, and shall include representatives
of Lloyds' and NEI syncrolift. The first inspection and
report required herein shall be conducted in accordance with
CITY's normal inspection schedule and in no event later than
allowed by Lloyds. It shall be a requirement of any
inspection agreement that the inspection must result in a
written report detailing the items and suggestions enumerated
in subsection (c) below.
(b) Engineering Report. At any time, and at CITY's
expense and control, CITY may retain a Registered Professional
Engineer well-versed in ship repair, dock, and industrial
facilities who shall conduct an independent survey of all
facilities not required to be inspected under subsection (a)
above, including those constructed by LESSEE on the Leased
Land, or improvements made to unleased but maintained
facilities. The purpose of this inspection and report is to
verify that the maintenance and repair obligations as
described in Sections 10.1 and 10.2 above are being faithfully
and fully performed by LESSEE.
(c) Contents of Inspection Reports. Each inspector
shall be provided with a copy of the Lease Agreement. The
inspections and reports required in subsections (a) and (b)
above may include the following findings, recommendations and
estimates:
(i) A list of repairs, maintenance, improve-
ments or other requirements necessary to maintain any
applicable certification standards.
(ii) A list of repairs, maintenance, improve-
ments, or changes in operating procedures reasonably necessary
to maintain full compliance with applicable federal, state and
local health, safety, and environmental statutes, rules or
regulations.
(iii) A certification that the maintenance
logging system, the preventive maintenance program, and the
actual maintenance work performed constitute reasonable
compliance with the maintenance and repair provisions of this
lease.
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(d) Action required by LESSEE. Promptly, and in no
event later than ten (10) days of receipt of the reports
referenced in subsection (c) above, LESSEE shall provide to
the CITY a written response specifically identifying the
maintenance or rehabilitation schedule, or other operational
information specifically identifying the steps LESSEE is
undertaking to remedy or comply with each item, and the
schedule for completion of each item. CITY may impose a
reasonable schedule to expedite the conclusion of the
disclosed items and LESSEE shall meet CITY's schedule.
Failure to complete any required remedial action promptly
shall be a default under the terms of this lease.
10.4.
Regular Maintenance, Repair and operations.
LESSEE agrees to maintain a fully complete maintenance,
repair and activity log for all major and minor operations and
maintenance on the syncrolift shiplift, transfer rails,
transfer platform and transfer cradles, and the unleased but
maintained public facilities. Upon request of CITY, which
requests may be made not more frequently than once every six
months, LESSEE shall provide CITY a complete and full copy,
(certified as to accuracy and completeness)of the log since
the date of the last entry in the previous copy submitted to
CITY.
In addition to the semi-annual report, LESSEE shall
provide CITY, its representatives, agents, contractors, and
other public officials full and complete access to LESSEE's
maintenance, repair, and operational records upon request by
CITY.
10.5.
Unusual Maintenance Requirements, Accidents,
Damage.
Notice of Damage. within two (2) hours of LESSEE
becoming aware of significant damage LESSEE shall provide
verbal notice to CITY, and within forty-eight (48) hours shall
provide written notice to CITY of at least the following
information:
(a) The time and date of any incident that lead to
the event.
(b) The parties present at the occurrence of the
event.
(c) Proof that the applicable insurance agencies
and/or brokers have been notified of the event.
(d) A preliminary assessment of whether, and to
what extent, the publicly funded leased facilities, including
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the syncrolift shiplift, transfer rails, transfer platform and
transfer cradles, and the unleased but maintained public
facilities are expected to be out of service or adversely
affected.
As used in this section of the lease, "significant
damage" means a failure of equipment, materials, or machinery
which is likely to disrupt operation of the publicly owned
facilities for more than five days.
10.6
Notice of Discovery of Condition.
Promptly, and in no event later than forty-eight (48)
hours of discovery thereof, LESSEE shall notify CITY in
writing of any condition or circumstance that is reasonably
expected to require a major repair, maintenance or operational
change. The written notice must include at least the
following:
(a) The time and date of the discovery.
(b) The parties present at the discovery.
(c) A preliminary assessment of whether, and to
what extent the publicly funded leased facilities, including
the syncrolift shiplift, transfer rails, transfer platform and
transfer cradles, and the unleased but maintained public
facilities are expected to be out of service or adversely
affected.
ARTICLE 11. ENVIRONMENTAL CONCERNS
11.1. Condition of Leased Land.
The parties will have full opportunity to examine the
Leased Land for the presence of any Hazardous Materials as
defined in Section 11.6 below prior to the commencement of the
Lease Term. LESSEE will accept the Leased Land including that
portion subject to the existing Lease Agreement in an "as is"
condition and will have reviewed a baseline assessment (CITY
to pay for the cost of the baseline assessment) prepared by an
engineering firm acceptable to the parties prior to September
15, 1992.
At any time prior to the commencement of the Lease Term,
either CITY or LESSEE shall have the right to terminate this
Lease without further liability, if the Baseline Assessment
discloses any Hazardous Materials as that term is defined in
Section 11.6 below. If Hazardous Materials are present on
that portion of the Leased Land NOT subject to the existing
lease, then LESSEE shall have the right to terminate. If
Hazardous Materials are present on that portion of the Leased
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Land NOT subject to the existing Lease Agreement, then LESSEE
shall have the right to terminate. If Hazardous Materials ARE
present on that portion of the Leased Land subject to the
existing Lease Agreement, CITY, acting through the City
Council, shall have the right to terminate. In either event,
notice of the election of the right to terminate shall be
provided to the other party in accordance with Sections 39 and
40 of this Lease Agreement prior to October 1, 1992. LESSEE
hereby waives any claim or right to a pre-termination hearing.
11.2.
Release of CITY.
Any other provision of this Lease Agreement to the
contrary notwithstanding, LESSEE releases CITY from any and
all claims, demands, penalties, fines, judgments, liabilities,
settlements, damages, costs or expenses (including, without
limitation, attorney's fees, court costs, litigation expenses,
and consultant and expert fees) arising during or after the
term of this Lease Agreement, and resulting from the use,
keeping, storage or disposal of Hazardous Material on the
Leased Land or at the Seward Marine Industrial Center, or
arising out of or resulting from LESSEE's operations on the
Leased Land except for those arising out of CITY'S sole
negligence or intentional misconduct. This release includes,
without any 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 law or regulation.
11.3.
Use of Hazardous Materials on the Leased
Land.
(a) LESSEE shall not cause or permit any Hazardous
Material to be brought upon, kept or used in or about the
leased property except in full compliance with all applicable
environmental laws and this Lease Agreement.
(b) Any Hazardous Material permitted on the Leased
Land as provided in this section, and all containers therefor,
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.
(c) 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 CITY,
or any governmental authority) does or may, pollute or
contaminate the same, or may adversely affect (i) the health,
welfare or safety of persons, whether located on the Leased
Land or elsewhere, or (ii) the condition, use or enjoyment of
the Leased Land or any other area or personal property.
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(d) 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 occurrence or condition required to be
reported by any environmental law.
11.4.
Indemnification of CITY.
Any other provision of this Lease Agreement to the
contrary notwithstanding, LESSEE shall defend, indemnify and
hold CITY harmless from and against any claims, demands,
penalties, fines, judgments, liabilities, settlements,
damages, costs, or expenses (including, without limitation,
attorney, consultant and expert fees, court costs and
litigation expenses) of whatever kind or nature, known or
unknown, contingent or otherwise, arising out of or in any way
related to
(a) the presence, disposal, release, or threatened
release of any such Hazardous Material which is on, from or
affecting the Leased Land, soil, water, ground water,
vegetation, buildings, personal property, persons, animals, or
otherwise;
(b) any personal injury (including wrongful death)
or property damage (real or personal) arising out of or
related to such Hazardous Material;
(c) any lawsuit brought or threatened, settlement
reached or government order relating to such Hazardous
Material; and or
(d) any violation of any laws applicable thereto;
provided, however, that this subsection 11.4(d) shall apply
only if the acts giving rise to the claims, demands,
penalties, fines, judgments, liabilities, settlements,
damages, costs, or expenses (i) occur in whole or in part
during the effective date of this Lease Agreement, and (ii)
arise in whole or in part from the use of, operations on, or
activities on the Leased Land by LESSEE or its employers,
employees, agents, invitees, contractors, subcontractors or
authorized representatives.
The provisions of this subsection shall be in addition to
any other obligations and liabilities LESSEE may have to CITY
at law or equity and shall survive the termination of this
Lease Agreement.
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11. 5.
Facility Operator.
For all purposes, LESSEE shall be deemed the operator of
any facility at the Leased Land and that portion of the Seward
Marine Industrial Center encompassing the unleased but
maintained facilities.
11.6.
Hazardous Material Defined.
As used in this Lease Agreement, the term Hazardous
Material includes any of the following:
(a) Any substance which is regulated by any
environmental law, or
(b) All materials or substances which are defined
as "hazardous waste," "extremely hazardous waste" or a
"hazardous substance" under any environmental law. Notwith-
standing any statutory petroleum exclusion, for the purposes
of this Lease Agreement the term Hazardous Material includes,
without limitation, petroleum, including crude oil or any
fraction thereof, petroleum soaked materials and other
petroleum wastes, or
(c)
environmental
public or the
Any substance or material not regulated by any
law which may reasonably pose a threat to the
environment.
11.7.
Environmental Law Defined.
As used in this Lease Agreement, environmental laws
include any and all local, state and federal ordinances,
statutes, and regulations, as now in force or as may be
amended from time to time, relating to the protection of human
health and the environment, as well as any judgments, orders,
injunctions, awards, decrees, covenants, conditions, or other
restrictions or standards relating to same. Environmental
laws include, by way of example and not as a limitation of the
generality of the foregoing, the Resource Conservation and
Recovery Act of 1976, Comprehensive Environmental Response,
Compensation and Liability Act of 1980, Clean Water Act, and
the Superfund Amendments and Reauthorization Act of 1986.
11.8.
Permits and Reporting.
(a) Permits required by other governmental
agencies. LESSEE shall obtain all necessary permits or other
consents from all governmental agencies. Copies of all such
permits shall be provided to CITY prior to LESSEE performing
any work or providing any service for which a permit or
consent is required. Copies of all permits or consents shall
be given to CITY immediately upon receipt thereof by LESSEE.
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This subsection is not intended to require copies of permits
or consents related to shipping documentation.
(b) LESSEE shall make all reports to any federal,
state or local government (including CITY) or agency required
by any permit or Environmental Law, including reports of any
spill or discharge of Hazardous Material. CITY 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 Agreement.
(c) Correspondence with and reports to agencies.
LESSEE shall immediately provide CITY with copies of all
correspondence and notices, including copies of all reports
and correspondence between LESSEE, or its agents, 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 or the unleased but maintained
facilities. This paragraph is not intended to include
newsletters or bulk federal mailings that are not specific to
the Leased Land.
ARTICLE 12. USE OF ADJACENT LAND/PUBLIC FACILITIES.
12.1.
No Preferential Rights to Use PUblic Facilities.
Except as provided in this Article, this Lease shall not
be construed to grant any preferential rights of use to LESSEE
of any public port facilities, including docks or any other
facilities constructed or maintained by the City of Seward and
the SMIC, and in particular the public port facilities.
Insofar as use of those facilities is concerned, LESSEE will
be subject to any applicable tariffs, procedures, rules and
regulations of the City of Seward as they may now exist or
from time to time be amended. Subject to the rights of others
to utilize the public facilities as set forth in any
applicable tariff or regulation, CITY agrees not to impose any
greater obstruction to LESSEE's access than is imposed upon
any similar user of the public facilities.
12.2.
other Users of SMIC.
This Lease shall not preclude the City of Seward from
actively seeking other and additional tenants for space at the
SMIC including those who would be in competition with LESSEE
or who might be interested in leasing the Leased Land leased
to LESSEE should this Lease be terminated for any reason.
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12.3.
Adequacy of pUblic Facilities.
CITY makes no representations or warranties as to any
particular part or the whole of CITY's public facilities with
respect to their fitness for the uses intended by LESSEE and
LESSEE has inspected those facilities.
12.4.
Tariffs and other Service Fees.
LESSEE agrees to properly and fairly serve the public,
providing reasonable hours of operation, suitable services and
tariff charges in keeping with standards of the trade.
LESSEE agrees that the posted tariff for moorage and
other non-ship repair services at the syncrolift dock will be
equal to the posted tariffs for those services at other SMIC
docks, and for which the City has filed tariffs with the
Federal Maritime commission.
12.5.
Time for Payment of utilities, Taxes.
LESSEE will pay for utilities and taxes related to
operations on the Leased Land and LESSEE's interest in this
Lease, if any, before such obligations become delinquent;
provided, that LESSEE may, in good faith and after such
payment, contest any such charge or assessment.
12.6.
Use of the Dock.
It is the intent of the parties that SMIC shiplift dock
be used for ship repair purposes only and not for other uses.
It is not the intent of the parties to allow the SMIC shiplift
dock to be used for purposes for which the city has adopted
tariff provisions. To the extent that the shiplift dock is
used by LESSEE or any other persons, parties, agents,
invitees, or customers of LESSEE for any purpose other than
those essential for ship repairs, the standard City adopted
tariff provisions then in effect and governing other dock
facilities at SMIC shall be enforced by LESSEE and all
(i) wharfage payments and (ii) dockage or moorage in excess
of ten (10) days shall be promptly remitted to CITY.
Requlatorv Approvals. If additional regulatory
approval becomes necessary to secure LESSEE's rights to use
the Dock as set forth in this section then CITY shall continue
to operate the Dock as a public facility and CITY and SSD
shall jointly prepare and submit for approval to any
regulatory agency having jurisdiction a Dock Use Agreement
including the provisions set forth in this section. The
parties agree to incorporate in that operation agreement as
many of the provisions of this section as are not prohibited
under applicable law.
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12.7.
Risk to Adjacent Facilities.
LESSEE will only use the Leased Land for the purposes
forth in section 8.1 of this lease, and activities and
purposes incidental thereto. LESSEE will not use the land
any manner or construct any facilities thereon which would
inhibit the use of adjacent or other lands at the Seward
Marine Industrial Center.
set
in
If any operation or construction by LESSEE might
adversely affect the safety of adjacent or nearby lands such
that public or private facilities are exposed to risk or
hazards, or a risk to the public interest (as distinguished
from a business risk), or if CITY is not satisfied with the
quality of construction or the conduct of LESSEE's business,
CITY may include in the reports required by Article 10 of this
lease a comprehensive survey and report for the purpose of
establishing whether the work by LESSEE poses an unreasonable
risk to adjacent public port facilities or adjacent private
facilities, and if that survey discloses an unreasonable risk
then LESSEE shall pay the costs of the survey and immediately
take whatever remedial steps are reported as necessary to
eliminate that risk or reduce it to an acceptable level.
ARTICLE 13. TITLE TO IMPROVEMENTS INSTALLED BY LESSEE
LESSEE may not remove from the Leased Land or from
easements to or from same, any permanent improvements
constructed by LESSEE such as buildings (fabric or solid),
warehouses, conveyor systems, ditches, sewer lines, water
lines, dikes or berms, and similar improvements except upon
written permission of CITY. Upon removal of any such
improvements, LESSEE shall return the Leased Land to its
original condition, ordinary wear and tear excepted, upon
termination or conclusion of this Lease.
LESSEE shall, at the option of CITY, remove at LESSEE's
sole expense from the Leased Land or any easements to or from
the same all improvements constructed by LESSEE such as
buildings, warehouses, tank systems or treatment facilities,
conveyor systems, ditches, sewer lines, water lines, dikes or
berms, and any similar improvements, or any of such
improvements as CITY shall reasonably designate, upon
termination or conclusion of this Lease. In such event,
LESSEE shall return the Leased Land to its original condition,
ordinary wear and tear excepted, after removal of the
improvements.
Anything herein notwithstanding, LESSEE shall not remove
any of the publicly constructed facilities on the Leased Land,
or the unleased but maintained facilities or any fixtures or
improvements affixed thereto without first obtaining written
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approval and consent by CITY, which consent may be withheld by
CITY for any reason.
LESSEE upon termination of this Lease for any reason,
may, but need not promptly remove upon termination or
conclusion of this Lease, trade fixtures and equipment from
the Leased Landi provided, that LESSEE shall repair any
damages to the Leased Land caused by such removal. Any trade
fixtures, equipment, or other personal property not removed
from the Leased Land and in any event within sixty (60) days
of the date of termination of this Lease shall become the
property of CITY without payment of any compensation to
LESSEE. Ship transfer cradles constructed specifically for
use on the transfer rail system shall become property of CITY
upon termination of this lease.
ARTICLE 14. FORCE MAJEURE
In the event LESSEE or CITY is delayed in the performance
of its obligations due to acts of God such as earthquake,
flood, tidal wave, 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. The term "acts of
God" shall not be interpreted in this section to include
adverse weather conditions, it being understood that weather
in Seward, Alaska, is frequently adverse. Only a flood of a
magnitude of a 100-year event or greater shall be considered
sufficient to be a force majeure under this section.
ARTICLE 15. INDEMNITY
In addition to the specific indemnity provisions set
forth in Section 11.4, LESSEE agrees to defend, indemnify and
hold CITY harmless from any and all claims for damages,
including personal injuries and property damage, arising out
of or resulting from LESSEE's use of the Leased Land or the
unleased but maintained facilities, or the Shiplift Dock, or
the use of any of those facilities by LESSEE's sublessees,
agents or contractors or the public, except for damages
arising from the sole negligence or willful acts or omissions
of CITY, its agents, employees, or contractors.
ARTICLE 16. INSURANCE
16.1. General obligation to Insure.
In order to provide adequate assurances that CITY shall
not be financially responsible to LESSEE or any third party
for any bodily injury, property damage, personal injury or
loss of use damages incurred as a result or related to
LESSEE's operations under the terms of this Lease Agreement,
LESSEE shall throughout the term of this Lease Agreement be
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solely and completely responsible for providing adequate
insurance of whatever kind or nature and in whatever amounts
might be necessary to protect CITY from such damages. The
intent of this section is to totally and completely shift any
risk of loss from CITY to LESSEE. LESSEE shall provide all
insurance for leased and unleased but maintained facilities
including, but not limited to, the syncrolift and adjacent
syncrolift dock, the SMIC breakwater, the rail and rail
transfer system, and all other publicly funded improvements to
the Leased Land.
16.2.
Required Insurance.
Prior to commencement of operations of any facilities on
the Leased Land, LESSEE shall procure, at LESSEE's sole cost
and expense, and maintain the below listed types and amounts
of insurance coverage. LESSEE shall keep all insurance
policies currently in effect at its Seward office. LESSEE
shall supply to CITY copies of all insurance binders,
endorsements and policies within seven working days of their
receipt at LESSEE's office. CITY shall have the right from
time to time to inspect and verify that LESSEE is in full
compliance with the insurance requirements as contained in
Article 16. CITY shall also have the on-going unimpeded
right, but not the duty, during the entire term of this lease
and any extensions thereto to prohibit LESSEE's access to the
shiplift and rail system if it is found that any required
insurance lapses, or is not in full force and effect as
required herein.
(a) comprehensive General Liability Insurance.
Comprehensive General Liability Insurance, with the broad form
endorsement, or Commercial General Liability Insurance, or
Marine General Liability Insurance with limits of liability of
not less than TEN MILLION DOLLARS ($10,000,000.00) combined
single limit for bodily injury, property damage or personal
injury liability. Coverage to include: Premises and
Operations, Product/Completed Operations, Owners & Contractors
Protective, Demurrage, Contractual Liability without
exclusions for explosions, collapse and underground. Policy
to be additionally endorsed to provide Sudden and Accidental
Pollution coverage arising out of activities or events taking
place on or adjacent to the Leased Land.
(b) Protection and Indemnitv Insurance. Protection
and Indemnity Insurance shall be provided with the same limits
of liability as the Commercial, Comprehensive or Marine
General Liability Insurance noted above. Protection and
Indemnity Insurance shall include crew coverage if not
provided through a Maritime Endorsement on Workmen's
Compensation policy, wreck removal and vessel pollution
coverage.
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(c) Property insurance. LESSEE shall provide "all-
risks" perils insurance including fire, earthquake and flood
for any buildings, equipment, machinery and other property for
which LESSEE is responsible including city-owned equipment,
machinery, property and unleased but maintained facilities.
Valuation and limits of liability is to be replacement cost
and the City of Seward is to be named loss payee with respect
to city-owned building, equipment, machinery and property.
(d) Wharfinqers and Ship Repairers Leqal Liabilitv
Insurance. LESSEE shall provide Wharfingers Legal Liability
Insurance including demurrage, wreck removal and pollution and
Ship Repairers Legal Liability Insurance including wreck
removal, traveling workmen endorsement and pollution, with
limits of liability not less than TEN MILLION DOLLARS
($10,000,000.00) for anyone vessel covering liability of
LESSEE for vessels in its care, custody and control, or while
being worked on by others while at, or adjacent to, the Leased
Land, or fair market value as established by the most recent
certified vessel survey, or at an amount mutually agreed to in
writing between LESSEE and the vessel owner or his duly
designated agent. However, limit of liability under this
Article shall never be less than TEN MILLION DOLLARS
($10,000,000.00) .
with respect to vessels with an estimated fair market
value in excess of TEN MILLION DOLLARS ($10,000,000.00) one of
the following forms of additional protection at the option of
LESSEE shall be provided as follows:
(i) LESSEE shall obtain and provide proof of
receipt to CITY that it has good and adequate insurance equal
to the total estimated fair market value of the vessel, or
(ii) LESSEE shall obtain a written waiver and
release from the vessel owner (or agent empowered to sign for
the owner) of any responsibility of either LESSEE or CITY for
damages in excess of LESSEE'S available insurance.
In the event CITY and LESSEE disagree on the
estimated fair market value of a vessel, then either a survey
shall settle the disagreement or the higher of the two
estimates shall be the controlling amount of insurance
coverage that will be supplied by LESSEE.
(e) Pollution. LESSEE shall procure and maintain,
throughout the term of this lease, environmental remediation
and environmental impairment liability insurance, including
sudden and accidental coverage and gradual pollution coverage.
Such coverage shall also include clean-up cost coverage
associated with any activity by LESSEE or others upon the
Leased Land. LESSEE shall maintain limits of liability of TEN
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MILLION DOLLARS ($10,000,000.00) for anyone accident or
occurrence.
LESSEE may receive a waiver of the gradual or
chronic pollution coverage as noted above, based upon:
(i) deferring construction of any permanent
waste oil or bulk petroleum storage facility on the Leased
Land, and
(ii) providing certification from a reputable
insurance broker acceptable to CITY in conjunction with the
provisions of Article 16.4 that "slow and chronic pollution
coverage is not required consonant with good city business
practice or accepted standards in the industry".
(f) Owned and non-owned automobile liability
insurance. LESSEE shall provide owned and non-owned
automobile liability insurance including employee's non-owned
liability and hired auto liability insurance for limits of TWO
MILLION DOLLARS ($2,000,000.00) combined single limit for
bodily injury and property damage.
(g) Workmen's Compensation. LESSEE shall provide
Workmen's compensation Insurance covering the statutory
Worker's Compensation obligations to the State of Alaska
including united States Longshore and Harborworkers
Compensation Act. The policy is to be endorsed to include
Employer's Liability united States Longshore and Harborworkers
Act and Maritime Employer's Liability.
(h) Other insurance. LESSEE shall supply other
insurance required under any permit, tariff or local, state or
federal law associated with its operations on the Leased Land.
16.3.
Self-Insured Retention or Deductible.
The amount of any self-insured risk retention or
deductible under any policy of insurance set forth hereinabove
shall not exceed the sum of FIFTY THOUSAND DOLLARS
($50,000.00) without LESSEE securing, in a form approved by
CITY, any amount in excess of FIFTY THOUSAND DOLLARS
($50,000.00). CITY shall accept as security for any self-
insured retention or deductible an (i) irrevocable letter of
credit in favor of CITY from a financial institution approved
by CITY, (ii) cash deposit, or (iii) a time certificate of
deposit issued to CITY in a manner satisfactory to CITY.
16.4.
Adjustments to Insurance Coverage.
The minimum amounts and types of insurance, retention and
deductible provided by LESSEE shall be subject to revision at
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CITY's request in order to provide continuously throughout the
term of this agreement and any extensions hereof, a level of
protection consonant with good business practice and accepted
standards in the industry. Such factors as increases in the
cost of living, inflationary pressures, new risk, and other
conditions shall be utilized in assessing whether the minimum
insurance requirements should be increased or changed from the
types and amounts noted above.
In addition, and at least annually, commencing on the
first anniversary date of this lease and annually thereafter
throughout the term of this lease, LESSEE shall, without
request or demand therefore by CITY, procure and submit to
CITY a written report from a reputable insurance broker
acceptable to CITY, that the broker has reviewed the types and
amounts of coverage of insurance obtained by LESSEE and the
operations of LESSEE or anyone operating upon the Leased Land,
and, in the opinion of the broker, the coverage complies with
LESSEE's obligations under this lease. CITY may notify LESSEE
of any requested increase in insurance coverage. If LESSEE
asserts that any requested increases over and above the
coverage set forth in Section 16.2 above are unreasonable as
measured against good business practice or standards in the
industry, then, within thirty (30) days of the request, LESSEE
may refer the reasonableness of the request to arbitration
under Article 22 of this Lease, but pending any final
decision, LESSEE must acquire the insurance. If the final
decision of the arbitrators conclude that CITY's request was
unreasonable, it shall require CITY to reimburse LESSEE for
the cost of coverage(s) that were both (i) beyond those
required by Section 16.2 and (ii) also beyond those
determined as being based upon good business practice or
standards in the industry. In no event will insurance
coverage decrease from those required in section 16.2 without
the written consent of the Seward city Council.
16.5.
Policy Provisions.
All insurance policies shall provide for thirty (30)
days' prior notice of cancellation to CITY, or sooner if
required by Alaskan statutes. Such notice of cancellation
requirement shall exist for insured initiated cancellation and
cancellation associated with non-payment of premiums. All
insurance policies shall provide for thirty (30) days' notice
of material chanqe to be sent to CITY at the address
designated in section 40 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 (one indication of "acceptable to CITY" may mean
Best's rating "A" or better). Nothing herein contained shall
prevent CITY from placing and maintaining at LESSEE's expense,
the insurance coverage as required under this Lease.
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All of the insurance policies required above as well as
any other insurance carried by LESSEE shall provide that
insurers waive their rights of subrogation against CITY and
its officers, servants, agents or employees. LESSEE further
agrees to waive and agrees to have its insurers waive any
rights of subrogation (whether by loan receipts, equitable
assignment or otherwise), with respect to deductibles under
such policies and with respect to damage to equipment
including the loss of use thereof, whether insured or not.
LESSEE shall also name CITY as an additional insured on all
policies as required above except workmen's compensation,
marine employers liability, employers liability and united
States Longshoremen and Harborworkers Compensation Act. All
insurance disputes regarding meaning, interpretation or
operation of any term condition, definition or provision of
any required insurance policy which results in litigation,
arbitration or other form of dispute resolution shall take
place in the state of Alaska. All required insurance noted
above shall extend to include incidental operations of LESSEE
anywhere within the City of Seward. All required insurance
noted above shall be primary with respect to any other
comparable insurance whether collectible or not.
16.6.
Sub-contractors or Work on Leased Land by
Third Parties.
LESSEE agrees to extend its insurance obligations as set
forth in section 16.2 to protect CITY from damages arising out
of the activities of subcontractors, customers or other third
parties who conduct any activities on the Leased Land. LESSEE
further agrees to extend to CITY the benefit of any and all
hold harmless agreements between third party entities
conducting activities on the Leased Land whether in writing or
verbal.
ARTICLE 17. ACTS OF DEFAULT
Each of the following shall be a "LESSEE Act of Default"
under this lease and the terms "acts of default" and "default"
shall mean, whenever they are used in this lease, anyone or
more of the following events:
(a) Failure by LESSEE to pay promptly when due, and
in no event later than forty five (45) days from the due date
thereof, the rentals required to be paid under this lease or
failure to promptly pay all sums due CITY including public
fees or user charges for adjacent public facilities,
electrical, sewer or other service charges.
(b) Failure by LESSEE to observe, fulfill or
perform any covenants, conditions or agreements on its part to
be observed or performed under this lease for a period of
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thirty (30) days after written notice specifying such failure,
requesting that it be remedied, and stating that it is a
notice of default, has been given to LESSEE by CITY; provided,
however, that if said default is such that it cannot be
corrected within the applicable period, it shall not
constitute an act of default if corrective action is
instituted by LESSEE within the applicable period and
diligently pursued until the default is corrected.
(c) The making by LESSEE of an assignment for the
benefit of creditors, the filing of a petition in bankruptcy
by LESSEE, the adjudication of LESSEE as insolvent or
bankrupt, the petition or application by LESSEE to any
tribunal for any receiver or any trustee for itself or for any
substantial part of its property; or the commencement of any
proceeding relating to LESSEE under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of
debt law or statute or similar law or statute of any
jurisdiction, whether now or hereafter in effect which shall
remain undismissed for a period of six (6) months from the
date of commencement thereof.
(d) violation by LESSEE of any laws or regulations
of the United States, or of the State of Alaska, or any
conditions of any permits issued by agencies of the City of
Seward, the State of Alaska, or of the United States Govern-
ment 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 be an act
of default if corrective action is instituted by LESSEE within
the applicable period and diligently pursued until the
violation is corrected. Furthermore, if LESSEE shall contest
such alleged violation through appropriate judicial or
administrative channels, the time period specified herein
shall not commence until such proceedings are finally
determined provided such proceedings are diligently pursued;
provided, however, that any such extension of time shall not
be effective if the effect of the interim administrative or
jUdicial action is to cause a stoppage, interruption or threat
to the activities of any person or entity other than those of
LESSEE.
(e) Failure of LESSEE to promptly pay when due any
real or personal property taxes or any sales taxes assessed by
the Kenai Peninsula Borough.
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ARTICLE 18. REMEDIES FOR DEFAULT
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:
(a) CITY may distrain for rent due any of LESSEE's
personal property which comes into CITY's possession. This
remedy shall include the right of CITY to dispose of personal
property distrained in any commercially reasonable manner. It
shall be conclusively presumed that compliance with the
procedures set forth in the Alaska Uniform Commercial Code
(AS 45.09.504) with respect to sale of property shall be a
commercially reasonable disposal;
(b) CITY may re-enter the premises and take
possession thereof and, except for any personal property of
LESSEE which CITY has waived its right to distrain under sub-
part (a) above, remove all personal property of LESSEE from
the Leased Land. Such personal property may be stored in
place or may be removed and stored in a public warehouse or
elsewhere at the cost of LESSEE all without service of notice
or resort to legal process, all of which LESSEE expressly
waives;
(c) declare this Lease terminated;
(d) collect any and all rents due or to become due
from sub-tenants or other occupants of the Leased Land;
(e) recover, whether this Lease be terminated or
not, reasonable attorney's fees from LESSEE and all other
expenses incurred by CITY by reason of the breach or default
by LESSEE ;
(f) recover an amount to be due immediately on
breach equal to the rent reserved under this Lease discounted
to the date of such breach at the rate of eight percent (8%)
per year. If the Leased Land or any part thereof be re-Iet by
CITY for the unexpired term of this Lease, CITY shall
reimburse to LESSEE upon receipt an amount not to exceed the
amount received by CITY under this section;
(g) if LESSEE does not immediately surrender
possession of the Leased Land after termination by CITY and
upon demand by CITY, CITY may forthwith enter into and upon
and repossess the Leased Land and expel LESSEE without being
deemed guilty in any manner of trespass and without prejudice
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to any remedies which might otherwise be used for arrears of
rent or breach of covenant;
(h) no expiration or termination of this Lease
shall expire or terminate any liability or obligation to
perform of LESSEE which arose prior to the termination or
expiration except insofar as otherwise agreed to in this
Lease;
(i) each right and remedy of CITY provided for in
this Lease shall be cumulative and shall be in addition to
every other right or remedy provided for in this Lease or now
or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise by
CITY of anyone or more of the rights and remedies provided
for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by CITY of any or all other
rights or remedies provided for in this Lease or now or
thereafter existing at law, or in equity or by statute or
otherwise; and
(j) no delay or omission to exercise any right or
power accrulng 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 19. SUBLEASE OR ASSIGNMENT
LESSEE shall not voluntarily assign or encumber its
interest in this Lease or in the Leased Land or sublease all
or any part of the Leased Land, or allow any other person or
entity (except LESSEE's authorized representatives) to occupy
or use all or any part of the Leased Land without first
obtaining CITY's written consent, which may be withheld by
CITY for any or no reason whatsoever in its sole unfettered
discretion. The parties recognize that a material reason for
the finding by the Seward City Council in Resolution Number
that it is in the public interest to lease land to LESSEE
is LESSEE's predecessor in interest's experience and history
as a Seward owned and operated business and prior participa-
tion in development of private ship repair and construction
facilities in the City of Seward. Subject to the provisions
of section 19.2, CITY shall have the right to refuse permis-
sion to any prospective assignee, sublessee or subtenant even
though such entity intends to use the Leased Land for ship
repair or construction. In no event may LESSEE assign any of
its rights hereunder prior to January 1, 2002.
19.1. A withdrawal or change, voluntary, involuntary or
by operation of law, of any ownership interest of LESSEE,
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shall be deemed a voluntary assignment. LESSEE warrants that
as of August 15, LESSEE will be a corporation and that James
T. Pruitt, individually, will be the owner of 100% of the
ownership interest of the corporation.
19.2. Notwithstanding the first paragraph above, LESSEE
may assign, encumber or mortgage its interests 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 Agreement. 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 such notice is furnished to Lender; provided, 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 re-let
the Leased Land unless Lender fails to cure the default or
breach within a reasonable period of time thereafter. Upon
foreclosure or other assertion of its interest, Lender may
further assign, transfer, or dispose of its interests,
provided that any subsequent assignee, purchaser or transferee
shall remain bound by each and every term of this Lease
Agreement, including the obligation to use the Leased Land as
a vessel repair and construction facility, subject to approval
of any prospective assignee or sublessee by CITY, which
approval shall not unreasonably be withheld.
ARTICLE 20. CONDEMNATION
If all or any part of the Leased Land is condemned for a
public use by any government agency or other duly authorized
entity, CITY and LESSEE shall each make a claim against the
condemning or taking authority for the amount of any damage
incurred by or done to them respectively as a result of the
taking. 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
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operate on the Leased Land. If LESSEE determines in good
faith that the condemning of such part of the Leased Land will
prevent it from continuing to operate on the Leased Land,
LESSEE may notify CITY in writing to this effect, and this
lease shall then be terminated for all purposes effective
fifteen (15) days from the date LESSEE sends such notice to
CITY in accordance with Article 40 of this Lease Agreement, or
at such other later date as LESSEE shall specify in its
notice, and such termination shall be treated in the same
manner as a termination at the expiration of the term of this
lease. LESSEE shall, as a condition precedent to such
termination, remove all encumbrances, debts and liens created
by LESSEE 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.
If all the Leased Land is condemned this lease shall
automatically terminate.
ARTICLE 21. CASUALTIES.
If the facilities located on the Leased Land or the
unleased but maintained facilities, or the Leased Land itself
is damaged by earthquake, flood, fire, subsidence, casualty or
act of God rendering the Leased Land or facilities located
thereon unusable for LESSEE's operations to such an extent
that the same cannot be restored LESSEE shall have the right
to terminate this lease.
All the proceeds of any insurance policies maintained in
accordance with Article 16 of this Lease shall be used to
restore and repair the facilities located on the Leased Land
or the unleased but maintained facilities. During the period
of restoration the rent shall be abated in the same proportion
as the interference or interruption of LESSEE'S operation. In
the event restoration cannot be made, then the proceeds of
such insurance shall be paid to CITY.
ARTICLE 22. DISPUTES BETWEEN PARTIES
Any dispute between CITY and LESSEE with respect to any
provision of this lease or the rights and obligations of the
parties hereunder shall be decided by arbitration in
accordance with the provisions of this paragraph. The party
desiring arbitration of a dispute shall give written notice to
that effect to the other party specifying in such notice the
name and address of a person to serve as an arbitrator on its
behalf. Within fifteen (15) days after receipt of such notice
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the other party shall give written notice to the first party
specifying the name and address of a person designated to
serve as an arbitrator on its behalf.
within five days of the second party's designation of his
representative arbitrator, the two chosen arbitrators shall
select a third person agreeable to both to become the third
member of the consent panel. The resulting panel of three
(called the "consent panel") shall promptly resolve the
dispute submitted. The panel may utilize informal techniques
and hold informal hearings or meetings without reference or
adherence to the rules or procedures of the American
Arbitration Association. If the panel desires to do so, it
may conduct such formal proceedings as it deems appropriate.
Promptly, and IN NO EVENT later than forty-five (45) days
after the selection of the third member, the panel shall issue
a written determination of all matters in dispute unless each
party consents to a reasonable extension of time determined by
the consent panel to be required for a fair adjudication of
the issues. It is the intent of this section to provide for a
speedy and inexpensive resolution of disputes submitted to the
panel. Any award shall be enforceable in accordance with
Alaska statutes. Any award shall include an award of costs,
interest and attorney fees.
ARTICLE 23. 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 port
facilities such that those risks are minimized. LESSEE shall
continue to provide and maintain marine industry accepted
standards of fire protection such that the City of Seward ISO
rating is not degraded by reason of LESSEE's operation. The
parties agree that with the rapid expansion of technology in
the field of fire prevention and control LESSEE's obligations
hereunder may vary during the term of this lease and CITY may
submit LESSEE's compliance with its obligation hereunder to
arbitration not more frequently than once each five years.
ARTICLE 24. 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 the amendment or
amendments), that there are no defaults existing (or, if there
is any claimed default, stating the nature and extent
Lease Agreement/1992
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thereof); and stating the dates to which the rent and other
charges have been paid in advance.
ARTICLE 25.
CONDITIONS AND COVENANTS
All the
running with
"conditions"
specifically
were used in
provisions of this lease shall be deemed as
the land, and shall be construed to be
as well as "covenants", as though the words
expressing or imparting covenants and conditions
each separate provision.
ARTICLE 26.
NO WAIVER OF BREACH
No failure by either CITY or LESSEE to insist upon the
strict performance by the other of any term, covenant or
condition of this lease or to exercise any right or remedy
consequent upon a breach thereof, shall constitute a waiver of
any such breach or of such terms, covenant or condition. No
waiver of any breach shall affect or alter this lease, but
each and every term, covenant and condition of this lease
shall continue in full force and effect with respect to any
other then existing or subsequent breach.
ARTICLE 27. TIME OF ESSENCE
Time is of. the essence of this lease and of each
provision.
ARTICLE 28. 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 29. 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 30. 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 31. GOVERNING LAW
This lease shall be governed by, construed and enforced
in accordance with the laws of the State of Alaska.
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ARTICLE 32. PARTIAL INVALIDITY
If any provision of this lease is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the provisions shall remain in full force and
effect and shall in no way be affected, impaired or
invalidated.
ARTICLE 33. RELATIONSHIP OF PARTIES
Nothing contained in this lease shall be deemed or
construed by the parties or by any third person to create the
relationship of principal and agent or of partnership or of
joint venture or of any association between CITY and LESSEE;
and neither the method of computation of rent, nor any other
provisions contained in this lease nor any acts of the
parties, shall be deemed to create any relationship between
CITY and LESSEE other than the relationship of lessee and
lessor.
ARTICLE 34. INTERPRETATION
The language in all parts of this lease shall in all
cases be simply construed according to its fair meaning and
not for or against CITY or LESSEE as both CITY and LESSEE have
had the assistance of attorneys in drafting and reviewing this
lease.
ARTICLE 35. NUMBER AND GENDER
In this lease, the neuter gender includes the masculine
and the feminine, and the singular number includes the plural;
the word "person" includes corporation, partnership, firm or
association wherever the context so requires.
ARTICLE 36. MANDATORY AND PERMISSIVE
"Shall", "will" and "agrees" are mandatory; "may" is
permissive.
ARTICLE 37. CAPTIONS
Captions of the sections and subsections of this lease
are for convenience and reference only, and the words
contained therein shall in no way be held to explain, modify,
amplify or aid in the interpretation, construction or meaning
of the provisions of this lease.
ARTICLE 38. AMENDMENT
This lease is not subject to amendment except in writing
executed by both parties hereto.
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ARTICLE 39. DELIVERY OF NOTICES - METHOD AND TIME
All notices, demands or requests from one party to
another shall be delivered in person or be sent by mail,
certified or registered, postage prepaid, to the addresses
stated in section 40 and shall be deemed to have been given at
the time of delivery or mailing.
ARTICLE 40. NOTICES
All notices, demands and requests from LESSEE to CITY
shall be given to CITY at the following address:
City Manager
City of Seward
P.O. Box 167
Seward, Alaska 99664
All notices, demands or requests from CITY to LESSEE
shall be given to LESSEE at the following address:
James T. Pruitt
Seward Ship's Drydock, Inc.
Box 944 Mile 1 Seward Highway
Seward, Alaska 99664
or
James T. Pruitt
2506 Maple Street
Seward, Alaska 99664
ARTICLE 41. CHANGE OF ADDRESS
Each party shall have the right, from time to time, to
designate a different address by notice given in conformity
with this Article.
IN WITNESS WHEREOF, the parties hereto have set their
hands and seals the date first hereinbefore set forth.
CITY
City of Seward
Darryl Schaefermeyer,
City Manager
LESSEE
SEWARD SHIP'S DRYDOCK, INC.
James T. Pruitt, President
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ATTEST:
City Clerk
Approved as to Form:
City Attorney
STATE OF ALASKA
ss.
THIRD JUDICIAL DISTRICT
THIS IS TO CERTIFY that on this day of
1992, before me, the undersigned Notary Public, personally
appeared JAMES T. PRUITT, President of Seward Ship's Drydock,
Inc., a corporation organized and existing under the laws of
the State of Alaska, and he acknowledged to me that he
executed this Lease Agreement on behalf of said corporation
for the uses and purposes therein set forth.
IN WITNESS WHEREOF I have hereunto set my hand and seal
the day and year first hereinabove written.
Notary Public in and for Alaska
My Commission Expires:
Lease Agreement/1992
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CONSENT TO TERMS OF LEASE AGREEMENT
James T. Pruitt, d/b/a Seward Ship's Chandelry, Lessee
under the terms of the existing Lease Agreement described in
the above Lease Agreement, hereby consents to the potential
modification of his rights as tenant under the existing lease
agreement as set forth in Subsection 6.2.
Dated this
day of
, 1992.
LESSEE
d/b/a
SEWARD SHIP'S CHANDELRY
James T. Pruitt
STATE OF ALASKA
ss.
THIRD JUDICIAL DISTRICT
THIS IS TO CERTIFY that on this day of
1992, before me, the undersigned Notary Public, personally
appeared JAMES T. PRUITT, d/b/a Seward Ship's Chandelry, a
corporation organized and existing under the laws of the State
of Alaska, and he acknowledged to me that he executed this
Lease Agreement on behalf of said corporation for the uses and
purposes therein set forth.
IN WITNESS WHEREOF I have hereunto set my hand and seal
the day and year first hereinabove written.
Notary Public in and for Alaska
My Commission Expires:
Lease Agreement/1992
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SEWARD MARINE INDUSTRIAL CENTER
PROPERTY DESCRIPTION
FOR
LEASE TO SEWARD SHIPS DRYDOCK, INC
OR
SALE TO JAMES T. PRUITT
THE PARCEL TOTALING APPROXIMATELY 22.647 ACRES, ALL LOCATED WITHIN
SECTION 18, RANGE 1 EAST, TOWNSHIP 1 SOUTH, SEWARD MERIDIAN ,
INCLUDES PARTS OF US SURVEY 4827, TRACT A FOURTH OF JULY CREEK
TRACTS, AND ALASKA TIDELAND SURVEY 1222, AND IS DESCRIBED AS
FOLLOWS:
THE BASIS OF BEARING FOR THIS METES AND BOUNDS DESCRIPTION IS THE
SE CORNER MONUMENT OF USS 4827 IDENTIFIED FOR MAPPING PURPOSES AS
COORDINATES N1643.0962; E5033.4l35, FROM WHICH THE CENTERLINE OF
NASH ROAD IS LOCATED 1896.5 FEET NORTH AND 1616.2 FEET WEST; AND
THE COMMON POINT OF BEGINNING FOR THE DESCRIPTIONS OF THOSE
PORTIONS OF USS 4827, TRACT A FOURTH OF JULY CREEK TRACTS, AND ATS
1222 IS LOCATE 1339.14 FEET S 89D 25' 10" W.
APPROXIMATELY 7.642 ACRES IN US SURVEY 4827 STARTING AT THE
SOUTHWEST CORNER OF US SURVEY 4827, THENCE N33009"00"W 122.10 FEET,
THENCE N06028"00"W 291.04 FEET, THENCE N89025'47"E 877.03 FEET,
THENCE SOoo34'13"E 392.36 FEET TO A POINT ON THE SOUTH BOUNDARY OF
US SURVEY 4827, AND THENCE S89025'10"W 781.38 FEET TO THE POINT OF
BEGINNING; AND
APPROXIMATELY 6.772 ACRES IN FOURTH OF JULY TRACT A STARTING AT THE
NORTHWEST CORNER OF TRACT A WHICH IS COMMON WITH THE SOUTH WEST
CORNER OF US SURVEY 4827, THENCE N89025'10"E 781.38 FEET ALONG THE
COMMON BOUNDARY WITH US SURVEY 4827, THENCE SOoo34'13"E 407.24
FEET, THENCE S89018'04"W 535.68 FEET, THENCE N60ol0'38"W 194.18
FEET TO A POINT ON THE COMMON BORDER OF ALASKA TIDELAND SURVEY
1222, THENCE N28005'30"W 115.91 FEET, THENCE N0702l'15"W 208.70
FEET TO THE POINT OF BEGINNING; AND
APPROXIMATELY 8.233 ACRES IN ALASKA TIDELAND SURVEY 1222 STARTING
AT THE SOUTHWEST CORNER OF US SURVEY 4827, THENCE S0702l'15"E
208.70 FEET ALONG THE COMMON BOUNDARY WITH FOURTH OF JULY CREEK
TRACT A, THENCE S28005'30"E 115.91 FEET, THENCE N60010'38''W 674.93
THENCE S89044'40"W 429.09 FEET, THENCE NOooOO'OO"E 156.00 FEET,
THENCE N90000'00''W 57.00 FEET, THENCE NOOoOO'OO"W 17.00 FEET,
THENCE S90000'00''E 57.00 FEET, THENCE NOOoOO'OO"W 117.00 FEET,
THENCE N89044'40"E 462.00 FEET TO ENCLOSE THE SHIPLIFT AND DOCK,
THENCE NOoo34'13"W 71.19 FEET, THENCE N89025'47"E 373.32 FEET TO A
POINT ON THE COMMON BOUNDARY WITH US SURVEY 4827, THENCE
S06028'00"E 291.04 FEET, THENCE S33009'00"E 122.10 FEET TO THE
POINT OF BEGINNING.
EXHIBIT A
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uS SURVE.V 4827
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S(C1l011 lB, R\( IS \S SIJD tlE.RlDll'IN
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PLAN
Scale: 1": 200'
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1.... )( 551'
~fDGeD TO
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Breakwater to be
maintained but not
under lease
EXHIBIT B
CITY OF SEWARD, ALASKA
SEWARD MARINE INDUSTRIAL CENTER
~ :..'>'~"~;'::--",:':"~:"J
......;:; J.: .
SENT BY:Perkins Coie
7-17-92 2:34PM
PERKINS COlE et al~
9072243246:#55
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.
.
ull toroe and effect unless striking such provision shall
ater1ally alter the intent of the parties.
5.4 In the event any action 1i1 brouqht to enforce
1s Cuaranty, ~e parties a~ee to be subject to exclusive in
ersonam jurisdiction in the Superior Court for ~e State of
laska or in the united statea District Court for the District
f Al.aka and agree that 1n any such action venue shall lie
xclusively at Anchorage, Alaska, in the Third Judicial
istrict, state of Alaaka.
5.1 Para'lraph headings contained in this Guaranty
re included. for convenience only and forD. no part of the
greement between the parties.
S.I All notices or requests required or permitted
nl.'ler this Guaranty shall be.-in writing; shall be personally
~livered or sent by certified mail, return receipt req"'ested,
osta'll! prepaid; shall be deellled given when so delivered or
ailed, irrespective of whether such notice or request is
ctually received by the addressee; and shall be s.nt to the
rties at the addresses set forth in the NEW LEASE AGRE~
nd to the Guarantor at the address Bat forth in this
uaranty. Either party may chanqa the address to which
otices ahall be sent Py notioe to the other party.
5.7 This Guaranty .hall be binding upon, and inure
o the benefit of, the parti.. hereto and their respective
uccesaors and assigns.
1.8 As used in this Guaranty, the masculine shall
nclude the feminine and neuter, the feminine shall inclUde
he masculine and neuter, the neuter shall include the
.sculine and feminine, the singular shall inclul.'le the plural
nd the plural shall include the singUlar, as the context may
equire.
DATED this ..D:t-day of
_\~
\
, 1992.
GDlUlJoJIfTOa,
.~:~~
+006 Mapi. Sto.::
Seward, Alaska pg664
[ 92O'r70.01'1
-5-
7/17/92
SENT BY:PerKins Coie
7-17-82 2:35PM
PERKINS COlE et al~
8072243248i1t56
.
.
.
snTEOF~~ )
) 0..
HIRD JUDXCIAL DISTRICT )
THIS IS TO CER.TI!'Y that on this 17~ day of \.....J.u ,
992, before me, the undersigned Notary PUblic , p~';:on~1i:y"
ppeared JAKES T. PRUITT, to me known to be the individual who
xecuted ~hlil wi ~in and foregoing Personal Guaranty, And he
cknowledged to De 1;hat he. executed thi. personal Guaranty as
is tr.. and voluntary act and deedt for the uses an4 purposes
herein set forth.
IN WITNESS WHEREOF I have hereunto set my hand and seal
e day a~d year first hereinabove written.
:f>~ \. ~~
-.Notary pg "in and for Alaslta
My Commission Expire~:
0770.DI4]
-6-
11\119:1