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2004-53 KIB Building Lease Agreement City of Kodiake— 11,1014 Administrative Contract LEASE AGREEMENT THIS LEASE AGREEMENT is made this first day of July, 2004, by and between THE KODIAK ISLAND BOROUGH, a borough organized under the laws of the state of Alaska, hereinafter called Landlord, and CITY OF KODIAK, hereinafter called Tenant. For and in consideration of the covenants, rents and demises, and upon the terms and conditions hereinafter set forth, the parties agree as follows: 1. Premises. Landlord, for and in consideration of the rents, covenants and conditions hereinafter specified to be paid, performed and observed by Tenant, does hereby let, lease and demise to Tenant the improved real estate located in the Kodiak Recording District, Third Judicial District, State of Alaska, more particularly described as follows: That certain office space of approximately 3,447 square feet known as Suite 210 — 222 on the second floor of that certain building known as the Kodiak Island Borough Building located on the following described real property situated in the Kodiak Recording District, Third Judicial District, State of Alaska: Lots Five (5) and Seven (7), U. S. Survey 2538 A and B, Township 27 South Range 19 West, Seward Meridian, Kodiak Recording District, Third Judicial District, State of Alaska. The aforesaid office space, hereinafter referred to as the leased premises, is more specifically depicted or outlined on the floor plan attached hereto as Exhibit A. Tenant, upon paying the rents, and performing all of the terms and covenants on this part to be performed, shall peaceably and quietly enjoy the leased premises subject nevertheless, to the terms of this lease, and to any deed of trust or mortgage to which this lease is subordinated. 2. Term of Lease. The term of the lease shall be for the period of Two (2) years following the commencement of the term, unless sooner terminated as hereinafter provided. The term of the lease shall commence on July 1, 2004, and shall expire at 5:00 P.M., Alaska Standard Time on June 30, 2006. In the event the foregoing commencement provision results in a commencement date other than on the first day of a calendar month, the rent shall be immediately paid for such initial fractional month prorated on the basis of a thirty (30) day month. 3. Termination of Lease. Both parties have the right to terminate this lease with a thirty (30) day written notification. 4. Rental. In consideration of the demise and leasing of the premises aforesaid by Landlord, the Tenant covenants, stipulates and agrees to pay to the Landlord as rental for said premises hereinabove described, at the rate of One Dollar Seventy-five Cents ($1.75) per square foot, the sum of Six thousand Thirty-two Dollars Twenty-five Cents ($6,032.25) Dollars monthly in advance, on or before the first day of each month of the lease term. Page 1 of 9 All rentals, unless and until otherwise directed in writing by Landlord, shall be paid to the Landlord at 710 Mill Bay Road, Kodiak, Alaska 99615, or at such other place as Landlord may designate from time to time in writing. 5. Alteration of Premises. Tenant shall not make any alterations, additions, or improvements in or to the leased premises without first obtaining the written consent of Landlord. Any such alterations, additions and improvements consented to by Landlord shall be made at Tenant's expense. Tenant shall secure all governmental permits required in connection with such work, and shall hold Landlord harmless from all liability and liens resulting therefrom. All alterations, additions and improvements, except trade fixtures and appliance and equipment which do not become attached to the building, shall immediately become a part of the realty and the property of the Landlord without obligation to pay therefor, except that Landlord may require removal of all or part thereof by Tenant at the termination of the lease, at Tenant's expense, and Tenant shall pay for or repair any damages to the leased premises, including, without limitation, any necessary patching, repainting, and repairing caused by such removal. Upon removal of the trade fixtures and appliances and equipment which do not become attached to the building, Tenant shall restore the leased premises to the same condition that they were in prior to the installation of said items, including, without limitation, any necessary patching, repainting and repairing. Any trade fixtures, appliances, equipment or other property not removed from the leased premises by Tenant upon termination of the lease shall be deemed abandoned by Tenant, provided that Tenant shall save Landlord harmless from any loss, cost, or damage arising from Tenant's failure to remove such items. 6. Use of Premises. The leased premises shall be used for general office space, and for no other purpose, without the prior written consent of Landlord. Tenant shall not use or permit the leased premises or any part thereof to be used for any purpose in violation of any municipal, borough, state, federal or other governmental law, ordinance, rule or regulation. Tenant agrees that Tenant, together with all other persons entering and/or occupying the leased premises at Tenant's request or with Tenant's permission, will abide by, keep and observe all reasonable rules and regulations which Landlord may make from time to time for the management, safety, care and cleanliness of the building, and the preservation of good order therein, as well as for the convenience of other occupants and tenants of the building, and for the use of any parking areas adjacent to the building. The violation of any such rules and regulations shall be deemed a material breach of the lease by the Tenant. Tenant shall not, without Landlord's prior written consent, use, operate or install any electrical or mechanical equipment, machinery, or mechanical devices in the leased premises, except in compliance with the highest standards applicable to the leased premises, except in compliance with the highest standards applicable to the use, operation, or installation of such equipment, machinery or devices, generally recognized by the profession or industry in which Tenant is engaged, nor shall Tenant use the leased premises, or any machinery or equipment therein, in such a manner as to cause substantial noise or vibration, or unreasonable disturbance to other tenants in the building. In the event Tenant's use of the leased premises causes an increase in Landlord's fire or hazard insurance premiums; Tenant shall reimburse Landlord for the amount of such increase. 7. Taxes. Tenant shall pay any and all taxes levied on personal property and trade or other fixtures in the leased premises, and any license and excise fees and occupation taxes covering Page 2 of 9 business conducted on the leased premises, and as additional rent, an amount equal to any sales taxes on rentals payable hereunder. 8. Utilities. Landlord shall furnish, at its expense, the following utilities and services for normal office use of the leased premises: (a) Electricity for normal lighting, air conditioning, and office use. Special or additional elcctrical iequirements shall be paid by Tenant. (b) Heat, snow removal for common areas, and sewer and water based on normal office use. (c) Janitorial service for the leased premises on a five -day -a -week basis, and periodic exterior window washing. (d) Refuse collection based on normal office use. Tenant shall provide at his expense all other utilities and services used at the leased premises. Landlord shall not be liable for any loss or damage caused by or resulting form any variation, interruption or failure of said utilities or services, arising from any cause, condition or event; and no variation, interruption or failure of such utilities and services incident to the making of repairs, alterations, or improvements, or arising from any accident, strike, condition, cause or event in whole or in part beyond the reasonable control of Landlord shall be deemed an eviction of Tenant or relieve Tenant from any obligation hereunder. 9. Maintenance and Repairs. Landlord shall, at its expense, maintain and keep in good repair the foundations, exterior walls, roof and other structural portions of the building. Tenant shall, at its expense, maintain the interior of the leased premises at all times in good condition and repair, all in accordance with the laws of the State of Alaska and all directions and regulations of governmental agencies having jurisdiction hereof. Tenant shall commit no waste of any kind in or about the leased premises, and Tenant shall pay for all damage to the building, as well as damage to tenants or occupants hereof, caused by Tenant's misuse or neglect of the leased premises, its apparatus or appurtenances. At the expiration of the term hereof, or on the termination of this lease, Tenant shall surrender the leased premises, its apparatus or appurtenances. At the expiration of the term hereof, or on the termination of this lease, Tenant shall surrender the leased premises in good and clean condition, normal wear and tear and damage by fire or other casualty excepted. Landlord shall maintain and repair all plumbing, lines and equipment installed for the general supply of hot and cold water, heat, ventilation and electricity, except that Tenant shall be responsible for any and all maintenance and repairs attributable to obstruction or objects deliberately or inadvertently introduced or placed in the fixtures, lines or equipment by Tenant, his employees, agents, licensees or invitees. Landlord shall not be responsible or liable at any time for any loss or damages to Tenant's equipment, fixtures or other personal property of Tenant or to Tenant's business except to the extent attributable to Landlord's negligence. Landlord shall not be responsible or liable to Tenant or to those claiming by, through or under Tenant for any loss or damages to either the person or property of Tenant that may be occasioned by or through the acts or omissions of persons occupying other portions of the building. Landlord shall not be responsible or liable for any defect, latent or otherwise, in the building in which the leased premises is situated, or any of the equipment, machinery, utilities, Page 3 of 9 appliances or apparatus therein nor shall it be responsible or liable for any injury, loss or damage to any person or to any property of Tenant or other person caused by or resulting from bursting, breakage or by or from leakage, stream or snow or ice, running or the overflow of water or sewerage in any part of said leased premises, the building, or the surrounding area, or for any injury or damage caused by or resulting from acts of nature or the elements, or for any injury or damage caused by or resulting from any defect in the occupancy, construction, operation or use of any of said leased premises, building, machinery, apparatus or equipment by any person or by or from the acts or negligence of any occupant of the premises, unless Landlord itself is negligent. 10. Fire and Other Casualty. Should the leased premises be damaged by fire or other casualty, and if the damage is repairable within four (4) weeks from the date of occurrence (with the repair work and the preparations therefore to be done during regular working hours on regular work days), the damages shall be repaired with due diligence by Landlord, an in the meantime the monthly rental shall be abated in the same proportion that the untenable portion of the leased premises bears to the whole thereof. Should the leased premises be completely destroyed by fire or other casualty, or should they be damaged to such an extent that the damage cannot be repaired within the four (4) weeks of the occurrence, Landlord shall have the option to terminate this lease, and Landlord shall advise Tenant within thirty (30) days after the happening of any such damage whether Landlord has elected to continue this lease in effect or to terminate it. If Landlord shall elect to continue this lease in effect, it shall commence and prosecute with reasonable diligence any work necessary to restore or repair the leased premises. If Landlord shall fail to notify Tenant of its election within said thirty -day period, Landlord shall be deemed to have elected to terminate this lease, and the lease shall thereafter automatically terminate. The commencement by Landlord of repair work shall be deemed to constitute notice that Landlord has elected to restore or repair the leased premises. For the period from the occurrence of any damage to the leased premises to the date of completion of the repairs (or to the date of termination of the lease if Landlord shall elect not to restore the leased premises), the monthly rental shall be abated in the same proportion as the portion of the leased premises bears to the whole thereof. In the event restoration or repair is delayed by acts or omissions of Tenant, there shall be no abatement of rental during the period of such delay. If the fire or damage is caused by the carelessness, negligence or improper conduct of Tenant, then notwithstanding other provisions of this lease, Tenant shall remain liable for the rent, without abatement, during any period of repair or restoration. If the Landlord, in its discretion, shall decide within thirty (30) days after the occurrence of any fire or other casualty in the building, even though the leased premises may not have been affected by such fire or other casualty, to demolish, rebuild or otherwise replace or alter the building containing the leased premises, then upon written notice given by Landlord to Tenant, this lease shall terminate on a date specified in such notice, but no sooner than thirty (30) days from the date of such notice, as if that date had been originally fixed as the expiration date of the term herein leased. Tenant and Landlord hereby mutually release each other from liability and waive all right of recovery against each other for any loss from perils insured against under their respective fire insurance policies, including any extended coverage and endorsements thereto; provided, however, that this paragraph shall be inapplicable if it would have the effect, but only Page 4 of 9 to the extent that it would have the effect, of invalidating any insurance coverage of Landlord or Tenant. Restoration or repair work conducted in the common areas, in areas of the building unleased, or leased to other tenants, or the noise or interference arising therefrom, shall not be deemed an eviction of Tenant, or a breach of this lease, but Tenant, or a breach of this lease but Tenant's obligation to pay rent shall be abated during such period of time as Tenant is unable to conduct business at the leased premises by reason of actual physical interference with use of the leased premises as a result of such restoration or repair work. 11. Subletting and Assignment. Tenant shall not sublet the leased premises, or any part thereof, or assign this lease or any part thereof, nor shall this lease be assigned in whole or in part by operation of law or through any court proceedings, without the prior written consent of Landlord to such subletting or assigning; any such assignment or sublease without Landlord's written consent shall be void. If Tenant is a corporation, any merger, consolidation, or dissolution to which it is a party, or any change in ownership of a majority of its voting stock outstanding, shall constitute an assignment of this lease for purposes of this paragraph. 12. Indemnification. Tenant agrees to protect, defend, indemnify and save harmless Landlord from and against any and all claims (no matter how meritless) demands, and causes of action of any nature whatsoever, and any expenses incident to defense of and by Landlord therefrom, for injury to or death of persons or loss of or damage to property occurring on the leased premises, or in any manner arising out of Tenant's use and occupation of said premises, or the condition thereof, during the term of this lease. Tenant shall procure and maintain public liability insurance coverage, naming Landlord as an insured, which coverage, pertaining to the leased premises, shall not be less than $250,000 per person for bodily injury or death, $500,000 per occurrence for bodily injury or death, and $100,000 for property damage. 13. Common Areas and Facilities. All common areas and common facilities in or about the leased premises and the building shall be subject to the exclusive control, scheduling and management of Landlord (e.g. assembly chambers). Landlord shall have the right to construct, maintain and operate lighting and other improvements on all said areas; to change the area, level, location and arrangement for common areas and other facilities and temporarily to close the common areas to effect such changes. All common areas and facilities which Tenant may be permitted to use and occupy are to be used and unoccupied under a revocable license, which shall not be unreasonably revoked, and if any such license be revoked or if the amount of such areas be changed or diminished, Landlord shall not be subject to any liability nor shall Tenant be entitled to any compensation or diminution or abatement of rent nor shall revocation or diminution of such areas be deemed constructive or actual eviction. 14. Liens. Tenant will not permit any mechanics', laborers' or material men's liens to stand against the leased premises or improvements for any labor materials furnished to Tenant or claimed to have been furnished to Tenant, or to Tenant's agents, contractors, or sublessee, in connection with work of any character performed or claimed to have been performed on said premises or improvements by or at the direction of sufferance of Tenant; provided, however, Page 5 of 9 Tenant shall have the right to contest the validity or amount of any such lien or claimed lien. In the event of such contest, Tenant shall give to Landlord such reasonable security as may be demanded by Landlord to insure payment of such lien or such claim of lien. Tenant will immediately pay any judgment rendered with all proper costs and changes and shall have such lien released or judgment satisfied at Tenant's own expense. The foregoing provisions respecting liens shall apply to all liens, of any kind or nature, asserted against the leased premises or improvements thereon, including liens arising out of, incident to, or connected with the use and occupation of the leased premises by Tenant. 15. Default. If Tenant at any time during the term of this lease (and regardless of the pendency of any bankruptcy, reorganization, receivership, insolvency or other proceedings, in law, in equity or before any administrative tribunal, which have or might have the effect of preventing Tenant from complying with the terms of this lease) shall: (a) Fail to make payment of any installment of rent or of any other sum herein specified to be paid by Tenant, and Tenant fails to cure such default within ten (10) days after such failure to make payment: or (b) Fail to observe or perform any of Tenant's other covenants, agreements or obligations hereunder, and if within thirty (30) days after Landlord shall have given to Tenant written notice specifying such default or defaults, Tenant shall not have commenced to cure such default and proceed diligently to cure the same; or (c) If Tenant has filed a Petition of an Arrangement under Chapter 11 of Bankruptcy Act, 11 O.S.C. 701 et seq., or a voluntary petition under any other provision of said Bankruptcy Act, or if Tenant finally and without further possibility to appeal or review: (1) is adjudicated as bankrupt or insolvent; or (2) has a receiver appointed for all or substantially all of its business or assets on the ground of Tenant's insolvency; or (3) has itself appointed as a debtor-in-possession; or (4) has a trustee appointed for it after a petition has been filed for tenant's reorganization under the Bankruptcy Act of the United States known as the Chandler Act or any future law of the United States having the same general purpose; or (5) if Tenant shall make an assignment for the benefit of creditors, then in any such event Landlord shall have the right at its election, then or at any time thereafter, and while such default, defaults or events shall continue, to give Tenant notice of Landlord's intention to terminate this lease and all Tenant's rights hereunder, on a date specified in such notice, which date shall not be less than ten (10) days after the date of giving of such notice, and on the date specified in such notice, the term of this lease and all rights granted Tenant hereunder shall come to an end as fully as if the lease then expired by its own terms, and Tenant hereby covenants peaceable and quietly to yield up and surrender to Landlord said leased premises and all structures, buildings, improvements and equipment located thereon, and to execute and deliver to Landlord such instrument or instruments as shall be required by Landlord as will properly evidence termination of Tenant's rights hereunder or its interest therein. In the event of termination of this lease as in this paragraph above provided, Landlord shall have the right to repossess the leased premises and such structures, buildings, improvements and equipment, either with process of law or through any form of suit or proceeding, as well as the right to sue for and recover all rents and other sums accrued up to the time of such termination, and damages for rent not then accrued. Landlord shall also have the right, without resuming possession of the premises or terminating this lease, Page 6 of 9 to sue for and recover all rents and other sums, including damages, at any time and from time to time accruing hereunder. 16. Notices. Any and all notices required or permitted under this lease, unless otherwise specified in writing by the party whose address is changed, shall be mailed, certified or registered mail, or delivered, to the following addresses: LANDLORD: Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 TENANT: City of Kodiak P. O. Box 1397 Kodiak, Alaska 99615 Any such notices shall be deemed effective on the date of mailing or delivery. 17. Costs Upon Default. In the event either party shall be in default in the performance of any of its obligations under this lease and an action shall be brought for the enforcement thereof, the defaulting party shall pay to the other all the expenses incurred therefor, including a reasonable attorney's fee. In the event either party shall without fault on its part be made a party to any litigation commenced by or against the other, then such other party shall pay all costs and reasonable attorney's fees incurred or paid by such party in connection with such litigation. 18. Rights or Remedies. Except insofar as this is inconsistent with or contrary to any provision of this lease, no right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder, or now or hereafter existing at law or in equity or by statute. 19. Waiver and Forbearance. Except to the extent that Landlord may have otherwise agreed in writing, no waiver by Landlord of any breach by Tenant of any of its obligations, agreements or covenants hereunder shall be deemed to be a waiver of any subsequent breach of the same or any other covenant, agreement or obligation. Nor shall any forbearance by Landlord to seek a remedy for any breach of Tenant be deemed a waiver by Landlord of its rights or remedies with respect to such breach. 20. Inspection. Landlord shall at all reasonable times during Tenant's business hours have access to the premises for the purpose of inspection. Landlord shall also be entitled to put "to lease" or "for lease" signs in and about the leased premises, and to show the leased premises to prospective tenants, during the last sixty (60) days of the lease term and any extended term, and during any period of time after Landlord has given Tenant a notice of intention to terminate under paragraph 15 of this lease. 21. Notices of Nonresponsibility. Landlord may enter the demised premises at any time for the purpose of posting notices of nonresponsibility. Page 7 of 9 22. Successors in Interest. This lease shall be binding upon and inure to the benefit of the respective heirs, successors and assigns of the parties hereto. 23. Holding Over. In the event that the Tenant holds over at or after the end of the term, the tenancy shall be needed a month-to-month tenacy commencing on the first day of the holdover period. 24. Signs. Landlord shall provide one sign for the Tenant. Tenant agrees that any other sign or signs installed on the demised premises shall be with the consent of the Landlord. 25. Memorandum of Lease. Tenant agrees that Tenant will not record this lease. At the request of either Landlord or Tenant, the parties shall execute a memorandum lease for recording purposes in lieu of recording this lease, in such form as may be satisfactory to their respective attorneys. 26. Estoppel Certificates. Tenant shall, at any time and from time to time upon not less than fifteen (15) days' prior request by Landlord execute, acknowledge and deliver to Landlord a statement in writing certifying that this lease is in full force and effect and unmodified (or in full force and effect and modified and stating the modifications), the dates to which the rent(s) and any other charges have been paid in advance, the date Tenant entered into occupancy of the leased premises and the date the lease term expires, the nature and amount of any claims of Tenant against Landlord arising as a result of this lease, and the existence and nature of any defenses or offsets claimed by Tenant against enforcement of this lease by Landlord; it being intended that any such statement delivered pursuant to this paragraph may be relied upon by any prospective purchaser or encumbrancer (including assignees) of the premises. In the event Tenant fails so to certify within such fifteen (15) day period, Tenant shall be deemed to have certified and admitted the accuracy of information submitted by Landlord in good faith to any prospective purchaser or encumbrancer in respect to this lease. 27. Excuse for Nonperformance. Either party hereto shall be excused from performing any or all of its obligations hereunder with respect to any repair and construction work required under the terms of this lease for such times the performance of any such obligation is prevented or delayed by an act of God, floods, explosion the elements, war, invasion, insurrection, riot, mob violence, sabotage, inability to procure labor, equipment, facilities, materials or supplies in the open market, failure of transportation, strikes, lockouts, action by labor unions, or laws or order of governmental agencies, or any other cause whether similar or dissimilar to the foregoing which is not within the reasonable control of such party. 28. Construction of Lease. This lease shall be governed by and construed in accordance with the laws of the State of Alaska. Words of gender used in this lease shall mean and include any other gender, and singular shall mean and include the plural and the plural the singular, where applicable, and when the sense requires. Page 8 of 9 29. Security Deposit. An essential inducement to Landlord from Tenant for this lease is a security deposit by Tenant in the amount of NONE DOLLARS ($ -0-), receipt of which by Landlord is hereby acknowledged. Said deposit for security is for the full and faithful performance by the Tenant of all the covenants and terms of this lease required to be performed by Tenant. Such security deposit shall be applied to the last month's rental after the expiration of this lease if Tenant has fully and faithfully carried out all of its covenants and terms. If Tenant docs not fully and faithfully perform the covenants and terms of this lease, Landlord may apply the aforementioned security deposit against damages resulting from breaches of Tenant. In the event all or part of the security deposit is so applied, Tenant shall, upon demand, promptly pay to Landlord such amount as may be necessary to replenish the security deposit to its original amount. In the event of a bona fide sale of the property of which the leased premises are a part, the Landlord shall have the right to transfer such security deposit to purchaser to be held under the terms of this lease, and, in that event, the Landlord shall be released from all liability for the return of such security deposit to the Tenant. The Tenant may not assign or encumber the money deposited as security, and neither the Landlord nor its successors or assigns shall be bound by any such assignment or encumbrances. 30. Subordination and Nondisturbance. This lease and all of the rights of Tenant hereunder are and shall be subject and subordinate to the lien of every deed of trust and every mortgage now or hereafter placed on the demised premises or any part thereof (except the property of Tenant and others stated to be removable under paragraph 4 of this lease), and to any and all renewals, modifications, consolidations, replacements, extensions or substitutions of any such mortgage or deed of trust ("encumbrances"). IN WITNESS WHEREOF, the parties have hereunto set their hands and seals this 1 day of Oct -o poet— , 2004. ATTEST: vqoa�� Debra Marlar, City Clerk ATTEST: ?udith. Nielsen, o ough Clerk Page 9 of 9 TENANT: CITY OF KODIAK c Linda d, City Manager LANDLORD: THE KODIAK ISLAND BOROUGH Patrick Carlson, Borough Manager P� �S%�AND So !p , / \OG 9�qs 1q b�/ KA �