Submerged Lands Lease Act (P.L. 7-20)

0 Seventh Northern Marianas The Honorable Joseph S. Inos Senate President Commonwealth Legislature Saipan, 96950 and Gov. NMI The Honorable Pedro R. Guerrero Speaker, House of Representatives Seventh Northern Marianas Saipan, 96950 Commonwealth Legislature Dear President Inos and Speaker Guerrero: This is to inform you that I have signed into law House Bill No. 7-186, 1 , H.D. 2, the "Submerged Lands Lease S-023-JulyO5-90, which was passed by the Seventh Legislature. This is a landmark bill with economic implications for Garapan and the Commonwealth in general. I would like to congratulate the developer, the Legislature, and the Department of Natural Resources for their public spirited effort. Though I don't mean to detract from its positive accomplishments, please allow me a few additional observations about this bill. The thrust of this measure is to approve the Department of Natural Resources submerged lands lease. But the measure does more; it also appropriates money. I note that appropriation bills should be limited to subjects of appropriation and not be combined, as is the case with H.B. No. 7-186, with other subjects. In the instant case, the Legislature has combined its obligations under Public Law 13 to approve development leases of submerged lands with an attempt to appropriate money. Subsection (1) of Section 4 of House Bill No. 7-186, C.D. 1, H.D. 2., appropriates for public works projects in the Third Senatorial District. Though they are not with our over-all infrastructure plan, the appear to be worthwhile endeavors for Saipan. My concern is with appropriating $808,500 which has not been identified as available for legislative action. The $808,500 was not included in House Concurrent Resolution No. That Resolution approves the revenues and resources available to be spent i n the appropriations must stay wi th in the sum identified available for projects. has not yet identified for appropriation. Governor consent to the increase in revenues for approprintion. Consent is required Article Section of Constitution. I n subsection (1) of Section 4 of the bill, the Legislature has by implication identified $1,858,500 for without the Executive's consent. , , . , , .') 0 0 0 C 0 PUBLIC LI\W 1-ZO q(ommonlucaltl) of tl)c j}ortl)crn (M,x Lttfite) ~ ®ffice of tbe cl? . ftlanana 1Jslanb5 . 7-8. The Capitol Hill S . OlJ£fnOr , aipan MP/USA 96950 . f FEB 1991 MP MP specifically $808,500 integrated Commonwealth. as Legislative The $808,500 must by Ill, appropria11on 9(a) " positive primary been our Ph . one. (67C ~-v-> Telefax· (6..,f, ,.-5091/2[3 . I.· ~)? Telex: 7S~--:::2;-·5096/99 C.D. 6 projects Though I approve this bill, the monies will not be available for expenditure until the constitutional requirement is satisfied. have a further concern with the appropriation aspects of H.B. 7- 186. My concern is that the Third Senatorial District plans to appropriate another generated by the submerged lands lease (once again not included in the House Concurrent Resolution) by resolution only. Section 5 of Article of our Constitution provides that appropriation shall be by bill. Apparently there is no plan to appropriate by bill. An appropriation law would necessarily come to the Governor’s desk for final action. Appropriation by resolution would eliminate the Executive’s constitutional role. It would be my hope that we will see appropriation of the by law. House Bill No. 186, 2, becomes Public Law No. 7- 20. Copies my signature are forwarded for your reference. Sincerely, . I-) I I. DE LEON GUERRERO Governor cc: Lt. Governor Director of Natural Resources SAPLR . I $1,050,000 7 bearing ~OREftZO $1,050,000 C.D. 1,H.D. II OF’ R E P R E S E N T A T I V E S S E V E N T H MARIANAS L E G I S L A T U R E REGULAR S E S S I O N , 1990 7-20 HOUSE B I L L NO. 7 - 1 8 6 , C . D . l , H . D . 2 AN A C T T O A P P R O V E SUBMERGED LAND L E A S E AGREEMENT BETWEEN T H E A P E X C O R P O R A T I O N , S A I P A N , AND T H E COMMONWEALTZ O F T H E NORTHERN M A R I A N A I S L A N D S V I A T H E O F NATURAL R E S O U R C E S P U R S U A N T TO P U B L I C LAW 6-13 AS AMENDED; AND F O R O T H E R P U R P O S E S . O f f e r e d by W i l l i a m C. A d a , D a t e : O c t o b e r 1 7 , 1990 HOUSE A C T I O N . R e f e r r e d t o on N a t u r a l R e s o u r c e s S t a n d i n g C o m m i t t e e N o . 7- 29 F i r s t a n d F i n a l N o v e m b e r 2 9 , 1990 S E N A T E A C T I O N S e c o n d and F i n a l D e c e m b e r 1 9 , Acting C l e r k :iOUSE Kc:::-:-::::RN s:::c:oND INT::::c:.:..TIONAL GOVERNMENT DEPAR-::-'.:::NT Represen::ative: Committee ::eport Rea::ing: Reie:::ing: COM}lONWEALTH PUBLIC IAW NO. 1990 House PUBLIC LAW NO. 7-20 SEVENTH MARIANAS LEGISLATURE HOUSE B I L L THIRD 1930 NO. C.D.l, H . D . 2 BE 1 2 3 4 5 6 7 8 9 1 0 11 1 2 13 1 4 1 5 16 A B I L L FOR AN ACT T o t h e submerged l a n d l e a s e ag reemen t between t h e APES C o r p o r a t i o n , S a i p a n , and t h e Commonwealth of t h e N o r t h e r n Mar iana I s l a n d s v i a t h e Depar tment R e s o u r c e s p u r s u a n t t o P u b l i c Law 6-13 a s amended; and for p u r p o s e s . THE NORTHERN MARIANAS COMMONWEALTH LEGISLATURE: S e c r i o n 1. S h o r t T i t l e . T h i s A c t s h a l l be known a s t h e Lands Lease 2 . The L e g i s l a t u r e f i n d s t h a t u n d e r t h e o f t h e Submerged Lands A c t ( P u b l i c Law 6-13, , a s t h e L e g i s l a t u r e h a s e x c l u s i v e r i g h t t o a p p r o v e , d i s a p p r o v e , o r modi fy t h e p r o v i s i o n s of any deve lopment l e a s e ! o r u s e o f submerged l a n d s and a l l l e a s e s s h a l l approved by law. L e g i s l a t u r e f u r t h e r f i n d s t h a t P u b l i c Law 6-13, a s amended, r e q u i r e s t h e Director of t h e Depar tment of N a t u r a l t o a l l l eases , l i c e n s e s and p e r m i t s of t h e u s e of submerged l a n d s t o t h e L e g i s l a t u r e f o r t h e L e g i s l a t u r e f i n d s t h a t t h e n o t i c e of t h e p u b l i c r e q u i r e d by P . L . 6 - 1 3 , a s amended, and 2 S e c t i o n 1 2 3 3 , h a s been w i d e l y p u b l i c i z e d i n Page 1 REGlJI...!,.:= SESSION, irr.o::-:-·.·e I:-:-:;;:rnational Goverr:::::e:-:-:: of Nat'-.:.r:::l =-::her IT ENAC':"~::; BY "Submerged COMMONWEALTH S-02J-July05-90." Sec-:ion Findings. prov.:.sions amen::ed), water dependent be The Resource;; submit C=::-.monweal th approva . codifie~ ~-: C~C 7-186 that 7-20 House B i l l C . D . 1 , H.D.2 1 2 3 4 5 6 7 a 10 11 12 13 14 . 1 5 1 6 17 1 8 2 0 21 22 23 25 a c c o r d a n c e w i t h t h e of a p p l i c a b l e law. S e c t i o n 3 . P u r p o s e . t h e p u r p o s e of t h i s A c t t o .- t h e Submerged Lands L e a s e Agreement e x e c u t e d between I n t e r n a t i o n a l C o r p o r a t i o n , S a i p a n , and t h e Commonwealth of t h e N o r t h e r n Mar i ana I s l a n d s v i a t h e Department of R e s o u r c e s . S e c r i o n 4 . A u t h o r i t y t o L e a s e Submerqed Lands. O n of t h e Commonwealth Government of t h e N o r t h e r n Mariana I s l a n d s , t h e D i r e c t o r of N a t u r a l R e s o u r c e s may execute a Lands Lease Agreement w i t h APEX I n t e r n a t i o n a l which c o n t a i n s t h e f o l l o w i n g d e s c r i p t i o n s : SUBMERGED LANDS LEASE BOAT MARINA APEX INTERNATIONAL CORPORATION, SAIPAN I Legal D e s c r i p t i o n : Bounded by c o o r d i n a t e s meters and meters: and meters and meters (see a t t a c h e d Exhibit P r o p e r t y A d d r e s s : West of Hor iguch i B u i l d i n g and Garapan C a t h o l i c Church and a d j a c e n t t o Lot Nos. 013 D 37 , 013 D 3 8 , 9 19 24 c.::::::::-ove Gcvernr:-.ent be:--ial f Sub:;ierged Corporation (a) (b) DUDLIC L\W NO. No.7-186 requirements is 5-023-;,JULYOS-90 ✓ NSJ,8000.00 N54,000.00 ES0,500.00 £50,700.00 "A"). Page 2 NO. 7-20 House Bill No.7-186, C.D.l, H . D . 2 1 2 3 6 7 a 9 10 11 12 13 14 15 16 17 18 19 21 2 2 Lessor Lessee Size ( f) Improvements (h) Use Terms Lease Fee and 013 D 35 in Garapan, Saipan. Commonwealth Government of the Northern Mariana Islands. APEX International Corporation, Saipan, Box 379, Saipan, MP 96950 58,549 square meters or 5 8 hectares None. Unzoned. To construct a 100 slip private marina. The term of this lease agreement shall be for a term of forty (40) years. The commencing and expiration dates shall be reflected in the lease agreement. The annual lease fee of $105,000.00 is only for the first ten years of the lease. The A P E X 3 PUBLIC Ll\W ( c) 5 ( d) P.O. (e) (g} Zone (i) 20 ( j ) 23 25 Page PUBLIC 7-20 House Bill C . D . l , H.D.? 1 2 3 3 6 7 a 9 10 11 12 13 14 15 16 16 20 21 22 Public Contributions International Corporation shall, within 90 days u p o n the effective date of this Act, pay to the Commonwealth Government the sum of $1,050,000.00, which represents the amount for the first ten years of the lease fee. The lease amount for the remaining 30 years of the lease period shall be determined by the Department of Natural Resources. : The APEX International Corporation shall construct a sewerline to connect to the existing sewerline from the Horiguchi Building southward to approximately 200 feet south of the Jade Garden Restaurant. The Page Ll\\'1 NO. No.7-186 4 (k) i7 19 23 24 25 4 PUBLIC NO. House Bill C.D.l. H.D.2 1 design of the sewerline construction shall meet 3 the standards of the Commonwealth Utilities 9 12 13 14 15 (1) Appropriation Authority Corporation and be ect to CUC inspection and approval. In addition, APEX International Corporation shall contribute cash the sum of Eight Hundred Eight Thousand Five Hundred Dollars $808,500.00) to the Commonwealth Government. The appropriations of the $1,050,000.00 and the for capital improvement projects shall be determined by the Third Senatorial District Delegation by Resolution, provided, that $300,000.00 is appropriated for Page 5 2 5 5 7 3 10 11 16 17 l9 20 21 22 :s LAW 7-:.:'.0 No.7-186 subj in (U.S. $808,500.00 Sublease PUBLIC House Bill H . D . 2 sewerline construction for $300,000.00 appropriated to improve the dock facility at Sugar Dock and $208,500.00 appropriated to construct a drainage system for the Tanapag subdivision. Section of the Agreement Between the Department of Natural Resources and APEX International Corporation hereby amended to read as follows : ”Lessee shall not sublease, assign, or transfer all or any part of its interest in this lease or to the premises or any portion thereof or any thereon without prior legislative approval through a Joint I Page 6 9 10 ll l2 13 14 7 r ':) :.9 20 21 2:? 2J 25 (m) LA1•i ~- 7-20 No.7-186, C.D.l, Koblerville, is 9 (Saipan)" is in is "Lease improvement. PUBLIC NO. 7-20 House Bill H.D.2 25 Resolution. In the event that a lease is terminated prior to the expiration of the lease term, cancellation or other default shall not serve to terminate subleases assignments, or subtenancies but shall operate as an assignment to the Director of the Department of Natural Resources or any and all subleases, and subtenancies. The above condition is only applicable to subleasing operations within submerged land. (n) Public Facilities: The Director of Natural Resources shall bid out Management and operation of public facilities that are for a water related u s e within the public Page 7 5 , 3 9 10 ll 12 13 14 15 16 17 18 lS 20 21 22 23 No.7-186. C.D.L PUBLIC LAW 7-20 House B i l l C . 1 , H . I?. 2 9 1 0 11 12 14 15 16 17 18 19 2 0 2 2 24 25 mar ina . The Director o f N a t u r a l R e s o u r c e s s h a l l award t h e b i d t o a n y b u s i n e s s e s which h a v e a t l e a s t 7 5 p e r c e n t o w n e r s h i p b y U . S . c i t i z e n s , e v e n i f t h e n e x t h i g h e s t b i d d e r is lower by 2 0 p e r c e n t , b u t h a v i n g m e t t h e 75 p e r c e n t o w n e r s h i p by U . S . c i t i z e n s . S e c t i o n 5 . C o n d i t i o n s . ( a ) The N a t u r a l R e s o u r c e s o r h i s d e s i g n e e s h a l l have t h e r i g h t t o make r e a s o n a b l e i n s p e c t i o n s o f t h e d e s i g n a t e d submerged l a n d a rea a t a n y r e a s o n a b l e t i m e o r d e r t o assess c o m p l i a n c e w i t h t h e submerged l a n d s lease a g r e e m e n t and t h e submerged l a n d R u l e s and ( b ) A s r e q u i r e d by S e c t i o n 4 0 4 of t h e P u b l i c L a w 3-91, t h e L e s s e e s h a l l p r o v i d e t h e P u b l i c A u d i t o r of t h e Commonwealth of t h e N o r t h e r n I s l a n d s w i t h access t o and t h e r i g h t t o examine a n d copy a n y r e c o r d s , d a t a o r documents r e l e v a n t t o t h i s l e a se u n t i l th ree ( 3 ) y e a r s h a v e pas sed s i n c e t h e f i n a l payment p u r s u a n t t o t h i s l e a s e . 1 2 3 4 5 6 7 8 13 21 23 t:o. No.7-186 o. Director -·of in Regulatior.s Mariana Pogc 8 PUBLIC 7-20 House Bill No.7-186, C.D.l, H.D.2 a 11 12 13 14 15 15 17 2 0 2 1 2 2 2 3 25 (c) The submerged Lands Lease Agreement, as herein amended, between APEX International Corporation, Saipan, and the Commonwealth Government of the Northern Mariana Islands via the Department of Natural Resources and other relevant documents indicated in the lease agreement shall become part of this Act. Section Lease Term. Notwithstanding any provisions of Law 6-13, as amended, the lease term shall be for . forty ( 4 0 ) years and a simple majority of each house shall be sufficient for approval of the lease. Section 7. Approval of Lease. The attached lease, as amended, entitled; "Lease for Water Dependent Use of Submerged Land", between APEX International Corporation, Saipan, and the Commonwealth Government of the Northern Mariana Islands is hereby approved. Section 8. Execution of Lease. The Director of the Department of Natural Resources shall issue the approved lease thirty ( 3 0 ) days upon effective date of this Act Section 9. Severability. If any provision of this Act, or its application to any person or circumstances held invalid by a court of competent jurisdiction, the invalidity does n o t affect other provisions or applications of the Act can be given effect without the provisions, and this end the provisions of this Act are severable. Page 1 2 .) 5 6 9 10 18 19 Public 2~ which U\W NO. 6. is invalid PUBLIC NO. 7-20 House Bill H . D . 2 1 10. Effective Date. This Act shall take effect 2 upon approval by the Governor, or upon its becoming law such approval. CERTIFIED AND ATTESTED TO BY: Speaker Acting House Clerk Governor Commonwealth of the Northern Mariana Islands 10 IAW No.7-186. C.D.1, Section ::. ::s 3 withe:.::: this (? J I. DE LEON GUERRERC LEASE AGREEMENT BETWEEN DEPARTMENT O F NATURAL RESOURCES AND APEX INTERNATIONAL CORPORATION (SAIPAN) I l l ] ) ] ] ] J J J ] ] J . I PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . TERMS AND CONDITIONS . . . . . . . . . . . . . . . . . . SECTION 1 . Grant Of Premises . . . . . . . . . . . . . . SECTION 2 . Purpose . . . . . . . . . . . . . . . . . . . SECTION 3 . Term . . . . . . . . . . . . . . . . . . . . . SECTION 4 . Rental . . . . . . . . . . . . . . . . . . . . 4.1. Rental Schedule . . . . . . . . . . . . . 4.2. Manner Of . . . . . . . . . . . . 4.3. Time And Pavment; Interest . . . . . . . . SECTION 5 . Permits. Construction Plans. And Specifications . . . . . . . . . . . . . . . . . . . 5.1. Permits . . . . . . . . . . . . . . . . . 5.2. Construction Plans And Specifications . . 5.3. Water Proqram . . . . . SECTION 6 . . Construction. Maintenance . Repair. Alteration . . . . . . . . . . . . . . . . . . . . . SECTION 7 . Excused Of Performance . . . . . . . . . SECTION 8 . Permanent Improvements . . . . . . . . . . . . SECTION 9 . Sublease. Transfer . . . . . . . . SECTION 10 . Compliance With Law . . . . . . . . . . . . . SECTION 11 . Insurance . . . . . . . . . . . . . . . . . . SECTION 12 . Indemnification . . . . . . . . . . . . . . . SECTION 13 . Covenant Waste . . . . . . . . . . . SECTION 14 . Notices . . . . . . . . . . . . . . . . . . . SECTION 15 . Storaqe O f Fuel On Marina . . . . . . . . . . SECTION 1 6 . O f Refuse . . . . . . . . . . . . . . 10 11 11 12 12 13 15 16 16 17 18 J J ] ] ] ] J J ] ] J J J ] Dumping Payment Quality Monitoring Dela Assignment, Against 1 4 4 4 5 5 5 6 7 7 7 7 9 . SECTION 17 . Reduced Speeds Near Marina . . . . . . . . . SECTION 18 . Covenant Aqainst Maintenance Of A Nuisance . . SECTION 19 . Inspection Of Premises . . . . . . . . . . . SECTION 20 . Public Access . . . . . . . . . . . . . . . . SECTION 21 . Condemnation . . . . . . . . . . . . . . . . SECTION 22 . Abandonment of Premises . . . . . . . . . . . SECTION 23 . Bankruptcy . . . . . . . . . . . . . . . . . SECTION 24 . Default . . . . . . . . . . . . . . . . . . . SECTION 25 . Remedies . . . . . . . . . . . . . . . . . . SECTION 26 . Waiver of Breach . . . . . . . . . . . . . . SECTION 27 . Covenant of Eniovment . . . . . . . . . SECTION 28 . of Enforcement . . . . . . . . . . . SECTION 29 . Law Governinq . . . . . . . . . . . . . . . . SECTION 30 . "Hold Clause . . . . . . . . . . . . . SECTION 31 . Boat Slip Concession . . . . . . . . . . . . SECTION 32 . Breakwater Construction . . . . . . . . . . . SECTION 33 . Fill and Shoreline Protection Construction Activities . . . . . . . . . . SECTION 34 . of Mortqaqe . . . . . . . . . . . . . . SECTION 35 . of Leasehold Mortqaqees . . . . . . . 35.1. Notice to Mortqaqee . . . . . . . . . . . 35.2. Remedy . . . . . . . . . . . . . . . . . 35.3. Prosecution . . . . . . . . . . 35.4. Termination . . . . . . . . . . . . . . . 35.5. Notice of Termination . . . . . . . . . . 18 19 19 19 19 21 22 22 23 23 24 25 25 25 26 26 26 27 29 29 30 30 30 31 I 1 I l J } ] ] ] ] J ] I J J l J l Ouiet Expenses over" Riqht Rights Diligent 35.6. First Mortsase . . . . . . . . . . 31 SECTION 36. Aqreement Complete. . . . . . . . . . . . . 32 SECTION 37. Interpretation. . . . . . . . . . . . . . . 33 SECTION 38. Public Auditor. . . . . . . . . . . . . . . 33 SECTION 39. Option To Terminate . . . . . . . . . . . . 33 l ] .1 ] ] ) J J J J l Onlv. - - - - --------· -- - =-=-=----=~ - - - COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS I 3 a SAIPAN, MARIANA ISLANDS LEASE OF WATER DEPENDENT USE OF SUBMERGED LANDS (P.L. 6-13) This lease agreement, made this day of , 1990, on Saipan, Northern Mariana Islands, by and between the Department of Natural Resources by and through its directors, Government of the Commonwealth of the Northern Mariana Islands, its successors and assigns, hereinafter referred to as (the and APEX International Corporation (Saipan), of Saipan, Northern Mariana Islands hereinafter referred to as (the PREAMBLE 1. Lessee wishes to lease submerged land the Garapan Lagoon located adjacent to the Fishing Base in Garapan, opposite and slightly to the south of the Garapan Catholic Church on Saipan in order to construct a 100 slip private marina. Lessee will perform the following: Dredge a boat basin for the marina and an entrance channel; construct a breakwater; and place approximately 78,850 cubic yards of fill on eroded areas between the fastland and the submerged land. I l l ] ] ] J ] J j ·1 J ( "DNR") , "L essee")". "D. 1.rector"), in 2. Lessee will dredge approximately acres of submerged land area to provide local fishermen and other boat operators with a safer and more efficient access through the reef, and provide protective berthing of vessels for excursions, charter fishing and local fishermen. 3 . Lessee will relocate the existing fisheries complex and public boat launching ramp at its expense to the norther portion of the site which is public fast and submerged lands. Twenty additional boat slips, docking facilities, marine fueling facility, and boat repair facility will be constructed for use by the public. Lessee agrees to provide the public with the use of its boat lift at a reasonable cost and a reasonable time and manner. DNR will hold title to the improvements referenced this paragraph, the real property upon which such improvements are affixed and it will manage the facilities created. 4 . Lessee has agreed to pay rent the amount of ONE MILLION FIFTY THOUSAND AND DOLLARS ($1,050,000.00) for the submerged land for the first ten (10) year period. Thereafter, rent shall be determined by means of an appraisal which shall be conducted after each ten (10) year period of the term of the lease to determine the then fair market rental value of the submerged lands. The generation of revenue a public benefit under 2 CMC Section 1212. 2 ] j l ] J ] ] J l ] J l J J 14.5 in in in 00/100 is I 1 I I 3 1 5. The availability of both the public and private marinas will enhance tourism development for the Commonwealth, and will create business opportunities for local residents. The use of submerged land for water-borne commerce and to benefit Commonwealth-wide interests is to be given priority the management of submerged lands. (2 CMC Section 6. An Environmental Protection Plan and a Coastal Engineering Plan have been completed by a firm approved by the Director. The Environmental Protection Plan is hereby incorporated into this lease. The Director finds that the environmental impacts can be minimized, and that the protection plan can preserve and protect the marine resources the lagoon of Saipan. The proposed shoreline protection plan will have a beneficial impact by restoring the original shoreline of the area and protecting against further erosion. 7. The granting of the lease will enhance tourism in the Commonwealth, business opportunities for local fishermen, create new water recreational facilities, provide greater shoreline access to residents, develop water-borne commerce between the islands, and will not adversely affect the protection and preservation of the marine resources. 3 ] ] ] J ] j 1 l I J in 1221(c)). in it I ' i 1 1 I I I TERMS AND C O N D I T I O N S S E C T I O N 1. Grant Of Premises. DNR, by and through its Director hereby leases to Lessee and Lessee hereby leases from DNR the following described submerged land adjacent to Fisheries Complex fast land, north and east of the Fishing Base are, Saipan, Mariana Islands: The submerged land, hereinafter referred to as (the located adjacent to, and offshore of the fastlands legal descriptions, The Premises located between the two rubble jetties at the site, and has a total area of 58,549 square meters, as more particularly described as follows: See Exhibit SECTION 2. The Premises shall be used for the construction and operation of a 100 slip private marina. In order to .protect the marina and stabilize the shoreline, Lessee at its own expense shall construct a large breakwater and place fill along the shoreline. Lessee shall at its own expense relocate the existing fishery complex presently occupying the Premises to public lands immediately adjacent to and north of its present location. 4 1 J ] J J ] J J ] J "Premises") , is is "A" Purpose. SECTION 3. Term. The term of this lease shall be for a period of forty ( 4 0 ) years unless sooner terminated pursuant to applicable provisions of this lease or extended by the CNMI Legislature. The leasehold term shall begin on the date of the execution of this lease. SECTION 4 . Rental. Lessee, in consideration of the foregoing covenants and agrees to pay DNR, in the manner prescribed herein, lawful money of the United States, as rental for the Premises leased hereby as follows: 4.1. Rental Schedule. Rental of ONE MILLION FIFTY THOUSAND AND DOLLARS ($1,050,000.00) for the first ten (10) years of this lease shall be paid as follows: PERIOD 1st Year 2nd Year 3rd Year 8th Year AMOUNT $105,000.00 $105,000.00 $525,000.00 TOTAL $1,050,000.00 5 in payment 00/100 I I At the end of each ten (10) year period of this lease or renewal or extension thereof, the annual rental payable by Lessee to the Director for the next ten (10) period shall be based upon eight ( 8 % ) percent of the appraised fair market value of the unimproved fastlands adjusted by a submerged lands multiplier of The appraised market value will be determined by an independent appraiser who must be a member of a nationally accepted appraisal society, to be selected by the agreement between the Director and the Lessee. In the event that the Director and the Lessee cannot reach an agreement on the selection of the appraiser, the appraiser will be selected by the Chief Justice or Associate Justice of the Commonwealth Supreme Court. The cost of the appraisal will be borne by the Lessee. However, no instance shall the annual rental for any subsequent ten year period be less than the annual rental for any prior ten year period. All costs associated with reappraisal shall be borne exclusively by Lessee and any real estate appraiser selected by the Director shall be a member of a nationally accepted appraisal society. 4 . 2 . Manner Of Payment. All rental payments payable pursuant to the terms of this lease shall be paid to the CNMI Treasury, its successor, or assignee as designated in writing. 6 ] ] J ] ] ] l J I • 30. in 4.3. Time And Interest. All rental payments payable pursuant to the terms of lease shall commence from the first day of the month of execution of this lease and shall be paid without prior notice or demand. Past due rental payments shall bear interest at a rate of one percent (1%) per month compounded monthly, from the date due until paid. This provision shall not be construed to relieve Lessee from any default making any rental payment at the time and in the manner herein specified. SECTION 5. Permits, Construction Plans, And Specifications. 5.1. Permits. Lessee covenants at its own cost and risk to construct the following improvements within eighteen months of the granting of the lease and the receipt of the necessary government permits the areas of the fastlands and submerged land as listed on Exhibit B attached hereto and made a part hereof. The costs noted are estimates only of the value of the improvements. Construction Plans And Specifications. As additional consideration for this lease, Lessee agrees to abide by and satisfy the following conditions: Prior to commencement of the dredging activities, Lessee shall submit to the Director for his approval its plan for the disposal of all dredged materials. 7 Payment; this in in 5.2. 5.2.1. ! This plan shall include appropriate methods to minimize pollution and turbidity in the water, methods for disposal of unexploded ordinance, and a notice to the Division of Fish and Wildlife of any dredging activity in the vicinity of Acropora coral beds. Lessee shall not have any property or other rights to sell dredged sand, soil, rocks or other substrate. Lessee shall only dispose of dredged materials with the approvals of the Division of Environmental Quality and the Department of Public Works. Lessee may donate such dredged materials to the Department of Public Works for public uses on landfills provided that such materials have been tested for chemical contaminants beforehand. The costs of such disposal and testing shall be borne exclusively by Lessee. Prior to commencement of dredging, Lessee shall submit to the Chief of the Division of Fish and Wildlife a Marine Biological Monitoring Plan which shall include all elements outlined in Exhibit C, attached hereto and made a part herein, All baseline studies shall be completed before dredging or filling activity. The cost of such studies shall be borne exclusively by Lessee, Prior to commencement of dredging activities, Lessee shall contract with the University of Guam or any other accredited institutions, or accredited 8 ) :a ] j J ] ] ) J ] 5. 2, 2. 5.2.3. 1 3 3 individual for assistance in coordinating with the Chief of Fish and Wildlife in the transplantation of all coral and seagrass effected by the dredging and as designated by the Division. The costs of transplanting these coral and seaweed to the sites designated by the Chief of Fish and Wildlife shall be borne by Lessee. 5.2.4. Prior to construction of the breakwater, Lessee shall complete a new baseline study of current and sediment activity, wave patterns and flushing characteristics. The study shall utilize standard methodology, employ statistical analysis of data, and cite relevant scientific literature after completion of the baseline study. The term of the study shall be extended five (5) years with annual reports to be submitted to the Division of Fish and Wildlife. All costs associated with this study shall be borne exclusively by Lessee. Lessee shall contact the Chief of Fish and Wildlife at least ten (10) days prior to the commencement of construction for both private and public marinas for site inspections. Water Quality Proqram. Lessee shall submit a water quality monitoring program to the Director for his approval prior to commencement of the construction period. The program shall commence with a new 9 J ;J ] I ] J ) ] l I ) 5, 2, 5. 5 • 3 , Monitoring baseline study and monthly sampling during the construction phase. Thereafter for five (5) years after construction is completed, sampling and analysis shall be done on a quarterly basis, and the results thereof shall submitted to the Chief of Division of Environmental Quality. All costs associated with this program shall be borne by Lessee. SECTION 6. Construction. Maintenance, Repair, Alteration. All improvements placed on the Premises shall be constructed good and workmanlike manner and compliance with applicable laws, regulations, ordinances, and building codes. All portions of buildings located upon the Premises exposed to perimeter properties or to the public view shall present a pleasant appearance and all service areas shall be screened from public view. The Lessee shall, at all times during the term of this lease and at the Lessee's sole cost and expense, maintain the Premises and all improvements thereon good order and repair and a neat, sanitary and attractive condition. Lessee also responsible to collect and properly dispose of all garbage and refuse left by vessels and visitors to the Premises. These costs shall also be borne exclusively by Lessee. 10 I 1 I I ] :i J J J ] J J ] ] ] l J w "'I I I in in in in is SECTION 7. Excused Of Performance. Jhenever under this lease a time stated which or by which original construction, repairs, reconstruction or other performance by the Lessee shall be commenced or be completed, and a failure or delay in such performance is due, in whole or in part, to fire, explosion, earthquake, storm, flood, drought or other unusually severe weather conditions, accident, breakdown of machinery or 1 facilities, strike, lockout, of workmen, war, insurrection, riot, act of God or the public enemy, or any contingency or delay or failure or cause of any nature beyond the reasonable control of either party, whether or not of the kind hereinbefore specified and whether or not any such contingency is presently occurring or occurs in the future, and such failure or delay does not result from the fault or negligence of Lessee, the period of delay so caused shall be added to the period allowed herein for the completion of such work provided, however, that Lessee shall notify the Director writing within thirty (30) days after the occurrence of any of the above events. SECTION 8 . Permanent Improvements. All improvements on the Premises, except removable personal property, trade fixtures, vessels, and equipment, 11 ,. i I Delay is rithin . l ] combination J j :il •, /· J ] ·i.!. ] in l ] J 1 shall remain on the Premises after the termination of this lease, and shall become the property of the Commonwealth Government. The term, personal property", as used this section shall not include property which would be attached or affixed to the improvements or submerged land such a way as to legally retain the characteristics of real property. SECTION 9. Sublease, Transfer. Lessee shall not sublease, assign, or transfer all of any part of its interest in this lease in or to the Premises or any portion thereof or any improvement thereon without the express prior written approval of the Director . In the event that the lease is terminated prior to expiration of the lease term, cancellation or other default shall not serve to terminate subleases, or subtenancies but shall operate as an assignment to the Director or any and all subleases, and subtenancies. SECTION 10. Compliance With Law. Lessee shall not use the Premises for any purpose in violation of any Federal or Commonwealth statute, or any regulation, order or governmental agency, as such statutes, regulations or orders now exist or may hereafter provide, 12 I "removable I in in 7 ] J Assignment, ] ) 'J J assignments, J ] ) ] J l "I J concerning the use and safety of the demised Premises. Lessee shall also perform all dredge and fill activity in compliance with local laws, regulations, and governmental permits. SECTION 11. Insurance. Lessee shall, from the effective date of this lease, carry fire and damage insurance with extended coverage endorsements, jointly in the names of the Lessee and the Commonwealth Government covering the full insurable value of all permanent improvements on the Premises, subject to appropriate co-insurance provisions. The policy shall contain a clause requiring that the Director be given thirty (30) days notice prior to any cancellation or termination of the policy. A copy of such policy or policies or an acceptable certificate shall be deposited with the DNR within thirty (30) days of the same obtained by the Lessee. Lessee shall pay all premiums and other charges payable in connection with insurance carried by the Lessee. Lessee agrees that if such insurance policies are not kept force during the entire term of this lease the Director may procure the necessary insurance, pay the premium and such premium will be repaid by Lessee upon demand by the Director. 13 ] ] .J l ] in In the event of damage to any permanent improvement on the Premises, Lessee shall reconstruct such improvement in compliance with applicable laws, ordinances, and regulations and accordance with the applicable provisions of this lease. Such reconstruction shall commence within six (6) months after the damage occurs and shall be pursued diligently and completed within one (1) year of the occurrence. In the event of damage to the extent of five percent (75%) or more of the total value of all permanent improvements on the Premises during the last five ( 5 ) years of the term of this lease, Lessee for ninety (90) days shall have the option to agree to reconstruct the damaged Should Lessee fail to notify the Director writing of the exercise of its option to reconstruct within ninety ( 90 ) days of the occurrence of damage, the Premises shall be cleared at Lessee's expense and upon completion of such clearing this lease shall terminate. In the event Lessee shall elect not to rebuild damaged improvements during the last five year term of the lease, all insurance proceeds accruing as a result of the fire or damage, it jointly agreed hereto, shall be for the sole benefit of and made payable to the DNR, or its lawful successors and assigns. Any damages incurred or suffered by 14 I l ·1 7 ] ] ] ] n TI ] ] l ] J J ) in improvement ( s) . in is seventy I 1 1 3 3 1 any sublessee, assignee, mortgagee or otherwise as a result of such termination shall be borne solely by Lessee. SECTION Indemnification. Lessee shall, at all times prior to the termination of this lease and to the delivery to the Director of possession of the demised Premises and all improvements thereon, indemnify the Director of Natural Resources and the Commonwealth Government against all liabilities, losses, costs, damages, or expenses sustained by said parties, including attorney's fees and other expenses of litigation, arising prior to termination of the lease terms and delivery to the Director of possession of the Premises. 12.1. On account of or through the use of the Premises or improvements or any part thereof by Lessee or by any other person for any purpose inconsistent with the provisions of this lease. 12.2. Arising out of, or directly or failure of Lessee with respect to satisfy its obligations under this indirectly due to, any promptly and faithfully lease. 12.3. Ar sing out of, or directly indirectly due to, any failure or other occurrence causing injury to any 15 l 1 :. j ] J ] '] ~~ J J 12. person or property resulting from the use of the Premises and improvements or any part thereof. 12.4. For which the demised Premises and improvements or any part thereof or DNR as owner thereof or interest therein may hereafter without fault by DNR become liable, and especially, but not exclusively, any such liability, loss, cost, damage, or expense that may arise under any statute or regulation. SECTION 13. Covenant Waste. Lessee shall not commit waste of the demised Premises. Nor shall Lessee waste of the Premises, except to the extent caused by natural causes or force majeure. SECTION 14. Notices. All notices shall be made by personal delivery or by registered or certified mail addressed to the proper party as follows: Director, Department Natural Resources CNMI Government Saipan, MP 96950 Lessee: APEX International Corp. P.O. Box Saipan, MP 96950 16 1 I I J J ] ] I :3 J J ] ] ] .l J ] Against permit i I 1 3 3 3 3 3 All notices to Lessee for the Director shall be deemed delivered as of the date of the postmark of any mail or notices properly addressed and registered by the Post Office provided that such notice and mail is properly addressed as set forth above contains sufficient postage and is registered. SECTION 15. Storaqe Of Fuel On Marina. Before commencing operation of the marina, Lessee shall submit emergency contingent plans to the Director for his approval. The plans shall include procedures for cleaning up oil and gas spills, and for cleaning up raw sewage spills. The plan shall also describe procedures for protecting and mitigating potential environmental damage caused by typhoons and other acts of Gods. No fuel or lubricant shall be stored upon the finger piers of the marina. In order to fuel at the finger piers, Lessee shall require that a grounding line must be connected first to the vessel, and then to the shore. In the event of an oil spill, attributable to marina operations or vessels using the marina all costs of the cleanup shall be borne by Lessee 17 ··1 " J J l U.S. I ' I I 3 3 3 I i SECTION 16. Of Refuse. Lessee shall use its best efforts to ensure that no rubbish, swill, garbage or refuse shall be thrown in the water, washed overboard or placed on the piers or at any location within the Premises. Lessee shall collect all garbage and trash placed within the private marina by marina users. Lessee shall provide facilities for vessel holding tanks. All costs associated with those facilities including clean-up in the event of a spill or leak shall be exclusively borne by Lessee. Lessee shall place signs informing marina users that it is illegal to dump rubbish, swill, garbage, refuse, or sewage into the marina, lagoon and CNMI waters. Lessee shall notify the Division of Environmental Quality the event of the discovery by Lessee of any spill slick, sewage or garbage found in the marina. SECTION 17. Reduced Speeds Near Marina. Boats owned or operated by the private marina shall not be operated at a speed greater than 5 while going from the nearest channel marker to the marina or from the marina to the nearest channel marker. 18 I l J J Dumping pumpout in m.p.h. SECTION 18. Covenant Maintenance Of A Nuisance. Lessee shall not, during the term hereof, maintain, commit, or permit the maintenance or commission of any nuisance on the demised Premises. SECTION 19. Of Premises. Director shall have free access to the demised Premises, including any structure that may at any time be thereon, at all reasonable times for the purpose of examining or inspecting the conditions thereof in order to exercise any right or power reserved to the Director under the terms and provisions of this lease. SECTION 2 0 . Public Access. Lessee shall provide public access over the Premises for the public's use and enjoyment of the shoreline at its own expense and risk. Lessee may restrict access to finger piers within the private marina. SECTION 21. Condemnation. The Director and Lessee covenant and agree that in the event the whole Premises hereby leased shall be taken condemnation proceedings or by any right of eminent domain, or otherwise, f o r public purposes, then and on the happening 19 ] 7 jJ ] ] ] J l .. J Aqainst Inspection in of any such event, the Director or Lessee, may terminate this lease and the term hereby granted and all the rights of the Lessee hereunder, and the rent shall be paid up to the date of such condemnation or termination and any unearned rent paid in advance by the Lessee shall be refunded prorata. In the event any portion of the property hereby leased is condemned or taken by right of eminent domain or otherwise for public purposes, thereby rendering the leased property unsuitable for the purposes of Lessee as stated Section 2 above, then and on the happening of such event Lessee may terminate this lease and the term hereby granted and all the rights of the Lessee hereunder and the rent shall be paid up to the date of such termination or and any unearned rent paid advance by the Lessee shall be refunded prorata. If Lessee does not terminate this lease upon such event, then the rent shall be reduced proportion to the land taken as such bears to the total area of land leased. The Director and the Lessee may each independently file separate claims in such proceedings for the purpose of having the value of their respective interests determined, and the award shall be paid accordingly; but the public or governmental authorities shall object or refuse to permit separate claims to be proved and/or distributed such manner, the Director will prosecute all claims for 20 in condemnation in in if in I I 'I ... '1 1 3 damages to the Premises on behalf of both the Director and the Lessee (and authority to do so is hereby granted), and after deducting all reasonable expenses incurred by the Director incident thereto, the balance of said award shall be divided between the Director and the Lessee prorata in proportion to their respective interests as established that proceeding. In the event the Director prosecutes the claim on behalf of both parties hereto, all such awards shall be paid to the Director for the account of the Director and Lessee as hereinbefore provided. SECTION 22. Abandonment of Premises. Should the Lessee fail to make any use of the premises for the purposes set forth in this agreement for a consecutive period of ninety (90) days without securing the written consent of the Director, the Lessee shall be deemed to have abandoned the premises. The Director may not withhold his consent except for good cause. But if Abandonment does occur this Lease may, at the option of the Director, be terminated pursuant to the provisions of Section 26 hereof. 21 I ] ] ] J J l 11 J in aGreement SECTION 23. If Lessee shall at any time during the term of this Lease Agreement become insolvent, or if proceedings bankruptcy shall be instituted by or against the Lessee, or the Lessee shall make an assignment for the benefit of creditors, or if any execution or attachment shall issue against the Lessee, whereupon the said demised premises shall be taken or attempted to be taken, or a receiver or trustee shall be appointed for the Lessee's property, then and in each of said cases, the Director may terminate this Lease Agreement pursuant to remedies provisions hereof, SECTION 24 , Default. Time of the essence, and Lessee shall automatically be default of the lease, if: 24 .1 . Lessee shall fail to pay any instrument or rent hereby reserved and such failure shall continue for thirty (30) days from and after the date written notice specifying such failure is received by Lessee, Lessee shall breach any term, provision, or covenant of this lease, other than the payment of rent, taxes, or other charges, and fails to commence the removal or curing of such breach within thirty (30) days from and after 22 r- . I l I I ·1 :I ] J J J J J ] ] ] J l J if Bankruptcy. 24.2. is in in if the date written notice specifying each failure is received by Lessee. 24.3. Lessee shall bankrupt. 24.4. Lessee become insolvent or adjudicated ons the premise as provided Section 23. Any notices as may be required by law or this lease shall be delivered as provided by Section 16 of this lease. SECTION 25. Remedies. Upon the occurrence of any event of default specified Section 26, the Director may terminate this lease and may, upon ten (10) days' written notice, enter in, into and upon the leased premises and take possession of all improvements, and evict Lessee without liability of trespass. The remedies herein shall not prejudice the other rights and remedies at law or equity. SECTION 26. Waiver of Breach. Waiver by the Director of any breach on any term, covenant, or condition herein contained shall not be deemed to be a wavier of any subsequent breach of the same or any other term, covenant, or condition herein contained. The acceptance of rent by the Director shall not b e deemed to be 23 abanc in in Director 1 s • J a waiver of any term or condition including the remedies of the Dire tor hereof, No covenant herein shall be deemed to be the Director unless such waiver be writing by the Director, SECTION 27. Covenant of Eniovment, The Director covenants that the Lessee, upon paying the rent required herein and upon fulfilling all the conditions and agreements required of the Lessee, shall and may lawfully, peacefully and quietly have, and hold, use, occupy, and posses and enjoy the premises during the term agreed upon without any let, suit, hindrance, eviction, ejection, molestation or interruption whatsoever of or by the Commonwealth, or by any other person lawfully claiming by, from, under, or against the Commonwealth. In consideration of this quiet enjoyment provision, the Lessee also covenants to permit vessels seeking shelter from a storm, typhoon, or other natural occurrences to enter and remain within the shelter of the private marina until such time as the storm, typhoon, or other natural occurrences has passed, and condition are again stable, Lessee agrees to provide such service to the public free of any charge. However, any boat owner or operator who uses the private marina for protection from a storm under this section shall 24 1 ·· ' I 1 l .I J ] ] ] ) ] ] ] J J ] .l J ] waived.by in Ouiet assume all risks and liability for damage to personal property, personal injury or other damage caused by such use except for acts of gross negligence by marina operators. SECTION 28. Expenses of Enforcement. If action is brought by the Director for rent or any other sums of money due under this Lease Agreement, or any action brought by either the Director or Lessee to enforce performance of any covenant or condition of this Lease Agreement, the losing and defaulting party shall pay reasonable attorney's fee to be fixed by the Court as a part of the costs in any such action. SECTION 29. Law Governinq. This Submerged Land Lease Agreement shall be governed by the Commonwealth Laws of the Northern Mariana Islands, as to interpretation and performance. It shall only be valid, if the permitted purpose is lawful and compliance with the laws, regulations, and the constitution of the CNMI. SECTION 30. "Hold Clause. If the Lessee shall remain in possession after expiration of the term of this Lease Agreement or the 2 5 1 J i ,,j is if in Over" extension thereof, the Lessee shall be a tenant on a to-month basis and there shall be no automatic renewal of this Lease Agreement. The only manner of renewal shall be as provided for 2 CMC, Section SECTION 31. Boat Slip Concession. Lessee may allocate boat slips for local residents within the private marina. The Lessee may set a special fee schedule for local use. No sale of boat slips permitted. SECTION 32. Breakwater Construction. Prior to the construction of the breakwater, the Lessee shall submit the final design to the Department of Natural Resources and the Coastal Resources Management Office for approval of the design. The breakwater shall be constructed to withstand a 100 year The design characteristics shall to the extent practicable reduce detrimental effects to natural current and sediment flow, wave patterns, and over all flushing characteristics. SECTION 33. Fill and Shoreline Protection Construction Activities. Lessee shall submit to the Director a diagram of the filled area showing the location and boundary of the 26 month in 1223. is storm. I I 1 proposed site prior to the filling of the shoreline. Lessee shall inform all contractors of the conditions under water work may be carried out. The contractor shall strictly comply with the special conditions of the Army Corps of Engineering Permit No. 1995 and CRM Permit SMS 87-X-25 concerning dredging and filling activities. SECTION 3 4 . of Mortsase. The Lessee, its successors and assigns may, subject to the express prior written approval of the Director mortgage this Lease Agreement and the Lessee's interest hereunder, provided that no holder of any mortgage of this Lease Agreement or the Lessee's interest hereunder, or any one claiming by, through or under any such mortgage shall, by virtue thereof, acquire any greater rights hereunder than the Lessee, and no mortgage. of this Lease Agreement or the Lessee's interest hereunder, whole or in part, by the Lessee or the Lessee's successors or assigns shall be valid, unless: at the time of the making of such mortgage, there shall be no default under any of the agreements, terms, covenants and conditions to be performed by the Lessee under this lease: such mortgage shall be subject to all the agreements, terms, covenants and conditions of this Lease Agreement, any such mortgage shall reserve to the 27 )· ] J l ) Ricrht ( i) (ii) (iii) which in in ! I I 3 3 3 a Director and CNMI Government prior right, in the event of Lessee's default under the same and after notice of the same character and duration as required to be given to Lessee, to correct the default or to purchase the same and terminate this Lease Agreement; and such mortgage shall contain the following provisions: instrument executed upon condition that (unless this condition be released or waived by the Director or his successors interest by an instrument in writing) no purchaser or transferee of said Lease Agreement at any foreclosure sale hereunder, or other transfer authorized by law reason of a default hereunder where no foreclosure sale is required, shall as a result of such sale or transfer, acquire any right, title or interest in or to said Lease Agreement or the Leasehold estate hereby mortgaged unless the Director shall receive written notice of such sale or transfer of said Lease Agreement within fifteen (15) days after the effective date of such sale or transfer and a duplicate original copy of the instrument or instruments used to effect such sale or transfer shall be delivered to the Director within thirty (30) days after the execution and deliver 28 (iv) "This is in J (i) (ii) thereof." J i I 1 1 3 3 3 3 I Any Mortgage entered into shall be in strict compliance with all applicable laws and regulations, including mortgage security instrument laws, or applicable constitutional provisions, in order to be valid and enforceable. SECTION 35. of Leasehold Mortsaaees. If the Lessee or the Lessee's successors or assigns shall mortgage this Lease Agreement or its interest in the Premises, in accordance with the provisions of this Lease Agreement, then so long as any such leasehold mortgage, as hereinafter defined, shall remain unsatisfied or record, the following provisions shall apply: 35.1. Notice to The Director shall serve upon the Lessee any notice of default pursuant to the provisions of Section 26 or any other notice under the provisions of or with respect to this Lease Agreement. The Lessee shall thereafter serve a copy of such notice upon the holder of the then existing mortgage or this Lease Agreement or the Premises. Service of such notice of default upon the Lessee shall be deemed as service on the mortgage who shall thereafter have the same period as the Lessee for remedying the default or causing the same to be remedied, as is given the Lessee after service of such notice upon it. 29 l :J ] J j J Rights Mortgagee, I Remedy, such leasehold mortgagee of this Lease Agreement or the Premises, in case the Lessee shall be in default hereunder, shall, within the period and otherwise as herein provided, have the right to remedy such default, or cause the same to be remedied, and the Director shall accept I 1 such performance by or at the instigation of such leasehold mortgagee as if the same had been performed by the Lessee. Prosecution. No default on the part of Lessee in the performance of work required to be performed, or acts to be done, or conditions to be remedied, shall be deemed to exist, if steps shall, in good faith, have been commenced promptly to rectify the same and shall be prosecuted to completion with diligence and continuity accordance with Section 26, on "Default", unless otherwise specified this Lease Agreement. 35.4. Termination. Anything herein contained notwithstanding while such leasehold mortgage remains unsatisfied of record, any event or events shall occur which shall entitle the Director to terminate this Lease Agreement, and before the expiration of ninety (90) days after the date of service of notice of termination by the Director all rent and other payments herein provided for then in default is fully paid, and the lease shall have complied or shall be engaged in the work of complying with all the 30 J I J ] J ) ] J J J .. J 35.2. 35.3. Diligent in in if if other requirements of this Lease Agreement, if any, then in default, then in such event the Director shall not be entitled to terminate this Lease Agreement and any notice of termination theretofore given shall be void and of no force or effect, provided, however, nothing herein contained shall any way affect, diminish or impair the right of Director to terminate this Lease Agreement or to enforce any other subsequent default in the performance of any of the obligations of the Lessee hereunder. 35.5. Notice of Termination. In the event of the termination of this Lease Agreement prior to the natural expiration of the term hereof, whether by summary proceedings to dispossess, service of notice to terminate or otherwise, due to default of the Lessee as provided Article 26 hereof, or any other default of the Lessee, the Director shall serve the holder of the then existing mortgage on this Lease Agreement or the Premises written notice of such termination. Nothing herein contained shall release the Lessee from any of its obligations under this Lease Agreement which may not have been discharged or fully performed by any mortgage of this Lease Agreement or the Premises, or its designee. 35.6. First Mortqaqe Only. Whenever reference is made herein to the holder of the mortgage on this Lease 31 ! . ' I , , I l l l ] J ] J J ] ] J l J J in in 1 I 1 1 3 1 3 Agreement or the Premises, the same shall be deemed to refer only to the holder of the first mortgage on this Lease Agreement or the Premises, any, as shown by last notice by registered mail given to the Director. Any notice or other communication to any such holder or mortgage shall be writing and shall be served either personally or by certified or registered air mail address to such holder or mortgagee at his address appearing on such records or at such other address as may have been designated by notice writing from such holder or mortgagee to the party serving such notice of communications. Nothing contained in this section shall be construed so as to require the Director to serve notices upon or recognize any leasehold mortgagees other than the holder or such first mortgage on this Lease Agreement or the Premises, as aforesaid. SECTION 36. Asreement It hereby agreed that this Lease Agreement contains all of the terms, covenants, conditions, and agreements between the parties hereto relating in any manner to the use or occupancy of the premises, and that no prior agreement or understanding pertaining to the same shall be valid or of any force and effect, and that the terms, covenants, conditions, and provisions of this Lease Agreement 3 2 ] J J ) ] J J I II I if in in Complete. is cannot be altered, changed, modified, or added to except writing singed by the parties hereto. SECTION 37. Interpretation, The language all parts of this Lease Agreement shall be in all cases construed simply, according to its fair meaning, and not strictly for or against the Lessor or the Lessee. SECTION 38 . Public Auditor. This Lease Agreement subject to Public Law No. 1-8, Chapter 6, Section 6, The Lessee shall provide all information and reports, and allow audit, inspection, and access to its books, records, and accounts relating to this Lease the Public Auditor of the Commonwealth of the Northern Mariana Islands. SECTION 3 9 . Option To Terminate In the event that the Lessee shall at any time be prevented from utilizing the property for the purposes herein stated for any reasons beyond the reasonable control of Lessee, such as but not limited to, the failure of Lessee to receive the necessary government licenses and permits required for earth clearing and construction or by action by 3 3 l ] ] J ] J ] J J ] ] in in is Agreement· to any government agency or judicial decree preventing Lessee from utilizing the property for the intended purpose, then and such event, Lessee shall have the option to terminate this lease upon ninety ( 9 0 ) days written notice to the Director. IN WITNESS WHEREOF, the parties have hereunto set their respective hands, the date and year first above written. Guerrero Director of Natural INTERNATIONAL CORP. Resources Approved as to form and legal capacity: 34 ! l l I I ] : I l J ] J ] J J ] J in ~\L ~ &di. As ~ORNEY GENERAL J LEASE.09:APEX.DNR J ] 1 3 1 1 1 . S U B M E R G E D PLAT f o r . . . A P E X Port o f . G R A P H I C S C A L E I n . .l J J l 1 J I .. ff'1Bff LAGUNAN i-ji----H:14,000.00 + >: 0 0 0 0 ( £• se•157'12.• .lt.JJ .(M.Jll) L• 22G.67 ca• ti4~•:ts'44•\, C:a %04.DO 3/ 8 d 0 n 0 .. .., L G 4 IO ZO l:l D:, 0 ~:J:======::::::::::::::.:; LAND INTERNATIONAL 58,549 SO.M. LAGUNAN GARAPAN ) p 4 N ao 11 r. I b:~~ 0 5. Fll•ilo.00~73 II 8 ,... ---....r.. II In, 731.0!58 ~ E~O, 004JO~ ~ co /00 \J 00~1-S LA1J'O (\ OJN~THV'CTIOiJ ~-LlfiV2ru:0 Sffi'\/lCE l".0.00:( tlRO S.l',;1".'-'1 J..l1" 'CQ'j::iO U.\:..J. T•1~~Z--:Z-UTt'>O SURVEY PLAT SU OMER GED LfJW fc.;APEX an· l. motor; I 3 3 3 3 3 EXH I BIT B Public Estimate Cost A. Boat Shop $240,000.00 B. Infrastructure (Paved parking, Road Utilities) $170,000.00 Piers $50,000.00 D. Dredging (Public Marina Area) $255,000.00 E. Revetment Walls $160,000.00 F. Channel Dredging Total Public Benefits $3,511,000.00 J ] J Description c. If 11 Improvement & $1.470.000.00 ! 1 BIOLOGICAL MONITORING PLAN REQUIREMENTS FOR THE PROPOSED APEX HOTEL-MARINA Division of Fish and Wildlife Department of Natural Resources Commonwealth of the Northern Mariana Islands This an amended Plan which will attempt to simplify specifications regarding sampling locations, habitat types and measures; it replaces the previously-issued Biological Monitoring Plan (BMP) . Marine Habitat Types. types : Sampling will occur in the following habitat 1) inshore seagrass-algal beds 2) sand and rubble fields 3 ) patch reef coral 4 ) reef margin and spur and groove zone at the mouth of the proposed channel (downcurrent) 5) reef bench just adjacent (downcurrent) to the mouth of the proposed channel. Locations. specified as: Three sampling locations for each habitat type are 1) a location upcurrent from the project site 2) directly off the project site 3 ) downsite- a location downcurrent (at least 300 m) from the site. Sampling Periodicity. periods: Sampling will be conducted during three 1) baseline (physical) of the project a period just prior to the onset of commencement 2) construction- bimonthly sampling (see below) for comparison with the baseline and the previous construction period sample 1 !j •' l ] j ] J ij I J J j J is Biological Monitoring upsite onsite (Acropora) PROJECT I I I 1 1 1 3 ) post-construction- quarterly sampling for the first year after construction has ceased and the project operation, followed by annual sampling for nine additional years. Sampling. Sampling methods for each habitat type at each location for the baseline study will be as follows: 1) fish counts- five (5) 10-minute fish counts will be conducted. Counts will be made by an defining an circle (360 deg) with the observer at its center. Fishes will be identified and counted within that circle. Water-column fishes will be counted at a distance of approximately 5 m all directions for the first five minutes. Benthic fishes will be counted at a distance of 1 m in all directions. Counting or points for replicated counts must be at least 10 m apart from each other. Density of each species and all species can be estimated from this method. After making the counts, a 10 minute random swim will be made through the sampling area, identifying additional species occurring the habitat type which were not counted within a circle. These species may be used, with the identifications made during the counts, to calculate species richness and similarity values for each habitat type. Identifications must be to the species level and employ current taxonomy. 2) benthic organisms- three ( 3 ) 50 m transects will be used in each habitat type to determine density, species richness, and similarity of macroinvertebrates. After making the counts, a 10 minute random swim will be made through the sampling area, identifying additional species occurring in the habitat type which were not counted on the transects. These species identifications may be used to calculate species richness and similarity values for each habitat type. Fifteen (15) 1 sq m random quadrats will be used to determine species richness, similarity and percent cover of algae, seagrasses and corals. Identifications must be to the species level and employ current taxonomy. 2 I I } j J J imang inary in is in observer in "circles" i 1 1 Sampling methods used during the construction period and the first year of the post-construction period may follow that of the baseline period. The consultant may choose to select guilds or suites of for each organismal group rather than considering an entire species compliment. However, this will require extraction of data for those species from the baseline study for comparative analyses. Sampling methods used during the post-construction period, Years 2-10, will follow the baseline methods. A similarity index, such as need only be calculated for those sampling periods which follow the baseline period. Analysis. comparative statistical analyses are required. Comparisons will be made between the baseline study and subsequent sampling events during the construction (bimonthly) and post-construction (year 1: quarterly; years 2-10: annually). Comparisons should also be made between successive sampling periods. For example, construction period sample 1 should be compared against the baseline data; construction sample period 2 (C2) should be compared against the baseline data and against construction period sample 3 should be compared against the baseline data and against C2, etc. Analyses should be made to support or refute a statement regarding the .impact of the project on the environment. should be transformed, either log (n + 1) or square root, where appropriate, to minimize or stablize variation. Data Reporting. A baseline report, following standard biological writing format, will be required. This report must satisfy data collection and analysis requirements. Results should include description, tables and appropriate figures. Inferences and conclusions made in the Discussion section must be supported and contrasted by references to scientific literature, in addition to technical reports. Reliance solely upon technical and contractual reports will not be sufficient. Construction period reports should be brief and timely, describing data and analyses for each period, with comparison to the baseline data and the previous sampling period. report will be required at the completion of the construction period, describing trends over the entire period of construction. A summary Post-construction reports for the first year will follow the method of reporting given for construction period reports: an annual summary will be required. Subsequent annual reports will be done in the same manner as the baseline report; comparisons will be made with the baseline report and the previous annual report (except for Year Comparison of Year 2 data will be 3 ] ] Cl i l I 1 1 J 11 target species 11 Ja.ccard's, (Cl) 2) . I 1 1 I made with that data given report. he construction period summary All reports will be submitted to the CNMI Division of Fish and Wildlife for review and comment. will be included in an appendix. Raw data sets, in tabular 4 l j ] ] } J l j J J I , . ' ' in form, Department of Natural Resources Permit for the Construction of a Public Marina on Commonwealth fast and Submerged Lands by APEX International Corp. I. The DNR approves and grants with the following special conditions a Submerged Lands permit to APEX International Corporation for the dredging of marina basin, and for the construction of twenty 20 slip public marina and other associated facilities. 11. Findings 1. The DNR has determined that the proposed project as conditioned is conformance with the policies set forth the Submerged Lands Act Public Law 6-13 and the regulations adopted thereunder. 2. The project will be constructed by the APEX International Corporation at its sole expense on public lands for the exclusive benefit of the public, as small boat and fishery complex. Conditions The Construction of the public marina, boat launch and other facilities are water dependent uses which will provide the boating public and local fishermen with facilities to repair, service and launch their boats. Condition 1 The purpose of this permit to allow APEX International Corp. (hereafter permittee) to relocate and improve the Garapan Fishing presently located opposite and slightly south of the Garapan Catholic Church to public lands north of the northern existing stone pier. Permittee shall retain no legal rights or property interests the Fishery Complex and public marina which shall be created under this permit 2 The DNR waives any administrative fee or other fee chargeable to permittee for this use permit for Submerged Lands since the project shall be constructed on public land at permittees sole expense and managed by the DNR for the public benefit. I' ' ,· I ] l I l J :I ] ] ] J J I ] J .) ] III. Conditon EXHIBIT D.l in in a harbor/marina is in 1 1 1 I 1 Condition 3 Thirty (30) days prior to undertaking any dredging, permittee shall prepare and submit to the Director of the Department of Natural Resources, (hereafter Director) his review three copies of an plan. This plan shall set for the in detail channel location on survey maps, depth, width, type of dredge to be used, amount of dredge spoils, anticipated, expected date of completion, disposal site for dredge spoils, and mitigation measures for controlling turbidity as required by condition P Coastal Permit Decision 87-X-25. Condition Permittee shall not deposit any dredge spoils onto wetland sites. Permittee relinquishes any and all legal interest dredge spoils except for the duty to safety and dispose of such spoils with written permission from Condition 5 Prior to undertaking any dredging, permittee shall perform a baseline monitoring study for the Chief incorporating the requirements set forth on attached EXHIBIT C. Condition 6 Permittee shall strictly comply with condition Q of Coastal Permit Decision 87-X-25 and the Army Corps. of Engineer Permit No. 1995 special conditions and guidelines for the transplantation of seagrass Enhalus and Pocillopora coral colonies. Condition 7 Permittee shall strictly comply with all conditions set forth coastal permit condition SMS 87-X-25, and Corps of Engineer Permit No. 1995. Condition 8 The Director or his designee shall have the right to make reasonable inspections of the permittee's use of submerged lands at any reasonable time in order to assess compliance with these permit conditions and the Submerged Land Act policies and regulations. Condition 9 This submerged lands permit shall only be valid, if the CRM permit and the MPLC lease signed previously valid, and the permitted purpose is a lawful use in compliance with all CNMI and federal laws. I -. l I l ] ] J ] j ] J ] in engineering/dredging 4 in is for law full~ DEQ. Condition 10 This permit may be suspended, revoked or terminated by the Director for violation of any permit condition. The Director shall notify the permittee of permit violation and any corrective action that must be taken within 30 days to correct and/or mitigate the violation. Condition 11 Permittee shall harmless, indemnify and defend the CNMI and any agents from all law suits and claims or liability for any personal injury, property damage, and economic damage arising from or related to permittee negligence or intentional acts on Submerged Lands caused by any failure on the part of permittee to maintain the area a safe condition for public use. Condition 12 The permittee shall be responsible for ensuring that the contractor performs the dredged work in an area contained by silt curtains or other such devices to minimize turbidity. At no time will water adjacent to the dredged site be allowed to reach greater than five Nephelometric Turbidity Units above ambient turbidity level at a distance of five hundreds feet (500) down current when performing any work the vicinity of acropora coral beds. During the dredging operation, the Permittee is also required to submit bi-weekly reports to the Director of Natural Resources on the water quality of the dredged areas until the dredging project completed. Condition 13 Permittee shall notify the Chief three days prior to commencing dredging activity. Condition 14 Permittee shall submit to the Director three copies of the final engineering and design plans for the public marina, boat launch, and fuel station, boat shop and fish market facility. Limitation: Construction shall not exceed one (1) year from the date, this permit issued. The permittee may request a time extension from Director. This request must be writing prior to the termination of the one year period I, the Permittee, has agreed and accepted to comply with the terms and conditions of this permit. 1 ] ·· 1 ·1 J ] l ] · 1 J J l J J in is ho,ld (SP) (NTU Is) in is in This permit becomes effective when the Legislature approved the following conditions above, and the Director of Natural Resources has signed below. of Natural Resources Department of Natural Resources Concurred by: bert Date I I l l J ] ] J ] J ] ] J ,I J J . . t ~(R, a~ p,,..u..)olr..,k r Name & Title / ~L - , Naraja Attorney General I Department of Natural Resources Permit for Filling Submerged Lands for Shoreline Protection from the Private Marina to the Public Marina I. Decision The Department of Natural Resources approves and grants with the following special conditions a submerged lands permit to APEX International Corporation for 4 , 2 9 6 cubic yards of material to be placed along 2,560 feet of shoreline from the APEX private marina to the public marina. 11. Findings The Department of Natural Resources has determined that the proposed project as conditioned is in conformance with the policies set forth the Submerged Lands Act, Public Law 6-13, and the regulations adopted thereunder. Conditions The goal of the Department of Natural Resources with respect to its stewardship of submerged lands is to provide the greatest benefits for all the people the Commonwealth. To that end leases, licenses and permits are prioritized in terms of the impact on public rights, customs, and uses. Those uses that are water dependent and that make wise'use of natural renewable resources are desirable. The filling of submerged lands will protect our shoreline from further erosion, and will minimize the losses of our fastland along the Fishing Base areas. order to avoid direct and significant impacts to the Commonwealth's submerged lands and the people thereof and to mitigate foreseeable impacts, this permit is issued with the following conditions. In Condition The purpose of this permit to allow the APEX International Corp. (hereafter permittee) to fill the Commonwealth submerged lands along the shoreline from the proposed APEX private marina to the proposed public marina. The permittee shall retain no legal rights or property interest in the shoreline created by its filling efforts the public marina. Condition A s consideration for this permit, permittee shall bear all costs for maintaining the shoreline as filled, and pay I . l ··1 l ] l J ] ] J J J ] ] j ] J Pe:cmit in III. longterm in 1 is in 2 3 I 4 I $25.00 DOLLARS to the Commonwealth Treasury as required under Section of the regulations for the Submerged Land Act. Condition 3 Thirty (30) days prior to undertaking any filling, permittee shall prepare and submit to the Director of the Department of Natural Resources, (hereafter Director) for his review three copies of an plan. This plan shall set forth in detail filling location on approved survey map by the Division of Lands Surveys, amount of filled materials, width and length of the proposed filled area, types of filling methods to be used, expected date of completion, and mitigation measures for controlling turbidity. Condition 4 Prior to undertaking any filling, permittee shall perform a basel ine monitoring study f o r t h e Chief incorporating t h e requirements set forth on attached appendix A. Condition 5 Permittee shall strictly comply with all conditions set forth coastal permit condition SMS 87-X-25, and Corps of Engineer Permit No. 1995. Condition 6 The Director his designee shall have the right to make reasonable inspections of the permittee's use of submerged lands at any reasonable time order to assess compliance with these permit conditions and the Submerged Land Act policies and regulations. Condition 7 The Public shall retain the right to use shoreline created under this permit. Condition 8 This submerged lands permit shall only be valid if the CRM permit and the MPLC lease signed previously is valid and the permitted purpose is a lawful use in compliance with all CNMI and Federal laws. Condition 3 This permit may be suspended, revoked, or terminated by the Director for violation of any permit condition. The Director shall notify the permittee of permit violations l ] J ] ] ] J I ] in 1. Sb or engineering/filling & in 1 3 I and any corrective action that must be taken to correct and/or mitigate the violation within 3 0 days. Condition Permittee shall hold harmless indemnify and defend the CNMI for any personal injury property damage and economic damage arising from or related to permittee negligence or intentional acts on the Submerged Lands caused by an failure on the part of permittee to maintain the area a safe condition for public use. ‘and any agents from all law suits and claims or liability . Condition Permittee shall notify commencing and filling Limitation: the Chief three day prior to activity, Construction shall not exceed one (1) year from the date, this permit issued. The permittee may request a time extension from the ctor. This request must be writing prior to the termination of the one year period. I, the Permittee, has agreed and accepted to comply with the terms and conditions of this permit. This permit becomes effective when the Legislature approved the following conditions above, and the Director of Natural Resources has signed below, of Resources Department of Natural Resources Concurred by: a Attorney General l I l l 1 .J J J ] J 10 11 is Dir ~ . '- Ji?~ DiectorNa tual ~obert Naraj in in Seer,. t e> \'?<fo Date I I ' 1 1 'I I 3 Department of Natural Resources Permit for Dredging Submerged Lands for use as a Navigation Channel I. Decision The Department of Natural Resources approves and grants with the following special conditions a submerged lands permit to APEX International Corporation for the dredging of a 150 foot wide channel from the APEX Marina south and west to the existing channel marked by the old Japanese lighthouse. Findings I I I I proposed project as conditioned is in conformance w i t h the policies set forth the Submerged Lands Act Public Law 13 and the regulations adopted thereunder. Conditions The goal of the Department of Natural Resources with respect to its stewardship of submerged lands to provide the greatest long term benefits fo r all the people the Commonwealth. To that end leases, licenses and permits are prioritized terms of their impact on public rights, customs and uses. that make wise use of natural renewable resources are desirable. The construction of this channel, a water dependent use will provide the boating public as well the developer with convenient and safe access to a deepwater channel. In order to avoid direct and significant impacts to the Commonwealth's submerged lands and the people there of and to mitigate foreseeable impacts, this permit is issued with the following conditions. Those uses that are water dependent and Condition 1 The purpose of this permit is to allow APEX International Corp. (hereafter permittee) to dredge a navigation channel on Commonwealth submerged lands from the proposed Apex Marina to the existing channel marked by the old Japanese Lighthouse south of Garapan. The permittee shall retain no legal rights or property interest in the channel created by its dredging efforts. Condition As consideration for this permit, permittee shall bear all costs f o r maintaining the channel as constructed relocating J .l J J j ·permit II. III. in 6 is in in 2 navigational aids as I ted the Chief of Fish and Wildlife (hereafter chief), and-pay $150.00 to the Department of Natural Resources as required under section of the regulations for Submerged Land Act. Condition 3 Thirty 30 days prior to undertaking any dredging, permittee shall prepare and submit to the Director of the Department of Natural Resources, (hereafter Director) for his review three copies of an plan. shall set forth in detail channel location on survey maps, depth, width, type of dredge to be used, amount of dredge spoils anticipated, expected date of completion, disposal site for dredge spoils, and mitigation measures for controlling turbidity as required by condition P Coastal Permit Decision 87-X-25. This plan Condition Permittee shall not deposit any dredge spoils onto wetland sites. dredge spoils except for the duty to safely and lawfully dispose of such spoils. Condition 5 Permittee relinquishes any and all legal interest Prior undertaking any dredging, permittee shall perform a baseline monitoring study for the Chief incorporating the requirements set forth on attached E X H I B I T C. Condition 6 Permittee shall strictly comply with condition Q of Coastal Permit Decision 87-X-25 and-the Army Corps. of Engineer Permit No. 1995 special conditions and guidelines for the transplantation of seagrass Euhalus and Pocillopora coral colonies. Condition 7 Permittee shall strictly comply with all conditions set forth coastal permit condition SMS 87-X-25, and Corps of Engineer Permit No. 1995. Condition 8 The Director or his designee shall have the right to make reasonable inspections of the permittee's use of submerged lands at any reasonable time in order to assess compliance with these permit conditions and the Submerged Land Act policies and regulations. Condition 9 di rec b~ 1.8c l l engineering/dredging l l 4 ] ] in a tQ ] J ] J J in J J ;1 I : I I 1 1 1 1 I 1 1 The Public shall retain the right to use the ship channel created under this permit. Condition This submerged lands permit shall only be valid the CRM permit and the MPLC lease signed previously valid and the permitted purpose is a lawful use in compliance with all CNMI and federal laws. Condition 11 This permit may be suspended, revoked or terminated by the Director for violation of any permit condition. The Director shall notify the permittee of permit violations and any corrective action that must be taken within 30 days to correct and/or mitigate the violation. Condition 12 Permittee shall hold harmless, indemnify and defend the CNMI and any agents from all law suits and claims or . liability for any personal injury, property damage, and economic damage arising from or related to permittee negligence or intentional acts on the Submerged Lands caused by any failure on the part of permittee to maintain the area in a safe condition for public use. Condition 13 The permittee shall be responsible for ensuring that the contractor performs the dredged work in an area contained by silt curtains or other such devices to minimize turbidity. At no time will water adjacent to the dredged site be allowed to reach greater than five (5.0) Nephelometric Turbidity Unit above ambient turbidity level at a distance of five hundreds feet (500) down current when performing any work the vicinity of acropora coral beds. During the dredging operation, the Permittee also required to submit bi-weekly reports to the Director of Natural Resources on the water quality of the dredged areas until the dredging project is completed. Condition 14 Permittee shall notify the Chief three days prior to commencing and dredging activity. Limitation: Construction shall not exceed one (1) year from the date, this permit is issued. The permittee may request a time l l j ] ] J J 10 is if is (NTU's) in i extension from th ctor. This request mi in prior to the termination of the one period. I, the Permittee, has agreed and accepted to comply with the terms and conditions of this permit. This permit becomes effective when the Legislature approved the following conditions above, and the Director of Natural Resources has signed below. of! Resources Department of Natural Resources Concurred by: Attorney General I . , . ! .. 1 J J J J J .J J NaraJa Dir ~ year st 1riting S ~~1'- \ S, \9 qo Date