KENAI PENINSULA BOROUGH

KENAI PENINSULA BOROUGH

GROUND LEASE

For good and valuable consideration, the TYONEK NATIVE CORPORATION, an Alaska ____________________ whose address is, 1689 C Street, Anchorage, AK 99501 (hereinafter called "LESSOR"), grants to the KENAI PENINSULA BOROUGH, an Alaska Municipal Corporation, whose address is 144 North Binkley Street, Soldotna, Alaska 99669 (hereinafter called "KPB"), use of the following described parcel of real property (hereinafter called "Property") described as follows:

Lot 82, Tyonek Teacher Housing Subdivision, according to KPB Preliminary Plat No. 2005-012, records of the Anchorage Recording District, Third Judicial District, State of Alaska.

TERMS AND CONDITIONS

1. Purpose. The purpose of this lease is to provide a site for teacherage housing units.

2. Lease Term. This lease is for a term of 40 years commencing ________, 2005 and terminating _____________ 2045.

3. Lease Rental. The annual Lease rental for the term of this lease is $1.00.

4. Utilities. All utilities needed to serve the teacherage housing units will be made available by the LESSOR to the Property. The Kenai Peninsula Borough School District is responsible for payment of utilities.

5. Taxes. The Kenai Peninsula Borough School District is responsible for all taxes.

6. Termination. The KPB may terminate this lease upon 60 days' written notice to LESSOR.

7. Compliance With Laws. The KPB agrees to comply with all applicable federal, state, borough and local laws and regulations.

8. Assignments. KPB may assign this Lease if approved in advance by LESSOR. The assignment shall be approved if it is found that the assignment is consistent with the terms of this lease. The assignee shall be subject to and governed by the provisions of this Lease and laws and regulations applicable thereto.

9. Subleasing. The KPB may sublease Lot 82 or any part thereof with written permission of the LESSOR. A sublease shall be in writing and subject to the terms and conditions of the original lease.

10. Notice of Default. Notice of default, where required, will be in writing and as provided in the Notice provision of this Lease.

11. Entry or Re-entry. In the event that the Lease is terminated, canceled or forfeited, or in the event that the demised lands, or any part thereof, should be abandoned by the KPB during the Lease term, LESSOR or its agents, servants or representative, may immediately or any time thereafter, enter or re-enter and resume possession of said lands or such part thereof, and remove all persons therefrom either without judicial action where appropriate, by summary proceedings or by a suitable action or proceeding at law or equity without being liable for any damages therefor.

12. Removal or Reversion of Improvements Upon Termination of Lease.

The KPB, at its option, may remove all items of personal property owned by KPB. The KPB may dispose of its improvements to a succeeding LESSEE.

13. Notice. Any notice or demand, which under the terms of this Lease must be given or made by the parties thereto, shall be in writing, and be given or made by registered or certified mail, addressed to the other party at the address shown on the contract. However, either party may designate in writing such other address to which such notice of demand shall thereafter be so given, made or mailed. A notice given hereunder shall be deemed received when deposited in a U.S. general or branch post office by the addressor.

All notices shall be sent to both parties as follows:

LESSOR KENAI PENINSULA BOROUGH

TYONEK NATIVE CORPORATION KENAI PENINSULA BOROUGH

President Planning Director

1689 C Street 144 N. Binkley

Anchorage, AK 99501 Soldotna, AK 99669-7599

14. Jurisdiction. Any suits filed in connection with the terms and conditions of this Lease, and of the rights and duties of the parties, shall be filed and prosecuted at Kenai, Alaska and shall be governed by Alaska law.

15. Savings Clause. Should any provision of this Lease fail or be declared null or void in any respect, or otherwise unenforceable, it shall not affect the validity of any other provision of this Lease or constitute any cause of action in favor of either party as against the other.

16. Binding Effect. It is agreed that all covenants, terms and conditions of this Lease shall be binding upon the successors, heirs and assigns of the original parties hereto.

17. Full and Final Agreement. This Lease constitutes the full and final agreement of the parties hereto and supersedes any prior or contemporaneous agreements. This Lease may not be modified orally, or in any manner other than by an agreement in writing and signed by both parties or their respective successors in interest. KPB avers and warrants that no representations not contained within this Lease have been made with the intention of inducing execution of this Lease.

TYONEK NATIVE CORPORATION KENAI PENINSULA BOROUGH

______________________________ ______________________________

Ted Kroto, Sr., President Dale L. Bagley, Mayor

Dated: _______________ Dated: _______________

ATTEST: APPROVED AS TO LEGAL FORM

AND SUFFICIENCY:

______________________________ ______________________________

Linda S. Murphy Holly B. Montague

Borough Clerk Assistant Borough Attorney

NOTARY ACKNOWLEDGMENT

STATE OF ALASKA )

)ss.

THIRD JUDICIAL DISTRICT )

The foregoing instrument was acknowledged before me this _____day of __________ 2005, by Ted Kroto, Sr., President, Tyonek Native Corporation, an Alaska ____________________, for and on behalf of the corporation.

____________________________________

Notary Public in and for Alaska

My commission expires: ________________