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HomeMy WebLinkAboutRES2023-074 OBI Seafoods Amendment 1 CITY OF SEWARD, ALASKA Sponsored by: Regis RESOLUTION 2023-074 A RESOLUTION OF THE CITY COUNCIL OF SEWARD, ALASKA APPROVING LEASE AMENDMENT 1 TO THE AMENDED AND RESTATED LEASE AGREEMENT BETWEEN OBI SEAFOODS, LLC AS ASSIGNEE OF ICICLE SEAFOODS, INC. AND THE CITY OF SEWARD. WHEREAS,the City of Seward leased Lots 2A and 3A,Block 2,Marine Subdivision,Block Two Replat, Plat No.96-28 Seward Recording District,Third Judicial District State of Alaska("the Property")to Icicle Seafoods pursuant to terms set forth in Lease No. RE-071 on August 17, 1988; and WHEREAS, City of Seward Resolution 2018-055 approved a 20 year Amended and Restated Lease of the Property with Icicle Seafoods on June 25, 2018 ("the Lease"); and WHEREAS, Icicle assigned the Lease to Ocean Beauty Seafoods, LLC on June 1, 2020 ("the Assignment"); and WHEREAS, the Assignment recognized that Icicle remained responsible to the City under the terms of the Lease; and WHEREAS,on or about January 14,2019,Icicle discovered a leak estimated to contain nine (9) gallons of fuel on the Property ("Spill"); and WHEREAS, Icicle timely reported the Spill to the State of Alaska, Department of Environmental Conservation ("ADEC"); and WHEREAS, ADEC, Icicle and OBI have agreed to a response to the Spill which requires the City of Seward to allow an Environmental Covenant to be to be recorded against the Property which contains containing institutional controls,including installation of a concrete cap,restrictions on the use of the ground water,inspection and reporting requirements,and limitations on uses of the Property; and WHEREAS,OBI, Icicle and the City have negotiated terms on which the City will consent to recording of the Environmental Covenant which require the Lease be amended; and WHEREAS,Article 32 of the Lease requires that any amendment to the Lease be in writing and signed by the City and the Lessee; and NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1.The Seward City Council consents to recording of the Environmental Covenant. Section 2. The Seward City Council approves Lease Amendment 1 to the Amended and CITY OF SEWARD, ALASKA RESOLUTION 2023-074 Restated Lease. Section 3. The Seward City Council finds that the essential terms and conditions of Lease Amendment No. 1 to the Amended and Restated Lease are in the public interest. Section 4. This resolution shall take effect 30 days from the date of posting of adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 10`" day of July, 2023. THE CITY OF SEWARD, ALASKA &44.-Altcs C - Sue McClure, Mayor AYES: Finch, Osenga, Calhoon, Demoss, McClure NOES: None ABSENT: Wells, Barnwell ABSTAIN: None ATTEST: Kris Peck, City Clerk (City Seal) ,��.��.�, PO ' 40,�, . I SEAL T Q5 .,':q,F O�'�' '+.*s City Council Agenda Statement Meeting Date: July 10, 2023 To: City Council Through: Norm Regis,Acting City Manager From: Brooks Chandler, City Attorney Agenda Item: Resolution 2023-074: A Resolution Of The City Council Of Seward,Alaska Approving Lease Amendment 1 To The Amended And Restated Lease Agreement Between OBI Seafoods, LLC As Assignee Of Icicle Seafoods, Inc. And The City Of Seward. Background and justification: The City of Seward has a long-standing relationship with the seafood processing industry. Icicle Seafoods, Inc. operated a processing facility at its current location under the terms of a lease agreement with the City. The initial lease was approved in 2008 and then extended in 2018. The lease expires in 2038. There are 2 five-year extension options. In 2019, Icicle and Ocean Beauty Seafoods combined to form a new entity called OBI Seafoods, LLC. The City Council approved assigning the Icicle lease to OBI in 2020. On January 14, 2019 a fuel leak from an above ground storage tank of approximately 9 gallons was discovered. It was reported to ADEC by Icicle shortly thereafter. A site investigation determined there were multiple contaminants present in the soil in concentrations that required clean up. ADEC supervised the clean up. A total clean up might have required tearing down the buildings on site to access and investigate the full extent of contaminated soil. ADEC agreed to an alternative approach which applied a concrete "cap"over the contamination. The City permitted the cap to be installed and the work has been completed. ADEC's approval was conditioned on the property owner(City of Seward) agreeing to notification of ADEC before excavations greater than 2 feet are begun, and inspecting and maintaining the cap. This is documented in what is called an Environmental Covenant which will be recorded with the lease amendment. The Lease Amendment makes Icicle responsible for complying with the Covenant and requires OBI to cooperate with Icicle. The Amendment also identifies what happens if the building is destroyed and specifies that future appraisals for rent adjustments must not consider any contamination or the existence of the Environmental Covenant. The Lease Amendment makes clear the underlying obligation to return the property to the City in the same condition as when the lease was made remains in force. OBI and Icicle have accepted the proposed lease amendment before the Council for approval. The City Attorney has participated in negotiations and is recommending Council approval. Comprehensive and Strategic Plan Consistency Information This legislation is consistent with(citation listed): Comprehensive Plan: Strategic Plan: Other: 410 Certification of Funds Total amount of funds listed in this legislation: S This legislation(✓): Creates revenue in the amount of: $ Creates expenditure in amount of: $ Creates a savings in the amount of: $ X Has no fiscal impact Funds are(✓): Budgeted Line item(s): Not budgeted X Not applicable AttorneyReview✓ Administration Recommendation X Yes X Adopt Resolution Not applicable Other: C010--, City Attorney Signature: 411 AMENDED AND RESTATED LEASE AGREEMENT between CITY OF SEWARD, ALASKA and Icicle Seafoods Inc. Effective Date: [ ] 4817-1371-2460v.14 0022769-000022 414 TABLE OF CONTENTS ARTICLE 1 - LEASED LAND.................................................................................................... 1 1.1 Description of Leased Land.................................................................................... 1 1.2 Covenant of Quiet Enjoyment; Warranty of Title................................................... 2 1.3 Property Accepted................................................................................................... 2 1.4 Permits.................................................................................................................... 2 1.5 Platting.................................................................................................................... 2 1.6 Development ofLeased Land.................................................................................. 2 1.7 Amendment and Restatement of Original Lease..................................................... 3 ARTICLE 2 - LEASE TERM...................................................................................................... 3 ARTICLE 3 - RENTAL RATE................................................................................................... 3 3.1 Initial Rental Rate................................................................................................... 3 3.2 Rental Adjustments.................................................................................................. 4 3.3 Procedure for Rental Adjustment............................................................................ 4 3.4 Effect of Late Appraisal by CITY............................................................................ 4 3.5 Appraisal by LESSEE............................................................................................. 5 3.6 Effective Date ofAdjusted Rental Rate................................................................... 5 3.7 Interim Rental Adjustments..................................................................................... 5 3.8 Rent Payment Credits for Production and Employment......................................... 6 3.9 Late Payment Charge ............................................................................................. 7 ARTICLE 4 - USE OF LEASED LAND .................................................................................... 7 4.1 Use ofLeased Land................................................................................................. 7 4.2 Obligations ofLESSEE........................................................................................... 7 4.3 No Preferential Rights to Use Public Facilities ..................................................... 7 4.4 Adequacy of Public Facilities................................................................................. 8 4.5 Tams and Other Service Fees ............................................................................... 8 4.6 Time for Payment of Utilities and Taxes................................................................. 8 4.7 Other Uses .............................................................................................................. 8 4.8 Use ofPublic Docks and Port Facilities................................................................. 8 ARTICLE 5 - UTILITIES AND RIGHTS OF ACCESS.......................................................... 8 5.1 Utilities.................................................................................................................... 8 5.2 Third-Party Improvements...................................................................................... 9 5.3 Easements ............................................................................................................... 9 ARTICLE 6 - CONSTRUCTION BY LESSEE....................................................................... 10 6.1 Improvements on Leased Land............................................................................. 10 6.2 City Review of Construction ................................................................................. 11 ARTICLE 7 - RETURN OF LEASED LAND/SITE CONDITIONS.................................... 11 ARTICLE 8 - FORCE MAJEURE ........................................................................................... 11 ARTICLE 9 - LESSEE'S ACTS OF DEFAULT..................................................................... 11 ARTICLE 10 - REMEDIES FOR DEFAULT BY LESSEE .................................................. 13 ARTICLE 11 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE........................ 14 11.1 Real Property Improvements ................................................................................ 15 11.2 Personal Property................................................................................................. 15 4817-1371-2460v.14 0022769-000022 i 415 ARTICLE 12 - ASSIGNMENT OR SUBLEASE .................................................................... 15 12.1 Assignment ofLease or Subleasing....................................................................... 15 12.2 Assignment ofLease for Security.......................................................................... 15 12.3 Assignment to Affiliate.......................................................................................... 16 12.4 Assignment or Encumbrance by City.................................................................... 16 ARTICLE 13 - LESSEE'S DUTY TO DEFEND/INDEMNIFY............................................ 17 ARTICLE 14 - CITY'S DUTY TO DEFEND/INDEMNIFY ................................................. 17 ARTICLE 15 - INSURANCE.................................................................................................... 17 15.1 Minimum Insurance Requirements ....................................................................... 17 15.2 Subrogation Rights Waived................................................................................... 18 15.3 Restoration of Buildings and Improvements......................................................... 19 ARTICLE 16 - CONDEMNATION.......................................................................................... 20 ARTICLE 17 - ARBITRATION ............................................................................................... 20 17.1 Arbitration............................................................................................................. 20 ARTICLE 18 - MAINTENANCE AND REPAIRS................................................................. 21 18.1 Normal Maintenance ............................................................................................ 21 18.2 Safety Issues.......................................................................................................... 21 18.3 Cost of Repairs...................................................................................................... 22 ARTICLE 19 - ENVIRONMENTAL CONCERNS................................................................ 22 19.1 Hazardous Materials ............................................................................................ 22 19.2 Permits and Reporting.......................................................................................... 24 ARTICLE 20 - ESTOPPEL CERTIFICATES........................................................................ 25 ARTICLE 21 - CONDITIONS AND COVENANTS .............................................................. 25 ARTICLE 22 - NO WAIVER OF BREACH ........................................................................... 25 ARTICLE 23 - TIME OF THE ESSENCE.............................................................................. 26 ARTICLE 24 - COMPUTATION OF TIME........................................................................... 26 ARTICLE 25 - SUCCESSORS IN INTEREST....................................................................... 26 ARTICLE 26 - ENTIRE AGREEMENT ................................................................................. 26 ARTICLE 27 - GOVERNING LAW........................................................................................ 26 ARTICLE 28 - PARTIAL INVALIDITY................................................................................. 26 ARTICLE 29 - RELATIONSHIP OF PARTIES .................................................................... 26 ARTICLE 30 - INTERPRETATION ....................................................................................... 26 ARTICLE 31 - CAPTIONS ....................................................................................................... 27 ARTICLE 32 - AMENDMENT................................................................................................. 27 ARTICLE33 - NOTICES.......................................................................................................... 27 ARTICLE 34 - FIRE PROTECTION FOR LEASED LAND................................................ 28 EXHIBIT A 4817-1371-2460v.14 0022769-000022 11 416 AMENDED AND RESTATED LEASE AGREEMENT THIS AMENDED AND RESTATED LEASE AGREEMENT (the "LEASE") is made by and between the CITY OF SEWARD (the "CITY"), a municipal corporation located in the Kenai Peninsula Borough, State of Alaska, whose mailing address is P.O. Box 167, Seward, Alaska 99664 and Icicle Seafoods Inc. (the "LESSEE"), an Alaska corporation whose mailing address is P.O. Box 79003, Seattle, Washington 98119. WHEREAS, LESSEE is currently occupying the Leased Land (as defined in Section 1.1 below) pursuant to various leases and most recently pursuant to that certain Ground Lease (Contract No. RE-071), dated July 11, 1988, as amended by Lease Amendment No. 1 dated June 8, 1989, and by Lease Amendment No. 2 (RE-071) effective as of January 1, 1999, as evidenced by a Memorandum of Lease and Lease Termination recorded August 23, 1988, in Book 51 at Page 954, and Memorandum of Lease Amendment recorded July 19, 1989 in Book 55 at Page 210 and by Lease Amendment No. 2 recorded April 4, 2000 in Book 100 at Page 127, all in the Seward Recording District, Third Judicial District, State of Alaska (collectively, the "ORIGINAL LEASE") and desires to continue to lease the Leased Land; and WHEREAS,the City Council of CITY has determined that a continued lease of the Leased Land (as defined below) to LESSEE for the purposes described herein would be in the public interest; and WHEREAS,pursuant to this LEASE, CITY and LESSEE desire to amend and restate the ORIGINAL LEASE in its entirety; and WHEREAS, neither CITY nor LESSEE intends that anything in this LEASE shall be construed as a novation of the ORIGINAL LEASE, and this LEASE shall not effect a novation of the ORIGINAL LEASE; and WHEREAS, it is the intent of this LEASE to transfer from CITY to LESSEE the entire burden of compliance with environmental regulations or controls with respect to LESSEE's operations on the Leased Land. NOW THEREFORE, for and in consideration of the mutual promises and covenants hereinafter contained, the parties hereto agree as follows: ARTICLE 1 -LEASED LAND 1.1 Description of Leased Land. The Leased Land is located in the City of Seward, Alaska. The Leased Land is described as follows: Lots 2A and 3A, Block 2, MARINA SUBDIVISION, BLOCK TWO REPLAT, as shown on Plat 96-28, Seward Recording District, Third Judicial District, State of Alaska, consisting of approximately 4.93 acres or 214,804 square feet, more or less (the "Leased Land")(Tax Parcel ID 145-240-15-LHO1). 4817-1371-2460v.14 0022769-000022 1 417 The Leased Land is also depicted on the attached Exhibit A, which is incorporated herein by reference. 1.2 Covenant of Quiet Enjoyment; Warranty of Title. Subject to the encumbrances as of the date hereof, any appurtenant easements or rights of way, and any reasonable restrictions imposed on the Leased Land as part of recording of a plat by CITY, and the provisions of this LEASE, CITY hereby covenants and warrants that LESSEE shall have the quiet enjoyment and possession of the Leased Land for the full term of this LEASE. 1.3 Property Accepted "As-is." LESSEE acknowledges that it has inspected the Leased Land and accepts the same "as-is" and without reliance on any expressed or implied representations or warranties of CITY (other than the representations in Section 1.2 hereof), or agents of CITY, as to the actual physical condition or characteristics thereof and the legal description or depiction of the Leased Land in Section 1.1 or Exhibit A hereto. 1.4 Permits. LESSEE, at its sole cost, shall obtain all permits necessary to the construction and operation of its facilities on the Leased Land. CITY may from time to time, upon request of LESSEE, execute such documents,petitions, applications, and authorizations as may be necessary, as the underlying fee owner, to file with an agency or public body responsible therefor an application for conditional use permits, zoning and re-zoning, tentative and final tract approval, or precise plan approval that may be required for the lawful construction and operation of the facilities of LESSEE permitted on the Leased Land by the terms of this LEASE. However, nothing in this Section shall be construed as requiring CITY to support or approve any such application or permit requests. If the agency or public body responsible to approve or grant such application or permit request is a City of Seward agency, department, or board, LESSEE shall follow all City of Seward procedures, the same as any other applicant making similar requests of the City of Seward, according to the Charter, ordinances, resolutions, or any regulation, rules, or procedures of the City of Seward. Nothing in this Section imposes any duty or responsibility on CITY to assist LESSEE in obtaining any other permits or approvals, including without limitation those required by the U.S. Army Corps of Engineers (e.g., wetland fill permits), the Environmental Protection Agency(e.g., Clean Air Act permits), the Alaska Department of Public Facilities and Transportation(e.g., right-of-way permits),the Alaska Department of Fish and Game, and the Alaska Department of Environmental Conservation. 1.5 Platting. If LESSEE requests a replat of the Leased Land, CITY shall assist LESSEE in the preparation and filing of the replat, and LESSEE shall reimburse CITY for CITY's costs in assisting with the preparation and filing of the replat. In the event CITY elects to replat, LESSEE agrees to sign the plat and any other documents necessary to complete the platting or replatting of any area including all or a portion of the Leased Land. LESSEE shall accept reasonable restrictions, easements, or plat notes as may be required by CITY or other governmental authorities as a condition to filing the plat of the Leased Land or the plat of CITY-owned real property adjacent to the Leased Land. 1.6 Development of Leased Land. LESSEE shall continue to operate a fish processing facility, a cold storage facility, a meal plant facility, and other uses necessary and 4817-1371-2460v.14 0022769-000022 2 418 incidental to the foregoing, through the term of this LEASE. LESSEE understands that construction and operations of its marine-related business is a major consideration for the CITY's agreement to lease the Leased Land to LESSEE. LESSEE shall not operate any other unrelated business on the Leased Land without the consent of the CITY. a) CITY may withhold its consent as to any proposed business or activity which, in CITY's sole discretion, is not desirable or compatible with the CITY's operation of the Seward Boat Harbor. b) In accordance with the provisions of Article 12, no assignment or sublease shall be permitted, unless approved in writing by CITY. Any sublease shall be expressly subject and subordinate to this Lease and the rights of the CITY hereunder. The CITY may elect to not approve any proposed assignment or sublease that might result in a business or activity that, in the CITY's sole discretion, is undesirable and/or incompatible with the CITY's Comprehensive Plan. 1.7 Amendment and Restatement of Original Lease. To accommodate LESSEE'S existing financing, this LEASE amends and restates in its entirety the ORIGINAL LEASE. This LEASE does not evidence a termination of LESSEE's leasehold interest in,nor a re-leasing of,the LEASED LAND. Such leasehold interest of the LESSEE in and to the Leased Land pursuant to the ORIGINAL LEASE shall be continuing in all respects, as amended and restated by this LEASE. The parties do not intend for this LEASE to be a novation of the ORIGINAL LEASE, and this LEASE shall not effect a novation of the ORIGINAL LEASE. ARTICLE 2 -LEASE TERM The term of this LEASE (the "Lease Term") shall be in accordance with CITY's authorization in Resolution No. 2018- (the "Resolution"). The Lease Term shall commence on the date this LEASE is signed by CITY and that date shall be the effective date of this LEASE (the "Effective Date"). The Lease Term shall run for approximately 20 years from the Effective Date, ending at midnight on December 31, 2037. LESSEE shall have the right to extend the term of this LEASE for 2 additional 5 year periods, provided that: a) LESSEE exercises its option to extend at least one hundred and eighty (180) days prior to the expiration of the then current lease term; b) LESSEE is not in default under any term or provision of this LEASE; c) LESSEE shall exercise its options to extend by sending written notice in accordance with the provisions of Article 33 of this LEASE; and d) The City Council, at the time this option is exercised, approves the extension by resolution or ordinance. ARTICLE 3 - RENTAL RATE 3.1 Initial Rental Rate. Commencing on the Effective Date of this LEASE, the annual rental rate for the Leased Land shall be set at $124,000. Rent shall be payable quarterly in 4817-1371-2460v.14 0022769-000022 3 419 advance upon the Effective Date of this Lease (prorated for the balance of the current quarter) and thereafter on or before the 20th day of the month beginning each calendar quarter: January 20, April 20, July 20 and October 20. The amount of each quarterly payment shall be one-quarter of the annual rental rate as initially established or later adjusted under this Article 3. 3.2 Rental Adjustments. The annual rental payment shall be adjusted on July 1, 2020, and on the same date every five years thereafter(each a "Rental Adjustment Date"). The adjusted annual rental payment to be paid under the terms of this Lease shall be the appraised fair market rental value(the "Fair Market Rental Value") of the Leased Land at the highest and best use of the Leased Land. The highest and best use of the Leased Land shall be determined without regard to LESSEE's intended or actual use of the Leased Land unless that use is coincidentally the highest and best use of the Leased Land. CITY shall complete such appraisal and deliver a copy of the appraisal report to LESSEE not less than ninety (90) days before each Rental Adjustment Date. 3.3 Procedure for Rental Adjustment. To adjust the rent as of any successive Rental Adjustment Date, CITY shall, at its own expense, retain an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute), who shall determine the "Fair Market Rental Value" of the Leased Land in accordance with this Article 3, exclusive of improvements placed thereon by LESSEE at any time but inclusive of all improvements made by CITY(including those made by CITY before or subsequent to this LEASE). The appraiser's report shall be delivered to LESSEE not less than ninety (90) days before the Rental Adjustment Date. The appraiser's determination of Fair Market Rental Value of the Leased Land shall constitute a final binding determination of the Fair Market Rental Value and the adjusted annual rental rate until the next Rental Adjustment Date, unless LESSEE objects to CITY's appraiser's determination of the Fair Market Rental Value. In that case, LESSEE shall give written notice to CITY of its objection within thirty(30) days of receipt of the appraiser's report, and LESSEE shall then engage an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at LESSEE's expense to make an appraisal of the Fair Market Rental Value in accordance with this Article 3. If LESSEE's appraisal determines a Fair Market Rental Value that varies from that determined by CITY's appraisal by no more than twenty percent (20%), then the adjusted rental rate shall be the average of the rental rates determined by the two appraisals. If LESSEE's appraisal determines a Fair Market Rental Value that varies from CITY's appraisal by more than twenty percent (20%), then, unless CITY and LESSEE agree on a rate themselves, the adjusted annual rental rate of the Leased Land shall be determined in accordance with the arbitration provisions contained in Article 19 of this LEASE. 3.4 Effect ofLate Appraisal by CITY. If, for any reason, CITY does not complete the appraisal or deliver a copy of the appraisal report to LESSEE ninety (90) days before the Rental Adjustment Date, CITY may proceed to complete the appraisal or deliver a copy of the appraisal report to LESSEE at any time thereafter. However, any such adjusted annual rental rate shall not be effective until the quarterly payment due date immediately following the date CITY delivers the appraisal report to LESSEE. 4817-1371-2460v.14 0022769-000022 4 420 3.5 Appraisal by LESSEE. If, for any particular Rental Adjustment Date, CITY fails to obtain an appraisal of the Fair Market Rental Value or fails to deliver the appraisal report to the LESSEE by the Rental Adjustment Date, LESSEE may engage an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at LESSEE's expense to make an appraisal under the terms of this Article 3 and submit a copy to CITY before the next quarterly rental payment due date. However, LESSEE must notify CITY in writing within thirty (30) days following the Rental Adjustment Date of LESSEE's election to obtain an appraisal. If CITY objects to LESSEE's appraiser's determination of the Fair Market Rental Value, CITY shall give written notice to LESSEE of its objection within thirty (30) days of receipt of the appraiser's report, and CITY shall then engage an independent State of Alaska certified MAI appraiser (Member, Appraisal Institute) at CITY's expense to make an appraisal of the Fair Market Rental Value as of the Rental Adjustment Date and in accordance with this Article 3. If the CITY's appraisal determines a Fair Market Rental Value that varies from that determined by LESSEE's appraisal by no more than twenty percent (20%), then the adjusted rental rate shall be the average of the rental rates determined by the two appraisals. If the CITY's appraisal determines a Fair Market Rental Value that varies from LESSEE's appraisal by more than twenty percent (20%), then, unless CITY and LESSEE agree on a rate themselves, the adjusted annual rental rate of the Leased Land shall be determined in accordance with the arbitration provisions contained in Article 19 of this LEASE. 3.6 Effective Date ofAdjusted Rental Rate. The adjusted annual rental rate established by this Article 3 shall apply as of the Rental Adjustment Date if CITY provided a copy of the appraisal report to LESSEE no later than ninety (90) days before the Rental Adjustment Date. If the adjusted annual rental rate is based on CITY's late appraisal or late delivery of the appraisal report to LESSEE, the adjusted rental rate shall be effective beginning with the quarterly rental payment due date immediately following the date the CITY delivers the appraisal report to LESSEE. Notwithstanding the above, the exercise by either CITY or LESSEE of the objection procedure relating to rental adjustment described in this Article 3 shall not postpone LESSEE's obligation to pay rent at the rate established by CITY. LESSEE shall pay the amount of rent as established or adjusted by CITY until the question of objection to the rental rate is finally resolved. At such time the objection to the rental rate is resolved, an appropriate credit or adjustment shall be made retroactive to the date the new rental rate was established by CITY or in cases where CITY failed to obtain an appraisal or deliver the appraisal report to the LESSEE, to the Rental Adjustment Date. 3.7 Interim Rental Adjustments. For each year in the period between each Rental Adjustment Date, excepting the Rental Adjustment Dates, the annual rental payment shall be increased beginning July 1, 2019 and on July 1 of every year thereafter (each an "Interim Rental Adjustment Date") in an amount that reflects the increase, if any, in the cost of living for the previous year as stated in the Consumer Price Index,All Urban Consumers,Anchorage, Alaska Area, All Items 1967=100 ("CPI"), as published by the United States Department of Labor, Bureau of Labor Statistics for the most recent period published immediately prior to the Interim Rental Adjustment Date. In no event shall the rent be less than the previous year. If the CPI is revised or ceases to be published,the CITY shall instead use such revised 4817-1371-2460v.14 0022769-000022 5 421 or other index as most nearly approximates the CPI for the relevant period, and make whatever adjustment in its application as may be necessary, in the CITY's sole discretion, to accomplished as nearly the same result as if the CPI had not been revised or ceased to be published. 3.8 Rent Payment Credits for Production and Employment. Provided that Lessee is not in default of any Lease provisions and is current in all other payments to City, Lessee shall be allowed as a credit against regular annual rent payable under Sections 3.1, 3.2 and 3.7 hereof(Regular Rental Rate),certain rent payments credits for production and employment at the Leased Land. The Lessee shall be entitled to receive credits as follows: (a) Production Credit. Lessee may deduct from Regular Rent payment due during a calendar year, a rent payment credit for processing fisheries resources at the Leased Land during the immediately preceding calendar year.The rent payment credit shall equal $.50 per ton of all fisheries resources delivered to the Leased Land by land or water or from within or outside of the City of Seward, Alaska. (b) Employment Credit. Lessee may deduct from the regular rent payment due during a calendar year, a rent payment credit for employment at the Leased Land during the immediately preceding calendar year. The rent payment credit shall equal $.25 per hour for each Alaska resident employee hour worked at the Leased Land which exceeds a base annual employment level of 25,000 employee hours. Only hours actually worked by Lessee's non-salaried, Alaska resident hourly paid employees shall be considered. All employee time must be for Alaska resident employees of Lessee who are actively engaged in work on behalf of Lessee at the Leased Land. City shall have the right to verify Lessee's compliance with provisions of this Article by being provided quarterly certified payroll records showing the hours worked by Lessee's Alaska resident employees at the Leased Land. (c) Alaska Resident Determination. Alaska resident status shall be determined by Alaska driver's license, Alaska resident fishing license, Alaska PFD recipient or an employee's Alaska resident address listed on previous years Federal Tax form. (d) Provisions Governing Use of All Rent Payment Credits. Rent payment credits shall be applied only against the Regular Rent due for each calendar year as otherwise computed under the terms of Lease sections 3.1 and 3.2 hereof, as such rental rate may be adjusted from time to time. Rent payment credits shall not be applied to any additional rent described in section 3.9 hereof, taxes assessments, utilities, other lease obligations paid by City on Lessee's behalf, late Regular Rental payments not timely made in the calendar year in which they were due, or late payment penalties. Final determination of the availability and amount of rent payment credits shall be in the sole reasonable discretion of City. 4817-1371-2460v.14 0022769-000022 6 422 Rent payment credits may be used in any combination; provided however, in no event shall the total of credits used in any one calendar year exceed 50% of the annual Regular Rent payments due for a calendar year or $75,000, whichever is less. Rent payment credits shall not be carried forward from year to year. Rent payment credits shall not be earned during the final calendar year of the lease term whether the lease has expired by its terms or is terminated by either party to the lease. 3.9 Late Payment Charge. Rental payments not received by the due date shall bear interest until paid at a rate of 10.5%per annum, or the maximum rate permitted under Alaska law, whichever is less, plus a flat monthly late fee of $2.50, or such amount as may be established from time to time by CITY ordinance or resolution and relating to late fees for CITY leases generally. ARTICLE 4 - USE OF LEASED LAND 4.1 Use of Leased Land. CITY has limited land available for lease. Use of the Leased Land by LESSEE has been determined by the City Council of CITY to be in the public interest. LESSEE may use the Leased Land for fish processing, cold storage, meal plant and other marine oriented business. 4.2 Obligations of LESSEE. LESSEE may use the Leased Land only in accordance with applicable CITY zoning code provisions and provided the following conditions are met: a) The Leased Land is to be completely cleaned and restored to its original condition, that is, the condition existing prior to this LEASE or in better condition upon termination of this LEASE. b) LESSEE agrees to prohibit the use, keeping, storage, or disposal of Hazardous Materials on the Leased Land except as permitted in Article 19 of this LEASE. c) LESSEE shall not use the Leased Land in any manner or construct any facilities thereon which would inhibit the use of adjacent or other lands. d) LESSEE shall operate a fish processing, cold storage, meal plant and other marine oriented business on the Leased Land. e) Any changes to this site require prior CITY approval, through the City Manager. 4.3 No Preferential Rights to Use Public Facilities. This LEASE does not grant to LESSEE any exclusive rights to use any public port facilities constructed or operated by CITY. LESSEE will be subject to any tariffs, procedures, rules, and regulations of CITY concerning the use of such facilities as they may now exist or from time to time be amended, and LESSEE shall not be entitled to any exclusive use. 4817-1371-2460v.14 0022769-000022 7 423 4.4 Adequacy of Public Facilities. CITY makes no representations or warranties as to the fitness of any particular part or the whole of CITY's public facilities for the uses intended by LESSEE, and LESSEE has inspected those facilities and has satisfied itself that the facilities are sufficient for the intended uses by LESSEE. CITY makes no representations or warranties of any nature with respect to the commercial practicability or accuracy of any information provided by CITY. 4.5 Tams and Other Service Fees. CITY shall have the right to make amendments to its tariffs, regulations, and scheduled fees from time to time, even if those adjustments shall cost LESSEE more for its operations or use of public facilities, and CITY is free to do so provided only that it does not impose any greater burden or higher rate upon LESSEE than upon any other similar user of the public facilities. 4.6 Time for Payment of Utilities and Taxes. LESSEE will pay for utilities and taxes related to operations on the Leased Land and LESSEE's interest in this LEASE and improvements thereon, if any,before such obligations become delinquent;provided that LESSEE may, in good faith and before such delinquency, contest any such charge or assessment. 4.7 Other Uses. This LEASE shall not preclude the CITY from actively seeking other and additional tenants for space, including those who would be in competition with LESSEE or who might be interested in leasing the Leased Land should this LEASE be terminated for any reason. 4.8 Use of Public Docks and Port Facilities. Public docks are subject to port and harbor rules and regulations as adopted by City Council. ARTICLE 5 -UTILITIES AND RIGHTS OF ACCESS 5.1 Utilities. LESSEE, at LESSEE's sole cost and expense, shall provide for the extension of public utilities to the Leased Land required for LESSEE's intended operations. In so doing, LESSEE shall comply with all CITY regulations and requirements, and the tariffs of the affected utilities, with respect to the construction of those utilities. CITY agrees to cooperate and assist the LESSEE, through consultation and review, in LESSEE's planning and engineering of those improvements. All utilities will be located and sized in accordance to CITY's Master Plan for the area leased. All such construction shall be in compliance with all applicable building, mechanical and fire codes. Utilities constructed by the LESSEE within the public right-of-ways or within public utility easements will normally be accepted and maintained by CITY or utility companies and may be used to serve other customers of CITY's without payment of fees or reimbursement of construction cost to the LESSEE. However, this does not preclude several lessees from agreeing to share the cost of constructing a utility to serve their facilities. CITY or other utility company may determine that it would be to their benefit to oversize the utility or install special fittings or equipment in order to serve other existing or future users. The additional direct costs of such oversizing shall be borne by CITY or other utility company. Such costs shall be limited to the supplier's cost of the additional fittings, equipment, direct labor, and 4817-1371-2460v.14 0022769-000022 8 424 equipment costs to complete the installation. The costs of oversizing pipe or electrical conduit shall be limited to the difference between the supplier's price to provide the size required to serve LESSEE's facility and the price of the oversized material required by CITY or utility company. LESSEE shall not be entitled to any refund, rebate, or payments from CITY for any rent, investment, or costs incurred by LESSEE with respect to any required permits for construction or operation of LESSEE's facilities on the Leased Land, it being the intent of the parties that the risk of obtaining required permits be solely a risk undertaken by LESSEE. 5.2 Third-Party Improvements. At the request of LESSEE, CITY shall, from time to time, execute and deliver, or join in execution and delivery of, such documents as are appropriate,necessary, or required to impose upon the Leased Land in accordance with the terms of this LEASE covenants, conditions, and restrictions providing for the granting of uses of the Leased Land, or any part thereof, the establishment of party walls, the establishment of mutual and reciprocal parking rights or rights of ingress or egress, or other like matters (herein called "third-party improvements"), all of which are for the purpose of the orderly development of the Leased Land as a commercial unit subject, however, to the conditions that: a) All such matters shall be limited to the Lease Term and shall terminate upon termination of this LEASE for whatever reason. b) Any such matters of a permanent nature extending beyond the Lease Term shall not be granted without the prior written approval of CITY. In any of the foregoing instances referred to in this Section, CITY shall be without expense therefor, and the cost and expense thereof shall be borne solely by LESSEE. c) At the expiration of the Lease Term (including any extended period) third-party improvements on the Leased Land other than trade fixtures and equipment shall become the property of CITY without the payment of any compensation to LESSEE. 5.3 Easements. In order to provide for the orderly development of the Leased Land and adjacent lands, it maybe necessary, desirable,or required that street,railroad,water,sewer, drainage, gas, power line, and other easements and dedications and similar rights be granted or dedicated over or within portions of the Leased Land. As additional consideration for this LEASE, CITY and LESSEE each shall, at the request of the other, join with each other in executing and delivering such documents from time to time and throughout the Lease Term as may be appropriate, necessary, or required by the several governmental agencies (including the City of Seward), public utilities, and other users or tenants of CITY land for the purpose of granting such easements and dedications;provided, however, that such easements and dedications and similar rights do not unreasonably interfere with LESSEE's operations. The costs of locating or relocating any public easements or restrictions of record including any relocation of public road, railroad,utility, 4817-1371-2460v.14 0022769-000022 9 425 or other easements shall be at the sole cost and expense of the party requesting the relocation. CITY shall not refuse reasonable requests for such relocations provided those relocations do not interfere with or inhibit the overall development of CITY property or other public property. Any easements or rights of access granted to LESSEE by CITY need not be exclusive to LESSEE. ARTICLE 6 - CONSTRUCTION BY LESSEE 6.1 Improvements on Leased Land. LESSEE shall have the right to erect, maintain, alter, remodel, reconstruct, rebuild, build, and/or replace buildings and other improvements on the Leased Land, subject to the following conditions: a) The cost of any construction, reconstruction, demolition, or of any changes, alterations, or improvements, shall be borne and paid for by LESSEE. b) The Leased Land shall at all times be kept free of mechanic's and materialmen's liens. c) LESSEE shall provide CITY with a copy of all building plans and specifications and a site development plan or plans(based on a recent survey)for the Leased Land prior to commencement of construction. d) LESSEE is solely responsible for resurveying and locating improvements on the Leased Land in such manner not to violate building setback requirements or encroach into rights-of-ways or easements. On completion of any improvements, LESSEE shall provide CITY a copy of an as-built survey depicting the improvements as completed on the Leased Land. e) Any general contractor employed by LESSEE shall be appropriately bonded by use of performance and labor and material payment bonds in the customary form when cost of the work is equal to or exceeds FIFTY THOUSAND DOLLARS ($50,000). Copies of all such bonds shall be furnished to CITY prior to commencement of construction. If the cost of the work is less than FIFTY THOUSAND DOLLARS ($50,000), LESSEE shall provide CITY, if no performance and labor and material bonds are provided by LESSEE, any necessary assurances or guarantees that the contemplated work will be performed by the general contractor or by LESSEE. In the event that LESSEE elects to construct the facility with its own personnel and equipment, or the personnel and equipment of any corporation or person that is an "affiliate" of LESSEE as such term is defined in AS 10.06.990(2)or Alaska limited liability company in which LESSEE maintains a substantial membership interest, a performance bond shall be required when the cost of the work is equal to or exceeds FIFTY THOUSAND DOLLARS ($50,000). f) CITY may, as contemplated by Alaska Statutes, give notice of non-responsibility for any improvements constructed or effected by LESSEE on the Leased Land. 4817-1371-2460v.14 0022769-000022 10 426 g) LESSEE shall comply with all federal, state, and local statutes and regulations with respect to such construction, including, but not limited to, all applicable building, mechanical, and fire codes. 6.2 City Review of Construction. CITY shall have the right to review initial plans, including those supplied to CITY under Section 6.1 hereof, and any future changes or additions to LESSEE's facilities on the Leased Land, by reviewing the design thereof prior to the commencement of construction. CITY shall have the right to comment upon that design and to require LESSEE to make reasonable changes so as to avoid interference with public operations, but the exercise of these rights shall not imply any obligation to do so nor any obligation to do so in a particular way. LESSEE shall construct the facility in accordance with final design specifications approved by CITY. CITY's representatives may monitor the work and shall have access to the site at all reasonable times. LESSEE shall be solely responsible for completing all improvements according to LESSEE's plans and specifications and shall bear all risk, responsibility, and liability for properly surveying the Leased Land before construction and to place all improvements on the Leased Land without encroaching upon any land, easements, rights-of-way, or setback requirements. LESSEE shall obtain the usual and customary performance guarantees from its contractors, and CITY shall be named as an additional insured. ARTICLE 7 -RETURN OF LEASED LAND/SITE CONDITIONS Subject to the provisions of Article 11.1 herein, upon termination of this LEASE for any reason, LESSEE shall return the Leased Land to CITY in the same condition as at the commencement this LEASE, subject to normal, non-abusive use. The Leased Land shall be free of all Hazardous Materials and contamination arising out of or resulting from or occurring during LESSEE's operations or use of the Leased Land during this LEASE. ARTICLE 8 -FORCE MAJEURE In the event either LESSEE or CITY is delayed from performance of any of its obligations under this LEASE due to acts of nature, acts of the enemies of the United States of America, sabotage, blockade, insurrection, riot, epidemic, fire, flood, explosion, earthquake/tsunami, civil disturbance, or war, the time period wherein such performance is to occur shall be extended by that amount of time necessary to compensate for the delay. ARTICLE 9 - LESSEE'S ACTS OF DEFAULT Each of the following shall be a"LESSEE Act of Default"under this LEASE and the terms "acts of default" and"default" shall mean,whenever they are used in this LEASE, any one or more of the following events: 9.1 Failure by LESSEE to pay promptly when due, and in no event later than twenty(20) days from the due date thereof, the rent required to be paid under this LEASE. 4817-1371-2460v.14 0022769-000022 11 427 9.2 Failure by LESSEE to comply with Section 4.1 of this LEASE for a period of thirty (30) days after written notice specifying such failure, requesting that it be remedied, and stating that it is a notice of default, has been given to LESSEE by CITY; provided, however, that if said default is such that it cannot be corrected within the applicable period, it shall not constitute an act of default if corrective action is instituted by LESSEE within the applicable period and diligently pursued until the default is corrected. 9.3 Failure by LESSEE to observe, fulfill or perform any covenants, conditions, or agreements on its part to be observed or performed under this LEASE, other than payment of rent or compliance with Section 4.1, for a period of thirty(30) days after written notice specifying such failure, requesting that it be remedied, and stating that it is a notice of default, has been given to LESSEE by CITY; provided, however, that if said default is such that it cannot be corrected within the applicable period, it shall not constitute an act of default if corrective action is instituted by LESSEE within the applicable period and diligently pursued until the default is corrected. 9.4 The making by LESSEE of an assignment for the benefit of creditors,the filing of a petition in bankruptcy by LESSEE, the adjudication of LESSEE as insolvent or bankrupt, the petition or application by LESSEE to any tribunal for any receiver or any trustee for itself or for any substantial part of its property; or the commencement of any proceeding relating to LESSEE under any bankruptcy, insolvency, reorganization, arrangement, or readjustment of debt law or statute or similar law or statute of any jurisdiction, whether now or hereafter in effect which shall remain undismissed for a period of six (6) months from the date of commencement thereof. 9.5 Violation by LESSEE of any laws or regulations of the United States, or of the State of Alaska, or any conditions of any permits issued by agencies of the City of Seward, the Kenai Peninsula Borough, the State of Alaska, or of the United States Government applicable to LESSEE's use of the Leased Land, pursuant to the regulations of such agencies, for a period of sixty(60) days after written notice specifying such violation has been given by the agency charged with the enforcement of such laws, regulations, or permits to LESSEE;provided,however, if such violation be such that it cannot be corrected within the applicable period, it shall not constitute an act of default if corrective action is instituted by LESSEE within the applicable period and diligently pursued until the violation is corrected. Furthermore,if LESSEE shall contest such alleged violation through appropriate judicial or administrative channels, the time period specified herein shall not commence until such proceedings are finally determined provided such proceedings are diligently pursued; provided, however, that any such extension of time shall not be effective if the effect of the interim administrative or judicial action is to cause a stoppage, interruption, or threat to the activities of any person or entity other than those of LESSEE. 9.6 Failure of LESSEE to maintain its operations within the Leased Land or to keep the public rights of way clear for a period of thirty (30) days after written notice specifying such failure, requesting that it be remedied, and stating that it is a notice of default, has been given to LESSEE by CITY; provided, however, that if said default is such that it cannot be corrected within the applicable period, it shall not constitute an act of default if corrective 4817-1371-2460v.14 0022769-000022 12 428 action is instituted by LESSEE within the applicable period and diligently pursued until the default is corrected. ARTICLE 10 -REMEDIES FOR DEFAULT BY LESSEE Whenever an act of default by LESSEE shall have occurred, and any applicable period for giving notice and any opportunity to cure shall have expired, CITY shall have the following rights and remedies all in addition to any rights and remedies that may be given to CITY by statute, common law, or otherwise: 10.1 CITY may distrain for rent due any of LESSEE's personal property which comes into CITY's possession. This remedy shall include the right of CITY to dispose of personal property distrained in any commercially reasonable manner. It shall be conclusively presumed that compliance with the procedures set forth in the Alaska Uniform Commercial Code (AS 45.29.601-.628) with respect to sale of property shall be a commercially reasonable disposal.Notwithstanding the foregoing, CITY agrees that its rights set forth in this Section 10.1 shall be junior to the rights granted to any Lender (as defined in Section 12.2) under a Security Instrument(as defined in Section 12.2), and CITY's consent is not required for a Lender to enter upon the LEASED LAND and assemble, have appraised, display, sever, remove, maintain,prepare for sale or lease, advertise, inspect, repair, lease, transfer and/or sell (at public auction or private sale), take possession of, or otherwise enforce such Lender's security interest in LESSEE's personal property or other assets located on the Leased Land in which such Lender holds a security interest. 10.2 CITY may re-enter the Leased Land and take possession thereof and, except for any personal property of LESSEE which CITY has waived its right to distrain under Section 10.1 above,remove all personal property of LESSEE from the Leased Land. Such personal property may be stored in place or may be removed and stored in a public warehouse or elsewhere at the cost of LESSEE all without service of notice or resort to legal process, all of which LESSEE expressly waives. 10.3 In addition to the above, CITY may: a) Declare this LEASE terminated; b) Collect any and all rents due or to become due from subtenants or other occupants of the Leased Land; c) Recover from LESSEE, whether this LEASE be terminated or not, reasonable attorney's fees and all other expenses incurred by CITY by reason of the breach or default by LESSEE; d) Recover an amount to be due immediately on breach equal to the unpaid rent for the entire remaining term of this LEASE. 4817-1371-2460v.14 0022769-000022 13 429 e) Recover all damages incurred by CITY by reason of LESSEE's default or breach, including, but not limited to, the cost of recovering possession of the Leased Land, expenses of reletting, including costs of necessary renovation and alteration of the premises, reasonable attorney's fees, and any real estate commissions actually paid. f) Remove or require the removal of any improvements constructed without CITY approval (when such approval is required under this LEASE) or constructed contrary to site development plans approved by CITY and recover all costs and expense incurred by CITY to remove violating improvements. 10.4 If LESSEE does not immediately surrender possession of the Leased Land after termination by CITY and upon demand by CITY, CITY may forthwith enter into and upon and repossess the Leased Land and expel LESSEE without being deemed guilty in any manner of trespass and without prejudice to any remedies which might otherwise be used for arrears of rent or breach of covenant. 10.5 No expiration or termination of this LEASE shall expire or terminate any liability or obligation to perform of LESSEE's which arose prior to the termination or expiration except insofar as otherwise agreed to in this LEASE. 10.6 Each right and remedy of CITY provided for in this LEASE shall be cumulative and shall be in addition to every other right or remedy provided for in this LEASE or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by CITY of any one or more of the rights and remedies provided for in this LEASE or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by CITY of any or all other rights or remedies provided for in this LEASE or now or thereafter existing at law, or in equity or by statute or otherwise. 10.7 No delay or omission to exercise any right or power accruing following an act of default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 10.8 Notwithstanding any other provision of this Article X, if this LEASE is rejected in a bankruptcy or insolvency proceeding or terminated due to LESSEE's breach of Section 9.4 above,upon Lender's written request made not more than forty(40) days after this LEASE is rejected, CITY will enter into a new lease of the Premises with the nominee of such Lender for the remainder of the term of this LEASE, at the same rent and under the same terms and conditions set forth in this LEASE. All sums due and owing to CITY under this LEASE shall be paid at the time of execution of the new lease. ARTICLE 11 - TITLE TO IMPROVEMENTS INSTALLED BY LESSEE 4817-1371-2460v.14 0022769-000022 14 430 11.1 Real Property Improvements. All improvements constructed by LESSEE or its predecessors on the Leased Land or on easements to or from the same, such as buildings, warehouses,conveyor systems, ditches,sewer lines,water lines, dikes or berms and similar improvements, are the property of LESSEE and shall be removed by LESSEE at the termination of this LEASE for any reason. All such improvements that are not removed by LESSEE prior to the termination of this LEASE shall become the property of CITY upon termination of this LEASE for any reason;provided,however,that CITY may require LESSEE to remove any improvements designated by CITY and without cost to CITY by giving notice to LESSEE of such requirement not more than 10 days after termination of this LEASE and sooner if possible. LESSEE shall have a period not to exceed three hundred sixty-five(365)days after LEASE termination or LESSEE's receipt of such notice (whichever is later) in which to remove such improvements, and LESSEE shall pay rent during such time, and shall continue to pay public utility bills until it has completed the removal obligations described in this Section 11.1. 11.2 Personal Property. Any other provisions of this LEASE to the contrary notwithstanding, LESSEE, upon termination of this LEASE for any reason, may, but need not, promptly remove, in no event later than ninety (90) days from the termination of the LEASE, trade fixtures and equipment from the Leased Land provided that LESSEE shall repair any damages to the Leased Land caused by such removal. ARTICLE 12 -ASSIGNMENT OR SUBLEASE 12.1 Assignment of Lease or Subleasing. The parties recognize that this LEASE has been determined to be in the public interest by the City Council of CITY for the reasons set forth in the approving Resolution. The rights and duties created by the LEASE are personal to LESSEE and CITY has granted the LEASE in reliance upon the business character and financial capability of LESSEE. Therefore, LESSEE shall not assign or sublease this LEASE without CITY's prior written consent, in CITY's sole discretion. 12.2 Assignment of Lease for Security. Notwithstanding Section 12.1 above, LESSEE may assign, encumber, or mortgage its interest in this LEASE or improvements on the Leased Land, by deed of trust or other security instrument (the "Security Instrument"), to (i) the State of Alaska to secure the LESSEE's tax obligations, and (ii) one or more entities engaged in the business of loaning money for LESSEE's development of or operations on the Leased Land (each beneficiary named in such Security Instrument referred to hereinafter as the "Lender"). CITY's consent is not required for any Security Instrument as described herein, or any loan documents related to the same (or any amendment, modification, restatement, supplement, renewal or substitution thereof), but upon a Lender's request, CITY shall execute a consent to the Security Instrument or include consent language in an estoppel certificate provided to CITY pursuant to Article XX of this LEASE. If requested by a Lender, CITY shall furnish such Lender, at the address provided to CITY by Lender in writing, with notice of any default or breach of LESSEE under this LEASE. Lender shall have the right(without being required to do so and without thereby assuming the obligations of LESSEE under this LEASE)to make good such default or breach within thirty(30)days after receipt of such written notice specifying such breach. 4817-1371-2460v.14 0022769-000022 15 431 Notwithstanding the provisions of Article 10 above, no "LESSEE Act of Default" shall exist until expiration of thirty (30) days after such notice is furnished to Lender; provided, a) If Lender, with respect to any default or breach other than a failure to make any required payment of rent or other money, shall undertake within thirty (30) days after notice to cure the default or breach and shall diligently and in good faith proceed to do so, CITY may not terminate this LEASE or relet the Leased Land unless Lender fails to cure the default or breach within a reasonable period of time thereafter; and b) If the default for which notice is given is a breach of Section 9.3, CITY shall not exercise any of the remedies afforded to it under Article 10 above so long as LESSEE or Lender remains in possession of the Leased Land and satisfies LESSEE's obligations under the terms of this LEASE. This LEASE shall not be terminated upon foreclosure or other assertion by Lender of its security interest as long as all obligations of LESSEE under the terms of this LEASE continue to be performed. Any assignee, purchaser at a foreclosure sale, or transferee shall agree to assume this LEASE and be bound by each and every term of this LEASE. No amendment,modification or termination of this LEASE prior to its expiration date shall be effective at any time that the Security Instrument remains effective,unless Lender shall have given its prior written consent thereto, which consent shall not unreasonably be withheld. Notwithstanding the forgoing, in the event the Lender does not notify the City of its election to withhold consent to any amendment, modification or termination of this Lease within thirty (30) days after receipt of a request for such approval, the Lender will be deemed to have approved such amendment,modification or termination as the case may be. If at any time the leasehold interest under this LEASE and the fee estate in the Leased Land are commonly held, such estates shall remain separate and distinct estates and shall not merge without the consent of Lender. 12.3 Assignment to Affiliate. Notwithstanding Section 12.1 above, LESSEE may assign this LEASE to an affiliate of LESSEE or of its parent company(as the term"affiliate"is defined by AS 10.06.990(2)) or to an Alaska limited liability company in which LESSEE or its parent company maintains a substantial membership interest; provided, however, that LESSEE's full faith and credit shall remain obligated under this LEASE as though the assignment had not taken place. 12.4 Assignment or Encumbrance by CITY. CITY agrees that, so long as any Security Instrument remains outstanding, the CITY shall not encumber its interest in the Leased Land or under the LEASE in any respect without the prior written consent of the LESSEE's Lender. If any deed of trust or similar instrument encumbers the CITY's interest in the Leased Land (a"CITY Deed of Trust") and is senior in priority to this LEASE, the CITY agrees to obtain: (i) a non-disturbance agreement in form reasonably satisfactory to Lender pursuant to which the beneficiary named in such CITY Deed of Trust agrees not to disturb the possession of LESSEE or Lender and their successors and assigns so long as LESSEE and Lender and their successors and assigns comply with this LEASE. 4817-1371-2460v.14 0022769-000022 16 432 ARTICLE 13 -LESSEE'S DUTY TO DEFEND/INDEMNIFY LESSEE shall defend,indemnify,and hold harmless CITY,its officials,employees,agents, and contractors from any and all liability or claims for damages, including personal injuries, environmental damage, death and property damage arising out of or resulting from LESSEE's use of the Leased Land or the use of the Leased Land by LESSEE's sublessees, assignees, agents, contractors, or the public, except for damages arising from the sole negligence or willful acts or omissions of CITY, its officials, employees, agents, or contractors. If any action or proceeding is brought against LESSEE by reason of any such occurrence, LESSEE shall notify CITY promptly in writing of such action or proceeding. ARTICLE 14 - CITY'S DUTY TO DEFEND/INDEMNIFY CITY shall defend, indemnify and hold LESSEE harmless from any and all liability or claims for damages, including personal injuries, death, and property damage arising from the sole negligence or willful acts or omissions of CITY, its officials, employees, agents, or contractors. ARTICLE 15 - INSURANCE 15.1 Minimum Insurance Requirements. Prior to commencement of the Lease Term or LESSEE'S occupancy of the Leased Land, LESSEE shall procure and maintain, at LESSEE's sole cost and expense, the following insurance: a) Commercial General Liability Insurance Policy insuring the Leased Premises and LESSEE's use thereof, with a minimum limit of Two Million Dollars ($2,000,000) on account of bodily injuries or death or property damage for each occurrence and a minimum limit Two Million Dollars ($2,000,000) annual general aggregate (such limits may be satisfied through a combination of primary and umbrella/excess liability insurance). The foregoing policy(ies) shall name CITY and, upon request, LESSEE's lender, as additional insureds under LESSEE's insurance policy(ies); b) Special Form Cause of Loss (excluding earthquake and flood) Property Insurance Policy, including extended coverage endorsements insuring all of Lessee's improvements (including LESSEE's stock-in-trade, trade fixtures, furniture, furnishings, special equipment, floor and wall coverings, and all other items of personal property of LESSEE located on or within LESSEE'S improvements' with such coverage to be in an amount equal to one hundred percent (100%) of the replacement cost thereof. The foregoing policy shall name CITY and LESSEE's lender, if any, as loss payee under LESSEE's insurance policy with regard to the permanent leasehold improvements on the Leased Land. c) Workers' compensation and United States Longshore and Harborworker's insurance covering Tenant's employees at the Leased Premises as required by Alaska law; 4817-1371-2460v.14 0022769-000022 17 433 d) Commercial automobile liability insurance for hired, owned/registered under LESSEE's name and non-owned vehicles, including contractual liability with a single limit of liability not less than One Million and 00/100 Dollars ($1,000,000.00) per accident for bodily injury and property damage combined or such other amounts as CITY may reasonably request. The foregoing policy shall name CITY and, upon request, LESSEE's lender, as additional insureds under Tenant's insurance policy. The minimum amounts and types of insurance provided by LESSEE shall be subject to revision at the sole discretion of CITY in accordance with standard insurance practices, in order to provide continuously throughout the term of this LEASE and any extensions hereof, a level of protection consonant with good business practice and accepted standards in the industry. Such factors as changes in the type of or extent of use of the Lease Land, increases in the cost of living, inflationary pressures, and other considerations, shall be utilized in assessing whether the minimum insurance requirements should be increased. CITY shall notify LESSEE of any required increase in insurance coverage. Provisions of insurance policies required under this Section 15.1 will not be materially altered by LESSEE during the term of this LEASE, and LESSEE will provide CITY with proof of insurance upon request. All such policies shall be written by insurance companies legally authorized or licensed to do business in the State of Alaska and acceptable to CITY (Best's Rating B+ or better). CITY shall be listed as an additional insured under all insurance policies. LESSEE shall furnish CITY, on forms approved by CITY, certificates evidencing that it has procured the insurance required herein prior to the occupancy of the Leased Land or operation by LESSEE. Insurance policy deductibles shall be consonant with good business practice and accepted standards in the LESSEE's industry. Nothing herein contained shall prevent LESSEE or CITY from placing and maintaining at CITY's or LESSEE's own individual cost and expense,additional or other insurance as may be desired. The minimum insurance requirements under this LEASE shall not act to limit LESSEE's liability for any occurrence and shall not limit LESSEE's duty to defend and indemnify CITY for claims related to this LEASE or the Leased Land. 15.2 Subrogation Rights Waived. To the extent permitted by law, LESSEE hereby releases CITY, its elected and appointed officials, employees and volunteers, and others working on behalf of CITY from any and all liability or responsibility to LESSEE or anyone claiming through or under LESSEE by way of subrogation or otherwise, for any loss of any kind (including damage to property caused by fire or any other casualty), even if such loss shall have been caused by the fault or negligence of the CITY, its elected or appointed officials,employees or volunteers,or others working on behalf of the CITY. This provision shall be applicable and in full force and effect only with respect to loss or damage occurring during the time of LESSEE's occupancy or use (including LESSEE's occupancy or use prior to the Effective Date of this LEASE), and LESSEE agrees its policies of insurance will not contain any clause,provision or endorsement that limits LESSEE's right to recover under such policy if an additional insured has obtained a waiver of subrogation. 4817-1371-2460v.14 0022769-000022 18 434 15.3 Restoration of Buildings and Improvements. In the event of damage to, or destruction of, any of the buildings or improvements situated on the Leased Land, and to the extent that LESSEE is entitled to any insurance proceeds resulting therefrom, such proceeds shall be paid to LESSEE's Lender,to be used to restore the LESSEE's improvements in accordance with the Security Instrument. In the event LESSEE does not have a Lender, then the insurance proceeds shall be payable to Lessee, and Lessee shall either: a) Within ninety(90) days after payment of the insurance proceeds, commence restoration of the buildings and improvements to their condition prior to such damage, provided, however, that Lessee's obligation to restore will be limited to the insurance proceeds available to Lessee; or b) Apply such insurance proceeds first to the cost of removal of the damaged or destroyed buildings, including any debris or other nuisance occasioned by the damage or destruction, and restore the Leased Land to a grade and condition similar to its grade and condition prior to the construction of the buildings or improvements thereon. Insurance proceeds remaining after the removal of damaged or destroyed buildings and other improvements, and restoration of the Leased Land to grade and condition satisfactory to the City may be applied to any indebtedness owed by Lessee to any lender named as beneficiary under any Deed of Trust recorded against the Lessee's interest, in order of priority of recordation. c) Regardless of whether Lessee elects to proceed under a) or b), above, all insurance proceeds shall be deposited and held in trust with a bank having offices in Seward and/or Anchorage, Alaska, as Lessee may designate, or with Lessee's mortgagee named in a Deed of Trust granting such mortgagee a beneficial interest in the damaged property, and shall be made available to Lessee for its use in either restoring or repairing any damaged or destroyed buildings or improvements on the Leased Land, or removing the damaged or destroyed buildings or improvements and restoring the Leased Land to a grade and condition of reasonable satisfaction to the City. The proceeds of insurance shall be paid out by such bank or mortgagee from time to time, on certifications, by the person having supervision of the work, that the amount certified is being applied to the payment of the reasonable costs of such work. Should the Lessee elect not to restore and repair damaged buildings and improvements on the Leased Land, all insurance proceeds remaining after removal of damaged and destroyed buildings and improvements, and restoration of the Leased Land, may be applied to any indebtedness by Lessee to any lender named as beneficiary under any Deed of Trust recorded against the Lessee's interest, in order of priority of recordation, after receipt of written satisfaction from the City of the restoration of the Leased Land. In the event Lessee elects not to restore and repair when substantial damage or destruction has occurred to the buildings and improvements,this Lease shall terminate, and all Lessee's obligations hereunder shall expire, upon the date that the City certified in writing its satisfaction with the restoration of the Leased Land. 4817-1371-2460v.14 0022769-000022 19 435 ARTICLE 16 - CONDEMNATION If all or any part of the Leased Land is condemned for a public use by any government agency or other duly authorized entity, CITY and LESSEE shall each make a claim against the condemning or taking authority for the amount of any damage incurred by or done to them respectively as a result of the taking. Neither LESSEE nor CITY shall have any rights in or to any award made to the other by the condemning authority;provided, that in the event of a single award to CITY which includes specific damages for loss of LESSEE's leasehold interest, CITY shall transmit to LESSEE the amount of such specific damages so found, if any or to LESSEE's Lender if required by a Security Instrument. If part but not all of the Leased Land is condemned for public use, LESSEE shall make a good faith determination as to whether or not the taking of the part of the Leased Land designated for condemnation will prevent it from continuing to operate on the Leased Land. If LESSEE determines in good faith that the condemning of such part of the Leased Land will prevent it from continuing to operate on the Leased Land, LESSEE may notify CITY in writing to this effect, and this LEASE shall then be terminated for all purposes effective fifteen (15) days from the date LESSEE sends such notice to CITY, or at such other later date as LESSEE shall specify in its notice, and such termination shall be treated in the same manner as a termination at the expiration of the term of this LEASE. LESSEE shall, as a condition precedent to such termination, remove all encumbrances, debts, and liens to which the Leased Land is subject. If at the time of such partial taking for public use, LESSEE determines that such partial taking will not prevent it from continuing to operate, then LESSEE and CITY shall negotiate an equitable and partial abatement of the rent beginning to be effective on the actual date when LESSEE is effectively prevented from utilizing the condemned land. ARTICLE 17 -ARBITRATION 17.1 Arbitration. a) Disputes between the parties with respect to the performance of this LEASE that cannot be resolved by the parties,may be submitted to an independent arbitrator for a settlement pursuant to the provisions of the Alaska Uniform Arbitration Act (AS 09.43.010 et. sec.), as it now exists or may hereafter be amended from time to time, and judgment on the award may be entered in any Superior Court in the State of Alaska. Either party may submit to the other party a request for arbitration and the party receiving a request shall have twenty (20) days to consent, in writing, to the use of arbitration to resolve the dispute. Failure of either party to consent will preclude the use of arbitration for that dispute. The costs and expenses of arbitration shall be shared equally by the parties, and each party shall bear its own attorney's fees and costs. b) Arbitration procedures shall be applicable only to contract, negligence, and similar claims arising from or related to this LEASE, and shall not be used to resolve or determine any claim based upon fraud, intentional misrepresentation,nor any claim based on conduct that is a felony crime in the State of Alaska. 4817-1371-2460v.14 0022769-000022 20 436 c) Arbitration of any dispute or claim shall be determined by a single arbitrator selected from a list of not less than five (5) arbitrators obtained from the presiding Superior Court Judge or other appropriate judicial officer in Anchorage, Alaska. The arbitrator shall be a person who (a) has not less than five (5) years legal experience in the State of Alaska prior to appointment; and (b) such legal experience includes substantial experience with long-term commercial real property transactions. Each party shall be provided with a copy of the list and shall be afforded a maximum of ten (10) working days to become familiar with the qualifications of the prospective arbitrators. The arbitrator shall be selected by each party, commencing with the party demanding the arbitration, striking one name from the list until only a single name remains. d) Arbitration hearings shall be conducted in Anchorage,Alaska or such other location as the parties may agree. Each party shall produce at the request of the other party, at least thirty(30) days in advance of such hearing, (i)the names, addresses, phone numbers, and email addresses for all witnesses who may testify at the hearing; and (ii) all documents to be submitted at the hearing and such other documents as are relevant to the issues or likely to lead to relevant information. e) In deciding the claim or dispute, the arbitrator shall follow applicable Alaska law, and the written decision shall be supported by substantial evidence in the record. Failure to apply Alaska law, or entry of a decision that is not based on substantial evidence in the record, shall be additional grounds for modifying or vacating an arbitration decision. ARTICLE 18 -MAINTENANCE AND REPAIRS 18.1 Normal Maintenance. During the entire term of this LEASE and every extension hereof, if any, LESSEE shall, at LESSEE's sole cost, risk and expense, maintain the Leased Land, including any improvements placed thereon by LESSEE, in as good condition as received or constructed by LESSEE, subject to normal, non-abusive use. CITY, at CITY's sole option and expense,may,prior to the commencement of construction by LESSEE,perform maintenance and preventative work on the Leased Land, exclusive of improvements placed thereon by LESSEE, in order to prevent erosion, mitigate damage to plants and animals, or prepare the Leased Land for eventual development by LESSEE or others by grading, filling, or contouring the Leased Land. Any such work performed by CITY shall be at CITY's sole expense and risk unless LESSEE agrees, in advance and in writing, to share such expense and risk. LESSEE shall maintain in first class condition at all times all fire, pollution, and other protective equipment, if any are placed on Leased Land. 18.2 Safety Issues. CITY may notify LESSEE in writing of any deficiencies in the performance of LESSEE's maintenance responsibilities as they relate to public health or safety and LESSEE shall promptly within thirty (30) days of receipt of such notice advise CITY in writing of its proposed schedule for performance of any work necessary to cure such deficiencies. 4817-1371-2460v.14 0022769-000022 21 437 If such deficiencies relate to the safety of LESSEE's operation such that the surrounding land and port facilities are exposed to risk, unnecessary potential hazards, or a risk to the public interest (as distinguished from a business risk), or if CITY is not satisfied with the proposed schedule of repairs either because of the delays therein or the scope of the repairs, then CITY may engage an independent engineering consultant well-versed and experienced who shall furnish to CITY a comprehensive survey and report for the purpose of establishing both the need and urgency to perform such maintenance work. As soon as practicable following receipt of said engineer's determinations and recommendations, if the report requires repair then LESSEE shall pay the cost of the report and perform such work in accordance therewith at LESSEE's cost, risk, and expense. 18.3 Cost of Repairs. Should LESSEE dispute the necessity of any maintenance work as being necessary or advisable or reasonable to protect the public facilities on adjacent land, it may submit the matter to arbitration; provided, however, that pending the decision of the arbitrator it shall fully comply with the maintenance requests. If an arbitration award should ultimately find that the repairs were not necessary, then LESSEE may either deduct from future rental payments the cost of such repairs or be reimbursed therefor. In deciding whether repairs requested by CITY or required by an engineering report are necessary, the arbitration panel is to give primary consideration to the safety and welfare of the Seward port facilities and the citizens of Seward in light of the highest standards in the industry. If any facility or service provided by CITY to the Leased Land shall become inadequate due to changes in environmental control standards or should any facility require updating or improvement by reason of a change in LESSEE's use of the Leased Land or operations therefrom, LESSEE shall either construct such improvements at LESSEE's own cost or reimburse CITY for such work at the option of CITY. ARTICLE 19 -ENVIRONMENTAL CONCERNS 19.1 Hazardous Materials. a) Condition of Site. LESSEE has had full opportunity to examine the site for the presence of any Hazardous Material and accepts the site in "as is" condition. LESSEE may elect, at LESSEE's sole cost, to conduct a baseline soils test prior to execution of this LEASE. b) Release of CITY. Any other provision of this LEASE to the contrary notwithstanding, LESSEE releases CITY from any and all claims, demands, penalties, fines, judgments, liabilities, settlements, damages, costs, or expenses (including, without limitation, attorney's fees, court costs, litigation expenses, and consultant and expert fees) arising prior to, during, and after the term of this LEASE, and resulting from the use, keeping, storage, or disposal of Hazardous Material on the Leased Land by LESSEE or its predecessors in interest, or arising out of or resulting from LESSEE's operations at the Leased Land or the operations of its predecessors in interest at the Leased Land except for those claims arising out 4817-1371-2460v.14 0022769-000022 22 438 of CITY's sole negligence or intentional misconduct. This release includes,without limitation, any and all costs incurred due to any investigation of the Leased Land or any cleanup,removal, or restoration mandated by a federal, state, or local agency or political subdivision or by law or regulation. c) Use of Hazardous Materials on the Site. i) LESSEE shall not cause or permit any Hazardous Material to be brought upon, kept, or used in or about the Leased Land except for such Hazardous Material as is necessary to conduct LESSEE's authorized use of the Leased Land. ii) Any Hazardous Material permitted on the Leased Land as provided in this paragraph, and all containers therefor, shall be used, kept, stored, and disposed of in a manner that complies with all Environmental Laws or other laws or regulations applicable to such Hazardous Material. iii) LESSEE shall not discharge, leak, or emit, or permit to be discharged, leaked, or emitted, any material into the atmosphere, ground, ground water, sewer system, or any body of water, if such material (as reasonably determined by the City, or any governmental authority)does or may,pollute or contaminate the same, or may adversely affect the (a)health, welfare, or safety of persons, whether located on the Leased Land or elsewhere; or (b) condition, use, or enjoyment of the Leased Land or any other area or personal property. iv) LESSEE hereby agrees that it shall be fully liable for all costs and expenses related to the use, storage, and disposal of Hazardous Material kept or brought on the Leased Land by LESSEE, its authorized representatives and invitees, and LESSEE shall give immediate notice to CITY of any violation or potential violation of the provisions of this subparagraph. d) Indemnification of CITY. Any other provision of this LEASE to the contrary notwithstanding, LESSEE shall defend, indemnify, and hold CITY harmless from and against any claims, demands, penalties, fines, judgments, liabilities, settlements, damages, costs, or expenses (including, without limitation, attorney, consultant and expert fees, court costs, and litigation expenses)of whatever kind or nature, known or unknown, contingent or otherwise, arising out of or in any way related to: i) The presence,disposal,release, or threatened release of any such Hazardous Material which is on or from the Leased Land, soil, water, ground water, vegetation, buildings, personal property, persons, animals, or otherwise; 4817-1371-2460v.14 0022769-000022 23 439 ii) Any personal injury(including wrongful death) or property damage(real or personal) arising out of or related to such Hazardous Material or any use of the Leased Land; iii) Any lawsuit brought or threatened, settlement reached,or government order relating to such Hazardous Material or any use of the Leased Land; and/or iv) Any violation of any laws applicable thereto; provided, however, that this Section 19.1(d) shall apply only if the acts giving rise to the claims, demands, penalties, fines, judgments, liabilities, settlements, damages, costs, or expenses (1) occur prior to or during the term of this LEASE; and (2) arise, in whole or in part, from the use of, operations on, or activities on the Leased Land by LESSEE or LESSEE's predecessors in interest, employees, agents, invitees, contractors, subcontractors, authorized representatives, subtenants, or any other persons. The provisions of this subparagraph shall be in addition to any other obligations and liabilities LESSEE may have to CITY at law or equity and shall survive the transactions contemplated herein and shall survive the termination of this LEASE. e) Operator. For all purposes, LESSEE shall be deemed the operator of any facility on the Leased Land. f) Hazardous Material Defined. As used in this LEASE, Hazardous Material is any substance which is toxic, ignitable, reactive, or corrosive or which is regulated by any Environmental Law. Hazardous Material includes any and all material or substances which are defined as industrial waste, hazardous waste, extremely hazardous waste, or a hazardous substance under any Environmental Law. Notwithstanding any statutory petroleum exclusion, for the purposes of this LEASE, the term Hazardous Material includes, without limitation, petroleum, including crude oil or any fraction thereof, petroleum soaked absorbent material, and other petroleum wastes. g) Environmental Law Defined. As used in this LEASE,Environmental Laws include any and all local, state, and federal ordinances, statutes, and regulations, as now in force or as may be amended from time to time, relating to the protection of human health and the environment, as well as any judgments, orders, injunctions, awards, decrees, covenants, conditions, or other restrictions or standards relating to same. Environmental Laws include, by way of example and not as a limitation of the generality of the foregoing, Alaska Statutes Title 46, the Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Clean Water Act, and the Superfund Amendments and Reauthorization Act of 1986. 19.2 Permits and Reporting. 4817-1371-2460v.14 0022769-000022 24 440 a) Permits Required by Other Governmental Agencies. LESSEE shall obtain all permits or approvals required by any applicable law or regulation. Copies of all such permits shall be provided to CITY prior to LESSEE commencing work under this LEASE. LESSEE shall promptly make all reports to any federal, state, or local government or agency required by any permit or Environmental Law, including reports of any spill or discharge of Hazardous Material. The CITY, through the City Manager,may order LESSEE to immediately cease any operations or activities on the Leased Land if the same is being carried out without necessary permits, in violation of the terms of any permit or Environmental Law, or contrary to this LEASE. b) Correspondence With and Reports to Environmental Agencies. LESSEE shall immediately (the same or the next business day) provide CITY with copies of all correspondence and notice, including copies of all reports between LESSEE and any state, federal, or local government or agency regulating Hazardous Material which relates to LESSEE's operations on or use of the Leased Land. ARTICLE 20 -ESTOPPEL CERTIFICATES Either party shall at any time and from time to time upon not less than ten (10) days'prior written request by the other party, execute, acknowledge, and deliver to such party, or to its designee, a statement in writing certifying that this LEASE is unamended and in full force and effect (or, if there has been any amendment thereof, that the same is in full force and effect as amended and stating the amendment or amendments), that there are no defaults existing (or, if there is any claimed default, stating the nature and extent thereof), the remaining term of this LEASE and any extensions hereto, stating the dates to which the rent and other charges have been paid in advance, and such other information as may be reasonably requested by the requesting party and, where the requesting party is the LESSEE, include such other provisions as a prospective assignee of the LES SEE's interest in this LEASE or a prospective leasehold mortgagee would reasonably request. ARTICLE 21 - CONDITIONS AND COVENANTS All the provisions of this LEASE shall be construed to be "conditions" as well as "covenants," as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. ARTICLE 22 -NO WAIVER OF BREACH No failure by either CITY or LESSEE to insist upon the strict performance by the other of any term, covenant, or condition of this LEASE or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or of such terms, covenants, or conditions. No waiver of any breach shall affect or alter this LEASE, but each and every term, covenant, and condition of this LEASE shall continue in full force and effect with respect to any other than an existing or subsequent breach. 4817-1371-2460v.14 0022769-000022 25 441 ARTICLE 23 - TIME OF THE ESSENCE Time is of the essence of this LEASE and of each provision. ARTICLE 24 - COMPUTATION OF TIME The time in which any act provided by this LEASE is to be done by shall be computed by excluding the first day and including the last,unless the last day is a Saturday, Sunday,or a holiday, and then it is also excluded. ARTICLE 25 - SUCCESSORS IN INTEREST Each and all of the terms,covenants, and conditions in this LEASE shall inure to the benefit of and shall be binding upon the successors in interest of CITY and LESSEE. ARTICLE 26 -ENTIRE AGREEMENT This LEASE contains the entire agreement of the parties with respect to the matters covered by this LEASE, and no other agreement, statement, or promise made by any party which is not contained in this LEASE shall be binding or valid. ARTICLE 27 - GOVERNING LAW This LEASE shall be governed by, construed, and enforced in accordance with the laws of the State of Alaska. The terms of this LEASE are subject in all respects to the Charter and Code of Ordinances of CITY in effect on the date of this LEASE, and as they may be hereafter amended, including, without limitation, Chapter 7.05 of the Seward City Code. ARTICLE 28 -PARTIAL INVALIDITY If any provision of this LEASE is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated. ARTICLE 29 -RELATIONSHIP OF PARTIES Nothing contained in this LEASE shall be deemed or construed by the parties or by any third person to create the relationship of principal and agent or of partnership or of joint venture or of any association between CITY and LESSEE; and neither the method of computation of rent, nor any other provisions contained in this LEASE, nor any acts of the parties, shall be deemed to create any relationship between CITY and LESSEE other than the relationship of lessee and lessor. ARTICLE 30 -INTERPRETATION 4817-1371-2460v.14 0022769-000022 26 442 The language in all parts of this LEASE shall in all cases be simply construed according to its fair meaning and not for or against CITY or LESSEE as both CITY and LESSEE have had the opportunity to seek assistance of counsel in drafting and reviewing this LEASE. ARTICLE 31 - CAPTIONS Captions of the articles,paragraphs, and subparagraphs of this LEASE are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction, or meaning of the provisions of this LEASE. ARTICLE 32 -AMENDMENT This LEASE is not subject to amendment except in writing executed by both parties hereto. ARTICLE 33 -NOTICES All notices, demands, or requests from one party to another shall be delivered in person or be sent by mail, certified or registered, postage prepaid, to the addresses stated in this Article and to such other persons and addresses as either party may designate. Notice by mail shall be deemed to have been given at the time of mailing. All notices, demands, and requests from LESSEE to CITY shall be given to CITY at the following address: City Manager CITY OF SEWARD PO Box 167 Seward,Alaska 99664 All notices, demands or requests from CITY to LESSEE shall be given to LESSEE at the following address: Seward Fisheries P.O. Box 8 Seward,Alaska 99664 Attn: Plant Manager With a copy to: Icicle Seafoods, Inc. c/o Cooke Aquaculture, Inc. 40 Wellington Row Saint John,New Brunswick E2L 31-13 Attn: Chief Legal Officer Each party shall have the right, from time to time,to designate a different address by notice given in conformity with this Article. 4817-1371-2460v.14 0022769-000022 27 443 ARTICLE 34- FIRE PROTECTION FOR LEASED LAND LESSEE shall at its sole cost, risk and expense provide fire detection and protection to its operations on the Leased Land and fire prevention to industry standards for risks to adjacent facilities such that those risks are minimized. LESSEE shall continue to provide and maintain industry accepted standards of fire protection such that the City of Scward's ISO rating is not degraded by reason of L 1:,:5S --E'S olicnition. The parties agree that with the rapid expansion of technolo,�}, 'n the field of fire prcvcrLt1oiL and control LESSEE's obligations hereunder may vary during the term of this LEASE and CITY may submit LESSEE's compliance with its obligation hereunder to arbitration not more frequently than once each five years. IN WITNESS WHEREOF, the parties hereto have set their hands and seals the dates herein set forth. CITY: LESSEE; CITY OF SEWARD ICICL SEAFOODS, INC By: By: f Jim Hunt, City Manager John W o , Chief Operating Officer Date: Date 07 ATTEST: Johanna Kinney, CMC City Clerk STATE OF ALASKA ) ss.. TI IIRD JUDICIAL DISTRICT } The f6l'cLo'1n,-, 1I1AI'LITIM11 SELLS ackTi0 ,,\lcdvcd before me this day of _ . 2 018. hy J i in 11 L.nt. C its Manager of the City of Seward, Alaska, on behalf of the City. Notary Public in and for Alaska My Commission Expires: STATE OF ALASKA ) ss. 4817-1371-2460v.14 0022769-000022 78 444 THIRD TUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this 7Aday of .finer 2018, by John Woodruff, Chief Operating Officer,who executed the foregoing document on behalf of Icicle Seafoods, Inc., a corporation, and affirmed such act to be the free and voluntary act of such corporation for the uses and purposes mentioned in the instrument. . NOTRR�, r + Notary Public�inan��forlasa y o r AU �tC 4 My Commission Expires: 44/&r� t _ 4817-1371-2460v,14 0022769-000022 29 445 EXHIBIT A Copy of Plat No. 96-28 th ."F n � In SO 1 I w c I � � I „ ,, M. 1III .,,.. al S rF t° 4817-1371-2460v.14 0022769-000022 30 446 ASSIGNMENT AND ASSUMPTION OF LKAASE Seward, Alaska (City of Seward—Lots 2A and 3A,Block 2,Plat No. 96-28)) This Assignment and Assumption of Lease ("Assignment") is made and entered into as of the Contribution Date(as such term is defined in the Contribution Agreement defined below), and is by and between Icicle Seafoods, Inc., an Alaska corporation (hereinafter "Icicle") and OBI Seafoods, LLC, an Alaska limited liability company(hereinafter"Assignee"). RECITALS A. Icicle and Ocean Beauty Seafoods LLC, an Alaska limited liability company (hereinafter "OBS") formed Assignee on May 21, 2019 and have executed an Operating Agreement for Assignee (the "Operating Agreement"). B. Icicle and OBS are the sole members of Assignee, and each of Icicle and OBS own fifty percent(50%) of the issued and outstanding membership interests of Assignee. C. IcicIe, OBS and Assignee are parties to that certain Contribution Agreement dated as of substantially even date (the "Contribution Agreement") pursuant to which IcicIe and OBS are,inter alia, contributing certain assets to Assignee and leasing to Assignee certain real property owned by Icicle, OBS or a subsidiary of Icicle. D. The Contribution Agreement also requires Icicle to assign and/or sublease its interest under various leases and agreements to Assignee. E_ Icicle and the City of Seward, a home rule municipality("Lessor"), are the parties named in that certain Amended and Restated Lease Agreement dated July 25, 2018 ("Seward Ground Lease"), the term of which expires on December 31, 2038 subject to two (2) extension options of five (5) years each, a copy of which is attached hereto as Exhibit A. F. Pursuant to Section 12.3 of the Seward Ground Lease, Icicle is not required to obtain the Lessor's prior written consent to this Assignment because OBI is an entity in which Icicle maintains a substantial membership interest. ASSIGNMENT AND ASSUMPTION For and in consideration of the consummation of the transactions specified in the Contribution Agreement and in order to consummate such transactions as required by the Contribution Agreement, Icicle and Assignee enter into and execute this Assignment. 1. Icicle hereby transfers,grants,conveys and assigns to Assignee all of Icicle's rights, title and interest in, to and under the Lease. 2. Assignee hereby accepts the assignment of the Lease and shall be entitled to all of the rights and benefits accruing to the tenant thereunder arising, and hereby fully and forever assumes and agrees to perform any and all of Icicle's obligations, duties, undertakings and Assignment and Assumption of Lease(City of Seward—Lots 2A and 3A, Block 2, Plat No. 96-28)— I 4811-8968-4924v.1 0022769-000026 447 liabilities of any kind whatsoever arising under the Lease on or after the Contribution Date,as fully and completely as if Assignee was the originally named tenant thereunder. 3. Pursuant to the provisions of the Lease, Icicle shall remain liable and responsible to the Lessor under the Lease at all times; provided that nothing in the foregoing statement prohibits Icicle from taking action against Assignee to recover any damages incurred by Icicle after the Contribution Agreement arising from or in any way related to Assignee's nonperformance under the Lease. 4. This Assignment may be terminated by the mutual agreement of the parties at any time. In addition, this Assignment may be terminated at any time by Icicle upon the occurrence of any of the following events: (a) Lessor declares Assignee or Icicle to be in default under the Lease, (b)Assignee fails to make any payment due under the Lease to the party entitled to receive such payment under the terms hereof,(c)the expiration or sooner termination of the Lease without the renewal thereof by Icicle and the Lessor, (d) the dissolution of Assignee, (e) the transfer of Icicle's interest in Assignee, or (f) the occurrence of an event described in the Contribution Agreement or Operating Agreement as one that results in the termination of this or any other real property lease, assignment or sublease between Icicle and Assignee. Upon the termination of this Assignment for reasons other than (c), above, Icicle shall be obligated to perform all duties and obligations, and shall have all the rights as the tenant,under the Lease. 6. This Assignment shall inure to the benefit of, and be binding upon,the respective legal representatives, successors, and assigns of the parties hereto. Capitalized tenors not defined herein shall have the means set forth in the Contribution Agreement. [signatures on following page] Assignment and Assumption of Lease(City of Seward—Lots 2A and 3A, Block 2, Plat 96-28)-2 4811-8968.4924v.1 0022769-000026 448 DoruSign Envelope ID:2F1DOA69-D24D-4883-, ;-F1559F3G4CF7 ICICLE SEAFOODS,INC. OBI SEAFOODS, LLC OocuSigned f - � by: 2ACDOACUSIg ned by: By: � �a(�t,r Y KF3717i 1(f7FC41R By. Name: Glenn B. Cooke Name: Mark Palmer Title: President Title: Chief Executive Officer Date: June 1, 2020 Date: June 1, 2020 Assignment and Assumption of Lease(City of Seward—Lots 2A and 3A,Block 2,Plat No, 96-28)-3 449 After recording in the Seward Recording District, Return to: City of Seward P.O- Box 167 Seward, AK 99664 AMENDMENT TO AMENDED AND RESTATED LEASE AGREEMENT This Amendment to Amended and Restated Lease Agreement ("Amendment") is dated and effective as of the last date of signature set forth below and is by and between the City of Seward, Alaska ("City"), a municipal corporation located in the Kenai Peninsula Borough, State of Alaska whose mailing address is P.O. Box 167, Seward, Alaska 99664, as the lessor,Icicle Seafoods Inc.("Icicle"),an Alaska corporation whose mailing address is P.O. Box 79003, Seattle, WA 98119, as the original lessee, and OBI Seafoods, LLC, ("OBI", and, collectively with City and Icicle, the "Parties"), an Alaska limited liability company, whose address is P.O. Box 70739, Seattle, WA 98127, as the current lessee. This Amendment amends that certain Amended and Restated Lease Agreement dated as of July 25, 2018 ("Lease") made of record by a Memorandum of Amended and Restated Lease recorded on September 6, 2018 as Reception No. 2018-000888-0, records of the Seward Recording District, Third Judicial District, State of Alaska and re-recorded on September 7, 2018, as Reception No. 2019-000895-0, records of the Seward Recording District, Third Judicial District, State of Alaska. WHEREAS, Icicle and the City entered into the Lease pursuant to which the City leased the following legally described land ("Leased Land") to Icicle: Lots 2A and 3A, Block 2, MARINE SUBDIVISION, BLOCK TWO REPLAT, as shown on Plat 96-28, Seward Recording District, Third Judicial District, State of Alaska, consisting of approximately 4.93 acres or 214,804 square feet, more or less (Tax Parcel ID 145-240-15-LHO1); WHEREAS, pursuant to the authority granted to Icicle in Section 12.3 of the Lease, on or about June 1, 2020, Icicle entered into an Assignment and Assumption of Lease ("Assignment") with OBI pursuant to which all of Icicle's rights, duties and obligations set forth in the Lease were assigned to, and assumed by, OBI; 4887-9135-9496v_7 0022769-000022 450 WHEREAS, Section 12.3 of the Lease provides that Icicle remains obligated under the Lease notwithstanding the Assignment; WHEREAS, on or about January 14, 2019, Icicle discovered a leak estimated to contain nine(9)gallons of fuel("Spill")from a fitting on an approximately four hundred(400) gallon above ground storage tank ("AST") which supplied a blend of approximately seventy percent (70%) reclaimed used oil and thirty percent (30%) diesel fuel to two boilers located in improvements on the Leased Land; WHEREAS, Icicle timely reported the Spill to the State of Alaska, Department of Environmental Conservation ("Alaska DEC") and has been working diligently with its consultant, Shannon & Wilson, Inc. ("S&W") to investigate the Spill, clean up the Spill and monitor the impact of the Spill on the Leased Land in accordance with all applicable legal requirements under the oversight of the Alaska DEC; WHEREAS, Alaska DEC has identified the Site as the Icicle Seafoods Seward Facility, Alaska ADEC File 92332.38.051 (the "Contaminated Site"); WHEREAS, Icicle removed the AST and approximately 10 cubic yards of impacted soil as part of its response action,but additional excavation activities were deemed not feasible due to the restricted space and the integrity of adjacent structure foundations,and some portion of the Spill may remain on the Leased Land under the foundation, footings and floor of improvements located on the Leased Land(such portion of the Spill, if any exists, hereinafter the "Residual Contamination"); WHEREAS, the Parties and Alaska DEC recognize the economic inefficiencies created if the Alaska DEC were to require the existing improvements to be destroyed in order to perform more investigation and possible clean-up activities to remove the Residual Contamination on the Leased Land; WHEREAS, in the spirit of cooperation, the Alaska DEC has required an Environmental Covenant complying with Alaska Statute 46.04.300-46.04.390, adopting the Uniform Environmental Covenants Act, recorded on , 2023, as Reception No. 2023- ,records of the Seward Recording District,Third Judicial District, State of Alaska containing institutional controls, including installation of a concrete cap at the Contaminated Site (the"Cap"), restrictions on the use of the ground water, inspection and reporting requirements, and limitations on uses of the Leased Land as an alternative to requiring the improvements to be destroyed in order to determine the existence of the Residual Contamination; WHEREAS, after recordation of the Covenant, the Alaska DEC is expected to designate the Contaminated Site as "Cleanup Complete with Institutional Controls"; and 2 4887-9135-9496v 7 0022769-000022 451 WHEREAS, the Parties wish to enter into this Amendment for the purposes of evidencing their consent to the recordation of the Covenant and to allocate the responsibilities set forth in the Covenant. NOW,THEREFORE,for and in consideration of the mutual promises and covenants hereinafter contained,the Parties agree as follows: I. The City, as the owner of the Leased Land, executed the Covenant as the Grantor, and OBI, as the current lessee, executed the Covenant as a holder. Because Icicle remains obligated under the Lease notwithstanding the Assignment, Icicle executed the Covenant as an additional Holder. Icicle is recording the fully executed Covenant in the records of the Seward Recording District, Third Judicial District, State of Alaska immediately prior to the recordation of this Amendment. icicle shall provide a conformed copy of the recorded Covenant to the City, OBI and the Alaska DEC not more than ten (10)business days after the Covenant is recorded. 2. If the Alaska DEC requires the State of Alaska, Department of Revenue ("Alaska DOR")to subordinate the deed of trust granted to the Alaska DOR to secure Icicle's obligations to pay fish related taxes assessed under Title 43 of the Alaska Statutes,which deed of trust was recorded in the Seward Recording District on December 15, 2015 as Reception No.2015-001368-0 and amended by instrument recorded on December 17,2015 as Reception No. 2015-001378-0, Icicle shall be responsible for obtaining such subordination or otherwise resolving the issue of priority to the satisfaction of the Alaska DEC and the Alaska DOR. OBI and the City hereby consent to the recordation of any documents related to resolve the priority issue between the Alaska DEC and the Alaska DOR. 3. Except as set forth in this Section 3, Icicle is responsible for the performance of all obligations set forth in the Covenant that are stated to be a duty of the City, OBI or both, and Icicle shall remain responsible for such performance notwithstanding the termination of the Lease. So long as OBI is operating the facility located on the Leased Land, OBI agrees to (i)cooperate with Icicle and all consultants hired by Icicle to perform the obligations set forth in the Covenant, (ii) allow Icicle and all consultants hired by Icicle to have access to the Leased Land as necessary to perform the duties and obligations set forth in the Covenant, (iii) post signs provided by Icicle at each end of the concrete cap setting forth the telephone number of Icicle and a request for persons to call that number when damage to the Cap is noticed, and (iv) inspect and annually provide Icicle with photos of the signs and Cap taken during the fourth quarter of each calendar year. The City agrees to release Icicle from the obligations set forth in this Amendment upon the first to occur of the following: (a) the specific and express assumption of Icicle's obligations described in this Amendment by a lessee other than Icicle in the form of an amendment to the Lease, 3 4887-9135-9496v.7 0022769-000022 452 a modification to the Lease, an amendment and restatement of the Lease, a new lease, or an agreement comparable to any of the foregoing; or (b) the Alaska DEC's agreement to terminate the Covenant evidenced by the recordation of a termination or similar document in the official records of the Seward Recording District, Third Judicial District, State of Alaska. 4. The Parties acknowledge and agree that if the improvements located on the Leased Land that currently prevent Icicle from investigating and, to the extent necessary, remediating the Residual Contamination are ever destroyed before the occurrence of the conditions set forth in Section 3(a) or Section 3(b), above, and such destruction allows the economically feasible investigation and, to the extent necessary, remediation of the Residual Contamination to meet applicable cleanup levels, Icicle will obtain the permission of the City and the current lessee of the Leased Land (which permission shall not be unreasonably withheld, conditioned or delayed), investigate the Residual Contamination as Icicle deems reasonable and necessary, and, if economically feasible, remediate the Residual Contamination to meet applicable cleanup levels. Icicle shall request a termination of the Covenant from the Alaska DEC upon completion of the foregoing activities. 5. The City hereby consents to Icicle's construction of an impermeable cap in the form of a concrete slab on a portion of the Leased Land at a location approved by the Alaska DEC. 6. Any and all reports any party provides to the Alaska DEC in connection with the activities described in this Agreement shall also be provided to the other parties hereto at substantially the same time so long as any such party is an owner, lessee or occupant of the land. 7. The occurrence of the Spill or the existence of the Residual Contamination or the recording of the Covenant shall not be taken into account when an appraiser calculates the Fair Market Rental Value pursuant to the provisions of Article 3 of the Lease for purposes of Rental Adjustments. 8. Nothing in this Amendment modifies Icicle's or OBI's obligations under Article 7 and Article 4.2(a) and Article 19 of the Lease with respect to the Spill. 9. Except as set forth in this Amendment, the Lease, as assigned, remains in full force and effect- [signatures on following page] 4 4887-9135-9496v.7 0022769-000022 453 IN WITNESS WHEREOF,the parties hereby have sent their hand and seals the dates herein set forth. CITY OF SEWARD ATTEST: By: By: Norm Regis, Interim City Manager Brenda Ballou, City Clerk Date: STATE OF ALASKA ) ss. THIRD JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this day , 2023 by Norm Regis, Interim City Manager of the City of Seward, Alaska on behalf of the City. Notary Public in and for Alaska My Commission expires: 5 4887-9135-9496v.7 0022769-000022 454 ICICLE SEAFOODS, INC. By: —(; , XAQ Name: C.OoreA4acKinnon Title: Chief Legal Officer Date: May 19,2023 PROVINCE OF NEW BRUNSWICK ) ss. The foregoing instrument was acknowledged before me this I day of , 2023 by rojr-% L;�.�.� , the '�Cj' c _ of Icicle Seafoods, Inc. on behalf of the corporation. 111u�lpi Notary Public ir��, �1 LtQ�l ,nswick Residing at: �, My Commis 'psi 4 ti PUBLIC !!/11VI171/iNt� 6 4887-9135-9496v 7 0022769-000022 455 OBI SEAFOODS, LLC Name: Title: Date: STATE OF WASHINGTON ) ss. COUNTY ) The fore oing instrument was acknowledged before me this `� day of �+ , 2023 by -yUv\ V2o5S , the of OBI Seafoods, LLC on behalf of the limited liability company. Notary Public ' and for Washington Residing at: q 00 � '- My Commission expires: i ASHLEY R. MILLER NOTARY PUBLIC STATE OF WASHINGTON I License Number21006569 MY Commission Expires 01/15/2025 4887-9135-9496v.7 0022769-000022 456 After Recordin2 in the Seward Recording District,Return to: City of Seward P.O. Box 167 Seward, AK 99664 Attention: City Attorney TI S RI W SEC 3 SEWARD MERIDIAN ENVIRONMENTAL COVENANT Grantor: City of Seward P.O. Box 167 Seward, AK 99664 Grantees: OBI Seafoods, LLC ("OBI") /Holders P.O. Box 70739 Seattle, WA 98127 Icicle Seafood, Inc. ("Icicle") P.O. Box 79003 Seattle, Washington 98119 Check the following. X Original Covenant Amendment of Covenant RECITALS I. This document is an environmental covenant (hereafter "Covenant") executed pursuant to AIaska Statute (AS) 46.04.300-46,04.390, the Act adopting the Uniform Environmental Covenants Act(hereafter, "the Act")and Title 18 of the Alaska Administrative Code (AAC) 75.325-390, Site Cleanup Rules, II. This Covenant subjects the Property to certain activity and use limitations and requires the Grantor to comply with those limitations as set forth herein and in accordance with the Act. The applicable activity and use limitations are described in this Covenant and are necessary to protect human health, safety, welfare or the environment and to ensure the integrity of the cleanup remedy conducted at the site. 4864-0423-9336v.6 0022769-000022 457 Environmental documents pertaining to the cleanup are available from the Alaska Department of Environmental Conservation (ADEC or"Department") at the Contaminated Sites Program Website at htt ://dee.alaska.2ov/s ar/eS /. III. The Property that is the subject of this Covenant is part of all of a site commonly known as: ADEC Site Name: Icicle Seafoods Seward Facility ADEC Hazard ID: 27085 Site Address: 601 Port Avenue, Seward, AK 99664 This Property is situated in Seward, Alaska, and shown on the site map attached as Appendix A, and legally described as: Lots 2A and 3A, Block 2, MARINE SUBDIVISION, BLOCK TWO REPLAT, as shown on Plat 96-28, Seward Recording District, Third Judicial District, State of Alaska, consisting of approximately 4.93 acres or 214,804 square feet, more or less (Tax Parcel. ID 145-240-15-LHO1). The Property has been leased to Icicle for many years, most currently under the terms set forth in an Amended and Restated Lease Agreement dated as of July 25, 2018 (the "Lease"). The Lease was made of record by a Memorandum of Amended and Restated Lease recorded on September 6, 2018 as Reception No.2018-000888-0,records of the Seward Recording District, Third Judicial District, State of Alaska and re-recorded on September 7,2018 as Reception No.2018-000895-0,records of the Seward Recording District, Third Judicial District, State of Alaska. Pursuant to Section 12.3 of the Lease, on or about June 1, 2020, Icicle entered into an Assignment and Assumption of Lease ("Assignment") with OBI pursuant to which all of Icicle's rights, duties and obligations set forth in the Lease were assigned to,and assumed by, OBI. Section 12.3 of the Lease provides that Icicle remains obligated under the Lease notwithstanding the Assignment, and Icicle further retained all responsibilities related to the environmental response project described in this Covenant pursuant to separate agreements with OBI. OBI is the current occupant of the improvements located on the Property and operates the fish processing facility located thereon. IV. The Property is the subject of an environmental response project under the site cleanup rules (18 AAC 75.325-18 AAC 75.390), underground storage tank regulations (18 AAC 78), federal Comprehensive Environmental Response Compensation and Liability Act(CERCLA) or federal Resource Conservation and Recovery Act (RCRA). This Covenant is required because following completion of a cleanup, residual contamination remains on the Property that is safe for some, but not all, activities and uses. Residual contamination remaining on the Property includes the following hazardous substances, pollutants, or contaminants: 2 4864-0425-9336v.6 0022769-OC-0022 458 Media Contaminants Soil Gasoline Range Or anie.r (GRO) Diesel RCtnge Organics(DRO) Residual RLcnge Organics (RRO) Bentiene Toluene EthylbmZene Xylenes 1,2,4-Trimethylben_Zene 1,3,5-Tramethylbenj�ene 1,2-Dibromoethane Tetrachlomethene Naphthalene 1-Metlylnaphthalene 2 Metbylnaphthalene V. The Department enters into this Covenant as a "department" under the Act, with all attendant rights of a "department" under the Act, which include but are not limited to having a right to enforce this Covenant. This is not an ownership interest and the rights of ADEC under the Act are not an interest in real property. VI. For purposes of indexing in the Recorder's office Grantor-Grantee index only, City of Seward shall be considered the Grantor, and Holders shall be considered the Grantees. COVENANT City of Seward, as Grantor, hereby grants to the Holders and their respective successors and assigns, the following covenants and declares that the Property as described in the Iegal description above shall hereinafter be bound by, held, sold, and conveyed subject to the following requirements set forth in paragraphs I through XVIII, below, which shall run with the Property in perpetuity and be binding on the Grantor and all parties now or subsequently having any right, title, or interest in the Property, or any part thereof, and any persons using the land, as described herein. I. Summary of Environmental Actions Site Description and Back round The Icicle processing plant is located on the north shoreline of the Seward boat harbor in Resurrection Bay. The complex is comprised of multiple individual structures covered by connecting roofs. Fill and a sheet pile wall form a bulkhead along the shoreline providing an area for a dock and paved operations yard between the complex and boat harbor. Port Avenue runs east-west along the north side of the complex. An aboveground storage tank(AST) spill occurred near the center of the 3 4864-0425-9336v.6 0022769-000022 459 complex in a narrow alleyway between the Old Boiler Room and Bait Holding Freezer structures. Site plans are included as Figures 1 and 2. A leak of approximately 9 gallons was discovered on January 14, 2019, from a fitting on an approximately 400-gallon AST. The AST reportedly supplied a blend of 70 percent reclaimed used oil and 30 percent diesel fuel to two boilers in the Old Boiler Room. The 400-gallon AST acted as a day tank and was supplied by two 10,000-gallon bulk ASTs. Icicle reported the spill to ADEC on January 16, 2019. Characterization and Cleanup Activities. The 400-gallon AST was removed from the location of the leak on January 16, 2019, and approximately 10 cubic yards of impacted soil were excavated using hand tools. The resulting excavation measured approximately 28 feet long and 3 feet wide as shown on Figure 2 and extended up to approximately 3 feet below ground surface (bgs). Additional excavation activities were deemed not feasible due to the restricted space and the integrity of adjacent structure foundations. A limited release investigation was conducted on January 28, 2019. The objectives of the limited release investigation were to conduct a site reconnaissance to document the spill response efforts, characterize the soil remaining in place at the location of the release, and characterize the excavated soil for disposal. Analytical soil samples, collected from the limits of the excavation, contained concentrations of gasoline range organics (GRO), diesel range organics (DRO), residual range organics (RRO), eight volatile organic compounds (VOCs), three polynuclear aromatic hydrocarbons (PAHs), and arsenic greater than the applicable ADEC cleanup levels. The analytical sample collected from the south sidewall did not contain concentrations of target analytes greater than the ADEC cleanup levels. The extent of the contamination after the limited release investigation remained undefined both vertically and laterally. Groundwater was not encountered during this sampling event. On February 6, 2019, the ADEC issued a potentially responsible party (PRP) letter requesting an interim report regarding a path forward to address the size and type of contamination, as required under IS Alaska Administrative Code (AAC) 75.300(d). In response to the letter, additional site characterization activities were performed to evaluate the vertical and lateral extent of the contamination at the AST spill location. The field activities consisted of advancing seven soil borings, installing seven groundwater monitoring wells, collecting soil and groundwater samples, and collecting an indoor air sample. Results of the June 2019 characterization activities showed GRO, DRO, RRO, VOC, and PAH contamination in soil that exceeded ADEC cleanup levels in Boring MWl and MW3. Groundwater samples were collected from the seven monitoring wells. Results of the June 2019 groundwater sampling showed naphthalene and 1,2-dibromoethane concentrations exceeded the ADEC cleanup levels in the sample from Monitoring Well MW l positioned at the former AST location. The concentrations of compounds detected in the indoor air sample did not exceed the ADEC commercial indoor air target levels. 4 4864-0425-9336Y 6 0022769-000022 460 Groundwater samples were collected from the seven wells at the site in September 2019 and October 2020. Analytical results from the September 2019 and October 2020 sampling events show that groundwater is not impacted with GRO, DRO, RRO, VOCs, or PAH concentrations greater than the ADEC cleanup levels. Contaminants of Concern. During the site characterization and cleanup activities conducted at the site, soil and groundwater samples have been analyzed for GRO, DRO, RRO, VOCs, and PAHs. Soil samples were also analyzed for polychlorinated biphenyls (PCBs) and metals (arsenic, cadmium, chromium, lead, and mercury). Analytical soil and groundwater results were compared to the ADEC Method Two Migration to Groundwater and Human Health Cleanup Levels (CULs) for the over 40-inch precipitation zone, established in 18 AAC 75.341(c), Table B 1, and 18 AAC 75.341(d), Table B2 and the groundwater CULs established in 18 AAC 75.345, Table C, respectively. The following contaminants were detected above the applicable cleanup levels and are considered Contaminants of Concern (COCs): • GRO (soil) • DRO (soil) • RRO (soil) • Benzene (soil) • Toluene (soil) • Ethylbenzene (soil) • Xylenes (soil) • 1,2,4-Trimethylbenzene (soil) • 1,3,5-Trimethylbenzene (soil) • 1,2-Dibromoethane (soil and groundwater) • Tetrachloroethene (soil) •Naphthalene (soil and groundwater) • 1-Methy]naphthalene (soil) • 2-Methylnaphthalene (soil) Arsenic was detected above the applicable cleanup level in soil. The reported concentrations were consistent with background levels present within the Seward area; therefore, arsenic is not considered a COC. Extent of Contamination. Data suggests the extent of impacted soil is presently confined to the vicinity of the former AST as shown in Figure 2. The lateral extent of the soil contaminant plume appears to be limited to the area directly beneath the release site. Borings positioned to the north, west, east, and south of the release site had no detected concentrations of contaminants except for RRO at a concentration less than CULs in the boring to the north. Headspace screening and analytical soil sample results indicate the vertical extent of the soil contamination extends to the groundwater table; however, groundwater in the vicinity of the release site is not impacted based on the results of two 5 4864-0425-9336v,6 0022769-000022 461 consecutive monitoring events. The maximum remaining contaminant concentrations in soil and groundwater are shown in Table 1. Exposure Pathways. Potential exposure pathways and descriptions of site-specific considerations that increase or decrease the viability of each pathway at the site are provided below. The site is located in a commercial/industrial area therefore residents arc not considered viable current or future receptors. It is also recognized that changes in the site use or other site conditions may affect the viability of potential exposure pathways. In particular, the exposure pathways will need to be re-evaluated and revised as necessary if construction occurs at the site or a change in land use occurs. Soil—Direct contact with impacted soil comprises the incidental ingestion and dermal absorption exposure routes. Because contaminated soil remains on site within 15 feet of the ground surface, the direct contact exposure pathway (both incidental ingestion and dermal absorption) is considered complete for future site visitors, trespassers, commercial/industrial workers, and construction workers. The exposure pathway is partially mitigated by the presence of clean soil backfill and the concrete floor slabs of the structures adjacent to the narrow alleyway. Groundwater-ADEC guidance stipulates that ingestion of groundwater be considered a potentially complete exposure pathway unless a groundwater use determination is conducted in accordance with 18 AAC 75.350, and that determination finds that the groundwater is not "a reasonably expected future source of drinking water."A groundwater use determination has not been performed; therefore, ingestion and inhalation of volatile compounds in groundwater are potentially complete exposure pathways for future site visitors, trespassers, commercial/industrial workers, and construction workers. One groundwater sample from June 2019 contained volatile contaminant concentrations, including naphthalene, above the cleanup levels. Contaminant concentrations did not exceed the cleanup levels in September 2019 and October 2020. Air - The outdoor inhalation pathway is potentially complete due to the presence of VOCs in soil within 15 feet bgs. However, the outdoor air exposure pathway is partially mitigated by the limited extent of the soil contaminant plume beneath the central area of the processing plant complex. The inhalation of indoor air exposure pathway is also potentially complete due to the presence of the VOC-impacted soil directly beneath the processing plant complex. To evaluate the risk of this pathway, a 24-hour indoor air sample was collected from the space immediately above the release location in September 2019. The measured concentrations of VOCs were less than the ADEC commercial indoor air target levels. Surface Water- The processing plant is located on the north shoreline of the Seward boat harbor in Resurrection Bay. Groundwater beneath the site flows to the south- southeast towards the Seward boat harbor. Groundwater samples collected from 6 4864-0425-9336v.6 0022769-000022 462 between the release location and the harbor did not contain elevated levels of contaminants; therefore, the surface water exposure pathway is not currently complete. Other- Other impacted media, including sediment and biota, were not identified at the site. Summary. Currently complete and potentially complete exposure pathways have been identified at the site. The direct contact soil exposure pathway is considered partially mitigated based on the presence of a clean backfill soil cap and concrete floor slab. Further, analytical samples of indoor air and groundwater were collected to evaluate if these pathways were currently complete. The September 2019 results indicate that contaminants in these pathways are below action levels. Future construction involving excavation in the vicinity of the fuel release has the highest potential to expose the remaining contaminants to humans and the environment. II. Activity and Use Limitations By acceptance and recordation of this Environmental Covenant, the Grantor, and any successors in interest, are hereby restricted from using the Property, now or at any time in the future, as specifically set forth below: 1. Excavation, drilling, and other intrusive activities below a depth of 2 feet within the area of remaining soil contamination are prohibited, without prior review and approval from ADEC. 2. The cap (2 feet of clean soil and concrete pad) shall be inspected annually and maintained as needed to prevent contact with subsurface contaminated soil, and/or infiltration of water and potential leaching of contaminants. Any damage to the cap shall be reported to ADEC within ten (1.0) days after discovery and shall be promptly repaired. Documentation of the repairs shall be submitted to ADEC within 30 days. 3. In the event that the remaining contaminated soil becomes accessible in the future due to the building being removed, the landowner shall notify ADEC and characterize and, if determined necessary, cleanup the soil. 4. ADEC must be notified in advance of the subdivision or replat of the Property associated with these activity and use limitations. This covenant must be included as part of future property transactions and attached to subsequent associated parcels, as determined applicable by ADEC. 5. ADEC approval is required prior to moving any soil or groundwater off site where contamination remains above applicable cleanup levels. A "site" as 7 4864-0425-9336v.6 0022769-000022 463 defined by [18 AAC 75.990 (1 15) or 18 AAC 78.995(134)] means an area that is contaminated, including areas contaminated by the migration of hazardous substances from a source area, regardless of property ownership. In the future, if soil will be excavated or groundwater will be brought to the surface (for example to dewater in support of construction) it must be characterized and managed following regulations applicable at that time and ADEC approval must be obtained before moving the soil or water off the Property. 6. Movement or use of contaminated material in a manner that results in a violation of 18 AAC 70 water quality standards is prohibited. 7. Groundwater throughout Alaska is protected for use as a water supply for drinking, culinary and food processing, agriculture including irrigation and stock watering, aquaculture, and industrial use. Contaminated site cleanup complete determinations are based on groundwater being considered a potential drinking water source. In the event that groundwater from this site is to be used for other purposes in the future, such as aquaculture, additional characterization and treatment may be required to ensure the water is suitable for its intended use. III. Site Figures The attached Figures I and 2 are site plans drawn to approximate scale that show the locations of existing structures and the approximate location and extent of remaining soil contamination which is subject to the activity and use limitations described above. IV. Conveyance of Interest The Grantor, when conveying any interest in any part of the Property, including but not limited to title, easement, Ieases, or other interest, must notify ADEC at least 30 days prior to conveyance, and must include in any conveyance document a complete copy of this Covenant. V. Successors The covenants, terms, conditions, and restrictions of this instrument shall be binding upon, and inure to the benefit of the parties hereto and their respective personal representatives, heirs, successors, and assigns and shall continue as a servitude running in perpetuity with the Property. The term "Grantor," wherever used herein, and any pronouns used in place thereof, shall include the persons and/or entities named at the beginning of this document, identified as "Grantor" and their personal representatives, heirs, successors, and assigns. The term "Grantee," wherever used herein, and any pronouns used in place thereof, shall include the persons and/or entities named at the beginning of this document, identified as 8 4864-0425-9336v_6 0022769-000022 464 "Grantee" and their personal representatives, heirs, successors, and assigns. The rights of the Grantee under this instrument are freely assignable, subject to the notice provisions hereof. VI. Prior Notification for Changes-in Land Use including Proposed Construction The Grantor shall provide prior notification to the Department of proposed changes in use of, applications for a building permit for activities that may affect exposure to contaminants on, or proposals for any site work affecting the contamination on,the Property subject to this covenant. VII. Notices and Reporting Icicle Seafoods, Inc. shall report to ADEC every five (5) years to document the status of compliance with the activity and use limitations described in this covenant. Such notice and the reports should be sent to the ADEC at: Alaska Department of Environmental Conservation Division of Spill Prevention and Response Contaminated Sites Program Attention: Institutional Controls Unit P.Q. Box 111800 Juneau,AK 998 1 1-1 800 Or be submitted electronically to CS.Submittals@alaska.gov. VIII. Authorizations Grantor shall restrict authorizations, including leases, for any portion of the Property to uses and activities consistent with this Covenant and notify all authorized users of the restrictions on the use of the Property. IX. Access The Department, including its authorized employees, agents, representatives and independent contractors, shall have the right of access to the Property granted in connection with implementation or enforcement of this covenant. X. Enforcement The Department and other parties, including parties to the environmental covenant, described in AS 46.04.335 are empowered to administer and enforce the terms of this 9 4864-0425-9336v.6 0022769-000022 465 covenant using civil authority granted to them in AS 46.03. In addition,the department may use administrative authority granted to it in AS 46.03. XI. Waiver of Certain Defenses This Environmental Covenant may not be extinguished, limited, or impaired through issuance of a tax deed, foreclosure of a tax lien, or application of the doctrine of adverse possession, prescription, abandonment, waiver, lack of enforcement, or acquiescence, or similar doctrine as set forth in AS 46.04.325(o. XII. Representations and Warranties Grantor hereby represents and warrants to the ADEC, Holder(s), Grantor(s) and any other signatories to this Environmental Covenant that, at the time of execution of this Environmental Covenant, that the Grantor is lawfully seized in fee simple of the Property, that the Grantor has a good and lawful right and power to sell and convey it or any interest therein, that the Property is free and clear of encumbrances, except those noted on Appendix S attached hereto. XIII. Amendment or Termination This Covenant runs with the land and is perpetual, unless amended or terminated pursuant to AS 46.04.330. Except as to the ADEC, all Holders and other signers waive the right to consent to an amendment or termination of the Environmental Covenant. This Environmental Covenant may be amended or terminated by consent only if the amendment or tennination is signed by the ADEC and the current owner of the fee simple of the Property, unless waived by ADEC. If Grantor no longer owns the Property at the time of proposed amendment or termination, Grantor waives the right to consent to an amendment or termination of the Environmental Covenant. XIV. Controlling Law This Environmental Covenant shall be construed according to and governed by the laws of the State of Alaska. XV. Liberal Construction Any general rule of construction to the contrary notwithstanding, this instrument shall be liberally construed in favor of the establishment of activity and use limitations that run with the land to effect the purpose of this instrument and the policy and purpose of the environmental response project and its authorizing legislation. If any provision of this instrument is found to be ambiguous, an interpretation consistent with the purpose of this 10 4864-0425-9336v.6 0022769-000022 466 instrument that would render the provision valid shall be favored over any interpretation that would render it invalid. XVI. Joint Obligation If there are two or more parties identified as Grantor herein, the obligations imposed by this instrument upon them shall be joint and several. XVII. Effective Date This Environmental Covenant is effective on the date it is recorded with the appropriate Alaska recorders' office. XVIII.List of Appendices Appendix A—Table 1: Maximum Remaining Contaminant Concentrations in Soil and Groundwater Appendix B Figures 1 and 2: Map of the Property and Diagram showing location of the Contamination Appendix C —List of Recorded Encumbrances or Limited Liability Report [signatures on following pages] 11 4864-0425-9336v_6 0022769-000022 467 CITY OF SEWARD ATTEST: By: By: Norm Regis, Interim City Manager Brenda Ballou, City Clerk Date: STATE OF ALASKA ) ss. THIRD JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this day of 2023 by Norm Regis, Interim City Manager of the City of Seward, Alaska on behalf of the City. Notary Public in and for Alaska My Commission expires: 12 4964-0425-9336v.6 0022769-000022 468 ICICLE SEAFOODS, INC. By: Name: C. Corey Mac 'neon Title: Chief Legal Officer Date: May 19,2023 PROVINCE OF NEW BRUNSWICK ) ss. The foregoing instrument was acknowledged efore me this day of c 2023 by c , the .. C i ��� ���, of cicle Seafoods, Inc. on behalf of the corporation. Not Publi in a car NeTARYnai$tAT, Residing at: 1 ' My Commission i&pjres It ''I�fj����j/�RU,�u��►3+''� 13 4864-0425-9336v.6 0022769-000022 469 OBI SEAFOODS, LLC F Name: ��r Title: Date: STATE OF WASHINGTON ) I� COUNTY ) The foregoing instrument was acknowledged before me this 14 day ti , 2023 by ,, s S the � of OBI Seafoods, LLC on behalf of the limited liability company, ASHLEY R. MILLER Notary Public iiy"and for Washington NOTARY PUBLIC STATE OF WASHINGTON Residing at: uw L License Number 21006569 My Commission expires: My commission Expires 01115/2025 14 4864-0425-9336v.6 0022769-000022 470 Appendix A—Table 1: Maximum Remaining Contaminant Concentrations in Soil and Groundwater [See following] 15 4864-0425-9336v.6 0022769-000022 471 APPENDIX A Table ' C lIc)M)1._Vell coil- Grnurrdwater- Suil-NITG Soil-Llatuan Maximum Ground-tvr- Maximm u CUL* llealth CUI.* Remaining, CUL** Remaining^^ Pa;CAr"ter f-WKg) (rnglhg) (mglKg) (mgfl.) (mgll.) Gasoline Range Organics(G RO) 2 IAM 1.4I0J+ __ -_li l00l3 Diesel Range Organics(DRO) 230 12,50i1 19,7,no Ji 1.5 0 34,�.I Residual Range(A�gnnics(R RO) 9-700 22,0(1() 61_. 00 I.I 0 6W,H Volatile Organic Cumpuuuds(VOCs) Benzene 0.022 8.P 5,06 0.0046 ND Toluene 6.7 200 378 l,l ND Cthylbenzene 0.13 35 4ti.5 UA15 ND Xylency{tounl) 1.5 57 262 0.19 ND 1?4-Trhnelhylbeozene 1)(It 43 46.4 C,056 VI) 1,2-Dibmmoethane 000024 0.31 &USJ+ 1)(1011075 ND 1.3,5-Trimethylbenzene 0.66 37 14.5 0.060 NI) 4-Isupropyltutucnc - - 5.88 ND Acelonc 3> 65.000 1.82 14 ND lsnpropylhenzene(C'umene) 5.6 54 3.74 0.45 ,ND n-Butylben7ene 13 20 128 1 ND ❑-Pmpylbeuzcnc 9,1 52 8.06 0.66 ND sc't:-i3utylbenzene 42 28 2_77 2 ND Ietmchlorocthcnc(PeL.) 0.19 68 13R 0,041 NO Dichlorodifluorumethane 3.9 110 ND 0200, 0.00033b.! Other VOC Analyze% Various Variorra ND Vatious ND 1'o1}rrucic;v Aromatic I lydrecarbons(PA I J i I-Methylnaphthalene 041 68 15.6 0.01 I ND 2-Methyinaphthalenc 1.3 250 22.3 0.036 ND Acenaphth,ne 17 3,800 0?1 1 1 r 0.530 NI) Fluorcnc .16 1.500 0.7691 029 ND Naphthalene 0038 20 13.3 0.0017 ND Phcnanducuc 39 1.900 0.8721, 0,170 N!) pwcuc 87 1900 0.273 0.120 ij Other PAIl.Anal}tce: Various Various ND Valium PolychlorinatedBiphenyls(PCB%) n a 1.0 ND 0AM144Metals Arsenic 0.20 7.2Z (}00052 Cadmium 91 76 <{1201Chruntiwn 100,000 100.000 43.7 22 Lead Ira4110 2?Mercun 0.36 3.1 0.OG13 000052 Notcs: " =Snil cleanup level(CUL)is the migration togroundwatcr(M'10)and Ilurntan I lcalrh Mcthnd'iwo level listed in -Cable 131 or B2,18 AAC 75(November 2020),for the"over 40 inches(precipitation,zone" d° =Groundwater CUL are listed rn'hable C,18 AAC 75.345(November 2020) -111c most rccert I,�il analytical data for target analytes from 2019 site characterization and cicamrp sampling -The mtc<r I III oondwater analytical data from the Clctober 2020 sampling event lug kg =Milligrae. rng L =Milligram •,. u J =An:th't :oacrutranot'cstnitatcd at less than the limit ofquantitatiou J r -Anm:,,-c-r,;entration possibly hissed high ND -AnalVte nod detected -0.606 13 =Analytc cuucc'titrnion estimated as less than 0,606 one,L duc ro a method ur trip blank dutedion 5.06 -Analyze conceriration exceeds ibe soil MTC CUL 6 _Analyre concentration exceeds the soil M'CC and Human Health CUL 16 4864-0425-9336v.6 0022769-000022 472 Appcndix B —Figures 1 and 2; Map of the Property and Diagram showing location of the Contamination APPENDIX B,page i of 2 iApproximate Parcel I D 14524015 Property Bourx1ary -Map adapted tram aerial Imagery provided by Gaogie Earti,Pro reproducetl by pe—son granled try Goggie Eadh Mapping Serve imagery dAW April I6,20££ -Abu.glound sloraga tank spoil located il5ide existing Wilding 601 Porl Avenue Srwartl,Alaska 39Q SITE PLAN .nvvra�xiixa.[�5 .I1I Lt. Ailgus[2C21 £C2617-005 EpI = MIA OM 6 WILSON,INC. Fig ' 17 4864-0425-9336v.6 0022769-000022 473 APPENDIX B,Page 2 of 2 LEGEND 5F Apwoxii ate lccahon I Boning and 14onilonn3 Wet M W I MW l inalalled by Shannon&wld5on,Inc.In June 2010, #6MW3 Ffe9zer 43 s} Freezer Back Dock Trurk Loading Dock_ 10.GMGallon p4 Hcleing Aw—grcund Slarage Tanks _,1 Estimated Earent of Sod Contamination New Bailer Raom I _ — MW2 Fcrmer_oceticn of I -4B0-galon AST Ff er x2 DM Bcller Room Approximate Lands of 0.7W4 —1 i `Bait January 2019 Excavation Molding Truck Loading Dock I Cannery C c 2 F <er Engna Raom mzi I y MW6 I li rMW7 [ Cold Slarage �MW5 Appinkimare 9-0water low dV tlicn Shorekne Shoot Piling Nch 601 Port Avenue Resu—L-Bay Seward.Alaska DETAILED SITE PLAN 1..�. Augu6r 2021 102617-D05 wrrrsovinare ocn�e in veer ���� O�SHANNONd WILSdN.f INC. Fig.2 10 4864-0425-9336v,6 0022769-000022 474 Appendix C—List of Recorded Encumbrances or Limited Liability Report [See following] 19 4864-0425-9336v.6 0022769-000022 475 . + First American Limited Liability Report ISSUED BY First American Title Insurance Company Limited Liability Report RE.onRT NUMBER 4064134 File No.:0229-gp64134 Ref No,: To:Davis Wright Tremaine LLP Attn:Angie Black 188 West Northern LTS Boulevard,Suite 1100 Anchorage,AK 99503 Limitation of Liability for Informational Reocrt IMPORTANT-READ CAREFULLY: THIS REPORT IS NOT AN INSURED PRODUCT OR SERVICE OR A REPRESENTATION OF THE CONDITION OF TITLE TO REAL PROPERTY. IT IS NOT AN ABSTRACT,LEGAL OPINION,OPINION OF TITLE,TITLE INSURANCE COMMITMENT OR PRELIMINARY REPORT,OR ANY FORM OF TITLE INSURANCE OR GUARANTY, THIS REPORT IS ISSUED EXCLUSIVELY FOR THE BENEFIT OF THE APPLICANT THEREFOR,AND MAY NOT BE USED OR RELIED UPON BY ANY OTHER PERSON. THIS REPORT MAY NOT BE REPRODUCED IN ANY MANNER WITHOUT FIRST AMERICAN'S PRIOR WRITTEN CONSENT, FIRST AMERICAN DOES NOT REPRESENT OR WARRANT THAT T-i- INFORMATION HEREIN IS COMPLETE OR FREE FROM ERROR,AND THE INFORMATION HEREIN IS PROVIDED WITI:OUT ANY WARRANTIES OF ANY KIND,AS-IS, AND WITH ALL FAULTS. AS A MATERIAL PART OF THE CONSIDERATION GIVEN IN EXCHANGE FOR THE ISSUANCE OF THIS REPORT, RECIPIENT AGREES THAT FIRST AMERICAN's SOLE LIABILITY FOR ANY LOSS OR DAMAGE CAUSED BY AN ERROR OR OMISSION DUE TO INACCURATE INFORMATION OR NEGLIGENCE IN PREPARING THIS REPORT SHALL BE LIMITED TO THE FEE CHARGED FOR THE REPORT. RECIPIENT ACCEPTS THIS REPORT WITH THIS LIMITATION AND AGREES THAT FIRST AMERICAN WOULD NOT HAVE ISSUED THIS REPORT BUT FOR THE LIMITATION OF LIABILITY DESCRIBED ABOVE. FIRST AMERICAN MAKES NO REPRESENTATION OR WARRANTY AS TO THE LEGALITY OR PROPRIETY OF RECIPIENT'S USE OF THE INFORMATION HEREIN, Farm 5022702(7-1-14) Page 1 of 4 Limited Liability Report(Rev.9-1-11) 20 4854-0425-9336v.6 0022769-000022 476 File No.0229-4064134 Effective Date:May 15,2023 at 8:00 am Fee:$255.00 Title is vested in: The City of Seward,a municipal Corporation organized under and operating pursuant to the laws of the State of Alaska The land referred to in this Report is situated in the State of Alaska and is described as follows: Lot 2A,Block 2,MARINA SUBDIVISION,BLOCK TWO REPLAT,according to the official plat thereof,filed under Plat Number 9628,Records of the Seward Recording District,Third Judicial District,State of Alaska. The title to the herein described land is subject to the matters shown as exceptions herein,which exceptions are not necessarily shown in order of their priority. EXCEPTIONS 1- Reservations or exceptions in patents or in acts authorizing the issuance thereof. 2. Taxes and/or Assessments due The Kenai Peninsula Borough for the year 2023,are a lien, but levy therefore has not been made. Tax Account No., 145240I5 Land Valuation: $1,625,500.00 Improvements: $0.00 Exemption(s): Possible exemptions.Contact The Kenai Peninsula Borough at (907)714-2304. NOTE:Said values have not been certified by The Kenai Peninsula Borough as of this date. 3. Taxes and/or Assessments due The Kenai Peninsula Borough for the year 2022,(Property Tax Division 907-714-2304;Assessment Department 907-714-2230): Tax Account No.: 14524015 Levied Amount: $0-00(Municipal) Balance Due: $0.00 Due Date: 1st half September 15th and 2nd half November 15th Qr entire Amount due October 15th Land Valuation: $1,625,500.00 Improvements: $0,00 4. Rights of the public and of governmental bodies in and to that portion of the premises herein described lying below the high and low water mark of Seward Harbor/Resurrection Bay. 5. Any prohibition or limitation on the use,occupancy or improvements of the land resulting from the right of the public or riparian owners to use any waters which may cover the land or to use any portion of the land which is now or may formerly have been covered by water, 6. Any adverse claim based upon the assertion that some portion of said land is tide or submerged lands,or has been created by artificial means or has accreted to such portion so created. Form 5022702(7-1-14) Page 2 of 4 Limited Liability Report(Rev.}1-I I) 21 4864-0425-9336v.6 0022769-000022 477 File No.0229-4064134 7. Any preference rights which may exist under the Alaska Land Act,terms,provisions and reservations under the Submerged Lands Act (43 USCA 1301,67 Stat.29)and the enabling act(Public Law 85- 508,72 Stat_339). 8. Terms, provisions and reservations under the Submerged Land Act (43 U.S.C.A. Sections 1301 through 1311)and the rights of the United States of America to regulate commerce, navigation,Flood control,fishing and production of power. 9. The terms and provisions contained in the document entitled"'Ratification of Prior Action Regarding Real Property"" Recorded: September 2,1987 Recording No.: Book 48 Page 333 10. Lease and the terms and conditions thereof as disclosed by Memorandum of Lease. Lessor: City of Seward,a home rule municipal corporation Lessee: Icicle Seafoods,Inc.,an Alaska corporation Term: Thirty(30)years from August 10,1988 Dated: August 23, 1988 Recorded: August 30, 1988 Recording Information; Book 51 Page 954 (Affects this and other property) Memorandum of Lease Amendment recorded luly 19,1989 in Book 55 at Page 2�10. Lease Amendment Number 2 recorded April 4,2000 in Book 100 at Page 127. Memorandum of Amended and Restated Lease Recorded September 6,2018 as Serial Number, 2018-000888-0. "Corrected"Memorandum of Amended and Restated Lease Recorded September 7,2018 as Serial Number 2018-O00895-0 to Correct the Effective Date of the Memorandum of Amended and Restated Lease Agreement. NOTE:Defects,liens,encumbrances or other matters affecting the leasehold estate,whether or not shown by the public records. 11. The effect of the notes which appear on the plat of said subdivision. (Copy Attached) 12. Easements as dedicated and shown on the plat of said subdivision. (Copy Attached) 13. Deed of Trust in Lieu of Cash Bond and the terms and conditions thereof. Grantor(frustor: Icicle Seafoods,Inc. Grantee/Beneficiary: State of Alaska Department of Revenue Trustee: First American Title Insurance Company Amount: $15,157,500.00 Dated: December 14,2015 Retarded: December 15,2015 Recording Information: Serial Number 2015-001368-0 (Affects this and other property) Form 5D22702(7-1-14) Page 3 of 4 Limited Liahllity Repan(Rev.9-1-11) 22 4864-0425-9336v_6 0022769-003022 478 File No.0229-4064134 Amended Deed of Trust in Lieu of Cash Bond: Recorded: December 17,2015 Recording Information: Serial Number 2015-001378-0 14. Unrecorded leases or periodic tenancies,if any. FirstAmencan 77tle Insurance Company a,-,"it" Dustyn Fergus,Title Officer NOTE: The attached plat,if any,is furnished solely for the purpose of assisting in locating the premises and does not purport to show all highways,roads or easements affecting the property. No reliance should be placed upon this plat for location or dimensions of the property and no Inability is assumed for the correctness thereof. Farm S022702(7-1-14) Page 4 of 4 Limited liability Report(Rev.9-1-11) 23 4864-0425-9336v.6 0022769-000022 479