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099-23 - Resolution - Revised Parking MOU with Port of BremertonDocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A RESOLUTION NO.099-23 A RESOLUTION OF THE CITY OF PORT ORCHARD, WASHINGTON, AMENDING RESOLUTION NO. 066-23, AUTHORIZING THE MAYOR PRO-TEM TO EXECUTE A MEMORANDUM OF AGREEMENT WITH THE PORT OF BREMERTON CONCERNING WATERFRONT PARKING. WHEREAS, the Port Orchard Marina is owned and operated by the Port of Bremerton (the "Port"), including Kitsap County Parcels Nos. 4053-013-007-0103, 4028-001-001-0007, and 4028-001-011-0005, commonly known as Lots 3 and 4, which are used for water dependent uses and waterfront parking; and WHEREAS, the City of Port Orchard owns and controls rights of way providing access to the aforementioned parking spaces, and has historically provided parking enforcement and associated services for these public parking lots; and WHEREAS, in 1996, the City and the Port entered into a Memorandum of Understanding to set forth parking assignments and responsibilities for the area (the "1996 MOU"); and WHEREAS, due to the configuration of the waterfront, and community events and business operations impacting parking in the area, in 2011, the City and the Port entered into a new Memorandum of Agreement (the "2011 MOA") to supersede the 1996 MOU, setting forth terms to govern the City and Port's use, management, and revenue collection for the parking areas; and WHEREAS, the City's proposal to construct the Marina Pump Station project to serve the residents of Port Orchard will impact the parking areas covered by the 2011 MOA, and accordingly, the City provided notice to the Port of the proposal in January 2023; and WHEREAS, in February 2023, the Port provided notice to the City of its intent to withdraw from the 2011 MOA effective June 1, 2023; and WHEREAS, the City and Port negotiated the terms of a Memorandum of Agreement to set forth the terms and conditions by which the Port will withdraw effective July 1, 2023, and to establish the use, management, and operation of the waterfront parking areas; and WHEREAS, the proposed Memorandum of Agreement provides, among other terms, that the City and Port will work collaboratively to ensure public events continue in the area and that the City will provide parking enforcement to benefit the public that utilize these parking lots in exchange for compensation; and WHEREAS, the City Council approved the Memorandum of Agreement by Resolution No. 066-23 on June 27, 2023, and following approval the Port requested additional modifications to the Memorandum of Agreement which are reflected in the version attached as Exhibit A and incorporated herein by this reference; WHEREAS, the City Council finds it in the best interest of the City and its residents to DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A Resolution No. 099-23 Page 2 of 2 authorized the Mayor Pro -Tern to execute the revised Memorandum of Agreement with the Port for waterfront parking; now, therefore, THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: THAT: It is the intent of the Port Orchard City Council that the recitals set forth above are hereby adopted and incorporated as findings in support of this Resolution. THAT: Resolution No. 066-23 is amended to substitute Exhibit A attached hereto and incorporated herein with this reference. The Mayor Pro-Tem is authorized to execute the Memorandum of Agreement attached hereto as Exhibit A and incorporated herein with this reference. The Mayor is further authorized to take all actions necessary to effectuate the terms of the Memorandum of Agreement. THAT: The Resolution shall take full force and effect upon passage and signatures hereon. PASSED by the City Council of the City of Port Orchard, SIGNED by the Mayor Pro-Tem and attested by the Clerk in authentication of such passage tfbis jot" �ay of October 2023. ocu igned y L Mark Trenary, Mayor Pro-Tem ATTEST: Brandy Wallace, City Clerk, MMC DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A Memorandum of Agreement for Allocation and Control of Parking on Waterfront Property Between City of Port Orchard and Port of Bremerton 2023 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A Contents 1. RECITALS.................................................................................................................................... 2 2. PURPOSE....................................................................................................................................2 3. PREMISES...................................................................................................................................2 4. EFFECTIVE DATE......................................................................................................................... 2 5. TERM.......................................................................................................................................... 2 6. AGREEMENT..............................................................................................................................2 7. COMPENSATION........................................................................................................................ 3 8. RESTRICTIONS ON USE............................................................................................................... 4 9. EVENTS COORDINATION............................................................................................................ 4 10. RECIPROCAL INDEMNIFICATION................................................................................................ 5 11. DEFAULT BY CITY OF PORT ORCHARD....................................................................................... 5 12. NOTICE.......................................................................................................................................5 13. ENTIRE AGREEMENT.................................................................................................................. 6 Exhibit A: DNR Lease No. 20-A09891 Exhibit B: Map of Premises 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT ("MOA") is effective on the day of the last signature on this MOA, by and between the Port of Bremerton ("Port"), a public port district, and the City of Port Orchard ("City"), a Washington State municipal corporation. RECITALS A. The Port Orchard Marina is owned and operated by the Port of Bremerton, which has a Port Management Agreement (PMA) no. 22-080016 with Department of Natural Resources ("DNR") for use of State-owned aquatics lands for port purposes. It is located within the Port Orchard Harbor Area in Sinclair Inlet, in Kitsap County, Washington. B. The Port of Bremerton is in ownership of property including Kitsap Assessor Parcel Number # 4053- 013-007-0103, commonly known as "Lot 3" and has been used for water dependent uses and waterfront parking. C. The Port of Bremerton is in ownership of property including Kitsap Assessor Parcel Number # 4028- 001-001-0007, commonly known as "Lot 4" and has been used for water dependent uses and waterfront parking. D. The Port of Bremerton also has a lease no. 20-AO9891 with DNR for use of State-owned aquatic lands including Kitsap Assessor Parcel Number # 4028-001-011-0005, that has been used for water dependent uses and waterfront parking, commonly known as the east end of the Port Orchard waterfront "Lot #4". E. The City of Port Orchard is in ownership of the Harrison Avenue Right -of -Way, that has been used for water dependent uses and waterfront parking and includes portions of parking spaces within both "Lot 3" and "Lot 4", this area is referred to as the "City's Right -of -Way" F. The 2011 existing MOA between the City of Port Orchard and Port of Bremerton previously provided the City of Port Orchard use, management, and revenue collection for the parking areas identified as "Lot 3" and "Lot 4", with allocation of spaces for Port of Bremerton use at 707 Sidney Parkway, in the area commonly known as "Lot 1". G. On January 9, 2023, The City of Port Orchard provided notice to the Port of Bremerton that the 2011 existing MOA between the City of Port Orchard and Port of Bremerton would be impacted by the Marina Pump Station project. H. On February 6, 2023, the Port of Bremerton provided notice to the City of Port Orchard with the intent to withdraw from the 2011 MOA effective June 1, 2023, however the Port extended that date while the parties negotiated the terms of a successor MOA. Page 1 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A NOW, THEREFORE, IT IS AGREED AS FOLLOWS: AGREEMENT 1. RECITALS The foregoing recitals are true and correct and are incorporated herein by this reference. 2. PURPOSE 2.1 The purpose of this Memorandum of Agreement is to set forth the terms and conditions by which the Port will withdraw from the 2011 MOA for waterfront parking, and by July 1, 2023, will vacate the allocated parking spaces for Port of Bremerton located at 707 Sidney Parkway, in the area commonly known as "Lot 1". 2.2 The purpose of this Memorandum of AGREEMENT is also to set forth the means by which the Port will withdraw from the 2011 MOA for waterfront parking, and by July 1, 2023, will establish the Port of Bremerton use, management, and operation of the areas commonly known as Port Orchard East waterfront parking areas "Lot 3" and "Lot 4". 2.3 The purpose of this MOA is to also replace and rescind the existing 2011 MOA between the City of Port Orchard and the Port of Bremerton regarding waterfront parking. 3. PREMISES The "Premises" include Kitsap Assessor Parcel Number # 4053-013-007-0103, # 4028-001-011-0005, Parcel Number # 4028-001-001-0007, including DNR aquatic lease No. 20-AO9891 and including 15 partial parking spaces located within the Harrison Avenue right-of-way, of the areas commonly known as Port Orchard East waterfront parking areas "Lot 3" and "Lot 4". 4. EFFECTIVE DATE The "Effective Date" of this MOA shall be the date this MOA has been fully executed. 5. TERM The term of this agreement shall be ongoing unless terminated by written agreement or with 180- day written notification. 6. AGREEMENT 6.1 The Port shall withdraw from the 2011 Memorandum of Agreement for waterfront parking with the City of Port Orchard on July 1, 2023, and will vacate the allocated parking spaces for Port of Bremerton located at 707 Sidney Parkway, in the area commonly known as "Lot 1" upon execution of this agreement. 6.2 The Port of Bremerton will establish the use, management, operation, maintenance, and revenue collection of the premises, commonly known as Port Orchard East waterfront parking Page 1 2 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A areas "Lot 3" and "Lot 4" upon execution of this agreement. 6.3 Upon execution of this agreement, the Port of Bremerton will begin to manage community event permits and event usage of the premises, commonly known as Port Orchard East waterfront parking areas "Lot 3" and "Lot 4". The Port of Bremerton will endeavor to honor existing approved 2023 City event permits as much as practicable and will coordinate with stakeholders. 6.4 The City of Port Orchard has agreed to provide parking enforcement for premises, commonly known as Port Orchard East waterfront parking areas "Lot 3" and "Lot 4". Enforcement shall include Marina Tenant parking passes and interaction with the Port regarding implementation of Port parking rules and requirements. Parking enforcement shall commence upon notice to proceed issued to the City by the Port, which may or may not occur simultaneously with the effective date of this MOA. Parking enforcement shall be compensated pursuant to compensation identified in Section 7. 6.5 The Port of Bremerton will manage, control, and be responsible for all maintenance, striping, landscaping, curbs, surfacing, lighting, signage, and all capital projects for premises, commonly known as parking areas "Lot 3" and "Lot 4". 6.6 The Port of Bremerton will manage, control, and be responsible for parking fare collection and any electronic parking kiosks for premises, commonly known as parking areas "Lot 3" and "Lot 4". 6.7 The City of Port Orchard agrees to remove the existing parking kiosks and signage upon the execution of this agreement, provided the kiosks and signage shall be removed by September 30, 2023. 6.8 The City of Port Orchard agrees to coordinate with the Port of Bremerton regarding plans, permits, and approvals pertaining to the construction of the Bay Street Pedestrian Path Segment 1, located on the premises, commonly known as parking areas "Lot 3" and "Lot 4". 6.9 With regards to any parking stalls or spaces not covered by this Agreement but which are located on the Premises described herein, the City shall be responsible for any such spaces in Lot 1, and the Port shall be responsible for any such spaces in Lots 3 and 4, including all necessary maintenance, striping, pavement repair, thermoplastics, sweeping, and landscaping. 7. COMPENSATION 7.1 Parking Enforcement: The Port shall provide compensation and payment to the City each year by June 30th for Parking Enforcement services provided by the City for Lot 3 and Lot 4. 7.2 Annual parking enforcement compensation shall be in the amount of $12,000 each year. 7.3 The annual parking enforcement compensation may be increased each year beginning January 1, 2025. The compensation shall increase annually per CPI-U (All Urban Consumers Index) (1982-1984=100), not seasonally adjusted, for the Seattle -Tacoma -Bellevue area for that 12-month period from January 1st to December 31st indexed as the annual average, as is specified by the Bureau Page 13 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A of Labor Statistics, United States Department of Labor. Increases based on CPI-U shall take effect on January 1st of the following year. However, the increase shall be no more than 5% or no less than M 7.4 In addition to the increase set out in Section 1.3 herein, the City shall be authorized to increase parking enforcement compensation upon six (6) months written notice to the Port if the City's costs associated with parking enforcement increase due to the Port's selection of a new permitting/ticketing method or vendor, including but not limited to a selection that triggers the City's purchase of necessary software or equipment at the request of the Port, or increased staff time dedicated to enforcement efforts due to the Port's choice of permitting method/vendor. 7.5 Initial parking enforcement compensation shall be prorated based on the number of days remaining in 2023 upon commencement of parking enforcement at the direction of the Port (see Section 6.4). 7.6 Compensation payment to the City shall be provided on or before June 30 of each year, with the initial prorated parking enforcement payment due to the City by December 31, 2023. 7.7 Termination of Parking Enforcement Services: Upon six (6) months of written notice, either party may terminate the agreement for parking enforcement. Termination of parking enforcement shall not impact or affect other sections of this agreement. RESTRICTIONS ON USE The Port shall maintain a total of 20 spaces located within Lot # 3, available to the public for 2-hour parking free of charge for the parking space. Those spaces shall not be exempt from enforcement due to a marina parking pass. 9. EVENTS COORDINATION 9.1 The Port of Bremerton and the City of Port Orchard agree to coordinate efforts related to community events occurring on the premises identified herein (for example, 4th of July, Cruz Car Show, Chimes & Lights), in relation to road closures, public works needs, police and first responder safety, transit operations, and similar use of public spaces. Community events located in areas controlled by the Port that do not involve the closure of or impact in any way Harrison Avenue shall be the primary responsibility of the Port, utilizing the Port's application process, provided the City shall be provided the opportunity to comment on the application. Community events involving Harrison Avenue shall be the primary responsibility of the City, utilizing the City's application process, provided the application shall be submitted to the Port for review and approval for events that propose to utilize property controlled by the Port. 9.2 The Port and the City agree to work together on a case -by -case basis to assist with temporary event parking for marina tenants where needed, related to specific community events (for example, 4th of July, Cruz Car Show, Chimes & Lights). 9.3 The Port of Bremerton and the City of Port Orchard agree to review and provide communication in relation to each other's Event permits and applications that may impact spaces or needs related to the premises. Page 14 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 9.4 For 2023, City event permits already approved by the City shall continue to be honored by the Port for 2023. 10. RECIPROCAL INDEMNIFICATION To the maximum extent permitted by law, each Party shall defend, indemnify, and hold harmless the other Party and all of its officials, Board Members, employees, principals, and agents from all claims, demands, suits, actions, and liability of any kind, including injuries to persons or damages to property ("Claims"), which arise out of, are connected with, or are due to the negligent acts or omissions of the indemnifying Party, its contractors, and/or employees, agents and representatives in performing its obligations under this Agreement, provided each Party's obligation under this section applies only to the extent of the negligence of that Party or its contractors, employees, agents, or representatives. Each of the Parties agrees that its obligations under this section extend to any claim, demand, cause of action and judgment brought by, or on behalf of, any of its employees or agents. For this purpose, both Parties, by mutual negotiation, hereby waive, regarding the other Party only, any immunity that would otherwise be available against such claims under the industrial insurance provisions of Title 51 RCW. 11. DEFAULT Failure to perform any provision of this MOA shall constitute a default by the party failing to perform, unless such default is cured by the party failing to perform within 90 days after receiving written notice from the other party. Exceptions: If there is any delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor, governmental restrictions, regulations or controls, enemy or hostile governmental action, riot, civil commotion, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform, such causes shall excuse the performance. If the default cannot reasonably be cured within 90 days, the non -performing party shall not be in default of this MOA if that party commences to cure the default within such ninety (90) day period and diligently and in good faith continues to cure the default. 12. NOTICE Any notice given under this MOA shall be effective only if in writing and given by delivering the notice in person or by sending it first-class mail or certified mail with a return receipt requested or by overnight courier return receipt requested, with postage prepaid, at the following addresses, or at such other addresses as either the Port or City of Port Orchard may designate by notice as its new address: Address for Port of Bremerton: Chief Executive Officer Port of Bremerton 8850 SW State Hwy 3 Bremerton, WA 98312 Telephone No: (360) 674-2381 Fax No: (360) 674-2807 Page 15 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A Email: Address for City of Port Orchard Telephone No: Fax No: Email: 0imr@portofbremerton.org Mayor City of Port Orchard 216 Prospect Street Port Orchard, WA 98366 (360) 876-4407 (360) 895-9029 rputaansuu@portorchardwa.gov Any notice hereunder shall be deemed to have been given two (2) days after the date when it is mailed if sent by first-class or certified mail, one day after the date it is mailed, if sent by overnight courier, or upon the date personal delivery is made. For convenience of the parties, copies of notices may also be given by email, facsimile or telephone to the address or numbers set forth above or such other address or number as may be provided from time to time; however, neither the Port nor City of Port Orchard may give official or binding notice by email, telephone or facsimile. 13. ENTIRE AGREEMENT This MOA (including attached exhibits, if any) contains the entire AGREEMENT between the parties with respect to the subject matter hereof. IN WITNESS WHEREOF, the parties have caused this MOA to be executed as of the date written below. City of Port Orchard Resolution No. 099-23 Port of Bremerton Resolution No. CITY OF PORT ORCHARD, a public municipality PORT OF BREMERTON, a public port district DocuSigned by: By: -rm& ' Mark Trenary Mayor Pro-Tem City of Port Orchard Date Signed: 10/24/2023 By: Jim Rothlin Chief Executive Officer Port of Bremerton Date Signed: Page 16 10734716.1 - 366922 - 0001 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A When recorded, return to: Port of Bremerton 8850 SW State Highway 3 Port Orchard, WA 98367-7487 P(RT OF RREr9t-RTON 201109290043 i15�I;,F!2G1? Il'� 00 uM Page blr a�i, �Yor Y rft 11 or WASHINGTON STATE DEPARTMENT OF Natural Resources Peter Goldmark -Commissioner of Public Lands AQUATIC LANDS LEASE Lease No. 20-AO9891 Grantor: Washington State Department of Natural Resources Grantee(s): Port of Bremerton Legal Description: Portions of Sections 25 and 26, Township 24 North, Range 1 East, W.M. Tract "A": That portion of an unnumbered tract of Shore and Tidelands of Sidney as shown on that certain map dated May 30, 1892, lying landward of the toe of the rock rip - rap as it existed on January 15, 2004 and adjacent to and abutting Lots 1 though 5 of Block 1 of the Plat of Bay Street Addition to Port Orchard as recorded under Auditor's File Number 51104 and filed in Volume 3, page 116 of plats, records of Kitsap County, Washington, more particularly described in Exhibit A; and Tract `B": That portion of an unnumbered tract of Shore and Tidelands of Sidney as shown on that certain map dated May 30, 1882, lying landward of the toe of the rock rip - rap as it existed on January 15, 2004 and adjacent to and abutting Lots 8 through 10 of Block 1 of the Plat of Bay Street Addition to Port Orchard as recorded under Auditor's File Number 51104 and filed in Volume 3, page 116 of plats, records of Kitsap County, Washington, more particularly described in Exhibit A. Complete legal description: Sheet 1 of 12 of Exhibit A, Current Survey recorded with Kitsap County, Auditor's File No. 20110301035, dated March 01, 2011. Assessor's Property Tax Parcel or Account Number: Not Applicable Assessor's Property Tax Parcel for Upland parcel used in conjunction with this Lease: Tax ID # 4028-001-011-0005 (Kitsap County Process # 1503739) THIS LEASE is between the STATE OF WASHINGTON, acting through the Department of Natural Resources ("State"), and the PORT OF BREMERTON, a government entity ("Port"). Port of Bremerton Public Access Page 1 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A BACKGROUND Port desires to lease the aquatic lands commonly known as the east end of the Port Orchard waterfront, public access and parking, which are tidelands and a harbor area located in Kitsap County, Washington, from State, and State desires to lease the property to Port pursuant to the terms and conditions of this Lease. State has authority to enter Lease under Chapter 43.12, Chapter 43.30 and Title 79 of the Revised Code of Washington (RCW). The area is divided into two parcels separated by a strip of Port -owned tidelands. This Lease is not used for eligibility for Port Management Agreement No. 22-080016, as amended (PMA). THEREFORE, the Parties agree as follows: SECTION 1 PROPERTY 1.1 Property Defined. (a) State leases to Port and Port leases from State the real property described in Exhibit A together with all the rights of State, if any, to improvements on and easements benefiting the Property, but subject to the exceptions and restrictions set forth in this Lease (collectively the "Property"). (b) This Lease is subject to all valid interests of third parties noted in the records of Kitsap County, or on file in the Office of the Commissioner of Public Lands, Olympia, Washington; rights of the public under the Public Trust Doctrine or federal navigation servitude; and treaty rights of Indian Tribes. (c) This Lease does not include a right to harvest, collect or damage natural resources, including aquatic life or living plants; water rights; mineral rights; or a right to excavate or withdraw sand, gravel, or other valuable materials. (d) State reserves the right to grant easements and other land uses on the Property to others when the easement or other land uses will not interfere unreasonably with the Permitted Use. 1.2 Survey and Property Descriptions. (a) Port prepared Exhibit A, which describes the Property. Port warrants that Exhibit A is a true and accurate description of the Lease boundaries and the improvements to be constructed or already existing in the Lease area. Port's obligation to provide a true and accurate description of the Property boundaries is a material term of this Lease. (b) State's acceptance of Exhibit A does not constitute agreement that Port's property description accurately reflects the actual amount of land used by Port. State reserves the right to retroactively adjust rent if at any time during the term of the Lease State discovers a discrepancy between Port's property description and the area actually used by Port. Port of Bremerton Public Access Page 2 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 1.3 Inspection. State makes no representation regarding the condition of the Property, improvements located on the Property, the suitability of the Property for Port's Permitted Use, compliance with governmental laws and regulations, availability of utility rights, access to the Property, or the existence of hazardous substances on the Property. Port inspected the Property and accepts it "AS IS." SECTION 2 USE 2.1 Permitted Use. Port shall use the Property for: nonwater-dependent bulkhead, parking, and public access (the "Permitted Use"), and for no other purpose. 2.2 Restrictions on Permitted Use and Operations. The following limitations apply to the Property and adjacent State-owned aquatic land. Port's compliance with the following does not limit Port's liability under any other provision of this Lease. (a) Port shall not cause or permit: (1) Damage to natural resources, (2) Waste, or (3) Deposit of material, unless approved by State in writing, and except to the extent expressly permitted in Exhibit B. This prohibition includes deposit of fill, rock, earth, ballast, wood waste, refuse, garbage, waste matter, pollutants of any type, or other matter. (4) Except as expressly permitted in Exhibit B, Port shall not construct new bulkheads or place hard bank armoring. (5) Except as expressly permitted in Exhibit B, Port shall not install fixed breakwaters. 2.3 Conformance with Laws. Port shall, at all times, keep current and comply with all conditions and terms of permits, licenses, certificates, regulations, ordinances, statutes, and other government rules and regulations regarding Port's use or occupancy of the Property. 2.4 Liens and Encumbrances. Unless expressly authorized by State in writing, Port shall keep the Property free and clear of liens or encumbrances arising from the Permitted Use or Port's occupancy of the Property. SECTION 3 TERM 3.1 Term Defined. The term of this Lease is twelve (12) years (the "Term"), beginning on the first day of September 2011 (the "Commencement Date"), and ending on the thirty-first day of August 2023 (the "Termination Date"), unless terminated sooner under the terms of this Lease. Port of Bremerton Public Access Page 3 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 3.2 Renewal of the Lease. This Lease does not provide a right of renewal. Port may apply for a new lease, which State has discretion to grant. Port must apply for a new lease at least one (1) year prior to Termination Date. State will notify Port within ninety (90) days of its intent to approve or deny a new Lease. 3.3 End of Term. (a) Upon the expiration or termination of this Lease, Port shall remove Improvements in accordance with Section 7, Improvements, and surrender the Property to State in the same or better condition as on the Commencement Date, reasonable wear and tear excepted. (b) Definition of Reasonable Wear and Tear. (1) Reasonable wear and tear is deterioration resulting from the Permitted Use that has occurred without neglect, negligence, carelessness, accident, or abuse of the Property by Port or any other person on the premises with the permission of Port. (2) Reasonable wear and tear does not include unauthorized deposit of material prohibited under Paragraph 2.2 regardless of whether the deposit is incidental to or the byproduct of the Permitted Use. (c) If Property is in worse condition, excepting for reasonable wear and tear, on the surrender date than on the Commencement Date, the following provisions apply: (1) State shall provide Port a reasonable time to take all steps necessary to remedy the condition of the Property. State may require Port to enter into a right -of -entry or other use authorization prior to the Port entering the Property if the Lease has terminated. (2) If Port fails to remedy the condition of the Property in a timely manner, State may take steps reasonably necessary to remedy Port's failure. Upon demand by State, Port shall pay all costs of State's remedy, including but not limited to the costs of removing and disposing of material deposited improperly on the Property, lost revenue resulting from the condition of the Property, and administrative costs associated with the State's remedy. 3.4 Holdover. (a) If Port remains in possession of the Property after the Termination Date, the occupancy will not be an extension or renewal of the Term. The occupancy will be a month -to -month tenancy, on terms identical to the terms of this Lease, which either Party may terminate on thirty (30) days' written notice. (1) The monthly rent during the holdover will be the same rent that would be due if the Lease were still in effect and all adjustments in rent were made in accordance with its terms. (2) Payment of more than the monthly rent will not be construed to create a periodic tenancy longer than month -to -month. If Port pays more than the monthly rent and State provides notice to vacate the property, State shall refund the amount of excess payment remaining after the Port ceases occupation of the Property. Port of Bremerton Public Access Page 4 of 32 Aquatic Lands Lease No. 20-A09891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (b) If State notifies Port to vacate the Property and Port fails to do so within the time set forth in the notice, Port will be a trespasser and shall owe the State all amounts due under RCW 79.02.300 or other applicable law. SECTION 4 RENT 4.1 Annual Rent. (a) Until adjusted as set forth below, Port shall pay to State an annual rent of Thirty- one Thousand Eight Hundred Forty-seven and 42/100 Dollars ($31,847.42) related to the nonwater-dependent use. (b) The annual rent, as it currently exists or as adjusted or modified (the "Annual Rent"), is due and payable in full on or before the Commencement Date and on or before the same date of each year thereafter. Any payment not paid by State's close of business on the date due is past due. 4.2 Payment Place. Port shall make payment to Financial Management Division, 1111 Washington St SE, MS 47041, Olympia, WA 98504-7041. 4.3 Adjustment Based on Use. Annual Rent is based on Port's Permitted Use of the Property, as described in Section 2 above. If Port's Permitted Use changes, the Annual Rent shall be adjusted as appropriate for the changed use. 4.4 Rent Adjustment Procedures. (a) Notice of Rent Adjustment. State shall provide notice of adjustments to the Annual Rent allowed under Paragraph 4.5(b) to Port in writing no later than ninety (90) days after the anniversary date of the Lease. (b) Procedures on Failure to make Timely Adjustment. If the State fails to provide the notice required in Paragraph 4.4(a), State shall not collect the adjustment amount for the year in which State failed to provide notice. Upon providing notice of adjustment, State may adjust and prospectively bill Annual Rent as if missed or waived adjustments had been implemented at the proper interval. This includes the implementation of any inflation adjustment. 4.5 Rent Adjustments for Nonwater-Dependent Uses. (a) Inflation Adjustment. Except in those years in which State revalues the rent under Paragraph 4.5(b) below, State shall adjust nonwater-dependent rent annually on the Commencement Date. Adjustment is based on the percentage rate of change in the previous calendar year's Consumer Price Index published by the Bureau of Labor Statistics of the United States Department of Commerce, for the Seattle - Tacoma -Bremerton Consolidated Metropolitan Statistical Area, All Urban Consumers, all items 1982-84 = 100. If publication of the Consumer Price Index is discontinued, State shall use a reliable governmental or other nonpartisan publication evaluating the information used in determining the Consumer Price Index. Port of Bremerton Public Access Page 5 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (b) Revaluation of Rent. (1) At the end of the first four-year period of the Term, and at the end of each subsequent four-year period, State shall revalue the nonwater-dependent Annual Rent to reflect the then -current fair market rent. (2) If State and Port cannot reach agreement on the fair market rental value, the Parties shall submit the valuation to a review board of appraisers. The board must consist of three members, one selected by and at the cost of Port; a second member selected by and at the cost of State; and a third member selected by the other two members with the cost shared equally by State and Port. The decision of the majority of the board binds the Parties. Until the Parties agree to, or the review board establishes, the new rent, Port shall pay rent in the same amount established for the preceding year. If the board determines additional rent is required, Port shall pay the additional rent within ten (10) days of the board's decision. If the board determines a refund is required, State shall pay the refund within ten (10) days of the board's decision. SECTION 5 OTHER EXPENSES 5.1 Utilities. Port shall pay all fees charged for utilities required or needed by the Permitted Use. 5.2 Taxes and Assessments. Port shall pay all taxes (including leasehold excise taxes), assessments, and other governmental charges applicable or attributable to the Property, Port's leasehold interest, the improvements, or Port's use and enjoyment of the Property. 5.3 Right to Contest. If in good faith, Port may contest any tax of assessment at its sole cost and expense. At the request of State, Port shall furnish reasonable protection in the form of a bond or other security, satisfactory to State, against loss or liability resulting from such contest. 5.4 Proof of Payment. If required by State, Port shall furnish to State receipts or other appropriate evidence establishing the payment of amounts this Lease requires Port to pay. 5.5 Failure to Pay. If Port fails to pay amounts due under this Lease, State may pay the amount due, and recover its cost in accordance with Section 6. SECTION 6 LATE PAYMENTS AND OTHER CHARGES 6.1 Failure to Pay Rent. Failure to pay rent is a default by the Port. State may seek remedies under Section 14 as well as late charges and interest as provided in this Section 6. Port of Bremerton Public Access Page 6 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 6.2 Late Charge. If State does not receive full rent payment within ten (10) days of the date due, Port shall pay to State a late charge equal to four percent (4%) of the unpaid amount or Fifty Dollars ($50), whichever is greater, to defray the overhead expenses of State incident to the delay. 6.3 Interest Penalty for Past Due Rent and Other Sums Owed. (a) Port shall pay interest on the past due rent at the rate of one percent (1%) per month until paid, in addition to paying the late charges determined under Paragraph 6.2. Rent not paid by the close of business on the due date will begin accruing interest the day after the due date. (b) If State pays or advances any amounts for or on behalf of Port, Port shall reimburse State for the amount paid or advanced and shall pay interest on that amount at the rate of one percent (1%) per month from the date State notifies Port of the payment or advance. This includes, but is not limited to, State's payment of taxes of any kind, assessments, insurance premiums, costs of removal and disposal of materials or Improvements under any provision of this Lease, or other amounts riot paid when due. 6.4 Referral to Collection Agency and Collection Agency Fees. If State does not receive full payment within thirty (30) days of the due date, State may refer the unpaid amount to a collection agency as provided by RCW 19.16.500 or other applicable law. Upon referral, Port shall pay collection agency fees in addition to the unpaid amount. 6.5 No Accord and Satisfaction. If Port pays, or State otherwise receives, an amount less than the full amount then due, State may apply such payment as it elects. State may accept payment in any amount without prejudice to State's right to recover the balance of the rent or pursue any other right or remedy. No endorsement or statement on any check, any payment, or any letter accompanying any check or payment constitutes accord and satisfaction. 6.6 No Counterclaim, Setoff, or Abatement of Rent. Except as expressly set forth elsewhere in this Lease, Port shall pay rent and all other sums payable by Port without the requirement that State provide prior notice or demand. Port's payment is not subject to counterclaim, setoff, deduction, defense or abatement. SECTION 7 IMPROVEMENTS 7.1 Improvements Defined. (a) "Improvements," consistent with RCW 79.105 through 79.145, are additions within, upon, or attached to the land. This includes, but is not limited to, fill, structures, bulkheads, docks, pilings, and other fixtures. (b) "Personal Property" means items that can be removed from the Property without (1) injury to the Property or Improvements or (2) diminishing the value or utility of the Property or Improvements. Port of Bremerton Public Access Page 7 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (c) "State -Owned Improvements" are Improvements made or owned by State. State - Owned Improvements includes any construction, alteration, or addition to State - Owned Improvements made by Port. (d) "Port -Owned Improvements" are Improvements authorized by State and (1) made by Port or (2) acquired by Port from the prior tenant. (e) "Unauthorized Improvements" are Improvements made on the Property without State's prior consent or Improvements made by Port that do not conform to plans submitted to and approved by the State. 7.2 Existing Improvements. On the Commencement Date, the following Improvements are located on the Property: Boardwalk, Bulkhead, Parking Surfaces. The Improvements are Port - Owned. 7.3 Construction, Major Repair, Modification, and Demolition. (a) This Paragraph 7.3 governs construction, alteration, replacement, major repair, modification, demolition, and deconstruction of Improvements ("Work"). Section 11 governs routine maintenance and minor repair. (b) All Work must conform to requirements under Paragraph 7.4. Paragraph 11.3, which applies to routine maintenance and minor repair, also applies to all Work under this Paragraph 7.3. (c) Except in an emergency, Port shall not conduct Work, without State's prior written consent, as follows: (1) State may deny consent if State determines that denial is in the best interests of the State or if proposed Work does not comply with Paragraphs 7.4 and 11.3. State may impose additional conditions reasonably intended to protect and preserve the Property. If Work is for removal of Improvements at End of Term, State may waive removal of some or all Improvements. (2) Except in an emergency, Port shall submit to State plans and specifications describing the proposed Work at least sixty (60) days before submitting permit applications to regulatory authorities unless Port and State otherwise agree to coordinate permit applications. At a minimum, or if no permits are necessary, Port shall submit plans and specifications at least ninety (90) days before commencement of Work. (3) State waives the requirement for consent if State does not notify Port of its grant or denial of consent within sixty (60) days of submittal. (d) Port shall notify State of emergency Work within five (5) business days of the start of such Work. Upon State's request, Port shall provide State with plans and specifications or as-builts of emergency Work. (e) Port shall not commence or authorize Work until Port has: (1) Obtained a performance and payment bond in an amount equal to zero percent (0.0%) of the estimated cost of construction. Port shall maintain the performance and payment bond until Port pays in full the costs of the Work, including all laborers and material persons. (2) Obtained all required permits. Port of Bremerton Public Access Page 8 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (f) Before completing Work, Port shall remove all debris and restore the Property, to an orderly and safe condition. If Work is intended for removal of Improvements at End of Term, Port shall restore the Property in accordance with Paragraph 3.3, End of Term. (g) Upon completing work, Port shall promptly provide State with as -built plans and specifications. (h) State shall not charge rent for authorized Improvements installed by Port during this Term of this Lease, but State may charge rent for such Improvements when and if Port or successor obtains a subsequent use authorization for the Property and State has waived the requirement for Improvements to be removed as provided in Paragraph 7.5. 7.4 Standards for Work. Port shall comply with State's Standards for Improvements current at the time Port submits plans and specifications for State's approval in accordance with Paragraph 7.3(b). 7.5 Port -Owned Improvements at End of Lease. (a) Disposition. (1) Port shall remove Port -Owned Improvements in accordance with Paragraph 7.3 upon the expiration, termination, or cancellation of the Lease unless State waives the requirement for removal. (2) Port -Owned Improvements remaining on the Property on the expiration, termination or cancellation date shall become State -Owned Improvements without payment by State, unless State elects otherwise. State may refuse or waive ownership. If RCW 79.125.300 or 79.130.040 apply at the time this Lease expires, Port could be entitled to payment by the new tenant for Port -Owned Improvements. (3) If Port -Owned Improvements remain on the Property after the expiration, termination, or cancellation date without State's consent, State may remove all Improvements and Port shall pay State's costs. (b) Conditions Under Which State May Waive Removal of Port -Owned Improvements. (1) State may waive removal of some or all Port -Owned Improvements whenever State determines that it is in the best interests of the State and regardless of whether Port re -leases the Property. (2) If Port re -leases the Property, State may waive requirement to remove Port -Owned Improvements. State also may consent to Port's continued ownership of Port -Owned Improvements. (3) If Port does not re -lease the Property, State may waive requirement to remove Port -Owned Improvements upon consideration of a timely request from Port, as follows: (i) Port must notify State at least one (1) year before the Termination Date of its request to leave Port -Owned Improvements. Port of Bremerton Public Access Page 9 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (ii) State, within ninety (90) days of receiving Port's notification, will notify Port whether State consents to some or all Port -Owned Improvements remaining. State has no obligation to grant consent. (iii) State's failure to respond to Port's request to leave Improvements within ninety (90) days is a denial of the request. (c) Port's Obligations if State Waives Removal. (1) Port shall not remove Improvements if State waives the requirement for removal of some or all Port -Owned Improvements. (2) Port shall maintain such Improvements in accordance with this Lease until the expiration, termination, or cancellation date. Port is liable to State for cost of repair if Port causes or allows damage to Improvements State has designated to remain. 7.6 Disposition of Unauthorized Improvements. (a) Unauthorized Improvements belong to State, unless State elects otherwise. (b) State may either: (1) Consent to Port ownership of the Improvements, or (2) Charge rent for use of the Improvements from the time of installation or construction and (i) Require Port to remove the Improvements in accordance with Paragraph 7.3, in which case Port shall pay rent for the Improvements until removal, (ii) Consent to Improvements remaining and Port shall pay rent for the use of the Improvements, or (iii) Remove Improvements and Port shall pay for the cost of removal and disposal, in which case Port shall pay rent for use of the Improvements until removal and disposal. 7.7 Disposition of Personal Property. (a) Port retains ownership of Personal Property unless Port and State agree otherwise in writing. (b) Port shall remove Personal Property from the Property by the Termination Date. Port is liable for damage to the Property and Improvements resulting from removal of Personal Property. (c) State may sell or dispose of all Personal Property left on the Property after the Termination Date. (1) If State conducts a sale of Personal Property, State shall apply proceeds first to the State's administrative costs in conducting the sale, second to payment of amount that then may be due from the Port to the State. State shall pay the remainder, if any, to the Port. (2) If State disposes of Personal Property, Port shall pay for the cost of removal and disposal. Port of Bremerton Public Access Page 10 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A SECTION 8 ENVIRONMENTAL LIABILITY/RISK ALLOCATION 8.1 Definitions. (a) "Hazardous Substance" means any substance that now or in the future becomes regulated or defined under any federal, state, or local statute, ordinance, rule, regulation, or other law relating to human health, environmental protection, contamination, pollution, or cleanup. (b) "Release or threatened release of Hazardous Substance" means a release or threatened release as defined under any law described in Paragraph 8.1(a). (c) "Utmost care" means such a degree of care as would be exercised by a very careful, prudent, and competent person under the same or similar circumstances; the standard of care applicable under the Washington State Model Toxics Control Act ("MTCA"), Chapter 70.105 RCW, as amended. (d) "Port and affiliates" when used in this Section 8 means Port or Port's subtenants, contractors, agents, employees, guests, invitees, licensees, affiliates, or any person on the Property with the Port's permission. (e) "Liabilities" as used in this Section 8 means any claims, demands, proceedings, lawsuits, damages, costs, expenses, fees (including attorneys' fees and disbursements), penalties, or judgments. 8.2 General Conditions. (a) Port's obligations under this Section 8 extend to the area in, on, under, or above (1) The Property and (2) Adjacent State-owned aquatic lands if affected by a release of Hazardous Substances that occurs as a result of the Permitted Use. (b) Standard of Care. (1) Port shall exercise the utmost care with respect to Hazardous Substances. (2) Port shall exercise utmost care for the foreseeable acts or omissions of third parties with respect to Hazardous Substances, and the foreseeable consequences of those acts or omissions, to the extent required to establish a viable, third -party defense under the law. 8.3 Current Conditions and Duty to Investigate. (a) State makes no representation about the condition of the Property. Hazardous Substances may exist in, on, under, or above the Property. (b) This Lease does not impose a duty on State to conduct investigations or supply information to Port about Hazardous Substances. (c) Port is responsible for conducting all appropriate inquiry and gathering sufficient information about the existence, scope, and location of Hazardous Substances on or near the Property necessary for Port to meet Port's obligations under this Lease and utilize the Property for the Permitted Use. Port of Bremerton Public Access Page 11 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 8.4 Use of Hazardous Substances. (a) Port and affiliates shall not use, store, generate, process, transport, handle, release, or dispose of Hazardous Substances, except in accordance with all applicable laws. (b) Port shall not undertake, or allow others to undertake by Port's permission, acquiescence, or failure to act, activities that result in a release or threatened release of Hazardous Substances. (c) If use of Hazardous Substances related to Port's use or occupancy of the Property results in violation of law: (1) Port shall submit to State any plans for remedying the violations, and (2) Port shall implement any remedial measures to restore the Property or natural resources that State may require in addition to remedial measures required by regulatory authorities. (d) Port shall comply with the provisions of Chapter 90.56 RCW Oil and Hazardous Substance Spill Prevention and Response Act. Port shall develop, update as necessary and operate in accordance with a plan of operations consistent with the requirements of Chapter 90.56 RCW. Failure to comply with the requirements of Chapter 90.56 is a default under Section 14. (e) At a minimum, Port and affiliates shall observe the following Hazardous Substances operational standards. If the Washington Department of Ecology, U.S. Environmental Protection Agency or other regulatory agency establishes different standards applicable to Port's activities under the Permitted Use, Port shall meet the standard that provides greater protection to the environment. (1) Port shall not allow work on overwater structures or vessels without protective measures to prevent discharge of toxins to the water, including: (i) Port shall not cause or allow underwater hull scraping and other underwater removal of paints. (ii) Port shall not cause or allow underwater refinishing work from boats or temporary floats unless permitted by an industrial National Pollution Discharge Elimination System (NPDES) permit. (iii) Port shall not cause or allow above the waterline boat repairs or refinishing in -water except if limited to decks and superstructures and less than 25 percent of a boat is repaired or refinished in -water per year. (iv) Port shall use and require others to use tarps and other dust, drip and spill containment measures when repairing or refinishing boats in water. (2) Port shall not store or allow others to store fuel tanks, petroleum products, hydraulic fluid, machinery coolants, lubricants and chemicals not in use in locations above the water surface. (3) Port shall inspect all equipment using petroleum products, hydraulic fluids, machinery coolants, chemicals, or other toxic or deleterious materials on a monthly basis and immediately make all repairs necessary Port of Bremerton Public Access Page 12 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A to stop leakage. Port shall submit to State an annual report documenting inspections and repair. (4) Port shall maintain a supply of oil spill containment materials adequate to contain a spill from the largest vessel in use on the Property. (5) Port shall not use or allow use of a pressure washer at any location above the water surface to clean any item that uses petroleum products. (6) Port shall incorporate best management practices to prevent the release of chemical contaminants, wastewater, garbage and other pollutants, as specified in Resource Manual for Pollution Prevention in Marinas published by the Washington Department of Ecology, publication number 98-11, available at http://www.ecy.wa.gov/biblio/9811.html. If the Department of Ecology or other regulatory agency establishes different standards, Port shall meet the most protective standard. 8.5 Management of Contamination, if any. (a) Port and affiliates shall not undertake activities that: (1) Damage or interfere with the operation of remedial or restoration activities, if any; (2) Result in human or environmental exposure to contaminated sediments, if any; (3) Result in the mechanical or chemical disturbance of on -site habitat mitigation, if any. (b) If requested, Port shall allow reasonable access to: (1) Employees and authorized agents of the Environmental Protection Agency, the Washington State Department of Ecology, health department, . or other similar environmental agencies; and (2) Potentially liable or responsible parties who are the subject of an order or consent decree that requires access to the Property. Port may negotiate an access agreement with such parties, but Port may not unreasonably withhold such agreement. 8.6 Notification and Reporting. (a) Port shall immediately notify State if Port becomes aware of any of the following: (1) A release or threatened release of Hazardous Substances; (2) Any new discovery of or new information about a problem or liability related to, or derived from, the presence of Hazardous Substances; (3) Any lien or action arising from Hazardous Substances; (4) Any actual or alleged violation of any federal, state, or local statute, ordinance, rule, regulation, or other law pertaining to Hazardous Substances; (5) Any notification from the US Environmental Protection Agency (EPA) or the Washington State Department of Ecology (DOE) that remediation or removal of Hazardous Substances is or may be required at the Property. (b) Port's duty to report under Paragraph 8.6(a) extends to lands described in Paragraph 8.2(a) and to any other property used by Port in conjunction with the Port of Bremerton Public Access Page 13 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A Property if a release of Hazardous Substances on the other property could affect the Property. (c) Port shall provide State with copies of all documents Port submits to any federal, state or local authorities concerning environmental impacts or proposals relative to the Property. Documents subject to this requirement include, but are not limited to, applications, reports, studies, or audits for National Pollution Discharge and Elimination System Permits; Army Corps of Engineers permits; State Hydraulic Project Approvals (HPA); State Water Quality certification; Substantial Development permit; and any reporting necessary for the existence, location, and storage of Hazardous Substances on the Property. 8.7 Indemnification. (a) To the extent allowed by law, Port shall fully indemnify, defend, and hold State harmless from and against Liabilities that arise out of, or relate to: (1) The use, storage, generation, processing, transportation, handling, or disposal of any Hazardous Substance by Port and affiliates occurring whenever Port occupies or has occupied the Property; (2) The release or threatened release of any Hazardous Substance resulting from any act or omission of Port and affiliates occurring whenever Port occupies or has occupied the Property. (b) To the extent allowed by law, Port shall frilly indemnify, defend, and hold State harmless for Liabilities that arise out of or relate to Port's breach of obligations under Paragraph 8.5. (c) Port has no duty to indemnify State for acts or omissions of third parties unless and only if an administrative or legal proceeding arising from a release or threatened release of Hazardous Substances finds or holds that Port failed to exercise care as described in Paragraph 8.2(b)(2). In such case, Port shall fully indemnify, defend, and hold State harmless from and against Liabilities arising from the acts or omissions of third parties in relation to the release or threatened release of Hazardous Substances. This includes Liabilities arising before the finding or holding in the proceeding. 8.8 Reservation of Rights. (a) For Liabilities not covered by the indemnification provisions of Paragraph 8.7, the Parties expressly reserve and do not waive any rights, claims, immunities, causes of action, or defenses relating to Hazardous Substances that either Party may have against the other under law. (b) The Parties expressly reserve all rights, claims, immunities, and defenses either Party may have against third parties. Nothing in this Section 8 benefits or creates rights for third parties. (c) The allocations of risks, Liabilities, and responsibilities set forth in this Section 8 do not release either Party from or affect the liability of either Party for Hazardous Substances claims or actions by regulatory agencies. Port of Bremerton Public Access Page 14 of 32 Aquatic Lands Lease No. 20-A09891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 8.9 Cleanup. (a) If Port's act, omission, or breach of obligation under Paragraph 8.4 results in a release of Hazardous Substances that exceeds the threshold limits of any applicable regulatory standard, Port shall, at Port's sole expense, promptly take all actions necessary or advisable to clean up the Hazardous Substances in accordance with applicable law. (b) Port may undertake a cleanup of the Property pursuant to the Washington State Department of Ecology's Voluntary Cleanup Program, provided that Port cooperates with the Department of Natural Resources in development of cleanup plans. Port shall not proceed with Voluntary Cleanup without the Department of Natural Resources approval of final plans. Nothing in the operation of this provision is an agreement by the Department of Natural Resources that the Voluntary Cleanup complies with any laws or with the provisions of this Lease. Port's completion of a Voluntary Cleanup is not a release from or waiver of any obligation for Hazardous Substances under this Lease. 8.10 Sampling by State, Reimbursement, and Split Samples. (a) State may enter the Property and conduct sampling, tests, audits, surveys, or investigations ("Tests") of the Property at any time to determine the existence, scope, or effects of Hazardous Substances. (b) If such Tests, along with any other information, demonstrate a breach of Port's obligations regarding Hazardous Substances under this Lease, Port shall promptly reimburse State for all costs associated with the Tests, provided State gave Port thirty (30) calendar days advance notice in nonemergencies and reasonably practical notice in emergencies. (c) In nonemergencies, Port is entitled to obtain split samples of Test samples, provided Port gives State written notice requesting split samples at least ten (10) calendar days before State conducts Tests. Upon demand, Port shall promptly reimburse State for additional cost, if any, of split samples. (d) If either Party conducts Tests on the Property, the conducting Party shall provide the other with validated final data and quality assurance/quality control/chain of custody information about the Tests within sixty (60) calendar days of a written request by the other party, unless Tests are part of a submittal under Paragraph 8.6(c) in which case Port shall submit data and information to State without written request by State. Neither party is obligated to provide any analytical summaries or the work product of experts. 8.11 Closeout Assessment. (a) State may require Port to conduct a Closeout Environmental Assessment ("Closeout Assessment") prior to Termination of the Lease. (b) The purpose of the Closeout Assessment is to determine the existence, scope, or effects of Hazardous Substances on the Property and associated natural resources. The Closeout Assessment may include sediment sampling. Port of Bremerton Public Access Page 15 of 32 Aquatic Lands Lease No. 20-A09891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (c) No later than one hundred eighty (180) calendar days prior to the Termination Date, or within ninety (90) days of valid notice to early termination, State shall provide Port with written notice that State requires a Closeout Assessment. (d) Within sixty (60) days of State's notice that Closeout Assessment is required and before commencing assessment activities, Port shall submit a proposed plan for conducting the Closeout Assessment in writing for State's approval. (e) If State fails to approve or disapprove of the plan in writing within sixty (60) days of its receipt, State waives requirement for approval. (f) Port shall be responsible for all costs required to complete planning, sampling, analyzing, and reporting associated with the Closeout Assessment. (g) If the initial results of the Closeout Assessment disclose that Hazardous Substances may have migrated to other property, State may require additional Closeout Assessment work to determine the existence, scope, and effect of Hazardous Substances on adjacent property, any other property subject to use by Port in conjunction with its use of the Property, or on associated natural resources. (h) Port shall submit Closeout Assessment to State upon completion. (i) As required by law, Port shall report to the appropriate regulatory authorities if the Closeout Assessment discloses a release or threatened release of Hazardous Substances. SECTION 9 ASSIGNMENT AND SUBLETTING 9.1 State Consent Required. Port shall not convey, transfer, or encumber any part of Port's interest in this Lease or the Property without State's prior written consent, which State shall not unreasonably condition or withhold. (a) In determining whether to consent, State may consider, among other items, the proposed transferee's financial condition, business reputation and experience, the nature of the proposed transferee's business, the then -current value of the Property, and such other factors as may reasonably bear upon the suitability of the transferee as a tenant of the Property. State may refuse its consent to any conveyance, transfer, or encumbrance if it will result in a subdivision of the leasehold. Port shall submit information regarding any proposed transferee to State at least thirty (30) days prior to the date of the proposed transfer. (b) State reserves the right to condition its consent upon: (1) Changes in the terms and conditions of this Lease, including, but not limited to, the Annual Rent; and/or (2) The agreement of Port or transferee to conduct Tests for Hazardous Substances on the Property or on other property owned or occupied by Port or the transferee. (c) Each permitted transferee shall assume all obligations under this Lease, including the payment of rent. No assignment, sublet, or transfer shall release, discharge, or otherwise affect the liability of Port. (d) State's consent under this Paragraph 9.1 does not constitute a waiver of any claims against Port for the violation of any term of this Lease. Port of Bremerton Public Access Page 16 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 9.2 Rent Payments Following Assignment. The acceptance by State of the payment of rent following an assignment or other transfer does not constitute consent to any assignment or transfer. 9.3 Terms of Subleases. (a) Port shall submit the terms of all subleases to State for approval. (b) Port shall incorporate the following requirements in all subleases: (1) The sublease must be consistent with and subject to all the terms and conditions of this Lease; (2) The sublease must provide that this Lease controls if the terms of the sublease conflict with the terms of this Lease; (3) The term of the sublease (including any period of time covered by a renewal option) must end before the Termination Date of the initial Term or any renewal term; (4) The sublease must terminate if this Lease terminates for any reason; (5) The subtenant must receive and acknowledge receipt of a copy of this Lease; (6) The sublease must prohibit the prepayment to Port by the subtenant of more than the annual rent; (7) The sublease must identify the rental amount subtenant is to pay to Port; (8) The sublease must provide that there is no privity of contract between the subtenant and State; (9) The sublease must require removal of the subtenant's Improvements and Personal Property upon termination of the sublease; (10) The subtenant's permitted use must be within the scope of the Permitted Use; and (11) The sublease must require the subtenant to meet all obligations of Port under Section 10, Indemnification, Financial Security, and Insurance. 9.4 Short -Term Subleases of Moorage Slips. Short-term subleasing of moorage slips for a term of less than one (1) year does not require State's written consent or approval pursuant to Paragraphs 9.1 or 9.3. Port shall conform moorage sublease agreements to the sublease requirements in Paragraph 9.3. SECTION 10 INDEMNITY, FINANCIAL SECURITY, INSURANCE 10.1 Indemnity. Each Party shall be responsible for the actions and inactions of itself and its own officers, employees, and agents acting within the scope of their authority. 10.2 Insurance Terms. (a) Insurance Required. (1) At its own expense, Port shall procure and maintain during the Term of this Lease, the insurance coverages and limits described in this Paragraph Port of Bremerton Public Access Page 17 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 10.2 and in Paragraph 10.3, Insurance Types and Limits. State may terminate this Lease if Port fails to maintain required insurance. (2) Unless State agrees to an exception, Port shall provide insurance issued by an insurance company or companies admitted to do business in the State of Washington and have a rating of A- or better by the most recently published edition of Best's Reports. Port may submit a request to the risk manager for the Department of Natural Resources to approve an exception to this requirement. If an insurer is not admitted, the insurance policies and procedures for issuing the insurance policies shall comply with Chapter 48.15 RCW and 284-15 WAC. (3) All general liability, excess, umbrella, property, builder's risk, and pollution legal liability insurance policies must name the State of Washington, the Department of Natural Resources, its elected and appointed officials, agents, and employees as an additional insured. (4) All insurance provided in compliance with this Lease must be primary as to any other insurance or self-insurance programs afforded to or maintained by State. (b) Waiver. (1) Port waives all rights against State for recovery of damages to the extent insurance maintained pursuant to this Lease covers these damages. (2) Except as prohibited by law, Port waives all rights of subrogation against State for recovery of damages to the extent that they are covered by insurance maintained pursuant to this Lease. (c) Proof of Insurance. (1) Port shall provide State with a certificate(s) of insurance executed by a duly authorized representative of each insurer, showing compliance with insurance requirements specified in this Lease and, if requested, copies of policies to State. (2) The certificate(s) of insurance must reference additional insureds and the Lease number. (3) Receipt of such certificates or policies by State does not constitute approval by State of the terms of such policies. (d) State must receive written notice before cancellation or non -renewal of any insurance required by this Lease, as follows: (1) Insurers subject to RCW 48.18 (admitted and regulated by the Insurance Commissioner): If cancellation is due to non-payment of premium, provide State ten (10) days' advance notice of cancellation; otherwise, provide State forty-five (45) days' advance notice of cancellation or non - renewal. (2) Insurers subject to RCW 48.15 (surplus lines): If cancellation is due to non-payment of premium, provide State ten (10) days' advance notice of cancellation; otherwise, provide State thirty (30) days' advance notice of cancellation or non -renewal. Port of Bremerton Public Access Page 18 of 32 Aquatic Lands Lease No. 20-A09891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (e) Adjustments in Insurance Coverage. (1) State may impose changes in the limits of liability for all types of insurance as State deems necessary. (2) Port shall secure new or modified insurance coverage within thirty (30) days after State requires changes in the limits of liability. (f) If Port fails to procure and maintain the insurance described above within fifteen (15) days after Port receives a notice to comply from State, State may either: (1) Deem the failure an Event of Default under Section 14, or (2) Procure and maintain comparable substitute insurance and pay the premiums. Upon demand, Port shall pay to State the full amount paid by State, together with interest at the rate provided in Paragraph 6.2 from the date of State's notice of the expenditure until Port's repayment. (g) General Terms. (1) State does not represent that coverage and limits required under this Lease are adequate to protect Port. (2) Coverage and limits do not limit Port's liability for indemnification and reimbursements granted to State under this Lease. (3) The Parties shall use any insurance proceeds payable by reason of damage or destruction to property first to restore the real property covered by this Lease, then to pay the cost of the reconstruction, then to pay the State any sums in arrears, and then to Port. 10.3 Insurance Types and Limits. (a) General Liability Insurance. (1) Port shall maintain commercial general liability insurance (CGL) or marine general liability (MGL) covering claims for bodily injury, personal injury, or property damage arising on the Property and/or arising out of Port's use, occupation, or control of the Property and, if necessary, commercial umbrella insurance with a limit of not less than One Million Dollars ($1,000.000) per each occurrence. If such CGL or MGL insurance contains aggregate limits, the general aggregate limit must be at least twice the "each occurrence" limit. CGL or MGL insurance must have products -completed operations aggregate limit of at least two times the "each occurrence" limit. (2) CGL insurance must be written on Insurance Services Office (ISO) Occurrence Form CG 00 01 (or a substitute form providing equivalent coverage). All insurance must cover liability arising out of premises, operations, independent contractors, products completed operations, personal injury and advertising injury, and liability assumed under an insured contract (including the tort liability of another party assumed in a business contract) and contain separation of insured (cross -liability) condition. (3) MGL insurance must have no exclusions for non -owned watercraft. Port of Bremerton Public Access Page 19 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (b) Workers' Compensation. (1) State of Washington Workers' Compensation. (i) Port shall comply with all State of Washington workers' compensation statutes and regulations. Port shall provide workers' compensation coverage for all employees of Port. Coverage must include bodily injury (including death) by accident or disease, which arises out of or in connection with Port's use, occupation, and control of the Property. (ii) If Port fails to comply with all State of Washington workers' compensation statutes and regulations and State incurs fines or is required by law to provide benefits to or obtain coverage for such employees, Port shall indemnify State. Indemnity shall include all fines; payment of benefits to Port, employees, or their heirs or legal representatives; and the cost of effecting coverage on behalf of such employees. (2) Longshore and Harbor Workers' and Jones Acts. Longshore and Harbor Workers' Act (33 U.S.C. Section 901 et sect.) and/or the Jones Act (46 U.S.C. Section 688) may require Port to provide insurance coverage in some circumstances. Port shall ascertain if such insurance is required and, if required, shall maintain insurance in compliance with law. Port is responsible for all civil and criminal liability arising from failure to maintain such coverage. (c) Employers' Liability Insurance. Port shall procure employers' liability insurance, and, if necessary, commercial umbrella liability insurance with limits not less than One Million Dollars ($1,000,000) each accident for bodily injury by accident or One Million Dollars ($1,000,000) each employee for bodily injury by disease. (d) Property Insurance. (1) Port shall buy and maintain property insurance covering all real property and fixtures, equipment, Port Improvements and betterments (regardless of whether owned by Port or State). Such insurance must be written on an all risks basis and, at minimum, cover the perils insured under ISO Special Causes of Loss Form CP 10 30, and cover the full replacement cost of the property insured. Such insurance may have commercially reasonable deductibles. Any coinsurance requirement in the policy must be waived. The policy must include State as an insured and a loss payee. (2) In the event of any loss, damage, or casualty which is covered by one or more of the types of insurance described above, the Parties to this Lease shall proceed cooperatively to settle the loss and collect the proceeds of such insurance, which State shall hold in trust, including interest earned by State on such proceeds, for use according to the terms of this Lease. The Parties shall use insurance proceeds in accordance with Paragraph 10.2(g)(3). (3) When sufficient funds are available, using insurance proceeds described above, the Parties shall continue with reasonable diligence to prepare Port of Bremerton Public Access Page 20 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A plans and specifications for, and thereafter carry out, all work necessary to: (i) Repair and restore damaged building(s) and/or Improvements to their former condition, or (ii) Replace and restore damaged building(s) and/or Improvements with a new building(s) and/or Improvements on the Property of a quality and usefulness at least equivalent to or more suitable than, damaged building(s) and/or Improvements. 10.4 Financial Security. (a) At its own expense, Port shall procure and maintain during the Term of this Lease a corporate security bond or provide other financial security that State, at its option, may approve ("Security"). Port shall provide Security in an amount equal to Zero Dollars ($0.00), which is consistent with RCW 79.105.330, and secures Port's performance of its obligations under this Lease, with the exception of the obligations under Section 8, Environmental Liability/Risk Allocation. Port's failure to maintain the Security in the required amount during the Term constitutes a breach of this Lease. (b) All Security must be in a form acceptable to the State. (1) Bonds must be issued by companies admitted to do business within the State of Washington and have a rating of A-, Class VII or better, in the most recently published edition of Best's Reports, unless State approves an exception. Port may submit a request to the risk manager for the Department of Natural Resources for an exception to this requirement. (2) Letters of credit, if approved by State, must be irrevocable, allow State to draw funds at will, provide for automatic renewal, and comply with RCW 62A.5-101, et. seq. (3) Savings account assignments, if approved by State, must allow State to draw funds at will. (c) Adjustment in Amount of Security. (1) State may require an adjustment in the Security amount: (i) At the same time as revaluation of the Annual Rent, (ii) As a condition of approval of assignment or sublease of this Lease, (iii) Upon a material change in the condition or disposition of any Improvements, or (iv) Upon a change in the Permitted Use. (2) Port shall deliver a new or modified form of Security to State within thirty (30) days after State has required adjustment of the amount of the Security. (d) Upon any default by Port in its obligations under this Lease, State may collect on the Security to offset the liability of Port to State. Collection on the Security does not: (1) Relieve Port of liability, (2) Limit any of State's other remedies, Port of Bremerton Public Access Page 21 of 32 Aquatic Lands Lease No. 20-A09891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A (3) Reinstate or cure the default, or (4) Prevent termination of the Lease because of the default. SECTION 11 ROUTINE MAINTENANCE AND REPAIR 11.1 State's Repairs. This Lease does not obligate State to make any alterations, maintenance, replacements, or repairs in, on, or about the Property, or any part thereof, during the Term. 11.2 Port's Repairs and Maintenance. (a) Routine maintenance and repair are acts intended to prevent a decline, lapse or, cessation of the Permitted Use and associated Improvements. Routine maintenance or repair is the type of work that does not require regulatory permits. (b) At Port's own expense, Port shall keep and maintain the Property and all Improvements in good order and repair and in a safe condition. State's consent is not required for routine maintenance or repair. (c) At Port's own expense, Port shall make any additions, repairs, alterations, maintenance, replacements, or changes to the Property or to any Improvements on the Property that any public authority may require. If a public authority requires work beyond the scope of routine. maintenance and repair, Port shall comply with Section 7 of this Lease. 11.3 Limitations. The following limitations apply whenever Port conducts maintenance, repair or replacement. The following limitations also apply whenever Port conducts maintenance, repair, or replacement on the exterior surfaces, features, or fixtures of a floating house. (a) Port shall not use or install ireated wood at any location above or below water, except that Port may use treated wood for above water structural framing. (b) Port shall not use or install tires (for example, floatation or fenders) at any location above or below water. SECTION 12 DAMAGE OR DESTRUCTION 12.1 Notice and Repair. (a) In the event of damage to or destruction of the Property or Improvements, Port shall promptly give written notice to State. State does not have actual knowledge of the damage or destruction without Port's written notice. (b) Unless otherwise agreed in writing, Port shall promptly reconstruct, repair, or replace the Property and Improvements as nearly as possible to its condition immediately prior to the damage or destruction in accordance with Paragraph 7.3, Construction, Major Repair, Modification, and Demolition and Port's additional obligations in Exhibit B, if any. Port of Bremerton Public Access Page 22 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 12.2 State's Waiver of Claim. State does not waive any claims for damage or destruction of the Property unless State provides written notice to Port of each specific claim waived. 12.3 Insurance Proceeds. Port's duty to reconstruct, repair, or replace any damage or destruction of the Property or any Improvements on the Property is not conditioned upon the availability of any insurance proceeds to Port from which the cost of repairs may be paid.. The Parties shall use insurance proceeds in accordance with Paragraph 10.2(g)(3). 12.4 Rent in the Event of Damage or Destruction. Unless the Parties agree to terminate this Lease, there is no abatement or reduction in rent during such reconstruction, repair, and replacement. 12.5 Default at the Time of Damage or. Destruction. If Port is in default under the terms of this Lease at the time damage or destruction occurs, State may elect to terminate the Lease and State then shall have the right to retain any insurance proceeds payable as a result of the damage or destruction. SECTION 13 CONDEMNATION 13.1 Definitions. (a) "Taking" means that an entity authorized by law exercises the power of eminent domain, either by judgment, settlement in lieu of judgment, or voluntary conveyance in lieu of formal court proceedings, over all or any portion of the Property and Improvements. This includes any exercise of eminent domain on any portion of the Property and Improvements that, in the judgment of the State, prevents or renders impractical the Permitted Use. (b) "Date of Taking" means the date upon which title to the Property or a portion of the Property passes to and vests in the condemner or the effective date of any order for possession if issued prior to the date title vests in the condemner. 13.2 Effect of Taking. If there is a taking, the Lease terminates proportionate to the extent of the taking. If this Lease terminates in whole or in part, Port shall make all payments due and attributable to the taken Property up to the date of taking. If Port has pre -paid rent and Port is not in default of the Lease, State shall refund Port the pro rata share of the pre -paid rent attributable to the period after the date of taking. 13.3 Allocation of Award. (a) The Parties shall allocate the condemnation award based upon the ratio of the fair market value of (1) Port's leasehold estate and Port -Owned Improvements and (2) State's interest in the Property; the reversionary interest in Port -Owned Improvements, if any; and State -Owned Improvements, if any. (b) If Port and State are unable to agree on the allocation, the Parties shall submit the dispute to binding arbitration in accordance with the rules of the American Arbitration Association. Port of Bremerton Public Access Page 23 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A SECTION 14 DEFAULT AND REMEDIES 14.1 Default Defined. Port is in default of this Lease on the occurrence of any of the following: (a) Failure to pay rent or other expenses when due; (b) Failure to comply with any law, regulation, policy, or order of any lawful governmental authority; (c) Failure to comply with any other provision of this Lease; (d) Commencement of bankruptcy proceedings by or against Port or the appointment of a trustee or receiver of Port's property. 14.2 Port's Right to Cure. (a) A default becomes an "Event of Default" if Port fails to cure the default within the applicable cure following State's written notice of default. Upon an Event of Default, State may seek remedies under Paragraph 14.3. (b) Unless expressly provided elsewhere in this Lease, the cure period is sixty (60) days. (c) For nonmonetary defaults not capable of cure within sixty (60) days, State will not unreasonably withhold approval of a reasonable alternative cure schedule. Port must submit a cure schedule within thirty (30) days of a notice of default. The default is not an Event of Default if State approves the schedule and Port works diligently and in good faith to execute the cure. The default is an Event of Default if Port fails to timely submit a schedule or fails to cure in accordance with an approved schedule. (d) State may elect to deem a default by Port as an Event of Default if the default occurs within six (6) months after a default by Port for which State has provided notice and opportunity to cure and regardless of whether the first and subsequent defaults are of the same nature. 14.3 Remedies. (a) Upon an Event of Default, State may terminate this Lease and remove Port by summary proceedings or otherwise. (b) If the Event of Default (1) arises from Port's failure to comply with restrictions on Permitted Use and operations under Paragraph 2.2 or (2) results in damage to natural resources or the Property, State may enter the Property without terminating this Lease to (1) restore the natural resources or Property and charge Port restoration costs and/or (2) charge Pot! for damages. On demand by State, Port shall pay all costs and/or damages. (c) Without terminating this Lease, State may relet the Property on any terms and conditions as State may decide are appropriate. (1) State shall apply rent received by reletting: (1) to the payment of any indebtedness other than rent due from Port to State; (2) to the payment of any cost of such reletting; (3) to the payment of the cost of any alterations and repairs to the Property; and (4) to the payment of rent and leasehold Port of Bremerton Public Access Page 24 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A excise tax due and unpaid under this Lease. State shall hold and apply any balance to Port's future rent as it becomes due. (2) Port is responsible for any deficiency created by the reletting during any month and shall pay the deficiency monthly. (3) At any time after reletting, State may elect to terminate this Lease for the previous Event of Default. (d) State's reentry or repossession of the Property under Paragraph 14.3 is not an election to terminate this Lease or cause a forfeiture of rents or other charges Port is obligated to pay during the balance of the Term, unless (1) State gives Port written notice of termination or (2) a legal proceeding decrees termination. (e) The remedies specified under this Paragraph 14.3 are not exclusive of any other remedies or means of redress to which the State is lawfully entitled for Port's breach or threatened breach of any provision of this Lease. SECTION 15 ENTRY BY STATE State may enter the Property at any reasonable hour to inspect for compliance with the terms of this Lease, to monitor impacts to habitat, or survey habitat and species. State's failure to inspect the Property does not constitute a waiver of any rights or remedies under this Lease. SECTION 16 DISCLAIMER OF QUIET ENJOYMENT 16.1 No Guaranty or Warranty. (a) State believes that this Lease is consistent with the Public Trust Doctrine and that none of the third -party interests identified in Paragraph 1.1(b) will materially or adversely affect Port's right of possession and use of the Property, but State makes no guaranty or warranty to that effect. (b) State disclaims and Port releases State from any claim for breach of any implied covenant of quiet enjoyment. This disclaimer and release includes, but is not limited to, interference arising from exercise of rights under the Public Trust Doctrine; Treaty rights held by Indian Tribes; and the general power and authority of State and the United States with respect to aquatic lands and navigable waters. (c) Port is responsible for determining the extent of Port's right to possession and for defending Port's leasehold interest. 16.2 Eviction by Third -Party. If a third -party evicts Port, this Lease terminates as of the date of the eviction. In the event of a partial eviction, Port's rent obligations abate as of the date of the partial eviction, in direct proportion to the extent of the eviction; this Lease shall remain in frill force and effect in all other respects. Port of Bremerton Public Access Page 25 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A SECTION 17 NOTICE AND SUBMITTALS Following are the locations for delivery of notice and submittals required or permitted under this Lease. Any Party may change the place of delivery upon ten (10) days written notice to the other. State: DEPARTMENT OF NATURAL RESOURCES Aquatic Resources Division, Ports Program 111.1 Washington Street SE MS 47027 Olympia, WA 98504-7027 Port: PORT OF BREMERTON 8850 SW State Highway 3 Port Orchard, WA 98367-7487 The Parties may deliver any notice in person, by facsimile machine, or by certified mail. Depending on the method of delivery, notice is effective upon personal delivery, upon receipt of a confirmation report if delivered by facsimile machine, or three (3) days after mailing. All notices must identify the Lease number. On notices transmitted by facsimile machine, the Parties shall state the number of pages contained in the notice, including the transmittal page, if any. SECTION 18 MISCELLANEOUS 18.1 Authority. Port and the person or persons executing this Lease on behalf of Port represent that Port is qualified to do business in the State of Washington, that Port has full right and authority to enter into this Lease, and that each and every person signing on behalf of Port is authorized to do so. Upon State's request, Port shall provide evidence satisfactory to State confirming these representations. 18.2 Successors and Assigns. This Lease binds and inures to the benefit of the Parties, their successors, and assigns. 18.3 Headings. The headings used in this Lease are for convenience only and in no way define, limit, or extend the scope of this Lease or the intent of any provision. 18.4 Entire Agreement. This Lease, including the exhibits and addenda, if any, contains the entire agreement of the Parties. This Lease merges all prior and contemporaneous agreements, promises, representations, and statements relating to this transaction or to the Property. 18.5 Waiver. (a) The waiver of any breach or default of any term, covenant, or condition of this Lease is not a waiver of such term, covenant, or condition; of any subsequent breach or default of the same; or of any other term, covenant, or condition of this Port of Bremerton Public Access Page 26 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A Lease. State's acceptance of a rental payment is not a waiver of any preceding or existing breach other than the failure to pay the particular rental payment that was accepted. (b) The renewal of the Lease, extension of the Lease, or the issuance of a new lease to Port, does not waive State's ability to pursue any rights or remedies under the Lease. 18.6 Cumulative Remedies. The rights and remedies under this Lease are cumulative and in addition to all other rights and remedies afforded by law or equity or otherwise. 18.7 Time is of the Essence. TIME IS OF THE ESSENCE as to each and every provision of this Lease. 18.8 Language. The word "Port" as used in this Lease applies to one or more persons and regardless of gender, as the case may be. If there is more than one Port, their obligations are joint and several. The word "persons," whenever used, shall include individuals, firms, associations, and corporations. The word "Parties" means State and Port in the collective. The word "Party" means either or both State and Port, depending on the context. 18.9 Invalidity. The invalidity, voidness, or illegality of any provision of this Lease does not affect, impair, or invalidate any other provision of this Lease. 18.10 Applicable Law and Venue. This Lease is to be interpreted and construed in accordance with the laws of the State of Washington. Venue for any action arising out of or in connection with this Lease is in the Superior Court for Thurston County, Washington. 18.11 Statutory Reference. Any reference to a statute means that statute as presently enacted or hereafter amended or superseded. 18.12 Recordation. At Port's expense and no later than thirty (30) days after receiving the fully -executed Lease, Port shall record this Lease in the county in which the Property is located. Port shall include the parcel number of the upland property used in conjunction with the Property, if any. Port shall provide State with recording information, including the date of recordation and file number. If Port fails to record this Lease, State may record it and Port shall pay the costs of recording upon State's demand. 18.13 Modification. No modification of this Lease is effective unless in writing and signed by both Parties. Oral representations or statements do not bind either Party. 18.14 Survival. Any obligations of Port not fully performed upon termination of this Lease do not cease, but continue as obligations of the Port until fully performed. Port of Bremerton Public Access Page 27 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A 18.15 Exhibits. All referenced exhibits are incorporated in the Lease unless expressly identified as unincorporated. THIS AGREEMENT requires the signature of all Parties and is effective on the date of the last signature below. PORT OF BREMERTON Dated: (y- r oZ9- , 2011 By: CARY BOZEMAN Title: Chief Executive Officer Address: 8850 SW State Highway 3 Port Orchard, WA 98367-7487 Phone: 360-674-2381 ext. 12 STATE OF WASHINGTON DEPARTMENT OF NATURAL RESOURCES Dated:2011 By: PE G LDMARK Title: mmi 'ones of Public Lands Address: 1 as hington Street SE M/S 47027 Olympia, WA 98504-7027 n Approved as to form this 29 day of June 2011 Janis Snoey, Assistant Attorney General Port of Bremerton Public Access Page 28 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A REPRESENTATIVE ACKNOWLEDGMENT STATE OF WASHINGTON ) ) ss County of Kitsap ) I certify that I know or have satisfactory evidence that CARY BOZEMAN is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the Chief Executive Director of the Port of Bremerton to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated:/l ( (Seal or stamp) wgNso toO'�ARg. Z •o Port of Bremerton Public Access Page 29 of 32 and Parking East End Port Orchard SIC (Signatur :B�7c'x� D}ISU/At03on-) (Print Na e) Notary Public in and for the State of Washington, residing at My appointment expires 11 3 Aquatic Lands Lease No. 20-AO9891 DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A STATE ACKNOWLEDGMENT STATE OF WASHINGTON ) ) ss County of Thurston ) I certify that I know or have satisfactory evidence that PETER GOLDMARK is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the Commissioner of Public Lands and ex officio administrator of the Department of Natural Resources of the State of Washington to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: 1144 Zt i i 91- t (Seal or stamp) auc�& (Signature) muk � 6 (Print Name)Trell&(11 Notary Public in and for the State of Washington, residing // at C.� My appointment expires Port of Bremerton Public Access Page 30 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A EXHIBIT A Legal Description of Premises and Encumbrances Current Survey recorded with Kitsap County Auditor's File No. 201103010135 March 01, 2011 Port of Bremerton Public Access Page 31 of 32 Aquatic Lands Lease No. 20-A09891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A .EEna?^cM01 6m0 m H y VI J O:Q O mE E yyco'�3�0°O�a���n`y.5�p. c�33'9� o O m e`oo gK�E-5 v 6Z., obi oan«c>, u'La ESE m7s oi"3.o EEmm. Z .c oXn- t8°�zv�i .5"C7 yyc�v'-• aQg oo U vo,w,-". :53Z m - PC p'p w c;o� °o Ml "Yo•,.3 y..". 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C/\ \sb T688 �O-ZZ 3sv3T� I / I I i 1 lu i 5� p,P"'va ,� i H A j Z •n N h U1 9107 � a) I � � c /V� 1� �� I\�� otiV. �•.lo a rrcq �A�Q 3 ap'• a(*�0 ti W I SVjT P" 41 b�'9 l ;l rZ N / o „8. T 86YO-ZZ 3SV37 V O' ti „T696VO-ZZ 3SV3T w o 00 - wj /T zSp� V Z � e o n� m o m a' DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A EXHIBIT B PLAN OF OPERATION AND MAINTENANCE 1. DESCRIPTION OF THE PERMITTED USE A. Existing Facilities. The Lease area consists of historically filled tidelands currently used primarily as a parking area with some public access elements. No changes to this basic configuration are proposed under this Lease. The Lease area includes a rock bulkhead and a public access boardwalk. There are no water - dependent uses waterward of the bulkhead. For rent calculation purposes, the bulkhead is a nonwater-dependent use. Only the footprint of the public access; boardwalk is eligible for no fee use. B. Proposed Facilities. No changes to this basic infrastructure are proposed under this Lease. 2. ADDITIONAL OBLIGATIONS A. Upland Operations (historically filled tideland). The current operations and maintenance of the parking area, vegetated buffers, and boardwalk structure are to be conducted using best professional judgment. The Port will conduct reasonable maintenance to avoid excessive oil staining on surfaces and to control garbage or wind-blown debris. Specific attention is to be paid to water quality resulting from refinishing surfaces. No contaminates are to enter the receiving waters as a result of operations or maintenance. Stormwater runoff is to be conveyed via a permitted municipal stormwater system. Specific Best Management Practices (BMPs) can be found in the most recent version of the Washington State Department of Ecology Stormwater Management Manual for Western Washington. B. Major Repair and Reconstruction. (1) Bulkhead. Any major repairs to the rock bulkhead requiring a shoreline permit and/or involving more than ten (10) cubic yards of material must be approved by the State in writing prior to construction. Emergency repairs may be conducted with verbal approval of the State. Any reconfiguration of the bulkhead will be reviewed by the State in regard to biological and environmental impacts and must be approved in writing. (2) Boardwalk. Any major repairs to the boardwalk structure must be approved in writing by the State. The State may require materials and design modifications to avoid or reduce impacts to water quality or to reduce shading impacts. Treated wood may not be used in areas in direct contact with marine waters. Port of Bremerton Public Access Page 32 of 32 Aquatic Lands Lease No. 20-AO9891 and Parking East End Port Orchard DocuSign Envelope ID: 074F02D6-60F6-4095-BC50-70AC8E012A7A ❑ Port Owned / ❑ Port DNR Leased Parcel Numbers# 4053-013-007-0103, # 4028-001-011-0005, & # 4028-001-001-0007 ❑ Harrison Avenue Right -of -Way.