AN ORDINANCE relating to the Department of Parks and Recreation; authorizing the Superintendent of Parks and Recreation to enter into an agreement with The Seattle Aquarium Society for operation and management of the Seattle Aquarium.

WHEREAS, the City of Seattle owns and operates the Seattle Aquarium, located on Piers 59/ 60, and widely recognized as a world-class aquarium and a regional marine conservation resource; and

WHEREAS, the Aquarium, under the management of the Department of Parks and Recreation, is primarily self-sustaining in its operations, through admissions and other revenues; and

WHEREAS, since 1982, The Seattle Aquarium Society ("SEAS") has supported the City in this endeavor, and since 2006, has managed the Aquarium food and merchandise concessions under a Master Concession Agreement with the City, authorized by Ordinance 122211; and

WHEREAS, in 2000, a Central Waterfront Citizens Advisory Committee recommended that the Aquarium be redeveloped at its current location at Piers 59/60 and the City accepted that recommendation; and

WHEREAS, deterioration of Pier 59 required a major capital investment to repair that structure; and

WHEREAS, pursuant to Resolution 30737, the City and SEAS entered into a Memorandum of Agreement ("MOA"), which, among other things, contained guidelines for a Phase One redevelopment of the Aquarium at Pier 59; and

WHEREAS, pursuant to the terms of the MOA, the City and SEAS commenced the Phase One redevelopment for which the City undertook a significant piersupport replacement project and SEAS completed a private capital fundraising campaign of $17.2 million and then successfully managed the construction of two new exhibits and substantial other capital improvements to the facility; and

WHEREAS, Resolution 30737 also contemplated that upon successful completion of the fundraising campaign and Phase One capital improvements and the satisfaction of other conditions SEAS would assume additional responsibilities with respect to the long-term management and operations of the Aquarium; and

WHEREAS, SEAS has demonstrated the capacity to administer large, complex business efforts through the completion of Phase One improvements, a related private fundraising campaign and the management of Aquarium concessions, reflected in the Seattle Aquarium Society Phase One Completion Report, dated February 1, 2008; and

WHEREAS, Resolution 30737 also required SEAS to employ a competent and reputable Chief Executive Officer to manage the Aquarium; prepare a sound business plan for the operation of the Aquarium; and successfully manage any phase of operations assigned to it; and

WHEREAS, SEAS has complied with the above conditions and has participated with the City in a study which, using nationally recognized standards, concluded that the Aquarium's structures and systems are in fair condition and identified a program of ongoing major maintenance; and

WHEREAS, Resolution 31080 required the Executive to undertake a due diligence investigation to evaluate the prospects for successful long-term transition of the management and operations of the Aquarium from the City to SEAS and established principles to guide the development of such an agreement; and

WHEREAS, the Executive has completed the due diligence investigation and determined that the transfer of Aquarium operation to SEAS is in the best interests of the City and has negotiated an agreement with SEAS for the long-term operation of the Aquarium that is consistent with the principles contained in Resolution 31080; and

WHEREAS, it is an established best practice nationally to maintain public ownership of aquariums while contracting for management with non-profit aquarium-specific organizations and seeking increasing private-sector support and contributions; NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The Superintendent of Parks and Recreation ("Superintendent") or his designee is authorized to execute an Operations and Management Agreement substantially in the form of Attachment 1 hereto, that will allow The Seattle Aquarium Society to operate the Seattle Aquarium for a term of twenty years.

Section 2. The Superintendent, or his designee, is further authorized and directed, for and on behalf of the City, to make technical, conforming or otherwise nonmaterial changes to the Agreement, and to execute, deliver, record, administer and perform such ancillary agreements or documents or to take such other actions as in his or her judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by, this ordinance.

Section 3. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of _________, 2009, and signed by me in open session in authentication of its passage this _____ day of __________, 2009.

_________________________________

President __________of the City Council

Approved by me this ____ day of _________, 2009.

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of _________, 2009.

____________________________________

City Clerk

(Seal)

ATTACHMENT 1:

SEATTLE AQUARIUM OPERATIONS AND MANAGEMENT AGREEMENT

This Seattle Aquarium Operations and Management Agreement ( "Agreement") is made and entered into this ____ day of __________, 20__, by and between the CITY OF SEATTLE, a Washington first class city (the "City"), acting through its DEPARTMENT OF PARKS AND RECREATION (the "Parks Department"), and The SEATTLE AQUARIUM SOCIETY, a Washington non-profit corporation ("SEAS") (collectively, the "Parties").

RECITALS

WHEREAS, the City currently owns and operates the public aquarium located in the City of Seattle commonly known as the Seattle Aquarium; and

WHEREAS, The Seattle Aquarium Society is a non-profit corporation organized in 1982 for charitable, scientific and educational purposes for the study and promotion of marine life and conservation and for the education and recreation of the public; and

WHEREAS, in 2000, the Washington State Legislature adopted Chapter 35.64 of the Revised Code of Washington to authorize certain cities, including the City of Seattle, to enter into contracts with non-profit corporations or other public organizations to manage and operate their zoos and aquariums; and

WHEREAS, The City of Seattle and The Seattle Aquarium Society believe that the proposed Agreement will provide the greatest opportunity for success of the Aquarium in fulfilling its mission in education, conservation and recreation, providing benefits to the citizens of Seattle, and developing the Aquarium as an important civic asset, cultural resource and attraction;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

AGREEMENT

1. Definitions. As used in this Agreement, the following terms have the meanings ascribed:

1.1 "Animals" means all living creatures residing at the Premises as part of the Aquarium Exhibits or other activities.

1.2 "AZA" means the Association of Zoos and Aquariums.

1.3 "Business Day" means any day on which banks in the State of Washington are open for business, excluding Saturdays.

1.4 "CEO" means the chief executive officer of SEAS.

1.5 "Capital Improvements" means improvements to the Premises performed by SEAS that increase the useful life of the Premises or enhance their use as an aquarium.

1.6 "Capital Maintenance" means the sorts of Aquarium planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement projects and activities that could be funded under RCW 82.46.010.

1.7 "City's Capital Obligations" means those items listed on Exhibit 3.

1.8 "City Employees" means those persons who are employed as of January 1, 2010, in part-time or full-time jobs at the Aquarium.

1.9 "Concession Agreement" means that Pier 59 Master Concession Agreement between the City and SEAS dated October 9, 2006.

1.10 "Debt Service Reimbursement" means the amounts shown on Exhibit 6 that SEAS owes to the City for debt service for previous Aquarium improvements.

1.11 "Effective Date" means the first day of the seventh calendar month following the month in which this Agreement is authorized by the Seattle City Council.

1.12 "Exhibits" means all areas of the Premises that have been constructed, arranged, or displayed for members of the public to view or interact with during their visit to the Aquarium.

1.13 "Favorable Ruling" is defined in Section 15.1.

1.14 "Fiscal Year" means a 12-month period beginning on January 1 of each calendar year and ending on December 31 of the same calendar year.

1.15 "Force Majeure" is defined in Article 19.

1.16 "Parks Board" means the Board of Park Commissioners established by City Charter.

1.17 "Personal Property" is defined in Section 5.1.

1.18 "Property," when used without a modifier, means the Premises and the Personal Property, collectively.

1.19 "Premises" is defined in Section 2.1.

1.20 "Reimbursement Schedule" is defined in Section 6.1.

1.21 "Retirement Board" means the Board of Administration of the Seattle City Employees' Retirement System established under Chapter 4.36 of the Seattle Municipal Code.

1.22 "SEAS Board" means the Board of Directors of the Seattle Aquarium Society.

1.23 "SEAS Property" is defined in Article 14.

1.24 "SEAS' Capital Obligations" means those items listed on Exhibit 4.

1.25 "Term" is defined in Section 3.1.

1.26 "Termination Date" means June 30, 2030, unless terminated earlier as provided herein.

1.27 "Transferring Employees" is defined in Section 15.3.

1.28 "Visitor Amenities" means improvements to the public areas of the Premises directly related to visitor experience, excluding concession areas, food service areas, and restrooms, for the purpose of enriching the visitor experience.

2. Management and Operation Rights; Use of Premises.

2.1 Grant of Rights. Beginning on the Effective Date, SEAS shall exclusively manage and operate the Aquarium in accordance with all of the terms and conditions contained in this Agreement. The Aquarium is comprised of the Exhibits and all related facilities located on Piers 59 and 60 over Elliott Bay in Seattle, Washington, on which the Aquarium is currently operated. The Aquarium Exhibits and facilities are shown as a diagram in Exhibit 1 and described in greater detail in Exhibit 2 hereto, and are referred to collectively herein as the "Premises."

2.2 Permitted Use. Throughout the Term, SEAS shall use and continuously occupy the Premises for the operation of a public Aquarium and for purposes and programs related or incidental thereto, focusing primarily on conservation, education, enterprise operations, and visitor services, and for no other purpose. SEAS shall not use or occupy any portion of the Premises, and shall not permit the use or occupancy thereof, in any unlawful manner or for any illegal purpose, and shall not permit any activity to be carried on that would constitute an actionable nuisance under the laws of the State of Washington. The Permitted Use shall not include the sale or the promotion of the sale or use of tobacco, weapons or alcoholic beverages (provided that alcoholic beverages may be served at catered events and in the restaurant area) and SEAS agrees to adopt and implement a policy prohibiting any person, except for law enforcement officers and on-duty security personnel, from possessing firearms on the Premises.

2.3 Continuous Operation; Staffing. SEAS shall keep the Premises open and use them to transact business with the public 364 days per year during such hours as SEAS may determine (but a minimum of 45 hours per week), except that SEAS may, upon posting a written and website notice to the public of not less than one (1) week in duration prior to any closure, close the Premises or a portion thereof for a reasonable period for repairs, approved remodeling, taking inventory and accommodating construction activities related to the Alaskan Way Viaduct replacement and related work. SEAS may also close the Premises to the public upon posting prompt actual and website notice, for such periods of time as are necessary to deal with: force majeure events; emergent situations threatening health and safety of the general public or the Animals; emergent situations threatening security of the Premises; and for not more than five (5) days per year for extraordinary and compelling economic or personnel conditions. SEAS shall ensure that an adequate number of personnel qualified to operate the Aquarium are present at the facility 24 hours per day.

3. Term of Agreement.

3.1 Term. The term of this Agreement ("Term") shall commence on the Effective Date and expire on June 30, 2030 (the "Termination Date"), unless this Agreement is terminated earlier as provided herein.

3.2 Option to Terminate. If the Superintendent of the Department of Parks and Recreation (the "Superintendent") determines that there is no reasonable likelihood of SEAS' expending at least $5,000,000 on new or updated Exhibits prior to June 30, 2020, as further described in Section 4.2 below, the City may terminate this Agreement upon 12 months' prior written notice to SEAS, which notice shall be delivered to SEAS between January 1, 2019, and June 30, 2019. During the 12-month notice period, SEAS and the City shall cooperate to provide for an efficient and coordinated transition of operations and management from SEAS to the City or to a City-designated successor operator.

4. Undertakings of the Parties.

4.1 City's Obligations. In addition to any other obligations imposed on the City under this Agreement, the City's obligations include (a) transfer of the Personal Property, defined in Section 5.1 below, to SEAS; (b) funding of $8,000,000 of agreed Capital Maintenance projects by December 31, 2015, as further described in Section 7.2.1, together with such other Capital Maintenance as may be required to keep the Aquarium open and operating, specifically including the City's Capital Obligations described in Exhibit 3 but excluding the SEAS' Capital Obligations described in Exhibit 4.

4.2 SEAS' Obligations. Except and as further provided elsewhere in this Agreement, and in addition to SEAS' other obligations contained herein, SEAS shall be responsible, at its sole cost and expense for: (a) the daily management and operation of the Aquarium; (b) maintaining the Personal Property located at the Premises and in SEAS' possession and control; (c) maintaining the needs of all Aquarium Animals by providing them with food, housing, medical care, and any other provisions necessary for their basic health, safety, and comfort; (d) providing compensation and benefits, if applicable, for all Aquarium employees and SEAS contractors; (e) providing all supplies and equipment necessary for a reasonably safe and functional work environment for all employees, contractors, and volunteers; (f) providing routine maintenance and janitorial services for the Premises, as described in Section 7.1.1; (g) repairing and maintaining Exhibits and creating any new Exhibits and Visitor Amenities; (h) performing the SEAS' Capital Obligations described in Exhibit 4; (i) paying the Debt Service Reimbursement to the City as described in Section 6.1; (j) developing a strategic plan within 18 months of the effective date to help guide capital investments in the following five years and a Master Plan to guide the development of the Aquarium through the Term, as described in Section 16.1; (k) funding a minimum of $10,000,000 of new or refurbished Exhibits and Visitor Amenities by June 30, 2030, with at least $5,000,000 of expenditures occurring on or before June 30, 2020; and (l) such other maintenance, repairs and improvements as the Parties may hereafter agree. In operating the Aquarium, SEAS should endeavor to partner with local entities with experience or expertise in marine conservation and education, including the National Oceanic and Atmospheric Administration, the University of Washington, Puget Sound Partnership, National Science Foundation, NASA, and local and regional educational institutions.

5. Transfer and Use of Personal Property.

5.1 Transfer of Personal Property. In order that SEAS may carry out its obligations under this Agreement, the City hereby transfers the Personal Property to SEAS, as of the Effective Date. "Personal Property" is all property possessed by the City (including without limitation vehicles, boats, computers and software) that is necessary to and exclusively used in the operation and maintenance of the Aquarium that is not: (a) real property; (b) Premises facilities or improvements described in Section 2.1, or (c) art that is in the City's collection. By December 31, 2010, the Parties shall agree on an inventory of the Personal Property as of the Effective Date and shall include that inventory as Exhibit 5 to this Agreement. SEAS shall maintain all such transferred Personal Property in good condition and repair, and shall replace with items of good quality any of the Personal Property that becomes inoperable or unusable if such item is necessary for the operation of the Aquarium, in SEAS' reasonable discretion. The Personal Property (including any replacement Personal Property) shall become the property of the City when this Agreement is terminated. Notwithstanding anything herein to the contrary, the City shall remove the telephone and switching equipment located at the Premises and operated by the City Department of Information Technology ("DoIT") unless SEAS and DoIT prior to the Effective Date enter an agreement for SEAS to purchase such equipment and an agreement for the ongoing operation of the equipment; regardless, SEAS will reimburse DoIT for its budgeted costs for providing telephone service to the Aquarium for 2010 and the costs of any equipment removal.

5.2 Animals, Generally. Personal Property includes all Animals, but if the general terms of this Agreement relating to Personal Property conflict with this Section 5.2, the provisions of this section shall control.

5.2.1 Rights to Animals. All Animals currently owned by the City and all rights to Animals owned by the City shall be transferred to and held by SEAS throughout the Term. The Animals shall be the sole property of SEAS, which shall also assume all obligations the City may have with respect to Animals exhibited, housed, or otherwise kept or cared for at the Aquarium during the Term of this Agreement. The Animals shall become the property of the City when this Agreement is terminated.

5.2.2 Care of Animals. SEAS shall care for all Animals in accordance with all federal, state and local laws and regulations, and in accordance with the policies and guidelines adopted by the AZA.

5.2.3 Sale and Purchase of Animals. SEAS shall have the authority to acquire or sell or otherwise dispose of Animals in the course of SEAS' operation of the Aquarium. The acquisition, sale or other disposition of Animals shall be made in strict accordance with (a) all applicable federal, state or local laws, regulations and policies, (b) the guidelines and policies of the AZA, and (c) existing and any adopted acquisition and disposition policies approved by the City.

5.3 City Documents. In this Agreement, "City Documents" means records pertaining to the operation and management of the Aquarium (including personnel files), but excluding any documents or records in SEAS' custody relating to Aquarium management, personnel, donors, or to the internal operations of SEAS, prior to the Effective Date. Unless and until agreed otherwise between the Superintendent and SEAS, the City will retain custody of all City Documents in its possession on the Effective Date. To the extent necessary to allow SEAS to operate and manage the Aquarium and to the extent permitted by law, the City will provide SEAS access to City Documents in the City's possession. SEAS shall make City Documents in SEAS' possession available to the Superintendent and other City designees promptly upon request and shall follow the Superintendent's instructions for disclosing City Documents in SEAS' possession in response to public records disclosure requests. SEAS will also comply with the records retention schedule for City Documents in its possession and make those City Documents available for purposes of compliance audits. SEAS shall return the City Documents to the City when this Agreement is terminated.

5.4 Aquarium Subaccount. Presently the Aquarium receives no direct operating subsidy from the City. Positive net income from Aquarium operations in any given year is contributed to the Aquarium Subaccount and operating losses are absorbed by it. As of the Effective Date, the City estimates there will be approximately $350,000 in the Aquarium Subaccount. The 2010 City Budget assumes that the Aquarium continues under City management for the entire year and that this transaction will not impact the City's General Fund. Therefore, the City agrees to transfer the funds in the Aquarium Subaccount to SEAS on the Effective Date. Any 2010 revenues earned but not received prior to the Effective Date shall be transferred to SEAS when received. Any 2010 expenses incurred but not paid prior to the Effective Date shall be paid by SEAS when due. From January 1, 2010, through the Effective Date, the City, acting through the Aquarium director, will consult with SEAS regarding anticipated charges to the Aquarium Subaccount that are in excess of ordinary charges for day-today operations. The City will provide SEAS with an accounting of its profits and losses with respect to the Aquarium for 2010 by February 28, 2011.

6. Fiscal Matters.

6.1 Debt Service Reimbursement. SEAS shall pay the City the Debt Service Reimbursement amounts in accordance with the schedule shown on Exhibit 6 (the "Reimbursement Schedule") by electronic funds transfer to the City's bank. The City will not provide invoices to SEAS. SEAS' payment obligation is absolute and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise. SEAS may prepay all or any part of the principal amounts shown on the Reimbursement Schedule at any time so long as SEAS agrees to fully compensate the City for its costs incurred in connection therewith, including the costs of defeasing bonds issued to finance the underlying work. In the event of any prepayment of the Debt Service Reimbursement, the City shall prepare an updated Reimbursement Schedule to reflect the revised reimbursement amounts and SEAS shall thereafter pay such revised amounts to the City. SEAS shall not undertake any Capital Improvements or design or create any new or refurbished Exhibits if its payment of the Debt Service Reimbursement is in arrears.

6.2 SEAS Revenue. SEAS shall collect and retain all admission proceeds and other revenue derived from operation of the Aquarium including, without limitation, fees and receipts from concessions, souvenirs and other services offered by SEAS to the public at or in association with the Aquarium, and all contributions collected by SEAS from any other source. SEAS shall expend or invest such revenue exclusively for Aquarium Purposes.

6.3 Fees and Prices. Subject to Article 13 of this Agreement, SEAS shall have the authority to set the amount of all prices and fees for admissions, services rendered or sales made to the public or otherwise at the Aquarium, including without limitation, food and drink concessions, membership passes, souvenirs, special exhibits and other special events.

6.4 Solicitation of Private and Public Funding. SEAS shall: (a) solicit private support for SEAS through membership fees and charitable contributions and solicit federal, state or local grants or other funds to support the operation and purposes of the Aquarium; and (b) apply all funds contributed to it as membership fees, charitable donations, public grants or loans, or any other sources, to the operating expenses, exhibits, Capital Improvements, and other Aquarium purposes in accordance with this Agreement, and to the administrative and operating expenses of SEAS. Without limiting the generality of the foregoing, SEAS agrees to use its best efforts to fundraise a minimum of $15,000,000 by June 30, 2020, and future City capital contributions to Aquarium improvements will be evaluated in part against SEAS' success in achieving this goal. The City hereby agrees to use its reasonable efforts to assist SEAS in the solicitation of federal, state and county grants or other sources of nonCity public funding to support the operation of the Aquarium or the financing of any work performed to bring any building, structure or service within the Premises into compliance with any applicable local, state or federal law or regulation, including without limitation the Americans With Disabilities Act of 1990. SEAS may apply for grants in the City's name subject to the Superintendent's prior approval or if the Superintendent instructs, by the Seattle City Council. The City Council retains the right to accept or not accept grant funds so applied for. All grants to the City received for the Aquarium shall be transferred to SEAS within thirty (30) days of the receipt of the grant funds, if permitted by the terms of the grant.

6.5 Naming Rights.

6.5.1 Name. Under no circumstances may the Aquarium's name be changed from "Seattle Aquarium" without formal action by the Parks Board and the City Council.

6.5.2 Donation Acknowledgement. The City expressly permits SEAS to recognize donors for their contributions to specific exhibits and discrete capital improvements by naming such exhibits or improvements and displaying recognition names as agreed between SEAS and its donors, provided that all donor recognition at the Aquarium is subject to the approval of the Superintendent or his or her designee, not to be unreasonably withheld.

6.6 City Financing. If requested by SEAS, the City will consider issuing debt for Aquarium capital purposes. Responsibility for funding debt service on such debt shall be agreed to by the Parties.

6.7 City Approval of SEAS Debt. SEAS shall not incur aggregate debt in excess of $1 Million without the approval of the City's Finance Director, which approval shall not be unreasonably withheld, conditioned or delayed.

7. Maintenance and Operations.

7.1 Routine Maintenance and Janitorial Services.

7.1.1 SEAS' Obligation. SEAS shall provide all routine maintenance and janitorial services required to maintain the Aquarium in a clean, safe and sanitary condition, and as necessary to maintain all necessary licenses and accreditations. Without limiting the generality of the foregoing, SEAS shall be solely responsible for items such as ductwork cleaning, interior and exterior window washing and repairs, gutter cleaning, caulking, tenant improvements and interior painting. SEAS shall employ sufficient personnel, or show evidence satisfactory to the City of personal service contracts which provide such personnel, to perform the routine maintenance and janitorial work in a prompt and efficient manner. While they remain City employees, the Aquarium's maintenance staff represented by Local 1239, will perform the janitorial and routine maintenance services for the Aquarium.

7.1.2 Routine Maintenance by Parks Department Forces. At SEAS' request, the Parks Department will provide routine maintenance at the Aquarium using City forces in substantially the same manner that the City currently provides such maintenance. The City will document the actual and direct labor hours, overhead, and any materials provided as a part of any such maintenance and submit such documentation to SEAS together with the City's invoice, on a monthly basis. SEAS shall pay such invoice within ten (10) Business Days of receiving it.

7.2 Capital Maintenance and Repair.

7.2.1 City Financial Commitment. The Parties acknowledge that the Aquarium was constructed in 1977, and although the facility has been improved from time to time throughout the years, a substantial amount of Capital Maintenance has been deferred. The Parties further acknowledge that the Aquarium competes with other City facilities for limited financial resources and the City makes no promise that City funds will be available to finance discretionary Capital Maintenance beyond the $8,000,000 provided for herein and the City obligations stated in Section 4.1. The $8,000,000 amount includes hard and soft project costs such as design and permitting, and cost overruns. Notwithstanding the foregoing or anything in this Agreement to the contrary, SEAS, rather than the City, shall be responsible for all maintenance and repairs of any nature whatsoever occasioned by any negligent, reckless or intentional act or omission of SEAS or its officers, agents, employees or contractors.

7.2.2 SEAS Financial Commitment. Prior to June 30, 2030, SEAS shall expend at least $10,000,000 of SEAS' funds on new or refurbished Exhibits, $5,000,000 of which must be expended or be reasonably anticipated to be expended by June 30, 2020, or the Superintendent may terminate this Agreement as provided in Section 3.2. SEAS' obligations to fund such new Exhibits shall expire upon expiration or earlier termination of the Term.

7.2.3 Process for Approving Capital Improvements and New Exhibits. The Parties agree that the Aquarium Pier 60 Filter Replacement Project ($300,000), the Aquarium Pier 60 Piling and Corrosion Renovation Project ($657,000) and the Aquarium Saltwater Pump Replacement Project ($500,000) in the City's 2010-2015 Capital Improvement Program will be undertaken and the amounts budgeted in the City's 2010 Adopted Budget will be credited toward the City's $8,000,000 Capital Maintenance obligation. Beginning March 1, 2010, and each March 1st thereafter throughout the Term, the Superintendent and representatives from SEAS shall meet and agree on the items of Capital Maintenance and any new or refurbished Exhibits that the Parties wish to undertake during the upcoming year, including any SEAS-initiated Capital Improvements as provided in Section 7.2.4. Proposals for the expenditure of City funds shall be subject to the approval of the Mayor and of the City Council through an appropriation of funds in the City's adopted budget for the upcoming year that reflects the Parties' estimated cost to perform the agreed City-funded Capital Maintenance for that year. The City will not be responsible for SEASinitiated Capital Improvements.

7.2.4 Capital Improvements. SEAS may make Capital Improvements or alterations to the Aquarium facilities, at its own expense, subject to the following:

(a) Any Capital Improvement that would modify the structure of the Premises or that would materially add to the City's maintenance costs under Section 7.2.1, requires the prior approval of the Superintendent, which approval may be granted, withheld or conditioned in that official's sole discretion; and

(b) Any Capital Improvement projected to cost more than three million dollars ($3,000,000), measured in 2008 dollars, shall require the City's approval, by ordinance; and

(c) If the Capital Improvement is of a nature for which plans and specifications are typically prepared and the cost of the improvement is $500,000 or more, then the plans and specifications for the improvement shall be subject to the Superintendent's review and approval before any construction occurs.

7.2.5 New Facilities Operating and Maintenance Costs. As SEAS funds and builds Capital Improvements and new Exhibits, or expands its support and visitor facilities, the corresponding increases in operating, program and maintenance costs will be the responsibility of SEAS.

8. Conditions for Construction of Improvements.

8.1 General. Subject to the separate agreements between the City and SEAS which shall address scope, schedule, cost, allocation of risk, and other matters, any work under Section 4.1 funded by the City may be managed and performed by SEAS in compliance with any and all applicable state laws, rules and regulations. All construction or repair work, including maintenance performed under contract, undertaken by SEAS using public funds shall be subject to prevailing wage requirements under RCW 39.12.020 and to the requirements of Seattle Municipal Code Chapters 20.32 (Art in Public Works Construction ) and 20.45 (Nondiscrimination in Benefits) and the Seattle Parks Department standards for LEED construction.

8.2 Contractor Insurance. Each party hereto shall provide, upon request, evidence acceptable to the other that every contractor engaged by a party to perform work on the Premises maintains insurance in such amounts with such coverages offered by such companies as shall be satisfactory to the City and SEAS, including but not limited to Worker's Compensation Insurance (including Employers' Liability Insurance) and insurance against liability for injury to persons and property arising out of all such contractor's operations, and the use of owned, non-owned or hired automotive equipment in the pursuit of all such operations.

8.3 Title to Improvements. Except as otherwise provided in this Agreement, all appurtenances, fixtures, improvements, equipment, additions and other property attached to or installed in the Premises by the City during the Term shall be and remain the property of the City and shall not be removed by SEAS without the Superintendent's approval. The City also shall own all SEAS-funded Capital Improvements, new Exhibits, or expanded support and visitor facilities upon their completion.

9. Signage. SEAS shall design and provide all signage for the Premises. SEAS will not maintain signage or advertisements on the Premises to which the Superintendent objects. City ownership of the Premises shall be noted where appropriate in SEAS public relations materials, on SEAS' website, and on Premises signage.

10. Utilities. The City shall provide heating and ventilation, water and sewer and electricity to the Premises to the extent reasonably necessary for the operation of the Premises for the Permitted Use. SEAS shall pay when due, directly to the appropriate company or to the City based on metered readings and prevailing rates, all bills for water, sewer, electricity, data and telecommunications services for the Premises. SEAS and its sub-concessionaires shall comply with commercially reasonable sorting and recycling standards adopted by the City. Except in the event of the City's gross negligence or intentional misconduct, the City shall not be liable for any loss, injury or damage to personal property caused by or resulting from any variation, interruption or failure of services due to any cause whatsoever, including, but not limited to, electrical surges, or from failure to make any repairs or perform any maintenance. No temporary interruption or failure of such services incident to the making of repairs, alterations or improvements that were due to accident, strike or conditions or events beyond the City's reasonable control shall be deemed an eviction of SEAS or to release SEAS from any of SEAS' obligations hereunder or to give SEAS a right of action against the City for damages. SEAS acknowledges its understanding that there may be Cityplanned utility outages affecting the Premises and that such outages may interfere, from time to time with SEAS' use of the Premises. The City shall provide SEAS with not less than 48 hours' prior written notice of any City-planned electricity outage affecting the Premises. The City has no obligation to provide emergency or backup power to SEAS. SEAS shall develop and implement protocols and procedures for dealing with power outages.

11. Fees and Taxes. From and after the Effective Date, SEAS shall be liable for, and shall pay prior to delinquency, all taxes, license fees and excise fees covering the business and activities conducted on and the occupation of the Premises by SEAS. SEAS shall be responsible for, and shall pay prior to delinquency, all fees, charges, or costs, for any governmental inspections or examinations relating to SEAS' use and occupancy of the Premises, and shall pay all taxes on any leasehold interest created by this Agreement (e.g., leasehold excise taxes). SEAS shall have the right to contest the amount and validity of any taxes by appropriate legal proceedings, but this shall not be deemed or construed in any way as relieving SEAS of its covenant to pay any such taxes. The City shall not be subjected to any liability nor required to pay any costs or expenses in connection with any such proceeding brought by SEAS and SEAS hereby covenants to indemnify and hold City harmless from any such costs or expenses. SEAS agrees not to allow or suffer a lien for any such taxes to be imposed upon the Premises or upon any equipment or property located thereon without promptly discharging the same, provided that SEAS, if so desiring, may have reasonable opportunity to contest the validity of the same. If SEAS intends to contest or to fail to pay when due any tax or fee referred to in the preceding sentence, SEAS shall provide the City with at least 30 days' notice of that intention before the tax is due, explaining its reasons. The City may choose to pay the tax on behalf of SEAS, and if it is later determined the tax or some portion of it validly owed, SEAS shall reimburse the City.

12. Permits, Licensing and Accreditation.

12.1 Required Permits, Licenses and Accreditation. Throughout the Term, SEAS shall cause both itself and the Aquarium to be at all times (a) accredited by the AZA; (b) licensed with the United States Department of Agriculture; and (c) licensed by the Seattle-King County Health Department.

12.2 Other Licenses and Permits. SEAS and the City shall use their best efforts to have all licenses and permits currently held by the City in connection with the operation of the Aquarium legally transferred to SEAS or to have them canceled upon SEAS' obtaining replacement permits or licenses in its name if transfer is not possible. If any licenses or permits are required to be held by a governmental entity and/or owner of the Premises, or if the Parties agree otherwise with respect to any particular permit or license, then those licenses and permits shall remain in the possession of the City and under the City's name, and SEAS shall hereby be authorized as the agent of the City to perform such services under such licenses and permits as are required in the operation of the Aquarium to the extent permitted by applicable law . Upon any termination of this Agreement for any reason, SEAS shall transfer all licenses and permits back to the City and SEAS shall use its best efforts to assist the City with the documentation of any such transfer or reapplication for any such permit or license to be held in City's name after such termination.

13. Admissions.

13.1 SEAS' Responsibilities. Subject to Section 13.2 below, SEAS shall have the authority to set Aquarium admissions charges. The City and SEAS intend that the Aquarium remain affordable to individuals from all economic circumstances and particularly, to families with children.

13.2 Public Access. SEAS intends to operate the Aquarium with the goal of providing wide access to Seattle residents at an affordable cost. In furtherance of that goal, SEAS will (a) provide reduced admission costs for school groups; (b) make at least 30,000 free passes available annually to human services agencies having a primary purpose of serving low-income Seattle residents; and (c) pursue other options for ease of access to the Aquarium and special services at the Aquarium for children, seniors, the disabled and low-income individuals. Subject to expansion of the Premises in accordance with a City-approved Aquarium Master Plan, SEAS shall provide public access to the west end of the Aquarium pier during Aquarium business hours to the extent such access can be reasonably and safely accommodated and SEAS shall comply with all provisions of the lease between the City and State Department of Natural Resources, including any provisions related to public access, and any access requirements of any City law or regulation, as the same may be enacted, amended, altered or modified, from time to time.

13.3 Admissions Tax. No City admission taxes are currently charged on Aquarium admission. The City agrees that it will not impose admission taxes on Aquarium admissions so long as similar facilities (such as the Woodland Park Zoo and Pacific Science Center) are exempt from such taxes.

14. SEAS' Personal Property. All furniture, furnishings and articles of movable personal property installed in the Premises by or for the account of SEAS, without expense to the City, and which can be removed without structural or other material damage to the Premises (all of which are herein called "SEAS Property") shall be and remain the property of SEAS and may be removed by it subject to the provisions of Article 22.

15. Staffing and Employees.

15.1 Generally. The Parties anticipate that as of January 1, 2010, there will be seventy-five (75) City Employees at the Aquarium. It is the intention of the Parties that all City Employees who wish to continue employment at the Aquarium become employees of SEAS. The City is currently pursuing an option whereby City employees who transfer to SEAS employment might remain in the City retirement plan (a "Favorable Ruling"). The City will support this option if it is available under state and federal law and approved by the Retirement Board. SEAS will offer employment to all City Employees for similar employment at the Aquarium to the extent similar positions are available. City Employees will have the shorter of two (2) years from the date of a Favorable Ruling or five (5) years from January 1, 2010, to determine whether they wish to transfer to SEAS employment. The City will use its best efforts to find other City employment for those City Employees who wish to remain in City employment but makes no representation that there will be comparable, vacant positions within the City at the time of the transfer.

15.2 SEAS Supervision of Employees. Pursuant to RCW 35.64.010(4) and commencing on the Effective Date until the transition of City Employees to SEAS employment is complete, SEAS, acting through its CEO, who shall replace the City's Aquarium Director, shall manage, supervise, and direct all City employees employed at the Aquarium and may, subject to the provisions of the City Charter, Seattle Municipal Code, City rules, state legislation and any applicable collective bargaining agreements, hire and, after consultation with the Superintendent, fire and otherwise discipline the City employees. The CEO shall be the ultimate appointing authority as provided for by City Charter and by City Ordinance. SEAS shall, in cooperation with the City's Personnel Director and the Superintendent, develop procedures for implementing this authority with regard to City Employees.

15.3 Employees. SEAS shall comply with all applicable federal, state and local laws, ordinances and regulations pertaining to all current and future employees at the Aquarium during and after their transition from City employment to SEAS employment. In addition, SEAS shall be an equal opportunity employer and make reasonable efforts to maintain a diverse work force. SEAS will use its best efforts during the Term to offer City Employees who transfer to SEAS employment (the "Transferring Employees") opportunities for professional advancement and a package of employee benefits that are generally consistent with the opportunities and benefits available to such City Employees as of the Effective Date.

15.4 City Employees Subject To Collective Bargaining Agreements. The City has previously negotiated collective bargaining agreements with collective bargaining representatives representing certain City Employees and anticipates that it will negotiate other such agreements that will affect City Employees working at the Aquarium. The Parties recognize that the terms of these collective bargaining agreements are binding on the City unless altered by mutual agreement between the City and the collective bargaining agents and consistent with all applicable state, federal and local laws. SEAS agrees to supervise City Employees consistent with applicable agreements and to bargain collectively with represented employees in the future.

15.5 City Transfer of Certain Balances. The City will calculate the vacation and sick leave balances for all Transferring Employees as of the transfer date and SEAS will credit the Transferring Employees with the full amount of those hours. The City will pay SEAS the value of the Transferring Employees' balances as follows:

15.5.1 Vacation. The vacation balances will be calculated based on the pay rate in effect on each employee's transfer date. The City will pay SEAS the value of each Transferring Employee's vacation leave in eight (8) equal quarterly payments (12.5% per quarter) beginning with the end of the first quarter in which the employee transfers to SEAS employment, such that the liability for vacation for each transferring employee will be paid out to SEAS over a two-year period.

15.5.2 Sick Leave. The City shall pay SEAS one-half of the value of the unused sick leave for each Transferring Employee in equal annual installments over five (5) years commencing the January following the year in which the employee's transfer date occurred (10% per year).

15.5.3 Pensions. SEAS has established and will maintain and manage a private defined contribution retirement plan for Transferring Employees. If the City obtains a Favorable Ruling as described in Section 15.1 above, and the Transferring Employees are permitted to remain in the City retirement system, then SEAS shall cooperate with the City and promptly execute such documents as the City may require in order to amend its retirement plan to allow for the Transferring Employees' continued participation in the City retirement plan. Thereafter, SEAS shall comply with all requirements of such documents and shall promptly pay when due the employer's share of all retirement system contributions for the Transferring Employees who remain in the City retirement plan.

15.6 Payroll and Taxation.

15.6.1 City Payroll until Transition. Each City Employee will remain on the City payroll until each such employee either transitions to SEAS employment or otherwise leaves City employment. Until such transition or separation, or transfer to other City employment, the City Employees will continue to receive City compensation and benefits, and City employee status and payment of taxes and reporting, although the CEO will supervise them. SEAS shall reimburse the City monthly for all compensation and benefits, including taxes and employer retirement contributions, for each City Employee from the Effective Date until the employee no longer works at the Aquarium. SEAS shall include a staffing plan and budget in its Annual Plan to the Superintendent and shall endeavor to schedule City Employees' hours so as to remain within the budget. If SEAS anticipates the need for any increase in the staffing budget, it shall so inform the Superintendent no later than September 1st of each year.

15.6.2 SEAS Payroll after Transition. From and after the date each City Employee commences employment with SEAS, SEAS shall make or cause to be made for each such employee all necessary payroll deductions for disability and unemployment insurance, social security, withholding taxes and other applicable taxes, and prepare, maintain and file or cause to be filed all necessary reports with respect to such taxes or deductions, and all other necessary statements and reports.

15.7 No Third Party Beneficiary Status. Employees affected by this Agreement are not intended to be third-party beneficiaries to this Agreement and cannot sue to enforce its terms.

16. Planning and Reporting Obligations; Public Involvement.

16.1 Master Plan. Within 18 months after the Effective Date, SEAS shall prepare for submittal to the Superintendent a strategic plan to help guide investments in the physical development of the Aquarium over the following five years. SEAS shall coordinate its planning and development of a future Master Plan with the Committee on Central Waterfront Partnerships, and the Waterfront Planning parameters subsequently developed by the City Council. The SEAS Master Plan shall be subject to City Council approval, by resolution, and shall be consistent with the adopted City Alaskan Way and Seawall Replacement Program, especially as concerns the seawall replacement component of the program and the redesign of adjacent public spaces at Waterfront Park and Piers 62/63. The Aquarium Master Plan should include, among other elements:

(a) A description of planned or potential physical development, including any planned infrastructure improvements and the timing of those improvements, including development priorities, the probable sequence for such planned development and estimated dates of construction and occupancy;

(b) A statement explaining the purpose of the development proposed in the master plan, including the public benefits resulting from the proposed new development and the way in which the proposed development will serve the public purpose mission of the Aquarium;

(c) A strategy for preservation of currently designated historic structures in connection with any future development;

(d) A strategy for preservation of view corridors in connection with any future development; and

(e) Consideration of pedestrian access to and circulation around the pier, including improved connections to existing and proposed public spaces, including Waterfront Park, Piers 62/63, the Pike Place Hillclimb and new public space immediately east of the Aquarium; and strategies to activate and program spaces adjacent to the Aquarium and support public access to the water's edge.

16.2 Annual Report to City Council Parks Committee. SEAS shall, at its sole expense, prepare an Annual Report that provides, for the preceding Fiscal Year, (a) a general summary of the Aquarium's operations; (b) a financial accounting for all funds received by SEAS for the continued operation and management of the Aquarium from all sources, by category, and lists all expenditures, including any capital investments, made at the Aquarium; (c) an analysis of the affordability of Aquarium admission fees and membership rates on middle-income families; (d) a description of the public benefits provided; and (e) an updated business plan, if any material assumptions have changed. On or before July 1st of each year throughout the Term, SEAS will provide a briefing on its Annual Report for the prior Fiscal Year to the City Council's Parks Committee or its successor committee.

16.3 Monthly Report to Superintendent. Beginning one month after the Effective Date and each month thereafter throughout the Term, SEAS shall provide the Superintendent with a report of the attendance and revenue totals for the Aquarium for the preceding month, by source.

16.4 Annual Plan to Parks Board and Superintendent. On or before December 1st of each year throughout the Term, SEAS shall, at its sole expense, prepare and deliver an Annual Plan for the next Fiscal Year to the Parks Board and to the Superintendent, for that official's approval. The Annual Plan shall cover, at a minimum, any Capital Improvement and Exhibit expansion or refurbishment plans and a description of any planned major programmatic changes. The Superintendent and the CEO shall meet each year to discuss the contents of the Annual Plan.

16.5 Annual Independent Audit. Within sixty (60) days after the end of each Fiscal Year, SEAS shall arrange for an audit of its books and records by an independent, certified public accountant. This audit shall be conducted at SEAS' sole cost and expense and shall cover the previous Fiscal Year. SEAS shall deliver to the Superintendent an original, signed copy of each such annual audit by the earlier of (a) thirty (30) days after the completion of such audit or (b) 180 days after the end of the Fiscal Year covered by such audit.

16.6 Financial Records. SEAS shall establish and maintain books, records and systems of account relating to the Aquarium's gross revenue and operating expenses in accordance with generally accepted accounting practices for non-profit organizations. These records shall, to the extent necessary to meet requirements for audits under Section 16.5 of this Agreement, be retained by SEAS and made available to the City upon request.

16.7 City Audit Participation. If requested by the City, SEAS shall make available all information reasonably necessary for the City and, to the extent required by applicable law, for the State Auditor to perform audits of the use and application of all public revenues, grants, fees and City funds received by SEAS during the current and preceding year.

16.8 Public Involvement.

16.8.1 Involvement on SEAS Board. Subject to the provision that all SEAS Board appointees shall be subject to qualification requirements and approval based upon the criteria generally recognized for membership on SEAS' Board, the Mayor and the Chair of the City Council committee with oversight of the Aquarium will each be entitled to appoint one person to SEAS' Board. The Superintendent shall also be appointed to SEAS' board. All City appointees shall have full voting rights. Following the initial appointments to the Board positions authorized under this Subsection, succeeding new appointments to these two positions by the appointing authorities may only be made effective upon the occurrence of a vacancy or expiration of the preceding term.

16.8.2 Public Involvement Process for Major Capital Projects. Except for those projects identified in the approved Master Plan, the City and SEAS agree that the development process for any Capital Improvement projects costing more than $3,000,000 must include reasonable opportunities for public involvement. For each such capital project, the Superintendent and SEAS will develop such a process for public involvement that is consistent with the Parks Department's Public Involvement Policy.

16.8.3 Open Meetings. The City intends that to the extent practicable, final decision-making with respect to Aquarium operations policies shall occur openly and with due consideration of public input. SEAS therefore agrees that (a) all regular, annual and special meetings of the SEAS Board of Directors (the "Board") shall be open and public; (b) members of the public shall be permitted to attend any such meeting without being required, as a condition to attendance, to register his or her name or otherwise to fulfill any condition precedent to his or her attendance; (c) SEAS will not adopt any policies or resolutions materially affecting Aquarium operations policies outside of a public meeting; and (d) no Board meeting voting shall be by secret ballot.

Approximately one week in advance of any regularly-scheduled or annual meeting of the Board (or immediately upon the noticing of any special meeting of the Board), the Board shall provide notice of the Board meeting time, location and proposed agenda items as of the date of the notice to any member of the public who submits a written request for such notice. Any written request for such notice shall state whether the requesting party wishes to receive such notice by electronic or regular mail. The Board shall also post contemporaneously such notice on the Aquarium internet web page(s). The proposed agenda identified in the notice shall be subject to change.

Nothing contained herein shall be construed as prohibiting the Board from convening an executive session during any regular or special meeting in situations where such session would be authorized under the provisions of the Washington Open Public Meetings Act, RCW 42.30.

16.9 SEAS Code of Ethics. SEAS shall maintain a code of ethics governing its Board members, employees and activities consistent with applicable requirements of State and federal laws and AZA standards. The City may request from SEAS those documents necessary for the City to confirm the existence of an ethics and conflict of interest policy. SEAS will report on compliance with the ethics and conflict of interest policy and any issues that have arisen as a result, in the Annual Report.

17. Insurance. The Parties will provide insurance and abide by the insurance provisions of this Agreement contained in Exhibit 7 to this Agreement.

18. Representations and Warranties.

18.1 SEAS hereby represents and warrants to the City and covenants as follows:

18.1.1 Experience. SEAS is experienced in aspects related to the operation and management of the Aquarium and hereby agrees to apply its best efforts and most efficient methods in the full operation and management of the Aquarium.

18.1.2 Mission. SEAS is committed to its fulfilling its mission: Inspiring conservation of our marine environment. Marine conservation, research, and education, with an emphasis on Pacific Northwest or Puget Sound aquatic ecosystems, will continue to be the primary focus of the Aquarium for the duration of this Agreement and any extension thereof.

18.1.3 Formation. SEAS is a nonprofit corporation duly incorporated, validly existing and in good standing under the laws of the State of Washington. SEAS shall at all times during the Term of this Agreement maintain its tax-exempt status under Section 501(c) (3) of the Internal Revenue Code.

18.1.4 Authority. SEAS has full power and authority (corporate or otherwise) to enter into this Agreement and to consummate the transactions contemplated by it. This Agreement has been duly authorized by all necessary action on the part of SEAS and no other corporate or other action on the part of SEAS is necessary to authorize the execution and delivery of this Agreement. The individual executing this Agreement for SEAS has full authority to do so and thereby to bind SEAS to its terms.

18.1.5 Conflicts and Consents. The execution and delivery by SEAS of this Agreement and the performance by SEAS of the transactions contemplated in it will not violate any federal, state or local law, rule or regulation, or conflict with or result in any breach or violation of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or constitute an event or condition that would permit termination or acceleration of the maturity of, the Articles of Incorporation, bylaws or partnership agreement of SEAS (as applicable) or any indenture, mortgage, lease, agreement or other instrument or obligation to which SEAS is a party or by which it may be bound whose termination or acceleration would materially adversely affect the ability of SEAS to perform its obligations under this Agreement. No approval, authorization, consent or other order or action of, or filing or registration with, any person, entity or governmental authority is required for the execution and delivery by SEAS of this Agreement.

18.1.6 Conflict with Orders, etc. The execution and delivery by SEAS of this Agreement will not conflict with any order, judgment or decree of any court, government, government agency or instrumentality, whether entered pursuant to consent or otherwise, by which SEAS may be bound or affected.

18.2 The City hereby represents and warrants to SEAS and covenants as follows:

18.2.1 Authority. The City has full power and authority to enter into this Agreement and to consummate the transactions contemplated by it. This Agreement has been duly authorized by all necessary action on the part of the City and no other action on the part of the City is necessary to authorize the execution and delivery of this Agreement. The individual executing this Agreement for the City has full authority to do so and thereby to bind the City to its terms.

18.2.2 Conflicts and Consents. The execution and delivery by the City of this Agreement and the performance by the City of the transactions contemplated in it will not violate any federal, state or local law, rule or regulation. No approval, authorization, consent or other order or action of, or filing a registration with, a person, entity or governmental authority is required for the execution and delivery by the City of this Agreement.

18.2.3 Conflict with Orders, etc. The Execution and delivery by the City of this Agreement will not conflict with any order, judgment of decree of any court, government, government agency or instrumentality, whether entered pursuant to consent or otherwise, by which the City may be bound or affected.

18.3 Litigation. There is no litigation, action, arbitration, grievance, administrative proceeding, suit or claim filed and pending, nor is there any investigation by a governmental agency of SEAS or any of its affiliates that, if adversely decided, could have a material adverse impact on SEAS' ability to perform its obligations under this Agreement.

19. Force Majeure. As used herein, the term "Force Majeure" with respect to a delay in performance shall mean any delay that is attributable to (a) any strike, lockout or other labor or industrial disturbance (whether or not on the part of the employees of either party hereto), civil disturbance, future order claiming jurisdiction, act of the public enemy, war, riot, sabotage, blockade, embargo, inability to secure customary materials, supplies or labor through ordinary sources by reason of regulation or order of any government or regulatory body; (b) any changes in any applicable laws or the interpretation thereof; or (c) any lightning, earthquake, fire, storm, hurricane, tornado, flood, washout, explosion, or any other cause beyond the reasonable control of the party from whom performance is required and of its contractors or other representatives. Any prevention, delay or stoppage in a party's performance hereunder due to Force Majeure shall excuse the performance of the party affected for a period of time equal to any such prevention, delay or stoppage; provided, however, that during the period of any such delay or stoppage, the party whose performance hereunder is excused shall take all reasonable steps to minimize the length of such delay or stoppage.

20. Indemnities.

20.1 City's Indemnity. The City hereby agrees to indemnify, save harmless and defend SEAS from any and all losses, claims, actions or damage suffered by any person or entity (including SEAS) by reason of or resulting from any act or omission of the City or any of its officers, agents, employees, or invitees in connection with: (a) the City's use or occupancy of the Property, including trademark, patent, and copyright infringement; (b) the City's maintenance, repair or improvement obligations arising under this Agreement; (c) the City's employment of any Aquarium employees prior to the Effective Date; and (d) the City's pension plan for City Employees; but as to subclauses (a) and (b) above, only to the extent such claims, actions, costs, damages or expenses are caused by the willful misconduct or negligence of the City, its authorized officers, agents, employees or invitees. The indemnification provided for in this section shall survive any termination or expiration of this Agreement. Notwithstanding anything herein to the contrary, if (and only if) the provisions of RCW 4.24.115 apply to the foregoing indemnification and any injuries or damage on which a claim is based are caused by or result from the concurrent negligence of the City or its agents or employees, and SEAS or its agents or employees, the City's indemnification applies only to the extent of the negligence of the City, its agents or employees. The City specifically assumes potential liability for actions brought by City's own employees against SEAS and for that purpose only the City specifically waives any immunity against claims by SEAS under the Workers Compensation Act, RCW Title 51; AND THE CITY ACKNOWLEDGES THAT THIS WAIVER WAS SPECIFICALLY ENTERED INTO PURSUANT TO THE PROVISIONS OF RCW 4.24.115 AND WAS THE SUBJECT OF MUTUAL NEGOTIATION.

20.2 SEAS' Indemnity. SEAS hereby agrees to indemnify, save harmless and defend the City from any and all losses, claims, actions or damaged suffered by any person or entity by reason of or resulting from any act or omission of SEAS or any of its officers, agents, employees, or invitees in connection with: (a) SEAS' use or occupancy of the Property, including trademark, patent, and copyright infringement; (b) SEAS' maintenance, repair or improvement obligations arising under this Agreement; (c) SEAS' management of any Aquarium employee while such employee remains employed by the City, but only to the extent such claims, actions, costs, damages or expenses are caused by the willful misconduct or negligence of SEAS, its authorized officers, agents, employees or invitees. The indemnification provided for in this section shall survive any termination or expiration of this Agreement. Notwithstanding anything herein to the contrary, if (and only if) the provisions of RCW 4.24.115 apply to the foregoing indemnification and any injuries or damage on which a claim is based are caused by or result from the concurrent negligence of SEAS or its agents or employees, and the City or its agents or employees, the SEAS indemnification applies only to the extent of the negligence of SEAS, its agents or employees. SEAS specifically assumes potential liability for actions brought by SEAS own employees against the CITY and for that purpose only SEAS specifically waives any immunity against claims the City under the Workers Compensation Act, RCW Title 51; AND SEAS ACKNOWLEDGES THAT THIS WAIVER WAS SPECIFICALLY ENTERED INTO PURSUANT TO THE PROVISIONS OF RCW 4.24.115 AND WAS THE SUBJECT OF MUTUAL NEGOTIATION.

20.3 Relationship to Insurance Obligations. Nothing contained in this Article 20 shall be construed to affect the allocation of responsibilities between the Parties or the insurance coverages required under Article 17 and Exhibit 7 of this Agreement.

21. Default; Termination of Agreement; Remedies.

21.1 Termination by City. The City shall have the right to terminate this Agreement following an Event of Default. The following shall constitute "Events of Default" under this Agreement:

(a) failure of SEAS to perform or comply with any covenant or condition made under this Agreement, or failure of any representation or warranty made by SEAS in this Agreement to have been or to continue to be true and correct. In the event of a monetary default, the City may terminate this Agreement after ten (10) days' prior written notice to SEAS; for all other defaults SEAS shall have a period of sixty (60) days from the date of written notice from the City within which to cure such default or, if such default is not legally capable of cure within such 60-day period, SEAS shall have a reasonable period to complete such cure if SEAS promptly undertakes action to cure such default within such 60-day period and thereafter diligently prosecutes the same to completion;

(b) abandonment, assignment, encumbrance, or transfer of this Agreement or of the Property by SEAS without the prior written consent of City; and

(c) the appointment of a receiver to take possession of all or substantially all of the assets of SEAS, or an assignment by SEAS for the benefit of creditors, or any action taken or suffered by SEAS under any insolvency, bankruptcy, reorganization, moratorium or other debtor relief act or statute, whether now existing or hereafter amended or enacted, if any such receiver, assignment or action is not released, discharged, dismissed or vacated within sixty (60) days.

The foregoing Events of Default are in addition to any other right to terminate explicitly given to the City elsewhere in this Agreement.

If SEAS is in default of its obligations under Section 6.1 of this Agreement, then SEAS agrees that during the period that such default remains uncured, all rents, issues, income and profits due and to become due from any lease, license or other use of any room or space in the Premises or from any concession therein shall be deemed to have been assigned to the City effective as of the date of default, without the need for further action by either party, and SEAS shall immediately instruct its tenants and licensees to thereafter remit their payments to the City. The City shall apply all assigned revenues it receives to amounts in default and owed by SEAS.

21.2 Termination by SEAS. In the event the City fails to timely perform any obligation required to be performed by the City hereunder, and such failure is not cured within thirty (30) days after written notice of such failure has been delivered to the City by SEAS, SEAS shall have the right to terminate this Agreement; provided that if such default is not legally capable of cure within such 30-day period, the City shall have a reasonable period to complete such cure if the City promptly undertakes action to cure such default within such 30-day period and thereafter diligently prosecutes the same to completion. The foregoing is in addition to any other right to terminate explicitly given to SEAS elsewhere in this Agreement.

22. Surrender of Premises; Transition. Upon the Termination Date or other termination of this Agreement, SEAS shall (a) promptly remit to the City all Debt Service Reimbursement owed and unpaid through the date of termination in accordance with the payment schedule shown on Exhibit 6, and (b) peaceably quit and surrender to the City the Premises and Personal Property together with all permanent improvements approved by the City, in good order and condition, normal wear and tear and damage caused by casualty or condemnation excepted. The Premises and Personal Property shall be surrendered free and clear of all liens and encumbrances other than encumbrances created or approved in writing by City. SEAS shall, immediately before the Termination Date or other termination of this Agreement, remove all of SEAS' Property as provided in this Agreement, and repair any damage resulting from the removal. SEAS' obligations under this section shall survive the Termination Date or other termination of this Agreement. Any items of SEAS' Property which shall remain in the Premises after the Termination Date of this Agreement may, at the option of the City, be deemed abandoned and in such case may be disposed of by City in any manner allowed by law.

Upon the termination of this Agreement for any reason, SEAS and the City shall cooperate to the fullest reasonable extent in effecting an orderly and efficient transfer of the operation and management of the Aquarium from SEAS to the City or its designee. Such cooperation shall include without limitation the entry into such agreement, the execution of such documents and the convention of such meetings as may be reasonably required to effect such transfer.

23. Hazardous Materials.

23.1 Definitions. As used herein, the following terms shall have the meanings set forth below:

23.1.1 "Environmental Laws" means any applicable federal, state and local laws (whether under common law, statute, ordinance, rule, regulation, code or otherwise), permits, orders, decrees, and other requirements of governmental authorities relating to the protection of human health or the environment, whether existing as of the date hereof, previously enforced, or subsequently enacted.

23.1.2 "Hazardous Material" means any element, compound, chemical, chemical mixture, or other substance that is identified as, or determined to be, a hazardous, toxic or dangerous substance, pollutant, contaminant, waste or material under, or is otherwise regulated under, any Environmental Law or other law relating to chemical management, environmental contamination, environmental cleanup or nuisances, including, without limitation, petroleum and petroleum products, asbestos, radon and other radioactive materials, bio-hazards and lead-based paint.

23.1.3 "Release" when used with respect to Hazardous Material shall include any actual or imminent spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing in, on, under or about any other part of the Premises.

23.2 No Hazardous Materials. SEAS covenants and agrees that neither SEAS nor any of its agents or invitees shall cause or permit any Hazardous Material to be brought upon, kept, used, stored, generated or disposed of in, on or about the Premises, or transported to or from the Premises, provided that SEAS may use such substances in such limited amounts as are customarily used in the operation and maintenance of aquariums so long as such use is in compliance with all applicable Environmental Laws. Each party hereto shall immediately notify the other party if and when such party learns or has reason to believe there has been any Release of Hazardous Material on or about the Premises.

23.3 SEAS' Environmental Indemnity. If SEAS breaches any of its obligations contained in this Article 23, or, if any act, omission or negligence of SEAS or any of its agents or invitees, contractors or consultants results in any contamination of the Premises or in the Release of Hazardous Material from, on, about, in, on or beneath the Premises, then SEAS shall indemnify the City from and against all claims, liabilities, damages, losses, costs and expenses (including, without limitation, the loss or restriction of the use of the Premises and sums paid in settlement of claims, fines, civil penalties, attorneys' fees, consultants' fees and experts' fees and costs) relating to such Release; provided, however, that, except as set forth in Section 23.4, the indemnity contained in this section shall not apply to any losses resulting from a pre-existing condition. The foregoing indemnity includes, without limitation, costs incurred in connection with the investigation of site conditions and all activities required to locate, assess, evaluate, remediate, clean up, remove, contain, treat, stabilize, monitor or otherwise control any Hazardous Material, and to restore the Premises to their prior condition, all of which shall be deemed to be direct rather than consequential damages. Without limiting the foregoing, if SEAS or any of its agents or invitees, contractors or consultants causes or permits the Release of any Hazardous Materials on, about, in or beneath the Property, SEAS shall, immediately, at no expense to the City, take any and all necessary actions to abate and remediate the Release in accordance with all Environmental Laws. SEAS shall afford the City a full opportunity to participate in any discussions with governmental regulatory agencies regarding any settlement agreement, cleanup or abatement agreement, consent decree, or other compromise or proceeding involving Hazardous Material.

23.4 City's Environmental Indemnity. If any act, omission or negligence of the City or any of its agents (other than SEAS), contractors or consultants results in or has resulted in any contamination of the Premises or in the Release of Hazardous Material from, in, on or beneath the Premises or if any contamination of the Premises or any Release has occurred before the Effective Date and was not caused by SEAS, then the City shall indemnify SEAS from and against all claims, liabilities, damages, losses, costs and expenses (including, without limitation, the loss or restriction of the use of the Premises and sums paid in fines, civil penalties, attorneys' fees, consultants' fees and experts' fees and costs) resulting from any such contamination or Release; provided, however, that the foregoing indemnity shall not include indemnification for any losses resulting from SEAS' aggravation of any pre-existing condition through SEAS' actions or inactions, or the actions or inactions of its agents, officers, employees, contractors or consultants, whether negligent or non-negligent. The foregoing indemnity includes, without limitation, costs incurred in connection with the investigation of site conditions and all activities required to locate, assess, evaluate, remediate, cleanup, remove, contain, treat, stabilize, monitor or otherwise control any Hazardous Material, and to restore the Premises to their prior condition, all of which shall be deemed to be direct rather than consequential damages. The City shall afford SEAS a full opportunity to participate in any discussions with governmental regulatory agencies regarding any settlement agreement, cleanup or abatement agreement, consent decree, or other compromise or proceeding involving Hazardous Material.

24. Assignments; Subcontracting. SEAS has been chosen by the City to operate and manage the Aquarium in reliance upon SEAS' stated and unique expertise, skill and experience. SEAS shall not assign, transfer, mortgage or encumber its interest in this Agreement or any other right, privilege or license conferred by this Agreement, or the Property, either in whole or in part. Any assignment or encumbrance shall be voidable and, at the City's election, shall constitute a material default under this Agreement. Without limiting the obligations of SEAS under this Agreement, the Parties specifically acknowledge that there are existing leases, agreements, and arrangements between SEAS and third parties regarding Aquarium operations that the City approved under the Concession Agreement. SEAS shall have the right and the authority to renew such leases, agreements, and arrangements that expire during the Term and to enter into new and additional contracting arrangements with any other person or entity (including without limitation the Parks Department or other City agency) for the provision of any service required or allowed to be performed by SEAS under this Agreement, including food concessions, gift shop concessions and other concessions, attractions and operations consistent with the Permitted Use, subject to the following:

24.1 All third-party concession agreements with terms in excess of twelve months and generating revenue in excess of $25,000 per year shall be subject to, and shall incorporate by reference, the terms and conditions of this Agreement.

24.2 Each such concession agreement shall provide that in the event of termination of this Agreement, at the City's option, the third party agreement shall continue in effect as a direct agreement between the City and the third party, and the third party shall execute such documents as the City shall reasonably request in order to evidence or give effect to the third party's attornment to the City.

24.3 Each such concession agreement shall provide that, upon notice from the City to the third party that SEAS is in default on monetary obligations hereunder and that payments of rent and other amounts owning on the third party agreement should be made to the City, the third party shall make all such payments to the City until otherwise instructed by the City or ordered by a court of competent jurisdiction, and shall further provide that payments so made shall be credited to the third party's obligations under the third party agreement.

25. Prior Contracts between SEAS and the City; Integrated Agreement; Modification. This Agreement supersedes the Concession Agreement and contains all the agreements of the Parties hereto relating to the subject matter addressed herein. No material provision of this Agreement may be amended or modified except by a written agreement approved by the Seattle City Council and executed by each of the Parties hereto.

26. Notices. All notices required to be given hereunder shall be in writing and either delivered personally or sent by certified mail or express overnight courier service to the appropriate address listed below, or at such other address as shall be provided by written notice. Notice shall be deemed communicated two Business Days from the time of mailing if mailed as provided in this section. For convenience of the Parties, copies of notices may also be given be other means; however, neither party may give official or binding notice except by personal delivery or by certified mail.

If to SEAS: Seattle Aquarium Society 1483 Alaskan Way Pier 59 Seattle, Washington 98101 Attn: CEO

If to The City of Seattle: City of Seattle Department of Parks and Recreation 100 Dexter Avenue North Seattle, Washington 98109 Attn: Superintendent of Parks and Recreation

27. Compliance with Laws.

27.1 Generally. At SEAS' sole cost and expense, SEAS shall comply and conform with all laws and all governmental regulations, rules and orders that may from time to time be put into effect relating to, controlling or limiting the use and operation of the Aquarium. SEAS shall secure, or cooperate with the City in its securing, all permits and licenses specifically required for the operation of the Aquarium (copies of which shall be promptly provided to the Parks Department), and shall comply with all applicable laws and regulations relating to labor employed in and relating to the operation of the Aquarium.

27.2 Americans with Disabilities Act. SEAS acknowledges that the Americans with Disabilities Act ("ADA") requires that programs, services and other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. SEAS further acknowledges its obligation to comply with the ADA and any other federal, state or local disability rights legislation. SEAS warrants that it will fulfill that obligation and that it will not discriminate against disabled persons in the provision of services, benefits or activities pursuant to this Agreement.

27.3 Non-Discrimination Ordinances. SEAS shall comply with all applicable equal employment opportunity and nondiscrimination laws of the United States, the State of Washington, and the City of Seattle, including but not limited to Chapters 14.04, 14.10, and 20.42 of the Seattle Municipal Code (SMC), as they may be amended; and rules, regulations, orders, and directives of the associated administrative agencies and their officers. Without limiting the generality of the foregoing, SEAS agrees not to discriminate against any employee or applicant for employment because of race, religion, creed, age, color, sex, marital status, sexual orientation, gender identity, political ideology, ancestry, national origin, or the presence of any sensory, mental or physical handicap unless based upon a bona fide occupational qualification. SEAS shall take affirmative action to ensure that applicants are employed, and the employees are treated during employment, without regard to their creed, religion, race, age, color, sex, national origin, marital status, political ideology, ancestry, sexual orientation, gender identity, or the presence of any sensory, mental or physical handicap. Such action shall include, but not be limited to the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay, or other forms of compensation and selection for training, including apprenticeship. SEAS shall post in conspicuous places, available to employees and applicants for employment, notices as provided by the City of Seattle setting forth the provisions of this nondiscrimination clause.

28. Installation of Artwork.

28.1 Prohibition against Installation or Integration of Works of Visual Art on Premises. SEAS shall not permit the installation or integration on or in the Premises of any "work of visual art," as that term is defined in the Visual Artists Rights Act of 1990, as now existing or as later amended ("VARA"), if the removal of such artwork is reasonably likely to result in its distortion, mutilation, modification or destruction unless SEAS delivers to the City an executed waiver of the creator's right of integrity regarding such art work, for the benefit of the City and its successors and assigns, in a form that satisfies both the City and the requirements of 17 U.S.C. section106A(e), as the same now exists or is hereafter modified.

28.2 SEAS' Indemnification of the City against Liability under VARA. SEAS shall protect, defend, and hold the City harmless from and against any and all claims, suits, actions or causes of action, damages and expenses (including attorneys' fees and costs) arising as a consequence of (a) the installation or integration of any work of visual art on or into the Premises; or (b) the destruction, distortion, mutilation or other modification of the art work that results by reason of its removal; or (c) any breach of Section 28.1 of this Agreement; or (d) any violation of VARA by SEAS or any of its officers, employees or agents. This indemnification obligation shall exist regardless of whether the City or any other person employed by the City has knowledge of such installation, integration, or removal or has consented to any such action or is not required to give prior consent to any such action. The indemnification obligation of this subsection shall survive the expiration or earlier termination of this Agreement.

29. Liens. SEAS and City shall keep the Premises and Personal Property free from any liens arising out of any work performed, material furnished or obligations incurred by or for SEAS and the City, respectively.

30. Dispute Resolution. In the event of a dispute between or among SEAS and the City regarding any term of this Agreement, the Parties shall attempt to resolve the matter informally through the following mechanism: the Superintendent and the CEO, or their respective designee(s), shall meet to review and discuss the matter(s) in dispute; if the Superintendent and the CEO are unable to reach a mutual resolution, SEAS' Board Chair(s) shall meet with the Superintendent and other City representatives, as appropriate, to review and discuss the matter(s) in dispute. If such persons are unable to resolve the matter informally, either party may submit the matter to a non-binding, structured mediation procedure fashioned by persons or organizations approved in advance by both Parties and experienced in alternative dispute resolution ("ADR") procedures. The mediation may be requested by either party and shall be initiated within thirty (30) days from the date of the request unless extended by agreement of both Parties. The ADR procedures utilized for the mediation shall include the exchange of written claims and responses, with supporting information, at least seven (7) days prior to the actual mediation. The positions expressed and mediator's recommendations shall not be admissible as evidence in any subsequent ADR or legal proceeding. If the matter is submitted to mediation and the matter is not resolved, an affected party shall be entitled to pursue any legal remedy available.

31. Use of Recycled Materials. Whenever practicable, SEAS shall use reusable products, recycled-content products and recyclable products, including recycled-content paper on all documents submitted to the City. SEAS shall duplex all documents that are prepared for the City under this Agreement, whether such materials are printed or copied, except when impracticable to do so due to the nature of the product being produced.

32. Miscellaneous.

32.1 Interest. If SEAS fails to pay the City any sum when due, such amount shall bear interest at the rate of twelve per cent (12%) per annum from the date due until the date paid.

32.2 Limitations of Liability. The City's obligations to SEAS and SEAS' obligations to the City under this Agreement shall be limited to the terms and conditions set forth herein. Notwithstanding any other provision in this Agreement to the contrary, in no event shall the City or SEAS be liable, regardless of whether any claim is based on contract or tort, for any special, consequential, indirect or incidental damages, including without limitation lost profits, arising out of or in connection with this Agreement or the services performed in connection with this Agreement.

32.3 Parties and Their Agents. As used herein, the term "agents" when used with respect to either party shall include the agents, employees, officers and representatives of such party. All approvals, consents or other determinations permitted or required by the City hereunder shall be made by or through the Superintendent unless otherwise provided in this Agreement or unless the City gives notice otherwise to SEAS. No permission, consent or approval of the Superintendent given pursuant to this Agreement is, or shall be construed as, a representation or assurance that the matter consented to or approved complies with applicable laws, regulations, ordinances or codes, nor shall any such consent or approval be construed to authorize any failure to comply with any of the foregoing.

32.4 No Implied Waiver. No failure by either party hereto to insist upon the strict performance of any obligation of the other party under this Agreement or to exercise any right, power or remedy arising out of a breach thereof, irrespective of the length of time for which such failure continues (except in cases where this Agreement expressly limits the time for exercising rights or remedies arising out of a breach), shall constitute a waiver of such breach or of that party's right to demand strict compliance such term, covenant or condition or operate as a surrender of this Agreement. No waiver of any default or the performance of any provision hereof shall affect any other default or performance, or cover any other period of time, other than the default, performance or period of time specified in such express waiver. One or more written waivers of a default or the performance of any provision hereof shall not be deemed to be a waiver of a subsequent default or performance. The consent of either party hereto given in any instance under the terms of this Agreement shall not relieve the other party of any obligation to secure the consent of the other party in any other or future instance under the terms of this Agreement.

32.5 Headings and Subheadings. The captions preceding the Articles, Sections, and Subsections of this Agreement and in the table of contents have been inserted for convenience of reference and such captions in no way define or limit the scope or intent of any provision of this Agreement.

32.6 Successors and Assigns. The terms, covenants and conditions contained in this Agreement shall bind and inure to the benefit of the City and SEAS and, except as otherwise provided herein, their personal representatives and successors and assigns.

32.7 No Third-Party Beneficiaries. There are no third-party beneficiaries to this Agreement.

32.8 Access to the Aquarium. The City, the Parks Department and their duly authorized agents shall have access to the Premises and Personal Property at all times (a) for the purpose of inspection and to make any repairs, additions or renovations as the City may have the right to do under the provisions of this Agreement, and (b) for use by the City in case of emergency, as determined by City in its sole discretion.

32.9 Relationship of Parties. The services to be rendered by SEAS pursuant to this Agreement are as an independent contractor only and the relationship between SEAS and the City is solely that of owner and contractor. Nothing contained in this Agreement shall be construed to create a partnership, joint venture, or a relationship of employment or agency.

32.10 Agreement Made in Washington. This Agreement shall be deemed to be made in and shall be construed in accordance with the laws of the State of Washington. Venue of any action brought by one party against the other to enforce or arising out of this Agreement shall be in King County Superior Court.

32.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

32.12 Non-Liability of Officials, Employees and Agents. No elective or appointive board, commission, member, officer, employee or other agent of the City shall be personally liable to SEAS, its successors and assigns, in the event of any default or breach by the City or for any amount which may become due to SEAS, its successors and assigns under this Agreement, or for any obligation of the City under this Agreement. Likewise, no board member, member, officer, employee or other agent of SEAS shall be personally liable to the City, its successors and assigns under this Agreement, in the event of any default or breach by SEAS or for any amount which may become due to the City, its successors and assigns, or for any obligation of SEAS under this Agreement.

32.13 Time of Essence. Time is of the essence of each provision of this Agreement.

32.14 Survival of Indemnities. Termination of this Agreement shall not affect the right of either party to enforce any and all indemnities and representations and warranties given or made to the other party under this Agreement, nor shall it affect any provision of this Agreement that expressly states it shall survive termination hereof.

32.15 Partial Invalidity. If any court determines that any provision of this Agreement or the application hereof to any person or circumstance is, to any extent, invalid or unenforceable, the remainder of this Agreement, or application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each other term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

32.16 Negotiated Agreement. The Parties to this Agreement acknowledge that it is a negotiated agreement, that they have had the opportunity to have this Agreement reviewed by their respective legal counsel, and that the terms and conditions of this Agreement are not to be construed against either party on the basis of such party's draftsmanship thereof.

[signatures on next page]

DATED this _____ day of _________________, 20__.

THE CITY OF SEATTLE, a Washington municipal corporation

SEATTLE AQUARIUM SOCIETY, a Washington non-profit corporation By _______________________________________ By ________________________________________ Its Superintendent of Parks and Recreation Its Executive Director By authority of Ordinance No. _______

Exhibits: Exhibit 1 General Premises Diagram Exhibit 2 Detailed Premises Diagram Exhibit 3 City's Capital Obligations Exhibit 4 SEAS' Capital Obligations Exhibit 5 Personal Property Inventory Exhibit 6 Debt Service Reimbursement Schedule Exhibit 7 Insurance Requirements

Exhibit 1 General Premises Diagram Exhibit 2 Detailed Premises Diagram

EHXIBIT A: SEATTLE AQUARIUM OPERATIONS AND MANAGEMENT AGREEMENT

This Seattle Aquarium Operations and Management Agreement ( "Agreement") is made and entered into this ____ day of __________, 20__, by and between the CITY OF SEATTLE, a Washington first class city (the "City"), acting through its DEPARTMENT OF PARKS AND RECREATION (the "Parks Department"), and The SEATTLE AQUARIUM SOCIETY, a Washington non-profit corporation ("SEAS") (collectively, the "Parties").

RECITALS

WHEREAS, the City currently owns and operates the public aquarium located in the City of Seattle commonly known as the Seattle Aquarium; and

WHEREAS, The Seattle Aquarium Society is a non-profit corporation organized in 1982 for charitable, scientific and educational purposes for the study and promotion of marine life and conservation and for the education and recreation of the public; and

WHEREAS, in 2000, the Washington State Legislature adopted Chapter 35.64 of the Revised Code of Washington to authorize certain cities, including the City of Seattle, to enter into contracts with non-profit corporations or other public organizations to manage and operate their zoos and aquariums; and

WHEREAS, The City of Seattle and The Seattle Aquarium Society believe that the proposed Agreement will provide the greatest opportunity for success of the Aquarium in fulfilling its mission in education, conservation and recreation, providing benefits to the citizens of Seattle, and developing the Aquarium as an important civic asset, cultural resource and attraction;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

AGREEMENT

1. Definitions. As used in this Agreement, the following terms have the meanings ascribed:

1.1 "Animals" means all living creatures residing at the Premises as part of the Aquarium Exhibits or other activities.

1.2 "AZA" means the Association of Zoos and Aquariums.

1.3 "Business Day" means any day on which banks in the State of Washington are open for business, excluding Saturdays.

1.4 "CEO" means the chief executive officer of SEAS.

1.5 "Capital Improvements" means improvements to the Premises performed by SEAS that increase the useful life of the Premises or enhance their use as an aquarium.

1.6 "Capital Maintenance" means the sorts of Aquarium planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement projects and activities that could be funded under RCW 82.46.010.

1.7 "City's Capital Obligations" means those items listed on Exhibit 3.

1.8 "City Employees" means those persons who are employed as of January 1, 2010, in part-time or full-time jobs at the Aquarium.

1.9 "Concession Agreement" means that Pier 59 Master Concession Agreement between the City and SEAS dated October 9, 2006.

1.10 "Debt Service Reimbursement" means the amounts shown on Exhibit 6 that SEAS owes to the City for debt service for previous Aquarium improvements.

1.11 "Effective Date" means the first day of the seventh calendar month following the month in which this Agreement is authorized by the Seattle City Council.

1.12 "Exhibits" means all areas of the Premises that have been constructed, arranged, or displayed for members of the public to view or interact with during their visit to the Aquarium.

1.13 "Favorable Ruling" is defined in Section 15.1.

1.14 "Fiscal Year" means a 12-month period beginning on January 1 of each calendar year and ending on December 31 of the same calendar year.

1.15 "Force Majeure" is defined in Article 19.

1.16 "Parks Board" means the Board of Park Commissioners established by City Charter.

1.17 "Personal Property" is defined in Section 5.1.

1.18 "Property," when used without a modifier, means the Premises and the Personal Property, collectively.

1.19 "Premises" is defined in Section 2.1.

1.20 "Reimbursement Schedule" is defined in Section 6.1.

1.21 "Retirement Board" means the Board of Administration of the Seattle City Employees' Retirement System established under Chapter 4.36 of the Seattle Municipal Code.

1.22 "SEAS Board" means the Board of Directors of the Seattle Aquarium Society.

1.23 "SEAS Property" is defined in Article 14.

1.24 "SEAS' Capital Obligations" means those items listed on Exhibit 4.

1.25 "Term" is defined in Section 3.1.

1.26 "Termination Date" means June 30, 2030, unless terminated earlier as provided herein.

1.27 "Transferring Employees" is defined in Section 15.3.

1.28 "Visitor Amenities" means improvements to the public areas of the Premises directly related to visitor experience, excluding concession areas, food service areas, and restrooms, for the purpose of enriching the visitor experience.

2. Management and Operation Rights; Use of Premises.

2.1 Grant of Rights. Beginning on the Effective Date, SEAS shall exclusively manage and operate the Aquarium in accordance with all of the terms and conditions contained in this Agreement. The Aquarium is comprised of the Exhibits and all related facilities located on Piers 59 and 60 over Elliott Bay in Seattle, Washington, on which the Aquarium is currently operated. The Aquarium Exhibits and facilities are shown as a diagram in Exhibit 1 and described in greater detail in Exhibit 2 hereto, and are referred to collectively herein as the "Premises."

2.2 Permitted Use. Throughout the Term, SEAS shall use and continuously occupy the Premises for the operation of a public Aquarium and for purposes and programs related or incidental thereto, focusing on conservation, education, enterprise operations, and visitor services, and for no other purpose. SEAS shall not use or occupy any portion of the Premises, and shall not permit the use or occupancy thereof, in any unlawful manner or for any illegal purpose, and shall not permit any activity to be carried on that would constitute an actionable nuisance under the laws of the State of Washington. The Permitted Use shall not include the sale or the promotion of the sale or use of tobacco, weapons or alcoholic beverages (provided that alcoholic beverages may be served at catered events and in the restaurant area) and SEAS agrees to adopt and implement a policy prohibiting any person, except for law enforcement officers and on-duty security personnel, from possessing firearms on the Premises.

2.3 Continuous Operation; Staffing. SEAS shall keep the Premises open and use them to transact business with the public 364 days per year during such hours as SEAS may determine (but a minimum of 45 hours per week), except that SEAS may, upon posting a written and website notice to the public of not less than one (1) week in duration prior to any closure, close the Premises or a portion thereof for a reasonable period for repairs, approved remodeling, taking inventory and accommodating construction activities related to the Alaskan Way Viaduct replacement and related work. SEAS may also close the Premises to the public upon posting prompt actual and website notice, for such periods of time as are necessary to deal with: force majeure events; emergent situations threatening health and safety of the general public or the Animals; emergent situations threatening security of the Premises; and for not more than five (5) days per year for extraordinary and compelling economic or personnel conditions. SEAS shall ensure that an adequate number of personnel qualified to operate the Aquarium are present at the facility 24 hours per day.

3. Term of Agreement.

3.1 Term. The term of this Agreement ("Term") shall commence on the Effective Date and expire on June 30, 2030 (the "Termination Date"), unless this Agreement is terminated earlier as provided herein.

3.2 Option to Terminate. If the Superintendent of the Department of Parks and Recreation (the "Superintendent") determines that there is no reasonable likelihood of SEAS' expending at least $5,000,000 on new or updated Exhibits prior to June 30, 2020, as further described in Section 4.2 below, the City may terminate this Agreement upon 12 months' prior written notice to SEAS, which notice shall be delivered to SEAS between January 1, 2019, and June 30, 2019. During the 12-month notice period, SEAS and the City shall cooperate to provide for an efficient and coordinated transition of operations and management from SEAS to the City or to a City-designated successor operator.

4. Undertakings of the Parties.

4.1 City's Obligations. In addition to any other obligations imposed on the City under this Agreement, the City's obligations include (a) transfer of the Personal Property, defined in Section 5.1 below, to SEAS; (b) funding of $8,000,000 of agreed Capital Maintenance projects by December 31, 2015, as further described in Section 7.2.1, together with such other Capital Maintenance as may be required to keep the Aquarium open and operating, specifically including the City's Capital Obligations described in Exhibit 3 but excluding the SEAS' Capital Obligations described in Exhibit 4.

4.2 SEAS' Obligations. Except and as further provided elsewhere in this Agreement, and in addition to SEAS' other obligations contained herein, SEAS shall be responsible, at its sole cost and expense for: (a) the daily management and operation of the Aquarium; (b) maintaining the Personal Property located at the Premises and in SEAS' possession and control; (c) maintaining the needs of all Aquarium Animals by providing them with food, housing, medical care, and any other provisions necessary for their basic health, safety, and comfort; (d) providing compensation and benefits, if applicable, for all Aquarium employees and SEAS contractors; (e) providing all supplies and equipment necessary for a reasonably safe and functional work environment for all employees, contractors, and volunteers; (f) providing routine maintenance and janitorial services for the Premises, as described in Section 7.1.1; (g) repairing and maintaining Exhibits and creating any new Exhibits and Visitor Amenities; (h) performing the SEAS' Capital Obligations described in Exhibit 4; (i) paying the Debt Service Reimbursement to the City as described in Section 6.1; (j) developing a strategic plan within 18 months of the effective date to help guide capital investments in the following five years and a Master Plan to guide the development of the Aquarium through the Term, as described in Section 16.1; (k) funding a minimum of $10,000,000 of new or refurbished Exhibits and Visitor Amenities by June 30, 2030, with at least $5,000,000 of expenditures occurring on or before June 30, 2020; and (l) such other maintenance, repairs and improvements as the Parties may hereafter agree. In operating the Aquarium, SEAS should endeavor to partner with local entities with experience or expertise in marine conservation and education, including the National Oceanic and Atmospheric Administration, the University of Washington, Puget Sound Partnership, National Science Foundation, NASA, and local and regional educational institutions, and pay particular attention to exhibits and conservation education focusing on Puget Sound, the Salish Sea, and the waters of the Pacific Northwest.

5. Transfer and Use of Personal Property.

5.1 Transfer of Personal Property. In order that SEAS may carry out its obligations under this Agreement, the City hereby transfers the Personal Property to SEAS, as of the Effective Date. "Personal Property" is all property possessed by the City (including without limitation vehicles, boats, computers and software) that is necessary to and exclusively used in the operation and maintenance of the Aquarium that is not: (a) real property; (b) Premises facilities or improvements described in Section 2.1, or (c) art that is in the City's collection. By December 31, 2010, the Parties shall agree on an inventory of the Personal Property as of the Effective Date and shall include that inventory as Exhibit 5 to this Agreement. SEAS shall maintain all such transferred Personal Property in good condition and repair, and shall replace with items of good quality any of the Personal Property that becomes inoperable or unusable if such item is necessary for the operation of the Aquarium, in SEAS' reasonable discretion. The Personal Property (including any replacement Personal Property) shall become the property of the City when this Agreement is terminated. Notwithstanding anything herein to the contrary, the City shall remove the telephone and switching equipment located at the Premises and operated by the City Department of Information Technology ("DoIT") unless SEAS and DoIT prior to the Effective Date enter an agreement for SEAS to purchase such equipment and an agreement for the ongoing operation of the equipment; regardless, SEAS will reimburse DoIT for its budgeted costs for providing telephone service to the Aquarium for 2010 and the costs of any equipment removal.

5.2 Animals, Generally. Personal Property includes all Animals, but if the general terms of this Agreement relating to Personal Property conflict with this Section 5.2, the provisions of this section shall control.

5.2.1 Rights to Animals. All Animals currently owned by the City and all rights to Animals owned by the City shall be transferred to and held by SEAS throughout the Term. The Animals shall be the sole property of SEAS, which shall also assume all obligations the City may have with respect to Animals exhibited, housed, or otherwise kept or cared for at the Aquarium during the Term of this Agreement. The Animals shall become the property of the City when this Agreement is terminated.

5.2.2 Care of Animals. SEAS shall care for all Animals in accordance with all federal, state and local laws and regulations, including the Marine Mammal Protection Act, and in accordance with the policies and guidelines adopted by the AZA.

5.2.3 Sale and Purchase of Animals. SEAS shall have the authority to acquire or sell or otherwise dispose of Animals in the course of SEAS' operation of the Aquarium. The acquisition, sale or other disposition of Animals shall be made in strict accordance with (a) all applicable federal, state or local laws, regulations and policies, (b) the guidelines and policies of the AZA, and (c) existing and any adopted acquisition and disposition policies approved by the City.

5.3 City Documents. In this Agreement, "City Documents" means records pertaining to the operation and management of the Aquarium (including personnel files), but excluding any documents or records in SEAS' custody relating to Aquarium management, personnel, donors, or to the internal operations of SEAS, prior to the Effective Date. Unless and until agreed otherwise between the Superintendent and SEAS, the City will retain custody of all City Documents in its possession on the Effective Date. To the extent necessary to allow SEAS to operate and manage the Aquarium and to the extent permitted by law, the City will provide SEAS access to City Documents in the City's possession. SEAS shall make City Documents in SEAS' possession available to the Superintendent and other City designees promptly upon request and shall follow the Superintendent's instructions for disclosing City Documents in SEAS' possession in response to public records disclosure requests. SEAS will also comply with the records retention schedule for City Documents in its possession and make those City Documents available for purposes of compliance audits. SEAS shall return the City Documents to the City when this Agreement is terminated.

5.4 Aquarium Subaccount. Presently the Aquarium receives no direct operating subsidy from the City. Positive net income from Aquarium operations in any given year is contributed to the Aquarium Subaccount and operating losses are absorbed by it. As of the Effective Date, the City estimates there will be approximately $350,000 in the Aquarium Subaccount. The 2010 City Budget assumes that the Aquarium continues under City management for the entire year and that this transaction will not impact the City's General Fund. Therefore, the City agrees to transfer the funds in the Aquarium Subaccount to SEAS on the Effective Date. Any 2010 revenues earned but not received prior to the Effective Date shall be transferred to SEAS when received. Any 2010 expenses incurred but not paid prior to the Effective Date shall be paid by SEAS when due. From January 1, 2010, through the Effective Date, the City, acting through the Aquarium director, will consult with SEAS regarding anticipated charges to the Aquarium Subaccount that are in excess of ordinary charges for day-today operations. The City will provide SEAS with an accounting of its profits and losses with respect to the Aquarium for 2010 by February 28, 2011.

6. Fiscal Matters.

6.1 Debt Service Reimbursement. SEAS shall pay the City the Debt Service Reimbursement amounts in accordance with the schedule shown on Exhibit 6 (the "Reimbursement Schedule") by electronic funds transfer to the City's bank. The City will not provide invoices to SEAS. SEAS' payment obligation is absolute and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise. SEAS may prepay all or any part of the principal amounts shown on the Reimbursement Schedule at any time so long as SEAS agrees to fully compensate the City for its costs incurred in connection therewith, including the costs of defeasing bonds issued to finance the underlying work. In the event of any prepayment of the Debt Service Reimbursement, the City shall prepare an updated Reimbursement Schedule to reflect the revised reimbursement amounts and SEAS shall thereafter pay such revised amounts to the City. SEAS shall not undertake any Capital Improvements or design or create any new or refurbished Exhibits if its payment of the Debt Service Reimbursement is in arrears.

6.2 SEAS Revenue. SEAS shall collect and retain all admission proceeds and other revenue derived from operation of the Aquarium including, without limitation, fees and receipts from concessions, souvenirs and other services offered by SEAS to the public at or in association with the Aquarium, and all contributions collected by SEAS from any other source. SEAS shall expend or invest such revenue exclusively for Aquarium Purposes.

6.3 Fees and Prices. Subject to Article 13 of this Agreement, SEAS shall have the authority to set the amount of all prices and fees for admissions, services rendered or sales made to the public or otherwise at the Aquarium, including without limitation, food and drink concessions, membership passes, souvenirs, special exhibits and other special events.

6.4 Solicitation of Private and Public Funding. SEAS shall: (a) solicit private support for SEAS through membership fees and charitable contributions and solicit federal, state or local grants or other funds to support the operation and purposes of the Aquarium; and (b) apply all funds contributed to it as membership fees, charitable donations, public grants or loans, or any other sources, to the operating expenses, exhibits, Capital Improvements, and other Aquarium purposes in accordance with this Agreement, and to the administrative and operating expenses of SEAS. Without limiting the generality of the foregoing, SEAS agrees to use its best efforts to fundraise a minimum of $15,000,000 by June 30, 2020, and future City capital contributions to Aquarium improvements will be evaluated in part against SEAS' success in achieving this goal. The City hereby agrees to use its reasonable efforts to assist SEAS in the solicitation of federal, state and county grants or other sources of nonCity public funding to support the operation of the Aquarium or the financing of any work performed to bring any building, structure or service within the Premises into compliance with any applicable local, state or federal law or regulation, including without limitation the Americans With Disabilities Act of 1990. SEAS may apply for grants in the City's name subject to the Superintendent's prior approval or if the Superintendent instructs, by the Seattle City Council. The City Council retains the right to accept or not accept grant funds so applied for. All grants to the City received for the Aquarium shall be transferred to SEAS within thirty (30) days of the receipt of the grant funds, if permitted by the terms of the grant.

6.5 Naming Rights.

6.5.1 Name. Under no circumstances may the Aquarium's name be changed from "Seattle Aquarium" without formal action by the Parks Board and the City Council.

6.5.2 Donation Acknowledgement. The City expressly permits SEAS to recognize donors for their contributions to specific exhibits and discrete capital improvements by naming such exhibits or improvements and displaying recognition names as agreed between SEAS and its donors, provided that all donor recognition at the Aquarium is subject to the approval of the Superintendent or his or her designee, not to be unreasonably withheld.

6.6 City Financing. If requested by SEAS, the City will consider issuing debt for Aquarium capital purposes. Responsibility for funding debt service on such debt shall be agreed to by the Parties.

6.7 City Approval of SEAS Debt. SEAS shall not incur aggregate debt in excess of $1 Million without the approval of the City's Finance Director, which approval shall not be unreasonably withheld, conditioned or delayed.

7. Maintenance and Operations.

7.1 Routine Maintenance and Janitorial Services.

7.1.1 SEAS' Obligation. SEAS shall provide all routine maintenance and janitorial services required to maintain the Aquarium in a clean, safe and sanitary condition, and as necessary to maintain all necessary licenses and accreditations. Without limiting the generality of the foregoing, SEAS shall be solely responsible for items such as ductwork cleaning, interior and exterior window washing and repairs, gutter cleaning, caulking, tenant improvements and interior painting. SEAS shall employ sufficient personnel, or show evidence satisfactory to the City of personal service contracts which provide such personnel, to perform the routine maintenance and janitorial work in a prompt and efficient manner. While they remain City employees, the Aquarium's maintenance staff represented by Local 1239, will perform the janitorial and routine maintenance services for the Aquarium.

7.1.2 Routine Maintenance by Parks Department Forces. At SEAS' request, the Parks Department will provide routine maintenance at the Aquarium using City forces in substantially the same manner that the City currently provides such maintenance. The City will document the actual and direct labor hours, overhead, and any materials provided as a part of any such maintenance and submit such documentation to SEAS together with the City's invoice, on a monthly basis. SEAS shall pay such invoice within ten (10) Business Days of receiving it.

7.2 Capital Maintenance and Repair.

7.2.1 City Financial Commitment. The Parties acknowledge that the Aquarium was constructed in 1977, and although the facility has been improved from time to time throughout the years, a substantial amount of Capital Maintenance has been deferred. The Parties further acknowledge that the Aquarium competes with other City facilities for limited financial resources and the City makes no promise that City funds will be available to finance discretionary Capital Maintenance beyond the $8,000,000 provided for herein and the City obligations stated in Section 4.1. The $8,000,000 amount includes hard and soft project costs such as design and permitting, and cost overruns. Notwithstanding the foregoing or anything in this Agreement to the contrary, SEAS, rather than the City, shall be responsible for all maintenance and repairs of any nature whatsoever occasioned by any negligent, reckless or intentional act or omission of SEAS or its officers, agents, employees or contractors.

7.2.2 SEAS Financial Commitment. Prior to June 30, 2030, SEAS shall expend at least $10,000,000 of SEAS' funds on new or refurbished Exhibits, $5,000,000 of which must be expended or be reasonably anticipated to be expended by June 30, 2020, or the Superintendent may terminate this Agreement as provided in Section 3.2. SEAS' obligations to fund such new Exhibits shall expire upon expiration or earlier termination of the Term.

7.2.3 Process for Approving Capital Improvements and New Exhibits. The Parties agree that the Aquarium Pier 60 Filter Replacement Project ($300,000), the Aquarium Pier 60 Piling and Corrosion Renovation Project ($657,000) and the Aquarium Saltwater Pump Replacement Project ($500,000) in the City's 2010-2015 Capital Improvement Program will be undertaken and the amounts budgeted in the City's 2010 Adopted Budget will be credited toward the City's $8,000,000 Capital Maintenance obligation. By March 1, 2010, and by each March 1st thereafter throughout the Term, the Superintendent and representatives from SEAS shall meet and agree on the items of Capital Maintenance and any new or refurbished Exhibits that the Parties wish to undertake during the upcoming year, including any SEAS-initiated Capital Improvements as provided in Section 7.2.4. Proposals for the expenditure of City funds shall be subject to the approval of the Mayor and of the City Council through an appropriation of funds in the City's adopted budget for the upcoming year that reflects the Parties' estimated cost to perform the agreed City-funded Capital Maintenance for that year. The City will not be responsible for SEASinitiated Capital Improvements.

7.2.4 Capital Improvements. SEAS may make Capital Improvements or alterations to the Aquarium facilities, at its own expense, subject to the following:

(a) Any Capital Improvement that would modify the structure of the Premises or that would materially add to the City's maintenance costs under Section 7.2.1, requires the prior approval of the Superintendent, which approval may be granted, withheld or conditioned in that official's sole discretion; and

(b) Any Capital Improvement projected to cost more than three million dollars ($3,000,000), measured in 2008 dollars, shall require the City's approval, by ordinance; and

(c) If the Capital Improvement is of a nature for which plans and specifications are typically prepared and the cost of the improvement is $500,000 or more, then the plans and specifications for the improvement shall be subject to the Superintendent's review and approval before any construction occurs.

7.2.5 New Facilities Operating and Maintenance Costs. As SEAS funds and builds Capital Improvements and new Exhibits, or expands its support and visitor facilities, the corresponding increases in operating, program and maintenance costs will be the responsibility of SEAS.

8. Conditions for Construction of Improvements.

8.1 General. Subject to the separate agreements between the City and SEAS which shall address scope, schedule, cost, allocation of risk, and other matters, any work under Section 4.1 funded by the City may be managed and performed by SEAS in compliance with any and all applicable state laws, rules and regulations. All construction or repair work, including maintenance performed under contract, undertaken by SEAS using public funds shall be subject to prevailing wage requirements under RCW 39.12.020 and to the requirements of Seattle Municipal Code Chapters 20.32 (Art in Public Works Construction ) and 20.45 (Nondiscrimination in Benefits) and the Seattle Parks Department standards for LEED construction.

8.2 Contractor Insurance. Each party hereto shall provide, upon request, evidence acceptable to the other that every contractor engaged by a party to perform work on the Premises maintains insurance in such amounts with such coverages offered by such companies as shall be satisfactory to the City and SEAS, including but not limited to Worker's Compensation Insurance (including Employers' Liability Insurance) and insurance against liability for injury to persons and property arising out of all such contractor's operations, and the use of owned, non-owned or hired automotive equipment in the pursuit of all such operations.

8.3 Title to Improvements. Except as otherwise provided in this Agreement, all appurtenances, fixtures, improvements, equipment, additions and other property attached to or installed in the Premises by the City during the Term shall be and remain the property of the City and shall not be removed by SEAS without the Superintendent's approval. The City also shall own all SEAS-funded Capital Improvements, new Exhibits, or expanded support and visitor facilities upon their completion.

9. Signage. SEAS shall design and provide all signage for the Premises. SEAS will not maintain signage or advertisements on the Premises to which the Superintendent objects. City ownership of the Premises shall be noted where appropriate in SEAS public relations materials, on SEAS' website, and on Premises signage.

10. Utilities. The City shall provide heating and ventilation, water and sewer and electricity to the Premises to the extent reasonably necessary for the operation of the Premises for the Permitted Use. SEAS shall pay when due, directly to the appropriate company or to the City based on metered readings and prevailing rates, all bills for water, sewer, electricity, data and telecommunications services for the Premises. SEAS and its sub-concessionaires shall comply with commercially reasonable sorting and recycling standards adopted by the City. Except in the event of the City's gross negligence or intentional misconduct, the City shall not be liable for any loss, injury or damage to personal property caused by or resulting from any variation, interruption or failure of services due to any cause whatsoever, including, but not limited to, electrical surges, or from failure to make any repairs or perform any maintenance. No temporary interruption or failure of such services incident to the making of repairs, alterations or improvements that were due to accident, strike or conditions or events beyond the City's reasonable control shall be deemed an eviction of SEAS or to release SEAS from any of SEAS' obligations hereunder or to give SEAS a right of action against the City for damages. SEAS acknowledges its understanding that there may be Cityplanned utility outages affecting the Premises and that such outages may interfere, from time to time with SEAS' use of the Premises. The City shall provide SEAS with not less than 48 hours' prior written notice of any City-planned electricity outage affecting the Premises. The City has no obligation to provide emergency or backup power to SEAS. SEAS shall develop and implement protocols and procedures for dealing with power outages.

11. Fees and Taxes. From and after the Effective Date, SEAS shall be liable for, and shall pay prior to delinquency, all taxes, license fees and excise fees covering the business and activities conducted on and the occupation of the Premises by SEAS. SEAS shall be responsible for, and shall pay prior to delinquency, all fees, charges, or costs, for any governmental inspections or examinations relating to SEAS' use and occupancy of the Premises, and shall pay all taxes on any leasehold interest created by this Agreement (e.g., leasehold excise taxes). SEAS shall have the right to contest the amount and validity of any taxes by appropriate legal proceedings, but this shall not be deemed or construed in any way as relieving SEAS of its covenant to pay any such taxes. The City shall not be subjected to any liability nor required to pay any costs or expenses in connection with any such proceeding brought by SEAS and SEAS hereby covenants to indemnify and hold City harmless from any such costs or expenses. SEAS agrees not to allow or suffer a lien for any such taxes to be imposed upon the Premises or upon any equipment or property located thereon without promptly discharging the same, provided that SEAS, if so desiring, may have reasonable opportunity to contest the validity of the same. If SEAS intends to contest or to fail to pay when due any tax or fee referred to in the preceding sentence, SEAS shall provide the City with at least 30 days' notice of that intention before the tax is due, explaining its reasons. The City may choose to pay the tax on behalf of SEAS, and if it is later determined the tax or some portion of it validly owed, SEAS shall reimburse the City.

12. Permits, Licensing and Accreditation.

12.1 Required Permits, Licenses and Accreditation. Throughout the Term, SEAS shall cause both itself and the Aquarium to be at all times (a) accredited by the AZA; (b) licensed with the United States Department of Agriculture; and (c) licensed by the Seattle-King County Health Department.

12.2 Other Licenses and Permits. SEAS and the City shall use their best efforts to have all licenses and permits currently held by the City in connection with the operation of the Aquarium legally transferred to SEAS or to have them canceled upon SEAS' obtaining replacement permits or licenses in its name if transfer is not possible. If any licenses or permits are required to be held by a governmental entity and/or owner of the Premises, or if the Parties agree otherwise with respect to any particular permit or license, then those licenses and permits shall remain in the possession of the City and under the City's name, and SEAS shall hereby be authorized as the agent of the City to perform such services under such licenses and permits as are required in the operation of the Aquarium to the extent permitted by applicable law . Upon any termination of this Agreement for any reason, SEAS shall transfer all licenses and permits back to the City and SEAS shall use its best efforts to assist the City with the documentation of any such transfer or reapplication for any such permit or license to be held in City's name after such termination.

13. Admissions.

13.1 SEAS' Responsibilities. Subject to Section 13.2 below, SEAS shall have the authority to set Aquarium admissions charges. The City and SEAS intend that the Aquarium remain affordable to individuals from all economic circumstances and particularly, to families with children.

13.2 Public Access. SEAS intends to operate the Aquarium with the goal of providing wide access to Seattle residents at an affordable cost. In furtherance of that goal, SEAS will (a) provide reduced admission costs for school groups; (b) make at least 30,000 free passes available annually to human services agencies having a primary purpose of serving low-income Seattle residents; and (c) pursue other options for ease of access to the Aquarium and special services at the Aquarium for children, seniors, the disabled and low-income individuals. Subject to expansion of the Premises in accordance with a City-approved Aquarium Master Plan, SEAS shall provide public access to the west end of the Aquarium pier during Aquarium business hours to the extent such access can be reasonably and safely accommodated and SEAS shall comply with all provisions of the lease between the City and State Department of Natural Resources, including any provisions related to public access, and any access requirements of any City law or regulation, as the same may be enacted, amended, altered or modified, from time to time.

13.3 Admissions Tax. No City admission taxes are currently charged on Aquarium admission. The City agrees that it will not impose admission taxes on Aquarium admissions so long as similar facilities (such as the Woodland Park Zoo and Pacific Science Center) are exempt from such taxes.

14. SEAS' Personal Property. All furniture, furnishings and articles of movable personal property installed in the Premises by or for the account of SEAS, without expense to the City, and which can be removed without structural or other material damage to the Premises (all of which are herein called "SEAS Property") shall be and remain the property of SEAS and may be removed by it subject to the provisions of Article 22.

15. Staffing and Employees.

15.1 Generally. The Parties anticipate that as of January 1, 2010, there will be seventy-five (75) City Employees at the Aquarium. It is the intention of the Parties that all City Employees who wish to continue employment at the Aquarium become employees of SEAS. The City is currently pursuing an option whereby City employees who transfer to SEAS employment might remain in the City retirement plan (a "Favorable Ruling"). The City will support this option if it is available under state and federal law and approved by the Retirement Board. SEAS will offer employment to all City Employees for similar employment at the Aquarium to the extent similar positions are available. City Employees will have the shorter of two (2) years from the date of a Favorable Ruling or five (5) years from January 1, 2010, to determine whether they wish to transfer to SEAS employment. The City will use its best efforts to find other City employment for those City Employees who wish to remain in City employment but makes no representation that there will be comparable, vacant positions within the City at the time of the transfer.

15.2 SEAS Supervision of Employees. Pursuant to RCW 35.64.010(4) and commencing on the Effective Date until the transition of City Employees to SEAS employment is complete, SEAS, acting through its CEO, who shall replace the City's Aquarium Director, shall manage, supervise, and direct all City employees employed at the Aquarium and may, subject to the provisions of the City Charter, Seattle Municipal Code, City rules, state legislation and any applicable collective bargaining agreements, hire and, after consultation with the Superintendent, fire and otherwise discipline the City employees. The CEO shall be the ultimate appointing authority as provided for by City Charter and by City Ordinance. SEAS shall, in cooperation with the City's Personnel Director and the Superintendent, develop procedures for implementing this authority with regard to City Employees.

15.3 Employees. SEAS shall comply with all applicable federal, state and local laws, ordinances and regulations pertaining to all current and future employees at the Aquarium during and after their transition from City employment to SEAS employment. In addition, SEAS shall be an equal opportunity employer and make reasonable efforts to maintain a diverse work force. SEAS will use its best efforts during the Term to offer City Employees who transfer to SEAS employment (the "Transferring Employees") opportunities for professional advancement and a package of employee benefits that are generally consistent with the opportunities and benefits available to such City Employees as of the Effective Date.

15.4 City Employees Subject To Collective Bargaining Agreements. The City has previously negotiated collective bargaining agreements with collective bargaining representatives representing certain City Employees and anticipates that it will negotiate other such agreements that will affect City Employees working at the Aquarium. The Parties recognize that the terms of these collective bargaining agreements are binding on the City unless altered by mutual agreement between the City and the collective bargaining agents and consistent with all applicable state, federal and local laws. SEAS agrees to supervise City Employees consistent with applicable agreements and to bargain collectively with represented employees in the future.

15.5 City Transfer of Certain Balances. The City will calculate the vacation and sick leave balances for all Transferring Employees as of the transfer date and SEAS will credit the Transferring Employees with the full amount of those hours. The City will pay SEAS the value of the Transferring Employees' balances as follows:

15.5.1 Vacation. The vacation balances will be calculated based on the pay rate in effect on each employee's transfer date. The City will pay SEAS the value of each Transferring Employee's vacation leave in eight (8) equal quarterly payments (12.5% per quarter) beginning with the end of the first quarter in which the employee transfers to SEAS employment, such that the liability for vacation for each transferring employee will be paid out to SEAS over a two-year period.

15.5.2 Sick Leave. The City shall pay SEAS one-half of the value of the unused sick leave for each Transferring Employee in equal annual installments over five (5) years commencing the January following the year in which the employee's transfer date occurred (10% per year).

15.5.3 Pensions. SEAS has established and will maintain and manage a private defined contribution retirement plan for Transferring Employees. If the City obtains a Favorable Ruling as described in Section 15.1 above, and the Transferring Employees are permitted to remain in the City retirement system, then SEAS shall cooperate with the City and promptly execute such documents as the City may require in order to amend its retirement plan to allow for the Transferring Employees' continued participation in the City retirement plan. Thereafter, SEAS shall comply with all requirements of such documents and shall promptly pay when due the employer's share of all retirement system contributions for the Transferring Employees who remain in the City retirement plan.

15.6 Payroll and Taxation.

15.6.1 City Payroll until Transition. Each City Employee will remain on the City payroll until each such employee either transitions to SEAS employment or otherwise leaves City employment. Until such transition or separation, or transfer to other City employment, the City Employees will continue to receive City compensation and benefits, and City employee status and payment of taxes and reporting, although the CEO will supervise them. SEAS shall reimburse the City monthly for all compensation and benefits, including taxes and employer retirement contributions, for each City Employee from the Effective Date until the employee no longer works at the Aquarium. SEAS shall include a staffing plan and budget in its Annual Plan to the Superintendent and shall endeavor to schedule City Employees' hours so as to remain within the budget. If SEAS anticipates the need for any increase in the staffing budget, it shall so inform the Superintendent no later than September 1st of each year.

15.6.2 SEAS Payroll after Transition. From and after the date each City Employee commences employment with SEAS, SEAS shall make or cause to be made for each such employee all necessary payroll deductions for disability and unemployment insurance, social security, withholding taxes and other applicable taxes, and prepare, maintain and file or cause to be filed all necessary reports with respect to such taxes or deductions, and all other necessary statements and reports.

15.7 No Third Party Beneficiary Status. Employees affected by this Agreement are not intended to be third-party beneficiaries to this Agreement and cannot sue to enforce its terms.

16. Planning and Reporting Obligations; Public Involvement.

16.1 Master Plan. Within 18 months after the Effective Date, SEAS shall prepare for submittal to the Superintendent a strategic plan to help guide investments in the physical development of the Aquarium over the following five years. SEAS shall coordinate its planning and development of a future Master Plan with the Committee on Central Waterfront Partnerships, and the Waterfront Planning parameters subsequently developed by the City Council. The SEAS Master Plan shall be subject to City Council approval, by resolution, and shall be consistent with the adopted City Alaskan Way and Seawall Replacement Program, especially as concerns the seawall replacement component of the program and the redesign of adjacent public spaces at Waterfront Park and Piers 62/63. The Aquarium Master Plan should include, among other elements:

(a) A description of planned or potential physical development, including any planned infrastructure improvements and the timing of those improvements, including development priorities, the probable sequence for such planned development and estimated dates of construction and occupancy;

(b) A statement explaining the purpose of the development proposed in the master plan, including the public benefits resulting from the proposed new development and the way in which the proposed development will serve the public purpose mission of the Aquarium;

(c) A strategy for preservation of currently designated historic structures in connection with any future development;

(d) A strategy for preservation of view corridors in connection with any future development; and

(e) Consideration of pedestrian access to and circulation around the pier, including improved connections to existing and proposed public spaces, including Waterfront Park, Piers 62/63, the Pike Place Hillclimb and new public space immediately east of the Aquarium; and strategies to activate and program spaces adjacent to the Aquarium and support public access to the water's edge.

16.2 Annual Report to City Council Parks Committee. SEAS shall, at its sole expense, prepare an Annual Report that provides, for the preceding Fiscal Year, (a) a general summary of the Aquarium's operations; (b) a financial accounting for all funds received by SEAS for the continued operation and management of the Aquarium from all sources, by category, and lists all expenditures, including any capital investments, made at the Aquarium; (c) an analysis of the affordability of Aquarium admission fees and membership rates on middle-income families; (d) a description of the public benefits provided; and (e) an updated business plan, if any material assumptions have changed. On or before July 1st of each year throughout the Term, SEAS will provide a briefing on its Annual Report for the prior Fiscal Year to the City Council's Parks Committee or its successor committee.

16.3 Monthly Report to Superintendent. Beginning one month after the Effective Date and each month thereafter throughout the Term, SEAS shall provide the Superintendent with a report of the attendance and revenue totals for the Aquarium for the preceding month, by source.

16.4 Annual Plan to Parks Board and Superintendent. On or before December 1st of each year throughout the Term, SEAS shall, at its sole expense, prepare and deliver an Annual Plan for the next Fiscal Year to the Parks Board and to the Superintendent, for that official's approval. The Annual Plan shall cover, at a minimum, any Capital Improvement and Exhibit expansion or refurbishment plans and a description of any planned major programmatic changes. The Superintendent and the CEO shall meet each year to discuss the contents of the Annual Plan.

16.5 Annual Independent Audit. Within sixty (60) days after the end of each Fiscal Year, SEAS shall arrange for an audit of its books and records by an independent, certified public accountant. This audit shall be conducted at SEAS' sole cost and expense and shall cover the previous Fiscal Year. SEAS shall deliver to the Superintendent an original, signed copy of each such annual audit by the earlier of (a) thirty (30) days after the completion of such audit or (b) 180 days after the end of the Fiscal Year covered by such audit.

16.6 Financial Records. SEAS shall establish and maintain books, records and systems of account relating to the Aquarium's gross revenue and operating expenses in accordance with generally accepted accounting practices for non-profit organizations. These records shall, to the extent necessary to meet requirements for audits under Section 16.5 of this Agreement, be retained by SEAS and made available to the City upon request.

16.7 City Audit Participation. If requested by the City, SEAS shall make available all information reasonably necessary for the City and, to the extent required by applicable law, for the State Auditor to perform audits of the use and application of all public revenues, grants, fees and City funds received by SEAS during the current and preceding year.

16.8 Public Involvement.

16.8.1 Involvement on SEAS Board. Subject to the provision that all SEAS Board appointees shall be subject to qualification requirements and approval based upon the criteria generally recognized for membership on SEAS' Board, the Mayor and the Chair of the City Council committee with oversight of the Aquarium will each be entitled to appoint one person to SEAS' Board. The Superintendent shall also be appointed to SEAS' board. All City appointees shall have full voting rights. Following the initial appointments to the Board positions authorized under this Subsection, succeeding new appointments to these two positions by the appointing authorities may only be made effective upon the occurrence of a vacancy or expiration of the preceding term.

16.8.2 Public Involvement Process for Major Capital Projects. Except for those projects identified in the approved Master Plan, the City and SEAS agree that the development process for any Capital Improvement projects costing more than $3,000,000 must include reasonable opportunities for public involvement. For each such capital project, the Superintendent and SEAS will develop such a process for public involvement that is consistent with the Parks Department's Public Involvement Policy.

16.8.3 Open Meetings. The City and SEAS intend that to the extent practicable, decision-making with respect to Aquarium operations policies shall occur openly and with due consideration of public input and in a manner consistent with the spirit of the Washington State Open Public Meetings Act, RCW 42.30. SEAS therefore agrees that (a) all regular, annual and special meetings of the SEAS Board of Directors (the "Board") shall be open and public; (b) members of the public shall be permitted to attend any such meeting without being required, as a condition to attendance, to register his or her name or otherwise to fulfill any condition precedent to his or her attendance; (c) SEAS will not adopt any policies or resolutions materially affecting Aquarium operations policies outside of a public meeting; and (d) no Board meeting voting shall be by secret ballot.

Approximately one week in advance of any regularly-scheduled or annual meeting of the Board (or immediately upon the noticing of any special meeting of the Board), the Board shall provide notice of the Board meeting time, location and proposed agenda items as of the date of the notice to any member of the public who submits a written request for such notice. Any written request for such notice shall state whether the requesting party wishes to receive such notice by electronic or regular mail. The Board shall also post contemporaneously such notice on the Aquarium internet web page(s). The proposed agenda identified in the notice shall be subject to change.

Nothing contained herein shall be construed as prohibiting the Board from convening an executive session during any regular or special meeting in situations where such session would be authorized under the provisions of the Washington Open Public Meetings Act, RCW 42.30.

16.9 SEAS Code of Ethics. SEAS shall maintain a code of ethics governing its Board members, employees and activities consistent with applicable requirements of State and federal laws and AZA standards. The City may request from SEAS those documents necessary for the City to confirm the existence of an ethics and conflict of interest policy. SEAS will report on compliance with the ethics and conflict of interest policy and any issues that have arisen as a result, in the Annual Report.

17. Insurance. The Parties will provide insurance and abide by the insurance provisions of this Agreement contained in Exhibit 7 to this Agreement.

18. Representations and Warranties.

18.1 SEAS hereby represents and warrants to the City and covenants as follows:

18.1.1 Experience. SEAS is experienced in aspects related to the operation and management of the Aquarium and hereby agrees to apply its best efforts and most efficient methods in the full operation and management of the Aquarium.

18.1.2 Mission. SEAS is committed to its fulfilling its mission: Inspiring conservation of our marine environment. Marine conservation, research, and education, with an emphasis on Pacific Northwest or Puget Sound aquatic ecosystems, will continue to be the primary focus of the Aquarium for the duration of this Agreement and any extension thereof.

18.1.3 Formation. SEAS is a nonprofit corporation duly incorporated, validly existing and in good standing under the laws of the State of Washington. SEAS shall at all times during the Term of this Agreement maintain its tax-exempt status under Section 501(c) (3) of the Internal Revenue Code.

18.1.4 Authority. SEAS has full power and authority (corporate or otherwise) to enter into this Agreement and to consummate the transactions contemplated by it. This Agreement has been duly authorized by all necessary action on the part of SEAS and no other corporate or other action on the part of SEAS is necessary to authorize the execution and delivery of this Agreement. The individual executing this Agreement for SEAS has full authority to do so and thereby to bind SEAS to its terms.

18.1.5 Conflicts and Consents. The execution and delivery by SEAS of this Agreement and the performance by SEAS of the transactions contemplated in it will not violate any federal, state or local law, rule or regulation, or conflict with or result in any breach or violation of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or constitute an event or condition that would permit termination or acceleration of the maturity of, the Articles of Incorporation, bylaws or partnership agreement of SEAS (as applicable) or any indenture, mortgage, lease, agreement or other instrument or obligation to which SEAS is a party or by which it may be bound whose termination or acceleration would materially adversely affect the ability of SEAS to perform its obligations under this Agreement. No approval, authorization, consent or other order or action of, or filing or registration with, any person, entity or governmental authority is required for the execution and delivery by SEAS of this Agreement.

18.1.6 Conflict with Orders, etc. The execution and delivery by SEAS of this Agreement will not conflict with any order, judgment or decree of any court, government, government agency or instrumentality, whether entered pursuant to consent or otherwise, by which SEAS may be bound or affected.

18.2 The City hereby represents and warrants to SEAS and covenants as follows:

18.2.1 Authority. The City has full power and authority to enter into this Agreement and to consummate the transactions contemplated by it. This Agreement has been duly authorized by all necessary action on the part of the City and no other action on the part of the City is necessary to authorize the execution and delivery of this Agreement. The individual executing this Agreement for the City has full authority to do so and thereby to bind the City to its terms.

18.2.2 Conflicts and Consents. The execution and delivery by the City of this Agreement and the performance by the City of the transactions contemplated in it will not violate any federal, state or local law, rule or regulation. No approval, authorization, consent or other order or action of, or filing a registration with, a person, entity or governmental authority is required for the execution and delivery by the City of this Agreement.

18.2.3 Conflict with Orders, etc. The Execution and delivery by the City of this Agreement will not conflict with any order, judgment of decree of any court, government, government agency or instrumentality, whether entered pursuant to consent or otherwise, by which the City may be bound or affected.

18.3 Litigation. There is no litigation, action, arbitration, grievance, administrative proceeding, suit or claim filed and pending, nor is there any investigation by a governmental agency of SEAS or any of its affiliates that, if adversely decided, could have a material adverse impact on SEAS' ability to perform its obligations under this Agreement.

19. Force Majeure. As used herein, the term "Force Majeure" with respect to a delay in performance shall mean any delay that is attributable to (a) any strike, lockout or other labor or industrial disturbance (whether or not on the part of the employees of either party hereto), civil disturbance, future order claiming jurisdiction, act of the public enemy, war, riot, sabotage, blockade, embargo, inability to secure customary materials, supplies or labor through ordinary sources by reason of regulation or order of any government or regulatory body; (b) any changes in any applicable laws or the interpretation thereof; or (c) any lightning, earthquake, fire, storm, hurricane, tornado, flood, washout, explosion, or any other cause beyond the reasonable control of the party from whom performance is required and of its contractors or other representatives. Any prevention, delay or stoppage in a party's performance hereunder due to Force Majeure shall excuse the performance of the party affected for a period of time equal to any such prevention, delay or stoppage; provided, however, that during the period of any such delay or stoppage, the party whose performance hereunder is excused shall take all reasonable steps to minimize the length of such delay or stoppage.

20. Indemnities.

20.1 City's Indemnity. The City hereby agrees to indemnify, save harmless and defend SEAS from any and all losses, claims, actions or damage suffered by any person or entity (including SEAS) by reason of or resulting from any act or omission of the City or any of its officers, agents, employees, or invitees in connection with: (a) the City's use or occupancy of the Property, including trademark, patent, and copyright infringement; (b) the City's maintenance, repair or improvement obligations arising under this Agreement; (c) the City's employment of any Aquarium employees prior to the Effective Date; and (d) the City's pension plan for City Employees; but as to subclauses (a) and (b) above, only to the extent such claims, actions, costs, damages or expenses are caused by the willful misconduct or negligence of the City, its authorized officers, agents, employees or invitees. The indemnification provided for in this section shall survive any termination or expiration of this Agreement. Notwithstanding anything herein to the contrary, if (and only if) the provisions of RCW 4.24.115 apply to the foregoing indemnification and any injuries or damage on which a claim is based are caused by or result from the concurrent negligence of the City or its agents or employees, and SEAS or its agents or employees, the City's indemnification applies only to the extent of the negligence of the City, its agents or employees. The City specifically assumes potential liability for actions brought by City's own employees against SEAS and for that purpose only the City specifically waives any immunity against claims by SEAS under the Workers Compensation Act, RCW Title 51; AND THE CITY ACKNOWLEDGES THAT THIS WAIVER WAS SPECIFICALLY ENTERED INTO PURSUANT TO THE PROVISIONS OF RCW 4.24.115 AND WAS THE SUBJECT OF MUTUAL NEGOTIATION.

20.2 SEAS' Indemnity. SEAS hereby agrees to indemnify, save harmless and defend the City from any and all losses, claims, actions or damaged suffered by any person or entity by reason of or resulting from any act or omission of SEAS or any of its officers, agents, employees, or invitees in connection with: (a) SEAS' use or occupancy of the Property, including trademark, patent, and copyright infringement; (b) SEAS' maintenance, repair or improvement obligations arising under this Agreement; (c) SEAS' management of any Aquarium employee while such employee remains employed by the City, but only to the extent such claims, actions, costs, damages or expenses are caused by the willful misconduct or negligence of SEAS, its authorized officers, agents, employees or invitees. The indemnification provided for in this section shall survive any termination or expiration of this Agreement. Notwithstanding anything herein to the contrary, if (and only if) the provisions of RCW 4.24.115 apply to the foregoing indemnification and any injuries or damage on which a claim is based are caused by or result from the concurrent negligence of SEAS or its agents or employees, and the City or its agents or employees, the SEAS indemnification applies only to the extent of the negligence of SEAS, its agents or employees. SEAS specifically assumes potential liability for actions brought by SEAS own employees against the CITY and for that purpose only SEAS specifically waives any immunity against claims the City under the Workers Compensation Act, RCW Title 51; AND SEAS ACKNOWLEDGES THAT THIS WAIVER WAS SPECIFICALLY ENTERED INTO PURSUANT TO THE PROVISIONS OF RCW 4.24.115 AND WAS THE SUBJECT OF MUTUAL NEGOTIATION.

20.3 Relationship to Insurance Obligations. Nothing contained in this Article 20 shall be construed to affect the allocation of responsibilities between the Parties or the insurance coverages required under Article 17 and Exhibit 7 of this Agreement.

21. Default; Termination of Agreement; Remedies.

21.1 Termination by City. The City shall have the right to terminate this Agreement following an Event of Default. The following shall constitute "Events of Default" under this Agreement:

(a) failure of SEAS to perform or comply with any covenant or condition made under this Agreement, or failure of any representation or warranty made by SEAS in this Agreement to have been or to continue to be true and correct. In the event of a monetary default, the City may terminate this Agreement after ten (10) days' prior written notice to SEAS; for all other defaults SEAS shall have a period of sixty (60) days from the date of written notice from the City within which to cure such default or, if such default is not legally capable of cure within such 60-day period, SEAS shall have a reasonable period to complete such cure if SEAS promptly undertakes action to cure such default within such 60-day period and thereafter diligently prosecutes the same to completion;

(b) abandonment, assignment, encumbrance, or transfer of this Agreement or of the Property by SEAS without the prior written consent of City; and

(c) the appointment of a receiver to take possession of all or substantially all of the assets of SEAS, or an assignment by SEAS for the benefit of creditors, or any action taken or suffered by SEAS under any insolvency, bankruptcy, reorganization, moratorium or other debtor relief act or statute, whether now existing or hereafter amended or enacted, if any such receiver, assignment or action is not released, discharged, dismissed or vacated within sixty (60) days.

The foregoing Events of Default are in addition to any other right to terminate explicitly given to the City elsewhere in this Agreement.

If SEAS is in default of its obligations under Section 6.1 of this Agreement, then SEAS agrees that during the period that such default remains uncured, all rents, issues, income and profits due and to become due from any lease, license or other use of any room or space in the Premises or from any concession therein shall be deemed to have been assigned to the City effective as of the date of default, without the need for further action by either party, and SEAS shall immediately instruct its tenants and licensees to thereafter remit their payments to the City. The City shall apply all assigned revenues it receives to amounts in default and owed by SEAS.

21.2 Termination by SEAS. In the event the City fails to timely perform any obligation required to be performed by the City hereunder, and such failure is not cured within thirty (30) days after written notice of such failure has been delivered to the City by SEAS, SEAS shall have the right to terminate this Agreement; provided that if such default is not legally capable of cure within such 30-day period, the City shall have a reasonable period to complete such cure if the City promptly undertakes action to cure such default within such 30-day period and thereafter diligently prosecutes the same to completion. The foregoing is in addition to any other right to terminate explicitly given to SEAS elsewhere in this Agreement.

22. Surrender of Premises; Transition. Upon the Termination Date or other termination of this Agreement, SEAS shall (a) promptly remit to the City all Debt Service Reimbursement owed and unpaid through the date of termination in accordance with the payment schedule shown on Exhibit 6, and (b) peaceably quit and surrender to the City the Premises and Personal Property together with all permanent improvements approved by the City, in good order and condition, normal wear and tear and damage caused by casualty or condemnation excepted. The Premises and Personal Property shall be surrendered free and clear of all liens and encumbrances other than encumbrances created or approved in writing by City. SEAS shall, immediately before the Termination Date or other termination of this Agreement, remove all of SEAS' Property as provided in this Agreement, and repair any damage resulting from the removal. SEAS' obligations under this section shall survive the Termination Date or other termination of this Agreement. Any items of SEAS' Property which shall remain in the Premises after the Termination Date of this Agreement may, at the option of the City, be deemed abandoned and in such case may be disposed of by City in any manner allowed by law.

Upon the termination of this Agreement for any reason, SEAS and the City shall cooperate to the fullest reasonable extent in effecting an orderly and efficient transfer of the operation and management of the Aquarium from SEAS to the City or its designee. Such cooperation shall include without limitation the entry into such agreement, the execution of such documents and the convention of such meetings as may be reasonably required to effect such transfer.

23. Hazardous Materials.

23.1 Definitions. As used herein, the following terms shall have the meanings set forth below:

23.1.1 "Environmental Laws" means any applicable federal, state and local laws (whether under common law, statute, ordinance, rule, regulation, code or otherwise), permits, orders, decrees, and other requirements of governmental authorities relating to the protection of human health or the environment, whether existing as of the date hereof, previously enforced, or subsequently enacted.

23.1.2 "Hazardous Material" means any element, compound, chemical, chemical mixture, or other substance that is identified as, or determined to be, a hazardous, toxic or dangerous substance, pollutant, contaminant, waste or material under, or is otherwise regulated under, any Environmental Law or other law relating to chemical management, environmental contamination, environmental cleanup or nuisances, including, without limitation, petroleum and petroleum products, asbestos, radon and other radioactive materials, bio-hazards and lead-based paint.

23.1.3 "Release" when used with respect to Hazardous Material shall include any actual or imminent spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing in, on, under or about any other part of the Premises.

23.2 No Hazardous Materials. SEAS covenants and agrees that neither SEAS nor any of its agents or invitees shall cause or permit any Hazardous Material to be brought upon, kept, used, stored, generated or disposed of in, on or about the Premises, or transported to or from the Premises, provided that SEAS may use such substances in such limited amounts as are customarily used in the operation and maintenance of aquariums so long as such use is in compliance with all applicable Environmental Laws. Each party hereto shall immediately notify the other party if and when such party learns or has reason to believe there has been any Release of Hazardous Material on or about the Premises.

23.3 SEAS' Environmental Indemnity. If SEAS breaches any of its obligations contained in this Article 23, or, if any act, omission or negligence of SEAS or any of its agents or invitees, contractors or consultants results in any contamination of the Premises or in the Release of Hazardous Material from, on, about, in, on or beneath the Premises, then SEAS shall indemnify the City from and against all claims, liabilities, damages, losses, costs and expenses (including, without limitation, the loss or restriction of the use of the Premises and sums paid in settlement of claims, fines, civil penalties, attorneys' fees, consultants' fees and experts' fees and costs) relating to such Release; provided, however, that, except as set forth in Section 23.4, the indemnity contained in this section shall not apply to any losses resulting from a pre-existing condition. The foregoing indemnity includes, without limitation, costs incurred in connection with the investigation of site conditions and all activities required to locate, assess, evaluate, remediate, clean up, remove, contain, treat, stabilize, monitor or otherwise control any Hazardous Material, and to restore the Premises to their prior condition, all of which shall be deemed to be direct rather than consequential damages. Without limiting the foregoing, if SEAS or any of its agents or invitees, contractors or consultants causes or permits the Release of any Hazardous Materials on, about, in or beneath the Property, SEAS shall, immediately, at no expense to the City, take any and all necessary actions to abate and remediate the Release in accordance with all Environmental Laws. SEAS shall afford the City a full opportunity to participate in any discussions with governmental regulatory agencies regarding any settlement agreement, cleanup or abatement agreement, consent decree, or other compromise or proceeding involving Hazardous Material.

23.4 City's Environmental Indemnity. If any act, omission or negligence of the City or any of its agents (other than SEAS), contractors or consultants results in or has resulted in any contamination of the Premises or in the Release of Hazardous Material from, in, on or beneath the Premises or if any contamination of the Premises or any Release has occurred before the Effective Date and was not caused by SEAS, then the City shall indemnify SEAS from and against all claims, liabilities, damages, losses, costs and expenses (including, without limitation, the loss or restriction of the use of the Premises and sums paid in fines, civil penalties, attorneys' fees, consultants' fees and experts' fees and costs) resulting from any such contamination or Release; provided, however, that the foregoing indemnity shall not include indemnification for any losses resulting from SEAS' aggravation of any pre-existing condition through SEAS' actions or inactions, or the actions or inactions of its agents, officers, employees, contractors or consultants, whether negligent or non-negligent. The foregoing indemnity includes, without limitation, costs incurred in connection with the investigation of site conditions and all activities required to locate, assess, evaluate, remediate, cleanup, remove, contain, treat, stabilize, monitor or otherwise control any Hazardous Material, and to restore the Premises to their prior condition, all of which shall be deemed to be direct rather than consequential damages. The City shall afford SEAS a full opportunity to participate in any discussions with governmental regulatory agencies regarding any settlement agreement, cleanup or abatement agreement, consent decree, or other compromise or proceeding involving Hazardous Material.

24. Assignments; Subcontracting. SEAS has been chosen by the City to operate and manage the Aquarium in reliance upon SEAS' stated and unique expertise, skill and experience. SEAS shall not assign, transfer, mortgage or encumber its interest in this Agreement or any other right, privilege or license conferred by this Agreement, or the Property, either in whole or in part. Any assignment or encumbrance shall be voidable and, at the City's election, shall constitute a material default under this Agreement. Without limiting the obligations of SEAS under this Agreement, the Parties specifically acknowledge that there are existing leases, agreements, and arrangements between SEAS and third parties regarding Aquarium operations that the City approved under the Concession Agreement. SEAS shall have the right and the authority to renew such leases, agreements, and arrangements that expire during the Term and to enter into new and additional contracting arrangements with any other person or entity (including without limitation the Parks Department or other City agency) for the provision of any service required or allowed to be performed by SEAS under this Agreement, including food concessions, gift shop concessions and other concessions, attractions and operations consistent with the Permitted Use, subject to the following:

24.1 All third-party concession agreements with terms in excess of twelve months and generating revenue in excess of $25,000 per year shall be subject to, and shall incorporate by reference, the terms and conditions of this Agreement.

24.2 Each such concession agreement shall provide that in the event of termination of this Agreement, at the City's option, the third party agreement shall continue in effect as a direct agreement between the City and the third party, and the third party shall execute such documents as the City shall reasonably request in order to evidence or give effect to the third party's attornment to the City.

24.3 Each such concession agreement shall provide that, upon notice from the City to the third party that SEAS is in default on monetary obligations hereunder and that payments of rent and other amounts owning on the third party agreement should be made to the City, the third party shall make all such payments to the City until otherwise instructed by the City or ordered by a court of competent jurisdiction, and shall further provide that payments so made shall be credited to the third party's obligations under the third party agreement.

25. Prior Contracts between SEAS and the City; Integrated Agreement; Modification. This Agreement supersedes the Concession Agreement and contains all the agreements of the Parties hereto relating to the subject matter addressed herein. No material provision of this Agreement may be amended or modified except by a written agreement approved by the Seattle City Council and executed by each of the Parties hereto.

26. Notices. All notices required to be given hereunder shall be in writing and either delivered personally or sent by certified mail or express overnight courier service to the appropriate address listed below, or at such other address as shall be provided by written notice. Notice shall be deemed communicated two Business Days from the time of mailing if mailed as provided in this section. For convenience of the Parties, copies of notices may also be given be other means; however, neither party may give official or binding notice except by personal delivery or by certified mail.

If to SEAS: Seattle Aquarium Society 1483 Alaskan Way Pier 59 Seattle, Washington 98101 Attn: CEO

If to The City of Seattle: City of Seattle Department of Parks and Recreation 100 Dexter Avenue North Seattle, Washington 98109 Attn: Superintendent of Parks and Recreation

27. Compliance with Laws.

27.1 Generally. At SEAS' sole cost and expense, SEAS shall comply and conform with all laws and all governmental regulations, rules and orders that may from time to time be put into effect relating to, controlling or limiting the use and operation of the Aquarium. SEAS shall secure, or cooperate with the City in its securing, all permits and licenses specifically required for the operation of the Aquarium (copies of which shall be promptly provided to the Parks Department), and shall comply with all applicable laws and regulations relating to labor employed in and relating to the operation of the Aquarium.

27.2 Americans with Disabilities Act. SEAS acknowledges that the Americans with Disabilities Act ("ADA") requires that programs, services and other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. SEAS further acknowledges its obligation to comply with the ADA and any other federal, state or local disability rights legislation. SEAS warrants that it will fulfill that obligation and that it will not discriminate against disabled persons in the provision of services, benefits or activities pursuant to this Agreement.

27.3 Non-Discrimination Ordinances. SEAS shall comply with all applicable equal employment opportunity and nondiscrimination laws of the United States, the State of Washington, and the City of Seattle, including but not limited to Chapters 14.04, 14.10, and 20.42 of the Seattle Municipal Code (SMC), as they may be amended; and rules, regulations, orders, and directives of the associated administrative agencies and their officers. Without limiting the generality of the foregoing, SEAS agrees not to discriminate against any employee or applicant for employment because of race, religion, creed, age, color, sex, marital status, sexual orientation, gender identity, political ideology, ancestry, national origin, or the presence of any sensory, mental or physical handicap unless based upon a bona fide occupational qualification. SEAS shall take affirmative action to ensure that applicants are employed, and the employees are treated during employment, without regard to their creed, religion, race, age, color, sex, national origin, marital status, political ideology, ancestry, sexual orientation, gender identity, or the presence of any sensory, mental or physical handicap. Such action shall include, but not be limited to the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay, or other forms of compensation and selection for training, including apprenticeship. SEAS shall post in conspicuous places, available to employees and applicants for employment, notices as provided by the City of Seattle setting forth the provisions of this nondiscrimination clause.

28. Installation of Artwork.

28.1 Prohibition against Installation or Integration of Works of Visual Art on Premises. SEAS shall not permit the installation or integration on or in the Premises of any "work of visual art," as that term is defined in the Visual Artists Rights Act of 1990, as now existing or as later amended ("VARA"), if the removal of such artwork is reasonably likely to result in its distortion, mutilation, modification or destruction unless SEAS delivers to the City an executed waiver of the creator's right of integrity regarding such art work, for the benefit of the City and its successors and assigns, in a form that satisfies both the City and the requirements of 17 U.S.C. section106A(e), as the same now exists or is hereafter modified.

28.2 SEAS' Indemnification of the City against Liability under VARA. SEAS shall protect, defend, and hold the City harmless from and against any and all claims, suits, actions or causes of action, damages and expenses (including attorneys' fees and costs) arising as a consequence of (a) the installation or integration of any work of visual art on or into the Premises; or (b) the destruction, distortion, mutilation or other modification of the art work that results by reason of its removal; or (c) any breach of Section 28.1 of this Agreement; or (d) any violation of VARA by SEAS or any of its officers, employees or agents. This indemnification obligation shall exist regardless of whether the City or any other person employed by the City has knowledge of such installation, integration, or removal or has consented to any such action or is not required to give prior consent to any such action. The indemnification obligation of this subsection shall survive the expiration or earlier termination of this Agreement.

29. Liens. SEAS and City shall keep the Premises and Personal Property free from any liens arising out of any work performed, material furnished or obligations incurred by or for SEAS and the City, respectively.

30. Dispute Resolution. In the event of a dispute between or among SEAS and the City regarding any term of this Agreement, the Parties shall attempt to resolve the matter informally through the following mechanism: the Superintendent and the CEO, or their respective designee(s), shall meet to review and discuss the matter(s) in dispute; if the Superintendent and the CEO are unable to reach a mutual resolution, SEAS' Board Chair(s) shall meet with the Superintendent and other City representatives, as appropriate, to review and discuss the matter(s) in dispute. If such persons are unable to resolve the matter informally, either party may submit the matter to a non-binding, structured mediation procedure fashioned by persons or organizations approved in advance by both Parties and experienced in alternative dispute resolution ("ADR") procedures. The mediation may be requested by either party and shall be initiated within thirty (30) days from the date of the request unless extended by agreement of both Parties. The ADR procedures utilized for the mediation shall include the exchange of written claims and responses, with supporting information, at least seven (7) days prior to the actual mediation. The positions expressed and mediator's recommendations shall not be admissible as evidence in any subsequent ADR or legal proceeding. If the matter is submitted to mediation and the matter is not resolved, an affected party shall be entitled to pursue any legal remedy available.

31. Use of Recycled Materials. Whenever practicable, SEAS shall use reusable products, recycled-content products and recyclable products, including recycled-content paper on all documents submitted to the City. SEAS shall duplex all documents that are prepared for the City under this Agreement, whether such materials are printed or copied, except when impracticable to do so due to the nature of the product being produced.

32. Miscellaneous.

32.1 Interest. If SEAS fails to pay the City any sum when due, such amount shall bear interest at the rate of twelve per cent (12%) per annum from the date due until the date paid.

32.2 Limitations of Liability. The City's obligations to SEAS and SEAS' obligations to the City under this Agreement shall be limited to the terms and conditions set forth herein. Notwithstanding any other provision in this Agreement to the contrary, in no event shall the City or SEAS be liable, regardless of whether any claim is based on contract or tort, for any special, consequential, indirect or incidental damages, including without limitation lost profits, arising out of or in connection with this Agreement or the services performed in connection with this Agreement.

32.3 Parties and Their Agents. As used herein, the term "agents" when used with respect to either party shall include the agents, employees, officers and representatives of such party. All approvals, consents or other determinations permitted or required by the City hereunder shall be made by or through the Superintendent unless otherwise provided in this Agreement or unless the City gives notice otherwise to SEAS. No permission, consent or approval of the Superintendent given pursuant to this Agreement is, or shall be construed as, a representation or assurance that the matter consented to or approved complies with applicable laws, regulations, ordinances or codes, nor shall any such consent or approval be construed to authorize any failure to comply with any of the foregoing.

32.4 No Implied Waiver. No failure by either party hereto to insist upon the strict performance of any obligation of the other party under this Agreement or to exercise any right, power or remedy arising out of a breach thereof, irrespective of the length of time for which such failure continues (except in cases where this Agreement expressly limits the time for exercising rights or remedies arising out of a breach), shall constitute a waiver of such breach or of that party's right to demand strict compliance such term, covenant or condition or operate as a surrender of this Agreement. No waiver of any default or the performance of any provision hereof shall affect any other default or performance, or cover any other period of time, other than the default, performance or period of time specified in such express waiver. One or more written waivers of a default or the performance of any provision hereof shall not be deemed to be a waiver of a subsequent default or performance. The consent of either party hereto given in any instance under the terms of this Agreement shall not relieve the other party of any obligation to secure the consent of the other party in any other or future instance under the terms of this Agreement.

32.5 Headings and Subheadings. The captions preceding the Articles, Sections, and Subsections of this Agreement and in the table of contents have been inserted for convenience of reference and such captions in no way define or limit the scope or intent of any provision of this Agreement.

32.6 Successors and Assigns. The terms, covenants and conditions contained in this Agreement shall bind and inure to the benefit of the City and SEAS and, except as otherwise provided herein, their personal representatives and successors and assigns.

32.7 No Third-Party Beneficiaries. There are no third-party beneficiaries to this Agreement.

32.8 Access to the Aquarium. The City, the Parks Department and their duly authorized agents shall have access to the Premises and Personal Property at all times (a) for the purpose of inspection and to make any repairs, additions or renovations as the City may have the right to do under the provisions of this Agreement, and (b) for use by the City in case of emergency, as determined by City in its sole discretion.

32.9 Relationship of Parties. The services to be rendered by SEAS pursuant to this Agreement are as an independent contractor only and the relationship between SEAS and the City is solely that of owner and contractor. Nothing contained in this Agreement shall be construed to create a partnership, joint venture, or a relationship of employment or agency.

32.10 Agreement Made in Washington. This Agreement shall be deemed to be made in and shall be construed in accordance with the laws of the State of Washington. Venue of any action brought by one party against the other to enforce or arising out of this Agreement shall be in King County Superior Court.

32.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

32.12 Non-Liability of Officials, Employees and Agents. No elective or appointive board, commission, member, officer, employee or other agent of the City shall be personally liable to SEAS, its successors and assigns, in the event of any default or breach by the City or for any amount which may become due to SEAS, its successors and assigns under this Agreement, or for any obligation of the City under this Agreement. Likewise, no board member, member, officer, employee or other agent of SEAS shall be personally liable to the City, its successors and assigns under this Agreement, in the event of any default or breach by SEAS or for any amount which may become due to the City, its successors and assigns, or for any obligation of SEAS under this Agreement.

32.13 Time of Essence. Time is of the essence of each provision of this Agreement.

32.14 Survival of Indemnities. Termination of this Agreement shall not affect the right of either party to enforce any and all indemnities and representations and warranties given or made to the other party under this Agreement, nor shall it affect any provision of this Agreement that expressly states it shall survive termination hereof.

32.15 Partial Invalidity. If any court determines that any provision of this Agreement or the application hereof to any person or circumstance is, to any extent, invalid or unenforceable, the remainder of this Agreement, or application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each other term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

32.16 Negotiated Agreement. The Parties to this Agreement acknowledge that it is a negotiated agreement, that they have had the opportunity to have this Agreement reviewed by their respective legal counsel, and that the terms and conditions of this Agreement are not to be construed against either party on the basis of such party's draftsmanship thereof.

[signatures on next page]

DATED this _____ day of _________________, 20__.

THE CITY OF SEATTLE, a Washington municipal corporation By _______________________ Its Superintendent of Parks and Recreation By authority of Ordinance No. _______

SEATTLE AQUARIUM SOCIETY, a Washington non-profit corporation By ________________________ Its Executive Director

Exhibits: Exhibit 1 General Premises Diagram Exhibit 2 Detailed Premises Diagram Exhibit 3 City's Capital Obligations Exhibit 4 SEAS' Capital Obligations Exhibit 5 Personal Property Inventory Exhibit 6 Debt Service Reimbursement Schedule Exhibit 7 Insurance Requirements

Exhibit 1 General Premises Diagram Exhibit 2 Detailed Premises Diagram

Exhibit 3: City's Capital Obligations

The City shall be responsible for the Capital Maintenance of all Aquarium piers, shell and core, as defined in Section 1.6. Specific responsibilities include, but are not limited to, the following:

Pier supports (pile and posts, pile caps) and under pier foundation elements including corrosion protection and repair (except if damaged in construction of new exhibits).

Building envelope (windows, interior and exterior doors), exterior paint, roof, flashing, and gutters including corrosion protection and repair (except for exhibits incorporated into building envelope).

Exterior concrete deck, interior slab or sub flooring including floor structural elements, wood decking, handrails, and exterior lighting on buildings and along pier apron, including corrosion protection and repair.

Electrical service from utility connection to outlets unless new or relocated.

Salt water delivery system to interior wall of facility and exterior salt water discharge system from wall of facility

Fire alarm and fire suppression systems and emergency lighting.

Fresh water supply from the street to the meter through the double check valve.

Except in restaurant areas, all sewer lines from the exhibits, sink and floor drains, toilets and pipe lines leading to the sewage, force main header collection vaults, sewage lift station pumps and controls and sewage connection lines from the sewage force main header lift stations to the connection with the main sewer lines in the street.

All heating and cooling elements and ductwork through facility, except for systems exclusively serving the gift shop and restaurant.

All elevator systems and stairways.

Structural elements of the exhibits and the corrosion protection necessary to assure the structural systems are protected to include all slab floors for the entire facility.

Exhibit 4: SEAS' Capital Obligations

SEAS shall be responsible for the following items of capital maintenance, repair, replacement and improvements:

Salt water delivery system from interior wall of facility and exterior salt water discharge system to exterior wall of facility.

Fresh water supply from the meter.

All sewer lines and sink and floor drains in the restaurant areas.

All heating and cooling elements and ductwork exclusively serving the gift shop and restaurant.

Exhibits, except for those portions that are integrated into the Aquarium building systems.

Tenant Improvements.

Exhibit 5: Personal Property Inventory [to be inserted]

Exhibit 6: Debt Service Reimbursement Schedule

* July 1, 2010 payment is final quarterly payment using methodology established in the Pier 59 Master Concession Agreement between the City and SEAS, dated October 9, 2006.

Exhibit 7: Insurance Requirements

1. SEAS Insurance Requirements. SEAS shall maintain (and, if applicable, cause its concessionaires, licensees or subtenants to maintain) in full force and effect throughout the Term, at no expense to City, insurance coverage as specified below:

1.1 Commercial General Liability (CGL) insurance including:

Premises/Operations Liability Products/Completed Operations Liability Personal/Advertising Liability Contractual Liability Stop Gap/Employers Contingent Liability Independent Contractors Liability Host Liquor Liability Fire/Tenant Legal Liability

Such insurance shall provide the following minimum limits of liability:

* $5,000,000 each Occurrence Combined Single Limit Bodily Injury and Property Damage

* $1,000,000 each Offense Personal and Advertising Injury

* $250,000 each Occurrence Fire/Tenant Legal Liability

* $1,000,000 each Accident/ Disease/Employee Stop Gap

The above limits may be provided through primary liability insurance only, or by a combination of primary and excess, or umbrella, liability insurance.

1.2 Business Automobile Liability insurance including coverage for owned, non-owned, leased or hired vehicles as applicable, with a minimum limit of liability of $1,000,000 each Occurrence Combined Single Limit Bodily Injury and Property Damage.

1.3 Workers Compensation insurance, securing SEAS' liability for industrial injury to its employees in accordance with the provisions of Title 51 of the Revised Code of Washington. If SEAS is qualified as a self-insurer in accordance with Chapter 51.14 of the Revised Code of Washington, SEAS shall deliver a letter to the City so certifying, signed by a corporate officer of SEAS and setting forth the limits of any policy of excess insurance covering its employees. In addition, SEAS shall comply with all Federal maritime workers' compensation statutes.

1.4 Property Insurance under which SEAS' furniture, trade and other fixtures, equipment and inventory (Business Contents) are insured throughout the Term in an amount equal to the replacement costs thereof, against the following hazards: (a) loss from the perils of fire and other risks of direct physical loss, not less broad than provided by the insurance industry standard "Causes of Loss Special Form (ISO form CP 1030 or equivalent); (b) loss or damage from water leakage or sprinkler systems now or hereafter installed in or on the Premises; (c) loss or damage by explosion of steam boilers, pressure vessels, oil or gasoline storage tanks or similar apparatus now or hereafter installed on the Premises; (d) loss from business interruption or extra expense, with sufficient limits of liability to provide for the payment of rent and/or other fixed costs during any interruption of SEAS' business, for at least twelve (12) months.

2. General Requirements Regarding SEAS Insurance (Except Workers Compensation).

2.1 The CGL and Business Automobile liability insurance policies required above shall be endorsed to include The City of Seattle as an additional insured and shall be primary with respect to the City so that any insurance and/or self-insurance maintained by City shall be excess and not contributing insurance with SEAS' insurance. The limits of liability specified herein are minimum limits of liability only and shall not be construed to limit SEAS' liability or that of its liability insurers if SEAS maintains higher limits. The City shall be an additional insured for the total limits of liability maintained by SEAS, whether such limits are primary, excess, contingent or otherwise.

2.2 No insurance policy provided hereunder shall be canceled without actual written notice having been delivered to the City at its address shown below at least thirty (30) days prior to the effective date of cancellation or, in the case of non-payment of premiums, ten (10) days' prior to cancellation.

2.3 Policies shall be issued by insurers rated A-:VII or higher in the then-current A. M. Best's Key Rating Guide and licensed to do business in the State of Washington or procured under the provisions of chapter 48.15 RCW (surplus lines).

2.4 Any deductible or self-insured retention in excess of $10,000 must be disclosed to, and shall be subject to reasonable approval of the City's Risk Manager. The cost of any claim payments falling within a deductible or self-insured retention shall be the responsibility of SEAS.

2.5 Coverage and/or limits may be reasonably altered or increased as necessary to reflect changes in the type of or exposure to risk. The City shall have the right to periodically review the appropriateness of the current coverage and limits in view of inflation and/or changing industry conditions and to require an increase in such coverage or limits upon ninety (90) days' prior written notice.

3. Evidence of Insurance. For all insurance policies required hereunder except workers' compensation, on or before the Effective Date (and thereafter, no later than five (5) days before the expiration or renewal date of each such policy), SEAS shall deliver proof of insurance coverage acceptable to the City. Such evidence shall be issued to "The City of Seattle, DEA Risk Management Division, P.O. Box 94669, Seattle, WA 98124-4669," but shall be delivered in electronic form as a PDF/XLS file attachment to riskmanagement@seattle.gov, or by facsimile transmission to (206) 470-1279.

Acceptable proof of insurance shall include a certificate of insurance and a copy of the CGL insurance policy provision showing the City as an additional insured for primary and non-contributory limits of liabilityon ISO Form CG 20 26 or equivalent additional insured or blanket additional insured policy wording.

4. City Insurance Requirements. The City shall insure and/or self-insure the Premises in an amount equal to the replacement cost thereof, against the following: (a) loss from the perils of fire and other risks of direct physical loss, not less broad than provided by the insurance industry standard "Causes of Loss Special Form (ISO form CP 1030 or equivalent); (b) loss or damage from water leakage or sprinkler systems now or hereafter installed in or on the Premises; and (c) loss or damage by explosion of steam boilers, pressure vessels, oil or gasoline storage tanks or similar apparatus now or hereafter installed on the Premises. The City will be responsible for claims falling within the deductible or self-insured retention.

5. Reconstruction Following Loss. In the event of a loss due to casualty then, provided insurance proceeds are sufficient therefor, the City will proceed to rebuild or restore the damaged portions of the facility so as to restore it as nearly as possible to its functionality before the casualty. If the Aquarium is to be restored, then SEAS shall proceed with reasonable diligence as soon as sufficient funds are available therefor, to repair and restore its Business Contents with property that is at least equivalent to, or more suitable than, the Business Contents that were damaged or destroyed. If the Aquarium is not to be restored, then either party may terminate this Agreement upon written notice to the other and in such event, SEAS shall adjust the loss with its property insurance carrier and promptly pay all insurance proceeds received on account of losses to SEAS' Business Contents to the City.

6. Waiver of Subrogation and Rights of Recovery. Except for losses up to the City's deductible or $500,000, whichever is less, the City and the City's property insurer(s) shall waive their rights of subrogation and recovery against SEAS for damage to or destruction of the Building and Premises provided such losses result from SEAS' negligence or willful misconduct and only to the extent to which SEAS' Fire/Tenant Legal Liability insurance responds. SEAS and SEAS' insurer(s) shall waive their rights of subrogation and recovery for damage to or destruction of SEAS' Business Contents against the City except with respect to losses falling within the deductible amount and only if such loss is due to the City's negligence or willful misconduct.

7. Assumption of Risk. SEAS' shall bear all risk and responsibility for the placement and storage of its personal property in or around the Premises.

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