Document:

Port of Kodiak Preferential Use Agreement, dated April 12, 2002

 Exhibit 10.40 
  
 PORT OF KODIAK 
 PREFERENTIAL USE AGREEMENT 
 City of Kodiak and CSX Lines LLC 
  
 This Preferential Use Agreement (“Agreement”) is made and entered into 4/12/2002,
between the City of Kodiak (City) and CSX Lines, LLC (CSX), a corporation organized under the laws of the state of Delaware. The City and CSX are collectively referred to as “the parties.” 
  
 I. PREFERENTIAL USE 
  
 A. Description of Premises. The City and CSX agree that CSX vessels
calling to load and discharge containerized cargo on a scheduled basis shall be entitled to preferential berthing rights at the Port of Kodiak Terminal III in accordance with the terms and conditions otherwise set forth in this Agreement. The
berthing area which is subject to CSX’s preferential rights under this Agreement, as shown on Exhibit A, consists of 4.46 acres for its freight operations; a container terminal dock, 490 feet by 64 feet with an overall length of 880 feet,
bollard to bollard, and an approximate depth of minus 38’ MLLW; and a 30-ton Paceco container crane. 
  
 B. Use of Pier III Terminal by CSX. The City hereby grants CSX the right to use and occupy the Pier III Terminal in connection with its
transportation business and such activities as are related thereto, during the term of this Agreement as follows: 
  
 1. Preferential Berthing and Crane Use Rights. 
  
 a. CSX shall have the preferential right to use the Pier III dock, berth, and container crane for purposes
of mooring, docking, loading, or discharging CSX’s vessels, including ships, barges, or other water craft which are owned, operated, or chartered by or for CSX or any affiliated or related company, or which are used in connection with any of
CSX’s freight operations, or a vessel owned or operated by an entity with which CSX has a connecting carrier, consortium, or rationalization agreement, if, and to the extent that, said vessel is carrying cargo on CSX’s behalf. 

 
 b. The preferential right of use provided by this
paragraph is defined to mean that CSX shall be accorded the right, after furnishing a vessel schedule, to berth vessels and utilize the container crane in preference to any other user immediately upon a vessel’s arrival in Kodiak harbor,
provided that (a) the vessel arrives during a period of twelve (12) hours before or after the arrival time designated in said vessel schedule on file with the City Harbormaster (which schedule may be changed from time-to-time upon ten (10) days
written notice) or (b) the vessel arrives at an arrival time designated at least eight (8) hours in advance by radio or other message from CSX to the Harbormaster. 
  
 c. The preferential rights herein provided shall apply whether or not the Pier III dock and crane are being
used by any other vessel, and any other such vessel, barge or craft occupying the berth at the time of arrival of CSX’s vessel during a preferential berthing period shall be removed immediately from the berth at no cost to CSX. 
  
 d. CSX shall make a reasonable effort to vacate the berth
within six (6) hours after working cargo; provided however, should weather conditions prevent the ship from leaving safely, an extension may be granted by the Harbormaster. 
  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 1 of 8

 e. CSX agrees that during the term of this Agreement, its Kodiak representative, upon
request, will furnish the Harbormaster with information as to the position, estimated time of arrival in Kodiak, and estimated port time of any vessels due to arrive in Kodiak which will claim preferential berthing rights under this Agreement.

  
 2. Preferential Use of Storage, Marshaling Areas, Ways and
Facilities Other Than the Berth, Dock Access and Container Crane. CSX shall have a continuing preferential right to use and occupy the storage, marshaling areas, parking areas, access ways, and all improvements included in the Pier III Terminal
other than the berth, dock, and container crane for its freight operations, including, without limitation, the operations of loading, unloading, working, parking, and storage of cargo, vans, chassis, trucks, and other equipment. “Preferential
right” as used in this paragraph is defined to mean that CSX’s use and occupancy of the Premises shall have first priority over any use and occupancy of the Premises by others which interferes with CSX’s operation, at no cost to CSX
other than as elsewhere set forth in this Agreement. 
  
 3.
Reservation of Secondary Rights. The City specifically reserves to itself secondary rights to use and occupy the Pier III Terminal, or portions thereof, subject to the priorities of use accorded to CSX under this Agreement. The City agrees
that it will issue tariffs governing the rates, charges, and conditions for the secondary use of the Pier III Terminal by others, and shall assess reasonable rates and charges to secondary users of the facility. 
  
 4. Berthing of CSX Barges. Barges owned, chartered, or operated by CSX
shall be allowed to berth at Pier HI, unless the Harbormaster requests its removal for use by other vessels. In such event, the Harbormaster will notify the barge /tug captain as early as possible of the time the vessel must clear the pier. If
available, the barge may be moved to a City mooring buoy. 
  
 II. PAYMENTS 
  
 A. CSX shall pay to the City
wharfage fees at the rate of $4.00 per ton for cargo moving westbound through Dutch Harbor to Asia or Russia, and $2.58 per ton for all other cargo. 
  
 B. CSX shall submit to the City within ten days of the end of each month a statement detailing the vessel dockage and cargo tonnage handled during the
previous month. 
  
 C. Transhipped/transloaded cargo shall be
subject to a single-move, one-time wharfage charge at the rates specified in paragraph A above. 
  
 D. All CSX ships (as described in Section I.B.1, except barges) shall pay dockage fees of $1.59 per foot per 12-hour period or portion thereof.

  
 E. All CSX barges shall pay dockage fees of $1.10 per foot per
12 hours, or any portion thereof. The barge dockage fees apply to Piers I, II and III. Barges on the mooring buoy shall pay the daily open moorage rate per the City’s Schedule of Fees and Charges. However, CSX barges at the mooring buoy will
not be charged, and will have preferential use, only if CSX bears the cost of repairing, installing and maintaining the city-owned buoy. CSX will hold the City harmless if the buoy or its anchorage system fails. 
  
 F. Payments made under this Agreement do not reduce or modify the liability
of CSX for other fees or charges set out in the general tariff applicable to the City of Kodiak, except wharfage and dockage fees and fees for use of the Paceco crane as described in this Agreement. With respect 

  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 2 of 8

 
to wharfage, dockage and crane fees, however, this Agreement shall supersede any charges set forth in the City tariff. 
  
 G. All amounts due under this Agreement that are not paid within thirty days
of the date of invoice shall bear interest at the rate of 12% per annum for as long as the delinquency continues. 
  
 H. For use of the facilities depicted on Exhibit “A”, including the Paceco crane, and in addition to wharfage, dockage, and other fees or
charges elsewhere specified in this Agreement, CSX agrees to pay the sum of $274,853.80 annually in equal monthly installments of $22,904.00 throughout the lease term, said payments to be due monthly in advance. 
  
 I. CSX shall provide competent and qualified operators for the Paceco crane
who shall be available on a 24-hour basis throughout the term of this Agreement to provide crane services to third-party vessels utilizing the Pier III Terminal. Third parties requiring use of the Paceco crane shall request such services through CSX
and shall be charged at the rate of $1,000.00 per hour, with a minimum of one hour for equipment warm-up plus a minimum of one hour for equipment usage. CSX shall retain $850.00 per hour of this amount and shall remit the balance of $150.00 per hour
to the City. 
  
 III. TERM OF AGREEMENT 
  
 A. As aforesaid, the term of this Agreement is for one (26) month term
beginning May 1, 2002, and terminating June 30, 2004. Notwithstanding the foregoing, the City retains the right to declare a default hereunder and terminate the Agreement should the Lessee fail to perform any covenant hereof or pay any sum due
hereunder within thirty (30) days after written notice specifying the alleged violation or default by the Lessee. 
  
 B. During the term of this Agreement, both CSX Lines and the City shall have the option to terminate this Agreement early, with 30 days notice, by either
party giving written notice of its election to do so. In the event of any such early termination, the City and CSX Lines shall each fully, faithfully, and timely perform all of their obligations under this Agreement through such early termination
date. 
  
 IV. USE OF AREA 
  
 A. CSX shall not use the Premises or any facilities for any unlawful
purposes. 
  
 B. CSX shall use the Pier III terminal area solely
for freight transportation purposes. 
  
 C. CSX is entitled to
quiet enjoyment of the Premises provided that CSX does not breach the terms of this Agreement. 
  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 3 of 8

 V. MAINTENANCE AND REPAIR OF PREMISES 
  
 A. The City shall maintain and repair, at its own expense, the utilities (water, sewer, storm drainage, and electrical),
common roadways and the dock structures (less mooring capstans) as shown on Exhibit A. In no event shall the City be obligated to repair or otherwise attempt to mitigate or respond to damages resulting in whole or in part from CSX’s use of the
dock and pavement pursuant to this agreement. The City shall insure that other users of Pier III, if any, keep it clean and orderly. 
  
 B. CSX shall, at its own expense, provide all routine preventative maintenance, repairs, and replacement to the structures shown in Exhibit A, including:
marine department building, maintenance facility building, Paceco container crane and rails, overhead lights, electric pedestals, van back stack area, and electric capstan mooring units. 
  
 C. Asphalt Area: CSX will maintain and repair all asphalt pavement in good condition. CSX will provide all snow removal and
de-icing of the Pier III Terminal. CSX shall keep the premises clean, orderly, and free of rubbish. If CSX fails to adequately remove show, ice, or debris, the City may furnish the necessary equipment and manpower to provide this service in which
event CSX shall promptly pay the City’s billings for such services. 
  
 D. CSX shall provide the Harbormaster a semi-annual maintenance and repair report on any single incident of damage or repair over ten thousand ($10,000) dollars. 
  
 E. Within thirty (30) days of each anniversary date of the signing of this
Agreement by the parties, CSX and the City agree to inspect the Premises and prepare a report describing the condition of the Premises and specifying any items in need of repair. The party responsible for those repairs shall start those repairs
within thirty days after the report is prepared and shall promptly complete them. 
  
 F. If, at any time during the term of this Agreement, the Premises are damaged or destroyed by fire or other casualty, however caused, the City may elect, either to repair, rebuild, replace and restore the Premises to
a condition comparable to that which existed immediately prior to the fire or other casualty or to terminate this agreement. In the event the City elects to repair, rebuild or restore the Premises, lease payments shall be abated in proportion to the
extent that the Premises are not usable by CSX during the time the unusable areas remain unrepaired or unrestored. 
  
 G. The City shall maintain a depth of approximately minus 38 feet MLLW in the berthing area. 
  
 H. CSX shall make no alterations, additions, or improvements to the Pier III Terminal without the prior written approval of
the City. At the expiration of this Agreement, or any renewal thereof, any such improvements shall become the property of the City. 
  
 I. CSX acknowledges having inspected or having been given a full opportunity to inspect the Premises and hereby accepts them in their present condition,
and shall at the termination of this Agreement surrender said Premises in as good a condition and repair to the City, reasonable wear and tear excepted. 
  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 4 of 8

 VI. INDEMNITY 
  
 A. CSX shall indemnify and hold harmless the City and its elected and appointed officials, employees, agents, and servants
from any and all losses, expenses, damages, demands, and claims by any person in connection with or rising out of any injury or alleged injury (including death) to persons or in connection with damage or alleged damage to property or the natural
environment, sustained or alleged to have been sustained in whole or in part as a result of CSX’s use and operation of the crane, its occupancy and maintenance of the Premises, and/or exercise of its rights under this Agreement or CSX’s
breach of this Agreement. CSX shall defend all suits and actions brought against the City and any of its elected or appointed officials, employees, agents or servants from any alleged injury or damage and shall pay all damages, costs, and expenses,
including attorney’s fees incurred in connection with the suits or actions. The only exception to this indemnity provision shall be for claims resulting from the negligence of the City or its employees, agents, or servants, with respect to
which CSX’s obligations under this paragraph shall be limited to that portion of any such claim not attributable to the City. 
  
 B. This indemnity provision specifically includes all environmental damage that may result from CSX’s operations under this Agreement and any
penalties or fines which may be assessed in connection therewith. 
  
 C. Claims arising in whole or in part out of any incident or event occurring during the term of this Agreement or any extension or renewal of it shall be covered by the provisions of this section V even though they may not have been
asserted or discovered until after the expiration of said term. 
  
 VII. REMEDIES 
  
 A. If CSX is in material default
under any provision of this Agreement, the City may terminate this Agreement and/or pursue any other remedies available to it by law; provided, however, that if the default is of such a nature that prompt action by CSX can effect a complete cure,
and if the same or similar default has not previous occurred during the term of this Agreement, then before terminating this agreement the City shall give CSX notice of the default and a reasonable opportunity to cure the same, which opportunity
shall in no event exceed thirty (30) days. If default occurs and is either not subject to cure pursuant to the foregoing sentence or is not cured within a reasonable time as specified by the City, the City may re-enter the Premises by summary
proceedings or otherwise, expel CSX property at CSX’s expense. 
  
 B. If CSX shall be adjudicated bankrupt, or if CSX shall make a general assignment for the benefit of creditors, or if in any proceeding based on the insolvency of CSX a receiver of CSX property is appointed, then the City may terminate
this Agreement by giving notice to CSX of its intention to do so. However, neither bankruptcy, insolvency or an assignment for the benefit of creditors nor the appointment of a receiver shall affect this Agreement or permit its termination provided
that the covenants on the part of CSX to be performed under this Agreement are performed by CSX, a receiver, or a trustee in bankruptcy. 
  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 5 of 8

 VIII. UTILITIES 
  
 A. During the term of this Agreement, CSX shall pay the providers directly for all utility bills and accounts for utility
services used or consumed by CSX on or in connection with the Premises, including all operating costs for the Paceco 30-ton crane. 
  
 B. The City shall provide water and sewer to the premises at no charge to CSX. 
  
 C. If upon the beginning of the term of this Agreement the facilities associated with the Pier III dock and terminal or any
part of them are the subject of a contract between the City of Kodiak and any other party for the provision of janitorial or similar services to those facilities, then CSX shall honor that contract for the remainder of its term, at which time CSX
shall be responsible for obtaining its own janitorial services. In the event such a contract includes premises other than those described herein, CSX shall reimburse the City for a reasonable proportionate share of the cost thereof. 
  
 IX. INSURANCE 
  
 A. While this Agreement is effective, CSX shall either (i) carry and keep in
force, liability insurance with a carrier or carriers acceptable to the City covering the City for all operations under this Agreement in an amount not less than $2,500,000 in the aggregate for injury or death to persons and $2,500,000 in the
aggregate for property damages or (ii) prove to the satisfaction of the City that it has sufficient financial resources to be self-insured. In the event of a loss, CSX shall be solely responsible for any deductibles. The City acknowledges that
CSX’s current financial situation is adequate for self-insurance. At least sixty (60) days prior to each annual anniversary date of this Agreement, CSX shall provide to the City such evidence of its financial condition as the City may
reasonably require. The City shall have thirty days thereafter to review the information and determine whether it will accept self-insurance for the following year or require CSX to obtain insurance. The acceptance by the City of self insurance on
the part of CSX under this section IX shall in no way be construed as limiting its obligations under section VI, above, entitled “Indemnity”. 
  
 B. In addition to the coverage described in paragraph A above, CSX shall provide fire and extended coverage for all perils including fall, collapse,
earthquake, earth tremor, sea quake, sea tremor, and flood in an amount equivalent to the full replacement value of all facilities described in Exhibit A, including the dock and the crane. CSX may self-insure for the additional coverage required by
this paragraph B subject to the same conditions as apply to the immediately preceding paragraph A. 
  
 X. RIGHT OF INSPECTION 
  
 A. The City shall have the right to inspect the Premises without prior notice to ensure compliance with the terms of this Agreement. 
  
 B. The City shall have the right to audit CSX’s records and to require CSX to prepare summaries or reports from its
records to determine compliance with the payment terms of this Agreement. 
  
 XI. TAXES 
  
 In addition
to the fees and charges provided in this Agreement, CSX shall pay when due all taxes and other charges which are levied at any time during the term of the Agreement upon the leasehold interest and any improvements on the Premises. 
  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 6 of 8

 XII. ASSIGNMENT OF RIGHTS 
  
 CSX may not assign or sublease any rights or interests under this Agreement except to a subsidiary or affiliated corporation
wholly owned by CSX (and/or one of its wholly owned subsidiaries) without prior written consent of the City, which consent the City may withhold at its sole discretion: Should the City consent to an assignment or sublease CSX shall nevertheless
remain liable for the performance of all of its obligations under this agreement and the acceptance by the City directly from an assignee or sublessee of any payments or other performance due under this agreement shall not be construed as a waiver
of CX’s continuing liability. 
  
 XIII. SEVERABILITY

  
 If any part, term or provision of this Agreement is
declared null or unenforceable by a court of competent jurisdiction, the validity and enforceability of the rest of this Agreement shall not be affected. 
  
 XIV. WAIVERS 
  
 No waiver by CSX or the City of any covenant or condition of this Agreement shall be construed as a waiver of any other covenant or condition, nor shall
the waiver of one breach be considered as a waiver of any other breach. 
  
 XV. SURRENDER 
  
 CSX agrees not to encumber the
Premises at any time during this Agreement. CSX agrees that the Premises shall not be subject to any liens, charges or encumbrances and agrees that at the expiration of this Agreement it will deliver to the City or its designee, the Premises in good
condition (ordinary wear and tear excepted) and without liens, charges, or encumbrances. 
  
 XVI. MODIFICATIONS AND NOTICES 
  
 A. No modification of this Agreement shall be effective unless submitted in writing and agreed to by CSX and the City in writing. No modification of one provision of this Agreement shall be considered a waiver, breach or cancellation of any
other provision. 
  
 B. All notices required to be given under
this Agreement shall be effective on the date of receipt and shall be mailed to the parties at the following addresses: CSX Lines, LLC., 1717 Tidewater Road, Anchorage, Alaska 99501; City Manager, City of Kodiak, 710 Mill Bay Road, Room 219, Kodiak,
Alaska 99615. Any notice or document delivered by facsimile transmission to a facsimile machine at which the recipient routinely receives such transmissions shall be effective upon the date of receipt of the complete and fully legible document (so
long as the original is also mailed in accordance with this paragraph) unless the transmission occurred outside of the usual business hours of the recipient, in which event the document shall be deemed to have been received on the next business day.

  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 7 of 8

 XVII. ANTI-DISCRIMINATION 
  
 During the performance of this Agreement, CSX agrees: 
  
 A. In connection with its performance under this Agreement including construction, maintenance, and operation of or on the
Premises, CSX will not discriminate against any employee or applicant for employment because of age, race, color, ancestry, religion, sex, or national origin. 
  

B. CSX and its employees shall not discriminate, by segregation or otherwise, against any person on the basis of race, color, ancestry, religion, sex,
or nationality by curtailing or refusing to furnish accommodations, facilities, services, or use privileges offered to the public generally. 
  
 C. CSX shall include and require compliance with the above non-discrimination provisions in any subletting or subcontract made with respect to
construction or maintenance operations under this Agreement. 
  
 XVIII. ALASKA LAW 
  
 The parties agree that this
Agreement was entered into in the State of Alaska, that Alaska law will govern its interpretation and application, and that venue of any suit or other action arising out of this agreement shall be in Alaska. 
  
 XIX. BINDING ON SUCCESSORS AND ASSIGNS 
  
 All provisions of this Agreement shall inure to the benefit of and be binding
on the parties, their successors, and assigns. 
  
 IN WITNESS WHEREOF, these
parties have signed this Agreement on the date or dates indicated beneath the signature of their respective officers or agents. 
  

																	
	 CITY OF KODIAK
 710 Mill Bay Road, Room 219
 Kodiak, AK 99615
	 	 	 	 	 	 	 	 CSX LINES, LLC.
 1717 Tidewater Road
 Anchorage, Alaska 99501
	 	 	 	 
							
	 /s/ Linda L. Freed
	 	 	 	 4/12/02
	 	 	 	 /s/ Marion G. Davis
	 	 	 	 4-12-02

	 By:
	 	 Linda L. Freed
	 	 	 	 Date
	 	 	 	 By:
	 	 Marion G. Davis
	 	 	 	 Date

	 City Manager
	 	 	 	 	 	 	 	 Manager, Seafood and Southern/Western AK
	 	 

  

																	
	 ATTEST:
	 	 	 	 	 	 	 	 ATTEST:
	 	 	 	 
							
	 /s/ Debra L. Marlar
	 	 	 	 4/12/0_
	 	 	 	 /s/ Clifford E. Farley
	 	 	 	 4-12-02

	 Debra L. Marlar, City Clerk
	 	 	 	 Date
	 	 	 	 Clifford E. Farley
	 	 	 	 Date

	 	 	 	 	 	 	 	 	 Manager, Kodiak Terminal Operations
	 	 

  

			
	 City of Kodiak/CSX Lines
 April 12, 2002
 Preferential Use Agreement
	 	Page 8 of 8

  
 PORT OF KODIAK

 PREFERENTIAL USE AGREEMENT 
 Between 
 City of Kodiak and CSX Lines, LLC 
 Dated October 1, 2001 
  
 Amendment #1 
  
 The parties hereby
agree to the following: 
  
 The name CSX LINES, LLC (CSX), as recognized in
the preamble of the Port of Kodiak Preferential Use Agreement, dated May 1, 200___, shall now be known as CSX LINES OF ALASKA, LLC (CSX). 
  

									
	 	 	 	 	 
			
	 /s/ Linda L. Freed
	 	 	 	 /s/ Clifford E. Farley

	 City of Kodiak
 Linda L.
Freed
 City Manager
	 	 	 	 CSX Lines of Alaska, LLC
 Clifford
E. Farley
 Terminal Manager

					
	Dated	 	 4/12/02
	 	 	 	Dated	 	 09-21-01

			
	Attested to by:	 	 	 	Attested to by:
			
	/s/ Debra L. Marlar	 	 	 	/s/ Diana HoltTerminal Operation Contract, dated May 2, 2002

 Exhibit 10.41 
  
 TERMINAL OPERATION CONTRACT 
  

This Terminal Operation Contract made and entered into May 2, 2002, by and between the City of Kodiak, Alaska, a municipal corporation organized and
existing under the laws of the State of Alaska, hereinafter referred to as the “City,” and CSX Lines of Alaska, LLC., a corporation organized under the laws of Delaware, hereinafter referred to as the “Operator.” 
  
 W I T N E S S E T H : 
  
 WHEREAS, the parties desire to enter into a Terminal Operation Contract and
Operator is willing and able to perform the services; and 
  
 WHEREAS, the City has a Preferential User Agreement and a Warehouse Lease Agreement, both dated May 2, 2002, and agrees that it is in the best interest of the public to provide services for the Port of Kodiak at Piers I, II, and III.

  
 NOW, THEREFORE, it is hereby mutually agreed that the City, in
consideration of the terms, covenants, conditions, and agreements herein contained and further enumerated in a Pier II Warehouse Lease Agreement, and Preferential User Agreement, does hereby contract with the Operator. 
  
 The Operator and the City hereby agree as follows: 
  
 1. Term. This Contract shall continue in effect for a period of
twenty-four (24) months commencing on July 1, 2002, and shall continue in full force and effect until midnight June 30, 2004, unless terminated pursuant to the terms of paragraph 14 below. 
  
 2. Facility. The City will make available to the Operator that
certain terminal and adjacent property at Piers I, II, and III, as depicted in Exhibits A through C to this Contract, hereinafter referred to as the “Facility.” The City shall have the right to make additions, alterations, or improvements
to the Facility which do not impede Operator’s access to or use of the Facility. Changes which meet Operator’s operating requirements shall be subject to the terms and conditions of this Contract, as long as they fall within the scope of
Operator’s operation. 
  
 3. Terminal Operator
Services. The parties recognize that CSX is a party to a Preferential Use Agreement, hereinafter referred to as the “PUA,” and that CSX has the right to perform its own stevedoring and shore-side services. Subject to the
foregoing and to any future modifications or revisions of the PUA, the Operator at the Facility agrees to perform in a prompt, efficient, prudent, and economical manner the following services: 
  
 A. Provide all clerical personnel, laborers, and supervision necessary to
perform cargo terminal services. 
  
 B. Perform loading,
discharging, and stevedoring of all vessels on a twenty-four (24) hours per day, seven (7) days per week basis, with the exception of vessels covered under the PUA, ferry vessels of the Alaska Marine Highway System, vessels in port at the express
invitation of the City, commercial fishing vessels (except fishing vessels engaged in shipment of commercial cargo), 

  

			
	 TERMINAL OPERATION CONTRACT
 CSX Lines LLC
 April 10, 2002
	 	PAGE 1 OF 5

 
vessels seeking fuel or other services from Harbor Enterprises, Inc., d/b/a Petro Marine Services (unless otherwise requested by Harbor Enterprises, Inc.),
and vessels seeking fuel or other services from Kodiak Oil Sales (North Pacific Fuel). 
  
 C. Without limiting the foregoing, the Operator shall: 
  

	 	(1)	Perform the stowage of cargo on board vessels in accordance with instructions received from their masters or their designated representatives. 

  

	 	(2)	Discharge cargo vessels and transport the cargo or containers to a place of rest in the Facility. 

  

	 	(3)	Transport containers between the yard and vessels and load and stow containers onto the vessels. 

  

	 	(4)	Lash and unlash cargo on vessels. 

  

	 	(5)	Open and close hatches and cells. 

  

	 	(6)	Plug and unplug shipboard electrical reefer receptacles if necessary to the extent not performed by the vessels. 

  

	 	(7)	Check and tally containers and container seals and cargo. 

  

	 	(8)	Spot vessels and handle lines as may be required. 

  

	 	(9)	Plan the layout and parking of containers and cargo. 

  

	 	(10)	Transport empty and loaded containers. 

  

	 	(11)	Receive and deliver empty or loaded containers or chassis. 

  

	 	(12)	Perform all necessary housekeeping services. 

  

	 	(13)	Furnish all security, excluding patrol officers. 

  

	 	(14)	Visually inspect the condition of containers and cargo, reporting to the vessels’ masters or agents any damage or defects noted. 

  

	 	(15)	Prepare daily reports reflecting the movement of containers or cargo. 

  

	 	(16)	Provide expeditious movement of containers and cargo. 

  

	 	(17)	Perform such other duties as are reasonable in such operations and as negotiated between the parties involved. 

  

	 	(18)	Bill, receive, or attempt to collect and, where applicable, remit to the City, all charges incurred under the applicable Port of Kodiak Tariff by persons, vessels, or cargo
utilizing Port facilities or services subject to this Contract. The Operator shall not discriminate for or against any shipper or carrier and shall give due recognition to the priorities afforded by Alaska Marine Highway System and the secondary
preferential use of Harbor Enterprises, Inc., dba Petro Marine Services, or its successor at Pier I. 

  
 4. Definition of Vessel. For the purpose of this Contract, the term “vessel” shall mean and include every type of propelled or
non-self propelled vessel, including, without limitation, barges, 

  

			
	 TERMINAL OPERATION CONTRACT
 CSX Lines LLC
 April 10, 2002
	 	PAGE 2 OF 5

 
container vessels, break-bulk vessels, and combinations of break-bulk and container vessels, and all other types of cargo or passenger vessels. 

 
 5. Terminal Operator’s Equipment. The operator will
provide all equipment necessary to perform the services required by this Contract. 
  
 6. Public Berth. It is agreed that the berths and facilities as above mentioned are public berths and shall be made available to and are available to all types of vessels that may wish to load or unload
without discrimination in favor of or against any vessel, shipper, or consignee provided, however, that the City at its option, may determine that a given vessel is unsuitable for servicing at the berth and may prohibit the berthing of such vessel
or alternatively may require such vessel owner to post such bond as the City may deem appropriate in the circumstances. Nothing herein contained is to be deemed to allow the berthing or transit of cargo which is prohibited by any applicable law
including, without limitations, explosives or other dangerous commodities. 
  
 7. Crane. 
  
 A. The
parties recognize that there is a Paceco 30-ton crane (the “crane”) at Pier III. A preferential user agreement (PUA) covers the rental of the crane: the operator’s use of the crane is limited to the loading and unloading of containers
only, the operator maintains the crane, and the Operator is hereby afforded secondary use of the crane. It is therefore agreed that operator shall reimburse the City and CSX for the actual use charges incurred and billed to the Operator as the
result of the Operator’s use of the crane. 
  
 B. It is
recognized that some vessels carry on-board cranes or other ship’s gear for the discharging or loading of cargo. In the interests of safety and expeditious handling of cargo, it is agreed that ship’s cranes or ship’s gear may be used
for the discharge or loading of cargo unless, in the City’s opinion the Operator’s cranes are not suitable for the handling of such cargo. 
  
 8. Compensation to City. As and for compensation to the City, the City shall be entitled to all income derived from wharfage, dockage, crane
rental, and sale of water. All such sums shall be a charge against the vessel or cargo, as the case may be, and shall be collected by the Operator and remitted by the Operator to the City. Such remittances shall be accompanied by appropriate
itemized documentation. Charges shall be paid by the Operator to the City within ninety (90) days after the first billing to the vessel or cargo, as the case may be or within ten (10) working days of receipt of payment by the Operator, whichever is
less, provided that credit terms shall be those chosen by the Operator. All such billings to the vessels and cargo will be itemized for services rendered by the Operator and shall be made promptly after performance of those services. 
  
 9. Compensation to Operator. The operator shall be entitled to
keep all other charges (including charges for electrical energy, storage, and the movement of cargo) authorized and fixed in accordance with the applicable Port of Kodiak Tariff. The Operator shall be bound by any future modification or amendments
of the Port of Kodiak Tariff provided, however, the City shall not alter the credit terms of the tariff during the course of this Contract. When charges involve stevedoring or other labor services based upon an hourly wage rate, then the Operator
may add to the total applicable labor charge an administrative fee of thirty (30%) percent and shall collect such fee from the person or vessel requiring the services in question. In no event, however, shall the Operator charge or collect an
administrative fee with respect to any portion of its labor costs which are based upon or derived from wage rates exceeding those applicable to similar work under contracts or agreements subject to the Davis-Bacon Act. If, on the date of execution
of this Contract, there exists 

  

			
	 TERMINAL OPERATION CONTRACT
 CSX Lines LLC
 April 10, 2002
	 	PAGE 3 OF 5

 
a labor organization which represents a majority of the individuals living in or around Kodiak, Alaska, who earn their livelihood as stevedores or
longshoremen, then the Operator shall make reasonable good-faith efforts to negotiate a collective bargaining agreement with said labor organization for the provision of stevedoring labor services under this Contract. 
  
 10. Indemnification. The Operator, in operating pursuant to
this Contract, is an independent contractor, and is in no way an agent, servant, or employee of the City. The Operator shall be responsible for and shall indemnify, defend, and hold the City harmless from and against any and all claims, demands, and
causes of action which arise out of or relate to the operation of this Contract, including, but not limited to any and all claims alleging that the negotiation, execution, or performance of this Contract violates or contravenes any federal, state,
or local law or regulation. 
  
 11. Bond. The
Operator, at its sole expense, shall furnish the City with a performance bond in a form satisfactory to the City with a maximum coverage of $10,000. The Operator, at its sole expense, shall furnish the City with employee fidelity coverage in the
amount of $50,000, naming the City as a loss payee, covering embezzlement or mysterious disappearance of funds that may have been collected by the Operator for the benefit of the City as provided in Paragraph 8 above. 
  
 12. Insurance. The Operator shall carry, at its sole expense,
comprehensive general liability insurance, comprehensive automobile liability insurance (or equivalent coverage), contractual liability, and personal injury liability insurance, all with a combined single limit of at least one million dollars per
occurrence naming the City, as well as, the Operator as insureds. Coverage under such insurance shall, to the maximum extent permitted by law, explicitly and specifically extend to damages arising from intentional torts, as well as to any punitive
damages which may be sought or awarded against the City. The Operator shall provide to the City evidence of insurance in an amount not less than $50,000 for loss due to property lost or stolen while in the Operator’s custody or control or while
the Operator is otherwise acting pursuant to this Contract. The Operator shall provide to the City proof of Workmen’s Compensation and U.S. Longshoremen and Harbor Worker’s Compensation insurance or compliance with the self-insuring
requirements of the State of Alaska. The insurance coverage to be obtained by the Operator pursuant to this paragraph shall be non-cancelable except upon at least thirty days prior written notice to the City and the insurer shall
unconditionally covenant in said insurance policy or policies to tender to the City thirty days written notice of expiration or termination of any such policy or policies. The Operator shall provide the City with proof of such insurance and bonding
pursuant to this paragraph and Paragraph 11 above prior to the effective date of this Contract, and this Contract shall not become effective until and unless such proof is made. 
  
 13. Damage to the Wharf Facilities and Improvements. The Operator shall pay for all damage to City-owned
property caused by the negligence of the Operator, its agents, employees, or invitees. The City shall make the Operator an additional insured, as its interests may appear, on any policy or policies of insurance the City may secure in contemplation
of such risk. 
  
 14. Default and Termination.

  
 (a) The term of this contract is for a twenty-four (24) month
period described in Paragraph 1 above. Notwithstanding the foregoing, the City retains the right to declare a default hereunder and terminate the Contract should the Operator fail to perform any covenant hereof or pay any sum due hereunder within
thirty (30) days after written notice specifying the alleged violation or default by the Operator. 
  

			
	 TERMINAL OPERATION CONTRACT
 CSX Lines LLC
 April 10, 2002
	 	PAGE 4 OF 5

 (b) During the term of this Agreement, both CSX and the City shall have the option to terminate this
Agreement early, with 30 days notice, by either party giving written notice of its election to do so. In the event of any such early termination, the City and CSX shall each fully, faithfully, and timely perform all of their obligations under this
Agreement through such early termination date. 
  
 15.
Inspection of Books. The City reserves the right at any reasonable time after seven days written notice to Operator to inspect and make copies of the books and records of the Operator related to operations conducted pursuant to this
Terminal Operation Contract. The Operator agrees that cargo manifests shall not be released by Operator to a third party except in accordance with the laws of the United States. 
  
 16. Non-Assignability. The parties stipulate and agree that the services rendered under this Contract are of
such a nature that the rights and duties arising to the Operator hereunder shall not be delegable or assignable to another party without the prior written consent of the City, which consent may be withheld at the City’s sole discretion. Nothing
in this paragraph is intended, however, to restrict the Operator in its selection of employees to carry out this Contract or any of its terms. Furthermore, notwithstanding the foregoing, the Operator shall have the right to assign this Contract to
any corporation, the stock of which is owned solely by the Operator, after thirty (30) days prior notice to the City, provided that Operator shall remain primarily responsible to the City for the due performance of this Contract during any period of
assignment. 
  
 17. Compliance with Federal, State, and Local
Laws. At all times during the Contract period, the Operator shall conduct operations in accordance with all applicable federal, state, and local laws and ordinances. 
  
 IN WITNESS WHEREOF, these parties have signed this Agreement on the date or dates indicated beneath the signature of their
respective officers or agents. 
  

											
	 CITY OF KODIAK
 710 Mill Bay Road, Room
219
 Kodiak, Alaska 99615
	 	 	 	 CSX Lines of Alaska, LLC,
 1717 Tidewater
Road
 Anchorage, Alaska 99501
	 	 
				
	 /s/ Linda L. Freed
	 	 5/2/02
	 	 /s/ Marion G. Davis
	 	 4-12-02

	By:	 	 Linda L. Freed
	 	 Date
	 	 By:
	 	 Marion G. Davis
	 	 Date

	City Manager	 	 	 	Manager, Seafood and Southern/Western AK	 	 

  

											
	 ATTEST:
	 	 	 	 ATTEST:
	 	 
				
	 /s/ Debra L. Marlar
	 	 ________
	 	 /s/ Clifford E. Farley
	 	 4-12-02

	 Debra L. Marlar, City Clerk
	 	 Date
	 	 Clifford E. Farley
	 	 Date

	 	 	 	 	 Manager, Kodiak Terminal Operations
	 	 

  

			
	 TERMINAL OPERATION CONTRACT
 CSX Lines LLC
 April 10, 2002
	 	PAGE 5 OF 5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]