6a attach10
LEASE AND CONCESSION AGREEMENT
Between
PORT OF SEATTLE
And
[TENANT]
KEY LEASE TERMS
Agreement Date January 1, 2015
Concessionaire: Airport Management Services, LLC
A Washington limited liability company
123 Main Street
Anytown, WA 98101
Attn: John Q. Manager, Vice President
Premises: Approximately ___ square feet of space commonly known as Unit(s)
_____, as identified on Exhibit B.
Occupancy Date: January x, xxxx
Build-Out Deadline: xxx or xxx days following the Occupancy Date
Midterm Deadline: Midpoint of the XX Agreement Year
Expiration Date: The last day of the month in which the date ___ years from the Build-
Out Deadline falls
Rent Commencement Date: The earlier of: (i) the Build-Out Deadline or (ii) the date on which
Concessionaire first opens for business from the Premises
Minimum Monthly Guarantee: MMG
First Agreement Year: No Minimum Monthly Guarantee. Concessionaire pays
percentage rent only.
Second and Subsequent Lease Years: Minimum Monthly Guarantee (MMG) will be an amount
equal to one twelfth (1/12) of eighty percent (80%) of the
total amount paid by concessionaire to the Port, whether by
MMG or (percentage fees) for the prior year
Percentage Fees:
Annual Gross Sales Percentage of Gross Sales
Annual Gross Sales $XXXX XX.%
$XXXX< Annual Gross Sales XXXX XX.%
$XXXX < Annual Gross Sales XX.%
Security: $XXXXXX
Use of Premises: Quick serve restaurant operating under the trade name, and otherwise
selling the products of Belle's Burgers
Initial Improvement Amount: $XXX per square foot
Delay Damages: $XXX per day
Exhibits to Agreement A - Legal Description of Airport
B - Premises
C - Street Pricing Policy
D - Operating Standards
E - Additional Non-Discrimination Covenants
F - Pertinent Non-Discrimination Authorities
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TABLE OF CONTENTS
KEY LEASE TERMS ..................................................................................................................... 1
TABLE OF CONTENTS ................................................................................................................ 2
SECTION 1 : DEFINITIONS ......................................................................................................... 3
SECTION 2 : LEASED PREMISES ............................................................................................... 8
SECTION 3 : TERM ....................................................................................................................... 8
SECTION 4 : RENT ........................................................................................................................ 8
SECTION 5 : SECURITY ............................................................................................................. 13
SECTION 6 : USE OF PREMISES ............................................................................................... 14
SECTION 7 : IMPROVEMENTS ................................................................................................. 16
SECTION 8 : MAINTENANCE AND REPAIR .......................................................................... 19
SECTION 9 : UTILITIES ............................................................................................................. 21
SECTION 10 : TAXES ................................................................................................................. 23
SECTION 11 : COMMON AREAS .............................................................................................. 24
SECTION 12 : MARKETING PROGRAM .................................................................................. 24
SECTION 13 : INSURANCE AND INDEMNITY ...................................................................... 25
SECTION 14 : DAMAGE OR DESTRUCTION ......................................................................... 28
SECTION 15 : ASSIGNMENT AND SUBLEASE ...................................................................... 29
SECTION 16 : DEFAULT ............................................................................................................ 32
SECTION 17 : RELOCATION OR TERMINATION OTHER THAN FOR DEFAULT ........... 34
SECTION 18 : ACCESS; EASEMENTS...................................................................................... 36
SECTION 19 : NONWAIVER; RIGHT TO PERFORM ............................................................. 37
SECTION 20 : SURRENDER AND HOLDING OVER .............................................................. 38
SECTION 21 : ENVIRONMENTAL STANDARDS ................................................................... 39
SECTION 22 : ACDBE REQUIREMENTS; NON-DISCRIMINATION ................................... 41
SECTION 23 : MISCELLANEOUS ............................................................................................. 42
SECTION 24 : SIGNATURES ..................................................................................................... 45
SECTION 25 : ACKNOWLEDGMENTS .................................................................................... 46
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THIS LEASE AND CONCESSION AGREEMENT is made as of the date set forth on
the first page of this Agreement by and between the PORT OF SEATTLE, a Washington
municipal corporation, and the Concessionaire identified on the first page of this Agreement. For
and in consideration of the mutual promises, covenants and conditions hereinafter set forth, the
parties agree:
SECTION 1: DEFINITIONS
For purposes of this Agreement, the following terms have the following meanings:
1.1 Additional Rent. "Additional Rent" shall have the meaning set forth in Section 4.4
of this Agreement.
1.2 Agreement. "Agreement" shall mean and refer to this Lease and Concession
Agreement, as the same may be amended from time-to-time.
1.3 Agreement Year. "Agreement Year" shall mean each successive twelve-month
period during the term of this Agreement, beginning with the first day of the first full month on
or after the Rent Commencement Date.
1.4 Airport. "Airport" shall mean the Seattle-Tacoma International Airport, a legal
description of which is attached as Exhibit A.
1.5 ACDBE. "Airport Concessions Disadvantaged Business Enterprise" and
"ACDBE" shall mean, a business, whether it is a corporation, sole proprietorship, partnership or
joint venture certified as an ACDBE by the State of Washington, of which at least fifty-one
percent (51%) of the interest is owned and controlled by one or more socially and economically
disadvantaged individuals as defined in the Airport and Airways Safety and Capacity Expansion
Act of 1987 and the regulations promulgated pursuant hereto at 49 CFR Part 23.
1.6 Airport Terminals. "Airport Terminals" shall mean the passenger transportation
facilities at the Airport, whether now existing or subsequently constructed. As of the date of this
Agreement, the Airport Terminals identified include Concourse A, Concourse B, Concourse C,
Concourse D, North Satellite, South Satellite, North Esplanade, South Esplanade, and Central
Terminal.
1.7 Alterations. "Alterations" shall have the meaning set forth in Section 7.2.3 of this
Agreement.
1.8 Annual Report. "Annual Report" shall have the meaning set forth in Section 4.7.3
of this Agreement.
1.9 Build-Out Deadline. "Build-Out Deadline" shall mean the date set forth on page 1
of this Agreement. In the event that the Build-Out Deadline is subject to extension as provided in
Section 7.2.1, the Port shall confirm the extended Build-Out Deadline in the manner provided for
notice in Section 23.1 of this Agreement.
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1.10 Concessionaire. "Concessionaire" shall mean and refer to the party executing this
Agreement, as identified on page 1 of this Agreement.
1.11 Day. "Day" or "Days" shall mean, unless otherwise specified, mean and refer to
calendar day(s), not business day(s).
1.12 Default Rate. "Default Rate" shall mean the rate of eighteen percent (18%) per
annum or the maximum rate provided by law for a transaction of this nature, whichever is less.
1.13 Delay Damages. "Delay Damages" shall mean and refer to the dollar amount,
expressed per day, set forth on page 1 of this Agreement.
1.14 Display Allowances. "Display Allowances" shall mean the total of all display
allowances, placement allowances, special purpose allowances, or other promotional incentives
received by Concessionaire (or Concessionaire's subtenant, licensee or concessionaire) from
vendors, suppliers or manufacturers and any other revenue of this type, and further, if such
allowances are received as a part of non-differentiated sales by Concessionaire (or
Concessionaire's subtenant, licensee or concessionaire) operating at multiple airports, the Port
shall solely and reasonably designate the amount to be allocated to the Airport for the calculation
of Percentage Fees due.
1.15 Enplaned Passenger. "Enplaned Passenger" shall mean all those passengers
boarding flights at the Airport from scheduled or chartered flights, whether domestic or
international, including non-revenue passengers (but excluding airline crew for the flight), and
including those passengers connecting from arriving flights of same or another airlines.
1.16 Excluded Costs. "Excluded Costs" shall mean the (i) financing costs; (ii) interest;
(iii) inventory; (iv) office equipment and furnishings; (v) pre-opening expenses; (vi) intra-
Concessionaire charges related to construction; (vii) professional fees and costs related to design
and engineering of Leasehold Improvements in excess of twelve percent (12%) of the initial
minimum investment; and (viii) professional fees and costs related to the design and engineering
of Leasehold Improvements in excess of twelve percent (12%) of the minimum mid-term
refurbishment.
1.17 Expiration Date. "Expiration Date" shall mean the date on which this Agreement,
unless earlier terminated, will expire, as set forth on page 1 of this Agreement. In the event that
this Agreement contains one or more option periods, the Expiration Date shall be subject to
extension on such terms, and subject to such conditions, as provided in this Agreement. In the
event that there is not a specific Expiration Date set forth on page 1, the Port shall confirm the
Expiration Date in the manner provided for notice in Section 23.1 of this Agreement.
1.18 Franchisor. "Franchisor" shall have the meaning set forth in Section 6.7 of this
Agreement.
1.19 Gross Sales. "Gross Sales" shall mean the total dollar amount derived from the
sale or delivery of any food, beverages, or merchandise or the performance of any services from,
in, upon or arising out of the Premises, whether by Concessionaire, any subtenants, licensees or
concessionaires of Concessionaire, or any other person on Concessionaire's behalf, whether at
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wholesale or retail, and whether for cash, check, credit (including charge accounts), exchange or
in kind (specifically including the amount of credit allowed for any trade-ins). No deduction
shall be permitted for credit card fees (e.g., interchange or processing fees) or thefts, and for
uncollected or uncollectible credit or charge accounts. No deduction shall be permitted for sales
discounts (such as prompt-payment discounts) that are not specifically reflected on the original
invoice/receipt at the time of the sale. Gross Sales shall, without limiting the generality of the
foregoing, also include:
1.19.1 Orders that originate or are accepted at the Premises, even if delivery or
performance is made from or at any other place. All sales made and orders received at the
Premises shall be deemed as made and completed therein, even though payment of account may
be transferred to another office/location for collection.
1.19.2 Orders that result from solicitation off the Premises but which are delivered or
performed from the Premises or by personnel either operating from the Premises or reporting to
or under the control or supervision of any employee employed at the Premises.
1.19.3 Mail, catalog, computer, internet, telephone, or other similar order received at,
ordered from, or billed from the Premises.
1.19.4 Sales originating from whatever source, and which Concessionaire (or
Concessionaire's subtenants, licensees or concessionaires) in the normal and customary course of
Concessionaire's (or Concessionaire's subtenant's, licensee's or concessionaire's) operations
would credit or attribute to Concessionaire's (or Concessionaire's subtenant's, licensee's or
concessionaire's) business conducted in the Premises;
1.19.5 Display Allowances, whether received by Concessionaire or its subtenant,
licensee or concessionaire; and
1.19.6 All monies or other things of value received by Concessionaire (or
Concessionaire's subtenant, licensee or concessionaire) from Concessionaire's (or
Concessionaire's subtenant's, licensee's or concessionaire's) operations at, upon or from the
Leased Premises which are neither included in nor excluded from Gross Sales by the other
provisions of this definition, including without limitation, finance charges, late fees, and all
deposits not refunded to customers.
"Gross Sales" shall not include, and may be adjusted to exclude, the following when
properly recorded and accounted for:
1.19.7 Tips and gratuities paid directly to employees;
1.19.8 The exchange of merchandise between stores of Concessionaire (or
Concessionaire's subtenant, licensee's or concessionaire's) where such exchanges are made
solely for the convenient operation of Concessionaire's (or Concessionaire's subtenant's,
licensee's or concessionaire's) business and not for the purpose of consummating a sale which
has been made at, upon or from the Premises;
1.19.9 Returns to shippers or manufacturers with no mark-up;
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1.19.10 Allowances or refunds allowed by Concessionaire to customers because of
unacceptable or unsatisfactory goods or services to the extent such allowance or refund was
actually granted and adjustment actually made;
1.19.11 Complimentary meals, the amount of any employee discount on meals,
and any meals provided by Concessionaire to its employees without cost as a benefit;
1.19.12 The amount of any sales tax or other excise tax imposed upon the
customer and collected by Concessionaire as agent for the taxing body imposing the tax and
billed to the customer as a separate item;
1.19.13 Revenue from the sale of uniforms or clothing to Concessionaire's
employees where it is required that such uniforms or clothing be worn by said employees;
1.19.14 Any sums that represent discounts so long as the amount of the discount is
shown on the face of the receipt issued to the customer; and
1.19.15 Any item, such as the cost of third-party shipping, for which the
Concessionaire is reimbursed at actual cost therefor; provided, however, in the event that
Concessionaire charges a customer more than the actual cost of such item (specifically including
through the inclusion of a "handling" or similar charge by Concessionaire), the entire amount
shall be includable with Gross Sales and shall not be subject to exclusion.
1.20 Initial Improvements. "Initial Improvements" shall the meaning set forth in
Section 7.2.1 of this Agreement.
1.21 Initial Improvement Amount. "Initial Improvement Amount" shall mean and refer
to the dollar amount, expressed per square foot of the Premises, set forth on page 1 of this
Agreement.
1.22 Legal Requirements. "Legal Requirements" shall mean and refer to all laws,
statutes and ordinances including building codes and zoning regulations and ordinances and the
orders, rules, regulations and requirements of all federal, state, county, city or other local
jurisdiction departments, agencies, bureaus, offices and other subdivisions thereof, or any official
thereof, or of any other governmental, public or quasi-public authority, including the Port, which
may be applicable to or have jurisdiction over the Premises.
1.23 Lien. "Lien" shall mean and refer to any mortgage, lien, security interest,
encumbrance, charge on, pledge of, conditional sale or other encumbrance on the Premises or the
Initial Improvements, Midterm Refurbishment, any Alteration, fixture, improvement or
appurtenance thereto.
1.24 Midterm Deadline. "Midterm Deadline" shall have the meaning set forth on page
1 of this Agreement.
1.25 Midterm Refurbishment. "Midterm Refurbishment" shall have the meaning set
forth in Section 7.2.2 of this Agreement.
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1.26 Minimum Monthly Guarantee. "Minimum Monthly Guarantee" shall have the
meaning set forth in Section 4.1 of this Agreement.
1.27 Net Book Value of Concessionaire's Leasehold Improvements. "Net Book Value
of Concessionaire's Leasehold Improvements" shall have the meaning set forth in Section 17.5
of this Agreement.
1.28 Occupancy Date. "Occupancy Date" shall mean the date set forth on page 1 of
this Agreement. . In the event that there is not a specific Occupancy Date set forth on page 1, the
Port shall confirm the Occupancy Date in the manner provided for notice in Section 23.1 of this
Agreement.
1.29 Percentage Fee. "Percentage Fee" shall have the meaning set forth in Section 4.2
of this Agreement.
1.30 Port. "Port" shall mean the Port of Seattle, a Washington municipal corporation.
1.31 Port Representative. "Port Representative" shall mean the Port employee having
primary responsibility for the Port's Airport concessions program as designated (from time to
time) by the Port in writing.
1.32 Port Standards. "Port Standards" shall mean the Sea-Tac Rules and Regulations,
the Regulations for Airport Construction, the Tenant Design and Construction Process Manual ,
the CAD Standards Manual, the Airport Dining and Retail Design Guidelines, the Port's
mechanical, electrical, water and waste, and industrial waste and storm drainage standards and
any other, similar document establishing requirements and/or standards for design and
construction at the Airport.
1.33 Premises. "Premises" shall have the meaning set forth on the first page of this
Agreement under the Key Agreement Terms.
1.34 Removable Fixtures. "Removable Fixtures" shall have the meaning set forth in
Section 7.4 of this Agreement.
1.35 Rent. "Rent" shall mean and refer collectively to sums denominated as either
Minimum Monthly Guarantee, Percentage Fee, Additional Rent or any other sums or charges
otherwise payable by Concessionaire under the terms of this Agreement. Failure by
Concessionaire to pay any sum denominated as Rent shall entitle the Port to pursue any or all
remedies specified in this Agreement as well as remedies specified in RCW Chapter 59.12 or
otherwise allowed by law.
1.36 Rent Commencement Date. "Rent Commencement Date" shall mean the date set
forth on page 1 of this Agreement. In the event that there is not a specific Rent Commencement
Date set forth on page 1, the Port shall confirm the Rent Commencement Date in the manner
provided for notice in Section 23.1 of this Agreement.
1.37 Security. "Security" shall have the meaning set forth in Section 5.1 of this
Agreement.
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SECTION 2: LEASED PREMISES
2.1 Premises. Effective on the Occupancy Date, the Port hereby leases to
Concessionaire and Concessionaire hereby leases from the Port, the Premises.
2.2 Acceptance of the Premises. Concessionaire shall promptly examine the Premises
following the Occupancy Date. Unless Concessionaire provides the Port with written notice of
any defect or problem within ten (10) working days of the Occupancy Date, Concessionaire shall
have accepted them in their present, "as-is" condition, and agrees to make any changes in the
Premises necessary to conform to federal, state and local law applicable to Concessionaire's use
of the Premises, and obtain necessary permits therefor.
2.3 Quiet Enjoyment. So long as Concessionaire is not in default under this
Agreement and subject to the specific provisions, covenants and agreements contained in this
Agreement, the Port covenants and agrees that the quiet and peaceful possession and enjoyment
of the Premises by Concessionaire shall not be disturbed or interfered with by the Port or by any
other party claiming by or through the Port.
2.4 No Warranty. The Port makes absolutely no warranty, promises or representations
as to the economic viability of any concession location, including the Premises. Passenger
counts, passenger flows and other customer traffic are for the most part products of airline
schedules and gate utilization. Further, Federal Aviation Administration and Transportation
Security Administration rules and regulations governing security and emergency situations may
restrict access to the Airport or portions thereof. Except as specifically set forth in this
Agreement, Concessionaire shall not be entitled to any relief in the event passenger counts,
passenger flow, customer traffic, or Gross Sales are other than Concessionaire predicted or
projected.
SECTION 3: TERM
Agreement Term. Unless earlier terminated pursuant to any provision of this Agreement, the
term shall commence on the Occupancy Date and continue until the Expiration Date.
SECTION 4: RENT
Lessee shall pay to the port, for the concession rights and privileges granted herein, the following
4.1 Minimum Monthly Guarantee
4.1.1 First Agreement Year. For the first Agreement Year, there will be no
Minimum Monthly Guarantee. Concessionaire will pay Percentage Fee only.
4.1.2 Second and Subsequent Agreement Years. For the se cond and each
subsequent Agreement Year, the Minimum Monthly Guarantee shall be an amount equal to one
twelfth (1/12) of eighty five percent (85%) of the total amount (whether by Minimum Monthly
Guarantee or Percentage Fees) paid by Concessionaire to the Port for the previous Agreement
Year.
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4.1.3 Relief for Exceptional Circumstances. In the event that the total number of
Enplaned Passengers for any month decreases by more than twenty percent (20%) from the same
month of the prior year, the Minimum Monthly Guarantee payment due for the next month shall
automatically be adjusted downward by the percentage decrease in the number of Enplaned
Passengers for the month experiencing the decrease. For example, if the number of Enplaned
Passengers for the month of July 2007 declined by 25% over the number of Enplaned Passengers
for the month of July 2006, then the Port will reduce the Minimum Monthly Guarantee amount
payable for the month of August 2007 by 25%.
4.1.4 Payment in Advance. All payments of the Minimum Monthly Guarantee
shall be payable in advance, on or before the first day of each and every month during the term
hereof, without written notice from the Port and without setoff or deduction.
4.2 Percentage Fees. Commencing on the Rent Commencement Date, Concessionaire
shall also pay the Port a percentage fee (the "Percentage Fee"), to the extent the Percentage Fee
is higher than the payment of the Minimum Monthly Guarantee paid to the Port pursuant to
Section 4.1.. On or before the fifteenth (15th) day of each month, Concessionaire shall submit to
the Port a detailed statement showing the Gross Sales generated from the concession during the
preceding month (the "Monthly Report") and shall simultaneously pay to the Port the
Percentage Fee due for that preceding month less the payment of the Minimum Monthly
Guarantee already paid by the Concessionaire for that month. The Monthly Report shall be filed
using the technology and procedures designated by the Port and shall show such reasonable
detail and breakdown as may be required by the Port. If the Port instructs Concessionaire to file
the Monthly Report or any other report by computer, e-mail, or internet website, the Port shall
not be obligated to furnish Concessionaire with the equipment or systems necessary to do so.
The failure to timely provide the reports required by this Section shall be grounds for the
imposition of liquidated damages as provided in Exhibit E.
4.3 Contract Rent. The Port and Concessionaire agree that the first seven percent
(7%) of the Gross Sales paid to the Port (whether paid as part of the Minimum Monthly
Guarantee or as Percentage Fees) shall be the contract rent for the Premises for purposes of the
Leasehold Excise Tax Payable pursuant to Chapter 81.29A of the Revised Code of Washington.
All amounts in excess of the first seven percent of the Gross Sales shall be consideration for the
concession rights granted under this Agreement.
4.4 Additional Rent. During this term of this Agreement, Concessionaire shall also
pay to the Port, within ten (10) days of invoice, any maintenance and repair charges required by
Article __, any utility charges required by Article __, and such other amounts as may be owing
by Concessionaire to the Port pursuant to the terms of this Agreement.
4.5 Payments; Automatic Transfer.
4.5.1 All Rent due under this Agreement shall be paid in lawful money of the
United States of America. Concessionaire may not pay any Rent due utilizing a credit card or
other, similar instrument for which the Port must pay a commission or discount on the gross
funds remitted; all payments shall be made by check, ACH credit transfer, or other form of
payment approved by the Port. In the event the Concessionaire delivers a dishonored check or
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draft to the Port in payment of any obligation arising under this Agreement, Concessionaire shall
pay a service charge in the amount established by the Port from time to time, along with interest
thereon at eighteen percent (18%) per annum from the original due date of such dishonored
check or draft without further demand. In such event, the Port may require that future payments
be made by cashier's check or other means acceptable to the Port.
4.5.2 Instead of requiring Concessionaire to pay Rent or other charges in a
manner pursuant to Section 4.5.1, the Port may, at its sole option, upon not less than sixty (60)
days prior notice to Concessionaire, require Concessionaire to promptly execute and deliver to
the Port any documents, instruments, authorizations, or certificates required by the Port to give
effect to an automated debiting system, whereby any or all payments by Concessionaire of
whatsoever nature required or contemplated by this Agreement shall be debited monthly or from
time to time, as provided in this Agreement, from Concessionaire's account in a bank or
financial institution designated by Concessionaire and credited to the Port's bank account as the
Port shall designate from time to time.
4.5.3 Concessionaire shall promptly pay all service fees and other charges
connected with its use of an automated debiting system, including, without limitation, any
charges resulting from insufficient funds in Concessionaire's bank account or any charges
imposed on the Port.
4.5.4 In the event that Concessionaire elects to designate a different bank or
financial institution from which any fees or other charges under the Agreement are automatically
debited, notification of such change and the required documents, instruments, authorizations, and
certificates specified in Section 4.5 must be received by the Port no later than thirty (30) days
prior to the date such change is to become effective.
4.5.5 Concessionaire agrees that it shall remain responsible to the Port for all
payments of Rent and other charges pursuant to the Agreement, even if Concessionaire's bank
account is incorrectly debited in any given month. Such fees and other charges shall be
immediately payable to the Port upon written demand.
4.5.6 Concessionaire's failure to properly designate a bank or financial
institution or to promptly provide appropriate information in accordance with this Section 4.5.2
shall constitute a default of this Agreement.
4.6 Late Charges.
4.6.1 Concessionaire hereby acknowledges that late payment by Concessionaire
to the Port of Rent, or any portion thereof, or any other sums due hereunder will cause the Port to
incur costs not otherwise contemplated by this Agreement. Accordingly, if any installment of
Rent, or any portion thereof, or any other sum due from Concessionaire shall not be received by
the Port within ten (10) days after such amount shall be due, then, without any requirement for
notice by the Port to Concessionaire, Concessionaire shall pay the Port a late charge equal to five
percent (5%) of such overdue amount unless such late charge is specifically waived by the Port
in writing. The parties agree that such late charge represents a fair and reasonable estimate of the
costs the Port will incur by reason of late payment by Concessionaire. Acceptance of such late
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charge by the Port shall in no event constitute a waiver of Concessionaire's default with respect
to such overdue amount, nor prevent the Port from exercising any of the other rights and
remedies granted hereunder.
4.6.2 In the event that a late charge is payable in this Agreement or otherwise,
whether or not collected, for three (3) installments of Rent and/or other remuneration in any 12-
month period, then the Minimum Monthly Guarantee and/or other remuneration shall, upon the
Port's election, become due and payable quarterly in advance, rather than monthly,
notwithstanding Section 4.1.1 or any other provision of this Agreement to the contrary.
4.6.3 In addition to the late charges provided for in this Section, interest shall
accrue on any unpaid Rent and/or other remuneration, or any other sums due hereunder, at the
Default Rate from the date due until paid.
4.7 Accounting Procedures.
4.7.1 Records. Concessionaire covenants and agrees that it will establish and
maintain an accounting system (specifically including all books of account and records
customarily used in the type of operation permitted by this Agreement) in full and complete
accordance with generally accepted accounting principles and otherwise reasonably satisfactory
to the Port for the determination of any Rent or other computations, which may be necessary or
essential in carrying out the terms of this Agreement. Concessionaire shall maintain its records
relating to the operation permitted by this Agreement for a period of at least three (3) years after
the end of each Agreement Year (or until the close of any ongoing audit thereof being conducted
by, or on behalf of, the Port); provided, however, that the Port may request that any such records
be retained for a longer period of time, in which case Concessionaire, at its option, may deliver
such records into the custody of the Port.
4.7.2 Daily Sales Reporting. Concessionaire shall participate in a daily sales
reporting program. Under the program, Concessionaire shall report, by the close of business the
following day, the amount of Gross Sales earned by Concessionaire each calendar day, including
such detail as reasonably requested by the Port (including, but not limited to, such things as
location and concession category). Concessionaire may, but shall not be obligated, to delegate
responsibility for reporting Gross Sales generated in any subleased space to the operator of such
subleased spaced; provided, however, Concessionaire shall nonetheless remain responsible for
full compliance with the program in the event it makes such delegation. The failure to timely
provide the reports required by this Section shall be grounds for the imposition of liquidated
damages as provided in Exhibit E.
4.7.3 Annual Report. Concessionaire shall provide the Port with a report (the
"Annual Report"), due within sixty (60) days after the close of each Agreement Year, that
reflects the amount of Gross Sales for the preceding Agreement Year (or, in the case of the first
Agreement Year, from the period from the Rent Commencement Date until the end of the first
Agreement Year). The Annual Report shall be accompanied by a signed certificate of an
independent Certified Public Accountant (CPA), Concessionaire's Chief Financial Officer or
Chief Executive Officer stating specifically that (a) he/she has examined the Annual Report, (b)
his/her examination included such tests of Concessionaire's books and records as he/she
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considered necessary or appropriate under the circumstances, (c) such report presents fairly the
information reflected for the preceding Agreement Year (or, in the case of the first Agreement
Year, from the period from the Rent Commencement Date until the end of the first Agreement
Year), (d) the information reflected conforms with and is computed in compliance with the
definitions set forth in this Agreement, and (e), if the certificate is submitted by a CPA, the
standards observed by the CPA in its audit are such that it planned and performed the audit to
obtain reasonable assurances that Concessionaire's report is free from material misstatement.
The Annual Report shall be provided in writing and/or electronic format as reasonably specified
by the Port, and in addition to such other detail as the Port may reasonably require, the Annual
Report shall breakdown Gross Sales by month, location, and product category. Any additional or
unpaid Rent or fees due for the prior Agreement Year shall be submitted with the Annual Report.
The failure to timely provide the reports required by this Section shall be grounds for the
imposition of liquidated damages as provided in Exhibit E.
4.7.4 Other Reports. In addition to any reports otherwise required under the
terms of this Agreement, Concessionaire shall provide the Port with: a statement, due within
thirty (30) days of any request by the Port, which request shall not be made any more frequently
than once each Agreement Year, of (i) Net Book Value of Concessionaire's Leasehold
Improvements (the "NBV Report"), calculated in conformance with the rules set forth in Section
17.5; and (ii) the number of persons with employment at the Airport under this Agreement and
other information related to the quality of such employment, and (iii) such other and further
reports, on such frequency as the Port may reasonably require from time to time, all without any
cost to the Port. All such reports shall be provided in writing and/or electronic format as
reasonably specified by the Port from time to time. The failure to timely provide the reports
required by this Section shall be grounds for the imposition of liquidated damages as provided in
Exhibit E.
4.8 Audit.
4.8.1 Right to Audit. The Port shall have the right to inspect and audit, through
its accountants or representatives, Concessionaire's records with reference to the determination
of any matters relevant to this Agreement, and Concessionaire shall make or cause to be made
the records readily available for such examination. The Port may undertake such inspection
and/or audit at any reasonable time and from time to time. In the event that Concessionaire's
Records are not maintained in the Puget Sound region, they shall be made available for audit
locally within five (5) business days of a request by the Port, or Concessionaire shall pay in full,
any travel and related expenses of Port representative(s) to travel to the location outside the
Puget Sound region. In addition, the Port shall have the right to conduct a "surprise" audit not
more frequently than twice every twenty four (24) months, and, in the event that
Concessionaire's books and records are not maintained locally, Concessionaire shall further pay
in full, any travel and related expenses of the Port representative(s) to travel the location outside
the Puget Sound region for such "surprise" audit(s).
4.8.2 Right to Review Records of Concessionaire's Other Stores. In connection
with the audit, the Port or its representative will have the right to inspect the records from any
other store operated by Concessionaire, but only if such inspection is reasonably necessary to
verify Concessionaire's reportable Gross Sales.
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4.8.3 Right to Copy Concessionaire's Records. The Port or its representatives
shall have the right to copy any and all Records of Concessionaire supporting Gross Sales or any
other matter the determination of which is relevant to this Agreement.
4.8.4 Concessionaire Must Reconstruct Insufficient Documentation. If upon
examination or audit the Port's accountant or representative determines that sufficient
documentation is not maintained, retained, or available to verify Concessionaire's actual Gross
Sales or any other matter the determination of which is relevant to this Agreement,
Concessionaire shall pay for the cost of such visit, and in addition, should the Port deem it
necessary, Concessionaire shall reconstruct, at its sole cost and expense, all records for the
determination of Gross Sales or any other matter the determination of which is relevant to this
Agreement for any period being audited. If, in the Port's determination, Concessionaire fails to
reconstruct all Records in accordance with this Section, then in addition to any remedies under
this Agreement or at law, the Port shall be entitled to collect as Additional Rent an additional
amount equal to twenty-five percent (25%) percent of the Base Rent payable by Concessionaire
during the period in question.
4.8.5 If Gross Sales are Under-Reported. If any such audit discloses that the
actual Gross Sales exceed those reported:
4.8.5.1 Concessionaire shall forthwith pay the Percentage Rent due along
with interest at the Default Rate; and
4.8.5.2 If the audit reveals a discrepancy of more than two percent (2%) of
the Percentage Rent reported in accordance with Section 4.2 above for any twelve (12) month
period, Concessionaire shall forthwith pay the cost of such audit along with interest at the
Default Rate; and
4.8.5.3 The Port shall have, in addition to the foregoing rights to costs and
any other rights and remedies available to the Port under this Agreement or at law, the right to
terminate this Agreement, if such audit discloses that said Gross Sales exceeded those reported
by more than ten percent (10%).
4.8.6 If Gross Sales are Over-Reported. If Concessionaire over-reports its Gross
Sales and is due a refund, Concessionaire will be granted a credit toward future rents after
deducting the cost of the audit.
4.8.7 Subtenant's Records. If Concessionaire subleases, licenses, or in any
manner allows the Premises to be used by another party, Concessionaire is responsible for
ensuring that all of such party(ies) Records conform to the requirements of this Agreement. The
failure of any such party to maintain its Records as required under this Agreement, or correctly
report gross sales, will be deemed a failure on the part of Concessionaire to conform to the
requirements of this Agreement.
SECTION 5: SECURITY
5.1 Security. Concessionaire shall, upon execution of this Agreement, obtain and
deliver to the Port a good and sufficient corporate surety company bond, irrevocable stand-by
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letter of credit, or other security in a form approved by the Port in the amount set forth on page 1
of this Agreement (hereinafter referred to as "Security"), to secure Concessionaire's full
performance of this Agreement, including the payment of all fees and other amounts now or
hereafter payable to the Port hereunder. In the event that a late charge is payable under Section
4.6 (whether or not collected) for three (3) installments of Rent in any twelve (12) month period,
the amount of the Security shall, at the Port's election, be doubled. The amount, form, provisions
and nature of the Security, and the identity of the surety or other obligor thereunder, shall at all
times be subject to the Port's approval. The Security shall remain in place at all times throughout
the full term of this Agreement and throughout any holdover period. If the Security is in a form
that periodically requires renewal, Concessionaire must renew the Security not less than 45 days
before the Security is scheduled to expire. No interest shall be paid on the Security and the Port
shall not be required to keep the Security separate from its other accounts. No trust relationship
is created with respect to the Security.
5.2 Return of Security. The Security is a part of the consideration for execution of this
Agreement. If Concessionaire shall have fully performed all terms and conditions of this
Agreement, any cash deposit security shall be paid to Concessionaire within sixty (60) days
following the termination (or expiration) date without interest; otherwise the Port shall, in
addition to any and all other rights and remedies available under this Agreement or at law or
equity, retain title thereto.
5.3 Application of Security. The Port may apply all or part of the Security to unpaid
Rent or any other unpaid sum due hereunder, or to cure other defaults of Concessionaire. If the
Port uses any part of the Security, Concessionaire shall restore the Security to its then-currently
required amount within fifteen (15) days after the receipt of the Port's written request to do so.
The retention or application of such Security by the Port pursuant to this Section does not
constitute a limitation on or waiver of the Port's right to seek further remedy under law or equity.
SECTION 6: USE OF PREMISES
6.1 Use of Premises. Concessionaire shall use the Premises for the purpose of a nail
salon with services including manicure, pedicure and foot massage. As an incidental use, not
more than 25% of the Premises shall be used for body care and beauty supplies and shall not use
them for any other purpose without the written consent of the Port. Concessionaire recognizes
that the specific limited use prescribed herein is a material consideration to the Port in order that
the Airport will, in the Port's sole discretion, maintain an appropriate tenant mix so as to
efficiently serve the traveling public and to produce the maximum Gross Sales possible for all
tenants.
6.2 Rights Are Non-Exclusive. Concessionaire's rights and privileges in this
Agreement are non-exclusive, and nothing herein shall preclude the Port from entering into an
agreement with any other parties during the term of this Agreement for the sale in any part of the
Airport of the same or similar food, beverages, merchandise or service which Concessionaire is
permitted to sell or offer hereunder, whether such agreements are awarded competitively or
through negotiations and regardless of whether the terms of such agreements are more or less
favorable than the terms of this Agreement.
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6.3 First Class Operations. In addition to, and not in lieu of, any other more specific
standards that may be set forth in this Agreement, Concessionaire shall maintain a first class
standard of service equivalent to the highest standards within the food and retail service industry
("First Class Manner"). For the purposes of this Agreement, First Class Manner shall mean the
standard of products, cleanliness, and customer service that would be reasonably expected in
upscale shopping malls and other similar high-quality airport and non-airport retail and food
service facilities. The Port desires to provide the air travelers and the public with facilities,
service, food, beverages and retail merchandise of first class quality. For food and beverage
operations, Concessionaire must ensure that the air travelers and public are provided first class
quality foods with adequate portions, comparable to or better than, that offered for sale in similar
food service operations in the greater Seattle-Tacoma region offering like products. To comply
with these requirements, Concessionaire must regularly review or cause to be reviewed the
Premises and operations at the Airport. Unless shown to be unreasonable by "clear, cogent and
convincing evidence," the Port shall be the final arbiter of what constitutes a First Class Manner.
6.4 General Operating Standards. Concessionaire shall not use or occupy or permit
the Premises or any part thereof to be used or occupied, in whole or in part, in a manner which
would in any way: (i) violate any present or future Legal Requirements or Port Standards, (ii)
violate any of the covenants, agreements, provisions and conditions of this Agreement, (iii)
violate the certificate of occupancy then in force with respect thereto, (iv) as will constitute a
public or private nuisance, (v) impair, in the Port's reasonable judgment, with the character,
reputation or appearance of the Airport or the Port, or (vi) occasion discomfort, inconvenience or
annoyance to either the Port or its adjoining tenants. Without limiting the foregoing,
Concessionaire specifically agrees to comply with all applicable rules and regulations of the Port,
whether now in existence or hereafter promulgated, pertaining to (a) the Airport and its
terminals, which exist for the general safety and convenience of the Port, its various tenants,
invitees, licensees and the general public, and (b) the food and beverage areas located within the
Airport.
6.5 Specific Operating Standards. Concessionaire shall, at all times, comply with the
operating standards set forth on Exhibit D. Without limiting any other rights that may exist under
this Agreement, Concessionaire acknowledges that it is subject to inspection as set forth on
Exhibit D and shall be subject to specified liquidated damages for the failure to comply with any
of the specified operating standards.
6.6 Street Pricing Policy. Concessionaire shall, at all times, comply with the street
pricing policy set forth on Exhibit C. Without limiting any other rights that may exist under this
Agreement, Concessionaire acknowledges that it is subject to the policies, requirements and
submittals as set forth on Exhibit C and shall be subject to specified liquidated damages for the
failure to comply with any of the specified policies.
6.7 Security Requirements. Concessionaire acknowledges that that Airport is an
environment subject to substantial security regulations and requirements that may materially
increase the cost of operating at the Airport. Concessionaire shall comply at all times with all
local, state and federal laws, rules, regulations and security plans relating to homeland security
(collectively, "Security Laws") applicable to Concessionaire, its operations, and the Premises.
Concessionaire shall be solely responsible for all of its costs of complying with any applicable
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Security Laws as well as any fines or penalties incurred (whether by Concessionaire or the Port)
as result of its failure to comply with such Security Laws.
6.8 Franchise. If the Premises are operated under a franchise, Concessionaire
represents and warrants to the Port that Concessionaire has been granted the right to use any
trade name that may be used at the Premises for the entire term of this Agreement, pursuant to a
franchise or license agreement (the "Franchise Agreement") with the trade name owner (a
"Franchisor"). At the Port's request, Concessionaire agrees to provide the Port with a copy of the
Franchise Agreement and reasonable evidence that such agreement remains in full force and
effect. Concessionaire agrees that the termination of Concessionaire's right to use
Concessionaire's trade name at the Premises or to conduct an operation at the Premises of the
type then conducted by or under license from Franchisor under Concessionaire's trade name,
shall constitute a material breach of Concessionaire's obligations under this Agreement.
Concessionaire agrees that if such Franchise Agreement is terminated, the Port shall have the
right to terminate this Agreement pursuant to SECTION 16 of this Agreement.
6.9 No Liens. Concessionaire will not directly or indirectly create or permit to be
created and/or to remain, a Lien upon the Premises, including any Initial Improvements, Midterm
Refurbishment, Alterations, fixtures, improvements or appurtenances thereto, except those Liens
expressly permitted by in writing by the Port. In the event any such Lien(s) have been created by
or permitted by Concessionaire in violation of this provision, Concessionaire shall immediately
discharge as of record, by bond or as otherwise allowed by law, any such Lien(s). Concessionaire
shall also defend (with counsel approved by the Port), fully indemnify, and hold entirely free and
harmless the Port from any action, suit or proceeding brought on or for the enforcement of such
lien(s). As used in this Section, "Lien" shall mean and refer to any mortgage, lien, security
interest, encumbrance, charge on, pledge of, conditional sale or other encumbrance on the
Premises, any Alteration, fixture, improvement or appurtenance thereto, or any larger building
and/or property of which the Premises may be a part.
SECTION 7: IMPROVEMENTS
7.1 Improvements by the Port. The Port shall have no obligation to make any
improvements to the Premises whatsoever. It is, however, understood that the Port may from
time to time elect to alter, improve or remodel other portions of the Airport, and Concessionaire
agrees that the portion of the Premises, if any, which is visible to the general public may be
altered, remodeled or improved at the Port's expense in connection with any such work. The Port
shall further have the right, at its sole discretion, to make minor modifications to the Premises to
accommodate Airport operations, renovations, maintenance, or other work to be completed in the
Airport Terminals, which modifications will not generally involve the recapture or disruption of
more than fifty (50) square feet of the Premises. In the event of any such modifications, the Port
will revise the Premises through a written notice to Concessionaire rather than a formal
amendment to the Agreement. Concessionaire agrees that any inconvenience resulting from any
such work or modifications by the Port or its contractors and agents shall not be grounds for
reduction of rent or fee if the same shall not unreasonably interfere with Concessionaire's use of
the Premises.
7.2 Improvements by Concessionaire.
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7.2.1 Initial Improvements. Concessionaire shall make a minimum investment
in initial leasehold improvements for the Premises, including architectural and engineering fees,
construction costs, furniture, fixtures and equipment and other expenditures (the "Initial
Improvements"), in an amount not less than the Initial Improvement Amount; provided,
however, the Port may, in its sole discretion, agree to a lower amount in the event that
Concessionaire can nonetheless satisfy all of the requirements of the Agreement, specifically
including the Port Standards. Concessionaire shall complete the Initial Improvements and
commence operations not later than the Build-Out Deadline; provided, however, the Build-Out
Deadline may be extended to the extent of non-concurrent delays directly caused by the Port
and/or force majeure events beyond the control of Concessionaire as set forth in Section 23.3. In
the event that Concessionaire has not completed the Initial Improvements and commenced
operations prior to the Build-out Deadline, Concessionaire shall, in addition to (and not in lieu
of) any other rights or remedies the Port may have (whether under this Agreement or in law or in
equity), pay the Port liquidated damages in the amount of the Delay Damages until
Concessionaire has completed the Initial Improvements and commenced operations.
Concessionaire and the Port agree that the Port will incur damages as a result of the failure to
timely complete the Initial Improvements and commence operations, which damages are
impractical or impossible to determine, and that this amount is a reasonable forecast of the
damages to be suffered by the Port.
7.2.2 Midterm Refurbishment. On or before the Midterm Deadline,
Concessionaire shall completely upgrade and refurbish the Premises (the "Midterm
Refurbishment") in a manner acceptable to the Port in order to maintain an attractive and inviting
appearance to customers. In order to permit the timely completion of the Midterm
Refurbishment, not later than one hundred twenty (120) days before the Midterm Deadline,
Concessionaire shall submit to the Port Concessionaire's proposed plan of refurbishment,
specifically identifying those repairs and Alterations, including but not limited to painting and
replacement of furniture, trade fixtures and equipment, that it intends to undertake. The Midterm
Refurbishment shall be of quality equal to or better than the Initial Improvements, and all work
(including, but not limited to, any Alterations) shall be subject to the prior written approval of the
Port, which shall not be unreasonably withheld, conditioned or delayed. Concessionaire's
investment in the Midterm Refurbishment shall be not less than fifteen percent (15%) of the
Initial Improvement Amount.
7.2.3 Other Alterations. Concessionaire, after completion of the Initial
Improvements, may from time to time during the term make such non-structural changes,
alterations, additions, substitutions or improvements (collectively referred to as "Alterations") to
the Premises, as Concessionaire may reasonably consider necessary and desirable to adapt or
equip the Premises for Concessionaire's use and occupancy. Concessionaire shall, however,
make no Alterations (including as part of the Midterm Refurbishment) that will (a) cost in excess
of $15,000; or (b) involve structural work or changes; or (c) involve work or changes to the
electrical, plumbing, heating, ventilation and air conditioning systems of the Premises without
the Port's prior written consent, which shall not be unreasonably withheld or delayed.
7.3 Standards for Alterations and Improvements.
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7.3.1 Requirements. The Initial Improvements, Midterm Refurbishment, and all other
Alterations shall be done at Concessionaire's sole cost and expense and at such times and in such
manner as the Port may from time to time designate. Initial Improvements, Midterm
Refurbishment, and all Alterations shall: (i) be of high quality, (ii) conform to the design criteria
approved by the Port Representative, (iii) be of fireproof construction according to the standards
of the local rating organization, (iv) be constructed in good and workmanlike manner, (v) be in
full and complete accordance with all Legal Requirements and Port Standards, and (vi) be
performed in a manner that will not unreasonably interfere with or disturb the Port or other
tenants of the Port.
7.3.2 Permits. Before commencing the Initial Improvements, Midterm Refurbishment,
or any Alterations for which the Port's consent is required, Concessionaire shall prepare plans
and specifications and otherwise comply with the Port Standards. Except as otherwise
specifically provided in this Agreement, Concessionaire shall obtain all necessary permits,
including any discretionary permits. In the event the Port is required or has obtained any of the
necessary permits, Concessionaire will reimburse the Port for any permit fees and associated
costs in obtaining said permits.
7.3.3 Coordination. Concessionaire understands that the Airport is undergoing
extensive remodeling. At all times during construction and installation of the Initial
Improvements, the Midterm Refurbishment, any Alterations and any furniture, trade fixtures
and/or equipment by Concessionaire, Concessionaire, its agents, employees and independent
contractors shall cooperate with and coordinate activities and work with the Port construction
managers and other concessionaires at or near the Premises.
7.3.4 Reports. Within ninety (90) calendar days of the completion of the Initial
Improvements, Midterm Refurbishment, and all Alterations for which the Port's consent is
required, Concessionaire shall provide the Port with: (a) a certified statement (subject to
verification, audit and approval by the Port) specifying the total construction cost (including
architectural, engineering and permitting costs) in such detail as reasonably necessary to
ascertain the costs of all leasehold improvements, furniture, fixtures and equipment constructed
or installed by Concessionaire in the Premises; (b) a certification that the improvements have
been constructed in accordance with the approved drawings and specifications and in strict
compliance with all Legal Requirements and the Port Standards; (c) a certified proof in writing
demonstrating that no liens exist on any or all of the construction; and (d) a reproducible final
copy of the plans as-built for all improvements along with computer discs as electronic files in a
format compatible with the Port's CAD Standards Manual, to enable the Port to upgrade its
existing files to reflect the as-constructed changes made by Concessionaire. The failure to timely
provide the reports, statements and certifications required by this Section shall be grounds for the
imposition of liquidated damages as provided in Exhibit E.
7.3.5 The failure to complete the Initial Improvements, Midterm Refurbishment, and
any Alterations shall subject Concessionaire to such fines and penalties identified in the Port
Standards.
7.4 Ownership of Alterations and Improvements. Other than those leasehold
improvements which are installed and become such a part of the Premises that they cannot be
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removed without substantial injury to the Premises, which improvements shall immediately
become the property of the Port following installation, Concessionaire shall retain ownership of
all furniture, trade fixtures and equipment from time to time installed in the Premises by
Concessionaire at its expense (the "Removable Fixtures"). Concessionaire may remove any of
the Removable Fixtures at any time during the term and shall remove all thereof prior to the
expiration of the term. Any Removable Fixtures or other property of Concessionaire not removed
at the expiration of the term shall, at the election of the Port, become the property of the Port
without payment to Concessionaire, or be deemed abandoned and removed by the Port, at
Concessionaire's expense. Upon any removal of such property, Concessionaire shall promptly
repair any and all damage to the Premises caused thereby and reimburse the Port for its costs and
expenses in removing any such property not removed by Concessionaire and repairing any such
damage not repaired by Concessionaire; this covenant shall survive the termination of this
Agreement.
7.5 Signs.
7.5.1 No signs, promotions or other advertising matter, symbols, canopies or awnings
(collectively "Signs") shall be attached to or painted on within, or outside the Premises,
including the walls, windows and doors thereof, without the prior written approval of the Port.
Any permitted Sign shall be professionally prepared. The Port may, without notice and without
any liability therefore, enter the Premises and remove any items installed or maintained by
Concessionaire in violation of the provisions of this Section 7.5. At the termination or sooner
expiration of this Agreement, Concessionaire shall remove all such Signs attached to or painted
by Concessionaire at its own expense, and Concessionaire shall repair any damage or injury to
the Premises and correct any unsightly condition caused by the maintenance and removal of said
Signs. Specific requirements with regard to signage are contained in Exhibit D.
7.5.2 If Concessionaire fails to comply with the requirements of this Section 7.5, the
Port shall have the right to require Concessionaire to restore the Premises to the condition
existing immediately prior to the unauthorized installation or modification of the Sign. In the
event that Concessionaire fails to restore the Premises within three (3) days following notice by
the Port, Concessionaire shall, in addition to (and not in lieu of) any other rights or remedies the
Port may have (whether under this Agreement or in law or in equity), pay the Port liquidated
damages in the amount identified on Exhibit E until Concessionaire has restored the Premises.
Concessionaire and the Port agree that the Port will incur damages as a result of the failure to
restore the Premises, which damages are impractical or impossible to determine, and that this
amount is a reasonable forecast of the damages to be suffered by the Port.
SECTION 8: MAINTENANCE AND REPAIR
8.1 Maintenance and Repair by Port.
8.1.1 The Port shall keep and maintain the foundations, roof, common areas and
common utilities up to the point of Concessionaire's connection, and structural portions of the
exterior walls of the Premises (excepting any walls which are installed by or on behalf of
Concessionaire) in good order, condition and repair. The Port shall perform this work at its sole
cost and expense, except to the extent that any such repairs may be required as a result of
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damage caused by negligence of Concessionaire or its agents, employees, invitees or licensees,
in which event the work shall be at the cost or expense of Concessionaire. The Port shall perform
such repair or maintenance work called to its attention by Concessionaire within a reasonable
period of time after receipt of such notice by Concessionaire. There shall be no abatement or
reduction of Rent, and the Port shall not be responsible for any loss or damages to
Concessionaire's business, arising by reason of the Port making any repairs, alterations or
improvements.
8.1.2 Absent an election as provided in Section 8.2.1, the Port shall maintain all
utility services (including, but not limited to, electrical, water, gas, sewer, HVAC, etc.) installed
by Concessionaire outside the Premises, and may charge Concessionaire for the cost of
maintaining such services.
8.1.3 The Port shall, at Concessionaire's cost, provide pest control services to
the Premises as part of the Port's Unified Pest Management Program.
8.2 Maintenance and Repair by Concessionaire.
8.2.1 Subject only to the specific obligations of the Port set forth in Section 8.1
and the attached Exhibit D Operations Standards, Concessionaire shall, at is sole cost and
expense, keep the Premises, and every part thereof and any fixtures, facilities or equipment
contained therein, in good order, condition and repair at all times. Concessionaire shall likewise
comply with any preventative maintenance practices established by the Port. Concessionaire
shall make all repairs and replacements (ordinary as well as extraordinary, foreseen and
unforeseen) which may be necessary or required so that at all times the Premises are in good
order, condition and repair. Without limiting the generality of the foregoing, Concessionaire
shall keep the heating, air conditioning, electrical, plumbing and sewer systems, floors, doors,
security grilles, interior walls, ceilings, window frames, glass and all portions of the storefront
area in a good state of repair. Concessionaire shall perform all maintenance, repairs, or
replacements using quality materials equal to the original, and, if materially changed from the
original, shall be subject to the prior written approval of the Port. The Port may require
Concessionaire to maintain, at Concessionaire's expense, all utility services installed by
Concessionaire outside the Premises.
8.2.2 Concessionaire shall also keep the Premises neat, clean and in sanitary
condition and follow best practices for hygiene to keep the Premises free from infestation of
pests and conditions which might result in harborage for, or infestation of, pests. Concessionaire
shall reimburse the Port for the pest control services provided by the Port pursuant to Section
8.1.3 at the then-current rate set forth in Seattle-Tacoma International Airport Tariff No. 1, as
the same may be revised or replaced from time-to-time. In the event that Concessionaire
otherwise contracts for the provision of pest control services, any such services shall be
supplemental to those provided by the Port under Section 8.1.3, and Concessionaire and its pest
control contractor shall specifically coordinate its services with the Port's selected Unified Pest
Management Program contractor.
8.2.3 Concessionaire shall perform all maintenance, repairs, or replacements
using quality materials equal to the original, and, if materially changed from the original, shall be
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subject to the prior written approval of the Port. In the event fixtures and/or equipment are
installed in, affixed to, or served by, roof vents or other similar air openings serving the
Premises, Concessionaire shall keep such vents and openings free from the accumulation of
grease, dirt, and other foreign matter, and shall furnish and service any and all filters or similar
equipment considered necessary by the Port, monthly or as often as necessary.
8.2.4 The failure to perform the maintenance and repair required by this Section
shall be grounds for the imposition of liquidated damages as provided in Exhibit D.
8.3 Annual Review. On or about the commencement of each Agreement Year, the
Port and Concessionaire shall tour the Premises and jointly agree upon what, if any, routine
refurbishment is required to maintain the Premises in a First Class Manner, as required by
Section 6.3, and Concessionaire shall, except to the extent any such work is the responsibility of
the Port under Section 8.1, promptly undertake any necessary repair, maintenance, or Alterations
at Concessionaire's expense. If the Port and Concessionaire cannot jointly agree upon the type
and extent of refurbishment necessary, the Port may, as set forth in Section 6.3, determine the
refurbishment required. For purposes of this Section, "refurbishment" shall generally be limited
to the routine repainting or redecoration of concession space within the Premises, including the
replacement or repair of worn carpet, tile, furnishings, fixtures, finishes, or equipment. Nothing
in the requirement for an annual review, however, shall relieve Concessionaire from the
obligation to maintain Premises in a First Class Manner on an ongoing basis as required by
Section 6.3, and Concessionaire shall specifically perform maintenance and refurbishment as
needed to continuously comply with that standard.
SECTION 9: UTILITIES
9.1 Utilities. Concessionaire shall be liable for and shall pay throughout the term of
this Agreement, all charges for all utility services furnished to the Premises, including, but not
limited to, light, heat, electricity, gas, water, cable television, grease interceptor, sewerage, fire
protection, recycling, garbage disposal and janitorial services. For any utility services furnished
by the Port, Concessionaire shall pay the Port for such services at the then-current rate set forth
in Seattle-Tacoma International Airport Tariff No. 1, as the same may be revised or replaced
from time-to-time.
Connections and Meters. Without limiting the generality of the language set forth in
Section 9.1, the following additional requirements related to utility services for the Premises
shall apply unless otherwise expressly agreed by the Port in writing:
9.1.1 HVAC. Concessionaire shall at its cost furnish, install and maintain
any ductwork and other connections within or leading into the Premises, and shall connect and
complete the heating, ventilating and air conditioning (HVAC) from the Airport's central system.
Thereafter, the Port shall, without charge, furnish normal and reasonable quantities of central air
from the central HVAC system to the Premises and all necessary power and electricity for such
central air circulation. Subject to conditions beyond its control, the Port shall maintain under
normal conditions a temperature adequate for comfortable occupancy according to the season;
provided, that Concessionaire properly maintains the ductwork and other connections within or
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leading into the Premises and complies with the recommendations of the Port regarding
reasonable occupancy and use of the Premises.
9.1.2 Electricity and Lighting. Concessionaire shall at its cost furnish, install
and maintain an electric meter for the Premises at a location and of a type specified by the Port.
Concessionaire shall also at its cost furnish, install and maintain all lighting fixtures and
wiring for general illumination of the Premises. Levels of illumination and wattage requirements
shall be subject to the approval of the Port.
9.1.3 Water, Natural Gas, and Sewerage. To the extent water or natural gas is
required by Concessionaire for its operations, Concessionaire shall at its cost furnish, install
and maintain a water and natural gas meter for the Premises at a location and of a type specified
by the Port.
9.1.4 Cabling and Communications. Concessionaire shall use the Port's cabling
and communications system for its operations at the Airport when such cabling and
communications system has been installed by the Port, and Concessionaire shall pay a user fee as
will be determined by the Port. In the event Concessionaire is allowed to install communication
equipment, any such installation shall be subject to the Port regulation.
9.1.5 Garbage and Recycling. Concessionaire shall use the garbage and
recycling areas provided by the Port. Concessionaire is required to participate in all garbage and
recycling programs. This includes, but is not limited to, composting, cardboard/mixed and glass
recycling, bulk grease and any other programs that may be instituted by Port.
9.2 Common Area Maintenance. The Port shall have the right to institute and charge a
monthly maintenance fee to offset the costs of maintenance and repair of common areas
(whether or not public) from which Concessionaire and other concession tenants benefit. The
specific amount will be established based on the specific concession type reasonably determined
by the Port (e.g. retail, service or food & beverage). However, the Port shall have no right to
charge Concessionaire, and Concessionaire shall have no obligation to pay, such amount until
such time as not less than fifty percent (50%) of other concessions tenants at the Airport, both in
both number and total Gross Sales for the particular concession type, are subject to payment of
such amount.
9.3 Utility Interruptions.
9.3.1 The Port shall have the right to shut down electrical energy to the
Premises (or portions thereof) when necessitated by safety, repairs, alterations, connections,
upgrades, relocations, reconnections, or for any other reason, with respect to the Airport's
electrical system (singularly or collectively, "Electrical Work"), regardless of whether the need
for such Electrical Work arises in respect of the Premises or elsewhere in the Airport. Whenever
possible, the Port shall give Concessionaire no less than two (2) days prior notice for such
electricity shutdown. The Port shall use all reasonable efforts to not shut down Concessionaire's
electrical energy for such Electrical Work during business hours unless such Electrical Work
shall be: (a) required because of an emergency; or (b) required by the electricity company
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servicing the Airport or by any governmental or quasi-government law, rule, code, directive, or
order.
9.3.2 Concessionaire further acknowledges that interruptions in utility services
(including, without limitation, electrical service) are not uncommon in facilities such as the
Airport, and Concessionaire acknowledges that it will, at its cost and expense, protect any
sensitive electronic equipment which may be used in the Premises from utility service
interruptions through the use of backup power supplies, surge protectors, and other appropriate
safety systems as Concessionaire deems reasonable and necessary. Concessionaire acknowledges
that it has taken or will take all precautions it deems necessary to protect its equipment in, on and
around the Airport, including the acquisition of insurance.
9.3.3 The Port shall not be liable to Concessionaire for any damages or losses
(including, without limitation, indirect or consequential damages or attorneys' fees) sustained to
any equipment installed by Concessionaire or otherwise caused by any utility service shut
downs, interruptions or failures, nor shall the same constitute an eviction or disturbance of
Concessionaire's use or possession of the Premises or a breach of the Port's obligations
hereunder. However, if any utility interruption is within the control of the Port, the Port shall use
reasonable efforts to restore utility service to Concessionaire promptly. If the Port fails to use
such reasonable efforts and such interruption or failure continues for more than two (2) days,
then as Concessionaire's sole and exclusive remedy, the Minimum Monthly Guarantee shall
equitably abate until utility service is resumed.
9.3.4 Energy Conservation. The Port shall have the right to institute such
reasonable policies, programs and measures as may be necessary or desirable, in the Port's
discretion, for the conservation and/or preservation of energy or energy related services, or as
may be required to comply with any applicable codes, rules and regulations, whether mandatory
or voluntary.
SECTION 10: TAXES
10.1 Payment of Taxes. Concessionaire shall be liable for, and shall pay throughout the
term of this Agreement, all license fees and all taxes payable for, or on account of, the activities
conducted on the Premises and all taxes on the property of Concessionaire on the Premises and
any taxes on the Premises and/or on the leasehold interest created by this Agreement and/or any
taxes levied in lieu of a tax on said leasehold interest and/or any taxes levied on, or measured by,
the rentals payable hereunder, whether imposed on Concessionaire or on the Port. With respect
to any such taxes payable by the Port which are on or measured by the Rent payments hereunder,
Concessionaire shall pay to the Port with each Rent payment an amount equal to the tax on, or
measured by, that particular payment. All other tax amounts for which the Port is or will be
entitled to reimbursement from Concessionaire shall be payable by Concessionaire to the Port at
least fifteen (15) days prior to the due dates of the respective tax amounts involved; provided,
that Concessionaire shall be entitled to a minimum of ten (10) days' written notice of the
amounts payable by it.
10.2 Personal Property Taxes. Concessionaire shall pay or cause to be paid, prior to
delinquency, any and all taxes and assessments levied upon all trade fixtures, inventories and
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other real or personal property placed or installed in and upon the Premises by Concessionaire. If
any such taxes on Concessionaire's personal property or trade fixtures are levied against the Port
or the Port's property, and if the Port pays the taxes based upon such increased assessment,
Concessionaire shall, upon demand, repay to the Port the taxes so levied.
SECTION 11: COMMON AREAS
11.1 Control of Common Areas by Port. The Port shall at all times have the exclusive
control and management of the roof, walls, parking areas, access roads, driveways, sidewalks,
concourses, loading docks, washrooms, elevators, escalators, stairways, hallways and other
areas, improvements, facilities and/or special services provided by the Port for the general use, in
common, of Airport users and tenants ("common areas and facilities"). Without limiting the
Port's right of control and management, the Port specifically reserves the right to: (i) use the
same for any purpose, including the installation of signs for directional, advertising or other
purposes, (ii) change the area, level, location and arrangement of the common areas and
facilities; (iii) provided Concessionaire is not deprived of reasonable access to its Premises, close
all or any portion of the common areas and facilities; and (iv) do and perform such other acts in
and to the common areas and facilities as the Port shall determine to be advisable with a view to
the improvement of the convenience and use thereof by the Port and tenants of the Airport.
11.2 License. All common areas and facilities that Concessionaire is permitted to use
and occupy are used and occupied under a revocable license. If the amount of such areas or
facilities is revised or diminished, such revision or diminution shall not be deemed a constructive
or actual eviction, and the Port shall not be subject to any liability, nor shall Concessionaire be
entitled to any compensation or reduction or abatement of Rent.
11.3 Parking. While the Port may provide parking facilities to the Concessionaire's
employees in common with employees of other tenants and users of the Airport, it retains the
right to impose a reasonable charge for the privilege of utilizing these parking facilities. Nothing
herein contained shall be deemed to require the Port to provide parking facilities to
Concessionaire's employees.
SECTION 12: MARKETING PROGRAM
12.1 Program. The Port has established a marketing program ("Program") to promote
the concession offerings at the Airport. The Program generally includes print materials, print
advertising and signage, public relations, promotional events and/or entertainment, customer
service initiatives, website development, social media campaigns, sponsorships, television and
radio commercials and videos, etc., as appropriate. For each calendar year, the Port will, in
consultation with interested Airport concession tenants, develop and establish the Program's
annual marketing plan, including objectives, strategies, tactics and budget.
12.2 Funding. The Program will be funded by contributions from the Concessionaire
and other concessionaires at the Airport. Concessionaire will contribute an amount up to one half
of one percent (0.5%) of its monthly Gross Sales, but no more than Twenty Four Thousand
Dollars ($24,000.00) per concession facility, per Agreement Year, to fund the Program.
However, in the event the Port assesses a lower percentage rate for other Airport concession
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tenant's contributions to the Program, with the exception of short-term or kiosk location tenants,
Concessionaire's contribution rate will automatically be adjusted to the lowest percentage rate
assessed by the Port for any such Airport concession tenant. Concessionaire recognizes that
short-term or kiosk tenants may not be required to participate in the Program or pay a lesser rate
than Concessionaire. All contributions to the Program may only be expended for the promotion
of concessions and marketing-related staff activities at the Airport and for no other purposes.
Concessionaire shall make its contributions to the Program monthly in arrears concurrently with
its payment of the Percentage Fee under this Agreement.
SECTION 13: INSURANCE AND INDEMNITY
13.1 Indemnity.
13.1.1 The Port, its officers, employees and agents shall not be liable for any
injury (including death) to any persons or for damage to any property regardless of how such
injury or damage be caused, sustained or alleged to have been sustained by Concessionaire or by
others, including but not limited to all persons directly or indirectly employed by Concessionaire,
or any agents, contractors, subcontractors, licensees or invitees of Concessionaire, as a result of
any condition (including existing or future defects in the Premises) or occurrence (including
failure or interruption of utility service) whatsoever related in any way to Concessionaire's use or
occupancy of the Premises and of areas adjacent thereto.
13.1.2 To the maximum extent permitted by law, Concessionaire shall defend
(with counsel approved by the Port), fully indemnify, and hold entirely free and harmless the
Port and its Commissioners, officers, agents and employees from any and all claims, loss,
damages, expenses, attorneys' fees, consultants' fees, court costs and other costs arising, directly
or indirectly, from: (a) the condition of the Premises or out of the occupancy by the
Concessionaire or any subtenant, licensee, concessionaire, or contractor of Concessionaire; and
(b) any accident, injury, death or damage, however caused, to any person or property on or about
the Premises; and (c) any fault or negligence by Concessionaire or any subtenant, licensee,
concessionaire or contractor of the Concessionaire or of any officer, agent, or employee of any
such person; and (d) any failure on Concessionaire's part to comply with any of the covenants,
terms and conditions contained in this Agreement; provided, however, nothing herein shall
require Concessionaire to indemnify the Port from any accident, injury, death or damage arising
out of the sole negligence of the Port or its Commissioners, officers, agents and employees.
Concessionaire agrees that the foregoing indemnity specifically covers actions brought by its
own employees, and thus Concessionaire expressly waives its immunity under industrial
insurance, Title 51, as necessary to effectuate this indemnity. Such waiver shall not, however,
prevent Concessionaire from asserting such immunity against any other person or entity.
13.1.3 Notwithstanding anything to the contrary in Section 13.1.2, in the event of
the concurrent negligence of Concessionaire, its subtenants, licensees, concessionaires,
contractors, or any officer, agent, or employee of any such person on the one hand and the
negligence of the Port, its agents, employees or contractors on the other hand, which concurrent
negligence results in injury or damage to persons or property of any nature and howsoever
caused, and relates to the construction, alteration, repair, addition to, subtraction from,
improvement to or maintenance of the Premises such that RCW 4.24.115 is applicable,
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Concessionaire's obligation to indemnity the Port as set forth in this Section shall be limited to
the extent of Concessionaire's negligence and that of Concessionaire's subtenants, licensees,
concessionaires, contractors, and any officers, agents, and employees of any such person,
including Concessionaire's proportional share of costs, court costs, attorneys' fees, consultants'
fees and expenses incurred in connection with any claim, action or proceeding brought with
respect to such injury or damage.
13.1.4 CONCESSIONAIRE AND PORT AGREE AND ACKNOWLEDGE
THAT THIS PROVISION IS THE PRODUCT OF MUTUAL NEGOTIATION.
Concessionaire's obligations under this Section 13.1 shall survive the expiration or earlier
termination of this Agreement.
13.2 Insurance.
13.2.1 Required Policies. Concessionaire shall obtain and keep in force, at its
sole cost and expense the following types of insurance, in the amounts specified and in the form
hereinafter provided for:
13.2.1.1 General Liability Insurance. Concessionaire shall obtain
and keep in force a commercial general liability policy of insurance in a form, on terms and
conditions approved by the Port, in the minimum single limit of Two Million Dollars
($2,000,000.00) (or, in the event that Concessionaire undertakes any operations in the Aircraft
Operations Area (AOA), in the minimum single limit of Five Million Dollars ($5,000,000.00))
on a per location basis (or equivalent satisfactory to the Port) and hereafter in such increased
amounts or on such revised terms and conditions as the Port may from time to time specify. The
Port shall be named as an additional insured (using ISO Form 20 26 11 85 or equivalent).
13.2.1.2 Automobile Liability Insurance. To the extent that
Concessionaire operates motor vehicles on or about the Airport, Concessionaire shall obtain and
keep in force business automobile liability insurance in a form, on terms and conditions
approved by the Port, in the minimum single limit of Two Million Dollars ($2,000,000.00) (or, in
the event that Concessionaire undertakes any motor vehicle operations in the Aircraft Operations
Area (AOA), in the minimum single limit of Five Million Dollars ($5,000,000.00)) on a per
location basis (or equivalent satisfactory to the Port) and hereafter in such increased amounts or
on such revised terms and conditions as the Port may from time to time specify. The Port shall be
named as an additional insured (using ISO Form 20 26 11 85 or equivalent).
13.2.1.3 Property Insurance. Concessionaire shall obtain and keep
in force property insurance on a "special extended," "special causes of loss," or "all risk" form
specifically including earthquake and flood coverage, insuring loss or damage to all of
Concessionaire's Initial Improvements, Midterm Refurbishment, Alterations, and furniture,
fixtures and equipment at, on or about the Premises. Coverage shall be provided for 100% of the
full replacement cost of the property required to be covered (or the commercially reasonable and
available insurable value thereof if, by reason of the unique nature or age of the improvements
involved, such latter amount is less than full replacement cost), and in compliance with all laws,
regulations or ordinances affecting such property. The policy shall also contain an agreed
valuation provision in lieu of any coinsurance clause.
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13.2.1.4 Business Income and Extra Expense Insurance.
Concessionaire shall obtain and keep in force business income and extra expense insurance on
"special extended," "special causes of loss," or "all risk" form, specifically including earthquake
and flood coverage. Coverage shall be provided for 80% of Concessionaire's gross annual
income from the Premises less any non-continuing expenses. The policy shall also contain an
agreed valuation provision in lieu of any coinsurance clause.
13.2.1.5 Liquor Liability Insurance. To the extent that
Concessionaire sells an alcoholic beverages on or about the Premises (whether for consumption
on the Premises or elsewhere), Concessionaire shall obtain and keep in force liquor liability
insurance in a form, on terms and conditions approved by the Port, in the minimum of Two
Million Dollars ($2,000,000.00) on a per location basis (or equivalent satisfactory to the Port)
and hereafter in such increased amounts or on such revised terms and conditions as the Port may
from time to time specify. The Port shall be named as an additional insured (using ISO Form 20
26 11 85 or equivalent).
13.2.1.6 Other Insurance. Such other and further forms of insurance
required for the particular use of the Premises or as required by law; for example, worker's
compensation insurance or state fund insurance as required by any applicable federal or state
statute, product liability insurance.
The limits of insurance specified in this Section shall be subject to periodic adjustment to reflect
changes in insuring practices for similar properties in the same geographic area and changes in
insurance products.
13.2.2 Insurance Policies.
13.2.2.1 Insurance Companies. Insurance required hereunder shall
be in companies duly licensed to transact business in the State of Washington, and maintaining
during the policy term a General Policyholders Rating of 'A-' or better and a financial rating of
'IX' or better, as set forth in the most current issue of "Best's Insurance Guide."
13.2.2.2 Policies Primary. All insurance to be carried by
Concessionaire shall be primary to and not contributory with any similar insurance carried by the
Port.
13.2.2.3 Evidence of Insurance; Notice. The Port shall be furnished
with appropriate written evidence to establish that Concessionaire's insurance obligations as
herein required have been and continue to be met, and that the insurance policy or policies as
herein required are not subject to cancellation, non-renewal or material reduction in coverage
without at least forty-five (45) days advance written notice to the Port. The inclusion of the Port
as an additional insured shall not create any premium liability for the Port. Concessionaire shall
furnish a Certificate of Insurance using ACORD Form 25 S (7/97 Version) that shows evidence
the Port has been added as an Additional Insured and that specifies the endorsement, which has
been used to add the Port as an Additional Insured. The Certificate of Insurance shall show the
types of insurance and limits as specified above, including deductible and/or self-insurance
retention amounts. Any provision above notwithstanding, the Port reserves the right to reject any
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insurance policy as to company, form or substance. In the event that Concessionaire maintains a
blanket policy or program of insurance, the Port further reserves the right to accept, in its sole
discretion, any such policy or program of insurance providing coverage equivalent to the
requirements set forth in Section 13.2.1.
13.2.2.4 Cancellation. In the event of cancellation of any required
insurance throughout the duration of this Agreement, or any change not acceptable to the Port,
the Port reserves the right to provide additional insurance and charge the cost of any premiums
for such coverage to the Concessionaire.
13.2.2.5 Subtenants. The Port may require all subtenants, at
subtenant's sole cost and expense, to maintain additional insurance coverage, during the
subtenant's occupancy of the Premises, and Concessionaire shall cause to be delivered to the
Port, certificates which shall include but not be limited to the following: Worker's Compensation
as required by Washington State law, Comprehensive General Liability Insurance, Property
Insurance, Business Automobile Liability Insurance, Product and/or Liquor Liability Insurance.
13.2.2.6 No Limitation of Liability. The Port makes no
representation that limits or forms of insurance coverage specified or required under this
Agreement are adequate to cover Concessionaire's property, or Concessionaire's liabilities or
obligations under this Agreement. The limits of insurance required by this Agreement or as
carried by Concessionaire shall not limit the liability of Concessionaire nor relieve
Concessionaire of any obligation hereunder.
13.3 Waiver of Subrogation. Without affecting any other rights or remedies,
Concessionaire (for itself and on behalf of anyone claiming through or under it by way of
subrogation or otherwise) hereby waives any rights it may have against the Port, its officers,
agents and employees (whether in contract or in tort) on account of any loss or damage
occasioned to Concessionaire arising out of or incident to the perils required to be insured
against under this Agreement. Accordingly, Concessionaire shall cause each insurance policy
required by this Section 13.2 to further contain a waiver of subrogation clause. The effect of such
release and waiver of the right to recover damages shall not be limited by the amount of
insurance carried or required, or by any deductibles applicable thereto.
13.4 Increase in Port's Cost of Insurance. Concessionaire shall not use the Premises in
such a manner as to increase the existing rates of insurance applicable to the buildings or
structures of which the Premises are a part. If it nevertheless does so, then, at the option of the
Port, the full amount of any resulting increase in premiums paid by the Port with respect to the
buildings or structures of which the Premises are a part, and to the extent allocable to the term of
this Agreement, may be added to the amount of Rent and shall be paid by Concessionaire to the
Port upon the monthly rental day next thereafter occurring.
SECTION 14: DAMAGE OR DESTRUCTION
14.1 Duty to Repair. If the Premises or any buildings or structures of which the
Premises are a part are damaged by fire, the elements, earthquake, accident or other casualty
(collectively, "Casualty"), the Port shall, except to the extent either party has the right to
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terminate this Agreement under Section 14.2, use reasonable efforts to repair and restore the
Premises and/or the buildings or structures of which the Premises are a part to substantially their
former condition to the extent permitted by then-applicable Legal Requirements; provided,
however, the Port's obligation to repair and restore shall not extend to any Initial Improvements,
Midterm Refurbishment, Alterations or any of Concessionaire's personal property, specifically
including the Removable Fixtures.
14.2 Right to Terminate. The Port may elect to terminate this Agreement in the event
that the Port, in its sole judgment, concludes that the damage to the Premises or any buildings or
structures of which the Premises are a part cannot be repaired within thirty (30) days of the
Casualty (with the repair work and the preparations therefor to be done during regular working
hours on regular work days). In the event that the Port elects to terminate this Agreement, the
Port shall advise Concessionaire of that fact within thirty (30) days of the date of the Casualty
and notify Concessionaire of the date, not more than ninety (90) days after the Casualty, on
which the Agreement will terminate.
14.3 Abatement of Rent. Unless the casualty results from Concessionaire's negligence
or breach of the terms of this Agreement, the Minimum Monthly Guarantee (if any) shall be
abated in the same proportion that any portion of the Premises that is rendered untenantable or
inaccessible bears to the whole thereof from the period from the date of the Casualty through the
date of substantial completion of the repairs to the Premises (or to the date of termination of the
Agreement if either party shall elect to terminate the Agreement). Percentage Fees shall not
abate. The Port shall not otherwise be liable to Concessionaire for any loss in the use of the
whole or any part of the Premises (including loss of business) and/or any inconvenience or
annoyance occasioned by the Casualty, by any damage resulting from the Casualty, or by any
repair, reconstruction or restoration.
14.4 Concessionaire's Duty to Repair. Except to the extent either party elects to
terminate this Agreement under Section 14.2, Concessionaire shall, at is sole cost and expense,
be responsible for any and all repair or restoration of any Initial Improvements, Midterm
Refurbishment, Alterations or any Removable Fixtures, which repair or restoration may be
necessary as a result of any casualty.
14.5 Waiver. Except as specifically set forth in this Agreement, Concessionaire hereby
waives any right that Concessionaire may have, under any applicable existing or future law, to
terminate this Agreement in the event of any damage to, or destruction of, the Premises or any
buildings or structures of which the Premises are a part.
SECTION 15: ASSIGNMENT AND SUBLEASE
15.1 Prohibition. Concessionaire shall not, in whole or in part, assign, sublet, license or
permit occupancy by any party other than Concessionaire of all or any part of the Premises,
without the prior written consent of the Port in each instance. Concessionaire shall at the time the
Concessionaire requests the consent of the Port, deliver to the Port such information in writing as
the Port may reasonably require respecting the proposed assignee, subtenant or licensee
including, without limitation, the name, address, nature of business, ownership, financial
responsibility and standing of such proposed assignee, subtenant or licensee together with the
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proposed form of assignment, sublease or license. Within thirty (30) days after receipt of all
required information, the Port shall, in its sole discretion, elect one of the following: (i) to
consent to such proposed assignment, sublease or license, (ii) buyout Concessionaire's interest in
the Agreement as provided in Section 15.3, or (iii) disapprove the assignment, sublease or
license, setting forth the grounds for doing so.
15.1.1 As a condition for the Port's consent to any assignment, sublease or
license, the Port may require that the assignee, sublessee or licensee remit directly to the Port on
a monthly basis, all monies due to Concessionaire by said assignee, sublessee or licensee (except
with respect to excess rentals otherwise due Concessionaire pursuant to Section 15.2). In
addition, a condition to the Port's consent to any assignment, sublease or license of this
Agreement or the Premises shall be the delivery to the Port of a true copy of the fully executed
instrument of assignment, sublease or license and an agreement executed by the assignee,
sublessee or licensee in form and substance satisfactory to the Port and expressly enforceable by
the Port, whereby the assignee, sublessee or licensee assumes and agrees to be bound by the
terms and provisions of this Agreement and perform all the obligations of Concessionaire
hereunder.
15.1.2 In the event of any assignment, Concessionaire and each respective
assignor, waives notice of default by the tenant in possession in the payment and performance of
the Rent, covenants and conditions of this Agreement and consents that the Port may in each and
every instance deal with the tenant in possession, grant extensions of time, waive performance of
any of the terms, covenants and conditions of this Agreement and modify the same, and in
general deal with the tenant then in possession without notice to or consent of any assignor,
including Concessionaire; and any and all extensions of time, indulgences, dealings,
modifications or waivers shall be deemed to be made with the consent of Concessionaire and of
each respective assignor.
15.1.3 Concessionaire agrees that any sublease or license will contain a provision
in substance that if there be any termination whatsoever of this Agreement or the Port should buy
out Concessionaire's interest pursuant to Section 15.3, then the subtenant or licensee, at the
request of the Port, will attorn to the Port and the sublessee or licensee, if the Port so requests,
shall continue in effect with the Port, but the Port shall be bound to the subtenant or licensee in
such circumstances only by privity of estate. Nothing herein shall be deemed to require the Port
to accept such attornment.
15.1.4 No assignment, subletting or license by Concessionaire shall relieve
Concessionaire of any obligation under this Agreement, including Concessionaire's obligation to
pay Rent or any other sum hereunder. Any purported assignment, subletting or license contrary
to the provisions hereof without consent shall be void. The consent by the Port to any assignment
or subletting shall not constitute a waiver of the necessity for such consent to any subsequent
assignment or subletting.
15.1.5 Concessionaire shall reimburse the Port in the sum of Five Hundred
Dollars ($500.00) plus any reasonable professionals' fees and expenses incurred by the Port in
connection with any request by Concessionaire for consent to an assignment, subletting or
license.
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15.2 Excess Rental. If in connection with any assignment, sublease or license,
Concessionaire receives rent or other monetary consideration, either initially or over the term of
the assignment or sublease, in excess of the Rent called for hereunder, or in case of the sublease
of a portion of the Premises, in excess of such Rent fairly allocable to such portion, after
appropriate adjustments to account for any improvements or alterations made by Concessionaire
and to assure that all other payments called for hereunder and out-of-pocket expenditures,
operating costs or concessions incurred by Concessionaire in connection with such assignment,
sublease or license, are appropriately taken into account, Concessionaire shall pay to the Port
seventy-five percent (75%) of the excess of each such payment of rent or other consideration
received by Concessionaire after its receipt.
15.3 Buyout.
15.3.1 Within the time provided by Section 15.1, the Port shall notify
Concessionaire whether it is interested in negotiating a buy-out of Concessionaire's interest in
this Agreement. The Port shall have no right to buy-out Concessionaire's interest in this
Agreement in the event that a proposed assignment is directly as a result of a proposed merger,
acquisition or sale of substantially all of the assets of Concessionaire. If the Port is interested in a
buy-out of Concessionaire's interest, the Port shall have sixty (60) days from the date of its
notice to Concessionaire to enter into an agreement to buy out Concessionaire's leasehold
interest in this Agreement upon substantially the same terms and conditions as proposed between
Concessionaire and the third party. The purchase price to be paid by the Port under this buy-out
right shall be the proposed transaction purchase price as set forth in the letter of intent or
proposed agreement between Concessionaire and the third party.
15.3.2 If the Port and Concessionaire fail to enter into a written agreement for
such a purchase within the period of time provided by Section 15.3.1, then the Port shall be
deemed to have waived its buy-out right. Subject to the other provisions of this SECTION 15,
Concessionaire may then transfer its interest in this Agreement, but only upon the same terms
and conditions as reviewed by the Port.
15.3.3 If the proposed terms and conditions of any transfer by Concessionaire to
a third party are at any time materially altered from the proposed terms and conditions of such
sale that were presented to and reviewed by the Port, the Port's buy-out right shall be deemed
applicable to the altered transfer terms, and the Port shall have sixty (60) days after the date it
receives notice of the material alteration to consider and enter into a written agreement for the
purchase of Concessionaire's interest in this Agreement. It is further understood that, in the event
that the Port does not exercise this buy-out right, this provision shall nevertheless be applicable
to any further or future transfer, which is subject to this provision.
15.4 Scope. The prohibition against assigning or subletting contained in this SECTION
15 shall be construed to include a prohibition against any assignment or subletting by operation
of law. Furthermore, for purposes of this SECTION 15, any sale, transfer or other disposition in
the aggregate of fifty percent (50%) or more of the equity ownership in Concessionaire (i.e.
stock with respect to tenant corporation, partnership interests with respect to a tenant partnership,
etc.) shall be deemed an assignment. If this Agreement be assigned, or if the underlying
beneficial interest of Concessionaire is transferred, or if the Premises or any part thereof be
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sublet or occupied by anybody other than Concessionaire, the Port may collect Rent from the
assignee, subtenant or occupant and apply the net amount collected to the Rent herein reserved
and apportion any excess Rent so collected in accordance with the terms of Section 15.2, but no
such assignment, subletting, occupancy or collection shall be deemed a waiver of this covenant,
or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Concessionaire
from the further performance by Concessionaire of covenants on the part of Concessionaire
herein contained. No assignment or subletting shall affect the continuing primary liability of
Concessionaire (which, following assignment, shall be joint and several with the assignee), and
Concessionaire shall not be released from performing any of the terms, covenants and conditions
of this Agreement.
15.5 Concessionaire's Responsibility for Subtenants. In the event that Concessionaire
subleases any portion of the Premises, Concessionaire shall be responsible for managing all of its
subtenants and for ensuring that all its subtenants adhere to the terms of this Agreement.
Concessionaire is responsible for ensuring all of its subtenants adhere to proper cash-handling
techniques, including without limitation any point-of-sale system and cash-handling criteria
required by the Port hereunder. If a subtenant fails to open its unit or goes out of business,
Concessionaire is responsible to put up appropriate temporary storefront barriers, curtains,
display boxes or signage as directed by the Port. And if Concessionaire fails to comply with this
paragraph in the time period specified by the Port, Operator agrees to pay the Port liquidated
damages in the amount identified on Exhibit __ until such temporary installation is complete.
Concessionaire is responsible for terminating any sublease and/or license with subtenants,
locking out a subtenant (if legally permissible), instituting suit for rent or for use or occupancy or
proceedings for recovery of possession when (a) subtenant defaults; or (b) Concessionaire is
entitled to terminate the subtenant's sublease and/or license. All legal expenses incurred in
bringing such action are Concessionaire's sole responsibility. The Port agrees not to terminate
this Agreement under SECTION 16 if the event of default is a result of an action or omission of
a subtenant if and only if; (i) after notification to the Port, Concessionaire has taken or is taking
all legally permissible corrective action, including initiation of termination actions with respect
to its sublease/subcontract with the defaulting subtenant; and (ii) Concessionaire has made the
Port financially whole.
SECTION 16: DEFAULT
16.1 Defaults. The occurrence of any one or more of the following events constitutes a
default of this Agreement by Concessionaire with or without notice from the Port:
16.1.1 The vacating or abandonment of the Premises by Concessionaire.
16.1.2 The failure by Concessionaire to make any payment of Rent, or any other
payment required by this Agreement, when due.
16.1.3 The failure by Concessionaire to observe or perform any covenant,
condition, or agreement to be observed or performed by Concessionaire in this Agreement.
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16.1.4 The discovery by the Port that any required report, financial statement or
background statement provided to the Port by Concessionaire, any successor, grantee, or
assignee was materially false.
16.1.5 The filing by Concessionaire of a petition in bankruptcy, Concessionaire
being adjudged bankrupt or insolvent by any court, a receiver of the property of Concessionaire
being appointed in any proceeding brought by or against Concessionaire, Concessionaire making
an assignment for the benefit of creditors, or any proceeding being commenced to foreclose any
mortgage or other lien on Concessionaire's interest in the Premises or on any personal property
kept or maintained on the Premises by Concessionaire.
16.2 Remedies.
16.2.1 Whenever any default (other than a default under Section 16.1.5 above,
upon which termination of this Agreement shall, at the Port's option, be effective immediately
without further notice) continues un-remedied, in whole or in part, for: (i) ten (10) days after
written notice is provided by the Port to Concessionaire in the case of default for failure to pay
any Rent, or other required payment when due, or (ii) thirty (30) days after written notice is
provided by the Port to Concessionaire for any non-monetary default, this Agreement and all of
Concessionaire's rights under it will automatically terminate if the written notice of default so
provides. Upon termination, the Port may reenter the Premises using such force as may be
necessary and remove all persons and property from the Premises. The Port will be entitled to
recover from Concessionaire all unpaid Rent or other payments and damages incurred because of
Concessionaire's default including, but not limited to, the costs of re-letting, including tenant
improvements, necessary renovations or repairs, advertising, leasing commissions, and
attorney's fees and costs ("Termination Damages"), together with interest on all Termination
Damages at the Default Rates from the date such Termination Damages are incurred by the Port
until paid.
16.2.2 In addition to Termination Damages, and notwithstanding termination and
reentry, Concessionaire's liability for all Rent or other charges which, but for termination of the
Agreement, would have become due over the remainder of the Agreement term ("Future
Charges") will not be extinguished and Concessionaire agrees that the Port will be entitled, upon
termination for default, to collect as additional damages, a Rental Deficiency. "Rental
Deficiency" means, at the Port's election, either:
16.2.2.1 An amount equal to Future Charges, less the amount of
actual rent and concession fees, if any, which the Port receives during the remainder of the
Agreement term from others to whom the Premises may be rented, in which case such Rental
Deficiency will be computed and payable at the Port's option either:
16.2.2.1.1 In an accelerated lump-sum payment discounted to
present value; or
16.2.2.1.2 In monthly installments, in advance, on the first day of
each calendar month following termination of the Agreement and continuing until the date on
which the Agreement term would have expired but for such termination, and any suit or action
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brought to collect any portion of Rental Deficiency attributable to any particular month or
months, shall not in any manner prejudice the Port's right to collect any portion of Rental
Deficiency by a similar proceeding; or
16.2.2.2 An amount equal to Future Charges less the aggregate fair
rental value of the Premises over the remaining Agreement term, reduced to present worth. In
this case, the Rental Deficiency must be paid to the Port in one lump sum, on demand, and will
bear interest at the Default Rate until paid. For purposes of this subparagraph, "present worth" is
computed by applying a discount rate equal to one percentage point above the discount rate then
in effect at the Federal Reserve Bank in, or closest to, Seattle, Washington.
16.2.3 If this Agreement is terminated for default as provided in this Agreement,
the Port shall use reasonable efforts to re-let the Premises in whole or in part, alone or together
with other premises, for such term or terms (which may be greater or less than the period which
otherwise would have constituted the balance of the Agreement term), for such use or uses and,
otherwise on such terms and conditions as the Port, in its sole discretion, may determine, but the
Port will not be liable for, nor will Concessionaire's obligations under this Agreement be
diminished by reason for any failure by the Port to re-let the Premises or any failures by the Port
to collect any rent due upon such re-letting.
16.2.4 In addition to the rights granted by Section 7.4, if upon any reentry
permitted under this Agreement, there remains any personal property upon the Premises, the
Port, in its sole discretion, may remove and store the personal property for the account and at the
expense of Concessionaire. In the event the Port chooses to remove and store such property, it
shall take reasonable steps to notify Concessionaire of the Port's action. All risks associated with
removal and storage shall be on Concessionaire. Concessionaire shall reimburse the Port for all
expenses incurred in connection with removal and storage as a condition to regaining possession
of the personal property. The Port has the right to sell any property that has been stored for a
period of thirty (30) days or more, unless Concessionaire has tendered reimbursement to the Port
for all expenses incurred in removal and storage. The proceeds of sale will be applied first to the
costs of sale (including reasonable attorneys fees), second to the payment of storage charges, and
third to the payment of any other amounts which may then be due and owing from
Concessionaire to the Port. The balance of sale proceeds, if any, will then be paid to
Concessionaire.
16.3 Remedies Cumulative. All rights, options and remedies of the Port contained in
this Agreement shall be construed and held to be distinct, separate and cumulative, and no one
of them shall be exclusive of the other, and the Port shall have the right to pursue any one or all
of such remedies or any other remedy or relief which may be provided by law or in equity,
whether or not stated in this Agreement.
SECTION 17: RELOCATION OR TERMINATION OTHER THAN FOR DEFAULT
17.1 Relocation for Performance. In the event that Concessionaire either (a)
experiences a decrease in its sales per Enplaned Passenger of more than twenty percent (20%)
for the Premises, or any discrete portion thereof, for two (2) quarters in any twelve (12)-month
period, (b) loses the franchise rights under which the concession for the Premises, or any discrete
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portion thereof, was operated, or (c) fails to achieve Gross Sales sufficient to result in Percentage
Fees greater than the Minimum Annual Guarantee allocable to the Premises, or any discrete
portion thereof, for two (2) consecutive years, the Port may initiate a discussion with
Concessionaire about termination of this Agreement or the discrete portion of the Premises to
which such issue pertains. If the parties mutually agree, then a termination agreement shall be
executed under which the Port shall agree to remarket the space and the Concessionaire shall
agree to terminate the lease and vacate the space if and when a new tenant lease for the space is
executed and the new tenant design for the space is approved by the Port.
17.2 Airport Operational Needs. If at any time the Port determines that the Premises
(or any portion thereof) are necessary for the operation, safety, security or convenience of the
Airport, the Port may require Concessionaire to close, reduce or relocate (to a location
designated by the Port) the Premises, or any discrete portion thereof. In such event, the Port shall
provide Concessionaire at least sixty (60) days advance written notice. Concessionaire shall have
the right to accept or reject any proposed reduction or relocation of the Premises. If accepted, the
Port and Concessionaire shall negotiate, in good faith, for the payment of any costs associated
with such change. If Concessionaire rejects the reduction/relocation, or if the parties are unable
to reach agreement regarding the payment of costs associated with such change, the Port may, at
the Port's election, terminate this Agreement. If Concessionaire is not in default under any of the
provisions of this Agreement on the effective date of termination, the Port shall refund any Rent
prepaid by Concessionaire shall, to the extent allocable to any period subsequent to the effective
date of the termination, and reimburse Concessionaire the Net Book Value of Leasehold
Improvements. Concessionaire shall not be entitled to any compensation at termination for the
bargain value of the leasehold or any relocation expenses.
17.3 Condemnation. In the event that any federal, state or local government or any
agency or instrumentality thereof shall, by condemnation or otherwise, take title, possession or
the right to possession of the Premises or any part thereof, the Port may, at its option, terminate
this Agreement as of the date of such taking, and if Concessionaire is not in default under any of
the provisions of this Agreement on the effective date of termination, the Port shall refund any
Rent prepaid by Concessionaire, to the extent allocable to any period subsequent to the effective
date of the termination. In addition, Concessionaire shall be entitled to participate in any
compensation paid in the event of a taking, not to exceed the Net Book Value of Leasehold
Improvements. Concessionaire shall not be entitled to any compensation at termination for the
bargain value of the leasehold or any relocation expenses, except to the extent such relocation
expenses may be awarded to Concessionaire as part of any condemnation proceeding.
17.4 Court Decree. In the event that any court having jurisdiction in the matter shall
render a decision which has become final and which will prevent the performance by the Port of
any of its obligations under this Agreement, then either party hereto may terminate this
Agreement by written notice, and all rights and obligations hereunder (with the exception of any
undischarged rights and obligations that accrued prior to the effective date of termination) shall
thereupon terminate. If Concessionaire is not in default under any of the provisions of this
Agreement on the effective date of termination, the Port shall refund any Rent prepaid by
Concessionaire, to the extent allocable to any period subsequent to the effective date of the
termination, and reimburse Concessionaire the Net Book Value of Leasehold Improvements.
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Concessionaire shall not be entitled to any compensation at termination for the bargain value of
the leasehold or any relocation expenses.
17.5 Net Book Value of Leasehold Improvements. As used in this Agreement, "Net
Book Value of Leasehold Improvements" shall mean and refer to the dollar amount generated
through application of the following rules:
17.5.1 Eligible Improvements. "Eligible Improvements" shall mean and refer to
any permanently affixed alterations or improvements made to the Premises and to cabinetry and
display fixtures that were custom designed by Concessionaire for the Premises and have no
practical use or value outside the Premises: (a) for which the Port's consent has been sought and
obtained in writing, (b) for which any and all information required by Section 7.3.4 or any Port
consent has been timely submitted, and (c) consistently appearing on any NBV Report requested
by the Port pursuant to Section 4.7.4, and (d) then currently in use and in such condition as
would warrant its continued use. Eligible Improvements shall, however, specifically exclude the
Removable Fixtures (other than custom designed cabinetry and display fixtures set forth above)
and any inventory maintained by Concessionaire.
17.5.2 Cost of Eligible Improvements. The "Costs of Eligible Improvements"
shall mean and refer to the direct costs expended by Concessionaire for any Eligible
Improvements, specifically including the cost for the demolition of any existing improvements
necessary for the installation of such Eligible Improvements. The Costs of Eligible
Improvements shall not, however, include any of the Excluded Costs. The Costs of Eligible
Improvements" shall be determined from the information timely submitted by Concessionaire
pursuant to Section 7.3.4 or any Port consent, which information is subject to verification by the
Port.
17.5.3 Calculation of Net Book Value of Leasehold Improvements. For each
Eligible Improvement, the Cost of that Eligible Improvement shall be amortized over the useful
economic life of such Eligible Improvement, where such useful economic life shall in no
instance exceed the period of time commencing on the date such Eligible Improvement is
installed and terminating on the expiration of this Agreement, or any lesser period that may be
specified in any consent, sublease or other writing, on a straight-line basis with no salvage value.
The "Net Book Value of Leasehold Improvements" shall be the sum of the unamortized portion
(as of the effective date of the applicable termination) of the Cost of Eligible Improvements for
each Eligible Improvement directly affected by such deletion or termination. As used in this
Section, "useful economic life" shall specifically be determined with respect to the initial
investment in the Eligible Improvement, Concessionaire's repair and maintenance of the Eligible
Improvement, and Concessionaire's custom and usage for assets similar to the Eligible
Improvements, both at the Airport and elsewhere.
SECTION 18: ACCESS; EASEMENTS
18.1 Access to Premises. The Port may, at any time, enter upon the Premises or any
part thereof to ascertain the condition of the Premises or whether Concessionaire is observing
and performing the obligations assumed by it under this Agreement, all without hindrance or
molestation from the Concessionaire. The Port shall also have the right to enter upon the
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Premises for the purpose of making any performing any necessary maintenance and repair work,
for providing pest control services, for performing any work that may be necessary by reason of
Concessionaire's failure to make any such repairs or perform any such work, or for any other
reasonable purpose. The above-mentioned rights of entry shall be exercisable upon request made
on reasonable advance notice to Concessionaire (except that no notice shall be required in the
event of an emergency) or an authorized employee of Concessionaire at the Premises, which
notice may be given orally.
18.2 Easements. The Port hereby reserves such continuous access and utilities
easements within or upon the Premises, as may in the opinion of the Port from time to time be
desirable for the purpose of enabling it to exercise any right or reservation or to perform any
obligation contained in this Agreement or in connection with the Port's ownership or operation
of the Airport. If the Port exercises this reservation of easement in any manner which
substantially and negatively impacts Concessionaire, the Port agrees to negotiate an equitable
adjustment in the Rent, or to bear reasonable costs of any permanent modifications to the
Premises necessary to permit Concessionaire to continue to operate its business. In no event,
however, shall the Port be responsible for any reduced efficiency or loss of business occasioned
thereby.
SECTION 19: NONWAIVER; RIGHT TO PERFORM
19.1 Receipt of Monies Following Termination. No receipt of monies by the Port from
Concessionaire after the termination or cancellation of this Agreement in any lawful manner
shall (i) reinstate, continue or extend the term of this Agreement; (ii) affect any notice theretofore
given to Concessionaire; (iii) operate as a waiver of the rights of the Port to enforce the payment
of any Rent and fees then due or thereafter falling due; or (iv) operate as a waiver of the right of
the Port to recover possession of the Premises by proper suit, action, proceeding or remedy; it
being agreed that after the service of notice to terminate or cancel this Agreement, or after the
commencement of suit, action or summary proceedings, or any other remedy, or after a final
order or judgment for the possession of the Premises, the Port may demand, receive and collect
any monies due, or thereafter falling due, without in any manner affecting such notice,
proceeding, suit, action or judgment; and any and all such monies collected shall be deemed to
be payments on account of the use and occupation and/or Concessionaire's liability hereunder.
19.2 No Waiver of Breach. The failure of the Port to insist in any one or more
instances, upon a strict performance of any of the covenants of this Agreement, or to exercise
any option herein contained, shall not be construed as a waiver of or relinquishment for the
future of the performance of such covenant, or the right to exercise such option, but the same
shall continue and remain in full force and effect. The receipt by the Port of the Rent or fees,
with knowledge of the breach of any covenant hereof, shall not be deemed a waiver of such
breach, and no waiver by the Port of any provision hereof shall be deemed to have been made
unless expressed in writing and signed by the Port. The consent or approval of the Port to or of
any act by Concessionaire requiring the Port's consent or approval shall not be deemed to waive
or render unnecessary the Port's consent or approval to or of any subsequent similar acts by
Concessionaire.
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19.3 No Waiver of Rent. The receipt by the Port of any installment of Rent or of any
amount shall not be a waiver of any Rent or other amount then due.
19.4 Application of Payments. The Port shall have the right to apply any payments
made by Concessionaire to the satisfaction of any debt or obligation of Concessionaire to the
Port, in the Port's sole discretion and regardless of the instructions of Concessionaire as to
application of any such sum, whether such instructions be endorsed upon Concessionaire's check
or otherwise, unless otherwise agreed upon by both parties in writing. The acceptance by the Port
of a check or checks drawn by others than Concessionaire shall in no way affect
Concessionaire's liability hereunder nor shall it be deemed an approval of any assignment of this
Agreement or subletting by Concessionaire.
19.5 Port's Right to Perform. Upon Concessionaire's failure to perform any obligation
or make any payment required of Concessionaire hereunder, the Port shall have the right (but not
the obligation) to perform such obligation of Concessionaire on behalf of Concessionaire and/or
to make payment on behalf of Concessionaire to such parties. Concessionaire shall reimburse the
Port the reasonable cost of the Port's performing such obligation on Concessionaire's behalf,
including reimbursement of any amounts that may be expended by the Port, plus interest at the
Default Rate.
SECTION 20: SURRENDER AND HOLDING OVER
20.1 Surrender. At the expiration or sooner termination of this Agreement,
Concessionaire shall promptly surrender possession of the Premises to the Port broom-clean, in
their improved condition, wear and tear consistent with Section 8.2 excepted, remove all its
Removable Fixtures and other property, and shall deliver to the Port all keys that it may have to
any and all parts of the Premises. If the Premises are not surrendered as provided in this Section,
Concessionaire shall indemnify and hold the Port harmless against loss or liability resulting from
the delay by Concessionaire in so surrendering the Premises, including, without limitation, any
claims made by any succeeding occupant founded on such delay.
20.2 Removal of Wires. Within ten (10) days following the expiration or earlier
termination of this Agreement, the Port may elect by written notice to Concessionaire to either:
20.2.1 Retain, without necessity of payment, any or all wiring, cables, conduit,
risers and similar installations installed by Concessionaire ("Wiring"), whether in the Premises
or the larger building of which the Premises are a part. In the event that the Port elects to retain
the wiring, Concessionaire covenants that: (i) it is the sole owner of the assets transferred or
passing to the Port, (ii) it shall have right to surrender the assets transferred or passing to the
Port, (iii) the Wiring transferred or passing to the Port are free from all liens and encumbrances,
(iv) the Wiring transferred or passing to the Port is in good condition, working order, in safe
condition and comply with the requirements of this Agreement, and (v) that all wiring or cables
included within the Wiring transferred or passing to the Port is properly labeled at each end, in
each telecommunications/electrical closet and junction box, and otherwise as may be required by
Port regulations. OR
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20.2.2 Remove, or require Concessionaire to remove, all such Wiring and restore
the Premises and any larger property of which the Premises are a part to their condition existing
prior to the installation of the Wiring, all at Concessionaire's sole cost and expense.
This Section shall survive the expiration or earlier termination of this Agreement.
20.3 Holding Over.
20.3.1 If Concessionaire, with the written consent of the Port, holds over after the
expiration or sooner termination of this Agreement, the resulting tenancy will, unless otherwise
mutually agreed, be for an indefinite period of time on a month-to-month basis. Any holding
over by Concessionaire after the expiration or earlier termination of the Agreement with the
express, written consent of the Port shall not, in any manner, constitute a renewal or extension of
the Agreement or give Concessionaire any rights in or to the Premises.
20.3.2 In order to facilitate transition from Concessionaire's tenancy to that of
another Concessionaire at the expiration of the term of the Agreement, the Port may request, and
Concessionaire shall agree, to extend its tenancy as to some or all of the Premises on a month-tomonth
basis, not to exceed six (6) months. No later than nine (9) months before expiration of the
Agreement, the parties shall meet to discuss the process for transitioning occupancy of the
Premises in order to minimize disruption of service to the traveling public at the Airport.
20.3.3 During such month-to-month tenancy, Concessionaire shall, unless
otherwise mutually agreed, pay to the Port the same Rent that was in effect immediately prior to
the month-to-month tenancy. Concessionaire will continue to be bound by all of the additional
provisions of this Agreement insofar as they may be pertinent.
SECTION 21: ENVIRONMENTAL STANDARDS
21.1 Definitions. "Law or Regulation" as used herein shall mean any environmentally
related local, state or federal law, regulation, ordinance or order (including without limitation any
final order of any court of competent jurisdiction), now or hereafter in effect. "Hazardous
Substances" as used herein shall mean any substance or material defined or designated as a
hazardous waste, toxic substance, or other pollutant or contaminant, by any Law or Regulation.
21.2 Hazardous Substances. Concessionaire shall not allow the presence in or about the
Premises of any Hazardous Substance in any manner that could be a detriment to the Premises or
in violation of any Law or Regulation. Concessionaire shall not allow any Hazardous Substances
to migrate off the Premises, or the release of any Hazardous Substances into adjacent surface
waters, soils, underground waters or air. Concessionaire shall provide the Port with
Concessionaire's USEPA Waste Generator Number, and with copies of all Material Safety Data
Sheets (MSDS), Generator Annual Dangerous Waste Reports, environmentally related
regulatory permits or approvals (including revisions or renewals) and any correspondence
Concessionaire receives from, or provides to, any governmental unit or agency in connection
with Concessionaire's handling of Hazardous Substances or the presence, or possible presence,
of any Hazardous Substance on the Premises.
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21.3 Violation of Environmental Law. If Concessionaire, or the Premises, is in
violation of any Law or Regulation concerning the presence or use of Hazardous Substances or
the handling or storing of hazardous wastes, Concessionaire shall promptly take such action as is
necessary to mitigate and correct the violation. If Concessionaire does not act in a prudent and
prompt manner, the Port reserves the right, but not the obligation, to come onto the Premises, to
act in place of the Concessionaire (Concessionaire hereby appoints the Port as its agent for such
purposes) and to take such action as the Port deems necessary to ensure compliance or to
mitigate the violation. If the Port has a reasonable belief that Concessionaire is in violation of
any Law or Regulation, or that Concessionaire's actions or inactions present a threat of violation
or a threat of damage to the Premises, the Port reserves the right to enter onto the Premises and
take such corrective or mitigating action as the Port deems necessary. All costs and expenses
incurred by the Port in connection with any such actions shall become immediately due and
payable by Concessionaire upon presentation of an invoice therefore.
21.4 Inspection; Test Results. The Port shall have access to the Premises to conduct an
annual environmental inspection. In addition, Concessionaire shall permit the Port access to the
Premises at any time upon reasonable notice for the purpose of conducting environmental testing
at the Port's expense. Concessionaire shall not conduct or permit others to conduct
environmental testing on the Premises without first obtaining the Port's written consent.
Concessionaire shall promptly inform the Port of the existence of any environmental study,
evaluation, investigation or results of any environmental testing conducted on the Premises
whenever the same becomes known to Concessionaire, and Concessionaire shall provide copies
to the Port.
21.5 Removal of Hazardous Substances. Prior to vacation of the Premises, in addition
to all other requirements under this Agreement, Concessionaire shall remove any Hazardous
Substances placed on the Premises during the term of this Agreement or Concessionaire's
possession of the Premises, and shall demonstrate such removal to the Port's satisfaction. This
removal and demonstration shall be a condition precedent to the Port's payment of any Security
to Concessionaire upon termination or expiration of this Agreement.
21.6 Remedies Not Exclusive. No remedy provided herein shall be deemed exclusive.
In addition to any remedy provided above, the Port shall be entitled to full reimbursement from
Concessionaire whenever the Port incurs any costs resulting from Concessionaire's use or
management of Hazardous Substances on the Premises, including but not limited to, costs of
clean-up or other remedial activities, fines or penalties assessed directly against the Port, injuries
to third persons or other properties, and loss of revenues resulting from an inability to re-lease or
market the property due to its environmental condition (even if such loss of revenue occurs after
the expiration or earlier termination of this Agreement).
21.7 Environmental Indemnity. In addition to all other indemnities provided in this
Agreement, Concessionaire agrees to defend, indemnify and hold the Port free and harmless
from any and all claims, causes of action, regulatory demands, liabilities, fines, penalties, losses,
and expenses, including without limitation cleanup or other remedial costs (and including
attorneys' fees, costs and all other reasonable litigation expenses when incurred and whether
incurred in defense of actual litigation or in reasonable anticipation of litigation), arising from
the existence or discovery of any Hazardous Substance on the Premises, or the migration of any
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Hazardous Substance from the Premises to other properties or into the surrounding environment,
whether (1) made, commenced or incurred during the term of this Agreement, or (2) made,
commenced or incurred after the expiration or termination of this Agreement if arising out of
events occurring during the term of this Agreement.
SECTION 22: ACDBE REQUIREMENTS; NON-DISCRIMINATION
22.1 Airport Concessions Disadvantaged Business Enterprises.
22.1.1 It is the policy of the Port to support participation of ACDBEs, as defined in 49
CFR, Part 23, in concession activities at the Airport. To the extent Concessionaire is required to
operate the Premises as an ACDBE, Concessionaire agrees to submit to the Port, upon execution
of this Agreement, certification from the State of Washington that Concessionaire is a certified
ACDBE. Likewise, at all times during the term of this Agreement, Concessionaire shall be and
remain certified as a ACDBE in accordance with all applicable federal, state and local laws, rules
and regulations and shall timely file any and all applications, together with all supporting
documentation, necessary to maintain such certification. In the event that Concessionaire is
certified as an ACDBE and that certification is necessary to satisfy the requirements of this
Section, prior to any change in ownership, control or organization of Concessionaire,
Concessionaire shall (in addition to any requirements that may be imposed by Section 15.1)
similarly obtain ACDBE certification for Concessionaire as so changed and provide the Port
with proof of the same. If Concessionaire shall at any time cease to be so certified, the Port may,
at its sole option, terminate this lease on not less than ninety (90) days advance written notice to
Concessionaire. So long as Concessionaire in good faith sought certification, reasonably
complied with all requirements and deadlines necessary to maintain certification, and
nonetheless ceased to be so certified, the Port shall pay to Concessionaire the Net Book Value of
Leasehold Improvements in the event of such termination.
22.1.2 It is the policy of the Port to ensure that Airport Concessions Disadvantaged
Business Enterprises (ACDBEs) as defined in the Department of Transportation (DOT), 49 CFR
Part 23, and other small businesses have an equal opportunity to receive and participate in DOT-
assisted contracts. The Port encourages Concessionaire to make every reasonable effort to
maximize the contracting opportunities for ACDBEs and other small businesses in the
architectural, engineering and construction of the Premises, and in the procurement of goods and
services necessary for the operation of the concession at this Airport.
22.1.3 Concessionaire shall submit quarterly ACDBE participation reports to the Port
starting on the first day of the second month after the commencement of this Agreement.
Concessionaire shall submit such reports as may be required by the Port, for the purpose of
demonstrating compliance with 49 CFR Part 23.
22.2 Nondiscrimination. This Agreement is subject to the requirements of Title VI of
the Civil Rights Act of 1964 and the U.S. Department of Transportation's regulations, 49 CFR
Part 21. Management Firm agrees that it will not discriminate against any business owner
because of the owner's race, color, national origin, or sex in connection with the award or
performance of any concession agreement, management contract, subcontract, purchase or lease
agreement or other agreement covered by 49 CFR part 21. Furthermore, during the performance
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of this Agreement, Management Firm, for itself, its assignees, and successors in interest (for
purposes of this Section and its referenced exhibits only, "contractor") agrees to both (i) comply
with the covenants set forth on Exhibit D and (ii) comply with the non-discrimination statutes
and authorities set forth on Exhibit E.
SECTION 23: MISCELLANEOUS
23.1 Notice. All notices hereunder shall be in writing and shall be delivered personally,
by certified or registered mail, or by recognized overnight courier. For any notice directed to the
Port, the address shall be as follows:
Street Address: Mailing Address:
Port of Seattle Port of Seattle
Seattle-Tacoma International Airport Seattle-Tacoma International Airport
17801 International Blvd. P. O. Box 68727
Seattle, WA 98158 Seattle, WA 98168
Attn: Gen. Manager, Business Development Attn: Gen. Manager, Business Development
For payments only, the following mailing address should be used:
Port of Seattle
P. O. Box 24507
Seattle, WA 98124-0507
For any notice directed to Concessionaire, the address shall be as set forth on page 1 of this
Agreement. Either party may, however, designate a different address from time to time by
providing written notice thereof. Notices shall be deemed delivered (i) when personally
delivered; (ii) on the third day after mailing when sent by certified or registered mail and the
postmark affixed by the United States Postal Service shall be conclusive evidence of the date of
mailing; or (iii) on the first business day after deposit with a recognized overnight courier if
deposited in time to permit overnight delivery by such courier as determined by its posted cutoff
times for receipt of items for overnight delivery to the recipient. Payments may be made in the
manner provided for notice or may be delivered by regular mail (postage prepaid); provided,
payments made by regular mail (postage prepaid) shall be deemed delivered when actually
received by the Port.
23.2 Brokers. The Port and Concessionaire each warrant to the other that it has had no
discussions, negotiations and/or other dealings with any real estate broker or agent and that it
knows of no other real estate broker or agent who is or may be entitled to any commission or
finder's fee in connection with this Agreement. The Port and Concessionaire each agree to
indemnify and hold the other harmless from and against any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including without limitation, attorneys' fees
and costs) with respect to any leasing commission or equivalent compensation alleged to be
owing on account of such party's discussions, negotiations and/or dealings with any real estate
broker. No commission(s) or finders fee(s) shall be paid to Concessionaire, employee(s) of
Concessionaire or any unlicensed representative of Concessionaire.
- 42 -
23.3 Force Majeure. In the event that either party hereto shall be delayed or hindered in
or prevented from the performance of any act required hereunder by reason of strikes, lockouts,
inability to procure labor or materials, failure of power, restrictive governmental laws or
regulations, riots, insurrection, war, fire or other casualty or other reason of a similar or
dissimilar nature beyond the reasonable control of the party, delayed in performing work, or
doing acts required under the terms of this Agreement, then performance of such act shall be
excused for the period of the delay and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay. Delays or failures to perform
resulting from lack of funds shall not be deemed delays beyond the reasonable control of a
party; and after the Rent Commencement Date, the provisions of this Section shall not operate
to excuse Concessionaire from the prompt payment of Rent as required by this Agreement and
shall not extend the term of this Agreement.
23.4 Labor Disputes. Concessionaire agrees to use its best efforts to avoid disruption to
the Port, its tenants or members of the public, arising from labor disputes involving
Concessionaire, and in the event of a strike, picketing, demonstration or other labor difficulty
involving Concessionaire, to use its good offices, including the utilization of available legal
remedies, to minimize and/or eliminate any disruption to the Port, its tenants or members of the
public, arising from such strike, picketing, demonstration or other labor difficulty.
23.5 Consent. Whenever the Port's prior consent or approval is required by this
Agreement, the same shall not be unreasonably delayed but may, unless otherwise specifically
provided by this Agreement, be granted or denied in the Port's sole and absolute discretion.
23.6 Wireless Devices. Concessionaire shall not install any wireless devices and/or
transmitters on or about the Premises without the prior written consent of the Port and subject to
any and all conditions in such consent. Concessionaire specifically grants to the Port the power
to regulate and control the use of unlicensed frequency bands (including, but not limited to,
FCC Part 15 Subpart C, FCC Part 15 Subpart D (both asynchronous and Isochronous),
IEEE 802.11 and BlueTooth (ISM), and FCC UNII 1 and UNII 2 (IEEE 802.11a)) on or about
the Premises.
23.7 Mandatory Programs. Concessionaire understands that, from time to time, the
Port may institute certain programs that the Port believes, in its sole judgment, will be in the
best interests of the Airport and its tenants. Such programs shall include, but not be limited to,
trash recycling, commuter trip reduction, and Aircraft Operations Area (AOA) Clean Surface
Program for FOD (Foreign Object Debris). Concessionaire agrees to promptly comply with and
carry out any and all obligations issued by the Port under such programs, as the same may exist
from time to time.
23.8 Relationship to the Port and Concessionaire. Nothing contained herein shall be
deemed or construed as creating the relationship of principal and agent, partnership, or joint
venture partners, and no provision contained in this Agreement nor any acts of Concessionaire
and the Port shall be deemed to create any relationship other than that of landlord and tenant.
23.9 Time. Time is of the essence of each and every one of Concessionaire's
obligations, responsibilities and covenants under this Agreement.
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23.10 Recording. Concessionaire shall not record this Agreement or any memorandum
thereof without the Port's prior written consent.
23.11 Joint and Several Liability. Each and every party who signs this Agreement, other
than in a representative capacity, as Concessionaire, shall be jointly and severally liable
hereunder. It is understood and agreed that for convenience the word "Concessionaire" and
verbs and pronouns in the singular number and neuter gender are uniformly used throughout
this Agreement, regardless of the number, gender or fact of incorporation of the party who is, or
of the parties who are, the actual lessee or lessees under this agreement.
23.12 Captions. The captions in this Agreement are for convenience only and do not in
any way limit or amplify the provisions of this Agreement.
23.13 Governing Law; Venue. This Agreement shall be construed under the laws of
Washington. Exclusive jurisdiction and venue for any action relating hereto shall be in the state
or federal courts located in King County, Washington.
23.14 Attorneys' Fees. In the event that either party shall be required to bring any action
to enforce any of the provisions of this Agreement, or shall be required to defend any action
brought by the other party with respect to this Agreement, and in the further event that one party
shall substantially prevail in such action, the losing party shall, in addition to all other payments
required therein, pay all of the prevailing party's actual costs in connection with such action,
including such sums as the court or courts may adjudge reasonable as attorneys' fees in the trial
court and in any appellate courts. For purposes of calculating attorneys' fees, legal services
rendered on behalf of the Port by public attorneys shall be computed at hourly rates charged by
attorneys of comparable experience in private practice in Seattle, Washington.
23.15 Invalidity of Particular Provisions. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be invalid or
enforceable, the remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or unenforceable shall
not be affected thereby and shall continue in full force and effect.
23.16 Survival of Indemnities. All indemnities provided in this Agreement shall survive
the expiration or any earlier termination of this Agreement. In any litigation or proceeding
within the scope of any indemnity provided in this Agreement, Concessionaire shall, at the
Port's option, defend the Port at Concessionaire's expense by counsel satisfactory to the Port.
23.17 Entire Agreement; Amendments. This Agreement, together with any and all
exhibits attached hereto, shall constitute the whole agreement between the parties. There are no
terms, obligations, covenants or conditions other than those contained herein. No modification
or amendment of this agreement shall be valid or effective unless evidenced by an agreement in
writing signed by both parties.
23.18 Exhibits. The exhibits identified on page 1 of this Agreement are attached to this
Agreement after the signatures and by this reference incorporated herein.
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SECTION 24: SIGNATURES
IN WITNESS WHEREOF the parties hereto have signed this Agreement as of the day
and year first above written.
PORT OF SEATTLE
By: By:
Its: Its:
- 45 -
SECTION 25: ACKNOWLEDGMENTS
ACKNOWLEDGMENT FOR CONCESSIONAIRE
STATE OF ___________________ )
) ss.
COUNTY OF _________________ )
On this _______ day of ____________________ 20___ , before me, personally appeared
____________________________________ to me known to be the
____________________________________ of ____________________________________, a
____________________________________ corporation, the corporat ion that executed the foregoing
instrument, and acknowledged said instrument to be the free and voluntary act and deed of said
corporation, for the uses and purposes therein mentioned, and on oath stated that he/she was duly
authorized to execute the same.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the day and year first
above written.
Notary Public in and for the State of
Residing at:
My commission expires:
ACKNOWLEDGMENT FOR THE PORT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _______ day of ____________________ 20___, before me, personally appeared
____________________________________ to me known to be the
____________________________________ of the PORT OF SEATTLE, a Washington municipal
corporation, the corporation that executed the foregoing instrument, and acknowledged said instrument to
be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned,
and on oath stated that he/she was duly authorized to execute the same.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the day and year first
above written.
Notary Public in and for the State of
Residing at:
My commission expires:
- 46 -
EXHIBIT A
Legal Description
A-1
EXHIBIT B
Premises
B-1
EXHIBIT D
Additional Non-Discrimination Covenants
1. Compliance with Regulations: The contractor (hereinafter includes consultants) will
comply with the Acts and the Regulations relative to Non-discrimination in Federallyassisted
programs of the U.S. Department of Transportation, Federal Aviation
Administration, as they may be amended from time to time, which are herein
incorporated by reference and made a part of this contract.
2. Non-discrimination: The contractor, with regard to the work performed by it during the
contract, will not discriminate on the grounds of race, color, or national origin in the
selection and retention of subcontractors, including procurements of materials and leases
of equipment. The contractor will not participate directly or indirectly in the
discrimination prohibited by the Acts and the Regulations, including employment
practices when the contract covers any activity, project, or program set forth in Appendix
B of 49 CFR part 21.
3. Solicitations for Subcontracts, Including Procurements of Materials and
Equipment: In all solicitations, either by competitive bidding, or negotiation made by the
contractor for work to be performed under a subcontract, including procurements of
materials, or leases of equipment, each potential subcontractor or supplier will be notified
by the contractor of the contractor's obligations under this contract and the Acts and the
Regulations relative to Non-discrimination on the grounds of race, color, or national
origin.
4. Information and Reports: The contractor will provide all information and reports
required by the Acts, the Regulations, and directives issued pursuant thereto and will
permit access to its books, records, accounts, other sources of information, and its
facilities as may be determined by the Recipient or the Federal Aviation Administration
to be pertinent to ascertain compliance with such Acts, Regulations, and instructions.
Where any information required of a contractor is in the exclusive possession of another
who fails or refuses to furnish the information, the contractor will so certify to the
Recipient or the Federal Aviation Administration, as appropriate, and will set forth what
efforts it has made to obtain the information.
5. Sanctions for Noncompliance: In the event of a contractor's noncompliance with the
Nondiscrimination provisions of this contract, the Recipient will impose such contract
sanctions as it or the Federal Aviation Administration may determine to be appropriate,
including, but not limited to:
a. withholding payments to the contractor under the contract until the contractor
complies; and/or
b. cancelling, terminating, or suspending a contract, in whole or in part.
6. Incorporation of Provisions: The contractor will include the provisions of paragraphs
one through six in every subcontract, including procurements of materials and leases of
equipment, unless exempt by the Acts, the Regulations and directives issued pursuant
thereto. The contractor will take action with respect to any subcontract or procurement as
D-1
the Recipient or the Federal Aviation Administration may direct as a means of enforcing
such provisions including sanctions for noncompliance. Provided, that if the contractor
becomes involved in, or is threatened with litigation by a subcontractor, or supplier
because of such direction, the contractor may request the Recipient to enter into any
litigation to protect the interests of the Recipient. In addition, the contractor may request
the United States to enter into the litigation to protect the interests of the United States.
D-2
EXHIBIT E
Pertinent Non-Discrimination Authorities
Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq., 78 stat. 252), (prohibits
discrimination on the basis of race, color, national origin); and 49 CFR part 21.
The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42
U.S.C. 4601), (prohibits unfair treatment of persons displaced or whose property has been
acquired because of Federal or Federal-aid programs and projects);
Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794 et seq.), as amended,
(prohibits discrimination on the basis of disability); and 49 CFR part 27;
The Age Discrimination Act of 1975, as amended, (42 U.S.C. 6101 et seq.), (prohibits
discrimination on the basis of age);
Airport and Airway Improvement Act of 1982, (49 USC 471, Section 47123), as amended,
(prohibits discrimination based on race, creed, color, national origin, or sex);
The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and
applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975
and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms
"programs or activities" to include all of the programs or activities of the Federal-aid
recipients, sub-recipients and contractors, whether such programs or activities are Federally
funded or not);
Titles II and III of the Americans with Disabilities Act, which prohibit discrimination on the
basis of disability in the operation of public entities, public and private transportation
systems, places of public accommodation, and certain testing entities (42 U.S.C. 12131
12189) as implemented by Department of Transportation regulations at 49 CFR parts 37 and
38;
The Federal Aviation Administration's Non-discrimination statute (49 U.S.C. 47123)
(prohibits discrimination on the basis of race, color, national origin, and sex);
Executive Order 12898, Federal Actions to Address Environmental Justice in Minority
Populations and Low-Income Populations, which ensures discrimination against minority
populations by discouraging programs, policies, and activities with disproportionately high
and adverse human health or environmental effects on minority and low-income populations;
Executive Order 13166, Improving Access to Services for Persons with Limited English
Proficiency, and resulting agency guidance, national origin discrimination includes
discrimination because of limited English proficiency (LEP). To ensure compliance with
Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access
to your programs (70 Fed. Reg. at 74087 to 74100);
Title IX of the Education Amendments of 1972, as amended, which prohibits you from
discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).
D-1
EXHIBIT E
Operating Standards
E-1
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