6d Attach 1 Exhibit A
Item Number: __6d_Exhibit A__
Date of Meeting: September 11, 2012
SEATTLE-TACOMA INTERNATIONAL
AIRPORT
LEASE AND CONCESSION AGREEMENT
PORT OF SEATTLE
SEATTLE-TACOMA INTERNATIONAL AIRPORT
LEASE AND CONCESSION AGREEMENT
1. GENERAL DEFINITIONS ............................................................................................ 1
2. LEASED PREMISES ...................................................................................................... 5
3. TERM................................................................................................................................ 5
4. RENT/CONCESSION FEES .......................................................................................... 5
5. REMITTANCE ADDRESS ............................................................................................ 7
6. automatic transfer ............................................................................................................ 7
7. ACCOUNTING PROCEDURES ................................................................................... 8
8. AUDIT ............................................................................................................................... 9
9. LATE CHARGES ............................................................................................................ 9
10. MARKETING PROGRAM ............................................................................................ 9
11. LETTER OF CREDIT OR OTHER SECURITY ...................................................... 10
12. USE OF PREMISES ...................................................................................................... 11
13. FIRST CLASS CONCESSIONS .................................................................................. 12
14. STANDARD OF OPERATIONS ................................................................................. 12
15. QUALITY ASSURANCE AUDITS ............................................................................. 14
16. ACCEPTANCE OF PREMISES .................................................................................. 15
17. IMPROVEMENTS BY THE PORT ............................................................................ 15
18. IMPROVEMENTS BY LESSEE ................................................................................. 16
19. ALTERATIONS............................................................................................................. 17
20. UTILITIES ..................................................................................................................... 18
21. MAINTENANCE AND REPAIR ................................................................................. 20
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22. OUTSIDE AREAS AND ROOF ................................................................................... 21
23. DAMAGE OR DESTRUCTION .................................................................................. 21
24. INDEMNIFICATION LIABILITY INSURANCE.................................................. 22
25. ENVIRONMENTAL STANDARDS INDEMNITY ................................................ 24
26. WAIVER OF SUBROGATION ................................................................................... 26
27. INCREASE IN COST OF INSURANCE .................................................................... 26
28. TAXES ............................................................................................................................ 26
29. SIGNS.............................................................................................................................. 27
30. COMPLIANCE .............................................................................................................. 27
31. ASSIGNMENT OR SUBLEASE .................................................................................. 27
32. DEFAULTS AND REMEDIES .................................................................................... 30
33. PERFORMANCE/RELOCATION OF SPACE ......................................................... 32
34. TERMINATION OF AGREEMENT .......................................................................... 33
35. NET BOOK VALUE OF LEASEHOLD IMPROVEMENTS .................................. 34
36. NONWAIVER ................................................................................................................ 34
37. SURRENDER OF PREMISES ..................................................................................... 35
38. ADVANCES BY PORT FOR LESSEE ....................................................................... 35
39. LIENS AND ENCUMBRANCES ................................................................................. 35
40. NOTICES........................................................................................................................ 35
41. ATTORNEYS' FEES .................................................................................................... 36
42. AIRPORT CONCESSIONS DISADVANTAGED BUSINESS ENTERPRISE
(ACDBE) ...................................................................................................................................... 36
43. NONDISCRIMINATION ............................................................................................. 37
44. MANDATORY PROGRAMS ...................................................................................... 38
45. LABOR DISPUTES ....................................................................................................... 38
46. RIGHT OF ENTRY, EASEMENTS ............................................................................ 38
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47. HOLDING OVER .......................................................................................................... 39
48. INGRESS AND EGRESS.............................................................................................. 39
49. FORCE MAJEURE ....................................................................................................... 39
50. JOINT AND SEVERAL LIABILITY.......................................................................... 40
51. "LESSEE" INCLUDES LESSEES, ETC. ................................................................... 40
52. CAPTIONS ..................................................................................................................... 40
53. INVALIDITY OF PARTICULAR PROVISIONS ..................................................... 40
54. SURVIVAL OF INDEMNITIES .................................................................................. 40
55. LAWS OF WASHINGTON; VENUE.......................................................................... 40
56. BROKER'S FEE ............................................................................................................ 40
57. ENTIRE AGREEMENT - AMENDMENTS .............................................................. 41
July 7, 2010 iii
PORT OF SEATTLE
SEATTLE-TACOMA INTERNATIONAL AIRPORT
LEASE AND CONCESSION AGREEMENT
THIS LEASE AND CONCESSION AGREEMENT (hereinafter referred to as "Agreement")
made as of day of , 2010, by and between the PORT OF SEATTLE, a
Washington municipal corporation as Lessor, (hereinafter referred to as "the Port"), and , a
corporation, (hereinafter referred to as "Lessee").
W I T N E S S E T H
WHEREAS, the Port, as owner and operator of Seattle-Tacoma International Airport, desires to
provide a wide range of business services for the benefit of the air traveling public and others
using the Airport; and
WHEREAS, Lessee is interested in operating, has been selected to operate, a duty free
concession in the Airport based on its response to a request for proposals by the Port;
NOW, THEREFORE, in consideration of their mutual promises, the parties hereto do hereby
mutually agree as follows:
1. GENERAL DEFINITIONS
For purposes of this Agreement, the following terms have the following meanings:
1.1 "Agreement Year" shall mean each successive year during the term of this Agreement,
beginning on the first day of the first full month on or after the Rent Commencement
Date.
1.2 "Airport" shall mean the Seattle-Tacoma International Airport, a legal description of
which is attached as Exhibit A.
1.3 "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.
1.4 "Alterations" shall have the meaning set forth in Section 19.1 of this Agreement.
1.5 "Central Terminal Space" shall mean that portion of the Premises located in the Central
Terminal and reflected on Exhibit B-1.
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1.6 Concourse A Space" shall mean that portion of the Premises located on Concourse A and
reflected on Exhibit B-2.
1.7 "Days" shall mean, unless otherwise specified, mean and refer to calendar days, not
business days.
1.8 "Display Allowance" shall mean a display allowance, placement allowances, or other
promotional incentives received by Lessee (or Lessee's subtenant, licensee or
concessionaire) from vendors, suppliers or manufacturers related to, or arising out of,
Lessee's operation of a duty free concession at the Airport. Display Allowances
frequently entail (but are not necessarily limited to): (i) marketing or restricted
allowances related to marketing and/or promotional initiatives undertaken by Lessee
and/or a vendor, and (ii) sponsorships, either cash or in kind, by which vendors provide
specific consideration to gain exposure in connection with specific events, customers
and/or activities. Display Allowance, however, specifically excludes discounts, rebates
or commissions that are properly recognized under Generally Accepted Accounting
Principles as a credit against the cost of goods sold. If any Display Allowance is received
as a part of non-differentiated sales by Lessee (or Lessee's subtenant, licensee or
concessionaire) operating at multiple airports, the Port shall solely and reasonably
designate the amount to be allocated to the Airport.
1.9 "Enplaned Passenger" shall mean all those passengers boarding flights at the Airport
from scheduled or chartered flights, whether domestic or international, including nonrevenue
passengers (but excluding airline crew for the flight), and including those
passengers connecting from arriving flights of same or another airlines.
1.10 "Gross Sales" shall mean the total gross dollar amount derived from the sale, lease,
license or delivery of any goods or other merchandise or the performance of any services
from, in, upon or arising out of the Lease Premises, whether by Lessee or any other
person on its behalf, or any subtenants, licensees or concessionaires of Lessee, whether at
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 tradeins
). No deduction shall be permitted for credit card discounts or thefts, or for
uncollected or uncollectible credit or charge accounts. Gross Sales shall, without limiting
the generality of the foregoing, also include:
1.10.1 Orders that originate at or are accepted in the Leased Premises, even if delivery or
performance there is made from or at any other place. All s ales made and orders
received in or 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.
1.10.2 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.
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1.10.3 Mail, catalog, computer, internet, telephone, telegraph or other similar order
received at, ordered from, or billed at or from the Premises.
1.10.4 Sales originating from whatever source, and which Lessee (or Lessee's
subtenants, licensees or concessionaires) in the normal and customary course of
Lessee's (or Lessee's subtenant's, licensee's or concessionaire's) operations
would credit or attribute to Lessee's (or Lessee's subtenant's, licensee's or
concessionaire's) business conducted in the Premises;
1.10.5 Display Allowances; and
1.10.6 All monies or other things of value received by Lessee (or Lessee's subtenant,
licensee or concessionaire) from Lessee's (or Lessee'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 the following when properly recorded and accounted for:
1.10.7 The exchange of merchandise between stores of Lessee (or Lessee's subtenant,
licensee's or concessionaire's) where such exchanges are made solely for the
convenient operation of Lessee's (or Lessee'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;
1.10.8 Returns to shippers or manufacturers with no mark-up;
1.10.9 Refunds allowed by Lessee to customers because of unacceptable or
unsatisfactory goods or services to the extent such refund was actually granted
and adjustment actually made;
1.10.10Any discounts actually granted; and
1.10.11The amount of any sales tax or other excise tax imposed upon the customer and
collected by Lessee as agent for the taxing body imposing the tax and billed to the
customer as a separate item.
1.11 "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.
1.12 "Minimum Annual Guarantee" shall have the meaning set forth in Section 4.1 of this
Agreement.
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1.13 "Net Book Value of Lessee's Leasehold Improvements" shall have the meaning set forth
in Section 35 of this Agreement.
1.14 "Occupancy Date" shall mean the date on which the Port turns over to Lessee a certain
portion of Premises (i.e. Central Terminal Space, Concourse A Space, and South Satellite
Space). There may be different Occupancy Dates for different portions of the Premises.
The Port shall confirm the Occupancy Date for each portion of the Premises in the
manner provided for notice in Section 40 of this Agreement.
1.15 "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.
1.16 "Port Standards" shall mean the Sea-Tac Rules and Regulations, the Regulations for
Airport Construction, the Tenant Design and Construction Process Manual (also known
as, and referred to herein, as the "Tenant Roadmap"), the CAD Standards Manual, the
Concession 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.
1.17 "Proposal" shall mean the proposal submitted by Lessee in response to a request for
proposals by the Port, which proposal is attached hereto as Exhibit C and incorporated
herein.
1.18 "Premises" shall mean that space identified on Exhibits B-1 through B-3 hereto, which
Premises, respectively, consist approximately of the number of square set forth on each
such Exhibit.
1.19 "Rent" shall mean and refer collectively to sums denominated as either Minimum Annual
Guarantee (as defined in Section 4.1), Percentage Fees (as defined in Section 4.2) or any
such other sums or charges otherwise payable by Lessee under the terms of this
Agreement. Failure by Lessee 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.
1.20 "Rent Commencement Date" shall mean the date on which Lessee first opens for
business from any portion of the Premises.
1.21 "South Satellite Space" shall mean that portion of the Premises located in the South
Satellite and reflected on Exhibit B-3.
1.22 "Specialty Carts" shall mean freestanding merchandising units, which the Port may
authorize to be installed in the Passenger Terminals.
1.23 "Transition Plan" shall mean the transition plan worked out and agreed between Lessee
and HG Retail, Inc., the Port's current duty free concessionaire, in order to ensure the
smooth transition of operations from the current duty free concessionaires to Lessee.The
Transition Plan shall specifically be subject to the Port's prior written approval.
July 7, 2010 4
2. LEASED PREMISES
Effective on the Occupancy Date, the Port hereby leases to Lessee and Lessee hereby leases from
the Port, the Premises.
2.1 Central Terminal Space. Effective on the Occupancy Date for the Central Terminal
Space, the Port hereby leases to Lessee and Lessee hereby leases from the Port, the
Central Terminal Space.
2.2 Concourse A Space. Effective on the Occupancy Date for the Concourse A Space, the
Port hereby leases to Lessee and Lessee hereby leases from the Port, the Concourse A
Space.
2.3 South Satellite Space. Effective on the Occupancy Date for the South Satellite Space, the
Port hereby leases to Lessee and Lessee hereby leases from the Port, the South Satellite
Space.
3. TERM
Unless earlier terminated pursuant to any provision of this Agreement, the term shall commence
on the earliest Occupancy Date for any portion of the Premises and continue until the last day of
the seventh Agreement Year.
4. RENT/CONCESSION FEES
Lessee shall pay to the Port, for the concession rights and privileges granted herein, the
following:
4.1 Minimum Annual Guarantee. Lessee shall pay the Port a minimum annual guarantee (the
"Minimum Annual Guarantee") as follows:
4.1.1 First Agreement Year. For the first Agreement Year, the Minimum Annual
Guarantee will be ($ .00).
4.1.2 Second Agreement Year. For the second Agreement Year, the Minimum Annual
Guarantee will be ($ .00).
4.1.3 Odd Numbered Agreement Years. For the third, fifth and seventh Agreement
Year, the Minimum Annual Guarantee shall be an amount equal to eighty-five
percent (85%) of the total amount (whether by Minimum Annual Guarantee or
Percentage Fees) paid by Lessee to the Port for the previous Agreement Year;
provided, however, the Minimum Annual Guarantee shall not (subject only to
relief in the event of exceptional circumstances set forth in Section 4.1.7) be less
than the Minimum Annual Guarantee amount for the second Agreement Year set
forth in Section 4.1.2.
4.1.4 Even Numbered Agreement Years. For the fourth and sixth Agreement Year, the
Minimum Annual Guarantee shall be equal to the amount for the prior, oddnumbered
Agreement Year.
July 7, 2010 5
4.1.5 Payment of MAG. The Minimum Annual Guarantee amount shall be divided into
equal monthly payments and shall be payable in advance, on or before the first
day of each and every month during the term hereof, without notice from the Port
and without setoff or deduction. If necessary, the Minimum Annual Guarantee
for the final, partial Agreement Year shall be prorated based on the actual number
of months occurring within the final, partial Agreement Year. For example, if the
Agreement Years run from January 1 to December 31, but the Agreement is set to
expire on June 30, 2020, the Minimum Annual Guarantee for the final, partial
Agreement Year running from January 1, 2020 through June 30, 2020 shall be
six-twelfths of MAG calculated as set forth in Section 4.1.4or 4.1.5, as otherwise
applicable.
4.1.6 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, then: (a) the Minimum Annual 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, and (b) the Minimum Annual Guarantee for the
Agreement Year in which the reduced monthly payment amount falls shall also be
reduced by a like dollar amount. For example, if the number of Enplaned
Passengers for the month of July 2015 declined by 25% over the number of
Enplaned Passengers for the month of July 2014, then the Port will: (a) reduce
the Minimum Annual Guarantee amount payable for the month of August 2015
by 25%, and (b) reduce the Minimum Annual Guarantee for the Agreement Year
in which August 2015 falls by a like dollar amount.
4.2 Percentage Fees. Commencing on the Rent Commencement Date, Lessee shall also pay
the Port a percentage fee, to the extent the Percentage Fee is higher than the monthly
payment of the Minimum Annual Guarantee paid to the Port pursuant to Section 4.1,
according to the following schedule:
Concession Category Percentage of Gross Sales
Gross Sales other than Display Allowances [insert percentage]
Display Allowances [insert percentage]
On or before the fifteenth (15th) day of each month, Lessee shall submit to the Port a
detailed statement showing the Gross Sales generated from the concession during the
preceding month and shall simultaneously pay to the Port the Percentage Fee due for that
preceding month less the monthly payment of Minimum Annual Guarantee already paid
by the Lessee for that month. The reports shall show such reasonable detail and
breakdown as may be required by the Port, including (but not limited to) breaking out
duty-free and duty-paid sales. To the extent technically feasible, the Port shall have the
right to require Lessee to submit such reports electronically.
4.3 Contract Rent. The Port and Lessee agree that the first seven percent (7%) of Lessee's
Gross Sales paid to the Port (whether paid as part of the Minimum Annual Guarantee or
as Percentage Fees) shall be the contract rent for the Premises for purposes of the
July 7, 2010 6
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.
5. REMITTANCE ADDRESS
Lessee shall pay all fees and charges and submit all reports required by this Agreement to the
following:
Port of Seattle
P.O. Box 34249
Seattle, WA 98124-1249
or to such other address as the Port may from time to time specify in writing to Lessee.
6. AUTOMATIC TRANSFER
6.1 Instead of requiring Lessee to pay Rent or other charges in a manner pursuant to Section
4, the Port may, at its sole option, upon not less than sixty (60) days prior notice to
Lessee, require Lessee 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 Lessee of whatsoever nature
required or contemplated by this Agreement shall be debited monthly or from time to
time, as provided in this Agreement, from Lessee's account in a bank or financial
institution designated by Lessee and credited to the Port's bank account as the Port shall
designate from time to time.
6.2 Lessee 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 Lessee's bank account or any charges imposed on the Port.
6.3 In the event that Lessee 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 6.1 must be received by the Port no later than thirty (30)
days prior to the date such change is to become effective.
6.4 Lessee agrees that it shall remain responsible to the Port for all payments of Rent and
other charges pursuant to the Agreement, even if Lessee'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.
6.5 Lessee's failure to properly designate a bank or financial institution or to promptly
provide appropriate information in accordance with this Section 6 shall constitute a
default of this Agreement.
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7. ACCOUNTING PROCEDURES
7.1 Lessee 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, or both, which may be necessary or
essential in carrying out the terms of this Agreement. Lessee 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
Lessee, at its option, may deliver such records into the custody of the Port.
7.2 In addition to any reports otherwise required, Lessee shall provide the Port with (i) within
fifteen (15) days after the close of each month of the Term, a report (the "Monthly
Report") of Gross Sales; (ii) within sixty (60) days after the close of each Agreement
Year, a report (the "Annual Report"), reflecting 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) (iii) within
sixty (60) days after the close of each Agreement Year, a statement of net book value (the
"NBV Report") of the Eligible Improvements (as defined in Section 35.1 calculated in
conformance with the rules set forth in Section 35; and (iv) 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 Annual Report shall be
accompanied by a signed certificate of an independent Certified Public Accountant
(CPA), Lessee'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 Lessee's books and records as he/she 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 Lessee's report is free from material misstatement.
7.3 Lessee shall, in addition to any other requirement set forth in the Lease, participate in a
daily sales program to be implemented by the Port. Under the program, Lessee shall
report, by a stated time each day, the amount of Gross Sales earned by Lessee that
calendar day, including such detail as reasonably requested by the Port (including, but not
limited to, such things as location and concession category). Lessee 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, Lessee shall
nonetheless remain responsible for full compliance with the program in the even it makes
such delegation.
July 7, 2010 8
8. AUDIT
8.1 A representative designated by the Port shall be allowed to inspect and audit Lessee's
books of accounts and records with reference to the determination of any matters relevant
to this Agreement at all reasonable times. The cost of such audit shall be borne by the
Port unless the results of such audit reveal a discrepancy of more than two percent (2%)
reported in accordance with Section 4 above for any twelve (12) month period. In the
event of such discrepancy, the full cost of the audit shall be borne by the Lessee, and
Lessee shall promptly pay all additional fees owing to the Port.
8.2 In the event that Lessee's books of accounts 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 Lessee shall pay in full, any travel and related expenses of Port
representative(s) to travel 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 months, and, in the event that Lessee's books and records are not
maintained locally, Lessee 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.
9. LATE CHARGES
Lessee hereby acknowledges that late payment by Lessee to the Port of the Rent, 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 other sum due from Lessee shall not
be received by the Port within ten (10) days after such amount shall be due, then interest shall
accrue on Rent, or any other sums due hereunder, at the rate of eighteen percent (18%) per
annum or the maximum rate provided by law, whichever is less, from the date originally due
until paid.
10. MARKETING PROGRAM
10.1 The Port may establish a marketing program ("Program") to promote the concessions at
the Airport. The Program may include advertising, media placements, special events,
promotional events, brochures, videos and catalogs, promotion and monitoring of
concession etc., as appropriate. During the first quarter of each calendar year, the Port
will develop and establish the Program's annual business plan, objectives, evaluation
methodology, and budget for the calendar year based in part on an analysis of the
effectiveness of each previous year's Program elements.
10.2 The Program will be funded by contributions from the Lessee and other concessionaires
at the Airport. Lessee 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; provided, however, in
the event the Port assesses a lower percentage rate for other Airport Lessees' contribution
to the Program, Lessee's contribution rate will be no higher than the lowest percentage
rate assessed by the Port..
July 7, 2010 9
10.3 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. Lessee
shall make its contributions to the Program monthly in arrears concurrently with its
payment of the Percentage Fee under this Agreement.
11. LETTER OF CREDIT OR OTHER SECURITY
11.1 Lessee shall, upon execution of this Agreement, obtain and deliver to the Port an
irrevocable stand-by letter of credit or other security in a form approved by the Port in an
amount equal to two thirds of the Minimum Annual Guarantee amount for the second
Agreement Year as set forth in Section 4.1.2 (without adjustment) (hereinafter referred to
as "Security"), to secure Lessee's full performance of this Agreement, including the
payment of Rent and other amounts now or hereafter payable to the Port hereunder;
provided, however, in the Lessee's pays any installment of Minimum Annual Guarantee
or Percentage Fees late in any twelve (12) month period, the Port shall have the right to
increase the amount of the Security to one hundred percent thirds (2/3) of the Minimum
Annual Guarantee amount for the third Agreement Year as set forth in Section 4.1.3
(without adjustment). The amount, form provisions and nature of the Security, and the
identity of the issuing bank or other obligor there under, 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. 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.
11.2 The Security is a part of the consideration for execution of this Agreement. If Lessee
shall have fully performed all terms and conditions of this Agreement, any cash deposit
security shall be paid to Lessee within thirty (30) 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.
11.3 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 Lessee. If the Security is in a form that
periodically requires renewal, Lessee must renew the Security not less than 45 days
before the Security is scheduled to expire. If the Port uses any part of the Security,
Lessee shall restore the Security to an amount acceptable to the Port 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 11 does not constitute a limitation on
or waiver of the Port's right to seek further remedy under law or equity.
11.4 It is further agreed that in the event the laws of the State of Washington applicable hereto
shall hereafter be amended, the provisions of this entire Section 11 shall be deemed
likewise automatically amended upon the effective date of such statutory amendments, to
the extent and in a manner necessary to comply therewith.
July 7, 2010 10
12. USE OF PREMISES
12.1 Lessee shall use the Premises for the operation of a duty free concession. Lessee shall
operate the concession substantially in accordance with its Proposal. The Port reserves
the right to approve a complete listing of goods and/or merchandise to be sold in the
Premises. Except according to any approved Transition Plan, Lessee shall not commence
sales from any portion of the Premises prior to the completion of the initial improvements
(as set forth in Section 18) for all portions of the Premises.
12.2 Lessee's rights and privileges in this Agreement as to duty free sales shall be exclusive
from and after the Rent Commencement Date. Lessee's rights and privileges in this
Agreement are otherwise 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 merchandise or service which
Lessee 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. This specifically
includes the award to other concessionaire(s) of the right to operate Specialty Carts in and
about the Passenger Terminals.
12.3 Lessee expressly covenants and agrees that it will not and shall not use the Premises for
any other purpose than herein provided without the written consent of the Port. Lessee
shall use the Premises for the conduct of said business in a first class manner
continuously during the entire term of this Agreement, with the exception of temporary
closures for such periods as may reasonably be necessary for repairs or redecorating or
for reasons beyond Lessee's control.
12.4 Lessee recognizes that the specific limited use prescribed herein is a material
consideration to the Port in order that the Airport will maintain an appropriate tenant mix
so as to efficiently serve the traveling public and to produce the maximum Gross Sales
possible for all tenants.
12.5 If the Premises are operated under a franchise, Lessee represents and warrants to the Port
that Lessee 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, Lessee agrees to provide the Port with a copy of the Franchise
Agreement and reasonable evidence that such agreement remains in full force and effect.
Lessee agrees that the termination of Lessee's right to use Lessee'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 Lessee's trade name, shall constitute a material
breach of Lessee's obligations under this Agreement. Lessee agrees that if such
Franchise Agreement is terminated, the Port shall have the right to terminate this
Agreement pursuant to Section 33 of this Agreement.
12.6 No amusement devices (including specifically, but without limitation, so-called pinball
machines and similar devices) shall be maintained on the Premises without permission
from the Port.
July 7, 2010 11
12.7 Lessee agrees that it will not disturb the Port or any other tenant of the Port by making or
permitting any disturbance or any unusual noise, vibration or other condition on or about
the Premises.
12.8 While the Port may provide parking facilities to the Lessee'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 Lessee's
employees.
13. FIRST CLASS CONCESSIONS
13.1 In addition to, and not in lieu of, any other standards that may be set forth in this
Agreement, Lessee shall maintain the Premises in a manner of operation such that the
standards for appearance, cleanliness, and customer service meet those of upscale malls
and similar non-airport retail facilities ("a First Class Manner"). 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."
13.2 Lessee agrees to upgrade and refurbish the Premises in a manner acceptable to the Port in
order to maintain an attractive and inviting appearance to customers. Unless otherwise
agreed by the Port, this upgrade and refurbishment shall be completed approximately in
the middle of the term provided by Section 3. Lessee shall submit to the Port a schedule
of refurbishment (in conformance with Article 19) before starting any work, which shall
include painting and repair attributable to ordinary wear and tear, and any replacement of
furniture, trade fixtures and equipment.
13.3 Lessee shall continuously review and analyze new trends or concepts in the retail service
industry and agrees to improve its operation by applying such new trends or concepts at
the Airport, subject to the Port's prior written approval.
14. STANDARD OF OPERATIONS
Lessee shall ensure that the Premises are installed and operated, at the minimum, under the
Preventative Maintenance Procedures and Concession Tenant Operations Manual and the
following general standards:
14.1 The highest degree and standards of quality of products and services must be provided to
the patrons of the Airport.
14.2 Concession operations must be conducted in a safe, clean, orderly and inviting condition
at all times.
14.3 Sufficient and current-season merchandise must be carried in the Premises at all times,
but only such quantities of merchandise as are reasonably required to facilitate sales from
the Premises shall be stored and/or stocked therein.
July 7, 2010 12
14.4 Use of such space as office, clerical or other non-selling purposes shall not be permitted
except as is reasonably required for Lessee's business therein (not including any other
business of Lessee in locations other than the Premises).
14.5 The Premises must be open to the public seven (7) days per week, for such hours as
directed by the Port Representative from time to time to adequately serve the traveling
public. The opening hours shall be conspicuously posted at the Premises in a manner
approved by the Port Representative.
14.6 All loading and unloading of goods, the delivery or shipping of merchandise, supplies,
and fixtures to and from the Premises shall be done only at such time, in the areas, and
through the entrances designated for such purposes by the Port Representative, pursuant
to a schedule developed by the Port from time to time.
14.7 Garbage, refuse and other debris shall be placed in such containers in non-broken, nonpunctured
, new 3-mil trash bags or such other garbage containers as may be required by
the Port Representative suitable for transportation to a designated bin or compactor in the
manner and at the time and places specified by the Port Representative. The Port will
provide the bin or compactor and Lessee will be charged a pro-rata share of the cost of
the service.
14.8 Trash or debris shall not be allowed to accumulate or be stored on any portion of the
Premises, nor deposited in Port's trash containers without the Port Representative's prior
consent.
14.9 Traveler's checks and at least three (3) major credit cards must be allowed for any
purchase over $5.00.
14.10 The concession shall be adequately equipped with cash registers, sales slips, invoicing
machines and other automatic accounting equipment or devices required to properly and
accurately record the Gross Sales on all sales, by type, services, and other business
transactions made.
14.11 Lessee shall train all its employees in the proper operation of its business, the compliance
with any applicable laws and regulations and the provisions of this Agreement, and the
provision of good service to customers. In the event that the Port initiates one or more
customer service programs for employees of tenants in the Retail Area, Lessee shall fully
participate (and cause its employees to participate) in such programs and shall pay
immediately to the Port its share of such costs upon invoice by the Port.
14.12 The concession shall be supervised at all times by an active, qualified, competent
manager or a qualified assistant manager, who shall have full authority to make day-today
business and operational decisions. The concession must be adequately staffed with
sufficient and well-trained sales personnel who shall be neat, clean and courteous at all
times. All employees must wear their nametag and Airport Identification badge at all
times while performing their duties if required in the area in which the employee is
working.
July 7, 2010 13
14.13 No loud, boisterous or otherwise improper actions or language shall be permitted within
the Premises. No radio or television or other similar device shall be installed without first
obtaining the written approval of the Port. Also, no antenna or aerial shall be erected on
the roof, interior walls or exterior walls of the Premises without first obtaining the written
approval of the Port.
14.14 Service must be provided promptly, efficiently, and on a fair, equal and not unjustly
discriminatory basis to all patrons of the Airport.
14.15 Lessee shall provide the Port a list of representatives and their telephone numbers, for
emergency purposes.
14.16 All written complaints concerning Lessee's operation shall be responded to in writing by
Lessee within five (5) days and shall be reported to the Port Representative along with
the response.
14.17 Lessee shall not charge prices for products or services that exceed the usual and
customary amount for such products or services in duty free sales at other locations.
14.18 Prices and charges for all items sold or offered from the Premises shall be conspicuously
displayed in such area of the Premises in a manner approved by the Port Representative.
In no event shall the price charged exceed an advertised price or the price marked on the
item being sold. If, in the opinion of the Port the prices or product quality does not meet
the requirements of this Section 14, the prices or product quality shall be adjusted
accordingly.
14.19 There shall be no auction, fire bankruptcy, close out, distress, liquidation or going-out-ofbusiness
sales conducted in the Premises; provided, however, that the Port may not
preclude periodic seasonal, promotional or clearance sales, nor shall the Premises operate
as an outlet/surplus store.
15. QUALITY ASSURANCE AUDITS
The Port may conduct the following regular concession performance inspections ("Quality
Assurance Audits") to ensure compliance with all of the standards of operation set forth in
Sections 13 and 14 as well as anywhere else they may appear in this Agreement:
15.1 The Port may, in its discretion, review each of Lessee's concession operations for quality
assurance at any time and shall endeavor to do so on a quarterly basis.
15.2 The Port shall document all Quality Assurance Audits on Quality Standards Performance
form. All Quality Assurance Audits shall, at a minimum, focus on, but not be limited to,
the following:
15.2.1 Premises General upkeep, signage, pricing, maintenance, equipment, and
cleanliness.
15.2.2 Products Delivered as represented, general quality and mix.
July 7, 2010 14
15.2.3 Personnel Professionalism, appearance, customer service, receipts provided and
activity.
15.3 The Port shall provide Lessee with written results of the Quality Assurance Audits.
Where deficiencies in performances are noted, the Port shall provide Lessee with fifteen
(15) days to correct all deficiencies noted in the Quality Assurance Audits. Lessee shall
promptly notify the Port of the corrections as completed, or request additional time to
correct outstanding items where the Port determines progress has been made by Lessee to
correct such deficiencies.
15.4 In the event that Lessee fails to timely correct the deficiencies noted in any Quality
Assurance Audit as provided in this Section 15, the Port may issue a notice of default
pursuant to Section 32; provided, however, the applicable cure period shall be fifteen (15)
days notwithstanding anything to the contrary in Section 32.2.1.
15.5 In addition, in the event that Lessee fails to correct in a timely manner the deficiencies
noted in any Quality Assurance Audit as provided in this Section 15, the Port may elect
to fine Lessee an amount not to exceed three hundred dollars ($300.00) per violation, per
day. The Port's right to impose a fine pursuant to this Section 15.5 shall be 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. The Port shall have no obligation to Lessee to impose
fines on or otherwise take action against any other party at the Airport. Lessee and the
Port agree that the Port will incur damages as a result of the failure to promptly remedy
such violations, 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.
16. ACCEPTANCE OF PREMISES
Lessee shall promptly examine the Premises following the Occupancy Date for each portion
thereof. Unless Lessee provides the Port with written notice of any defect or problem within ten
(10) working days of the Occupancy Date, Lessee shall have accepted them in their present, "asis"
condition, and agrees to make any changes in the Premises necessary to conform to federal,
state and local law applicable to Lessee's use of the Premises, and obtain necessary permits
therefor.
17. IMPROVEMENTS BY THE PORT
17.1 The Port, at its sole cost and expense, shall develop theSouth Satellite Space in
accordance with plans and specifications on file with the Port prior to the respective
Occupancy Date for the South Satellite Premises. As part of the construction, the Port
shall construct the exterior walls and faade of the Premises, the floor base for the
Premises, the ceiling shell (but not the ceiling) over the Premises, and all necessary
structural support for the aforementioned components. The Port shall make available all
utilities reasonably necessary for the Premises as provided in Section 20. Lessee shall be
required to design the storefront entry and may, with Port design approval, make
modifications to the exterior faade of the Premises.
17.2 It is understood that the Port may from time to time elect to alter, improve or remodel
portions of the Airport, and Lessee agrees that the portion of the Premises, if any, which
July 7, 2010 15
is visible to the general public may be altered, remodeled or improved at the Port's
expense in connection with any such work. Lessee agrees that any temporary
inconvenience resulting from any such work 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 Lessee's use of the Premises.
18. IMPROVEMENTS BY LESSEE
18.1 Lessee shall make leasehold improvements to the Premises consistent with its Proposal.
The investments in leasehold improvements including architectural and engineering fees,
construction costs, furniture, fixtures and equipment and other expenditures for the
Premises shall be in an amount not less than Two Hundred Fifty Dollars ($250.00) per
square foot; provided, however, the Port may, in its sole discretion, agree to a lower
amount in the event that Lessee can nonetheless satisfy all of the requirements of the
Agreement, specifically including the Port Standards.
18.2 All improvements made by Lessee shall be of high quality, shall conform to the design
criteria approved by the Port Representative, shall be of fireproof construction according
to the standards of the local rating organization, shall be constructed in good and
workmanlike manner and shall otherwise be in full and complete accordance with all
Legal Requirements and Port Standards. Construction shall be performed diligently and
substantially in accordance with the Port Standards.
18.3 Before any construction of any leasehold improvement is commenced on the Premises,
Lessee shall prepare plans and specifications and otherwise comply with the Port
Standards.
18.4 Except as otherwise specifically provided in this Agreement, Lessee shall obtain all
necessary permits, including any discretionary permits. In the event the Port is required
or has obtained any of the necessary permits, Lessee will reimburse the Port for any
permit fees and associated costs in obtaining said permits.
18.5 Lessee understands that the Airport is undergoing extensive remodeling. At all times
during construction and installation of improvements, Alteration, furniture, trade fixtures
and/or equipment by Lessee, Lessee, 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.
18.6 Lessee agrees not later than one hundred fifty (150) days following the Occupancy Date
for the South Satellite Space, the leasehold improvements for the Central Terminal Space,
the Concourse A Space and the South Satellite Space shall be completed and Lessee shall
commence operations; provided, however, said time period may be extended to the extent
of delays directly caused by the Port and/or force majeure events beyond the control of
Lessee as set forth in Section 49. In the event that Lessee has not commenced operations
within the period set forth in this Section, Lessee 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 one thousand dollars
($1,00.00) per day until Lessee has commenced operations. Lessee and the Port agree
July 7, 2010 16
that the Port will incur damages as a result of the failure to timely complete 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.
18.7 Within sixty (60) calendar days of the completion of construction required under this
Agreement, Lessee 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 Lessee 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 Lessee.
18.8 Other than those leasehold improvements which are installed and become such a part of
the Premises that they cannot be removed without substantial injury to the Premises,
which improvements shall immediately become the property of the Port following
installation, Lessee shall retain ownership of all furniture, trade fixtures and equipment
from time to time installed in the Premises by Lessee at its expense. Lessee may remove
any of such furniture, trade fixtures or equipment at any time during the term and shall
remove all thereof prior to the expiration of the term. Any such property not removed at
the expiration of the term shall, at the election of the Port, become the property of the
Port without payment to Lessee, or be deemed abandoned and removed by the Port, at
Lessee's expense. Upon any removal of such property, Lessee 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 Lessee and repairing any such
damage not repaired by Lessee; this covenant shall survive the termination of this
Agreement.
19. ALTERATIONS
19.1 Lessee, after completion of the leasehold improvements provided for in Section 18, 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 Lessee may reasonably consider necessary and desirable to adapt or equip
the Premises for Lessee's use and occupancy. All such Alterations shall be done at
Lessee's sole cost and expense and at such times and in such manner as the Port may
from time to time designate.
19.2 Lessee shall make no Alterations 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 unless Lessee shall first
deliver plans and specifications therefore to the Port and obtain the Port's prior written
consent, which shall not be unreasonably withheld or delayed.
July 7, 2010 17
19.3 Any Alteration (whether permitted of right or subject to approval) shall be of high
quality, shall conform to the design criteria approved by the Port Representative, shall be
of fireproof construction according to the standards of the local rating organization, shall
be constructed in good and workmanlike manner and shall otherwise be in full and
complete accordance with all Legal Requirements and Port Standards.
19.4 Before any construction of any Alteration, Lessee shall prepare plans and specifications
and otherwise comply with the Port Standards. Except as otherwise specifically provided
in this Agreement, Lessee shall obtain all necessary permits, including any discretionary
permits, for any Alteration. In the event the Port is required or has obtained any of the
necessary permits, Lessee will reimburse the Port for any permit fees and associated costs
in obtaining said permits.
19.5 Within ninety (90) days of the completion of any Alteration, Lessee shall provide the Port
with: (a) a certified statement (subject to verification, audit and approval by the Port)
specifying the total construction cost in such detail as reasonably necessary to ascertain
the costs of the Alteration constructed or installed by Lessee in the Premises; (b) a
certification that the Alteration has 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 the
Alteration; and (d) a reproducible final copy of the plans as-built for the Alteration 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 asconstructed
changes made by Lessee.
20. UTILITIES
20.1 Lessee shall, at its expense, 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. The
Port shall, at its expense, 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 Lessee properly maintains the ductwork and other connections
within or leading into the Premises and complies with the recommendations of the Port
regarding reasonable occupancy and use of the Premises.
20.2 To the extent required, Lessee shall, at its expense, furnish, install and maintain a water
meter for the Premises at a location and of a type specified by the Port and shall pay all
costs for water used within the Premises. Lessee shall be responsible for all water hookup
of its equipment and for extending its drain lines to the point of connection identified
by the Port. The Port shall furnish water from the central water source in reasonable
amounts provided that Lessee complies with all water conservation programs in effect or
as adopted.
20.3 Lessee shall, at its expense, furnish, install and maintain an electric meter, and a gas
meter if required, for the Premises at a location and of a type specified by the Port, and
July 7, 2010 18
shall pay all costs for electricity and gas used within the Premises. Lessee shall furnish,
install and maintain all power circuits and connections required for equipment and
mechanical systems used in the Premises.
20.4 Lessee shall, at its expense, 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.
20.5 Lessee agrees to use the Port's cabling and communications system for its operations at
the Airport when such cabling and communications system have been installed by the
Port, and Lessee shall pay a user fee as will be determined by the Port. In the event
Lessee is allowed to install communication equipment, any such installation shall be
subject to the Port regulation.
20.6 Lessee shall be responsible for extending, at its own costs, the utility services from the
distribution/connection points determined by the Port Representative.
20.7 Lessee shall pay to the Port, on a pro-rata per square foot basis or on a metered basis
where metering is possible, or on any basis as the Port may establish consistent with the
charges made to other tenants at the Airport, any assessments including nondiscriminatory
sewer use charge and/or fire protection charge assessed against the Port as
a result of Lessee's occupancy of the Premises.
20.8 Lessee shall pay to the Port, on a pro-rata or any other reasonable basis, including
administrative fees, the cost of the repair and maintenance of any utility services installed
by Lessee outside the Premises but maintained by the Port pursuant to Section 21.1.2.
20.9 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.
20.10 The Port shall have the right to shut down electrical energy to the Premises 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, any other tenant space, or any Airport
common area. Whenever possible, the Port shall give Lessee no less than two (2) days
prior notice for such electricity shutdown. The Port shall use all reasonable efforts to not
shut down Lessee'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 servicing the Airport or by any governmental or
quasi-government law, rule, code, directive, or order.
20.11 The Port shall not be liable to Lessee for any losses, including loss of income or business
interruption, resulting from any interruptions or failure in the supply of any utility to the
Premises, except when such losses result from the Port's gross negligence.
July 7, 2010 19
20.12 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
Lessee 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 Lessee, and
Lessee 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.
21. MAINTENANCE AND REPAIR
21.1 Maintenance and Repair by Port.
21.1.1 The Port will keep and maintain the foundations, roof, common areas and
common utilities up to the point of Lessee's connection and structural portions of
the exterior walls of the Premises (excepting any walls which are installed by or
on behalf of Lessee) in good condition and repair, except for repairs required
thereto by reason of the acts of Lessee, its employees, agents, invitees, licensees,
or contractors. Lessee agrees to report to the Port of the necessity for repairs as
promptly as possible after discovery.
21.1.2 Absent an election as provided in Section 21.2.1, the Port shall maintain all utility
services (including, but not limited to, electrical, water, gas, sewer, HVAC, etc.)
installed by Lessee outside the Premises, and may charge Lessee for the cost of
maintaining such services.
21.1.3 The Port may temporarily enter or have access to the Premises from time to time
as reasonably necessary in connection with maintenance or repair work, which the
Port may elect to undertake from time to time to the foundations, roof, common
utilities and exterior walls.
21.2 Maintenance and Repair by Lessee.
21.2.1 Subject only to the specific obligations of the Port set forth in Section 21.1.1,
Lessee will keep and maintain the Premises and every part thereof and any
fixtures, facilities or equipment contained therein, in good condition and repair
and in a manner consistent with the Port's Preventative Maintenance Procedures,
including, but not limited to, 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, and shall make any
replacements thereof. The Port may require Lessee to maintain, at Lessee's own
costs, all utility services installed by Lessee outside the Premises.
21.2.2 Lessee 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.
July 7, 2010 20
21.2.3 Lessee shall provide complete and adequate arrangements for the sanitary
handling of all trash, garbage, and other refuse generated in connection with the
use of the Premises.
21.2.4 Lessee shall not allow the accumulation of boxes, cartons, barrels, carts,
equipment, or other similar items in a public area.
21.2.5 Lessee shall be responsible for the complete control of all rodents and insects or
other pests within the Premises.
21.2.6 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, Lessee 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.
22. OUTSIDE AREAS AND ROOF
The roof and walls of the building in which the Premises are located are reserved to the Port,
which shall have the right to utilize same for any purpose, including the installation of signs for
directional, advertising or other purpose.
23. DAMAGE OR DESTRUCTION
23.1 Should the Premises or the buildings or structures of which the Premises are a part be
damaged by fire or other casualty, and if the damage is repairable within four (4) weeks
from the date of the occurrence (with repair work and the preparations therefore to be
done during regular working hours on regular work days), the Premises (other than
furniture, fixtures and equipment owned by Lessee pursuant to Section 18.8) shall be
repaired with due diligence by the Port, and in the meantime, the Minimum Annual
Guarantee shall be abated in the same proportion that the untenantable portion of the
Premise bears to the whole thereof, for the period from the occurrence of the damage to
the completion of the repairs.
23.2 Should the Premises or any buildings or structures of which said Premises are a part be
completely destroyed by fire or other casualty, or should they be damaged to such an
extent that the damage cannot be repaired within four (4) weeks of the occurrence, the
Port and Lessee shall have the option to terminate this Agreement on thirty (30) days
notice, effective as of any date not more than sixty (60) days after the occurrence. In the
event that this Section 23.2 shall become applicable, either party shall advise the other
within thirty (30) days after the occurrence of any such damage whether to continue the
Agreement in effect or to terminate it. If the parties shall elect to continue this
Agreement in effect, the shall commence and prosecute with due diligence any work
necessary to restore or repair the Premises (other than furniture, fixtures and equipment
owned by Lessee pursuant to Section 18.8) , and in the meantime, the Minimum Annual
Guarantee shall be abated in the same proportion that the untenantable portion of the
Premise bears to the whole thereof, for the period from the occurrence of the damage to
the completion of the repairs. If either party shall fail to notify the other of its election
July 7, 2010 21
within said thirty (30)-day period, that party shall be deemed to have elected to continue
this Agreement.
23.3 Lessee shall, at is sole cost and expense, be responsible for any and all repair or
restoration of any furniture, fixtures and equipment owned by Lessee pursuant to Section
18.8, which repair or restoration may be necessary as a result of any casualty.
24. INDEMNIFICATION LIABILITY INSURANCE
24.1 To the maximum extent permitted by law, Lessee shall indemnify, defend and save
harmless the Port, the commissioners, representatives, directors, officers, agents and
employees of the Port, and those in privity of estate with the Port, from and against all
claims, expenses (including, without limitation, attorney's fees) or liability of whatever
nature: (a) arising from any default, act, omission or negligence of Lessee, or Lessee's
contractors, licensees, agents, servants or employees, or the failure of Lessee or such
persons to comply with any rule, order, regulation or lawful direction now or hereafter in
force of any public authority, in each case to the extent the same are related, directly or
indirectly, to the Premises or Lessee's use thereof; or (b) arising, directly or indirectly,
from any accident, injury or damage, however caused, to any person or property on or
about the Premises; or (c) arising directly or indirectly, out of default by Lessee under
any of the terms or covenants of this Agreement, or in connection with any mechanical,
electrical, plumbing, or any other equipment or installations that are to be maintained or
repaired by Lessee; or (d) arising from any accident, injury or damage to any person or
property occurring outside of the Premises but within the Airport or the general area of
the Airport, where such accident, injury or damage results, or is claimed to have resulted
from, any act, omission or negligence on the part of Lessee, or Lessee's contractors,
licensees, agents, servants or employees or customers, or anyone claiming by, through or
under Lessee; provided, however, nothing in this Section 24.1 shall require Lessee to
indemnify the Port from injury or damage caused by the sole negligence of the Port. This
indemnity and hold harmless agreement shall include indemnity against all costs,
expenses (including, without limitation, reasonable attorneys' fees) and liabilities
incurred in or in connection with any such claim, or any action or proceeding brought
thereon. If any action or proceeding be brought against the Port by reason of any such
claim, Lessee, upon notice from the Port, shall, at Lessee's expense, resist or defend such
action or proceeding and employ counsel therefore acceptable to the Port.
24.2 At all times, Lessee shall at its own expense maintain in full force, and in carriers
rated A+, A or A- by Best's Insurance Rating Guide, the following policies of insurance:
24.2.1 Commercial General 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 Lessee 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, to indemnify both the Port
and Lessee against any liability or expense relating to this Section 24. The Port
July 7, 2010 22
shall be named as an additional insured (using ISO Form 20 26 11 85 or
equivalent).
24.2.2 To the extent that Lessee operates motor vehicles on or about the Airport 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 Lessee 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, to
indemnify both the Port and Lessee against any liability or expense relating to this
Section 24. The Port shall be named as an additional insured (using ISO Form 20
26 11 85 or equivalent).
24.2.3 Property Insurance, on "special extended," "special causes of loss" or "all risk"
form, specifically including earthquake and flood coverage, insuring loss or
damage to all of Lessee's 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.
24.2.4 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 Lessee'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.
24.2.5 To the extent that Lessee sells any alcoholic beverages on or about the Premises
(and whether for consumption on the Premises or elsewhere), 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, to
indemnify both the Port and Lessee against any liability or expense relating to this
Section 24. The Port shall be named as an additional insured (using ISO Form 20
26 11 85 or equivalent).
24.2.6 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.
July 7, 2010 23
The Port shall be furnished with appropriate written evidence to establish that Lessee'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, nonrenewal
or material reduction in coverage without at least thirty (30) 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. Lessee 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.
24.3 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 Lessee.
24.4 The Port makes no representation that limits or forms of insurance coverage specified or
required under this Agreement are adequate to cover Lessee's property, or Lessee's
liabilities or obligations under this Agreement. 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 Lessee 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.
24.5 Any provision above notwithstanding, the Port reserves the right to reject any insurance
policy as to company, form or substance. In the event that Lessee 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 24.2.
24.6 All insurance policies shall be endorsed to state that Lessee's policy is primary and not
contributory with any insurance carried by the Port.
24.7 In consideration of the Port's execution of this Agreement, Lessee hereby waives any
immunity Lessee may have under applicable worker's compensation benefit or disability
laws, (including but not limited to Title 51 RCW) in connection with the foregoing
indemnity. Such waiver shall not prevent Lessee from asserting such immunity against
any other persons or entities. LESSEE AND PORT AGREE AND ACKNOWLEDGE
THAT THIS PROVISION IS THE PRODUCT OF MUTUAL NEGOTIATION.
25. ENVIRONMENTAL STANDARDS INDEMNITY
25.1 "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"
July 7, 2010 24
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.
25.2 Lessee 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. Lessee 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. Lessee shall provide the Port with Lessee'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 Lessee receives
from, or provides to, any governmental unit or agency in connection with Lessee's
handling of Hazardous Substances or the presence, or possible presence, of any
Hazardous Substance on the Premises.
25.3 If Lessee, 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,
Lessee shall promptly take such action as is necessary to mitigate and correct the
violation. If Lessee 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 Lessee
(Lessee 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 Lessee is in violation of any Law or Regulation, or that
Lessee'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 reasonably
incurred by the Port in connection with any such actions shall become payable by Lessee
within fifteen (15) days after presentation of an invoice therefor.
25.4 The Port shall have access to the Premises to conduct an annual environmental
inspection. In addition, Lessee 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. Lessee shall not conduct or permit others to conduct environmental testing on
the Premises without first obtaining the Port's written consent. Lessee 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 Lessee, and Lessee shall provide copies to the Port.
25.5 Prior to vacation of the Premises, in addition to all other requirements under this
Agreement, Lessee shall remove and demonstrate to the Port's satisfaction that Lessee
has not left any Hazardous Substances on the Premises. This demonstration shall be a
condition precedent to the Port's payment of any Agreement Security to Lessee upon
termination or expiration of this Agreement.
25.6 No remedy provided herein shall be deemed exclusive. In addition to any remedy
provided above, the Port shall be entitled to full reimbursement from Lessee whenever
the Port incurs any costs resulting from Lessee's use or management of Hazardous
Substances on the Premises, including but not limited to, costs of clean-up or other
July 7, 2010 25
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).
25.7 In addition to all other indemnities provided in this Agreement, Lessee 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
Hazardous Substance from the Premises to other properties or into the surrounding
environment, whether (a) made, commenced or incurred during the term of this
Agreement, or (b) made, commenced or incurred after the expiration or termination of
this Agreement if resulting from Lessee's use or management of the Premises during the
term of this Agreement. Provided, however, Lessee's obligation to indemnify the Port
pursuant to this Section 25.7 shall not apply with respect to any Hazardous Substance
either (a) first existing on the Premises, (b) first released in, on or under the Premises, or
(c) first migrating from the Premises to other areas of the surrounding environment, prior
to the commencement of this Agreement under Section 3.
26. WAIVER OF SUBROGATION
The Port and Lessee hereby mutually release each other from liability and waive all right of
recovery against each other for any loss from perils covered by their respective first party
property insurance policies for all perils insured there under; provided, that no such release shall
be effective unless the insurance policy or policies expressly permit such a release or contain a
waiver of the insurance carrier's right to be subrogated.
27. INCREASE IN COST OF INSURANCE
Lessee 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 or fee
hereinabove specified and shall be paid by Lessee to the Port upon the monthly rental day next
thereafter occurring.
28. TAXES
Lessee shall be liable for, and shall pay throughout the term of this Agreement, all license and
excise fees payable for, or on account of, the activities conducted on the Premises and all taxes
on the property of Lessee 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, rent or fees payable hereunder, whether
imposed on Lessee or on the Port. Lessee shall reimburse the Port for all such taxes paid or
July 7, 2010 26
payable by the Port. With respect to any such taxes payable by the Port which are on or
measured by the rent or fee payments hereunder, Lessee shall pay to the Port with each rent or
fee 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 Lessee shall be payable
by Lessee to the Port at least fifteen (15) days prior to the due dates of the respective tax amounts
involved; provided, that Lessee shall be entitled to a minimum of ten (10) days' written notice of
the amounts payable by it.
29. SIGNS
29.1 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 Lessee in violation of the provisions of this Section 29. At the termination
or sooner expiration of this Agreement, Lessee shall remove all such Signs attached to or
painted by Lessee at its own expense, and Lessee shall repair any damage or injury to the
Premises and correct any unsightly condition caused by the maintenance and removal of
said Signs.
29.2 If Lessee fails to comply with the requirements of this Section 29, the Port shall have the
right to require Lessee to restore the Premises to the condition existing immediately prior
to the unauthorized installation or modification of the Sign. In the event that Lessee fails
to restore the Premises within three (3) days following notice by the Port, Lessee 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 one hundred dollars ($100.00) per day until Lessee has restored the Premises.
Lessee 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.
30. COMPLIANCE
Lessee agrees to comply with all applicable rules and regulations of the Port, whether now in
existence or hereafter promulgated, pertaining to (a) the building or other realty of which the
Premises are a part of, 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. Lessee further agrees to comply with all applicable federal, state, and
municipal laws, ordinances, and regulations, including without limitation those relating to
environmental matters and airport security. Any fees for any inspection of the Premises during
or for the term of the Agreement by a federal, state or municipal officer and the fees for any socalled
"Certificate of Occupancy" shall be paid by Lessee.
31. ASSIGNMENT OR SUBLEASE
31.1 Prohibition. Lessee shall not assign or transfer this Agreement or any interest therein nor
sublet the whole or any portion of the Premises, nor shall this Agreement or any interest
July 7, 2010 27
there under be assignable or transferable by operation of law or by any process or
proceeding of any court, or otherwise without the advance written consent of the Port. If
Lessee is anything other than an individual, Lessee further agrees that if at any time
during the term of this Agreement more than one-half (1/2) of the outstanding voting
equity interests shall belong to any persons other than those who own more than one-half
(1/2) of those outstanding voting equity interests at the time of the execution of this
Agreement or to members of their immediate families, such change in the ownership of
Lessee shall be deemed an assignment of this Agreement within the meaning of this
Section 31.1; provided, however, that this sentence shall not apply if, and to the extent
that Lessee is a corporation, the outstanding voting stock of which is listed on a
recognized security exchange. Lessee's entering into any operating agreement, license or
other agreement where under a third party is given rights or privileges to utilize a portion
of the Premises shall be an attempted assignment or subletting within the meaning of this
Section.
31.1.1 If Lessee shall, at any time during the term of this Agreement, desire to sell,
assign or otherwise permanently transfer the Agreement in whole or in part, or
any right or leasehold interest granted to it by this Agreement, Lessee shall, at the
time the Lessee requests the consent of the Port, deliver to the Port such
information in writing as the Port may reasonably require respecting the proposed
assignee or subtenant including, without limitation, the name, address, nature of
business, ownership, financial responsibility and standing of such proposed
assignee or subtenant together with the proposed form of assignment or sublease.
Within thirty (30) days from receipt of the information specified above, the Port
shall notify Lessee of its election to: (a) consent to the assignment, (b) buy-out
Lessee's interest in this Agreement as provided in Section 31.3, or (c) disapprove
the assignment, setting forth the grounds for doing so.
31.1.2 As a condition for the Port's consent to any transfer, the Port may require that the
assignee or subtenant remit directly to the Port on a monthly basis, all monies due
to Lessee by said assignee or subtenant (except with respect to excess rentals
otherwise due Lessee pursuant to Section 31.2). In addition, a condition to the
Port's consent to any assignment or sublease of this Agreement or the Premises
shall be the delivery to the Port of a true copy of the fully executed instrument of
assignment or sublease and an agreement executed by the assignee or subtenant in
form and substance satisfactory to the Port and expressly enforceable by the Port,
whereby the assignee or subtenant assumes and agrees to be bound by the terms
and provisions of this Agreement and perform all the obligations of Lessee
hereunder.
31.1.3 In the event of any assignment, Lessee and each respective assignor, waive notice
of default by the Lessee in possession in the payment of rent or fees and in the
performance of the covenants and conditions of this Agreement and consents that
the Port may in each and every instance deal with the Lessee 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
Lessee then in possession without notice to or consent of any assignor, including
Lessee; and any and all extensions of time, indulgences, dealings, modifications
July 7, 2010 28
or waivers shall be deemed to be made with the consent of Lessee and of each
respective assignor.
31.1.4 Lessee agrees that any sublease will contain a provision in substance that if there
be any termination whatsoever of this Agreement or the Port should buy-out
Lessee's interest pursuant to Section 31.3, then the subtenant, at the request of the
Port, will attorn to the Port and the subtenancy, if the Port so requests, shall
continue in effect with the Port, but the Port shall be bound to the subtenant in
such circumstances only by privity of estate. Nothing herein shall be deemed to
require the Port to accept such attornment.
31.1.5 No assignment, subletting or license by Lessee shall relieve Lessee of any
obligation under this Agreement, including Lessee's obligation to pay any sums
due hereunder. Any purported assignment or subletting 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.
31.1.6 Lessee shall reimburse the Port any reasonable professionals' fees and expenses
incurred by the Port in connection with any request by Lessee for consent to an
assignment or sublease.
31.2 Excess Rentals. If in connection with any assignment or sublease, Lessee receives rent or
other monetary consideration, either initially or over the term of the assignment or
sublease, in excess of the payments called for hereunder, or in case of the sublease of a
portion of the Premises, in excess of such amounts fairly allocable to such portion, after
appropriate adjustments to account for any improvements or alterations made by Lessee
and assure that all other payments called for hereunder and out-of-pocket expenditures,
operating costs or concessions incurred by Lessee in connection with such assignment,
sublease or license, are appropriately taken into account, Lessee shall pay to the Port fifty
percent (50%) of the excess of each such payment of rent or other consideration received
by Lessee after its receipt.
31.3 Buyout.
31.3.1 Within the time provided by Section 31.1.1, the Port shall notify Lessee whether it
is interested in negotiating a buy-out of Lessee's interest in this Agreement. The
Port shall have no right to buy-out Lessee'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 Lessee. If the Port is interested in a
buy-out of Lessee's interest, the Port shall have sixty (60) days from the date of
its notice to Lessee to enter into an agreement to buy out Lessee's leasehold
interest in this Agreement upon substantially the same terms and conditions as
proposed between Lessee 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 Lessee and the
third party.
July 7, 2010 29
31.3.2 If the Port and Lessee fail to enter into a written agreement for such a purchase
within the period of time provided by Section 31.3.1, then the Port shall be
deemed to have waived its buy-out right. Subject to the other provisions of this
Section 31, Lessee may then transfer its interest in this Agreement, but only upon
the same terms and conditions as reviewed by the Port.
31.3.3 If the proposed terms and conditions of any transfer by Lessee 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 Lessee'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.
32. DEFAULTS AND REMEDIES
32.1 Defaults.
Time is of the essence for each of Lessee's obligations under this Agreement. The
occurrence of any one or more of the following events constitutes a default of this
Agreement by Lessee with or without notice from the Port:
32.1.1 The vacating or abandonment of the Premises by Lessee.
32.1.2 The failure by Lessee to make any payment of Rent, or any other payment
required by this Agreement, when due.
32.1.3 The discovery by the Port that any financial or background statement provided to
the Port by Lessee, any successor, grantee, or assignee was materially false.
32.1.4 The filing by Lessee of a petition in bankruptcy, Lessee being adjudged bankrupt
or insolvent by any court, a receiver of the property of Lessee being appointed in
any proceeding brought by or against Lessee, Lessee making an assignment for
the benefit of creditors, or any proceeding being commenced to foreclose any
mortgage or other lien on Lessee's interest in the Premises or on any personal
property kept or maintained on the Premises by Lessee.
32.1.5 A failure by Lessee to observe or perform any covenant, condition, or agreement
to be observed or performed by Lessee under this Agreement.
32.2 Remedies.
32.2.1 Whenever any default (other than a default under Section 32.1.4, 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 thirty (30)
days after written notice is provided by the Port to Lessee (or for ten (10) days
after written notice in the case of default for failure to pay any Rent, or other
July 7, 2010 30
required payment when due), this Agreement and all of Lessee's rights under it
will automatically terminate if the written notice of default so provides.
Notwithstanding the foregoing, with respect to any default (other than a monetary
default) that cannot reasonably be cured within the period of time provided, this
Agreement shall not terminate upon the expiration of this period of time if, but
only if, Lessee shall, within such period of time, commence such cure and
thereafter diligently prosecute the same to completion. 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 Lessee all unpaid rent, concession fees or other payments and damages
incurred because of Lessee's default including, but not limited to, the costs of reletting
, 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 rate of 18%
per annum, or the maximum rate permitted by applicable law, whichever is less,
from the date such Termination Damages are incurred by the Port until paid.
32.2.2 In addition to Termination Damages, and notwithstanding termination and reentry
, Lessee's liability for all rent, concession fees or other charges which, but
for termination of this Agreement, would have become due over the remainder of
the term of the Agreement ("Future Charges") will not be extinguished and
Lessee 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:
32.2.2.1 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 term of the Agreement 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:
(i) In an accelerated lump-sum payment discounted to present
value, or
(ii) In monthly installments, in advance, on the first day of each
month following termination of this Agreement and
continuing until the date on which the term of the
Agreement would have expired but for such termination,
and any suit or action 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
32.2.2.2 An amount equal to Future Charges less the aggregate fair rental
value of the Premises over the remaining term of the Agreement,
reduced to present value. In this case, the Rental Deficiency must
be paid to the Port in one lump sum, on demand, and will bear
July 7, 2010 31
interest at a rate of 18% per annum, or the maximum rate permitted
by applicable law, whichever is less, until paid. For purposes of
this Section 32.2.2, "present value" 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.
32.2.3 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 term of
the Agreement), 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 Lessee'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 or concession fee due upon such re-letting.
32.2.4 If upon any re-entry 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 Lessee. In the event
the Port chooses to remove and store such property, it shall take reasonable steps
to notify Lessee of the Port's action. All risks associated with removal and
storage shall be on Lessee. Lessee 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,
which has been stored for a period of thirty (30) days or more, unless Lessee 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 Lessee
to the Port. The balance of sale proceeds, if any, will then be paid to Lessee.
32.2.5 The Port's action pursuant to this Remedies Section shall not be construed to limit
the Port in the exercise of any other additional right or remedy which may be
available to the Port, at law or in equity, by reason of Lessee's default.
33. PERFORMANCE/RELOCATION OF SPACE
33.1 In the event that the Premises either (a) experiences a decrease in its sales per Enplaned
Passenger of more than twenty percent (20%) for two (2) quarters in any twelve (12)-
month period, (b) loses the franchise rights under which the concession was operated, or
(c) fails to achieve Gross Sales sufficient to result in Percentage Fees greater than the
Minimum Annual Guarantee for two (2) consecutive years, the Port may initiate a
discussion with Lessee about termination of this Agreement. If the parties mutually
agree, then a termination agreement shall be executed under which the Port shall agree to
remarket the space and the Lessee 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.
July 7, 2010 32
33.2 If at any time the Port determines that the Premises (or any portion thereof) are necessary
for the operation or convenience of the Airport, the Port may require Lessee to close,
reduce or relocate (to a location designated by the Port) the Premises. In such event, the
Port shall provide Lessee at least thirty (30) days advance notice of such event in writing.
Lessee shall have the right to accept or reject any such reduction or relocation of the
Premises. If accepted, the Port and Lessee shall negotiate, in good faith, for the payment
of any costs associated with such change. If Lessee 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. In the event
of such termination, the Port shall reimburse Lessee for no more than the Net Book Value
of Leasehold Improvements.
34. TERMINATION OF AGREEMENT
This Agreement may be terminated in advance of its scheduled expiration date on any of the
following events:
34.1 In the event of Lessee's default under the Agreement pursuant to Section 32.
34.2 In the event Lessee loses any necessary Airport Concessions Disadvantaged Business
Enterprise certification required by Section 42, pursuant to Section 42.2.
34.3 In the event the Port requires the Premises for a capital improvement of the Airport, or
for safety and security reasons, the Port shall give Lessee six (6) months advance notice
of termination pursuant to this provision. In such event, the Port shall be obligated to
reimburse Lessee no more than the Net Book Value of Leasehold Improvements.
34.4 In the event that any federal, state or local government or 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 Lessee is not in default under any of the
provisions of this Agreement on said date, any rent or concession fees prepaid by Lessee
shall, to the extent allocable to any period subsequent to the effective date of the
termination, be promptly refunded to Lessee. In addition, Lessee 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.
34.5 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 Lessee is not in default under any of the provisions of this
Agreement on the effective date of such termination, any rent or concession fees prepaid
by Lessee shall, to the extent allocable to any period subsequent to the effective date of
the termination, be promptly refunded to Lessee and the Port shall reimburse Lessee the
"Net Book Value of Leasehold Improvements."
July 7, 2010 33
35. NET BOOK VALUE OF LEASEHOLD IMPROVEMENTS
"Net Book Value of Leasehold Improvements" shall mean and refer to the dollar amount
generated through application of the following rules:
35.1 Eligible Improvements. "Eligible Improvements" shall mean and refer to any
permanently affixed alterations or improvements made to the Premises and to Lessee's
custom designed cabinetry, display fixtures, furnishings and equipment: (a) for which the
Port's consent has been sought and obtained in writing, (b) for which any and all
information required by Section 18.7 or any Port consent issued under Section 18 or 19
has been timely submitted, and (c) consistently appearing on the NBV Report required by
Section 7, and (d) then currently in use and in such condition as would warrant its
continued use. Eligible Improvements shall specifically exclude: (a) any furniture,
fixtures and/or equipment (other than Lessee's custom designed cabinetry, display
fixtures, furnishings and equipment as set forth above), the ownership of which is
retained by Lessee pursuant to Section 18.8 or otherwise, and (b) any inventory
maintained by Lessee.
35.2 Cost of Eligible Improvements. The "Costs of Eligible Improvements" shall mean and
refer to the direct costs expended by Lessee 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
be determined from the information timely submitted by Lessee pursuant to Section 18.7
or any Port consent issued under Section 18 or 19, which information is subject to
verification by the Port.
35.3 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,
Lessee's repair and maintenance of the Eligible Improvement, and Lessee's custom and
usage for assets similar to the Eligible Improvements, both at the Airport and elsewhere.
36. NONWAIVER
The acceptance of Rent by the Port for any period or periods after a default by Lessee hereunder
shall not be deemed a waiver of such default unless the Port shall so intend and shall so advise
Lessee in writing. Lessee shall construe no waiver by the Port of any default hereunder by
Lessee to be or act as a waiver of any subsequent default.
July 7, 2010 34
37. SURRENDER OF PREMISES
At the expiration or sooner termination of this Agreement, Lessee shall promptly surrender
possession of the Premises to the Port broom-clean, in their improved condition, wear and tear
consistent with Section 13 excepted, remove all its furniture, fixtures and equipment, and shall
deliver to the Port all keys that it may have to any and all parts of the Premises. Lessee shall be
responsible for all consequential damages to the Port as a result of Lessee's failure to surrender
the Premises in accordance with this Agreement, and this clause shall survive the termination of
the Agreement. Nothing herein contained shall be deemed to constitute a release or discharge of
Lessee with respect to any obligation or liability incurred under the Agreement and outstanding
and unsatisfied on the surrender date.
38. ADVANCES BY PORT FOR LESSEE
If Lessee shall fail to perform any act required by this Agreement in a manner reasonably
satisfactory to Port, including repairs to the Premises, the Port, without waiving or releasing
Lessee from any obligation or default under this Agreement, may (but shall be under no
obligation) at any time thereafter make such payment or perform such act for the account and at
the expense of Lessee. All sums so paid by Port and all costs and expenses incurred in
connection therewith shall be paid immediately by Lessee upon invoice by the Port. The Port
may, in its sole discretion, apply all or any portion of any Security toward the satisfaction of said
sums.
39. LIENS AND ENCUMBRANCES
Lessee shall keep the Premises free and clear of any liens and encumbrances arising or growing
out of the use and occupancy of the said Premises by Lessee. Lessee agrees to fully indemnify
and defend the Port in connection with any such liens filed against the Port property. At the
Port's request, Lessee shall furnish the Port with written proof of payment of any item, which
would or might constitute the basis for such a lien on the Premises if not paid.
40. NOTICES
All notices hereunder shall be in writing and shall be delivered personally, by certified or
registered mail, by facsimile or by recognized overnight courier addressed as follows:
To Lessor:
The Port of Seattle
Seattle-Tacoma International Airport
P. O. Box 68727
Seattle, Washington 98168
Attn: General Manager, Business Development
To Lessee:
July 7, 2010 35
Attn:
or to such other respective addresses as either party hereto may hereafter from time to time
designate in writing. Notices shall be deemed delivered (a) when personally delivered; (b) 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; (c) on the date
transmitted by facsimile, if the facsimile is confirmed received; or (d) 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.
41. 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 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.
42. AIRPORT CONCESSIONS DISADVANTAGED BUSINESS ENTERPRISE
(ACDBE)
42.1 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 Lessee is required to operate
the Premises as a ACDBE, Lessee agrees to submit to the Port, upon execution of this
Agreement, certification from the State of Washington that Lessee is a certified ACDBE.
At all times during the term of this Agreement, Lessee 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 Lessee is
certified as a ACDBE and that certification is necessary to satisfy the requirements of this
Section, prior to any change in ownership, control or organization of Lessee, Lessee shall
(in addition to any requirements that may be imposed by Section 31) similarly obtain
ACDBE certification for Lessee as so changed and provide the Port with proof of the
same. If Lessee 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 Lessee
and, in the event of such termination, the Port shall pay to Lessee the Net Book Value of
Leasehold Improvements.
42.2 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
July 7, 2010 36
in DOT-assisted contracts. The Port encourages Lessee 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.
42.3 Lessee shall submit quarterly ACDBE participation reports to the Port starting on the first
day of the second month after the commencement of this Agreement. Lessee shall
submit such reports as may be required by the Port, for the purpose of demonstrating
compliance with 49 CFR Part 23.
43. NONDISCRIMINATION
43.1 Lessee for itself, its heirs, personal representatives, successors in interest, and assigns, as
part of the consideration hereof, does hereby covenant and agree that in the event
facilities are constructed, maintained, or otherwise operated on the Airport for a purpose
for which a DOT program or activity is extended or for another purpose involving the
provision of similar services or benefits, Lessee shall maintain and operate such facilities
and services in compliance with all other requirements imposed pursuant to 49 CFR Part
21, Nondiscrimination in Federally Assisted Programs of the Department of
Transportation, and as said Regulation may be amended.
43.2 Lessee for itself, its personal representatives, successors in interest, and assigns, as a part
of the consideration hereof, does hereby covenant and agree: (a) that no person on the
grounds of race, color, or national origin shall be excluded from participation in, denied
the benefits of, or be otherwise subjected to discrimination in the use of said facilities,
(b) that in the construction of any improvements on, over, or under such land and the
furnishing of services thereon, no person on the grounds of race, color, or national origin
shall be excluded from participation in, denied benefits of, or otherwise be subjected to
discrimination, (c) that Lessee shall use the Premises in compliance with all other
requirements imposed by or pursuant to 49 CFR Part 21, Nondiscrimination in Federally
Assisted Programs of the Department of Transportation, and as said Regulations may be
amended.
43.3 Lessee assures that it will comply with pertinent statutes, Executive Orders and such rules
as are promulgated to assure that no person shall, on the grounds of race, creed, color,
national origin, sex, age, or handicap be excluded from participating in any activity
conducted with or benefiting from Federal assistance. This Provision obligates Lessee or
its transferee for the period during which Federal assistance is extended to the airport
program, except where Federal assistance is to provide, or is in the form of personal
property or real property or interest therein or structures or improvements thereon. In
these cases, the Provision obligates Lessee or any transferee for the longer of the
following periods: (a) the period during which the property is used by the Port or any
transferee for a purpose for which Federal assistance is extended, or for another purpose
involving the provision of similar services or benefits; or (b) the period during which the
Port or any transferee retains ownership or possession of the property. In the case of
contractors, this Provision binds the contractors from the bid solicitation period through
the completion of the contract.
July 7, 2010 37
43.4 In addition, Lessee agrees that, whether or not this Agreement is conducted with, or
benefits from, Federal assistance, it shall in all matters pertaining to the performance of
this Agreement conduct its business in a manner which assures fair, equal and
nondiscriminatory treatment of all persons without respect to race, sex, age, color, creed,
sexual preference, marital status, national origin, or the presence of any sensory, mental
or physical handicap.
43.5 Lessee will maintain open hiring and employment practices and will welcome
applications for employment in all positions from all qualified individuals.
43.6 It is the policy of the Department of Transportation that disadvantaged business
enterprises as defined in the Airport and Airway Improvement Act, as amended, and as
implemented by Federal regulations shall have the maximum opportunity to participate in
the performance of services as defined in 49 CFR 23.5. Consequently, this Agreement is
subject to 49 CFR Part 23 as applicable.
43.7 Lessee will, at the timely request of the Port, provide any information needed in
preparation of necessary reports, forms, documents, and other data relative to equal
employment.
43.8 Lessee hereby assures that it will include the above clauses in any subcontract(s)
approved by the Port and cause subcontractor(s) to similarly include clauses in further
subcontracts.
44. MANDATORY PROGRAMS
44.1 Lessee 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, luggage cart token program, and Aircraft Operations Area (AOA) Clean
Surface Program for FOD (Foreign Object Debris).
44.2 Lessee 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.
45. LABOR DISPUTES
Lessee agrees to use its best efforts to avoid disruption to the Port, its tenants or members of the
public, arising from labor disputes involving Lessee, and in the event of a strike, picketing,
demonstration or other labor difficulty involving Lessee, 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.
46. RIGHT OF ENTRY, EASEMENTS
46.1 The Port shall have the right to enter the Premises at any and all reasonable times
throughout the duration of this Agreement for any reasonable purpose; provided, that the
Port shall not interfere unduly with Lessee's operations. This right shall impose no
July 7, 2010 38
obligation on the Port to make inspections to ascertain the condition of the Premises, and
shall impose no liability upon the Port for failure to make inspections.
46.2 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
other properties. If the Port exercises this reservation of easement in any manner which
substantially and negatively impacts Lessee, the Port agrees to negotiate an equitable
adjustment in the rent or fee, or to bear reasonable costs of any permanent modifications
to the Premises necessary to permit Lessee 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.
47. HOLDING OVER
47.1 If Lessee shall, with the consent of the Port, hold over after the expiration or sooner
termination of the term of this Agreement, the resulting tenancy shall, unless otherwise
mutually agreed, be on a month-to-month basis.
47.2 In order to facilitate transition from Lessee's tenancy to that of other Lessee at the
expiration of the term of the Agreement, the Port may request, and Lessee shall agree, to
extend its tenancy as to some or all of the Premises on a month-to-month 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.
47.3 During any month-to-month tenancy pursuant to this Section 47, Lessee shall pay to the
Port the same rent or fee as set forth herein, unless a different rent or fee shall be agreed
upon, and shall be bound by all of the additional provisions of this Agreement insofar as
they may be pertinent.
48. INGRESS AND EGRESS
Lessee shall possess the right of ingress to and egress from the Premises as made necessary in
fulfillment of the terms of this Agreement, provided that the rights herein defined shall not be
exercised in such manner and to such extent as to impede or interfere unduly with the operation
of the Airport by the Port, its tenants or authorized occupants or in violation of any leases or
agreements heretofore or hereafter entered into between the Port and third persons.
49. FORCE MAJEURE
49.1 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
July 7, 2010 39
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.
49.2 After Lessee first opens for business, the provisions of this Section 49 shall not operate to
excuse Lessee from the prompt payment of Rent as required by this Agreement and shall
not extend the term of this Agreement.
50. JOINT AND SEVERAL LIABILITY
Each and every party who signs this Agreement, other than in a representative capacity, as
Lessee, shall be jointly and severally liable hereunder.
51. "LESSEE" INCLUDES LESSEES, ETC.
It is understood and agreed that for convenience, the word "Lessee" 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.
52. CAPTIONS
The captions in this Agreement are for convenience only and do not in any way limit or amplify
the provisions of this Agreement.
53. 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 unenforceable, 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.
54. 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, Lessee shall, at the Port's option, defend the Port at Lessee's expense by counsel
satisfactory to the Port.
55. LAWS OF WASHINGTON; VENUE
This Agreement shall be construed under the laws of Washington. Jurisdiction and venue for
any action relating hereto shall be in King County, Washington.
56. BROKER'S FEE
Lessee warrants that it has had no discussions, negotiations and/or other dealings with any real
estate broker or agent other than affirmatively disclosed to the Port in connection with the
July 7, 2010 40
negotiation of this Agreement, 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. Lessee
shall, at its sole cost and expense, be responsible for the compensation of any real estate broker
or agent with which it has had any discussions and agrees to indemnify and hold the Port
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 discussions,
negotiations and/or dealings with any broker or agent in connection with this Agreement or any
assignment or sublease.
57. ENTIRE AGREEMENT - AMENDMENTS
This Agreement, together with the Exhibits A, B, C, and D all of which are attached hereto and
incorporated herein by this reference, constitute the entire 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.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year
first above written.
PORT OF SEATTLE
A corporation A Washington municipal corporation
By: _ By: _
Its: _ Its:
July 7, 2010 41
(ACKNOWLEDGMENT FOR LESSEE)
STATE OF )
) ss.
COUNTY OF )
On this day of _ , 2003, before me, personally appeared
to me known to be the
of , a 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:
(ACKNOWLEDGMENT FOR THE PORT)
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day of , 2003, before me, personally appeared
to me known to be the
of the PORT OF SEATTLE, a 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:
July 7, 2010 42
EXHIBIT A Airport
Legal Description
July 7, 2010 1
EXHIBIT B
The Premises
July 7, 2010 1
EXHIBIT C
Lessee's Proposal
July 7, 2010 1
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