Appendix_5_-_Food_&_Beverage_Concession_Agreement.pdf

DEPARTMENT OF AIRPORTS

FOOD & BEVERAGE CONCESSION AGREEMENT

Terminal B Pre-Security

SACRAMENTO INTERNATIONAL AIRPORT

Company name i

TABLE OF CONTENTS

ARTICLE 1

DEFINITIONS

1.01 ACDBE

1.02 Agreement

1.03 Agreement Year

1.04 Airport

1.05 Airside

1.06 Concessionaire

1.07 County

1.08 Department

1.09 Director

1.10 DOT

1.11 FAA

1.12 Fiscal Year

1.13 Gross Revenues

1.14 HVAC

1.15 Joint Venture

1.16 Landside

1.17 Leased Premises

1.18 Percentage Rent

1.19 Project Coordinator

1.20 Rent

1.21 Rent Commencement Date

1.22 Sign

1.23 State

1.24 Tenant Improvements

1.25 Trade Fixtures

1.26 TSA

ARTICLE 2

SPECIAL CONDITIONS

2.01 Leased Premises

A. Concession Location

B. Expansion, Reduction, and Relocation

2.02 Term

2.03 Rent and Other Payment Obligations

A. Time and Manner of Payment

B. Percentage Rent

C. Annual Reconciliation and Adjustment of Percentage Rent

D. Merchant Association Program (MAP)

E. Common Area Maintenance (CAM)

F. Centralized Receiving and Distribution Center

G. Waste Collection Fee

H. Support Space Charges

2.04 Security Deposit

2.05 Authorized Use

2.06 Notice Address

2.07 Utilities

ii

2.08 Maintenance

2.09 Labor Peace

2.10 Worker Retention

ARTICLE 3

GENERAL CONDITIONS

3.01 Acceptance of Leased Premises

3.02 Accord and Satisfaction

3.03 ACDBE Participation and Monitoring and Site Enforcement

3.04 Additional Fees, Charges and Rentals

3.05 Airport Security

3.06 Amendment Required by FAA or TSA

3.07 Applicable Law

3.08 Assignment and Subletting

3.09 Audit

A. Concessionaire’s Audit

B. County Audit

3.10 Authority of the Director

3.11 Compliance with Child, Family, and Spousal Support Reporting Obligations . 24

3.12 Concessionaire Indemnification of County

3.13 Consent

3.14 County’s Remedies

3.15 County’s Right to Perform Concessionaire’s Obligations

3.16 Credit Cards and Debit Cards

3.17 Cumulative Remedies

3.18 Damage or Destruction of Leased Premises

A. Restoration of Tenant Improvements, Trade Fixtures or Personal Property .. 27

B. Removal of Damaged Property

C. Option to Terminate Concessionaire’s Interest Upon Damage or Destruction 28

3.19 Delivery of Products

3.20 Entire Agreement

3.21 Vehicle, Equipment and Employee Parking

3.22 Early Termination by Concessionaire

3.23 Early Termination by County

3.24 FAA Requirements

3.25 Force Majeure

3.26 Hazardous Materials

A. Concessionaire’s Compliance with Environmental Laws

B. Hazardous Material Storage Permit

3.27 Headings

3.28 Holding Over

3.29 Improvements by Concessionaire

A. General

B. Conceptual Review

C. Preliminary Plan Submittal (30%)

D. Review of and Comment on Preliminary Plans

E. Final Plan Submittal (90%)

F. Final Plan Back Check (100%)

G. Modification of Final Plans

H. Notice to Proceed

I. Pre-Construction Meeting

J. Notice of Completion

K. As-Constructed/Record Drawings and Certificate of Occupancy

L. Removal of Unapproved Improvements iii

M. Liquidated Damages for Failure to Timely Complete the Project

N. Certification of Facility Build-Out Investment

O. Title to Tenant Improvements

3.30 Improvements by County

3.31 Independent Contractor

3.32 Insurance

3.33 Invalid Provisions

3.34 Licenses and Permits

3.35 Limitations on Use of Leased Premises

3.36 Liquidated Damages from Late Payments

3.37 Negation of Partnership

3.38 Net Lease

3.39 Nonexclusive Rights

3.40 Non-waiver of Rights

3.41 Notice of Claims and Suit

3.42 No Warranty Regarding Airport

3.43 Nuisance and Waste

3.44 Patents and Trademarks

3.45 Performance Standards

3.46 Prior Damages and Vested Rights

3.47 Prohibition of Liens

3.48 Records and Reports

A. Monthly Report

B. Delinquent Monthly Report

C. Annual Report

D. Delinquent Annual Report

3.49 Regulations and Restrictions

3.50 Release of Liability

3.51 Retention of Records

3.52 Right of Access

3.53 Right to Nonexclusive Use of Airport

3.54 Rights Upon Termination by Concessionaire

3.55 Risk Reduction

3.56 Data Sharing

3.57 Signs

3.58 Statement Regarding a Certified Access Specialist

3.59 Successors and Assigns

3.60 Surrender of Leased Premises

3.61 Taxes

A. Possessory Interest and Property Taxation

B. Right to Contest Taxes

3.62 Time of the Essence

3.63 Title to the Leased Premises

3.64 Transportation of Products and Other Items within the Terminals

3.65 Handling and Disposal of Waste Materials

3.66 Execution of Agreement

EXHIBITS

EXHIBIT A – Concessionaire’s Proposal EXHIBIT B – Leased Premises

EXHIBIT C – Common Use Areas

EXHIBIT D – Permitted Use and Operational Requirements EXHIBIT E – Utility Responsibilities

EXHIBIT F – Maintenance Responsibilities iv

EXHIBIT G – Insurance Requirements

EXHIBIT H – Performance Standards EXHIBIT I – Tenant Design Manual

EXHIBIT J – FAA Contract Provisions EXHIBIT K – Merchandise and Services Pricing Policies

Food & Beverage Concession Agreement Sacramento International Airport

<Concessionaire> Page 1 of 54

FOOD & BEVERAGE CONCESSION AGREEMENT

SACRAMENTO INTERNATIONAL AIRPORT

THIS AGREEMENT is made and entered into this _____of

_________________, 2024 (Effective Date), by and between the County of

Sacramento, a political subdivision of the State of California, hereafter “County,” and <Concessionaire> a <Company type> authorized to do business in the

State of California, hereafter “Concessionaire.”

WHEREAS, the County owns Sacramento International Airport (Airport), which is located in the County of Sacramento and operated by the Sacramento

County Department of Airports (Department); and

WHEREAS, on Month day, year, the Department issued a Request for

Proposals (RFP) for interested parties to construct, manage, and operate food and beverage concession(s) in Terminal B Pre-Security at the Airport; and

WHEREAS, on Month day, year, Concessionaire submitted a written proposal for the non-exclusive right to construct, manage, and operate food and beverage concession(s) at the Airport (Proposal), attached hereto and incorporated herein as EXHIBIT A; and

WHEREAS, on Month day, year, by Resolution No. 2025-#### the

Sacramento County Board of Supervisors (County Board) authorized the

Director of Airports to negotiate and execute this Agreement on behalf of the

County; and

<Concessionaire> Page 2 of 54

WHEREAS, Government Code Section 25536 authorizes the County Board to enter into concession agreements involving the leasing or subleasing of any part of County-owned property devoted or held for airport purposes; and

WHEREAS, Concessionaire desires to lease certain real property at the

Airport pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the promises, terms, conditions, and covenants set forth herein below, County and Concessionaire hereby mutually agree as follows:

<Concessionaire> Page 3 of 54

ARTICLE 1

Definitions

As used herein, the following words and phrases shall have the meanings set forth below:

1.01 ACDBE

“ACDBE” means Airport Concessions Disadvantaged Business Enterprise.

1.02 Agreement

“Agreement” means this written Food & Beverage Concession Agreement between the County and Concessionaire covering the leasing of premises and permitted operations at the Airport.

1.03 Agreement Year

“Agreement Year” means a period of twelve (12) consecutive calendar months, beginning July 1st and ending June 30th. The Agreement Year during the first and last year of Term may not include twelve (12) full calendar months;

therefore, partial Agreement Year means any portion of an Agreement Year less than a full year, as described in this paragraph.

1.04 Airport

“Airport” means the Sacramento International Airport operated by the Department as a public airport.

1.05 Airside

“Airside” means the airfield and the areas beyond the security checkpoints and passport and customs control in the Airport terminals.

1.06 Concessionaire

“Concessionaire” means the Airport tenant or lessee, subtenants, or its authorized representative(s), whose business is non-airline related, who sells goods and/or services for a profit, and who is performing under this Agreement.

1.07 County

“County” means the County of Sacramento, a political subdivision of the State of California, as represented and governed by its Board of Supervisors.

1.08 Department

“Department” means the County of Sacramento Department of Airports.

<Concessionaire> Page 4 of 54

1.09 Director

“Director” means the Department’s Director of Airports and their authorized representatives.

1.10 DOT

“DOT” means the Department of Transportation of the United States government and any federal agency succeeding to its jurisdiction.

1.11 FAA

“FAA” means the Federal Aviation Administration of the United States government and any federal agency succeeding to its jurisdiction.

1.12 Fiscal Year

“Fiscal Year” means July 1 – June 30.

1.13 Gross Revenues

“Gross Revenues” means all monies received by or due to Concessionaire, its subtenants or any other person selling goods or services for a profit in, at or from the Leased Premises for cash, credit or otherwise, without reservation or deduction for uncollected amounts, discounts (employee or advertised), credit card fees or charges, or collection costs, including, but not limited to:

1. All sales and services occurring on the Leased Premises, including all orders that originate in, at, or from the Leased Premises, regardless of where delivery or performance is made;

2. Orders that are made to and/or filled from the Leased Premises pursuant to mail, telephone, fax, catalog, Internet, or otherwise received, filled, or distributed from the Leased Premises;

3. Any income resulting from transactions originating in, at, or from the

Leased Premises, and deposits not refunded to customers; and

4. Compensation of any kind received from a distributor or manufacturer for promoting or advertising any product on the Leased Premises or elsewhere at the Airport.

Gross Revenues shall exclude:

1. All credits or refunds made to customers under such generally acceptable terms and conditions as are first approved in writing by the

County;

2. All sums or credits received in settlement of claims for loss or damage to merchandise;

3. All sales taxes, retailers’ excise taxes, Gross Revenues taxes, transaction taxes, or similar equivalent taxes paid to or collected by or payable by Concessionaire, its subtenants or any other person selling

<Concessionaire> Page 5 of 54 goods or services for a profit in, at or from the Leased Premises, as are first approved in writing by the County as excludable items;

4. The amount of any gratuities paid or given by patrons or customers to or for employees of Concessionaire, its subtenants or any other person selling goods or services for a profit in, at or from the Leased Premises;

5. The amount of any promotional discount and coupon offers issued to customers as a result of a County approved marketing plan;

6. The proceeds from the sale of capital assets or expendables;

7. Charges paid to the Concessionaire by its customers for the mailing of purchased items, but only to the extent of the actual mailing cost thereof;

8. The receipts from the sale or trade-in value of any equipment or materials not constituting an item inventoried by the Concessionaire for sale to the public used on the Leased Premises by the Concessionaire;

9. The value of any merchandise, supplies or equipment exchanged or transferred from or to other locations of business of the Concessionaire, where such exchange or transfer is not made for the purpose of avoiding inclusion of a transaction which would otherwise be made from or at the Leased Premises; and

10. Receipts in the form of refunds from, or the value of merchandise, supplies or equipment returned to, shippers, suppliers or manufacturers.

1.14 HVAC

“HVAC” means heating, ventilating and air-conditioning.

1.15 Joint Venture

“Joint Venture” means an association of an ACDBE firm and one (1) or more other firms to carry out a single, for-profit business enterprise, for which the parties combine their property, capital, efforts, skills and knowledge, and in which the ACDBE is responsible for a distinct, clearly defined portion of the work of the contract and whose shares in the capital contribution, control, management, risks, and profits of the Joint Venture are commensurate with its ownership interest.

1.16 Landside

“Landside” means all areas of the Airport not located on the Airside, as defined herein.

1.17 Leased Premises

“Leased Premises” means those certain premises at the Airport, more particularly described in Section 2.01, and shown on EXHIBIT B.

<Concessionaire> Page 6 of 54

1.18 Percentage Rent

“Percentage Rent” means the amount payable to the County as Rent, which is based on a percentage(s) of Concessionaire’s Gross Revenues, as shown in Section 2.03 B.

1.19 Project Coordinator

“Project Coordinator” means the Airport representative overseeing a particular tenant project.

1.20 Rent

“Rent” means the Percentage Rent and other fees and charges as described in Section 2.03, paid to the County during the Agreement Term every month as consideration for this Agreement.

1.21 Rent Commencement Date

“Rent Commencement Date” means, for each concession space, the date the Concessionaire is obligated to commence payment of Rent under this Agreement for that concession space, which date shall be the first day that the concession space is operating and open for business at the Airport, unless otherwise approved in writing by the Director.

1.22 Sign

“Sign” means any advertising sign, billboard, identification sign or symbol, poster, or other similar device, regardless of content.

1.23 State

“State” means the State of California.

1.24 Tenant Improvements

“Tenant Improvements” are all improvements or alterations constructed and installed on the Leased Premises by Concessionaire, its agents, employees, subtenants, contractors, subcontractors, licensees and/or representatives that are affixed in any manner to the Leased Premises and that have been approved by the County.

1.25 Trade Fixtures

“Trade Fixtures” are all fixtures, furnishings and equipment, affixed in such a manner that they can be readily removed without damage to the remainder of the Leased Premises and without substantially changing the character of the improvements, and are the removable personal property that

Concessionaire places upon the Leased Premises for use in operation of the food and beverage concession. All non-affixed items, including point of sale equipment, moveable furnishings, safes, racks, telephone equipment, and non-affixed display fixtures, shall be deemed to be Trade Fixtures for the purposes of this Agreement.

<Concessionaire> Page 7 of 54

1.26 TSA

“TSA” means the Transportation Security Administration of the United States government, and any federal agency succeeding to its jurisdiction.

<Concessionaire> Page 8 of 54

ARTICLE 2

Special Conditions

2.01 Leased Premises

A. Concession Location

County hereby leases to Concessionaire the following premises at the Airport more particularly described below and shown on EXHIBIT B, attached hereto and incorporated herein by this reference:

Unit Concept Approximate

Square Feet

3248 TBD 589

3252 TBD 1,538

3344 TBD 437

3345 TBD 1,191

TBD Support Space TBD

B. Expansion, Reduction, and Relocation

The County may expand, reduce or relocate any portion or all of the Leased Premises due to Airport development/construction, operational necessity, security, or safety considerations. In such event, Concessionaire shall be given no less than ninety (90) days prior written notice unless circumstances beyond the control of the County occur

(e.g., because of a direct or indirect requirement by TSA or another governmental authority), in which case notice may be less. If, at the

County’s determination, Concessionaire is unable to reasonably continue its operations at its assigned concession location as a result of a space contraction as authorized herein, County will attempt to provide reasonably comparable space for relocation within Terminal B but makes no guarantee of such availability. Concessionaire shall fully cooperate so that any such expansion, contraction or relocation occurs within the time frame determined by the County. Any expansion, contraction or relocation required hereunder will not affect Concessionaire’s Rent and other payment obligations under this Agreement.

<Concessionaire> Page 9 of 54

In the event of relocation, whether temporary or permanent, the

County, at its option, will either directly pay for or reimburse Concessionaire for Concessionaire’s reasonable and proper moving costs, as determined by the County. For purposes of this Section 2.01B, “reasonable and proper moving costs” include moving of Trade Fixtures from the old space to the new space, moving and reinstallation of telephone lines and computer equipment and connections, and reasonable expenses associated with reinstalling electrical connections and other utilities. In addition, in the event of relocation, the County will reimburse Concessionaire for the remaining undepreciated portion of the costs of Concessionaire’s Tenant Improvements that are not replaced or relocated by County, computed based on straight-line depreciation over a ten (10) year life.

If a contraction occurs, prior to any expansion, reduction or relocation of any portion or all of Concessionaire’s Leased Premises, County and Concessionaire shall mutually agree upon the commercial viability of the modified Leased Premises, then, if the Leased Premises is not commercially viable, the County will pay Concessionaire the remaining undepreciated portion of the costs of Concessionaire’s Tenant Improvements, computed based on straight-line depreciation over a ten

(10) year life.

For the purpose of determining the undepreciated portion of the costs of Concessionaire’s Tenant Improvements, original cost of the Tenant Improvements shall be based on the cost of construction statement provided to the County by Concessionaire as required in Section 3.29N hereof, verified by actual bills and receipts pertaining to original construction and improvements, subject to the approval in writing by County.

If the County exercises its right to delete or reduce the Concessionaire’s Leased Premises, then the portion of the Leased

Premises that is deleted or reduced shall cease to be leased to

Concessionaire and shall no longer be subject to the terms of this Agreement.

Finally, if the County requires deletion or reduction of the Leased Premises, the County shall not be liable to Concessionaire for any damages resulting from such deletion or reduction of the Leased Premises, including, but not limited to, damages for any inconvenience or loss of business profits.

2.02 Term

The Term of this Agreement shall commence on the Effective Date first set forth above and expire on the last day of the month completing ten (10) years from the first day that the concession space is open for business at the Airport, identified in Section 2.01.A above, as evidenced by the issuance of a

Certificate of Occupancy as described in Section 3.29K, unless sooner terminated pursuant to this Agreement.

<Concessionaire> Page 10 of 54

2.03 Rent and Other Payment Obligations

Concessionaire shall pay Rent to the County in the amounts and manner described below.

A. Time and Manner of Payment

Throughout the Term hereof, Concessionaire shall pay all Rent required in this Section 2.03 by electronic payment or first-class mail, postage prepaid, payable to “County of Sacramento”, at County’s Airport

Accounting Office, at the address shown for County in Section 2.06 hereof.

Except as stated in the following paragraph, the Percentage Rent shall be delivered no later than the fifteenth (15th) day of the calendar month immediately following the month Gross Revenues were generated, along with a Monthly Report as required by Section 3.48A hereof.

In the event the Term commences on a day other than the first day of a calendar month, then Percentage Rent shall apply for such month, and payment of the Percentage Rent for such month shall be due to County on or before the fifteenth (15th) day of the following calendar month, along with a Monthly Report as required by Section

3.48A hereof.

B. Percentage Rent

Concessionaire shall pay County Percentage Rent throughout the

Term of this Agreement as defined in this Section 2.03B.

Commencing on the Rent Commencement Date for each concession concept, Percentage Rent payable shall be the sum of the percentage of Gross Revenues received as follows:

Unit Concept Percentage Rent from

Open through First 6 Full

Months

3252 TBD Food & Beverage 5%

3345 TBD Food & Beverage 5%

All Retail Sales 16%

<Concessionaire> Page 11 of 54

Unit Concept Percentage Rent

Beginning of Full Month 7

3252 TBD Food & Beverage 10%

3345 TBD Food & Beverage 10%

All Retail Sales 16%

Percentage Rent shall be computed for each month and shall be paid in accordance with Section 2.03A above.

C. Annual Reconciliation and Adjustment of Percentage Rent

The Percentage Rent as set forth in this Section shall be subject to reconciliation at the end of each Agreement Year. If said reconciliation shows a balance due to County or an excess paid by Concessionaire, the appropriate adjustment, either payment by Concessionaire of the balance due or credit or repayment by County to Concessionaire of the excess payment, shall be made within thirty (30) days after an approved

Annual Report, as required in Section 3.48C hereof, is received by Department. However, Concessionaire shall not be entitled to interest on the amount credited or repaid by County to Concessionaire.

D. Merchant Association Program (MAP)

In addition to Percentage Rent, Concessionaire shall pay an annual

MAP fee in the amount of three-tenths percent (0.3%) of Gross Revenues to market and promote the Airport concessions to the community and traveling public, maintaining concessions customer satisfaction surveys and any other reasonable and necessary expenses related to the benefit and promotion of the Airport concessions program as approved by the Director. The MAP fee shall be payable monthly with the Percentage Rent payment. Concessionaire acknowledges and agrees that, from time to time, the County may need to increase

Concessionaire’s MAP fee based on cost recovery calculations and shall do so upon thirty (30) days prior written notice to Concessionaire.

However, at no time shall the MAP fee be more than six-tenths percent (0.6%) of Gross Revenues.

E. Common Area Maintenance (CAM)

In addition to Percentage Rent and the MAP fee, Concessionaire shall pay a CAM charge to the County in the amount of three-tenths percent (0.3%) of Gross Revenues for maintenance of back-of-house concession, food court seating areas for maintenance of common seating, break, and locker areas. The CAM charge is payable monthly with the Percentage Rent payment. Concessionaire acknowledges and

<Concessionaire> Page 12 of 54 agrees that, from time to time, the County may need to increase

Concessionaire’s CAM charge based upon cost recovery calculations and shall do so upon thirty (30) days prior written notice to Concessionaire.

However, at no time shall the CAM charge be more than one percent (1.0%) of Gross Revenues.

F. Centralized Receiving and Distribution Center

The Department plans to develop a Centralized Receiving and

Distribution Center (CRDC) that will serve as a single point of entry for all vehicles and persons that need to access the Airport’s secured areas.

The CRDC will help the Airport comply with the federal regulations in 49 CFR §1542 that require screening and inspection of vehicles and persons entering the secured areas. The CRDC will also improve the efficiency of the delivery and distribution process for Concessionaire goods and supplies by reducing the number of vehicles and persons within the secured areas. The CRDC will enhance the security and operational performance of the Airport. The Department anticipates that the CRDC will be funded by a user fee to cover the costs of operation of the CRDC.

Such user fee shall be in addition to all other fees and rent described in this Section. The user fee will be determined by the Department in consultation with Concessionaire, other tenants at Airport, and other stakeholders and imposed following said consultation process. Once imposed, the CRDC fee shall be payable monthly with the Percentage

Rent payment.

G. Waste Collection Fee

The County may, at any time, institute a solid waste, food waste, garbage, and recyclable removal program and may thereafter require the Concessionaire to pay a waste collection fee to be determined by the County based on cost recovery calculations, separate from the other charges described in this Section. County shall provide Concessionaire thirty (30) days prior written notice of this fee and once imposed, the solid waste collection fee shall be payable monthly with the Percentage Rent payment.

H. Support Space Charges

In the event Concessionaire leases Support Space, i.e., space used for office and/or storage purposes, from the County that is not a contiguous part of the Leased Premises used for sales to the public, Concessionaire shall pay the current Support Space Charge, and on each July 1 during the Term hereof, as well as during any holdover period, the annual rate per square foot shall increase by three percent (3%).

The Director shall assign, remove, relocate or reallocate Support Space to Concessionaire via written amendment to this Agreement.

<Concessionaire> Page 13 of 54

2.04 Security Deposit

Within thirty (30) days of the Effective Date, Concessionaire shall provide a security deposit to the Department established at twenty-five percent

(25%) of the projected Percentage Rent Concession Fee for the first (1st) year of operations as stated in Concessionaire’s proposed proforma, which amount shall be <dollar amount> ($##,###) dollars. Concessionaire may request a reduction to the first (1st) year security deposit by submitting such request in writing to the Director within fifteen (15) days of the Effective Date. The Director shall grant or deny such request in writing at their sole and absolute discretion, and the Director’s decision in this matter shall be final. The Director may, at their sole discretion, approve a reduction of first (1st) year security deposit, notice of such reduction shall be in writing. In the absence of such written reduction, Concessionaire must meet the minimums set forth herein.

Within ninety (90) days of the commencement of Agreement Year two (2) and each Agreement Year thereafter throughout this Agreement, Concessionaire shall deliver a security deposit in an amount equal to twenty-five percent (25%) of the Percentage Rent for the previous Agreement Year. Security deposits shall be payable to the “County of Sacramento” and shall be submitted to County at the address shown for County in Section 2.06 hereof. At no point during the Term of this Agreement shall the Security Deposit be lower than the first

Agreement Year Security Deposit, or the previous Agreement Year Security Deposit, whichever is higher.

Said security deposit shall be in the form of a letter of credit or a performance bond obtained from a company that has an A.M. Best’s rating of no less than A:VII or has been approved by the County. Said security deposit shall be provided at Concessionaire’s sole cost and expense and will be adjusted annually pursuant to each Agreement Year’s Percentage Rent. In lieu of such security deposit, Concessionaire may deposit with County, in a form acceptable to the County, an irrevocable letter of credit (“at sight” draft) from a bank acceptable to the County as security for faithful performance by Concessionaire as hereinabove provided.

Said security deposit shall be kept in full force throughout the Term of this Agreement to ensure the faithful performance by Concessionaire of all the covenants, terms and conditions of this Agreement, including the payment of all consideration provided herein.

Said security deposit shall continue to be retained by Department as security for the timely performance by Concessionaire of each and every obligation under this Agreement and shall not be subject to the claim of any creditor of County or Concessionaire.

Upon satisfaction of all financial and reporting obligations required under this Agreement, the amount of said security deposit, less any amounts due or owing to County by Concessionaire, shall be refunded/released by County to Concessionaire, provided, however, County shall have no obligation whatsoever to pay any interest on the amount of said security deposit to Concessionaire.

<Concessionaire> Page 14 of 54

Within fifteen (15) calendar days following the application of said security deposit to correct any default by Concessionaire, or to pay any amount due or owing upon expiration or earlier termination of this Agreement, Department shall provide Concessionaire with an accounting of such application.

2.05 Authorized Use

Subject to all applicable laws, regulations and limitations set forth in this Agreement, Concessionaire shall operate food and beverage concessions from the Leased Premises. Concessionaire is also granted the following use/rights in connection with Concessionaire’s operation at the Airport listed below:

a. If Concessionaire operates the Leased Premises under license or franchise agreement, Concessionaire shall provide the Director an executed copy of the license or franchise agreements within sixty (60) days of execution of this Agreement.

b. Concessionaire shall have for its common use with other tenants, common use employee break room, locker, and restroom facilities in the terminal lower level generally shown on EXHIBIT C. The County shall maintain those common use areas of said lower level space; however, it shall be the Concessionaire’s duty to inform the County as soon as any hazard, unsafe condition or problem(s) arise or exist within said lower level space. Concessionaire shall assist in the containment and/ or security of said space. Further, Concessionaire agrees to be solely responsible for the safety of its own representatives, officers, agents, employees, invitees, licensees, subtenants and any other persons doing business with Concessionaire who may be using the common areas.

c. The right of ingress to and egress from the Leased Premises over and across roadways servicing the Airport for Concessionaire, its subtenants, agents, patrons, guests and suppliers.

d. The right to install appropriate Tenant Improvements on the Leased

Premises, provided that all such design and installation shall have the prior written approval of the County.

e. The nonexclusive right and privilege to offer the types of products listed in EXHIBIT D, which is attached hereto and incorporated herein, in accordance with the provisions of this Agreement. All products provided by Concessionaire must be approved in writing by the County prior to being offered for sale within the Leased Premises. In addition, the

County, in its sole discretion, may change the approved product list upon written notice to Concessionaire. All products shall be in good taste and in accordance with all applicable health and service codes and presented in such manner as to be well received by the public. The

County reserves the right to allow others to conduct the same or similar operations and/or to sell the same or similar products within the terminals and elsewhere at the Airport.

f. The right to use no more than ten percent (10%) of each food and beverage location serving the public for storage and office purposes.

<Concessionaire> Page 15 of 54

g. The County may expand or add to the authorized uses described in this Section 2.05.

2.06 Notice Address

Notices required herein shall be in writing and served either personally, by e-mail, by certified mail, return receipt requested, postage prepaid or by overnight courier. Any notice mailed pursuant to this Agreement shall be deemed received by the addressee five (5) business days after deposit of same in the mail. Either party shall have the right, by giving fifteen (15) days written notice to the other, to change the addressee or address at which its notices are to be deemed received. Until any such change is made, notices shall be addressed and delivered as follows:

County:

Sacramento County Department of Airports

Properties and Commercial Development

6900 Airport Boulevard Sacramento, CA 95837-1109

Attn: SMF Concessions

E-mail: SMFConcessions@saccounty.gov

Concessionaire:

<New Concessionaire> <Street>

<City, State Zip>

Attn: <New Concessionaire>

E-mail: <email>

Unless otherwise notified by the Department, payments and communications regarding billing and invoicing shall be directed to the following address:

Sacramento County Department of Airports

Airport Accounting 6900 Airport Boulevard

Sacramento, CA 95837-1109

If notice is given in any other manner or at any other place, it will also be given at the place and in the manner specified in this Section. All notices shall be effective upon receipt and shall be deemed received upon delivery, if sent electronically or personally delivered.

2.07 Utilities

County and Concessionaire’s utility responsibilities are detailed in

EXHIBIT E, which is attached hereto and incorporated herein by this reference.

2.08 Maintenance

County and Concessionaire’s maintenance responsibilities are detailed in EXHIBIT F, which is attached hereto and incorporated herein by this reference.

<Concessionaire> Page 16 of 54

2.09 Labor Peace

As a condition precedent to the performance by the County of any or all of its promises and covenants made herein, Concessionaire shall promptly submit to the County a fully executed Labor Peace Agreement between the Concessionaire and any labor organization that has requested such a Labor

Peace Agreement. If no labor organization requests a Labor Peace Agreement with Concessionaire within fifteen (15) days of execution of this Agreement, then Concessionaire shall be excused from complying with this requirement.

Any Labor Peace Agreement submitted pursuant to this Section must be a valid agreement with a labor organization that contains, at a minimum, provisions prohibiting the labor organization and its members from engaging in any picketing, work stoppages, boycotts, or other economic interference with all operations at the Leased Premises, whether conducted by Concessionaire or its sublessees or subtenants, as described in this Agreement. The Labor Peace Agreement shall not include any provision that would require or compel any employee to be a member of the labor organization. “Labor organization” means a labor organization as defined in 29 U.S.C. 152(5).

2.10 Worker Retention

Concessionaire understands that the County has adopted a Worker Retention policy, and that Concessionaire is to comply with all of the conditions for the first ninety (90) days of the execution of this agreement at the Airport as follows:

a. The program would be applicable only to employees of the current food and beverage Concessionaires who are displaced as a result of the award of this Agreement.

b. Only non-managerial, non-supervisorial, non-confidential employees who have been continuously employed by the current food and beverage Concessionaires for at least twelve (12) months as of the date of execution of this Agreement, during that twelve (12) month period have worked sixteen (16) or more hours per week and whose primary place of employment is at the Airport shall be given first preference in hiring pursuant to this Agreement.

c. Preference in hiring shall entitle the employees to a ninety (90) day trial employment period.

d. Employee must be in good standing with the current food and beverage Concessionaires with no final warning or suspension for the previous twelve (12) months.

e. The Worker Retention requirements would apply only to new Concessionaires hiring twenty (20) or more employees.

f. The new Concessionaires shall not be required to hire an employee who does not meet the minimum qualifications for any available positions.

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g. The new food and beverage Concessionaires shall make a reasonable attempt to schedule interviews such that the employee has at least fourteen (14) days written notice of the interview date, time and location.

h. The displaced employee shall be solely responsible for ensuring that the current food and beverage Concessionaires have the current contact and accurate information to provide to new food and beverage

Concessionaires for purposes of communicating interview opportunities.

i. Any employee failing to arrive for a scheduled interview waives their right to further consideration.

j. Concessionaire retains the right to terminate any employee for just cause during the trial employment period.

k. County staff shall be responsible for requesting from the current food and beverage Concessionaires a list of its displaced employees, if any. The current food and beverage Concessionaires shall be asked to provide sufficient detail on such list to establish that the individuals on the list meet the requirements of the new food and beverage Concessionaires including but not limited to duration of employment and disciplinary standing. The list shall include each employee’s current contact information.

l. County staff shall provide the full list provided by the current food and beverage Concessionaires to each new food and beverage

Concessionaire.

m. County staff shall have no responsibility to mediate disputes or complaints from employees with regard to their suitability or lack thereof for initial or continued employment as determined by any

Concessionaire.

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ARTICLE 3

General Conditions

3.01 Acceptance of Leased Premises

Concessionaire hereby accepts the Leased Premises in its “as-is” condition existing on the notice to proceed date. Taking possession of the

Leased Premises by Concessionaire shall be conclusive evidence that the condition thereof is satisfactory to Concessionaire. County makes no expressed or implied representation or warranty of any kind whatsoever that the Leased Premises are suitable for the uses to which Concessionaire shall be restricted pursuant to this Agreement.

Notwithstanding anything set forth herein to the contrary, if Concessionaire encounters conditions in the Leased Premises that (1) are subsurface or otherwise concealed that differ materially from those identified in as-built drawings of the Leased Premises and/or were not reasonably discoverable during a walk-through of the Leased Premises, (2) consist of hazardous materials or substances, or (3) are physical conditions of an unusual nature, that differ materially from those ordinarily found to exist and generally recognized as inherent in locations of the nature of the Leased Premises, each shall be considered an “Unforeseen Condition”. To the extent Concessionaire encounters Unforeseen Conditions during the design phase of the construction schedule, not to exceed one-hundred twenty (120) days from the notice to proceed, Concessionaire may elect to terminate the Agreement provided Concessionaire notifies the County of such election to terminate in writing no later than the one-hundred twenty-seventh (127th) day from the notice to proceed date. Such termination shall be effective on the date the County receives the written notice of termination. Such early termination shall be effective to relieve the County and Concessionaire from further obligation or duty under the Agreement save and except any accrued and unperformed duties and obligations under the Agreement (excluding such for which performance is reasonably obviated by virtue of such termination) and other provisions which by their terms are to survive a termination of the Agreement. If no such written election to terminate is provided to the County within the designated time, then

Concessionaire shall have no right of termination or recourse of whatever nature against the County with respect to any Unforeseen Condition.

3.02 Accord and Satisfaction

No payment by Concessionaire or receipt by County of a lesser amount than the Rent, fees and/or charges due to be made by Concessionaire hereunder shall be deemed to be other than on account of the Rent, fees and/or charges due, and no endorsement or statement on any check or in any letter accompanying any check or payment as Rent, fees and/or charges shall be deemed an accord and satisfaction, and County may accept such check or payment without prejudice to County’s right to recover the balance of such

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Rent, fees and/or charges or to pursue any other remedy provided in this

Agreement.

3.03 ACDBE Participation and Monitoring and Site Enforcement

The County will implement various mechanisms to monitor program participants to ensure compliance with 49 CFR Part 23, including, but not limited to the following:

a. Conduct site visits to determine ACDBE participation in Joint Venture as described in Article 1 of the Agreement; and

b. Verify ACDBE certification status annually; and

c. Review revenue reports on a monthly basis; and

d. Review agreement terms and conditions for compliance.

The County has several remedies available to enforce the ACDBE requirements, including, but not limited to the following:

a. Breach of contract action, pursuant to the terms of this Agreement;

and

b. Breach of contract action, pursuant to all applicable state laws; and

c. All other available legal remedies.

In addition, the federal government has several enforcement mechanisms that may be applied to firms participating in the ACDBE program, including, but not limited to, the following:

a. Suspension or debarment proceedings pursuant to 49 CFR Part 23 and 2 CFR Parts 180 and 1200; and

b. Enforcement action pursuant to 49 CFR Part 31; and

c. Prosecution pursuant to 18 USC 1001.

3.04 Additional Fees, Charges and Rentals

Concessionaire shall pay County additional fees, charges and rentals in the event of any of the following:

a. If County has paid any sum or sums, or has incurred any obligation or expense, for which Concessionaire has agreed to pay or reimburse County, or for which Concessionaire is otherwise responsible;

b. If County is required or elects to pay any sum or sums, or incurs any obligation or expense, because of the failure, neglect or refusal of Concessionaire to perform or fulfill any of the promises, terms, conditions or covenants required of it hereunder;

c. Pursuant to any separate agreement between the parties not contained herein;

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d. To reimburse County for services rendered, such as, but not limited to, utilities, trash removal, telephone, delivery access charges and similar charges.

Concessionaire’s obligations pursuant to this Section shall include all interest, cost, damages, and penalties in conjunction with such sums so paid or expenses so incurred by County.

3.05 Airport Security

a. Concessionaire shall comply with all security regulations at the

Airport pursuant to all local, State and federal law, including, but not limited to, any and all directives issued by the County. If required, Concessionaire shall obtain an Airport Tenant Security Program (“ATSP”) document approved by TSA within sixty (60) days of receipt of written notice from the County or as otherwise directed by TSA. If required, Concessionaire shall maintain any TSA-approved ATSP throughout the

Term of this Agreement.

b. Concessionaire’s representatives, as determined by the County, must be able to pass a security background access investigation consisting of a fingerprint based criminal records check (“CHRC”)

(collectively, “Background Check”), as well as a Security Threat

Assessment (“STA”), which must be approved by TSA before an Airport

ID badge will be issued. All of Concessionaire’s employees, contractors, or other persons doing business with Concessionaire requiring unescorted access to the secured area of the Leased Premises will require a badge and are also subject to Background Check and STA.

Badges are issued by the County subject to each individual’s successful completion of the Background Check in compliance with 49 CFR Part

1542 and all other applicable regulatory directives. Concessionaire applicants with approved access media will be subject to automatic enrollment into a continuous background monitoring program. In addition to the CHRC and STA requirements, Concessionaire employees and their representatives must establish a justifiable need for unescorted access authority. Third (3rd) party venders such as delivery drivers, maintenance personnel or union officials that are not directly employed by the Concessionaire are not automatically eligible for a badge as they do not meet the standard for justifiable need. The determination of justifiable need is at the sole discretion of the County.

c. If a badge is lost, stolen, or if the recipient fails to return the badge to the County when required by the County, Concessionaire shall be subject to a non-refundable reissuance fee, if applicable, and any other damages directly caused by the loss, theft or retention of the badge.

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d. If required, Concessionaire shall establish and implement written procedures (Security Procedures) acceptable to the County for the control of and prevention of unauthorized access to all areas within the

Leased Premises. Concessionaire’s Security Procedures shall also incorporate activities designed to assist the County in safeguarding all other secured areas of Airport. The Security Procedures shall include, but are not limited to, the following procedures:

1. Gates, doors, fences or other parts of the Leased Premises shall be kept locked by Concessionaire at all times when not in use by or when not under the security surveillance of Concessionaire.

2. Lock malfunctions or other deficiencies, which would permit unauthorized access into secured/unsecured or into sterile/non-sterile areas of the Airport, shall be reported by Concessionaire at once to the County through the Airport Communications Center at

(916) 874-0456. The unsecured access point shall be maintained under constant security surveillance by the Concessionaire until the

Concessionaire has repaired the same and security through such point has been restored, and/or the County assumes security and/or repair of the access point.

3. Loss, misplacement, theft or failure to comply with the return of any badge shall be immediately reported to the County through the

Airport Communications Center at (916) 874-0456.

e. Concessionaire shall be solely responsible for the control and movement of persons who are representatives of Concessionaire and that have a valid Airport issued ID badge moving from the Leased

Premises onto all secured areas of the Airport. These badged representatives will comply with Airport security standards and the

Airport’s “Tiered” based fine program in order to obtain the badge.

Concessionaire shall be solely responsible for the payment of any and all penalties and fines which may be levied by the TSA or other local, State or federal agencies for violation of any security regulations arising from or relating to Concessionaire’s failure to perform its security responsibilities.

f. If required, Concessionaire shall install, maintain and operate, at no cost to County, access prevention and surveillance devices on the Leased

Premises at access points to secured areas and along the secured perimeter of the Leased Premises, as determined by the County to be necessary for the safety or security of Airport. The County shall have unrestricted access to all access control devices or systems developed by

Concessionaire.

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g. Use of issued access control media, Airport issued ID badge, for other than official employer work purposes is prohibited; use of access control media, after work hours, to gain access to secured and/or sterile areas of the Airport is prohibited.

h. Concessionaires who use knives, scissors, bottle/wine openers, or any

TSA prohibited item as part of their food preparation operation are subject to no notice inspections and are solely responsible for knife accountability at all times. Failure to properly account for knife audits will subject the

Concessionaire to both Federal and local fine based penalties. Once a knife is unaccounted for, the Concessionaire must notify the Airport through the Airport Communications Center at (916) 874-0456 within five

(5) minutes. Concessionaires are prohibited from selling or providing to the public any TSA prohibited item inside the sterile areas of the Airport.

i. Concessionaire must comply with all Airport Security Procedures and

TSA security regulations in regards to the merchandise and consumables sold or provided to the general public inside the Sterile Areas of the

Airport. Under no circumstances can merchandise or consumables be introduced into the Sterile Area without prior inspection/screening as required by TSA-NA-16-01B (Inspection of Merchandise and Consumables

Intended for the Sterile Area) dated June 25, 2018.

3.06 Amendment Required by FAA or TSA

This Agreement may be amended without further consideration for the purpose of satisfying FAA or TSA requirements.

3.07 Applicable Law

This Agreement shall be interpreted and enforced in accordance with the laws of the State of California, and shall be deemed to have been made, and shall be performed, in the State of California.

3.08 Assignment and Subletting

Concessionaire shall have no right to assign, mortgage, pledge, or otherwise transfer this Agreement, either voluntarily or by operation of law, in whole or in part, without the prior written approval of the County. Likewise, Concessionaire shall not subcontract any rights authorized hereunder or sublease any or all of the Leased Premises without the prior written approval of the County.

Notwithstanding anything to the contrary contained herein, neither notice to County nor County’s consent shall be required for transfers to an entity

a. into or with which Concessionaire is merged, reorganized or consolidated,

b. to which all or substantially all of Concessionaire’s assets are transferred, <Concessionaire> Page 23 of 54

c. that acquires all or substantially all of Concessionaire’s locations in the Sacramento metropolitan area, or

d. that controls, is controlled by, or is under common control with

Concessionaire, including but not…