Draft_Automated_Concessions_Agreement.pdf

DEPARTMENT OF AIRPORTS

AUTOMATED CONCESSION AGREEMENT

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 .................................................................................... ERROR! BOOKMARK NOT DEFINED.

1.06 ASSIGNED PREMISES

1.07 AUTOMATED CONCESSION

1.08 CONCESSIONAIRE

1.09 COUNTY

1.10 DEPARTMENT

1.11 DIRECTOR

1.12 DOT

1.13 FAA

1.14 FISCAL YEAR

1.15 GROSS REVENUES

1.16 JOINT VENTURE

1.17 LANDSIDE

1.18 PERCENTAGE RENT

1.19 PROJECT

1.20 RENT

1.21 RENT COMMENCEMENT DATE

1.22 SIGN

1.23 STATE

1.24 TSA

ARTICLE 2

SPECIAL CONDITIONS

2.01 GENERAL SCOPE OF SERVICES

2.02 ASSIGNED PREMISES

2.03 TERM

2.04 RENT AND OTHER PAYMENT OBLIGATIONS

A. Time and Manner of Payment B. Percentage Rent C. Annual Reconciliation and Adjustment of Percentage Rent D. Centralized Receiving and Distribution Center E. Support Space Charges

2.05 SECURITY DEPOSIT

2.06 AUTHORIZED USE

2.07 NOTICE ADDRESS

2.08 UTILITIES

2.09 AUTOMATED CONCESSION MACHINES

2.10 OPERATION OF AUTOMATED CONCESSION MACHINE

2.11 APPEARANCE OF PERSONNEL

2.12 AUTOMATED CONCESSION MACHINE STOCK

2.13 PRODUCT PRICING

2.14 REFUND POLICY

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2.15 MERCHANDISE CHANGE-OUT

2.16 ADVERTISING

ARTICLE 3

GENERAL CONDITIONS

3.01 ACCEPTANCE OF ASSIGNED 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

3.10 AUTHORITY OF THE DIRECTOR

3.11 COMPLIANCE WITH CHILD, FAMILY, AND SPOUSAL SUPPORT REPORTING OBLIGATIONS

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 ASSIGNED PREMISES

A. Restoration of Automated Concession Machines B. Removal of Damaged Property C. Option to Terminate Concessionaire’s Interest Upon Damage or Destruction .. 25 D. Adjustment of Rent

3.19 DATA SHARING

3.20 DELIVERY OF MERCHANDISE AND EQUIPMENT

3.21 ENTIRE AGREEMENT

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. Title to Automated Concession Machines C. Liquidated Damages for Failure to Complete the Project

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 ASSIGNED PREMISES

3.36 LIQUIDATED DAMAGES FROM LATE PAYMENTS

3.37 NEGATION OF PARTNERSHIP

3.38 NET LEASE

3.39 NONEXCLUSIVE RIGHTS

3.40 NONWAIVER OF RIGHTS

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3.41 NOTICE OF CLAIMS AND SUIT

3.42 NO WARRANTY RE AIRPORTS

3.43 NUISANCE AND WASTE

3.44 PATENTS AND TRADEMARKS

3.45 PRIOR DAMAGES AND VESTED RIGHTS

3.46 PROHIBITION OF LIENS

3.47 RECORDS AND REPORTS

A. Monthly Reporting B. Delinquent Monthly Reporting C. Annual Reporting D. Delinquent Annual Reporting

3.48 REGULATIONS AND RESTRICTIONS

3.49 RELEASE OF LIABILITY

3.50 RETENTION OF RECORDS

3.51 RIGHT OF ACCESS

3.52 RIGHT TO NONEXCLUSIVE USE OF AIRPORT

3.53 RISK REDUCTION

3.54 SIGNS

3.55 SUCCESSORS AND ASSIGNS

3.56 SURRENDER OF ASSIGNED PREMISES

3.57 TAXES

A. Possessory Interest and Property Taxation B. Right to Contest Taxes

3.58 TIME OF THE ESSENCE

3.59 TITLE TO THE ASSIGNED PREMISES

3.60 TRANSPORTATION OF MERCHANDISE WITHIN THE TERMINALS IF APPLICABLE

3.61 TRASH AND GARBAGE

3.62 VEHICLE AND EQUIPMENT PARKING

3.63 EXECUTION OF AGREEMENT

EXHIBITS:

EXHIBIT A – Concessionaire’s Proposal

EXHIBIT B – Assigned Premises EXHIBIT C – Merchandise and Price List

EXHIBIT D – Insurance Requirements EXHIBIT E – Performance Standards

EXHIBIT F – FAA Contract Provisions

Automated Concession Agreement Page 1 of 45

AUTOMATED CONCESSION AGREEMENT

Sacramento County Department of Airports

THIS AGREEMENT is made and entered into this ______________ day of _______________________, 2026 (effective date), by and between the County of Sacramento, a political subdivision of the State of California, hereafter “County,” and Company Name, a company organized and existing under the laws of the State of _____, and authorized to do business in the

State of California, hereafter “Concessionaire.”

WHEREAS, the County owns Sacramento International Airport (SMF), Mather Airport (MHR), and operates Sacramento Executive Airport (SAC) leased from the City of Sacramento, all of which are located in the County of

Sacramento and operated by the Sacramento County Department of Airports

(Department); and

WHEREAS, on ____________ the Department issued a Request for

Proposals (RFP) for interested parties to install, operate, and maintain automated concessions (vending machines) at [Airport(s)]; and

WHEREAS, on ______, 2026, Concessionaire submitted a written proposal for the non-exclusive right to provide vending machine(s) at

[Airport(s)] (Proposal), attached hereto and incorporated herein as Exhibit

A; and

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

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WHEREAS, Concessionaire desires to lease certain real property at the airport pursuant to the terms and conditions set forth in this Agreement;

and

WHEREAS, on ___________ by Resolution No. _______, the

Sacramento County Board of Supervisors (County Board) authorized the

Director of Airports (Director) to negotiate and execute this Agreement on behalf of the County.

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

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ARTICLE 1

Definitions

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

1.01 ACDBE

“ACDBE” means Airport Concession Disadvantaged Business

Enterprise.

1.02 Agreement

“Agreement” means this written Automated Concession Agreement between the County and Concessionaire covering the assigned premises and permitted operations at ___ __.

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 the Agreement 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 public airports operated by the Sacramento County

Department of Airports, limited to Sacramento International Airport (SMF) and Sacramento Executive Airport (SAC).

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

1.05 Assigned Premises

“Assigned Premises” means those certain premises at the airports, more particularly described in Section 2.02 and shown in Exhibit B.

1.06 Automated Concession

“Automated Concession” means a for-profit business that authorizes the sale of goods from vending machines in exchange for payment from customers in the form of cash or credit.

1.07 Concessionaire

“Concessionaire” means the airport tenant or lessee, 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.

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1.08 County

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

Supervisors.

1.09 Department

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

1.10 Director

“Director” means the County’s Director of Airports and his or her authorized representatives.

1.11 DOT

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

1.12 FAA

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

1.13 Fiscal Year

“Fiscal Year” means July 1 – June 30.

1.14 Gross Revenues

“Gross Revenues” means all monies received by or due to

Concessionaire, for a profit in, at or from the Assigned Premises for cash, credit or otherwise, without reservation or deduction for uncollected amounts, credit card fees or charges, or collection costs, including, but not limited to:

a. All sales and services occurring on the Assigned Premises, including all orders that originate in, at, or from the Assigned

Premises, regardless of where delivery or performance is made;

b. Orders that are made to and/or filled from the Assigned

Premises pursuant to mail, telephone, fax, catalog, internet, or otherwise received, filled, or distributed from the Assigned Premises.

c. Any income resulting from transactions originating in, at, or from the Assigned Premises, and deposits not refunded to customers; and

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

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“Gross Revenues” shall exclude:

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

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

c. All sales taxes, retailers’ excise taxes, Gross Revenues taxes, transaction taxes, or similar equivalent taxes paid to or collected by or payable by Concessionaire, as are first approved in writing by Director as excludable items.

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 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 2.04 B.

1.18 Project

“Project” means any equipment installations on the Assigned Premises as approved by County that Concessionaire has agreed to make for operation of the Automated Concession.

1.19 Rent

“Rent” means the Percentage Rent and other fees and charges as described in Section 2.04, paid to the County during the Agreement Term every month as consideration for this Agreement.

1.20 Rent Commencement Date

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

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1.21 Sign

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

1.22 State

“State” means the State of California.

1.23 TSA

“TSA” means the Transportation Security Administration of the United

States government and any federal agency succeeding to its jurisdiction.

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ARTICLE 2

Special Conditions

2.01 General Scope of Services

Concessionaire shall have the non-exclusive, limited right, privilege and duty to operate an Automated Concession at the Airport as more particularly described herein.

Provided, however, such right, privilege and duty shall not be deemed to be exclusive as to the entire area of the Airport, and shall be exclusive only with respect to the location authorized by this Agreement which is assigned to Concessionaire for placement of Automated Concession machines.

Concessionaire shall operate such concession continuously, twenty-four (24) hours per day, each and every day throughout the term of this

Agreement, in accordance with the provisions hereof.

2.02 Assigned Premises

County hereby assigns to Concessionaire the following premises at the

Airport as more particularly described below and shown on Exhibit B, attached hereto and incorporated herein by this reference:

Type of Space/Location Square Feet

TBD

TBD

Concessionaire shall install additional machines and add locations only as approved in writing by the Director.

2.03 Term

The term of this Agreement shall be for a period of ______ years beginning on the Rent Commencement Date and terminating after ____ (__) full calendar months. Either party may, upon thirty (30) calendar day’s prior written notice to the other, terminate this Agreement without cause. If

Concessionaire is in default of its obligations herein, the Director may, in addition to all other rights, give written notice terminating this Agreement at any time, such termination to be effective ten (10) calendar days from the date of receipt of such notice. If Director reasonably believes that continuing operation by Concessionaire will threaten the security, safety or health of others, or if Concessionaire fails to maintain the insurance coverage required herein, or if Concessionaire does not comply with applicable law, this Agreement may be terminated without notice and the permitted activities may be immediately halted.

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2.04 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 2.04 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 2.07 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

3.47A 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 3.47A hereof.

B. Percentage Rent

Concessionaire shall pay Percentage Rent to the County in the amount and manner defined in Section 1.18 equal to the percentages established in the table below:

Automated Concession Machine Percentage of Gross Revenue

TBD XX%

Percentage Rent shall be calculated for each month of the Agreement Term and paid in accordance with Section 2.04A above.

C. Annual Reconciliation and Adjustment of Percentage Rent

The Percentage Rent paid monthly as set forth in this section shall be subject to annual reconciliations performed by the

Department at the end of each Agreement Year, wherein Department staff will reconcile monthly reports detailing Gross

Revenue and all rents payable to the annual report for the corresponding 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

Automated Concession Agreement Page 9 of 45 approved annual report, as required in Section 3.47C hereof, is received by Department. However, Concessionaire shall not be entitled to interest on the amount credited or repaid by County to

Concessionaire.

D. 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. Use of the CRDC under this Agreement applies only to vending operations at SMF. The CRDC will be established in order for the Airport to comply with the federal regulations in 49 CFR §1542 that require screening and inspection of vehicles and persons entering the secured areas. The CRDC implementation and operation will also reduce the number of vehicles and persons within the secured areas. 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.

E. Support Space Charges

In the event Concessionaire leases Support Space from the

County, i.e., space used for office and/or storage purposes, Concessionaire shall pay the then-applicable support space charge.

On each July 1 during the Term of this Agreement, as well as during any holdover period, the annual rate per square foot of leased support space shall increase by three percent (3%).

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

2.05 Security Deposit

Prior to the Rent Commencement Date, Concessionaire shall provide a security deposit to the Department initially established at One Thousand Dollars and 00/100ths ($1,000.00).

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. Cash and checks are not acceptable forms of security deposit. Said security deposit shall be provided at Concessionaire’s sole cost and expense and will be adjusted annually pursuant to each Agreement Year’s Rent. In lieu of such security deposit, Concessionaire may deposit with County, in a form acceptable to

Automated Concession Agreement Page 10 of 45 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.

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.

2.06 Authorized Use

Subject to all applicable laws, regulations and limitations set forth in this Agreement, Concessionaire shall operate the Automated Concession machine from the Assigned Premises in accordance with the Concessionaire’s

Proposal referenced in Exhibit A, attached hereto and incorporated herein by this reference. Concessionaire is also granted the following use/rights, in connection with Concessionaire’s operation at the Airport, listed below:

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

b. The right to install appropriate Automated Concession machines on the Assigned Premises, provided that all design, specifications, dimensions, appearance, finishes, utility and data connections requirements and installation details for each machine shall have the prior written approval of the Director.

c. The nonexclusive right and privilege to offer the types of goods listed in Exhibit C, attached hereto and incorporated herein by this reference, in accordance with the provisions of this Agreement. All merchandise provided by Concessionaire must be approved in writing by the Director prior to installation in the Automated Concession

Automated Concession Agreement Page 11 of 45 machines. In addition, the Director, in their sole discretion, may change this list upon written notice to Concessionaire. All merchandise shall be in good taste and in accordance with all applicable health or 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 merchandise within the Airport or buildings, including but not limited to any public-facing or employee-accessible areas under the Department’s jurisdiction.

2.07 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

Airport Commercial Development

6900 Airport Boulevard

Sacramento, CA 95837-1109

Attn: SMF Concessions

E-mail: SMFConcessions@saccounty.gov

Concessionaire:

Address

E-mail:

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

E-mail: Air-Accounting@saccounty.gov

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.

mailto:SMFConcessions@saccounty.gov mailto:Air-Accounting@saccounty.gov

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2.08 Utilities

The County shall provide, at its cost, electrical connections to the Assigned Premises; provided that the Director reserves the right to not approve any proposed Automated Concession machine location based on the cost of locating electrical service to the area. Throughout the term of this

Agreement, the County may determine that it will charge Concessionaire for electricity to the Automated Concession machines. If the County determines that it will charge Concessionaire for electricity to the Automated Concession machines, written notice of the proposed fee and implementation date will be provided to Concessionaire. If an Automated Concession machine requires a water line for operation, such as certain coffee units, Concessionaire shall be responsible for identifying that need and the County will determine, at its sole discretion, whether a water hookup can be provided to the location; the Director reserves the right to disapprove any machine location based on the feasibility or cost of extending water service to the area.

2.09 Automated Concession Machines

Concessionaire shall install and maintain at the Airport the type and number of Automated Concession machines in the locations described in Exhibit B and as approved by the Director throughout the Agreement Term.

Unless otherwise expressly approved in writing by the Director, all Automated Concession machines installed by the Concessionaire shall be new and in first class condition and of the year, make, model, and appearance acceptable to the Director. All Automated Concession machines shall accept U.S. dollar bills, provide change and accept credit cards. No Automated Concession machine installed by Concessionaire shall have any sound producing device as a part of the normal operation thereof, nor shall any machine contain bright, flashing or otherwise distracting lights, displays or visual effects, unless expressly approved in writing by the Director.

Concessionaire shall not add, remove or relocate any Automated Concession machines at the Airport without the prior written approval of the

Director. The Director may, upon ten (10) calendar days advance written notice, require Concessionaire to remove or relocate any of its Automated

Concession machines. The Director may, upon thirty (30) calendar days advance written notice, require Concessionaire to install additional

Automated Concession machines, and thereafter stock and maintain said Automated Concession machines in accordance with the provisions of this

Agreement. Any such Automated Concession machine addition, removal or relocation required by the Director shall be at Concessionaire’s sole cost and expense.

Concessionaire is aware of and understands that additional Automated

Concession machines may be required by the Director throughout the

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Agreement Term. Prices for merchandise offered for sale shall be clearly posted and shall be approved in writing by the Director prior to installation.

Concessionaire shall regularly maintain all of its Automated Concession machines at the Airport in good mechanical working order, and in safe, sanitary, clean and undamaged condition, in accordance with the requirements of the California Health and Safety code, and all other applicable laws and administrative regulations.

Concessionaire shall perform said maintenance in accordance with the maintenance schedule in Concessionaire’s Proposal attached as EXHIBIT B.

Additionally, Concessionaire shall provide maintenance and service whenever requested by the Director.

2.10 Operation of Automated Concession Machine

a. Concessionaire shall furnish all services provided hereunder on a fair and reasonable basis to all users of the Airport and the general public. Concessionaire shall maintain and operate the Automated Concession machines in a first-class manner and shall keep the

Assigned Premises in a safe, clean, orderly and inviting condition at all times, satisfactory to the County.

b. Concessionaire shall operate its business at the Airport under the trade name set forth in the Agreement so long as, (1) the same shall not be held to be in violation of any applicable law; and, (2) shall not change the advertised name or character of the business operated at the Assigned Premises without the prior written approval of the County, which approval may be withheld at the County’s sole option.

c. Concessionaire shall not give samples, approach customers or otherwise solicit business in the common areas, terminals, or any other location at the Airport, nor shall Concessionaire distribute any handbills or other advertising material at the Airport. In the event that

Concessionaire violates the foregoing, Concessionaire shall, at

Concessionaire’s sole cost and expense, be responsible for clearing the area of any such materials.

d. At the Director’s request, Concessionaire shall meet with the Director to review any complaints or concerns and shall promptly correct any deficiencies. The Director’s determination as to the quality of operation or services shall be conclusive and curative measures shall be implemented by Concessionaire as expeditiously as possible.

e. The Director may monitor, test, or inspect Concessionaire’s service at any time through the use of a responsible shopping service or by other commercially reasonable means that do not unduly interfere with Concessionaire’s business.

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f. Concessionaire shall provide, at Concessionaire’s sole cost and expense, any and all equipment, materials, etc., necessary for the Automated Concession machine operation.

2.11 Appearance of Personnel

The operations of Concessionaire, its employees, and those doing business with it shall be conducted in an orderly and proper manner and so as to not annoy, disturb or be offensive to others at the Airport.

Concessionaire’s employees shall wear uniforms and other suitable means of identification. The Director shall have the right to object to Concessionaire regarding the demeanor, conduct and appearance of Concessionaire’s employees, and those doing business with it at the Airport, whereupon

Concessionaire will take all steps necessary to remove the cause of the objection.

2.12 Automated Concession Machine Stock

Throughout the term of this Agreement, Concessionaire shall supply and offer for sale through its Automated Concession machines a variety of merchandise, as approved by the Director, in quantities sufficient to satisfy the demands of the Airport patrons, as determined by the Director. All merchandise offered for sale by Concessionaire through its Automated Concession machines shall be subject to the approval of the Director as to type, quality and price throughout the term of this Agreement.

The Director shall provide ten (10) calendar days’ advance written notice, if Concessionaire is required to remove certain merchandise from its Automated Concession machines. Concessionaire shall request the prior approval of the Director to remove merchandise from the Automated Concession machines that were previously approved by the Director.

Concessionaire shall be solely responsible for the purity, cleanliness and wholesomeness of all edible merchandise offered for sale at the Airport by Concessionaire. Concessionaire shall keep all food and beverage merchandise free from contamination and shall store, handle, and dispense such merchandise in full compliance with the California Retail Food Code

(Health and Safety Code, Division 104, Part 7), including but not limited to Chapter 4, Article 1 (Protection From Contamination), Sections 113980–

113992, as well as all other applicable laws and regulations.

2.13 Merchandise Pricing

The price of all merchandise offered for sale by Concessionaire through its Automated Concession machines within the Airport shall be clearly marked and displayed within the public view, either on the product packaging or on the Automated Concession machine from which the product is sold. The Airport’s pricing policy requires that Airport prices are within five percent (5%) of similar facilities in the Sacramento Metropolitan area.

Concessionaire will be responsible for periodically providing product price

Automated Concession Agreement Page 15 of 45 comparisons to the Airport for similar items at similar facilities in the

Sacramento Metropolitan area to ensure compliance with this policy.

Concessionaire shall request approval from the Director not less than thirty (30) days in advance of any proposed increase in the sales price of the merchandise offered for sale by Concessionaire through its Automated

Concession machines at the Airport. When an item has a suggested retail price pre-marked and established by the manufacturer or distributor, Concessionaire shall not charge a price higher than the suggested retail pre-marked price without the prior written approval of the Director.

When an item does not have a suggested retail price or pre-marked price, the item shall be sold in accordance with the prices identified in

Concessionaire’s Proposal attached as Exhibit A or at a price approved in writing by the Director.

2.14 Refund Policy

Concessionaire shall provide refunds in accordance with Concessionaire’s refund policy described in Concessionaire’s Proposal attached as Exhibit A. Any proposed changes to the refund policy must first be approved in writing by the Director prior to implementation.

2.15 Merchandise Change-Out

Concessionaire shall, at its sole cost and expense, upon thirty (30) calendar days written notice from the Director, change the merchandise to a concept that shall be approved by the Director prior to installation. If

Concessionaire determines that a change in the merchandise is required, Concessionaire shall submit a written request to the Director for approval no later than thirty (30) calendar days prior to the proposed change-out date. If Concessionaire changes the merchandise without the Director’s prior written approval, the Director may require immediate removal or replacement, upon verbal or written notice, with merchandise that is acceptable to the Director.

2.16 Advertising

Concessionaire shall not install or display without the prior written approval of the Director, any sign, or other display of advertising media, including materials supplied by manufacturers of equipment, on Concessionaire’s Automated Concession machine, on other equipment free standing or attached, or on the Assigned Premises. Concessionaire understands the County has a contract for in-terminal advertising services.

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ARTICLE 3

General Conditions

3.01 Acceptance of Assigned Premises

Concessionaire hereby accepts the Assigned Premises in its “as-is” condition existing on the effective date of the Agreement and such area shall not be subject to recalculation. Taking possession of the Assigned Premises by Concessionaire shall be conclusive evidence that the condition thereof is satisfactory to Concessionaire. The County makes no expressed or implied representation or warranty of any kind whatsoever that the Assigned

Premises are suitable for the uses to which Concessionaire shall be restricted pursuant to this Agreement.

3.02 Accord and Satisfaction

No payment by Concessionaire or receipt by the 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 the County may accept such check or payment without prejudice to the County’s right to recover the balance of such rent, fees and/or charges or to pursue any other remedy provided in this Agreement.

3.03 ACDBE Participation and Monitoring and Site Enforcement

To the extent required and in accordance with timelines set forth by the Federal Aviation Administration (FAA), 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.

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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;

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

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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 Assigned 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.

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 Assigned 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 Assigned 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

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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

Assigned 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 Assigned Premises at access points to secured areas and along the secured perimeter of the Assigned 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.

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.

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i. Concessionaire must comply with all Airport Security Procedures and TSA security regulations in regards to the merchandise sold or provided to the general public inside the Sterile Areas of the

Airport. Under no circumstances can merchandise 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 Assigned 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;

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 limited to a parent, subsidiary or affiliate of any type.

3.09 Audit

Concessionaire shall, upon request, make all or any part of its records pertaining to this Agreement available to the County, or any other authorized representative of County during normal business hours throughout the Term of this Agreement, for the purposes of inspection, copying, or audit. Except as otherwise expressly provided herein, the cost of such inspection, copying or audit shall be borne by County.

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In the event that the results of any such audit by County show any discrepancy as compared to the amount of Concessionaire’s Gross Revenues at the Airport, as reported to County by Concessionaire, Concessionaire shall pay the County the difference in Rent payments or County shall reimburse Concessionaire, as the case may be, within thirty (30) calendar days following discovery of such discrepancy.

In the event that any such discrepancy exceeds the amount of such

Gross Revenues reported by Concessionaire to County by more than two percent (2%), Concessionaire shall reimburse County for all of County’s costs in connection with such audit, plus a fifteen percent (15%) administrative charge of the cost of such audit.

3.10 Authority of the Director

The Director shall administer this Agreement on behalf of the County and has authority to make administrative amendments to this Agreement on behalf of the County including, but not limited to, changes to the Assigned Premises, authorized uses, vending machine concepts, locations, merchandise, pricing, schedules, performance milestones, and management practices. Unless otherwise provided herein or required by applicable law, the Director shall be vested with all the rights, powers, and duties of County herein. With respect to matters herein subject to the approval, satisfaction, or discretion of County or Director, the decision of the Director in such matters shall be final.

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

Concessionaire’s failure to comply with State and federal child, family and spousal support reporting requirements regarding a Concessionaire’s employees or failure to implement lawfully served wage and earnings assignment orders or notices of assignment relating to child, family and spousal support obligations shall constitute a default under this Agreement.

Concessionaire’s failure to cure such default within ninety (90) days of notice by the County shall be grounds for termination of this Agreement.

3.12 Concessionaire Indemnification of County

To the fullest extent allowed by law, Concessionaire shall indemnify, defend, and hold harmless County, its governing Board, officers, directors, officials, employees, and authorized volunteers and agents, (collectively

“Indemnified Parties”) from and against any and all claims, demands, actions, losses, liabilities, damages, and all expenses and costs incidental thereto (collectively “Claims”), including cost of defense, settlement, arbitration, and reasonable attorneys’ fees, resulting from injuries to or death of persons, including but not limited to employees of either party hereto, and damage to or destruction of property or loss of use thereof, including but not limited to the property of either party hereto, arising out

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Concessionaire, its officers, agents, employees, or contractors, or the acts or omissions of the Concessionaire, its officers, employees, or agents, or the acts or omissions of anyone else directly or indirectly acting on behalf of the Concessionaire, or for which the Concessionaire is legally liable under law regardless of whether caused in part by an Indemnified Party.

Concessionaire shall not be liable for any Claims arising from the sole negligence or willful misconduct of an Indemnified Party.

This Indemnity shall not be limited by the types and amounts of insurance or self-insurance maintained by the Concessionaire or the Concessionaire’s subcontractors.

Nothing in this Indemnity shall be construed to create any duty to, any standard of care with reference to, or any liability or obligation, contractual or otherwise, to any third party.

The provisions of this Indemnity shall survive the expiration or termination of the Agreement.

3.13 Consent

Whenever the consent or approval of either party hereto is required or authorized hereunder, such consent or approval shall not be unreasonably withheld, unreasonably conditioned, or unreasonably delayed.

3.14 County’s Remedies

Pursuant to California Civil Code Section 1951.2:

a. In the event that Concessionaire breaches this Agreement and abandons the Assigned Premises before the end of the

Agreement Term, or if Concessionaire’s right to possession is terminated by County because of a breach of this Agreement, this Agreement terminates. Upon such termination, the County may recover from Concessionaire:

1. Any and all of the unpaid Rent…