CONCESSION AGREEMENT FOR RENTAL CAR CONCESSION LOUISVILLE INTERNATIONAL AIRPORT LOUISVILLE REGIONAL AIRPORT AUTHORITY AND

Transcription

1 CONCESSION AGREEMENT FOR RENTAL CAR CONCESSION AT LOUISVILLE INTERNATIONAL AIRPORT LOUISVILLE REGIONAL AIRPORT AUTHORITY AND VANGUARD CAR RENTAL USA INC. D/B/A ALAMO

2 TABLE OF CONTENTS Page SECTION 1. PREMISES... 1 SECTION 2. PERMITTED USES AND PRIVILEGES... 2 SECTION 3. TERM... 3 SECTION 4. CONCESSION FEES... 4 SECTION 5. PERFORMANCE BOND... 9 SECTION 6. MAINTENANCE AND SUBMISSION OF RECORDS AND REPORTS SECTION 7. MINIMUM STANDARDS SECTION 8. INSTALLATION OF IMPROVEMENTS AND TENANT FINISHES SECTION 9. MAINTENANCE AND REPAIR SECTION 10. UTILITIES SECTION 11. QTA MANAGEMENT AND OPERATION SECTION 12. ALLOCATION OF QTA SPACES SECTION 13. OWNERSHIP OF QTA SECTION 14. ENVIRONMENTAL RESPONSIBILITIES SECTION 15. TAXES SECTION 16. LAWS AND REGULATIONS SECTION 17. INDEMNIFICATION SECTION 18. INSURANCE SECTION 19. AUTHORITY NOT LIABLE FOR DAMAGE SECTION 20. INDEPENDENT CONTRACTOR SECTION 21. ASSIGNMENT, TRANSFER OR SUBLEASE SECTION 22. NONDISCRIMINATION AND DISADVANTAGED BUSINESS ENTERPRISE i

3 TABLE OF CONTENTS (continued) Page SECTION 23. AIRPORT CONCESSION DISADVANTAGE BUSINESS ENTERPRISES SECTION 24. PENDING CONSTRUCTION AND NON DEFAULT TERMINATION SECTION 25. TERMINATION BY CONCESSIONAIRE SECTION 26. TERMINATION BY AUTHORITY SECTION 27. OBLIGATIONS IN EVENT OF DEFAULT SECTION 28. GOVERNMENTAL AND BOND RESOLUTIONS SECTION 29. NOTICES SECTION 30. WAIVER AND SEPARABILITY OF TERMS SECTION 31. HEADINGS SECTION 32. NO BROKERS INVOLVED SECTION 33. INCORPORATION OF DOCUMENTS; ENTIRE AGREEMENT SECTION 34. GOVERNING LAW; TIME ii

4 CONCESSION AGREEMENT THIS AGREEMENT, made and entered into this day of, 2005 by and between the Louisville Regional Airport Authority ("Authority") and Vanguard Car Rental USA Inc. d/b/a Alamo, a Delaware corporation ("Concessionaire"), WITNESSETH; For and in consideration of the covenants and agreements hereinafter contained and other valuable consideration, the parties agree for themselves, their successors and assigns, as follows: SECTION 1. PREMISES 1.1 Authority hereby leases to Concessionaire, and Concessionaire takes the following areas: A. For its exclusive use, the counter space in the Landside Building, shown as location #4 on Exhibit B attached hereto, comprising of 253 square feet, more or less, in which Concessionaire shall equip, install and maintain an office area and one counter; B. For its exclusive use, that portion of the QTA building, shown as location #4 on Exhibit C-1, comprising of 133 square feet, more or less (the QTA Exclusive Space ); C. For is exclusive use, the QTA Parking Spaces, shown on Exhibit C-2, as allocated by Authority from time to time in accordance with Section 12 hereof, which at all times shall be at least 25 spaces (the QTA Parking Spaces ); D. For is exclusive use, the kiosk location, shown as location #6 on Exhibit C-3 (the Kiosk Space ); and E. For its use in common with other rental car companies, other than Concessionaire, that have agreements with the Authority ( Rental Car Companies ) those facilities, areas and appurtenances which constitute QTA Common Facilities (the QTA Common Facilities ). 1.2 The type and design of the office area and counter insert to be constructed and installed by Concessionaire shall be approved in advance by Authority as specified elsewhere herein. The improvements provided by Authority and those to be provided by Concessionaire are specified in Section 8 of this Agreement. The equipment installed by Concessionaire shall remain the personal property of Concessionaire and may be removed by Concessionaire upon termination of the Concession Agreement. Any and all space of which Concessionaire is granted exclusive use and common use under this Agreement as designated on Exhibits B, C-1, C-2 and C-3 is, for the duration of such exclusive use and common use hereunder, defined as the "Premises". 1

5 1.3 Authority, its officers, agents and employees, shall have the right to enter the Premises at all reasonable times and for all reasonable purposes. 1.4 The Authority shall, at any time during the term of this Agreement, have the right, if it determines in its sole judgement to terminate the Concession Agreement with respect to the QTA space to address the parking requirements for Louisville International Airport (the Airport ) or otherwise, upon at least 12 months advance notice to the Concessionaire of such event. 1.5 Concessionaire shall not conduct, nor permit any employee to conduct, any business or commercial operation from the Premises or upon the property of Authority not herein or otherwise authorized by Authority. SECTION 2. PERMITTED USES AND PRIVILEGES 2.1 Concessionaire is hereby granted the non-exclusive right and privilege to operate a passenger vehicle rental concession at and from the Premises at the Airport. 2.2 Concessionaire, during the term of this Agreement, shall operate and maintain all signage under the brand name or trade name of Alamo. Concessionaire shall be prohibited from operating at the Airport under any brand name or trade name other than stated herein. No other brand name or trade name shall be used or displayed by Concessionaire at the Airport or upon the Premises during the term of this Agreement. 2.3 Concessionaire shall have the right to joint use, in common with others, of the driveways in the Terminal Area of the Airport for the conduct, operation and maintenance of the Concession. 2.4 Concessionaire, so long as permitted by law, shall be permitted to sell used automobiles, subject to the limitations of Paragraph 4.3 G., in order to maintain the modern fleet standards required by this Agreement. 2.5 Concessionaire shall further have the right to offer personal accident insurance to its rental car customers; such insurance being that which provides the customer with 24 hour insurance protection in the event of accidental death or bodily injury during the duration of a rental period and that which provides the passengers of a customer with insurance protection in the event of accidental death or bodily injury while such passengers are entering, occupying or leaving the rental vehicle during the duration of the rental period. 2.6 Concessionaire shall have the right to offer personal effects insurance to its rental car customers; such insurance being that which provides the customer with protection if any of the customer's personal items placed in the rental vehicle are damaged, destroyed or stolen from the rental vehicle during the duration of the rental period. 2

6 2.7 Concessionaire shall have the right to offer cellular phones and other electronic services to its rental car customers for the duration of the rental period. 2.8 Concessionaire shall have the right to offer infant/child safety restraint seats to its rental car customers for the duration of the rental period. 2.9 Authority agrees to do all that it lawfully is able to do to prevent persons, firms, or corporations engaged in the rental car business who do not hold permits, licenses, leases or concession agreements with Authority from soliciting such business at the Airport, provided that any off-airport rental car firm or agency shall have the right to pick-up or deliver any customer at the Airport if such firm or agency shall have prior arrangements with such customer Employees of Concessionaire shall have the right to park their private vehicles in such area(s) of the Airport as Authority may designate for airport employee parking, for so long as Authority makes such area(s) available for other Airport employees, under the same conditions and provisions and at the same charge as other non-authority employees are permitted to park. Employees of Concessionaire shall not park their private vehicles in the QTA; and, if found in violation, the private vehicle will be subject to towing. Authority is not hereby obligated to make such employee parking area(s) available. SECTION 3. TERM 3.1 This Agreement shall be binding upon execution by both parties for a term of five years commencing September 1, 2005 (the "Effective Date") and ending August 31, After the execution of this Agreement and receipt by Authority of all required bonds and insurance policies, Authority shall make available to Concessionaire, and Concessionaire shall have the right to enter on the Premises for the purpose of constructing, and otherwise installing, the Initial Improvements pursuant to Section 8 hereof. 3.3 Upon the expiration or other termination of this Agreement, Concessionaire's right to use the Premises, facilities, rights, licenses, services and privileges herein granted shall cease, and Concessionaire shall forthwith upon such expiration or termination surrender the same. The continued occupancy and use of the Premises by Concessionaire after the expiration of the five year term of this Agreement shall not result in the automatic renewal of this Agreement under KRS (1) or any similar statute then in effect, or otherwise, nor shall Authority's failure to object to or resist such continued occupancy operate to extend the term of this Agreement unless specifically agreed to in writing. For the purpose of payment of rents and fees, any such holding over by Concessionaire shall be construed as a month-tomonth tenancy at the rents and fees provided in Section 4 hereof in effect at the expiration or other termination of this Agreement. 3

7 SECTION 4. CONCESSION FEES 4.1 Commencing on the Effective Date herein and continuing for the term hereof, Concessionaire agrees to pay Authority for the use of the Premises and for the rights and privileges herein granted by Authority, a Concession Fee in an amount equal to: A. A business privilege fee, for the use of Authority provided driveways, terminal curb areas, other Airport facilities, other than the Premises leased to Concessionaire, and for the business opportunity afforded by the Airport, which is the greater of: 1. Ten percent (10%) of monthly gross receipts for each year of the term of the Concession Agreement. -or- 2. A monthly minimum guarantee of: First Year Second Year Third Year Fourth Year Fifth Year $21, per month $21, per month $21, per month $21, per month $21, per month B. For exclusive use terminal rental counter space: 1. For the first year, $15,425.41, payable in 12 monthly installments of $1, as a fixed charge for 253 square feet of exclusive use counter space in the Landside Building, as designated in Exhibit B hereto, such fixed charge being calculated on the basis of $60.97 per square foot per year, and 2. For the second year, $15,888.40, payable in 12 monthly installments of $1, as a fixed charge for 253 square feet of exclusive use counter space in the Landside Building, as designated in Exhibit B hereto, such fixed charge being calculated on the basis of $62.80 per square foot per year, and 3. For the third year, $16,364.04, payable in 12 monthly installments of $1, as a fixed charge for 253 square feet of exclusive use counter space in the Landside Building, as designated in Exhibit B hereto, such fixed charge being calculated on the basis of $64.68 per square foot per year, and 4. For the fourth year, $16,854.86, payable in 12 monthly installments of $1, as a fixed charge for 253 square feet of exclusive use counter space in the Landside Building, as designated in Exhibit B hereto, such fixed charge being calculated on the basis of $66.62 per square foot per year, and 4

8 5. For the fifth year, $17,360.86, payable in 12 monthly installments of $1, as a fixed charge for 253 square feet of exclusive use counter space in the Landside Building, as designated in Exhibit B hereto, such fixed charge being calculated on the basis of $68.62 per square foot per year. Provided; however, if the U.S. Department of Labor national Consumer Price Index ( CPI ) exceeds 3% growth in any year of the Agreement the terminal counter space rental rate will be increased for that year by the CPI. C. QTA Rent in the amount of $76.04 per space per month for each space allocated to Concessionaire pursuant to Section 12 hereof. D. Concessionaire shall pay the cost of maintenance and repair for the QTA as provided in Section 9 hereof. E. Concessionaire shall pay the cost of utilities used in QTA Common Facilities as provided in Section 10 hereof. F. (1) Customer Contract Fee. The Authority currently charges a fee of $5.00 per contract for each customer entering into rental contracts with Concessionaire (the "Customer Contract Fee"). The Authority hereby reserves the right to increase, decrease or eliminate the Customer Contract Fee or to change the Customer Contract Fee to a charge per day, or other method, rather than per contract in its sole discretion at any time, such increases or decreases or changes to be effective as provided by the Authority. (2) Collection and Remittance of Customer Contract Fees. Concessionaire shall collect the Customer Contract Fee from each customer. The Customer Contract Fee shall be identified on a separate line on all rental car customer contracts, after taxes, and shall be described as the "LIA Contract Fee." All Customer Contract Fees collected and/or held by the Concessionaire shall (i) be held in trust by the Concessionaire for the Authority's benefit, and (ii) be the Authority's property, and the Concessionaire acknowledges and agrees that it shall have only a possessory interest (not an equitable interest) in such Customer Contract Fees. Any such Customer Contract Fees collected by the Concessionaire shall be (i) in the amount established by the Authority from time to time for all rental car operators doing business at the Airport, and (ii) collected from all customers, including without limitation all customers receiving complimentary or discounted car rental under the Concessionaire's bona fide marketing plans. All Customer Contract Fees so collected shall be remitted to the Authority within fifteen days after the end of the calendar month during which such fees were collected. 5

9 (3) Accounting Records for Customer Contract Fee. The Concessionaire shall maintain records and controls that are sufficient to demonstrate the correctness of any such Customer Contract Fees collected by the Concessionaire and the amount of any Customer Contract Fees remitted to the Authority. The records shall be available for inspection and examination by the Authority or its duly authorized representatives at all times. G. The Concessionaire shall be required to collect and state the 10% of gross receipts to be paid to the Authority pursuant to 4.1.A.1 hereof in all rental contracts for all rentals, services or fees paid by its customers. Such amount shall be identified as Concession Rent on each rental contract. The Concessionaire shall state in all rental contracts the Vehicle License Fee, Loss Damage Waiver Fee, Collision Damage Waiver Fee, or other pass through fees allowed herein. Any such amounts collected by Concessionaire shall be included in gross receipts, and the Concession Rent amounts collected shall be subject to a recoupment fee or concession fee recovery by the Concessionaire and such recoupment shall not make the Concession Rent to exceed 11.11%. No other pass-through fees or charges shall be allowed other than exceptions allowed herein. The Authority shall have the right to modify or delete this requirement herein upon 30 days written notice to each Concessionaire if it concludes, in its sole discretion, that its treatment herein of passthrough fees is not in the best interest of the Authority, is contrary to accepted industry practices, or in unlawful. 4.2 The minimum guarantee, the terminal counter space rental and the QTA Rent shall be paid monthly in advance on or before the first Calendar Day of each month. Within 20 days after the end of each calendar month, Concessionaire shall, in addition, pay to Authority such an amount which, when added to the monthly minimum guarantee previously paid Authority for that month, will make the total amount of the business privilege fee paid to Authority equal to not less than the percentage of Concessionaire's gross receipts stipulated in Paragraph 4.1A.1 for that preceding month. Other rents or payments are due as provided in the Sections referenced above. Payments not made on or before the due dates shall accrue interest, from the date due until paid, at the rate set forth in Authority's Regulations as may be amended from time to time. 4.3 The term "gross receipts" as used herein shall mean, for all purposes hereof, the aggregate of the entire amount of all revenues received and services performed for cash, on credit or otherwise, of every kind, name and nature arising out of or from Concessionaire's operations at or from the Airport, regardless of actual collection, including without limitation: A. Amounts paid by customers of Concessionaire separately billed as additional charges for waiver by Concessionaire of its right to recover from customers for damage to the vehicle rented (commonly referred to as "CDW" or "LDW"), including unbundled CDW or LDW (unbundling commonly referred to as Rental Car Companies practices of having agreements with customers that stipulate an all inclusive rate that, in addition to time and mileage, may include loss damage 6

10 waiver, collision damage waiver, liability insurance supplement, personal accident insurance, and personal effects coverage); and B. Any charges separately billed to customers for prepaid fueling or as reimbursement for refueling an automobile which is rented pursuant to a rental agreement under which the customer is obligated to return the automobile with the same amount of gasoline as furnished at the inception of the rental (commonly referred to as "fuel to fill"); and C. The amount of any corporate or volume discounts or rebates. D. Any charges separately billed to customers of Concessionaire for Vehicle License Fee ( VLF ) including all items included in the VLF line item except federal, state or municipal sales taxes or other similar taxes such as property taxes. except: E. The amount of any federal, state or municipal sales taxes or other similar taxes separately stated and collected from customers of Concessionaire now or hereinafter levied or imposed; F. Any sums received by Concessionaire as compensation for damage to automobiles or other property of Concessionaire, or for loss, conversion, or abandonment of such automobiles; G.. Proceeds from the sale of vehicles under Paragraph 4.3 hereof; provided, however, that Concessionaire shall not, under this exemption, be permitted to annually sell more vehicles than: (1) the number of vehicles purchased each model year for use in the business activity authorized by this Agreement; or (2) the number of vehicles which were permanently assigned to Concessionaire's Airport operation; or (3) the number of vehicles in the average daily fleet of Concessionaire's Airport operation, whichever number of vehicles is greater, whether such sale shall be at wholesale, retail, barter or exchange. No later than the commencement date hereof, Concessionaire shall report to Authority the total number of vehicles in its rental fleet for this Concession as of the commencement date. Monthly thereafter, Concessionaire shall report to Authority the number of vehicles purchased, or permanently assigned, for use in its Concession rental fleet and the number of vehicles sold during that month and the cumulative total of purchases/assignments and sales for the then current agreement year. If, at the end of the then current year of this Agreement, the twelve month total of sales exceeds that number of vehicles which were purchased, or is in excess of that number of vehicles which were permanently assigned for use hereunder, or is in excess of the number of vehicles in the average daily fleet of Concessionaire's Airport operation, whichever number of vehicles is greater, then, in such event, Concessionaire shall report the total receipts from the sale of such excess vehicles and pay Authority 10% thereof, such amount to be in addition to any other sums due Authority under this Agreement; and 7

11 H. Customer Contract Fee. I. Any discounts separately stated on the rental agreement which are granted at the time the rental transaction commences, and are recorded and reported in separately documented accounts from non-excludable discounts. Company forfeits exclusion of all discounts in the event otherwise allowable discounts are commingled with any non-excludable amounts. No exclusion shall be allowed for any amount retained by a third party as a financing discount which may apply by reason of Company s acceptance of credit cards or other credit arrangements. No exclusion shall be allowed for the portion of retroactive rebates, dividends or refunds to any customer upon attainment of a specified volume of rentals attributable to revenue or as part of any other marketing plan which does not list the discount on the rental agreement at the commencement of the rental transaction. 4.4 No demand of payment need at any time be made, but it shall be the duty of Concessionaire to pay monies when due, without demand. Failure to pay the amounts due or comply with any other Concessionaire's financial obligations to Authority under this Agreement within 15 days of the due date set forth herein, will entitle Authority to terminate or suspend this Agreement upon giving Concessionaire 10 days advance notice of its intention to do so, and for no other cause than nonpayment. If payment is not made on or before the 10th day after delivery of such notice, Authority, in addition to all other rights and remedies it may have, may terminate the Concession Agreement and reenter and take possession of any Premises on the Airport of which Concessionaire has exclusive use. 4.5 Except for its fleet of rental vehicles, Concessionaire hereby waives the right to claim that any of its property located on the Airport is exempt from execution or attachment, or exempt by any law from the payment of debt; and, except for its fleet of rental vehicles, all such property shall be subject to and responsible for the payment of the money agreed to be paid by Concessionaire under this Agreement, and for the discharge of any liability created hereby, for which a lien on such property is hereby granted to Authority. 4.6 Concessionaire hereby agrees that it will not, after receipt of the notice pursuant to Paragraph 4.4, remove any of its property from the Premises until the default has been cured. Concessionaire hereby grants to Authority, at any time after 10 days following the receipt of such notice, the right to take possession of all property of Concessionaire located at the Airport, to remove the same to a storage place selected by Authority and to retain such property in storage either at such place or its original site on the Airport, until the default is cured and a reasonable charge for removal and storage is paid to Authority. This right shall be in addition to, and not in substitution for, any other rights of Authority. It is further agreed that Authority shall not be liable for any damage to such property incurred as a result of its removal or storage, unless such damage is caused by negligence on the part of Authority, or for any loss of business or indirect injury to Concessionaire or its business resulting from or attributable to such removal or storage. 8

12 4.7 If at any time, Concessionaire and other Rental Car Companies using the QTA do not account for at least 50% of the gross receipts of rental car companies doing business at the Airport, whether under a Concession Agreement or not, then Concessionaire and Authority may re-negotiate the rentals payable with respect to the QTA. 4.8 Concessionaire shall not modify its accounting methods or rename or redefine services or products, which under the terms of this Agreement would be subject to gross receipts. Except as provided in Paragraph 4.3 A through I, all other fees or charges collected shall be considered gross receipts and shall not be withheld from the percentage calculation. Unless revenues from Concessionaire is expressly and particularly excluded from gross receipts under this Agreement, such revenues shall be included in gross receipts. Revenues that may be derived from sources similar but not identical to those described herein shall be included in gross receipts unless expressly excluded by this Agreement. 4.9 All reports and submissions to the Authority as required in Section 4 hereof shall also be subject to reporting requirements pursuant to Section 6 herein. SECTION 5. PERFORMANCE BOND 5.1 Concessionaire shall, before commencement of operation of the Concession granted by this Agreement furnish Authority a Performance Bond in the amount equal to 50% of the highest annualized minimum monthly guarantee to be paid to Authority by Concessionaire under this Agreement, which shall be $128, The term of such Performance Bond shall be for five years, in accordance with the term of this Agreement. The Performance Bond shall be given by Concessionaire, at Concessionaire's sole expense, to assure and guarantee the performance by Concessionaire of all its obligations, including the payment of Concession Fees and any other payments due to the Authority, under this Agreement, and shall not be canceled on less than 30 days notice to Authority. The Surety or Sureties, for the required Performance Bond shall be a Corporate Surety or Sureties duly authorized to do business in the Commonwealth of Kentucky and shall be subject to approval by Authority. Concessionaire may, at its option, substitute an Irrevocable Bank Letter of Credit drawable in Jefferson County, Kentucky, payable without condition to Authority, in lieu of a Performance Bond underwritten by other corporation Surety, in a form acceptable to Authority. The term of such Letter of Credit shall be for five years, in accordance with the term of this Agreement. It shall not be necessary for Authority to terminate this Agreement, or to pursue any other remedy available to it, in order to look to such security for performance. Failure to maintain such security in effect shall constitute a default hereunder, and shall justify Authority asserting any right, or taking any action, permitted elsewhere in this Agreement, or by law, for its protection or for enforcement of the obligations of Concessionaire. The rights of Authority under this paragraph shall be in addition to, and not in substitution for, any other rights of Authority. 9

13 SECTION 6. MAINTENANCE AND SUBMISSION OF RECORDS AND REPORTS 6.1 Books and Records. A. Concessionaire shall keep and maintain full and complete books of accounts and other records concerning operations at the Airport. All records required under this Section 6.1 shall be on a form or format acceptable to Authority; and, if Concessionaire s records have been generated from computerized data, Concessionaire shall provide the extracts of data files in a computer readable format on data disks, with attached files or suitable alternative computer data exchange formats. All rental agreement forms used by the Concessionaire in its operations at the Airport shall be sequentially numbered in a numbering series exclusively for the Airport. Accounting records of Concessionaire shall be stored sequentially, or in such other manner approved by the Authority, to provide expeditious access for audit purposes herein. In the event the Concessionaire does not maintain exclusive sequential numbering for rental agreements commencing at the Airport, the Concessionaire agrees to provide copies of rental agreements from other rental locations included in the nonexclusive sequence to Authority or its auditors for the purposes of testing reporting completeness. 1. The books and records shall include, but is not limited to: (a) all original accounting source documents detailing transactions relevant to this Agreement, including but not limited to (i.) original rental contacts, (ii.) operating/financial statements, (iii.) a complete (cumulative) general ledger, (iv.) monthly sales journals detailing each rental transaction for the month, (v.) reconciliations between the financial records and monthly reports submitted to the Authority, (vi.) bank statements applicable to the operation of this Concession at the Airport, (vii.) corporate trial balances, (viii.) corporate contracts with corporate customers, (ix.) annual audited financial statements and related reports on internal controls (including management representation letters), (x.) electronic media documenting accounting records, and (xi.) other sales related documents; and (b) all exclusions from gross receipts claimed by Concessionaire. For exclusions or adjustments to gross receipts, the books or records shall include, but are not limited to: (i.) all agreements between Concessionaire and corporate or volume customers establishing the customers' contractual rights to rebates; (ii.) lists of all individual rental transactions with all corporate or volume customers; (iii.) all individual rental agreements with all corporate or volume customers; and (iv.) any documentation or records supporting additional reductions to gross receipts. B. Concessionaire shall provide and maintain, by generally accepted accounting principles, accurate records of its gross receipts derived under this Agreement for a period of three years from the date the record is made. Concessionaire agrees that said records will be kept on the Premises during the term hereof or made readily available at the Authority s general offices. After the expiration or other termination 10

14 of this Agreement said records shall be kept at Concessionaire's principal office and shall remain accessible to Authority as provided herein. Authority shall have the right at all reasonable times to inspect the books, records and receipts of Concessionaire, or may so designate a duly authorized representative to make a review or investigation of the daily, weekly or monthly gross receipts accruing from said business; and Concessionaire shall freely lend its own assistance in such inspections, examinations and audits and provide the name and telephone number of Concessionaire s accounting manager or the like who has thorough knowledge of the accounting system as it pertains to this Agreement, if requested. C. Authority reserves the right to audit Concessionaire's books, including, but not limited to, the general ledger, records of receipts, and rental car contracts, at any reasonable time, for the purpose of verifying the gross receipts reported by Concessionaire hereunder. Concessionaire agrees to retain all such records, which shall be readily available to Authority for the purpose stated herein; provided, however, that individual rental contracts may be disposed of by Concessionaire 90 days after the end of each contract year upon 60 days prior written notice by Concessionaire to Authority. If, as a result of such audit, it is established that Concessionaire has understated the gross receipts received by it from all operations on the Premises by three percent or more, the entire expense of said audit shall be borne by Concessionaire. Any additional percentage fees due shall forthwith be paid by Concessionaire to Authority with interest thereon, at the rate set forth in Authority's Regulations as amended from time to time, from the date such additional percentage fee originally became due. D. In addition to the audit(s) provided for in Paragraph 6.1.C above, Authority is hereby granted the right to conduct an audit(s) of the books and records (whether in paper, electronic or other form), including the general ledger and all vehicle rental contracts, of any of Concessionaire's vehicle rental facilities located in Jefferson County, Kentucky for the purpose of determining what, if any, of the vehicle rentals were made to airport passengers and which have been diverted from the Concession and which would, or should, have otherwise been reported as gross receipts hereunder. Concessionaire hereby agrees to freely lend its assistance and support to Authority in the conduct of any audit(s) hereunder, including the conduct of customer origin/destination surveys as Authority deems appropriate. If, as a result of such audit(s), it is established that Concessionaire diverted any vehicle rentals from the Airport, Concessionaire shall report all such sums to Authority as gross receipts in the month in which such diversion occurred. Any additional percentage fees due shall forthwith be paid by Concessionaire to Authority with interest thereon, at the rate set forth in Authority's Regulations, from the date such additional percentage fees originally became due. If, as a result of any such audit, Authority determines that Concessionaire engaged in a willful diversion of vehicle rentals from the Airport, Concessionaire shall, in addition to the Concession Fee, and interest thereon, otherwise due, pay to Authority as liquidated damages and not as a penalty an amount equal to 25% of the total amount of all sums that would, or should, have otherwise been reported as gross receipts hereunder. If willful diversion is 11

15 6.2 Reports. determined, the entire expense of said audit(s) shall be borne by Concessionaire. If, based on two or more separate audits, covering two separate time frames, conducted pursuant to this Paragraph 6.1.D, Authority determines that Concessionaire has a systematic pattern of willful diversion of Airport vehicle rentals, Authority may, in its sole discretion and without further obligation to Concessionaire, upon seven days notice of its intent to do so, forthwith terminate this Agreement. In the event of such termination, Concessionaire shall remain liable for all sums due Authority herein and elsewhere hereunder. As used herein, "willful diversion" shall mean five or more vehicle rentals diverted from the Airport in any one calendar month; and "systematic pattern" shall mean willful diversion occurring in two or more calendar months. A. Concessionaire shall submit to Authority by the 20th day of each month, a verified statement of gross receipts of the Concession in a form as shown on Exhibit D, as well as all other required reports, for the preceding month. B. Concessionaire shall provide Authority with a monthly accounting of all transactions written at the Airport, such information to be reported at the time monthly gross receipts are reported in a form as shown on Exhibit E. To the extent permitted by law, Authority agrees that it will treat such data as confidential and will not disclose the transaction of Concessionaire, without Concessionaire's expressed approval, except that the total number of all transactions of all rental car Concessionaires and combined total gross receipts may be distributed with approval of Concessionaire. C. The statement of gross receipts as shown, reported and submitted to the Authority on Exhibit D and the monthly accounting of all transactions as shown, reported and submitted on Exhibit E shall agree in total. D. Concessionaire shall provide Authority, at Concessionaire's sole cost and expense, within 90 days after the end of each year of operation, a certified audited statement of gross receipts for the preceding twelve-month period covering all business transacted by Concessionaire at the Airport. The statement shall be certified by an independent Certified Public Accountant and shall be prepared in such detail and on such forms acceptable to Authority, at its sole discretion. E. All reports required under this Section 6.2 shall be on a form or format acceptable to Authority; and, if Concessionaire s reports have been generated from computerized data, Concessionaire shall provide the extracts of data files in a computer readable format on data disks, with attached files or suitable alternative computer data exchange formats. 12

16 6.3 Concessionaire shall pay Authority, in addition to Concession Fees or other financial obligations to the Authority not as a penalty but as liquidated damages, $5.00 every Calendar Day for each record Company is late in submitting to the Authority as required in Section 6.1 hereof. Said charge will continue until specific performance is accomplished and shall not be offset against any other amount due Authority. SECTION 7. MINIMUM STANDARDS 7.1 The following standards of service are the minimum levels acceptable to Authority for operation of the Rental Car Concession. In operation of the Concession, Concessionaire shall meet or exceed every such standard of service. A. Concessionaire shall accept "major" or nationally recognized credit cards and may have and operate a national credit card system exclusive to Concessionaire. B. Concessionaire shall operate and maintain a national reservations system conducted exclusively by Concessionaire, or in conjunction with a nationally franchised system, or a reservations system conducted by other than Concessionaire to which the general traveling public has reasonably convenient access. C. Concessionaire shall, as a condition of performance hereunder, offer one-way rental service, "rent it here, leave it there", for the convenience of the traveling public. D. Concessionaire shall provide bodily injury and property damage liability insurance coverage as required by Section 18 hereof. E. Concessionaire shall at all times maintain, at its own expense, on or reasonably near the Airport an adequate number of automobiles to meet reasonable public demand therefor. Such automobiles shall at all times be maintained by Concessionaire, at its own cost and expense, in good operating order and free from known or reasonably discernible mechanical defects, and shall be kept in clean, neat and attractive condition, inside and out. Concessionaire agrees that it will at no time use automobiles whose year model is more than two years older than the current model year. For example, when the current model year is 2005, only 2005, 2004 and 2003 models shall be used; when the current model year is 2006, only 2006, 2005 and 2004 models shall be used. Not less than 50% of Concessionaire's fleet shall be equipped with factory or dealer-installed air conditioning. Authority reserves the right to disapprove of any automobile supplied by Concessionaire that does not meet or exceed the standards contained herein for public use at the Airport. Notice of such disapproval shall be submitted to Concessionaire by Authority in writing with the reasons therefor and Concessionaire shall take immediate action to withdraw such unsatisfactory automobiles from service at the Airport. 13

17 F. Concessionaire shall furnish service on a fair, reasonable and nondiscriminatory basis to all users of the Airport. Concessionaire shall furnish good, prompt, clean, courteous and efficient service adequate to meet all reasonable demands for its services at the Airport. It shall maintain and operate the Concession in a first-class manner and shall keep its Premises in a safe, clean, orderly and inviting condition at all times, satisfactory to Authority. G. Concessionaire's rental counters shall be kept open so as to provide maximum availability of service and adequate rental opportunity to the public during such hours as may be established or reestablished from time to time by Authority, such period initially to be not less than 17 hours a day, from the hours of 6:00 a.m. to 11:00 p.m., seven days a week; provided, however, Concessionaire will remain open to meet any reservations arriving outside of such initial time frame. The hours during which the business conducted by Concessionaire hereunder shall remain open as hereinabove provided may, at the sole discretion, or with the approval, of Authority, be changed if the requirements of the air travelers and the public for such service changes, and such change is consistent with the flight schedules of the airlines serving the Airport and Authority deems the change to be in the best interest of the public. H. Concessionaire shall not misrepresent to the public its prices or the terms and provisions of its rental agreements or those of its competitors. Concessionaire shall fully inform each customer, prior to the execution of such customer s rental agreement, of all fees and charges applicable to such customer s rental. If the Authority determines, after notice and opportunity for Concessionaire to comment that any of Concessionaire s business practices are unreasonable, deceptive, or unconscionable, Concessionaire shall immediately cease such practices upon receipt of a written notice to do so from the Authority. The Authority will give advance notice to Concessionaire that the Authority considers a certain practice to be unreasonable, deceptive, or unconscionable and Concessionaire shall have an opportunity to respond to the allegation. I. Concessionaire may install, as a facility on the demised Premises, or at such other places as the parties may agree upon, a direct line telephone to the nearest office of Concessionaire for the purpose of supplying automobile rental service to Airport patrons during periods when other automobile rental facilities of Concessionaire are closed. J. Concessionaire shall select and appoint a full time manager of its operations herein authorized. Such manager shall be highly qualified and experienced, and vested with full power and authority to act in the name of Concessionaire in respect to the method, manner and conduct of the operation of the rental car facilities to be performed under this Agreement. Such manager or supervisor shall be assigned to a duty station at Airport where he or she shall be available during regular business hours, and at all times during the Manager's absence a duly authorized subordinate shall be in charge and available at such duty station. 14

18 K. Concessionaire shall provide, at Concessionaire's sole expense, a sufficient number of employees to effectively and efficiently operate the Concession at the Airport. Concessionaire shall employ enough persons to maintain adequate levels of automobiles available for rental. L. Concessionaire shall control the conduct, demeanor and appearance of its employees and representatives. Concessionaire's employees while on duty, shall wear acceptable uniforms, or other suitable attire, complete with name-tags identifying such employees, which shall, at all times, be maintained in a neat, orderly and clean condition. Such employees shall be trained by Concessionaire to render a high degree of courteous and efficient service and it shall be the responsibility of Concessionaire to maintain close supervision over such employees to assure the rendering of a high standard of service to the public and the patrons of the rental car concession. Upon reasonable objection from Authority concerning the conduct, demeanor or appearance of such persons, Concessionaire shall forthwith take all steps necessary to remove the cause of the objection. M. Concessionaire shall not permit its employees to engage in the solicitation of the services offered by Concessionaire outside of its rental counter area. Authority shall be the sole judge as to whether the conduct of Concessionaire's employees in the solicitation of business constitutes a violation of this Paragraph 7.1, and upon notice from Authority, Concessionaire shall forthwith take all steps necessary to eliminate the condition complained of. N. Concessionaire shall so conduct and carry on its automobile rental business on the Airport so as to maintain a friendly, cooperative, competitive relationship with other Rental Car Companies engaged in like business at the Airport and shall not engage in open, or public disputes, disagreements, or conflicts tending to impair the quality of the automobile rental service of Concessionaire or its competitors or be incompatible to the best interest of the public at the Airport. Authority shall have the right to resolve all such disputes, disagreements, or conflicts and its resolution thereof, shall be binding upon Concessionaire. O. In order to maintain the visual appearance of the Landside Building and to avoid visual clutter, Concessionaire shall keep its terminal counter, and back wall visible to the public, free and clear of all advertisements, hand-outs, schedules of rates, special offerings and any and all other material which Authority, in its sole judgment, deems undesirable. Concessionaire agrees to promptly remove all such material and matter from public view upon instruction of an authorized representative of Authority to do so. P. Concessionaire shall promptly respond to any and all written complaints of patrons within 48 hours of receipt of such complaint and shall promptly deliver to Authority a copy of such complaint and a copy of such written response to such complaining patron. 15

19 Q. Concessionaire shall provide and maintain on or conveniently close to the Airport, at Concessionaire's sole expense, adequate facilities to service and store vehicles used in operation of the concession at the Airport. Such facilities, if not already available, shall be constructed as soon as possible, but in no event later than 90 days following the commencement date of this Agreement. For purposes of this Paragraph 7.1, "Conveniently Close" shall mean within a one-way driving time of 10 minutes under normal traffic conditions. R. Concessionaire shall, during the term of this Agreement, be qualified to do business in the Commonwealth of Kentucky and shall obtain and maintain all necessary business licenses and permits from Louisville Metro Government or other applicable governmental authority. SECTION 8. INSTALLATION OF IMPROVEMENTS AND TENANT FINISHES 8.1 The existing rental car counter located on the Premises is available to the Concessionaire as is in its present condition. On the back wall behind the counter, Concessionaire will provide a sign identifying Concessionaire, said sign to be of a size, color, style and material selected solely by Authority and uniform for all rental car concessionaires. 8.2 Subject to prior written approval by Authority, Concessionaire, at its expense, shall provide all other improvements and finishes desired by Concessionaire, or required but not provided by Authority pursuant to Paragraph 8.1 above. The improvements and/or finishes to be provided by Concessionaire include, but are not necessarily limited to, the counter insert(s) and office area floor and wall covering. The Concessionaire shall be required to modify or improve the leased space in the Landside Terminal at its expense to comply with new design standards or guidelines promulgated by the Authority from time to time. Concessionaire shall use the ceiling and lighting as provided by Authority and shall not be permitted to alter, change or augment such fixtures. 8.3 Concessionaire shall prepare, and submit to Authority for its written approval, plans and specifications for construction of improvements and tenant finishes to the Premises, pursuant to Paragraph 8.2 above, for operation of its terminal counter and office area for the Rental Car Concession in the Landside Building at the Airport and the kiosk in the QTA (hereinafter referred to as the "Initial Improvements"). Concessionaire agrees that it shall, not later than 60 days after direction by the Authority, submit detailed plans and specifications for the proposed Initial Improvements to be made to the Premises to Authority for approval. Authority agrees that it shall either approve said plans and specifications as submitted, or transmit to Concessionaire all reasonable revisions that must be made to said plans and specifications in order to obtain Authority approval, within 30 Calendar Days of receipt of said plans from Concessionaire. If Authority requires revisions of the original plans and specifications, Concessionaire shall have not more than 30 Calendar Days from the date of receipt of said proposed revisions to resubmit the plans and specifications for Authority approval. Upon receiving final Authority approval of the plans and specifications, Concessionaire shall engage a qualified contractor(s) to construct said Initial Improvements. 16

20 Construction shall commence promptly and shall be completed in a diligent manner. Initial Improvements constructed pursuant to this provision shall become the property of Authority during and upon final completion of construction except the rental car kiosk. 8.4 While it is agreed and understood that Concessionaire is not hereby granted any such right nor is Authority hereby obligated to confer any such approval, Concessionaire may be permitted to construct, or otherwise make, other improvements in addition to the Initial Improvements specified in Paragraph 8.3 above, to the Premises from time to time (hereinafter referred to as "Subsequent Improvements") subject to prior written Authority approval, at Concessionaire's sole cost and expense. Concessionaire agrees that it shall submit detailed plans and specifications for all of the proposed Subsequent Improvements to Authority for written approval prior to commencing any such work. Upon receiving final Authority written approval, if such approval is given, of the plans and specifications, including a construction time schedule, Concessionaire shall engage a qualified contractor(s) to construct said Subsequent Improvements. Subsequent Improvements undertaken pursuant to this provision shall become the property of Authority during and upon final completion of construction. 8.5 Concessionaire shall not allow renovations or construction, including the Initial Improvements or any Subsequent Improvements, to commence on the Premises without first assuring Authority that all applicable Equal Employment Opportunity/ Nondiscrimination and Minority or Disadvantaged Business Enterprise provisions have been included as part of the contract for such renovation or construction work. Concessionaire shall indemnify and hold Authority, its officers, agents and employees, free and harmless from any and all claims, suits, loss or damage, or injury to persons or property resulting from or arising out of construction or renovation on the Premises unless such acts result from the sole negligence of Authority, its employees, agents and representatives. Concessionaire shall not commence or undertake any such permitted work nor will allow or permit any agent, independent contractor or subcontractor ("Contractor") to commence work until all performance and payment bonds and all insurance certificates required hereunder have been approved and are in Authority's possession. Approval of the insurance by Authority shall not relieve or decrease the liability of Concessionaire or its agents, independent contractors, or subcontractors. Concessionaire shall furnish Authority, at Concessionaire's sole expense the following: A. Performance and Payment Bonds. These bonds shall have surety satisfactory to Authority, in a sum equal to 100% of the amount of the improvements to be made, payable to Authority, to insure the execution of the entire work according to the approved plans and specifications, and for payment of labor and material suppliers. B. Kentucky Unemployment Insurance Bonds. Under the provisions of KRS and , provide a separate bond, or have specific provisions made in the Payment Bond to assure payment of all unemployment contributions which become due and payable under the Kentucky Unemployment Insurance Law. 17