RICHMOND INTERNATIONAL AIRPORT FOOD AND BEVERAGE CONCESSION AGREEMENT. by and between CAPITAL REGION AIRPORT COMMISSION. and [NAME OF CONCESSIONAIRE]

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1 CB DRAFT: 12/22/04 Gross Revenues in lieu of Gross Receipts throughout RICHMOND INTERNATIONAL AIRPORT FOOD AND BEVERAGE CONCESSION AGREEMENT by and between CAPITAL REGION AIRPORT COMMISSION and [NAME OF CONCESSIONAIRE]

2 TABLE OF CONTENTS ARTICLE 1 DEFINITIONS, REPRESENTATIONS AND WARRANTIES Page Section 1.01 Definitions... [table of contents to come]

3 CONCESSION AGREEMENT FOOD AND BEVERAGE OPERATIONS RICHMOND INTERNATIONAL AIRPORT THIS FOOD AND BEVERAGE CONCESSION AGREEMENT, made and entered into this day of, 2005, by and between the Capital Region Airport Commission, a political subdivision of the Commonwealth of Virginia (the Commission ), and, a corporation organized and existing under the laws of the State of (the Concessionaire ), having its principal offices at. W I T N E S S E T H : WHEREAS, the Commission owns and operates the Richmond International Airport (hereinafter called the Airport ), located in Henrico County, Virginia; WHEREAS, Concessionaire is a corporation engaged in the business of operating airport food and beverage concessions similar in nature to that proposed for the Airport; WHEREAS, the Commission solicited competitive proposals for the operation of a food and beverage concession at the Airport, and Concessionaire submitted a proposal that the Commission selected; and WHEREAS, the Commission deems it advantageous to itself and to its operation of the Airport (i) to award certain concession rights to Concessionaire to operate an airport food and beverage concession at the Airport (the Concession as same is specifically defined herein) under an agreement containing mutually satisfactory terms and covenants, (ii) to lease unto Concessionaire certain premises (the Leased Premises as same is specifically described herein) in connection with the Concession, and (iii) to grant unto Concessionaire certain rights, privileges, and uses in connection with the foregoing, as necessary to provide food and beverage to the traveling public within the Terminal Building; NOW, THEREFORE, for and in consideration of payment of the fees and charges hereinafter provided, and of the mutual covenants, agreements and conditions hereinafter contained to be kept and performed, Commission and Concessionaire DO HEREBY AGREE AS FOLLOWS:

4 ARTICLE I DEFINITIONS, REPRESENTATIONS AND WARRANTIES Section 1.01 Definitions. The following words and phrases shall have the meaning set forth below: Agreement means this Food and Beverage Concession Agreement between the Commission and Concessionaire, as it may be amended or supplemented from time to time. Concession shall mean rights and privileges to operate the food and beverage concession from the Leased Premises in the Terminal Building as herein set forth and as more particularly described in the RFP and the Proposal. Concession Fee shall have the meaning more fully described in Section Default shall refer to the conditions under which this Agreement may be terminated as further described in Article 12. Enplaning Passengers shall mean the aggregate number of passengers departing via airplane from the Terminal Building, excluding others in the Terminal Building but not traveling via commercial air service such as persons coming into the Terminal Building to greet arriving passengers, airport employees, and the employees of airport tenants. Need to use deplaning to match the RFP Effective Date shall mean [January 1, 2006, at 12:01 a.m.]. Fiscal Year shall mean the Commission s fiscal year, currently July 1 through June 30, as the same may be changed from time to time. Force Majeure shall mean acts of God, acts of the public enemy, orders of any kind of the government of the United States of America, or of any state thereof, or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, tornadoes, storms, floods, washouts, droughts, arrests, restraining of government and people, civil disturbances, explosions, nuclear accidents, wars, breakage or accidents to machinery, transmission pipes or canals, partial or entire failure of utilities, shortages of labor, material, supplies or transportation, or any other cause not reasonably within the control of the party claiming inability to perform due to such cause. Gross Receipts shall have the meaning more fully described in Section Hazardous Materials shall have the meaning set forth in Section. Laws means all federal, state, regional, county and local laws, ordinances, resolutions, orders, directions and regulations, including without limitation those pertaining to Hazardous - 4 -

5 Materials, applicable to Concessionaire, to its operations on and about the Airport, and to the performance of its undertakings in this Agreement. Leased Premises shall mean those particular areas within the Terminal Building leased to Concessionaire, as shown on Exhibit A hereto, as such exhibited ma be amended and in effect from time to time. Minimum Annual Guarantee shall have the meaning set forth in Section Person shall mean any association, individual, corporation, governmental entity, partnership, joint venture, business association, estate or any other organization or entity. President and CEO shall mean the Commission s President and Chief Executive Officer or his/her designee. Proposal shall mean Concessionaire s proposal dated, 2005, submitted in response to the RFP. RFP shall mean the Commission s Request for Proposals dated, 2005, as amended or supplemented by written addenda dated, 2005 and, Rules and Regulations shall mean the Rules and Regulations Regarding Conduct and Activities on the Property of the Capital Region Airport Commission, as amended through May 25, 1999, attached as Exhibit B hereto, as the same shall be promulgated, amended or in effect from time to time, and any successor rules or regulations. Terminal Building shall mean the Commission s passenger terminal building, providing for the arrival and departure of passengers flying on commercial air carriers, as it may exist from time to time. Term shall mean the time between the Effective Date and the Termination Date. Termination Date shall refer to the date on which this Agreement expires or is terminated, in either case without renewal or award following a rebidding or renegotiation of the airport food and beverage concession (in which case this Agreement shall continue as long as Concessionaire is operating at the Airport under holdover or similar provisions of this Agreement) or any similar or successor agreement. TSA means the U.S. Transportation Security Agency, an agency of the United States Government, or successor agency. Section 1.02 warrants that: Representations by the Commission. The Commission represents and - 5 -

6 (a) The Commission is a duly organized and existing political subdivision of the Commonwealth of Virginia. (b) The Commission has the authority to execute and deliver this Agreement and to perform its obligations hereunder. (c) The Commission, by proper action, has duly authorized the execution and delivery of this Agreement. (d) No event has occurred, and to the Commission s knowledge no condition currently exists, which constitutes or could reasonably result in, with the passage of time or the giving of notice, or both, a default on the Commission s part hereunder. Section 1.03 warrants that: Representations by Concessionaire. Concessionaire represents and (a) Concessionaire is a corporation duly created and existing under the laws of the state of its incorporation, is qualified to do business and is in good standing in the Commonwealth of Virginia, has the corporate power and authority to enter into this Agreement, has duly authorized the execution and delivery of this Agreement by proper [corporate] action, has the [corporate] power to carry on the business of operating the food and beverage concession at the Airport, and has duly qualified to transact business in the Commonwealth of Virginia. (b) This Agreement shall constitute the valid and binding obligation of Concessionaire enforceable against Concessionaire in accordance with its respective terms except that (i) its enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws of general application relating to the enforcement of creditor s rights, and (ii) certain equitable remedies, including specific performance may be unavailable. (c) There is no action, suit, proceeding or investigation at law or in equity before or by any court, either state or federal, or public board or body pending or threatened against Concessionaire, calling into question (i) the creation or existence of Concessionaire, (ii) the validity of this Agreement, (iii) the authority of Concessionaire to execute and deliver this Agreement, or (iv) the authority of Concessionaire to perform in any material respect its obligations hereunder. (d) The execution and delivery by Concessionaire of this Agreement and the performance of its obligations hereunder, will not violate the [certificate of incorporation or bylaws] of Concessionaire nor, in any material respect any provision of law or regulation, or any judgment, decree, writ, order or injunction applicable to Concessionaire, and will not contravene in any material respect the provisions of or constitute a default under any material agreement to which Concessionaire is a party or by which any of its properties are bound. (e) No event has occurred, and no condition currently exists that constitutes or could reasonably result in, with the passage of time or the giving of notice, or both, a Default with respect to or on the part of Concessionaire hereunder

7 Section Incorporation by Reference; Contract Composition. (a) The RFP, the Proposal and any amendments to the Proposal shall become part of this Agreement and are specifically incorporated by reference into this Agreement. The component parts of this Agreement shall consist of: (i) this Agreement and its exhibits, as executed, and any subsequent amendments, supplements or modifications hereto; (ii) the RFP, including its appendices and exhibits; (iii) any addenda, supplements or amendments to the RFP; and (iv) the Proposal, amendments or supplements thereto and any written clarifications or representations incorporated as part of the procurement process. (b) The order of precedence among the components of this Agreement shall be, first, this Agreement; second, the RFP; and third, the Proposal. A higher-order component shall supersede a lower-order component to the extent necessary to resolve any inconsistencies between them, but silence on any matter in a higher-order component shall not negate or modify the provisions of a lower-order document as to that matter. In the event that an issue is addressed in the Proposal that is not addressed in the RFP, no conflict in language shall be deemed to occur. However, the Commission reserves the right to clarify any contractual ambiguity in writing, and such written clarification shall govern in case of conflict. In all other matters not affected by the written clarifications, if any, this Agreement and the RFP shall govern. The Commission is solely responsible for rendering decisions in matter of interpretation of all terms and conditions. ARTICLE II TERM Section Term. (a) Concessionaire shall have and hold the rights, licenses and privileges set forth herein, commencing on the Effective Date and continuing for a period of ten years (10) years through December 31, 2015, subject to [extension,] earlier termination and cancellation as provided in this Agreement. [(b) The Term of this Agreement shall, at the Commission s option, to be exercised in its sole discretion, be extended for up to five (5) additional one (1) year periods.] no extension offered Section Option Periods. The Commission shall provide written notice of its determination to extend no later than 90 days prior to the expiration of the then current Term. Concessionaire may accept or decline the extension within 30 days of the Commission s notice

8 Failure of the Concessionaire to respond to the Commission s notice within 30 days shall be considered a declination of the offer. NO Section 2.03 Holdover. Should Concessionaire operate all or any portion of the Concession after this Agreement has terminated, without the written consent of the Commission or any written extension or renewal hereof, such holding over shall not be deemed to operate as an extension or renewal of this Agreement, and Concessionaire will operate under the same terms and conditions contained in this Agreement. Concessionaire shall in such case be deemed a tenant at sufferance during the period of such use, which the Commission may terminate at any time, and Concessionaire shall continue to pay the charges provided herein. In the event of such holdover, the Commission shall have all remedies provided under applicable law. ARTICLE III LEASED PREMISES Section Leased Premises. For the Term herein specified, the Commission hereby demises and leases to Concessionaire, and Concessionaire hereby takes and leases from the Commission, the Leased Premises for the uses and purposes specified in this Agreement. This leasing and the concession rights and privileges granted and awarded to Concessionaire are expressly subject to all of the terms, covenants and conditions of this Agreement. Concessionaire shall operate the Concession within the Leased Premises summarily described below and as depicted on applicable pages of Exhibit A attached hereto and made a part hereof, subject, however, to the expansion, reduction or relocation of any such area specified in Article XI hereof. Facility Concept Space # Approximate Square Feet AT2030 3,492 AT2025 2,005 AT AT AT ? 350 A B Total [Storage?] [10,411] - 8 -

9 Section Square Footage. The square footage figures appearing throughout Exhibit A are approximate only and are subject to on-site measurements to be performed by the Concessionaire, at their option. Section Non-Exclusivity. The rights and privileges granted to the Concessionaire under this Agreement are not exclusive, except solely as to the Leased Premises, and the Commission specifically reserves the right in its sole and unfettered discretion to use or otherwise permit its facilities, including other areas in the Terminal Building, to be used for any activities whatsoever, including the sale of food and beverages to the public. Subject to change clause, if airline situation changes exhibit A subject to change???? ARTICLE IV CONCESSION RIGHTS AND PRIVILEGES Section Concession Rights Granted. (a) Concessionaire is hereby granted and awarded a concession to operate an airport food and beverage concession in the Terminal Building at the Airport. The concession rights and privileges granted and awarded to Concessionaire are expressly subject to all terms, covenants and conditions of this Agreement. (b) Except as the Commission may approve in writing, Concessionaire shall not engage in any other activities on or in respect of the Airport. Section Right to Operate. Commission hereby grants to Concessionaire the right and obligation to occupy, equip, furnish, operate, maintain, market and promote food and beverage facilities in those the Leased Premises. The rights granted shall be carried on solely and exclusively within the limits and confines of the Leased Premises; subject, however, to the expansion, reduction or relocation of any such area as provided in Article XI. Section General Obligation to Operate. At the locations indicated herein, Concessionaire shall provide food and beverage service to Airport users, on and throughout each day of the Term, without exception. Concessionaire shall take all reasonable measures, in every proper manner, to develop, maintain and increase the business conducted by it under this Agreement. Concessionaire shall actively operate each food and beverage facility so as to best serve the needs of the traveling public. Section Right to Advertise/Promote Products. Concessionaire may advertise brand-name products on its packaging and within the Leased Premises only upon the written approval of Commission. Section Quiet-Enjoyment. Concessionaire, upon payment of fees and charges as described in Article V hereof, and its sections, and upon observing and keeping the conditions and covenants of this Agreement on its part to be observed and kept, shall lawfully and quietly hold, use and enjoy the Leased Premises during the term of this Agreement

10 Section Ingress and Egress. Concessionaire shall have reasonable rights of ingress to and egress from the Leased Premises, subject to the Rules and Regulations. Such rights of ingress and egress shall apply to Concessionaire s employees, agents, contractors, suppliers and other authorized individuals. Commission agrees to use its best efforts to keep the routes of ingress and egress to the Leased Premises free from obstruction including the removal of snow, ice, vegetation, stones, and other foreign matter. The Commission has the right to alter or change the routes of ingress and egress upon giving reasonable notice to Concessionaire and upon providing other reasonably adequate means of ingress and egress. Section Parking Facilities. Subject to the Rules and Regulations, Concessionaire s employees shall park their vehicles only in parking areas at the Airport designated by the Commission from time to time for such purposes, such parking to be subject to applicable fees and charges. Section Exclusivity. The rights pertaining to the Concession granted herein to Concessionaire shall be exclusive within the Leased Premises but otherwise shall be nonexclusive at all other locations in the Terminal Building and at the Airport. After the Effective Date, the Commission may identify space for future concession development in areas not part of the Leased Premises. The Commission may request Concessionaire to develop and lease this space, subject to the Commission s approval of the proposed use and negotiation and execution of a written amendment to this Agreement. The Commission also reserves the right to issue additional requests for proposals, requests for bids or directly negotiate with other parties to develop such space. By its execution of this Agreement, Concessionaire acknowledges that it shall have no exclusive right to lease, operate or develop such space. Section Tenant Employee Dining. From time to time, Commission s other tenants may, at Commission s option, be granted the right to operate dining facilities for their employees, but not for the general public, and not in locations to which the general public has access. Such rights may include the right to sell food and beverages, either directly or through a contractor. Concessionaire shall not have the exclusive or first right to provide such services to such tenants at the Airport. Section Dispute with Other Tenants. In the event of a dispute between Concessionaire and any other Airport tenant as to the services to be offered or products to be sold, Concessionaire shall meet and confer with the Commission s President and CEO. The President and CEO shall determine the services to be offered or products to be sold by each, and Concessionaire shall be bound by such determination. Section No Other Uses. Concessionaire shall not use nor permit the Leased Premises to be used for any purpose other than as set forth herein, except with the prior written consent of Commission, nor for any use in violation of any Laws. Section Storage Space. Concessionaire may lease storage space identified by the Commission if so available for such purposes, at the sole discretion of the Commission, subject to applicable charges for Terminal space. Storage space may be used only for such purposes (including refrigerated storage) and for no other purpose, without the Commission s consent

11 ARTICLE V CONCESSION FEES Section Concession Fees. (a) In addition to any other payments required under this Agreement, Concessionaire, in consideration of the Concessionaire s privileges herein granted, shall pay a Concession Fee to the Commission during each year of the Term. The Concession Fee shall be paid on a monthly basis and shall be equal to the greater of (i) the Percentage Fee applicable to each category of Concessionaire s Gross Receipts for all business done by Concessionaire at the Airport for such period, as defined and as further provided in Section 5.01(b), or (ii) the amount of the Minimum Annual Guarantee for such period. On the terms and conditions set forth in Section below, Concessionaire shall also make certain profit-sharing payments to the Commission, which a (b) The Percentage Fee shall be the sum of (1) percent ( %) of the Gross Receipts derived or earned from all alcoholic beverages sales, (2) percent ( %) of the Gross Receipts derived or earned from all food sales [at the locations], (3) percent ( %) of the Gross Receipts earned from all other food and beverage sales, and (4) percent ( %) of the Gross Receipts earned from all in-flight catering sales. (c)(1) The Minimum Annual Guarantee for the first year of the Term shall be Thousand Dollars ($ or $ per month). Thereafter, commencing [January 1, 2007] [and including extensions of this Agreement pursuant to Section 2.01(b) hereof,] the Minimum Annual Guarantee shall be the greater of or eighty-five percent (85%) of the all Concession Fees paid for or during the previous year, but in no case less than $. Should this Agreement terminate or be terminated at any time other than at the end of the Agreement year (i.e., December 31), the Minimum Annual Guarantee for the year in which such termination occurs shall be in the same proportion that the number of days the Agreement is in effect for that year bears to the total number of days in the year. (2) In the event that Enplaning Passengers decrease by an amount greater than twenty percent (20%) from one Agreement year to the immediately following Agreement year (i.e., the period January 1 through December 31), the Commission will adjust the Minimum Annual Guarantee for that period by the percentage corresponding to the percentage decrease in Enplaning Passengers. Within 90 days after each Agreement year, Commission will compare the actual number of Enplaning Passengers for that period to the immediately preceding period. If Enplaning Passengers have decreased by an amount greater than twenty percent (20%), Commission will adjust the Minimum Annual Guarantee. If a smaller amount is due, Commission will credit such amount against future payments of Concession Fees. (d) Gross Receipts shall include all receipts, whether by coin or currency, on account, by check, debit or credit card, collected or uncollected, whether conducted on or off- Airport, derived by Concessionaire in connection with or as a result of its operation of the Concession, without any exclusion whatever, except those expressly permitted under (i) through

12 (ix) next following. Gross Receipts shall include the sales revenues received or billed by Concessionaire from the sale, dispensing and serving of food, food products and beverages, including alcoholic beverages, and other related services and products, [including in-flight catering sales]. Goods, work or services furnished by any person or firm in lieu of payment in exchange for value received shall be deemed to be cash sales. Gross Receipts shall, however, exclude revenues from the following: (i) retail sales taxes, excise taxes or related direct taxes on the consumer which are collected by Concessionaire on such sales, provided all such taxes are properly accounted for and recorded; (ii) receipts from the sale of waste or scrap materials resulting from the operation of Concessionaire s business on Airport; receipts from the sale of or the tradein value of furniture, fixtures or equipment used on the Leased Premises, and owned by Concessionaire; receipts from the sale at cost of uniforms/clothing to Concessionaire s employees where such uniforms/clothing are required to by worn by such employees; (iii) the value of any merchandise, supplies or equipment exchanged or transferred from or to other business locations of Concessionaire, where such exchanges or transfers are not made for the purpose of avoiding a sale by Concessionaire which would otherwise be made from or at the Leased Premises; receipts in the form of refunds from or the value of merchandise, supplies or equipment returned to shippers, suppliers or manufacturers; (iv) receipts with respect to any sale where the subject of such sale, or some part thereof, is thereafter returned by the purchaser to and accepted by Concessionaire, to the extent of any refund actually granted or adjustment actually made, either in the form of cash or credit; (v) the cost or value of free meals given to employees of Concessionaire pursuant to such employees employment contracts; the amount of a % discount on all items except alcoholic beverages which Concessionaire may give to those Airportbased employees who have been issued Airport Security Identification badges by the Commission or identification issued by airport-based employers. (vi) the amount of any cash or quantity discounts received from sellers, suppliers or manufacturers; (vii) the amount of any gratuity paid or given by patrons or customers to employees of Concessionaire; and (viii) receipts in the form of reimbursements from Concessionaire s subcontractor(s) for any taxes, loan payments and/or license fees paid by Concessionaire for or on behalf of such subcontractor

13 (e) The Commission and/or Federal Government shall retain the right to restrict access to areas airside of security checkpoints to ticketed passengers and Airport/airline personnel. The Commission shall retain the right to restrict access for purposes of construction of Commission-approved improvements. During such actions, Concessionaire shall not be entitled to any fee abatement or percentage adjustment, other than the reductions specifically set forth in this Agreement. (f) Promptly upon the conclusion of each Agreement year, the Commission shall prepare and submit to Concessionaire a statement showing the total Percentage Fees for such period. If the Concession Fees paid by Concessionaire for or during such period exceed the greater of (i) the then-applicable Minimum Annual Guarantee for such period, or (ii) the Percentage Fees for such period, such overpayment shall be credited to the fees and charges next thereafter due from Concessionaire. If Concessionaire s aggregate payments are less than the total due, Concessionaire shall, within ten (10) calendar days, pay Commission the difference. The statement submitted by the Commission under this provision shall be binding, absent manifest error, and may also set forth the applicable Minimum Annual Guarantee for the ensuing Agreement year. Section Profit-Sharing. (a) Effective, and in addition to all other sums payable under this Agreement by way of Concession Fees, rent, additional rent or otherwise, Concessionaire shall pay to the Commission fifty percent (50%) of its annual profits from the operation of the Food Concession and the Retail Concession according to the following formula: Gross Receipts (as defined in this Agreement) from such operations -- (a) LESS cost of sales fixed at 32% of Gross Receipts; (b) LESS payroll fixed at 30% of Gross Receipts; (c) LESS controllable expenses fixed at 6% of Gross Receipts; (d) LESS non-controllable expenses fixed at 2% of Gross Receipts; (e) LESS Concession Fees payable pursuant to Section 5.01; (f) LESS actual depreciation/amortization, on a monthly basis, of capital improvements in existence on per the depreciation schedule attached to this Agreement as Exhibit ; (g) LESS general and administrative expenses fixed at 5% of Gross Receipts; (h) LESS a management fee fixed at 2.5% of Gross Receipts; EQUALS the amount available for profit sharing on a 50/50 basis. Summarizing the foregoing, the amount available for profit sharing on a 50/50 basis is 22.5% of Gross Receipts, LESS (e) and (f) above

14 Commencing [with the Effective Date] [ ], profit sharing shall be calculated on a cumulative calendar year-to-date basis, and shall be paid to the Commission on a quarterly basis by the 15 th day of the month next succeeding the end of the quarter, subject to adjustment between the parties at year end. Section Other Fees and Charges. If the Commission has paid any sum or sums or has incurred any obligations or expense which Concessionaire had agreed to pay or reimburse the Commission for, or if the Commission is required or elects to pay sum(s) or ensure obligation(s) or expense(s) by reason of the failure, neglect or refusal of Concessionaire to perform or fulfill any of the conditions, covenants or agreements contained in this Agreement, or as a result of an act or omission of Concessionaire contrary to such conditions, covenants and agreements, Concessionaire shall pay the sum(s) so paid or the expense(s) so incurred, including all interest, costs, damages and penalties, and the same may be added to any installment of the fees and charges thereafter due hereunder, and each and every part of the same shall be and become additional fees and charges, recoverable by the Commission in the same manner and with like remedies as if it were originally a part of the basic fees and charges. Section Method of Payment. (a) Concession Fees to be paid by Concessionaire to Commission hereunder shall be payable in monthly installments throughout the term of this Agreement. Within fifteen (15) calendar days after the end of each calendar month, Concessionaire shall pay the Commission, as the fees and charges for such calendar month, onetwelfth (1/12) of the Minimum Annual Guarantee or the Percentage Fee, whichever sum is greater. (b) Concessionaire shall submit an accurate monthly accounting of the Gross Receipts received at each location operated by Concessionaire under this Agreement. Each facility shall be reported as a separate location. The monthly accounting shall be in such manner and detail and upon such forms as are prescribed or approved by the Commission. Each monthly report shall be due on the same date and at the same address as the payment for that month is due. Section Late Payment. If any payment is not paid within seven (7) calendar days after the day when such payment is due, Company shall pay to the Commission a late charge equal to 5 percent (5%) of such payment. Additionally, any payment that is 30 days delinquent shall bear interest at the rate of 18 percent (18%) per annum from the date same is due until paid by Company to the Commission. Section Audit Reports. (a) With respect to all business it does hereunder, Concessionaire shall keep full, true and accurate accounts, records, books and data that show all Gross Receipts. During the Term, Concessionaire may keep in the Richmond area, books and records in accordance with generally accepted accounting principles, and such other records as the Commission may reasonably request, such books and records to cover the immediately preceding two (2) year period. If records are maintained within the corporate offices outside of the Richmond area then requests for information should be responded to and completed within seventy-two (72) hours of receipt of the request. If Concessionaire cannot satisfy such time requirement, it shall advise the Commission of such fact, along with the anticipated delivery date

15 of the information, which in all cases shall be within fifteen (15) days. Concessionaire shall arrange and pay for transportation, room and other direct costs and expenses associated with travel for not more than one (1) Commission auditor and other representatives to the location where such records are maintained. Concession agreement invoices, and all other books and records of Concessionaire as aforesaid, shall be open for inspection by authorized representatives of the Commission at reasonable times during business hours. Concessionaire shall allow the Commission s representatives to photocopy records the representatives reasonably determine to be necessary to conduct and support their audit. Concessionaire shall provide the Commission s representatives with retrievals of computer-based records or transactions the representatives determine to be necessary to conduct the audit. Concessionaire shall not charge the Commission for reasonable use of Concessionaire s photocopy machine while conducting the audit, nor for the cost of retrieving, downloading to diskette or other media, and/or printing any records or transactions stored in magnetic, optical, microform, or other media.] (b) Within ninety days (90) of the end of the Concessionaire s accounting year, commencing, By of each year, commencing, Concessionaire shall provide the Commission a statement, certified by an independent certified public accountant, showing all Gross Receipts derived from operation of the concession during the preceding Agreement year ended December 31. []fiscal year ended June 30]. (c) The Commission shall have the right during the Term, or within twenty-four (24) months thereafter, to authorize one (1) or more further audits of Concessionaire s records, whether maintained in the Richmond area or elsewhere, pertaining to the Concession. The cost of such audits shall be borne by the Commission unless the results of such audits reveal a discrepancy of more than five percent (5%) between the Gross Receipts reported by Concessionaire and the Gross Receipts as determined by audits for the applicable period. In case of such discrepancy, the full cost of the audits shall be borne by Concessionaire. In any event, any additional Concession Fee determined by the audit to be due shall immediately be paid by Concessionaire to the Commission with interest thereon from the date the additional Concession Fee became due, at an interest rate which shall be eight (8) percentage points above the discount rate charged to member banks of the Federal Reserve Bank in Richmond, Virginia, in effect from time to time. Section Utilities. All utilities, including electricity, gas and water, shall be separately metered at Concessionaire s expense, and shall be invoiced directly to Concessionaire. Section Refuse Removal. Concessionaire shall comply with the provisions of Section 6.11 herein with regard to the disposition of trash and garbage. The Commission shall maintain garbage or refuse disposal areas for use by tenants and concessionaires. Concessionaire shall pay to the Commission a pro-rata amount of the cost for removal of garbage and refuse from designated garbage or refuse disposal areas

16 ARTICLE VI OPERATING STANDARDS; CONCESSIONAIRE OBLIGATIONS Section Concession Personnel. Concessionaire shall, at its cost, furnish prompt, courteous and efficient service and shall ensure polite and inoffensive conduct and demeanor on the part of its representatives, agents and employees, collectively referred to herein as personnel. Concessionaire shall employ or permit the employment of only such personnel as will assure a high standard of service to the public. All such personnel, while on or about the Airport, shall be clean, neat in appearance and courteous at all times and shall be appropriately attired, with badges or other suitable means of identification, in such instances as are appropriate. No personnel while on or about the Leased Premises, shall use improper language, act in loud, boisterous or otherwise improper way or be permitted to solicit business in an inappropriate manner. Section Manager. Concessionaire shall select and appoint, subject to the prior approval of the Commission, a manager of Concessionaire s operations at the Airport. Such person must (i) have at least five or more years of continuous experience within the past 10 years as manager of a multi-unit commercial project with at least $4 million in annual sales, (ii) be an outstanding, highly qualified and experienced manager or supervisor of comparable food and beverage operations, and (iii) be vested with full power and authority to accept service of all notices provided for herein and regarding operation of the Concession, including the quality and prices of foods and beverages and the appearance, conduct and demeanor of Concessionaire s agents, servants and employees. The manager shall be assigned to a duty station or office at the Airport, where he or she shall ordinarily be available from 8:00 a.m. until 5:00 p.m., Monday through Friday and where, at all times during his or other absences, a responsible subordinate shall be in charge and available during the concession operating hours. During other hours, one (1) member of the management team must be on-call, with a telephone and/or pager number provided to the Commission, who can be reached at any time and who is able to arrive at the Airport within one hour of a telephone call to address emergency problems. Section Hours of Operation. (a) In each location and on each day, Concessionaire shall operate during those hours as are necessary to adequately serve the public demand, as such demand may be determined and re-determined by the Commission. Concessionaire may advise the Commission regarding optimum hours of operation at each location. (b) Concessionaire shall be obligated to operate facilities within the Leased Premises for the hours specified herein, or as the Commission may direct, until such time as the Commission requests that hours be extended or authorizes hours to be contracted. The initial minimum hours each day shall be as follows: Concourse Locations from one and one-half (1.5) hours before the first scheduled departure of the day from the concourse (or, if later, the time the TSA opens the concourse to the public) until the last actual departure of the day on that concourse; Atrium Locations from one and one-half (1.5) hours before the first scheduled departure of the day until the last actual departure of the day; and

17 Pre-Security Location from one and one-half (1.5) hours before the first scheduled departure of the day until one hour subsequent to the last scheduled arrival of the day. In addition, Concessionaire shall be obligated to remain open for business as directed by the Commission or his designee to accommodate flight delays. In addition, the Commission may, on 48 hours notice to Concessionaire,[not in RFP?] require earlier opening times or later closing times for any location. Concessionaire shall comply with such hours. The Commission may, from time to time, authorize a later opening or earlier closing time for any location, provided it first finds that Concessionaire has submitted adequate justification therefore. Section Food Services Plan and Menu. Concessionaire s food services plan, prices and menu shall be as Concessionaire has proposed for each facility and the Commission has approved. During the Term, Concessionaire shall make no changes to the food services plan, menu or prices of any item on the approved menu without first obtaining the prior written approval of the Commission. The Commission shall require the same information, and apply the same criteria to each proposed change as described below. (a) Concessionaire s proposed menu and all subsequent menus shall include a description of each item, including the weight of each portion and the government grade of government quality (if any) for its component item(s). No menu shall misrepresent quality, grade, or weight of any item. (b) Prices for each item sold in each facility shall be conspicuously displayed or printed in a menu to the satisfaction of the Commission as to information given, design, type, size, style, color, and all other specifics. Such prices shall not exceed the approved prices for such items. (c) The Commission may re-evaluate the selection of items during the term. The Commission s determination that the selection offered is inadequate (in general or at any particular location), or that any price is excessive, or that the quality or quantity of any item is deficient, shall be conclusive. Concessionaire may meet and confer with the Commission regarding such matters. (d) All foods and beverages offered for sale by Concessionaire shall be of high quality, and comparable to first class food and beverage facilities of a similar type in the Richmond area. Concessionaire shall maintain sufficient inventory to continuously offer food and beverage products of the same quality, portion and ingredients as described in its menu as approved by the Commission. (e) All food and beverage products offered for sale by Concessionaire shall be priced reasonably in comparison to like facilities serving similar products to the general public in the Richmond area. What constitutes like facilities and comparability of prices shall be determined solely by Commission but generally in accordance with the following guidelines: like facilities shall generally mean casual dining establishments located within a 40 mile radius of the Airport, as determined by the Commission. Prices no more than 10% over the average of

18 a minimum of three (3) like non-airport facilities for similar menu items of similar portions and presentations shall be deemed to be reasonable. Concessionaire shall check prices on a semiannual basis to assure compliance with this provision, comparing the prices of twenty-five percent (25%) of those items offered in each concession location to the prices of similar items in three (3) like non-airport facilities establishments within the above-described radius. Should there be discrepancies as a result of such price comparison, Concessionaire shall be given seven (7) calendar days to bring all products into compliance with the prices found in the survey. Failure to do so may result in the assessment of liquidated damages. (f) Concessionaire shall offer at least a ten percent (10%) discount (excluding purchases of alcoholic beverages) to Airport employees and other Commission badged facility users. Section Cash and Record Handling Requirements. Concessionaire shall prepare a description of its cash handling and sales recording systems and equipment which shall be submitted to the Commission for approval. When approved by the Commission, such systems and equipment, including any revisions thereto approved by Commission, shall be utilized by Concessionaire in its operations at Airport. Concessionaire shall accurately record each sale on a point of sale register acceptable to the Commission. Such register shall be non-resetable and sufficient to supply an accurate record of all sales on tape or otherwise as directed by the Commission. Such register shall have a counter visible to the purchaser. Section Credit Cards. Customers shall be permitted to utilize at a minimum the following credit cards in payment for food and beverage sales: Visa, MasterCard, Discover and American Express. Minimum purchase requirements are not permitted. Section Change-Making. Concessionaire shall provide, without charge, changemaking service at each cashier s location in the Leased Premises. Section Deliveries and Storage. Concessionaire shall make deliveries only within the times and at the locations authorized by the Commission and in conjunction with TSA requirements. Deliveries shall not be scheduled for times that conflict with the Airport s peak traffic times. All deliveries must unload at the building s loading dock area. Concessionaire will be responsible for arranging transportation of the merchandise to the storage areas and coordination of any security checks. Delivery hours may be changed from time to time at the sole discretion of the Commission. Concessionaire and vendors making deliveries must conform to all security requirements at the Airport and the Rules and Regulations. Concessionaire shall not permit storage or restocking bins or carts to be visible to the public, except while in the actual process of restocking shelves and other merchandise displays. Section Prohibited Acts. Concessionaire shall not: (a) do anything which may interfere with free access and passage in the Leased Premises or the areas adjacent thereto, or in the elevators, escalators, streets or sidewalks of the Airports, or hinder police, fire fighting or other emergency personnel in the discharge of their

19 duties, or hinder access to utility, heating, ventilating or air-conditioning systems, or portions thereof, on or adjoining the Leased Premises; (b) do anything which may interfere with the effectiveness of utility, heating, ventilating or air-conditioning systems or portions thereof on or adjoining the Leased Premises (including lines, pipes, wires, conduits and equipment connected with or appurtenant thereto) or interfere with the effectiveness of elevators or escalators in or adjoining the Leased Premises, or overload any floor in the Leased Premises; areas; (c) do anything contrary to the Commission s policy prohibiting smoking in certain (d) place any additional lock of any kind upon any window or interior or exterior door in the Leased Premises, or make any change in any existing door or window lock or the mechanism thereof, nor refuse, upon the expiration or sooner termination of this Agreement, to surrender to Commission any and all keys to the interior or exterior doors on the Leased Premises, whether such keys were furnished to or otherwise procured by Concessionaire, and in the event of the loss of any keys furnished by the Commission, Concessionaire shall pay the Commission, on demand, the cost for replacement thereof, and the cost of re-keying the Commission s locks; (e) do any act or thing upon the Leased Premises which will invalidate, suspend or increase the rate of any insurance policy required under this Agreement, or carried by the Commission, covering the Leased Premises, or the buildings in which the same are located or which, in the opinion of the Commission, may constitute a hazardous condition that will increase the risks normally attendant upon the operations contemplated under this Agreement. If, by reason of any failure on the part of Concessionaire after receipt of notice in writing from the Commission to comply with the provisions of this paragraph, any insurance rate on the Leased Premises, or any part thereof, or on the buildings in which the same are located, shall at any time be higher than it normally would be, then Concessionaire shall pay the Commission, on demand, that part of all insurance premiums paid by the Commission which have been charged because of such violation of failure of Concessionaire; provided, however, that nothing contained herein shall preclude Concessionaire from bringing, keeping or using on or about the Leased Premises such materials, supplies, equipment and machinery as are appropriate or customary in carrying on its business, or from carrying on such business in all respects as is customary; (f) permit undue loitering on or about the Leased Premises or use the Leased Premises, or any part thereof, for lodging or sleeping purposes; or (g) use or allow the Leased Premises to be used for any improper, immoral, unlawful or objectionable purposes. Section Promotions; Displays; [Marketing Fund]. Concessionaire may hold instore promotions, and is encouraged to creatively merchandise and display its products. However, displays or decorations that are reasonably considered objectionable by the

20 Commission must be removed or the objectionable features altered as necessary to be rendered unobjectionable by the Commission, upon written notice by the Commission. [Unless otherwise agreed by the Commission in writing, Concessionaire will fund and maintain a Marketing Fund, through which Concessionaire will annually spend an amount equal to at least one percent (1%) of the Gross Receipts on advertising, marketing, and promotions of its Airport operations. Concessionaire may pass through this marketing fee to any subtenants, but shall not apply any mark up or increase in doing so. Concessionaire will provide an annual report each year to the Commission identifying the amounts paid in, their sources, and the uses of the marketing fund, along with proposed marketing ideas for the forthcoming year that can be commented on by the Commission and Concessionaire s subtenants.] Section Removal of Garbage and Refuse. Concessionaire shall strictly comply with all Airport and other rules and regulations regarding the disposition of trash and garbage, shall regularly remove from all Leased Premises to the garbage or refuse disposal area all rubbish, refuse and garbage and shall remove the accumulation of all such material in such garbage or refuse disposal area at frequent intervals. Accumulation of trash, boxes, cartons, barrels or other similar items shall not be permitted in any public area at Airport. Concessionaire shall not remove trash or garbage through public or common areas (including concourses and sidewalks). Section Cardboard Recycling. Concessionaire will maintain a recycling program for, at a minimum, cardboard boxes, and will comply with any other recycling rules, policies or laws. Section Wireless Communications. In the interests of public safety and the efficient operation of the Airport, the Commission reserves the sole right to resolve, in its complete and unfettered discretion, any conflicts between or amongst any wireless communications devices or systems of the Commission, Concessionaire, and any third party users of the Airport, and to require Concessionaire to change over to any future Airport-wide network once installed. The Concessionaire will be required to comply with Commission s WiFI policy. Section Business Reports. If requested by the Commission in writing, Concessionaire will submit, within sixty (60) days of the request, information requested by the Commission, which may include: (a) (b) (c) True and accurate reports of the prior month s opening and closing times for each facility of the Concession; A review of the prior year s performance, including achievement of sales projections and other goals and objectives; Establishment of new operational goals for the forthcoming year, including identification of sales opportunities;