RFB ADDENDUM No. 3 ISSUE DATE: 12/22/17 REVISED DEADLINE: 2/1/18 at 2:00 PM Eastern Time

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1 REQUEST FOR BIDS (RFB) FOR CAR RENTAL CONCESSION OPPORTUNITY RFB ADDENDUM No. 3 ISSUE DATE: 12/22/17 REVISED DEADLINE: 2/1/18 at 2:00 PM Eastern Time 1. This addendum is being issued to modify some sections of the Revised RFB, provide clarifications as well as to answer questions submitted by the question deadline. Note: Generally, Bold Italic text has been added or is replacement text, and strikethrough text has been removed. I. MODIFICATIONS: 1. ADD: A Question Deadline for questions related to this Addendum has been added. All questions related to this addendum must be ed to: info@craa.com on or before Friday, January 5, 2018 at 2:00 PM Eastern Time. 2. REPLACE: Second paragraph of description on Revised RFB cover page in its entirety with the following: The agreement will be for a term of five (5) years. 3. CHANGE: Section 1, Glossary of Terms, Agreement Year definition as provided below: Agreement Year: The agreement year for the Concession and Lease Agreements resulting from this Revised RFB shall be from February 1 to January 31. April 1 to March REPLACE: Section 3 Specific Terms and Requirements, Subsection 3) Concession Fee of the Revised RFB in its entirety with the following: 3) CONCESSION FEE: On or before the 15th of each month, Rental Car Concessionaires will pay to the Airport Authority, a Concession Fee equaling ten percent (10%) of the prior month s Gross Revenues. The sum of monthly payments in an agreement year will be reconciled to the MAG for the same period as described in subsection 4 below. Addendum #3 Page 1 of 16

2 5. REPLACE: Section 3 Specific Terms and Requirements, Subsection 4) Year End Reconciliation of the Revised RFB in its entirety with the following: 4) YEAR END RECONCILIATION: Before February May 20th of each year, the Airport Authority shall reconcile the Concession Fee payments received for the previous agreement year (ending March 31) to the MAG for the same period. The Airport Authority will produce a Car Rental Concessionaire credit or invoice. This reconciliation will ensure the total amount paid to the Airport Authority for each agreement year (April 1 to March 31) is the greater of the MAG or 10% of the Total Gross Revenues. 6. REPLACE: Section 3 Specific Terms and Requirements, Subsection 5) Minimum Annual Guarantee (MAG) of the Revised RFB in its entirety with the following: 5) MINIMUM ANNUAL GUARANTEE (MAG): a) The initial MAG for year 1 (to be entered on the Car Rental Concession Fee Form of this RFB) for a site shall not be less than 9% of total Gross Revenues of the brand operating on a single site at the Airport during the period from January 1, 2017 to December 31, 2017, OR sum of the Gross Revenues of multiple brands operating on a single site at the Airport during the period from January 1, 2016 to December 31, 2017 OR ninety thousand dollars ($90,000), whichever is greater. b) If a brand did not operate at the airport during the period from January 1, 2017 to December 31, 2017 and it is an additional brand to operate on the same site as a brand(s) that did operated on a site during the above period, then the additional MAG for year 1 (to be included in the sum entered on the Car Rental Concession Fee Form of this RFB) shall not be less than thirty thousand dollars ($30,000) for that additional brand. c) If a brand did not operate at the airport during the period from January 1, 2017 to December 31, 2017 and will operate alone or on the same site as other brand(s)s that did not operate on a site during the above period, then the MAG for year 1 (to be included in the sum entered on the Car Rental Concession Fee Form of this RFB) shall be not be less than thirty thousand dollars ($30,000) per brand OR ninety thousand dollars ($90,000), whichever is greater. d) The MAG for agreement years 2 through 5 shall not be less than 8.5% of Total Gross Revenues of the previous agreement year. Addendum #3 Page 2 of 16

3 7. MODIFY: Section 3 Specific Terms and Requirements, Subsection 7) Bid Evaluation of the Revised RFB as follows: 7) BID EVALUATION: The Car Rental Service Areas and Car Rental Office and Customer Counter spaces available for selection as noted below are only those relinquished (if any) by the brand(s) operating at the airport during the period from January 1, 2017 to December 31, The Bidder with the highest MAG will select its Car Rental Service Area first, the Bidder with the second highest MAG will select its Car Rental Service Area second, and so on. In the event that there are more Bidders than Car Rental Service Sites, then the Bidders with the lowest MAG(s) will be offered the opportunity to operate Off-Airport. In addition, the Bidder with the highest MAG will select Car Rental Office and Customer Counter space and Ready/Return Car parking spaces first. In the event of a tie, the choice for Car Rental Service Sites, Car Rental Office and Customer Counter spaces, and Ready/Return Car Parking Spaces shall be awarded to the Bidder with the largest volume of annual rentals for the previous three (3) years at the Airport. Unless otherwise agreed to by all Car Rental Companies operating at the Airport, the number of Ready/Return Car Parking Spaces assigned to each Car Rental Company will be based of the MAGs submitted with the Bids for the first year and the actual Concession Fee paid to the Airport Authority in subsequent years of the Agreement. 8. REPLACE: Section 3 Specific Terms and Requirements, Subsection 8) Post Bid Deadline Car Rental Company Entrants of the Revised RFB in its entirety with the following: 8) POST BID DEADLINE CAR RENTAL COMPANY ENTRANTS: If any Car Rental Concessionaire begins operations from an on-airport site at the Airport after April 1, 2018 but did not submit a bid in response to this RFB, the Car Rental Car, will pay all fees rents required by Car Rental Concessionaire and be assigned a number of Ready/Return Car Parking Spaces based on their MAG initially and the required Concession Fee in subsequent years of the Agreement. Their MAG for their first agreement year shall not be less than ninety thousand dollars ($90,000). The Airport Authority, through its CEO, reserves the right, upon mutual agreement, to amend the terms and conditions of the agreements resulting from this RFB, to match the terms and conditions of post bid deadline car rental companies to ensure all on-airport rental car companies operate under similar terms and conditions Addendum #3 Page 3 of 16

4 9. REVISE: Section 3 Specific Terms and Requirements, Subsection 9) Relocation Costs of the Revised RFB as follows: 9) RELOCATION COSTS: The costs associated with relocation of an existing Car Rental Agency Concessionaire to another facility Car Rental Service Area (including signage), if it occurs in accordance with subsection 7 above, shall be the responsibility of the successful Bidder who rents the facility Car Rental Service Area as a result of this RFB. To alleviate the cost of this relocation, the Airport Authority agrees to provide up to $50,000 of CFCs per building for repairs and/or improvements of the following: roofing, building electrical, building mechanical (HVAC and plumbing), building structure and walls. The car wash equipment must be deemed in satisfactory condition by the CRAA prior to any relocation of bidders. Any repairs or improvements thereto will be borne by the current tenant (prior to relocation). The Airport Authority also agrees to provide matching (1:1 match) funds up to $2,500 per site to a rental car company for the preparation of a Baseline Environmental Assessment (BEA). 10. DELETE: Section 3 Specific Terms and Requirements, Subsection 10) of the Revised RFB in its entirety. 11. REVISE: Section 3 Specific Terms and Requirements, Subsection 11) Operating Restrictions of the Revised RFB as follows: 10) OPERATING RESTRICTIONS: Successful Bidders may not position equipment or personnel to process customers in any area(s) not approved by the Airport Authority. Each Responsible Bidder who operates a Car Rental Concession hereunder shall not operate airport parking services from its On- Airport Car Rental Service Sites. 12. REVISE: Section 3 Specific Terms and Requirements, Subsection 12) Form of Agreement of the Revised RFB as follows: 11) FORM OF AGREEMENT: The Bidder agrees to contract with Airport Authority to enter into a Lease and Concession Agreement, and, if awarded the concession therefore, the undersigned agrees to pay to Airport Authority the fees set forth in the attached Lease and Concession Agreement and the greater of the following amounts: Attachment B - Form of Agreement with key terms and conditions related to Car Rental Services at the Airport will be issued as an Addendum to this RFB. Addendum #3 Page 4 of 16

5 13. REPLACE: Section 4 Scope of Concession Opportunity, Subsection 3) Facility Utilization and Brands of the Revised RFB in its entirety with the following: 3) FACILITY UTILIZATION AND BRANDS: a) Bidders shall may bid as an individual brand or multiple brands. Each submitted bid will be considered a bid for one of the four sets for facilities. Brands must be one hundred percent (100%) owned, controlled or have the contractual right to be operated by the Bidder. If two or more Bidders are wholly owned or controlled by the same entity, the Bidders must be prepared to attest that no collusion has taken place in the bid process, and the parent company must be prepared to sign each Concession and Lease Agreement as guarantor of all obligations and duties contained therein. b) Dual Multi branding or operating more than one (1) two (2) brands from the same facilities and with one MAG is permitted, however, the minimum MAG of the two brands must meet the requirements of the minimum MAG as defined in Section 3, subsection 5 of this RFB. See sub-sections c and d below for financial obligations of Car Rental Companies if all available facilities are not leased. c) Rental Office and Customer Counters Areas. If any Car Rental Office and Customer Counter is not rented by a Car Rental Company Concessionaire, then the Car Rental Companies Concessionaire (in bid order from highest to lowest) will be offered the ability to rent the vacant Car Rental Office and Customer Counter space. If no car rental company rents the vacant Car Rental Office and Customer Counter space, the Airport Authority reserves the right to rent the facilities to another tenant or use the space for other purposes. Note: All Car Rental Office and Customer Counters areas leased by a Car Rental Company Concessionaire must be staffed as defined in the Form of Agreement. d) Car Rental Service Areas and Buildings. If any Car Rental Service Areas is not leased by a Car Rental Company Concessionaire, then all Car Rental Companies Concessionaire utilizing a Car Rental Service Area will share equally in paying the rent for all vacant Car Rental Service Areas and shall share use of the area (land and building) throughout the term of the Agreement unless otherwise mutually agreed. our until the vacant Car Rental Service Area is rented by the Airport Authority to another tenant or used by the Airport Authority for other purposes. Addendum #3 Page 5 of 16

6 14. REVISE: Section Definitions of Form of Agreement issued with the Revised RFB as follows: Gross Revenues" means all revenues paid or due to the Concessionaire arising out of or in connection with its operations at the Airport, including, without limitation: (a) all time and mileage revenues and all revenues from the sale of personal accident insurance, or any insurance of a similar nature; (b) all Concession Fees; (c) all mark-up and additional fees above actual costs sums received by the Concessionaire for damage to Concessionaire s vehicles or the Concessionaire's property or premises, or from loss, conversion, or abandonment of Motor Vehicles (without mark-up or additional fees); and (d) all other revenues paid or due to the Concessionaire arising out of or in connection with its operations at the Airport. Gross Revenues shall not include: (i) amounts of any Federal, State, or municipal taxes; (ii) any Customer Facility Charges collected by the Concessionaire, if any; (iii) amounts for credits, refunds, or adjustments to customers for transactions made at the Airport at the time of, or prior to, the close-out of the rental transaction and shown on the customer Contract (without mark-up or additional fees); (iv) sums received by reason of the Concessionaire's disposal of personal property (capital assets) (without mark-up or additional fees); (v) sums received by the Concessionaire from its customers for traffic tickets, parking tickets, highway tolls, towing charges, impound fees, and other similar governmental fines and charges actually paid by the Concessionaire on behalf of such customers (without mark-up or additional fees); and (vi) sums received by the Concessionaire for pass-through charges collected by the Concessionaire from its customers with respect to damage repair, parts replacement, and extraordinary cleaning of vehicles, and towing and transporting of damaged or abandoned vehicles, rented by such customers, and replacement of keys for such vehicles (without mark-up or additional fees). The retroactive adjustment, at any time, by the Concessionaire of Gross Revenues designated as volume discounts or rebates, corporate discounts or rebates, any other other discounts, rebates, or coupons, or any other designation of any nature, or for any purpose, is prohibited. Anything not explicitly excluded from the definition of Gross Revenues shall be included within Gross Revenues. Addendum #3 Page 6 of 16

7 15. REVISE: Section 3.06 of Form of Agreement issued with the Revised RFB as follows: 3.06 MAINTENANCE AND REPAIR OF PREMISES A. AUTHORITY S RESPONSIBILITIES The Airport Authority shall not be obligated to maintain or repair the Premises or any part thereof other than: 1. Maintenance and repair of Ready/Return Car Parking lot surface and lighting systems, and 2. Repairs (if needed) to roofing systems, load bearing columns and wall within and/or abutting Car Rental Office and Customer Counter spaces, electrical systems which feed electrical and lighting systems within Car Rental Office and Customer Counter spaces, and 3. Maintenance of floor area on public side of Car Rental Customer Counters. B. CONCESSIONAIRE S RESPONSIBILITIES the Concessionaire shall, at its own expense, maintain the Premises, in a sanitary and neat condition and in good repair, reasonable wear and tear excepted, by providing all structural and non-structural maintenance and repair of the Fixed Improvement and other buildings located on the Premises, and providing all necessary janitorial, maintenance, snow removal and landscaping services, unless listed in Section 3.06 A above. If the Concessionaire fails to perform any obligation required by this Section within thirty (30) days after receiving written notice of such failure from the Airport Authority, through its CEO or his designee, or under circumstances where the obligation is of such character as to require more than thirty (30) days to perform, and the Concessionaire fails within said thirty (30) day period to commence and thereafter proceed diligently to perform such obligation, then in either of such events, the Airport Authority may, at its option and in addition to its other remedies, perform such obligation. Any sum expended by the Airport Authority in the performance of any such obligation will be additional rent for all purposes hereunder and shall be due within thirty (30) days after the date an invoice for such expenses is mailed to the Concessionaire. In the event the Concessionaire s failure to perform any obligation under this Section adversely affects or endangers the health or safety of the public or the Airport Authority s employees, and such is stated in the aforesaid notice, the Airport Authority may, but is not obligated to, perform such obligation at any time after giving such notice and without awaiting the expiration of said thirty (30) day period. Addendum #3 Page 7 of 16

8 16. REVISE: Section 4.01 of Form of Agreement issued with the Revised RFB as follows: 4.01 TERM The agreement shall be for a maximum term of ten five (10 5) years; an initial 5- year term beginning on February April 1, 2018 and ending on January March 31, The agreement year for the Lease and Concession Agreements resulting from this RFB shall be from February 1 to January DELETE: Section 4.02 Extension Option of Form of Agreement issued with the Revised RFB in its entirety. 18. REVISE: Section 4.03 of Form of Agreement issued with the Revised RFB as follows: HOLDING OVER If the Concessionaire should continue operating its Rental Car Concession after the termination of this Agreement, Concessionaire s continued right of occupancy of the Premises shall be deemed a tenancy from month-to-month and subject to all the terms and conditions of this Agreement. 19. REVISE: Section 5.02 Minimum Annual Guarantee Calculation of Form of Agreement issued with the Revised RFB to match the language in RFB. See Modification #6 of this Addendum. 20. DELETE: Section 5.03 Minimum Annual Guarantee Abatement of Form of Agreement issued with the Revised RFB in its entirety. 21. REVISE: Section 5.07 subsection Q of Form of Agreement issued with the Revised RFB as follows: Q. If either the required Audited Schedule of Gross Revenues and Concession Fees Paid or any audit performed reveals that the amount of Concession Fee actually due and owing pursuant to Section 5.01 and should have paid during an Agreement Year is greater than the total of such Concession Fees the Concessionaire paid to the Airport Authority, then the Concessionaire shall pay the difference to the Airport Authority, without demand or invoice, at the time it submits to the Airport Authority such statement or, in the case of an audit, within thirty (30) days of notice by the Airport Authority of the difference, together with payment of interest which shall accrue on such difference at the rate of the lower of eighteen twelve percent (18% 12%) per annum or the maximum rate of interest allowed by law, calculated from the date the Concession Fees should have been paid to the date of actual payment by the Concessionaire. If the Concession Fees actually paid by the Concessionaire during an Agreement Year exceed the Concession Fees due and owing pursuant to Section 5.01, then the Concessionaire shall be entitled to a credit in the amount of the excess against the Concession Fees next due and owing from the Concessionaire to the Airport Authority; provided however, that the annual payment to the Airport Authority by the Concessionaire shall not be less than the MAG stipulated herein. Addendum #3 Page 8 of 16

9 Upon the termination of this Agreement, if there are any amounts due pursuant to the preceding sentence then the Airport Authority shall refund the amount due to the Concessionaire within thirty (30) days of the Airport Authority s receipt of the Concessionaire s Audited Schedule of Gross Revenues and Concession Fees Paid or the Airport Authority s completion of its own audit or examination. 22. REVISE: Article X, Section A, subsection 1 of Form of Agreement issued with the Revised RFB as follows: 1. Comprehensive Commercial General Liability Insurance on an occurrence basis, with contractual liability and property damage endorsements, covering the entire Concessionaire s operations and activities on or in connection with this Agreement, including the Rental Car Concession, in which the combined single limits of liability are no less than two million dollars ($2,000,000) per occurrence. The insurance policies shall be primary. The Airport Authority shall be named as an additional insured, as their interest may appear for liabilities arising out of the conduct of the concessionaire, with respect to this Agreement under all such insurance policies, and a current certificate evidencing such coverage and any renewals thereof will be furnished to the Airport Authority at all times. The Concessionaire shall not revise such policies or change the insurance, or any part thereof, without first giving the Airport Authority thirty (30) days prior written notice. 23. REVISE: Article XII, Section C of Form of Agreement issued with the Revised RFB as follows: C. Compliance with Environmental Law The Concessionaire shall keep and maintain and shall conduct its operations on and around the Premises in full compliance with any Environmental Law. The Concessionaire shall further ensure that its employees, licensees, invitees, agents, contractors, subcontractors, and any other persons conducting any activities on the or adjacent to the Premises to do so in full compliance with any Environmental Laws By virtue of its operational control of the Premises, the Concessionaire shall be responsible for obtaining any and all necessary government permits or other approvals required by any Environmental Law with respect to the TENANT's use or occupancy of the Premises in its name. In particular, the Concessionaire shall comply with all regulations related to the installation, operation, maintenance, and (if applicable) removal of underground storage tanks (USTs) containing any regulated substances. The Concessionaire shall have Class A and B Operators, with up-to-date- certifications from the State of Michigan, either on their payroll or under contract and all employees that dispense fuel from Concessionaire-operated USTs shall be trained as Addendum #3 Page 9 of 16

10 Class C Operators. A list of Class A, B, and C Operators shall be maintained by the Concessionaire and made available to the Airport Authority upon request. 24. REVISE: Article XII, Section G of Form of Agreement issued with the Revised RFB to change the title of the Section to G. Underground Storage Tank Legacy. II. ANSWERS TO SUBMITTED QUESTIONS: 1. Section 3.2 (pg. 9) - We again request that the renewal option be exercised mutually by the Authority and the Concessionaire. We should not be forced to continue for another 5 years if we desire to terminate our operation at the end of the 5 year term. There has been volatility in deplanements in the last 10 years, and loss of one airline could drop deplanements by over 20%. Since our revenues are tied to the number of passengers arriving at the Airport, drops will affect our revenue, through no fault of our own. We should not be required to continue to operate in a situation our revenues are insufficient to meet our MAG. This is even more important since the MAG language and the abatement language is disadvantageous to the Concessionaries, and could potentially put us into a MAG miss for 5 years. 2. Please change this to read February 1, 2023 by providing written notice from the Chief Executive Officer to the Concessionaire; provided however, that the Authority and Concessionaire, are in mutual agreement on exercising the renewal. Answer The extension term has been eliminated. The term of the agreements resulting from this RFB will only be five (5) years. See addendum #2 and Modification #2 of Addendum 2 issued on 12/18/17 and modifications included in this Addendum. 3. Section 3.5.c (page 10). We object to the MAG at year 6 being negotiated. We request it be set at 85% of the payments made to the Authority in the prior 12 months. As currently written, we have no choice in whether we extend for another 5 years, and we have no bargaining power in a negotiation. Answer RFB Section 3, subsection 5 has been revised. See Modification #6 of this addendum. 4. Section 3.5.d (pg 10). Again, we object to the MAG being set at 10% of the prior year s Gross Revenues for years That would require us to pay 100% of the amount of revenue we paid to the Airport in the prior year. We suggest it be set at 85% of the 10% payments made in the prior year. Answer See answer to Question #2 of this addendum. Addendum #3 Page 10 of 16

11 5. Addendum 1, #28. The language is a bit unclear as to what the trigger is for abatement. I am hoping it is 10% decline. Please clarify. Answer No clarification is required as Section 5.03 of the Form of Agreement has been eliminated. See Modification #20 of this addendum. 6. Same. There must also be a MAG adjustment based on deplanements compared to the first year. Otherwise, deplanements could go down 9% each year and never hit the trigger. By year 3 deplanements could be down 27% and we would not receive MAG relief. We request that the Agreement contain the following abatement language in italic below (from my first set of questions): "Concessionaire's obligation to make the monthly payment of the Minimum Annual Guarantee shall abate and Concessionaire shall pay only 10% of its revenue for each 30 day period in which: a) the number of deplaning passengers on all scheduled airline flights at the airport is less than 90% of the number of such deplaning passengers for the period of the previous year; b) the number of deplaning passengers on all scheduled airline flights at the airport is less than 90% of the number of such deplaning passengers for the same period in the first calendar year of this Agreement, or c) Concessionaire's operations or gross revenues are materially reduced due to a shortage, disruption, limitation, or curtailment in the supply or use of automobiles, or the supply of gasoline or other goods, labor and materials necessary for the operation thereof." Answer It must be noted that a higher than usual percentage of rental cars transactions at LAN are generated from those in the region and who did not arrive by aircraft. However, Section 3, subsection 5 of the revised RFB has been modified as part of this addendum to allow the MAG in years 2 through 5 to be lower than Year 1. Additionally, see Modification #6 of this addendum. 7. Fixed Improvement Definition. Please clarify this pertains to the Service Facility site, and not the Counter or ready/return lot. Answer The Fixed Improvement definition includes all spaces rented and used by the concessionaires. However, the maintenance and repair of some of the Premises will be the responsibility of the Airport Authority. See Modification #15 of this addendum. 8. Gross Revenues Definition. We request you remove the following language from Gross Revenues: (c) sums received by the Concessionaire for damage to Concessionaire s vehicles or the Concessionaire's property or premises, or from loss, conversion, or abandonment of Motor Vehicles (without mark-up or additional fees). If a customer damages a vehicle, e.g., any money received from the customer or the insurance company to repair or replace the vehicle should NOT be considered revenue. It is just to pay to get the vehicle back in service. Answer The definition of Gross Revenues has been revised. See Modification #14 of this addendum. Addendum #3 Page 11 of 16

12 Premises. We cannot accept a new Service Facility site as is. We have no idea of what environmental issues it may have. We recommend exit environmental due diligence [e.g., soil/groundwater sampling around the fuel system] and a requirement that a current tenant will mitigate all environmental issues raised, before vacating a property. Answer - See modifications included in this addendum B. Please clarify that we are not responsible for all structural maintenance and repair of the Counters. Answer See Modification #15 of this addendum A. Please clarify that this section applies to the Service Center site, and not the Counter or Ready/Return areas. Answer See Modification #15 of this addendum F. We object to having to hire an independent auditor and request that an employee of the concessionaire be able to verify the schedule of gross revenues and fees paid. Answer Noted. No change has been made to requirement of an independent auditor G. Please limit the length of time in which records must be kept to 4 years after close of a Contract (Agreement) year. We should not be responsible for keeping records for ever. Otherwise we could be required to keep records for a total of 14 years. (4 years after the end of the Term). Answer - The term of the agreements resulting from this RFB have been revised to be only five (5) years. No change has been made to Form of Agreement Section 5.7G. See addendum #2 and Modification #2 of Addendum 2 issued on 12/18/17 and modifications included in this Addendum L. We object to this paragraph and request it be deleted. I have no idea what type of information you would be looking for or how you believe you would be able to find diversion of rentals. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum M. We object to this paragraph and request it be deleted. It is an over-reaching definition of diversion which could cause us to be considered diverting if we have vehicles at one of our home city locations, yet run out of vehicles at the Airport. We never intend for this to happen, but cannot be held responsible to include home city revenue into the Airport revenue if it would happen. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum. Addendum #3 Page 12 of 16

13 O. We no longer keep duplicate copies of invoices and do not have sequentially numbered contracts. Our rental system is nation-wide, with certain blocks of cities in the same reservation pool, thus the sequence of agreements is spread among those cities. For auditing purposes, however, we can pull out all the rental agreements for., and can also show you which cities were assigned the missing numbers. We request you change this paragraph to require that a numbered invoice shall be issued with each sale or transaction. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum Q. We object to paying interest at the rate of 18%. Please reduce it to a more commercially acceptable level such as 6%. Answer - See Modification #21 of this addendum. 18. Article X, A. Please revise the middle of the second sentence to read as their interest may appear for liabilities arising out of the conduct of the concessionaire. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum. 19. Article X, A.1. Please revise the title of the section to read Commercial General Liability Insurance rather than Comprehensive. Answer - See Modification #22 of this addendum. 20. Article X, A.1. Please add on line 6, after an additional insured the following phrase: as their interest may appear for liabilities arising out of the conduct of the concessionaire, Answer - See Modification #22 of this addendum. 21. Article X, C. We request that the following language in this section be removed: however, that the Concessionaire will, within thirty (30) calendar days following the written request from the Airport Authority, replace any insurance certificate with a certified copy of each insurance policy. Being a privately held company, we are not at liberty to provide copies of our full insurance policies. Answer No revision of the language has been made as it is not necessary We object to your ability to cancel our agreement if we fail to render the amount or quality of service required. This is very subjective. At a minimum, we require notice and a change to cure for 60 days. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum. 23. Article XII, C. We object to being responsible for removal of underground tanks, as that is the responsibility of the Authority. Please delete the word removal. Answer - See Modification #23 of this addendum. 24. Article XII, E. In the fifth line of this section, please replace or with and. The Airport Authority should only be reimbursed for fees if Concessionaire is not fulfilling its obligations. Otherwise, the Concessionaire will comply with Environmental Law. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum. Addendum #3 Page 13 of 16

14 25. Article XII, G. There is an error in the title of this section. Please replace Take with Tank. Answer - See Modification #24 of this addendum. 26. Addendum #1, Question 2. Please consider restricting the ability to add additional brands or substitute brands during the term of the agreement. The prospective bidders should be able to have certainty that those brands that bid will be the ones against which they will compete during the term. At a market this size, there is no need to allow substitution of brands midterm. Answer If the Airport Authority agrees to allowing additional brands of concessionaires that are awarded contracts as a result of this RFB, additional MAG will be added in accordance with Modification #6 of this addendum. 27. Addendum #1, Question 12. We restate our strong objection to the minimum MAGs for each brand in a dual-branded for brands that do not operate at the airport in that is unfair and discriminatory. Answer - See Modification #6 of this addendum. 28. Addendum #1, Question 13. We restate our objection to the MAGs being set at 9% of previous year s gross revenues and request that this be reduced to 8.5%. At 9%, in light of the amount of air service at LAN, even losing a single flight would likely force the rental car companies to pay excess MAGs rather than their concession fee. Answer The existing requirement of Monthly Minimum Guarantees is not included in this RFB or its Form of Agreement. Also, See Modification #6 of this addendum. 29. Addendum #1, Question 14. Perhaps there is an error as this answer indicates a change in the RFB document but no significant change has been made. We restate our objection to the MAG in Years 7 10 being 10% of gross revenues in the previous year (100% of the concession fees paid in the prior year). Any reduction in car rental revenues due to air service changes, TNCs, etc. would force the current operators to pay a MAG in excess of their 10% concession fee. Answer - See Modification #6 of this addendum. 30. Addendum #1, Question 15. We restate our objection to the Year 1 MAG being used as a base during the entire term of the agreement. As discussed during the pre-bid, we recommend that, if the option is extended, the Year 6 MAG be set at 85% of previous years gross revenues paid (or 8.5% of previous year s gross revenues) and that the Year 6 MAG be used as the MAG floor for years Answer - See Modification #6 of this addendum. 31. Addendum #1, Question 15. ABATEMENT??? Answer - See Modifications #6 and #20 of this addendum. 32. Addendum #1, Question 17. In the event the Airport wishes to retain a right to re-bid any unused concessions, we believe the Airport should be required to utilize the same minimums contained in this RFB in any future RFB. Failing to do so is discriminatory against those who actually participated in the current RFB and allows other companies the ability to sit on the sidelines and potentially enter the LAN market on more favorable terms than those who participated. Answer - See Modification #13 of this addendum. Addendum #3 Page 14 of 16

15 33. Addendum #1, Question 18. We restate our request that the service facilities, counters, location of ready/ready return spaces be grandfathered. There is virtually no benefit to putting these at risk and should the counters and service facilities change, there is no way the concessionaires will be in their correct counters and service facilities when the new contract commences. In addition, the environmental impacts of reallocating service facilities will take a minimum of six months to resolve. Please reconsider. Answer - See Modification #7 of this addendum. 34. Addendum #1, Question 35. We object to a minimum MAG based on each concessionaire s gross revenues. Simply provide a reasonable minimum MAG for a single-branded bid ($50,000) and one for a dual-branded bid ($100,000). The MAG provisions, as currently drafted, unnecessarily discriminate against brands not currently located at LAN. In the event, you are unwilling to make this change, please answer questions Answer - See Modification #6 of this addendum. 35. Addendum #1, Question 35. Please calculate and provide Hertz s minimum MAG for this RFB. Answer The minimum MAG will be provided to each existing Car Rental Concessionaire in early January Addendum #1, Question 36. Please provide the appropriate minimum MAG calculation for a new entrant who wishes to submit a dual-branded bid. Answer - See Modification #6 of this addendum. 37. Addendum #1, Question 36. Please provide the appropriate minimum MAG calculation for an existing concessionaire who wishes to submit a dual-branded bid with one incumbent brand and one new brand. Answer - See Modification #6 of this addendum. 38. Updated RFB document, Page 1 & Section 2, page 9. The issue of the extension option remains unresolved. We have no issue with the Airport having the ability to either exercise the option or forego exercising the option; however, a concessionaire cannot be required to stay during the option period if they d rather leave after the initial five year term. As such, the option must be at both parties discretion. That way, if either the Airport OR the concessionaire wish not to exercise the option, either may do so (i.e., the concessionaire can t force the Airport to extend the agreement over the Airport s objection and the Airport can t force the concessionaire to extend the agreement over the concessionaire s option). Conversely, in order for the agreement to be extended, both the Airport and concessionaire must agree to extend. 39. Answer See answer to Question #2 of this addendum. 40. Updated RFB document, Section 10, Page 10. While we appreciate the matching funds for a Phase 1 assessment, we believe this does not adequately address the significant issues that arise from a reallocation that involves fuel systems. Should a concessionaire be forced to vacate their service facility site and a clean Phase 1 is obtained, that concessionaire is still in the chain of environmental liability should contamination be found on the site in the future that may be related to the previous occupant. Should Hertz be required to move service facilities, we request the Airport either remove the existing tanks and replace them or indemnify us from any environmental liability associated with our current site. Answer - See Modification #7 of this addendum. Addendum #3 Page 15 of 16

16 41. Agreement, Section The term Concession Fee is not clearly defined in the definition section in 1.01 or the Concession Fee discussion in Article V. It should clearly state that the Concession Fee is equal to ten percent (10%) of the Concessionaire s Annual Gross Revenues for each Agreement Year. Answer The definition of Concession Fee shall be as described as above. 42. Agreement, Section In the definition of Gross Revenues please delete (c) sums received by the Concessionaire for damage to Concessionaire s vehicles or the Concessionaire's property or premises, or from loss, conversion, or abandonment of Motor Vehicles (without mark-up or additional fees. We should not have to pay concessions are sums recovered to make us whole after suffering damages or loss. Answer - See Modification #14 of this addendum. 43. Agreement, Section 2.02B. We believe the counter requirements are too restrictive, especially as it relates to inbound flights. Concessionaires should only be required to stay at their counter long enough to meet all customers, which typically is 30 minutes. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum. 44. Agreement, Section 2.03A. Please delete the second paragraph. The ACDBE termination requirements are overly restrictive, including the requirement of CEO approval. If an ACDBE vendor isn t performing (or worse they are doing something such as overbilling), we should be able to terminate an ACDBE vendor. We d still be required by the concession agreement to make good faith efforts to meet the ACDBE goal. Answer Noted. The Airport Authority will review this language and if revisions are made, revised language will be included in a future addendum. 45. Agreement, Section The MAG abatement language here is wholly inadequate. The abatement only occurs if there is a 20% drop in any one year and then the abatement is only a partial abatement calculated by subtracting 20% from the actual percentage decrease and applying that difference to the MAG. For example, should deplaning passengers fall 21% in a year, concessionaires will receive a nominal 1% reduction in MAG. In addition, should deplaning passengers decline less than 20% per year for several years, deplaning passengers could drop by 57% over a three year period (19% times three) and concessionaires would receive no abatement. This is unconscionable. Answer - See Modification #6 and answers to questions included in this addendum. Addendum #3 Page 16 of 16