CONCESSION AGREEMENT BETWEEN CITY OF LOS ANGELES …

CONCESSION AGREEMENT

BETWEEN

CITY OF LOS ANGELES

AND

SMARTE CARTE, INC.

FOR THE OPERATION OF A LUGGAGE CART CONCESSION

AT

LA/ONTARIO INTERNATIONAL AIRPORT

TABLE OF CONTENTS

(LUGGAGE CART CONCESSION AGREEMENT)

INTRODUCTION AND RECITALS............................................................................. 1Section .01 BASIC INFORMATION AND SUMMARY OF PRINCIPAL TERMS . 2Section .02 DEFINITONS............................................................................................. 3Section 1.0 TERM; ASSIGNMENT BY CITY; CITY’S LIABILITY UPON

TRANSFER....................................................................................................41.1 Term of Concession Agreement.............................................................. 41.2 Assignment by City..................................................................................41.3 City’s Liability Upon Transfer of Ownership.........................................4

Section 2.0 RIGFITS AND OBLIGATIONS OF CONCESSIONAIRE..... .................42.1 Rights Granted to Concessionaire........................................................... 42.2 Services....................................................................................................42.3 Business and Operations Plan............................................................... 52.4 Assigned Areas and Required Facilities............................................... 62.5 Allowable Charge for Use of Luggage Carts...........................................72.6 Refund Policy......................................................................................... 72.7 Cart and Retrieval Plan.......................................................................... 72.8 Ingress and Egress.................................................................................. 72.9 Cart Retrieval Tugs................................................................................ 82.10 Prohibited Acts..................................................................................... 8

Section 3.0 CONCESSION FEES AND OTHER CHARGES.......................................93.1 Monthly Concession Fees....................................................................... 93.2 Gross Revenues Defined......................................................................... 93.3 Method and Payment............................................................................... 103.4.Management pee...................................................................................... 12

Section 4.0 DOCUMENTATION AND ACCOUNTABILITY.................................... 134.1 Monthly Statement.................................................................................. 134.2 Year-end Audit......................................................................................... 134.3 Remittance and Submittal Address..........................................................144.4 Books and Records.................................................................................. 144.5 CMU and Luggage Cart Accountability................................................. 154.6 Description of Cash and Record Handling and Requirements.............. 154.7 Inventory...................................................................................................16

Section 5.0 IMPROVEMENTS, EQUIPMENT AND FIXTURES...............................165.1 Maintenance of CMU, Luggage Carts and Equipment..........................165.2 Plan and Specifications............................................................................175.3 Plan Approval.......................................................................................... 175.4 Subcontract Approval.............................................................................. 175.5 Installation.................................................................................................175.6 Conformance.............................................................................................175.7 Furnishings................................................................................................175.8 Completion Schedule............................................................................... 185.9 Workers’ Compensation..........................................................................18

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5.10 Completion of Approved Investment.................................................... 185.11 Additional Improvements............................................................ 185.12 Utilities................................................................................................... 195.13 No Liens................................. 195.14 Telecommunications............................... 20

Section 6.0 MAINTENANCE........................... ........................................................... 206.1 Maintenance and Repair..........................................................................206.2 Janitorial Service................................. 216.3 Telecommunications Room.................................................. 226.4 City’s Obligations....................................................................................22

Section 7.0 PERSONNEL...............................■...............................................................227.1 Trained, Qualified and Competent Personnel.........................................227.2 Concession Manager................................................................................237.3 On-Site Responsible Employees............................................................. 24

Section 8.0 DELIVERIES AND CENTRAL INSPECTION DELIVERYCHECKPOINT................. ......................... 24

Section 9.0 CITY’S RIGHT OF ACCESS AND INSPECTORS...................................249.1 Access...................................................................................................... 249.2 Inspection................................. 249.3 Right of Chief Executive Officer............................................................ 24

Section 10 ASSIGNMENTS, TRANSFERS AND ENCUMBRANCES..................... 2510.1 Transfer Prohibited................................................................................2510.2 Transfer.................................................................................................. 2510.3 No Further Consent Implied........................ 2510.4 No Release................... 2610.5 Payment of City’s Costs........................................................................2610.6 Incorporation of Terms.................................................................. 2610.7 Right to Collect Directly........................................................................2610.8 Reasonableness of Restrictions............................................................. 2610.9 Transfer Premium..................................................................................2710.10 Name Change Only..............................................................................27

Section 11 SIGNS, PROMOTIONS AND DISPLAYS................................................. 2711.1 Specially Designed Signs.......................................................................2711.2 Prohibition and Requirements............................................................... 2811.3 Reservation of Cart Advertising Rights............................... ■............... 2811.4 Failure to Comply..................................................................................28

Section 12 HAZARDOUS AND OTHER REGULATED SUBSTANCES................. 29Section 13 INTENTIONALLY OMITTED................................................................... 31Section 14 PREVAILING WAGE................................................................................... 31Section 15 PERFORMANCE AND PAYMENT BONDS............................................32

15.1 Performance Bond............................................................................... 32

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15.2 Payment Bond.......................................................................................................3215.3 Compliance..........................................................................................32

Section 16 DEFAULT, TERMINATION AND WAIVER............................................32Section 17 SURRENDER AND OWNERSHIP............................................................. 38

17.1 Surrender................................................................................................ 3817.2 Ownership of Equipment.......................................................................39

Section 18 CONTINUED OCCUPANY OF THE ASSIGNED AREAS AFTEREXPIRATION DATE OR EARLIER TERMINATION..............................39

Section 19 DAMAGE OR DESTRUCTION TO ASSIGNED AREAS....................... 3919.1 Damage or Destruction to Assigned Areas.... ...................................... 3919.2 Limits of City’s Obligatins................................................................... 40

Section 20 TAXES, LICENSES AND PERMITS......................................................... 40Section 21 BUSINESS TAX REGISTRATION............................................................ 41Section 22 INDEPENDENT CONTRACTOR............................................................... 41Section 23 LIABILITY.................................................................................................... 41

23.1 Plold Harmless....................................................................................... 4123.2 Insurance................................................................................................ 42

Section 24 COMPLIANCE WITH LAWS..................................................................... 44Section 25 RULES AND REGULATIONS................................................................... 45Section 26 SECURITY.................................................................................................... 46

26.1 Security Arrangements...........................................................................46, 26.2 Security Inspection and Survey........................................................... 46

26.3 Airport Identification.............................................................................4626.4 Control of Movement................................... 4626.5 Security Education and Training.......................................................... 4626.6 Corrective Action...................................................................................4626.7 Indemnification......................................................................................4626.8 Periodic Evaluation................................................................................4726.9 Assignment of Security Obligations..................................................... 4726.10 Security Design Guidelines................................................................. 47

Section 27 NOTICE REQUIREMENTS.........................................................................4727.1 Notice to City......................................................................................... 4727.2 Notice to Concessionaire.......................................................................48

Section 28 AGENT FOR SERVICE OF PROCESS...................................................... 48Section 29 GENERAL PROVISIONS............................................................................48

29.1 Airport Concession Disadvantaged Business Enterprise Program.....4829.2 Child Support Orders.............................................................................4929.3 Compliance with Los Angeles City Charter Section 470(c)(12)........ 5029.4 Contractor Responsibility Program....................................................... 50

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29.5 Nondiscrimination and Equal Employment Practices/AffirmativeAction Program.............................................................................................. 5129.6 Disabled Access.....................................................................................5229.7 Environmentally Favorable Operations................................................5329.8 Equal Benefits Ordinance...... ...............................................................5329.9 Labor Peace Agreement....................................................................... 5429.10 Living Wage Ordinance General Provisions......................................5429.11 Municipal Lobbying Ordinance.......................................................... 5629.12 Visual Artists’ Right Act.................................................................... 5629.13 DOT Title Assurance...........................................................................5629.14 Anti-Lobbying Certifications.............................................................. 5829.15 Board Order AO-5077 Exemption...................................................... 5829.16 Anti-trust Claims..................................................................................59

Section 30 OTHER PROVISIONS........................................................................ 5930.1 City Approval......................................................................................... 5930.2 Airport Operations.................................................................................5930.3 Subordination of Agreement................................................................. 5930.4 Laws of California; Venue.................................................................... 6030.5 Agreement Binding Upon Successors..................................................6030.6 Ordinances and Los Angeles Administrative and Municipal Codes

and Programs Language Governs..........................................................6030.7 Amendments to Ordinances and Codes................................................6030.8 Conditions and Covenants.................................................................... 6030.9 Gender and Plural Usage...................................................................... 6030.10 Void Provision........................................... 6030.11 Construction and Interpretation ......................................................... 6030.12 Section Headings.................................................................................6030.13 Waiver of Claims.................................................................................6030.14 Waiver.................................................................................................. 6130.15 Incorporation of Exhibits and Attachments........................................6130.16 Right to Develop Airport.................................................................... 6130.17 Concessionaire’s Consent to City’s Right to Amend........................ 6130.18 Force Majeure......................................................................................6130.19 Days......................................................................................................6230.20 Authority to Execute............................................................................6230.21 No General Assignment, etc................................................................ 6230.22 Understanding of Agreement.............................................................. 6230.23 Documents of Agreement................................................................... 6230.24 Non-liability of Agents and Employees..............................................6230.25 Deprivation of Concessionaire’s Rights.............................................6330.26 No Exclusivity..................................................................................... 6330.27 Entire Agreement and Modification/Amendment to Agreement......63

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SIGNATURES 64

EXHIBITS

Exhibit A Assigned AreasExhibit B Performance Bond FormExhibit C Payment Bond FormExhibit D Insurance .Exhibit E Contractor Responsibility Program

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CONCESSION AGREEMENT BETWEEN THE CITY OF LOS ANGELES AND SMARTE CARTE, INC. FOR THE OPERATION OF A LUGGAGE CART CONCESSION AT

LA/ONTARIO INTERNATIONAL AIRPORT

THIS CONCESSION AGREEMENT (this “Agreement”) is made and entered into as of__________________ , 2016, at Los Angeles, California, by and between the City of LosAngeles, a municipal corporation, through its Department of Airports (collectively referred to as “City” “Department” or “LAWA”) and acting by order of and through its Board of Airport Commissioners (the “Board”), and Smarte Carte, Inc., a Minnesota corporation (“Concessionaire”).

RECITALS

WHEREAS, City is the owner of LA/Ontario International Airport (hereinafter referred to as “ONT” or “Airport”). City operates said ONT for the promotion and accommodation of air commerce and air transportation between City and other cities of the United States and the world; and,

WHEREAS, City desires to provide a luggage cart concession, for the benefit of the air traveling public using the Airport, for the non-exclusive right to maintain and operate luggage cart facilities at ONT; and

WHEREAS, Concessionaire desires to provide facilities and services at the Airport of the type and character required by City, and Concessionaire has represented that it has the experience, ability, and resources to provide such facilities and services on a continuing basis under the terms and conditions set forth herein; and

■ WHEREAS, Concessionaire desires to secure and enter into a concession agreement inaccordance with the foregoing and undertakes to provide adequate facilities and service of the type and character required by City to meet the needs of passengers at ONT; and

WHEREAS, on December 22, 2015, the City executed a Settlement Agreement with the City of Ontario (“Ontario”) and the Ontario International Airport Authority (“OIAA”), a joint powers authority created by Ontario and San Bernardino County, which provides for the eventual transfer of ownership of ONT from the City to OIAA, upon the satisfaction of a number of terms and conditions; and

NOW, THEREFORE, the parties for and in consideration of the terms, covenants and conditions hereinafter contained to be kept and performed by said parties, DO HEREBY AGREE AS FOLLOWS:

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Section 0.1 Basic Information and Summary of Principal Terms. This sectionprovides some basic information and summary of the principal terms of this Agreement, as provided in the table below.

Concessionaire Information: SMARTE CARTE, INC.4455 White Bear ParkwaySt. Paul, MN 55110-7641Attn: Arthur Spring, Executive Vice President

Registered Agent: National Registered Agents, Inc.818 W. Seventh St., Ste. 930Los Angeles, CA 90017

Commencement Date: November 1, 2016

Expiration Date &Term: October 31,2017

Assigned Areas: See, Exhibit A

Monthly Concession Fee to Citv: The Monthly Contingent Percentage Fee shall be equal to twenty percent (20%) times the amount that the total Gross Revenues exceed the Monthly Threshold Amount, as provided in Section 3.3.1.

Service Fee to Concessionaire: LAWA to pay Concessionaire $168,000 annually, divided into 12 equal monthly installments, as provided under Section 3.4.

Flours of Operation: 24 hours per day, 7 days per week

Fees Remittance Address: City of Los Angeles - LAWAP.O. Box 54078Los Angeles, CA 90054-0078

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Section 0.2 Definitions. The following words and phrases when used in this Agreement, or any amendment hereto, shall have the meanings given to them in this Paragraph:

BOARD: The Board of Airport Commissioners of the City of Los Angeles.

CITY COUNCIL: The City Council of the City of Los Angeles.

DEPARTMENT: ■■ The Department of Airports of the City of Los Angeles.

CHIEF EXECUTIVE OFFICER: Chief Executive Officer (f/k/a Executive Director) of the Department of Airports or her/his designee.

BUSINESS OPERATIONS PLAN: A detailed plan for the management of concessions operations.

CART MANAGEMENT UNITS: Mechanical devises which dispense luggage carts (hereinafter referred to as “CMU”).

FIS AREAS: The Federal Inspection Services areas of the terminals at ONT used to process international arriving passengers, including the baggage claim areas where the Concessionaire will be required to provide Luggage Carts.

LUGGAGE CARTS: The luggage carts provided by Concessionaire, whether or not dispensed from the CMU.

CONCESSION: The non-exclusive right of Concessionaire to receive rental fees for the installation, operation, and management of the Luggage Cart Concession in Assigned Areas.

ASSIGNED AREAS: Any facilities, assigned spaces, and other concession areas that Concessionaire is authorized to use for the operation of the Concession.

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Section 1.0 TERM; ASSIGNMENT BY CITY; CITY’S LIABILITY UPON TRANSFER

1.1 Term of Concession Agreement. This Concession Agreement shall commence on November 1, 2016 (“Commencement Date”) and shall expire on October 31, 2017 (“Term”), unless earlier terminated in accordance with this Agreement.

1.2 Assignment by City. Concessionaire acknowledges that this Agreement may be assigned by City to the OIAA upon the transfer of ownership of ONT to the OIAA and Concessionaire hereby agrees it will cooperate with such assignment and, if asked to do so by LAWA, it will execute a consent to assignment and novation of this Agreement. In addition, Concessionaire acknowledges that in the event of a transfer of ownership of ONT to OIAA, this Agreement may be terminated by the Chief Executive Officer before the Commencement Date, in accordance with Section 16.16, unless this Agreement is assigned to OIAA.

1.3 City’s Liability Upon Transfer of Ownership. In the event of any transfer of ownership of ONT by the City to OIAA, then from and after the date of such transfer, the City shall be relieved of all liability with respect to City’s obligations to be performed under this Agreement.

Section 2.0 RIGHTS AND OBLIGATIONS OF CONCESSIONAIRE

2.1 Rights Granted to Concessionaire. City hereby grants to Concessionaire, subject to all of the terms, covenants and conditions of this Agreement, the non-exclusive right and obligation to operate, maintain (including but not limited to cleaning, repair and replacement), and manage luggage cart facilities in those portions of existing terminal buildings (“Terminals”) and parking lots (“Parking Lots”) at ONT, as indicated in Exhibit A. No CMU will be located in areas other than the Assigned Areas (in Exhibit A), as defined in Section 2.4. The Chief Executive Officer shall have the right to approve, in his/her sole discretion, CMU locations as is necessary to respond to the needs of the traveling public.

2.2 Services. Concessionaire shall manage and operate CMUs and Luggage Carts in Assigned Areas, as defined in Section 2.4, as well as maintain them in good and working condition in the Terminals and Parking Lots. In addition, Concessionaire will be responsible for providing CMUs with a constant supply of Luggage Carts in domestic and international arrivals and departures levels in in the Terminals and Parking Lots, and for providing a sufficient number of Luggage Carts to accommodate all of the guests who wish to use them. All of the foregoing under this Section 2.2 is collectively referred to as the “Luggage Cart Concession.” Further, Concessionaire shall operate and manage the Luggage Cart Concession to the satisfaction of LAWA.

2.2.1 Concessionaire warrants that the work hereunder shall be performed and completed diligently, in good faith and in an efficient manner consistent with professional standards practiced among those in the industry doing the same or similar work under the same or similar circumstances.

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2.3 Business and Operations Plan. Subject to the terms of this Agreement, Concessionaire shall operate and manage the Luggage Cart Concession in accordance with its Business and Operations Plan (the “Business and Operations Plan” or “BOP”), prepared and submitted by Concessionaire as specified in the LAWA Business and Operations Plan Approval Process (hereinafter referred to as “BOPAP”), available at www.lawa.org/uploadedFiles/LAWA/Business/BOP.pdf, which BOP shall be subject to the approval of the Chief Executive Officer as specified in the BOPAP. Once approved by the Chief Executive Officer, the BOP as so approved shall be deemed a part of this Agreement and incorporated herein by reference. In the event of a conflict between the provisions of this Agreement and the BOP (including any revisions to the BOP), the provisions of this Agreement shall control over the provisions of the BOP. The contents of the BOP shall include, in addition to what is required in the BOPAP, but not be limited to, the following:

(a) Maintenance plan which must include how carts and equipment will be cleaned and procedures for testing the accuracy of Cart Management Units

(b) Staffing plan including proposer’s hours of operation and plan to adequately staff facilities when employees call in sick or unexpectedly do not show up for work

(c) Operating Standards which include Concessionaire’s Luggage Cart retrieval and restocking process, as follows:

(i) The manner and method in which Luggage Carts arc to be safely retrieved from all terminals and parking lots, during regular and peak traffic times;

(ii) A specific plan for the retrieval of Luggage Carts that will ensure the constant availability of Luggage Carts in CMUs and FIS Areas;

(iii) The type of retrieval equipment to be used for CMUs and FIS Areas;

(iv) The maximum number of Luggage Carts that can be retrieved safely at any time; and,

(v) Measures to protect the safety of the public during cart retrieval periods.

(d) Customer service and quality assurance plan that includes remedial action, complaint procedures, and employee code of conduct

(e) Establishment of operational goals and objectives for the forthcoming year of the plan

(f) Such other managerial and operational plans, policies, standard operating procedures, reports and requirements as may be referred to elsewhere in this Agreement as being set forth in the BOP or as may be required by the Chief Executive Officer.

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http://www.lawa.org/uploadedFiles/LAWA/Business/BOP.pdf

2.4 Assigned Areas and Required Facilities. Concessionaire shall operate an adequate number of locations of CMU with Luggage Carts in the Terminals and Parking Lots. Only locations approved by the Chief Executive Officer in his/her sole discretion shall be designated the “Assigned Areas” that Concessionaire is authorized to use for the operation of the Luggage Cart Concession, which is attached and incorporated by reference as Exhibit A. Exhibit A also contains the number of CMUs and carts per terminal/location,

2.4.1 No repair facilities or office space or storage space will be provided as a part of this Agreement.

2.4.2 Acceptance of Assigned Areas “As Is”. Concessionaire agrees that the Assigned Areas, when delivered to Concessionaire by City in accordance with the terms herein, will be suitable for the purposes for which they are to be used and Concessionaire agrees so to accept them in its “AS IS, WHERE IS” condition, and “WITH ALL FAULTS” and without any improvements or alterations to be made or constructed by City, unless otherwise specified under this Agreement.

2;4.3 Addition, Reduction and Removal, and/or Relocation of Assigned Areas or CMUs. Concessionaire understands, acknowledges and agrees that at any time during the Term hereof, Chief Executive Officer may require, within his/her authority, at Concessionaire’s expense, for security reasons, to meet the needs of LAWA or to accommodate remodeling projects, or for any other reason: (1) the reduction and removal of CMUs at theAssigned Areas; (2) the reduction of Assigned Areas, (3) the relocation of a portion or all of the Assigned Areas for the CMUs and Luggage Carts; (4) an increase in the number of locations in the Assigned Areas or CMUs or Luggage Carts at any designated location; or (5) the installation of CMUs and Luggage Carts in locations other than those originally determined on the Commencement Date of this Agreement. Any and all such additions, reductions and removals and relocations will be at the sole expense of Concessionaire. LAWA will attempt to provide as much notice as possible for the reduction and removal or relocation of Assigned Areas or CMUs and Luggage Carts. Temporary disruptions of Concessionaire’s operations resulting from such additions, reduction and removal and/or relocation shall not entitle Concessionaire to a temporary location elsewhere. Concessioinaire acknowledges that the number of CMUs and Luggage Carts in operation may change from the amount on the Commencement Date due to the terms of this section.

2.4.4 Reconfigure or Surrender of Assigned Areas. In addition to the provisions under Section 2.4.3, Concessionaire understands, acknowledges and agrees that, at any time during the term hereof, the Chief Executive Officer may require, within his/her authority Concessionaire to surrender use of any portion of the Assigned Areas.


2.5 Allowable Charge for Use of Luggage Carts.

2.5.1 Domestic Departure and Arrival Areas and International Departure Areas. The Concessionaire will charge the public using its Luggage Carts Five Dollars ($5.00) per cart dispensed from a CMU located in the domestic arrivals and departures areas and in the international departure areas, unless an alternative amount is approved by the Board.

2.5.2 FIS Areas of International Arrivals. Concessionaire shall provide arriving international passengers with the use of Luggage Carts, in the FIS Areas of international arrivals at ONT, tree of charge. Such FIS Areas include International Arrivals Terminal, and any other area that becomes an operational FIS Area during the Term of this Agreement. Concessionaire shall solely bear the costs for the usage of such Luggage Carts.

2.6 Refund Policy. Concessionaire shall post a notice on each pay machine containing the toll-free telephone number at which refund requests can be made and its service personnel can be reached at any time, day or night, in the event of a breakdown or malfunction of, or vandalism to, a machine or machines.

2.6.1 Concessionaire shall maintain twenty-four (24) hour toll-free telephone sendee to handle service requests. Refunds shall be mailed out within three (3) business days following receipt of a request for refund. Concessionaire shall maintain records of refunds made and shall furnish copies of the records to City upon City’s request.

2.7 Cart Retrieval and Plan. Concessionaire shall maintain and adhere to its Operating Standards for Luggage Cart retrieval and restocking process as described in the BOP under Section 2.3.

2.8 Ingress and Egress. Throughout the Term of this Agreement, Concessionaire, its agents, servants, employees, contractors, and business invitees, shall have ground ingress and egress to and from the Assigned Areas. Such access shall be subject to reasonable airfield access control and permitting requirements as may be established by LAWA and temporary blockage or redirection due to Airport’s construction or Airport’s operational necessity. Subject to compliance with City’s Rules and Regulations and security requirements, Concessionaire is hereby granted the rights of ingress and egress to and from the Assigned Areas, and Concessionaire shall have the non-exclusive right, in common with others authorized by City, of ingress and egress through all Common Areas (as defined in this section); provided, however, the Chief Executive Officer may, in its sole discretion, and without liability to Concessionaire, change the size or location of the Common Areas, including, without limitation, by converting Common Areas to leaseable or other areas, leaseable areas to Common Areas, removing all access rights to Common Areas or closing Common Areas. Chief Executive Officer may, in Chief Executive Officer’s sole discretion, establish and enforce Rules and Regulations (as defined in Section 25,0) concerning the Common Areas, temporarily close portions of the Common Areas for security, maintenance or other purposes, and make changes to the Common Areas including, without limitation, changes in the location of security points, driveways,


entrances, exits, parking spaces and the direction and flow of pedestrian and vehicular traffic. For purposes of this Agreement, the term “Common Areas” means all areas and facilities located within ONT and outside the Assigned Areas, that are designated by the Chief Executive Officer from time to time as common use areas for the general use and convenience of Concessionaires, tenants and other occupants at ONT, airline passengers and other visitors to ONT, such as lobbies, corridors, sidewalks, elevators, escalators, moving sidewalks, parking areas, facilities, restrooms, pedestrian entrances, driveways, loading zones and roadways.

2.9 Cart Retrieval Tugs. In the operation of Luggage Cart Concession, Concessionaire shall provide mechanized equipment and the services thereof for the transport and retrieval of Luggage Carts (“Cart Retrieval Tugs”); provided, however, that the nature, size, type, character and condition of such Cart Retrieval Tugs shall be subject to the prior, written approval of Chief Executive Officer before the same is placed in operation, and upon placing such equipment in operation, Concessionaire shall strictly comply with such rules and regulations as Chief Executive Officer may, from time to time, adopt covering operation of such equipment and the time periods therefore, the routes over any of the aprons necessary to the operation of the concession, the location of the parking and storage areas for such equipment, the maintenance of the mechanical condition, appearance, cleanliness and sanitary condition of such equipment and the cleanliness, neat appearance and conduct and demeanor of Concessionaire’s or other personnel operating the same. All of said personnel shall have licenses required by law and shall also be licensed by City, and City may require periodic inspections of such equipment by City representatives. Approval of inspected equipment may be evidenced by a decal or sticker to be placed on same as required by City. A nominal fee to cover such licensing and inspection services may be charged by City.

2.10 Prohibited Acts. Concessionaire shall not provide any service to the City except as provided under this Agreement for the Luggage Cart Concession. In addition, Concessionaire shall not:

a. Do or permit to be done anything which may interfere with the effectiveness or accessibility of utility, heating, ventilating or air conditioning systems or portions thereof on the concession premises or elsewhere at ONT, and not do or permit to be done anything which may interfere its free access and passage in the Assigned Areas or the pubic area adjacent thereto, or in the street or sidewalks adjoining the Assigned Areas or hinder police, firefighter or the emergency personnel in the discharge of their duties;

b. Do or permit to be done anything which may interfere with the effectiveness or accessibility in or adjacent to the Assigned Areas, including lines, pipes, wires, conduits and equipment connected with or appurtenant thereto;

c. Overload any floor in the Assigned Areas with carts that will impact compliance with Fire/Life Safety regulations and/or cause the surrounding area to look untidy and disorganized;


d. Do or permit to be done any act or thing upon the Assigned Areas which will invalidate, suspend or increase the rate of any fire insurance policy required under this Agreement, or carried by city, covering the Assigned Areas, or the buildings in which the same are located or which, in the opinion of Chief Executive Officer, 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 City to comply with the provisions of this paragraph, any fire insurance rate on the Assigned Areas, 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 City, on demand, that part of all fire insurance premiums paid by City which have been charged because of such violation or failure of Concessionaire; provided, however, that nothing contained herein shall preclude Concessionaire from bringing, keeping, or using on or about the Assigned Areas such materials, supplies, equipment and machinery as are appropriate or customary in carrying on its business, or from carrying on said business in all respects as is customary;

e. Allow any sale by auction upon the Assigned Areas;

f. Permit undue loitering on or about the Assigned Areas;

g. Use the Assigned Areas, or any part thereof, for lodging or sleeping purposes or in any manner that will constitute waste; or

h. Use or allow the Assigned Areas to be used for any improper, immoral, unlawful or objectionable purposes.

Section 3.0 CONCESSION FEES, OTHER CHARGES AND MANACEMENET FEE

3.1 Monthly Concession Fees. As consideration for City's granting the Concession rights described in this Agreement, Concessionaire shall pay to City on a monthly basis for each month (“Monthly Concession Fee”) during the Term of this Agreement as follows:

® an Annual Contingent Percentage Fee, divided into twelve equalinstallments (Monthly Contingent Percentage Fee, as defined under Section 3.3.1).

3.1.1 Fees and Additional Fees. The Monthly Concession Fee and all Additional Fees payable by Concessionaire hereunder are sometimes collectively referred to as "Fees." "Additional Fees" shall mean all sums, fees, charges, payments and other amounts due hereunder from Concessionaire other than Monthly Concession Fee.

3.2 Gross Revenues Defined. “Gross Revenues” means the aggregate total of all revenues derived from charges and/or fees imposed upon users of the Luggage Carts, and including without limitation, any compensation due to Concessionaire or Concessionaire’s subcontractors derived from the operation of the Luggage Cart Concession at ONT, and shall

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further include, without limitation, all revenues whether by coin or currency, on account, by check, credit card or debit card, or in any other manner, derived by Concessionaire as a result of its operation of the concession rights herein granted, and shall also include, without limitation, the charges received or billed (whether or not received or collected) by Concessionaire from the use of luggage cart services at ONT pursuant to this Agreement. "Gross Revenues" shall also include any payments made to Concessionaire for advertising or promoting products and services from the Assigned Areas. Goods, work or services furnished by any person or firm in lieu of payment in exchange for value received shall be deemed to be "Gross Revenues." "Gross Revenues" shall exclude revenues from the following:

a. Management Fee to be paid to Concessionaire by LAWA.

b. separately stated retail sales taxes, excise taxes or related direct taxes, if any, on the patrons and collected by Concessionaire.

c. the sale of waste or scrap materials resulting from the operation of Concessionaire’s business;

d. the sale of or the trade-in value of any furniture, fixtures or equipment used at ONT, and owned by Concessionaire;

e. the sale, or the trade-in value, of any equipment used at ONT and owned by Concessionaire;

f. Test monies obtained by City from Concessionaire and deposited in CMUs to validate proper functionality of the CMUs, as described in Section 6.1.1.1.

g. the amount of any refund given to patrons; and

h. proceeds from any arbitration lawsuit, judgment of settlement of lawsuit or other dispute.

3.2.1 Concessionaire shall not be credited with nor allowed to have any reduction in the amount of the Gross Revenues, as herein defined, which results from any arrangement for a rebate, kickback or hidden credit given or allowed to any customer.

3.2.2 Collections. Concessionaire shall be responsible for collections and shall assume all financial responsibility for dishonored credit cards and loss of uncollected funds. Amounts attributable to dishonored credit cards and uncollected funds shall not reduce Gross Revenues for the purpose of calculating the Percentage Fee described in Section 3.1.

3.3 Method and Payment.

3.3.1 Amount of Contingent Percentage Fee Paid by Concessionaire. The annual amount of the Contingent Percentage Fee (“Annual Contingent Percentage Fee”) shall be equal to twenty percent (20%) times the amount that the total Gross Revenues exceed the Annual Threshold Amount. The “Annual Threshold Amount” for


the first year of this Agreement from the Commencement Date shall be $70,000, which will be divided into twelve equal (or close to equal, if not equally divisible) monthly installments (“Monthly Threshold Amount”). The “Monthly Contingent Percentage Fee” shall be equal to twenty percent (20%) times the amount that the total Gross Revenues exceed the Monthly Threshold Amount. The Contingent Percentage Fee is subject to year-end adjustment/reconciliation as provided in Sections 4.2 and 4.2.1.

3.3.1.1 Adjustment to the Annual Threshold Amount. If applicable, the Annual Threshold Amount shall be adjusted as of the first day of the month immediately following the anniversary of the Commencement Date, and every year thereafter during the Term of the Agreement. The Annual Threshold shall be the amount in effect for the immediately prior Agreement Year, which will be adjusted proportionately with the change in the percentage of passenger traffic at ONT; provided, however, that in no event shall the Annual Threshold Amount for a given adjustment year be decreased as the result of such adjustment. For purposes of this Agreement, “Agreement Year” is defined to mean one year from the Commencement Date and each year thereafter.

3.3.2 Payment of Monthly Contingent Percentage Fee. The Monthly Contingent Percentage Fee, as defined in Section 3.3.1, shall be paid by the 20th day of every month. If the twentieth (20th) day of the month falls on a weekend day ora holiday, the payment shall be made on the next business day.

3.3.3 Pro Rata Payment. If the commencement or termination of this Agreement falls on any date other than the first or last day of any calendar month, the applicable fees and charges for said month shall be payable by Concessionaire to City pro rata in the same proportion that the number of days the Agreement is in effect for that month bears to the total number of days in that month.

3.3.4 Utility Charges. Utilities, including electricity, gas and water, shall be separately metered at Concessionaire's expense, and shall be invoiced directly to Concessionaire. If Chief Executive Officer agrees that it is impossible to separately meter any or all Assigned Areas, then Concessionaire shall pay to City as Additional Fees a reasonable and not unjustly discriminatory pro-rata amount of said utility invoice which includes the Assigned Areas, based upon Chief Executive Officer's good faith estimate of Concessionaire's share thereof. City shall invoice Concessionaire for amounts due and Concessionaire shall pay the same within thirty (30) days of receipt of City's invoice. All charges, including, but not limited to, deposits, installation costs, meter deposits and all service charges for electricity, heat, air conditioning and other utility services to the concession Assigned Areas shall be paid by Concessionaire regardless of whether such utility services are furnished by City or by a third party utility service provider.

3.3.5 Late Charge. Notwithstanding any other provision of this Agreement to the contrary, Concessionaire hereby acknowledges that late payment to City of the Monthly Concession Fee, or other amounts due hereunder will cause City to incur costs not contemplated by this Agreement, the exact amount of which will be difficult to ascertain. If any Monthly Concession Fee or other sums due from Concessionaire are not

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received by Concessionaire within ten (10) days after their due date, then Concessionaire shall pay to City a late charge equal to ten percent (10%) of such overdue amount. City and Concessionaire hereby agree that such late charges represent a fair and reasonable estimate of the cost that City will incur by reason of Concessionaire's late payment and shall not be construed as a penalty. City's acceptance of such late charges shall not constitute a waiver of Concessionaire's default with respect to such overdue amount or stop City from exercising any of the other rights and remedies granted under this Agreement.

3.3.6 Interest. Without waiving any other right of action available to City in the event of monetary default hereunder, if any Monthly Concession Fee or other Fees are not received within three (3) days of when they are due pursuant to this Agreement, Concessionaire shall pay to LAWA, as Additional Fee, interest thereon at (a) an annual rate equal to the maximum rate of interest permitted by law, or (b) fifteen percent (15%) per annum from the date such Monthly Concession Fee or other Fees were due and payable until paid in full. Payment of such interest shall not excuse or cure any Default by Concessionaire. Chronic delinquency shall constitute a Default as provided under Section 16.1,13 of this Agreement.

3.4 Management Fee. Concessionaire shall be paid a Management Fee of One Hundred and Sixty Eight Thousand Dollars ($168,000) per year, to be divided into twelve equal monthly installments (“Monthly Management Fee”), for the management and operation of the Luggage Cart Concession, so long as Concessionaire performs to the satisfaction of the Chief Executive Officer.

3.4.1 Payment of Monthly Management Fee and Deduction of Any Unpaid Monthly Contingent Percentage Fee. The Monthly Management Fee shall be paid by the 20th day of every month. If the twentieth (20th) day of the month falls on a weekend day or a holiday, the payment shall be made on the next business day. Any unpaid Monthly Contingent Percentage Fee (including any applicable late charge and interest described in Sections 3.3.4 and 3.3.5) owed to LAWA shall be deducted from the following month’s Monthly Management Fee paid to Concessionaire.

3.4.2 Adjustment to the Management Fee. If applicable, the Management Fee shall be adjusted as of the first day of the month immediately following the anniversary of the Commencement Date, and every year thereafter during the Term of the Agreement. The adjusted Management Fee shall be the amount in effect for the immediately prior Agreement Year increased by the percentage increase, if any, in the CPI (as defined below) for the Comparison Month (as defined below) for such adjustment year over the CPI for the Base Month (as defined below) for such adjustment year; provided, however, that in no event shall the Management Fee for a given adjustment year be decreased as the result of such computation; and provided, further, that in no event shall the

Concessionaire Initials:

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Management Fee for a given Adjustment Year be increased by more than two percent (2%) of the Management Fee in effect for the immediately prior adjustment year. The term “CPI” shall mean the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor of CPI-U (all urban consumers) for Los Angeles - Riverside - Orange County, CA (all items 1982 - 1984 equals one hundred). In the event that the compilation and/or publication of the CPI shall be discontinued, then the index most nearly the same as the CPI shall be used to make such calculation (as reasonably determined by the Chief Executive Officer). The term “Comparison Month” shall mean the month that is two (2) months prior to the first (1st) month of the applicable adjustment year. The term “Base Month” shall mean the month that is fourteen (14) months prior to the first (1st) month of the applicable Adjustment Year.

Section 4.0 DOCUMENTATION AND ACCOUNTABILITY

4.1 Monthly Statement. No later than twenty (20) days after the end of each calendar month in Agreement, Concessionaire shall submit to City a written statement, in an electronic database format acceptable to the Chief Executive Officer, of the monthly accounting and itemization for the preceding calendar month showing the Gross Revenues received at each location operated under this Agreement, and all permissible exclusions or deductions (“Monthly Statement”) together with the payment of the Monthly Concession Fee. Each terminal and parking lots, consisting of the Terminals and Parking Lots, shall be reported as a separate location. This monthly accounting report shall be in such manner and detail and upon such forms as are prescribed by Chief Executive Officer. The Chief Executive Officer may amend the forms to be used during the term of this Agreement. If the Commencement Date of this Agreement falls on a date other than the first day of a month, the Gross Revenues from the partial month shall be added to, and the partial month shall be included in, the Monthly Statement for the first full calendar month in the Term. The Monthly Statement shall be certified by Concessionaire or Concessionaire's duly authorized officer or agent to be true and accurate. Each Monthly Statement shall be due on the same date and at the same address as the Concession Fee payment for that month is due.

4.2 Year-end Audit. Concessionaire shall also furnish to City within ninety (90) days after the end of each Agreement Year during the Term, in an electronic database format acceptable to the Chief Executive Officer, an annual accounting of all business transactions conducted by Concessionaire at ONT pursuant to this Agreement, prepared at the close of Concessionaire’s contract year in a form and with such detail as Chief Executive Officer may request, together with such other financial and statistical reports, including a statement of Gross Revenues and monthly concession fees and other Fees paid to City by Concessionaire, as Chief Executive Officer may reasonably require. Such annual accounting shall be prepared in accordance with generally accepted accounting principles, shall be certified by an independent Certified Public Accountant, and shall be approved and certified as being correct by an officer of the Concessionaire.

4.2.1 Annual Adiustment/Reconciliation. No later than sixty (60) days after theend of each Agreement Year, a reconciliation report will be prepared either by the City or

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Concessionaire showing an overpayment or deficit. If there is a difference, Concessionaire will be credited or billed within thirty (30) calendar days from the date of the reconciliation report.

4.3 Remittance and Submittal Address. All Monthly Concession Fees, Additional Fees and Fees, along with hard copies of the Monthly Statements shall be sent to the following remittance address:

City of Los Angeles - LAWAP.O. Box 54078Los Angeles, CA 90054-0078

and shall be submitted by e-mail to the following address:

[email protected]. Liard copies and electronic submittals of the Lists of CMUs and Annual Statement shall also be sent to the same addresses. City may designate an alternate address at any time upon giving Concessionaire a thirty (30) day advance, written notice.

4.4 Books and Records. Concessionaire undertakes and agrees, as a covenant and condition herein, to establish a business office in the metropolitan area of Los Angeles, California. Concessionaire shall maintain in said office its permanent books and records, whether electronically maintained or otherwise (herein “Books and Records”), including but not limited to balance sheets, income statements, general ledgers, subsidiary ledgers, trial balances, sales journals, invoices, chart of accounts and all other supporting documents wherein are kept all entries and information necessary to perform an audit of (i) fees, and other charges paid and payable to City, (ii) all financial information relating to the Gross Revenues and all other transactions of Concessionaire at the Airport, and (iii) any other matters relating to the performance of Concessionaire’s obligations under this Agreement. City may, in the Chief Executive Officer’s sole discretion and with reasonable notice to Concessionaire, require Concessionaire to provide access to all Books and Records and other information necessary in connection with any audit by City under this Agreement. City’s right to access such records and information shall survive six (6) years beyond the expiration or earlier termination of this Agreement. Unless otherwise authorized by the Chief Executive Officer in writing, Concessionaire shall retain all Books and Records and any other information necessary to perform any audit as described in this Agreement during the entire term of this Agreement and for a minimum of six (6) years thereafter.

4.4.1 Examination of Records. City’s accountants or representatives may examine the Books and Records of Concessionaire for the purpose of conducting an audit. Concessionaire shall produce these records for inspection and copying at the Assigned Areas or, at Chief Executive Officer’s option, City’s offices within ten (10) days of Chief Executive Officer’s request. In the event Concessionaire does not make available to City the pertinent books and records at the Airport within the aforesaid ten (10) days as set forth in this section, Concessionaire agrees to pay for all travel costs, housing, meals, and other related expenses associated with the audit of said books,

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mailto:[email protected]

reports, accounts, and records by City at Concessionaire’s place of records at any time during its ordinary business hours. If Concessionaire’s Books and Records have been generated from computerized data, Concessionaire agrees to provide City with extracts of the data files in a computer readable format or other suitable alternative computer data exchange formats. City shall have the right to interview such employees and representatives of Concessionaire City deems necessary to conduct and support the audit.

4.4.3 Audit; Deficiencies. If it is determined by City as a result of an audit that there has been a deficiency in the payment of any Fees (a “Deficiency”), then such Deficiency shall- immediately become due and payable upon thirty (30) days written demand by City. In connection with any audit conducted by City, deficiencies ascertained by applying percentages of error obtained from such testing and sampling to the entire period of reporting under examination will be binding upon Concessionaire. If Concessionaire believes that any audit performed on behalf of City has disclosed an isolated error and wishes to increase the sample size of the audit or perform a detail audit, Concessionaire shall pay City for any additional audit procedures. In the event any deficiencies in the amount of two percent (2%) or greater of any item being audited with respect to the Fees payable to City hereunder is ascertained by City, Concessionaire agrees to pay City for the cost of the audit and the Deficiency (and the provisions of Section 3.3.5 (Late Charge) and Section 3.3.6 (Interest) shall apply to the amount of the Deficiency).

4.4.4 Confidentiality. The execution of a confidentiality agreement shall not be a prerequisite to the conduct of any audit by City hereunder. However, to the maximum extent permitted under applicable laws, all information gained by City from such examinations shall be confidential and shall not be disclosed other than as may be required by court order, other legal process or pursuant to the provisions of the California Public Records Act; provided, however, the foregoing shall not prevent the use of such information in connection with any litigation between the City and Concessionaire; provided, further, to the extent commercially reasonable under the then-existing circumstances, City shall use commercially reasonable efforts to give written notice to Concessionaire in advance of such disclosure to afford Concessionaire the opportunity to attempt to secure available protective measures to safeguard such information.

4.5 CMU and Luggage Cart Accountability. CMUs and Luggage Carts in all locations must be capable of being audited by Department staff for the number of luggage carts dispensed and revenue derived. The Concessionaire shall maintain an accurate inventory of CMU, including meters, number of carts per CMU, and location of CMU, Such inventory shall be submitted to LAWA upon request.

4.6 Description of Cash and Record Handling, and Requirements. Concessionaire shall prepare a written description of its cash handling and receipts recording systems and equipment which shall be submitted to Chief Executive Officer for approval. When approved by Chief Executive Officer, such systems and equipment, including any revisions thereto approved by Chief Executive Officer shall be utilized by Concessionaire in its operations hereunder. Concessionaire will maintain adequate employee fidelity bonds to cover all its employees who handle money.


4.7 Inventory. Prior to the commencement of operations, and annually thereafter, Concessionaire shall furnish to the Chief Executive Officer a written inventory of all furnishings equipment and removable fixtures it has placed in each of the Assigned Areas.

Section 5.0 IMPROVEMENTS, EQUIPMENT, AND FIXTURES

5.1 Maintenance of CMU, Luggage Carts and Equipment. Concessionaire shall maintain (including but not limited to cleaning, repair and replacement), at its sole expense, all CMUs, Luggage Carts (including but not limited to the equipment for retrieval and restocking of Luggage Carts, related materials and software), and shall furnish all improvements, fixtures, apparatus, facilities and equipment necessary for such installation (collectively “Improvements”), as well as tools, locks and parts required to keep and maintain said machines in good working condition. Concessionaire shall also provide, at its sole expense, all signs as stated in Section 11.1 necessary to instruct persons desiring to use said machines as to the method of operating the same.

5.1.1 Equipment Description. On the Commencement Date, Concessionaire will provide a complete equipment description that includes a written list and renderings of luggage cart models and all equipment needed to support the Concession at ONT.

5.1.2 Concessionaire shall continue to maintain and provide a sufficient number of CMU’s and Luggage Carts to meet the needs of the guests using the Luggage Carts, as approved by the Chief Executive Officer at his/her sole discretion.

5.1.3.1 The Luggage Carts shall be constructed of non-corrosive metal, have soft front bumpers, non-scuff wheels, luggage restraint, basket or optional

' child seat and be of a type and construction satisfactory to Chief ExecutiveOfficer.

5.1.3.2 CMU shall accept U.S. currency, and credit and debit cards.

5.1.3.3 All Luggage Carts must be capable of displaying approximately one hundred forty (140) square inches of advertising. LAWA reserves the right to install advertising on Luggage Carts with no compensation to the Concessionaire. Concessionaire shall not insert any advertising unless approved in writing by the Chief Executive Officer.

5.1.4 With the exception of the CMUs in the Parking Lots, Concessionaire shall install all new power conduits, cables, electrical outlets at locations in the Assigned Areas where an electrical outlet is not currently available, circuit breakers, and related hardware, and make all connections to the nearest electrical room at ONT (collectively “Electrical Hardware”).

5.1.5 Concessionaire warrants that all goods and materials furnished in connection with the CMUs, Luggage Carts, Improvements and Electrical Hardware will


be like new and of good quality and that all workmanship will be of good quality, freefrom faults and defects.

5.2 Plans and Specifications. Concessionaire shall, at its own cost and expense, employ competent licensed craftsmen who will prepare detailed plans, specifications and cost estimates for all concession improvements, graphical designs and equipment to be installed in the Assigned Areas.

5.3 Plan Approval. Prior to any work commencing, Concessionaire shall submit a concept request form in' order to initiate a concept review in accordance with LAWA’s Tenant Improvement Approval Process (http://www.lawa.org/welcome_lawa.aspx?id=4162). Concessionaer shall comply with applicable portions of LAWA’s Design and Construction Handbook located at www.lawa.org/laxdev/ handbook.aspx (such handbook as may be revised from time to time by City) (herein, the “Design and Construction Handbook”). Chief Executive Officer may amend said submittal requirements and procedures during the course of this Agreement, Chief Executive Officer may reject any such submittal and require Concessionaire to resubmit plans, designs and specifications until they meet with approval.

5.4 Subcontract Approval, Concessionaire shall obtain written approval by the Chief Executive Officer before Concessionaire awards or lets any contract for the construction of any improvements, or enters into contracts for the purchase and installation of any fixtures and equipment in the Assigned Areas.

5.5 Installation. Upon issuance of a Notice to Proceed by Chief Executive Officer, Concessionaire shall forthwith commence and complete the work approved by LAWA. No substantial change, addition or alteration shall be made in the scope of the work so approved without first obtaining Chief Executive Officer's written approval. No structural or other

’ improvements, decor or equipment, other than as contemplated herein, shall be made in or upon the Assigned Areas without the written consent of Chief Executive Officer. Concessionaire acknowledges that the Airport presents a complicated and congested operating environment, and Concessionaire agrees to conduct and manage all of its activities at the Airport in a highly professional manner and with minimum disruption of Airport operations.

5.6 Conformance. All Improvements and Electrical Hardware, structural or other improvements, equipment, fixtures, facilities and interior design and decor constructed or installed by Concessionaire in the Assigned Areas, including the plans and specifications therefor, shall in all respects conform to and comply with all Laws, including without limitation, the City Building Code and the applicable statutes, ordinances, building codes, rules and regulations of such other authorities as may have jurisdiction over the Assigned Areas or Concessionaire's operations therein. Concessionaire shall at its own cost and expense and prior to the start of construction obtain all permits and approvals required by law, including, but not limited to, those required by the City of Los Angeles Department of Building and Safety, the Los Angeles County Department of Llealth Services, and the Los Angeles Fire Department.

5.7 Furnishings. Concessionaire, at its sole cost and expense, shall furnish, install and maintain all necessary fixtures, facilities, and equipment required to operate the Luggage Cart


http://www.lawa.org/welcome_lawa.aspx?id=4162

http://www.lawa.org/laxdev/

Concession, and shall supply all necessary equipment, fixtures and parts required to keep the same in good order and repair. Concessionaire shall also supply and install, at its sole cost and expense, any improvements, fixtures, equipment or facilities incidental to the Luggage Cart Concession of Concessionaire or any alterations or relocations thereof, or additions thereto.

5.8 Completion Schedule. Concessionaire shall ensure that CMUs, Luggage Carts, Improvements, Electrical Hardware and other improvements described in this Agreement in the Assigned Areas described in Exhibit A are all operational and available for public use no later than the Commencement Date.

5.9 Workers' Compensation. Prior to commencement of any Improvements or Electrical Hardware, Concessionaire (and any relevant Concessionaire Party) shall first submit to City a certificate of insurance evidencing the fact that Concessionaire maintains workers' compensation and employers liability coverage in the amounts and form required by the Workers' Compensation Act and insurance laws of the State of California. Such certificate shall include a Waiver of Subrogation naming and for the benefit of the City of Los Angeles and City Agents. Such certificate shall contain the applicable policy number and the inclusive date for same, shall bear an original signature of an authorized representative of the insurance carrier and shall also provide thereon that the insurance shall not be subject to cancellation except after notice by registered mail to the City Attorney of the City of Los Angeles at least thirty (30) days prior to the date of cancellation.

5.10 Completion of New Approved Investment. Upon Concessionaire’s completion of any purchase and installation of any new CMUs, Luggage Carts and Improvements, and Electrical Hardware, Concessionaire shall furnish to LAWA, at no charge:

5.10.1 A certificate, signed by a duly authorized officer or representative of Concessionaire, certifying that the Improvements have been constructed in accordance with the approved plans and specifications and in strict compliance with all Laws;

5.10.2 Three (3) complete reproducible sets of “as-built” drawings, and two (2) complete sets in Computer Aided Design (hereinafter referred to as “CAD”) format which complies with the LAWA CAD standards current at the time of submission. These drawings must include any applicable Permit numbers, the structural and other improvements installed by Concessionaire in the Assigned Areas, and the location and details of installation of all equipment, utility lines, wiring conduits and related matters. Concessionaire shall keep said drawings current by updating them in order to reflect any changes or modifications which may be made in or to the Assigned Areas.

5.11 Additional Improvements. After completion of the structural and other improvements and the installation of equipment, fixtures, facilities and interior design and decor, as above provided, Concessionaire shall not make any additional alterations to the ceilings, walls, floors or any other part of the Assigned Areas without first obtaining Chief Executive Officer’s written consent and will require compliance with the applicable provisions of Section 5.0.


5.12 Utilities. Concessionaire shall provide for the installation, distribution and operation of any and all utilities required for the Luggage Cart Concession, including any necessary installations outside of the Assigned Areas, except those performed by City or its contractors.

5.12.1 Utility Interruption. Concessionaire hereby expressly waives any and all Claims, or for any diminution or abatement of Monthly Concession Fees or other Fees against the City Agents for compensation for any and all loss or damage sustained by Concessionaire which may occur from time to time by reason of any defect, deficiency or impairment of the water supply, drainage, or heating or air conditioning systems, gas mains, electrical supply, electrical apparatus or wires furnished to the Assigned Areas, or from loss or damage resulting from water, tornado, earthquake, wind, civil commotion, criminal or terrorist activity, or riot. Concessionaire hereby expressly releases and discharges the City Agents from any and all Claims arising from any of the aforesaid causes.

5.13 No Liens. Concessionaire shall pay when due all claims for labor or materials furnished or alleged to have been furnished to or for Concessionaire at, on, or for use in the Assigned Areas or any portion thereof. Concessionaire shall keep the Assigned Areas, the Terminals, Parking Lots and the Airport, and any interest therein, free and clear of all mechanics' liens and all other liens from any work undertaken by or on behalf of Concessionaire. Concessionaire shall give City written notice of any lien filed against the Assigned Areas, the Airport or any interest therein related to or arising from work performed by or for Concessionaire. Additionally, Concessionaire shall keep any City-owned Improvements or other City-owned improvements on the Assigned Areas free and clear of any liens or other encumbrances. By way of specification without limitation, Concessionaire shall keep the Assigned Areas free from any liens arising out of any work performed, materials furnished, or obligations incurred by or for Concessionaire and Concessionaire shall indemnify, defend, protect, and hold the Assigned Areas, the Airport, City and City Agents harmless against any liens and encumbrances and all Claims arising from any work performed by or on behalf of Concessionaire or any Concessionaire Party and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against Concessionaire, City, the Airport, or the Assigned Areas. In the event that Concessionaire does not, within thirty (30) calendar days following the imposition of any such lien, cause such lien to be released of record by payment or posting of a bond in form and amount satisfactory to Chief Executive Officer in its good faith business judgment, City shall have in addition to all other remedies provided herein and by law, the right, but not the obligation to cause, upon ten (10) business days prior written notice to Concessionaire, the same to be released by such means as it shall deem proper, including payment in satisfaction of any Claim giving rise to such lien. All such sums paid by City and all expenses incurred by it in connection therewith, plus the Administrative Fee, shall be payable to City by Concessionaire as Additional Fee within fifteen (15) days after written demand therefore. Concessionaire shall give City not less than ten (10) days' prior written notice of the commencement of the Improvements or any subsequent improvements in the Assigned Areas, and City shall have the right to post notices of non-responsibility in or upon the Assigned Areas as provided by law. In addition, City shall have the right to require that Concessionaire pay City's disbursements, court costs and other costs in defending any such action if City is


named as a party to any such action, the lien encumbers any portion or interest in the Airport or if City elects to defend any such action or lien. Nothing in this section shall be construed to place any obligations upon Concessionaire with respect to liens, loans, or mortgages placed upon the Assigned Areas by City, its Department of Airport, its Board, City officers, agents, or employees.

5.14 Telecommunications. Concessionaire shall not install any television, licensed or unlicensed wired or wireless communication equipment including any antenna, conduit, fiber, wires, radio, television equipment, or any other type of telecommunications equipment, inside or outside of the Airport’s Terminals, without the prior written approval of the Chief Executive Officer, and upon such terms and conditions as may be specified by the Chief Executive Officer in each and every instance.

5.14.1 Concessionaire is required to comply with LAWA telecommunication policies. Concessionaire shall be responsible for expenses incurred by LAWA for corrective action resulting from non-compliance with LAWA policies.

5.14.2 Telecommunication facilities and services established and used by the Concessionaire shall not interfere with LAWA telecommunication facilities and services. All such facilities and services shall comply with FCC licensing regulations, with City building codes, and with all other applicable municipal, state, and federal rules and regulations.

5.14.3 Concessionaire shall not allow the use of, and shall not sell, sublet, or trade, telecommunication facilities or services to other airport entities without prior written approval of the Chief Executive Officer.

5.14.4 Concessionaire shall not use, and shall not purchase, sublet or trade for, telecommunication facilities or services from other airport entities without prior written approval of the Chief Executive Officer.

Section 6.0 MAINTENANCE

6.1 Maintenance and Repairs. Concessionaire shall maintain in clean and good working condition and repair (including installing any necessary replacements), structural or otherwise, all of its CMUs, Luggage Carts, Improvements, Electrical Hardware, equipment, fixtures, and other improvements installed pursuant to this Agreement, together with the Assigned Areas or applicable areas wherein the same are or have been installed. Concessionaire shall service these items when needed, or at such intervals as shall be designated by Chief Executive Officer, by competent service personnel. .

6.1.1 Maintenance Schedule. To provide continuous satisfactory service, Concessionaire shall establish an adequate preventive maintenance program and the provisions of same shall be subject to periodic review by City’s representatives. Maintenance of the Assigned Areas shall include, without limitation, the periodic inspection, and cleaning of each CMU and luggage cart. All necessary repairs,


refurbishment and replacement will be immediately provided to maintain the excellent condition of fixtures and equipment. All CMUs shall be maintained in good repair, replenished with Luggage Carts and operational, 7 days per week for public use twenty- four (24) hours daily. Concessionaire shall include a maintenance plan as described in Section 2.3.

6.1.1.1 CMU Testing. If requested by City, Concessionaireagrees to deliver to City, monthly, an agreed upon sum of money in coins, which amount shall initially be set at Twenty Dollars ($20.00) that are specially marked with a removable dye or color film. City will use the coins to test the reliability of Concessionaire’s equipment, on an unannounced basis, during the course of each month. City shall notify Concessionaire in writing following each test period advising Concessionaire as to the locations and identification numbers of the CMUs tested, the amount of money deposited and the results of the tests. The "test money" deposited by City in Concessionaire's equipment shall not be included as part of the Gross Revenues reported by Concessionaire in accordance with Section 3.2. f,

6.1.2 Failure to Maintain. In the event Concessionaire fails to accomplish such necessary repairs, refurbishment and replacement required hereunder within a period of ten (10) days after written notice from Chief Executive Officer so to do, or fails to diligently repair, refurbish and replace CMUs, Luggage Carts, Improvements, Electrical Hardware or other fixtures and equipment required to be repaired, refurbished or replaced by Concessionaire pursuant to said maintenance schedule, City may, at its option, and in additions to all other remedies which may be available to it, repair, refurbish and replace any such fixtures and equipment included in said notice, the cost thereof, plus fifteen percent (15%) for administrative overhead (as Additional Fee), to be paid by Concessionaire to City within thirty (30) days of the date of the invoice sent to Concessionaire.

6.1.3 Quality of Repairs, All repairs done by Concessionaire or on its behalf shall be of first class quality in both materials and workmanship. All repairs shall be made in conformity with the applicable Laws prescribed from time to time by federal, state or local agencies having jurisdiction over the work in Concessionaire's Assigned Areas. All work performed by Concessionaire must be inspected and approved by the Chief Executive Officer.

6.2 Janitorial Services. Concessionaire agrees to provide at its own expense such janitorial and cleaning services and supplies as may be necessary or required in the operation and maintenance of the Assigned Areas, CMUs, Luggage Carts and Improvements or other improvements located therein. Concessionaire also agrees to keep and maintain the Assigned Areas in a clean, neat and sanitary condition, and attractive in appearance. At a minimum, Concessionaire agrees to clean its CMU’s and Luggage Carts on a regular basis, and no less often than at each maintenance or collection visit, to the reasonable satisfaction of the Chief Executive Officer. Concessionaire shall promptly remove all graffiti from its the CMUs or Luggage Carts.


6.3 Telecommunications Rooms. Terminal Telecommunications Rooms shall be kept free of Concessionaire’s excess wire cuttings and other trash. Concessionaire shall, in a timely manner, provide for the adequate sanitary handling and removal of all trash, garbage and other refuse caused as a result of Concessionaire’s operations. Concessionaire agrees to provide and use suitably covered or sealed receptacles for all garbage, trash and other refuse from its Assigned Areas. Piling of boxes, cartons, barrels or similar items shall not be permitted in a public area.

6.4 City’s Obligation. The City shall not be required to make repairs or improvements of any kind at Concessionaire’s Assigned Areas, except as follows:

6.4.1 Structural repairs to the roof, floor and exterior walls and exterior windows of the terminal.

6.4.2 General maintenance and upkeep of ONT’s Common Areas. The City agrees to keep and maintain in good condition all water, heating and air conditioning lines, sewer mains, supply mains and electrical power to the Assigned Areas. Concessionaire agrees to keep and maintain in good condition all service lines used exclusively by Concessionaire and located within the Assigned Areas. Concessionaire shall keep and maintain in good and operating condition the telecommunications circuits, power conduit, cable, electrical outlets, circuit breakers, and related hardware, data lines, equipment, infrastructure and service connections installed in the Assigned Areas or elsewhere in the Airport by or on behalf of the Concessionaire.

6.4.3 Should the City make any repairs or improvements under the provisions herein contained, the City shall not be liable to Concessionaire for any damage caused by the failure to make repairs or improvements of any kind until the City has had reasonable opportunity to perform repairs after being notified in writing of the need for same by Concessionaire. Further, the City shall not be liable to Concessionaire, or its employees, agents, servants, contractors or patrons for any damage to its or their merchandise, trade fixtures, equipment or personal property, including but not limited to, Improvements, Electrical Hardware, or CMUs and Luggage Carts in the Assigned Areas caused by water leakage from the roof, water lines, sprinkler or heating and air conditioning equipment unless caused by the sole negligence of City Agents.

Section 7.0 PERSONNEL

7.1 Trained, Qualified and Competent Personnel. Concessionaire shall, in the operation of the Luggage Cart Concession and in providing the services under this Agreement, employ or permit the employment of only such personnel as will assure a high standard of service to the public. Concessionaire shall furnish well trained, qualified, and competent personnel necessary to fullfil its obligations under this Agreement (“Personnel”). All such Personnel shall comport himself or herself in a professional manner and provide a high level of customer service consistent with first class luggage cart concession operations and shall use skill and diligence in the conduct of business. All such Personnel, while on or about the Assigned


Areas, shall be clean and neat in appearance. All Personnel employed by Concessionaire shall apply for a badge with the Airport Security Badge program, and undergo the required background verification and airport security training. It is Concessionaire’s responsibility to keep its employees and the employees of its contractors and subcontractors fully aware of the latest airport safety and security directives. Neither Concessionaire nor any of its Personnel shall conduct, transact or otherwise carry on any business or service that is not specifically authorized in accordance with the terms of this Agreement. Concessionaire shall include a personnel plan as described in Section 2.3.

7.1.1 Sufficient Number of Personnel. Concessionaire shall employ a sufficient number of Personnel for the following purposes:

“ Such number of employees as is necessary to maintain and keep in good operating condition all of the CMU and FIS Area cart counters.

B Such number of employees as shall be necessary to handle the office and administrative duties incidental to the operation of the business herein authorized.

■ Such number of employees as is necessary to assure all arriving international passengers in all the FIS Areas of International arrivals have an adequate number of free luggage carts available to them at all times.

7.2 Concession Manager. Concessionaire shall designate an experienced Concession Manager acceptable to the Chief Executive Officer. He/she shall be responsible for the implementation and management of the day-to-day operations of the services. This individual shall be the single point of contact between LAWA and Concessionaire and be involved in the fulfillment of the requirements outlined herein and elsewhere in this Agreement. The Concession Manager must be capable of monitoring and maintaining an acceptable service level at LAWA. The initial Concession Manager and any change(s) in the Concession Manager must be approved in writing by the Chief Executive Officer. The Concession Manager will be subject to the same requirements for Personnel under Section 7.1.

7.2.1 The Concession Manager shall serve as liaison with LAWA with sufficient authority and support staff and appropriate equipment, supplies and means to manage and perform the development, management, and other functions and obligations with respect to the Assigned Areas, including, without limitation, the obligation to administer any contracts to which Concessionaire is party, each with authority to resolve operational issues.

7.2.2 The Concession Manager shall monitor the Luggage Cart Concession to evaluate and enforce compliance with this Agreement, including but not limited to compliance with all Laws. A Concession Management Office will be located within 50 miles of the Assigned Areas.

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7.2.3 The Concession Manager shall use reasonable efforts to remedy any problem or issue raised by Airport’s patrons with respect to the operation of the Luggage Cart Concession.

7.2.4 The Concession Manager shall act as the project manager for Concessionaire’s design and construction program, which may be coordinated with the project’s construction manager.

7.2.5 The Concession Manager will be required to attend all meetings called by LAWA that relate to the Luggage Concession with at least five (5) business days' notice (or less, in the case of an emergency situation).

7.3 On-Site Responsible Employees. In addition to the Concession Manager specified above, Concessionaire shall also designate a responsible employee to be in charge of the Assigned Areas in each of the Terminals and Parking Lots. The names of such employees shall be given, in writing, to Chief Executive Officer. Said employees shall be responsible for the proper operation of the business of Concessionaire.

Section 8.0 DELIVERIES AND CENTRAL INSPECTION DELIVERY CHECKPOINT

Section 8.1 Deliveries of any kind must be made in conformance with LAWA’s and the Transportation Security Administration’s rules and regulations, which may include limitations on time of day and location of routing. Concessionaire acknowledges that the Chief Executive Officer may at some point during the Term of this Agreement require Concessionaire to exclusively deliver products, merchandise, supplies and other materials through a mandatory central inspection delivery checkpoint (except for such items as may be exempted by the Chief Executive Officer from time to time). In the event that any such new delivery systems are implemented, Concessionaire shall be required to reimburse City for Concessionaire’s share of the operating costs of such systems, as determined by the Chief Executive Officer.

Section 9.0 CITY’S RIGHT OF ACCESS AND INSPECTION

9.1 Access, City, by and through its officers, employees, agents, representatives, and contractors, shall have the right at all times to construct, repair, alter, replace or install over, in, under or through the Assigned Areas new lines, pipes, mains, wires, conduits and equipment.

9.2 Inspection. City, by and through its officers, employees, agents, representatives, and contractors, shall have the right at all times to inspect the Assigned Areas or, upon notice of Concessionaire, to do any act or thing which City may be obligated or have the right to do under this Agreement, or otherwise, and no abatement of any Monthly Concession Fee shall be claimed by or allowed for Concessionaire by reason of the exercise of such rights. In the exercise of its rights under this section, City, its officers, employees, agents, and contractors shall not unreasonably interfere with the conduct of Concessionaire's business on the Assigned Areas as herein authorized.

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9.3 Right of Chief Executive Officer. Chief Executive Officer shall have the right to perform any and all things which Concessionaire is obligated to perform and has failed, after reasonable notice, to do, including: maintenance, repairs and replacements to the Assigned Areas. The cost of all labor and materials required to complete the work will be paid by Concessionaire to the City within thirty (30) days following demand by the Chief Executive Officer for said payment.

Section 10.0 ASSIGNMENTS, TRANSFERS, AND ENCUMBRANCES BY CONCESSIONAIRE PROHIBITED

10.1 Transfer Prohibited. Concessionaire shall not, in any manner, directly or indirectly, by operation of law or otherwise, hypothecate, assign, transfer, or encumber this Agreement, the Assigned Areas, or any portion thereof or any interest therein, in whole or in part or any right or privilege appurtenant thereto, or allow any other person (the employees and invitees of Concessionaire excepted) to occupy or use the Assigned Areas, or any portion thereof ("Transfer"), without the prior written consent of Board, which may be granted, denied or conditioned in Board’s sole discretion. Any written request for consent to a Transfer shall include proposed documentation evidencing such Transfer, name and address of the proposed transferee and the nature and character of the business of the proposed transferee and shall provide current and 3 years prior financial statements for the proposed transferee, which financial statements shall be audited to the extent available and shall in any event be prepared in accordance with generally accepted accounting principles (collectively, a "Transfer Request"). This Agreement shall not, nor shall any interest therein, be assignable as to the interest of Concessionaire by operation of law without the prior written consent of Board.

10.2 Transfer. For purposes of this Agreement, the term "Transfer" shall include, but not be limited to, the following: (i) if Concessionaire is a joint venture, a limited liability company, or a partnership, the transfer of fifty percent (50%) or more of the interest or membership in the joint venture, the limited liability company, or the partnership; (ii) if Concessionaire is a corporation, any cumulative or aggregate sale, transfer, assignment, or hypothecation of fifty percent (50%) or more of the voting shares of Concessionaire; (iii) the dissolution by any means of Concessionaire; and, (iv) the involvement of Concessionaire or its assets in any transaction or series of transactions (by way of merger, sale of stock, sale of assets, acquisition, financing, refinancing, transfer, corporate restructure, leveraged buyout or otherwise) which results in or will result in either (a) the direct or indirect transfer of fifty percent (50%) or more on a cumulative basis of the ownership and/or controlling interests in Concessionaire or (b) a material reduction of Concessionaire’s net worth as stated in the most current financial statements contained in the Concessionaire Bid. Any such transfer, assignment, mortgaging, pledging, or encumbering of Concessionaire without the written consent of Board is a violation of this Agreement and shall be voidable at City's option and shall confer no right, title, or interest in or to this Agreement upon the assignee, mortgagee, pledgee, encumbrancer, or other lien holder, successor, or purchaser.

10.3 No Further Consent Implied. A consent by City to one Transfer shall not be deemed to be a consent to any other or subsequent Transfer, and consent to any Transfer shall in no way relieve Concessionaire of any liability under this Agreement. Any Transfer without

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City's consent shall be void, and shall, at the option of City, constitute a Default under this Agreement.

10.4 No Release. Notwithstanding any Transfer, Concessionaire and any Guarantor of Concessionaire 's obligations under this Agreement shall at all times remain fully and primarily responsible and liable for the payment of the Fee and for compliance with all of Concessionaire's other obligations under this Agreement (regardless of whether City's approval has been obtained for any such Transfer),

10.5 Payment of City's Costs. In connection with any Transfer, Concessionaire shall pay to City as Additional Fee hereunder an administrative processing fee in the amount of $2,500.00, plus all costs incurred by City in connection with City's review and processing of documents regarding any proposed Transfer.

10.6 Incorporation of Terms. Each Transfer pursuant to this section shall be subject to all of the covenants, agreements, terms, provisions and conditions contained in this Agreement and each of the covenants, agreements, terms, provisions and conditions of this Agreement shall be automatically incorporated therein. If City shall consent to, or withhold its consent to, any proposed Transfer, Concessionaire shall indemnify, defend and hold harmless City and City Agents from and against and from any and all Claims that may be made against City or any City Agent by the proposed transferee or by any brokers or other persons claiming a commission or similar fee in connection with the proposed Transfer.

10.7 Right to Collect Fee Directly. If this Agreement is transferred or assigned, whether or not in violation of the provisions of this Agreement, City may collect Fee from such transferee or assignee. If the Assigned Areas or any part thereof is used or occupied by anyone other than Concessionaire, whether or not in violation of this Agreement, City may, after a Default by Concessionaire, collect Fee from the occupant. In either event, City may apply the net amount collected to Fee, but no such assignment, occupancy or collection shall be deemed a waiver of any of the provisions of this Section 10, or the acceptance of the assignee, or occupant as Concessionaire, or a release of Concessionaire from the further performance by Concessionaire of Concessionaire's obligations under this Agreement. The consent by City to any Transfer pursuant to any provision of this Agreement shall not, except as otherwise provided herein, in any way be considered to relieve Concessionaire from obtaining the express consent of City to any other or further Transfer. References in this Agreement to use or occupancy of the Assigned Areas or any portion thereof by anyone other than Concessionaire shall not be construed as limited to sub-Concessionaires or subtenants and those claiming under or through sub-Concessionaires or subtenants but as including also licensees or others claiming under or through Concessionaire, immediately or remotely.

10.8 Reasonableness of Restrictions. Concessionaire acknowledges and agrees that the restrictions, conditions and limitations imposed by this Section 10 on Concessionaire's ability to Transfer this Agreement or any interest herein, the Assigned Areas or any part thereof, to Transfer any right or privilege appurtenant to the Assigned Areas, or to allow any other person to occupy or use the Assigned Areas or any portion thereof, are, for the purposes of California Civil Code Section 1951.4, as amended from time to time, and for all other purposes, reasonable at the

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time that this Agreement was entered into, and shall be deemed to be reasonable at the time that Concessionaire seeks to Transfer this Agreement or any interest herein, the Assigned Areas or any part thereof, to Transfer any right or privilege appurtenant to the Assigned Areas, or to allow any other person to occupy or use the Assigned Areas or any portion thereof. Concessionaire's sole remedy if City withholds its consent to any Transfer in violation of Concessionaire's rights under this Agreement shall be injunctive relief, and Concessionaire hereby expressly waives California Civil Code Section 1995.310, which permits all remedies provided by law for breach of contract, including, without limitation, the right to contract damages and the right to terminate this Agreement if City withholds consent to a Transfer in violation of Concessionaire's rights under this Agreement, and any similar or successor statute or law in effect or any amendment thereof during the Term.

10.9 Transfer Premium. If City approves any Transfer as herein provided, Concessionaire shall pay to City, as Additional Fee, one hundred percent (100%) of any monetary or other economic consideration received by Concessionaire as a result of the Transfer over and above the amount of Concessionaire's Concession Fee and other payments due City pursuant to this Agreement (or applicable share, if a sublease) (excluding any consideration attributed to assets other than this Agreement) after first deducting the unamortized cost of improvements which costs had been approved by City and paid for by Concessionaire. The agreement evidencing such Transfer, as the case may be, after approval by City, shall not be amended without City's prior written consent, and, at City's option, shall contain a provision directing such transferee to pay the Fee and other sums due thereunder directly to City upon receiving written notice from City that Concessionaire is in default under this Agreement with respect to the payment of Fee. In the event that, notwithstanding the giving of such notice, Concessionaire collects any Concession Fee or other sums from such transferee, then Concessionaire shall hold such sums in trust for the benefit of City and shall immediately forward the same to City. City's collection of such Concession Fee and other sums shall not

' constitute an acceptance by City of attornment by such transferee.

10.10 Name Change Only. In the event of a name change of Concessionaire, in which there is no transfer, assignment, mortgaging, pledging, or encumbering of Concessionaire as provided in Sections 10,1 and 10.2, the Concessionaire must obtain the written consent of the Chief Executive Officer; and Concessionaire shall provide all related documents, as well as any other documents requested by Chief Executive Officer. If City is required to make any payment to Concessionaire under this Agreement, the Concessionaire’s failure to obtain the written consent of the Chief Executive Officer or provide the documents requested under this section may result in the City’s inability to make such payment and/or delay such payment to the newly named entity.

Section 11.0 SIGNS, PROMOTIONS AND DISPLAYS

11.1 Specially-designed Signs. Concessionaire shall be required to furnish, at Concessionaires expense, specially-designed signs at CMU locations and in the FIS Areas at International Terminals and Parking Lots at ONT. These signs shall be in English and in a number of foreign languages. Concessionaire shall provide a sufficient number of signs, as


determined by the Chief Executive Officer at his/her sole discretion, with the appropriate foreign languages for each international flight arrival, and as follows:

■ at all locations, the signs shall describe the proper procedures to use the carts; and,

B at all locations, the signs shall provide explicit warning about the danger of using luggage carts on escalators and other improper uses of the carts; and

Concessionaire shall coordinate these procedures with Chief Executive Officer who shall approve in writing the text of such signs and shall determine which signs and languages are to be displayed for each international flight arrival.

11.2 Prohibition and Requirements. Concessionaire shall not erect, construct or place any signs or displays pertaining to its concession business upon any portion of ONT other than upon the Assigned Areas, and Concessioner shall comply with applicable portions of the Design and Construction Handbook. Prior to the erection, construction or placing of any such signs or displays, Concessionaire shall submit to Chief Executive Officer, for approval in writing, drawings, sketches, design dimensions and type and character of the proposed sign or display and any conditions, including a requirement that the same be multilingual, restrictions or limitations with respect to the use thereof specified by said Chief Executive Officer in the latter’s written approval shall become conditions hereof as if specifically set forth a length herein.

11.2.1 Upon the expiration or earlier termination of this Agreement, Concessionaire shall remove, obliterate or paint out, as Chief Executive Officer may direct, any and all of its signs and displays on the Assigned Areas and in connection therewith, shall restore said Assigned Areas and improvements there to the same condition as prior to the placement of any such signs or display. In the event that there is a failure by Concessionaire to comply with these provisions, Chief Executive Officer may, at Chief Executive Officer’s option, cause to be performed the necessary work at the expense of Concessionaire.

11.2.2 In addition, Concessionaire shall not, at anytime, under any circumstances, install, place or maintain any type of advertising anywhere on the exterior of the Assigned Areas or any place in ONT without the specific written permission of the Chief Executive Officer.

11.3 Reservation of Cart Advertising Rights. The City reserves the right, at its sole discretion, to implement a commercial advertising program on luggage carts at any time during the term of this Concession Agreement. All luggage carts shall be designed to accommodate commercial advertising pursuant to Section S.l.3.3. In the event the City chooses to implement a commercial advertising program on luggage carts, all revenues from such advertising shall be retained by the City. The City or its advertising contractor shall assume the costs of soliciting, placing and maintaining the advertising on the luggage carts, and may, but is not required to negotiate with Concessionaire regarding these activities.

11.4 Failure to Comply. In the event Concessionaire fails to comply with obtaining the written approvals or consents, or to comply with applicable portions of the LAWA Design and

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Construction Handbook, under Sections 11.1 or 11.2, and refuses to remove any advertising displays within twenty-four (24) hours of receiving a written notice or request to do so from the Chief Executive Officer, City shall have the right to pursue any and all of the following remedies:

(i) Commence termination of this Agreement pursuant to the terms of this Agreement;

(ii) Physically remove the non-complying display materials and require Concessionaire to pay, as Additional Fees, all costs of City-related thereto plus fifteen percent (15%) administrative and overhead charges;

(iii) Additional Fee for Failure to Comply. Notwithstanding any other provision of this Agreement to the contrary, Concessionaire hereby acknowledges that its failure to comply with Section 11.1 and Section 11.2 will cause City to incur costs not contemplated by this Agreement, the exact amount of which will be difficult to ascertain. Concessionaire further agrees that (a) it is impractical and extremely difficult to fix the actual damages which City would suffer; (b) the amount set forth shall constitute liquidated damages payable to City; (c) the payment of such amounts to City as liquidated damages constitutes a reasonable approximation of the damages which would be suffered by City, and (d) payment of such amounts to City as liquidated damages is not intended as a forfeiture or penalty, but instead is intended to constitute liquidated damages to City pursuant to section 1671 of the California Civil Code. Concessionaire shall pay City an Additional Fee of One Thousand Dollars ($1,000) per day for each day of Concessionaire’s failure to comply. City's acceptance of such Additional Fee shall not stop City from exercising any of the other rights and remedies granted under this Agreement.

11.4.1 Determination of Non-Compliance. The Chief Executive Officer’s reasonable and documented determination regarding the existence of the failures listed above in Section 11.4 shall be binding on Concessionaire. Concessionaire may contest any Additional Fee, under Section 11.4(iii), imposed by delivery of notice to the Chief Executive Officer, whose sole decision on the matter shall be final. City’s failure to impose liquidated damages for any particular occurrence of a failure set forth above shall not constitute a continuing waiver or a waiver of any subsequent failures.

Section 12.0 HAZARDOUS AND OTHER REGULATED SUBSTANCES

12.1 For the purposes of this Agreement, "hazardous substances" means:

12.1.1 Any substance the presence of which requires the investigation or remediation under any federal, state or local statute, regulation, rule, ordinance, order, action, policy or common law; or

Concessionaire Initials:

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12.1.2 Any substance which is or becomes defined as a hazardous waste, extremely hazardous waste, hazardous material, hazardous substance, hazardous chemical, toxic chemical, toxic substance, cancer causing substance, substance that causes reproductive harm, pollutant or contaminant under any federal, state or local statute, regulation, rule or ordinance or amendments thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and/or the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); or

12.1.3 Any substance which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, council, board, or instrumentality of the United States, the State of California, the City of Los Angeles, or any political subdivision of any of them; or

12.1.4 Any substance the presence of which on the Assigned Areas causes or threatens to cause a nuisance upon the Assigned Areas or to adjacent properties or poses or threatens to pose a hazard to the health or safety of persons on or about the Assigned Areas; or

12.1.5 Any substance the presence of which on adjacent properties could constitute a trespass by Concessionaire; or

12.1.6 Any substance, without limitation, which contains gasoline, aviation fuel, jet fuel, diesel fuel or other petroleum hydrocarbons, lubricating oils, solvents, polychlorinated bipheynols (PCBs) asbestos, urea formaldehyde or radon gases.

12.2 Except for conditions existing prior to the original occupancy of the Assigned Areas by Concessionaire or by Concessionaire's predecessors in interest, Concessionaire agrees to accept sole responsibility for full compliance with any and all applicable present and future rules, regulations, restrictions, ordinances, statutes, laws, and/or other orders of any governmental entity regarding the use, storage, handling, distribution, processing, and/or disposal of hazardous substances, regardless of whether the obligation for such compliance or responsibility is placed on the owner of the land, on the owner of any improvements on the Assigned Areas, on the user of the land, or on the user of the improvements. Concessionaire agrees that any claims, damages, penalties, or fines asserted against or levied on City and/or the Concessionaire as a result of noncompliance with any of the provisions in this section shall be the sole responsibility of the Concessionaire and that Concessionaire shall indemnify and hold City harmless from all such claims, damages, penalties, or fines. Further, City may, at its option, pay such claims, damages, penalties, or fines resulting from Concessionaire’s non-compliance with any of the terms of this section, and Concessionaire shall indemnify and reimburse City for any such payments.

12.3 Except for conditions existing prior to the original occupancy of the Assigned Areas by Concessionaire or Concessionaire 's predecessors in interest, in the case of any hazardous substance spill, leak, discharge, release or improper storage on the Assigned Areas or

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contamination of the Assigned Areas by any person, Concessionaire agrees to make or cause to be made any necessary repairs or corrective actions as well as to clean up and remove any spill, leakage, discharge, release or contamination. In the case of any hazardous substance spill, leak, discharge, release or contamination by Concessionaire or its employees, servants, agents, contractors, or subcontractors on the Assigned Areas or as may be discharged or released in, on or under adjacent property which affects other property of City or its tenants, Concessionaire agrees to make or cause to be made any necessary corrective actions to clean up and remove any such spill, leakage, discharge, release or contamination. If Concessionaire fails to repair, clean up, properly dispose of, or take any other corrective actions as required herein, City may (but shall not be required to) take all steps it deems necessary to properly repair, clean up, or otherwise correct the conditions resulting from the spill, leak, discharge, release or contamination. Any such repair, cleanup, or corrective actions taken by City shall be at Concessionaire's sole cost and expense and Concessionaire shall indemnify and pay for and/or reimburse City for any and all costs City incurs as a result of any repair, cleanup, or corrective action it takes plus an additional fifty percent (50%) administrative fee.

12.4 If Concessionaire installs or uses already installed underground storage tanks, above-ground storage tanks, pipelines, or other improvements on the Assigned Areas for the storage, distribution, use, treatment, or disposal of any hazardous substances, Concessionaire agrees, upon the expiration and/or termination of this Agreement, to remove and/or clean up, at the sole option of the Chief Executive Officer, the above-referred-to improvements. Said removal and/or cleanup shall be at the Concessionaire 's sole cost and expense and shall be undertaken and completed in full compliance with the Laws, as well as with the reasonable directions of the Chief Executive Officer.

12.5 Concessionaire shall promptly supply City with complete and legible copies of all notices, reports, correspondence, and other documents sent by Concessionaire to or received by Concessionaire from any governmental entity regarding any hazardous substance. Such written materials include, without limitation, all documents relating to any threatened or actual hazardous substance spill, leak, or discharge, or to any investigations into or clean up of any actual or threatened hazardous substance spill, leak, or discharge including all test results.

12.6 Section 12.0 and the obligations herein shall survive the expiration or earlier, termination of this Agreement.

Section 13.0 Intentionally Omitted.

Section 14.0 PREVAILING WAGE. Construction, demolition, alteration, installation, repair and maintenance work performed on City’s property will require payment of prevailing wages, if applicable. Concessionaire is obligated to make the determination of whether the payment of prevailing wages is applicable. Concessionaire shall be bound by and comply with applicable provisions of the California Labor Code and federal, state, and local laws related to labor, including, but not limited to, assuming all obligations and responsibilities under the California Labor Code related to prevailing wages, apprenticeship and recordkeeping that requires compliance by the contracting or awarding agency or body (i.e., City) when work requires payment of prevailing wages under the applicable federal or California law.


Concessionaire shall obtain the applicable wage determination for each craft, classification or worker, which are on file at the Office of Contract Compliance, Bureau of Contract Administration, in the City of Los Angeles, or may be obtained from the California Department of Industrial Relations. Concessionaire shall indemnify, defend and pay or reimburse City for any damages, penalties or fines (including, but not limited to, attorney's fees and costs of litigation) that City incurs, or pays, as a result of noncompliance of Concessionaire or its subConcessionaires, vendors, employees, contractors, representatives, agents with applicable prevailing wage and apprenticeship laws in connection with the work performed under this Agreement.

Section 15.0 PERFORMANCE AND PAYMENT BONDS

15.1 Performance Bond. If and when applicable, after award of the Agreement, but before any work is performed under the Agreement in connection with any works of improvement constructed or installed by Concessionaire, Concessionaire shall furnish, at its sole cost and expense (except as otherwise expressly provided in this Agreement), a performance bond as prescribed by the City Attorney in the principal sum (i.e., 100%) of the amount of the construction proposed by Concessionaire, or alternative security deposit for said amount acceptable to Chief Executive Officer. A Performance Bond form is attached herein as Exhibit B.

15.2 Payment Bond. If and when applicable, after award of the Agreement, but before any work is performed under the Agreement in connection with any works of improvement constructed or installed by Concessionaire, Concessionaire shall furnish, at its sole cost and expense (except as otherwise expressly provided in this Agreement), a payment bond as prescribed by the City Attorney in the principal sum (i.e., 100%) of the amount of the construction, alteration, repair or improvement work in excess of $25,000 proposed by Concessionaire. A Payment Bond form is attached herein as Exhibit C.

15.3 Compliance. Concessionaire shall comply with the provisions of California Civil Code Sections 8600 to 8614, as applicable, by filing the original contract and any modifications thereto in the office of the Los Angeles County Recorder, together with the bonds specified therein, and a conformed copy of such bonds, filed for record as aforesaid, shall be furnished by Concessionaire to City. Such payment and/or performance bonds shall be furnished no later than thirty (30) days prior to the commencement of such work. The payment and/or performance bonds shall be in substantially the same form as may be prescribed from time to time by the City Attorney, be issued by a surety company satisfactory to Chief Executive Officer, and authorized and licensed to transact business in the State of California and be for the full amount stated above with the Concessionaire, as obligee, and shall guarantee the full, faithful and satisfactory payment and performance by Concessionaire of its obligations to construct and install the aforementioned works of improvement, and shall guarantee the payment for all materials, provisions, supplies, and equipment used in, on, for, or about the performance of Concessionaire’s works of improvement or labor done thereon of any kind, and shall protect City from any liability, losses, or damages arising therefrom.

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Section 16.0 DEFAULT. TERMINATION. AND WAIVER

16.1 Defaults. The occurrence of any one of the following events shall constitute a default on the part of Concessionaire (“Default”):

16.1.1 Abandonment: Vacation. The vacation or abandonment of any location of the Assigned Areas by Concessionaire for a period of five (5) consecutive days or any vacation or abandonment of any location of the Assigned Areas by Concessionaire which would cause any insurance policy to be invalidated or otherwise lapse in each of the foregoing cases irrespective of whether or not Concessionaire is then in monetary default under this Agreement. Concessionaire agrees to notice and service of notice as provided for in this Agreement and waives any right to any other or further notice or service of notice which Concessionaire may have under any statute or law now or hereafter in effect;

16.1.2 Failure to Pay Fees. Failure to pay any installment of the Monthly Concession Fee and/or Additional Fee or any other monies due and payable hereunder, said failure continuing for a period of three (3) days after the same is due;

16.1.3 Assignment for Creditors. A general assignment by Concessionaire or any guarantor or surety of Concessionaire 's obligations hereunder (collectively, “Guarantor”) for the benefit of creditors;

16.1.4 Filing of Bankruptcy Petition. The filing of a voluntary petition in bankruptcy by Concessionaire or any Guarantor, the tiling by Concessionaire or any Guarantor of a voluntary petition for an arrangement, the filing by or against Concessionaire or any Guarantor of a petition, voluntary or involuntary, for reorganization, or the filing of an involuntary petition by the creditors of Concessionaire or any Guarantor, said involuntary petition remaining undischarged for a period of thirty (30) days;

16.1.5 Attachment. Receivership, attachment, or other judicial seizure of substantially all of Concessionaire's assets at any Assigned Area, such attachment or other seizure remaining undismissed or undischarged for a period of thirty (30) days after the levy thereof;

16.1.6 Death; Dissolution. Death or disability of Concessionaire or any Guarantor, if Concessionaire or such Guarantor is a natural person, or the failure by Concessionaire or any Guarantor to maintain its legal existence, if Concessionaire or such Guarantor is a corporation, partnership, limited liability company, trust or other legal entity;

16.1.7 Failure to Deliver Ancillary Documents. Failure of Concessionaireto execute and deliver to City documents and reports (including, without limitation, reports required under Section 4.0). financial statement or other document required under this Agreement within the time periods and in the manner provided hereunder (or if no


time period is provided, within three (3) days after receipt of written notice from Chief Executive Officer of delinquency);

16.1.8 Incomplete Records. Concessionaire fails to maintain adequate books and records and accounts reflecting its business as required hereunder (including without limitation, books and records and information regarding Gross Revenues, Luggage Cart Investment Report if new CMUs or Luggage Carts are purchased);

16.1.9 Transfers. An assignment or sublease, or attempted assignment or sublease, of this' Agreement or any Assigned Areas by Concessionaire contrary to the provision of Section 10.0 without the required prior written consent hereunder;

16.1.10 Intentionally omitted.

16.1.11 Other Defaults. A default under any other agreement with City beyond any applicable notice period under such agreement;

16.1.12 General Non-Monetary Breaches. General Non-Monetarv Breaches. Failure in the performance of any of Concessionaire's covenants, agreements or obligations hereunder (except those failures specified as events of Default in Sections16.1.1. 16.1.2, 16.1,4. 16.1.5, 16.1.7, 16.1.13, 16,1.15 or 16.1.16 herein or any other subsections of this Section 16, which shall be governed by the notice periods set forth in such other subsections), which failure continues for ten (10) days after written notice thereof from Chief Executive Officer to Concessionaire;

16.1.13 Chronic Delinquency. Chronic delinquency by Concessionaire in the payment of the Monthly Concession Fees, Additional Fees, or any other periodic payments required to be paid by Concessionaire under this Agreement. "Chronic delinquency" shall mean failure by Concessionaire to pay the Monthly Concession Fee, Additional Fee, or any other payments required to be paid by Concessionaire under this Agreement within five (5) days after the date due for any consecutive or nonconsecutive three (3) months during any period of twelve (12) months, failure by Concessionaire to perform its obligations under this Agreement for any three (3) consecutive or nonconsecutive incidents during any period of twelve (12) months as determined in the sole discretion of the Chief Executive Officer;

16.1.14 Termination of Insurance. Any insurance required to be maintained by Concessionaire pursuant to this Agreement shall be canceled or terminated or shall expire or be reduced or materially changed, except as permitted in this Agreement;

16.1.15 Liens. Any failure by Concessionaire to discharge any lien or encumbrance placed on the Assigned Areas, the Airport or any part thereof in violation of this Agreement within thirty (30) days after the date such lien or encumbrance is filed or recorded against the Assigned Areas, the Airport or any part thereof;

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16.1.16 Revocation of Licenses. An act occurs which results in the suspension or revocation of the rights, powers, licenses, permits and authorities necessary for the conduct and operation of the business authorized herein for a period of more than thirty (30) days;

16.1.17 Adverse Operation. Service ceases or deteriorates for any period which, in the opinion of Chief Executive Officer, materially and adversely affects the operation of service required to be performed by Concessionaire under this Agreement;

16.1.18 - Hazardous Materials. Any failure by Concessionaire to immediately remove, abate or remedy any Hazardous Materials located in, on or about the Assigned Areas or the Airport in connection with any failure by Concessionaire to comply with Concessionaire's obligations under Section 12.0: and

16.1.19 False Representations. Any representation of Concessionaire herein, in any financial statement or other materials provided by Concessionaire or any guarantor of Concessionaire's obligations under this Agreement shall prove to be untrue or inaccurate in any material respect, or any such financial statements or other materials shall have omitted any material fact.

Concessionaire agrees that any notice given by City pursuant to this Section 16.0 shall satisfy the requirements for notice under California Code of Civil Procedure Section 1161, if applicable, and City shall not be required to give any additional notice in order to be entitled to commence an unlawful detainer proceeding.

16.2 In the event any condition of default shall occur (notwithstanding any waiver, license or indulgence granted by City with respect to any condition of default in any form or instance), City, then, or at any time thereafter, while such breach is continuing, shall have the right, at its election, to (a) terminate this Agreement and Concessionaire will quit and surrender the Assigned Areas to City upon delivery of at least five (5) days’ written notice, or (b) City may enter upon and take possession of the Assigned Areas (or any part thereof), without demand or notice and repossess the same, expelling those claiming under Concessionaire, forcibly, if necessary, without prejudice to any remedy for arrearage of fees or preceding breach of covenant and without any liability to Concessionaire or those claiming under Concessionaire for such repossession. Notwithstanding such election by the City, Concessionaire shall remain liable under this Agreement.

16.3 City’s repossession of the Assigned Areas shall not be construed as an election to terminate this Agreement nor shall it cause a forfeiture of Fees or other charges remaining to be paid during the balance of the Term hereof, unless a written notice of such intention is given by the Chief Executive Officer to Concessionaire, or unless such termination is decreed by a court of competent jurisdiction. Notwithstanding any Reassigning (as defined in Section 16.4) without termination by City because of any default by Concessionaire, City may, at any time after such Reassigning, elect to terminate this Agreement for any such default.


16.4 Upon repossession, City shall in good faith attempt to enter into new concession agreements for Luggage Cart Concession services in the Assigned Areas or any part thereof for such period or periods (which may extend beyond the term of this Agreement) at such fee and upon such other terms and conditions as City may, in good faith, deem advisable (“Reassigning” or “Reassigning the Assigned Areas”). City shall, in no event, be liable and Concessionaire’s liability shall not be affected or diminished in any way whatsoever if a Reassigning of the Assigned Areas does not occur, or in the event that there is a Reassigning, for failure to collect any fees or other sums due under such Reassigning.

16.5 In the event that City shall elect to enter into a Reassigning the Assigned Areas, then fees received by City from such Reassigning shall be applied: first, to the payment of any indebtedness other than fees due hereunder from Concessionaire to City; second, to the payment of any cost of such Reassigning; third, to the payment of fees due and unpaid hereunder; and the residue, if any, shall be held by City and applied in payment of future fees as the same may become due and payable hereunder. Should that portion of such fees received from such Reassigning during any month, which is applied to the payment of fees hereunder, be less than the fee payable during that month by Concessionaire hereunder, then Concessionaire shall pay such deficiency to City. Such deficiency shall be calculated and paid monthly. Concessionaire shall also pay to City, as soon as ascertained, any costs and expenses incurred by City in such Reassigning not covered by the fees received from such Reassigning of the Assigned Areas.

16.6 If City terminates this Agreement or takes possession of the Assigned Areas by reason of a condition of default, Concessionaire, and those holding under Concessionaire, shall, forthwith remove personal property from the Assigned Areas, as provided in Section 17.0. If Concessionaire or any such claimant shall fail to effect such removal forthwith, City may, at its option, exercise the rights set forth in this section or may without liability to Concessionaire or those claiming under Concessionaire, remove the same and may store the same for the account of Concessionaire or of the owner thereof at any place selected by City, or, at City’s election, and upon giving fifteen (15) days written notice to Concessionaire of date, time and location of sale, City may sell the same at public auction or private sale on such terms and conditions as to price, payment and otherwise as City may in good faith deem advisable. If, in the judgment of City, the cost of removing and storing, or the cost of removing and selling any such personal property exceeds the value or probable sale price thereof, as the case may be, City shall have the right to dispose of such personal property in any manner City may deem advisable.

16.7 Concessionaire shall be responsible for all costs of removal, storage and sale, and City shall have the right to reimburse itself from the proceeds of any sale for all such costs paid or incurred by City. If any surplus sale proceeds shall remain after such reimbursement, City may deduct from such surplus any other sum due to City hereunder and shall pay over to Concessionaire any remaining balance of such surplus sale proceeds.

16.8 If City enters into and repossesses the Assigned Areas by reason of the default of Concessionaire in the performance of any of the terms, covenants or conditions herein contained, Concessionaire hereby covenants and agrees that Concessionaire will not claim the right to redeem or re-enter the Assigned Areas to restore its operations hereunder.

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16.9 All rights and remedies of City herein created or otherwise existing at law or in equity are cumulative, and the exercise of one or more rights or remedies shall not be taken to exclude or waive the right to the exercise of any other. All such rights and remedies may be exercised and enforced concurrently and whenever and as often as deemed advisable.

16.10 If proceedings shall at any time be commenced for recovery of possession as aforesaid and compromise or settlement shall be effected either before or after judgment whereby Concessionaire shall be permitted to retain possession of its Assigned Areas, then such proceeding shall not constitute a waiver of any term, provision or agreement contained herein or of any subsequent breach thereof, except as otheiwise mutually agreed to in a written document signed and acknowledged by both City and Concessionaire.

16.11 Any amount paid or expense or liability incurred by City for the account of Concessionaire may be deemed to be additional fees and the same may, at the option of City, be added to any fees then due or thereafter falling due hereunder.

16.12 Concessionaire hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Concessionaire being dispossessed for any cause, or in the event of City’s obtaining possession of the Assigned Areas by reason of the violation by Concessionaire of any of the covenants and conditions of this Agreement or otherwise. The rights given to City herein are in addition to any rights that may be given to City by any statute or otherwise.

16.13 A material breach of the terms of any other lease, license, permit, or contract held by Concessionaire with City shall constitute a material breach of the terms of this Agreement and shall give City the right to terminate this Agreement for cause in accordance with the procedures set forth in this Agreement.

16.14 Should City waive any breach of any term, covenant, or condition herein contained, such waiver shall not be deemed to be a waiver of any other term, covenant, or condition, or of any subsequent breach of the same term, covenant, or condition. The subsequent acceptance of Monthly Concession Fee, Additional Fees or other fees or charges hereunder by City shall not be deemed to be a waiver of any preceding breach by Concessionaire of any term, covenant, or condition of this Agreement, regardless of City's knowledge of such preceding breach at the time of acceptance of such Monthly Concession Fee, Additional Fees or other fees or charges.

16.15 Cross Default. A material breach of the terms of any other lease, license, permit, or contract held by Concessionaire with City shall constitute a material breach of this Agreement and shall give City the right to terminate this Agreement for cause in accordance with the procedures set forth in this section.

16.16 Termination by City or Concessionaire. Either party may terminate this Agreement, without cause, upon giving the other party thirty (30) days’ advanced written notice. In addition, City may terminate this Agreement, without cause, without liability for any damages, whatsoever.

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Section 17.0 SURRENDER AND OWNERSHIP

17.1 Surrender. Concessionaire agrees that by 11:59 pm on the Expiration Date, or on the sooner termination of this Agreement, Concessionaire shall surrender the Assigned Areas to City (a) in good condition and repair (damage by acts of God, fire, and normal wear and tear excepted), but with all floors or carpet repaired, any carpets cleaned and (b) free of any Hazardous Materials in accordance with Section 12.0. Normal wear and tear shall not include any damage or deterioration that would have been prevented by proper maintenance by Concessionaire or Concessionaire otherwise performing all of its obligations under this Agreement. On or before the expiration or sooner termination of this Agreement, (i) except as provided under Section 17,2.3, Concessionaire shall remove all of Concessionaire's personal property, including but not limited to Luggage Carts and CMUs, in the Assigned Areas or elsewhere at ONT by or on behalf of the Concessionaire (provided City may require that such removal shall be performed by a contractor or telecom provider designated by City), and shall remove all of Concessionaire's signage. Concessionaire shall repair any damage caused by such removal, and (ii) City may, by notice to Concessionaire given not later than ninety (90) days prior to the Expiration Date (except in the event of a termination of this Agreement prior to the scheduled Expiration Date, in which event no advance notice shall be required), require Concessionaire at Concessionaire's expense to repair any damage caused by such removal. Any of Concessionaire's personal property not so removed by Concessionaire as required herein shall be deemed abandoned and may be stored, removed, and disposed of by City at Concessionaire's expense, and Concessionaire waives all Claims (as defined in Section 23.1) against City for any damages resulting from City's retention and disposition of such property; provided, ho\i>ever, that Concessionaire shall remain liable to City for all costs incurred in storing and disposing of such abandoned property of Concessionaire.

17.1.1 Removal of CMUs, Luggage Carts or Improvements. Upon the expiration or earlier termination of this Agreement, and under circumstances permitting Concessionaire to remove the CMUs, Luggage Carts and Improvements under this Agreement, Concessionaire will only be allowed to remove such property from one of its Assigned Areas at a time, upon mutual agreement of the Chief Executive Officer, and during such removal operations, which shall be completed thirty (30) days after commencement. Concessionaire shall continue its operations at other locations at ONT, it being intended that adequate luggage cart service will be maintained at all times. Subject to any remedies which City may have to secure any unpaid Fees or charges due under this Agreement, Concessionaire shall have the right to remove from the concession areas only those items of movable equipment and furnishings installed by it and listed on the aforesaid inventory; provided, however, Concessionaire shall repair all damage done to said areas and other City-owned property resulting from the removal of such machinery, equipment and fixtures.

17.1.2 If applicable and if, during the last month of this Agreement, Concessionaire has removed all or substantially all of its personal property from the Assigned Areas, City may enter said areas and alter, renovate or redecorate the same.

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17.2 Ownership of Equipment.

17.2.1 Ownership by Concessionaire. Ownership of and title to all CMUs, Luggage Carts and other removable personal property or equipment shall remain in Concessionaire.

17.2.3 Ownership of Electrical Hardware and Improvements. In the event of termination of expiration of the Agreeement, the Electrical Hardware and Improvements that are not the personal property or equipment of Concessionaire, or that cannot be removed without structural damage to the Assigned Areas, shall become the property of the City and remain and vest in the City, and Concessionaire shall provide any and all documents required and necessary for such title to vest in the City upon termination.

Section 18,0 CONTINUED OCCUPANCY OF THE ASSIGNED AREAS AFTER EXPIRATION DATE OR EARLIER TERMINATION. Concessionaire has no right to continue to occupy or remain in possession of the Assigned Areas or storage space (if any) after the expiration of the Term or the earlier termination of this Agreement. Such continued occupancy or possession shall constitute a Default, and shall be considered occupancy at sufferance. Without limiting the City’s remedies under this Agreement, Concessionaire shall pay two hundred percent (200%) of the Monthly Concession Fee last due in this Agreement, plus Additional Fees, and other fees and charges, and shall otherwise be on the teims and conditions specified in this Agreement, so far as applicable. If the Assigned Areas are not surrendered at the expiration of the Term or earlier termination of this Agreement, and in accordance with the provisions of Sections 12.0 and 17.1, Concessionaire shall indemnify, defend and hold City and City Agents harmless from and against any and all Claims resulting from delay by Concessionaire in so surrendering the Assigned Areas including, without limitation, any Claims resulting from any claim against City or any City Agent made by any succeeding Concessionaire or prospective Concessionaire founded on or resulting from such delay and losses to City due to lost opportunities to lease or grant a concession to any portion of the Assigned Areas to any such Concessionaire, together with, in each case, actual costs. Nothing in this Section shall be construed as granting Concessionaire any right to continue to occupy the Assigned Areas following the expiration or termination of this Agreement. City may terminate such occupancy on delivery of five (5) days’ notice. City may pursue all rights and remedies at law or in equity to recover possession of the Assigned Areas and to recover damages resulting from any continued occupancy by Concessionaire.

Section 19.0 DAMAGE OR DESTRUCTION TO ASSIGNED AREAS

19.1 Damage or Destruction to Assigned Areas.

19.1.1 Insured Damage. If, during the teim of this Agreement, any Improvements in or on the Assigned Areas are partially or totally destroyed from a risk covered by the insurance described in Section 23.2 herein, thereby rendering said Assigned Areas partially or totally inaccessible or unusable, Concessionaire must restore the Assigned Areas to substantially the same condition as they were immediately before destruction.

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19.1.2 Uninsured Damage. If, during the term of this Agreement, Improvements in or on the Assigned Areas are partially or totally destroyed from a risk not covered by the fire and extended coverage insurance described in Section 23,2 herein, thereby rendering said Assigned Areas partially or totally inaccessible or unusable, such destruction shall not automatically terminate this Agreement. If, however, the cost of restoration exceeds ten percent (10%) of the full replacement value of improvements, as said value existed immediately before said destruction, Concessionaire may, at Concessionaire’s option, terminate this Agreement by giving written notice to City within sixty (60) days from the date of discovery of such destruction. If Concessionaire elects to terminate as above provided, Concessionaire shall be obligated, unless otherwise directed by City, to demolish all damaged improvements and remove all debris from the Assigned Areas at Concessionaire's sole cost. If Concessionaire fails to exercise its right to terminate this Agreement, this Agreement shall continue in full force and effect for the remainder of the term specified herein and Concessionaire shall restore the Assigned Areas to substantially the same condition as they were in immediately before destruction at no additional cost to the City.

19.1.3 Destruction Due to Negligence. Notwithstanding the foregoing, if the said Assigned Areas, or a substantial portion thereof, are completely destroyed as a result of the negligence or omission to act of Concessionaire or any of the Concessionaire Parties, the Monthly Concession Fee shall not abate and City may, in its discretion, require Concessionaire to repair and reconstruct said Assigned Areas within twelve (12) months of the date of discovery of such damage and pay the cost therefore, or City may repair and reconstruct the same within twelve (12) months of the discovery of such damage and Concessionaire shall be responsible for reimbursing City for the cost and expenses incurred in such repair.

19.2 Limits of City's Obligations. In the application of the foregoing provisions, City's obligations shall be limited to repair or reconstruction of the Assigned Areas to the same extent and of equal quality as obtained by Concessionaire at the commencement of its operations hereunder. Redecoration and replacement of ail of Concessionaire's personal property, CMUs, Luggage Carts, Improvements, Electrical Hardware, furniture, equipment, trade fixtures, inventory, goods and supplies shall be the responsibility of Concessionaire and any such redecoration and refumishing/reequipping shall be equivalent in quality to that originally installed.

Section 20.0 TAXES, LICENSES AND PERMITS

20.1 Concessionaire shall be responsible for payment of, and shall pay, all taxes, fees or license charges (of whatever character) that may be levied, assessed or charged upon Concessionaire or City in connection with Concessionaire’s services provided pursuant to this Agreement, including without limitation, those related to or in connection with the Luggage Cart Concession or CMUs and Luggage Carts in the Assigned Areas, or Concessionaire’s Improvements, other improvements, fixtures, or other property thereon or Concessionaire’s use thereof, including, but are not limited to, possessory interest taxes, personal property taxes, Los Angeles Department of Building and Safety permits fees, and City business taxes. Concessionaire shall also pay all license or permit fees necessary or required by law or

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regulation in order to perform its obligations under this Agreement or use of the Assigned Areas, including any and all government health licenses and permits.

20.2 If a claim is made against City for any of the above charges, City shall promptly notify Concessionaire in writing; provided, however, that failure by City to give such notice shall not constitute a waiver of Concessionaire's obligation to pay such taxes, license and/or permit fees. Concessionaire shall promptly pay, as Additional Fees, the required amount plus all legally imposed interest, penalties and surcharges. If all or any part of such taxes and/or fees, penalties, or surcharges are refunded to City, City shall remit to Concessionaire such sum(s) to which Concessionaire is legally entitled.

Section 21.0 BUSINESS TAX REGISTRATION. Concessionaire represents that it has registered its business with the City Clerk of City and has obtained and presently holds from that Office a Business Tax Registration Certificate, or a Business Tax Exemption Number, required by City's Business Tax Ordinance (Article 1, Chapter 2, Sections 21.00 and following, of City’s Municipal Code). Concessionaire shall maintain, or obtain as necessary, all such Certificates required of it under said Ordinance and shall not allow any such Certificate to be revoked or suspended during the term hereof.

Section 22.0 INDEPENDENT CONTRACTOR. It is the express intention of the parties that Concessionaire is an independent contractor and not an employee, agent, joint venturer or partner of City. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between Concessionaire and City, or between Concessionaire and any official, agent, or employee of City. Both parties acknowledge that neither Concessionaire nor any of Concessionaire’s employees, contractors, or agents are employees of City, Concessionaire hereby agrees to indemnify, defend, and hold City, the Board, Chief Executive Officer and their respective Board members, officers, directors,

' employees, agents, advisors, attorneys, and representative (collectively, "City Agents") harmless from and against any Claims of whatever nature that arise in connection with any such employment arrangements or labor agreements.

Section 23.0 LIABILITY. Concessionaire shall comply with the indemnification and insurance provisions which follow.

23.1 Hold Harmless. In addition to the requirements of Section 23.2 (Insurance) below, to the fullest extent permitted by law, Concessionaire shall indemnify, defend, keep and hold City, City Agents and their successors and assigns harmless from and against any and all actions, causes of action, charges, claims, costs, damages, demands, expenses (including costs of court and expenses incurred), fines, judgments, liabilities, liens, losses, or penalties of every kind and nature whatsoever (collectively, “Claims”) arising out of or in connection with (i) any injury or death to a person or damage to a person’s property using the CMUs or Luggage Carts, or caused by Electrical Hardware or Improvements or any other improvements installed, maintained or operated by Concessionaire, (ii) the entry upon, use or occupancy of the facilities or the Airport or the performance of this Agreement by Concessionaire or any of the Concessionaire Parties, (iii) any acts or omissions of Concessionaire or any of the Concessionaire Parties,and (iv) any default in the performance of Concessionaire’s obligations under this Agreement, The


foregoing defense and indemnification obligations of Concessionaire shall include, without limitation, all Claims claimed by anyone (including Concessionaire and the Concessionaire Parties) by reason of injuiy to, or death of, any person(s) (including Concessionaire and the Concessionaire Parties), all Claims for damage to, or destruction of, any property (including property of Concessionaire and the Concessionaire Parties) and all Claims for any and all other losses founded upon or alleged to arise out of, pertain to, or relate to Concessionaire’s and/or the Concessionaire Parties’ performance of this Agreement). The foregoing defense and indemnification obligations of Concessionaire shall apply to all Claims, whether or not contributed to by any act or omission of City or any City Agents; provided, however, that where such Claim arises from or relates to Concessionaire’s performance of a “Construction Contract” as defined by California Civil Code section 2783, this paragraph shall not be construed to require Concessionaire to indemnify or hold City harmless to the extent such Claim is caused by City’s sole negligence, willful misconduct or active negligence; and provided, further, that where such Claim arises from Concessionaire’s design professional services as defined by California Civil Code section 2782.8, Concessionaire’s indemnity obligations shall be limited to claims arising out of, pertaining to, or relating to Concessionaire’s negligence, recklessness or willful misconduct in the performance of such services.

23.1.1 In addition, Concessionaire agrees to protect, defend, indemnify, keep and hold harmless City and City Agents from and against any and all Claims arising out of any threatened, alleged or actual claim that the end product provided to City by Concessionaire violates any patent, copyright, trade secret, proprietary right, moral right, privacy or similar right, or any other rights of any third party anywhere in the world. Concessionaire agrees to, and shall pay, all damages, settlements, expenses and costs (including, without limitation, costs of investigation, court costs), and all other costs and damages sustained or incurred by City arising out of, or relating to, the matters set forth above in this paragraph.

23.1.2 In Concessionaire’s defense of City under this section, negotiation, compromise and settlement of any Claim, City shall retain discretion in and control of the litigation, negotiation, compromise, settlement and appeals therefrom, as required by the Los Angeles City Charter (particularly Article II, Sections 271, 272 and 273 thereof).

23.1.3 The provisions of this Section 23.0 shall survive the expiration or termination of this Agreement.

23.2 Insurance. Concessionaire shall procure at its expense, and keep in effect at all times during the term of this Agreement, the types and amounts of insurance specified on Insurance, Exhibit D attached hereto and incorporated by reference herein, including, without limitation, all-risk casualty and property damage insurance to be maintained by Concessionaire, at Concessionaire’s expense, covering all improvements located in or on the Assigned Areas which policy shall be in the name of Concessionaire and City with loss payable endorsement in a form approved by City. The specified insurance shall also, either by provisions in the policies, by City’s own endorsement form or by other endorsement attached to such policies, include and insure City and all of City Agents, their successors and assigns, as additional insureds, against the areas of risk described on Exhibit D with respect to acts or omissions of Concessionaire or

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any of the Concessionaire Parties in their respective operations, use, and occupancy of the Airport or other related functions performed by or on behalf of Concessionaire or any of the Concessionaire Parties in, on or about Airport.

23.2.1 Each specified insurance policy (other than Workers’ Compensation and Employers’ Liability and fire and extended coverages) shall contain a Severability of Interest (Cross Liability) clause which states, “It is agreed that the insurance afforded by this policy shall apply separately to each insured against whom claim is made or suit is brought except with respect to the limits of the company’s liability,” and a Contractual Endorsement which shall state, “Such insurance as is afforded by this policy shall also apply to liability assumed by the insured under this Agreement with the City of Los Angeles.”

23.2.2 All such insurance shall be primary and noncontributing with any other insurance held by City where liability arises out of or results from the acts or omissions of Concessionaire or any of the Concessionaire Parties. Such policies may provide for such reasonable deductibles and retentions as are acceptable to Chief Executive Officer based upon the nature of Concessionaire’s operations and the type of insurance involved.

23.2.3 City shall have no liability for any premiums charged for such coverage(s). The inclusion of City and City Agents, their successors and assigns, as insureds is not intended to, and shall not, make them, or any of them, a partner or joint venturer with Concessionaire in Concessionaire’s operations at Airport. In the event Concessionaire fails to furnish City evidence of insurance and maintain the insurance as required, City, upon ten (10) days prior written notice to comply, may (but shall not be required to) procure such insurance at the cost and expense of Concessionaire, and Concessionaire agrees to promptly reimburse City for the cost thereof plus the Administrative Fee for administrative overhead. Payment shall be made within thirty (30) days of invoice date.

23.2.4 At least ten (10) days prior to the expiration date of the above policies, documentation showing that the insurance coverage has been renewed or extended shall be filed with City. If such coverage is canceled or reduced, Concessionaire shall, within fifteen (15) days of such cancellation of coverage, file with City evidence that the required insurance has been reinstated or provided through another insurance company or companies.

23.2.5 Concessionaire shall provide proof of all specified insurance and related requirements to City either by production of the actual insurance policy(ies), by use of City’s own endorsement form(s), by broker’s letter acceptable to Chief Executive Officer in both form and content in the case of foreign insurance syndicates, or by other written evidence of insurance acceptable to Chief Executive Officer. The documents evidencing all specified coverages shall be filed with City in duplicate and shall be procured and approved in strict accordance with the provisions in Sections 11.47 through 11.56 of the City of Los Angeles’ Administrative Code prior to Concessionaire occupying the Assigned Areas. The documents shall contain the applicable policy number, the inclusive

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dates of policy coverages, and the insurance carrier’s name, shall bear an original signature of an authorized representative of said carrier, and shall provide that such insurance shall not be subject to cancellation, reduction in coverage, or nonrenewal except after written notice by certified mail, return receipt requested, to the City Attorney of the City of Los Angeles at least thirty (30) days prior to the effective date thereof. City reserves the right to have submitted to it, upon request, all pertinent information about the agent and carrier providing such insurance.

23.2.6 City and Concessionaire agree that the insurance policy limits specified herein shall be reviewed for adequacy annually throughout the term of this Agreement by Chief Executive Officer who may, thereafter, require Concessionaire, on thirty (30) days prior written notice, to adjust the amounts of insurance coverage to whatever reasonable amount said Chief Executive Officer deems to be adequate.

23.2.7 Submission of insurance from a non-Califomia admitted carrier is subject to the provisions of California Insurance Code Sections 1760 through 1780, and any other regulations or directives from the State Department of Insurance or other regulatory board or agency. Concessionaire agrees, except where exempted, to provide City proof of said insurance by and through a surplus line broker licensed by the State of California.

23.2.8 To the fullest extent permitted by law and except for the gross negligence or intentional misconduct by City or the City Agents, Concessionaire, on behalf of Concessionaire and its insurers, hereby waives, releases and discharges City and all City Agents from all Claims arising out of damage to or destruction of the Assigned Areas, or to Concessionaire’s improvements, fixtures, trade fixtures or other personal property located on or about the Assigned Areas, and any loss of use or business interruption, caused by any casualty, regardless of whether any such Claim results from the negligence or fault of City or any City Agent, and Concessionaire will look only to Concessionaire’s insurance coverage (regardless of whether Concessionaire maintains any such coverage) in the event of any such Claim. Any property insurance which Concessionaire maintains must permit or include a waiver of subrogation in favor of City and all City Agents.

23.2.9 City’s establishment of minimum insurance requirements for Concessionaire in this Agreement is not a representation by City that such limits are sufficient and does not limit Concessionaire’s liability under this Agreement in any manner.

Section 24.0 COMPLIANCE WITH LAWS

24.1 Concessionaire shall, at Concessionaire's sole cost and expense, (and shall cause Concessionaire's sub-Concessionaires, vendors, employees, contractors, representatives, agents, permittees and invitees (individually, a “Concessionaire Party” and collectively, “Concessionaire Parties”) to fully and faithfully observe and comply with (a) all municipal, state and federal laws, statutes, codes, rules, regulations, ordinances, requirements, and orders (collectively, “Laws”), now in force or which may hereafter be in force pertaining to the Assigned Areas or Concessionaire *s use of the Assigned Areas, Concessionaire’s services for the


Luggage Cart Concession, the Terminals, Parking Lots or the Airport (including without limitation, (i) all safety, security and operations directives of City, including by Chief Executive Officer, which now exist or may hereafter be promulgated from time to time governing conduct on and operations at the Airport or the use of facilities at the Airport; and (ii) any and all valid and applicable requirements of all duly-constituted public authorities (including, without limitation, the Department of Transportation, the Department of Homeland Security, the Federal Aviation Administration, and the Transportation Security Administration); (b) all recorded covenants, conditions and restrictions affecting the Airport (“Private Restrictions”) now in force or which may hereafter be in force; and (c) the Rules and Regulations. .The judgment of any court of competent jurisdiction, or the admission of Concessionaire in any action or proceeding against Concessionaire, whether City be a party thereto or not, that Concessionaire has violated any Laws or Private Restrictions, shall be conclusive of that fact as between Concessionaire and City. In addition to the above Section 24.1, as used in this Agreement, “Laws” shall include all present and future federal, state and local statutes, ordinances and regulations and City ordinances applicable to Concessionaire, the Assigned Areas, the Improvements, the services provided by Concessionaire for the Luggage Cart Concession or ONT, including but not limited to requirements under Section 29.6.1 of this Agreement, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., including, without limitation, to Title III thereof, and all regulations and guidelines related thereto, together with any and all laws, rules, regulations, ordinances, codes and statutes now or hereafter enacted by local or state agencies having jurisdiction thereof (including, without limitation, all of the requirements of Title 24 of the California Code of Regulations) and, as the same may be in effect on the date of this Agreement and may be hereafter modified, amended or supplemented (collectively, the “ADA”), all acts and regulations relating in any way to food and drugs, worker's compensation, sales and use tax, credit card processing, social security, unemployment insurance, hours of labor, wages, working conditions, the Immigration Reform and Control Act of 1986, the City of Los Angeles Administrative Code, and all Hazardous Materials Laws (as defined under Section 12.0).

24.2 Concessionaire agrees to pay or reimburse City as Additional Fee for any civil penalties or fines which may be assessed against City as a result of the violation by any Concessionaire Party of any Laws or Private Restrictions, which payment shall be made by Concessionaire within thirty (30) days from receipt of City's invoice for such amount and documentation showing that payment of such penalty or fine is Concessionaire's responsibility hereunder.

Section 25.0 RULES AND REGULATIONS. Concessionaire shall comply with the non-discriminatory rules, regulations and directives of the City and the Department of Airport, along with any modifications, amendments and supplements thereto, as are in effect from time to time, for the orderly and proper operation of the Airport, the Terminals, Parking Lots, the Common Areas and the Assigned Areas (collectively, the “Rules and Regulations”). City shall not be responsible to Concessionaire, any Concessionaire Party or any other third party for the failure of any other person to observe and abide by any of said Rules and Regulations.


Section 26.0 SECURITY

26.1 Security Arrangements. LAWA shall provide, or cause to be provided, during the term hereof, all proper and appropriate public fire, police and security protection similar to that afforded to others at Airport, and it will issue and enforce rules and regulations with respect thereto for all portions of Airport. Concessionaire is required to comply with LAWA security policies. Concessionaire shall be responsible for all expenses incurred by LAWA for corrective action resulting from Concessionaire’s non-compliance with LAWA policies.

26.2. Security Inspection and Survey. Concessionaire shall make the Assigned Areas available to Airport Police Division for security survey and inspection.

26.3. Airport Identification. Concessionaire shall, and ensure that Concessionaire Parties shall, display proper Airport identification at all times during their work hours. Concessionaire shall, ensure that Concessionaire Parties shall, report to Airport management and/or Airport Police any persons present in restricted areas that are known by Concessionaire not to be authorized or known not to be displaying a proper Airport identification badge. In accordance with the Comprehensive Security Program, Concessionaire shall use reasonable efforts to refer all individuals found within restricted areas without proper identification to the Airport Police. Concessionaire shall ensure that Concessionaire Parties shall use reasonable efforts to immediately notify the Airport Security Coordinator each time a suspicious action related to Airport security is observed or an unresolved question arises concerning Airport security.

26.4. Control of Movement. Concessionaire agrees to control the movement of Concessionaire Parties and vehicles within its Assigned Areas, abiding by the personnel and vehicle identification requirements outlined in the Comprehensive Airport Security Program '(“CASP”).

26.5. Security Education and Training. Concessionaire shall, and ensure that Concessionaire Parties shall, be indoctrinated on specific security responsibilities and procedures, with emphasis on the badging and challenge requirements.

26.6. Corrective Action. Concessionaire is required to notify the Airport Security Coordinator immediately when significant modifications or changes are made to the Assigned Areas. If, at any time, Concessionaire is unable to comply with this section, Concessionaire shall notify LAWA. LAWA will take immediate corrective actions to establish the required level of security.

26.7. Indemnification. Concessionaire shall indemnify and hold the City harmless with regard to any fine, fee or penalty arising from the violation of security provisions by Concessionaire contained herein as to the applicable Assigned Areas surveyed, or within the CASP, or about those areas defined, or anywhere on Airport with regard to any violation of those security provisions of the Airport Security Program committed by Concessionaire or Concessionaire Party. In addition, Concessionaire agrees to indemnify City for any such


violation assessed to City by the Federal Aviation Administration (“FAA”) and directly related to Concessionaire’s negligence hereunder.

26.8. Periodic Evaluation. Chief Executive Officer will periodically evaluate the above procedures. Failure by Concessionaire to fully implement and maintain these procedures shall be the basis for Chief Executive Officer, upon ten (10) days’ notice, to take immediate measures to restore security to an acceptable level, and to hold Concessionaire responsible for the reasonable cost of such measures until Concessionaire restores the required level of security under this Agreement.

26.9. Assignment of Security Obligations. Without the prior written consent of the Chief Executive Officer, exercised in his or her sole discretion, Concessionaire shall not, by operation of law or otherwise, in any manner, assign or transfer its obligations under Section 10.0, or any portion thereof, , in whole or in part. Consent to one assignment shall not be deemed consent to any subsequent assignment.

26.10. Security Design Guidelines. Concessionaire shall provide complete security hardware compatible with the Assigned Areas’ pre-established system, when openings between non-secure and secure sides are made. The openings will be subject to Chief Executive Officer’s approval and FAA guidelines. Exits dispensing directly onto Air Operations Areas must be fitted with FAA-approved electronic security card key access monitoring and alarms. Exits dispensing into restricted areas may be fitted with LAWA system electronic security card key access monitoring and alarms, or other methods compatible with existing systems and Airport Police security requirements.

Section 27.0 NOTICE REQUIREMENTS

27.1 Notice to City. Written notices to City hereunder, shall be given by registered or certified mail (which will become effective five days from mailing), postage prepaid, return receipt requested, and addressed to City at the following address, or to such other address as City may designate by written notice to Concessionaire:

City of Los Angeles Department of Airports Commercial Development Group 1 World Way 2nd Floor Los Angeles, California 90045 Attention: Deputy Executive Director

With a copy to:

Los Angeles City Attorney 1 World Way Post Office Box 92216 Los Angeles, CA 90045

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27.2 Notice to Concessionaire. Written notices to Concessionaire hereunder, shall be given by registered or certified mail (which will become effective five days from mailing), postage prepaid, return receipt requested, and addressed to Concessionaire at the following address:

SMARTE CARTE, INC.4455 White Bear Parkway St. Paul, MN 55110-7641Attn: Arthur Spring, Executive Vice President

or to such other address or email as Concessionaire may designate by written notice to City.

Section 28.0 AGENT FOR SERVICE OF PROCESS. The parties hereto expressly understand and agree that if Concessionaire is not a resident of the State of California, or is an association or partnership without a member or partner resident of said State, or is a foreign corporation, then in any such event Concessionaire does designate its California registered agent as its agent for the purpose of service of process in any court action between it and City arising out of or based upon this Agreement, and the service shall be made as provided by the laws of the State of California by also serving Concessionaire's registered agent. The parties hereto expressly agree, covenant, and stipulate that Concessionaire shall personally be served with such process out of this State by the registered mailing of such complaint and process to Concessionaire at the address set forth herein. Any such service out of this State shall constitute valid service upon Concessionaire as of the date of receipt thereof. The parties hereto further expressly agree that Concessionaire is amenable to and hereby agrees to the process so served, submits to the jurisdiction, and waives any and all obligations and protest thereto, any laws to the contrary notwithstanding.

Section 29.0 GENERAL PROVISIONS

29.1 Airport Concession Disadvantaged Business Enterprise Program. Compliance with Department of Transportation (DOT). City strictly prohibits all unlawful discrimination and preferential treatment in contracting, subcontracting and purchasing, leasing or any subleasing under this Agreement (the “Non-Discrimination Policy”). This Agreement is subject to the requirements of the U.S. Department of Transportation’s regulations, 49 CFR part 23. The Concessionaire agrees that it will not discriminate against any business owner because of the owner’s race, color, national origin, or sex in connection with the award or performance of any concession agreement, management contract, or subcontract, purchase or lease agreement, or other agreement covered by 49 CFR part 23, and in connection with its performance under this Agreement or the management of the concession. Additionally, City has established an Airport Concession Disadvantaged Business Enterprise program in accordance with regulations of the U.S. Department of Transportation, 49 Code of Federal Regulations Part 23 (the program and federal regulations are collectively referred to as the “ACDBE Rules”). Concessionaire shall comply with the Non-Discrimination Policy and the ACDBE Rules. Concessionaire shall cooperate with City in City’s program of recruiting, training, providing technical assistance and holding workshops to ensure that contracting, subcontracting and purchasing opportunities available under this Agreement are accessible and available to all qualified businesses owners,

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including “Airport Concession Disadvantaged Business Enterprises” (“ACDBEs”), as defined in the ACDBE Rules. In order to provide a fair opportunity for ACDBE participation, Concessionaire shall make good faith efforts, within the meaning of the ACDBE Rules, to provide for a level of ACDBE participation in the concession operations by Concessionaires contemplated by this Agreement equal to or greater than zero percent ( 0%).

29.1.1 Subsequent Concession Agreement or Contract Covered by 49 CFR Part23. The Concessionaire agrees to include the following statement in any subsequent concession agreement or contract covered by 49 CFR part 23, that it enters and cause those businesses to similarly include the statement in further agreements: “ThisAgreement is subject to the requirements of the U.S. Department of Transportation’s regulations, 49 CFR part 23. The Concessionaire agrees that it will not discriminate against any business owner because of the owner’s race, color, national origin, or sex in connection with the award or performance of any concession agreement, management contract, or subcontract, purchase or lease agreement, or other agreement covered by 49 CFR part 23.”

29.1.2 Substitutions. Concessionaire shall have no right to terminate any ACDBE without Board's prior written consent. Should a substitution or an addition of an ACDBE become necessary, Concessionaire shall comply with all requirements of the ACDBE Rules. Failure to comply with the ACDBE Rules shall constitute a Default of this Agreement.

29.1.3 Monthly Report. In order to assure compliance with the NonDiscrimination Policy and the ACDBE Rules, Concessionaire shall submit, in the format required by Chief Executive Officer, a monthly report to City, describing the Gross Revenues of each initial ACDBE (and each substitute ACDBE), in each case calculated in accordance with the requirements of this Agreement. Concessionaire shall submit in the format required by the Chief Executive Officer and such other information as may be requested by the Chief Executive Officer to ensure compliance with the ACDBE Rules,

29.2 Child Support Orders.

29.2.1. This Agreement is subject to Section 10.10, Article I, Chapter 1, Division 10 of the Los Angeles Administrative Code related to Child Support Assignment Orders, which is incorporated herein by this reference, including specific sections discussed in this Section29.2,1. Pursuant to this Section, Concessionaire (and any sub-Concessionaire of Concessionaire providing services to City under this Agreement) shall (1) fully comply with all State and Federal employment reporting requirements for Concessionaire 's or Concessionaire 's subConcessionaire's employees applicable to Child Support Assignment Orders; (2) certify that the principal owner(s) of Concessionaire and applicable sub-Concessionaires are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally; (3) fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignment in accordance with California Family Code Section 5230, et seq.; and (4) maintain such compliance throughout the term of this Agreement. Pursuant to Section 10.10(b) of the Los Angeles Administrative Code, iuilure of Concessionaire or an applicable subConcessionaire to comply with all applicable reporting requirements or to implement lawfully

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served Wage and Earnings Assignment Orders and Notices of Assignment or the failure of any principal owner(s) of Concessionaire or applicable sub-Concessionaires to comply with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally shall constitute a default of this Contract subjecting this Agreement to termination where such failure shall continue for more than ninety (90) days after notice of such failure to Concessionaire by City (in lieu of any time for cure provided elsewhere in this Agreement).

29.3 Compliance with Los Angeles City Charter Section 470(c)(12).

29.3.1 Subcontractors, and their Principals are obligated to fully comply with City of Los Angeles Charter Section 470(c)(12) and related ordinances, regarding limitations on campaign contributions and fundraising for certain elected City officials or candidates for elected City office if the contract is valued at $100,000 or more and requires approval of a City elected official. Additionally, Concessionaire is required to provide and update certain information to the City as specified by law. Any Concessionaire subject to Charter Section 470(c)(12), shall include the following notice in any contract with a subcontractor expected to receive at least $100,000 for performance under this contract:

"Notice Regarding Los Angeles Campaign Contribution and Fundraising Restrictions.

As provided in Charter Section 470(c)(12) and related ordinances, you aresubcontractor on City of Los Angeles contract #________. Pursuant to City CharterSection 470(c)(12), subcontractor and its principals are prohibited from making campaign contributions and fundraising for certain elected City officials or candidates for elected City office for 12 months after the City contract is signed. Subcontractor is required to provide to Concessionaire names and addresses of the subcontractor's principals and contact information and shall update that information if it changes during the 12 month time period. Subcontractor's information included must be provided to Concessionaire within 5 business days. Failure to comply may result in termination of contract or any other available legal remedy, including fines. Information about the restrictions may be found at the City Ethics Commission's website at http://ethics.lacitv.org/ or by calling 213/978-1960.”

29.3.2 Concessionaire, Subcontractors, and their Principals shall comply with these requirements and limitations. Violation of this provision shall entitle the City to terminate this Agreement and pursue any and all legal remedies that may be available.

29,4 Contractor Responsibility Program. Concessionaire shall comply with the provisions of the Contractor Responsibility Program adopted by the Board. Executive Directives setting forth the rules, regulations, requirements and penalties of the Contractor Responsibility Program and the Pledge of Compliance Form is attached hereto as Exhibit E and incorporated herein by reference. The Contractor Responsibility’ Program Rules and Regulations are available at http://www.lawa.org.

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http://ethics.lacitv.org/

http://www.lawa.org

29.5 Nondiscrimination and Equal Employment Practices/Affirmative Action Program.

29.5.1 Federal Non-Discrimination Provisions. Concessionaire assures that it will comply with pertinent statutes, Executive Orders, and such rules as are promulgated to assure that no person shall, on the grounds of race, creed, color, national origin, sex, age, or handicap be excluded from participating in any activity conducted with or benefiting from Federal assistance. This provision obligates Concessionaire or its transferee for the period during which Federal assistance is extended to the airport program, except where Federal assistance is to provide, or is in the form of personal property or real property or interest therein or structures or improvements thereon. In these cases, the provision obligates the party or any transferee for the longer of the following periods: (a) the period during which the property is used by the sponsor or any transferee for a purpose for which Federal assistance is extended, or for another purpose involving the provision of similar services or benefits; or (b) the period during which the airport sponsor or any transferee retains ownership or possession of the property.

29.5.2 Municipal Non-Discrimination Provisions In Use of Airport. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, religion, national origin, ancestry, sex, sexual orientation, gender identity, gender expression, age, physical handicap, marital status, domestic partner status, or medical condition in connection with this Agreement, the transfer, use, occupancy, tenure, or enjoyment of the Airport or any operations or activities conducted on the Airport. Nor shall Concessionaire or any person claiming under or through Concessionaire establish or contract any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of contractors, subcontractors, or vendees of the Airport. Any assignment or transfer, which may be permitted under this Agreement, shall also be subject to all non-discrimination clauses contained in this Section 29.5.2.

29.5.3 Municipal Non-Discrimination Provisions in Employment. During the term of this Agreement, Concessionaire agrees and obligates itself in the performance of this Agreement not to discriminate against any employee or applicant for employment because of the employee's or applicant's race, religion, national origin, ancestry, sex, sexual orientation, gender identity, gender expression, age, physical handicap, marital status, domestic partner status, or medical condition. Concessionaire shall take affirmative action to insure that applicants for employment are treated, during the term of this Agreement, without regard to the aforementioned factors and shall comply with the affirmative action requirements of the Los Angeles Administrative Code, Sections 10,8, et seq., or any successor ordinances or law concerned with discrimination, which are incorporated herein by reference.

29.5.4 Municipal Equal Employment Practices. If the total payments made under this Agreement are One Thousand Dollars ($1,000) or more, this provision shall apply. During the performance of this Agreement, Concessionaire agrees to comply with Section 10.8.3 of the Los Angeles Administrative Code (“Equal Employment Practices”), which is incorporated herein by this reference, including specific sections


discussed in this Section 29.5.4. By way of specification but not limitation, pursuant to Sections 10.8.3.E and 10.8.3.F of the Los Angeles Administrative Code, the failure of Concessionaire to comply with the Equal Employment Practices provisions of this Agreement may be deemed to be a material breach of this Agreement. No such finding shall be made or penalties assessed except upon a full and fair hearing after notice and an opportunity to be heard have been given to Concessionaire. Upon a finding duly made that Concessionaire has failed to comply with the Equal Employment Practices provisions of this Agreement, this Agreement may be forthwith terminated, cancelled, or suspended.

29.5.5 Municipal Affirmative Action Program. If the total payments made under this Agreement are One Hundred Thousand Dollars ($100,000) or more, this provision shall apply. During the performance of this Agreement, Concessionaire agrees to comply with Section 10.8.4 of the Los Angeles Administrative Code (“Affirmative Action Program”), which is incorporated herein by this reference, including specific sections discussed in this Section 29.5.5. By way of specification but not limitation, pursuant to Sections 10.8.4.E and 10.8.4.F of the Los Angeles Administrative Code, the failure of Concessionaire to comply with the Affirmative Action Program provisions of this Agreement may be deemed to be a material breach of this Agreement. No such finding shall be made or penalties assessed except upon a full and fair hearing after notice and an opportunity to be heard have been given to Concessionaire. Upon a finding duly made that Concessionaire has failed to comply with the Affirmative Action Program provisions of this Agreement, this Agreement may be forthwith terminated, cancelled, or suspended.

29.6 Disabled Access.

29.6.1 Concessionaire shall be solely responsible for fully complying with any ' and all applicable present or future rules, regulations, restrictions, ordinances, statutes, Laws, or orders of any federal, state, or local governmental entity or court regarding disabilities and disabled access to the CMUs, Luggage Carts and Assigned Areas, including any services, programs, improvements or activities provided by Concessionaire or by Concessionaire’s subcontractors; and which include but are not limited to the Air Carrier Access Act; 2010 ADA Standards For Accessible Design; 28 Code of Federal Regulation Part 35; 28 Code of Federal Regulation Part 36; Sections 504 and 508 of the Rehabilitation Act of 1973 as amended and the State of California Code of Regulations Title 24, and including such rules, regulations, restrictions, ordinances, statutes, Laws, or orders of any federal, state, or local governmental entity or court related to volume control standards, height standards, shelve standards, and such other accessibility standards for the Luggage Cart Concession. Further, Concessionaire agrees to cooperate fully with City in its efforts to comply with the ADA, including but not limited to, Title II of the Americans with Disabilities Act of 1990, as amended by the final rule published on September 15, 2010, and any amendments thereto, or successor statutes. The Concessionaire shall comply with 49 CFR 37. Special attention shall be given to: 49 CFR §37.5, §37.105; §37.161; §37.165; §37.167; § 37.171; §37.173; §37.207. In addition to federal requirements, Concessionaire shall also be required to comply with Title III of the Americans with Disabilities Act, as amended and any amendments thereto, or successor statutes, and the State of California disabilities laws. Among these, though not all inclusive are the Unruh Civil Rights Act, Civil

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Code §54; Civil Code § 54.1; Civil Code §51.5; and Government Code § 12948. Without limiting the generality of the foregoing, Concessionaire shall ensure the accessibility of any and all existing or future CMUs, Luggage Carts, equipment and related improvements installed, maintained or used by Concessionaire in connection with this Agreement, regardless of whether the obligation for such compliance is placed on the owner of the land, the owner of the buildings, structures, and facilities, or the owner of such CMUs, Luggage Carts, equipment and related improvements.

29.6.2 Concessionaire shall be solely responsible for any and all Claims and damages caused by, and/or penalties levied as the result of, Concessionaire's or Concessionaire’s subcontractors’ noncompliance.

29.6.3 If Concessionaire should fail to comply with the provisions under Section29.6,1, City shall have the right, but not the obligation, to perform, or have performed, whatever work is necessary to achieve equal access compliance. Concessionaire will then be required to reimburse the City for actual cost, plus the Administrative Fee of fifteen percent (15%) (as Additional Fee), within thirty (30) days of written demand therefor.

29.7 Environmentally Favorable Operations. Concessionaire acknowledges for itself and any sub-Concessionaires that its operation of its activities under this Agreement will be subject to all Department of Airports’ policies, guidelines and requirements regarding environmentally favorable construction, use and/or operations practices ( collectively, “LAWA Policies”) as such LAWA Policies may be promulgated, revised and amended from time-to-time.

29.8 Equal Benefits Ordinance. Unless otherwise exempt in accordance with the provisions of the Equal Benefits Ordinance (“EBO”), Concessionaire certifies and represents that Concessionaire will comply with the applicable provisions of EBO Section 10,8.2.1 of the Los Angeles Administrative Code, as amended from time to time. Concessionaire shall not, in any of its operations within the City of Los Angeles or in other locations owned by the City of Los Angeles, including the Airport, discriminate in the provision of Non-ERISA Benefits (as defined below) between employees with domestic partners and employees with spouses, or between the domestic partners and spouses of such employees, where the domestic partnership has been registered with a governmental entity pursuant to state or local law authorizing such registration. As used above, the term “Non ERISA Benefits” shall mean any and all benefits payable through benefit arrangements generally available to Concessionaire's employees which are neither "employee welfare benefit plans" nor "employee pension plans", as those tenns are defined in Sections 3(1) and 3(2) of ERISA. Non-ERISA Benefits shall include, but not be limited to, all benefits offered currently or in the future, by Concessionaire to its employees, the spouses of its employees or the domestic partners of its employees, that are not defined as "employee welfare benefit plans" or "employee pension benefit plans", and, which include any bereavement leave, family and medical leave, and travel discounts provided by Concessionaire to its employees, their spouses and the domestic partners of employees.

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29.8.1 Concessionaire agrees to post the following statement in conspicuous places at its place of business available to employees and applicants for employment:

"During the term of a contract with the City of Los Angeles, Concessionaire will provide equal benefits to employees with spouses and its employees with domestic partners. Additional information about the City of Los Angeles' Equal Benefits Ordinance may be obtained from the Department of Public Works, Bureau of Contract Administration, Office of Contract Compliance at (213) 847- 2625."

29.8.2 The- failure of Concessionaire to comply with the EBO will be deemed to be a material breach of this Agreement by City, If Concessionaire fails to comply with the EBO, City may cancel or terminate this Agreement, in whole or in part, and all monies due or to become due under this Agreement may be retained by City. City may also pursue any and all other remedies at law or in equity for any breach. Failure to comply with the EBO may be used as evidence against Concessionaire in actions taken pursuant to the provisions of Los Angeles Administrative Code Section 10.40, et seq., Contractor Responsibility Ordinance. If City determines that Concessionaire has set up or used its contracting entity for the purpose of evading the intent of the EBO, City may terminate this Agreement.

29.9 Labor Peace Agreement. Prior to the execution of this Agreement by City, and as a condition precedent to such execution: (i) Concessionaire shall have a signed Labor Peace Agreement (LPA) with the labor organizations representing or seeking to represent concession workers at the Assigned Areas covered by the Agreement; (ii) Concessionaire shall have submitted to LAWrA a copy of such LPA, or evidence of a signed Labor Peace Agreement acceptable to the City, executed by all of the parties; and (iii) such LPA shall prohibit such labor organizations and their members from engaging in picketing, work stoppages, boycotts or other economic interference with the business of Concessionaire at any of the airports operated by City for the duration of the Agreement.

29.10 Living Wage Ordinance General Provisions.

29.10.1 This Agreement is subject to the Living Wage Ordinance(“LWO’j (Section 10.37, et seq., of the Los Angeles Administrative Code, which are incorporated herein by this reference, including specific sections discussed in this Section 29.10.1). The LWO requires that, unless specific exemptions apply, any employees of service contractor's who render services that involve an expenditure in excess of Twenty Five Thousand Dollars ($25,000) and a contract term of at least three months are covered by the LWO if any of the following applies: (1) at least some of the services are rendered by employees whose work site is on property owned by City, (2) the services could feasibly be performed by City of Los Angeles employees if the awarding authority had the requisite financial and staffing resources, or (3) the designated administrative agency of the City of Los Angeles has determined in writing that coverage would further the proprietary interests of the City of Los Angeles. Employees covered by the LWO are required to be paid not less than a minimum initial wage rate, as adjusted each year. The LWO also requires that employees be provided with at least twelve (12) compensated

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days off per year for sick leave, vacation, or personal necessity at the employee's request, and at least ten (10) additional days per year of uncompensated time pursuant to Section 10.37.2(b). The LWO requires employers to inform employees making less than Twelve Dollars ($12) per hour of their possible right to the federal Earned Income Tax Credit (“EITC”) and to make available the forms required to secure advance EITC payments from the employer pursuant to Section 10,37.4. Concessionaire shall permit access to work sites for authorized City representatives to review the operation, payroll, and related documents, and to provide certified copies of the relevant records upon request by City. Whether or not subject to the LWO, Concessionaire shall not retaliate against any employee claiming non-compliance with the provisions of the LWO, and, in addition, pursuant to Section 10.37.6(c), Concessionaire agrees to comply with federal law prohibiting retaliation for union organizing.

29.10.1.1 Living Wage Coverage Determination. An initial determination has been made that this is a service contract under the I,WO, and that it is not exempt from coverage by the LWO. Determinations as to whether this Agreement is a service contract covered by the LWO, or whether an employer or employee are exempt from coverage under the LWO are not final, but are subject to review and revision as additional facts are examined or other interpretations of the law are considered. In some circumstances, applications for exemption must be reviewed periodically. City shall notify Concessionaire in writing about any redetermination by City of coverage or exemption status. To the extent Concessionaire claims non-coverage or exemption from the provisions of the LWO, the burden shall be on Concessionaire to prove such non-coverage or exemption.

29.10.1.2 Compliance; Termination Provisions and Other Remedies: Living Wage Policy. If Concessionaire is not initially exempt from the LWO, Concessionaire shall comply with all of the provisions of the LWO, including payment to employees at the minimum wage rates, effective on the execution date of this Agreement., If Concessionaire is initially exempt from the LWO, but later no longer qualifies for any exemption, Concessionaire shall, at such time as Concessionaire is no longer exempt, comply with the provisions of the LWO and execute the then currently used Declaration of Compliance Form, or such form as the LWO requires. Under the provisions of Section 10.37.6(c) of the Los Angeles Administrative Code, which is incorporated herein by reference, violation of the LWO shall constitute a material breach of this Agreement and City shall be entitled to terminate this Agreement and otherwise pursue legal remedies that may be available, including those set forth in the LWO, if City determines that Concessionaire violated the provisions of the LWO. The procedures and time periods provided in the LWO are in lieu of the procedures and time periods provided elsewhere in this Agreement. Nothing in this Agreement shall be construed to extend the time periods or limit the remedies provided in the LWO,

29.10.2 Service Contract Worker Retention Ordinance. This Agreement may be subject to the Service Contract Worker Retention Ordinance (hereinafter referred

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to as “SCWRO”) (Section 10.36, et seq., of the Los Angeles Administrative Code), which is incorporated herein by this reference, including specific sections discussed in this Section 29.10.2 . If applicable, Concessionaire must also comply with the SCWRO which requires that, unless specific exemptions apply, all employers under contracts that are primarily for the furnishing of services to or for the City of Los Angeles and that involve an expenditure or receipt in excess of Twenty Five Thousand Dollars ($25,000) and a contract term of at least three (3) months, shall provide retention by a successor Concessionaire for a ninety-day (90-day) transition period of the employees who have been employed for the preceding twelve (12) months or more by the terminated Concessionaire or sub-Concessionaire, if any, as provided for in the SCWRO. Under the provisions of Section 10.36.3(c) of the Los Angeles Administrative Code, City has the authority, under appropriate circumstances, to terminate this Agreement and otherwise pursue legal remedies that may be available if City determines that the subject Concessionaire violated the provisions of the SCWRO.

29.11 Municipal Lobbying Ordinance. Concessionaire shall comply with the provisions of the City of Los Angeles Municipal Lobbying Ordinance, Municipal Code Section48.01 et seq., as amended.

29.12 Visual Artists' Rights Act. Concessionaire shall not install, or cause to be installed, any work of art subject to the Visual Artists' Rights Act of 1990 (as amended), 17 U.S.C. 106A, et seq., or California Code Section 980, et seq., (“VARA”) on or about the Assigned Areas without first obtaining a waiver, in writing, of all rights under VARA, satisfactory to Chief Executive Officer and approved as to form and legality by the City Attorney's Office, from the artist. Said waiver shall be in full compliance with VARA and shall name City as a party for which the waiver applies. Concessionaire is prohibited from installing, or causing to be installed, any piece of artwork covered under VARA on the Assigned Areas without the prior, written approval and waiver of Chief Executive Officer. Any work of art installed on the Assigned Areas without such prior approval and waiver shall be deemed a trespass, removable by City, by and through its Chief Executive Officer, upon three (3) days written notice, all costs, expenses, and liability therefore to be borne exclusively by Concessionaire. Concessionaire, in addition to other obligations to indemnify, defend and hold City and City Agents harmless, as more specifically set forth in this Agreement, shall indemnify, defend and hold City and City Agents harmless from all Claims resulting from Concessionaire's failure to obtain City's waiver of VARA and failure to comply with any portion of this provision. The rights afforded City under this provision shall not replace any other rights afforded City in this Agreement or otherwise, but shall be considered in addition to all its other rights.

29.13 DOT Title VI Assurances.

29.13.1 Compliance with Federal Regulations. If applicable, Concessionaire shall comply with the regulations relative to nondiscrimination in Federally-assisted programs of the DOT Title 49, Code of Federal Regulations, Part 21, as they may be amended from time to time (hereinafter referred to as the “Federal Regulations”), which are herein incorporated by reference and made a part of this Agreement.


29.13.2 Non-discrimination. Concessionaire, with regard to the work performed by it during the term of this Agreement, shall not discriminate on the grounds of age, sex, race, creed, color, handicap, or national origin in the selection and retention of sublessees or subcontractors, including procurement of materials and leases of equipment. Concessionaire shall not participate either directly or indirectly in the discrimination prohibited by Section 21.5 of Federal Regulations including employment practices when the Agreement covers a program set forth in Appendix B of the regulations.

29.13.3 Solicitations for Subcontractors. Including Procurement of Materials and Equipment. In all solicitations involving either competitive bidding or negotiation by Concessionaire for services or work to be performed under a subcontract, including procurement of materials and leases of equipment, each potential subcontractor or supplier shall be notified by Concessionaire of Concessionaire's obligations under this Agreement and Federal Regulations relative to nondiscrimination on the grounds of age, sex, race, creed, color, handicap, or national origin.

29.13.4 Information and Reports. Concessionaire shall provide all information and reports required by Federal Regulations or directives issued pursuant thereto, and shall permit access to its books, records, accounts, other sources of information, and its facilities as may be determined by City or the Federal Aviation Administration to be pertinent to ascertain compliance with such regulations, orders, and instructions. Where any information required of a Concessionaire is in the exclusive possession of another who fails or refuses to furnish this information, Concessionaire shall so certify to City or the Federal Aviation Administration, as appropriate, and shall set forth what efforts it has made to obtain the information. .

29.13.5 Sanctions for Non-Compliance. In the event of Concessionaire’s noncompliance with the nondiscrimination provisions of this Agreement, City shall impose sanctions as it or the FAA may determine to be appropriate, including, but not limited to, the right to immediately terminate this Agreement and to re-enter and repossess the Assigned Area and any improvements thereon, and hold same as if this Agreement had never been made or issued.

29.13.6 Equal Employment Opportunity. In the performance of services under this Agreement, Concessionaire shall not discriminate against any employee or applicant for employment because of race, creed, color, sex, age, handicap, or national origin. Concessionaire shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, sex, age, handicap, or national origin. Such action shall include, but not be limited to, the following: Employment, upgrading, demotion, or transfer; recruitment or other forms of compensation; and, selection for training, including apprenticeship. Concessionaire agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the government setting forth the provisions of this nondiscrimination clause. Concessionaire shall, in all

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solicitations or advertisements for employees placed by or on behalf of Concessionaire, state that all qualified applicants shall receive consideration for employment without regard to race, creed, color, sex, age, handicap, or national origin. Concessionaire shall incorporate the foregoing requirements of this paragraph in all subleases and subcontracts for services covered by this Agreement.

29.13.7 Incorporation of Provisions. Concessionaire shall include the provisions of Sections 29.5 through 29.13 in every subcontract, including procurement of materials and leases of equipment, unless exempted by Federal Regulations or directives issued pursuant ‘thereto. Concessionaire shall take such action, with respect to any subcontract or procurement, as City or the FAA may direct as a means of enforcing such provisions including sanctions for noncompliance; provided, however, that in the event Concessionaire becomes involved in or is threatened with litigation with a subcontractor or supplier as a result of such directions, Concessionaire may request City to enter into such litigation to protect the interest of City, and, in addition, Concessionaire may request the United States to enter into such litigation to protect the interests of the United States.

29.14 Anti-Lobbying Certifications. Concessionaire certifies, to the best of its knowledge and belief, that:

29.14.1 No Federally appropriated funds have been paid or will be paid by, or on behalf of, Concessionaire to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, in making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan or cooperative agreement.

29.14.2 If any funds other than Federally appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any Contract, grant, loan, or cooperative agreement, Concessionaire shall complete and submit Standard Form-LLL, "Disclosure of Lobby Activities," in accordance with its instructions.

29.14.3 Concessionaire shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

29.15 Board Order AO-5077 Exemption. With respect to the provision of products and services pursuant to this Concession Agreement, Concessionaire and its respective vendors are expressly exempt from the Board-imposed license fee described in Board Order AO-5077 (“Board Order”) and related Staff Report, and any subsequent Board action substituting, replacing or modifying the Board Order, which license fee may, in the absence of such

2016-07-1 l-Smarte Carte-Luggage Cart-ONT-Contract-v5 (RT)58

exemption, be assessed on the gross revenues derived from the provision of products and services pursuant to this Agreement.”

29.16 Anti-trust Claims. Concessionaire understands that it may be subject to California Government Code Sections 4550-4554. If applicable, the Concessionaire offers and agrees that it will assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act or under the Cartwright Act, arising from purchases of goods, services, or materials by the Concessionaire. Such assignment is made and becomes effective at the time the City tenders final payment to the Concessionaire.

Section 30.0 OTHER PROVISIONS

30.1 City Approval. Following the execution and delivery of this Agreement, whenever this Agreement calls for a matter to be approved or disapproved by or on behalf of City, then the written approval, disapproval, or consent of the Chief Executive Officer within the legal authority of the Chief Executive Officer, subject to the consent of the Office of the City Attorney as to form if and when applicable, shall constitute the approval, disapproval, or consent of City; provided, however, if the approval or consent by City is in excess of the Chief Executive Officer’s legal authority, then such matter shall be approved by the Board. Except as otherwise expressly set forth in this Agreement, with respect to any matter that is subject to the approval or consent of the Chief Executive Officer or the Board, such approval or consent may be given or withheld in the Chief Executive Officer’s or the Board’s sole and absolute discretion. Any approvals or consents required from or given by City under this Agreement shall be approvals of the City of Los Angeles Department of Airports acting as the owner and Concessionaire of the Airport, and shall not relate to, constitute a waiver of, supersede or otherwise limit or affect the rights or prerogatives of the City of Los Angeles as a government, including the right to grant or deny any permits required for construction or maintenance of the Assigned Areas and the right to enact, amend or repeal laws and ordinances, including, without limitation, those relating to zoning, land use, and building and safety.

30.2 Airport Operations. Concessionaire acknowledges that the operationalrequirements of the Airport as an airport facility, including without limitation security requirements, are of paramount importance. Concessionaire acknowledges and agrees that Concessionaire must conduct its business in a manner that does not conflict with the operational requirements of the Airport as an airport facility and that fully accommodates those requirements. Without limiting other waivers herein, Concessionaire waives all Claims against City and City Agents arising out of or connected to the operation of the Airport as an airport facility.

30.3 Subordination of Agreement. This Agreement shall be subordinate to the provisions of any existing or future agreement between City and the United States of America, its boards, agencies or commissions, or between City and the State of California, relative to the operations or maintenance of Airport the execution of which has been or may be required as a condition precedent to the expenditure of federal or state funds for the development of said Aiiport. This Agreement and all the provisions hereof shall be subject to whatever right the United States Government now has or in the future may have or acquire affecting the control,


operation, regulation, and taking over of the Airport or the exclusive or nonexclusive use of the Airport by the United States during the time of war or national emergency.

30.4 Laws of California; Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of California and venue shall lie in the appropriate U.S. Federal Court or California Superior Court located in Los Angeles County, California

30.5 Agreement Binding Upon Successors. Subject to the provisions of Section 10. this Agreement shall be binding upon and shall inure to the benefit of the successors, heirs and assigns of the parties hereto.

30.6 Ordinances and Los Angeles Administrative and Municipal Codes (“Codes”) and Programs Language Governs. Exhibits to ordinances, Codes and programs (e.g., Alternative Fuel program, First Source Hiring program) are provided as a convenience to the parties only. In the event of a discrepancy between the exhibits and the applicable language in the ordinance, Codes or programs, the language of the ordinance, Codes or programs, and any amendments thereto, shall govern.

30.7 Amendments to Ordinances and Codes. The obligation to comply with any ordinances, Codes and programs shall extend to any amendments which may be made to those ordinances, Codes and programs during the term of this Agreement.

30.8 Conditions and Covenants. Each covenant herein is a condition, and each condition herein is as well a covenant by the parties bound thereby, unless waived in writing by the parties hereto.

30.9 Gender and Plural Usage. The use of any gender herein shall include all genders and the use of any number shall be construed as the singular or the plural, all as the context may require.

30.10 Void Provision. If any provision of this Agreement is determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provision of this Agreement, and all such other provisions shall remain in full force and effect.

30.11 Construction and Interpretation. It is the intention of the parties hereto that if any provision of this Agreement is capable of two constructions, one of which would render the provision void and the other of which would render the provision valid, then the provision shall have the meaning which renders it valid. The language of this Agreement shall be construed according to its fair meaning, and not strictly for or against either City or Concessionaire.

30.12 Section Headings. The section headings appearing herein are for the convenience of City and Concessionaire, and shall not be deemed to govern, limit, modify or in any manner affect the scope, meaning or intent of the provisions of this Agreement.

30.13 Waiver of Claims. Concessionaire hereby waives any Claim against City and City Agents for loss of anticipated profits caused by any suit or proceeding directly or indirectly attacking the validity of this Agreement or any part hereof, or by any judgment or award in any


suit or proceeding declaring this Agreement null, void or voidable, or delaying the same, or any part hereof, from being carried out.

30.14 Waiver. Every provision herein imposing an obligation upon Concessionaire is material inducement and consideration for the execution of this Agreement by City. No waiver by City of any breach of any provision of this Agreement shall be deemed for any puipose to be a waiver of any breach of any other provision hereof nor of any continuing or subsequent breach of the same provision.

30.15 Incorporation of Exhibits and Attachments. All exhibits and attachments referred to in this Agreement are intended to be and are hereby specifically made a part of this Agreement.

30.16 Right to Develop Airport. The parties hereto further acknowledge and agree that City reserves the right to further develop or improve the Airport’s terminals and all landing areas and taxiways at Airport as it may see fit, regardless of the desires or views of Concessionaire and without interference or hindrance. Concessionaire is hereby advised that ONT undergoes continual new construction and reconstruction, while accommodating heavy passenger traffic in a fast moving environment. Concessionaire, therefore, acknowledges to take such elements into account when considering the nature of the business atmosphere it is entering. Flexibility and adaptability to changing daily conditions is essential. Such conditions include the permanence or lack of permanence of CMUs and Luggage Carts and other service machine locations, passenger/customer levels, revenue fluctuations, and construction changes.

30.17 Concessionaire’s Consent to City’s Right to Amend. In the event that the FAA or its successors require modifications or changes in this Agreement as a condition precedent to the granting of funds for the improvement of the Airport, or otherwise, Concessionaire agrees to consent to such amendments, modifications, revisions, supplements or deletions of any of the terms, conditions, or requirements of this Agreement as may be reasonably required. Any expenses resulting from such amendments, modifications, revisions, supplements or deletions, shall be borne solely by Concessionaire without reimbursement by City.

30.18 Force Majeure. Neither City nor Concessionaire shall be deemed in violation of this Agreement for events of force majeure. For purposes of this Agreement, the term “Force Majeure” shall mean, in relation to the conditions that may cause a party to be temporarily, partially or wholly prevented from performing its obligations to the other party under this Agreement and not for any other purpose or for any benefit of any third party: any event beyond the reasonable control of the party claiming it, including, but not limited to, embargoes, shortages of material, acts of God, acts of public enemy (such as war, (declared or undeclared), invasion, insurrection, terrorism, riots, rebellion or sabotage), acts of a governmental authority (such as the United States Department Of Transportation, the United States Federal Aviation Administration, the United States Transportation Security Administration, the United States Environmental Protection Agency and defense authorities), fires, floods, earthquakes, hurricanes, tornadoes and other extreme weather conditions; provided, however, that strikes, boycotts, lockouts, labor disputes, labor disruptions, work stoppages or slowdowns shall not be considered an event of Force Majeure. If Concessionaire shall claim a delay due to Force Majeure, Concessionaire must notify City in writing within five (5) business days of the first occurrence of

612016-07-1 l-Smarte Carte-Luggage Cart-ONT-Contract-v5 (RT) .

any claimed event of Force Majeure. Such notice must specify in reasonable detail the cause or basis for claiming Force Majeure and the anticipated delay in Concessionaire’s performance to the extent such anticipated delay is known to Concessionaire at the time such notice to City is required. If Concessionaire fails to provide such notice within said five (5) business day period, then no Force Majeure delay shall be deemed to have occurred. Delays due to events of Force Majeure shall only be recognized to the extent that such event actually delays the performance by such party and cannot otherwise be mitigated using commercially reasonable efforts.

30.19 Days. Unless otherwise specified, "days" shall mean calendar days.

30.20 Authority to Execute. The individuals executing this Agreement personally warrant that they have full authority to execute this Agreement on behalf of the entity for which they are acting herein. Further, if Concessionaire is an entity, Concessionaire warrants that it is duly organized, validly existing and in good standing under the laws of the state of its organization, and is qualified to do business in the state in which the concession in this Agreement is located, and the persons executing this Agreement on behalf of Concessionaire have the full right and authority to execute this Agreement on behalf of Concessionaire and to bind Concessionaire without the consent or approval of any other person or entity. Concessionaire has full power, capacity, authority and legal right to execute and deliver this Agreement and to perform all of its obligations hereunder. This Agreement is a legal, valid and binding obligation of Concessionaire, enforceable in accordance with its terms.

30.21 No General Assignment, etc. Concessionaire warrants that it has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by any creditors, (iii) suffered the appointment of a receiver to take possession of all or substantially all of its assets, (iv) suffered the attachment or other judicial seizure of all or substantially all of its assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally within the last 5 years prior to the date of this Agreement or any recertification.

30.22 Understanding of Agreement. The parties hereto acknowledge that they have thoroughly read this Agreement, including all exhibits or attachments hereto, and have sought and received whatever competent advice and counsel deemed necessary for them to form a full and complete understanding of all rights and obligations herein.

30.23 Documents of Agreement. This Agreement between the parties shall consist of this Agreement, the Request For Bids and Concessionaire's Bid, all of which are incoiporated herein as if copied verbatim. In the event of any conflict between the terms of this Agreement and the terms and provisions of the Request For Bid or the Concessionaire’s Bid, this Agreement shall control.

30.24 Non-liability of Agents and Employees. No member, officer, agent, Commissioner, or employee of City shall be charged personally or held contractually liable by or to the other party under the terms or provisions of this Agreement or because of any breach thereof, or because of its or their execution or attempted execution.


30.25 Deprivation of Concessionaire's Rights. City shall not be liable to Concessionaire for any diminution or deprivation of Concessionaire's rights under this Agreement which may result from Concessionaire's obligation to comply with any and all Laws, nor shall Concessionaire be entitled to terminate the whole or any portion of the Agreement by reason thereof.

30.26 No Exclusivity. It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308 of the Federal Aviation Act [49 U.S.C. 40103 (e) and 40107(a)(4) (Public Law 103-272; 108 STAT. 1102)]

30.27 Entire Agreement and Modification/Amendment to Agreement. The provisions of this Agreement constitute the entire agreement between the parties hereto and said Agreement may not be changed or modified in any manner except by written amendment fully executed by City and Concessionaire. There are no representations, agreements or understandings, oral or written, between and among the parties relating to the subject matter contained in this Agreement which are not fully set forth herein. This is an integrated agreement. Concessionaire acknowledges that it has conducted its own due diligence investigation of its prospects for successfully operating the Luggage Cart Concession as provided in this Agreement, and has made its own determination of the accuracy of any information provided by City with respect to the financial results of any prior Concessionaire of any similar business at the Airport, that City has made no representations or warranties to Concessionaire with respect to any of such matters, and that all prior discussions between City and Concessionaire with respect to such matters are superseded by this Agreement.

[SIGNATURE PAGE FOLLOWS]

2016-07-1 l-Smarte Carte-L.uggage Cart-ONT-Contract-vS (RT)63

IN WITNESS WHEREOF, City has caused this Concession Agreement for Luggage Cart Concession services to be executed on its behalf by Chief Executive Officer, and Concessionaire has caused the same to be executed by its duly authorized officers as of the day and year first hereinabove written.

Approved as to form:

MICHAEL N. FEUER, City Attorney

Date:

CITY OF LOS ANGELES

Date:

By: fas'Deputy/Assistant City Attorney Chief Executive Officer

City of Los Angeles, Department of Airports

By:_______________________" Wei Chi

Deputy Executive Director Comptroller

SMARTE CARTE, INC., a Minnesotacorporation

/ / Signature

Print Name

Secretary

SMARTE CARTE, INC., a Minnesota corporation

Signatu:

Print Name

Print Title

2016-07-11-Smarie Carte-Luggage Cart-ONT-Contract-v5 (RT)64

Exhibit A

ONT Luggage Cart Vending Unit Locations

Number of Units LocationConsolidated Rental Car Facility

1 Inside BuildingTerminal 2

3 T2 Inside Baggage1 T2 Outside Baggage1 T2 Outside Ticketing

Terminal 2 Parking Lot1 Parking Lot

Terminal 43 T4 Inside Baggage1 T4 Outisde Baggage1 T4 Outside Ticketing

Terminal 4 Parking Lot1 Parking Lot

International Arrivals Terminal0 Inside Building

Performance BondKnow all Men by these presents:

THAT____________________________________________________________________________________as PRINCIPAL,and________________________________________________________ , a corporation organized under the laws ofthe State of__________________________________ and duly authorized to transact business under the laws of theState of California, as surety(ies), are held and firmly bound unto [COMPANY NAME], as obligee, in the just andfull sum of________________________________________________________________________________________________________________________________________________ Dollars ($________ ),

for the payment whereof well and truly to be made said principal and surety bind themselves, their heirs, executors, administrators, successors, and assigns, jointly and severally firmly by these presents.

THE CONDITION of the foregoing obligation such, that whereas, the above bounden principal is about to enter into a contract, attached hereto, and incorporated by reference herein, with said obligee to do and perform the following, to-wit:

as will more fully appear from said contract, reference to which is hereby made, and which said contract and all documents incorporated therein by reference are expressly made a part hereof.

The said surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the contract or to the work to be performed thereunder shall in anywise affect its obligations on this bond, and it does hereby waive notice of any such change, extension, alteration or addition to the terms of the contract or the work, including any Task Order or Change Order.

NOW, THEREFORE, if the above bounden principal shall well and truly perform the work contracted to be done under said contract, and shall fully and faithfully carry out and perform all of the terms, covenants and conditions of said contract upon its part to be performed, then this obligation to be null and void, otherwise to remain in full force and effect.

No right of action shall accrue under this bond to or for the use of any person other than the obligee named herein.

Signed and sealed this____day of__________________________ A.D. 20____ .

PRESIDENT

SECRETARY

By_______________________ATTORNEY-IN-FACT

Corporation, Partnership or Individual Principal must have signatures acknowledged in the appropriate blank on the reverse hereof.

If a Corporation - Corporate Seal must be impressed hereon.

EXHIBIT B

CORPORATE ACKNOWLEDGMENT

STATE OF CALIFORNIAss.

COUNTY OF LOS ANGELES

On this____day of___________________________ , 20____before me, the undersigned, a Notary Publicin and for said County, personally appeared______________________________known to me to be the__________________ President, and_________________known to me to be the__________________ Secretary of__________________the Corporation that executed the within and foregoing instrument, and known to me to be the persons who executed the within instrument on behalf of the Corporation therein named, and acknowledged to me that such corporation executed the same.

WITNESS MY HAND AND OFFICIAL SEAL.

Notary Public in and for the County of_______________ , State of California

INDIVIDUALor

PARTNERSHIP ACKNOWLEDGMENTSTATE OF CALIFORNIA

ss.COUNTY OF LOS ANGELES

On this____day of___________________________ , 20____before me, ______________a Notary Publicin and for THE said County and State, personally appeared

known to me to be *the person whose name is subscribed to*one of the partners of the partnership that executed

the within instrument and acknowledged to me *that such partnership executed the same*that.. .he executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

* Strike out words not applicable.

STATE OF

Notary Public in and for the County of________________, State of California

County of______________On this______________ day of__________________ in the year two thousandand ______________________ before, me ____________________, a NotaryPublic in and for the County of_________________________, State of residingtherein, duly commissioned and sworn, personally appeared___________________________________________ known to me to be the_____________________of___________________________________________ , the corporation thatexecuted the within instrument, and also known to me to be the person________who executed it on behalf of said corporation therein named, and__________ he_______________ acknowledged to me that such individual/partnership executedthe same.IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal atmy office in the_______________________County of___________________ ,the day and year in this certificate first above written.

Notary Public in and for the County of State of

EXHIBIT B

Payment BondKnow all Men by these presents:

THAT WE_________________________________________________________________________________________________________________________________________________________________________ , as principal, and__________________________________________________________________________________ , as surety(ies),are held and firmly bound unto____________________________________ [COMPANY NAME], in the sum of____________________________________________________________________Dollars ($__________________ )lawful money of the United States, for which, payment well and truly to be made, we bind ourselves, jointly and severally, firmly by these presents.

Signed, sealed and dated_________________________________________________________ , 20_______ .The condition of the above obligation is such that, whereas said principal has been awarded and is about to

enter into a written contract with the [COMPANY NAME] for

which contract is hereto attached and incorporated by reference herein, and to which reference is made for all particulars, and is required by said city to give this bond in connection with the execution of said contract;

Now, therefore, if said principal as contractor in said contract, or principal's subcontractor(s), fails to pay for any materials, provisions, provender or other supplies or teams used in, upon or for or about the performance of the work contracted to be done, or for any work or labor done thereon of any kind or for amounts due under the Unemployment Insurance Act with respect to such work or labor, or for any amounts required to be deducted, withheld, and paid over to the Franchise Tax Board from the wages of employees of the principal and its subcontractors pursuant to Sec. 18806 of the Revenue and Taxation Code of the State of California with respect to such work and labor, said surety(ies) will pay the same in an amount not exceeding the sum set forth above, and also in case suit is brought upon this bond, a reasonable attorney's fee to be fixed by the court. This bond shall inure to the benefit of any and all persons, companies and corporations, or their assigns, entitled to file claims under and by virtue of the applicable provisions of Division III, Part 4, Title 15 (commencing with Section No. 8000) of the Civil Code of the State of California.

WITNESS our hands this_____________ day of_________________________ , 20_________ .

PRESIDENT

SECRETARY

Surety,

Surety,

Corporation, Partnership or Individual Principal must have signatures acknowledged in the appropriate blank on the reverse hereof.

If a Corporation - Corporate Seal must be impressed hereon.

EXHIBIT C

STATE OF CALIFORNIAss.

COUNTY OF LOS ANGELES

On this____day of___________________________ , 20____ before me, the undersigned, a Notary Publicin and for said County, personally appeared______________________________

known to me to be the__________________ President, and________________known to me to be the__________________ Secretary of_________________the Corporation that executed the within and foregoing instrument, and known to me to be the persons who executed the within instrument on behalf of the Corporation therein named, and acknowledged to me that such corporation executed the same.

WITNESS MY HAND AND OFFICIAL SEAL.

CORPORATE ACKNOWLEDGMENT

Notary Public in and for the County of_______________ , State of California

INDIVIDUALor

PARTNERSHIP ACKNOWLEDGMENTSTATE OF CALIFORNIA

ss.COUNTY OF LOS ANGELES

On this____day of___________________________ , 20____ before me, ______________a Notary Publicin and for THE said County and State, personally appeared

known to me to be *the person whose name is subscribed to*one of the partners of the partnership that executed

the within instrument and acknowledged to me *that such partnership executed the same*that...he executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

Notary Public in and for the County of________________ , State of California* Strike out words not applicable.

STATE OF________________________ ss.County of______________

On this______________ day of__________________ in the year two thousandand ______________________ before, me ____________________, a NotaryPublic in and for the County of_________________________, State of residingtherein, duly commissioned and sworn, personally appeared___________________________________________ known to me to be the_____________________of___________________________________________ , the corporation thatexecuted the within instrument, and also known to me to be the person________who executed it on behalf of said corporation therein named, and__________ he_______________ acknowledged to me that such individual/partnership executedthe same.IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal atmy office in the_______________________County of___________________ ,the day and year in this certificate first above written.

Notary Public in and for the County of State of

EXHIBIT C

INSURANCE REQUIREMENTS FOR LOS ANGELES WORLD AIRPORTS

NAME: SMARTE CARTE, INC.AGREEMENT / ACTIVITY: Luggage Cart Service Agreement at ONT.LAWA DIVISION: Commercial Development Group

The insured must maintain insurance coverage at limits normally required of its type operation; however, the following coverage noted with an "X" is the minimum required and must be at least the level of the limits indicated. All limits are per occurrence unless otherwise specified.

LIMITS

(X) Workers' Compensation (Statutory)/Employer's Liability Statutory(X) Voluntary Compensation Endorsement(X) Waiver of Subrogation, specifically naming LAWA .

(Please see attached supplement)

(X) Automobile Liability - covering owned, non-owned & hired auto $1.000,000 CSL

(X) Aviation/Airport or Commercial General Liability, including the following coverage: $1,000.000(X) Premises and Operations (X) Contractual (Blanket/Schedule)(X) Independent Contractors '(X) Personal Injury(X) Products /Completed Operations(X) Damage to Premises Rented to You (minimum $1 million each occurrence)( ) Liquor Liability( ) Explosion, Collapse & Underground

(required when work involves digging, excavation, grading or use of explosive materials,)( ) Hangarkeepers Legal Liab. (At least at a limit of liability of $ 1 million)(X) Additional Insured Endorsement, specifically naming LAWA

(Please see attached supplement).

(X) Property Insurance( ) Building, including contents

All Risk/Special Form Coverage, including flood and earthquake LAWA named additional insured and loss payee

(X) Tenant improvementsAll Risk/Special Form Coverage, including flood and earthquake LAWA named loss payee

(X) Waiver of subrogation naming LAWA (Please see attached supplement)

( ) Builder's Risk InsuranceAll Risk/Special Form Coverage, including flood and earthquake LAWA named loss payeeRequired if property or building ultimately revert to City

100% Replacement Cost

100% Replacement Cost

Total project value - 100% Replacement Cost

Pollution Legal Liability*** Must meet contractual requirements

$ ***

CONTRACTOR SHALL BE HELD RESPONSIBLE FOR OWN OR HIRED EQUIPMENT AND SHALL HOLD AIRPORT HARMLESS FROM LOSS, DAMAGE OR DESTRUCTION TO SUCH EQUIPMENT. ,

INSURANCE COMPANIES WHICH DO NOT HAVE AN AMBEST RATING OF A- OR BETTER, AND HAVE A MINIMUM FINANCIAL SIZE OF AT LEAST 4, MUST BE REVIEWED FOR ACCEPTABILITY BY RISK MANAGEMENT.

EXHIBIT D

INSURANCE REQUIREMENTS FOR LOS ANGELES WORLD AIRPORTS(SUPPLEMENT)

The only evidence of insurance accepted will be either a Certificate of Insurance and/or a True and Certified copy of the policy. The following items must accompany the form of evidence provided:

• Endorsements:

1. Workers Compensation Waiver of Subrogation Endorsement(WC 04 03 06 or similar)

2. General Liability Additional Insured Endorsements(ISO Standard Endorsements)

3. Property Insurance Waiver of Subrogation Endorsement

• A typed legible name of the Authorized Representative must accompany the signature on the Certificate of Insurance and/or the True and Certified copy of the policy.

• Certificate Holder:

Los Angeles World AirportsPO Box 92216Los Angeles, CA 90009

EXHIBIT D

LOS ANGELES WORLD AIRPORTS CONTRACTOR RESPONSIBILITY PROGRAM

PLEDGE OF COMPLIANCE

The Los Angeles World Airports (LAWA) Contractor Responsibility Program (Board Resolution #21601) provides that, unless specifically exempted, LAWA contractors working under contracts for services, for purchases, for construction, and for leases, that require the Board of Airport Commissioners' approval shall comply with all applicable provisions of the LAWA Contractor Responsibility Program. Bidders and proposers are required to complete and submit this Pledge of Compliance with the bid or proposal or with an amendment of a contract subject to

1 the CRP. In addition, within 10 days of execution of any subcontract, the contractor shall submit to LAWA this Pledge of Compliance from each subcontractor who has been listed as performing work on the contract.

The contractor agrees to comply with the Contractor Responsibility Program and the following provisions:

(a) To comply with all applicable Federal, state, and local laws in the performance of the contract, Including but not limited to, laws regarding health and safety, labor and employment, wage and hours, and licensing laws which affect employees.

(b) To notify LAWA within thirty (30) calendar days after receiving notification that any ■' government agency has initiated an Investigation that may result In a finding that the

contractor Is not In compliance with paragraph (a).(c) To notify LAWA within thirty (30) calendar days of all findings by a government agency or

court of competent Jurisdiction that the contractor has violated paragraph (a).(d) To provide LAWA within thirty (30) calendar days, updated responses to the CRP

Questionnaire If any change occurs which would change any response contained within the completed CRP Questionnaire. Note: This provision does not apply to amendments of contracts not subject to the CRP and to subcontractors not required to submit a CRP Questionnaire. .

(e) To ensure that subcontractors working on the LAWA contract shall complete and sign a Pledge of Compliance attesting under penalty of perjury to compliance with paragraphs (a) through (c) herein. To submit to LAWA the completed Pledges.

(f) To notify LAWA within thjrty (30) days of becoming aware of an Investigation, violation orfinding of any applicable federal, state, or local law Involving the subcontractors in the performance of a LAWA contract, .

(g) To cooperate fully with LAWA during an Investigation and to respond to request(s) for Information within ten (10) working days from the date of the Notice to Respond.

Failure to sign and submit this form to LAWA with the bid/proposal may make the bld/proposal

LuflAQQl, OtkJrV GJforfJDSStUn -PnkLriQ j jMirpDfi-

CRP Ptedge.dac

EXHIBIT EContractor Responsibility Program (CRP)

Pledge of Compliance

LOS ANGELES WORLD AIRPORTS

CONTRACTOR RESPONSIBILITY PROGRAM

RULES AND REGULATIONS

Effective date: August 23, 2011

Procurement Services Division 7301 World Way West, 4th Floor Los Angeles, CA 90045 (424) 646-5380 (424) 646-9262 (Fax)



j

CONTENTS

A. DEFINITIONS.............................................................................................................................. 3

B. SUBMISSION OF CRP QUESTIONNAIRES...........................................................................5

C. LAWA REVIEW OF SUBMITTED CRP QUESTIONNAIRES................................................6

D. AWARD AND EXECUTION OF CONTRACTS.........................................................................7

E. CONTRACT AMENDMENTS.................................................................................................... 9

F. CONTRACTOR NOTIFICATION OF INVESTIGATIONS AND UPDATE OFINFORMATION............................................................................................................................9

G. LAWA INVESTIGATION........................................................................................................... 11

H. VIOLATIONS OF THE CRP OR THESE RULES AND REGULATIONS...........................12

I. NON-RESPONSIBILITY HEARING............................................... 12

J. NON-RESPONSIBILITY SANCTIONS ..................................................................................14

K. EXEMPTIONS............................................................................................................................ 14

L. EFFECTIVE DATE OF CRP RULES AND REGULATIONS............................................... 16

M. CONSISTENCY WITH FEDERAL AND STATE LAW.......................................................... 16

N. SEVERABILITY..........................................................................................................................16



These Rules and Regulations are promulgated pursuant to Board Resolution #21601, the Los Angeles World Airports Contractor Responsibility Program (CRP). Each Requesting LAWA Division shall cooperate to the fullest extent with the Executive Director in the administration of the CRP. The Executive Director may amend these Rules and Regulations from time to time as required for the implementation of the CRP.

A. DEFINITIONS

1. Adoption of CRP definitions: For purposes of these Rules and Regulations, the definitions set forth in the Board Resolution are incorporated herein by reference, and include the following:

a. Boardb. Executive Directorc. Los Angeles World Airports (LAWA)d. "Contract" means any agreement for the performance of any work or service, the

provision of any goods, equipment, materials or supplies, or the rendition of any service to LAWA or to the public or the grant of a public lease, which is awarded or entered into by or on behalf of LAWA. These Rules and Regulations shall apply to the following contracts:

(1) Contracts for services that require Board approval.(2) Contracts for purchasing goods and products that require Board approval.(3) Construction contracts that require Board approval.

e. Contractorf. Subcontractorg. Bidderh. Bidi. Invitation for Bid (“IFB”)j. Public Lease

2. New Definitions:

a. “Awarding Authority” means either the Executive Director or the Board of Airport Commissioners (“Board”) or the Board's designee.

b. “CRP Questionnaire" means the set of questions developed by Procurement Services Division (PSD) that will assist LAWA in determining a bidder or contractor's responsibility. Information solicited from the CRP Questionnaire may include but is not limited to: ownership and name changes, financial resources and responsibility, satisfactory performance of other contracts, satisfactory record of compliance with relevant laws and regulations, and satisfactory record of business integrity. PSD may amend the CRP Questionnaire from time to time.



c. “CRP Pledge of Compliance" means the CRP Pledge developed by PSD. The CRPRules and Regulations may be updated from time to time by PSD. The CRP Pledgeshall require contractors to sign under penalty of perjury that the contractor will:

(1) Comply with all applicable Federal, State, and local laws and regulations during the performance of the contract, including but not limited to laws regarding health and safety, labor and employment, wage and hour, and licensing laws which affect employees.

(2) Notify LAWA within 30 calendar days after receiving notification that any government agency has initiated an investigation that may result in a finding that the contractor did not comply with subparagraph 2(c)(1) above in the performance of the contract.

(3) Notify LAWA within 30 calendar days of all findings by a government agency or court of competent jurisdiction that the contractor has violated subparagraph 2(c)(1) above in the performance of the contract.

(4) Provide LAWA within thirty (30) calendar days updated responses to the CRP Questionnaire if any change occurs which would change any response contained within the completed CRP Questionnaire. Note: This provision does not apply to amendments of contracts not subject to the CRP and to subcontractors not required to submit a Questionnaire.

(5) Ensure that subcontractors working on the LAWA contract shall complete, sign and submit a CRP Pledge of Compliance attesting under penalty of perjury to compliance with paragraphs 2(c)(1) through (4).

(6) Notify LAWA within thirty (30) days of becoming aware of an investigation, violation or finding of any applicable Federal, State, or local law involving the subcontractors in the performance of a LAWA contract.

(7) Cooperate fully with LAWA during an investigation and to respond to request(s) for information within ten (10) working days from the date of the Notice to Respond.

d. “Requesting Division” means the LAWA division(s) which issued the Request ForBids (“RFB"), Request For Proposal (“RFP”) or Request for Qualifications (“RFQ").

e. “Responsibility” means possessing the necessary “trustworthiness" and “quality,fitness and capacity" to perform the work set forth in the contract.

B. SUBMISSION OF CRP QUESTIONNAIRES

1. Issuance of Invitation for Bids (IFB): These include Request for Bids (RFB), Request for Proposals (RFP), and Request for Qualifications (RFQ). Unless otherwise exempt from the CRP, if a proposed contract meets the definition of a contract subject to the CRP as



defined in the Resolution and these Rules and Regulations, LAWA shall include in the IFB:

a. Language informing potential bidders of the CRP;b. The CRP Questionnaire that bidders submit with their bid; andc. The CRP Pledge of Compliance that bidders submit with their bid.

2. Submission of CRP Questionnaires with Bids:

a. All bid and proposal submissions are required to contain a completed and signed CRP Questionnaire and a signed CRP Pledge of Compliance.

b. Failure to submit a CRP Questionnaire and a CRP Pledge of Compliance in accordance with the IFB procedures may make the bidder non-responsive and disqualified from the bidding process.

c. Submitted CRP Questionnaires and CRP Pledge of Compliance become public records, and information contained therein will be available for public review, except to the extent that such information is exempt from disclosure pursuant to applicable law.

3. Use of a non-competitive process to procure the proposed contract: If a noncompetitive process is used by LAWA Divisions to procure the proposed contract, the proposed contractor is required to submit the completed CRP Questionnaire and a signed CRP Pledge of Compliance to LAWA for determination of contractor responsibility prior to execution of the contract.

4. Subcontractors: The list of subcontractors shall be submitted with the bid and will be made available for public review along with the bidder’s Questionnaire. For construction contracts, bidders must list a subcontractor proposed to be used on the City contract if the subcontractor will be performing work on the construction contract in an amount in excess of $10,000 or in excess of one-half of one percent of the total bid amount, whichever is greater. For service contracts, bidders must list subcontractors as required by the IFB.



C. LAWA REVIEW OF SUBMITTED CRP QUESTIONNAIRES

1. Departmental Review of submitted bids: As part of the determination of a bidder’s responsiveness, PSD will review the bid submissions to determine whether a completed CRP Questionnaire, signed under penalty of perjury, has been included with the bid. If a completed Questionnaire has not been included with the bid as required by the IFB procedures, the bidder may be deemed to be non-responsive and may be disqualified from the bidding process.

2. Posting of CRP Questionnaires and Subcontractor List: Requesting Divisions will forward to PSD the completed CRP Questionnaires and subcontractor list(s), if any, submitted by the responsive bidders to make available for public review as follows:

a. If a contract is to be awarded pursuant to a competitive bid process, the CRP Questionnaires for the three lowest responsive bidders and their list of proposed subcontractors, if any, will be forwarded to PSD to make them available for public review for a minimum period of 14 calendar days.

b. If a contract is to be awarded pursuant to a proposal (RFP) or qualifications (RFQ) and award is not based on the lowest submitted bid price, the CRP Questionnaires for the short-listed proposers and their list of proposed subcontractors, if any, will be forwarded to PSD to make them available for public review for a minimum period of 14 calendar days. If no short-listing procedure is used, the CRP Questionnaire for the prospective contractor shall be made available for public review for a minimum period of 14 calendar days.

c. If a contract is to be awarded to a Sole Source, the CRP Questionnaire for the proposed contractor and their list of proposed subcontractors, if any, will be forwarded to PSD to make it available for public review for a period of 14 calendar days.

d. No contract shall be awarded to any bidder until at least 14 calendar days after the CRP Questionnaire has been made available for public review. If administrative or technical errors prevent or delay the posting of the CRP Questionnaire, the posting period will be extended by the amount of time that the CRP Questionnaire was not available for public review.

e. The CRP Questionnaire of the bidder/proposer awarded the contract will be retained by the Requesting Division as part of the contract file. The CRP Questionnaires for the bidders/proposers not awarded the contract will be retained in the customary manner by the Requesting Division.

3. Claims Resulting from Public Review:

a. Claims regarding a bidder or contractor’s responsibility should be submitted to PSD in writing. However, PSD may investigate a claim regarding a bidder’s or a contractor’s responsibility, whether or not it is submitted in writing, if PSD in its discretion



determines that the claim calls into question the bidder’s, the proposer’s or the contractor's responsibility.

b. If PSD receives information which calls into question a bidder’s responsibility, and the information was received before the contract has been executed, PSD shall:

(1) Notify the Requesting Division in writing that no contract shall be awarded until PSD has completed investigation into the matter.

(2) Investigate the matter as required in Section G, “LAWA INVESTIGATION” to determine its validity.

(3) Upon completion of the investigation, PSD shall notify the Requesting Division and the Awarding Authority in writing of the result of the investigation.

(4) No contract may be awarded to any bidder until after the investigation has been completed and the Requesting Division and the Awarding Authority have received written notification that the investigation has been completed.

(5) Findings from the PSD investigation received by the Awarding Authority will be considered by the Awarding Authority as part of the determination of the bidder’s responsibility.

c. If PSD receives written information that calls into question a contractor’s responsibility, and the information was received after the contract has been executed, PSD shall investigate the matter as required in Section G, LAWA INVESTIGATION.

D. AWARD AND EXECUTION OF CONTRACTS

1. Departmental Determination of Responsibility and Award of Contract:

a. Requesting Division and the Awarding Authority shall determine whether a bidder/contractor is a responsible bidder, proposer or contractor with the necessary trustworthiness, quality, fitness and capacity to perform the work set forth in the proposed contract by considering the following:

(1) Information contained in the CRP Questionnaire;(2) Information and documentation from PSD's investigation;(3) Information regarding the bidder’s, proposer’s or contractor’s past performance

that may be contained in the City of Los Angeles’ Contractor Evaluation Database.

(4) Information that may be available from any compliance or regulatory governmental agency, and

(5) Any other reliable information that may be available, including but not limited to information from any individual or any other governmental agency.



b. The Board may award and the Executive Director may execute a contract with abidder or proposer only if:

(1) The bidder’s or proposer's CRP Questionnaire has been made available for public review for at least 14 calendar days unless otherwise exempted from the posting requirement by the CRP;

(2) The bidder or proposer is not being investigated by PSD pursuant to the CRP;(3) The bidder or proposer has not been found to be a non-responsible

bidder/proposer pursuant to the CRP;(4) The bidder or proposer does not appear on any City list of debarred bidders or

contractors; and(5) The bidder or proposer has met all other applicable City requirements.

2. Submission of Pledge of Compliance:

a. Unless otherwise exempt from the CRP, all bid/proposal submissions (RFBs, RFPs and RFQs) are required to contain a Pledge of Compliance with the CRP signed under penalty of perjury. Failure to submit a CRP Pledge of Compliance with the bid/proposal may make the bidder non-responsive and disqualified from the bidding process.

b. Within 10 calendar days of execution of a contract with LAWA, the contractor shall submit to LAWA a signed CRP Pledge of Compliance from each subcontractor listed as performing work on the contract.

3. Subcontractor Responsibility:

a. Contractors shall ensure that their subcontractors meet the criteria for responsibility set forth in the CRP and these Rules and Regulations unless the subcontract is not subject to the CRP.

b. Contractors shall ensure that subcontractors working on the LAWA agreement shall complete and submit a signed CRP Pledge of Compliance.

c. Contractors shall not use in any capacity any subcontractor that has been determined or found to be a non-responsible contractor by LAWA or the City.

d. Subject to approval by the Requesting Division, contractors may substitute a non- responsible subcontractor with another, responsible subcontractor with no changes in bid amounts.



4. Execution of Contracts:

a. Unless exempt from the CRP, all contracts shall contain language obligating the contractor to comply with the CRP.

b. No contract may be executed unless:

(1) The proposed contractor has submitted a signed Pledge of Compliance with the CRP.

(2) The proposed contractor's CRP Questionnaire, unless otherwise exempt, has been made available for public review for at least 14 calendar days in accordance with these Rules and Regulations.

E. CONTRACT AMENDMENTS

1. Compliance with the CRP, except for the requirement to submit a CRP Questionnaire, is required in contract amendments if the initial contract was not subject to the CRP, but the total term and amount of the contract, inclusive of all amendments, would make the contract subject to the CRP.

a. A contractor subject to the CRP because of an amendment shall submit a CRP Pledge of Compliance to the Requesting Division before the contract amendment can be executed.

b. Unless exempt from the CRP, all contract amendments shall contain contract language obligating the contractor to comply with the CRP.

F. CONTRACTOR NOTIFICATION OF INVESTIGATIONS AND UPDATE OF INFORMATION

1. Notification of Investigations: Contractors shall:

a. Notify the Requesting Division and PSD within 30 calendar days of receiving notice of any findings by a government agency or court of competent jurisdiction that the contractor violated any applicable Federal, State, or local law in the performance of a LAWA, City of Los Angeles, County of Los Angeles, State of California, Federal Government or other government contract, including but not limited to laws regarding health and safety, labor and employment, wage and hour, and licensing laws which affect employees.

b. Notify the Requesting Division and PSD within 30 calendar days of becoming aware of a violation or finding of violation of any applicable federal, state, or local law involving its subcontractors or sub-sub-contractors at any level in the performance of a LAWA contract.

2. Update of CRP Questionnaire Information:



a. Updates of information contained in the contractor’s responses to the CRP Questionnaire shall be submitted to the Requesting Division and PSD within 30 days of any changes to the responses if the change would affect the contractor’s responsibility or ability to continue performing the contract.

b. PSD or the Requesting Division shall determine whether a contractor in a specific situation should have provided information or updated information.

(1) If PSD or the Requesting Division becomes aware of new information concerning a contractor and determines that the contractor should have provided information or updated LAWA with such information, but the contractor has not done so, PSD shall issue a written notice to the contractor requiring the contractor to submit the required information within 10 calendar days.

(2) If PSD or the Requesting Division becomes aware of new information concerning a subcontractor and determines that the subcontractor should have provided information or updated LAWA of such information, but the subcontractor has not done so, PSD shall issue a written notice to the contractor requiring the subcontractor to submit the required information within 10 calendar days.

c. Contractor's failure to provide information or updated information when required by LAWA, the CRP or these Rules and Regulations may be considered a material breach of the contract, and, additionally, may result in the initiation of a non-responsibility hearing pursuant to Section I of these Rules and Regulations.

3. Contractors shall ensure that subcontractors provide information and updates.Contractors shall ensure that subcontractors performing work on their LAWA contract abide by these same updating requirements, including the requirement to:

a. Notify the Requesting Division and PSD within 30 calendar days after receiving notification that any government agency has initiated an investigation which may result in a finding that the subcontractor did not comply with any applicable Federal, State, or local law in the performance of the LAWA or City contract, including but not limited to laws regarding health and safety, labor and employment, wage and hour, and licensing laws which affect employees

b. Notify the Requesting Division and PSD within 30 calendar days of all findings by a government agency or court of competent jurisdiction that the subcontractor violated any applicable Federal, State, or local law in the performance of a LAWA or City of Los Angeles contract, including but not limited to laws regarding health and safety, labor and employment, wage and hour, and licensing laws which affect employees.

4. Submission of CRP Questionnaires and Updates of CRP Questionnaire Is Not Applicable to Subcontractors: The requirement that contractors submit to LAWA CRP Questionnaires and updates to the CRP Questionnaire responses does not apply to subcontractors.



G. LAWA INVESTIGATION

1. Reporting of Alleged Violations: Allegations of violations of the CRP or these Rules and Regulations shall be reported to PSD. Complaints regarding a bidder’s, proposer’s or contractor's responsibility should be submitted to PSD in writing. However, PSD may investigate any claim or complaint regarding a bidder's, proposer’s or a contractor's responsibility, whether or not it is submitted in writing. Whether based on a written complaint or otherwise, PSD shall be responsible for investigating such alleged violations.

2. Process:

a. Upon receipt of a complaint or upon initiation of an investigation, PSD shall notify the Requesting Division, the Awarding Authority and the bidder, proposer or contractor in writing that an investigation has been initiated.

b. The bidder, proposer or contractor shall cooperate fully with PSD in providing information. If the bidder/proposer or contractor fails to cooperate with PSD’s investigation or fails to timely respond to PSD’s requests for information, LAWA may initiate a non-responsibility hearing as set forth in Section I of these Rules and Regulations. A contractor's failure to cooperate may be deemed a material breach of the contract, and the City may pursue all available remedies.

c. To the extent permissible, PSD shall maintain the identity of the complainant, if any, confidential.

d. Upon completion of the investigation, PSD shall prepare a written report of the findings and notify the Requesting Division, the Awarding Authority and the bidder, proposer or contractor of the results.

3. Results of Investigation:

a. When an investigation is completed before the contract is awarded, PSD shall notify the Requesting Division and the Awarding Authority of the results, and Requesting Division and the Awarding Authority will consider the information as part of the determination of a bidder’s responsibility during the bid/proposal review process.



b. When an investigation is completed after the execution of a contract:

(1) If violations of the CRP are found, PSD shall notify the Requesting Division and contractor of the violation and require the contractor to make corrections or take reasonable measures within 10 calendar days.

(2) If the contractor fails to make corrections as required, PSD shall notify the Requesting Division and the Awarding Authority and may recommend that the Awarding Authority:(i) Terminate the contract.(ii) Initiate a hearing to declare the contractor a non-responsible contractor.

H. VIOLATIONS OF THE CRP OR THESE RULES AND REGULATIONS

1. Violations of the CRP or of these Rules and Regulations may be considered a material breach of the contract and may entitle LAWA or the City to terminate the contract.

2. Alleged violations of the CRP or of these Rules and Regulations shall be reported to the PSD which will investigate all such complaints.

3. When a violation of the CRP or of these Rules and Regulations is found, PSD shall notify the contractor and the Awarding Authority of the violation. PSD shall require the contractor to correct the violation within 10 calendar days. Failure to correct violations or take reasonable measures to correct violations within 10 calendar days may result in PSD:

a. Recommending that the Awarding Authority declare a material breach of the contract and that the Awarding Authority exercise all contractual and legal remedies available, including but not limited to termination of the contract, and/or

b. Recommending that the Awarding Authority declare the contractor a non- responsible contractor by initiating, within 30 calendar days or as soon as practicable, a non-responsibility hearing in accordance with Section I of these Rules and Regulations.

I. NON-RESPONSIBILITY HEARING

1. The process of declaring a bidder or contractor a non-responsible bidder or contractor shall be initiated by the Awarding Authority after consultation with the City Attorney's Office.

2. Before a bidder, proposer or contractor may be declared non-responsible, the bidder, proposer or contractor shall be notified of the proposed determination of nonresponsibility and provided with an opportunity fora hearing.



3. The Awarding Authority or the Executive Director's designee shall preside over the nonresponsibility hearing and shall provide the bidder, proposer or contractor with thefollowing:

a. The bidder, proposer or contractor shall be provided with written Notice of intent to declare the bidder, proposer or contractor non-responsible ("Notice”) which shall state that the Awarding Authority intends to declare the bidder, proposer or contractor a non-responsible bidder or contractor.

b. The Notice shall provide the bidder, proposer or contractor with the following information:

(1) That the Awarding Authority intends to declare the bidder or contractor a non- responsible bidder, proposer or contractor.

(2) A summary of the information upon which the Awarding Authority is relying.(3) That the bidder, proposer or contractor has a right to respond to the information

by requesting a hearing to rebut adverse information and to present evidence of its necessary trustworthiness, quality, fitness and capacity to perform the work required under the contract.

(4) That the bidder, proposer or contractor must exercise the right to a hearing by submitting to the Awarding Authority a written request for a hearing within 10 working days of the date of the Notice.

(5) That failure to submit a written request for hearing within 10 working days of the date of the Notice shall be considered a waiver of the right to a hearing that allows the Awarding Authority to proceed with the determination of nonresponsibility.

c. If the bidder or contractor submits a written request for a hearing, the hearing may be held by the Awarding Authority for recommendation to the Board, which shall make the final decision.

d. The hearing must allow the bidder, proposer or contractor an opportunity to address the issues contained in the Notice of Intent to declare the bidder, proposer or contractor non-responsible.

e. The Awarding Authority may determine that the bidder, proposer or contractor:(1) Does not possess the necessary trustworthiness, quality, fitness, or capacity to

perform the work set forth in the proposed contract, should be declared a non- responsible bidder, proposer or contractor, and recommend to the Board invocation of the remedies set forth in Section J of these Rules and Regulations.

(2) Should not be declared a non-responsible bidder or contractor.

f. The Board's determination shall be final and constitute exhaustion of administrative remedies.

g. The Board's final decision shall be in writing and shall be provided to the bidder,



proposer or contractor, the Requesting Division and to PSD. If the bidder, proposer or contractor is declared to be non-responsible, a copy of the final decision shall also be provided to the CAO.

J. NON-RESPONSIBILITY SANCTIONS

1. A bidder/proposer found non-responsible by LAWA shall be disqualified from:a. award of the proposed contract or,b. participating, in any way, in the proposed contract.

Such non-responsible bidder or proposer shall not perform any work in the proposed contract, whether as a prime contractor, a subcontractor, a partner in a partnership, a participant in a joint venture, a member of a consortium or in any other capacity.

2. An existing contractor found non-responsible by LAWA may be declared to have a material breach of contract, and LAWA may exercise its contractual and legal remedies thereunder, which are to include, but are not limited to termination of the contract.

3. Upon final determination of a bidder, proposer or contractor as non-responsible, PSD shall provide the Requesting Division and the bidder, proposer or contractor with a written notice summarizing the Awarding Authority's findings and sanctions.

4. PSD shall maintain a listing of bidders/proposers and contractors who have been found non-responsible by LAWA pursuant to the CRP.

K. EXEMPTIONS

1. Categorical Exemption: The following types of contracts are categorically exempt from the CRP and these Rules and Regulations:

a. Contracts with a governmental entity such as the United States of America, the State of California, a county, city or public agency of such entities, or a public or quasi-public corporation located therein and declared by law to have such status.

b. Contracts for the investment of trust moneys or agreements relating to the management of trust assets.

c. Banking contracts entered into by the Treasurer pursuant to California Government Code Section 53630 et seq.

Board approval required for CRP Exemptions: The following types of contracts are exempt from the requirement to submit a Questionnaire but remain subject to the requirement that the contractor submit a Pledge of Compliance and notify the Awarding Authority within 30 days of any information regarding investigations or the results of investigations by any governmental agency into the contractor's compliance with applicable laws.



a. Contracts awarded on the basis of exigent circumstances when the Awarding Authority finds the City would suffer a financial loss or that City operations would be adversely impacted.(1) This exemption is subject to approval by PSD.(2) The Awarding Authority shall submit a request to PSD for waiver along with

written certification that the required conditions exist.(3) No contract may be exempted under this provision unless PSD has granted

written approval of the waiver.

b. Contracts where the goods or services are proprietary or available from only one source.(1) This exemption is subject to approvalby PSD.(2) The Awarding Authority shall submit a request to PSD for waiver along with

written certification that the required conditions exist.(3) No contract may be exempted under this provision unless PSD has granted

written approval of the waiver.

c. Contracts awarded in accordance with Charter Section 371(e)(5). The Awarding Authority must certify in writing that award is based on urgent necessity in accordance with Charter Section 371(e)(5).

d. Contracts entered into based on, Charter Section 371(e)(6), (7) or (8). The Awarding Authority must certify in writing that the contract is entered into in accordance with Charter Section 371(e)(6), (7) or (8).



L. EFFECTIVE DATE OF RULES AND REGULATIONS

1. These Rules and Regulations apply to IFB's issued after the Executive Director has approved these Rules and Regulations.

2. These Rules and Regulations apply to contracts entered into by LAWA after the Executive Director has approved these Rules and Regulations.

3. Contracts amended after these Rules and Regulations are approved by the Executive Director will become subject to CRP and these Rules and Regulations if they meet definitions contained in the CRP and these Rules and Regulations.

M. CONSISTENCY WITH FEDERAL AND STATE LAW

The CRP and these Rules and Regulations do not apply in instances where application would be prohibited by Federal and State law or where the application would violate or be inconsistent with the terms and conditions or a grant or contract with the Federal or State agency.

N. SEVERABILITY

If any provision of the CRP or these Rules and Regulations are declared legally invalid by any court of competent jurisdiction, the remaining provisions remain in full force and effect.

