HomeMy WebLinkAbout7/1/2011 - AGREEMENTS v = N6 I
CONTINUATION
CERTIFICATE
BERKLEY INSURANCE COMPANY ,Surety upon
a certain Bond No. 0159385
dated effective 07/01/2011
(MONTH-DAY-YEAR)
on behalf of AVIS BUDGET CAR RENTAL, LLC
(PRINCIPAL)
and in favor of CITY OF PALM SPRINGS.
(OBLIGEE)
does hereby continue said bond in force for the further period
beginning on 7/1/2019
(MONTH-DAY-YEAR)
and ending on 6/30/2020
(MONTH-DAY-YEAR)
Amount of bond $540,000.00
Description of bond concession at Palm Springs International Airport
Premium: $ 3,510.00
PROVIDED: That this continuation certificate does not create a new obligation and is executed upon the express condition and provision
that the Surety's liability under said bond and this and all Continuation Certificates issued in connection therewith shall not be cumulative
and that the said Surety's aggregate liability under said bond and this and all such Continuation Certificates on account of all defaults
committed during the period (regardless of the number of years) said bond had been and shall be in force, shall not in any event exceed
the amount of said bond as hereinbefore set forth.
Signed and dated on May 20,2019
(MONTH-DAY-YEAR)
BERKLEYI URANCE GOMPANY
By
ORNEY-IWFACT Sandra M.Winsted
• No.BI-7845k
POWER OF ATTORNEY
BERKLEY INSURANCE COMPANY
WILMINGTON,DELAWARE
NOTICE: The warning found elsewhere in this Power of Attorney affects the validity thereof. Please review carefully.
o KNOW ALL MEN BY THESE PRESENTS, that BERKLEY INSURANCE COMPANY (the "Company"), a corporation duly
cc organized and existing under the laws of the State of Delaware,having its principal office in Greenwich,CT,has made,constituted
and appointed, and does by these presents make, constitute and appoint: Sandra M. Winsted; Susan A. Welsh; Christopher P.
Troha; Michelle D. Krebs; Judith A. Lucky-Eftimov; Christina L. Sandoval; Derek J. Elston; Sandra M. Nowak; Aerie
CZ
?? Walton;Ann Mullins;or Bartlomiej Siepierski ofAon Risk Services Central,Inc. of Chicago,IL its true and lawful Attorney-in-
Fact, to sign its name as surety only as delineated below and to execute, seal, acknowledge and deliver any and all bonds and
CZ .� undertakings, with the exception of Financial Guaranty Insurance,providing that no single obligation shall exceed One Hundred
Million and 00/100 U.S. Dollars (U.S.$100,000,000.00), to the same extent as if such bonds had been duly executed and
acknowledged by the regularly elected officers of the Company at its principal office in their own proper persons.
b This Power of Attorney shall be construed and enforced in accordance with, and governed by, the laws of the State of Delaware,
•o without giving effect to the principles of conflicts of laws thereof. This Power of Attorney is granted pursuant to the following
o resolutions which were duly and validly adopted at a meeting of the Board of Directors of the Company held on January 25,2010:
a�
o c RESOLVED, that, with respect to the Surety business written by Berkley Surety, the Chairman of the Board, Chief
Executive Officer, President or any Vice President of the Company, in conjunction with the Secretary or any Assistant
4.
o Secretary are hereby authorized to execute powers of attorney authorizing and qualifying the attorney-in-fact named therein
c to execute bonds, undertakings, recognizances, or other suretyship obligations on behalf of the Company, and to affix the
o c corporate seal of the Company to powers of attorney executed pursuant hereto; and said officers may remove any such
attomey-in-fact and revoke any power of attorney previously granted; and further
wRESOLVED, that such power of attorney limits the acts of those named therein to the bonds, undertakings, recognizances,
or other suretyship obligations specifically named therein, and they have no authority to bind the Company except in the
> manner and to the extent therein stated;and further
Z 7� RESOLVED, that such power of attorney revokes all previous powers issued on behalf of the attorney-in-fact named; and
o by further
.In'•� RESOLVED, that the signature of any authorized officer and the seal of the Company may be affixed by facsimile to any
3 power of attorney or certification thereof authorizing the execution and delivery of any bond, undertaking, recognizance, or
other suretyship obligation of the Company; and such signature and seal when so used shall have the same force and effect as
though manually affixed. The Company may continue to use for the purposes herein stated the facsimile signature of any
-n r- person or persons who shall have been such officer or officers of the Company,notwithstanding the fact that they may have
ceased to be such at the time when such instruments shall be issued.
o 0 IN WITNESS WHEREOF, the Comp Y has caus these p esents.to be signed and attested by its appropriate officers and its
corporate seal hereunto affixed this day of ' ,2018.
CZ
Attest: Berkle Insurance Company
o (Seal) I By By
o U) Ira S.lCederman e e after
b
Executive Vice President&Secretary e o President
a - WARNING:,THIS POWER INVALID IF NOT PRINTED ON BLUE"BERKLEY"SECURITY PAPER.
7) STATE OF CONNECTICUT)
0
N O ) ss:
o COUNTY OF FAIRFIELD ) Ilk—
Sworn to before me, a Notary Public in the State of Connecticut, this day of , 2018,by Ira S. Lederman and
Z as
Jeffrey M. Hafter who are sworn to me to be the Executive Vice President d Sec tary, and t e Senior Vice President,
respectively,of Berkley Insurance Company. MARIA C R B PUBLIC
NOTARY PUBLICIC
CONNECTICUT
WCOMMISSION EXPIRES
ZAPRIL 30.2018 otary Public, State of Connecticut
z CERTIFICATE
d I,the undersigned,Assistant Secretary of BERKLEY INSURANCE COMPANY,DO HEREBY CERTIFY that the foregoing is a
3 y true, correct and complete copy of the original Power of Attorney; that said Power of Attorney has not been revoked or rescinded
and that the authority of the Attorney-in-Fact set forth therein, who executed the bond or undertaking to which this Power of
Attorney is attached,is in full force and effect as of this date. '`
Given under my hand and seal of the Company,this QC) day of P7
(Seal)
Vincent R Forte
Please verify the authenticity of the instrument attached to this Power
by:
Toll-Free Telephone: (800) 456-5486; or
Electronic Mail: BSGinguiry@berkleysurety.com
Any written notices, inquiries, claims or demands to the Surety on the bond
attached to this Power should be directed to:
Berkley Surety
412 Mount Kemble Ave.
Suite 310N
Morristown, NJ 07960
Attention: Surety Claims Department
Or
Email: BSGClaim@berkieysurety.com
Please include with all communications the bond number and the name of the
principal on the bond. Where a claim is being asserted, please set forth generally
the basis of the claim. In the case of a payment or performance bond, please also
identify the project to which the bond pertains.
Berkley Surety is a member company of W. R. Berkley Corporation that
underwrites surety business on behalf of Berkley Insurance Company, Berkley
Regional Insurance Company and Carolina Casualty Insurance Company.
ACKNOWLEDGEMENT BY SURETY
STATE OF ILLINOIS
COUNTY OF COOK
On this 201 day of May, 2019 before me, Judi Lucky-Eftimov, a Notary
Public, within and for said County and State, personally appeared
Sandra M. Winsted to me personally known to be the Attorney-in-Fact of
and for Berkley Insurance Company and acknowledged that she executed
the said instrument as the free act and deed of said Company.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal, at my office in the aforesaid County, the day and year in this
certificate first above written.
V`V
44Publ "f
h�State of IllinoisOFFICIAL SEAa000 �� KYEFT
NOTARY UBL CIUDI CS q «"+F.��' .
Y COMMIS E���,"— .,ILUNOIS
t�02/21/2020
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ARYLIN.OIS2112020
X
AMENDMENT NO. 3 TO LEASE A6110
AVIS BUDGET CAR RENTAL, LLC
D/B/A AVIS RENT A CAR SYSTEM, LLC AND BUDGET RENT A CAR SYSTEM, INC
OPERATING AND LEASE AGREEMENT
FOR OPERATION OF A CAR RENTAL CONCESSION
AT PALM SPRINGS INTERNATIONAL AIRPORT
THIS AMENDMENT NO. 3 TO THAT CERTAIN NON-EXCLUSIVE
OPERATING AND LEASE AGREEMENT NO. 6110, ("Agreement"), is made and
entered into this 21st day of June, 2017, by and between the CITY OF PALM
SPRINGS, a California charter city and municipal corporation, ("City"), and AVIS
BUDGET CAR RENTAL, LLC D/B/A AVIS RENT A CAR SYSTEM, LLC AND
BUDGET RENT A CAR SYSTEM, INC., a Delaware limited liability company,
("Tenant"), having its usual place of business at the Palm Springs International Airport,
3400 E. Tahquitz Canyon Way, Palm Springs, California 92262, and a permanent
mailing address at 6 Sylvan Way, Parsippany, New Jersey 07054. City and Tenant
may hereinafter be referred to individually as a "Party" and collectively as "Parties".
RECITALS
WHEREAS, effective July 1, 2011, City and Tenant entered into the Agreement
for Tenant's lease and operation at Palm Springs International Airport ("Airport"), as
more specifically described in the Agreement; and
WHEREAS, effective July 1, 2014, City and Tenant entered into that certain
Amendment No. 1 to extend the term from July 1, 2014, through June 30, 2017; and
WHEREAS, effective January 1, 2016, City and Tenant entered into that certain
Amendment No. 2 to seasonally increase leased counter space for 2016 and 2017;
and
WHEREAS, the Parties wish to amend the Agreement to extend the term by
one year through June 30, 2018, subject to two additional one year optional
extensions to be exercised at the City's sole discretion, and to increase certain fixed
rent charges as specified in the Agreement, as more specifically described herein this
Amendment No. 3.
AGREEMENT
NOW THEREFORE, in consideration of the City's covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City and Tenant mutually agree as follows:
t
Premises: Each rental car agency shall retain the existing rental
location for customer ticketing and transactions along with
vehicle maintenance buildings and adjacent vehicle
storage. Ready and return car spaces will be subject to
existing terms and conditions of the Lease Agreement.
Term: One year, commencing on the Effective Date July 1, 2017,
through June 30, 2018.
Extension Option: Two (2), one (1) year options available at the discretion of
the City.
Early Lease Termination:The tenant is advised that the Airport is planning to
construct a new rental car center or to substantially
renovate the existing rental car center, and such
construction or renovation will impact the Airport's available
leased areas used in conjunction with the rental car
facilities. The City Manager, in his sole discretion, has the
authority to terminate the Lease during the term or any
extension option year if (a) the construction of the new
rental car center is substantially complete prior to June 30,
2020, or (b) the rental car facilities renovations require a
relocation of the Tenants. In the event the City Manager
exercises this early termination, the Airport shall meet and
confer with representatives from each rental car
concession and provide Tenant a six-month written notice
of the early termination and a transition plan for
comparable space to conduct the rental car concession
services.
Rental Rate Adjustment: Commencing for the term of this AMENDMENT NO. 3 to
the Agreement:
Counter Square Footage: 547 (+130 s.f. seasonal)
Services Facilities Square Footage: 72,921
Ready Return Spaces: 91
Effective July 1, 2017, the annual rent shall be adjusted as
indicated in the following table:
Effective Terminal Service Ready Overflow
Dates Rent Facility Spaces Spaces
Effective $46.70 / SF $0.87 / SF $1,400 / space $1.50 / space
July 1, 2017
Effective $55.88 / SF $1.04 / SF $1,675.25/space $1.79 / space
2
August 1, 2017
Effective $76.76 / SF $1.43 / SF $2,301.11/space $2.47 / space
Januaryl, 2018
Effective $65.55 / SF $1.22 / SF $1,965.24 / $2.11 / space
July 1, 2018 space
Covenant Against Discrimination:
In connection with its performance under this Agreement,
Tenant shall not discriminate against any employee or
applicant for employment because of race, religion, color,
sex, age, marital status, ancestry, national origin, sexual
orientation, gender identity, gender expression, physical or
mental disability, or medical condition (each an
"Impermissible Basis for Discrimination"). Tenant shall
ensure that applicants are employed, and that employees
are treated during their employment, without regard to any
Impermissible Basis for Discrimination. Such actions shall
include, but not be limited to, the following: employment,
upgrading demotion or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other
forms of compensation; and selection for training, including
apprenticeship.
Full Force and Effect: Except as expressly modified herein all other provisions of
the Agreement, as previously amended, shall remain
unmodified, and in full force and effect.
Corporate Authority: The persons executing this Agreement on behalf of the
parties hereto warrant that (i) such party is duly organized
and existing, (ii) they are dully authorized to execute and
deliver this Agreement on behalf of said party, (iii) by so
executing this Agreement, such party is formally bound to
the provisions of the Agreement, and (iv) the entering into
this Agreement does not violate any provision of any other
agreement to which said party is bound.
(SIGNATURE PAGE FOLLOWS)
3
AMENDMENT NO. 2 TO LEASE A6110
AVIS BUDGET CAR RENTAL, LLC
D/B/A AVIS RENT A CAR SYSTEM, LLC AND BUDGET RENT A CAR SYSTEM, INC
OPERATING AND LEASE AGREEMENT
FOR OPERATION OF A CAR RENTAL CONCESSION
AT PALM SPRINGS INTERNATIONAL AIRPORT
THIS AMENDMENT NO. 2 TO LEASE #A6110 is made and entered into this
1st day of January, 2016, by and between the CITY OF PALM SPRINGS, a charter
city and California municipal corporation ("City"), and AVIS BUDGET CAR RENTAL,
LLC D/B/A AVIS RENT A CAR SYSTEM, LLC AND BUDGET RENT A CAR SYSTEM,
INC. ("Tenant") having its usual place of business at the Palm Springs International
Airport, 3400 E. Tahquitz Canyon Way, Palm Springs, California 92262, and a
permanent mailing address at 6 Sylvan Way, Parsippany, New Jersey 07054. City and
Tenant may hereinafter be referred to individually as a "Party" and collectively as
"Parties".
RECITALS
WHEREAS, on July 1, 2011 , City and Tenant entered into that certain lease
A6110 for rental car concession services ("Agreement"), for Tenant's lease and
operation at Palm Springs International Airport ("Airport") and,
WHEREAS, on July 1, 2014, City and Tenant amended lease A6110 for rental
car concession services ("Agreement"), for Tenant's lease and operation at Palm
Springs International Airport ("Airport"), to extend the term from July 1, 2014 through
June 30, 2017. As more specifically described in the Agreement;
WHEREAS, the City and Tenant amended lease A6110 for Tenant's lease and
operation at Palm Springs International Airport ("Airport"), to lease 130 square feet of
customer counter space on a seasonal basis, from January 1, 2016 through April 30,
2016 and January 1, 2017 through April 1, 2017. As more specifically described in the
Agreement, the parties wish to amend the Agreement pursuant to the terms of
Amendment No. 2 as follows;
AGREEMENT
NOW THEREFORE, in consideration of the City's covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City and Tenant mutually agree as follows:
Premises: Each rental car agency shall retain the existing rental
location for customer ticketing and transactions along with
vehicle maintenance buildings and adjacent vehicle
storage. Ready and return car spaces will be subject to
existing terms and conditions of the Lease Agreement.
1
ORIGINAL BID
AND/OR AGREEMENT
Term: Commencing on the Effective Date through June 30, 2017.
Early Lease Termination: The tenant is advised that the Airport is planning to
construct a new rental car center or to substantially
renovate the existing rental car center, and such
construction or renovation will impact the Airport's ability to
manage the rental car facility. The City Manager, in his
sole discretion, has the authority to terminate the Lease
during the term if (a) the construction of the new rental car
center is substantially complete prior to June 30, 2017, or
(b) the rental car facilities renovations require a relocation
of the Tenants. In the event the City Manager exercises
this early termination, the Airport shall meet and confer with
representatives from each rental car concession and
provide Tenant a six (6) month written notice of the early
termination and a transition plan for comparable space to
conduct the rental car concession services.
Rental Rate Adjustment: In addition to the premises, commencing through the term
of this amendment:
Total square footage Supplemental Space Effective Jan. 1, 2016
130 s.f. $46.70 s.f.p.a. Terminal Rent monthly $505.92
Effective January 1, 2016 and monthly thereafter, the
minimum rent for the supplemental space shall be $505.92.
The supplemental space shall be used to accommodate
the customers of Avis/Budget Car Rental. Rent for the
Supplemental space shall be paid for each month of
occupancy, with the seasonal use expected to be
December through April.
Full Force and Effect: Except as expressly modified herein all other provisions of
the Agreement shall remain unmodified and in full force
and effect.
Corporate Authority: The persons executing this Agreement on behalf of the
parties hereto warrant that (i) such party is duly organized
and existing, (ii) they are duly authorized to execute and
deliver this Amendment on behalf of said party, (iii) by so
executing this Amendment, such party is formally bound to
the provisions of the Amendment, and (iv) the entering into
this Amendment does not violate any provision of any other
agreement to which said party is bound.
(SIGNATURE PAGE FOLLOWS)
2
IN WITNESS WHEREOF,the Parties have executed this Agreement as of the dates stated below.
"CITY"
City of Palm Springs
Date: B .
David H. Ready, Esq.
City Manager
APPROVED AS TO FORM: ATTEST
By: 1'.4*414t-V By ---
Douglas C. Holland, / . James Thompson,
City Attorney City Clerk
CtW,Y ✓a csr
APPROVED BY CITY COUNCIL: APPROVED BYCITYCOUNCIL
Date: Agreement No. /a/.AjZr,l1H ^j—I z APPv_c,rev
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Corporations require two notarized signatures. One signature must be from Chairman of Board,President,or any Vice President.
The second signature must be from the Secretary,Assistant Secretary,Treasurer,Assistant Treasurer,or Chief Financial Officer.
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AMENDMENT NO. 1 TO LEASE A6110
AVIS BUDGET CAR RENTAL, LLC
D/B/A AVIS RENT A CAR SYSTEM, LLC AND BUDGET RENT A CAR SYSTEM, INC
OPERATING AND LEASE AGREEMENT
FOR OPERATION OF A CAR RENTAL CONCESSION
AT PALM SPRINGS INTERNATIONAL AIRPORT
THIS AMENDMENT NO. 1 TO LEASE #A6110 is made and entered into this
1st day of July, 2014, by and between the CITY OF PALM SPRINGS, a charter city
and California municipal corporation ("City"), and AVIS BUDGET CAR RENTAL, LLC
D/B/A AVIS RENT A CAR SYSTEM, LLC AND BUDGET RENT A CAR SYSTEM, INC.
("Tenant") having its usual place of business at the Palm Springs International Airport,
3400 E. Tahquitz Canyon Way, Palm Springs, California 92262, and a permanent
mailing address at 6 Sylvan Way, Parsippany, New Jersey 07054. City and Tenant
may hereinafter be referred to individually as a "Party" and collectively as "Parties".
RECITALS
WHEREAS, on July 1, 2011, City and Tenant entered into that certain lease
A6110 for rental car concession services ("Agreement"), for Tenant's lease and
operation at Palm Springs International Airport ("Airport"). As more specifically
described in the Agreement;
WHEREAS, the parties wish to amend the Agreement pursuant to the terms of
Amendment No. 1 as follows;
AGREEMENT
NOW THEREFORE, in consideration of the City's covenants set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, City and Tenant mutually agree as follows:
Premises: Each rental car agency shall retain the existing rental
location for customer ticketing and transactions along with
vehicle maintenance buildings and adjacent vehicle
storage. Ready and return car spaces will be subject to
existing terms and conditions of the Lease Agreement.
Term: Commencing on the Effective Date through June 30, 2017.
Early Lease Termination: The tenant is advised that the Airport is planning to
construct a new rental car center or to substantially
renovate the existing rental car center, and such
construction or renovation will impact the Airport's ability to
manage the rental car facility. The City Manager, in his
1
sole discretion, has the authority to terminate the Lease
during the term if (a) the construction of the new rental car
center is substantially complete prior to June 30, 2017, or
(b) the rental car facilities renovations require a relocation
of the Tenants. In the event the City Manager exercises
this early termination, the Airport shall meet and confer with
representatives from each rental car concession and
provide Tenant a six month written notice of the early
termination and a transition plan for comparable space to
conduct the rental car concession services.
Rental Rate Adjustment: Commencing for the term of this agreement:
(Total square footage) Current Effective July 1, 2014
547 s.f. $41.18 s.f.p.a. Terminal Rent $46.70 square foot per annum
72,921 s.f. $ 0.77 s.f.p.a. Service Facility $ 0.87 square foot per annum
Adjusted yearly $1,235.70 per Ready Parking $1,400.00 per stall annually
$1.30 Overflow Parking Spaces $1.50 per day
Effective July 1, 2014 and annually thereafter, the minimum
annual rent shall be automatically adjusted to the greater of
either (a) or (b) immediately below, to be paid monthly:
(a) Ninety Five percent (95%) of the prior year's 10%
gross revenue figure. Based on the annual
revenue from June 1st through May 31st of the
prior year.
(b) Ten percent (10%) of gross annual revenue as
defined in the current agreement.
Full Force and Effect: Except as expressly modified herein all other provisions of
the Agreement shall remain unmodified and in full force
and effect.
Corporate Authority: The persons executing this Agreement on behalf of the
parties hereto warrant that (i) such party is duly organized
and existing, (ii) they are dully authorized to execute and
deliver this Amendment on behalf of said party, (iii) by so
executing this Amendment, such party is formally bound to
the provisions of the Amendment, and (iv) the entering into
this Amendment does not violate any provision of any other
agreement to which said party is bound.
(SIGNATURE PAGE FOLLOWS)
2
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the date first
written above.
ATTEST: CITY OF PALM SPRING
a municipal corporatio
City Clerk City Mane
APPRMDOFORM: APPROVED BY CITY COUNCIL
By. h a1 ��t 2\/ 10
CityjAtforney
CONTRACTOR: Check one: _Individual _ Partnership X Corporation
Corpim
tarized signatures: One from each of the following:
d, President, or any Vice President: AND
Secretary, Treasurer, Assistant Treassurer, or Chief Financial Officer.
By: By:d) Signature (notarized)
Robert Muhs Nar
Vice President,and Assistant Secretary of, Robert Bouta,Senior Vice President
Avis Budget Car Rental,LLC Tltl( For Properties&Facilities for Avis Budget Car Rental,LLC
++++++++++++++++++++xxxxxxxxx++x+++++++++++++++x+++++xx++xx+xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
State of State of fJel,t)SP.ISe.
County of County of VC AM-"
knsuoe 2014 t Surk 20'f
On 1� before me, On before me, 11I4i6i mP5
personally appeared + [ �d l�S personally appeared �J�rt eyAl irA
who proved to me on the basis of satisfactory who proved to me on basis of satisfactory
evidence to be the person(s)whose name(s) evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument is/are subscribed to the within instrument
and acknowledged to me that he/she/they and acknowledged to me that he/she/they
executed the same in his/her/their authorized executed the same in his/her/their authorized
capacity(ies), and that by his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), signatures(s) on the instrument the person(s)
or the entity upon behalf of which the or the entity upon behalf of which the
person(s) acted, executed the instrument. person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY I certify under PENALTY OF PERJURY
under the laws of the State of California that under the laws of the State of California that
the foregoing paragraph is true and correct. the foregoing paragraph is true and correct.
WITNESS my hand and official seal. d WITNESS my hand and official seal
Notary Signature: Notary Signature
Notary Seal: Notary Seal:
CYNTIA M. HERMES CYNTIA M.HERMES
NOTARY PUBLIC NOTARY PUBLIC
STATE OF NEW JERSEY $TATE OF NEW JERSEY
NO.2284899 N0,2284899 3
MY COMM.EXP.4.23.17 MY COMM.EXP.4.2317
c
Non-Exclusive Operating and Lease Agreement
No. A�►o
Between the City of Palm Springs
and
Avis Budget Car Rental, LLC
d/b/a Avis Rent A Car System, LLC
and Budget Rent A Car System, Inc.
For the Operation of a
Car Rental Concession at
Palm Springs International Airport
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
ORIGINAL BID
ANND/OR AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE1 RECITALS............................................................................................ 8
ARTICLE 2 DEFINITIONS....................................................................................... 8
2.01 Airport................................................................................................... 8
2.02 Agreement Year.....................................................................................8
2.03 Annual Percentage Payment................................................................ 8
2.04 Brand.................................................................................................... 8
2.05 Collusion............................................................................................... 8
2.06 Concession........................................................................................... 8
2.07 Concession Fees.................................................................................. 9
2,08 Consolidated Rental Car Service Facility ............................................. 9
2.09 Customer Facility Charge..................................................................... 9
2.10 Designated Premises ........................................................................... 9
2.11 Executive Director of Aviation............................................................... 9
2.12 Airport Concession Disadvantaged Business Enterprise (ACDBE)...... 9
2.13 FAA...................................................................................................... 9
2.14 Facility Rental....................................................................................... 9
2.15 Gross Revenues................................................................................... 9
2.16 Minimum Annual Guarantee............................................................... 11
2.17 Monthly Percentage Payment ............................................................ 11
2.18 Response........................................................................................... 11
2.19 Terminal ............................................................................................. 11
2.20 TSA.................................................................................................... 11
ARTICLE 3 TERM OF OPERATING AGREEMENT.............................................. 12
3.01 Term................................................................................................... 12
3.02 Delivery of Assigned Designated Premises........................................ 12
ARTICLE 4 PRIVILEGES AND PREMISES.......................................................... 12
4.01 Description of Specific Privileges, Uses and Rights ........................... 12
4.02 Description of General Privileges, Uses and Rights........................... 12
4.03 Restrictions of Privileges, Uses and Rights........................................ 13
4.04 Condition of the Designated Premises and Airport............................. 13
4.05 Dual Branding..................................................................................... 14
4.06 Right to Relocate or Replace Customer Service Counter................... 15
4.07 Ready Return Space/Lane Allocation/Relocation............................... 15
4.08 Overflow Parking Spaces................................................................... 16
4.09 Off-Airport Car Rentals....................................................................... 16
4.10 Selection of Customer Service Counter/Service Facility Location...... 16
4.11 Security/Safety Meeting...................................................................... 17
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
ARTICLE 5 CONCESSION FEES, FACILITY RENTAL, ACCOUNTABILITY AND
PERFORMANCE GUARANTEE. ....................................................... 17
5.01 Concession Fees................................................................................ 17
5.02 Abatement of Minimum Annual Guarantee......................................... 18
5.03 Facility Rental..................................................................................... 19
5.04 Unpaid Fees....................................................................................... 20
5.05 Diversion of Gross Revenues............................................................. 20
5.06 Sales and Use Tax............................................................................. 20
5.07 Net Agreement...................................................................................20
5.08 Place of Payments.............................................................................. 20
5.09 Monthly Reports of Gross Revenues.................................................. 21
5.10 Accounting Records ........................................................................... 21
5.11 Audit Requirements............................................................................ 21
5.12 Audit by City....................................................................................... 22
5.13 Internal Controls................................................................................. 23
5.14 Concession Pass-Through................................................................. 23
5.15 Customer Facility Charge................................................................... 24
5.16 Performance Guarantee..................................................................... 25
ARTICLE 6 CONSTRUCTION OF IMPROVEMENTS...........................................26
6.01 Required Improvements.....................................................................26
6.02 Alterations, Improvements or Additions.............................................. 26
6.03 Construction Requirements................................................................ 26
6.04 Construction Insurance/Indemnification Requirements ...................... 27
6.05 No Liens............................................................................................. 27
6.06 As-Built Drawings............................................................................... 27
ARTICLE 7 ALTERATIONS AND IMPROVEMENTS............................................ 27
7.01 Title to Improvements......................................................................... 27
7.02 Removal of Improvements.................................................................. 28
7.03 Maintenance Service Facility Improvements ...................................... 28
ARTICLE 8 OBLIGATIONS OF CONCESSIONAIRE............................................ 29
8.01 Maintenance and Repair.................................................................... 29
8.02 Concession Service Standards .......................................................... 29
8.03 Concession Operational Standards.................................................... 31
8.04 Utilities................................................................................................ 34
8.05 Trash and Refuse............................................................................... 34
8.06 Tree Maintenance............................................................................... 35
8.07 Cleanliness of Premises..................................................................... 35
8.08 Security .............................................................................................. 35
8.09 Airport Security Program .................................................................... 35
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PSP CAR RENTAL CONCESSION AGREEMENT
7586I4A
ARTICLE 9 SIGNAGE........................................................................................... 36
9.01 Signage.............................................................................................. 36
ARTICLE 10 INSURANCE...................................................................................... 36
10.01 Commercial General Liability.............................................................. 37
10.02 Comprehensive General Liability........................................................ 37
10.03 Workers' Compensation ..................................................................... 37
10.04 Automobile Liability............................................................................. 37
10.05 General Provisions............................................................................. 38
ARTICLE 11 RELATIONSHIP OF THE PARTIES................................................... 38
ARTICLE 12 INDEMNIFICATION............................................................................ 39
ARTICLE 13 DAMAGE OR DESTRUCTION OF PREMISES/IMPROVEMENTS ... 40
13.01 Concessionaire's Obligation...............................................................40
13.02 Right to Cancel...................................................................................40
13.03 Insurance Proceeds............................................................................ 41
13.04 Termination Upon Destruction or Other Casualty...............................41
ARTICLE 14 TERMINATION OF AGREEMENT, DEFAULT, AND REMEDIES...... 41
14.01 Termination ........................................................................................ 41
14.02 Default................................................................................................41
14.03 Remedies ........................................................................................... 42
14.04 Termination by Concessionaire..........................................................43
14.05 Termination by City............................................................................. 43
14.06 Surrender of Assigned Designated Premises..................................... 44
ARTICLE 15 ASSIGNMENT AND TRANSFER....................................................... 44
ARTICLE 16 LAWS, REGULATIONS, PERMITS AND TAXES...............................44
16.01 Compliance with Laws........................................................................44
16.02 Use of Underground Storage Tanks................................................... 46
16.03 Permits and Licenses Generally.........................................................47
16.04 Air and Safety Regulation...................................................................48
16.05 Payment of Taxes...............................................................................48
ARTICLE 17 DISCLAIMER OF LIABILITY ..............................................................48
ARTICLE18 NOTICES ...........................................................................................49
ARTICLE 19 GOVERNMENTAL RESTRICTIONS.................................................. 50
19.01 Federal Right to Reclaim.................................................................... 50
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
19.02 Federal Review .................................................................................. 50
19.03 City Tax Assessment Right ................................................................ 50
19.04 Right of Flight..................................................................................... 50
19.05 Operation of Airport............................................................................ 50
19.06 Release.............................................................................................. 51
19.07 Develop/Improve Landing Area.......................................................... 51
19.08 Reserved Rights................................................................................. 51
19.09 Notification and Review Requirements............................................... 51
19.10 Height Restriction............................................................................... 51
19.11 Non-Interference................................................................................. 51
19.12 Non-Exclusive .................................................................................... 51
19.13 War/ National Emergency.................................................................. 52
ARTICLE 20 NON-DISCRIMINATION ..............................:..................................... 52
20.01 No n-Discrimination ............................................................................. 52
20.02 Airport Concession Disadvantaged Business Enterprise (ACDBE) ... 52
20.03 Non-Compliance................................................................................. 52
20.04 Affirmative Action................................................................................ 53
ARTICLE 21 MISCELLANEOUS............................................................................. 53
21.01 City Not Liable.................................................................................... 53
21.02 Authorized Uses Only......................................................................... 53
21.03 Waivers .............................................................................................. 53
21.04 Subordination to Federal Agreements................................................ 53
21.05 City's Governmental Authority............................................................ 54
21.06 Rights Reserved to City...................................................................... 54
21.07 Invalidity of Clauses............................................................................ 54
21.08 Venue ................................................................................................ 54
21.09 Governing Law...................................................................................54
21.10 Inspections......................................................................................... 54
21.11 Remedies Cumulative ........................................................................ 54
21.12 Paragraph Headings........................................................................... 54
21.13 Binding Effect..................................................................................... 54
21.14 Performance....................................................................................... 55
21.15 Conflict ............................................................................................... 55
21.16 Excusable Delay................................................................................. 55
21.17 Incorporation by References .............................................................. 55
21.18 Entirety of Agreement......................................................................... 55
21.19 Construction ....................................................................................... 55
21.20 Radon................................................................................................. 55
SIGNATUREPAGE ...................................................................................................... 56
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
EXHIBITS...................................................................................................................... 57
Exhibit A Ready Return Spaces/Lanes.............................................................. 57
Exhibit B Overflow Parking Lots ........................................................................ 58
Exhibit C Customer Service Counter Spaces .................................................... 59
Exhibit D Maintenance Service Facility Spaces................................................. 60
Exhibit E Terminal Common Use Space ...........................................................61
Exhibit F ACDBE Good Faith Efforts.................................................................62
6
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
Non-Exclusive Operating and Lease Agreement No. NKO
Between City of Palm Springs
and
Avis Budget Car Rental, LLC
d/b/a Avis Rent A Car System, LLC and Budget Rent A Car System, Inc.
For the Operation of a Car Rental Concession
AT
Palm Springs International Airport
THIS NON-EXCLUSIVE OPERATING AND LEASE AGREEMENT (Agreement),
made and entered into this 15t day of July, 2011, by and between the CITY OF PALM
SPRINGS, a municipal corporation (hereinafter referred to as City), and AVIS BUDGET
CAR RENTAL, LLC D/B/A AVIS RENT A CAR SYSTEM, LLC AND BUDGET RENT A
CAR SYSTEM, INC. (hereinafter referred to as Concessionaire), having its usual place
of business at the Palm Springs International Airport, 3400 E. Tahquitz Canyon Way,
Palm Springs, California 92262, and a permanent mailing address at 6 Sylvan Way,
Parsippany, New Jersey, 07054.
WITNESSETH:
WHEREAS, the City owns and operates the Palm Springs International Airport
(hereinafter referred to as Airport), located in the City of Palm Springs, County of
Riverside, State of California, at 3400 E. Tahquitz Canyon Way; and
WHEREAS, Concessionaire submitted a response to City's public solicitation for
competitive bids for the Airport Rental Car Lease and Concession, Invitation for Bids
(IFB) No.11-06, which was opened May 25, 2011; and
WHEREAS, the City operates the Airport as a governmental function for the
primary purpose of providing to the public the service of air transportation; and
WHEREAS, rental car services at the Airport are essential for proper
accommodation of passengers arriving at and departing from the Airport and for patrons
of the Airport; and
WHEREAS, City and Concessionaire mutually desire to enter into this
Agreement in order to provide, as a portion of ground transportation to the Airport, car
rental services for the community and its visitors; and
WHEREAS, City has the right to permit the use of its property at the Airport and
to grant the use of the Airport to Concessionaire for the operation of Concessionaire's
car rental service and to fix the terms and conditions for such operations by the
7
758614.1
Concessionaire; and
WHEREAS, Concessionaire, for many years, has been engaged in the
operations of an automobile rental business and is presently engaged in the
performance of this type of service and is prepared, equipped and qualified to comply
with the terms provided herein;
NOW, THEREFORE, the parties hereto, for and in consideration of the premises,
covenants and agreements hereinafter contained to be observed and performed, the
respective parties, DO HEREBY AGREE AS FOLLOWS:
ARTICLE 1
RECITALS
The foregoing recitals are true and correct and are hereby incorporated herein by
reference.
ARTICLE 2
DEFINITIONS
2.01 "Airport" means the Palm Springs International Airport, located at 3400 E.
Tahquitz Canyon Way, Palm Springs, California, owned and operated by the City
of Palm Springs.
2.02 "Agreement Year" means the twelve (12) month period, beginning on July 1,
2011 and ending on June 30, 2012, and each twelve (12) month period
thereafter, until the termination of this Agreement
2.03 "Annual Percentage Payment" means ten percent (10%) of Concessionaire's
annual Gross Revenues.
2.04 "Brand" for purposes of the Agreement, means a distinct rental car service brand
or trade name that is used for the purpose of customer identification,
reservations, and rental car transactions.
2.05 "Collusion" means the unlawful communication between unaffiliated rental car
competitor firms.
2.06 "Concession" means the ,rental car concession operated by Concessionaire
pursuant to the terms and conditions of this Agreement.
8
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
2.07 "Concession Fees" means the fees payable by Concessionaire to City pursuant
to Section 5.01(A) and (B).
2.08 "Consolidated Rental Car Service Facility" means the planned new single facility
that will be constructed to replace the existing five separate rental car service
facilities and which will be financed by the CFC funding.
2.09 "Customer Facility Charge" or "CFC" means the fee imposed by CITY on each
and every customer of the Concessionaire with respect to customer contracts at
the Airport.
2.10 "Designated Premises" means the Ready Spaces/Return Lanes, Customer
Service Counters, Overflow Parking Spaces and the Maintenance and Service
Facilities as shown on Exhibits A, B, C, and D attached hereto and incorporated
herein by reference and described more particularly below:
A. Ready Return Spaces/Lanes adjacent to the north side of the Terminal
Building as depicted on Exhibit A.
B. Overflow Parking Spaces: are located in the parking lot as depicted on
Exhibit B.
C. Customer Service Counters: five (5) counters are located in the baggage
claim area of the Terminal Building as depicted on Exhibit C.
D. Maintenance and Service Facilities: five (5) facilities are located as
depicted on Exhibit D.
2.11 "Executive Director of Aviation" means the person designated by the City holding
said position and having the responsibilities and authority described herein or his
designees.
2.12 "Airport Concession Disadvantaged Business Enterprise (ACDBE) has the same
meaning as set forth in 49 CFR, part 23 (Code of Federal Regulations) as now or
hereafter amended or any successor regulation.
2.13 "FAA" means the Federal Aviation Administration.
2.14 "Facility Rental" means the annual rental rate payable by Concessionaire to City
for Concessionaire's use and occupancy of the assigned Designated Premises
pursuant to Section 5.03.
2.15 "Gross Revenues" means all monies due Concessionaire, whether paid or
unpaid, from any and all customers for the use, rental lease or sale of vehicles
and any additional services or accessories contracted for, delivered, supplied or
9
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
rented at or from the Airport regardless of where, how (cash, credit, barter or
otherwise) or by whom payment is made; whether the customer is transported
from the Airport to an off-Airport place of business; or where the vehicle is picked
up or returned. Unless revenues are expressly and specifically excluded from
Gross Revenues, all revenues derived from, arising out of or becoming payable
on account of the Concession, whether directly or indirectly, shall be included in
Gross Revenues. Gross Revenues shall include, but shall not be limited to:
A. Time and/or mileage charges, after discounts taken at the time of rental,
assessed by Concessionaire to its customers.
B. Premiums on any and all insurance sold, including personal accident
insurance, personal effects and cargo insurance, life insurance and any
other insurance sold in connection with a vehicle rental.
C. Sums received from customers for Collision Damage Wavier (CDW)
protection and Loss Damage Waiver (LDW) protection.
D. Any and all add-on fees and charges including extra driver coverage,
underage driver coverage and vehicle upgrade charges.
E. Any and all fees and charges for equipment, supplies and incidental items
which are made available and charged for separate from the vehicle
including, but not limited to, sporting equipment, cellular telephones,
pagers, child restraint seats, video equipment, and any other incidental
items and services.
F. All local revenue derived from a vehicle rental or vehicle sales transaction
with a customer who has not deplaned at the Airport, yet the rental
transaction occurred at the Airport. It also includes revenue derived from a
vehicle rental or vehicle sales transaction from any of the fixed base
operator(FBOs) located on the airport.
G. All charges attributable to any vehicle originally rented at the Airport,
which is exchanged at any other location of Concessionaire.
H. All proceeds from the long-term lease of vehicles from any location on the
Airport.
I. Amount charged to Concessionaire's customers at the commencement or
the conclusion of the rental transaction for the cost of furnishing and/ or
replacing fuel provided by Concessionaire.
J. Amount charged by Concessionaire as a pass through to its Customers of
Concession Fees, including, but not limited to, any Recovery Fee as
provided in Section 5.14.
K. Charges commonly referred to as "drop charges" or"intercity fees."
10
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
L. If the retail sale of a vehicle is directly related and preceded by a rental of
the vehicle at the Airport, then the NET proceeds from the sale of vehicle
shall be included in Gross Revenue that is subject to the Concession Fee.
Gross Revenues shall not include:
M. The CFC added to each customer contract or otherwise charged to or
assessed on each customer of the Concessionaire.
N. Amount of any sales taxes or other similar excise taxes, now or hereafter
levied or imposed, which are separately stated and collected from
customers.
O. Any sums received as insurance proceeds, or payments from
Concessionaire's customers or insurers for damage to vehicles or other
property of Concessionaire.
P. Sums received as the result of the loss, conversion, or abandonment of
Concessionaire's vehicles.
Q. Sums received from the sale of equipment, not vehicles used in the
operation of the Concession, the use of which Concessionaire wishes to
discontinue.
R. Any retroactive discounts from gross revenues, including corporate
volume discounts, are specifically prohibited.
S. Sums received as payment for parking tickets and other traffic violations
and fines.
T. Carbon Offsets fees paid by a customer and remitted to a Third Party
2.16 "Minimum Annual Guarantee" (MAG) means a minimum amount to be paid to
City on an annual basis during each Agreement Year as set forth in Section
5.01(A).
2.17 "Monthly Percentage Payment" means ten percent (10%) of Concessionaire's
monthly Gross Revenues.
2.18 "Response" means Concessionaire's response to City's Invitation for Bids#11-06
which was opened May 25, 2011.
2.19 "Terminal" means the main structures at the Airport where ticket counters, center
lobby, baggage claim, and gate concourses are located and are depicted on
Exhibit E.
2.20 "TSA" means the Transportation Security Administration.
11
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
ARTICLE 3
TERM OF OPERATING AGREEMENT
3.01 Term. The term of this Agreement shall be for a period of three (3) years,
commencing on July 1, 2011 (the Commencement Date) and terminating on
June 30, 2014 (the Term), unless sooner terminated as provided herein.
3.02 Delivery of Assigned Designed Premises. Should City be unable to deliver
possession of the assigned Designated Premises as of the Commencement
Date, rent shall be abated until possession is delivered. Concessionaire shall
have no other remedy for such late delivery, nor shall such delay extend the term
of this Agreement. If possession cannot be delivered within sixty (60) days of the
Commencement Date, Concessionaire shall have the right to terminate this
Agreement.
ARTICLE 4
PRIVILEGES AND PREMISES
4.01 Description of Specific Privileges. Uses and Rights. City hereby grants to
Concessionaire the following non-exclusive specific privileges, uses and rights,
all of which shall be subject to the terms, conditions and covenants set forth
herein:
A. To conduct and operate a high quality rental car concession at the Airport
from the Designated Premises.
B. To offer for rent additional services or accessories to complement the
basic vehicle rental from the assigned Designated Premises. Such
additional services or accessories may include the right to offer for sale
related loss and collision damage waiver protection, personal injury and
accident insurance, supplemental liability, uninsured motorist, and
personal effects insurance; and to provide customer service features such
as baby car seats and cellular telephones.
C. To offer for sale used rental vehicles from the Designated Premises.
4.02 Description of General Privileges. Uses and Rights. In addition to the specific
privileges granted pursuant to Section 4.01, City hereby grants to
Concessionaire:
A. Nonexclusive use of the public areas within the Terminal for
Concessionaire, its employees, contractors, patrons, invitees, suppliers of
service, agents and authorized sublessees, if any, in connection with its
operations hereunder. For purposes of this Agreement, "Public Areas"
means the public corridors, restrooms and other areas within the Terminal
12
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
that the general public has the right to access. Public Areas shall at all
times be subject to the exclusive control and management of City. City
shall have the full right and authority to make all rules and regulations as
City may in its sole discretion deem proper, pertaining to the proper
operation and maintenance of the Public Areas; and
B. Nonexclusive right of ingress to and egress from the Terminal over and
across public roadways and walkways serving the Airport for
Concessionaire, its employees, contractors, patrons, invitees, suppliers of
service, agents and authorized sublessees, if any, in connection with its
operations hereunder.
Nothing herein contained shall be construed to grant to Concessionaire, its
employees, contractors, patrons, invitees, suppliers of service, agents or
authorized sublessees, if any, the right to use or occupy any space or area at the
Airport improved or unimproved that is leased or assigned to a third party, or,
except as expressly set forth in Section 4.02(A) and (B) above, City has not
leased to Concessionaire pursuant to this Agreement. The general privileges,
uses and rights granted in this Section 4.02 shall be subject to the terms,
conditions and covenants set forth herein.
4.03 Restrictions of Privileges Uses and Rights. The rights granted hereunder are
expressly limited to the operation and management of a rental car concession.
Concessionaire covenants and agrees that the Designated Premises shall be
used solely for the uses permitted in Sections 4.01 and 4.02 above and for no
other purposes whatsoever. Concessionaire hereby acknowledges and agrees
that the car rental concession herein granted is not an exclusive concession and
the City shall have the right to deal with and perfect arrangements with any other
individual or individuals, company or corporation to engage in a like car rental
concession activity at the Airport, provided that there are not more than five car
rental concessions operating out of the Terminal Building. In the event that any
contract granted by the City to any other on-site automobile rental
Concessionaire shall contain any provisions more favorable to such
Concessionaire than the terms herein granted, then, at the option of
Concessionaire, which option shall be exercised by providing written notice to
City, this Agreement shall be amended to include such more favorable terms and
any off-setting burdens that may be imposed on any such other Concessionaire.
The intent of this provision is to ensure that Concessionaire is competing on as
equal of terms as possible with any additional Concessionaire and, as a result,
no other Concessionaire shall enjoy any rights, profits or conditions more
favorable to such Concessionaire than those enjoyed by Concessionaire.
4.04 Condition of the Designated Premises and Airport. Concessionaire expressly
acknowledges that it has inspected the assigned Designated Premises and
Airport and accepts the same "As Is, Where Is" in the condition existing as of the
13
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
Effective Date, together with all defects latent and patent, if any. Concessionaire
further acknowledges that City has made no representations or warranties of any
nature whatsoever regarding the Airport or the Designated Premises, including,
but not limited to, the physical and/or environmental condition of the Designated
Premises, or any improvements located thereon, or the value of the Designated
Premises or improvements, or the suitability of the Designated Premises, or any
improvements, or Concessionaire's legal ability to use the Designated Premises
for Concessionaire's intended use thereof.
City agrees to indemnify and hold harmless Concessionaire from and against all
judgments, suits, liabilities, losses, costs, judgments, orders, obligations,
damages or claims arising out of or in any way related to the existence of any
Hazardous Materials placed on, in or under the Premises by any person or entity
other than Concessionaire or any person or entity acting for, by or through
Concessionaire or with Concessionaire's permission or acquiescence.
4.05 Dual Branding. The City acknowledges that certain parent companies may own
two or more separate trade or brand names and may at times operate each
separately or jointly. Nothing contained herein shall prevent Concessionaire from
including no more than two (2) separate brand and/or trade names owned by the
same parent company in its Response. Such arrangements shall not be
considered to constitute collusion under the terms of this Agreement.
Concessionaire shall be prohibited from operating at the Airport under any brand
name or trade name other than the brand name(s) or trade name(s) that it
originally designated in its Response, unless this Agreement has been assigned
or sublet during its Term with the approval of City pursuant to the terms and
conditions of Article 15 herein. In no event, however, may more than a total of
two (2) trade or brand names be used. Except in the event of assignment or
subletting during the Term of this Agreement as indicated above, Concessionaire
shall operate and maintain all signage only under the brand or trade name(s)
originally designated in its response to the IFB. No other brand name shall be
used or displayed by Concessionaire at the Airport or upon the Premises.
If Concessionaire utilizes any particular brand or trade name under a license or
franchise agreement, Concessionaire represents and warrants to the City that
Concessionaire has been granted the right to use any such brand or trade name
that may be used at the Premises for the entire term of this Agreement, pursuant
to a franchise or license agreement (the Franchise Agreement) with the trade
name owner (a Franchisor).
At the City's request, Concessionaire agrees to provide the City with a copy of
the Franchise Agreement and reasonable evidence that such agreement remains
in full force and effect. Concessionaire agrees that the termination of
14
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
Concessionaire's right to use Concessionaire's brand or trade name at the
Designated Premises or to conduct a Rental Car Concession at the Premises of
the type then conducted by or under license from Franchisor under the brand or
trade name, shall constitute a material breach of Concessionaire's obligations
under this Agreement.
Except as provided herein, "More than two (2) or Multiple Branding" is prohibited.
4.06 Right to Relocate or Replace Customer Service Counter. City reserves the right
to relocate all of the Customer Service Counter Spaces within the Terminal
Building if required to ensure the operational effectiveness of the Terminal
Building and concourses and, if City agrees, to reimburse such Relocation Costs
to Concessionaire through Concession Fee credits. Said relocation shall be
undertaken from original counter selection to an area of comparable size and
quality as is reasonably practicable. "Relocation Costs" shall mean the
reasonable and actual out-of-pocket expenses incurred by Concessionaire to
move from the existing assigned Customer Service Counter Space to a
substituted area (Substituted Premises) and the unamortized cost of Customer
Service counter improvements made by Concessionaire, if any, that cannot be
relocated to the Substituted Premises. The unamortized cost of the
improvements shall be determined in accordance with Generally Accepted
Accounting Principles with a useful life not to exceed the term of the this
Agreement
Upon completion of such relocation, Concessionaire shall provide City with a
statement certified by a financial officer of Concessionaire: (1) setting out
Concessionaire's Relocation Costs; and (2) itemizing the improvements made by
Concessionaire that cannot be relocated to the Substituted Premises and
showing the calculation of the unamortized value of such improvements. Copies
of invoices shall accompany said statement for such Relocation Costs. City shall
thereafter reimburse Concessionaire for such Relocation Costs by crediting the
Privilege Fee thereafter due until the Relocation Costs are reimbursed. City
reserves the right to replace the actual counters to improve the appearance and
function of the units, and with the majority consent of the five (5)
Concessionaires, use Customer Facility Charge (CFC) Funds to cover the
expense.
4.07 Ready Return Space/Lane Allocation/Reallocation. The City will assign the
location of the Ready Return Spaces and Return Lanes within the Ready Return
Space/Lane Lot for the first Agreement Year of the term to the top five (5)
Concessionaires based upon the Minimum Annual Guarantees. Ready Return
Lanes 5/6 counts as one lane for this allocation.
At the commencement of this Lease, Concessionaire will be assigned 62 Ready
15
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
Return Spaces and Ready Return Lane # 1 based on the ratio of
Concessionaire's Annual Minimum Annual Guarantee set forth in Section 5.01.A.
specified for the top five (5) Concessionaires in order from highest to fifth lowest
MAG.
For all subsequent years of the Agreement, the number of Ready Spaces will be
reallocated to each Concessionaire based on a ratio of Concessionaire's Gross
Revenues for the preceding Agreement Year to the total Gross Revenues of the
top five (5) highest Gross Revenue On-Airport Car Rental Concessionaires for
the preceding Agreement Year.
For all subsequent years of the Agreement, the Return Lane reallocation, if any,
will be given to the top five (5) Concessionaires in descending order based on
the Gross Revenues for the preceding Agreement Year.
In the event a City audit of Gross Revenues determines an error in Gross
Revenues of Concessionaire, the City may adjust the assigned Ready Return
Spaces/Lanes based on the corrected Gross Revenues.
The reallocation of Ready Return Spaces/Lanes shall take place on September 1
of each subsequent Agreement Year.
Should TSA impose security rules that negate the above process by reducing the
total number of Ready Return Spaces/Lanes, the Airport shall have the right to
adjust allocations.
4.08 Overflow Parking Spaces. The Overflow Parking Spaces shall be used to park
Concessionaire's vehicles awaiting for or returning from customer rental, or for
purposes of fleet rotation. The City, based on Concessionaire's request and
space availability, shall designate overflow Parking Spaces on a first come, first
served basis depicted in Attachment "B" hereto, and incorporated herein by
reference. The fee per space per day will be $1.35 (One dollar thirty five cents).
4.09 Off-Airport Car Rentals. The City will continue to require off-airport car rental
operators to obtain a permit as stipulated in the City's Comprehensive Fee
Schedule and pay nine (9%) percent of gross revenue privilege fee for business
transacted with Airport passengers and customers as long as legally allowable.
Nothing contained within this Section 4.09 shall be construed to mean that
granting of said permit is the granting of a concession within the meaning of this
Agreement, nor shall any provision of this subsection be construed to require the
City to extend any more favorable economic terms established for off-airport car
rental operators, including percentage fees, to Concessionaires.
4.10 Selection of Customer Service Counter / Service Facility Location. The selection
PSP CAR RENTAL CONCESSION AGREEMENT 16
758614.1
of the Customer Service Counter and Service Facility location will be awarded to
the top five (5) Concessionaires based upon the Minimum Annual Guarantees.
The final Customer Service Counter configuration will be determined at the time
of award. The Airport will expeditiously complete the modifications, which are
very elementary, and will coordinate the move and shuffle with the Rental Car
Concessionaires so that there is only one move accomplished in a minimal
amount of time. All Concessionaires will be required to lease one (1) Airport
Service Facility. Service Facility locations will be grandfathered for successful
incumbent Concessionaires for the entire term of this Agreement. New
Concessionaires will be required to lease a Service Facility location that was or is
to be vacated by an unsuccessful bidder/incumbent Concessionaire. Selection of
vacant and available Service Facilities will be made using the highest to lowest
Minimum Annual Guarantees of the new Concessionaires. In the event of a
dispute regarding the provisions of this Article or the selection/assignment of
Customer Service Counter or Service Facility locations, the City shall in its sole
discretion have the right and authority to assign said locations to the
Concessionaires. Should a new Consolidated Service Facility be constructed
and made available prior to June 30, 2014, the City shall have the sole discretion
to assign Concessionaires to the new facility and base the assigned positions on
the highest to lowest Minimum Annual Guarantees of incumbent
Concessionaires. An entirely new agreement will be negotiated and executed
with each incumbent Rental Car Concessionaire for space within the
Consolidated Rental Car Facility.
4.11 Security/Safety Meeting. Prior to the commencement of operations under this
agreement, and at least annually thereafter, Concessionaire shall meet with the
other car rental Concessionaires operating on the Airport and Airport
management to discuss and agree upon parking, recalculation and reallocation
of Ready Return Spaces/Lanes, automobile movement procedures and
Security/Safety procedures to be utilized by car rental Concessionaires operating
at the Airport. Said operating procedures shall specifically address procedures
covering the receipt, storage and dispensing of automobile fuel at the
Maintenance Facility Spaces. Safety procedures applicable to the installation,
maintenance, and safety checks of storage and dispensing equipment will be
included. The Executive Director of Aviation shall have the right to resolve all
disputes, disagreements or conflicts that may arise.
ARTICLE 5
CONCESSION FEES, FACILITY RENTAL, ACCOUNTABILITY AND
PERFORMANCE GUAARANTEE
5.01 Concession Fees. For the concession privileges granted hereunder,
Concessionaire shall pay to City Concession Fees equal to the greater of the
17
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
Minimum Annual Guarantee or Annual Percentage Payment for each Agreement
Year throughout the Term of this Agreement. Concession Fees shall be payable
in advance by installment as provided for herein and shall be reconciled on an
annual basis in accordance with the provisions of Section 5.11 below.
A. Minimum Annual Guarantee (MAG). Concessionaire shall pay to City,
commencing upon the Commencement Date and on the first day of each
and every month throughout the Term of this Agreement, one-twelfth
(1/12) of the Minimum Annual Guarantee for the applicable Agreement
Year without demand, deduction, holdback or setoff. Concessionaire
agrees the MAG for each Agreement Year shall be $1,080,000 (One
million, eighty thousand dollars).
B. Monthly Percentage Payment. Within twenty (20) days after the beginning
of each and every month throughout the Term of this Agreement,
Concessionaire shall deliver a Statement of Gross Revenues (as
hereinafter defined) for the preceding month to the Airport. In the event the
Monthly Percentage Payment is greater than (1/12) of the MAG for the
applicable Agreement Year, Concessionaire shall pay the difference to
City with the Statement of Gross Revenues. This fee is for the privilege to
engage in business at Airport and is not for lease of the Concession
Premises. Concessionaire shall be liable for any State Sales Tax thereon,
should such "privilege fee" now or hereafter be held to be taxable by the
State of California.
5.02 Abatement of Minimum Annual Guarantee. In the event for any reason the
number of passengers deplaning on scheduled airline flights at the Airport during
any calendar month shall be less than 65 percent (65%) of deplaning passengers
for the same month previous year, or in the opinion of the Executive Director of
Aviation, the operation of Concessionaire's car rental business at the Airport is
affected, through no fault of Concessionaire, by shortages or other disruption in
the supply of automobiles, gasoline or other goods necessary to the conduct of
such business, and said shortages or other disruption results in the material
diminution in Concessionaire's monthly gross receipts and said shortage or other
disruption is not caused by a labor dispute involving Concessionaire (such
diminution to be satisfactorily demonstrated by Concessionaire to Executive
Director of Aviation, and the final decision to be solely that of Executive Director
of Aviation), then, in that event, Concessionaire shall not be required to pay to
City that portion of the MAG that would otherwise be due and payable in
accordance with the requirements of Section 5.01(A) above for that month.
During the abatement period, Concessionaire shall continue to pay to City the
Monthly Percentage Payment with the Statement of Gross Revenues (as
hereinafter defined), and, if applicable, City shall credit Concessionaire a pro-
rated portion of any payment of the MAG as may have been paid in advance.
18
PSP CAR RENTAL CONCESSION AGREEMENT
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Concessionaire acknowledges and agrees that Concessionaire shall remain
liable for payment of the full Annual Percentage Payment notwithstanding City's
waiver of its right to receive any portion of the MAG.
5.03 Facility Rental. In addition to the Concession Fees, Concessionaire shall pay to
City for the use and occupancy of the assigned Designated Premises, an annual
Facility Rental described as follows:
A. For the lease of 62 (#) Ready Return Spaces and # 1 Ready Return Lane
located in the Ready Return Spaces/Lane Lot depicted on Attachment "A"
hereto and incorporated herein by reference, Concessionaire shall pay to
the City an annual fee for each Ready Return Space in an amount equal
to $1,200.00 (one thousand, two hundred dollars) per space multiplied by
the total number of spaces allocated to Concessionaire for the Agreement
Year, for the total sum of $74,400 (seventy four thousand, four hundred
dollars) annually, payable in twelve equal monthly installments of $6,200
(six thousand, two hundred dollars), payable in advance and without
demand on the first day of each month of this Agreement commencing
July 1, 2011.
B. For the lease of a Customer Service Counter at a rate of $40.00 (forty
dollars) per square foot per annum Counter #2 consisting of 547 square
feet, depicted in Attachment "C" hereto and incorporated herein by
reference, the sum of$21,880 (twenty one thousand, eight hundred eighty
dollars) annually, payable in twelve equal monthly installments of
$1,823.33 (one thousand, eight hundred twenty three dollars and thirty
three cents), payable in advance and without demand, on the first day of
each calendar month of this Agreement, commencing July 1, 2011.
C. For the lease of a Maintenance Service Facility at a rate of$0.75 (seventy
five cents) per square foot per annum Service Facility # 3 consisting of
72,921 square feet, depicted in Attachment "D" hereto, and incorporated
herein by reference, the sum of $54,690.75 (fifty four thousand, six
hundred ninety dollars and seventy five cents annually, payable in twelve
equal monthly installments of $4,557.56 (four thousand, five hundred fifty
seven dollars and fifty six cents), payable in advance and without demand,
on the first day of each calendar month of this Agreement commencing
July 1, 2011.
D. Facility rental fates identified in Sections 4.08 and 5.0.3, paragraphs A, B
and C are subject to a Consumer Price Index (CPI) adjustment each year
on the anniversary date of the agreement. The rent adjustment will be
adjusted upward or downward by the same percentage increase or
decrease, occurring during the previous twelve months, in the Consumer
Price Index for all Urban Consumers (CPI-U) for LA/Riverside/Orange
County, CA (published by the Bureau of Labor Statistics, U.S. Department
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
of Labor), or applying a similar index if the CPI-U is not published or
available.
5.04 Unpaid Fees. All payments required to be made to the City hereunder shall bear
interest at the City's then current rate charged on overdue accounts or the
maximum non-usurious interest rate, whichever is less, if not paid within 15 days
from the date due. Said interest shall be calculated on a daily basis and shall be
due and payable when billed. City shall not be prevented from terminating this
Agreement for default in payment due to City pursuant to this Agreement or from
exercising any other remedies contained herein or implied by law.
5.05 Diversion of Gross Revenues. Concessionaire shall not intentionally divert,
through direct or indirect means, any of Concessionaire's rental car or related
business with Airport's customers to off-airport locations of Concessionaire or
affiliates of Concessionaire without including the Gross Revenues of such
transactions, as defined in Section 2.13, in Concessionaire's reported Gross
Revenues. Any such intentional diversion of Gross Revenues shall constitute a
breach of contract and the City shall have the right to immediately terminate this
Agreement upon determination by the City or its auditors that an intentional
diversion exists or has occurred. Concessionaire shall not modify its accounting
treatment or rename or redefine services or products.
5.06 Sales and Use Tax. Concessionaire shall pay monthly to City any sales, use or
other tax, or any imposition in lieu thereof (excluding State and/or Federal
Income Tax) now or hereinafter imposed upon the rents, use or occupancy of the
assigned Designated Premises imposed by the United States of America, the
State of California, or City of Palm Springs, notwithstanding the fact that the
statute, rule, ordinance or enactment imposing the same may endeavor to
impose the tax on City.
5.07 Net Agreement. This Agreement in every sense shall be without cost or expense
to City including, without limitation, cost and expenses relating to the
development, maintenance, improvements and operation of the assigned
Designated Premises.
5.08 Place of Payments. All payments required to be made by the Concessionaire
under this Agreement shall be made payable to the City of Palm Springs,
delivered or mailed postage prepaid to:
City of Palm Springs
Finance Department
Post Office Box 2743,
Palm Springs, CA 92263-2743
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
or at such other place the City as the place of payment may hereinafter
designate as in writing.
5.09 Monthly Reports of Gross Revenues. Within twenty (20) days after close of each
month of throughout the Term of this Agreement, Concessionaire shall submit to
the Airport, in a form and detail satisfactory to the City, a Statement of Gross
Revenues that details Gross Revenues for the prior calendar month. The
Concessionaire shall attach payment per Section 5.016 if applicable to its
Statement of Gross Revenues.
The City reserves the right to reasonably prescribe or change reporting forms,
their methods and time of submission, and payment schedule. The City shall first
submit the alterations to Concessionaire in writing specifying the desired
changes.
5.10 Accounting Records. Concessionaire shall keep, throughout the Term of this
Agreement, all books of accounts and records customarily used in this type of
operation, in accordance with Generally Accepted Accounting Principals
prescribed by the American Institute of Certified Public Accountants or any
successor agency thereto. Such books of accounts and records shall be retained
and be available for three (3) years from the end of each Agreement Year,
including three (3) years following the expiration or termination of this Agreement.
City shall have the right to audit and examine during normal business hours all
such books of accounts and records relating to Concessionaire's operations
hereunder. If the books of accounts and records are kept at locations other than
the Airport, Concessionaire shall, at its sole cost and expense, arrange for them
to be brought to a location convenient to the auditors for City in order for City to
conduct the audits and inspections as set forth in this Article. Concessionaire
shall maintain a record of each vehicle rental agreement or vehicle sales
agreement written at the Airport, including a copy of each original agreement
signed by Concessionaire's customer. Accountability for the numerical sequence
of contracts issued and unissued shall be maintained. Accounting records of
Concessionaire shall be stored sequentially, or in such other manner approved
by the Airport, to provide reasonable and expeditious access for audit purposes
hereunder. Failure to maintain books of accounts and records as required under
this Section 5.10 shall be deemed to be a material breach of this Agreement. The
obligations arising under this Section 5.10 shall survive the expiration or
termination of this Agreement.
5.11 Audit Requirements. Within one hundred twenty (120) days after the close of
each Agreement Year, Concessionaire shall provide to the City an audit report on
all Gross Revenues from operations at the Airport and from the operations of any
of Concessionaire's subsidiaries, contractors, management companies, or
related or affiliated companies involved in providing services covered by this
PSP CAR RENTAL CONCESSION AGREEMENT 21
758614.1
F
Agreement. The audit report shall cover the preceding Agreement Year. The
audit report shall be prepared by an independent Certified Public Accountant, not
a regular employee of Concessionaire, in accordance with Generally Accepted
Auditing Standards prescribed by the American Institute of Certified Public
Accountants or any successor agency thereto or PCAOB, as appropriate. The
audit report shall include the following:
A. Schedule of all revenues by category and month and a schedule of the
payments made to City.
B. Schedule summarizing the total number of vehicle rental transactions and
any sales taxes collected by month.
C. The total amount of Concession Fees that have been paid to City in
accordance with this Agreement.
D. The audit report shall include an opinion on the schedule of all revenues
by category and by month, the schedule of payments to City, and the
calculation of Concession Fees during the period.
Delivery of an audit report containing a qualified opinion, an adverse opinion, or a
disclaimer of opinion, as defined by the American Institute of Certified Public
Accountants or any successor agency thereto, shall be deemed to be a material
breach of this Agreement. If the audit report indicates that the amount of
Concession Fees (together with any sales taxes thereon) due and owing for any
Agreement Year is greater than the amount paid by Concessionaire to City
during such Agreement Year, the Concessionaire shall pay the difference to City
with the audit report. If amount of Concession Fees actually paid by
Concessionaire to City during any Agreement Year exceeds the Concession
Fees due and owing for such Agreement Year, the City shall credit the
overpayment in the following order: (1) against any past due amounts owed to
City by Concessionaire, including interest and late fees; (ii) against currently
outstanding, but not yet due, Concession Fees owed to City by Concessionaire;
(iii) against future Concession Fees which will become due during the
succeeding Agreement Year; and (iv) against any other sums payable by
Concessionaire to City. Notwithstanding the foregoing, in the event of an
overpayment by Concessionaire during the final Agreement Year, the City shall
credit the overpayment against any remaining amounts owed to City, including
interest and late fees, and refund to Concessionaire any overpayment amount in
excess of the credit.
5.12 Audit by City. Notwithstanding any provision in this Agreement to the contrary,
Executive Director of Aviation or its representative(s) may at any time perform
audits of all or selected operations performed by Concessionaire under the terms
of this Agreement. In order to facilitate the audit performed by City,
Concessionaire agrees to make suitable arrangements with the Certified Public
Accountant who is responsible for preparing the audit report on behalf of
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
3 �
Concessionaire pursuant to Section 5.11 to make available to City's
representative(s) working papers that deal with calculations and testing relevant
to the audit performed by the Certified Public Accountant. City or its
representative(s) shall make available to Concessionaire a copy of the audit
report prepared by or on behalf of City. Concessionaire shall have thirty (30)
days from receipt of the audit report from City or its representative(s) to provide a
written response to the City regarding the audit report. Concessionaire agrees
that failure of Concessionaire to submit a written response to the audit report in
accordance with the requirements of this Section 5.12 shall constitute
acceptance of the audit report as issued.
If any audit performed by or on behalf of the City for any period discloses an
under reporting of Gross Revenues, Concessionaire shall forthwith report and
pay to City amounts due plus interest from the date upon which the correct
Concession Fee report and payment originally was to be made at the City's then
current interest rate charged on overdue accounts, or the highest amount of
interest allowed by law if said interest is deemed usurious. If any audit discloses
an under reporting by three (3) percent or more for any period, Concessionaire
shall reimburse the City for the cost of said audit. The rights granted to the City
herein shall be cumulative and in addition to any and all rights and remedies the
City may have at law, equity or otherwise by the terms of this Agreement.
5.13 Internal Controls. Concessionaire shall establish and maintain a reasonably
adequate system of internal controls, including a revenue control system.
Concessionaire shall require its outside auditors providing the audited statement
and opinion required by Section 5.11, to notify Concessionaire and the City of
any weakness in Concessionaire's system of internal control coming to the
auditor's attention during the course of said audit. Concessionaire shall take the
appropriate action to remedy any weakness reported.
5.14 Concession Pass-Through. The Concessionaire acknowledges that the
percentage fee payments by Concessionaire to the City under this agreement
are for the Concessionaire's privilege to use the Airport facilities and access the
Airport market and are not fees imposed by the City upon Concessionaire's
customers. The City does not require, but will not prohibit, a separate statement
of and charge for the percentage fee on customer invoices or rental agreement
(Recovery Fee), provided that such Recovery Fee is in full compliance with
California laws and regulations and meets the following conditions:
A. Such Recovery Fee must be titled "Concession Recovery Fee'
"Concession Recoupment Fee" or such other appropriate name.
B. Recovery Fee must be shown on the customer rental agreement and
invoiced with other Concessionaire charges (i.e. above the line).
PSP CAR RENTAL CONCESSION AGREEMENT 23
758614.1
}' J
C. Recovery Fee as stated on the invoice and charged to the customer shall
be no more than eleven and one-tenths percent (11.11%) of Gross
Revenues and shall be specifically included in the Definition of Gross
Revenues for purposes of remittance to the City.
D. Concessionaire shall neither identify, treat, nor refer to the Recovery Fee
as a tax, nor imply that City is requiring pass through of such fee.
E. Concessionaire shall comply with all applicable laws, including Federal
Trade Commission requirements and any commitment to or contractual
obligation by Concessionaire with any group of State Attorneys General.
5.15 Customer Facility Charge.
A. During the Term of this Agreement, City will impose, and the
Concessionaires will collect and remit to City, a Customer Facility Charge
(CFC). The amount of each CFC shall be payable directly by each of the
customers of the Concessionaire as a separately identified charge for
rental car transaction entered into by said customer. The CFC amount for
any of Concessionaire's automobiles contracted for or picked up at the
Airport pursuant to a customer contract will be in the amount authorized by
applicable California legislation. The proceeds from the CFC shall be used
for the planning, design and construction of common rental car facilities.
The CFC shall remain in effect until terminated by City in its sole
discretion. The current CFC rate is $10.00 (ten dollars) per transaction.
City may at its own discretion, with the input of its Concessionaires as
required by law, change the CFC rate.
B. Collection of Customer Facility Charges. Concessionaire shall separately
state the amount of the CFC in all of its customer contracts and collect the
CFC from its customers on behalf of City. Concessionaire agrees that the
CFC is not income, revenue or any other asset to Concessionaire; that
Concessionaire has no ownership or property interest in such CFCs; and
that Concessionaire hereby waives any claim to a possessory or
ownership interest in the CFCs. Concessionaire agrees that it holds such
CFCs in trust for the benefit of the City, and that the City (or a trustee on
its behalf) has complete possessory and ownership rights to such CFCs.
C. Reporting and Audit. Concessionaire shall report to City by the twentieth
(20th) day of each month the number of transactions that it processed
during the preceding month, and at such time remit to City all amounts it
has collected as CFCs from its customers during the preceding month
without deduction or set-off. Concessionaire shall be responsible for the
amounts of any CFCs that it does not collect from its customers. Any such
amounts not remitted by the twentieth (201h) day of the month shall be
24
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
� 1
assessed as a fee payable by Concessionaire equal to two (2%) of such
amount per month until paid. City shall have the right to audit the records
of Concessionaire, pursuant to Section 5.12 of this Agreement, to assure
compliance with this provision. Further, if City determines that a
Concessionaire has failed for any reason to collect and remit the proper
amount of CFCs for any fiscal year, such Concessionaire will be required
to pay to City an amount equal to the amount of any such deficiency
applicable to its Customer Contracts for the fiscal year in question plus the
amount of any fees and penalties owed pursuant to the terms of this
Agreement.
D. Use of CFC Proceeds. City will apply and use the amounts of CFCs
remitted to it as follows:
First to the payment of debt service on debt obligations incurred by City
in connection with the planning, design and construction of common rental
car facilities.
Second: to repay City for the annual amortization of any amounts of City's
funds expended on or invested in capital rental car facilities;
Third: to fund a reserve against any future shortfalls in CFC revenues;
Fourth: to make up any deficiencies in the amount of CFCs collected in
prior years or to defray all or part of a future fiscal year's CFC expenditure
requirement;
Fifth: to decease or prepay the amounts of any indebtedness that City has
incurred in connection with the planning, design and construction of
common rental car facilities;
Sixth: to be held in reserve to pay the cost of future improvements to
common rental car facilities or anything else allowed by the law.
5.16 Performance Guarantee. Concessionaire shall be required to comply with the
following performance security requirement prior to commencement of activities:
Prior to commencing operations at the Airport pursuant to this Agreement,
Concessionaire must post with the City, and Concessionaire must thereafter
continuously maintain for the entire term, a performance bond or such other
guarantee form acceptable to the Executive Director of Aviation and City
Attorney, equal to fifty percent (50%) of the dollar value of its Minimum Annual
Guarantee for the term of the concession agreement to cover Concessionaire's
performance of all of its obligations under this Agreement for the entire term. If
Concessionaire elects to submit a performance bond, the performance bond to
be provided by Concessionaire and its surety shall be in a form acceptable to the
City. The surety company shall be licensed to do business in California, and shall
be otherwise acceptable to the City. Concessionaire shall be responsible for
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
paying all required bond premiums.
Such Performance Bond shall not contain any exclusion or condition based on a
time-period for the discovery of, and the making of a claim for any loss which is
less than one year after the expiration date of such Performance Bond. In other
words, the Performance Bond shall allow the City to make a claim under the
Bond, for losses which totally or partially occurred during the period of such
Bond. Such extended claim discovery and/or claim reporting period shall be for a
period of at least one year or longer after the expiration of such Bond. Such Bond
shall not contain any wording that would allow for the cancellation or reduction in
coverage under the Bond, other than at the listed expiration date, provided that
30-days notice of such expiration is given to the City before termination of
coverage at any such expiration date.
An annually renewable Performance Bond may be substituted by the
Concessionaire each year in lieu of providing a single Bond.
The performance bond shall be payable to the City in the event Concessionaire
defaults in any of its monetary or other obligations to the City hereunder.
ARTICLE 6
CONSTRUCTION OF IMPROVEMENTS
6.01 Required Improvements. Concessionaire shall, at its sole cost and expense,
install all improvements and trade fixtures necessary and customary for the
operation of a rental car concession within the assigned Designated Premises in
accordance with the requirements of this Section 6.
6.02 Alterations. Improvements or Additions. Concessionaire shall make no
alterations, additions or improvements to the assigned Designated Premises,
without the prior written approval of the Executive Director of Aviation, which
approval may be granted or withheld by the Executive Director of Aviation at the
Executive Director's sole discretion.
6.03 Construction Requirements. All improvements, alterations and additions made by
Concessionaire to the assigned Designated Premises shall be of high quality and
meet all applicable Federal, State and local laws, regulations, rules and
requirements. Prior to the commencement of construction, one (1) full and
complete set of plans and specifications for all improvements, alterations and/or
additions shall be submitted to the Executive Director of Aviation for approval,
which approval may be granted or withheld in the Executive Director's sole
discretion. All improvements shall be completed in accordance with construction
standards established by the Airport and the plans and specifications approved
26
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
by the Airport.
6.04 Construction Insurance/Indemnification Requirements. Concessionaire shall be
required to carry comprehensive public liability insurance during construction per
Article 10; if an independent contractor does the construction, the contractor in
Concessionaire and City's name shall procure insurance. All insurance shall be
in the limits and coverage's acceptable to City's Risk Management Department.
Concessionaire shall indemnify and hold City harmless for any and all claims,
demands, damages, costs or expenses of any nature, including defense costs by
reason of construction or alteration by Concessionaire.
6.05 No Liens. Concessionaire covenants and agrees that nothing contained in this
Agreement shall be construed as consent by City to subject the estate of City to
liability under the Construction Lien Law of the State of California.
Concessionaire shall notify any and all parties or entities performing work or
providing materials relating to any improvements made by Concessionaire of this
provision of this Agreement. If so requested by City, Concessionaire shall file a
notice satisfactory to City in the Public Records of Palm Springs, California
stating that the City's interest shall not be subject to liens for improvements made
by Concessionaire. In the event that a construction lien is filed against the
assigned Designated Premises or other City property in connection with any work
performed by or on behalf of Concessionaire, Concessionaire shall satisfy such
claim, or transfer same to security within ten (10) days, City may do so and
thereafter charge Concessionaire, and Concessionaire shall promptly pay to City
upon demand all costs incurred by City in connection with the satisfaction or
transfer of such claim, including, but not limited to, attorney's fees.
6.06 As-Built Drawings. Within ninety (90) days after completion of all work,
Concessionaire shall furnish to the City, at no charge, a complete set of as-built
drawings. Concessionaire agrees that, upon the request of the City,
Concessionaire will inspect the assigned Designated Premises jointly with the
City to verify the as-built drawings.
ARTICLE 7
ALTERATIONS AND IMPROVEMENTS
7.01 Title to Improvements. All fixtures and improvements that are constructed or
placed upon the assigned Designated Premises, excluding furnishings,
equipment and trade fixtures, (the Improvements) shall become the absolute
property of City upon termination or expiration of this Agreement and City shall
have every right, title, and interest therein, free and clear of any liens, mortgages
encumbrances.
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
7.02 Removal of Improvements. City shall be entitled, at its option, to have the
assigned Designated Premises returned to City free and clear of some or all of
the Improvements at Concessionaire's sole cost and expense. In such event,
City shall provide timely notification to Concessionaire of its election to require
removal of Improvements and, to the extent possible, City shall notify
Concessionaire at least sixty (60) days prior to the expiration or termination of
this Agreement. Concessionaire shall have sixty (60) days from date of notice
within which to remove the Improvements. If Concessionaire fails to remove the
Improvements, City may remove the Improvements. Concessionaire agrees that
Concessionaire shall fully assume and be liable to City for payment of all costs of
removal of the Improvements (whether direct or indirect) incurred by City, plus a
twenty-five percent (25%) administrative overhead fee, which costs and
administrative overhead fee shall be due and payable City within thirty (30) days
from the date of the written notice provided by the Airport. The obligations arising
under this Article 7 shall survive the expiration or termination of this Agreement.
The Concessionaire shall not be required to remove any permanent
improvements, including, but not limited to demising walls. Concessionaire shall
only be required to remove personal property and trade fixtures and shall be
required to leave the Premises in a clean and good condition, ordinary wear and
tear excepted.
7.03 Maintenance Service Facility Improvements. Not withstanding the provisions of
Section 7.02, Concessionaire hereby acknowledges that it is and will continue to
be the owner and operator of all improvements, alterations, fixtures and
appurtenances installed at the assigned Maintenance Service Facility Space,
including, but not limited to, the Underground Storage Tank System. Unless a
new Agreement is entered into with Concessionaire for the assigned
Maintenance Service Facility Space, upon the expiration or sooner termination of
this agreement, Concessionaire hereby agrees to either (i) sell said
improvements, alterations, fixtures and appurtenances including, but not limited
to, the Underground Storage Tank System, to a car rental Concessionaire that
the city has approved to enter into a car rental concession agreement with City,
which sale shall be at a price mutually agreeable to Concessionaire and such car
rental Concessionaire and which sale shall be effective on the expiration or
sooner termination of this Agreement; or (ii) remove, at Concessionaire's sole
cost and expense, such improvements, alterations, fixtures and appurtenances,
including the Underground Storage Tank System, from the assigned
Maintenance Service Facility Space within thirty (30) days of the expiration or
sooner termination of this Agreement and to assess, remove, remediate,
cleanup, monitor, dispose of and mitigate any Covered Hazardous Materials
released on or in the assigned Maintenance Service Facility Space as more
specifically provided in Section 16.01, to closure from all appropriate regulatory
agencies. If Concessionaire elects to remove said improvements,
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PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
Concessionaire shall turn over the assigned Maintenance Service Facility to City
in the condition the assigned Maintenance Service Facility existed prior to the
installation of said improvements, reasonable wear and tear excepted. Upon the
last day of the term of this Agreement, Concessionaire shall surrender the
Designated Premises to City in the same condition as received, and in a good,
sanitary and clean condition, reasonable use and wear thereof excepted.
ARTICLE 8
OBLIGATIONS OF CONCESSIONAIRE
8.01 Maintenance and Repair. Concessionaire shall, at its sole cost and expense,
maintain the assigned Designated Premises and improvements and
appurtenances thereto, in a safe and presentable condition consistent with good
business practice, industry standards and in accordance with all applicable
Federal, State and local laws, regulations and rules. Concessionaire shall repair
all damages to the assigned Designated Premises caused by its employees,
patrons, invitees, suppliers of service, or furnishers of material, or any other
person whomsoever, and all damages caused by or resulting from or in any way
arising out of Concessionaire's operations thereon or Concessionaire's use of the
assigned Designated Premises. Concessionaire shall maintain and repair all
equipment thereon. Concessionaire shall repaint and refurbish its facilities as
may be deemed necessary in the reasonable discretion of the City.
The City may inspect the assigned Designated Premises to identify items in need
of maintenance or repair and report in writing to the Concessionaire those items
in need of maintenance and repair. Concessionaire agrees that it shall abide by
the decision of the City with respect to any and all such maintenance or repair.
The City shall reasonably judge Concessionaire's performance under this
Section 8.01 as to the quality of maintenance and repair. Upon written notice by
the City to Concessionaire, Concessionaire shall perform the required
maintenance or repair in accordance with the City's decision. If Concessionaire
has not made a good faith effort, as determined by the City, to begin to perform
the maintenance or repair within ten (10) days after receipt of the City's written
notice and to diligently pursue the same to completion, City shall have the right to
enter the assigned Designated Premises and perform the necessary
maintenance or repair, and Concessionaire hereby expressly agrees that it shall
fully assume and be liable to City for payment of the costs thereof, plus twenty-
five percent (25%) administrative overhead. Such maintenance or repair cost,
plus the administrative cost, shall be due and payable within thirty (30) calendar
days of the City's billing therefore.
8.02 Concession Service Standards.
A. Subject to the terms and conditions of this Agreement, Concessionaire
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shall operate and manage the Concession for the purpose of providing
rental car services to the traveling public and shall conform in all respects
to all applicable Federal, State and local laws, regulations and rules.
B. The assigned Designated Premises shall be staffed and operated seven
(7) day per week, commencing not less than thirty (30) minutes prior to the
first scheduled flight and ending not less than thirty (30) minutes after the
last scheduled flight, except as otherwise approved in writing by the
Executive Director of Aviation.
C. Concessionaire shall cause its employees to conduct themselves at all
times in a courteous manner towards the public or other tenants and to
provide prompt, efficient and safe service.
D. Concessionaire shall employ a sufficient number of trained personnel to
handle customer service, vehicle maintenance, car handling and office or
administrative duties incidental to the operation of the car rental
concession granted hereunder. Concessionaire must have sufficient
personnel to handle peak season rental car rental and return activities in
order to keep terminal building queuing from blocking passenger flow and
to keep rental return vehicles from blocking public roadways.
E. Concessionaire shall be responsible for the conduct, demeanor and
appearance of its officers, agents, employees and representatives.
Attendants and other employees, while on duty, shall wear uniforms which
shall be subject to approval by the Executive Director of Aviation who shall
take due regard of the existence of franchise agreements specifying
uniforms. Uniforms shall, at all times, be maintained in a neat, orderly and
clean condition.
F. Concessionaire shall at all times during the term of this Agreement
maintain at the Airport, at its sole cost and expense, an adequate number
of automobiles for rental to meet all reasonably foreseeable demands by
passengers and other users. Said automobiles shall not be older than two
years previous to the current model year. All automobiles shall be clean,
neat and attractive inside and out and be maintained in good mechanical
condition. The City reserves the right to disapprove any automobile
provided by Concessionaire for public use. The City shall submit notice in
writing of its disapproval and the reasons thereof to the Concessionaire.
Concessionaire shall forthwith withdraw said unsatisfactory automobile
from its Airport rental fleet.
G. Concessionaire recognizes that from time-to-time the City may cause
quality assurance reviews of the Concession to be conducted. Such
reviews may include inspection of the assigned designated premises used
in the operation of the Concession. Concessionaire agrees to fully
cooperate in such quality assurance reviews and to immediately take
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whatever actions are necessary to correct any deficiencies.
8.03 Concession Operational Standards.
A. Concessionaire shall furnish service on a fair, reasonable and
nondiscriminatory basis to all users of the Airport. Concessionaire shall
furnish good, prompt, courteous and efficient service adequate to meet all
reasonable demands for its service at said Airport. Concessionaire shall
keep the Designated Premises in a safe, clean, orderly and inviting
condition at all times, satisfactory to the City. All services and property
sold must conform in all respects to federal, state, county and municipal
laws, ordinances, and regulations.
B. Concessionaire shall not, through its officers, agents, representatives or
employees, divert or cause to be diverted any prospective concession
patrons from the Airport to another location. If any such diversion does
occur, the diverted transaction shall be deemed to have occurred at the
Airport and the cost of such diverted rental shall be included in
Concessionaire's Gross Revenues.
C. Concessionaire shall not permit its employees nor any other person under
its control to engage in open or public disputes or conflicts.
Concessionaire shall be responsible for the conduct, demeanor and
appearance of its officers, agents, employees and representatives.
Attendants and other employees, while on duty, shall wear uniforms which
shall be subject to approval by the Executive Director of Aviation who shall
take due regard of the existence of franchise agreements specifying
uniforms. Uniforms shall, at all times, be maintained in a neat, orderly and
clean condition. Customer service personnel and attendants shall be
trained by Concessionaire to render a high degree of courteous and
efficient service, and it shall be the responsibility of the Concessionaire to
maintain close supervision over said personnel to assure the rendering of
a high standard of service to the public and the patrons of the car rental
concession. Upon objection from the Executive Director of Aviation
concerning the conduct, demeanor or appearance of such persons,
Concessionaire shall take all steps necessary to remove the cause of the
objection.
D. The assigned Designated Premises shall be operated and maintained in a
safe, clean, orderly and inviting condition at all times.
E. Except such advertising and promotional items as may be purchased from
the Airport's advertising Concessionaire or which the Executive Director of
Aviation has previously approved as permanent signage to be installed
within the assigned Designated Premises, Concessionaire shall be strictly
prohibited from posting any signage which advertises inducements,
including, but not limited to, automobile rental rates, fuel charges, makes
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1 �
and models of automobiles, automobile equipment and amenities,
availability of automobiles and any other type of promotional information or
incentive.
F. Concessionaire shall not permit its agents or employees to engage in the
overt or offensive solicitation or pressure sales tactics for rentals or related
services offered by Concessionaire on or about the Airport. The City shall
be the sole judge as to whether the conduct of Concessionaire's
representative constitutes a violation of this subsection and, upon notice
from the Executive Director of Aviation, Concessionaire shall take all steps
necessary to eliminate the offensive conduct or condition. This restriction
shall include the approaching of any person by an employee or any other
representative of Concessionaire for the purpose of offering information
regarding Concessionaire or conducting surveys. This restriction shall
apply at all times and at all Terminal locations.
G. The public access area located in front of Concessionaire's reservation
counter may be cordoned-off, at the option of Concessionaire, for the
purpose of customer queuing. The area is included in the assigned
Designated Premises and therefore is considered in the calculation of
Facility Rental. The public access area extends the length of
Concessionaire's reservation counter and ten feet (10") from the front of
the counter. Such use of the public access area requires that
Concessionaire utilize only such barrier stanchions as specifically
designated by the Executive Director of Aviation and that the placement
and condition of such stanchions be maintained in a neat and orderly
manner and in good repair at all times.
H. Concessionaire shall not represent itself as a provider of for-hire
transportation services nor render services, which are customarily
provided by the operators of such transportation services.
I. Nothing contained herein shall require Concessionaire to own,
unconditionally or otherwise, vehicles used in the operation of the
Concession; provided, however, all vehicles used in the operation of the
Concession shall be owned, leased, or rented by Concessionaire or an
affiliate. Concessionaire may obtain such vehicles from any supplier.
J. All contracts, advertising, solicitation and publicity regarding
Concessionaire shall be made in Concessionaire's lawful trade/brand
name and shall not in any manner misrepresent the relationship between
City and Concessionaire nor City's interest herein.
K. Concessionaire shall make service available at the Customer Service
Counter Space year-round seven days a week commencing not less than
thirty (30) minutes prior to the first scheduled flight and ending not less
than thirty (30) minutes after the last scheduled flight.. Automobile rentals
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and customer service shall be available through staffing of the Customer
Service Counter Space. The Executive Director of Aviation shall have the
right, upon written request from Concessionaire, to approve changes to
the above referenced business hours, if he, at his sole discretion,
determines such change of staffing hours is necessary.
L. The day-to-day operation and management of the Concession shall be
under the direct supervision of an active, qualified and competent
manager who shall at all times be subject to the direction and control of
Concessionaire. Prior to the Commencement Date, Concessionaire shall
designate in writing to the City the name, address and telephone number
of the manager who at all times shall be the authorized representative of
Concessionaire for all matters relating to the Concession. Concessionaire
shall provide written notice to the City of any change in its manager within
seven (7) days of the change and shall include any change of address or
telephone number.
M. Concessionaire, its agents, employees and suppliers shall not block any
areas used for ingress and egress by Airport traffic and shall not interfere
with the activities of City, its agents, employees, any other Airport
Concessionaires or tenants, or any other authorized person.
N. The services provided by Concessionaire shall be strictly limited to those
permitted herein. Concessionaire shall not engage in any other business
activity from the assigned Designated Premises or any other location on
the Airport without benefit of a validly executed agreement entered into
with City for the provision and conduct of such other business activity.
O. Ready Return Spaces described in Section 2.08.A are solely for the
parking of Lessee's automobiles available for rental and the return by
customers of automobiles rented. No storing, servicing or washing of
automobiles shall be permitted in the parking spaces area. Parking of
vehicles other than automobiles complying with Section 8.02 shall not be
permitted upon the Concession Premises: this includes trucks, jitneys,
junk cars, etc.
P. Concessionaire may also, at its option, provide car rental service for
customers at Airport Fixed Base Operators, who have been authorized by
Lessor to engage Airport Car Rental Concessionaires for this purpose;
provided that Concessionaire shall so notify City in writing of its intent to
do so. Gross receipts derived from such car rentals shall be included in
the calculation of the monthly Percentage Fee payable to City pursuant to
Section 5.01 of this Agreement.
Q. Concessionaire shall provide, install and maintain, at its sole cost and
expense, within the Assigned Premise, office furnishings, fixtures and
PSP CAR RENTAL CONCESSION AGREEMENT 33
758614 1
communication systems and equipment as may be necessary for the
effective and efficient operation of the Concession.
R. The Maintenance Service Facility Space described in Section 2.08.13 shall
be maintained by Concessionaire in good order and repair. The area shall
be used solely for the servicing of its vehicles rented in the course of
business under this Lease, and for no other purpose. Due to the close
proximity of the Service Facility to an abutting residential area, the
Concessionaire shall implement operational and functional procedures
that mitigate noise generating activities, related horn honking, vacuuming,
engine revving, car locator alarms, and tire squealing.
S. Concessionaire shall diligently and adequately provide for the trimming of
the trees on its Designated Premises. Such trees shall be maintained in
such a manner that they are trimmed back to the edge of the curb at all
times.
T. Concessionaire shall not, under any circumstances or at any time, allow
keys to be left in vehicles in the return area of the ready/return lot.
8.04 Utilities. City shall provide electricity and water used or consumed in or on the
assigned Designated Premises located at the Terminal Building. Concessionaire
will provide telephone, computer service at its own cost. Concessionaire shall
pay, before delinquency, all charges for electric, gas, water, sewer, telephone,
computer and all other utility services used in, upon or about the assigned
Maintenance Service Facility Space.
8.05 Trash and Refuse. Concessionaire shall provide a complete and proper
arrangement for the adequate sanitary handling of all trash and other refuse
caused as a result of the operation of the assigned Designated Premises and
shall provide for its timely removal to the central collection point to be provided by
the City. Concessionaire shall provide and use suitable covered fireproof
receptacles for all trash and other refuse on or in connection with the assigned
Designated Premises. Piling of boxes, cartons, barrels, or other similar items in
view of a public area shall not be permitted. Concessionaire shall make a
reasonable attempt at recycling all trash if practical.
Transporting Merchandise, Trash, and refuse associated with operation of the
car rental concession hereunder to and from the assigned Designated Premises,
Concessionaire shall use only carts, vehicles, or conveyances that are sealed
and leak proof and that are equipped with wheels suitable for operating on
carpets without damage hereto.
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8.06 Tree Maintenance. Concessionaire shall be responsible for the ongoing tree
trimming and maintenance of the trees located curbside at the assigned
Maintenance Service Facility to eliminate public road obstruction.
8.07 Cleanliness of Premises. The assigned Designated Premises and all equipment
and materials used by Concessionaire shall at all times be clean, sanitary and
free from rubbish, refuse, food scraps, garbage, dust, dirt, rodents, insects, and
other offensive or unclean materials. The Concessionaire will not sell or permit
the sale of any food or beverages on or from the assigned Designated Premises
The City shall reasonably determine whether Concessionaire is in compliance
with the obligations as provided for herein and shall provide Concessionaire with
written notice of any violations of Concessionaire's obligations. Immediately upon
Concessionaire's receipt of the City's written notice of violation, Concessionaire
shall commence such corrective action as required by City or as may be
necessary to remedy such non-compliance to satisfaction of City. If corrective
action is not initiated within ten (10) days of receipt of City's written notice and
pursued to completion in a diligent manner, the City may cause the same to be
accomplished and Concessionaire hereby expressly agrees that Concessionaire
shall assume and be liable to City for payment of all such costs, plus twenty-five
percent (25%) for administrative overhead. Such costs, plus the administrative
cost, shall constitute additional rent and shall be due and payable within thirty
(30) consecutive days from the City's billing therefore.
8.08 Security. Concessionaire acknowledges and accepts full responsibility for the
security and protection of the assigned Designated Premises and any and all
inventory and equipment now existing or hereafter placed on or installed at the
Airport, and for the prevention of unauthorized access to its facilities and
expressly agrees to comply with all rules and regulations of City and of any and
all other governmental entities that now or may hereafter have jurisdiction over
such security. Concessionaire fully understands that the police security
protection provided by City is limited to that provided to any other business
situated at the Airport, and expressly acknowledges that any special security
measures deemed necessary or desirable for additional protection of the
assigned Designated Premises shall be the sole responsibility of Concessionaire
and shall involve no cost to City.
8.09 Airport Security Program. Concessionaire agrees to observe all security
regulations and other requirements of any agency of the Federal government,
including, but not limited to, the FAA and TSA, applicable to Concessionaire, as
such regulations or requirements have been or may be amended, including
without limitation, TSA Part 1542 of the Code of Federal Regulations and Title
49, Part 1500 of the Code of Federal Regulations. Concessionaire agrees to
comply with the Airport Security Program and the Air Operations Area (AOA)
Vehicle Access Program, and amendments thereto, and to comply with such
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4
other rules and regulations as may be reasonably prescribed by City, and to take
such steps as may be necessary or directed by City to insure that sublessees,
employees, invitees and guests observe these requirements. Concessionaire
shall conduct background checks of its employees to the extent required by any
Federal, State or local law or if, to the extent permitted by law, required by the
City. The City shall have the right to require the removal or replacement of any
employee of Concessionaire at the Airport that the City has reasonably
determined may present a risk to public safety or the security of the Airport. If as
a result of the acts or omissions of Concessionaire, its sublessees, employees,
invitees or guests, City incurs any fines and/or penalties imposed by the FAA or
TSA; any expense in enforcing the regulations of the FAA or TSA or the rules or
regulations of City; or any expense in enforcing the Airport Security Program,
then Concessionaire agrees to pay to City all such costs and expenses, including
all costs of administrative proceeding, court costs, and attorneys fees and all
costs incurred by City in enforcing this provision. Concessionaire further agrees
to rectify any security deficiency or other deficiency as may be determined by
City, the FAA or TSA. In the event Concessionaire fails to remedy any such
deficiency, City may do so at the cost and expense of Concessionaire.
Concessionaire acknowledges and agrees that City may take whatever action is
necessary to rectify any security deficiency or any other deficiency identified by
City, the FAA or TSA.
ARTICLE 9
SIGNAGE
9.01 Sianage. City shall install all signs necessary or required for the direction of
pedestrian and vehicular traffic on the sidewalks, ways and roads within the
Terminal Building and Designated Premises. All directional signs in the Terminal
Building, including any additions thereto, shall be installed by the City. No signs
or advertisements pertaining to Concessionaire's car rental business shall be
installed or maintained outside of or within the Designated Premises until
Concessionaire has submitted to the Executive Director of Aviation for approval,
in writing, such drawings, sketches, design dimension and type and character of
such signs and advertisements proposed to be placed therein or thereon and any
payments, conditions, restrictions or limitation in respect to the use thereof stated
by the Executive Director of Aviation in his written approval thereof shall become
conditions hereof as if set forth herein at length.
ARTICLE 10
INSURANCE
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4 �
Concessionaire shall, at its sole expense, maintain in full force and effect at all times
during the Term of this Agreement, the insurance limits, coverages and endorsements
required herein. Neither the requirements contained in this Article 10 nor City's review
or acceptance of insurance shall in any manner limit or qualify the liabilities and
obligations assumed by Concessionaire under this Agreement.
10.01 Commercial General Liability. Concessionaire, at its expense, shall maintain fire
and extended coverage insurance written on a per occurrence basis on its
improvements, appurtenances, alterations, trade fixtures, equipment, personal
property and inventory within the Designated Premises from loss or damage to
the extent of their full replacement value. Concessionaire shall have the right to
self-insure the items specified in this Section 10.01 and Sections 10.02, 10.03,
and 10.04, so long as Concessionaire maintains a net worth satisfactory to the
City's Risk Manager. The City's Risk Manager may require net worth
documentation up to and including an audited financial statement.
10.02 Comprehensive General Liability. During the entire term of this Agreement, the
Concessionaire shall, at the Concessionaire's sole cost and expenses, but for the
mutual benefit of City and Concessionaire, maintain comprehensive general
liability insurance insuring against claims for bodily injury, death or property
damage occurring in, upon or about the Designated Premises and on any areas
directly adjacent to the Designated Premises written on a per occurrence basis in
an amount not less than either (i) a combined single limit of THREE MILLION
DOLLARS ($3,000,000.00) for bodily injury, death, and property damage or (ii)
bodily injury limits of $500,000.00 per person, $1,000,000.00 per occurrence and
$1,000,000.00 products and completed operations and property damage limits of
$200,000.00 per occurrence and $500,000.00 in the aggregate.
10.03 Worker's Compensation. Concessionaire shall, at the Concessionaire's sole cost
and expense, maintain a policy of worker's compensation insurance in an
amount as will fully comply with the laws of the State of California and which shall
indemnify, insure and provide legal defense for both the Concessionaire and the
City against any loss, claim or damage arising from any injuries or occupational
diseases occurring to any worker employed by or any persons retained by the
Concessionaire in the course of conducting Concessionaire's business in the
Designated Premises.
10.04 Automobile Liability. Concessionaire shall, at Concessionaire's sole cost and
expense, maintain a policy of automobile liability insurance written on a per
occurrence basis in an amount of not less than THREE MILLION DOLLARS
($3,000,000.00) combined single limit covering all owned, non-owned, leased
and hired cars.
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10.05 General Provisions. All of the policies of insurance required to be procured by
Concessionaire pursuant to this Article shall be primary insurance and shall
name the City, its officers, employees and agents as additional insureds. The
insurers shall waive all rights of contribution they may have against the City, its
officers, employees and agents and their respective insurers. All of said policies
of insurance shall provide that said insurance may not be amended or cancelled
without providing 30 days prior written notice by registered mail to the City. Prior
to the effective date of the Agreement and at least 30 days prior to the expiration
of any insurance policy, Concessionaire shall provide City with certificates of
insurance or appropriate insurance binders evidencing the above insurance
coverages written by insurance companies acceptable to City, authorized and
licensed to do business in the State of California and rated A: VII or better by
Best's Insurance Guide. In the event the Risk Manager of City (Risk Manager)
determines that (i) the Concessionaire's activities in the Designated Premises
create an increased or decreased risk of loss to the City, (ii) greater insurance
coverage is required due to the passage of time, or (iii) changes in the industry
require different coverages be obtained, Concessionaire agrees that the
minimum limits of any insurance policy required to be obtained by
Concessionaire may be changed accordingly upon receipt of written notice from
the Risk Manager; provided that Concessionaire shall have the right to appeal a
determination of increased coverage by the Risk Manager to the City Council of
City within ten (10) days of receipt of notice from the Risk Manager. City and
Concessionaire hereby waive any rights each may have against the other on
account of any loss or damage occasioned by property damage to the
Designated Premises, its contents, or Concessionaire's trade fixtures,
equipment, personal property or inventory arising from any risk generally covered
by insurance against the perils of fire, extended coverage, vandalism, malicious
mischief, theft, sprinkler damage, and earthquake sprinkler leakage. Each of the
parties, on behalf of their respective insurance companies insuring such property
of either City of Concessionaire against such loss, waives any right of
subrogation that it may have against the other. The foregoing waivers of
subrogation shall be operative only so long as available in California and
provided further that no policy is invalidated thereby.
ARTICLE 11
RELATIONSHIP OF THE PARTIES
Nothing contained herein shall be deemed or construed to the parties hereto, or by any
third party, as creating the relationship of principal and agent, partners, joint ventures, or
any other similar such relationship between the parties hereto. It is understood and
agreed that neither the method of computation of fees nor any other provision contained
herein, nor any acts of the parties hereto creates a relationship other than the
relationship of the City and Concessionaire.
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ARTICLE 12
INDEMNIFICATION
Concessionaire, as a material part of the consideration to be rendered to City under this
Agreement, hereby waives all claims against City for damage to equipment or other
personal property, trade fixtures, or improvements in, upon or about the Designated
Premises and for injuries to persons in or about the Designated Premises, from any
cause arising at any time. Concessionaire agrees to indemnify the City, its officers,
agents and employees against, and will hold and save them and each of them harmless
from, any and all actions, suits, claims, damages to persons or property, losses, costs,
penalties, obligations, errors, omissions or liabilities, (herein claims or liabilities) that
may be asserted or claimed by any person, firm or entity arising out of or in connection
with the negligent performance of the work, operations or activities of Concessionaire,
its agents, employees, subcontractors, or invitees, provided for herein, or arising from
the use of the Designated Premises by Concessionaire or its employees and
customers, or arising from the failure of Concessionaire to keep the designated
premises in good condition and repair, as herein provided, or arising from the negligent
acts or omissions of Concessionaire hereunder, or arising from Concessionaire's
negligent performance of or failure to perform any term, provision, covenant, or
condition of this Agreement (including, but not limited to, the failure to perform the
remediation obligations specified in Section 16.02), or arising from the presence or
threatened presence of any hazardous material on or about the Designated Premises
caused or exacerbated by Concessionaire, and excepting any presence of any pre-
existing hazardous material on or about the Designated Premises directly caused by a
party other than Concessionaire, whether or not there is concurrent passive or active
negligence on the part of the City, its officers, agents or employees, but excluding such
claims or liabilities arising from the sole negligence or willful misconduct of the City, its
officers, agents or employees, who are directly responsible to the City, and in
connection therewith:
(a) Concessionaire will defend any action or actions filed in connection with
any of said claims or liabilities and will pay all costs and expenses,
including legal costs and attorney's fees incurred in connection therewith;
(b) Concessionaire will promptly pay any judgment rendered against the City,
its officers, agents or employees for any such claims or liabilities arising
out of or in connection with the negligent performance of or failure to
perform such work, operations or activities of Concessionaire hereunder;
and Concessionaire agrees to save and hold the City, its officers, agents,
and employees harmless therefrom;
(c) In the event the City, its officers, agents, or employees are made a party
to any action or proceeding filed or prosecuted against Concessionaire for
such damages or other claims arising out of or in connection with the
negligent performance of or failure to perform the work, operation or
activities of Concessionaire hereunder, Concessionaire agrees to pay to
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the City, its officers, agents or employees, any and all costs and expenses
incurred by the City, its officers, agents or employees in such action or
proceeding, including, but not limited to, legal costs and attorney's fees.
ARTICLE 13
DAMAGE OR DESTRUCTION OF PREMISES/IMPROVEMENTS
13.01 Concessionaire's Obligations. Concessionaire hereby assumes full responsibility
for the condition of the assigned Designated Premises and character, acts and
conduct of all persons admitted to the assigned Designated Premises by or with
the actual or constructive consent of Concessionaire or by or with the consent of
any person acting for or on behalf of Concessionaire. If the assigned Designated
Premises, improvements, or any part thereof, are damaged in any way
whatsoever, whether by act of God, by the act, default or negligence of
Concessionaire, or of Concessionaire's members, agents, employees, officers,
representatives, guests, invitees, contractors, patrons, or any person admitted to
the assigned Designated Premises by Concessionaire or otherwise,
Concessionaire shall, at its sole cost and expense, restore the assigned
Designated Premises to the condition existing prior to such damage.
Concessionaire shall commence such restoration within thirty (30) days and shall
diligently pursue such restoration to completion. Concessionaire shall make such
repairs, replacements or rebuilding in accordance with the construction
requirements contained herein and as established by the City. If Concessionaire
fails to restore the assigned Designated Premises as required above, City shall
have the right to enter the assigned Designated Premises and perform the
necessary restoration, and Concessionaire hereby expressly agrees that it shall
fully assume and be liable to City for payment of the costs therefore, plus twenty-
five percent (25%) administrative overhead. Such restoration cost, plus the
administrative cost, shall be due and payable within thirty (30) days from date of
written notice therefore.
13.02 Right to Cancel. If any of the improvements on the assigned Designated
Premises are damaged or destroyed in whole or in part by fire or other casualty,
Concessionaire may, subject to approval of City, be relieved of the obligation to
repair, replace or rebuild the same and have the right to cancel this Agreement.
In such event, Concessionaire shall provide City written notice within thirty (30)
days after the date of any such damage or destruction and, upon approval by
City, this Agreement shall terminate and the insurance proceeds received or
receivable under any policy of insurance shall be paid to and retained by City. All
fees and other sums due hereunder payable under this Agreement shall be
prorated and paid to the date of such termination. The receipt and acceptance of
insurance proceeds by City under this Article 13 will, except as provided in Article
13.03, relieve Concessionaire from any responsibility to restore the assigned
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Designated Premises to its former condition; provided, however, that
Concessionaire expressly agrees, covenants and warrants that nothing herein
shall serve to relieve Concessionaire of its liability for penalties or expenses
associated with, arising out of, or in any way resulting from any impairment of or
damage to the environment of the assigned Designated Premises, and
Concessionaire further waives any claim against City for damages or
compensation, should this Agreement be so terminated.
13.03 Insurance Proceeds. Upon receipt by Concessionaire of the proceeds of the
insurance policy or policies, the proceeds shall be deposited in an escrow
account approved by the City so as to be available to pay for the cost of such
repair, replacement or rebuilding. Such proceeds shall be disbursed during
construction to pay the cost of such work. If the amount of such insurance
proceeds is insufficient to pay the costs of the necessary repair, replacement or
rebuilding of such damaged improvements, Concessionaire shall pay any
additional sums required into the escrow account. If the amount of such
insurance proceeds is in excess of the costs thereof, the amount of such excess
shall be remitted to Concessionaire.
13.04 Termination Upon Destruction or Other Casualty. In the event the assigned
Designated Premises, or any part thereof, shall be destroyed or damaged in
whole or in part by fire, water or any other cause, or if unforeseen occurrence
shall likewise render the fulfillment of this Agreement by City impossible, then
City, at its sole option, may terminate this Agreement. Concessionaire shall pay
all fees, rental, and costs and satisfy all of its obligations hereunder arising prior
to the time of such termination, whereupon this Agreement shall terminate and
the parties shall be relieved of all further obligations hereunder other than those,
which expressly survive expiration or termination of this Agreement.
Concessionaire hereby waives any claim for damages or compensation should
this Agreement be so terminated.
ARTICLE 14
TERMINATION OF AGREEMENT, DEFAULT, AND REMEDIES
14.01 Termination. This Agreement shall automatically terminate and expire at the end
of the Term.
14.02 Default. The occurrence of any one or more of the following events shall
constitute a material default and breach of this Agreement by Concessionaire:
A. The vacating or abandonment of the assigned Designated Premises by
Concessionaire.
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B. The failure by Concessionaire to make payment of Concession Fees,
Facility Rental or any other payment required to be made by
Concessionaire hereunder, as and when due, where such failure
continues for a period of three (3) days after written notice thereof from
City to Concessionaire.
C. The failure by Concessionaire to observe or perform any of the covenants,
conditions or provisions of this Agreement to be observed or performed by
Concessionaire, other than those described in paragraph B above, where
such failure shall continue for a period of thirty (30) days after written
notice from City to Concessionaire; provided, however, that if the nature of
Concessionaire's default is such that more than thirty (30) days are
reasonably required for its cure, then Concessionaire shall not be deemed
to be in default if Concessionaire commenced such cure within such thirty
(30) day period and thereafter diligently pursues such cure to completion.
D. To the extent permitted by law, (1) the making by Concessionaire or any
guarantor hereof of any general assignment, or general arrangement for
the benefit of creditors; (ii) the filing by or against Concessionaire of a
petition to have Concessionaire adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy
[unless, in the case of a petition filed against Concessionaire, the same is
dismissed within sixty (60) days]; (iii) the appointment of a trustee or
receiver to take possession of substantially all of Concessionaire's assets
located at the assigned Designated Premises or of Concessionaire's
interest in this Agreement, where possession is not restored to
Concessionaire within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Concessionaire's assets located
at the assigned Designated Premises or of Concessionaire's interest in
this Agreement, where such seizure is not discharged within thirty (30)
days.
E. The discovery by City that any information given to City by Concessionaire
relating to this Agreement was materially false.
14.03 Remedies. In the event of any such material default or breach by
Concessionaire, City may, with or without notice or demand, pursue any
available right or remedy at law or equity including the right, at its option, to
immediately terminate this Agreement, by giving written notice to that effect.
Upon such termination, Concessionaire shall immediately surrender the assigned
Designated Premises to City and shall cease its operations at the Airport. Such
termination shall be without prejudice to City to any remedy for arrearages or
payments due hereunder or breach of covenant or damages for the balance of
the Concession Fees and other sums due hereunder, payable through the full
Term of this Agreement, or any other damages or remedies whatsoever. Upon
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termination of this Agreement, City shall have the right to engage another
Concessionaire to provide the services required hereunder for such period or
periods at such fees and upon other terms and conditions as City may, in good
faith, deem advisable.
14.04 Termination by Concessionaire. Concessionaire may terminate this Agreement, if
Concessionaire is not in default of this Agreement (including, but not limited to,
its payments to City hereunder), by giving City sixty (60) days advance written
notice to be served as hereinafter provided, upon or after the happening of any
one of the following events:
A. Issuance by any court of competent jurisdiction of an injunction in any way
preventing the use of the Airport for Airport purposes and the remaining in
force of such injunction for a period of at least ninety consecutive (90)
days.
B. The default by City in the performance of any covenant or agreement
herein required to be performed by City and the failure of City to remedy
such default for a period of sixty (60) consecutive days after receipt from
Concessionaire of written notice to remedy same provided, however, that
if the nature of City's obligations is such that more than sixty (60) days are
required for performance then City shall not be in default if City
commences performance within such sixty (60) day period and thereafter
diligently prosecutes the same to completion. Notwithstanding the
foregoing, a notice of cancellation shall not be of any force or affect if City
has remedied the default prior to receipt of Concessionaire's notice of
cancellation.
C. The lawful assumption by the United States Government or any
authorized agency thereof, of the operation, control, or use of the Airport
and facilities, or any substantial part or parts thereof, in such a manner as
to substantially restrict the operation of Concessionaire, for a period of at
least ninety (90) consecutive days.
14.05 Termination by City. City may terminate this Agreement without cause by giving
Concessionaire sixty (60) days advance written notice. If termination is without
cause, City will reimburse Concessionaire the amortized cost of Improvements
(as defined in Article 7.01) made by Concessionaire, if any, to the Designated
Premises. The amortized cost of the improvements shall be determined in
accordance with Generally Accepted Accounting Principles with a useful life not
to exceed the term of the this Agreement Concessionaire shall pay all fees,
rental, and costs and satisfy all of its obligations hereunder arising prior to the
time of such termination, whereupon this Agreement shall terminate and the
parties shall be relieved of all further obligations hereunder other than those,
which expressly survive expiration or termination of this Agreement.
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14.06 Surrender of Assigned Designated Premises. Notwithstanding the obligations of
Concessionaire and rights of City provided for herein, Concessionaire expressly
agrees that upon termination or cancellation of this Agreement it shall
immediately surrender the assigned Designated Premises to City free and clear
of all personal property of Concessionaire. All repairs and obligations for which
Concessionaire is responsible shall be completed by the earliest practical date
prior to surrender. Any personal property of Concessionaire not removed in
accordance with this provision may be removed and placed in storage by the City
at the sole cost of Concessionaire. Failure on the part of Concessionaire to
reclaim same, as provided by law, shall constitute a gratuitous transfer of title to
City for whatever disposition is deemed to be in the best interest of City.
ARTICLE 15
ASSIGNMENT AND TRANSFER
Concessionaire shall not, in any manner, assign, transfer or otherwise convey an
interest in this Agreement, or sublet the Designated Premises or any portion thereof
(Assignment), without the prior written consent of the City, which consent may be
granted or withheld by the City in its sole discretion. Any such attempted Assignment
without City approval shall be null and void. In the event the City consents in writing to
an Assignment, Concessionaire shall have the right to assign this Agreement, to the
extent permitted by the City's consent to such Assignment, provided that the use of the
Designated Premises shall be limited to the same uses as are permitted under this
Agreement. Any permitted Assignment shall be subject to the same conditions,
obligations and terms as set forth herein and Concessionaire shall be fully responsible
for the observance by its assignees of the terms and covenants contained in this
Agreement. Notwithstanding any provision of this Agreement to the contrary, in the
event of an approved Assignment, Concessionaire shall remain primarily liable to City
for fulfilling all obligations, terms, and conditions of this Agreement, throughout the Term
of this Agreement. City may freely assign this Agreement at any time without the
consent of Concessionaire, and upon assumption by such assignee of City's obligations
hereunder, City shall be released from all liability and obligation arising hereunder after
such assignment.
ARTICLE 16
LAWS, REGULATIONS, PERMITS AND TAXES
16.01 Compliance with Laws.
Concessionaire shall, at its sole cost and expense, comply with all of the
requirements of all municipal, state and federal authorities now in force or which
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may hereafter be in force pertaining to the use of the Designated Premises, and
shall faithfully observe in said use all municipal ordinances, including, but not
limited to, the City's General Plan and zoning ordinances, state and federal
statutes or other governmental regulations now in force or which shall hereinafter
be in force. The judgment of any court of competent jurisdiction, or the admission
of Concessionaire in any action or proceeding against Concessionaire, whether
City is a party thereto or not, that Concessionaire has violated any such order or
statute in said use, shall be conclusive of that fact as between the City and
Concessionaire, subject to any appeal rights Concessionaire may have.
Concessionaire shall not engage in any activity on or about the Designated
Premises that violates any Environmental Law, and shall promptly, at
Concessionaire's sole cost and expense, take all investigatory and/or remedial
action required or ordered by any governmental agency or Environmental Law for
clean-up and removal of any contamination involving any Hazardous Material
created or caused directly or indirectly by Concessionaire subject to any appeal
rights Concessionaire may have under the terms of this Agreement. The term
"Environmental Law" shall mean any federal, state or local law, statute,
ordinance or regulation pertaining to health, industrial hygiene or environmental
condition on, under or about the Designated Premises, including, without
limitation, (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. SECTIONs 9601 et seq.; (ii) the
Resource Conservation and Recovery Act of 1976 ("RCRA") 42 U.S.C.
SECTIONs 6901 et seq.; (iii) California Health and Safety Code SECTIONs
25100 et seq.; (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986,
California Health and Safety Code SECTION 25249.5 et seq.; (v) California
Health and Safety Code SECTION 25359.7; (vi) California Health and Safety
Code SECTION 25915; (vii) the Federal Water Pollution Control Act, 33 U.S.C.
SECTIONs 1317 et seq.; (viii) California Water Code SECTION 1300 et seq.; (ix)
California Civil Code SECTION 3479 et seq.; (x) the Solid Waste Disposal Act 42
U.S.C. SECTION 6901 et seq.; and (xi) California Health and Safety Code
SECTION 25280 et seq. regulating the use of underground storage tanks, as
such laws are amended and the regulations and administrative codes applicable
thereto. The term "Hazardous Material" includes, without limitation, any material
or substance which is (i) defined or listed as a "hazardous waste," "extremely
hazardous waste," "restrictive hazardous waste" or "hazardous substance" or
considered a waste, condition of pollution or nuisance under the Environmental
Laws; (ii) petroleum or a petroleum product or fraction thereof; (iii) asbestos;
and/or (iv) substances known by the State of California to cause cancer and/or
reproductive toxicity. It is the intent of the parties hereto to construe the terms
"Hazardous Materials" and "Environmental Laws" in their broadest sense.
Concessionaire shall provide all notices required pursuant to the Safe Drinking
Water and Toxic Enforcement Act of 1986, California Health and Safety Code
SECTION 25249 et seq. Concessionaire shall provide prompt written notice to
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City of all notices of violation of the Environmental Laws received by
Concessionaire relating to the Designated Premises.
16.02 Use of Underground Storage Tanks. The parties acknowledge that
Concessionaire or Concessionaire's predecessor-in-interest installed one or
more underground storage tanks at the Maintenance and Service Facility Space,
along with related pipelines, pumps, pump islands and dispensers, and other
appurtenant structures (collectively hereafter referred to as the Underground
Storage Tank System) which Concessionaire uses or will use in its car rental
concession hereunder. Concessionaire understands and acknowledges that
Concessionaire is the owner and operator of the Underground Storage Tank
System as more particularly set forth in Article 7.0.3. To the best knowledge of
Concessionaire, there has been no release of Hazardous Materials on, under or
around the Maintenance and Service Facilities Space, the groundwater
underlying the Maintenance and Service Facilities Space, or otherwise.
Concessionaire hereby agrees to comply with all federal, state and local laws,
ordinances, regulations and orders applicable to the installation, maintenance,
use, operation and removal of said Underground Storage Tank System during
the term of this Agreement, including, but not limited to, the provisions of Health
and Safety Code Section 25280 et seq. All references contained in this Article to
the "Code" shall be deemed to refer to the Health and Safety Code. Except to the
extent any materials (as hereinafter defined) are protected by attomey-client
privilege or attorney work product, Concessionaire covenants and agrees to
provide City promptly with any and all correspondence, reports, studies, notices,
permits, approvals, orders and similar matters received by Concessionaire or
given by Concessionaire with respect to the Underground Storage Tank System
(Materials), including, but not limited to, copies of any permits relating to the
Underground Storage Tank System issued, renewed or transferred pursuant to
Code Section 25284 or 25285, copies of any notices revoking or modifying said
permits pursuant to Code Section 25285.1, copies of all compliance or inspection
reports prepared pursuant to Code Section 25288, and copies of any notices of
releases of substances from the Underground Storage Tank System pursuant to
Code Section 25295. As used in this Agreement, the term "release" does not
include the passive allowance of migration or movement of pre-existing
contamination or Hazardous Materials on, under, or migrating to or from the
Designated Premises. In addition, Concessionaire shall notify City of any
unauthorized release in excess of five (5) gallons from the Underground Storage
Tank System even if notice is not required to be provided to the applicable local
agency. Not more than three (3) months prior to expiration of the term of this
Agreement and not less than one (1) month prior to the expiration of the term of
this Agreement, Concessionaire shall have a tank integrity test (as such term is
defined in Code Section 25281(v)) conducted by a tank tester licensed by the
State Water Resources Control Board pursuant to Code Section 25284.4 and
shall deliver to City a copy of the report prepared by the tank tester setting forth
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the findings, recommendations and conclusions of the tank integrity test.
Remediation Obligations. If any inspection of the Underground Storage Tank
System determines that a release from the Underground Storage Tank System
has occurred or if the presence or threatened presence of any Hazardous
Material is hereafter detected on or about the Designated Premises, including,
but not limited to, the Maintenance and Service Facility Space, and the
Hazardous Material is one which may have been introduced to the Designated
Premises by Concessionaire or its agents, contractors, employees or licensees
from the Underground Storage Tank System or otherwise during the term of this
Agreement or any previous agreement between City and Concessionaire, then
until such time as it is finally determined by a court of competent jurisdiction that
such Hazardous Material (hereinafter Covered Hazardous Material) was released
or discharged on or about the Designated Premises by a person other than
Concessionaire or its agents, contractors, employees or licensees,
Concessionaire shall, at its sole expense, promptly commence the remedial
clean-up measures to assess, remove or remediate the Covered Hazardous
Material from the Designated Premises, monitor, mitigate and/or dispose of the
effects of such Hazardous Material, to the extent such may be required under
Environmental Law, and shall diligently pursue such assessment, removal,
remedial clean-up, monitoring, disposal and mitigation measures to completion
and closure from the appropriate regulatory agencies, all in compliance with
applicable Environmental Laws. Such activities shall be conducted in a diligent,
expeditious and safe manner so as not allow any dangerous or hazardous
conditions to occur on the Designated Premises during or after such activities. In
addition, Concessionaire shall promptly repair all material damage to the
Designated Premises and the improvements thereof caused by any such
removal, remedial clean-up, monitoring, disposal or mitigation measures
undertaken by or at the direction of Concessionaire and return the Designated
Premises substantially to the condition it existed immediately prior to such
remediation activities.
16.03 Permits and Licenses Generally. Concessionaire agrees that it shall, at its sole
cost and expense, be strictly liable and responsible for obtaining, paying for, and
maintaining current, and fully complying with, any and all permits, licenses and
other governmental authorizations, however designated, as may be required at
any time throughout the Term of this Agreement by any Federal, State or local
governmental entity or any court of law having jurisdiction over Concessionaire or
Concessionaire's operations and activities, for any activity of Concessionaire's
conducted on the assigned Designated Premises and for any and all operations
conducted by Concessionaire including ensuring that all legal requirements,
permits, and licenses necessary for or resulting, directly or indirectly, from
Concessionaire's operations and activities on the assigned Designated Premises
have been obtained and are in full legal compliance.
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16.04 Air and Safety Regulation. Concessionaire agrees that it shall conduct its
operations and activities under this Agreement in a safe manner, shall comply
with all safety regulations of the Airport and with safety standards imposed by
applicable Federal, State and local laws and regulations and shall require the
observance thereof by all employees, contractors, business invitees and all other
persons transacting business with or for Concessionaire resulting from, or in any
way related to, the conduct of Concessionaire's business on the Designated
Premises. Concessionaire hereby agrees that neither Concessionaire, nor
employee or contractor or any person working for or on behalf of Concessionaire,
shall require any personnel engaged in the performance of Concessionaire's
operations to work in surroundings or under working conditions which are
unsanitary, hazardous, or dangerous to his or her health or safety, as determined
by standards adopted pursuant to the Occupational Safety and Health Act of
1970, as same may be amended from time to time, as well as all State and local
laws, regulations, and orders relative to occupational safety and health.
16.05 Payment of Taxes. Concessionaire shall pay any and all taxes and other costs
lawfully assessed against its interest in the Designated Premises, its
improvements and its operations under this Agreement. Concessionaire shall
have the right to contest the amount or validity of any tax or assessment payable
by it by appropriate legal proceedings, but this shall not be deemed or construed
in any way as relieving, modifying, or extending Concessionaire's covenants to
pay any such tax or assessment, unless the legal proceedings shall operate to
prevent the collection of the tax or assessment. Upon termination of such legal
proceedings, the Concessionaire shall pay the amount of any such tax or
assessment, or part thereof, as finally determined in such proceedings, the
payment of which may have been deferred during the prosecution thereof,
together with any costs, fees, interest, penalties, or other liabilities in connection
therewith.
ARTICLE 17
DISCLAIMER OF LIABILITY
City hereby disclaims, and Concessionaire hereby releases City, from any and all
liability, whether in contract or tort (including strict liability, negligence and nuisance), for
any loss, damage, or injury of any nature whatsoever sustained by Concessionaire, its
employees, agents, or invitees during the term of this agreement including, but not
limited to, loss, damage, or injury to the improvements or personal property of
Concessionaire or Concessionaire's business invitees that might be located or stored
on the Designated Premises, unless such loss, damage, or injury is caused solely by
City's sole negligence. The parties expressly agree that under no circumstances shall
City be liable for indirect, consequential, special, or exemplary damages whether in
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contract or tort (including strict liability, negligence, and nuisance), such as, but not
limited to, loss of revenue or anticipated profits or any other damage related to the
assignment of the Designated Premises to Concessionaire pursuant to this agreement.
Concessionaire acknowledges and agrees that City shall have no liability whatsoever
and Concessionaire covenants and agrees to hold harmless City from any and all
liability relating to any information provided by city relating to this agreement.
Furthermore, Concessionaire acknowledges and agrees that its use of any such
information, whether prepared or provided by City or otherwise, in determining whether
to enter into this agreement, was at its sole risk.
ARTICLE 18
NOTICES
All notices and elections (collectively, notices) to be given or delivered by or to any party
hereunder, shall be in writing and shall be (as elected by the party giving such notice)
hand delivered by messenger, courier service or overnight mail, or alternatively shall be
sent by United States Certified Mail, with Return Receipt Requested. The effective date
of any notice shall be the date of delivery of the notice if by personal delivery, courier
services or overnight mail, or if mailed, upon the date which the return receipt is signed
or delivery is refused or the notice designated by the postal authorities as non-
deliverable, as the case may be. The parties hereby designated the following addresses
as the addresses to which notices may be delivered, and delivery to such addresses
shall constitute binding notice given to such party:
City:
Executive Director of Aviation
Palm Springs International Airport
3400 E. Tahquitz Canyon Way, Suite OFC
Palm Springs, CA 92262
Concessionaire:
Robert Bouta, Vice President
Avis Budget Car Rental, LLC
6 Sylvan Way
Parsippany, NJ 07054
Either party may change the address to which notices under this Agreement shall be
given, upon three (3) days prior written notice to the other party.
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ARTICLE 19
GOVERNMENTAL RESTRICTIONS
19.01 Federal Right to Reclaim. In the event a United States governmental agency
shall demand and take over the entire facilities of the Airport or the portion
thereof wherein the Premises are located, for public purposes for a period in
excess of ninety (90) days, either party may terminate this Agreement by
providing written notice of such termination to the other party and the parties
shall thereupon be released and fully discharged from any and all liability
hereunder arising after such termination or as a result thereof. This Section 19.01
shall not act or be construed as a waiver of any rights Concessionaire may have
against the United States as a result of such taking.
19.02 Federal Review. Concessionaire acknowledges this Agreement may be subject
to review or inspection by the FAA to determine satisfactory compliance with
Federal law or grant assurances and agrees that this Agreement shall be in full
force and effect and binding upon both parties pending such review or inspection
by the FAA, if applicable; provided, however, that upon such review or inspection
all parties hereto agree to modify any of the terms of this Agreement which shall
be determined by the FAA to be in violation of existing laws, regulations, grant
assurances or other requirements.
19.03 City Tax Assessment Right. None of the terms, covenants and conditions of this
Agreement shall in any way be construed as a release or waiver on the part of
City, as a political subdivision of the State of California, or any of the public
officials of the City of Palm Springs of the right to assess, levy, and collect any ad
valorem, non ad valorem, license, personal, intangible, occupation, or other tax
which shall be lawfully imposed on the Designated Premises, the business or
property of Concessionaire.
19.04 Right of Flight. City reserves unto itself, its successors and assigns, for the use
and benefit of the public, a right of flight for the passage of aircraft in the airspace
above the surface of the Designated Premises together with the right to cause in
said airspace such noise as may be inherent in the operations of aircraft now
known or hereafter used, for navigation of or flight in the said airspace for landing
on, taking off from, or operating on the Airport.
19.05 Operation of Airport. Concessionaire expressly agrees for itself, its subleases,
successors and assigns, to prevent any use of the Designated Premises which
would interfere with or adversely affect the operation, maintenance or
development of the Airport, or otherwise constitute an Airport hazard.
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19.06 Release. Concessionaire acknowledges that noise, airborne particulate matter,
and vibration are inherent to the operation of Airport and hereby releases City
from any and all liability relating to the same.
19.07 Develop/Improve Landing Area. City reserves the right to further develop or
improve the landing area of the Airport as it sees fit, regardless of the desire or
view of Concessionaire and without interference or hindrance.
19.08 Reserved Rights. City reserve the right, but shall not be obligated to
Concessionaire, to maintain and keep in repair the landing area of the Airport
and all publicly-owned facilities of the Airport, together with the right to direct and
control all activities of the Concessionaire in this regard.
This Agreement shall be subordinate to the provisions and requirement of any
existing or future agreement between the City and the United States, relative to
the development, operation or maintenance of the airport.
19.09 Notification and Review Requirements. Concessionaire agrees to comply with
the notification and review requirements covered in Part 77 of the Federal
Aviation Regulations in the event future construction of a building is planned for
the leased premises, or in the event of nay planned modification or alteration of
any present or future building or structure situated on the leased premises.
19.10 Height Restriction. Concessionaire, by accepting this Agreement, expressly
agrees for itself, its successors and assigns that it will not erect nor permit the
erection of any structure or object, nor permit the growth of any tree on the land
leased hereunder above the mean sea level elevation of 500 feet. In the event
the aforesaid covenants are breached, City reserves the right to enter upon the
Designated Premises hereunder and to remove the offending structure or object
and cut the offending tree, all of which shall be at the expense of Concessionaire.
19.11 Non-Interference. Concessionaire, by accepting this Agreement expressly
agrees for itself, its successors and assigns that it will not make use of the
premises in any manner which might interfere with the landing and taking off of
aircraft from the Airport or otherwise constitute a hazard. In the event the
aforesaid covenant is breached, City reserves the right to enter upon the
premises and cause the abatement of such interference at the expense of
Concessionaire.
19.12 Non-Exclusive. 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 in 308a of the Federal Aviation Act of 1958 (49 U.S.C.
1349z).
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19.13 War / National Emergency. 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 said airport or the exclusive or non-exclusive use of the Airport by the
United States during the time of war or national emergency.
ARTICLE 20
NON-DISCRIMINATION
20.01 Non-Discrimination. This agreement is subject to the requirements of the U.S.
Department of Transportation's regulations, 49 CFR Part 23 and Part 26. The
Concessionaire agrees that it will not discriminate against anyone because of
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.
The Concessionaire agrees to include the above statements in any subsequent
concession agreement or contract covered by 49 CFRR Part 23, that it enters
and cause those businesses to similarly include the statements in further
agreements.
Concessionaire shall furnish its accommodation and/or services on a fair, equal
and not unjustly discriminatory basis to all users thereof and it shall charge fair,
reasonable and not unjustly discriminatory prices for each unit or service.
Concessionaire may be allowed to make reasonable and nondiscriminatory
discounts, rebates or other similar type of price reductions to volume purchasers.
20.02 Airport Concession Disadvantaged Business Enterprise Program (ACDBE). This
is an Airport Concession Disadvantaged Business Enterprise (ACDBE) Race
Neutral Agreement. The Concessionaire will make a Good Faith Effort defined in
Appendix A, 49 CFR Part 26 attached as Exhibit "F" to achieve ACDBE
participation in the performance of this concession.
Concessionaire will be required to submit the following information on an annual
basis (October — September) during the term of the agreement: (1) the names
and addresses of ACDBE firms and suppliers that have participated in the
Concession and proof of ACDBE certification; (2) a description of the services or
goods that each ACDBE contractor/vendor provided; and (3) the dollar amount of
the participation of each ACDBE.
20.03 Non-compliance. Non-Compliance with Sections 20.01 and 20.02 shall constitute
a material breach thereof and in the event of such non-compliance, the City shall
have the right to terminate this Agreement and the estate hereby created without
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PSP CAR RENTAL CONCESSION AGREEMENT
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. r
liability therefore or at the electing of the City or the United States either or both
said Governments shall have the right to judicially enforce provisions.
20.04 Affirmative Action. Concessionaire assures that it will undertake an affirmative
action program as required by 14 CFR Part 152, Subpart E, to insure that no
person shall, on the grounds of race, creed, color, national origin, or sex, be
excluded from participating in any employment activity covered by this subpart.
Concessionaire assured that it will require that its covered sub-organizations
provide assurances to the Concessionaire that they similarly will undertake
affirmative action programs and that they will require assurance from their sub-
organizations, as required by 14 CFR 152, Subpart E, to the same effort.
ARTICLE 21
MISCELLANEOUS
21.01 City Not Liable. City shall not be responsible or liable to Concessionaire for any
claims for compensation or any losses, damages or injury sustained by
Concessionaire resulting from (a) cessation for any reason of air carrier
operations at the Airport Terminal or (b) diversion of passenger traffic to any
other facility. City shall not be responsible or liable to Concessionaire for any
claims for compensation or any losses, damages or injury whatsoever sustained
by Concessionaire including, but not limited to, those resulting from failure of any
water supply, heat, air conditioning or electrical current or from an act of God,
state of war, terrorism, civilian commotion or riot or any cause beyond the control
of City. All personal property placed on or moved on to the Designated Premises
shall be at the sole risk of Concessionaire. City shall not be liable for any damage
or loss of any personal property placed or moved on to the Designated Premises.
21.02 Authorized Uses Only. Notwithstanding anything to the contrary herein,
Concessionaire shall not use or permit the use of the Designated Premises or the
Airport for any illegal or improper purpose or for any purpose which would
invalidate any policies of insurance, now existing or hereafter written on the
Airport for City or Concessionaire.
21.03 Waivers. The failure of City to insist on a strict performance of any of the
agreements, terms, covenants and conditions hereof shall not be deemed a
waiver of any rights or remedies that City may have for any subsequent breach,
default, or non-performance, and City's right to insist on strict performance of this
Agreement shall not be affected by any previous waiver or course of dealing.
21.04 Subordination to Federal Agreements. This Agreement shall be subject and
subordinate to all the terms and conditions of any instrument and documents
under which City acquired the land or improvements thereon and shall be given
53
PSP CAR RENTAL CONCESSION AGREEMENT
758614A
only such effect as will not conflict with nor be inconsistent with such terms and
conditions. Concessionaire understands and agrees that this Agreement shall be
subordinate to the provisions of any existing or future agreement between City
and the United States of America, or any of its agencies, relative to the operation
or maintenance of the Airport, the execution of which has been or may be
required as a condition precedent to the expenditure of federal funds for the
development of the Airport.
21.05 City's Governmental Authority. Nothing in this Agreement shall be construed to
waive or limit City's governmental authority as a political subdivision of the State
of California to regulate Concessionaire or its operations.
21.06 Rights Reserved to City. All rights not specifically granted Concessionaire by this
Agreement are reserved to City.
21.07 Invalidity of Clauses. The invalidity of any portion, article, paragraph, provision
clause, or any portion thereof of this Agreement shall have no effect upon the
validity of any other part or portion hereof.
21.08 Venue. To the extent allowed by law, the venue for any action arising from this
Agreement shall be in Riverside County, California.
21.09 Governing Law. This Agreement shall be governed by and in accordance with
the laws of the State of California.
21.10 Inspections. The authorized employees and representatives of City and any
applicable federal, state, and local governmental entity having jurisdiction hereof
shall have the right of access to the Designated Premises at all reasonable times
for the purposes of inspection for compliance with the provisions of this
Agreement and/or applicable laws.
21.11 Remedies Cumulative. The rights and remedies of the parties with respect to any
of the terms and conditions of this Agreement shall be cumulative and not
exclusive and shall be in addition to all other rights and remedies of the parties.
21.12 Paragraph Headings. The headings of the various articles and sections of this
Agreement, and its Table of Contents, are for convenience and ease of reference
only, and shall not be construed to define, limit, augment or describe the scope,
context or intent of this Agreement or any part or parts of this Agreement.
21.13 Binding Effect. The terms, conditions and covenants of this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
successors, assigns and sublessees, if any. This provision shall not constitute a
waiver of any conditions against assignment or subletting.
54
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
21.14 Performance. The parties expressly agree that time is of the essence in this
Agreement and the failure by Concessionaire to complete performance within the
time specified, or within a reasonable time if no time is specified herein, shall, at
the option of City without liability, in addition to any other rights or remedies,
relieve City of any obligation to accept such performance.
21.15 Conflict. In the event of any conflict, and for purposes of resolving any disputes
which may arise regarding this Agreement, the Invitation for Bid or
Concessionaire's response to the Bid, as referenced above, the order-of-
precedence shall be (1) this Agreement; (ii) the Invitation for Bid; (iii)
Concessionaire's response to the Bid.
21.16 Excusable Delay. Any party performing under this Agreement shall use
reasonable efforts to remedy the cause or causes of an excusable delay.
Excusable delays are those delays due to force majeure, acts of God, fire, flood,
earthquake, explosion, riot, sabotage, windstorm, or labor dispute, and shall toll
the time to perform under this Agreement.
21.17 Incorporation by References. All terms, conditions, specifications of Invitation For
Bid #11-06, all exhibits attached hereto and referenced herein shall be deemed
to be incorporated in this Agreement by reference.
21.18 Entirety of Agreement. The parties agree that this Agreement sets forth the entire
agreement between the parties, and there are no promises or understandings
other then those stated herein. None of the provisions, terms and conditions
contained in this Agreement may be added to, modified, superseded or otherwise
altered except by written instrument executed by the parties hereto.
21.19 Construction. Neither party shall be considered the author of this Agreement. The
terms of this Agreement shall not be strictly construed against one party as
opposed to the other based upon who drafted it.
21.20 Radon. Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed Federal
and State guidelines have been found in buildings in California. Additional
information regarding radon and radon testing may be obtained from City's public
health unit.
SIGNATURES ON NEXT PAGE
55
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
'3
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the
date first written above.
ATTEST: CITY OF PALM SPRING
ici al corporation
By: B
City Clerk O?I14 �1 City anager
APPROV D T M: APPROVED BY CITY COUNCIL
By. �J.0•U 2m, (X"X0
City Attorney
CONTRACTOR: Check one:_ Individual_Partnership X Corporation
Corporations require two notarized signatures: One from each of the following: A. Chairman of
Board, Pre ' 1t, or any Vice President: AND B. Secretary, Assistant Secretary, Treasurer,
Assi nt Tr ur , orZf Financial Officer.
By: By: r'w'v J O
Signature notariz d) T Signature (notarized)
Robert Mobs
Vie,President,and Assistant Secretary of, Robert Bouts,Senior Vice President
Avis Budget Car Rental,LLC _ _ _. For Properties&Facilities for Avis Budget Car Rental,LLC
State of: r, l STerseu State of: Neu)Se✓3ey
County of: Warr,6 County of: f (O4^,16
On6I30I1 1 before me, CUn-�a 4 flZr b OnI01201I I before me, G/nfta M• H r rtt
Personally appeared R61ser4 mu h5 Personally appeared go,bw� & tea
personally known to me (or proved to me on personally known to me (or proved to me on
the basis of satisfactory evidence) to be the the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed person(s) whose name(s) is/are subscribed
to the within 'nstrument and acknowledged to the within instrument and acknowledged
to me that lbe he/they executed the same to me that&she/they executed the same
in&her/their authorized capacity(ies), and in&her/their authorized capacity(ies), and
that by dj�her/their signature(s) on the that by q&her/their signature(s) on the
instrument the person(s), or entity upon instrument the person(s), or entity upon
behalf of which the person(s) acted, behalf of which the person(s) acted,
executed the instrument. executed the instrument.
WITNESS my hand and official seal. WITNESS my hand and official seal.
Notary Signature: Notary Signature: eW12�q -4—�-
Notary Seal: Notary Seal:
CYNTIA M. HERMES' CYNTIA M. HERMES
NOTARY PUBLIC - NOTARYPUBUVU
PSP CAR RENTAL CONCEISSM N9WjffAMT STATE OF NEW JERSEY
758614.1 NO.2284899 NO.2284899 -
MY COMM.EXP.423-12 MY COMM.FXP.4-23-12
EXHIBIT A
READY RETURN SPACES/LANES
See attached
57
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
EXH I BIT A - PSP READY RETURN LCJT
I
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i
PIV�/ � � RflWIR fm ROb
• �� R[ApY f11quYE rpnD .�.y
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279 READY SPACES -
i
i
762 RETURN SPACES I"� ,�tah�f—
RETURN LANES 5 ANO 6 COUNT AS ONE LANE
EXHIBIT B
OVERFLOW PARKING LOT
See attached
58
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
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EXHIBIT C
CUSTOMER SERVICE COUNTER SPACE
See attached
59
PSP CAR RENTAL CONCESSION AGREEMENT
758614A
6/8/2011
Palm Springs International Airport
Rental Car Concession Locations
(door) (door)
USO
LOBBY Office
Aidine BAGGAGE CLAIM AREA
Rest Rooms Baggage
Back Room Counters
Cooler Space 1=647 SF Counbr Spec.4-393 SF
Counter Selection Order COnn[er Selected Office=9x 17.5=157.5 SF Office=9x 12= 108 SF
Counter=7 x20.5=143.5 SF Counter=7x 15=105 SF
1.Hertz 1 Que=12x2a5=gas SF Quo=12x 15=180 SF
2.A1ds/Budgel 2 Counter Space 2=547 SF Counter Space 5-349.5 SF
Office=9x 17.5=157.5 SF Office=9x 11.5=103.5 SF
3. DollarrFhritty 3 Counter=7 x20.5=143,5 SF Counter=a5x 12=102 SF
Que=12 x205=246 SF Quo=12x 12=144 SF
4.National/Alarro 4
Counter Space 3=947 SF
5.Enterprise 5 Office=9 x 17.5=157,5 SF
Counter=7 x 20,5=143 5 SF
Que=12 x 20.5=246 SF
59A
r
EXHIBIT D
MAINTENANCE SERVICE FACILITY SPACES
Service Facility 1 - Hertz
Service Facility 2- National/Alamo
Service Facility 3-Avis/Budget
Service Facility 4- Enterprise
Service Facility 5- Dollar/Thrifty
See attached
60
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
EXHIBIT E3
M AINTEN AN CElSERVICE FACILITIES_
View Pazcel maps
SPACE SO_ FT_
7S,2S1 SF_
90P-fQ xsaw PM.V#Z Nf/N SM/4 I.A ,- q y:"' „�
� 4 � #2 � 72,326 SF.
.. 03 = 72,921 SF-
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EXHIBIT E
TERMINAL COMMON USE SPACE
See attached
61
PSP CAR RENTAL CONCESSION AGREEMENT
758614.1
GATE I .A7 1p
LG.AIR CARRIER HOi.GROOM 16,516 SF
r 8 AIR CARRIER'-VALWV.AYS 821,177 SF
(+%-E? e o RJ TERN41NAL HOLDROON! 15,010, SF
Gzr, ■ SAC�,AGE CLA.10 15,158 SF
ro e, CHEC�PO`ds 5445 SF
1° TICKET LUNG 9,905 SF
CENTER LOBBY 9,088 S.
- r P"SPRN63 OWL ARPOW
1
COMMON USE SPACE
MEN
VA
EXHIBIT F
ACDBE GOOD FAITH EFFORTS
See attached
62
PSP CAR RENTAL CONCESSION AGREEMENT
7586I4A
Code of Federal Regulations Search Results Exhibit F Page 46 of 67
reasonably be construed as confidential business information to any third party without the written consent of
the firm that submitted the information.This includes applications for DBE certification and supporting
documentation. However, you must transmit this information to DOT in any certification appeal proceeding
under §26.89 in which the disadvantaged status of the individual is in question.
(b) Confidentiality of information on complainants. Notwithstanding the provisions of paragraph(a) of this
section,the identity of complainants shall be kept confidential, at their election. If such confidentiality will
hinder the investigation, proceeding or hearing, or result in a denial of appropriate administrative due process to
other parties, the complainant must be advised for the purpose of waiving the privilege. Complainants are
advised that, in some circumstances, failure to waive the privilege may result in the closure of the investigation
or dismissal of the proceeding or hearing. FAA follows the procedures of 14 CFR part 16 with respect to
confidentiality of information in complaints.
(c) Cooperation. All participants in the Department's DBE program(including, but not limited to, recipients,
DBE firms and applicants for DBE certification, complainants and appellants, and contractors using DBE firms
to meet contract goals) are required to cooperate fully and promptly with DOT and recipient compliance
reviews, certification reviews, investigations, and other requests for information. Failure to do so shall be a
ground for appropriate action against the party involved(e.g.,with respect to recipients, a finding of
noncompliance; with respect to DBE firms, denial of certification or removal of eligibility and/or suspension
and debarment; with respect to a complainant or appellant, dismissal of the complaint or appeal; with respect to
a contractor which uses DBE firms to meet goals, findings of non-responsibility for future contracts and/or
suspension and debarment).
(d)Intimidation and retaliation. If you are a recipient, contractor, or any other participant in the program, you
must not intimidate,threaten,coerce,or discriminate against any individual or firm for the purpose of
interfering with any right or privilege secured by this part or because the individual or firm has made a
complaint,testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under
this part. If you violate this prohibition, you are in noncompliance with this part.
[64 FR 5126,Feb.2, 1999,as amended at 68 FR 35556,June 16,20031
Appendix A to Part 26--Guidance Concerning Good Faith Efforts
I.When,as a recipient,you establish a contract goal on a DOT-assisted contract,a bidder must,in order to be responsible and/or
responsive,make good faith efforts to meet the goal.The bidder can meet this requirement in either of two ways.First,the bidder can
meet the goal,documenting commitments for participation by DBE firms sufficient for this purpose. Second,even if it doesn't meet
the goal,the bidder can document adequate good faith efforts.This means that the bidder must show that it took all necessary and
reasonable steps to achieve a DBE goal or other requirement of this part which,by their scope,intensity,and appropriateness to the
objective,could reasonably be expected to obtain sufficient DBE participation,even if they were not fully successful.
II.In any situation in which you have established a contract goal,part 26 requires you to use the good faith efforts mechanism of this
part.As a recipient,it is up to you to make a fair and reasonable judgment whether a bidder that did not meet the goal made adequate
good faith efforts.It is important for you to consider the quality,quantity,and intensity of the different kinds of efforts that the bidder
has made.The efforts employed by the bidder should be those that one could reasonably expect a bidder to take if the bidder were
actively and aggressively trying to obtain DBE participation sufficient to meet the DBE contract goal.Mere pro forma efforts are not
good faith efforts to meet the DBE contract requirements.We emphasize,however,that your determination concerning the sufficiency
of the firm's good faith efforts is a judgment call:meeting quantitative formulas is not required.
Ill.The Department also strongly cautions you against requiring that a bidder meet a contract goal(i.e.,obtain a specified amount of
DBE participation)in order to be awarded a contract,even though the bidder makes an adequate good faith efforts showing.This rule
specifically prohibits you from ignoring bonafrde good faith efforts.
IV.The following is a list of types of actions which you should consider as part of the bidder's good faith efforts to obtain DBE
participation.It is not intended to be a mandatory checklist,nor is it intended to be exclusive or exhaustive.Other factors or types of
&Zq
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efforts may be relevant in appropriate cases. -
A.Soliciting through all reasonable and available means(e.g.attendance at pre-bid meetings,advertising and/or written notices)the
interest of all certified DBEs who have the capability to perform the work of the contract.The bidder must solicit this interest within
sufficient time to allow the DBEs to respond to the solicitation.The bidder must determine with certainty if the DBEs are interested by
taking appropriate steps to follow up initial solicitations.
B.Selecting portions of the work to be performed by DBEs in order to increase the likelihood that the DBE goals will be achieved.
This includes,where appropriate,breaking out contract work items into economically feasible units to facilitate DBE participation,
even when the prime contractor might otherwise prefer to perform these work items with its own forces.
C.Providing interested DBEs with adequate information about the plans,specifications,and requirements of the contract in a timely
manner to assist them in responding to a solicitation.
D.(1)Negotiating in good faith with interested DBEs.It is the bidder's responsibility to make a portion of the work available to DBE
subcontractors and suppliers and to select those portions of the work or material needs consistent with the available DBE
subcontractors and suppliers,so as to facilitate DBE participation.Evidence of such negotiation includes the names,addresses,and
telephone numbers of DBEs that were considered;a description of the information provided regarding the plans and specifications for
the work selected for subcontracting;and evidence as to why additional agreements could not be reached for DBEs to perform the
work.
(2)A bidder using good business judgment would consider a number of factors in negotiating with subcontractors,including DBE
subcontractors,and would take a firm's price and capabilities as well as contract goals into consideration.However,the fact that there
may be some additional costs involved in finding and using DBEs is not in itself sufficient reason for a bidder's failure to meet the
contract DBE goal,as long as such costs are reasonable.Also,the ability or desire of a prime contractor to perform the work of a
contract with its own organization does not relieve the bidder of the responsibility to make good faith efforts.Prime contractors are
not,however,required to accept higher quotes from DBEs if the price difference is excessive or unreasonable.
E.Not rejecting DBEs as being unqualified without sound reasons based on a thorough investigation of their capabilities.The
contractor's standing within its industry,membership in specific groups,organizations,or associations and political or social
affiliations(for example union vs.non-union employee status)are not legitimate causes for the rejection or non-solicitation of bids in
the contractor's efforts to meet the project goal.
F.Making efforts to assist interested DBEs in obtaining bonding,lines of credit,or insurance as required by the recipient or
contractor.
G.Making efforts to assist interested DBEs in obtaining necessary equipment,supplies,materials,or related assistance or services.
H.Effectively using the services of available minority/women community organizations;minority/women contractors'groups;local,
state,and Federal minority/women business assistance offices;and other organizations as allowed on a case-by-case basis to provide
assistance in the recruitment and placement of DBEs.
V.In determining whether a bidder has made good faith efforts,you may take into account the performance of other bidders in
meeting the contract.For example,when the apparent successful bidder fails to meet the contract goal,but others meet it,you may
reasonably raise the question of whether,with additional reasonable efforts,the apparent successful bidder could have met the goal.If
the apparent successful bidder fails to meet the goal,but meets or exceeds the average DBE participation obtained by other bidders,
you may view this, in conjunction with other factors,as evidence of the apparent successful bidder having made good faith efforts.
Appendix B to Part 26—Uniform Report of DBE Awards or Commitments and Payments Form
(OZ 13
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