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In-ter-space Airport Advertising - Airport Advertising Concession Agreement AIRPORT ADVERTISING CONCESSION AGREEMENT This Concession Agreement, hereinafter referred to as "Agreement," made and entered into this (*) day(f 7.0(-e_,c,--rm-lc-edii, 1997, by and between YAKIMA INTERNATIONAL AIRPORT- McALLISTER FIELD, an agency of the City of Yakima and the County of Yakima, Washington, hereinafter referred to as the "Airport", and IN- TER-SPACE SERVICES, INC., d/b/a INTERSPACE AIRPORT ADVERTISING, a — Pennsylvania corporation which is qualified to do business in the State of Washington, hereinafter referred to as the"Concessionaire." ITNESSETH: WHEREAS, Airport is responsible for oversight of the passenger terminal building and associated facilities, as currently exist or as may be constructed, hereinafter referred to in its entirety as the"Facility"; and, WHEREAS, the Concessionaire is a corporation engaged in the business of operating airport display advertising concessions similar in nature to that proposed for the Airport, and WHEREAS,the Airport wishes to grant to Concessionaire the right to operate the Airport's display advertising concession at the Facility under an agreement containing mutually satisfactory terms and covenants. NOW, THEREFORE, in consideration of the mutual covenants, terms, conditions, privileges, obligations and agreements herein contained, and intending to be bound hereby, the Airport and the Concessionaire hereby mutually undertake, promise and agree, each for itself and its successors and assigns, as follows: Article I. TER S e-e_ a 41,c ti if 1 C -11-67 1.1 The term (t Term") of this Agreement shall comme bn June 15, 1997, and continue for ten (10) years thereafter. T ir(port and Concessionaire shall ,001 ,,,,nee" have the mutual option to extend th6 Term for one additional ten year period. The option must be exercised by both parties by providing written notification prior to the expiration of the original ten year term. 970212v.MTL 1.2 This Agreement may continue on a month to month basis, subject to the terms and conditions hereof, at the mutual agreement of the parties upon the expiration of the Term. Article II. PRIVILE E AN BLI ATI NS F THE C C SI NAI• E 2.1 The Airport hereby grants to Concessionaire the right to operate, maintain and provide the Facility-wide display advertising concession. The parties understand and agree that, notwithstanding the above, Airport tenants reserve the right to engage in advertising for their own products and services within their premises. 2.2 Concessionaire shall develop and maintain a comprehensive advertising program totally integrated and coordinated as to design, quality, and content for the Facility. Under this program, Concessionaire shall establish, operate, service, and maintain prime quality, expertly designed commercial advertising displays, including but not limited to: floor exhibits, wall and floor back-lit units, product cases, brochure cases, posters, expo space, car and boat displays, direct telephone line hotel and transportation displays, electronic displays, computer displays, video displays, board advertising and other forms of advertising relating to an attractive and profitable means for the graphic display of materials, articles, and services of various manufacturers, industries, companies, and persons. 2.3 All installations shall be in good taste, professionally developed, and presented so as to be inoffensive to the general public and of such high caliber as to contribute to the establishment of the Facility as a prestige location for commercial advertising media. 2.4 The specific locations for backlit displays, product cases, poster boards, telephone boards and all other sites available for advertising use at the Facility ("Assigned Areas") are subject to selection and approval by the Airport and are indicated on Exhibit"A", attached hereto and made a part hereof. The Assigned Areas shall be subject to revisions from time to time based on the availability of advertising sites at the Facility and as may be mutually agreed upon by the parties. In such instance, Exhibit "A" shall be substituted to show such revisions. All Assigned Areas selected are subject to relocation at anytime at the Airport's discretion in accordance with Article19.17, herein. Should the Airport and the Concessionaire disagree on any advertising locations, the Airport's decision shall be final. However, the Airport shall 970212v.MTL 2 provide sufficient acceptable advertising locations to allow Concessionaire to meet its Facility-related direct and indirect equipment, capital depreciation, administrative overhead and service costs from the proceeds of net advertising sales. Concessionaire shall have the exclusive advertising use of all Assigned Areas. 2.5 Concessionaire shall be responsible for the commercial advertising program within the Assigned Areas at the Facility and shall apply to that program the fiscal, marketing and administrative resources of its organization. Through its national and regional organization, Concessionaire shall use its best efforts to: a. Develop, on a continuing basis, integrated master plans for advertising at the Facility. b. Follow quality criteria which will recognize the need for integrity of design and advertising content appropriate to the prestige and dignity of the Facility. c. Practice space utilization planning which will recognize and meet the needs of all advertising classifications and insure maximum revenue retum to the Airport. d. Provide a sales organization with ability and experience of sufficient scope to solicit and sell local, regional, and national advertising for display at the Facility, with a primary emphasis on local advertising. e. Provide advertising and display units and facilities which are consistent with the approved architectural design plan for advertising at the Facility. 2.6 Except as provided elsewhere in this Agreement, Concessionaire shall pay all expenses associated with planning, implementing, and operating the display advertising program provided for in this Agreement. 2.7 The Concessionaire shall have rights of ingress and egress to and from the Assigned Areas, including but not limited to common use roadways, subject to any rules or regulations which may have been established or shall be established in the future by the Airport or other duly constituted authority. Such rights of ingress and egress shall apply to the Concessionaire's employees, customers, agents, contractors, suppliers, and other authorized individuals. 2.8 The Airport shall provide parking facilities to the Concessionaire's employees, agents and contractors in the employee parking area of the Facility. 970212v.MTL 3 2.9 The Concessionaire may utilize additional storage space identified by the Airport as available for such purposes, at the discretion of the Airport, for the storage of cleaning supplies. 2.10 The Concessionaire has the right to install and maintain appropriate signs in the Assigned Areas provided that the design, installation and maintenance of such signs shall be consistent with the graphic standards and policies of the Airport as they may be developed and amended and shall have the written approval of the Airport prior to installation. Article III. ADVERTISING STA DAR S 3.1 The Concessionaire agrees to use the Assigned Areas solely for the sale, placement and display of advertising products and shall use its best efforts in every proper manner to maintain, develop and increase the sales of advertising developed hereunder. 3.2 The Concessionaire shall submit annually to the Airport, upon request, a schedule of monthly rates to be applied to the advertising locations, with the understanding that advertising locations shall be subject to quantity purchase and other incentive discounts and to standard sales/advertising agency deductions or commissions. 3.3 Advertisements, advertising copy, advertising materials and manners of presentation ("Advertisements") shall be subject to the reasonable approval of the Airport. Concessionaire shall not display any Advertisements reasonably disapproved by the Airport. Concessionaire shall immediately remove from the Facility upon written demand of the Airport, at its sole cost and expense, any reasonably disapproved Advertisements. In the event that any so disapproved Advertisement is not removed promptly upon receipt of written demand,the Airport may remove and store said Advertisement. The Airport shall not in any way be held responsible or liable for any damage to any Advertisement so removed. 3.4 No Advertisements reasonably considered offensive by the Airport may be presented to the public. The Concessionaire will promptly remove or modify the presentation of any Advertisement if so directed by the Airport. 3.5 Questions or complaints regarding the quality of service and/or prices, whether raised by patrons'complaints, clients'complaints or on the Airport's own initiative or otherwise, may be submitted to Concessionaire for response. 970212v.MTL 4 Such response shall be provided by Concessionaire within ten (10) working days. 3.6 At the Airport's request, Concessionaire shall meet with the Airport to review any complaints or concerns regarding the advertising program. Concessionaire shall endeavor to satisfy all reasonable concerns of the Airport regarding the display advertising program. 3.7 All Advertisements, improvements and equipment used in Concessionaire's operation shall conform in all respects to federal, state and local laws, statutes, ordinances and regulations. 3.8 Concessionaire shall, at its own expense, identify, provide and maintain in force any and all licenses and permits required for the legal operation of all aspects of the Concession. Article IV. I PR VE ENTS :Y AI RP RT 4.1 The Airport shall provide finished floors,walls and ceilings for the Assigned Areas. 4.2 All permanent improvements installed by Concessionaire, as set forth by Washington law, will be considered an integral part of the Facility and title to such permanent improvements will vest in the Airport upon the expiration or earlier termination of this Agreement,free and clear of any liens or encumbrances whatsoever. 4.3 The Airport will be responsible for the providing of, maintenance of, and upkeep of the following: a. All partitions about the perimeter of the Assigned Areas, all structural walls and supports, all structural roof construction, all structural floor construction and all exterior window walls designed about the perimeter of the Assigned Areas. b. All required electrical and other utility service to the Assigned Areas, except that, as provided in Article VI, Concessionaire shall pay for all telephone service to the Assigned Areas. 4.4 Concessionaire's utility obligations will be limited to the electrical connections of signs and displays within the Assigned Areas only. 970212v.MTL 5 Article V. I P VE E TS BY CO CESSI NAIRE 5.1 Prior to the beginning of the Term, and upon approval from the Airport,the Concessionaire may access the Assigned Areas. 5.2 All improvements, displays, equipment and interior design and decor constructed or installed by the Concessionaire, its agents, or contractors, including the plans and specifications therefore, shall conform to all applicable statutes, ordinances, building codes, and rules and regulations. Concessionaire shall obtain at its own expense all necessary building permits and all other required permits and licenses. 5.3 Concessionaire shall submit plans and specifications for the work to be performed pursuant to this Agreement("Preliminary Plans") to the Airport for review. 5.4 The Airport Manager shall, within fourteen (14) days of receipt of any such Preliminary Plans, either approve or disapprove the Preliminary Plans. Review and approval by Airport shall refer only to the conformity of such plans and specifications to the general architectural and aesthetic plan for the Assigned Areas and such approval shall not be unreasonably withheld. The Airport shall reserve the right to reject any Preliminary Plans or portions thereof submitted, and shall provide written notice to Concessionaire of the reason for such rejection with adequate specificity to allow Concessionaire to modify such Preliminary Plans accordingly. 5.5 In the event of rejection of the Preliminary Plans or any portion thereof by the Airport,the Concessionaire shall have up to fourteen (14) days to submit adequately revised Preliminary Plans for Airport review. Approval of the revised Preliminary Plans by the Airport shall not be unreasonably withheld. 5.6 Once approved by the Airport,the Preliminary Plans shall become final ("Final Plans"). No changes or alterations shall be made to the Final Plans after approval by the Airport, except as may be agreed to in writing by the parties. 5.7 The Concessionaire shall submit a schedule depicting the estimated time required to complete the construction and installation of the displays and improvements called for in the Final Plans. 5.8 Upon written "Notice to Proceed"from the Airport Manager, the Concessionaire shall immediately begin construction and installation of the approved displays and improvements in the Assigned Areas and pursue the same to completion. However, any delay in construction and installation due to fire, earthquake, 970212v-MTL 6 • wars, acts of the Airport or one of the Airport's contractors that materially interfere with the construction schedule, or other impediment beyond the control of the Concessionaire shall reasonably extend the time within which such construction and installation shall be completed. 5.9 All work shall be at Concessionaire's sole cost and expense and Concessionaire shall provide all necessary labor, supervision, materials, supplies and transportation. 5.1 0 All work performed by Concessionaire shall be in accordance with the Final Plans. No structural alterations or improvements shall be made to or upon the Assigned Area without the prior written approval of the Airport. The ultimate control over the quality and acceptability of the finishes in the Assigned Areas will be retained by the Airport, and all improvements and finishes shall require the written approval of the Airport prior to installation. 5.11 All improvements made by the Concessionaire to the Assigned Areas shall be of high quality, safe, fire resistant materials and shall be attractive in appearance. 5.12 Concessionaire and its architect-engineer shall meet with the Airport Manager in periodically scheduled meetings to assess the current status of completion. 5.13 One reproducible final "as built"copy of the Final Plans for all displays and improvements, as may have been revised by the parties during the course of construction and installation, shall be signed by the Concessionaire and submitted to the Airport Manager within ninety (90) days following completion of the construction and installation. 5.14 Upon completion of the work, the Concessionaire shall forthwith provide the Airport with a certification that the improvements and displays have been constructed and installed in accordance with the Final Plans, and in strict compliance with all applicable building codes, laws, statutes, ordinances and regulations. 5.15 All permanent improvements made to the Assigned Areas (as described in Article 4.2) by the Concessionaire shall be and remain the property of the Concessionaire until the expiration or earlier termination of this Agreement, at which time said permanent improvements shall become the property of the Airport. However, notwithstanding anything to the contrary in this Agreement, all non-permanent advertising displays, equipment, fixtures, materials and supplies of Concessionaire, which shall include, without limitation, telephone boards, wall displays and freestanding displays and display cases, shall 97021 2v.MTL 7 remain the property of Concessionaire unless Concessionaire shall fail within sixty (60) days following the expiration or earlier termination of this Agreement to remove its property. In the event of such failure to remove non-permanent property, title to such property shall, at the option of the Airport, vest in Airport at no cost to Airport. 5.16 The Concessionaire shall have a continuing right throughout the Term of this Agreement to negotiate with the Airport for additional or revised acceptable locations for advertising displays at the Facility, where available. Article VI. PRIVILEGE FEES, CHARGES AND ACCOUNTAB 6.1 Subject to the terms hereof, Concessionaire a o pay to the Airport a the greater of a base amount of$2,760 greement year quarter or a variable percentage of the Gross nue derived from the sale of advertising and advertising spac e Facility (together the"Airport Fee") in accordance with / 6.- the folio ' schedule: /X Annual (previous complete Calendar Percentage to Airport Year) Documented Passenger Enplanements at the Facility Less than 50,000 15% 50,000 to 75,000 200/0 75,001 to 100,000 25°/0 over 100,000 30% "Gross Revenue", as used herein, shall mean all moneys paid to or payable to Concessionaire for advertising sales made and for advertising services rendered at or from the Facility, regardless of when or where the order therefore is received, or delivered, whether on a cash basis or credit; provided, however, that: a. Gross Revenue shall exclude the following: (1) Any amount paid by advertisers in connection with design, fabrication or installation of the advertiser's display; (2) Any amount paid by the advertisers to Concessionaire for telephone service; (3) Standard 15°/0 selling commission for sales/advertising agencies; (4) Any sales or excise tax imposed by law and separately stated to and paid by an advertiser ("Sales Tax"); and 97021 2v.MTL 8 (5) Amounts owed which are deemed uncollectible by Concessionaire after prudent collection efforts. b. In the event Concessionaire is unable to collect amounts due from advertisers upon which Concessionaire had previously based Airport Fee payments after diligent efforts, such "bad debts"shall be deemed uncollectible and an appropriate adjustment shall be made in Concessionaire's subsequent statements and Airport Fee submissions. If any "bad debts"are collected by Concessionaire after adjustment,then an appropriate readjustment shall be made to the revenue statement and Airport Fee submission, excluding collection costs. c. Quantity purchase and incentive discounts shall be allowed. 6.2 The Airport Fee shall be paid by the twentieth (20th) day of the month following each calendar quarter of service, beginning with the month following the first calendar quarter in which Concessionaire used the Assigned Areas for display advertising purposes. Such Airport Fee shall be due for the previous calendar quarters on April 20th, July 20th, October 20th, and January 20th of each calendar year. Notwithstanding the above, any and all taxes (except income or gross revenue tax, Sales Tax and State of Washington Leasehold Excise Tax, where applicable) imposed by law and levied or assessed to Concessionaire as a result of its activities hereunder shall be deducted from the Airport Fee. f-r• am 4 # 6.3 The Airport Fee shall be subject to pro rtional reduction if passenger enplanements at the Facility during any calendar quarter of the Term shall fall ten percent (10%) or more below those recorded during the same quarter of c;- 14" •' •, or where a display case or other display advertisement in an Assigned Area was visually obstructed or subject to electric supply failure for more than three (3) days without fault to Concessionaire. If passenger enplanements during any calendar quarter of the Term shall fall twenty percent (20%) or more below that recorded for the same quarter oft?9,K then Concessionaire may Or. elect, at its sole discretion,to forthwith terminate this Agreement in accordance with the terms of Article 13. 6.4 Concessionaire shall furnish to the Airport for each calendar quarter a statement showing total Gross Revenue by advertiser for the preceding calendar quarter. With each quarterly statement, the Concessionaire shall remit to the Airport the Airport Fee derived through the end of the last month of the calendar quarter. 970212v.MTL 9 •s Concessionaire shall include therewith, where applicable, invoices to verify improvement and display capital expenses. 6.5 Concessionaire shall pay for all telephone service to the Assigned Areas. The Airport shall pay for all heating, air conditioning, electrical service and other utility service provided to the Assigned Areas. 6.6 The Concessionaire shall keep full and accurate books and records showing all Gross Revenue, and the Airport shall have the right, through its representatives, and at all reasonable times, to inspect and audit all such records as may be necessary to verify the reported Gross Revenue, including State of Washington sales tax return records. The Concessionaire agrees that all such books and records shall be made available at Concessionaire's office location for at least a two (2) year period following the end of each Agreement year. 6.7 No later than one hundred twenty (120) days after the end of Concessionaire's fiscal year, Concessionaire shall furnish to the Airport the written statement of a Certified Public Accountant stating that the Airport Fee paid by the Concessionaire to the Airport pursuant to this Agreement during each of Concessionaire's fiscal years is accurate. Such statement shall also state Gross Revenues as shown on the books and records of Concessionaire that were used to compute the Airport Fee made to the Airport during the period covered by the statement. 6.6 Without waiving any other right of action available to the Airport, in the event that Concessionaire is delinquent for a period of fifteen (15) days or more in paying to the Airport any fees payable to the Airport pursuant to this Agreement, the Concessionaire shall pay to the Airport interest thereon at the rate of twelve percent (12%) per annum from the date such amount was due and payable until paid. Such interest shall not accrue with respect to disputed amounts being contested in good faith by Concessionaire. 6.9 In the event that any additional Airport Fee shall be determined to be rightly due and owing by any audit of Concessionaire's books and records as provided in Article 6.6, such amount shall forthwith be paid by the Concessionaire to the Airport with interest thereon at the rate of twelve percent (12%) per annum from the date such additional Airport Fee became due; provided, however, that such audit is not contested in good faith by Concessionaire. 970212v.MTL 1 0 Article VII. OPERATIONAL STANDARDS 7.1 Concessionaire agrees to implement the Marketing and Management Plans developed as part of the original proposal submitted by Concessionaire. 7.2 The management, maintenance and operation of the Assigned Areas shall at all times be under the supervision and direction of an active, qualified, competent manager who shall at all times be subject to the direction and control of the Concessionaire. 7.3 The operations of Concessionaire, its employees, agents, suppliers and contractors shall be conducted in an orderly and proper manner. 7.4 The Concessionaire agrees that its employees and contractors shall be of sufficient number so as to properly conduct the Concessionaire's operation. Article VIII. AINTENANCE 8.1 Airport shall not be required to make repairs or improvements of any kind at the Concessionaire's Assigned Areas except as follow: a. Structural repairs to the roof, floor and walls and windows of the terminal; b. General maintenance and upkeep of the Airport's interior common use areas and external areas; c. Should the Airport be required to make any repairs or improvements under the provisions herein contained, Airport shall not be liable to Concessionaire for any damage caused by disrepair of any kind until the Airport has had reasonable opportunity to perform repairs after being notified in writing of the need for same by Concessionaire; and d. The Airport shall have the right to construct or install over, in, under or through the Assigned Areas new lines, pipes, mains,wires, conduits and equipment; provided, however, that such repair, alteration, replacement or construction shall not unreasonably interfere with Concessionaire's use of the Assigned Areas. The Airport will repair at its sole cost, any damage resulting from such activities. 8.2 The Concessionaire agrees to provide at its own expense such janitorial, and cleaning services and supplies as may be necessary or required in the operation and maintenance of the Assigned Areas. The Concessionaire also agrees to keep and maintain the Assigned Areas in a clean, neat and sanitary condition, and attractive in appearance. 970212v.MTL 1 1 ., 8.3 The Concessionaire agrees to maintain and make necessary general repairs to all of the Assigned Areas and to the improvements, fixtures and equipment therein, including, without limitation, signs, showcases, displays, and telephone boards. Concessionaire agrees to keep and maintain in good condition the electrical equipment located at or on the Assigned Areas. 8.4 All repairs done by the Concessionaire or on its behalf shall be of first class quality in both materials and workmanship. All repairs shall be made in conformity with the rules and regulations prescribed from time to time by federal, state or local authority having jurisdiction over the work in the Concessionaire's Assigned Areas. 8.5 The Airport Manager or his duly appointed representatives shall have the right to enter the Concessionaire's Assigned Areas to: a. Inspect the Assigned Areas at reasonable intervals during the Concessionaire's regular business hours, or at any time in case of emergency,to determine whether the Concessionaire has complied with and is complying with the terms and conditions of this Agreement. The Airport Manager may, at his discretion, require the Concessionaire to affect repairs required of Concessionaire at the Concessionaire's own cost; and b. Perform any and all things which the Concessionaire is obligated to and has failed after reasonable notice to do, including: maintenance, repairs and replacements to the Concessionaire's Assigned Areas. The cost of all labor and materials required to complete the work will be paid by the Concessionaire to the Airport within thirty (30) days following demand by Airport Manager for said payment. 8.6 The Concessionaire shall, in a timely manner, provide for the adequate sanitary handling and removal of all trash, garbage and other refuse caused as a result of the Concessionaire's operations. 8.7 The Airport shall provide, or cause to be provided, during the term of this Agreement, security protection similar to that afforded to other concessionaires at the Facility, and it will issue and enforce rules and regulations with respect to all portions of the Facility. The Concessionaire shall have the right, but shall not be obligated,to provide such additional or supplemental public protection as it may desire at its own cost. Any extra security protection shall be subject to Airport regulation and shall in no way hinder or interfere with Airport operations. 97021 2v.MTL 1 2 8.8 All terminal advertising deliveries, if required, shall be in a manner and location established by the Airport. All vendors traveling in the Air Operations Area or other secure area of the Facility must be escorted by authorized Airport personnel. Article IX. COMPLIANCE 9.1 The Concessionaire, its officers, agents, servants, employees, contractors, and licensees shall in the carrying out of this Agreement comply with all present and future laws, ordinances, orders, directives, rules and regulations of the United States of America,the State of Washington, the County of Yakima and the City of Yakima, their respective agencies, departments, authorities or commissions ("Applicable Law"). 9.2 Except as otherwise provided herein, Concessionaire shall pay, or in good faith contest, on or before their respective due dates, to the appropriate collecting authority, all federal, state, and local taxes and fees which may be levied upon Concessionaire on account of the business being conducted by Concessionaire in the Assigned Areas. It is the expressed intent of the parties that this Agreement not be a lease and that this Agreement grant no real property rights to Concessionaire. Concessionaire's advertising displays and equipment shall not be viewed as the real property of Concessionaire. Concessionaire shall not be liable for any property, real estate, or lease tax levied at the Facility. If such taxes are levied, the Airport shall be responsible for the payment or abatement of such taxes. Concessionaire shall maintain in current status all federal, state, and local licenses and permits required for the operations of the business conducted by Concessionaire. 9.3 Concessionaire shall pay wages that are not less than the minimum wages required by law to persons employed in its operations hereunder. 9.4 This Agreement is governed by the laws of Washington. Any disputes relating to this Agreement must be resolved in accordance with the laws of Washington. Article X. AS I N E TS AND SU :A 'EE ENTS 10.1 The provisions contained in this Agreement shall be binding on all assignees. 970212v.MTL 1 3 1 0.2 Concessionaire shall not assign this Agreement or allow same to be assigned by operation of law or otherwise without the prior written consent of Airport, which consent shall not unreasonably be withheld. Article XI. I SURANCE AND INDE NIFICATI N 11.1 Concessionaire shall protect, defend, indemnify and hold Airport, its officers, employees, boards and commissions, completely harmless from and against any and all liabilities, demands, suits, claims, losses, fines, or judgments arising by reason of the injury or death of any person or damage to any property, including all reasonable costs from investigation and defense thereof(including but not limited to attorney fees, court costs, and expert fees), of any nature whatsoever to the extent caused by the negligence or willful misconduct of Concessionaire, its agents, employees, licensees, or contractors, and arising out of or incident to the operation of the Facility advertising program pursuant to this Agreement or the use by Concessionaire of the Assigned Areas, regardless of where the injury, death or damage may occur. Concessionaire shall have the right to control the defense of any such claim, suit or other action as mentioned above for which Concessionaire indemnifies the Airport. This subsection shall not create any third party rights and shall not be interpreted as a waiver by the Airport of any immunities or limitations on damages available to the Airport pursuant to state law. 11.2 Concessionaire shall maintain throughout the Term comprehensivepublic liability and property damage, insurance in an amount of not less than One Million Dollars ($1,000,000) combined single limit. Such insurance policies shall name the Airport, its officers, employees, boards and commissions as additional insureds to the full extent of Concessionaire's insurance coverage but in no event less than the required minimum coverage limit amount. 11.3 Concessionaire shall maintain throughout the Term workers'compensation insurance at statutory limits. 11.4 Concessionaire agrees that all insurance policies specified herein, except workers'compensation, shall contain a severability of interest or cross liability provision endorsement which shall read generally as follows: In the event of one of the assured incurring liability to any other of the assured,this policy shall cover the assured against whom claim is or may be made in the same manner as if separate policies had been 97021 2v.MTL 1 4 issued to each assured. Nothing contained herein shall operate to increase the limits of liability. 11.5 Concessionaire agrees that all insurance policies shall provide that they will not be altered or canceled without thirty (30) days advance written notice to the Airport. Such insurance must provide that it will be considered primary insurance as respects any other valid and collectible insurance, self insured retention, or deductible the Airport may possess. Any other insurance or self insured retention of the Airport shall be considered excess insurance only. 11.6 Concessionaire shall obtain all insurance required from an insurance company or companies licensed to do business in the State of Washington. The insurance company must be acceptable to the Airport. Approval may be denied a company based on its Best rating or other indication of financial inadequacy. 11.7 Concessionaire shall provide to the Airport such evidence of compliance with Airport's insurance requirements as the Airport may from time to time request. At a minimum the Concessionaire shall provide, at the commencement of the Term, a certificate of insurance. All such certificates shall be completed to show compliance with Concessionaire's obligation hereunder. The Airport may also require copies of the declaration page, insurance policy, and endorsements thereto. Article XII. TE !NATION =Y AIRP RT 12.1 In addition to all other remedies available to the Airport, this Agreement shall be subject to termination by Airport, at its election, should any one or more of the following events occur ("Concessionaire Default"): a. If Concessionaire shall neglect or fail to perform or observe any of the terms, provisions, conditions or covenants herein contained and on Concessionaire's part to be performed and observed and if such neglect or failure should continue for a period of thirty (30) days after receipt by Concessionaire of written notice of such neglect or failure or, if more than thirty (30) days shall be required because of the nature of the default, if Concessionaire shall fail within said thirty (30) day period to commence and thereafter diligently proceed to cure such default; b. If the concession rights hereby created shall be taken by execution or by other process of law; 970212v.MTL 15 c. The taking by a court of jurisdiction of Concessionaire and its assets pursuant to proceedings under the provision of any federal or state reorganization code or act, insofar as the enumerated remedies for default are provided for or permitted in such code or act; d. If any court shall enter a final order with respect to Concessionaire, providing for modification or alternation of the rights of creditors; e. If Concessionaire shall continually after notice fail to abide by any material Applicable Law; f. If Concessionaire shall fail to take possession of the Assigned Areas; or, g. If Concessionaire shall abandon all or any part of the Assigned Areas or shall discontinue the conduct of its operations in all or any part of the Assigned Areas. 12.2 In the event Concessionaire shall fail to cure a Concessionaire Default within the time herein specified, the Airport, then, or at any time thereafter, while such breach is continuing, shall have the right, at its election,to terminate this Agreement by giving at least ten (10) days written notice to Concessionaire. 12.3 If Airport shall terminate this Agreement by reason of a condition of Concessionaire Default, Concessionaire shall forthwith remove its non- permanent improvements, fixtures, displays and equipment from the Assigned Areas at its own expense. Article XIII. TER !NATION BY CONCESSIONAIRE 13.i In addition to all other remedies available to the Concessionaire, this Agreement shall be subject to termination by the Concessionaire, at its election, should any one or more of the following events occur("Airport Default"): a. The abandonment of the Facility for longer than sixty (60) days; b. The issuance of an order or injunction by any court of competent jurisdiction preventing or restraining the use of the Facility in such a manner as to substantially restrict the Concessionaire from conducting its operation of the Facility display advertising concession where such order or injunction was not caused by any act or omission of the Concessionaire; provided that such order or injunction remain in force of such injunction for at least sixty (60) days; 970212v.MTL 1 6 c. The breach by the Airport of any of the material terms, covenants, or conditions of this Agreement to be kept, performed, and observed by the Airport, and the failure of the Airport to remedy such breach, for a period of sixty (60) days after receipt of written notice from the Concessionaire of the existence of such breach; d. The assumption by the United States Government, or any authorized agency thereof, of the operation, control or use of the Facility and its facilities in such a manner as to substantially restrict the Concessionaire from conducting its display advertising concession if such restriction be continued for a period of sixty (60) days or more; e. If the number of enplaned passengers at the Facility decreases forty percent (40%) or more below the traffic recorded during the same quarter of calendar year 1996; or, f. The destruction of a significant portion of the Facility terminal building(s) due to fire, earthquake or any other causes. 13.2 In the event of any Airport Default, the Concessionaire shall, in lieu of or in addition to termination of this Agreement, be granted an abatement in all of its obligations, fees and charges which may otherwise have been due Airport from the outset of such Airport Default until the cessation of such event of default. 13.3 In the event any condition of Airport Default shall occur, Concessionaire shall, then, or at any time thereafter while such breach or event is continuing, have the right, at its election, to terminate this Agreement by giving at least thirty (30) days written notice to Airport. Concessionaire shall upon the passing of the thirty (30) days quit and surrender the Assigned Areas and all permanent improvements, as described in Articles 4.2 and 5.15,to the Airport. In such any such event, except for Airport Default pursuant to subsection 13.1.d, above, Concessionaire shall be reimbursed by the Airport for the undepreciated portion of its actual capital costs (including, without limitation, construction and installation costs) of the permanent and non-permanent improvements, fixtures, displays and equipment used or acquired to be used in the Assigned Areas per a ten year straight-line depreciation schedule substantiated by actual invoices. 970212v.MTL 1 7 Article XIV. SECURITY 14.1 Concessionaire agrees to observe all security requirements of Federal Aviation Regulations Part 107, and the Airport's security rules and regulations, as the same may be from time to time amended. A copy of any Airport security regulations shall be furnished to Concessionaire. Concessionaire shall take such steps as may be necessary or directed by the Airport to ensure that its employees, agents and contractors observe these requirements. Article XV. FIRE AND OTHER DA AGE 15.1 In the event that structural or permanent portions of the Assigned Areas shall be partially damaged by fire or other casualty not the cause of Concessionaire,the Concessionaire shall give immediate notice after discovery thereof to the Airport and the same shall be repaired at the expense of the Airport without unreasonable delay unless Airport determines that the damage is so extensive that repair or rebuilding is not feasible. From the date of such casualty until such area is so repaired, Airport Fee payments hereunder shall abate in amounts proportional to the loss of available advertising space, as may be reasonably determined by the Airport; provided, however, that if an area shall be so slightly injured in any such casualty as not to be rendered unfit for normal usage, the fees hereunder shall not cease or be abated during any repair period. In the event that the damage to an Assigned Area should be so extensive as to render it unusable,the Airport Fee due for such an area shall cease until such time it shall again be put in repair, but in the event of the area being damaged by fire or other casualty to such an extent as to render it necessary in the exclusive judgment of the Airport not to rebuild the same, then, at the option of the Airport or Concessionaire, and upon thirty (30) days written notice to the other, this Agreement as it applies to said area shall cease and come to an end, and the fees hereunder shall be apportioned and paid up to date of such damage. If the Airport elects to rebuild said areas, the Airport shall notify Concessionaire of such intention within thirty (30) days of the date of the damage, otherwise, the Agreement as it applies to said area shall be deemed canceled and of no further force or effect. 970212v.MTL 18 , Article XVI. A END ENT 16.1 This Agreement constitutes the entire agreement between the parties. No amendment, modification, or alteration of the terms of this Agreement shall be binding unless the same be in writing, dated subsequent to the date hereof and duly executed by the parties hereto. Article XVII. APPROVALS BY 17.i Whenever this Agreement calls for approval by the Airport, such approval shall be evidenced by the written approval of the Airport Manager or his designee. Article XVIII. E VIR N E TAL PR TECTI N 18.1 Concessionaire agrees to comply in the performance of this Agreement with all applicable environmental laws, statutes, ordinances, regulations and orders, including all rules and regulations adopted by Airport relating to protection of the environment. Article XIX. GENERAL PROVISIONS 19.1 Federal Aviation Act, Section 308—Nothing herein contained shall be deemed to grant the Concessionaire any exclusive right or privilege within the meaning of Section 308 of the Federal Aviation Act. Without derogation to the Act and subject to the terms and provisions hereof, the Concessionaire shall have the sole right to use the Assigned Areas for advertising purposes under the provisions of this Agreement. 19.2 Subordination to Agreements With the United States Government—This Agreement is subject and subordinate to the provisions of any agreement heretofore or hereafter made between the Airport and the United States Government relative to the operation or maintenance of the Facility,the execution of which has been required as a condition precedent to the transfer of federal rights or property to the Airport for airport purposes, or the expenditure of federal funds for the improvement or development of the Airport, 97021 2v.MTL 1 9 . ..‘ including the expenditure of federal funds for the development of the Facility in accordance with the provisions of the Federal Aviation Act of 1958, as it has been amended from time to time. The Airport covenants that it has no existing agreements with the United States Government in conflict with the express provisions hereof. 19.3 Nonwaiver of Rights ---• No waiver of default by either party of any of the terms, covenants, and conditions hereof to be performed, kept, and observed by the other party shall be construed as, or shall operate as, a waiver of any subsequent default of any of the terms, covenants, or conditions herein contained, to be performed, kept, and observed by the other party. 19.4 Notices—All notices, requests and other communications under this Agreement shall be effectively given only if in writing and sent by United States registered or certified mail, return receipt requested, postage prepaid, or by nationally recognized and receipted overnight courier service (e.g. Federal Express) guaranteeing next business day delivery, addressed as follows: If to Airport: Airport Manager Yakima International Airport-McAllister Field 2400 W. Washington Avenue Yakima, Washington 98903 If to Concessionaire: President Interspace Airport Advertising 4635 Crackersport Road Allentown, Pennsylvania 18104 or to such other addresses of which Airport or Concessionaire shall have provided notice as herein provided. 19.5 Captions—The headings of the several articles of this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, or describe the scope or intent of any provisions of this Agreement and shall not be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. 19.6 Severability—If one or more clauses, sections, or provisions of this Agreement shall be held to be unlawful, invalid, or unenforceable,the parties hereto agree that the remaining portions of this Agreement or portions thereof shall not be affected thereby, and such remaining provisions or portions thereof shall remain in full force and effect. 19.7 Agent for Service of Process— If the Concessionaire is a foreign corporation with principal place of business outside the State of Washington, then in such 97021 2v.MTL 20 event the Concessionaire does designate its registered agent as its agent for the purpose of service of process in any court action between it and the Airport arising out of or based upon this Agreement, and the service shall be made as provided by the laws of the State of Washington by serving the Concessionaire's registered agent. 19.8 Right to Develop Facility—The parties hereto further covenant and agree that the Airport reserves the right to engage in further major development and improvement to the Facility as it may see fit, regardless of the desires or view of the Concessionaire and without interference or hindrance. In such instances, financial impact to Concessionaire shall be borne by the Airport. 19.9 Incorporation of Exhibits—All exhibits referred to in this Agreement are intended to be and hereby are specifically made a part of this Agreement. 19.10 Inc° ration of Required Provisions—The parties incorporate herein by this reference all provisions lawfully required to be contained herein by any governmental body or agency. 19.11 Nonliability of Officers and Employees—No member, director or officer of any Airport board or commission or its constituting authority, nor employees of the Airport or its constituting authority, and no officer, director, employee or agent of Concessionaire, shall be charged personally or held personally contractually liable by or to the other due to any breach of this Agreement or relating to the execution of this Agreement. 19.12 Successors and Assigns Bound—This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto where permitted by this Agreement. 19.13 Right to Amend—In the event that the Federal Aviation Administration or its successors requires modifications or changes in this Agreement as a condition precedent to the granting of funds for the improvement of the Facility, or otherwise, the Concessionaire agrees to consent to such amendments, modifications, revisions, supplements, or deletions of any of the terms, conditions, or requirements of this Agreement as may be reasonably required. 19.14 Time of Essence—Time is expressed to be of the essence of this Agreement. 19.15 Gender—Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. 19.16 Force Majeure—Neither the Airport nor the Concessionaire shall be deemed in violation of this Agreement if it is prevented from performing any of the 970212v.MTL 21 obligations hereunder by reason of strikes, boycotts, labor disputes, embargoes, shortage of material, act of God, acts of the public enemy, acts of superior governmental authority, weather conditions, riots, rebellion, sabotage, or any other circumstances for which it is not responsible or which is not within its control. 19.17 Right of Relocation—The Airport reserves the general right to relocate portions of the Activity Area. Notice of such relocation demands shall be provided to Concessionaire in writing from the Airport no less than sixty (60) days prior to such relocation requirement. Costs reasonably attributed to such relocation shall be deducted by Concessionaire from subsequent Airport Fee payments. Article XX. DISA VANTA ED BUSINESS ENTERPRISE AND 0 DISCRI INATIO 20.1 Concessionaire agrees to submit all information necessary for the Airport to determine the eligibility of an individual or firm for certification as a Disadvantaged Business Enterprise, or a regional or local suboperator. Concessionaire agrees that it will comply with the Airport's Disadvantaged Business Enterprise Program, which Program shall be in accordance with 49 CFR Part 23 and shall apply to Concessionaire as an "Airport Concessionaire." Concessionaire agrees that participation by Disadvantaged Business Enterprises will be in accordance with the goals and objectives of the Airport's Program. 20.2 Nondiscrimination—The 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 activities covered in 14 CFR Part 152, Subpart E. Article XXI. ENTI-E AGREE ENT 21.1 The parties hereto understand and agree that this instrument contains the entire agreement between the parties hereto. The parties hereto further understand and agree that the other party and its agents have made no representations or promises with respect to this Agreement or the making or entry into this Agreement, except as in this Agreement expressly set forth. No 970212v.MTL 22 claim or liability or cause for termination shall be asserted by either party against the other and such party shall not be liable by reason of the making of any representations or promises not expressly stated in this Agreement, any other written or oral agreement with the other being expressly waived. 21.2 The individuals executing this Agreement personally warrant that they have full authority to execute this Agreement on behalf of the entity for whom they are acting herein. 21.3 The parties hereto acknowledge that they have thoroughly read this Agreement, including any exhibits or attachments hereto, and have sought and received whatever competent advice and counsel was necessary for them to form a full and complete understanding of all rights and obligations herein. 970212v.MTL 23 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers or representatives as of the date and year first above written. AIRPORT: YAKIMA INTERNATIONAL AIRPORT - McALLISTER FIELD A EST: / BY: (LA ec e Chairmin [SEAL] CONCESSIONAIRE: IN-TER-SPACE SERVICES, INC. d/b/a INTERSPACE AIRPORT ADVERTISING A. ; -- AIIESI , , -- Cr rs Chew ol Board -,-e• a ,„ • [SEAL] 970212v.MTL 24 I 1»( 1 ; t 0 Y-21 ? • Y-20 Airport Ailvertising Y-22 Y-23 MAP CODE 4t419 VAJUIRA EiTERN'L AIRPORT EXPANSION INVENTORY 10/14/97 tIm FIRST AMENDMENT TO AIRPORT ADVERTISING CONCESSION AGREEMENT THIS FIRST AMENDMENT TO AGREENIEN_T (hereinafter referred to as "Amendment") is made and entered into this 62_,)-' day of iL-17-1 , 2007, by and between the YAKIMA INTERNATIONAL AIRPORT- MeCALLISTER FIELD, (hereinafter referred to as "Airport") and IN-TER-SPACE SERVICES, INC., d/bia INTERSPACE AIRPORT ADVERTISING (hereafter referred to as "Concessionaire"). WITNESSETH WHE " AS, the Airport is responsible for oversight of the passenger terminal building and associated facilities; (hereinafter referred to as "Facility"); and WHEREAS, the Concessionaire has operated the display advertising program at the Airport which commenced on June 15, 1997, pursuant to a certain Airport Advertising Concession Agreement dated December 20, 1997 (hereinafter referred to as "Agreement"); and WIIEREAS, the Concessionaire has delivered consistent advertising revenues to the Airport and has otherwise created a noticeably improved display advertising program at the Airport; and WHE ' AS, the Agreement allowed for a ten-year extension option to be exercised at the parties mutual option; and WHEREAS, both parties desire Concessionaire make a capital investment into the Facility to upgrade its displays and equipment; and WHE ' AS, Concessionaire's investment into the Facility will be designed to increase advertising revenues to the Airport; and WHE AS, both parties desire to exercise the extension option of the Agreement for an additional ten (10) years. NOW, THEREFO " , the Airport and Concessionaire, in consideration of the mutual covenants herein contained and intending to be legally bound, hereby agree to amend the Agreement as follows: 1. The initial term of the Agreement is hereby extended for one (1) additional ten-year period from the original expiration date. 2. Subject to the terrns of the Agreement, Concessionaire agreed-tozpay the Airport a base of two thousand dollars 02,000) per Agreement year qua "2/Variable percentage of Gross Revenues derived from the sale of advertising n9clvertising space at the Facility in accordance with the schedule provided for in the Airport Advertising Agreement dated December 20, 1997. 3. Article VI, Paragraph 6.3 of the Agreement, is herby amended to read as follows: "The Airport Fee shall be subject to proportional reduction if passenger enplanements at the Facility during any calendar quarter of the Term shall fall ten percent (10%) or more below those recorded during the same quarter of 2006, or where a display case or other display advertisement in an Assigned Area was visually obstructed or subject to electric supply failure for more than three (3) days without fault to Concessionaire. If passenger enplanements during any calendar quarter of the Term shall fall twenty percent (20%) or more below that recorded for the same quarter of 2006, then Concessionaire may elect, at its sole, discretion to forthwith terminate the Agreement in accordance with the terms of Article 13." 4. The Concessionaire agrees to make a capital investment of no less than ten thousand dollars ($10,000) into the advertising displays at the Facility during the extension term. S. F,xcept as expressly modified hereby, all other terms and conditions of the Agreement, shall continue in full force and effect and the parties hereby ratify and confimi their rights, duties, and obligations thereunder. IN WITNESS WHE ' 'OF, the above parties have executed this Amendment as of the date and year first above written. AIRPORT: CONCESSIONAIRE: YAKIMA INTENRATIONAL AIRPORT In-ter-space Services, Inc., d/b/a -McCALLTSTER FIELD Inter pace Airpou)k xertising / By: Jf ( Chairman f liGtn MARK T. LLEBERMAN Printed Name Printed Name , _ r V T- CO-CEO Title Titli (Li Date Date ATTESty/2 A0,000': ; , Secretary S- retary 2