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HomeMy WebLinkAboutResolution - 6213 - Agreement - Host Marriott Services Corporation - Restaurant Concession, LIA - 02_25_1999Resolution No. 6213 Item No. 28 February 25, 1999 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Lubbock International Airport Restaurant Concession Agreement by and between the City of Lubbock, Texas and Host Marriott Services Corporation. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 25th day of February '1999. APPROVED AS TO CONTENT: Director of Aviation APPROVED AS TO FORM: Linda L. Chamales, Supervising Attorney/ Office Practice Section LLC:dk/ccdocs/E1ost Maniott-Airport Cons February 15, 1999 Resolution No. 6213 Item No. 28 February 28, 1999 RESTAURANT CONCESSION AGREEMENT THE STATE OF TEXAS § COUNTY OF LUBBOCK § This LEASE AGREEMENT, hereinafter referred to as the "Agreement" or "Lease," is entered into at Lubbock, Texas, by and between the CITY OF LUBBOCK, TEXAS, (the "Lessor"), and HOST MARRIOTT SERVICES CORPORATION, (the "Lessee") WITNESSETH: WHEREAS, Lessor owns and operates a public airport designated as Lubbock International Airport (the "Airport"); and WHEREAS, Lessor deems it advantageous to itself and to its operation of the Airport to enter into a restaurant concession agreement with the Lessee including leasing unto Lessee the Airport terminal area herein described, together with certain privileges, rights, uses and interest therein, as set forth below; and WHEREAS, Lessee intends to utilize the premises herein leased for the purpose of establishing and maintaining the exclusive liquor, restaurant and news/gift sales for the commercial/passenger terminal at the Ali -port; and WHEREAS, the Airport Board of the City of Lubbock has approved and recommends that Lessee be granted this Agreement for the term designated below; and WHEREAS, the City Council of the City of Lubbock accepts the recommendation of the Airport Board and finds that execution of this Lease will properly serve the public interest of the citizens of the City of Lubbock; NOW THEREFORE, The Parties do hereby agree as follows: ARTICLE I DEMISE OF LEASED PREMISES 1.01 LEASED PREMISES In consideration of the mutual covenants and agreements of this lease, and other good and valuable consideration, Lessor demises and leases to Lessee, and Lessee leases from Lessor, certain property in the Airport terminal known as the kitchen, food court, alcoholic beverage lounge, gift/news shop, and related areas, all as shown on the attached plat of said premises, a copy of which is attached hereto as Exhibit "I", and incorporated herein as though set forth fully herein (the "Leased Premises") 1.02 PURPOSE & CONCESSIONS Lessee's use of said Leased Premises shall be for the sole purpose as set out below unless otherwise stated herein. All such business operations at the Airport will be confined to the Leased Premises. Lessor grants to Lessee the exclusive liquor, restaurant and gift shop concession sales for the entire airport terminal building including merchandising and vending machines, except any vending machines operated by tenants or employees and located within non-public exclusive Leased Premises. The concessions granted herein are described as novelties, news, magazines, books, tobacco items and wearing apparel. Lessor agrees to give Lessee first right of refusal on any additional merchandise categories and locations within the Lubbock Airport if and when demand specifics such additional items be added to the assortment. Lessor reserves the right to negotiate a separate fee structure for any such new categories or any categories added to the scope of this agreement. The Leased premises do not include shoeshine areas, airline VIP clubs exclusively operated and controlled by an airline, and game machines, game rooms and arcades. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 2 of 29 The vending machines listed above which Lessee has the right to operate shall be placed in the lobby of the Airport terminal or elsewhere, and the locations must be approved by the Director of Aviation, which approval will not be unreasonably withheld. 1.03 RIGHTS OF OTHERS Nothing in this Agreement shall be construed as granting to Lessee any right to operate any other business or concession on the airport premises except as enumerated herein. Lessor specifically reserves the right to grant to other concessionaires the privileges not specifically contained within the scope of the Agreement. 1.04 JOINT VENTURE AGREEMENT Lessee agrees to enter into a ten percent (10%) Joint Venture Partner Agreement with a firm(s) who qualify as a Disadvantaged Business Enterprises (hereinafter referred as DBE(s)) under Department of Transportation Regulations. Lessee agrees to make every effort to select this entity from the local Lubbock market. Lessor agrees to make every effort to assist Lessee in locating this entity from the existing pool of certifiable DBE(s) candidates located within the City of Lubbock. Lessee agrees to advertise and execute a local Request For Qualification (RFQ) if necessary to select this entity. Lessee agrees to use the attached "Joint Venture Agreement" (attached hereto as Exhibit "2") when entering any agreement with a DBE(s). The duration of the joint venture will be determined by the "Joint Venture Agreement" but will not exceed the duration of this lease, January 31, 2016. As required by 49 CFR §23.107 (d)(2)(iii), the DBE firm(s) participating in the Joint Venture Agreement who is unable to perform successfully will be replaced with another DBE firm(s) if the remaining term of the agreement makes this feasible. The selection process will be the same as heretofore set out. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 3 of 29 1.05 CAPITAL INVESTMENT Lessee agrees to spend approximately Eight Hundred Thousand Dollars ($800,000) in initial capital investment, with ten percent (10%) funding from the Joint Venture Partner, as defined in Article II of the Joint Venture Agreement, and the remainder of the funding from the Lessee. The capital investment will be used for the following: remodeling and upgrading the current cafeteria into a food court with common seating area out front (the food court will initially consist of the following food brands: Burger King, Pizza Hut, City Deli and TCBY); News/Gift shop refurbishment; and conversion of the Premium Stock Lounge to a Brew Pub. Lessee agrees to minor refurbishment and upgrade of the vending areas as mutually agreed to by both parties and the meeting rooms above the cafeteria. Lessee agrees to supply the City with the breakout of estimated capital expenditures that will make up the total capital investment. Lessee agrees that if the entire $800,000 initial capital investment is not fully expended during the initial capital investment, Lessor will be given a 3/4% additional percentage rent on each tier of the food rent category only for every Sixty Thousand Dollars ($60,000) not expended. This determination will be made after all invoices and costs are reviewed by the Lessee and the Lessor. The additional rent is in addition to any and all rent Lessee is currently obligated to pay to the Lessor under the Agreement and will be effective upon the opening of the food court and continue through the life of the Lease. Final level of calculation of capital investment shall be determined within 30 days of the opening of the food court. Any additional retroactive rent due shall be paid within 30 days thereafter of the opening of the food court. Lessee agrees to spend up to an additional Three Hundred Thousand Dollars ($300,000) in midterm refurbishment (between January 1, 2008 through January 1, 2010) with ten percent (10%) of the funding from the Joint Venture Partner, as defined in Article II of the Joint Venture Agreement, and the remaining funding being furnished by the Lessee. This additional funding Lubbock International Airport and Host Marriott Services Corporation Resun.rra nt Concession Agreenient Page 4 of 29 may be used to upgrade facilities in the operated premises, provide additional facilities, or change existing facilities if necessary. 1.06 PUBLIC BENEFIT Lessee agrees to conduct business on the Leased Premises for the use and benefit of the public and further agrees: 1. To furnish good, prompt and efficient senlices adequate to meet all the demands for its services at the Airport; 2. To furnish said services on a fair, equal and nondiscriminatory basis to all users thereof; and 3. To charge fair, reasonable nondiscriminatory prices for each unit of sale or service, provided that the Lessee may make reasonable nondiscriminatory discounts, rebates or other similar types of price reductions for volume purchases. ARTICLE II 2.01 TERM The initial term of this Agreement shall be for a period of seventeen (17) years commencing on the clay of 1999 and ending on the 3 1 " day of January, 2016, unless terminated sooner as proved in this lease. This agreement may be extended upon the mutual agreement of both Lessor and Lessee for one (1) additional five (5) year period. The Lessor and/or Lessee may elect to not extend the terns of this Agreement at their sole discretion. Prior to the approval of any extensions of this agreement Lessor will submit Lessee's written request for extension to the Federal Aviation Administration as required by 49 CFR §23.107(d)(2)(ii) in order to determine if the extent of DBE participation will change. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concessiolr .4greernerrt Page 5 of 29 2.02 TERMINATION This Agreement will terminate without further notice when the Iease term (or any extension thereof) expires, and if the Lessee holds over after the term expires such hold over will not constitute a renewal of the Agreement or give Lessee any rights under this Agreement in or to the premises. 2.03 HOLDOVER If Lessee holds over and continues in possession of the premises after the lease term (or any extension thereof) expires, Lessee shall be considered to be occupying the premises on an at will tenancy, subject to all the tennis of this Lease. ARTICLE III RENTALS AND FEES 3.01 RENTAL In consideration of the rights and privileges herein granted, Lessee shall pay to Lessor the amounts provided below on all gross sales. RENTAL SCHEDULE: All Newspapers and Periodicals — 5% All Gifts and Novelty Items — 10% All Liquor Sales — 12% Food Sales (including vending sales) rent will be paid based on the schedule attached in Exhibit ' 3". For purposes of rent calculation, the sales level will be reset to zero (0) at the beginning of each calendar year. Gross sales shall include all monies received by Lessee from the sale of any and all articles and other things upon or from the airport premises, and from any and all services rendered and operations and business of every kind conducted upon or from the airport premises less the deduction of State and Federal sales and excise taxes. 3.02 PAYMENTS All payments that become due and payable by Lessee shall be made to the City of Lubbock at the office of the Director of Aviation, Lubbock International Airport, Lubbock, Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 6 of 29 Texas, 5401 N. Martin Luther King Blvd., Rt. 3 Box 389, Lubbock, Texas 79401. Lessee shall pay Lessor a late payment charge of five percent (5%) of the total amount of rental payable if payment is not made on or before the twentieth (20"') day of each month. 3.03 DEFAULT FOR FAILURE TO PAY RENTALS OR FEES If Lessee fails to pay any rent due and owing to Lessor hereunder within fifteen (15) days of the due date, the Director of Aviation of Lessor shall provide written notice to the Lessee. Thereafter, if the rent remains unpaid, Lessor may exercise its rights under Article VI of this Agreement. 3.04 DEPOSIT FOR SECURITY BADGES In addition to the above rental and fees, Lessee shall pay the City a processing fee and a deposit for security badges for each of Lessee's employees on the Leased Premises if it is determined by the Director of Aviation that badges are necessary to continue operations. Lessor's Director of Aviation shall also determine the amount of both the processing fee and deposit, each of which shall be reasonable and uniform for all similarly situated tenants at the Airport. Said deposit shall be refundable upon return of the badges to the Director of Aviation. 3.05 TRASH DISPOSAL Lessee shall pay to Lessor a trash disposal fee of TWO HUNDRED SEVENTY AND NO/100 DOLLARS (S270.00) per month. If the Lessor's costs increase for trash disposal Lessee agrees to renegotiate said fee. 3.06 WATER SOFTENER Lessee shall pay to Lessor FORTY-FIVE AND NO/100 DOLLARS ($45.00) per month for the water softener. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession ,4greenent Page 7 of 29 ARTICLE IV RIGHTS RESERVED TO LESSOR The following rights are reserved unto Lessor, and Lessee agrees that all rights, powers and privileges granted under this Lease shall be subordinated to Lessor's rights as hereinafter stated: 4.01 AIRPORT HAZARDS Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of tale Airport against obstruction, together with the right to prevent Lessee from erecting or permitting the erection of any building or other structure on the Airport or constitute a hazard to aircraft and the right to remove any such obstructions. 4.02 AGREEMENT WITH UNITED STATES During time of war or national emergency, the Lessor shall have the right to enter into an agreement with the United States Government for military or naval use of all or part of the landing area, the publicly -owned air navigation facilities, and any other area or facilities of the Airport. If any such agreement is executed, the provisions of this Lease, insofar as they are inconsistent with the provisions of the agreement with the Government, shall be suspended. The original term of this Lease may be extended by mutual agreement between the Lessor and Lessee by the amount of the period of such suspension. 4.03 SUBORDINATION OF LESSEE'S RIGHTS This Agreement shall be subordinate to the provisions of any existing or fixture agreement between the Lessor and the United States pertaining to the operation and 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. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 8 of 29 4.04 DEVELOPMENT OF AIRPORT Lessee shall not operate in any manner that would impair Lessor's ability to secure federal funding or affect the efficient operation of the airport. Lessee also agrees that Lessor has the right to further develop or improve the Airport as Lessor sees fit, regardless of the desires or views of the Lessee, and without interference or hindrance therefrom. 4.05 MAINTENANCE OF PUBLIC AREA Lessor reserves the right, but shall not be obligated to Lessee, 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 Lessee in this regard. ARTICLE V GENERAL CONDITIONS This Lease is granted subject to the following provisions and conditions: 5.01 RULES AND REGULATIONS In conducting its business on the Leased Premises, Lessee shall comply with and ensure that all authorized activities conducted comply with all federal, state and local laws, ordinances, rules and regulations now in force or hereinafter prescribed or promulgated by authority or by law. Lessee shall pay for all licenses and permits necessary for the operation of said restaurant and shall pay all fees, taxes and charges assessed under State, local or Federal statutes or ordinances insofar as they are applicable. Lessee further agrees that in the event a civil penalty or fine is levied against the Airport as a result of Lessee's failure to comply or act in accordance with said laws, ordinances, rules or regulations, Lessee shall immediately reimburse the Airport the full amount of the penalty or fine and correct the failure, act or omission leading to, causing or contributing to the violation. Failure of the lessee to comply with any requirement of this paragraph shall be cause for Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession ,4greement Page 9 of 29 immediate termination of this Lease by Lessor's Director of Aviation. Provided, however, that the duty of the Lessee to reimburse Lessor is subject to Lessor providing written notice of any potential fine or penalty. Lessee shall be provided notice to participate in the proceeding and defend itself, with counsel of its choice, at its own cost. 5.02 IMPROVEMENTS OR ALTERATIONS Lessee may not, absent the prior written consent of Lessor in principle to the proposed activities, erect, maintain, alter, remodel, reconstruct, rebuild, replace, and remove buildings and other improvements on the premises, and correct and change the contour of the premises, except as provided by Article I, S 1.05. Lessee agrees that any said improvements or alterations approved by Lessor, including the improvements outlined in Article I, § 1.05, shall be subject and conform to the minimum standards as set forth by the Lessor's Director of Aviation and any amendments thereto, and must comply with all applicable federal law, state law and city ordinances. In the event Lessor shall consent in principle to the proposed activities of Lessee, such activities of Lessee are subject to the following: a. Lessee bears the cost of any such work. b. The premises must at all times be kept free of mechanics' and materialman's Liens. Lessor must be notified of the time for beginning and the general nature of any such work, other than routine maintenance of existing buildings or improvements, at the time the work begins. 5.03 SIGNS Lessee shall have the right to place signs identifying Lessee's business at locations approved by the Director of Aviation. Said signs shall be of a type, size and design approved in Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 10 of 29 writing by the Director of Aviation. The installation of such signs must comply with all applicable City ordinances and shall be without cost to the Lessor. 5.04 LIENS Lessee shall riot cause or permit any Mechanics' liens or other liens to be filed against the fee of the premises or against Lessee's leasehold interest in the land or any buildings or improvements on the premises by reason of any work, labor, services, or materials supplied or claimed to have been supplied to Lessee or anyone holding the premises or any part of them through or under Lessee. If such a mechanic's lien or materialman's lien is recorded against the premises or any buildings or improvements on them, Lessee must either cause it to be removed or, if Lessee in good faith wishes to contest the lien, take timely action to do so, at Lessee's sole expense. If Lessee contests the lien, Lessee will indemnify Lessor and hold it harmless from all liability for damages occasioned by the lien or the lien contest and will, in the event of a judgment of foreclosure on the lien, cause to the lien to be discharged and removed before the judgment is executed. 5.05 REMOVAL AND DEMOLITION Lessee shall not remove or demolish, in whole or in part, any improvements that already exist on the Leased Premises without prior written consent of the Director of Aviation of Lessor, who may, in his discretion, condition such consent upon the obligation of Lessee to replace the same improvements specified in such consent upon tennination or expiration of this Lease. This provision applies to those improvements outlined in Article 1, § 1.05 as well. The Director of Aviation shall not withhold consent unreasonably and shall not impose unreasonable conditions on his consent. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 11 of 29 5.06 INSPECTION OF LEASED PREMISES Lessor, acting by and through its Director of Aviation or his designated representatives, shall have the right to inspect the Leased Premises at all reasonable times during the initial term of this Lease and during any extension thereof. 5.07 INSPECTION OF BOOKS AND RECORDS Lessee shall maintain complete books and records of all transactions, sales and income resulting from its business operations at the Airport, which books and records may be inspected at any time by the Director of Aviation or his designated representative at Lubbock, Texas, upon reasonable notice to Lessee. In the event Lessee request such inspection to be performed outside the Lubbock area, the Director of Aviation may honor such request; however, any and all expenses incurred by so doing shall be reimbursed by the Lessee. Lessee agrees to furnish facts and figures necessary to determine the amount to be paid Lessor, together with a fiscal -year-end signed statement certified by a Certified Public Accountant that such figures are correct and properly stated. 5.08 JANITORIAL SERVICES Lessee shall, at its own expense, provide janitorial services for the Leased Premises. Said services may be provided by Lessee alone, or by Lessee in conjunction with other tenants who are now or may hereafter be Lessees at the Airport. 5.09 MAINTENANCE & SERVICES Lessee shall provide the following services at the Airport at all times during the term of this Agreement, and at their own cost and expense: a). First class restaurant service during all of the hours customary for a restaurant business, including service for all flights. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 12 of 29 b). Lessee shall provide electrical power and gas used in the operation of said restaurant for cooking purposes only, providing that Lessor shall cause to be installed free of cost to Lessee, separate meters so that said fuels are correctly metered, and said fuels, if furnished through Lessor, are to be paid for by Lessee at the rate set forth in ordinary utility contracts covering commercial users. c). Lessee shall furnish its own equipment (other than noted in (b) above) utensils, dishes, silverware, china, tables and chairs and any and all other equipment not specifically excluded elsewhere in this Agreement, needed to operate a first class restaurant and bar. d). Lessee shall furnish adequate personnel to furnish the above mentioned services. Said personnel to be uniformly and neatly dressed. e). Lessee shall, at its sole cost and expense, maintain the Leased Premises in presentable, neat, clean, attractive, safe and in an orderly condition consistent with good business practice. Lessee shall keep the Leased Premises free of waste, refuse and debris and shall provide complete and proper arrangement for the sanitary handling and disposal of trash, garbage and other refuse caused as a result of its activities at the airport. f). Lessee agrees that Lessor reserves the right to determine the location and manner in which publications and or other materials may be displayed in Lessee's leased area. The Director of Aviation of Lessor, acting in good faith, shall be the sole judge of the quality of maintenance, and upon written notice by the Director of Aviation of Lessor, Lessee shall be required to perform whatever maintenance such Lessor's agent deems necessary. If said maintenance is not commenced by Lessee within thirty (30) days after receipt of written notice, Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page t3 of 29 the Director of Aviation shall have the right to enter upon the Leased Premises and perform the necessary maintenance, the cost of which shall be borne by Lessee. 5.10 LESSEE'S DUTY TO REPAIR Except as provided herein, any property of Lessor, or for which Lessor may be responsible, which is damaged or destroyed incident to the exercise of the rights or privileges herein granted, or which damage or destruction is occasioned by the negligence of Lessee, its employees, agents, servants, patrons or invitees, shall be properly repaired or replaced by Lessee to the satisfaction of the Director Aviation of Lessor, or in lieu of such repair or replacement, Lessor and Lessee may mutually agree to the payment of an amount by Lessee to compensate Lessor from losses sustained or expenses incurred as a result of the loss of or damage to or destruction of such property. 5.11 UTILITIES Lessor agrees to furnish ventilation, heat, light, air-conditioning, and water in the demised premises at no cost to Lessee. Lessor agrees to keep the equipment for the furnishing of said heat, light, air-conditioning, and water in good repair during the term of this lease without cost to Lessee. Lessor further agrees to provide sewage and drainage lines including installation, maintenance, and repair thereof, except that which is caused by negligence of Lessee. In the furnishing of water and lights, the Lessee will exercise prudent management to prevent waste If waste is excessive, to be determined by the Director of Aviation, the Lessor may meter or otherwise determine the extent of waste and charge Lessee for excess usage. 5.12 TAXES, ASSESSMENTS AND LICENSES In addition to the rent specified in Article III, Lessee will pay and discharge all taxes, general and special assessments, and other charges of any kind levied on or assessed against the premises and all interest in the premises and all improvements and other property on them during Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 14 of 29 the lease term, whether belonging to Lessor or to Lessee. Lessee will pay all the taxes, charges, and assessments directly to the public officer charged with their collection not fewer than fifteen (15) days before they become delinquent, and Lessee will indemnify Lessor and hold it harmless from all such taxes, charges, and assessments. Lessee may, in good faith at its own expense contest any such taxes, charges, and assessments and must pay the contested amount, plus any penalties and interest imposed, if and when finally determined to be due. Lessee shall obtain and pay for all licenses and permits necessary or required by law for the construction of any additional improvements, the installation of equipment and furnishings, and any other licenses necessary for the conduct of its business. 5.13 INDEMNITY AND RELEASE LESSEE SHALL INDEMNIFY AND HOLD HARMLESS, TO THE FULLEST EXTENT PERMITTED BY LAW, LESSOR, AND LESSOR'S RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS AND AGENTS, FROM AND AGAINST ANY AND ALL LOSSES, BUSINESS LOSSES, DAMAGES, CLAIMS OR LIABILITIES, OF ANY KIND OR NATURE, WHICH ARISE DIRECTLY OR INDIRECTLY, OR ARE RELATED TO, IN ANY WAY, MANNER OR FORM, THE ACTIVITIES CONTEMPLATED HEREUNDER, OR THE OMISSION OF THE ACTIVITIES CONTEMPLATED HEREUNDER, WHETHER CAUSED, OR CONTRIBUTED TO, BY THE NEGLIGENCE OR FAULT OF LESSOR, ITS OFFICIALS AND/OR AGENTS, INCLUDING, BUT NOT LIMITED TO, LOSSES, DAMAGES, CLAIMS OR LIABILITIES ARISING FROM OR RELATED TO, IN ANY WAY, MANNER OR FORM, THE ACT OR OMISSION OF THIRD PARTIES ON THE PREMISES HEREIN LEASED. LESSEE FURTHER COVENANTS AND AGREES TO DEFEND ANY SUITS OR ADMINISTRATIVE PROCEEDINGS BROUGHT AGAINST LESSOR AND/OR LESSOR'S RESPECTIVE OFFICERS, EMPLOYEES, Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 15 of 29 ELECTED OFFICIALS AND/OR AGENTS ON ACCOUNT OF ANY SUCH CLAIM, AND TO PAY OR DISCHARGE THE FULL AMOUNT OR OBLIGATION OF ANY SUCH CLAIM INCURRED BY, ACCRUING TO, OR IMPOSED ON LESSOR, OR LESSOR'S RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS AND/OR AGENTS, AS APPLICABLE, RESULTING FROM ANY SUCH SUITS, CLAIMS, AND/OR ADMINISTRATIVE PROCEEDINGS OR ANY MATTERS RESULTING FROM THE SETTLEMENT OR RESOLUTION OF SAID SUITS, CLAIMS, AND/OR ADMINISTRATIVE PROCEEDINGS. IN ADDITION, LESSEE SHALL PAY TO LESSOR, LESSOR'S RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS AND/OR AGENTS, AS APPLICABLE, ALL ATTORNEYS' FEES INCURRED BY SUCH PARTIES IN ENFORCING LESSEE'S INDEMNITY IN THIS SECTION. BOTH PARTIES HEREBY AGREE TO MUTUALLY RELEASE EACH OTHER AND THEIR RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS AND AGENTS, SHALL NOT BE LIABLE, AND BOTH PARTIES HEREBY RELEASE EACH OTHER, AND THEIR RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS AND AGENTS, FOR, FROM AND/OR AGAINST ANY LOSSES, DAMAGES, CLAIMS OR LIABILITIES TO LESSEE, ON ANY THEORY OF LEGAL LIABILITY, INCLUDING, BUT NOT LIMITED TO THE NEGLIGENCE, OF ANY TYPE OF DEGREE, OR FAULT, OF EITHER PARTY, ARISING FROM OR RELATED TO, IN ANY WAY, MANNER OR FORM, THE UNENFORCEABILITY OR VOIDANCE, FOR ANY REASON, OF ALL OR ANY PART OF THIS AGREEMENT. THE INDEMNITY AND RELEASE PROVIDED HEREIN SHALL SURVIVE THE TERMINATION OR VOIDANCE OF THIS AGREEMENT. PROVIDED, HOWEVER, THAT THIS SECTION 5.14, AND THIS AGREEMENT/LEASE DOES NOT RELEASE LESSOR, Lubbock hiternational Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 16 of 29 NOR INDEMNIFY OR HOLD HARMLESS, NOR REQUIRE A LEGAL DEFENSE OF LESSOR, FOR ANY LOSSES, BUSINESS LOSSES, DAMAGES, CLAIMS, OR LIABLITIES OF ANY KIND, WHICH ARISE DIRECTLY FROM THE INTENTIONAL ACTS OR OMISSIONS OF THE EMPLOYEES, AGENTS, OFFICERS, OFFICIAL, OR ANY OTHER PERSON ACTING FOR OR UNDER AUTHORITY OF LESSOR, PAYMENTS OR OTHER REIMBUSEMENTS SHALL NOT BE SURROGATED OR OTHERWISE MADE THE BASIS OF ANY CLAIM BY LESSOR OR ANY THIRD PERSON FOR REIMBURSEMENT BY LESSEE. 5.14 PUBLIC LIABILITY: PROPERTY DAMAGE AND WORKER'S COMPENSATION INSURANCE Lessee shall maintain at all times during the initial term of this Lease, during any extension thereof, at its sole expense, with an insurance underwriter reasonably acceptable to the Director of Aviation of Lessor and authorized to do business in the State of Texas, adequate insurance against claims of public liability and property damage resulting from Lessee's activities at the Airport. The amount of insurance coverage's shall not be less than ONE HUNDRED THOUSAND DOLLARS (S100,000) for property damages as a result in any one event, or less than THREE HUNDRED THOUSAND DOLLARS ($300,000) for personal injury or death of any one person in any one event, or less than FIVE HUNDRED THOUSAND DOLLARS ($500,000) for personal injury or death of two or more persons in any one event. All policies shall contain an agreement on the part of the respective insurers waiving the right of such insurer to subrogation. Certificates of insurance or other satisfactory evidence of insurance shall be filed with Director of Aviation prior to the commencement of the initial term of this Lease. Each policy shall name the City of Lubbock as an additional insured as its interest may appear, require the insurer to notify the Director of Aviation of the City of Lubbock, Texas, or Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 17 of 29 any alteration, nonrenewal or cancellation, and remain in full force and effect until at least ten (10) days after such notice of alteration, nonrenewal or cancellation is received by the Director of Aviation. Lessee shall provide Worker's Compensation Insurance. Upon the renewal date of each policy owned by Lessee, separate certificates of renewal shall be provided to the Director of Aviation of the Lessor. 5.15 FIRE AND HAZARD INSURANCE Lessee shall acquire fire and extended insurance coverage for the Leased Premises and fixtures on the Leased Premises and shall keep such insurance in full force and effect during the entire term of this Lease, and during any extension thereof. Such insurance shall be in an amount equal to not less than eighty percent (80%) of the replacement value of the Leased Premises and fixtures. All fire insurance policies shall contain a loss payee endorsement in favor of the lessor as their interest may appear. The policy shall also waive the right of subrogation against the Lessor. Lessee shall furnish evidence of certificates of insurance to the Director of Aviation prior to taking possession of the Leased Premises. 5.16 NONDISCRIMINATION Lessee, its agents and employees will not discriminate against any person or class of persons by reason of race, color, sex, religion or national origin in providing any services or in the use of any of its facilities provided for the public; nor shall Lessee discriminate against any person or class of persons on the basis of age in a manner that violates any prohibition against such discrimination under the Age Discrimination Act of 1975, 42 U.S.C. §§ 621 et. sue. Lessee further agrees to comply with such enforcement procedures as the United States might demand that Lessor take in order to comply with the Sponsor's Assurances as evidenced by agreement by and between Lessor and the United States. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 18 of 29 Lessee agrees to not discriminate against any employees or applicants for employment because of race, color, age, sex, religion or national origin. Lessee also agrees to take affirmative action to ensure that applicants are employed without regard to their race, color, sex, religion or nation origin and that employees are treated as such during employment. Such action shall include, but not be limited to, employment, upgrading, demotion or transfer, recruitment, layoff, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Lessee will also conduct its activities in accordance with the requirements of Section 504 of the Rehabilitation Act of 1973, and will assure that no qualified handicapped person shall, solely by reason of his or her handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination, including discrimination in employment, under any program or activity of Lessee. Lessee also agrees that in the event facilities are constructed, maintained or otherwise operated on the Leased Premises for a purpose for which a Department of Transportation program or activity is extended, or for another purpose involving the provision of similar services or benefits, Lessee shall maintain and operate such facilities and services in compliance with all requirements imposed pursuant to 49 CFR Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and Part 23.93(a)(3), participation by Minority Business Enterprises in Department of Transportation programs, and as said Regulation may be amended. 5.17 WARRANTY OF NO SOLICITATION Lessee warrants that it has not employed any person employed by Lessor to solicit or secure this Agreement upon any agreement for a commission, percentage, and brokerage or contingent fee. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 19 of 29 5.18 NO ASSIGNMENT OR SUBLETTING Except with the prior written consent of the Director of Aviation of the Lessor, such consent not to be unreasonably withheld, Lessee shall not sublet any part of the Leased Premises or assign any of its rights hereunder. No such assigrunent or subletting made with the consent of the Director of Aviation shall affect Lessee's obligation to make all required rental and fee payments hereunder upon default of any assignee or subtenant. Except as set forth above, Lessee shall not at any time assign, sell, transfer, pledge or otherwise alienate this Agreement or any interest herein without the prior written consent of the Director of Aviation of Lessor, such consent not to be unreasonably withheld. 5.19 WAIVER The failure of Lessor to insist in any one or more instance upon performance of any of the terms, covenants or conditions of this Lease shall not be construed as a waiver or relinquishment of the future performance of any such terms, covenants or conditions, and Lessee's obligation with respect to such future performance shall continue to be in full force and effect. Furthermore, the acceptance of rentals or fees by Lessor after Lessee's failure to perform, keep or observe any of the terms, covenants or conditions of the Lease shall not be deemed a waiver by Lessor to cancel this Agreement for such failure. 5.20 DUTY TO PREVENT UNAUTHORIZED ACCESS Lessee shall prohibit unauthorized persons, vehicles and animals from obtaining access or entry to the air operations area and any other sterile area at the Airport through those Airport premises which Lessee either controls or has possession of under this Agreement; and Lessee agrees that in the event that a civil penalty or fine is levied against the Airport or Lessor as a result of Lessee's failure to comply or act in accordance with this provision, or any other applicable federal, state or local statues, ordinances, rules and regulations affecting the use, Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 20 of 29 occupancy or operation of any said premises, Lessee shall immediately reimburse the Lessor the full amount of the penalty or fine and correct the act or omission leading to, causing or contributing to the violation. Provided, however, that the duty of the Lessee to reimburse Lessor subject to Lessor providing written notice of any potential fine or penalty. Lessee shall be provided notice to participate in the proceeding and defend itself, with counsel of choice, at its own cost. 5,21 SECURITY PLAN Lessee shall submit a Security Plan to the Director of Aviation of Lessor, which is acceptable to the Director of Aviation, the Airport Security Coordinator and the Federal Aviation Administration. Failure to submit an acceptable Security Plan at the request of the Director of Aviation shall be a breach of this Agreement subject to the provisions of Article VI of this Agreement. 5.22 STANDARDS Lessor reserves the rights to establish reasonable standards for the construction and maintenance of and alterations, repairs, additions or improvements to Lessee's facilities. This includes structural design, color, material used, landscaping and maintenance of Lessee's facilities and the Leased Premises. Lessor also reserves the right to issue through its Director of aviation such reasonable ntles, regulations and procedures for activities and operations conducted on the Airport as deemed necessary to protect and preserve the safety, security and welfare of the Airport and all persons, property and facilities located thereon. Lessor also reserves the right to make improvements and repairs at its own expense during the term of this agreement and agrees to maintain in good repair the space herein leased to the Lessee. Lubbock International Airport and Host Marriott Services Corporation Restaiwant Concession Agreement Page 21 of 29 5.23 ACCESS Lessee is herein granted the right of ingress to and egress from the Leased Premises over and across common or public roadways serving the Airport. Such right of ingress and egress, however, shall be subject to all laws, ordinances, rules and regulations now existing or hereafter promulgated by the City of Lubbock or other lawful authority. 5.24 TITLE TO LEASED PREMISES Lessee agrees that it does not acquire any equity or title to the Leased Premises as a result of this Agreement and that the property lierein leased shall remain the sole property of Lessor. Lessor grants Lessee a leasehold interest by and through this Agreement. 5.25 STORED CONTENTS Lessee agrees that it will not store or permit storage of gasoline, oil paint or any other flammables on the leased premises and that no smoking or open flame will be permitted thereon. It is also understood that Lessee will not use or permit the use of the Leased Premises for any purpose other than that set forth in paragraph 1.02 above or uses authorized by the Director of Aviation. 5.26 EMPLOYEE PARKING Lessor agrees to provide employee parking for Lessee's employees at the same charge and same location as provided other airport tenant employees. 5.27 INDEPENDENT CONTRACTOR The Lessee is and shall be an independent contractor in the performance of this contract, and Lessee shall have no authority to incur any obligation or indebtedness in the name of, or on behalf of Lessor, or in any manner act for it or on its behalf. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreenient Page 22 of 29 ARTICLE VI TERMINATION This Agreement is subject to termination for the reasons set forth below, provided that ten (10) days written notice is given to the nonterniinating party, unless otherwise specified as follows: 6.01 LESSEE'S RIGHT TO TERMINATE Subject to Lessor's right to cure, Lessee may terminate upon the happening of any of the following: A. The pennanent abandonment of the Airport as an air terminal by Lessor. B. The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Leased Premises for at least thirty (30) days. C. The breach by Lessor of any of the terms, covenants or conditions of this Agreement to be kept, performed and observed by Lessor, and the failure of Lessor to remedy such breach for a period of thirty (30) days after written notice from Lessee of the existence of such breach. D. The assumption by the United States Government, or any authorized agency of same, of the operation, control or use of the Airport and its facilities in such a manner as to substantially restrict Lessee from conducting its business under this Agreement, if such restriction is to continue or has continued for a period of three (3) months or more. 6.02 LESSOR' S RIGHT TOT ERNJIN ATE Subject to the Lessee's right to cure, Lessor may terminate upon the happening of any of the following: Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession .4greenxau Page 23 of 29 A. If the Lessee makes an assignment for the benefit of creditors; or files a voluntary petition of bankruptcy; or if proceedings in bankruptcy are instituted against Lessee and Lessee is thereafter adjudicated as bankrupt pursuant to such proceedings, or if a receiver for the Lessee's assets is appointed; or if Lessee petitions or applies to any tribunal for the appointment of a trustee or receiver for Lessee under any bankruptcy, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect. B. If Lessee shall abandon and discontinue operations under this Agreement. C. If Lessee shall default in or fail to make any rental or fee payment at the time and in the amounts required under this Agreement. D. If Lessee shall fail to perform, keep and observe all of the covenants and conditions contained in this Agreement to be performed, kept and observed by Lessee. E. If Lessee shall fail to abide by all applicable laws, ordinances, rules and regulations of the United States, State of Texas, City of Lubbock and Director of Aviation of the City of Lubbock. F. Lessee agrees to act in a manner that will not impair Lessor's ability to secure federal financial aid for the development of the Airport, or further development of the aeronautical operations thereon. G. If Lessor, acting in good faith, finds termination of the rights, privileges and interest of Lessee acquired under this lease be necessary to secure federal financial aid for the development of the Airport, or further development of aeronautical operations thereon, and Lessee is not otherwise in breach of contract, then Lessor Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 24 of 29 shall pay Lessee the fair market value of Lessee's affected rights, privileges, and interest. H. Lessor shall give written notice to Lessee to correct or cure any such default, failure to perform or breach and if, within thirty (30) days from the date of such notice, the default, failure to perform or breach complained of shall not have been corrected to the reasonable satisfaction of the Director of Aviation of Lessor, then and in such event the Director of Aviation shall have the right, at once and without further notice to Lessee, to declare this Agreement tenninated and to enter Upon and take full possession of the Leased Premises. In such event, Lessor shall take reasonable and good faith efforts to lease the premises to a third person and/or otherwise mitigate any damages incurred as a result of Lessee's default. 6.03 FIRE DAMAGE In the event the Leased Premises are damaged by fire or other accidental cause during the initial terns of this Agreement or during any extension thereof, so as to become totally or partially unusable, Lessor shall have the option to restore such Leased Premises. If Lessor exercises its option to restore the same, Lessor shall proceed with due diligence. If the damage is so extensive as to amount practically to the total destruction of the utility of the Leased Premises for the purposes expressed in this Agreement, Lessee's obligation to pay rental and fees hereunder shall abate for the time and to the extent that the Leased Premises have been rendered unusable. Should Lessor not exercise its option to restore the Lease Premises, this Lease shall terminate, such termination to be effective on the date of damage by fire or other accidental cause, and all rentals and fees due pursuant to this Agreement shall be apportioned to that date. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 25 of 29 6.04 VACATION OF LEASE AND OWNERSHIP OF FIXTURES Within thirty (30) days after expiration or termination of this Agreement, as herein provided, the Lessee, at Lessee's sole expense, shall remove all improvements constructed or placed on the Leased Premises such as buildings, equipment, and fixtures belonging to Lessee and restore the Leased Premises to the condition in which they were received, reasonable wear and tear and damage by fire or the elements excepted. In the event of the failure on the part of Lessee to remove from the Leased Premises, all such above described property owned by Lessee under the requirements set forth in this paragraph, Lessor may effect such removal and deliver said property to Lessee at Lessee's expense. However, this in no way relieves the Lessee of the debt incurred. Lessee shall pay monthly a sum equal to the rental paid the preceding month for the period of time that Lessee's property remains on the Leased Premises after expiration or termination of this Agreement. In the event Lessor terminates this Agreement for cause, as contained herein, or if Lessee discontinues its business on the Leased Premises at any time prior to expiration of the term, or the expiration of any subsequent extension, Lessor shall retain ownership of Lessee's improvements to the extent of the rentals due for the remainder of the term or extension if paid at the rate paid for the month prior to termination. Furthermore, upon the expiration or termination of this Agreement, Lessee shall, remove any furniture, machinery, equipment, chattels, goods, or other trade fixtures owned or placed by Lessee, in, tinder, or on the premises, or acquired by Lessee, whether before or during the lease term; provided, however, that Lessee's right to remove its property is subject to the condition that Lessee has paid in full all amounts due and owed to lessor under this Agreement. If Lessee shall fail or neglect to remove said property on or before said expiration or termination of the Agreement, then at the option of Lessor, said property shall either become the property of Lessor Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 26 of 29 without compensation therefor, or the Director of Aviation of Lessor may cause such property to be removed at the expense of Lessee, and no claim for damages against the Lessor, or its officers, agents or employees shall be created or made on account of such removal and restoration. In the event that there are any substantial disagreements concerning the Vacation of Lease and Ownership of Fixtures, Lessor and Lessee agree to Dispute Resolution as set out in Article VII. 6.05 SURRENDER The Lessee covenants that at the tennination of this Agreement it will surrender the Leased Premises to Lessor without notice further than is herein provided in as good condition as when entered into by said Lessee, reasonable wear and tear excepted. Upon the expiration or termination of this Agreement, or any renewal thereof, Lessee shall remove the trade fixtures, equipment and utensils installed by Lessee. ARTICLE VII MISCELLANEOUS PROVISIONS 7.01 NOTICES Notices to the Lessor provided for herein shall be sufficient if sent certified mail, postage prepaid, addressed to the Director of Aviation, Route 3, Box 389, Lubbock, Texas 79041, and notices to Lessee, if sent by certified mail, postage prepaid, to the address for Lessee on file with the Director of Aviation for Lessor. 7.02 MULTIPLE PARTIES If this lease names more than one Lessor or Lessee, service of any notice on any one Lessee or Lessor is considered service on all Lessees or Lessors, respectively. 7.03 PARTIES BOUND This agreement binds, and inures to the benefit of, the parties to the lease and their respective heirs, executors, administrators, legal representatives, successors, and assigns. Lubbock International Airport and Host Marriott Services Corporation Restaurant Concession Agreement Page 27 of 29 7.04 APPLICABLE LAW This agreement is to be construed under Texas law, and all obligations of the parties created by this lease are performable in Lubbock County, Texas. Venue for any action brought pursuant to this Agreement, or any activity contemplated hereby, shall lie exclusively in Lubbock County, Texas. 7.05 CONSTRUCTION If any one or more of the provisions contained in this lease are for any reason held to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unen force ablity will not affect any other provision of the lease, which will be construed as if it had not included tine invalid, illegal, or unenforceable provision. 7.06 PRIOR AGREEMENTS This lease constitutes the parties' sole agreement and supersedes and replaces any prior contracts, agreements, understandings or oral agreements between the parties with respect to the subject matter. 7.07 AMENDMENT No amendment, modification, or alteration of this lease is binding unless in writing, dated subsequent to the date of this lease, and duly executed by the parties. 7.08 RIGHTS AND REMEDIES CUMULATIVE The rights and remedies provided by tills lease agreement are cumulative, and either party's using any right or remedy will not preclude or waive its right to use any other remedy. The rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance, or otherwise. 7.09 ATTORNEY'S FEES Lubbock International Airport and Host Marriott Services Corporation Restatnrant CwTcession ,4greement Page 28 of 29 In the event of any dispute under this Agreement/Lease, Lessor and Lessee shall first attempt to resolve such difference in good faith through a neutral mediator, each party bearing their own expense. If mediation fails, the parties may then proceed to enforce and/or litigate their dispute in a court of law under the jurisdictional and venue requirements outlined in Section 7.04 of this Agreement. 7.10 TIME OF ESSENSE Time is of the essence of this agreement. EXECUTED this the 25th day of February 1999. LESSOR: CITY OF LUBBOCK BY: Windy Sitton, ayor A EST: Kayt Darnell, City Secretary APPROVE TO CONTENT: Mar arle, Director o n APPROVED AS TO FORM: Linda L. Chamales Supervising Attorney/Office Practice Lubbock International Airport and Host International, Inc. Restaurant Concession Agreement Page 29 of 29 LESSEE: HOST INTERNATIONAL, INC. BYP� G� Title: ATTEST: ._Secr tary -�- �� EXH1B� r` tr y r r ir r I ; fn I , i ' � r f i f i i 'ti r r - --- - r U -------------- --- -- --- - - �J e y ji 5 L Q ,11 ee a ee � � e c c m �� \\ ,� ve ExHiel.r 1 r EXHIBIT 2 JOINT VENTURE AGREEMENT by and between HOST INTERNATIONAL, INC., a Delaware corporation, "Host" and ABC, , a LUBBOCK INTERNATIONAL AIRPORT FOOD, BEVERAGE AND RETAIL MERCHANDISE CONCESSION Dated: 91998 N/Host and ABC DRAFT JOINT VENTURE AGREEMENT THIS JOINT VENTURE AGREEMENT, (the "Agreement" or "Joint Venture") is entered into effective the — day of 1998, by and between HOST INTERNATIONAL, INC., a Delaware corporation ("Host") and ABC, _, a ("ABC"). (Host and ABC are collectively referred to hereinafter as the "Principals.") WITNESSETH: WHEREAS, Host is an operator of food, beverage, and retail merchandise concessions at major airports throughout the United States, and ABC is a disadvantaged business enterprise ("DBE") formed to engage in the food, beverage and retail merchandise business; and WHEREAS, the City of Lubbock (the "City") desires that Host increase the DBE participation in that certain concession agreement as amended dated (as amended the "Concession Agreement"); and WHEREAS, the Principals desire to form a joint venture for the purpose of developing and operating food, beverage and retail merchandise concessions under a Sublease from Host as Concessionaire at Lubbock International Airport (the "Airport"); NOW, THEREFORE, It is mutually agreed by and between the Principals as follows: ARTICLE I FORMATION 1.1. Formation and Purpose of the Joint Venture. The Principals hereby constitute and form themselves as a joint venture (hereafter the "Joint Venture") for the purpose of developing and operating food, beverage and retail merchandise concessions under a Sublease from Host as Concessionaire, and under any franchise or license agreement entered into by the Joint Venture in connection with a Sublease from Host. 1.2. and Ownership of ABC. The "ABC Principals" are , who are ABC's sole legal and beneficial owners. 1.3. Name of the Joint Venture. The name of the Joint Venture is "Host ABC Lubbock Airport Joint Venture". The business of the Joint Venture may be conducted under any other name deemed necessary or desirable by the Principals. 1.4. Principal Place of Business. The Joint Venture's principal place of business shall be located at the Host office at the Airport. The Joint Venture shall have no other principal place of business or office unless agreed to by all of the Principals. W/Host and ABC 1.5. Term of the Joint Venture. The Joint Venture shall commence upon the execution of this Agreement by the Principals, but shall not become effective until approved by the Director as provided in Section 9.20 hereof. The Term of the Joint Venture shall continue until the earliest to occur of the following: (a) failure of the Authority to approve the Sublease between Host and the Joint Venture; (b) failure of any Principal other than Host to provide capital pursuant to a capital call by the Managing Principal within the time provided in Article II; (c) termination pursuant to the provisions of Article VI of this Agreement or any other default not cured, if a cure period is allowed under this Agreement; (d) expiration without renewal of the Sublease with Host; (e) termination of the Joint Venture by mutual agreement of the Principals; (f) failure of a Principal or its representative, as the case may be, to attend two (2) or more scheduled meetings of the Management Committee (pursuant to Section 3.1 hereof) during any calendar year; or (g) 20 . 1.6. Registration of Fictitious Name, Etc. The Joint Venture's name (and any other name under which the Joint Venture conducts business) shall be registered and filed as a fictitious name under the laws of Texas and each other jurisdiction in which the Joint Venture conducts business as required by applicable law. In addition, if required, each corporate Principal shall register and be qualified to do business as a foreign corporation, or foreign limited liability company, as the case may be, in each jurisdiction in which the Joint Venture conducts business (including Texas if such corporate Principal is not incorporated or organized under the laws of the State of Texas), and shall maintain such qualification as long as such Principal remains a member of the Joint Venture or as long as the Joint Venture conducts business in such jurisdiction, whichever period is shorter. 1.7. Treatment as a Partnership for Income Tax Purposes. The Principals intend that the Joint Venture is, and shall continue to be, an entity taxable as a partnership pursuant to the provisions of the Internal Revenue Code of 1986 (the "Code") and applicable tax laws of the State of Texas. The Principals shall take all reasonable actions requisite to the maintenance of the Joint Venture as an entity taxable as a partnership for federal and state income tax purposes. 1.8. Interests. Principals shall have rights in the Joint Venture in proportion to their share of ownership. The Percentage Interest of Host is ninety percent (90%) and the Percentage Interest of ABC is ten percent (10%). The term "Majority of Principals," when used in this Agreement means the Principal Host, or its successor, owning the majority of the total number of Percentage Interest then owned by all Principals in the Joint Venture. 1.9. Certification as a Disadvantaged Business Enterprise or Minority Business Enterprise. ABC represents that it is certified by the City as a disadvantaged business enterprise ("DBE") and that it shall maintain certification as a DBE throughout the term of this Agreement. ABC's failure to maintain its DBE certification shall be a default hereunder, and entitle Host to terminate this Joint Venture as provided below, unless on or prior to the 35`h day following the loss of certification of ABC's DBE status (the "Recertification Period") ABC's certification as a DBE is restored, or ABC is otherwise re -certified as a DBE. In the event ABC does not restore 2 W[Host and ABC its DBE status on or prior to the last day of the Recertification Period, then Host may terminate the Joint Venture at the end of the Recertification Period. 1.10. Future Opportunities at the Airport. This Joint Venture is formed for the purpose of operating the specific facilities identified at the time of formation of the Joint Venture. Should the opportunity to operate additional facilities arise at the Airport, Host, at its sole option, may offer new facilities to the Joint Venture, but Host shall be under no obligation to do so. ARTICLE II CAPITAL OF THE JOINT VENTURE 2.1. Initial Capital Contributions. ABC and Host shall contribute to the capital of the Joint Venture that amount of money or other assets set forth next to their respective names in Schedules A and B. Schedule A reflects an estimate of net asset value as of the effective date of this Joint Venture. The capital requirements for purchase of existing assets and operations are as indicated in Schedule A. The estimated capital requirements for construction, fixturing, and operation of new facilities are indicated in Schedule B. In exchange for such transfers and other contributions the parties shall receive their respective percentage interests ("Percentage Interests" or "Interests") in the profits and losses of the Joint Venture. Each Principal is to make its contribution to the Joint Venture no earlier than the dates identified in Schedules A and B and no later than ten (10) days after notification by the Managing Principal that the contribution is due. 2.2. Subsequent Capital Contributions. In addition to the capital contributions identified in Schedules A and B, the parties agree that there shall be mandatory refurbishment during the term, including but not limited to mid-term refurbishment, and other improvements required by the Concession Agreement. The parties further agree that at the end of each year they shall make immediately available in accordance with their respective Percentage Interest, subject to a call by the Managing Principal, an amount equal to one and one-half percent (1.5%) of the prior year's Gross Sales. Such funds may be used for repairs and refurbishment, separate from and in addition to, any midterm commitment. These amounts are cumulative during the Term of the Agreement. For example, at the end of the third year of the Term of this Agreement, the total amount available would be one and one-half (1.5%) of total Gross Sales for the first three years, less any amounts called during those three years. The term "Gross Sales" as used in this Agreement shall have the same meaning as in the Concession Agreement, as applied to those operations subleased to the Joint Venture. The parties acknowledge that additional contributions may be required to cover negative cash flows, as provided herein. 2.3. No Interest on Capital Contributions. No interest shall be paid by the Joint Venture to any Principal on any contribution to Joint Venture capital, whether or not such contribution is in excess of the amount of capital which such Principal agreed to contribute to the Joint Venture. 2.4. Maintenance of Capital Accounts. Each Principal shall have a separate Capital Account. The determination and maintenance of the Capital Accounts is to be effected by the Managing Principal in its reasonably exercised discretion, applying principles consistent with this Agreement and the final regulations promulgated under Code §704, including Treasury 3 N/Host and ABC Regulation § 1.704-1(b)(2)(iv) and other applicable law, in order to assure that all allocations herein have substantial economic effect for federal income tax purposes. In the event any Interest is transferred in accordance with the terms of this Agreement, the transferee succeeds to the Capital Account of the transferor to the extent such Capital Account relates to the transferred Interest. 2.5. Withdrawals. A Principal is not entitled to withdraw any part of its Capital Account or to receive any distribution from the Joint Venture except as provided in this Agreement. No Principal has the right to demand or receive property other than cash for its Interest. ARTICLE III MANAGEMENT OF THE JOINT VENTURE 3.1. Management Committee. The Management Committee shall be composed of the ABC Principals, as defined in Article 1.2, and an equal number of representatives designated by Host. The primary role of the Management Committee shall be policy budget formulation for the venture. Meetings shall be scheduled to occur no less often than monthly and shall usually occur within thirty (30) days of the end of each month. At such meetings, the Principals, or their designated representatives, are expected to review the performance of the Joint Venture, examine trends and operational reports, design strategies and policy to further enhance the business, and consider high level business, landlord, and customer needs. Voting power of the Principals, or their designated representatives, shall be proportionate to the interest in the capital of the Joint Venture which is ninety percent (90%) for Host and ten percent (10%) for ABC. Decisions of the Management Committee shall be recorded in writing and signed by a representative of each Principal who has the authority to bind that Principal. The Principals shall first attempt in good faith to reach agreement by consensus, but shall ultimately decide issues by a vote based on their Percentage Interest in the Joint Venture. A majority of the Percentage Interests shall determine the outcome. A quorum to transact business shall exist when members representing a majority of ownership interest in the Joint Venture are present. Minutes shall be prepared in support of each meeting. 3.2. Host's Role as Managing Principal. Subject to the terms and conditions of this Agreement, Host as the Managing Principal has authority and management of the day-to-day affairs of the Joint Venture and shall exercise such control and management according to its usual business practices, subject to the direction of the Management Committee, and the "Major Decisions" discussed in Section 3.3, below. In connection with such management, the Managing Principal may employ on behalf of the Joint Venture any other person to perform services for the Joint Venture, including affiliates of any Principal. 4 N/Host and ABC 3.3. Major Decisions, Restrictions on the Authority of the Managing Principal. Neither the Managing Principal nor the Joint Venture (nor any other Principal) may enter into or conduct any of the following transactions without the approval of the Management Committee: (a) assign the Joint Venture's property in trust for creditors or on the assignee's promise to pay the debts of the Joint Venture; (b) confess a judgment against the Joint Venture; (c) sell, convey, assign, lease, exchange or otherwise dispose of any of the Joint Venture's property (or interests therein) other than in the ordinary course of the Joint Venture's business; (d) borrow money in the name of the Joint Venture or issue evidences of indebtedness of the Joint Venture or refinance, recast, modify or extend the same, or secure the same by mortgage, deed of trust, pledge or other Encumbrance; (e) admit a person as a Principal except as provided in this Agreement; (0 amend this Agreement; or (g) do any act in violation of the Uniform Partnership Act as in effect in the State of Texas or which would make it impossible to carry on the ordinary business of the Joint Venture. 3.4. Specially Compensated Duties and Obligations of the Managing Principal. -- (a) The Managing Principal shall provide, or shall cause its affiliates to provide, in connection with the operations of the Joint Venture, the following administrative support services (herein collectively referred to as "Administrative Services"), in consideration of which the Managing Principal shall receive the Administrative Services Fee referred to in Section 3.4(b) hereof: {i) accounting and record keeping, including payroll services and bank reconciliations, from Managing Principal's staff located at the Managing Principal's headquarters in Bethesda, Maryland (the "National Headquarters"); (ii) marketing/sales/promotion advice and direction from the Managing Principal's National Headquarters staff (which excludes marketing assets of the Managing Principal at the Airport or regionally located); 5 N/Host and ABC (iii) legal counseling and direction from the Managing Principal's in- house legal counsel (excluding any expenditure for outside counsel); (iv) purchasing supervision, including extension to the Joint Venture of the Managing Principal's national buying privileges where practical, from the Managing Principal's National Headquarters, provided that charges for materials or services obtained from affiliates of the Managing Principal shall be accounted for in the same manner as charges to other airport operations of the Managing Principal; (v) tax administration services, including preparation and delivering of all tax returns on behalf of the Joint Venture (as set forth herein), from the Managing Principal's National Headquarters internal tax department; and (vi) internal audit, including staff audits at the Airport, from the Managing Principal's National Headquarters auditing department; and (b) In consideration of the Managing Principal providing, or causing one or more of its affiliates to provide, the Administrative Services to the Joint Venture, the Joint Venture shall pay to the Managing Principal a fee (the "Administrative Services Fee") equal to 4.3% of the Joint Venture's Gross Sales. 3.5. Store Managers. The operating organization for the Joint Venture initially shall have a Store Manager designated to guide the day-to-day management of the locations. ABC shall be responsible for designating a candidate for one (1) Assistant Manager position at the premises to be operated by the Joint Venture. The candidate designated by ABC, once approved by the Management Committee, if hired, shall be an employee of ABC. Every candidate must meet the qualifications established for all Assistant Managers and shall be subject to the same performance criteria as all other Assistant Managers, including the ability to achieve promotions, advance their careers within ABC (and the Joint Venture), and be removed if poor performance warrants. The candidate for Assistant Manager designated by ABC may be an owner or officer of ABC or any other individual designated by ABC. The Joint Venture shall reimburse ABC for the amount equal to the compensation and benefits appropriate for an Assistant Manager with the skills and experience of ABC's successful candidate. The Management Committee shall designate a unit or store, within the premises to be operated by the Joint Venture, the management and opertation of which shall be the sole responsibility of ABC. The Assistant Manager designated by ABC shall be responsible for the day-to-day operations of such unit or store. Host shall designate candidates to be presented to the Management Committee for two (2) or more Assistant Manager positions, as may be needed, for the premises to be operated 6 JVIHost and ABC by the Joint Venture. Every candidate must meet the qualifications established for all Assistant Managers and shall be subject to the same performance criteria as all other Assistant Managers, including the ability to achieve promotions, advance their careers within the Joint Venture, and be removed if poor performance warrants. Successful candidates shall be eligible for compensation and benefits appropriate to their skills and experience. Each such Assistant Manager hired to fill this position is directly responsible for the day-to-day operations of their respective facilities (i.e., unit or store), under the guidance of the Managing Principal. Such Assistant Manager's scope of responsibility includes the right to determine in good faith (i) charges for and kind and character of products and other items to be offered for sale in their respective facilities operated, subject to the branded concept agreements and City restrictions and the corporative directives of Host, (ii) charges for and the kind of services to be offered in the respective facilities operated, subject to the branded concept agreements and City restrictions and the corporate directives of Host, (iii) all phases of promotion, marketing, and publicity related to the respective facilities operated, subject to the branded concept standards and city restrictions and the corporate directives of Host, (iv) the determination of and purchase of products to be served in the respective facilities operated, subject to branded concept guidelines and City restrictions and the corporate directives of Host, and (v) the hiring, training and dismissal of personnel employed at the premises operated, subject to all relevant labor laws and the existing union contract covering all non -management associates. A conditions precedent for employment of such Assistant Manager is that he or she agree to become fully certified in all brands that he or she is operating. 3.6. Indemnification. The Joint Venture is to indemnify each Principal in respect of payments made and personal liabilities reasonably incurred by such Principal in the ordinary and proper conduct of the Joint Venture's business, or for the preservation of the Joint Venture's business or property. In addition, the Joint Venture is to indemnify and hold harmless each Principal from any loss, damage or liability due to, or arising out of, any act performed by such Principal within the scope of the authority conferred upon it by this Agreement, except for any act which constitutes willful misconduct or gross negligence. 3.7. Loans. Principals or their affiliates may make loans to the Joint Venture on such terms as determined by the Managing Principal. Loans to the Joint Venture by any Principal are not contributions to the capital of the Joint Venture. 3.8. Activities of Principals. It is understood that the Principals are and shall be engaged in other interests and occupations unrelated to the Joint Venture. Therefore, the Principals are required to devote only such of their time as each of them, in its sole discretion, deems necessary to the affairs of the Joint Venture subject to the requirements and obligations identified in this Agreement. Nothing herein relieves any Principal of its fiduciary obligations to the Joint Venture or the other Principals. Any Principal may engage in and have an interest in other business ventures ("Independent Ventures") of every nature and description, independently or with others, except for business ventures which compete, or may compete with the Joint Venture. Neither the Joint Venture nor any other Principal has any right by virtue of this Agreement in and to such Independent Ventures or the income or profits derived therefrom whether or not such Independent Venture was presented to such Principal as a direct or indirect N/Host and ABC result of his connection with the Joint Venture. No Principal may engage in any business venture at the Airport which is not an Independent Venture (a "Competing Business") unless the Competing Business is conducted by the Joint Venture, or unless the Managing Principal consents in writing signed by its General Counsel (identified in Section 9.12 hereof). 3.9. Remuneration. Except as set forth herein, no Principal is entitled to remuneration for acting in the Joint Venture's business. ARTICLE IV ACCOUNTING MATTERS The Managing Principal shall be solely responsible for all accounting matters related to the Joint Venture. In all accounting matters, the Managing Principal shall use generally accepted accounting principles (GAAP) set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, except (i) for matters which shall not have a material impact on the applicable financial statement or schedule, or (ii) as otherwise noted herein. The Managing Principal shall provide to the other Principals as soon as practicable after the close of each fiscal period a Statement of Operations (Income Statement) in the form which the Managing Principal deems necessary and appropriate and consistent with the form of such information it customarily provides to other joint ventures of which it is a part. In addition, the Managing Principal shall provide to the other Principals, within 120 days of the end of the fiscal year of the Joint Venture, a Balance Sheet, a Statement of Operations (Income Statement) and a Statement of Changes in Partners' Capital, such information to be provided in the form which the Managing Principal deems necessary and appropriate and consistent with the form of such information it customarily provides to other joint ventures of which it is a part. ARTICLE V DISTRIBUTIONS AND ALLOCATIONS 5.1. Net Cash FIow. (a) Net Cash Flow is defined as: (1) the Gross Revenue of the Joint Venture for the period for which the calculation of Net Cash Flow is being made ("the Applicable Period") less (ii) all operating costs incurred or attributed to Joint Venture operations for the Applicable Period, consistent with accounting practices at other Host branches (other than depreciation and amortization of 8 N/Host and ABC intangibles which shall not be included in the determination of operating costs for purposes of determining Net Cash Flow) and less (iii) the Administrative Services Fee for the Applicable Period. Gross Revenue, for purposes of this Agreement is the sum of Gross Sales and other income of the Joint Venture. As an example, other income may include payment from the City under section 201 of the Concession Agreement if there are no replacement facilities identified at the time of payment that shall be operated by the Joint Venture. If replacement facilities that shall be operated by the Joint Venture are identified at the time a payment is made pursuant to Section 201 of the Concession Agreement, proceeds from that payment shall be held by the Joint Venture for investment in the replacement facilities, and shall not be considered part of Gross Revenue. (b) Net Cash Flow, as calculated by the Managing Principal, is to be distributed at least once per quarter at such times and in such amounts as the Managing Principal deems appropriate in light of future capital needs and any anticipated losses. Any such distributions are to go to the Principals in proportion to their Percentage Interests in this Joint Venture. For any quarter in which there is a negative Net Cash Flow, no distributions shall be made. If Net Cash Flow is negative, the Managing Principal shall determine whether the Principals should make contributions to the Joint Venture sufficient to cover the negative Net Cash Flows. If such contributions are deemed necessary they shall be noticed by the Managing Principal and contributions must be made within thirty (30) days of receipt of such notice. 5.2. Distributions Upon Dissolution. Upon dissolution and termination of the Joint Venture, any and all assets which become the property of the City under the Concession Agreement between Host and the City shall be excluded from the final assets of the Joint Venture. The remaining assets of the Joint Venture, or the proceeds of sales or other dispositions in liquidation of the assets of the Joint Venture, as may be determined by the Managing Principal are to be distributed to the Principals in the priority set forth as follows: (a) first, to discharge or to make adequate provision for (to the extent required by any lender or creditor) debts and obligations of the Joint Venture (other than debts and obligations of the Joint Venture to the Principals), and the payment of the expenses of liquidation; (b) second, to fund reserves which the Managing Principal deems reasonably necessary for any contingent or unforeseen debt of the Joint Venture; (c) third, to discharge or make adequate provision for debts and obligations of the Joint Venture to the Principals; and (d) fourth, to all Principals to the extent of and in proportion to their positive Capital Accounts after taking into account all Capital Account adjustments W/Host and ABC for the Joint Venture's taxable year during which the Capital Transaction or dissolution and termination of the Joint Venture occurred. Upon liquidation, the distribution under Section 5.2(d) hereof must be made by the later of (i) the end of the Joint Venture's taxable year in which the liquidation occurred, or (ii) 90 days after the date of such liquidation. 5.3. Special Allocation Provisions. (a) Interim Allocations. All profits, losses, and credits are to be allocated, and all distributions under this Article are to be made, as the case may be, to the persons shown on the records of the Joint Venture to have been Principals as of the day on which such allocation or distribution is to be made, in proportion to their Percentage Interest as of the date of allocation or distribution. However, if during a fiscal year, any person is admitted as a Principal pursuant to the terms hereof, the Joint Venture shall adopt the "interim closing of the books" (as defined in applicable Treasury Regulations) method of allocating Joint Venture profits, losses, gains and distributions as follows: (1) If Principals are admitted to the Joint Venture at any time during a Host accounting period, the Joint Venture shall close its books as of the end of the accounting period of admission and the newly admitted Principals shall share in profits, losses, gains and distributions of the Joint Venture from the day of admission of the new Principal, (2) If during a taxable year a Principal sells, exchanges or otherwise disposes of all or any portion of its Interest to any Person pursuant to the terms hereof, the Joint Venture shall close its books as of the end of the accounting period of disposition and such transferee shall share in profits, losses, gains and distributions of the Joint Venture from the date of disposition or transfer. (b) Effect of Revaluation of Property. Notwithstanding anything to the contrary in this Article, the Managing Principal may, in accordance with Treasury Regulation § 1.704-1(b)(2)(iv)(f), increase or decrease the Principals' Capital Accounts to reflect a revaluation of the Joint Venture's property. In the event of any such increase or decrease, the Principals' distributive shares of depreciation, amortization and gain or loss with respect to such revalued property, are to be determined so as to take account of the variation between the adjusted tax basis and the book value of the property in the same manner as under Code §704(c) and Treasury Regulation § 1.704-1(b)(2)(1v)(f) and § 1.704-1(b)(2)(iv)(g). (c) Code §754 Election. To the extent an adjustment to the adjusted tax basis of any Joint Venture asset pursuant to Code §§734(b) or 743(b) is required, pursuant to Treasury Regulation § 1.704- 1 (b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts is to be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss is to be specially allocated to the Principals in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such section of the Treasury Regulations. 10 W Host and ABC (d) Modifications. To assure compliance with the final and temporary Treasury Regulations under Code §704, the Managing Principal in its reasonable discretion may modify the manner in which the Capital Accounts, and any debits and credits thereto, are computed without requiring any amendment to this Agreement or approval of the other Principals, provided that such modification is not likely to have a material adverse effect on amounts distributable to any Principal upon the dissolution and termination of the Joint Venture. The Managing Principal may make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Code §704 and Applicable Law related thereto. (e) Qualified Income Offset. If an allocation of losses creates a negative Capital Account (or increases the deficit of such negative Capital Account) of any Principal, such Principal is to be allocated profits and gains as a "qualified income offset" in an amount and manner sufficient to eliminate such negative Capital Account as quickly as possible, all in a manner consistent with Treasury Regulation § 1.704- 1 (b)(2)(ii)(d). (0 Nonrecourse Liabilities. (i) Beginning in the first taxable year of the Joint Venture that the Joint Venture has nonrecourse deductions and thereafter throughout the full term of the Joint Venture, nonrecourse deductions are to be allocated in a manner that is reasonably consistent with allocations that have substantial economic effect on some other significant item attributable to the property securing the nonrecourse Iiability, all in a manner consistent with Treasury Regulation § 1.704-2(e)(2) and other applicable law. (ii) Beginning in the first taxable year of the Joint Venture that the Joint Venture has nonrecourse deductions or makes a distribution of proceeds of a nonrecourse liability that are allocable to an increase in Joint Venture minimum gain, and thereafter throughout the full term of the Joint Venture, there is to be a minimum gain chargeback, all in a manner consistent with Treasury Regulation § 1.704-2(e)(3) and § 1.704-2(f) and other applicable law so that, if there is a net decrease in Joint Venture minimum gain for a Joint Venture taxable year, each Principal is allocated items of profits and gain on a Capital Transaction for that year equal to that Principal's share of the net decrease in Joint Venture minimum gain consistent with the minimum gain chargeback requirement of applicable law. 5.4 Distributions In Kind. If any assets of the Joint Venture are to be distributed in kind (other than a distribution which is a liquidating distribution to a retired Principal), each Principal receives such interest therein as a tenant -in -common with all other Principals so entitled. Any difference between the fair market value and the amount at which such assets are carried on the books of the Joint Venture is to be recorded as Joint Venture Profit or Loss, as the case may be, and allocated to the Capital Accounts of the Principals immediately prior to such distribution as set forth in Section 5.3 hereof. Such assets are to be distributed on the basis of the fair market value thereof. The fair market values of such assets are to be determined by an appraiser to be selected by the liquidating Principal. N/Host and ABC ARTICLE VI TERMINATION AND DISSOLUTION OF THE JOINT VENTURE 6.1. Termination of the Joint Venture. The Joint Venture is terminated upon the happening of any of the following events, whichever first occurs; (a) the bankruptcy, liquidation or dissolution of ABC and failure of the financial institution providing the financing referred to in Section 7.2 hereof ("ABC Bankers"), within 120 days of ABC's liquidation, dissolution or bankruptcy proceedings (or within such other period to which Host and the ABC Bankers may agree), to take possession of ABC's interest in the Joint Venture and find a substitute partner acceptable to Host and the Director of Airports of the Airport Authority of the City of Lubbock (the "Director"), or such other person as the City shall designate, to replace ABC as a Principal, provided, however, that this section does not excuse ABC's duty to maintain DBE status at all times; (b) the written agreement of all the Principals; (c) the expiration of the Term provided for in Section 1.5 hereof; (d) termination of the Concession Agreement; (e) the arrest, indictment, guilty or nolo contendre or no contest plea, or conviction of any owner of ABC for a crime constituting a felony under United States law or the law of any state within the United States, including the District of Columbia, provided that no such termination under this subsection shall occur (i) in the case of an arrest or indictment, if the owner is found not guilty or the charges are otherwise dismissed by the applicable authorities; (ii) in the case of a plea or conviction, if within 120 days of the date of such plea or final conviction, (A) the remaining owners of ABC expel such person as an owner and succeed to such owner's interest in ABC, or (B) the ABC Bankers declare ABC in default and proceed as provided in Section 6.1(a) hereof; (f) a default by ABC, other than decertification as an DBE, not excused by the Managing Principal, provided that no such termination under this subsection shall occur unless each of ABC and the ABC Bankers are provided at least 30 days' notice of any such default and the opportunity to cure the specified default within such 30-day period; (g) a failure of ABC to remain certified as an DBE or to be recertified as described in Section 1.9 hereof; 12 N/Host and ABC (h) transfer of an interest in ABC to a new owner which is determined to be unacceptable to Host; or (i) a "change in control' of ABC without approval of the Director. A "change in control" may also constitute an event of termination pursuant to Paragraph (g) above or Section 1.9 hereof. 6.2. Right to Wind Up. (a) Upon any termination of the Joint Venture, the Joint Venture is to be dissolved and its affairs wound up as soon as practicable thereafter by the Managing Principal. In winding up the affairs of the Joint Venture, the Managing Principal is to proceed to liquidate the assets of the Joint Venture in such manner as it determines (including the sale of such assets), allowing a reasonable time therefor to enable the Joint Venture to minimize losses upon a liquidation. (b) Upon the termination and dissolution of the Joint Venture and liquidation of its assets, the proceeds are to be applied and distributed in the manner and order provided in Section 5.2 hereof. 6.3. Right to Contribution. Upon the termination and dissolution of the Joint Venture, and in the event the Joint Venture's assets are insufficient to pay the debts of the Joint Venture (including the debt of the Joint Venture to its Principals for loans made by such Principals) (the "Excess Liabilities"), each Principal is to contribute to the capital of the Joint Venture an amount in cash equal to its Percentage Interest of the Joint Venture sufficient to cover the Excess Liabilities. In the event a Principal pays more, or is required to pay more, than its Percentage Interest of the Excess Liabilities, such Principal has the right to seek contribution from the other Principals. ARTICLE VII NEW PRINCIPALS AND TRANSFERS OF JOINT VENTURE INTERESTS 7.1. New Principals. A person may be admitted as a Principal in the Joint Venture only with the consent of all of the Principals, such consent to be endorsed in writing by the General Counsel of the Managing Principal. 7.2. Assignment of Interest. No Principal may voluntarily resign or assign, sell, exchange or transfer his Interest, in whole or in part, or hypothecate, mortgage or subject it or any part of it to any encumbrance, or otherwise dispose of it, without the prior consent of the Managing Principal, such consent not to be unreasonably withheld and to be endorsed in writing by the General Counsel of the Managing Principal. Notwithstanding the foregoing, and subject to the approval of the City, ABC shall be entitled to assign its interest, as collateral security, to any one or more financial institutions to secure loans in an aggregate principal amount equal to the maximum amount to be contributed by ABC to the Joint Venture pursuant to the terms hereof. Any subsequent assignments by ABC for financing purposes are subject to the approval of the Director as well as the Managing Principal. In the event that ABC should default on any 13 rv/Host and ABC such loans, the financial institutions holding an interest in this Joint Venture shall have one hundred and twenty (120) days (or such other period of time as Host and such financial institutions may agree) to identify a substitute DBE partner to replace ABC. Any substitute must be acceptable to Host and the Director. If the financial institution has not identified a substitute partner within one hundred and twenty (120) days (or such other period of time as Host and such financial institutions may agree), this Joint Venture shall terminate and neither Host nor the Director nor the City shall have any further duty or obligation to ABC or the financial institutions holding an interest in the Joint Venture. During the period of possession by a financial institution, the Managing Principal shall make all Net Cash Flow distributions that would have been made to ABC to the financial institutions in ABC's place and the financial institution(s) shall have all other rights and responsibilities previously held by ABC. 7.3. Substitute Principals. (a) No transfer, assignment or substitution by a Principal which has otherwise been consented to by the Managing Principal or is otherwise in compliance with this Agreement is effective as against the Joint Venture until the transferee or assignee executes all documents and performs all acts which the Managing Principal deems necessary or appropriate for the purpose of admitting such transferee or assignee as a Principal. (b) Any transfer or assignment of an Interest made in compliance with this Article is effective as of the date of such transfer or assignment. (c) Each assignee or transferee of a Joint Venture Interest made in compliance with this Article is to reimburse the Joint Venture for all fees and expenses incurred by the Joint Venture with respect to such assignment or transfer. (d) Schedules A and B are to be amended to reflect the admission of a new Principal or the transfer of an Interest made in compliance with this Article. 7.4. Transfer of an Interest . A conveyance (including the granting of a mortgage, pledge or other security interest) by a Principal of its Interest (or any part thereof) not in contravention of the terms of this Agreement shall, as against the Principals or the Joint Venture, entitle the assignee to the same rights and responsibilities of the assignor during the continuance of the Joint Venture. Assignee shall be able to participate in the management or administration of the Joint Venture's business or affairs, or to require any information or account of Joint Venture transactions, or to inspect the Joint Venture's books, to the extent of the assignor's rights to do so. In the case of a dissolution and termination of the Joint Venture, such assignee is entitled to receive his assignor's Interest and may require an account, but only from the date of the assignment or transfer. 14 N/Host and ABC ARTICLE VIII RECORDS 8.1. Books and Records. The books of account, records, and all documents and other writings of the Joint Venture are to be kept and maintained at the principal office of the Joint Venture or at such other location as may be designated by the Managing Principal in a notice to all the Principals. Notice is hereby given that accounting records shall be maintained at Host's corporate headquarters. Each Principal or its designated representative, upon reasonable notice to the Managing Principal, has access to such financial books, records, and documents during reasonable business hours and may inspect and make copies of any of them. 8.2. Accounting Method. The Joint Venture hereby adopts the accrual method of accounting. 8.3. Fiscal Year. The fiscal year of the Joint Venture shall be a fifty-two/fifty-three (52/53) week year ending on or about the Friday closest to December 31. As such, the fiscal year shall include thirteen (13) periods of twenty-eight (28) days each, except every fourth year. In the fourth year, the last period shall consist of thirty-five (35) days. 8.4. Bank Accounts. The Managing Principal shall open and maintain on behalf of the Joint Venture bank accounts with such depositories as it determines, in which all monies received by or on behalf of the Joint Venture shall be deposited. All withdrawals from such accounts shall be made upon the signature of such person as the Managing Principal may from time to time designate. As long as Host is the Managing Principal, the account maintained on behalf of the Joint Venture shall be swept daily and combined with other Host accounts on a daily basis. The Managing Principal shall credit the Joint Venture account with a receivable in the amount of each day's deposits. Payments for operating expenses and other ordinary costs and expenses made by the Managing Principal on behalf of the Joint Venture shall be deducted from the receivable. 8.5. Special Elections. Where a distribution of an asset is made in the manner described in Code §734(a), or where a sale or exchange of an Interest permitted by this Agreement is made in the manner described in Code §743(a), the Managing Principal, in its sole discretion, may file on behalf of the Joint Venture an election under Code §754 in accordance with the procedures set forth in the applicable Treasury Regulations. In the event an election is so filed, the Managing Principal shall keep appropriate records to reflect the application of such elections. 8.6. Tax Returns and Tax Treatment. The Managing Principal shall prepare for each Fiscal Year, or other applicable tax period(s) within a Fiscal Year, for the Joint Venture, a United States Partnership Return of Income, and appropriate state tax returns, which returns shall be consistent, and Host shall file such returns within the time prescribed by law for such filing, or in its sole discretion, obtain an extension of the time to file and file timely under any extension. The Managing Principal shall send a copy of tax form K-1 or any successor or replacement form thereof to each Principal within 120 days after each Fiscal Year, or as soon thereafter as is practicable. The Managing Principal may rely upon all decisions as to accounting matters made 15 W/Host and ABC by an accountant or legal counsel, except as specifically provided to the contrary herein. The determination of the Tax Matters Partner with respect to the treatment of any item or its allocation for federal, state or local tax purposes, including any election made under Applicable Law, is binding upon all of the Principals so long as such determination is not inconsistent with any express term hereof. 8.7. Tax Matters. (a) The Managing Principal is the Tax Matters Partner of the Joint Venture, The Managing Principal shall perform all duties required by applicable law, including the duty to keep each Principal informed of all administrative and judicial proceedings involving the adjustment at the Joint Venture level of partnership. Any Principal has the right to participate in any administrative proceeding with the IRS relating to the determination of partnership items at the Joint Venture level. A Principal may at any time waive such right by a signed notice, in writing, filed with the IRS and a copy of which is delivered to the Joint Venture. Any settlement with respect to IRS matters made by the Tax Matters Partner is binding upon all Principals. By execution of this Agreement, every Principal irrevocably waives any right that it may have under Code §6224(c)(3)(B) to file a statement with the IRS providing that the Tax Matters Partner does not have the authority to enter into a settlement agreement with the IRS on behalf of such Principal. Further, by its execution hereof, every Principal (other than the Tax Matters Partner acting in such capacity) irrevocably waives any right that it may have under Code §6227(a) to file a request with the IRS for an administrative adjustment of partnership items for any Fiscal Year of the Joint Venture. (b) The Tax Matters Partner is not liable, responsible or accountable to the Joint Venture or to the Principals for any loss in connection with any actions taken by the Tax Matters Partner. The Joint Venture (but not the Principals) shall indemnify and hold harmless the Tax Matters Partner from any loss, damage or liability due to, or arising out of, any act performed by the Tax Matters Partner within the scope of the authority conferred upon it by this Agreement. 8.8. PrincipaIs Accountable as a Fiduciary. Every Principal must account to the Joint Venture and the other Principals for any benefit, and hold as trustee for the Joint Venture and the other Principals any profits derived by it (except as otherwise set forth herein or without the consent of the other Principals) from any transaction connected with the formation, conduct or liquidation of the Joint Venture or from any use by it of the Joint Venture's property other than for Joint Venture business or from any competing business. 8.9. Right to an Accounting. Every Principal has the right to a formal accounting as to the Joint Venture's affairs: (a) if he is wrongfully excluded from the Joint Venture's business or the possession of its property by the Joint Venture or any other Principal in contravention of this Agreement; 16 N/Host and ABC (b) upon the dissolution and termination of the Joint Venture; and (c) as otherwise set forth in this Article. 8.10. Duty of Principal to Render Information. Each Principal is to render on demand true and full information of all things affecting the Joint Venture to any Principal. 8.11. Joint Venture Property. All property contributed to or acquired by the Joint Venture is Joint Venture property and will be titled accordingly. Unless a contrary intention specifically appears, property acquired with Joint Venture funds is Joint Venture property. 8.12 Rights of the Principals to the Joint Venture's Assets. Each Principal has an equal right with all Principals to possess specific Joint Venture property for Joint Venture purposes, but no Principal has the right to possess such property for any other purpose. A Principal's right in specific Joint Venture property is not assignable except in connection with the assignment of rights of all the Principals in such property. A Principal's right in specific Joint Venture property is not subject to attachment or execution except on a claim against the Joint Venture. ARTICLE IX GENERAL PROVISIONS 9.1. Accounting Terms. All accounting terms not specifically defined herein are to be construed in accordance with GAAP as in effect from time to time. 9.2. Amendment and Modification. No amendment, modification, supplement, termination, consent or waiver of any provision of this Agreement, nor consent to any departure therefrom, shalt in any event be effective unless the same is in writing and is signed by the party against whom enforcement of the same is sought. Any waiver of any provision of this Agreement and any consent to any departure from the terms of any provision of this Agreement -- is to be effective only in the specific instance and for the specific purpose for which given. 9.3. Approvals and Consents. If any provision hereof requires the approval or consent of either party to any act or omission, such approval or consent is not to be unreasonably withheld or delayed except as set forth herein. 9.4. Captions. Captions contained in this Agreement have been inserted herein only as a matter of convenience and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof. 9.5 Compliance with Law. None of the terms or provisions of this Agreement require any of the parties to take any action prohibited by, or contrary to, applicable law. 9.6. Entire Agreement. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, letters of 17 W lost and ABC intent, understandings, negotiations and discussions of the parties, whether oral or written. There shall be a sublease from Host to the Joint Venture regarding such matters. 9.7. Exhibits. All of the Exhibits and Schedules attached to this Agreement are deemed incorporated herein by reference. 9.8. Failure or Delay. No failure on the part of any party to exercise, and no delay in exercising, any right, power or privilege hereunder operates as a waiver thereof; nor does any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof, or the exercise of any other right, power or privilege. No notice to or demand on any party in any case entitles such party to any other or further notice or demand in similar or other circumstances. 9.9. Further Assurances. The parties shall execute and deliver such further instruments and do such further acts and things as may be required to carry out the intent and purpose of this Agreement. 9.10. Governin Law. This Agreement and the rights and obligations of the parties hereunder are to be governed by and construed and interpreted in accordance with the laws of the State of Texas applicable to contracts. 9.11. Legal Fees. Except as otherwise provided herein, all legal and other costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby are to be paid by the party incurring such costs and expenses, 9,12. Notices. All notices, consents, requests, demands and other communications hereunder are to be in writing, and are deemed to have been duly given or made: (a) when delivered in person, (b) three days after deposited in the United States mail, first class postage prepaid, (c) in the case of telegraph or overnight courier services, one business day after delivery to the telegraph company or overnight courier service with payment provided for, or (d) in the case of telex or telecopy or fax, when sent, verification received, in each case addressed to the Principals as set forth below, or to such other address as any party may designate by notice to the other parties in accordance with the terms of this section. Notices to ABC, shall be made to: is W/Host and ABC With a copy to: Notices to Host shall be made to: Joe P. Martin, Sr. Vice President & General Counsel Host Marriott Services Corporation Law Department 72/923 6600 Rockledge Drive Bethesda, MD 20817 With a copy to: Edwin G. Davila-Bloise, Esquire Ober, Kaler, Grimes & Shriver 1401 H Street, N.W. Suite 500 Washington, DC 20005-3324 9.13. Remedies Cumulative. Each and every right granted hereunder and the remedies provided for under this Agreement are cumulative and are not exclusive of any remedies or rights that may be available to any party at law, in equity, or otherwise. 9.14. Severability. Any provision of this Agreement which is prohibited, unenforceable or not authorized in any jurisdiction is, as to such jurisdiction, ineffective to the extent of any such prohibition, unenforceability or nonauthorization without invalidating the remaining — provisions hereof, or affecting the validity, enforceability or legality of such provision in any other jurisdiction, unless the ineffectiveness of such provision would result in such a material change as to cause completion of the transactions contemplated hereby to be unreasonable. 9.15. Dispute Resolution. (a) The Principals agree that they shall make good faith efforts to resolve all disputes, regarding, arising from, related to or in connection with this Agreement. If the Principals cannot reach a resolution of any dispute within thirty (30) days, the dispute shall be referred to mediation. A mediator shall be chosen from a list of five candidates furnished by the CPR Institute for Dispute Resolution but the mediator cannot have any past or present relationship to either of the Principals or their respective counsel. If a mediator cannot be agreed on by both Principals within an additional ten (10) days, the matter shall be subject to binding, non - appealable arbitration. In such event, the Principal raising the disputed t9 JW/Host and ABC matter shall request a list of five candidate neutrals from the CPR Institute for Dispute Resolution. No neutrals shall be considered that have any past or present relationship to the Principals or their respective counsel. If the Principals cannot agree on an arbitrator within fifteen (15) days of receipt of the candidate list, then an arbitrator shall be chosen from the Iist by having each party alternately strike names from the candidate list, with the party requesting the arbitration striking first. The last candidate remaining shall be chosen as the arbitrator. If, for any reason that individual cannot serve as the arbitrator, then the process shall be repeated until an arbitrator is chosen. The arbitration shall take place in Lubbock and shall be conducted pursuant to the CPR Institute rules. Each Principal shall be responsible for its own costs for any matter referred to mediation, except that the cost of the mediator shall be borne by the Principal requesting the mediation. The prevailing Principal in any arbitration shall be entitled to recover its reasonable attorneys' fees, out-of- pocket expenses incurred and its share of the cost of the arbitration proceeding. (b) Each Principal hereby makes a knowing waiver of trial by jury for any matter regarding, arising from, related to or in connection with this Agreement. It is the intent of the Principals under this term of the Agreement to give the broadest possible meaning and scope to this term for the purpose of ensuring that every possible kind of dispute which otherwise would be brought in a court of law is instead resolved through mediation and arbitration. 9.16. Successors and Assigns. All provisions of this Agreement are binding upon, inure to the benefit of, and are enforceable by or against, the parties and their respective heirs, executors, administrators or other legal representatives and permitted successors and assigns. 9.17. Third -part. Beneficiary. This Agreement is solely for the benefit of the parties and their respective successors and permitted assigns, and no other person has any right, benefit, priority or interest under, or because of the existence of, this Agreement. 9.18. Signatory Warranty. Each person executing this Agreement warrants that he is authorized to do so on behalf of the party for whom he signs this Agreement. 9.19. Financial Information. All financial information developed, shared, or discussed or otherwise communicated to ABC or its agents or counsel in the context of negotiation of this Agreement is based on good faith estimates and does not represent any guarantee on the part of Host or the City. ABC acknowledges that it has independently reviewed and evaluated the available information and enters into this Agreement based solely on that review and evaluation, and not in reliance on any statement, forecast or representation by Host or any employee or agent of Host. Any and all such information may be based on erroneous assumptions or calculations. ABC understands and agrees that it enters into this Joint Venture based solely on its own 20 W/Host and ABC financial information and forecasts. ABC, and its Principals, agree to waive and hold harmless Host and its respective agents, officers, shareholders and employees from any claims by ABC or its Principals arising from or in connection with entering into this Joint Venture, based on any financial information provided by Host 9.20 Conditions Precedent. Notwithstanding anything to the contrary in this Agreement, it is a condition precedent to the commencement of this Agreement that the Director shall have approved the terms of this Agreement as consistent with the Concession Agreement between Host and the City, such approval to be indicated by the signature of the Director to this Agreement. [Next page is the Execution Page] 21 N/Host and ABC EXECUTION PAGE This Execution Page to the Joint Venture Agreement of Host ABC Lubbock Airport Joint Venture is to be attached to and made a part of the Agreement. DC#644903.5 HOST INTERNATIONAL, INC. Title: Vice President ABC, By: Title: 22 W/Host and ABC APPROVAL BY CITY AND/OR AUTHORITY The City and/or Authority has reviewed and approved the terms and conditions of this Joint Venture. By: �Ak Title: W Date: Approved as to Content: 1�#41n—,= David Jones, Depu Director for Business Development Approved as to Form: Linda L. Chamales, Supervising Attorney Office Practice Section 23 N/Host and ABC EXHIBIT A Estimated Net Asset Value as of Effective Date Estimated Contribution by Host $ 90,000 Estimated Contribution by ABC 10,000 Total Estimated Net Asset Value as of Effective Date 10$ 10-00 Date Contribution Required , 19_ 24 N/Host and ABC EXHIBIT B Estimated Capital Requirements for Construction, Fixturing, and Operation of New Facility Estimated Capital Contribution -by Host $720,000 Estimated Capital Contribution by ABC 80,000 Total Estimated Capital Requirement for Construction, Fixturing and Operation of New Facility $800,000 Date Capital Contribution Required , 19 25 FOOD RENT - EXHIBIT 3 Sheet1 1 1999 2000 2001 From: To: From: ll$ To: From: To: $ $ Is $ $ 5.40% $0 $500,000 $0 $500,000 $0 $500„000 5.65% $500,001 $550,000 $500,001 $550,000 $500,001 $550,000 5.90% $550,001 $600,000 $550,001 $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,000 $600,001 $650,000 6.40% $650,001 $700,000 $650,001 $700,000 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000 $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 i $800,001 $850,000 7.40% $850,001 $900,000 $850,001 $900,000 $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000I $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 PE $1,050,000I $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 $1,100,000 8.65% $1,100,001 $1,150,000 $1,100,001 $1,150,000 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 $1,150,001 $1,200,000 _ 9.15% $1,200,001 $1,250,000 $1,200,001 $1,250,000I 1$1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 $1,300,000I $1,250,001 $1,300,000 9.65% $1,300,00, , $1,342,000 I $1,300,001 $1,342,000 $1.300,001 $1,350,000 9,90% na Ina 1 $1,350,001 $1,380,918 $1,350,001 $1,420,964 10.00% $1,342,001 $1,392,000 $1,380,919 1 $1,430,918 $1,420,965 $1,470,964 10.50% $1,392,001 $1,442.000 $1,430,919 $1,480,918 1 $1,470,965 $1,520,964 11.00% $1,442,001 $1,492,000 $1,480,919 $1,530,918 1$1.520,965 $1,570,964 11.50% $1,492,001 $1,552,000 ' 1 $1,530,919 $1,580,918 1$1,570,965 $1,620,964 12.00% $1,552,001 and above I $1,580,919 and above $1,620,965 and above I Page 1 Sheet2 2002 2003 2004 From: I To: From: I To: From: To: $ Is $ Is $ $ 5.40% $0 $500,000 $0 $500,000 $0 $500,000 5.65% $500,001 $550,000 $500,001 $550,000 $500,001 $555,000 5.90% $550,001 $600,000 $550,001 $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,000 $600,001 $650,000 6.40% $650,001 $700,000 $650,001 $700,000 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000 $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40% $850,001 $900,000 $850,001 $900,000 $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 I $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 $1,050,000 $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 $1,100,000 8.65% $1,100,001 $1,150,000 $1,100,001 $1,150,000 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 $1,150,001 $1,200,000 9.15% $1,200,001 $1,250,000 $1,200,001 $1,250,000 $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350,000 $1,300,001 $1,350,000 $1.300,001 $1,350,000 9.90% $1,350,001 $1,462,172 $1,350,001 $1,504,575 $1,350,001 $1,548,208 10.00% $1,462,173 $1,512,172 $1,504,576 $1,554,575 $1,548,209 $1,598,208 10.50% $1,512,173 $1,562,172 $1,554,576 $1,604,575 $1,598,209 $1,648,208 11.00% $1,562,173 $1,612,172 $1,604,576 $1,654,575 $1,648,209 $1,698,208 11.50% $1,612,173 $1,662,172 $1,654,576 $1,704,575 $1,698,209 1$1,748,208 12.00% $1,662,173 and above $1,704,576 and above $1,748,209 and above Page 1 Sheet3 i i I j 2005 2006 2007 From: To: rFrom: To: From: To: $ $ $ $ $ 5.40% $0I $500,000 $0 $500,000 $0 $500,000 5.65% $500,001 $550,000 $500,001 $550,000 ! $500,001 $550,000 5.90% $550,001 $600,000 $550,001 $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,000 $600,001 $650,000 6.40% $650,001 I $700,000 $650,001 $700,000 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000 $700,001 $750,000 6.90% $750,001 $800,000 i $750,001 $800,0001 $750,001 $800,000 715% $800,001 $850,000 j� $800,001 $850,000 $800,001 $850,000 7.40% I $850,001 $900,000 ' , $850,001 $900,000 $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 I $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 $1,050,000 $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 $1,100,000 8,65% $1,100,001 $1,150,000 $1,100,001 $1,150,000 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 I $1,150,001 $1,200,000 $1,150,001 $1,200,000 9.15% $1,200,001 $1,250,000 $1,200,001 $1,250,000 $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350,000 $1,300,001 $1,350,000 $1,300,001 $1,350,000 9.90% $1,350,001 $1,593,105 $1,350,001 $1,639,306 $1,350,001 $1,686,845 10.00% $1,593,107 $1,643,106 $1,639,307 $1,689,306 $1,686,846 $1,736,845 10.50% $1,643,107 $1,693,106 $1,689,307 $1,739,306I $1,736,846 $1,786,845 11.00% $1,693,107 $1,743,106 $1,739,307 $1,789,306 $1,786,846 $1,836,845 11.50% $1,743,107 $1,793,106 $1,789,307 $1,839,306 $1,836,846 $1,886,845 12.00% $1,793,107 and above $1,839,307 and above $1,886,846 and above Page 1 Sheet4 i I i� 2008 2009 2010 From: To: From: I To: From: To: $ $ $ $ $ $ 5.40% $0 $500,000 $0 $500,000 ! $0 $500,000 5.65% $500,001 $550,000 $500,001 i $550,000 $500,001 $550,000 5,90% $550,001 $600,000 $550,001 ; $600,000 j $550,001 $600,000 6.15% $600,001 1 $650,000 $600,001 i $650,000 ! $600,001 $650,000 6.40% $650,001 $700,000 $650,001 $700,000II $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000 $700,001 $750,000 6.90% $750,001 1 $800,000 $750,001 $800,000 $750,001 $800,000 715% a800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40% $850,001 $900,000 $850,001 $900,0001 $850,001 $900,000 7,65% $900,001 $950,000 $900,001 $950,000 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 $950,001 $1,000,000 8.15% $1,000.001 $1,050,000 $1,000,001 $1,050,000 $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 $1,100,000 8.65% $1,100,001 $1,150,000 $1,100,001 $1,150,000 $1,100,001 1 $1,150,000 8,90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 { I $1,150,001 � $1,200,000 9.15% $1,200,0Q1 $1,250,000 $1, 200,001 $1,250,000 $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350.000 $1,300,001 $1,350,000 $1,300,001 $1,350,000 9.90% $1,350,001 $1,735,764 $1,350,001 $1.786,101 $1,350,001 $1,837,898 10.00% $1,735,765 $1,785,764 $1,786,102 $1,836,101 j $1,837,899 $1,887,898 10.50% $1,785,765 $1,835,764 $1,836,102 $1,886,101 $1,887,899 $1,937,898 11.00% $1,835,765 $1,885,764 $1,886,102 $1,936,101 $1,937,899 $1,987,898 11.50% $1,885,765 $1,935,764 $1,936,102 $1,986,101 $1,987,899 $2,037.898 12.00% $1,935,765 and above $1,986,102 and above $2,037,899 and above Page 1 Sheet5 I 2011 2012 2013 From: To: 1 From: To: 1 From: To: is $ $ $ $ $ 5.40% $0 $500,000 $0 $500,000 $0 $500,000 5,65% $500,001 $550,000 $500,001 $550,000 $500,001 $550,000 5.90% $550,001 $600,000 $550,001 $600,000 , $550,001 $600,000 6.15% $600,001 I $650,000 $600,001 I $650,000 ! $600,001 $650,000 6.40% $650,001 $700,000 $650,001 $700,000 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000 $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40% $850,001 $ 900,000 $850,001 $900,000 $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 $1,050,000 $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 1 $1,100,000 8.65% $1,100,001 $1,150,000 $1,100,001 $1,150,000 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 $1,150,001 $1,200,000 9.15% $1„200,001 $1,250,000 $1,200,001 $1,250,000 $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 $1,250,001 $1,300,000 9,65% $1.300,001 $1,350,000 $1,300,001 $1,350,000 $1,300,001 $1,350,000 9,90% $1,350,001 $1,891,197 $1,350,001 $1,946,042 $1,350,001 $2,002,477 10.00% $1,891,198 $1,941,197 $1,946,043 $1,996,042 $2,002,478 $2,052,477 10.50% $1,941,198 $1,991,197 $1,996,043 $2,046,042 $2,052,478 $2,102,477 11,00% $1,991,198 $2,041,197 1 $2,046,043 $2,096,042 $2,102,478 $2,152,477 11.50% $2,041,198 $2,091,197 $2,096,043 $2,146,042 $2,152,478 $2,202,477 12.00% $2,091,198 and above $2,146,043 and above $2,202,478 and above Page 1 Sheet6 I 2014 2015 2016 From: To: j Ero To: From: To: $ $ $ $ $ 5.40% $0 $500,000 $0 $500,000 $0 $500,000 5.65% $500,001 $550,000 $500,001 $550,000 $500,001 $550,000 5.90% $550,001 $600,000 $550,001 3 $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,000 $600,001 $650,000 6.40% $650,001 $700,000 $650,001 $700,000 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000 i $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 # $800,001 $850,000 7.40% $850,001 900000 $850,001 $900,000 ; $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 r $1,000,000 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 $1,050,000 41,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 1$1,050,001 $1,100,000 $1,050,001 $1,10a,000 8.65% $1,100,001 $1,150,000 $1,100,001 pp! $1,150,000 E $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 i $1,150,001 $1,200,000 9.15% $1,200,001 $1,250,000 $1,200,001 $1,250,000 i $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350,000 $1,300,001 $1.350,0001 $1,300,001 $1,350,000 9.90% $1,350,001 $2,060,449 $1,350,001 $2,120,305 $1,350,001 $2,181,794 10.00% $2,060,550 $2,110,449 $2,120,306 $2,170,305 $2,181,795 $2,231,794 10.50% $2,110,550 $2,160,449 $2,170,306 $2,220,3051 $2,231,795 $2,281,794 11.00% $2,160,550 $2,210,449 $2,220,306 $2,270,305 $2,281,795 $2,331,794 11.50% $2,210,550 $2,260,449 $2,270,306 $2,320,305 $2,331,795 $2,381,794 12.00% $2,260,550 and above $2,320,306 and above $2,381,795 and above Page 1 Resolution No. 6213 HMS July 1, 2002 Mr. Mark Earle Director of Aviation Lubbock International Airport 5401 N. Martin Luther King Boulevard Lubbock, Texas 79403 Subject: Pre -security Retail Kiosk at Lubbock Dear Mark, Thank you for providing the terms for the new pre -security retail kiosk at Lubbock. We accept your offer. Please sign below assuming you agree with the terms below. When signed by you, this letter will serve as an acknowledgement of these terms. Following are the terms of this agreement: ■ LIA will provide space in the pre -security area with no additional rent. ■ LIA will provide electricity, lighting and water. ■ LIA will provide a door to the back of the kitchen for passage that will contain a card reader for security purposes. ■ LIA will assemble the kiosk and dress up the woodwork to coordinate with existing surrounding fixtures. ■ LIA will provide floor space for tables and chairs. ■ LIA will promote the new space to local news media. ■ HMSHost will operate the space during normal airport operating hours. ■ HMSHost will provide the kiosk with selections from the following merchandise categories: Beverages Waters, sodas, juice and coffee Food Items Bagged snacks and candies Ice cream Hot dogs, breakfast burritos and sandwiches Danish, muffins and coffee Readables Magazines, newspapers and books Souvenir 1 Accessories Luggage accessories Key chains and magnets Mugs and shot glasses T-shirts Sundries Drugs and sundries Film, cameras and batteries Cigarettes and chewing tobacco The compensation structure from HMSHost to LIA on gross sales shall be the same as set forth in 3.01 of the concession agreement, dated February 25, 1999, attached hereto as Exhibit A and made a part of this agreement. The term will run for the term of the concession agreement, but HMSHost and LIA will periodically review the performance of this unit, and each party will reserve the right to discontinue operation, with 60 days notice to the other, if acceptable cash flow is not achieved or if operational or structural changes are undertaken at the airport that would affect the operation of the unit. 6600 Rockledge Dr. Bethesda, MD 20817 866-467.4671 fox ;240.694.4626 www.hmshost.com If you will acknowledge our understanding of this opportunity and return this letter to me, we'll get started on bringing this unit to life as soon as possible. We value our relationship with Lubbock International Airport, and appreciate the opportunity to partner with you to improve the experience for passengers and guests. Sincerely, 7/1 Curt Littlejohn Vice President — Retail Operations Host International, Inc., as General Partner of Host Bush Lubbock Joint Venture /1 4Jon ner Sr. Vice President — Retail Host International, Inc., as General Partner of Host Bush Lubbock Joint Venture CITY OF LUBB K 1-/ J� arc McD gal Mayor ATTEST: Rebecca Garza City Secretary APPROVED TO CONTENT: Ma arle Difector of Aviation APPROVED AS TO FORM: William de Haas Contract Manager/Attorncy EXHIBIT A 2.02 TERMINATION This Agreement will terminate without further notice when the lease term (or any extension thereof) expires, and if the Lessee holds over after the term expires such hold over will not constitute a renewal of the Agreement or give Lessee any rights under this Agreement in or to the premises. 2.03 HOLDOVER If Lessee holds over and continues in possession of the premises after the lease term (or any extension thereof) expires, Lessee shall be considered to be occupying the premises on an at will tenancy, subject to all the terms of this Lease. ARTICLE III RENTALS AND FEES 3.01 RENTAL In consideration of the rights and privileges herein granted, Lessee shall pay to Lessor the amounts provided below on all gross sales. RENTAL SCHEDULE: All Newspapers and Periodicals — 5% All Gifts and Novelty Items — 10% All Liquor Sales -- 12% Food Sales (including vending sales) rent will be paid based on the schedule attached in Exhibit "Y'. For purposes of rent calculation, the sales level will be reset to zero (0) at the beginning of each calendar year. Gross sales shall include all monies received by Lessee from the sale of any and all articles and other things upon or from the airport premises, and from any and all services rendered and operations and business of every kind conducted upon or from the airport premises less the deduction of State and Federal sales and excise taxes. 3.02 PAYMENTS All payments that become due and payable by Lessee shall be made to the City of Lubbock at the office of the Director of Aviation, Lubbock International Airport, Lubbock, Lubbock International Airport and Host Marriott Smices Corporation Restaurant Concession Agreement Page 6 of29 v%Ju riC1v I - CRrlI=I ! -ri Sheets I i ° I � 1999 2000 2001 From: I To: From: I To: From: I To: $ $ $ $ is 1$ 5.40% $0 j $500,000 I i $0 $500,000 I $0 $500,000 5.65% $500,001 $550,000 $500,001 $550,000 $500,001 $550,000 5.90% $550,001 $600,000 $550,001 t $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,000 i $600,001 $650,000 6.40% $650,001 $700,000 $650,001 j $700,000 $650,001 I $700,000 6.65% $700,001 $750,000 $700,001 $750,000 L $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 J $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40% $850,001 $900,000 $850,001 { $900,000 I $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000I $900,001 l $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 i $950,001 I $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 i $1,050,000 $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 Isi,050,0d1 $1,100,000 $1,050,001 $1,100,000 8.65% $1,100,001 $1,150,000 $1,100,001 $1,150,000 1 $1,100,001 1 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 I $1,150,001 I $1,200,000 9.15% $1,200,001 $1,250,000 $1,200,001 $1,250,000 $1,200,001 $1,250,000 9,40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,342,000 $1,300,001 $1,342,000 i $1,300,001 l $1,350,000 9.90% na na l $1,350,001 I $1,380,918 $1,350,001 $1,420,964 10.00% $1,342,001 $1,392,000 $1,380,919 $1,430,918 $1,420,965 $1,470,964 10.50% ---t$1,442,001 $1,392,001 $1,442,000 $1,430,919 $1,480,919 $1,480,918 $1,470,965 $1,530,918 l $1,520,965 $1,520,964 $1,570,964 11.00% $1,492,000 11.50% $1,492,001 $1,552,000 $1,552,001 land above $1,530,919 $1,580,918 $1,570,965 1 $1,620,964 12.00% i $1,580,919 and above $1,620,965 land above i l ! i Page 1 Sheet2 2002 2003 2004 From: To: From: To: [Frorn: To: $ $ $ $ $ 5.40% $0 $500,000 $0 $500,0001 $0 1 $500,000 5.65% $500,001 $550,000 $500,001 1 $550,000 $500,001 $555,000 5.90% $550,001 $600,000 $550,001 $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,000 $600,001 $650,000 6.40% $650,001 $700,000 $650,001 $700,000 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000I $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 ! $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40% $850,001 $900,000 $850,001 $900,000I $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000I $900,001 $950,000 7,90% $950,001 $1,000,000 $950,001 I $110001000 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1•,000,001 $1,050,000 $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 $1,100,000 8.65% $1,100,001 $1,150,000 $1,100,001 $1,150,0001 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 j $1,150,001 $1,200,000 9.15% $1,200,001 $1,250,000 $1,200,001 $1,250,000 I $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 f $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350,000 $1,300,001 $1,350,000 $1,300,001 $1,350,000 9.90% $1,350,001 $1,462,172 $1,350,001 $1,504,575 $1,350,001 $1,548,208 10.00% $1,462,173 $1,512,172 $1,504,576 $1,554,575 $1,548,209 $1,598,208 10.50% $1,512,173 $1,562,172 $1,554,576 , $1,604,575 $1,598,209 $1,648,208 11.00% $1,562,173 $1,612,172 $1,604,576 $1,654,575 $1,648,209 $1,698,208 11.50% $1,612,173 $1,662,172 $1,654,576 $1,704,575 $1,698,209 $1,748,208 12.00% $1,662,173 land above $1,704.576 and above $1,748,209 and above If f Page 1 Sheet3 I 2005 2006 2007 From: To: From: To: From: To: $ $ _ $ $ $ $ 5.40% $0 $500,000 $0 $500,0001 $0 $500,000 5.65% $5001001 $550,000 $500,001 $550,000 i $500,001 $550,000 5.90% $550,001 $600,000 $550,001 $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,0001 $600,001 I $650,000 6.40% $650,001 $700,000 $650,001 $700,0001 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,0001 $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40%1 $850,001 $9001000 $850,001 $900,000 i $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 i $1,000,000 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 $1,050,000I $1,000,001 $1.050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 ; $1,050,001 $1,100,000 8.65% $1,100,001 $1,150,000 $1,100,001 $1,150,000 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 $1,160,001 $1,200,000 9.15% $1,200,001 $1,250,000 $1,200,001 $1,250,000 $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350,000 $1,300,001 $1,350,000 $1,300,001 I $1,350,000 9.90% $1,350,001 $1,593,106 $1,350,001 $1,639,306 $1,350,001 $1,686,845 10,00% $1,593,107 $1,643,106 $1,639,307 $1,689,306 $1,686,846 $1,736,845 10.50% $1.643,107 $1,693,106 $1,689,307 $1,739,306 $1,736,846 $1,786,845 11.00% $1,693,107 $1,743,106 $1,739,307 $1,789,306 $1,786,846 $1,836,845 11.50% $1,743,107 $1,793,106 $1,789,307 $1.839,306 $1,836,846 $1,886,845 12.00% $1,793,107 and above $1,839,307 and above $1,886,846 and above 1 I a I I Page 1 Sheet4 2008 2009 2010 From: To: From: To:J]LFroirn: To:$ $ $ $ Is 5.40% I $0 $500,000 I $0 $500,000 1 $0 i $500,000 5.65% $500,001 $550,000. $500,001 p $550,000 i $500,001 $550,000 5.90% $550,001 $600,000 I $550,001 $600,000 f $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $650,000 j $600,001 f $650,000 6.40% $650,001 $700,000 , $650,001 $700,000 i $650,001 $700,000 6.65% $700,001 $750,000 ! $700,001 $750.000 i $700,001 $750,000 6,90% $750,001 $800,000 $750,001 $800,000 ! $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 I $800,001 , $850,000 7.40% $850,001 $900,000 $850,001 I $900,0001 $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000 1 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 I $1,050,000 $1,000,001 $1,050,000 8,40% I $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 ! $1,100,000 8.65% $1,100,001 $1,150,000 $1.100,001 .$1,150,000 ! $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,00 $$1,150,001 $1,200,000 { 1 $1,150,001 $1,200,000 9.15% $1,200,041 $1,250,000 $1,200,001 $1,250,000 i f $1,200,001 $1,250,000 9,40% $1,250,001 $1,300,000 $1,250,001 $1,300,000 I $1,250,001 FV,300,000 9.65% $1,300,001 $1.350,000 $1,300,001 $1,350,000I $1,300,001 $1,350,000 9.90% $1,350,001 $1,735,764 $1.350.001 $1,786,101 $1,350,001 $1,837,898 10.00% $1,735,765 $1,785,764 $1,786,102 $1,836,101 I $1,837,899 , $1,887,898 10.50% $1,785,765 $1,835,764 $1,836,102 $1,886,101 f $1,887,899 $1,937,898 11.00% $1,835,765 $1,885,764 $1,886,102 $1,936,10i $1,937,899 $1,987,898 11.50% + $1,885,765 $1,935,764 $1,936,102 . $1,986,101 I $1,987,899 ' $2,037,898 12.00% $1,935,765 and above $1,986,102 ,and above F I $2,037,899 1 and above I � I Page 1 Sheet5 2011 2012 2013 From: To: From I TO: I lFrom: To: $ $ is 1 $ 1 1 $ $ 5,40% $0 $500,000 $0 L$500,000 1 $0 $500,000 5.65% $500,001 $550,000 $500,001 $550,000 ' $500,001 $550,000 5.90% $550,001 $600,000 $550,001 $600,000 $550,001 $600,000 6.15% $600,001 $650,000 $600,001 $6.50,000 I $600,001 $650,000 6.40% $650,001 $700,000 $650,001 $700,d00 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750.000 $700,001 $750,000 6.90% $750,001 $800,000 $750,001 $800,000 $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40% $850,001 $ 900,000 $850,001 $900,000 $850,001 $900,000 7.65% $900,001 $950,000 $900,001 $950,000 $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,000 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000,001 $1,050,000 $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 $1,100,000 $1,050,001 $1,100,000 8.65% $i,100,001 $1,150,000 $1,100,001 $1,150,000 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 $1,200,000 $1,150,001 $1,200,000 9.15% $1,200,OG1 $1,250,000 $1,200,001 $1,250.000 $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 1$1,250,001 $1.300,000 1 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350,000 $1,300,001 $1,350,000 $1,300,001 $1,350,000 9.90% $1,350,001 $1,891,197 $1,350,001 $1,946,042 1 $1,350,001 $2,002,477 10.00% $1,891,198 $1,941,197 $1,946,043 $1,996,042 $2,002,478 $2,052,477 10.50% $1,941,198 $1,991,197 $1,996,043 $2.046,042 $2,052,478 $2,102,477 11.00% $1,991,198 $2,041,197 $2,046,043 $2,096,042 $2,102,478 $2,152,477 11.50% $2,041,198 $2,091,197 $2,096,043 $2,146,042 $2,152,478 $2,202,477 12.00% $2,091,198 and above $2,146,043 and above $2,202,478 and above I Page 1 r Sheet6 j 1 I I � 2014 2015 2016 From: To: From: To: 1 From: To: is Is 1 1$ Is $ $ 5.40% $0 $500,000 1 $0 $500,000 ! $0 $500,000 5.65% $500,001 $550,000 $500,001 $550,000 $500,001 $550,000 5.90% $550,001 $600,000 $550,001 $600,000 i $550,001 $600,000 6.15% $600,001 $650,000 1 $600,001 $650,000 $600,001 $650,000 6.40% $650,001 $700,000 $650,001 i $700,0001 $650,001 $700,000 6.65% $700,001 $750,000 $700,001 $750,000 i $700,001 $750,00'0 6.90% $750,001 $800,000 $750-001 $800,000 $750,001 $800,000 715% $800,001 $850,000 $800,001 $850,000 $800,001 $850,000 7.40% $850,001 900000 $850,001 $900,000 $850,001 $900.000 7.65% $900,001 $950,000 $900,001 $950,000 ' $900,001 $950,000 7.90% $950,001 $1,000,000 $950,001 $1,000,0001 $950,001 $1,000,000 8.15% $1,000,001 $1,050,000 $1,000.001 i $1,050,000 ; $1,000,001 $1,050,000 8.40% $1,050,001 $1,100,000 $1,050,001 I $1,100,000 1 $1,050,001 $1,100,000 8.65% $1,100.001 $1,150,000 $1,100,001 i $1,150,0001 $1,100,001 $1,150,000 8.90% $1,150,001 $1,200,000 $1,150,001 1 $1,200,000 $1,150,001 1 $1,200,000 9.15% $1,200,001 $1,250,000 $1,200,001 I $1,250,000 a $1,200,001 $1,250,000 9.40% $1,250,001 $1,300,000 $1.250,001 $1,300,000 $1,250,001 $1,300,000 9.65% $1,300,001 $1,350,000 $1,300,001 $1,350,000I $1,300,001 $1,350,000 9.90% $1,350,001 $2,060,449 $1,350,001 $2,120,305 $1,350,001 $2,181,794 10.00% $2,060,550 $2,110,449 $2,120,306 $2,170,3051 $2,181,795 $2,231,794 10.50%#$2,"2610,5550 50 $2,160,449 $2,170,306 i $2,220,305 i $2,231,795 52,281,794 11.00%50 $2,210,449 $2,220,306 $2,270,305 $2,281,795 $2,331,794 11.50% $2,260,449 $2,270,306 $2,320,305I $2,331,795 $2,381,794 12.00% $2,260,550 and above $2,320,306 and above I $2,381,795 and above i Page 1