10-Exhibit 8 - T5 Concessions Draft Agreement 062926.pdf

LOS ANGELES INTERNATIONAL AIRPORT

[XXXCONCESSIONTYPEXXX]

CONCESSION AGREEMENT

LAA-______

By and between

THE CITY OF LOS ANGELES,

DEPARTMENT OF AIRPORTS

and

[XXXPROPOSERNAMEXXX]

Dated , 2026

Terminal 5 [yyyconcessiontypeyyy] Concession Agreement

LOS ANGELES INTERNATIONAL AIRPORT

[XXXCONCESSIONTYPEXXX] CONCESSION AGREEMENT

THIS LOS ANGELES INTERNATIONAL AIRPORT

[XXXCONCESSIONTYPEXXX] CONCESSION AGREEMENT (this "Agreement"), is made and entered into as of __________, 20__, by and between THE CITY OF LOS ANGELES

DEPARTMENT OF AIRPORTS, a municipal corporation ("City" or “LAWA”), acting by order of and through its Board of Airport Commissioners ("Board"), and

[XXXPROPOSERNAMEXXX], a ____________ ("Concessionaire"), with reference to the following Basic Information and the following Recitals.

BASIC INFORMATION

Agreement Date: ________________, 20__

City: THE CITY OF LOS ANGELES DEPARTMENT OF AIRPORTS, a municipal corporation ("City" or “LAWA”), acting by order of and through its Board of Airport

Commissioners ("Board")

City's Address: Department of Airports

1 World Way

Post Office Box 92216

Los Angeles, California 90009-2216 or such other address as may be designated in a written notice from the Chief Executive

Officer (CEO) in accordance with Section 16.5.1.

All notices sent to City under this Agreement shall be sent to the above address, with copies to:

Office of City Attorney

1 World Way

Post Office Box 92216

Los Angeles, California 90009-2216 or to such other address as may be designated in a written notice from the CEO in accordance with Section 16.5.1.

All rent amounts and fees payable to City or LAWA hereunder shall be made payable to:

City of Los Angeles, Department of Airports and shall be mailed to:

City of Los Angeles – LAWA

P.O. Box 54078

Los Angeles, CA 90054-0078

Re: LAX Concession Agreement No. LAA-_________ or to such other address as may be designated in a written notice from the CEO in accordance with Section 16.5.1.

Concessionaire: [xxxPROPOSERNAMExxx] (Limited Liability Company)

Contact Person:

Address:

Phone:

Facsimile:

E-mail:

Registered Agent: Leave Blank – to be completed by Concessionaire.

Address:

Phone:

Facsimile:

E-mail:

Airport: Los Angeles International Airport

Terminal(s): 5

RFP: Request for Proposals No. _____________, issued by City.

Concession

Proposal:

Response to Request for Proposal dated as of _________, submitted by Concessionaire.

Package: A

Premises: The spaces comprised of the following Unit(s):

Unit

No.

Concept

Square

Feet

All as shown on Exhibit A-1, which may be amended from time to time pursuant hereto.

Length of Term: Approximately Twelve (12) years

Commencement

Date:

July 1, 2028

Expiration Date: June 30, 2040

Rent: Unit No. Category 1st Year

Minimum

Annual

Guarantee

1st Year

Minimum Monthly

Guaranteed Rent

Rent Category Percentage Rent

Yr 1-3 Yr 4-5 Yr 6-end

Coffee, Bar, Quick-Service Restaurant, F&B

Marketplace

Restaurant & Casual Dining

Alcoholic Beverages

Travel Essentials & Specialty Retail

Per Enplaned Passenger MAG for first

Agreement Year

Permitted Uses: Unit No. Category

Retail market (local/regional)

Coffee (national/branded)

Specialty bar

QSR (local/regional – made-to-order)

Coffee (national/branded)

– pre-security

Minimum Initial Qualified

Investment Amount:

Unit Unit Allocation

Total

Minimum Reinvestment

Percentage:

Faithful Performance

Guarantee:

Initially, $___________ [25% of MMG x 12] as such amount may be adjusted in accordance with Section 13.3.1.

Guarantor:

Storage Space

Addendum:

Yes

No

Note: To be determined after award and based on availability.

Concepts:

Unit

Approved concepts in accordance with Exhibit X (Permitted

Uses). Concessionaire’s branding concepts shall remain as described in the basic information and shall only be modified with the prior approval of the CEO.

The initially-capitalized defined terms used in this Agreement which are defined in the foregoing

Basic Information ("Basic Information") shall have the meaning and definition given them in the Basic Information. The Basic Information, the exhibits, the addendum or addenda described in the Basic Information, and this Agreement are and shall be construed as a single instrument and are referred to herein as the "Agreement."

RECITALS:

A. City is the owner of Los Angeles International Airport (the "Airport"), located in the City of Los Angeles, County of Los Angeles, State of California, and operates said Airport for the promotion and accommodation of air commerce and air transportation between the City of Los

Angeles and other local, national and international cities; and

B. City desired to provide a wide range of [xxxCONCESSIONTYPExxx] products and merchandise for the benefit of the air traveling public and other persons using the Airport and issued the RFP referenced in the Basic Information (the "RFP") to solicit proposals for the operation and management of certain [xxxCONCESSIONTYPExxx] concessions at the Airport;

and

C. City received proposals in response to the RFP, including the proposal from

Concessionaire and chose Concessionaire’s proposal.

NOW, THEREFORE, for and in consideration of the foregoing Recitals (which are incorporated herein by this reference), the payment of the fees and charges hereinafter provided, the covenants and conditions hereinafter contained to be kept and performed, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

I TERM.

1.1 Term. The term of this Agreement (the "Term") shall commence on the

Commencement Date specified in the Basic Information and expire on June 30, 2040 (“Expiration

Date”), unless extended or sooner terminated as herein provided.

1.1.1 City’s Extension Option. On or before December 31, 2038, the Chief

Executive Officer or his or her designee (“CEO”) has one (1) option to extend the Term by one (1) year by written notice to Concessionaire, in the CEO’s sole discretion.

1.2 Unit Commencement Date. The unit commencement date “Unit Commencement

Date” shall be the earlier of (a) one hundred and twenty (120) days after the Delivery Date

(hereinafter defined) with respect to such Unit, or (b) the date Concessionaire commences business operations to the public at such Unit (hereinafter defined). The "Delivery Date" for a Unit shall be the date specified by the CEO in a written notice delivered to Concessionaire (a "Delivery

Notice") as the date that Concessionaire may take possession of such Unit pursuant to the terms of this Agreement.

1.3 Commencement of Preparatory Actions. Immediately following the

Commencement Date, Concessionaire shall make all necessary arrangements in order to prepare for the commencement of business operations at the Premises including, without limitation, preparation, submission for approvals, and finalization of all materials required in connection with the construction of improvements for the Premises as required under this Agreement, obtaining all permits, authorizations, licenses and clearances required for Concessionaire's agents, representatives, employees, contractors, and vendors in order to comply with the security requirements imposed under this Agreement, making all necessary arrangements for obtaining all merchandise, supplies, inventory, and equipment necessary for the operation of Concessionaire's business at the Premises in accordance with this Agreement.

1.4 Surrender. Concessionaire agrees that at 12:00 noon on the Expiration Date, or on the sooner termination of this Agreement, Concessionaire shall surrender the Premises to City (a) in good condition and repair (damage by acts of God, fire, and normal wear and tear excepted), but with all interior walls repaired, any carpets cleaned, and all floors cleaned and waxed, and (b) free of any Hazardous Materials in accordance with Section 15. Normal wear and tear shall not include any damage or deterioration that would have been prevented by proper maintenance by

Concessionaire or Concessionaire otherwise performing all of its obligations under this

Agreement. On or before the expiration or sooner termination of this Agreement, (i)

Concessionaire shall remove all of Concessionaire's personal property, all Telecommunications

Facilities (hereinafter defined) installed in the Premises or elsewhere in the Airport by or on behalf of the Concessionaire (provided City may require such removal shall be performed by a contractor or telecom provider designated by City), and Concessionaire's signage from the Premises, and

Concessionaire shall repair any damage caused by such removal, and (ii) City may, by notice to

Concessionaire given not later than ninety (90) days prior to the Expiration Date (except in the event of a termination of this Agreement prior to the scheduled Expiration Date, in which event no advance notice shall be required), require Concessionaire at Concessionaire's expense to remove any or all Alterations and to repair any damage caused by such removal. Any of

Concessionaire's personal property not so removed by Concessionaire as required herein shall be deemed abandoned and may be stored, removed, and disposed of by City at Concessionaire's expense, and Concessionaire waives all Claims against City for any damages resulting from City's retention and disposition of such property; provided, however, that Concessionaire shall remain liable to City for all costs incurred in storing and disposing of such abandoned property of

Concessionaire. All improvements and Alterations except those which City requires

Concessionaire to remove shall remain in the Premises as the property of City.

II PREMISES.

2.1 Premises; Units. The premises which are the subject of this Agreement (the

"Premises") are described in Exhibit A attached hereto, are located at the Airport described in the

Basic Information (the "Airport") at the Terminal(s) listed in the Basic Information, and are comprised of those spaces (the "Units") set forth in the Basic Information, are described on Exhibit

A attached hereto, and shown on the plan attached hereto as Exhibit A-1.

2.2 Unit Nos.; Square Footage. The Units have the unit numbers and square footage set forth in the Basic Information and in Exhibit A; provided, however, that any statement of square footage set forth in this Agreement, or that may have been used in calculating any of the economic terms hereof, is an approximation which City and Concessionaire agree is reasonable and no economic terms based thereon shall be subject to revision whether or not the actual square footage is more or less. The location and dimensions of the Units are depicted on Exhibit A-1, which is attached hereto and incorporated herein by this reference.

2.3 Storage Space. Concessionaire shall not use more square footage of the Unit for the storage of equipment, inventory or supplies than the square footage in each Unit approved by the City as a part of the design and construction approval process. City may (but shall have no obligation to) make additional storage space available to Concessionaire at the Airport from time to time. In the event City makes such storage space available to Concessionaire and

Concessionaire desires to lease such storage space, CEO and Concessionaire shall enter a storage space addendum in the form of Exhibit C attached hereto, as such form may be modified from time to time by CEO.

2.4 Common Areas. Subject to compliance with City's Rules and Regulations and security requirements, Concessionaire shall have the non-exclusive right, in common with others authorized by City, of ingress and egress through all Common Areas (as defined in this Section);

provided, however, the CEO may, in its sole discretion, and without liability to Concessionaire, change the size or location of the Common Areas, including, without limitation, by converting

Common Areas to leaseable or other areas, or leaseable areas to Common Areas. City shall use reasonable efforts so as to not prevent access and/or substantially impair access to the Premises in connection with any such changes to the Common Areas. CEO may, in CEO's sole discretion, establish and enforce non-discriminatory Rules and Regulations (as defined in Section 3.10) concerning the Common Areas, temporarily close portions of the Common Areas for security, maintenance or other purposes, and make changes to the Common Areas including, without limitation, changes in the location of security points, driveways, entrances, exits, parking spaces and the direction and flow of pedestrian and vehicular traffic. For purposes of this Agreement, the term "Common Areas" means all areas and facilities located within the Airport and outside of the Premises, that are designated by the CEO from time to time as common use areas for the general use and convenience of concessionaires, tenants and other occupants at the Airport, airline passengers and other visitors to the Airport, such as lobbies, corridors, sidewalks, elevators, escalators, moving sidewalks, parking areas, and facilities, restrooms, pedestrian entrances, driveways, loading zones and roadways. Except for damage caused by Concessionaire, Concessionaire shall not be responsible for the maintenance or repair of any Common Areas located outside of the Premises. For avoidance of doubt, the parties acknowledge that the

Concessionaire Common Areas are not a part of the Common Areas as described in this Section

2.4, and Concessionaire 's obligations with respect to the Concessionaire Common Areas are described elsewhere in this Agreement.

2.5 Public Address System. Unless superseded by Concessions Standard Operating

Procedures (as defined in Section 3.10.1): City shall have the right, in its sole discretion, to install one (1) or more public address system speakers in each Unit for announcing flight arrivals and departures and other Airport information. Concessionaire shall not install any public address, paging, or other similar audio system in any Unit at any time. Any installation of a music system or television system in any Unit shall require the prior written approval of the CEO, in his or her sole discretion; provided that no such system shall interfere with the City’s public address system.

Concessionaire shall not have any wireless internet system within the premises that can be accessed by any means by non-employees of Concessionaire.

2.6 Wireless Communications. Unless superseded by Concessions Standard Operating

Procedures (as defined in Section 3.10.1): without the prior written consent of the CEO, in his or her sole discretion, Concessionaire shall not install or use any wireless workstations, access control equipment, wireless internet servers, transceivers, modems or other hardware that transmit or otherwise access radio frequencies.

III CONCESSION RIGHTS AND OBLIGATIONS.

3.1 Permitted Uses; Rights Granted. The permitted uses of the Units under this

Agreement (the "Permitted Uses") include only the following: the right to sell to the public such food, beverage and branded merchandise in each Unit, as more particularly set forth with respect to such Unit in the Basic Information and as may be further detailed in Exhibit Z (if any), and such other non-edible promotional items used to promote the sale of such [yyyconcessiontypeyyy] items. The Permitted Uses for each Unit shall be specific to that Unit, and Concessionaire shall not, without the prior written consent of CEO (granted, denied or conditioned in CEO's sole discretion) use that Unit for the Permitted Uses authorized for any other Unit. Concessionaire is only authorized to conduct at the Airport, and only from the Premises, the Permitted Uses with respect to each Unit and no other business or uses. Except as expressly set forth in Section 5.10 or as directed by CEO in writing, the Permitted Uses do not permit Concessionaire to have access to the airside operations of the Airport. Concessionaire shall not engage in any activity on the

Airport outside of the Premises for the recruitment or solicitation of business without the prior written consent of CEO (granted, denied or conditioned in CEO's sole discretion). Without limiting the generality of this Section, Concessionaire shall not operate any Unit under any name or brand, other than a name or brand specifically permitted or required herein, or as otherwise approved in advance in writing by CEO.

3.2 Right to Operate. City hereby grants to Concessionaire the right and obligation to occupy, equip, furnish, operate and maintain concessions in those Units of existing buildings at

Airport described in further detail in Exhibit A, and shown on Exhibit A-1. The rights granted shall be carried on solely and exclusively within the limits and confines of said Units; subject, however, to the expansion, reduction or relocation of any such Unit, as specified in Article IX hereof and its sections.

3.3 General Obligation to Operate. Except for periods of closure specified in writing as a part of City's construction approval process in connection with construction of the Initial

Improvements, any approved Alterations (including the Minimum Refurbishment (hereinafter defined) as approved in writing by CEO in connection with the construction approval process, at each of the Units indicated herein, Concessionaire shall provide [yyyconcessiontypeyyy] service to the air traveling public and other persons using the Airport, every day of the Term hereof, without exception. Concessionaire shall not divert, cause or permit to be diverted any business from the Premises and shall take all reasonable measures, in every proper manner, to develop, maintain and increase the business conducted by Concessionaire under this Agreement.

Concessionaire shall actively operate each Unit so as to best serve public needs.

3.4 Right to Promote Products; Restriction on Advertising. Concessionaire shall have the right, without the prior consent of the CEO, to promote Concessionaire's brand-name products on its packaging and available for sale within the Premises in accordance with Section 5.15 of this

Agreement. Receipts for any revenue generated in connection with such promotion shall be subject to the "Percentage Fee" as described in Section 4.1.3 hereof. Concessionaire acknowledges that City has entered in an exclusive agreement with a third party with respect to commercial advertising within the Airport and the Terminals. Accordingly, except as permitted under this

Section with respect to promotion of brand-name product packaging and signs within the Premises otherwise in compliance with this Agreement, Concessionaire acknowledges and agrees that

Concessionaire has no rights (a) to advertise or promote its products outside of the Premises, (b) to advertise or promote the products of any third party, or (c) participate in any non-City sponsored marketing income program at the Airport. Concessionaire hereby agrees to indemnify, defend and hold City and City Agents (hereinafter defined) harmless from and against any actions, causes of action, charges, claims, costs, damages, demands, expenses (including attorneys' fees, costs of court and expenses incurred), fines, judgments, liabilities, liens, losses, or penalties of every kind and nature whatsoever (collectively, "Claims") City may suffer or incur as a result of

Concessionaire's violation of this Section. Concessionaire hereby assigns to City and agrees to pay to City as Additional Rent hereunder any fees, compensation or other revenue received by

Concessionaire, directly or indirectly, from any such advertising or product promotion in violation of this Section. For purposes of this Agreement, "advertising" shall mean fixed and dynamic advertising display signage, as well as marketing income programs (including, but not limited to, sponsorships, events, product rights, licensing, naming rights and branding) at locations outside the Premises and, except to the extent approved in advance in writing by CEO, at locations within each Unit with respect to products not sold by Concessionaire within such Unit.

3.5 Quiet-Enjoyment. Subject to the rights reserved in favor of City under this

Agreement, Concessionaire, upon payment of Rent hereunder and upon observing and keeping the conditions and covenants of this Agreement on its part to be observed and kept, shall lawfully and quietly hold, use and enjoy the Premises during the term of this Agreement.

3.6 As-Is Condition. Concessionaire acknowledges and agrees that each Unit is being delivered to and accepted by Concessionaire on the Delivery Date in an "As-Is," "Where Is" and

"With all Faults" condition and without any representation, warranty or implied warranty of any kind or nature as to the condition, use or occupancy which may be made thereof and without any improvements or alterations by City. Except as expressly set forth in this Agreement, Concessionaire waives, and City disclaims, all warranties of any type or kind whatsoever with respect to the Premises, whether express or implied, including, by way of description but not limitation, those of fitness for a particular purpose and use.

3.7 Rights are Not Exclusive. Subject to the rights reserved to City under this

Agreement, Concessionaire acknowledges and agrees that (a) subject to Concessionaire's compliance with the terms and conditions of this Agreement, the rights herein granted to

Concessionaire shall be exclusive within the Premises covered by this Agreement, but non-exclusive at the Airport; (b) Concessionaire has no exclusive rights to conduct the business of the

Permitted Uses in areas other than the Units; (c) other than with respect to Storage Space pursuant to a Storage Space Addendum, if applicable, the rights granted to Concessionaire under this

Agreement do not include any right to use, occupy or possess any area other than the Units

(including, without limitation, any new leaseable areas in the existing Terminals or any new terminals developed by City in the future); and (d) City intends to enter into concession agreements with other [yyyconcessiontypeyyy] concessionaires and other retail and services concessionaires at the Airport, some of which will be located in Terminal 5 In addition, City expressly reserves the right to grant others the right to sell retail products and merchandise, personal services, and

[zzzconcessiontypepluralzzz] in Terminal 5 and such right has been, or may in the future be granted to others in separate agreements.

3.8 General Disputes. In the event of a dispute between Concessionaire and any other

Airport tenant or concessionaire as to the services to be offered or products to be sold at any Unit, Concessionaire shall meet and confer with CEO and, CEO shall determine the services to be offered or products to be sold by each, and any decision by CEO shall be final and binding upon

Concessionaire and such other Airport tenant or concessionaire.

3.9 No Other Uses. Concessionaire shall not use nor permit any Unit to be used for any purpose other than the Permitted Uses with respect to such Unit except with the prior written consent of CEO, nor for any use in violation of any applicable present or future law, ordinance, rule or regulation of any governmental authority, agency, department or officer thereof. In the event that Concessionaire desires to use a Unit for any purpose other than the Permitted Use for that Unit, Concessionaire may submit a request to CEO, and CEO may, in CEO's sole and absolute discretion, approve, deny or condition its approval of such request in writing (and any such written approval shall be approved as to form by the City Attorney); provided, however, under no circumstances shall any use that is not a [xxxCONCESSIONTYPExxx] use be permitted, and no retail use shall be converted to a [yyyconcessiontypeyyy] use, nor shall a [yyyconcessiontypeyyy] use be converted to a retail use. Any such decision by CEO shall be final and binding upon

Concessionaire.

3.10 Rules and Regulations. Concessionaire shall comply with the rules and regulations of the City and the Department of Airports, along with any modifications, amendments and supplements thereto, as are in effect from time to time, for the orderly and proper operation of the

Airport, the Terminals, the Common Areas and the Premises (collectively, the "Rules and

Regulations"). City shall not be responsible to Concessionaire or any other third party for the failure of any other person to observe and abide by any of said Rules and Regulations.

3.10.1 Without limiting the foregoing, Concessionaire shall comply with the Los

Angeles International Airport and Van Nuys Airport Concessions Standard Operating Procedures approved by the Board of Airport Commissioners (as such rules may be amended from time), which rules are hereby incorporated herein by reference (“Concessions SOP”) and attached to this

Agreement as Schedule 1. Concessionaire’s breach of such Concessions SOP shall be deemed a material breach of this Agreement. If there is any conflict between the Concessions SOP and this

Agreement, then the terms of the Concessions SOP shall prevail.

The Concessions SOP includes, but is not limited to:

1. Pricing Policy

2. Required Hours of Operation

3. Deliveries, Access & Coordination

4. Removal of Garbage & Refuse

5. Refuse Removal Costs

6. City Events

7. Distressed Concession Relief Program

8. Value For Money Program

9. Children’s Menu

10. Digital Marketing

11. Business Operations Plan

12. LAWA-Defined Metrics for Performance

3.11. Business and Operations Plan. Concessionaire shall prepare a detailed plan for the management of the concession operations within the Premises (the “Business and Operations

Plan”), which Business and Operations Plan shall at all times be subject to the approval of CEO as set forth in this Section 3.11, such approval not to be unreasonably withheld, conditioned or delayed. The initial version of the Business and Operations Plan shall be in a form prepared by

Concessionaire and approved by CEO, prior to the first Unit Commencement Date of this

Agreement. Thereafter, the Business and Operations Plan shall be updated by Concessionaire and submitted to CEO, on an annual basis for the subsequent fiscal year, no later than March 31st of each year continuing through the end of the Term. The updated Business and Operations Plan shall be subject to the approval of LAWA each year (which CEO shall provide within thirty (30) days following submission), and any changes to the Business and Operations Plan as so approved by CEO that occur during the year shall be subject to the further approval of CEO in a similar manner. Until such approval is obtained, Concessionaire shall continue to operate under the most recent approved Business and Operations Plan. Concessionaire shall manage the concession operations within the Premises substantially in accordance with the Business and Operations Plan as approved by CEO. Notwithstanding anything contained in the Business and Operations Plan, in the event of a conflict between the provisions of this Agreement and the provisions of the

Business and Operations Plan, the provisions of this Agreement shall control.

IV PAYMENTS BY CONCESSIONAIRE.

4.1 Monthly Base Rent Payments.

4.1.1 Base Rent. Commencing on the first Unit Commencement Date, and continuing thereafter throughout the Term of this Agreement, Concessionaire shall pay to City with respect to the Premises (as such Premises are defined herein) annual base rent

(“Base Rent”), which Base Rent shall be an amount equal to the greater of (a) the Minimum

Annual Guaranteed Rent (as defined in Section 4.1.2), or (b) the Percentage Rent (as defined in Section 4.1.3) with respect to such Premises. The Base Rent and all Additional

Rent payable by Concessionaire hereunder are sometimes collectively referred to as

“Rent.” The term “Additional Rent” shall mean all sums, fees, charges, payments and other amounts due hereunder from Concessionaire other than Base Rent. For the Premises with a Unit Commencement Date earlier than December 1, 2027, Base Rent shall be defined as

Percentage Rent until the commencement of the first Agreement Year.

4.1.2 Minimum Annual Guaranteed Rent and Minimum Monthly

Guaranteed Rent. The Minimum Annual Guaranteed Rent (herein, the ”Minimum Annual

Guaranteed Rent” or “MAG Rent”) shall be an annual amount for all such Units comprising the

Premises for the applicable Agreement Year, subject to adjustment as provided below. The MAG

Rent with respect to each Unit for the first Agreement Year is set forth in the Basic Information.

The MAG Rent shall be payable monthly in advance in equal installments on the first (1st) of every month (herein, “Minimum Monthly Guaranteed Rent” or “MMG Rent”). Beginning July 1, 2029, and continuing each successive Agreement Year, the MAG Rent with respect to the Premises shall be the greater of (i) the product of (a) the Per Enplaned Passenger MAG (as defined in Section

4.1.5), and (b) the total enplaned passenger activity for flights departing from Terminal 5 during the prior Agreement Year, or (ii) eighty-five percent (85%) of the actual Base Rent payments for such Premises for the immediately prior Agreement Year. The term “Agreement Year” shall mean the twelve (12) month period commencing on July 1st and ending June 30th of each year through the expiration or earlier termination of the Term (including any portion of a year in which the expiration or earlier termination of Term occurs).

4.1.3 Percentage Rent. At all times while “Gross Revenues” (as defined in Section 4.1.4) are being generated from the Premises, Concessionaire shall calculate Percentage

Rent for each Unit in accordance with the Percentage Rent Rates established for the respective sales categories, as set forth in the Basic Information. Percentage Rent for each Unit shall be the product of (a) the respective Percentage Rent Rate(s) by sales category/type, and (b) the Gross

Revenues from the preceding month’s sales in accordance with the applicable Percentage Rent

Rate(s). If the monthly Percentage Rent for all Units comprising the Premises is greater than the

Concessionaire’s MMG Rent, Concessionaire shall pay to City the amount by which the monthly

Percentage Rent exceeds the MMG Rent. Concessionaire shall pay Percentage Rent to City without prior notice or demand within ten (10) days after the expiration of each month. All

Percentage Rent payments shall be computed based on all Gross Revenues during the previous month as all such Gross Revenues are indicated on Concessionaire’s Monthly Certified Statement.

4.1.4 Gross Revenues Defined. "Gross Revenues" shall include all revenues, whether by coin or currency, on account, by check, credit or debit card, collected or uncollected, whether conducted on or off Airport, derived by or on behalf of

Concessionaire as a result of its operation of the concession rights herein granted, without any exclusion whatsoever, except those exclusions expressly permitted under Sections

4.1.4(1) through 4.1.4(9) below. "Gross Revenues" shall include (a) the sales prices received or billed by or on behalf of Concessionaire from the sale, dispensing and serving of food, food products and beverages (including alcoholic beverages), other retail non-

[yyyconcessiontypeyyy] products, and other related services and products ("Products and

Services"); (b) the full amount of any deposits, prepayments or credits forfeited by customers in connection with any business by Concessionaire in, on, about or from the

Premises; (c) the full amount of all orders for Products and Services accepted by or on behalf of Concessionaire in, on, about or from the Premises, whether or not to be filled or performed at any other place, and the full amount of all orders accepted by or on behalf of

Concessionaire elsewhere, but to be filled or performed in, on, about or from the Premises;

(d) the retail price of all orders for Products and Services placed from the Premises from

Concessionaire's catalog, internet or otherwise; (e) the full amount of any charge

Concessionaire customarily makes for Products and Services even though Concessionaire fails to actually collect such a charge (except to the extent expressly excluded pursuant to

Sections 4.1.4(1) through 4.1.4(9) below); and (f) any amounts paid or payable to

Concessionaire in exchange for coupons or vouchers which are redeemed at the Premises.

"Gross Revenues" shall also include any payments made to Concessionaire for advertising or promoting products and services from the Premises. Goods, work or services furnished by any person or firm in lieu of payment in exchange for value received shall be deemed to be "Gross Revenues." "Gross Revenues" shall exclude revenues from the following:

1. Taxes. Retail sales taxes, excise taxes or related direct taxes on the consumer which are collected by or on behalf of Concessionaire on such sales, provided all such taxes are properly accounted for and recorded;

2. Sale of Scrap, Equipment or Uniforms. Revenues from the sale of waste or scrap materials resulting from the operation of Concessionaire's business at the Airport; revenues from the sale of or the trade-in value of furniture, fixtures or equipment used on the Premises, and owned by Concessionaire; receipts from the sale at cost of uniforms/clothing to Concessionaire's employees where such uniforms/clothing are required to by worn by said employees;

3. Exchanges and Refunds from Suppliers. The value of any merchandise, supplies or equipment exchanged or transferred from or to other business locations of

Concessionaire, where such exchanges or transfers are not made for the purpose of avoiding a sale by Concessionaire which would otherwise be made from or at the Premises; revenues in the form of refunds from or the value of merchandise, supplies or equipment returned to shippers, suppliers or manufacturers;

4. Refunded Revenues. Revenues with respect to any sale where the subject of such sale, or some part thereof, is thereafter returned by the purchaser to and accepted by Concessionaire, to the extent of any refund actually granted or adjustment actually made, either in the form of cash or credit;

5. Employee Discounts. The cost or value of Products and Services given to employees of Concessionaire pursuant to such employees' employment contracts;

provided, however, the amount of such excluded employee discounts shall not exceed eighty percent (80%) of the retail price of such items;

6. Supplier Discounts. The amount of any cash or quantity discounts received from sellers, suppliers or manufacturers;

7. Tips. The amount of any gratuity paid or given by patrons or customers to employees of Concessionaire; provided, however, Concessionaire shall take commercially reasonable efforts to assure that its compensation system does not incentivize its employees to serve, dispense, provide or distribute Products and Services which would otherwise generate Gross Revenues to generate gratuities;

8. Reimbursements. Receipts in the form of any reimbursements from

Concessionaire's subtenants or subcontractor(s) for any taxes, loan payments or license fees paid by Concessionaire for or on behalf of such subtenants or subcontractor; and

9. Insurance Proceeds. All sums and credits received in settlement of claims for loss, theft or damage to inventory, supplies, and merchandise, and the proceeds received by Concessionaire from any casualty or liability proceeds (other than business interruption proceeds attributable to amounts which would have otherwise been Gross Revenues).

No deduction shall be made from "Gross Revenues" by reason of any credit loss sustained or financing discount that may be applicable by reason of the acceptance or use of credit cards, debit cards or by reason of any other credit arrangements. Except as otherwise expressly provided in the exclusions set forth in Sections 4.1.4(1) through 4.1.4(9) above, if any charge customarily made by Concessionaire for Products and Services is not assessed, charged or collected, irrespective of the reason therefore, then the full amount of

Concessionaire's customary charge therefore shall nevertheless be included in determining

Gross Revenues. Concessionaire shall not show the percentage of Gross Revenues payable to City, or any adjustments or surcharge(s) permitted by Law, as a separate charge to

Concessionaire's customers. For purposes of calculating Gross Revenues, the Gross

Revenues of any Approved Transferee shall be attributed to Concessionaire. All computations in the determination of Gross Revenues shall be made in accordance with the terms of this Agreement, using the accrual basis of accounting.

4.1.5 Per Enplaned Passenger MAG. The Per Enplaned Passenger MAG for each

Unit in the first Agreement Year is set forth in the Basic Information. Beginning the second

Agreement Year, and each successive Agreement Year on July 1st during the Term, the

Per Enplaned Passenger MAG shall be the prior Agreement Year’s Per Enplaned Passenger

MAG adjusted by the percentage change (increase or decrease) from the prior Agreement

Year’s CPI (as defined below), computed to the nearest one-thousandths of a dollar. The

Per Enplaned Passenger MAG for each Unit shall be computed to the nearest one-thousandths of a dollar. The term “CPI” shall mean the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor of CPI-U (all urban consumers, not seasonally adjusted) for Los Angeles-Long Beach-Anaheim, CA (all items 1982-1984 equals 100). In the event that the compilation and/or publication of the CPI is discontinued, then the index most nearly the same as the CPI shall be used to make such calculation (as reasonably determined by the CEO).

4.1.6 True-Up Adjustment of Percentage Fee. With respect to each Unit, on

August 15 of each Agreement Year, Concessionaire shall prepare and submit to City a statement showing the total Percentage Fee paid by Concessionaire for the previous agreement year with respect to each Unit. If the Base Rent paid by Concessionaire with respect to a Unit during any Agreement Year exceeds the greater of (i) the MMG Rent for such Unit multiplied by twelve, or (ii) the total Percentage Fee for such year for such Unit

(the "Actual Rent"), such overpayment shall be credited to the fees and charges thereafter due from Concessionaire. If Concessionaire's aggregate payments with respect to a Unit are less than the Actual Rent for such Unit, Concessionaire shall, within ten (10) calendar days, pay City the difference.

4.1.7 MAG Adjustment for Enplanement Decline Event. For purposes of this

Section 4.1.7, an “Enplanement Decline Event” means a decrease in passengers during any full calendar quarter during the Term (excluding any partial quarter or period prior to the first Agreement Year) in which the total enplaned passenger activity for flights departing from Terminal 5 is less than eighty percent (80%) of the total enplaned passenger activity departing from Terminal 5 in the same quarter in the prior Agreement Year (e.g., Year 2: Jan-Mar 2030 as compared to Year 3: Jan-Mar 2031).

In case of an Enplanement Decline Event, the CEO may immediately adjust the

MMG Rent for the current calendar quarter to be equal to 1/3 of the product of: (A) the then current, CPI adjusted Per Enplaned Passenger MAG, multiplied by (B) the total enplaned passenger activity for flights departing from Terminal 5 during the preceding full calendar quarter, illustrated as follows:

Such quarterly adjusted MMG Rent will continue until the next full calendar quarter of total enplaned passenger activity for flights departing from Terminal 5 equals or exceeds ninety percent (90%) of the prior Year’s same, full calendar quarter of total enplaned passenger activity for flights departing from Terminal 5 at which point the MMG Rent will revert to the computation defined in Section 4.1.2.

4.2 Quality-Variable Annual Rent (QVAR).

4.2.1 In addition to the foregoing rent, Concessionaire shall pay a variable annual rent based on LAWA-defined metrics for performance as defined in the SOP for an

Agreement Year as follows: the Quality-Variable Annual Rent (“QVAR”) shall be $15,000 per year payable at the end of each Agreement Year, provided that if the defined metrics for a given Agreement Year are met or exceeded, Concessionaire shall receive a QVAR rent credit of $15,000 applied toward the QVAR (i.e., the QVAR for such Agreement Year is reduced to zero).

4.2.2 City shall use the QVAR collectively received from Terminal 5

Concessionaires (“QVAR Fund”) toward costs or expenses that can improve the Terminal

5 ASQ Score.

4.2.4 Concessionaire shall implement the following to improve ASQ Scores.

Concessionaire shall implement ASQ best practices outlined in the Concessions SOP in pursuit of higher ASQ scores, and should also evaluate their own initiatives to consistently elevate these scores.

a. Pricing and value for money review on all pricing submissions including review of entire marketplace offer, quality, service and value price of items;

b. Mystery Shop scores audits, anything below 75% triggers immediate retraining on problem areas;

c. Recognition/gifts/ awards for high-performing employees;

d. Store inspections with clear action plans to address deficiencies, communicated to LAWA upon request;

e. Monitoring online reviews and providing responses to guest feedback;

f. Full retraining on policies and procedures, including open/close policy and full enforcement of this;

4.3 Common Area Maintenance.

4.3.1 Common Area Maintenance Charges. In addition to the monthly

Base Rent payable to City hereunder, LAWA through its CEO reserves the right, in its sole discretion, to impose and amend from time to time, "Common Area Maintenance

Expenses" (as defined in Section 4.3.2). If so imposed, on and after the Unit

Commencement Date, Concessionaire shall pay to City with respect to each Unit as

Additional Rent the applicable Share for such Unit set forth in the Basic Information (as so amended) of all Common Area Maintenance Expenses based upon City's most recent estimate of the projected Common Area Maintenance Expenses, as adjusted in accordance with Section 4.3.3.

4.3.2 Common Area Maintenance Expenses. "Common Area

Maintenance Expenses" shall mean all costs and expenses paid or incurred by City in connection with the ownership, operation, maintenance, management, repair and replacement of the Common Areas including, without limitation, all costs and expenses to operate, maintain, repair, replace, supervise, insure and administer such Common Areas, including but not limited to:

1. Cleaning of Common Area seating areas;

2. Pest control for the Common Areas;

3. Trash removal for the Common Areas; and

4. Supplies, materials, labor and equipment used in or related to the operation and maintenance of the Common Areas including the cost of maintenance, depreciation and replacement of machinery, tools and equipment (if owned by City) and for rental paid for such machinery, tools and equipment (if rented) used in connection with the operation or maintenance of the Common Areas;

5. Costs for management and administration of the Common Areas, including, without limitation, any management fee, accounting, auditing, billing, postage, salaries and benefits for all employees and contractors engaged in the management, operation, maintenance, repair and replacement of the Common Areas;

6. Supplies, materials, labor and equipment used in or related to the operation and maintenance of the HVAC system serving the Common Areas pursuant to Section 8.6

(including, City's administration and overhead).

7. To the extent City maintains the utilities in accordance with Section 8.7, supplies, materials, labor and equipment used in or related to the operation and maintenance of such utilities serving the Common Areas (including, City's administration and overhead).

8. Any other necessary and reasonable Common Area maintenance or repair item.

4.3.3 Estimates and Reconciliation of Common Area Maintenance

Expenses. Within ninety (90) days of the end of each calendar year during the Term of this Agreement or as soon thereafter as practicable, City shall give to Concessionaire notice of City's estimate of the total amounts that will be payable by Concessionaire under Section

4.3.1 for the following calendar year, and Concessionaire shall pay such estimated

Additional Rent on a monthly basis, in advance, on the first day of each month.

Concessionaire shall continue to make said monthly payments until notified by City of a change therein. If at any time or times City determines that the amounts payable under

Section 4.3.1 for the current calendar year will vary from City's estimate given to

Concessionaire, City, by notice to Concessionaire, may revise the estimate for such calendar year, and subsequent payments by Concessionaire for such calendar year shall be based upon such revised estimate. By April 1 of each calendar year following the first Unit

Commencement Date, City shall endeavor to provide to Concessionaire a statement showing the actual Additional Rent due to City for the prior calendar year. If the total of the monthly payments of Additional Rent that Concessionaire has made for the prior calendar year is less than the actual Additional Rent chargeable to Concessionaire for such prior calendar year, then Concessionaire shall pay the difference in a lump sum within ten

(10) days after receipt of such statement from City. Any overpayment by Concessionaire of Additional Rent for the prior calendar year shall, at City's option, be either credited towards the Additional Rent next due or returned to Concessionaire in a lump sum payment within ten (10) days after delivery of such statement. Even though the Term has expired and Concessionaire has vacated the Premises, with respect to the year in which this

Agreement expires or terminates, Concessionaire shall remain liable for payment of any amount due to City in excess of the estimated Additional Rent previously paid by

Concessionaire, and, conversely, City shall promptly return to Concessionaire any overpayment. Failure of City to submit statements as called for herein shall not be deemed a waiver of Concessionaire's obligation to pay Additional Rent as herein provided.

4.3.4 Share; Allocation to Concessionaire. With respect to Common Area

Maintenance Expenses, which City allocates to the Common Areas, the "Share" allocated to each Unit shall be the percentage set forth in the Basic Information, as adjusted by City from time to time based upon changes in the operation of all Concessions. Notwithstanding the foregoing, City may adjust a Unit's Share for all or part of any item of expense or cost reimbursable by Concessionaire that relates to a repair, replacement, or service that benefits only the Premises or only a portion of the Terminal or that varies with the occupancy of the Terminal. Without limiting the generality of the foregoing, Concessionaire understands and agrees that City shall also have the right to adjust a Unit's Share of any Common Area

Maintenance Expenses based upon Concessionaire's burden or impact on such Common

Areas as reasonably estimated and determined by City based upon factors such as size and

Gross Revenues of each Unit and intensity of use of such Common Areas by

Concessionaire's customers. Any adjustments by City under this Section 4.3.4 shall be undertaken in a reasonable and not unjustly discriminatory manner.

4.3.5 Gross Up. In the event the average occupancy level of Concessions for the Terminal in which the Unit is located for any calendar year is not ninety-five percent

(95%) or more of full occupancy, then the Common Area Maintenance Expenses for such year shall be apportioned among the concessionaires by City to reflect those costs which would have occurred had the Concessions been ninety-five percent (95%) occupied during such year.

4.4 Utilities. Concessionaire shall adhere to the procedures as defined in the

Concessions SOP (as defined in Section 3.10.1).

4.5 Marketing Fund. (a) City may establish a marketing fund to promote the concessions and enhance the overall guest experience at the Terminal ("Marketing Fund"). Without limiting the foregoing, City may use the Marketing Fund in its discretion, to fund (i) intra-

Terminal promotional and advertising programs such as permanent and interactive directories, events, graphics, pamphlets, other electronic media or digital activations, establishing customer service and training programs, (ii) other service and hospitality initiatives with respect to the operations of the concession program and all concessionaires in the Terminal, such as customer surveys, “secret shopper” programs and sales technique seminars, or (iii) any other programs to enhance the overall guest experience at the

Terminal. Any promotional services and personnel provided pursuant to this Section shall be under the exclusive control and supervision of City, who shall have the sole authority to employ and discharge personnel and to establish a budget. City shall not be obligated to expend more for promotions and advertising than is actually collected from concessionaires.

(b) If City establishes a Marketing Fund, then, upon City’s one hundred eighty (180) days’ prior written notice to Concessionaire: (i) Concessionaire shall pay a monthly fee in an amount not to exceed one-half percent (0.50%) of its monthly Gross Revenues as

Concessionaire’s share of the Marketing Fund, payable to City without prior notice or demand together with Monthly Rent; and (ii) Concessionaire shall thereafter include in its

Annual Gross Revenue Report under Section 4.8.4, a report reconciling actual amounts paid to the Marketing Fund, including any over or underpayments to the Marketing Fund.

If there is any underpayment, then any underpayments shall be due and payable at the same as the reconciliation. If there is any overpayment, then City shall credit such overpayment to Concessionaire’s next payment(s) due for the Marketing Fund, provided that if this

Agreement has expired or terminated, then City may apply any overpayments to any of

Concessionaire’s outstanding obligations, after which any remaining balance shall be refunded, without…