Los Angeles World Airports

Transcription

1 Los Angeles World Airports TM March 24, 2011 The Honorable City Council of the City of Los Angeles City Hall, Room 395 Los Angeles, CA lax LA/ Ontario Van Nuys Subject: APPROVAL OF SUBLEASE FROM DELTA AIR LINES, INC. TO LOS ANGELES WORLD AIRPORTS FOR PREMISES IN TERMINAL 5 AT LOS ANGELES INTERNATIONAL AIRPORT. City of Los Angeles Antonio R. Villaraigosa MDyor Board of Airport Commissioners Michael A. Lawson President Volcria C. Velasco Vice President Joseph A. Aredas Robert D. Beyer Boyd Higi11 Fernando M. Tones-Gil Walter Zifkin Gina Marie Lindsey Executive Director In accordance with Section 606 of the City Charter, the Board of Airport Commissioners transmits for your approval a Sublease from Delta Air Lines, Inc. to Los Angeles World Airports for premises in Terminal 5 at Los Angeles International Airport. RECOMMENDA TJON FOR CITY COUNCIL APPROVE the Sublease between Delta Air Lines, Inc. and Los Angeles World Airports. CONCUR in the Board's action authorizing the Executive Director to execute the Sublease. FIND that this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Article Ill Class 1(18)(c) of the Los Angeles City CEQA Guidelines. The Board of Airport Commissioners, at their meeting held on February 22, 2011 by Resolution No approved the Sublease, subject to the approval of your Honorable Body, is attached. MAYOR'S TRANSMITTAL Enclosed is the approval by the Mayor and the Office of the City Administrative Officer. There is no fiscal impact to the City's General Fund as a result of this action. 1 World \!..lay Los Angeles Cal:fomia Mail P.O. Bor G Los Angeles Ccllifotnia :l.G Telerlhone 310 G Internet.VV.'w.iawa.Ctero

2 Los Angeles City Council March 24, 2011 Page2 CONCLUSION Please return the attached Sublease to the Department of Airports' Board Office after City Council approval and Certification of that approval. Very truly yours,.\r Sa~ Commission ~BO~i~Jo~!~~PORT COMMISSIONERS Executive Assistant II cc:trade, Commerce and Tourism Committee Councilmember Hahn, E-file Councilmember Rosendahl, E-file Councilmember LaBonge, E-file. CAO (Airport Analyst), E-file CLA (Airport Analyst), E-file City Clerk's Office, Enc. (one original and one copy)

3 TRANSMITTAL - TO DATE COUNCIL FILE NO. Gina Marie Lindsay, Executive Director Department of Airports FROM FEB \l COUNCIL DISTRICT The Mayor 11. Proposed Lease Agreement Between the Los Angeles World Airports and Delta Air Lines, inc. for Space at the Los Angeles International Airport (LAX), Terminal 5, Required to Support New Concession Operations Transmitted for further processing, including.council consideration. See the City Administrative Officer report attached. - ~~ AYOR MAS:WDC: CAO 649-d

4 REPORT FROM OFFICE OF THE CITY ADMINISTRATIVE OFFICER Date: February 10, 2011 CAO File No Council File No. Council District: 11 To: The Mayor From: Miguel A. Santana, City Administrative Office;;y C. ~ Reference: Subject: Transmittal from the Department of Airports dated January 20, 2011; referred by the Mayor for report on January 25, 2011 PROPOSED lease AGREEMENT WITH DELTA AIR lines, INC. FOR SPACE AT THE LOS ANGELES INTERNATIONAL AIRPORT (LAX), TERMINAL 5, REQUIRED BY THE LOS ANGLES WORLD AIRPORTS TO SUPPORT NEW CONCESSION OPERATIONS SUMMARY The management of the Los Angeles World Airports (LAWA; Department) requests authority to execute a proposed 14-year Sublease Agreement (copy attached) with current lessee Delta Air Lines, Inc. (Delta; lessee) for the use of 2,883 square feet of space in Terminal 5 at the Los Angeles International Airport. The sublease enables LAWA to support new concession operations resulting from the recent LAX concessions upgrade and renovation project for Terminals 4, 5, 7, and 8. While the actual term of the sublease is tied to, and runs in parallel with, the original Delta Terminal Facilities Lease dating from 1987, it is anticipated that the sublease will be in effect from April1, 2011 to November 1, 2025, unless terminated earlier or replaced by a new lease. The proposed sublease will require that LAWA provide Delta Air Lines with an annual rent credit of $176,843 comprised of (1) the Department's foregoing annual lease revenue of $129,677, and (2) its payment of Delta's debt service in the amount of $47,166 per year for RAIC (Regional Airports Improvement Corporation) bond costs incurred in the 1980s used to finance the acquisition, construction, and installation of improvements to the leased premises at LAX. However, while LAWA will lose $176,843 annually to the rental credit and debt service payment, that amount will be more than offset by an increase in annual concession revenues of $359,000 generated from the subleased space. The above-referenced aspects of the proposed sublease, and this report, are based upon revised information received from the Department subsequent to the initial request submittal. Background and Lease Terms On October 20, 2010, the Council approved several contracts for new retail and food and beverage

5 CAO File No. PAGE concessions at LAX (C. F ; ; ). Included in those contracts were four agreements for food and beverage concessions and four retail packages for Terminals 4, 5, 7, and 8. In order to accommodate the new concessions, additional space is needed. While options for space in Terminals 4, 7, and 8 are still being considered, LAWA was able to negotiate the lease of 2,883 square feet from the current lessee, Delta Air Lines, for concession space in Terminal 5 in the form of a sublease to Delta's 1987 Terminal Facilities Lease. The following table illustrates the major components of the sublease: * Maintenance & Operations consist of (1) Maintenance & Operations Expense, (2) Terminal Special Expense, and (3) Airport Infrastructure Charge Once the build-out of the new concession space is completed, any modifications (e.g., reconfigurations, space reductions) to the 2,883 square foot space (up to a cumulative total of 200 square feet) may be undertaken by LAWA upon approval of the Executive Director and approval by the City Attorney as to form. It is anticipated that several concessions will be located in the leased space. Alternatives to Approving the Proposed Lease According to the Department, there are two possible alternatives to approving the proposed sublease with Delta Air Lines as follows: Identifying another location for the new concessions to be housed: this is not feasible since LAWA, during the development of its plans for new concessions, approached other longterm lessees of LAX Terminals 4, 5, 7, and 8 to ask whether they would be willing to give up space for the concessions operations. Other than Delta, and for Terminal 5 only, no other lessee was able to give up the needed space Amending the existing lease with Delta Air Lines: while this approach is feasible, it is not practical in that, according to the Department, it is more difficult to amend the lease to decrease the square footage than to sublease the required space from Delta using a lease credit due to the fact that any amendments to the original lease would affect the RAIC bonds that were used to finance the capital improvements to the Delta terminal space

6 CAO File No. PAGE Compliance with City Administrative Requirements Since the proposed agreement is a property lease, the Department's request is not subject to the provisions of Charter Section With respect to the CEQA (California Environmental Quality Act) guidelines, issuance of agreements, renewals, amendments, and extensions thereof or other entitlements granting use of an existing facility at a municipal airport involving no expansion of use are exempt from the requirements of the CEQA pursuant to Article Ill, Class 1(18)(c) of the Los Angeles City CEQA Guidelines. Furthermore, the lessee is either in compliance with or the Department will monitor and ensure compliance with the Living Wage Ordinances, Affirmative Action Program, and Child Support Obligations Ordinance. The lease with Delta Air Lines, Inc. is exempt from the provisions of the Minority/Women Business Enterprise program pursuant to the Mayor's Executive Directive , the Contractor Responsibility Program, the Equal Benefits Ordinance, and the First Source Hiring Program for all non-trade airport jobs. Pursuant to Charter Section 606 and the Los Angeles Administrative Code Section 10.5, the proposed lease, being that it is for a period longer than five years, must be approved by the Council. Additionally, to become effective, the City Attorney must approve the lease as to form. RECOMMENDATIONS That the Mayor: 1. Approve, subject to City Attorney approval as to form, the proposed Sublease Agreement between the Los Angeles World Airports (LAWA) and Delta Air Lines, Inc. for the use of 2,883 square feet of space in Terminal 5 at the Los Angeles International Airport (LAX) to enable LAWA to support its new concession operations that resulted from the recent LAX concessions upgrades and renovation project for Terminals 4, 5, 7, and 8; and 2. Return the proposed Sublease Agreement to the Department for further processing, including Council consideration. FISCAL IMPACT STATEMENT Approval of the proposed Sublease Agreement with Delta Air Lines, Inc. will result in reduced annual revenue to the Department of $176,843 from a combination of lost lease revenue ($129,677) and LAW A's payment of Delta's debt service ($47, 166) on a RAIC bond. However, the Department will obtain $359,000 from an increase in annual concession revenues generated from the subleased space. The net benefit to the Department of the sublease agreement is approximately $182,000 annually. Since the Los Angeles World Airports is bound only by the City Debt Management Policies, the City Financial Policies are not applicable. Approval of the proposed Sublease Agreement will have no impact on the City's General Fund.

7 CAO File No. PAGE Time Limit for Council Action Pursuant to Charter Section 606, "Process for Granting Franchises, Permits, Licenses and Entering Into Leases," and the Los Angeles Administrative Code Section 10.5, "Limitation and Power to Make Contracts," unless the Council takes action disapproving a contract that is longer than five years within 30 days after submission to Council, the contract shall be deemed approved. MAS:WDC: Attachment

8 Los Angeles World Airports TiYl RESOLUTION NO LAX LA!Ontario Van Nuys City of Los Angeles Antonio R. Villamigosa Mayor Board of Airport Commissioners Michael A. Lawson President Valeria C. Velasco Vice President Joseph A. Arcdas Robert D. Beyer 13oyd Hight Fernando M. Torres Gil WDitcr Zifl\in Gina Marie Lindsey Executive Director WHEREAS, on recommendation of Management, there was presented for approval, a Sublease Agreement between the City of Los Angeles and Delta Air Lines, Inc. for premises in Terminal 5 at Los Angeles International Airport. Delta Air Lines, Inc. agreed to sublease to Los Angeles World Airports approximately 2,880 square feet to support new concession operations in Terminal 5. The Sublease will result in an annual rent credit to Delta Air Lines, Inc. of approximately $177,000 which will be offset by approximately $360,000 of concession revenue; and WHEREAS, during Los Angeles World Airports' (LAWA) development of plans for new concessions in Terminals 4, 5, 7, and 8 at Los Angeles International Airport (LAX), staff approached the long term lessees of Terminals 4, 5, 7, and 8 to inquire if they would be willing to return leased space to LAWA to be included in the new concessions plan. Only Delta Air Lines, Inc. ("Delta") expressed interest so long as the space could be provided pursuant to a sublease as opposed to an amendment to their Terminal Facilities Lease. Key points of the Sublease include: Term: The Sublease commences April 1, 2011 and is co-terminus with the Terminal Facilities Lease (LAA-4983) unless terminated earlier by early termination of the Terminal Facilities Lease or upon execution of an Amended and Restated Terminal Facilities Lease for space in Terminal 5 with Delta. Premises: The Sublease covers approximately 2,880 square feet (SF). Following completion of build out of new concessions space, modification to the premises, not to exceed a cumulative total of 200 SF. Compensation to Delta: To compensate Delta for the sublease of the space, LAWA will provide a rent credit to Delta. The credit is calculated as the sum of (a) the amount of rent that Delta pays to LAWA in its role as landlord under the Terminal Facilities Lease for the premises covered by this Sublease, plus (b) Delta's monthly Bond payment per square foot multiplied by the premises covered by this Sublease. This amount will adjust in accordance with premises changes and Rental Rates for the Terminal Facilities Lease as may be approved by the Board of Airport Commissioners. For transfer of the space to LAWA, Delta requires that LAWA cover bond costs owed to Regional Airports Improvement Corporation on the square footage taken for concessions; and WHEREAS, the following is a summary of the Sublease Agreement: I Description Terms II Term: Commencement April1, 2011 J;:~pi i:i!it?d... - ""'"""""'"'"'"""' lll.o\/~.rt1~~r?.o?~...._.._,., Estimated Annual Rent Estimated SF Premises Total Chargeable Area 2,883 Estimated $/SF/Year Annual Credit Base Rent (effective January 1, 2011) $21.00 Estimated Annual Base Rent Credit $ 60,543 1 World Way Los Angeles Cctl:fomii'l 900< Mail P.O. flox l_os An1~cles C81:10IIIIIl 900()~;-22:\() Telephone 310 6< Internet l'l'lll'l.ii.l'.'ii.03no

9 Resolution No (Table continued) Maintenance & Operations (M&O) Charges Estimated Annual M&O Credit Debt Service Allocation Estimated Annual Debt Allocation Credit Total Estimated Annual Credit Estimated $/SF/Year $23.98 $16.36 Annual Credit $ 69,134 $ 47,166 $176,843; and WHEREAS, approval of the Sublease will incur a direct fiscal impact on the LAWA operating budget of approximately $14,737 monthly, or approximately $176,843 annually. Payments from LAWA to Delta in the form of rent credits include foregoing lease revenue and covering Delta's bond costs. However, increased concession revenue of approximately $360,000 annually is anticipated to be generated from the use of the subleased spaces which will offset the Sublease costs; and WHEREAS, funds for this item are currently available in LAX Cost Center Real Estate Services, Commitment Item 525- Other Operating Expenses. Funding for subsequent years will be requested as part of the annual budget process; and WHEREAS, the issuance of permits, leases, agreements or other entitlements granting use of an existing facility at a municipal airport is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Article Ill Class 1(18)(c) of the Los Angeles City CEQA Guidelines; and WHEREAS, Delta will comply with the Living Wage Ordinance; and WHEREAS, Delta will comply with the provisions of the Affirmative Action Program; and WHEREAS, Delta will comply with the provisions of the Child Support Obligations Ordinance; and WHEREAS, actions taken on this item by the Board of Airport Commissioners will become final pursuant to the provisions of Los Angeles City Charter Section 606; NOW, THEREFORE, BE IT RESOLVED that the Board of Airport Commissioners determined that this action is exempt from the California Environmental Quality Act requirements, adopted the Staff Report, approved a Sublease Agreement between Delta Air Lines, Inc. and the City of Los Angeles for premises in Terminal 5 at Los Angeles International Airport that will result in a credit of approximately $177,000 in the first year to Delta Air Lines, Inc., and authorized the Executive Director to execute the Sublease Agreement with Delta Air Lines, Inc. upon approval as to form by City Attorney and upon approval by the Los Angeles City Council. ooo I hereby certify that this Resolution No is true and correct, as adopted by the Board of Airport Commissioners at its Special Meeting held on Tuesday, February 22, Sandra J. Miller- Secretary BOARD OF AIRPORT COMMISSIONERS

10 SUBLEASE AGREEMENT (On-Airport Properties) THIS SUBLEASE AGREEMENT (this "Sublease"), dated as of the day of -,----,--,---' 2011, is entered into by and between Delta Air Lines, Inc., a Delaware corporation ("Delta"), and the City of Los Angeles, a municipal corporation acting by order of and through its Board of Airport Commissioners ("Sublessee" or the "City''). WHEREAS, Western Air Lines, Inc. ("Western") and the City entered into a terminal facilities lease (LAA-4983) (as amended or supplemented, the "Terminal Facilities Lease") pursuant to which Western leased certain areas of TerminalS at Los Angeles International Airport ("LAX") and the ground adjacent thereto (the "Base Lease Premises") (if the Base Lease Premises are part of a larger structure, that structure shall be referred to herein as the "Building"); WHEREAS, pursuant to the Partial Assignment of Terminal Facilities Lease dated as of November 1, 1985 between Western and the Regional Airports Improvement Corporation ("RAIC"), Western assigned to RAIC certain rights under the Terminal Facilities Lease for the purpose of financing the acquisition, construction and installation of certain improvements to the Base Lease Premises; WHEREAS, Western and RAIC entered into a Facilities Sublease dated as ofnovember 1, 1985 (as amended or supplemented, the "Facilities Sublease", and together with the Terminal Facilities Lease, the "Base Lease") pursuant to which Western subleased the Base Lease Premises and agreed to pay rent sufficient in time and amount to pay the principal of and interest on certain bonds; WHERAS, on April 1, 1987, Western merged with and into Delta, and Delta assumed all obligations and liabilities of Western, including, without limitation, Western's liabilities and obligations under the Terminal Facilities Lease and the Facilities Sublease; WHEREAS, Delta entered into a First Supplemental Facilities Sublease dated as of April 1, 1987 with RAIC whereby (i) Delta assumed Western's obligations under the Facilities Sublease and (ii) RAIC consented to the assignment of the Facilities Sublease to Delta; WHEREAS, Sublessee wishes to sub-sublease approximately 2,803 square feet of space in the Base Lease Premises as part of its concession program in TerminalS, and Delta is willing to sublease such space to Sublessee, under the terms and conditions hereinafter set forth; NOW, THEREFORE, Delta and Sublessee agree as follows: 1. PREMISES. Delta hereby subleases to Sublessee and Sublessee hereby subleases and takes from Delta a portion of the Base Lease Premises, as more particularly described and delineated on - 1 -

11 Exhibit A attached hereto and made a part hereof (the "Premises"). The parties acknowledge-that a portion of the Premises may be modified upon the commencement of the new concession program in Terminal 5. Delta agrees that if the parties agree to a different Premises, Exhibit A shall be amended by the Executive Director of Los Angeles World Airports and Delta, subject to City Attorney approval as to form, with an appropriate adjustment in rental charges without the prior approval or later ratification by the Board of Airport Commissioners or the Los Angeles City Council; provided, however, that such modification shall not result in an increase or a decrease of the Premises of more than 200 square feet. 2. TERM. The term of this Sublease shall commence on April!, 2011, and shall expire upon the expiration or earlier termination of the Facilities Sublease. 3. SUBJECT TO BASE LEASE. A. This Sublease is made subject and subordinate to all the terms and conditions of the Base Lease, and shall not be construed as granting any rights to Sublessee beyond those granted to Delta under the Base Lease or any such other agreements. Unless this Sublease expressly provides to the contrary, Sublessee covenants to observe and to comply with all of the terms and conditions of the Base Lease and to perform all the obligations of Delta as tenant under the Base Lease (excepting only the rental obligations) insofar as the same are applicable to the Premises. Sublessee shall not commit or permit to be committed any act or omission that violates any term or condition of the Base Lease or that would cause Delta to be in default under the Base Lease. Where the Base Lease provides that the consent of the City, in its role as landlord under the Terminal Facilities Lease, or RAIC (a "Landlord" or, collectively, "Landlords") is required in connection with any matter, Delta's consent also shall be required. Upon termination of the Base Lease for any reason, this Sublease also shall terminate. B. Sublessee acknowledges that at least a portion of the Premises was financed with proceeds of the special facility bonds issued by RAIC (the "Terminal 5 Bonds") and that the use of said portion of the Premises is also governed and restricted by the agreements related thereto (the "Bond Documents"). Sublessee agrees that it shall take no action nor permit any action to be taken in counection with its use of the Premises that would violate any provision, of, or cause a default under, the Bond Doc~Jments. In addition, Sublessee agrees not to use the Premises, conduct its operations therein, or otherwise do anything which adversely affects the exclusion from gross income of the interest on the Terminal 5 Bonds for federal income tax purposes. Sublessee agrees, as a condition to the effectiveness of this Sublease, for the joint benefit of Delta and RAIC, that Sublessee shall not claim depreciation or an investment tax credit with respect to the Premises for purposes of federal income taxation. 4. USE. Subject to the use restrictions of the Base Lease, Sublessee shall use and occupy the Premises for the following purposes and for no other purpose: airport concession space. - 2-

12 5. RENT. A. Rent. Sublessee shall pay as monthly rent (the "Rent") the monthly rental per square foot (including M&O charges) that Delta is required to pay to the City under the Terminal Facilities Lease for the Premises hereunder, without setoff or deduction. The rate in effect on the commencement date of this Sublease is set forth in Exhibit B attached hereto. Such rate shall be adjusted effective with adjustments to the corresponding rate under the Terminal Facilities Lease. The rental amount will be applied monthly as a credit against Terminal 5 rentals and M&O costs due from Delta to City. Rental for any partial month shall be prorated. Sublessee and Delta agree that the Rent shall offset and be paid towards a portion of the monthly rent for the same month owed by Delta to the City, in its role as landlord under the Terminal Facilities Lease, pursuant to Section 6 of the Terminal Facilities Lease. B. Additional Rent. Sublessee shall pay Delta, as additional rent, a proportionate share of Delta's debt service payments for the TerminalS Bonds for the use of the Premises, calculated as the area subleased multiplied by $16.36/SF per month as shown in Exhibit B, which amount will adjust in accordance with premises changes allowed in accordance with Section 1. Sublessee and Delta agree that the Additional Rent shall offset and be credited towards a portion of the monthly rent for the same month owed by Delta to the City, in its role as landlord under the Terminal Facilities Lease, pursuant to Section 6 of the Terminal Facilities Lease. C. Credit. For purposes of clarification, Delta and Sublessee agree the effect of Section S.A. and Section 5.B. shall be that, during the term of this Sublease, Sublessee shall not remit a check to Delta for the Rent and Additional Rent due, and the monthly rent for which the City, in its role as landlord under the Terminal Facilities Lease, bills Delta (via an invoice) pursuant to the Terminal Facilities Lease shall be equal to the rental amounts due to the City, in its role as landlord under the Terminal Facilities Lease, pursuant to Section 6 of the Terminal Facilities Lease less the Rent and the Additional Rent for the same month due to Delta from Sublessee under this Sublease (with the invoice from the City, in its role as landlord under the Terminal Facilities Lease, showing a line item credit for the Rent and Additional Rent as provided above). D. Leasehold Taxes. In addition to the charges stated above, Sublessee shall pay and agrees to indemnify, defend and hold Delta harmless from and against any and all taxes of whatsoever kind or nature, including but not limited to attorneys' fees, costs and expenses incurred in connection therewith (but excluding Delta's income taxes) which are or may be assessed against, chargeable to or collectible from Sublessee or Delta by any taxing authority, federal, state or local, and which are based upon or levied or assessed with respect to the performance of this Sublease or the use of the Premises by Sublessee, or any payments made by Sublessee to any party pursuant to this Sublease. E. Default Interest. If Sublessee shall default in its crediting of any rent or other amounts or charges required to be credited pursuant to this Sublease or in its payment of any other amounts due under this Sublease, such amount shall bear interest from the date of default at the lesser of 18% per annum or the maximum lawful rate

13 6. UTILITIES AND SERVICES; OTHER CHARGES. Utilities that are not provided by Landlords under the Base Lease shall be provided to the Premises by Sublessee and paid for by Sublessee. Sublessee shall also be responsible for its telephone and other communications charges. Delta shall have no liability or responsibility, and Sublessee hereby waives any claims against Delta, for any interruption or cessation of any services covered by this Section 6, except to the extent such interruption or cessation is caused by the gross negligence or willful misconduct of Delta. Sublessee shall be responsible for payment of all other charges for its use of the Airport. 7. ACCEPTANCE OF PREMISES. Sublessee has inspected the Premises and accepts the Premises "as is" and acknowledges that, except as otherwise expressly contained herein, Delta has made no representations as to the condition thereof or as to the fitness thereof for Sublessee's purposes. 8. REP AIRS AND MAINTENANCE. The Sublessee, at its sole cost and expense, shall keep the Premises in a clean, neat and orderly condition at all times, including without limitation, the provision of janitorial services to the Premises. Further, Sublessee shall, at its own expense, make all necessary repairs to the Premises (other than those required as a result of Delta's negligence or willful misconduct) so as to maintain the Premises in good order and condition, reasonable wear and tear and damage by fire or other casualty excepted. 9. TAXES. Sublessee agrees to pay, before they become delinquent, all taxes (both general and special), assessments or governmental charges of any kind whatsoever (the "Taxes") levied or assessed against the Premises, or any property of Sublessee located thereon or any business conducted by Sublessee thereon. Sublessee agrees to use its best efforts to cause the Premises, its personal property and business operations to be assessed and taxed separately from the Base Lease Premises. In the event that Delta shall be assessed for Taxes on the Premises or any or all of Sublessee's leasehold improvements, equipment, furniture, fixtures, personal property or business operations, Sublessee shall pay to Delta the amount of the Taxes within ten (1 0) days after delivery to Sublessee by Delta of a written statement setting forth the amount of the Taxes payable by Sublessee. Sublessee shall furnish Delta with satisfactory evidence of the payments required to be made by Sublessee hereunder within ten (1 0) days after such payments are made. Sublessee shall notify Delta prior to protesting any assessment of Taxes and upon commencement of audit by any taxing authority with respect to any of the Taxes. 10. ALTERATIONS. a. Delta acknowledges that Sublessee is entering into this Sublease for the purpose of expanding its concession program in Terminal 5. Accordingly, Delta agrees and consents to the alterations and improvements to be made by (i) Sublessee, or (ii) the City's sub lessees with the written consent of the City, necessary or desirable for such purpose, provided all such alterations and improvements are made in compliance with the requirements of the Base Lease and the Bond Documents, including the receipt of the consent of RAIC, and that Delta will assist and support Sublessee's efforts to obtain such consent. -4-

14 b. During the term of this Sublease, title to all improvements and alterations installed by (i) Sublessee, or (ii) the City's sub lessees with the written consent of the City, shall remain in the Sublessee or the City's sublessee, as applicable. Upon the termination or this Sublease, said additions, improvements or alterations shall become a part of the land upon which they are constructed, or of the building to which they are affixed, and title thereto shall thereupon vest in Sublessee. 11. SIGNAGE. Sublessee, and the City's sub lessees, with the written consent of the City, shall each have the right to install signage for the airport concessions to be located in the Premises. Sublessee, and the City's sub lessees, with the written consent of the City, shall have the right to install, erect, maintain or display any other signage or advertising in or about the Premises, provided that. Sublessee consults with Delta prior to the installation of such signage. 12. RIGHT OF ENTRY. Delta shall have the right to enter the Premises upon reasonable notice to Sublessee (or without notice in the case of an emergency) for any reasonable purpose, including without limitation to gain access to and egress from those portions of the Base Lease Premises not leased to Sublessee hereunder, to perform such functions as may be necessary or convenient for the maintenance and operation thereof, and to determine whether Sublessee is in compliance with the terms of this Sublease. 13. COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Sublessee shall faithfully observe and comply with all laws, ordinances, statutes, rules, orders and regulations of all governmental authorities, at any time issued or enforced, which are applicable to the Premises or the conduct of Sublessee's business in, on or about the Premises, and shall comply with all rules and regulations of Delta for the operation, safety, care or appearance of the Premises or the preservation of good order thereon and all rules and regulations promulgated by the City, in its role as landlord, pursuant to the Base Lease. Sublessee agrees that it will not use the Premises or permit the use of the Premises in any manner that will violate the terms and conditions of any fire insurance policy from time to time carried by Delta or Landlords on the Premises. Sublessee shall comply with any reasonable regulations or requests that may be made by insurance underwriters. 14. CASUALTY. In the event that the Premises or any portion thereof should be damaged or destroyed by fire, or other casualty, Delta, at its option, may either terminate this Sublease or diligently proceed to cause the repair of the damage to the Premises. If Delta elects to repair or rebuild, and if the Premises are so damaged that Sublessee is unable to occupy the Premises or a portion thereof during such repair or reconstruction, then the rental hereunder shall be abated, if and on the same basis that Delta's rental under the Base Lease is abated, until the Premises can be occupied by Sublessee. Delta shall in no event be required to rebuild, repair or replace any improvements, fixtures or personal property of Sublessee. Nothing in this Section 14 is intended to modify or limit the provisions of Sections 15 and 16 of tills Sublease. 15. RELEASE AND INDEMNITY. A. Release. Sublessee hereby agrees that no Indemnified Party (as hereinafter defined) shall be liable for any claims, liabilities, losses, damages, fines, civil penalties, or expenses of any - 5-

15 kind or nature whatsoever, including without limitation loss of or damage to any property or the death or injury of any persons, occasioned by theft, fire, acts of God, public enemy, injunction, riot, strike, insurrection, war, or any other action of any governmental body or authority, by other occupants of the Building or any other matter beyond the reasonable control of that Indemnified Party, or for any injury or damage or inconvenience which may arise through repair or alteration of any part of the Premises or the Base Lease Premises, or failure to make repairs, or for any cause whatsoever, except the gross negligence or willful misconduct of that Indemnified Party. B. Indemnity. To the fullest extent permitted by law, Sublessee hereby releases and agrees to indenmify, defend and hold harmless Delta and Landlords, and their respective directors, officers, agents, and employees (collectively, the "Indemnified Parties" and individually, an "lndenmified Party") from and against any and all claims, liabilities, losses, damages, fines, civil penalties, and expenses of any kind or nature whatsoever (including without limitation costs of suit and reasonable expenses of!egal services) which maybe suffered by, accrued against, charged to or recoverable from any of the Indemnified Parties by reason of (i) any occupancy, use, or misuse of the Premises by Sublessee, its officers, directors, employees, agents, contractors, subtenants or invitees, or any occurrence (whether on Premises or elsewhere at the Airport) in counection with such occupancy, use or misuse; (ii) any occurrence in, upon, or at the Premises; or (iii) Sublessee's failure to comply with its obligations under this Sublease or the violation of any law, regulation or ordinance by Sublessee or its officers, directors, employees, agents, contractors, subtenants or invitees in counection with Sublessee's operations at or from the Premises. This Section shall apply regardless of whether or not the damage, loss or injury complained of arises out of or relates to the negligence (whether active, passive or otherwise) of, or was caused in part by, an Indemnified Party. However, nothing contained in this Section shall be construed as an indenmity by Sublessee of an lndenmified Party against any loss, liability or claim to the extent arising from the gross negligence or willful misconduct of that Indemnified Party. This Section shall not be construed to negate, abridge or otherwise reduce any other right to indenmity which would otherwise exist in favor of any Indemnified Party, or any other obligation of Sublessee, its officers, directors, employees, agents, subtenants or contractors to indenmify an Indemnified Party. Sublessee's obligations under this Section shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits paid or payable by Sublessee under Workers' Compensation Acts, disability benefits acts or other employee benefit laws or regulations. The indenmification obligations of this Section shall survive termination or expiration of this Sublease. 16. INSURANCE. A. Coverage, During the term of this Sublease, Sublessee, at its own cost and expense, shall maintain with insurers reasonably acceptable to Delta, the following coverage: (i) Commercial General Liability, Contractual Liability and Automobile Liability coverages in an amount not less than $1,000,000 for bodily injury and property damage combined single limit per occurrence, and (ii) all risk property insurance covering loss of or damage to property of the Sublessee in an amount at least equal to the replacement value of such property. Sublessee shall also maintain Workers' Compensation coverage as may be required by law and Employer's Liability coverage with a combined single limit of not less than $1,000,000 to cover employees. -6-

16 B. Form and Certificates. The liability policies shall: (i) name Delta and the Landlords as additional insureds to the extent of Sublessee's indemnity obligations hereunder; (ii) specifically insure the liability assumed by Sublessee hereunder; (iii) be primary without right of contribution from any insurance carried by Delta or the Landlords; and (iv) provide for thirty (30) days written notice to Delta and the Landlords prior to cancellation or material change. Certificates evidencing the above coverages and special endorsements shall be provided to Delta and the Landlords on or before the date Sublessee takes possession of the Premises. C. Waiver of Subrogation. Sublessee, on behalf of itself and its insurers, hereby waives any claim or right of recovery from Delta or Landlords, their officers, directors, employees, agents, concessionaires and contractors, for loss or damage to Sublessee's property or the property of others under Sublessee's control, to the extent that such loss is covered by valid insurance policies. Sublessee shall provide notice of this waiver of subrogation to its insurers. 17. LIENS. Sublessee hereby agrees to keep the Premises, and the improvements thereon, free and clear of mechanics' liens and other liens for labor, services, equipment or materials. In the event such a lien is filed or recorded, Sublessee shall take all action required to remove the same within fifteen (15) days of the filing or recordation. In the event that Sublessee fails to take such action to remove the lien, then Delta, at its option, may do so and all costs associated therewith plus an administrative fee equal to 15% of such costs shall be due to Delta from Sublessee upon demand. 18. CONDEMNATION. A. Total Taking. If during the term of this Sublease or any extension or renewal thereof, all or a substantial part of the Premises should be taken for any public or quasi-public use under any govermnentallaw, ordinance or regulation or by right of eminent domain, or should be sold to the condenming authority under threat of condenmation, this Sublease shall terminate on the date of taking of the Premises by the condemning authority. B. Partial Taking. If less than a substantial part of the Premises is taken for public or quasi-public use under any govermnentallaw, ordinance or regulation, or by right of eminent domain, or is sold to the condenming authority under threat of condenmation, Delta, at its option, may by written notice terminate this Sublease or shall forthwith at its sole expense restore the remaining Premises (other than leasehold improvements made by Sublessee situated on the Premises) in order to make the same reasonably tenantable and suitable for the uses for which the Premises are subleased. The rent payable hereunder during the unexpired portion of this Sublease shall be adjusted equitably if and on the same basis that rent is adjusted under the Base Lease. C. Awards. Subject to the provisions of the Base Lease, Delta and Sublessee agree that any award shall belong to and be paid to Delta, except tliat Sublessee shall be entitled to pursue and receive a separate award for the value of Sublessee's trade fixtures and for the value of the loss of Sublessee's business at the Premises, provided such award does not diminish the award that Delta is entitled to receive. - 7-

17 19. DEFAULTS. The occurrence of any of the following shall constitute a default by Sublessee. under this Sublease: (a) Sublessee fails to credit to Delta when due any sum as required hereunder or to pay when due any sums required to be paid hereunder and such failure shall continue for more than thirty (30) days after Sublessee receives notice from Delta of the failure; (b) Sublessee fails to cure any other breach of this Sublease within thirty (30) days after written notice thereof or within such longer period of time as may be granted by Delta to cure such default as long as Sublessee commences to cure such default within such thirty (30) day period and diligently proceeds to cure such default; (c) Sublessee (i) takes any steps leading to its cessation as a going concern or ceases or suspends operations for reasons other than a strike; (ii) becomes insolvent or makes transfers in fraud of creditors or makes an assigurnent for the benefit of creditors; (iii) has an involuntary bankruptcy petition filed against it which is not dismissed within sixty (60) days; or (iv) files a petition for protection under any state or federal bankruptcy act or a trustee or receiver is appointed for all or substantially all of Sublessee's assets. 20. REMEDIES UPON DEFAULT. Upon the occurrence of an event of default hereunder, Delta may take any one or more of the following actions: (a) Maintain this Sublease in full force and effect, but terminate Sublessee's right to possession of the Premises, and recover any and all rent and other fees and charges as they become due. Delta shall have the right to enter the Premises and expel or remove Sublessee and its personal property by any lawful means, including without limitation by force if necessary and lawful. Any personal property so removed may be disposed of or stored in a public warehouse or elsewhere, at Delta's election, at the cost of and for the account of Sublessee. In the event of such termination of Sublessee's right to possession without terminating this Sublease, Delta shall have the right, but not the obligation, to relet the Premises on behalf of Sublessee and receive rent therefor. None of these actions will be deemed an acceptance of surrender of the Leased Premises. If the Premises are not relet by Delta, Sublessee shall pay to Delta as damages a sum equal to the amount of rent reserved in this Sublease for such period or periods in addition to all other losses or damages which Delta may suffer by reason of Sublessee's default or Delta's retaking possession of the Premises, including, without limitation, (i) all expenses incurred by Delta, including without limitation reasonable court costs and attorney's fees, in recovering possession of the Premises or enforcing Delta's rights under this Sublease; (ii) all costs and charges for care of the Premises while vacant; (iii) all costs of restoring the Premises to a good condition; and (iv) all reasonable costs associated with Delta's efforts to relet the Premises. In the event Delta relets the Premises, Sublessee shall be liable to Delta for any deficiency which may arise by reason of such reletting during the remainder of the term in addition to all other losses or damages which Delta may suffer by reason of Sublessee's default or Delta's retaking possession and reletting of the Premises, including without limitation the items listed in (i)-(iv) above. Delta may file suit to recover any sums falling due under the terms of this subsection from time to time on one or more occasions without Delta being obligated to wait until expiration of the term of this Sublease and without barring or affecting in any manner Delta's - 8-

18 right to bring a later action or actions for further damages. Notwithstanding that Delta does not elect to terminate this Sublease initially (but has elected to terminate Sublessee's possession), Delta at any time thereafter may elect to terminate this Sublease as a result of such previous default; (b) Terminate this Sublease by written notice to Sublessee, in which event this Sublease shall be ended as to Sublessee and all persons holding under Sublessee, and all of Sublessee's rights shall be forfeited and lapsed, as fully as if this Sublease had expired by lapse of time. In such event, Sublessee shall be required to vacate the Premises immediately and surrender same to Delta. If Sublessee fails to surrender the Premises immediately to Delta, Delta, without prejudice to any other remedy, may enter upon and take possession of the Premises and expel or remove Sublessee and its personal property by any lawful means, including without limitation, by force if necessary and lawful. In the event of termination in accordance with this provision, the rental or any other sums payable by Sublessee pursuant to this Sublease that have accrued hereunder but are unpaid shall be immediately due and payable by Sublessee to Delta. In addition, Sublessee agrees to pay to Delta upon demand the amount of all loss and damages which Delta may suffer by reason of such termination, including, without limitation, (i) all amounts to which Delta may be entitled by applicable law in compensation for the rent and other charges that would have been due to Delta by Sublessee for the remainder of the term; (ii) all expenses incurred by Delta, including reasonable court costs and attorney's fees, in recovering possession of the Premises or enforcing Delta's rights under this Sublease; (iii) all costs and charges for care of the Premises while vacant; (iv) all costs of restoring the Premises to a good condition; and (v) all reasonable costs associated with Delta's efforts to relet the Premises. The failure of Delta to relet the Premises or any part or parts thereof shall not release or affect Sublessee's liability for damages hereunder; (c) Cure the default on the behalf of the Sublessee, in which event the Sublessee shall, upon demand by Delta, pay or, in the alternative, if Delta so elects, credit Delta all sums expended by Delta in accomplishing such cure plus an administrative charge of 15% of said sums; (d) Exercise any right or remedy available to Delta in law or in equity, or any right or remedy available to Landlords under the Base Lease in the event of default by Delta as tenant thereunder. 21. CUMULATIVE RIGHTS. Each right and remedy of Delta provided for in this Sublease, or now or hereafter existing at law, in equity or by statute or otherwise, shall be cumulative and concurrent, and the exercise or beginning of the exercise of any one or more of such rights or remedies shall not preclude the exercise of that right or remedy in the future or the exercise of any other right or remedy at any time. 22. SURRENDER OF PREMISES/HOLDING OVER. At the expiration or earlier termination of this Sublease, or upon Delta's termination of Sublessee's right of possession in accordance with the provisions of this Sublease, Sublessee shall surrender the Premises to Delta in good condition, reasonable wear and tear, damage by fire or other casualty excepted. In the event that Sublessee remains in possession after the expiration or termination of this Sublease without a written agreement to renew or extend the term, the tenancy shall be deemed to be a tenancy at will at a monthly rental equal to one and one-half(l-112) times the rental payable during the last full month -9-

19 of the term of this Sublease. All holdover tenancies shall be subject to all other terms and conditions of this Sublease. 23. ASSIGNMENT AND SUBLETTING. This Sublease is personal to Sublessee and Sublessee shall not assign this Sublease, sublet the Premises or any portion thereof, or permit use by others (including without limitation, use by others being ground handled by Sublessee) without the prior written consent of Delta and, to the extent required by the Base Lease, Landlords. Delta's acceptance of rent from any person other than Sublessee shall not be deemed to be a waiver of this provision. Consent to one assignment, subletting or use shall not be deemed to be consent to any subsequent assignment, or subletting or use. Notwithstanding the foregoing, Sublessee shall have the right to sublease the Premises to an airport concessionaire that is a part of Sublessee's airport concessions program for Terminal 5 without the prior written consent of Delta, provided such subtenant's use of the Premises conforms to the requirements of the Base Lease and Bond Documents and provided Delta is given advance written notice of such subtenant by the City and a copy of the sublease between the City and such subtenant. 24. ACCORD AND SATISFACTION. No payment or receipt by Delta of a lesser amount than the rent or other charges herein stipulated shall be deemed to be other than on account of the rent or such charges. Further, no endorsement or statement on any check or any letter accompanying any check shall be deemed to be an accord and satisfaction. Delta may accept such check or payment without prejudice to Delta's right to recover the balance of such rent or other charges or to pursue any other remedy provided in this Sublease or by law. 25. FORCE MAJEURE. Neither party shall be deemed to be in breach of this Sublease by reason of a failure to perform any of its obligations hereunder to the extent that such failure is caused by strike or labor troubles, unavailability of materials or utilities, riots, rebellion, terrorist attack, insurrection, invasion, war, action or interference of governmental authorities, acts of God, or any other cause whether similar or dissimilar to the foregoing which is reasonably beyond the control of the parties; provided, however, this clause shall not apply to Sublessee's obligation to pay rent or other sums due hereunder, such obligation being absolute and unconditional. 26. ATTORNEY'S FEES. In any action or litigation by Delta or Sublessee for recovery of any sum due under this Sublease, or to enforce any of the terms, covenants or conditions contained herein, the prevailing party shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements incurred in such action. Each party shall give prompt notice to the other of any claim or suit instituted against it that may affect the other party. 27. GOVERNING LAW. This Sublease shall be governed by and construed under the laws of the state in which the Premises are located. 28. ENTIRE AGREEMENT. This Sublease constitutes the complete agreement of the parties with respect to the subject matter hereof and supersedes all previous agreements, representations and understandings concerning the same, whether written or oral. The provisions of the Sublease may be modified, amended or waived only by a written instrument, executed by Delta and Sublessee

20 29. WAIVER AND CONSENT. A waiver by either party to this Sublease of any breach of the covenants, conditions or agreements contained herein shall not be construed as a waiver of any succeeding breach of the same or other covenants, conditions or agreements. Delta's acceptance of any rent or other payments due hereunder shall not be deemed a waiver of any default. Whenever Delta's consent or approval is required under this Sublease, such consent or approval may be granted or withheld in Delta's sole discretion for any or no reason. Delta's consent to any act by Sublessee requiring Delta's consent or approval shall not be deemed to waive or render uunecessary Delta's consent or approval to any subsequent or similar acts by Sublessee. 30. SEVERABILITY. If any provision or term of this Sublease shall be determined to be illegal, invalid or unenforceable, the remainder of this Sublease shall not be affected and shall remain valid and enforceable to the fullest extent permitted by law. 31. LANDLORDS CONSENT. The Landlords consent to this Sublease may be necessary. In the event such consent is required and is denied, this Sublease shall terminate and Sublessee shall immediately vacate and surrender the Premises. 32. NOTICES. Any notices, requests or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand, by overnight courier, or by facsimile transmission ("fax"), or mailed by United States registered or certified mail, return receipt requested, postage prepaid, and addressed to the appropriate party at its address or to its fax number, as appropriate, as set forth below: Sublessee: Attention: Fax No.: Department of Airports 1 World Way Post Office Box Los Angeles, CA Executive Director (424) With a copy to: Attention: Fax No.: Department of Airports 1 World Way Post Office Box Los Angeles, CA City Attorney (424)

21 Delta: Attention: Fax No.: Delta Air Lines, Inc Delta Boulevard Atlanta, Georgia Jim Boucher- General Manager Corporate Real Estate (404) Any such notice, request, or other communication shall be considered given on the date of hand or courier delivery if delivered by hand or overnight courier, on the date of receipt if delivered by fax, or on the day of deposit in the United States mail as provided above. Rejection or other refusal to accept or inability to deliver because of changed address or fax number of which no notice was given shall not affect the validity or the effectiveness of the notice, request, or other communication. By giving at least ten (1 0) days' prior written notice thereof, either party may from time to time and at any time change its mailing address or fax number hereunder. 33. QUIET ENJOYMENT. Upon Sublessee's payment of all sums due hereunder and provided that Sublessee is not otherwise in defanlt hereunder, Sublessee shall peaceably and quietly hold, occupy and enjoy the Premises for the term of this Sublease without hindrance, ejection or interruption by Delta, or persons lawfully claiming through Delta. 34. BINDING EFFECT. Subject to prohibitions against assignment, this Sublease shall be binding upon the parties, their personal representatives, successors and assigns. 35. NONDISCRIMINATION. Without limiting the generality of any of the provisions of this Sublease, the Sublessee in its operations on the Premises, and the exercise of any privileges under this Sublease, shall not on the grounds of race, creed, sex, color or national origin discriminate or permit discrimination against any person or group of persons in any manner whatsoever and shall comply with Part 21 of the Regulations of the Office of the Secretary of the Department of Transportation, as it may be amended, and any other present or future laws, rules, regulations, orders, or directions of the United States of America with respect thereto which from time to time may be applicable to the Sublessee's operations on the Premises, whether by reason of agreement between a Landlord and the United States Government or otherwise. 36. SECURITY. Without limiting the generality of Section 13 of this Sublease, Sublessee shall adopt and enforce appropriate procedures as required by applicable law or regulation or the operator of the Airport to prevent or deter unauthorized access on the part of its passengers, employees, vendors, licensees, and invitees to the Airport operations areas and aircraft. Such procedures shall include, without limitation, a requirement that all of Sublessee's employees visibly display a photographic identification badge on their person at all times while within an area covered by this Sublease which is not open to the general public, and a requirement that all passengers and other persons who are present in such an area at the invitation of Sublessee shall at all times while within such area be in the company of, and escorted by, a properly identified employee of Sublessee. Sublessee further agrees to indemnify, defend and hold harmless Delta with respect to any fine, levy or penalty which may be imposed upon Delta by the Federal Aviation Administration or any other governmental authority for violation of any law or regulation pertaining to aircraft or airport security as a result of any act or omission on the part of Sublessee, such indemnity to include all attorneys' - 12-

22 fees and other costs of defense incurred in connection therewith. The indemnity obligations of this Section 36 shall survive the expiration or termination of this Sublease. 37. ENVIRONMENTAL MATTERS. A. Indemnity. Sublessee shall be responsible for and shall indemnity, defend and hold the Indemnified Parties harmless from and against all liability, claims, penalties, fines, causes of action, suits, liens, losses, damages, costs and expenses of any kind (including, without limitation, all reasonable attorneys' fees and costs) arising from (i) any Release from, in, on or to the Premises of a Hazardous Substance during the term of this Sublease (or any holdover by Sublessee after expiration of the term), or (ii) any violation of any Environmental Law in connection with the use of the Premises during the term of this Sublease (or any holdover by Sublessee after the expiration of the term); provided, however, nothing contained in this Section shall be construed as an indemnity by Sublessee of an Indemnified Party against any loss, liability or claim arising solely from the negligence or willful misconduct of such Indemnified Party. Nothing herein shall be construed to waive any of Delta's obligations under the Base Lease or this Sublease. The indemnity obligations of this Section 37 shall survive the expiration or termination of this Sublease. noted: B. Definitions. For purposes of this Sublease, the following terms shall have the meanings (i) "Environmental Law" shall mean all applicable federal, state and local laws, rules, codes, regulations, ordinances, and orders with respect to environmental protection or worker health and safety, including, but not limited to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the Superfund Amendments and Reauthorization Act of 1986, as amended; the Hazardous Materials Transportation Act, as amended; the Resource Conservation and Recovery Act, as amended; the Toxic Substance Control Act of 1976, as amended; the Federal Clean Air Act, as amended; the Federal Water Pollution Control Act, as amended; the National Environmental Policy Act, as amended; any so-called "Superfund" or "Superlien" law; the Occupational Safety and Health Act, as amended; all regulations promulgated by the United States Environmental Protection Agency; all regulations promulgated by the Occupational Safety and Health Administration; and all rules adopted pursuant thereto. (ii) "Hazardous Substance" shall mean all substances defined or listed as "hazardous substances," "toxic substances," "hazardous waste," "toxic pollutants" in, or otherwise regulated under, any Environmental Law, including without limitation petroleum products and wastes and asbestos-containing materials. (iii) "Release" shall mean any actual or threatened escape, seepage, leakage, spillage, discharge, emission, pumping, emptying or release. 38. COUNTERPARTS. This Sublease may be signed in any number of counterparts, each of which shall be deemed to be an original, and all of which taken together shall constitute one and the same document

23 IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers or representatives to execute this Sublease as of the day and year first written above. SUBLESSEE: City of Los Angeles DELTA: Delta Air nne. ~~e:~~ By: Name: Title: Title: &M e o!l,f (1,12... Date: Date: 1._, ;;L=-...r. ;t:..!._\-,_1 ud APPROVED AS TO FORM: Carmen A. Trutanich, City Attorney ~;;.,~fm~ Title: DePUY!ksistant City Attorney Date: 3/P-jl/ - 14-

24 CONSENT OF REGIONAL AIRPORTS IMPROVEMENT CORPORATION The Regional. Airports Improvement Corporation hereby consents to fhis Sublease for ali purposes of the Facilities Sublease (as defined herein). ~ -~ By ':L ~ Name: FRANKLIN E. U~ Title: u_rre_c_t_o_r Date:,MA=R""CH"-~/,_,t/IZ.-~-'2""0"'1-"-l----- By: Name: CHERYL K. PETERSEN Title: D_I_RE_C~T~O~R~ Date: MARCH,

25 CONSENT OF REGIONAL AJRPORTS IMPROVEMENT CORPORATION The Regional Airports Improvement Corporation hereby consents to this. Sublease for all purposes of the Facilities Sublease (as defined herein). By: Name: Title: FRANKLIN E. ULF DIRECTOR Date: MARCH 2011 Title: D~I~RE~C~T~OR= Date: MARCH,

26 EXHIDITA Premises 2,803 square feet of space in Terminal 5 at LAX as shown on the drawing attached as Exhibit A-1 hereto - 16-

27 ) 0 o I & (E)ILO\'E la 1\:!U:!UII!\0.1nE!i.C2... 4t~E1JRo ~~ '"""" LEGEND' (N)EXTENT OF TENANT SPACE 0 (E)WALL TO BE DEMOLISHED 0 (N)DEMISING WALL ME: (E)MECHAN!CAL UTILITIES PL ( )PLUMBING UTILITIES EL ( )ELECTRICAL UTILITIES (S, W,G) s~(e)sanit ARY WASTE AND VENT SERVICES LOCATED HERE w~(e)hot AND COLD WATER SER~CES LOCATED HERE G~(E)NATURAL GAS SERVICES LOCATED HERE NOTE: REFER TO PBS REPORT BY TERMINALS FOR EXISTING MECHANICAL, PLUMBING AND ELECTRICAL UTILITIES I ~ ~ TERMINAL 5 - DEPARTURES LEVEL U8015 LAX