respondents to the terminal 2

Respondents to the Terminal 2 Food and Beverage Lease December 3, 2009

5. Summary of Experience [Part VI-Proposal Content and Forms, Submittal 2, Item B].

If proposer intends to qualify through its management experience and is unable to provide audited financial statements, proposer may submit a certification of sales for each qualifying year, for the entity from which such experience was acquired.

If audited statements are not available, proposer may provide financial statements reviewed or compiled by a CPA for each qualifying year.

6. Commencement Date [Part VIII-Lease, Section 2.1 Commencement and Expiration]. Language is revised to allow the City up to one year after the Commencement Date to deliver the premises to Tenant, after which, each of City and Tenant shall have the right to terminate this Lease by notice to the other.

7. Third-Party Operator [Part VIII-Lease, Section 3.1 Permitted Use]. The last sentence is revised to read, “…Without limiting Section 5 [Assignment or Subletting], Tenant shall not, without the prior consent of Director, engage a third-party operator to conduct the Permitted Use or otherwise operate on the Premises.”

8. Definition of First Month [Part VIII-Lease, Section 4.2 Monthly Rent Payment, page 10; Section 4.6 Sales Report, page 12]. The term “First Month” is defined as the month in which the Rent Commencement Date occurs.

9. Rent During Construction [Part VIII-Lease, Section 4.5, page 11]. If Tenant elects to operate a temporary facility during the construction period, Tenant shall pay to the Airport as rent, the amount equal to the highest percent in the tiered percentage rent scale specified in the individual leases.

10. Affidavit of Tenant’s Work [Part VIII-Lease, Section 7.2 Tenant’s Work; Minimum Investments]. Tenant shall have up to ninety (90) days after substantial completion of Tenant’s Work, to provide to City an affidavit, signed by Tenant and any of the following, Tenant’s general contractor, architect or construction manager, under penalty of perjury, stating the hard construction costs paid by Tenant to complete Tenant’s Work, together with copies of paid invoices and lien waivers substantiating the costs stated in the affidavit.

11. Submittal Date of Plans and Specifications [Part VIII-Lease, Section 7.4 Structures and Fixtures]. Tenant shall have up to ninety (90) days from the Effective Date to submit plans and specifications which meet City approval, after which the City has the right to terminate the Lease.

Bakery and Coffee Facilities RFP Only

12. Permitted Uses [Part VIII-Lease, Exhibit B Use and Operational Requirements]. Grab and go cases shall be allowed and shall be subject to the approval of the Design Review Committee.

Baked products item is removed from the “Prohibited Merchandise” list and moved to “Required Merchandise.”

Respondents to the Terminal 2 Food and Beverage Lease December 3, 2009 Cocktail Lounge RFP Only

13. Summary of Business Terms [Part I.3; Part VIII-Lease, Major Lease Term Summary]. The minimum annual guarantee for the first year of the lease shall equal Ninety-one Thousand Two Hundred Dollars ($91,200) calculated at $48 per square foot.

The minimum investment amount shall be Six Hundred Sixty Five Thousand Dollars ($665,000) based on 1,900 square feet calculated at $350 per square foot.

14. Premises [Part I.4; Part VIII-Lease, Major Lease Term Summary; Exhibit A]. The square footage under the premises is reduced from 2,998 square feet to 1,900 square feet.

15. Proposal Bond [Part V, 6.e]. Proposer must submit a Proposal Bond in the amount of Forty-five Thousand Six Hundred Dollars ($45,600).

16. Permitted Uses [Part VIII-Lease, Exhibit B Use and Operational Requirements]. Tenant shall offer between six to fifteen wine selections.

Gourmet Market and Wine Bar RFP Only

17. Description of Lease [Part I.2]. The following is added: “Subleasing is permitted provided (1) the sublease form mimics the base lease and is approved by the Airport; (2) the Tenant operates a portion of the overall premises; and (3) the rent structure does not result in the subtenant paying a disproportionate share of the rent.”

18. Minimum Qualification Requirements [Part I.5.a]. Proposer must have a minimum of three years within the past five years (“qualifying years”) in the ownership or management of a gourmet market, wine bar, retail coffee and bakery facility, delicatessen or other relevant food and beverage experience as determined by the Airport.

19. Minimum Qualification Requirements [Part I.5.b.iii). The following is added: “Newly-formed entities cannot meet this RFP’s minimum qualifications through a sublease agreement.”

20. Food Court Maintenance Fee [Section VIII-Lease, 4.12 Food Court Maintenance Fee]. Applicable to this Lease. Section is amended requiring Tenant to pay fee in monthly installments, with fee adjustment occurring on an annual basis, effective July 1st of each year. For the first Lease Year, the fee equals $29,325.00.

Quick Serve RFPs Only

21. Proposal Bond [Part V, 6.e]. Proposer must submit one Proposal Bond in the amount of Twenty-three Thousand Seven Hundred Thirty Dollars ($23,730.00) regardless of the number of quick-serve leases for which the proposer submits a proposal.

TERMINAL 2 FOOD AND BEVERAGE LEASES Attachment A to Addendum No. 2 SUBJECT QUESTIONS RESPONSES

Page 1 of 26

General (All RFPs)

1) Additional Support Space Availability

Are there storage facilities and production kitchen available to tenants? If so, at what cost?

Yes. Additional storage facilities are available to tenants at a separate charge. Current Fiscal Year Rates and Charges for storage spaces is $44.03 per square foot per year.

2) Administrative If there is a request for the Airport Director to respond to, what is procedure and how long does the response usually take?

If we submit the request for an item to be serviced to Director of SFO, what is procedure and how long does the response usually take?

Requests of the Airport Director must be made in writing and will typically be responded to within two weeks.

If any conflict or service occurs between SFO and tenants, how do we solve the conflicts?

The Airport will work with tenants regarding any conflict, referring to the lease as the binding document.

Provide complaints by tenants and the results and unsolved problems.

The Airport will not provide this information.

What are any new Restrictions/ Ordinances/Regulation updated information access or participation opportunities?

Prospective tenants should refer to the RFP document, including addenda and the lease for regulations that are pertinent. All concession opportunities are published on the Airport’s website at http://www.flysfo.com/web/page/about/b2b/conces/.

Is there due process for a claimed violation or regulation? If do so, what is the petition process.

Please review § 15 DEFAULTS; REMEDIES of the Lease.

Can renegotiation of lease agreement be made under any circumstances?

Yes. It is very rare, however, for the Airport to renegotiate.

3) Air Traffic / Enplanement Information

What airlines will be occupying Terminal 2 and which gates will they be located?

Virgin will operate seven gates (Gates 50-54A) and American will operate seven gates (54B-59).


Page 2 of 26

General (All RFPs)

3) Air Traffic / Enplanement Information (continued)

Please provide calendar year 2008 enplanement count for American Airlines and Virgin America.

American Airlines’ enplanement for CY 2008 is 1,664,389 and Virgin America’s enplanement for CY 2008 is over 905,784.

How many enplanements will T-2 have in its first full year of operation?

Projected enplanements for Terminal 2, in its first full year of operation, is 3.2 million.

Can you please send me the number of enplanements for Terminal 1? At least for 2008 and year to date for 2009.

Jan-Dec 2008: 5,153,338

Jan-Sep 2009: 4,059,018

4) Approved Architects List Do you have a current list of approved architects? We do not have a list of approved architects. The attendee list may include architectural firms that are be interested in working with potential proposers. This is by no means a complete list or an endorsement from the Airport.

5) AutoCAD files I would like to request access to digital, AutoCAD files (plans, elevations and sections) for the proposed Terminal 2 concessions spaces.

Is it possible to get floor plans for the food locations in an electronic autocadd format?

Interested party to complete EDF form, which may be requested by email to [email protected] or fax to (650) 821-4519. Please submit to the same address or fax number upon completion. Upon receipt, staff will forward to you two CDs with the most current drawings available.

6) BICE (Building Inspection and Code Enforcement) Requirement

Will we be able to get a building permit without venting or if we’re required to vent, will a venting run be available?

All plumbing fixtures must be vented. Food and Beverage leaseholds and the Spa leasehold will be provided with a 3-inch plumbing vent stub out for the tenant to connect to. Exhaust vents for cooking facilities will be required as well. Tenant must coordinate location and installation with the base building team per Tenant Work Letter.


Page 3 of 26

General (All RFPs)

7) Concessions Map The Concessions Map shown on the T2 web page seems to be the same as the one presented on 10/22. How can I download a high-resolution image (jpg or pdf)?

I would like to request for the floor plan of Terminal 2 that has recently been updated. It can be an electronic file (pdf) or a web site link that I can download.

The most recent map is posted on line at http://www.flysfo.com/web/page/about/T2/concessions/map.html.

8) Construction-Related What are the security procedures for contractor, crews, materials and equipment?

The contractor and crews will need to obtain badges from the Security Access Office. General guidelines are posted online at http://www.flysfo.com/web/page/sao/index.html.

Is there a limitation on construction hours? Since the Terminal 2 is not an operational building, there is no limitation on construction hours.

Is there a limitation on number of workers on site? No.

9) Deliveries Where is loading [dock] area? Tenant deliveries are made at Courtyard 2, which is located in between Terminal 1 and Terminal 2, towards the front-end of the buildings.

Are there Security check procedures for deliveries? Yes, all goods are pscreened.

Who are the existing SFO Airport suppliers/distributors? Tenants choose their own suppliers.

Are there any schedule limitations on deliveries? Tenant will be provided the schedule as it becomes available.

10) Design Criteria Is the T2 Design Criteria document that is posted on the website the correct one to use for this opportunity?

Yes.


Page 4 of 26

General (All RFPs)

11) Grease Traps Are local grease traps within the space acceptable, or are large grease interceptors required?

Food and beverage locations will have a grease waste stub at the leasehold that connects to a centrally located collection point.

12) Infrastructure Components Are there shared tenant services for telecommunication/data networking? For example, centralized intra-terminal and inter-terminal fiber optic backbone infrastructure available for tenant use. If so what are the specifications and terms?

The Airport’s Information Technology and Telecommunications offers VLAN on commission network w/ gigabit backbone and block of 64 IPs at $1,350.00 per month.

What are SFO’s specifications/regulations regarding telecommunications/data network cabling?

SFO’s specs and regulations regarding cabling may be found in the Tenant Improvement Guide (TIG), obtained through Airport Building Inspection and Code Enforcement (BICE). Please call (650) 821-7880.

What are SFO’s specifications/regulations regarding tenant wireless solutions such as dish antennas and wireless access points?

Neither dish antennas nor wireless access points are allowed. Currently T-Mobile has exclusive wireless access in public areas.

Are there schematics of airport network pathways (available cable trays, telecommunication closets, horizontal and vertical raceways) available for tenant use?

Each tenant will be directed to the closest wiring closet to their respective spaces only.

13) Minimum Investment Amount Is there some possibility of TI's? The $350 psf minimum investment amount seems about right-- is the airport willing to consider contributing in the form of TI's or rent abatement for local, upcoming entrepreneurs?

No.


Page 5 of 26

General (All RFPs)

14) Minimum Qualification Requirements

For the last two of the three years our airport business gross sales qualify for the RFP minimums. For the years prior we acted as a master franchisee that managed a multi unit market. Each unit exceeded the required gross sales. The gross revenue of the master franchisee represents only a percentage the total gross sales and does not meet the minimum. Due to the management and operating role would we qualify in the financial experience portion of the RFP?

Yes, provided the type of experience meets the published minimum qualifications (i.e. three years within the last five years managing the type of concession for which proposer is proposing, with the exception of the Gourmet Market and Wine Bar Lease where the experience requirement has been broadened).

What would be considered favorable net worth criteria?

In assessing a proposer’s financial capability to take on the proposed lease, the Airport looks for adequate capitalization to complete a quality build out and cash or liquidity to operate well into the first year of the lease without relying solely on business revenues.

15) Operational Issues Our “concept” has not reached the required number of units for posting Nutritional Data; does the city require any such information?

No.

Are we able to use our own suppliers provided they can be approved by SFO Security?

Yes, so long as suppliers pass the background check.

What restrictions are there for imported products, i.e., beef products are generally CA processed. In the unlikely event of a USDA ban on US products, are we able to import overseas beef approved by the USDA?

Are there any restrictions on any USDA approved imported items?

Tenant is required to follow best business practices and the Airport’s Sustainable Food Guideline, as provided in Exhibit B of the Lease.


Page 6 of 26

General (All RFPs)

15) Operational Issues Food and Beverage Resources from overseas or out of states options. What is tax? And any exemption? Delivery procedure?

This question is for tenant to find out and comply with the Airport.

16) Opening Date; Relocation JBT AeroTech just received the award for construction in September 2009 and anticipates completing its portion of the project in the first half of 2010 prior to the terminal's final completion in the first quarter of 2011.

a) Does this mean the terminal will not open until 2011?

b) How does this impact our opening for business?

c) Premise

i) If our unit is open and we are forced to relocate, how does SFO Authorities calculate the maximum reimbursement amount?

ii) How long is the review process before the reimbursement is made?

a) Anticipated opening date of the terminal is February 2011.

b) No impact to the Terminal 2 Opening Date

c) Please see review § 1.2 Relocation, Expansion, Contraction of the Lease. Reimbursement, if any, usually represents unamortized capital investment costs.

Length of time for review and issuance of check, if any, should not exceed 45 days.

17) Permitted Use Will the Japanese and Chinese concepts have exclusivity on rice dishes or rice bowls throughout the terminal?

No.


Page 7 of 26

General (All RFPs)

18) Possessory Interest Tax What are the current property taxes PSF? The San Mateo County Assessor’s Office assesses the property tax for the Airport. This tax is based on primarily upon a tenant’s lease term and rent, and present value of the property, leasehold improvements on tenant’s business personal property statement – Schedule B.

Website: www.smcare.org Email: [email protected] Telephone: 650.363.4500 Address: 555 County Center Redwood City, CA 94063

19) Proposal Bond Can Cashier’s check be submitted in lieu of Surety Bond?

The Airport can accept a cashier’s check in lieu of a surety bond, for the first $200,000 of the bond requirement.

For the food & beverage RFPs, if the proposal deposit is submitted in the form of a cashier’s check, who should the check be made out to?

“City and County of San Francisco, Airport Commission”

Is there a “Cashier’s Check Form” or template for the “Proposal Bond Form” or can we just attach the Cashier’s Check to the page in the correct section?

There is no cashier’s check form or template. Please attach the original cashier’s check to the proposal submittal.

Samples of proposal bonds are included in the RFP under Part VI, Submittal 7.

20) Request for full-day observation

Is it possible that I can get through the security checkpoints to do a full-day observation?

Unfortunately, we are unable to accommodate this request.


Page 8 of 26

General (All RFPs)

21) Sales Information Provide sales figures of some of the existing food operators in Terminals 1 and 3, as well as current rent structures.

Do you have historical concession sales record of cocktail lounge and quick service in terminal 1 and terminal 3?

Please see http://www.flysfo.com/web/page/about/T2/concessions/stats.html.

As for the current rent structure, rent is the higher of the Minimum Annual Guarantee or tiered percent rent, which ranges from 6% to 12%.

22) Schedule Extend the Deadline for submission of written questions or requests for clarification.

Per Addendum No. 1, comment deadline date has been extended until close of business, November 6, 2009.

Extend the proposal submittal deadline. Per Addendum No. 1, Proposal Submittal Deadline has been extended to January 6, 2010.

If there is a delay in opening caused by SF Authorities or work done by SFO contractors, are we still held to the fixed construction dates?

The Airport will notify the tenant of any delays within a reasonable period of time. Tenant is not held to the fixed construction date in the given scenario. It is important for tenant to complete its work within the 120 day construction period unless otherwise approved in writing by the Airport.

If there is a delay by ABC, Health or any local departments can we postpone the opening without penalty?

The Airport will work with the tenant should the delay be evidently caused by another outside party.

If the SFO design impacts the tenant design and causes inspection failure, what is the tenant’s recourse for reimbursement of construction or delay and how and when does the reimbursement take place?

The Airport will work with the tenant to ensure that such an incident does not occur.

If any matters for change orders on construction or design from SFO causes delay of opening, can tenant obtain any waiver to delay opening?

The Airport will work with the tenant should the delay be caused by the Airport.


Page 9 of 26

General (All RFPs)

22) Schedule (continued) What is the expected opening date for the terminal? Opening date for T2 is anticipated to be February 2011. All tenants are to be open on the Terminal Opening Date.

What is the expected opening date for the tenants?

There may be a brief period prior to the Terminal 2 Opening Date which we may require for tenants to operate. Such time is yet to be determined. Tenants will be informed as soon as date is available.

23) Seating If possible, could you please provide an estimate of how many actual seats are being planned for the food court seating area as well as for the boarding areas? How, for example might the numbers compare to the hub of Boarding Area F?

There are 465 planned seats in the food court, and 1,311 planned seats in the gate hold rooms. There are approximately 300 seats in the Hub F food court.

24) Submittals Federal tax returns are very long and consist of many pages. Can we use the first 4 pages of the federal tax returns to show the gross sales numbers or do you want all of the pages?

The first four pages of a federal tax return are adequate.

If there is more than one company interested in submitting a proposal for the same concept, and these companies are franchisees under the same corporation, will you accept proposals from both?

Yes.

Can franchisee as well as a franchisor submit proposals for the same space?

Yes.

Part VI Submittal 6 Evaluation Criteria - part of Submittal 5?

Pagination error. Page 1 of the Evaluation Criteria should read “Submittal 6 - Page 1.”

Part VI Submittal 6 Evaluation Criteria, Subsection 3 - Instructs to use Submittal 7 for the Financial Pro Forma. Submittal 7 is the Proposal Bond format.

Please use Submittal 8, Financial Pro Forma, to complete this information.


Page 10 of 26

General (All RFPs)

24) Submittals Part VI Submittal 2.B.2 Evidence per qualifying years. Can franchise documents from Subway (showing gross income) be submitted to provide evidence of gross income instead of financial statements or tax statements?

Yes. The information, however, is limited to facility(ies) owned or managed by the proposer.

25) Union Is the airport unionized? Will our employees be required to join a union or will it be optional?

The Airport is requiring for all proposers to sign Submittal 4, Statement of Commitment to Labor Harmony. The Airport has a Labor Peace/Card Check provision in all its concession leases.

All Leases (Part VIII of all RFPs)

26) Lease Summary, page ii; § 2.1 Term - Commencement Date

Please further define Commencement Date. Commencement Date is the date when space is turned over to tenant to begin its construction.

27) § 2.1 and § 2.4 Revise provision in either § 2.4 or § 2.1. One language contradicts the other.

Lease § 2.1 is amended to allow the City up to one year to deliver possession of the premises to Tenant, after which either party may terminate the Lease by notice to the other.

28) § 2.3 Late Opening Charge Would the City consider excepting delay beyond the control of the tenant from the late opening charge provisions contained in Section 2.3?

This section applies to a delay in opening date caused by the Tenant. If delay is proven not to be caused by Tenant, Tenant will not be penalized.

29) § 3.5 Hours of Operation Is the tenant required to operate 16 hours like the other tenants/units even though we don’t have a breakfast menu?

Lease requires for tenant to be open 16 hours a day, 7 days a week. The Airport is willing to review this requirement with the tenant after the terminal opens and airline schedules are known.


Page 11 of 26


30) § 3.6 Prices In Section 3.6 Prices, please insert “on average or in the aggregate” following “no more than ten percent (10%) in the second sentence. This allows for normal rounding up or down on specific items while remaining with the 10% requirement in total.

Organic foods tend to be about 10-15% higher in cost. Would you consider raising the street pricing rule to 20%?

No. Tenant may not charge for each item any more than 10% of off-Airport facility pricing.

31) § 3.8 Other Operational Requirements

Subsection (b) - is the City likely to provide common trash areas? If so, what would be the charge to the Tenant, or how would the charge be calculated or determined?

Tenant is required to provide its own trash receptacles within its Premises. The referenced common trash area is the use of a trash compactor for which the Airport currently charges, under a separate agreement, as follows: $342 per month for green-certified, or $456 per month for non-green certified business.

Subsection (c)(iii) - what arrangements are there or what arrangement will there be for tenant employee parking?

Tenant can apply for employee parking at a separate charge. Current charges are posted on line at http://www.flysfo.com/investor/SummaryChargesFY0910.pdf.

32) § 3.8 Other Operational Requirements (continued)

There are additional fees that I'd like to know more about, those being the Tenant Infrastructure Fee, the Food Court Maintenance Fee and the Initial Promotional Charge. As I read the RFP, these are all discrete, required fees that are in addition to the MAG. Is that the case?

Yes. The Infrastructure Fee, Food Court Maintenance Fees, and Promotional Charge are additional charges for tenant in addition to Base Rent, which is the higher of MAG or tiered percent rent.

32) § 4.3 Adjustment to Minimum Annual Guarantee

Rent increase - Is there any cap i.e. a maximum increase per year?

There is no cap on increase per year.


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32) § 4.3 Adjustment to Minimum Annual Guarantee (continued)

What “Comparison Index” is used for Minimum Annual Guarantee increases?

As provided on page 2, 3. b. Rent of the RFP and § 4.1 (b) of the Lease, the Comparison Price Index for the Terminal 2 Food and Beverages Leases is U.S. Department of Labor, Bureau of Labor Statistics known as “Food Away From Home – All Urban Consumers – San Francisco-Oakland-San Jose, California.”

33) § 4.5 Rent During Construction

Does the rent during construction of 20% of gross revenue include all other costs: utilities, CAM, etc?

Per this addendum, rent during the construction period is reduced from 20% of gross revenues achieved to the highest tier of percentage rent listed on the individual leases. This does not include utility charges, food court maintenance, or other fees.

34) Section 4.10 Other Reports and Submissions

Delete “as well as that pertinent portion of both the California and Federal income tax returns.”

No.

35) § 4.16 Severe Decline in Enplanement; MAG Suspension

Subsection b.ii - Should only pay the lowest level of percentage rent (e.g. if the tenant has reached $1million in gross sales and then a Severe Decline happens, the tenant should only pay 6% not 10% percentage rent).

No.

36) § 5 Assignment or Subletting If the partner structure changes (i.e. one partner passes) do the entities have to maintain the qualification throughout the lease?

Partner structure could change from time to time, Is there any requirement for approval from SFO when partnership structure changes. Any case study as reference available?

The Airport has the approval rights for a substantial transfer of ownership interest. Please review § 5.2 Changes in Tenant of Lease. The Airport does not have a case study available.

37) § 5.5 Excess Rent. Delete Lease 5.5 Excess Rent No.


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38) § 7.2 Tenant’s Work; Minimum Investments

I noticed that there's a section entitled "Minimum Investment Amount", calculated at $350 per square foot. The only thing I can think this is talking about is that the RFP is requiring construction of facilities within the square footage of the respective leases. Is that correct or am I misinterpreting what I'm reading?

The minimum build out cost of $350 per square foot is based on the square footage which makes up the premises of each lease.

39) § 7.4 Structures and Fixtures; Definition of Effective Date

How will the “Effective Date” be determined?” If this is to coincide with execution of the lease, is 30 days sufficient to get 100% design plans approved?

Revise language in that Tenant fails to submit plans and specifications which meet the approval of City within 90 days [instead of 30 days] after the Effective Date.

40) § 8.3 Shared Tele-communication Services; § 4.11 Tenant Infrastructure Fee

Regarding Section 8.3, have STS Program charges or rates been established? Also, is the Airport Communication Infrastructure Charge referred to in this Section the same or different as the Tenant Infrastructure Fee referred to in the Summary and Section 4.11? If different, what is this charge amount and/or how will it be determined?

STS charges and/or rates have been established. The STS is different from the Tenant Infrastructure Fee. Please see attached for STS charges. The Tenant Infrastructure Fee is listed in the Summary pages of the Leases provided in the RFPs.

41) § 11 Promotional Program Add some language that allows for consultation with the Tenant on the promotional program. Also, there should be some reasonable limit to the charge.

The Airport provides at minimum 30-days notification for any fee adjustment. Lease language remains as is.


Page 14 of 26


42) § 12 Waiver; Indemnity; Insurance

Is there any recourse for rent or damages for any of the following:

a) Closed by Earthquake, Flood, Disease, iced, storm, fire, and others.

b) Building construction defeated ( leaking, HVAC damages, structure problems)

c) Building utilities service ( including cable, telephone, etc) closes service

d) Terrorist attack closes building, before or after damages occurring

Tenant’s recourse is its insurance coverage for any of the crises mentioned.

43) § 13 Deposit If we terminate the lease, how do we get our deposit back?

The deposit may or may not be returned subject to the provisions of an early termination agreement.

How long does the process take of deposit being returned?

The Airport will ensure that tenant met its lease obligations upon termination of the lease, and will return tenant’s deposit within a reasonable time period.

44) § 14.5 No Abatement of Rent; Tenant’s Remedies

§ 14.5 (a) – Add at the end of the first sentence “except as noted in this section.”

No.

45) § 15.3 Remedies Section 15.3 – Delete “Upon occurrence and during the continuance of an Event of Default” and replace with “Should Tenant fail to cure an Event of Default by the Cure deadline”.

No.

46) § 17.3 Environmental Indemnity

Section 17.3 – Add “in violation of any law or regulation” after “any Hazardous Materials on the Premises” in the second to last line. Hazardous Materials, as defined to include natural gas, may be in appropriate for an F&B lease.

No.


Page 15 of 26


47) § 17.5 Closure Permit Section 17.5 – Add “brought on the Premises by Tenant” after “during the Term” in the second to last line.

No.

48) § 18.4 Parking Taking; Election to Terminate

Subsection (b) – Add “or Tenant” after “City”. No.

Subsection (c) - Please delete “upon the thirtieth (30th) day after such notice is given and replace with “effective upon the date of Taking”.

No.

49) § 18.7 Temporary Takings Replace “affected thereby, and Tenant shall continue to pay rent, and to perform all of the terms, conditions and covenants of this Lease” in the second half of the first sentence with “in effect but Tenant shall have no obligation to pay Rent, and to perform all of the terms, conditions and covenants of this Lease until the Taking ceases.”

No.

50) Exhibit B Use and Operational Requirements

Item C - How enforceable is the 16 point sustainability food policy and what ways do you try to enforce them. And are current food and beverage tenants abiding by this policy?

Out of the 16 elements of the Airport’s Sustainable Food Guideline, the first seven items are required. The remaining nine items are to be complied with to the very greatest extent possible. Along with relying on Tenants to abide by their leases, staff will also conduct periodic audits to ensure compliance of this lease requirement. This is a new policy and we have not fully audited our existing tenants.

During the Informational Meeting, the question was asked if a concept could sell items not specified in the "Permitted Uses". RDM's reply was that if its existing facility sold that item, it would be okay. Advised against this without some right of review or denial by SFO.

Successful proposer’s menu offering will be reviewed and approved by the Airport to ensure that concept remains focused.


Page 16 of 26

Bakery and Coffee Facilities

51) Fees and Charges; Food Court Maintenance Fee

The food court maintenance fee of $64,022 a year is too high, due to the fact that the majority of the sales from these two coffee locations will not be using the food court seating. The recommendation is to lower the food court maintenance fee.

No.

Please clarify the food court maintenance fee for the two in-line bakery/coffee concepts - appears out of line: at 1,227sq. ft. /$64K they are charging $52 sq. ft. vs. the 4-concept quick serve 3,995 sq. ft./$40,700 or $10.30 sq. ft.

This food court maintenance fee is based on sales projections for the different concepts. Correct first year food court maintenance fee for both spaces in the Bakery and Coffee Facilities Lease is $62,373 annually.


Even though Space #4 is bigger than Space #2, the tenant needs to have the ability to offer a similar menu and offerings at both locations, including sandwiches.

Tenant is already allowed to sell sandwiches. Because of the limited square footage for Space #2, the Airport would like for the Tenant to maintain focus of a coffee concept.

53) Infrastructure Components Will the “Bakery & Coffee Facilities” have a stub-out for grease waste? The “Bakery & Coffee Facilities” needs to have a stub-out for grease waste. This should be included in Exhibit “B” of the lease

Space 4 will have a grease waste stub. Space 2 will not.

Cocktail Lounge Lease

54) § 1 Premises The cocktail lounge appears to have support beams restricting the construction. Is the Lease Line fixed or can we adjust per your approval?

Lease line is set. The new premises drawing reflecting a decrease to 1,900 square feet will be distributed upon availability.


Page 17 of 26


54) § 1 Premises (continued) How high is the ceiling? Ceiling heights vary throughout T2 for various reasons, mostly architectural aesthetic reasons, not because of utilities. The ceiling in the cocktail lounge will be installed by the base building contract and is a continuation of the hold room ceiling. This lends a lounge feel to the hold rooms and entire boarding area. The ceiling slopes in two directions in the hold rooms. Its lowest approximately in the middle of the space and slopes upward toward the windows and also toward the food court area.

Are there any metal layers in the walls which would block wireless signals?

WiFi design for T2 takes into account architectural features and WiFi is not blocked.

55) § 8.3 Shared Tele-communication Services

What forms of internet access are available? T1? Multiple T1s? Business Ethernet? What are the SLAs?

Public Internet Access (PIA) $110.00

PIAPro $220.00 T1/DS1 $139.00 ZTERM $ 190.00

SLAs for installations are generally 5-10 business days after providers due dates.

Can we get static IP addresses for our facility? Airport ITT does offer static IP addresses, PIA (single IP address ) and PIAPro (5 IP static IP addresses).


“The tenant shall display and sell, on a non-exclusive basis…no more than six types of wine.” This limitation appears in the Cocktail Lounge Lease. Does this limitation also apply to the Sit Down Restaurant?

No.


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56) Exhibit B Use and Operational Requirements (continued)

Request that cocktail lounge concept be more similar to the current bar/restaurant facilities located at SFO. Limiting the food menu to tapas style will restrict family or individual’s that’s 21 and below. This also means that the return on investment will take much longer than in the current facilities. By having a restaurant/bar concept will entail a far more better revenue to its operator and most of all the airport.

No.

Are Smoothies allowed? No.

Are Herbal Teas allowed? No.

Wine books, liquor books, Cook books? No.

Kitchen Accessory? No.

The Cocktail Lounge should also be allowed to serve fresh sandwiches.

No.

Are we able to sell wine/beer/liquor to go if ABC permits?

Yes.

Are we able to sell BP Free Bottle or reusable drink ware for water or other items?

Tenant’s pricing shall be the same or comparable to prices found in Tenant’s menu at Tenant’s other facilities, if any, or as determined by Director to be comparable.

Any retail price limitations? Tenant pricing shall be the same or comparable to prices found at Tenant’s other facilities, if any, or as determined by Director to be comparable.

Free internet service - Are tenants allowed to have free access internet for their customers?

Yes, at a charge to the tenant.


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Any restrictions on the hours of service of alcohol? Tenant is required to abide by the Alcohol Beverage License rules and regulations.

Are we able to work with other “lounge services” i.e. airlines or other groups to provide related services at our facility?

Can we develop a relationship with the lounge services with previous lounge in terminal 1 or 3 or other terminals as the reference?

Tenant is allowed to negotiate an arrangement with the airlines, so long as the provided services and menu offering is within tenant’s lease.

If the facility loses service, is emergency power available?

The Airport will have back-up emergency power.

Can we have our own emergency power facility available on site as backup power for our computers or important equipment?

Tenants can provide their own commercial grade battery powered emergency power compatible with a commercial environment.

Can we provide music and movies within our premise through TV, computer or internet service?

Design of the leased space, including entertainment equipment must be reviewed and approved by the Airport’s Design Review Committee.

Can we have touch screens that allow mood music for consumers tables

Yes.

Can we provide band or cooking show within our premise?

Perhaps. Both would be subject to Airport approval.

Are there any limitations on service programs provided by our lounge:

The Airport will review proposed service programs in the lounge.

Are we allowed multiple languages and channel service including private channels for our guests?

Tenant is allowed multiple languages for its TV programming. The Airport will consider the private channels.


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Do we have a right to sell advertisement on our TV located within our premise (for example Marriot hotel Channel)?

No.

Does SFO charge income from advertisement from our TV programs? Charges for participating in the advertisement program with American Airline Advertisement Program?

No. Advertising of this nature is not permitted.

Are there any special advantages or options program to participate in through SFO terminal 2, i.e. AA advertisement program.

Not presently.

Confirm that the cocktail lounge will not be another restaurant with a bar. Will the restaurant have a limited bar area, which is vital to the success of the cocktail lounge concept?

The Airport is looking for a true cocktail lounge, not another sit-down restaurant. The Airport will limit the bar area in the sit-down restaurant to 10 seats.

57) Electrical Is there a server room with adequate power and cooling for 2 8 ft high racks, and minimum 12 sets of 120 volt outlets with grounds?

This would need to be provided in tenant space or concession storage at tenant’s cost.

58) Natural Gas Is natural gas available? Tenant Work Letter does not specifically state Cocktail Lounge. Does the mention of Bar include the cocktail lounge?

Natural gas is available to certain leaseholds, including the cocktail lounge.

59) Request for Information on current Food and Beverage Facilities

Do you have a cocktail lounge and quick serve concept in the American Airline terminal? And, do you have same for other international airports like LAX or Chicago?

There is no cocktail lounge in the Boarding Area “E” terminal from which American Airlines currently operate. There are four (4) quick serve units in or near Boarding Area “E” (Klein’s Deli, Guava and Java, Subway and Jalapeno Tacqueria). We do not have data from other airports but interested parties are welcome contact the respective airports for such information.


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60) Request for Airline Info Where will the American Airlines Admirals Club be relocated to?

American Airlines’ Admirals Club will be located behind retail spaces 20, 21, and 22.

Are you able to provide a sample schedule of American Airline flights for Terminal 2?

The Airport does not have this information. Feel free to review American Airlines’ flight schedule on its website.

61) Request for Airline Info Will Virgin have an executive club? There are currently no plans for Virgin America to have a club room.

61) Airport Work Have the airport provide common area seating dedicated to the Cocktail Lounge of 1,500-1,800 square feet. The tenant should not be charged the monthly MAG for that area. Airport to provide lighting, flooring, waist receptacles, electrical outlets (laptop plug-ins) and railings. Tenant will provide tables and chairs. The airport should maintain the common area seating and charge the tenant a food court maintenance fee based on the revised square footage of the Cocktail Lounge.

No, seating should be designed and built-out within and by Tenant‘s leased space.

62) Rendering When will the rendering be available for the cocktail lounge?

Attached as Exhibit A.

Gourmet Market and Wine Bar Lease

63) Contingency of Award of Lease

We are requesting that SFO consider allowing the Gourmet Market and Wine Bar Lease (Space 18) to be contingent on the award of the Newsstand, Coffee and Specialty Stores Lease.

No.


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Gourmet Market and Wine Bar Lease

64) Premises In the Gourmet Market and Wine Bar Lease, is the approximate square footage amount allocated to the Gourmet Market, and the approximate square footage amount allocated to the wine bar each flexible staying within the total approximate 4,995 square?

Yes.

Does the wine bar have to be located on the side, or can it go anywhere within the foot print of the location?

The wine bar can be situated anywhere within the leasehold space of the Gourmet Market and Wine Bar.


What are the required alcohol offerings, and what are the prohibited alcohol offerings in the Gourmet Market in the Gourmet Market and Wine Bar Lease?

Alcohol offerings is restricted to wine and beers in the gourmet market.

66) Limited Tables and Chairs Are there a maximum number of seats in the Gourmet Market?

Tenant may not have more than 16 seats in the Gourmet Market.

67) Proposed Concept Should the winner be allowed to duplicate whatever concept they have within the lease space, in another awarded lease space in the T2 development?

No.


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Quick-Serve Leases

68) Minimum Qualification Requirements

Modify qualification requirements so that the last 2-½ years of current operation will meet qualifications.

No.

Modify gross revenue qualification as follows: Proposer to have generated $2m in one of the qualifying years.

No.

69) Part VI Submittal 6.2 Design Intentions

Design is particular to desired space A, B, C, or D? Proposers may focus their design submittal on any of the four spaces. Keep in mind, however, that the Airport Commission will ultimately award the individual spaces.

Can an architect have access to spaces A, B, C, or D in preparation for proposal?

Tours were available for interested parties during the week of November 16, 2009. More tours will be scheduled, if needed.

70) Rent, Fees and Charges Just to confirm-- your current proposal is $48 psf in rent (or percentage rent, whichever is higher) + $1 psf in promotional charges + $18.26 psf in infrastructure fees + a lump-sum food court maintenance fee of $41,000-- all calculated annually but paid monthly?

Yes. The infrastructure and food court maintenance fees vary by space.

Food Court Maintenance Fees: I recommend that the maintenance fees be based on gross sales rather than be a fixed amount regardless of sales.

They are allocated to tenants, in part, based on sales volume.

Food Court Maintenance costs: The quick serve lease states the charge to be $40,766.00 for the first year. The Bakery Coffee lease states $64,022. Is this difference due to the fact that the Bakery Coffee lease has 2 locations?

Yes.


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Quick-Serve Leases

71) Rent, Fees and Charges (continued)

Why not bill the food court clean up fee by sales, adjusted annually?

Initial year is calculated based on projections. Every year thereafter will be adjusted based on sales.

71) § 3.5 Hours of Operation Will there be required hours of operation for the quick-serve leases? Will individual operators have the flexibility to stay open later than posted hours? Do all of the quick-serve leases serve breakfast, lunch and dinner?

All tenants in Terminal 2 are required to operate 16 hours a day. Any hours beyond that are permissible.


Please verify that “Bakery” items will be allowed in the quick serve locations.

Bakery items, integral to an awarded concept, will be allowed. The Airport does not want a pure bakery concept, however, under the quick-serve leases.

The lease terms specify that we "cannot operate a bakery, wine bar..."-- can we sell beer and wine? Are there special requirements for acquiring a beer/wine license at the airport?

The Airport will review the proposed concepts and proposed menu offering to ensure proposed concept is kept true. If a tenant’s concept typically includes beer, for instance, we will allow it here. Tenant must apply from Alcoholic Beverage Control the appropriate license should it be approved to sell beer and/or wine.

73) Electrical How many electrical volts and amperes will be available at each of the four quick serve locations?

All concessions will receive 277/480 volt, 3 phase, 4 wire service with a maximum of 125 amps.


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Sit-Down Restaurant

74) Design and Operation; Use and Operational Requirements

The intent “Full-Service Restaurant” is to be a restaurant with a bar, not a bar with a restaurant. We recommend that the restaurants bar should be limited to 8:

• The size of the bar can be no larger than 10% of the overall square footage of the space;

• Have no visible liquor bottle display promoting that it is a bar;

• The bar portion should be located on the inside back wall lease line away from the entry. A passenger would have to walk through the restaurant to get to the bar.

• Alcoholic beverage may not exceed 25% of the total sales.

The number of seats in the bar area is limited to 10. All other requests made (i.e. limiting total alcoholic beverage sales and design changes to downplay the bar within the restaurant) are denied.


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Sit-Down Restaurant

75) Design Submittal What are the submission requirements for the RFP for T2 Sit Down restaurant location? Can you kindly clarify for me what are the specific deliverables for the design proposal portion of the tenant candidate submission?

Submittals are found in the RFP, Part IV. Specific requirement of design submittal is found in Submittal 6, Item #2, as follows:

Design Intention and Capital Investment • Images depicting the front elevation, signage,

floor plan and interior design intent. While renderings are preferred, photographs of existing similar facilities along with a discussion of the design intent for SFO may be acceptable.

• Overall appeal and quality of design intent • Design supports the proposed brand/concept

and a strong merchandising strategy is incorporated into design

• Proposed capital investment amount • Reflects Tenant Design Guidelines


“The tenant shall display and sell, on a non-exclusive basis…no more than six types of wine.” This limitation appears in the Cocktail Lounge Lease. Does this limitation also apply to the Sit Down Restaurant?

No.

77) Phased Delivery and Required Opening

For the Terminal 2 Sit Down Restaurant lease, is the phased delivery concept contained in Section 2.2 and use of the “Facility” and “Facilities” terms (which are not defined) throughout the Lease necessary since the “Premises” will be just one location?

Yes, in the event that the Airport delivers the premises in phases.

Exhibit A TERMINAL 2 COCKTAIL LOUNGE LEASE – RENDERING

This rendering is provided only to convey that the Airport desires a design which affords good visibility from the holdrooms and public space through the cocktail lounge and out the windows.

respondents to the terminal 2

Documents