EXHIBIT 10(u)
THE PORT AUTHORITY
OF NEW YORK AND NEW JERSEY
WORLD TRADE CENTER
--------------
AGREEMENT OF LEASE
between
THE PORT AUTHORITY OF
NEW YORK AND NEW JERSEY
and
SCOR U.S. CORPORATION
TABLE OF CONTENTS
Section 1. Letting 1
Section 2. Term 1
Section 3. Rights of User by the Lessee 2
Section 4. Basic Rental 3
Section 5. Governmental Requirements 4
Section 6. Rules and Regulations 5
Section 7. Responsibilities of the Lessee 5
Section 8. Maintenance and Repair 8
Section 9. Casualty 9
Section 10. Indemnity 11
Section 11. Ingress and Egress 12
Section 12. Construction by the Lessee 12
Section 13. Signs 21
Section 14. Injury and Damage to Person or Property 21
Section 15. Additional Rent and Charges 21
Section 16. Rights of Entry Reserved 22
Section 17. Condemnation 24
Section 18. Abatement of Rental 25
Section 19. Assignment and Sublease 26
Section 20. Termination 33
Section 21. Right of Re-entry 35
Section 22. Survival of the Obligations of the Lessee 36
Section 23. Reletting by the Port Authority 37
Section 24. Waiver of Redemption 38
Section 25. Remedies and Suits Against the Lessee 38
Section 26. Surrender 38
Section 27. Acceptance of Surrender of Lease 39
Section 28. Brokerage 39
Section 29. Notices 39
Section 30. Payments 40
Section 31. Late Charges; Monetary and Non-Monetary
Disputes 41
Section 32. Quiet Enjoyment 44
Section 33. Non-Liability of Individuals 44
Section 34. Headings 44
Section 35. Construction and Application of Terms 44
Section 36. Definitions 45
Section 37. Force Majeure 46
Section 38. Premises 47
Section 39. Governmental Compliance 47
Section 40. Services and Utilities 48
Section 41. Liability Insurance 52
Section 42. Port Authority Work; Additional Lessee Work 56
Section 43. Additional Space 60
Section 44. Lessee's Right to Extend the Letting 68
Section 45. No Gifts, Gratuities, Offers of Employment, etc. 70
Section 46. Security Deposit or Letter of Credit 71
Section 47. Additional Services 73
Section 48. Entire Agreement 75
THIS AGREEMENT, made as of the 10th day of January, 1995, by
and between THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter
called the "Port Authority"), a body corporate and politic, created by
Compact between the States of New Jersey and New York, with the
consent of the Congress of the United States of America, having an
office at One World Trade Center, in the Borough of Manhattan, City,
County, and State of New York, and SCOR U.S. CORPORATION, a
corporation organized and existing under the laws of the State of
Delaware, having an office and place of business at 2 World Trade
Center, New York, New York 10048 (hereinafter called the "Lessee"),
whose representative is Ann Sue Mushnick,
WITNESSETH, That:
The Port Authority and the Lessee, for and in consideration
of the rents, covenants and agreements hereinafter contained, mutually
covenant and agree as follows:
Section 1. Letting
The Port Authority hereby lets to the Lessee and the Lessee
hereby hires and takes from the Port Authority, at the World Trade
Center (sometimes hereinafter referred to as the "Facility") in the
Borough of Manhattan, City, County and State of New York, the space as
shown in diagonal hatching, vertical hatching, horizontal hatching,
diagonal crosshatching, crosshatching and stipple on the sketch
annexed hereto, made a part hereof and marked "Exhibit A", together
with the fixtures, improvements and other property of the Port
Authority located or to be located therein or thereon, and the space
as shown in diagonal hatching on the sketch annexed hereto, made a
part hereof and marked "Exhibit A-1", together with the fixtures,
improvements and other property of the Port Authority located or to be
located therein or thereon, the spaces, fixtures, improvements and
other property of the Port Authority shown on Exhibit A and Exhibit A-
1 being hereinafter collectively referred to as the "premises". The
Port Authority and the Lessee hereby acknowledge that the aforesaid
premises constitutes non-residential real property.
Section 2. Term
(a) The term of the letting of the premises under this
Agreement shall commence at 12:01 o'clock A.M. on the earlier of the
following dates: (i) the two hundred fourteenth (214th) day following
the Prior Entry Date, as such term is defined in paragraph (c) of this
Section, or (ii) such date as the Lessee commences business operations
in the premises. The term of the letting shall expire, unless sooner
terminated, or unless extended, at 11:59 o'clock P.M., on the day
preceding the fifteenth (15th) anniversary of the Rent Commencement
Date, as such term is defined in the Section of this Agreement
entitled "Basic Rental".
(b) If on March 22, 1995 the premises are not
available or ready for the commencement therein by the Lessee of its
proposed construction and finishing work pursuant to and in accordance
with the provisions of the Section of this Agreement entitled
"Lessee's Finishing Work" by reason of the fact that the Port
Authority has not then completed those provisions of the "Port
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Authority Work", as such term is defined in the Section of this
Agreement entitled "Port Authority Work", which are required to be
completed on or prior to the Prior Entry Date or by reason of a
casualty of the type described in the Section of this Agreement
entitled "Casualty", then the Port Authority may postpone the Prior
Entry Date for the premises and the Port Authority shall not be
subject to any liability for such postponement or failure to give
possession of the premises on such date except as provided in
paragraph (d) below. No such postponement or failure to give
possession of the premises on March 22, 1995 shall affect the validity
of this Agreement or the obligations of the Lessee hereunder.
However, in such event, the Prior Entry Date shall not occur until
possession thereof is tendered by the Port Authority to the Lessee;
tender shall be made by notice given at least five (5) days prior to
the effective date of the tender. In the event that notice of tender
of the premises is not given for possession thereof to commence on or
prior to March 21, 1996 for the reasons set forth in this paragraph
(b), then the letting of the premises under this Agreement shall be
deemed cancelled, and each party does release and discharge the other
from any and all claims and demands in any way related to the letting
of the premises based on this Agreement, or a breach or alleged breach
thereof.
(c) For purposes of this Agreement "Prior Entry Date"
shall mean March 22, 1995, as such date may be postponed pursuant to
the provisions of paragraph (b) above of this Section. The Lessee
shall be permitted entry into the premises on the Prior Entry Date for
the purpose of performing its construction and installation work and
the Lessee's use of the premises during the period commencing with the
Prior Entry Date and continuing up to the day preceding the
commencement date of the term of the letting shall be subject to and
in accordance with all the terms and conditions of this Agreement
except those relating to payment of rental and rights of user.
(d) In the event that the Prior Entry Date does not
occur on or before April 1, 1995 due to the Port Authority's inability
to complete those portions of the Port Authority Work which the Port
Authority has agreed to complete prior to the Prior Entry Date, then
the two hundred seventy-one (271) day period from the commencement
date of the term of the letting used to determine the Rent
Commencement Date shall be increased by the sum of the following: (i)
one (1) day for each of the first sixty (60) excess days plus (ii) one
and three quarter days (1 ) for each excess day, if any, after the
first sixty (60) excess days. For purposes of this paragraph (d)
"excess days" shall be the number of days in the period commencing
April 2, 1995 and ending on the day preceding the Prior Entry Date
less the number of days in the period subsequent to execution of this
Agreement by the parties hereto that the Port Authority or its
contractor is prevented from performing such portions of such Port
Authority Work by forces and conditions beyond the control of the Port
Authority.
Section 3. Rights of User by the Lessee
The Lessee shall use the premises for the following
purposes only and purposes incidental thereto and for no other purpose
whatsoever: as clerical, executive and administrative offices for the
Lessee's business of providing reinsurance services to firms providing
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insurance services to entities engaged in world trade and commerce and
such other type or types of business or operations engaged in or
previously engaged by other office tenants at the World Trade Center
whose eligibility and qualifications are determined by the Port
Authority under the provisions of Chapter 5 of Title 17 of the
Unconsolidated Law of the State of New York strictly on the basis of
their functions, activities and services in world trade and commerce.
In the event the Port Authority transfers fee title to the World Trade
Center or to the building in which the premises are located to other
than a governmental or quasi governmental entity, then notwithstanding
the foregoing sentence the Lessee from and effective the effective
date of such transfer may use the premises for general office purposes
consistent with the operation of a first class office building.
Section 4. Basic Rental
(a) The Lessee agrees to pay to the Port Authority a
basic rental for the premises as follows:
(i) During the period from and after
the Rent Commencement Date through the day
preceding the fifth anniversary of the Rent
Commencement Date at the rate of One Million Eight
Hundred Twenty-two Thousand Two Hundred Seventy-
two Dollars and No Cents ($1,822,272.00) per
annum, in advance in monthly installments of One
Hundred Fifty-one Thousand Eight Hundred Fifty-six
Dollars and No Cents ($151,856.00) each, on the
Rent Commencement Date and on the first day of
each calendar month thereafter throughout such
period.
(ii) During the period from and after
the fifth anniversary of the Rent Commencement
Date through and including the day preceding the
tenth (10th) anniversary of the Rent Commencement
Date, at the rate of One Million Nine Hundred
Eighty-three Thousand Nine Hundred Twenty-four
Dollars and No Cents ($1,983,924.00) per annum, in
advance in monthly installments of One Hundred
Sixty-five Thousand Three Hundred Twenty-seven
Dollars and No Cents ($165,327.00) each, on the
fifth (5th) anniversary of the Rent Commencement
Date and on the first day of each calendar month
thereafter throughout such period.
(iii)During the period from and after
the tenth (10th) anniversary of the Rent
Commencement Date through the balance of the term
of the letting under this Agreement, at the rate
of Two Million One Hundred Forty-five Thousand
Five Hundred Seventy-six Dollars and No Cents
($2,145,576.00) per annum, in advance in monthly
installments of One Hundred Seventy-eight Thousand
Seven Hundred Ninety-eight Dollars and No Cents
($178,798.00) each, on the tenth (10th)
anniversary of the Rent Commencement Date and on
the first day of each calendar month thereafter
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through the balance of the term of the letting
under this Agreement.
(b) If the Rent Commencement Date shall be other than
the first day of a calendar month, the installment of basic rental
payable on the Rent Commencement Date shall be the amount of the
monthly installment stated in subparagraph (a)(i), above, multiplied
by a fraction the numerator of which shall be the number of days the
letting was in effect in the calendar month in which the Rent
Commencement Date fell and the denominator of which shall be the
number of days in that calendar month and if the expiration or
termination date of the letting is other than the last day of a month,
the basic rental for the portion of the month during which the letting
is effective shall be the amount of the applicable monthly installment
similarly prorated. If any basic rental increase is effective on a
day other than the first day of a calendar month there shall be
payable in advance on the effective date of the rental increase an
installment of rental equal to one-twelfth of the annual rental
increase multiplied by a fraction, the numerator of which shall be the
number of days from and including the effective date of the rental
increase to the end of the month in which the rental increase was
effective and the denominator of which shall be the number of days in
that month.
(c) For purposes of this Agreement "Rent Commencement
Date" shall mean the two hundred seventy first (271st) day from the
commencement date of the term of the letting as such two hundred
seventy-one (271) day period may be increased by the provisions of
paragraph (d) of the Section of this Agreement entitled "Term" and the
provisions of the Section of this Agreement entitled "Construction by
the Lessee".
(d) The basic rental for the premises set forth above
in this Section shall be subject to adjustment during the term of the
letting of the premises in accordance with the provisions of Schedule
A attached to this Agreement and hereby made a part hereof.
Section 5. Governmental Requirements
The Lessee shall procure all licenses, certificates,
permits or other authorization from all governmental authorities
having jurisdiction over the operations of the Lessee at the premises
or at the World Trade Center which may be necessary for the conduct of
its operations. The Lessee shall promptly observe, comply with and
execute the provisions of any and all present and future governmental
laws, rules and regulations, requirements, orders and directions which
may pertain or apply to the operations of the Lessee on the premises
or at the World Trade Center or its occupancy of the premises which
are applicable or which would be applicable if the Port Authority were
a private corporation, and the Lessee shall, in accordance with and
subject to the provisions of the Section of this Agreement entitled
"Construction by the Lessee", make any and all improvements,
alterations or repairs of the premises that may be required at any
time hereafter by any such present or future law, rule, regulation,
requirement, order or direction, provided such improvements,
alterations or repairs are not required generally throughout the
building in which the premises are located unless such general
requirement results from the Lessee's particular manner of use of or
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its particular operations in the premises which are not common to
other tenants in the building in which the premises are located. The
provisions of this Section are not to be construed as a submission by
the Port Authority to the application to itself of such requirements,
or any of them.
Section 6. Rules and Regulations
The Lessee covenants and agrees to observe and obey
(and to compel its officers, members, employees, agents,
representatives, contractors, customers, guests, invitees and those
doing business with it to observe and obey) the Rules and Regulations
of the Port Authority (a copy of which is attached hereto, hereby made
a part hereof and marked "Exhibit R") for the government of the
conduct and operations of the Lessee, and such further reasonable
rules and regulations (including amendments and supplements thereto)
as may from time to time and throughout the letting be promulgated by
the Port Authority for reasons of safety, health or preservation of
property, or for the maintenance of the good and orderly appearance of
the premises and the World Trade Center or for the safe or efficient
operation of the World Trade Center, provided, however, that in case
of any conflict or inconsistency between the provisions of this
Agreement and any of the Rules and Regulations, the provisions of this
Agreement shall control. The Port Authority agrees that, except in
cases of emergency, it will give notice to the Lessee of every such
further rule or regulation adopted by it at least fifteen (15) days
before the Lessee shall be required to comply therewith. The Port
Authority shall not enforce any of the Rules and Regulations in such
manner as to discriminate against the Lessee.
Section 7. Responsibilities of the Lessee
(a) The Lessee shall conduct its operations in an
orderly and proper manner and so as not to annoy, disturb or be
offensive to others at the World Trade Center, and the Lessee shall
control the conduct of its officers, members, employees, agents,
representatives, contractors, customers, guests, invitees and those
doing business with it. Upon objection from the Port Authority
concerning the conduct of any such the Lessee shall immediately take
all steps necessary to cure or remove the cause of the objection.
(b) The Lessee shall not knowingly commit or knowingly
continue any nuisance on the premises, or do or permit to be done
anything which may result in the creation or commission of a nuisance
on the premises, and the Lessee shall not knowingly cause or knowingly
permit or continue to be caused or produced upon the premises, to
permeate the same or to emanate therefrom, any unusual, noxious or
objectionable smokes, gases, vapors, odors or objectionable noises.
(c) The Lessee shall not use or connect any equipment
or engage in any activity or operation in the premises which will
cause or tend to cause an overloading of the capacity of any existing
or future utility, mechanical, electrical, communication or other
systems, or portion thereof, serving the premises, nor shall the
Lessee do or permit to be done anything which may interfere with the
effectiveness or accessibility of existing and future utility,
mechanical, electrical, communication or other systems or portions
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thereof on the premises or elsewhere at the World Trade Center.
Nothing in this paragraph (c) shall be construed to impose any
liability on the Lessee for unknowingly overloading the electrical
system, which such overloading results from the Port Authority's
failure to supply electricity in accordance with the specifications
set forth in Schedule D.
(d) The Lessee shall not overload any floor, roadway,
passageway, pavement or other surface or any wall, partition, column
or other supporting member, or any elevator or other conveyance, in
the premises or at the World Trade Center and without limiting any
other provision of this Agreement, the Lessee shall repair, replace or
rebuild any such damaged by overloading. The Port Authority hereby
represents that the floor load for the premises is as stated in
Schedule D, attached hereto and hereby made a part hereof. Subject to
the provisions of the Section of this Agreement entitled "Construction
by the Lessee", the Lessee at its cost and expense may perform the
work necessary to reinforce the existing floor load in the premises.
(e) Except as hereinafter provided in this paragraph
(e), the Lessee shall not install, maintain or operate or permit the
installation, maintenance or operation on the premises of any vending
machine or service designed to dispense or sell food, beverages,
tobacco products or merchandise of any kind, whether or not included
in the above categories, or any restaurant, cafeteria, kitchen, stand
or other establishment for the preparation, dispensing or sale of
food, beverages, tobacco or tobacco products, or merchandise of any
kind or any equipment or device for the furnishing to the public of a
service of any kind, including without limitation thereto any
telephone pay-stations. Subject to all the terms and provisions of
this Agreement, and notwithstanding the provisions of the preceding
sentence of this paragraph (e) and Rule 20, the Lessee may install an
eating facility in the premises pursuant to an approved construction
application as provided in the Section of this Agreement entitled
"Construction by the Lessee" and may operate such eating facility with
its own employees, or arrange for the operation thereof by an
independent contractor or operator selected by the Lessee unless the
Port Authority reasonably determines that the said contractor or
operator will adversely affect or interfere with operations at the
Facility or will cause or contribute to the causing of labor problems
or disturbances thereat, and the Lessee may install food and non-
alcoholic beverage vending machines or arrange for the installation
and operation of such machines, subject to the Port Authority's
reasonable approval of the type and method of installation thereof,
and the Lessee may use an independent contractor, operator or supplier
for such machines selected by the Lessee unless the Port Authority
reasonably determines that said contractor, operator or supplier will
adversely affect or interfere with operations at the Facility or will
cause or contribute to the causing of labor problems or disturbances
thereat, provided that such eating facility and vending machines shall
be installed and operated solely for use by the Lessee's officers,
members, employees, contractors, customers, guests, and invitees. The
Lessee's agreement with any contractor, operator or supplier of eating
facilities or vending machines shall permit cancellation by the Lessee
on short term notice in the event the Port Authority notifies the
Lessee that such contractor, operator or supplier fails to meet the
standards described in this paragraph. In the event any of the
aforesaid installations shall require modifications or alterations to
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building systems or equipment (including heating, ventilating or air-
conditioning systems), and whether such modifications or installation
thereof are performed by the Lessee or by the Port Authority, the
Lessee shall be responsible for the cost of any such modifications or
alterations, and no such alteration or modification shall be commenced
until the Lessee has received an approved construction application
therefor. The Port Authority reserves the right from time to time to
make additional reasonable charges to the Lessee for any and all
utilities or other building services used in connection with any
eating facilities or any of the aforesaid machines, provided, however
that the provisions of this sentence shall not be applicable to
utilities and building services for which a charge or fee is
specifically provided for in this Agreement or for which this
Agreement specifically states that there will be no charge or fee.
The Lessee covenants and agrees that upon notification from the Port
Authority that objectionable odors emanate from the premises as the
result of the operation of any eating facility equipment or food
vending machines in the premises (whether through the building
heating, ventilating or air-conditioning systems or otherwise), the
Lessee will immediately take all necessary steps to eliminate such
odors, or if such odors cannot be so eliminated, the Lessee will
discontinue use of such eating facility or food vending machines and
shall not resume the use or operation thereof until written consent
therefor has been obtained from the Port Authority. Nothing herein
shall be deemed to permit the operation on the premises of any public
food or other merchandise or vending operation or service of any kind.
(f) The Lessee shall not use or make any reference, by
advertising or otherwise, to the names "World Trade Center" (except to
designate the Lessee's business address and then only in a
conventional manner and without emphasis or display and except in
connection with any contemplated subletting or assignment), "The Port
Authority of New York and New Jersey", "Port Authority" or any
simulation or abbreviation of any such names, or any emblem, picture
or reproduction of the World Trade Center, for any purpose whatsoever.
Upon notice from the Port Authority the Lessee shall immediately
discontinue any such use or reference.
(g) The Lessee recognizes that the Port Authority has
undertaken the planning, construction and operation of the World Trade
Center as a facility of commerce pursuant to concurrent legislation of
the State of New York, Chapter 209, Laws of New York, 1962 and the
State of New Jersey, Chapter 8, Laws of New Jersey, 1962. The
purpose, character and scope of the Lessee's occupancy, operation and
usage of the premises as described in the Section of this Agreement
entitled "Rights of User by the Lessee" are of primary importance and
inducement to the Port Authority in entering into this Agreement of
lease with the Lessee. The Lessee has represented to the Port
Authority that all its occupancy, operation and usage, throughout the
term of the letting hereunder, will be in strict accordance with and
subject to the provisions and requirements of the Section of this
Agreement entitled "Rights of User by the Lessee" and the Port
Authority has relied on such representations in entering into this
Agreement. Without affecting the Lessee's liability for any breach of
this representation and its obligations hereunder, in the event that
the Lessee has not complied with all the requirements of this Section
and the Section of this Agreement entitled "Rights of User by the
Lessee", within a period of ten (10) days after notice from the Port
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Authority of such non-compliance, the Port Authority may by five (5)
days' notice terminate this Agreement and the letting hereunder and
the same shall be and operate as a conditional limitation and have the
same effect as if it were specifically included as a ground for
termination under paragraph (a) of the Section of this Agreement
entitled "Termination".
Section 8. Maintenance and Repair
(a) Except to the extent of such items of cleaning
service as may be supplied by the Port Authority as stated in the
Section of this Agreement entitled "Services and Utilities", the
Lessee shall at all times keep the premises in a clean and orderly
condition and appearance, together with all fixtures, equipment and
personal property of the Lessee located in or on the premises,
including without limitation thereto the interior surface of windows
and both sides of all entrance doors.
(b) The Lessee shall repair, replace, rebuild and
paint all or any part of the premises which may be damaged or
destroyed by the acts or omissions of the Lessee's contractors,
customers, guests, invitees or other persons who are doing business
with the Lessee or who are on or at the premises or the World Trade
Center with the consent of the Lessee (such damage or destruction
occurring while such contractors, customers, guests, invitees or other
persons are at the premises or the World Trade Center in connection
with business being transacted with the Lessee or are at the premises
or the World Trade Center with the consent of the Lessee) and the
Lessee shall repair, replace, rebuild and paint all or any part of the
World Trade Center, including the premises which may be damaged or
destroyed by the acts or omissions of the Lessee, its officers,
members, employees, agents and representatives.
(c) The Lessee shall take good care of the premises,
including therein, without limitation thereto, walls, partitions,
floors, ceilings, doors and exteriors of columns, and all parts
thereof, and all equipment and fixtures, and shall do all non-
structural preventive maintenance and make all necessary non-
structural repairs, replacements, rebuilding and painting necessary to
keep the premises in good condition befitting office space in a first
class office building and to keep any improvements, additions and
fixtures made or installed during the term of the letting in good
condition befitting office space in a first class office building.
(d) In the event the Lessee fails to commence so to
make or do any repair, replacements, rebuilding or painting required
by this Agreement within a period of ten (10) days after notice from
the Port Authority so to do, or fails diligently to continue to
completion the repair, replacement, rebuilding or painting of all of
the premises required to be repaired, replaced, rebuilt or painted by
the Lessee under the terms of this Agreement, the Port Authority may,
at its option, and in addition to any other remedies which may be
available to it, repair, replace, rebuild or paint all or any part of
the premises included in the said notice, the Port Authority's
reasonable cost thereof to be paid by the Lessee on demand. This
option or the exercise thereof shall not be deemed to create or imply
any obligation or duty to the Lessee or others.
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(e) The Port Authority agrees that during the term of
the letting hereunder it will maintain and operate those portions of
the Facility affecting the premises and those portions of the Facility
utilized by the Lessee for access to the premises and will provide
services to the premises and will maintain the systems providing such
services to the premises all substantially in the manner and at the
level existing on the date of this Agreement. The Port Authority
further agrees to maintain the public areas in the building of which
the premises are a part, to clean the exterior of windows in the
premises and to make structural repairs to the exterior walls, floor
slab and structural building supporting members in the premises to the
extent necessary to keep the premises in a reasonably good condition
for the operations of the Lessee under this Agreement, provided that
nothing herein shall relieve the Lessee from the requirements of the
Section of this Agreement entitled "Governmental Requirements".
Section 9. Casualty
(a) In the event that, as a result of a casualty
insurable under the New York standard form of fire insurance policy
and extended coverage endorsement, the premises or areas at the World
Trade Center other than the premises are damaged (such areas other
than the premises as may be damaged hereinafter in this Section called
the "damaged areas") without the fault of the Lessee, its officers,
members, employees, customers, guests, invitees or other persons who
are doing business with the Lessee or who are on the premises with the
Lessee's consent, so as to render the premises untenantable in whole
or part, then
(1) if the Port Authority finds that the
necessary repairs or rebuilding can be completed within two
hundred seventy (270) days after the occurrence of the
damage, the Port Authority shall repair or rebuild with due
diligence, and the rental hereunder shall be abated, as
hereinafter provided in the Section of this Agreement
entitled "Abatement of Rental", only for the period from the
occurrence of the damage to the earlier of (i) fifteen (15)
days from the notification of the completion of the repairs
or rebuilding or (ii) the commencement of business
operations by the Lessee in the damaged areas of the
premises; or
(2) if the Port Authority finds that such repairs
or rebuilding cannot be completed within two hundred seventy
(270) days after the occurrence of the damage, then the Port
Authority shall have options: (i) to proceed with due
diligence to repair or to rebuild the premises or damaged
areas as necessary in which event the rental hereunder shall
be abated as provided in the Section of this Agreement
entitled "Abatement of Rental" only for the period from the
occurrence of the damage to the earlier of (x) fifteen (15)
days from notification of the completion of the repairs or
rebuilding or (y) the commencement of business operations by
the Lessee in the damaged areas of the premises; or (ii) to
terminate the letting as to the entire premises.
(b) In the event of damage to the premises or damaged
areas under circumstances described in paragraph (a) of this Section
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9, the Port Authority within thirty (30) days after the occurrence of
the damage will furnish to the Lessee in writing a good faith estimate
of the time required to complete the repairs or rebuilding, such good
faith estimate to be arrived at by the Port Authority after consulting
with its Chief Engineer. In the event the Port Authority estimates
that the repairs or rebuilding cannot be completed within two hundred
seventy (270) days after the occurrence of the damage, then, upon
written notice to the Port Authority within twenty (20) days following
its receipt of the Port Authority's estimate, the Lessee shall have
the right to terminate the letting as to the entire premises under
this Agreement, provided that prior to or contemporaneously with the
exercise of such right to terminate this Agreement and the letting
hereunder, a responsible officer of the Lessee shall certify to the
Port Authority that on an economic and operational basis the premises
cannot be used by the Lessee for the operations described in Section 3
of this Agreement prior to the substantial completion of the repairs
or rebuilding and provided further that the Lessee is not under a
notice of termination from the Port Authority either on the date of
the giving of its notice to the Port Authority or on the effective
date thereof. Termination pursuant to this paragraph (b) shall have
the same force and effect as if the termination date were the original
expiration date provided in this Agreement.
(c) If damage to the premises or damaged areas under
circumstances described in paragraph (a) of Section 9 occurs during
the period which constitutes the last two (2) years of the term of the
letting, the provisions of this Section 9 shall be applicable, except
that for the purpose of applying such provisions the two hundred
seventy (270) day periods referred to in paragraphs (a) and (b) above
of this Section 9 shall in each instance be deemed changed to ninety
(90) days.
(d) The parties do hereby stipulate that neither the
provisions of Section 227 of the Real Property Law of the State of New
York nor those of any other similar statute shall extend or apply to
this Agreement.
(e) The Lessee shall give the Port Authority immediate
notice in case of any fire, accident or casualty in the premises or
elsewhere in the World Trade Center if the occurrence elsewhere in the
World Trade Center is known to and involves the Lessee, its officers,
members, employees, agents, representatives, contractors, or is known
to any of them and involves customers, guests or invitees of the
Lessee.
(f) In the event of a partial or total destruction of
the premises, the Lessee shall as soon as practicable remove any and
all of its property and all debris from the premises or the portion
thereof destroyed and if the Lessee does not promptly so remove, the
Port Authority may discard the same after giving the Lessee five (5)
days' prior notice of such or may remove the Lessee's property to a
public warehouse for deposit or retain the same in its own possession
and at its discretion may sell the same at either public auction or
private sale, the proceeds of which shall be applied first to the
expenses of removal, storage and sale, second to any sums owed by the
Lessee to the Port Authority, with any balance remaining to be paid to
the Lessee; if the expenses of such removal, storage and sale shall
exceed the proceeds of sale, the Lessee shall pay such excess to the
10
Port Authority upon demand. Notwithstanding anything in this
Agreement to the contrary, the Lessee's restoration obligations under
this Agreement which would otherwise apply upon expiration or
termination of this Agreement shall not be applicable upon termination
of this Agreement pursuant to this Section 9 to the portion or
portions of the premises damaged under the circumstances described in
paragraph (a) above except to the extent that the Lessee shall be
required to remove all of its trade fixtures, equipment and any other
personalty from such damaged portion or portions of the premises.
(g) The provisions of paragraph (a) of this Section 9
shall also be applicable to damage to the premises and the damaged
areas caused by the fault of the Lessee, its officers, members,
employees, customers, guests, invitees and other persons who are doing
business with the Lessee, or who are on the premises with the Lessee's
consent, but notwithstanding such application or any action taken by
the Port Authority or the Lessee pursuant to paragraph (a) of this
Section 9, including without limitation, termination of the letting,
the Lessee's obligation to repair and rebuild under paragraph (b) of
Section 8 shall continue in full force and effect except to the extent
released pursuant to the provisions of the Section of this Agreement
entitled "Liability Insurance". In connection with damage to the
premises or the damaged areas which is due to the fault of the Lessee,
its officers, employees, customers, invitees or other persons doing
business with the Lessee, the Lessee shall not be entitled to an
abatement of rentals unless and only to the extent that the Port
Authority actually receives proceeds of rental insurance in connection
with such damage, it being understood that the Port Authority shall
not be obligated to maintain or procure such insurance.
Section 10. Indemnity
(a) The Lessee shall indemnify and hold harmless the
Port Authority, its Commissioners, officers, agents and employees from
(and shall reimburse the Port Authority for the Port Authority's costs
or expenses including reasonable legal expenses and the costs to the
Port Authority of its in-house legal counsel incurred in connection
with the defense of) all claims and demands of third persons including
but not limited to those for death, for personal injuries, or for
property damages, arising out of any default of the Lessee in
performing or observing any term or provision of this Agreement, or
out of the use or occupancy of the premises by the Lessee or by others
with its consent, or out of any of the acts or omissions of the
Lessee, its officers, members, employees, agents, representatives,
contractors, customers, guests, invitees and other persons who are
doing business with the Lessee or who are at the premises with the
Lessee's consent where such acts or omissions are on the premises, or
arising out of any acts or omissions of the Lessee, its officers,
members, employees, agents and representatives where such acts or
omissions are elsewhere at the World Trade Center.
(b) If so directed, the Lessee shall at its own
expense defend any suit based upon any such claim or demand (even if
such suit, claim or demand is groundless, false or fraudulent), and in
handling such it shall not, without obtaining express advance
permission from the General Counsel of the Port Authority, raise any
defense involving in any way the jurisdiction of the tribunal over the
person of the Port Authority, the immunity of the Port Authority, its
11
Commissioners, officers, agents or employees, the governmental nature
of the Port Authority or the provision of any statutes respecting
suits against the Port Authority.
Section 11. Ingress and Egress
The Lessee solely for itself, its officers, employees
and such business invitees as are at the premises in connection with
the transaction of the regular business of the Lessee, shall have the
right of ingress and egress between the premises and the City streets
outside the World Trade Center. Such right shall be exercised by
means of such corridors, lobbies, public areas and pedestrian or
vehicular ways, and by means of such elevators, escalators or other
facilities for movement of persons or property, to be used subject to
all the provisions of this Agreement and in common with others having
rights of passage and movement within the World Trade Center, as may
from time to time be designated by the Port Authority for the use of
the public. The use of any such facility, way or other area shall be
subject to the rules and regulations of the Port Authority which are
now in effect or which may hereafter be promulgated for the safe and
efficient operation of the World Trade Center. The Port Authority
may, at any time, temporarily or permanently close, move, change or
limit the use of, or consent to or request the closing, moving,
changing or limitation of the use of, any such facility, way or any
other area at or near the World Trade Center presently or hereafter
used as such, so long as a reasonably comparable means of ingress and
egress as provided above remains available to the Lessee. The Lessee
shall not do or permit anything to be done which will interfere with
the free access and passage of others to space adjacent to the
premises or in any areas, streets, ways, facilities and walks near the
premises.
Section 12. Construction by the Lessee
(a) Except as expressly provided in this Section 12,
the Lessee shall not erect any structures, make any modifications,
alterations, additions, improvements, repairs or replacements or do
any construction work on or to the premises, or install any fixtures
in or on the premises (other than trade fixtures, removable without
injury to the premises and other than purely decorative changes such
as painting, the Lessee to notify the Port Authority not less than
five (5) business days prior to making any decorative changes and the
Lessee shall not commence or continue such changes if the Port
Authority advises the Lessee that such changes are not decorative and
require the prior approval of the Port Authority) without the prior
consent of the Port Authority, and in the event any construction,
improvement, alteration, modification, addition, repair or replacement
is made or done with or without such consent and unless the consent of
the Port Authority shall expressly provide otherwise, the same shall
immediately become the property of the Port Authority and any change
or removal of same by the Lessee, except for trade fixtures removable
without injury to the premises, either during the term or at the
expiration thereof shall be in accordance with and pursuant to the
terms of this Section. Notwithstanding the foregoing, immediately
upon notice from the Port Authority given at any time during the
letting, the Lessee shall remove or change any of the same made or
done by it without the Port Authority's consent, and in the case of
any of the same made or done with the Port Authority's consent, the
12
Lessee if so required by notice from the Port Authority, shall remove
and restore the following improvements and installations made or
installed by the Lessee in the premises immediately upon the
expiration or termination of the letting, or immediately upon receipt
of such notice as may be given within thirty (30) days after such
expiration or termination: modular furniture, computer and
telecommunications equipment and wiring, all standard office
equipment, inventories, removable fixtures and other personal property
of the Lessee or for which the Lessee is responsible, and the Lessee
shall repair any damage caused by any of such removal work. In
addition, immediately upon expiration or termination of the letting or
immediately upon receipt of notice from the Port Authority as may be
given within thirty (30) days after such expiration or termination,
the Lessee shall be required to restore all floor slabs or other
vertical penetrations and to restore all other structural work
performed by the Lessee to the condition existing at the time the
premises were made available to the Lessee, including the removal of
all stairwells installed in the premises by the Lessee. In the event
the Lessee removes electrical or plumbing fixtures, the Lessee shall
be required to cap all altered electrical and plumbing lines flush
with walls, floors and ceilings but nothing in this sentence shall be
construed as an obligation of the Lessee to remove electrical or
plumbing fixtures unless such obligation is imposed elsewhere in this
Section. Nothing herein shall be deemed to affect or impair the
Lessee's maintenance and repair obligations set forth elsewhere in
this Agreement. With respect to any modifications, additions,
alterations, improvements, installations or construction made or done
by the Port Authority at the request of the Lessee either prior to or
during the term of the letting, the Lessee shall have the same
obligations as provided above with respect to that made or done by the
Lessee with the Port Authority's consent.
(b) The Lessee has thoroughly examined and inspected
the premises and agrees, except for the work described in the Section
of this Agreement entitled "Port Authority Work", to take the premises
in its "as is" condition on the date of this Agreement, provided,
however that if there is a latent condition existing in the premises
on the Prior Entry Date requiring structural work, which condition was
not known by the Lessee at the time of its execution of this
Agreement, then the Lessee shall notify the Port Authority
expeditiously upon its discovery of such condition and the Port
Authority, at its cost and expense, will correct same. The Lessee
acknowledges that it has not relied upon any representation or
statement of the Port Authority or of its Commissioners, officers,
agents or employees as to the suitability of the premises for the
operations permitted thereon by this Agreement. The Port Authority,
except for the work described in the Section of this Agreement
entitled "Port Authority Work", shall have no obligation hereunder for
finishing work or preparation of the premises for the Lessee's use.
The Lessee, subject to the provisions of paragraph (g) of this Section
12, agrees to perform at its sole cost and expense all construction
and installation work that it may require to finish off and decorate
the premises. Without limiting the generality of the foregoing, the
Lessee acknowledges that facilities for heat, ventilation and air
cooling have heretofore been installed in the premises pursuant to a
certain design configuration and the Port Authority makes no
representations that such heat, ventilation and air-cooling shall be
adequate for the Lessee's needs and in the event any alteration to
13
such facilities shall be required the cost of the same shall be borne
by the Lessee. Nothing in the preceding sentence shall be construed
to relieve the Port Authority from providing heat, ventilation and air
cooling in accordance with the specifications set forth in Schedule D
attached hereto.
(c) With respect to all modifications, alterations,
additions, improvements, repairs, replacements or other construction
or installation work proposed to be performed in or on the premises
(hereinafter referred to as the "construction and installation work")
the Lessee shall submit to the Port Authority for its approval a
construction application for the premises in the form attached hereto
as Exhibit TAA setting forth in detail and by appropriate plans and
specifications the construction and installation work proposed by the
Lessee to finish off and decorate the premises and the manner of and
time periods for performing the same. No construction and
installation work shall be commenced by the Lessee in the premises
until the construction application and plans and specifications have
been approved by the Port Authority. In the event of any incon-
sistency between the provisions of this Agreement and the construction
application, the provisions of this Agreement shall control. The data
to be supplied by the Lessee shall describe in detail the fixtures,
equipment and systems, if any, to be installed by the Lessee or, if
already installed, to be modified by the Lessee including those for
the emission, handling and distribution of heat, air conditioning,
domestic hot and cold water and electrical and other systems and shall
show the proposed method of tying in the same to the utility lines or
connections provided by the Port Authority either on or off the
premises. The Lessee shall install all electrical distribution equip-
ment required, including but not limited to, service switches,
excluding the disconnect switches, current transformer cabinets and,
if the consumption and demand for electricity by the Lessee is to be
metered, meter pans suitable for the installation by the Port
Authority of an electric meter or meters, the Port Authority to
provide and install such meter or meters at its sole cost and expense.
The Lessee shall be responsible at its sole expense for retaining all
architectural, engineering and other technical consultants and
services as may be reasonably required by the Port Authority and for
developing, completing and submitting detailed plans and specifi-
cations for the work. The plans and specifications to be submitted by
the Lessee to the Port Authority shall bear the seal of a qualified
architect or professional engineer and shall be in sufficient detail
for a contractor to perform the work. If the Lessee's plans and
specifications shall satisfy and be in conformance with the applicable
requirements of the Port Authority's Tenant Construction Review Manual
issued by the Port Authority Engineering Department dated March, 1984,
revised March, 1990, together with Amendment No. 1 dated October,
1990, (and as the same may be further amended prior to the date the
Lessee submits its plans and specifications) the Port Authority will
approve same. In the event the Lessee disputes an interpretation or
application by the Port Authority of any of the provisions of the
Construction Manual with respect to any work to be performed by the
Lessee pursuant to this Section 12, then and in such event such
dispute shall be diligently resolved by the Port Authority's Chief
Engineer. In the event that the Lessee in connection with the
performance of the initial construction and finishing work in the
premises shall give to the Port Authority not less than twenty (20)
business days' notice of the date that the Lessee intends to deliver
14
its construction application and plans and specifications to the Port
Authority and the Lessee shall actually deliver such construction
application and plans and specifications to the Port Authority on such
date and such construction application and plans and specifications
shall cover all of the initial construction and installation work
necessary to finish off and decorate the premises (hereinafter called
the "Pre-Appointment Process"), then the Port Authority will review
the same and forward its comments thereon to the Lessee within seven
(7) business days after the Port Authority's receipt of such
construction application and plans and specifications and the Port
Authority will review and comment on any resubmission of corrected,
modified or amended plans and specifications within seven (7) business
days after the Port Authority's receipt thereof. All comments made by
the Port Authority to the Lessee pursuant to this Section shall be
made in writing and all comments by the Port Authority with respect to
the Lessee's plans and specifications shall be made with specificity.
If the total of the number of business days actually required by the
Port Authority for review of all submissions and resubmissions of the
Lessee's construction application and plans and specifications for the
initial construction and finishing work during the Pre-Appointment
Process should be in excess of the total of the number of business
days allocated for the Pre-Appointment Process to all such reviews of
the Lessee's submissions and resubmissions of its plans and
specifications as provided above, then the two hundred seventy-one
(271) day period from the commencement date of the term of the letting
used to determine the Rent Commencement Date shall be increased by one
(1) day for each of such excess business days. The Lessee hereby
agrees that such increase in the number of days from the commencement
date of the letting to the Rent Commencement Date shall be the sole
remedy available to the Lessee in the event the Port Authority fails,
within the time provided herein for the Port Authority to respond to
the Lessee's submission or resubmission of its construction
application and plans and specifications during the Pre-Appointment
Process. In the event the Lessee does not elect to use the "Pre-
Appointment Process", then the Port Authority shall review the
construction application and all plans and specifications submitted by
the Lessee for the initial work and will forward its comments on same
within fifteen (15) business days after its receipt of the aforesaid
submission, provided such construction application and plans and
specifications cover all of the initial construction and installation
work necessary to finish off and decorate the premises (unless the
estimated amount of the work to be performed by the Lessee as shown on
the construction application is in excess of $3,000,000.00, in which
case the Port Authority will so respond within twenty (20) business
days after such submission by the Lessee) and will review and comment
on any resubmissions within twelve (12) business days (unless the
estimated amount of the work to be performed by the Lessee as shown on
the construction application is greater than $3,000,000.00, in which
case the Port Authority will so respond in 14 business days). If the
total of the number of business days actually required by the Port
Authority for the review of all submissions and resubmissions of the
Lessee's plans and specifications for the initial work shall be in
excess of the total of the number of business days allocated to all
reviews of the Lessee's submissions and resubmissions as provided in
the preceding sentence, then the two hundred seventy-one (271) day
period from the commencement date of the term of the letting used to
determine the Rent Commencement Date shall be increased by one (1) day
for each of such excess business days. The Lessee hereby agrees that
15
such increase in the number of days from the commencement date of the
letting to the Rent Commencement Date shall be the sole remedy
available to the Lessee in the event the Port Authority fails within
the time provided for above in this paragraph to respond to the
Lessee's submission or resubmission. The Lessee shall not engage any
contractor or permit the use of any subcontractor unless and until
each such contractor or subcontractor shall have been approved by the
Port Authority. The Port Authority hereby approves the AJ Contracting
Company, Inc. as the Lessee's general contractor. The Port Authority
further agrees that within five (5) business days after a request is
made by the Lessee, it will notify the Lessee as to whether it
approves or disapproves any contractor or subcontractor as to which
the Lessee seeks Port Authority approval. If the Port Authority shall
fail to notify the Lessee in writing within such five (5) business day
period that such contractor or subcontractor is approved or
disapproved, such contractor or subcontractor shall be deemed to have
been approved by the Port Authority for performance of the work for
which such contractor or subcontractor was submitted. The Lessee
shall include in each such contract or subcontract such provisions as
the Port Authority may reasonably approve or reasonably require
including, without limitation thereto, provisions regarding labor
harmony. The Lessee hereby assumes the risk of loss or damage to all
of the construction and installation work prior to the completion
thereof. If such loss or damage shall occur prior to the delivery by
the Port Authority's Assistant Director Physical Facilities, World
Trade Department, of the certificate of substantial completion to the
Lessee and the Port Authority as hereinafter provided in this
paragraph (c), the Lessee, subject to the provisions of paragraph (f)
of the Section of this Agreement entitled "Liability Insurance", shall
forthwith repair, replace and make good the construction and
installation work and the property of the Port Authority without cost
or expense to the Port Authority. If such loss or damage shall occur
subsequent to delivery of such certificate, the provisions of the
Section of this Agreement entitled "Casualty" shall be applicable.
The Lessee shall itself and shall also require its contractors to
indemnify and hold harmless the Port Authority, its Commissioners,
officers, agents and employees from and against all claims and
demands, just or unjust, of third persons (including employees, offi-
cers, and agents of the Port Authority) arising or alleged to arise
out of the performance of the construction and installation work and
for all expenses, including without limitation thereto legal expenses
(including the costs to the Port Authority of its in-house legal
counsel), incurred by it and by them in the defense, settlement or
satisfaction thereof, including without limitation thereto, claims and
demands for death, for personal injury or for property damage, direct
or consequential, whether they arise from the acts or omissions of the
Lessee, of any contractors of the Lessee, of the Port Authority, or of
third persons, or from acts of God or of the public enemy, or
otherwise, excepting only claims and demands which result from
affirmative willful acts done by the Port Authority, its
Commissioners, officers, agents and employees with respect to the
construction and installation work, provided, however, that the Lessee
shall not be required to indemnify the Port Authority where such
indemnity would be precluded pursuant to the provisions of Section 5-
322.1 of the General Obligations Law of the State of New York.
Notwithstanding the provisions of the foregoing sentence, with respect
to the Additional Lessee Work, as such term is defined in the Section
of this Agreement entitled "Port Authority Work; Additional Lessee
16
Work", the Lessee's indemnification obligations therein shall be
limited to claims and demands arising or alleged to arise out of the
negligent acts of the Lessee, its officers and employees, but nothing
herein shall limit the indemnification obligations of the Lessee's
contractor as stated aforesaid. The Lessee shall, and shall cause
each of its contractors and subcontractors to, obtain and maintain in
force such insurance coverage, including without limitation a
contractual liability endorsement covering the obligations assumed by
the Lessee in the three preceding sentences. All work to be performed
by the Lessee hereunder shall be in accordance with the said
construction application and final plans and specifications approved
by the Port Authority, except that all aspects of the construction and
installation work which affect life safety shall be performed strictly
in accordance with the construction application and final plans and
specifications approved by the Port Authority, shall be subject to
inspection by the Port Authority during the progress of the work and
after the completion thereof and the Lessee shall redo or replace at
its own expense any work not done in accordance therewith. In
connection therewith the Lessee agrees not to install ceiling tiles in
the premises or otherwise cover up the ceiling until the Port
Authority has inspected any ceiling work performed by the Lessee in
the premises and the Port Authority agrees to inspect any ceiling work
performed by the Lessee within five (5) business days after such
request is made by the Lessee. Upon substantial completion of the
initial construction and installation work to be performed by the
Lessee pursuant to the construction application the Lessee shall
deliver to the Port Authority a certificate by an authorized officer
of the Lessee and a certificate by the Lessee's qualified architect
and/or professional engineer, each certifying that the initial con-
struction and installation work has been performed in accordance with
the construction application and the final plans and specifications
approved by the Port Authority (or strictly in accordance with the
plans and specifications approved by the Port Authority in the case of
life-safety matters) and the provisions of this Agreement and in
compliance with the Port Authority's Tenant Construction Review Manual
and all applicable governmental laws, ordinances, enactments,
resolutions, rules, regulations and orders. Notwithstanding the
foregoing, with respect to the certification set forth in the
preceding sentence, the Lessee may notify the Port Authority in
writing that the certification of the Lessee's architect or
professional engineer shall also be deemed to be the certification of
the Lessee with the same force and effect as if given directly by the
Lessee. The Port Authority shall inspect the initial construction and
installation work and within fifteen (15) business days after receipt
of such certification (or within ten (10) business days after receipt
of a resubmission of such certification), the Port Authority's
Assistant Director, Physical Facilities, World Trade Department, shall
do either of the following (i) if the initial construction and
installation work has been substantially completed as certified by the
Lessee and such architect and/or engineer, the Assistant Director
shall so certify to the Port Authority and to the Lessee, subject to
the condition that all risks thereafter with respect to the
construction and installation work covered by such construction
application and any liability therefor for negligence or other reason
shall be borne by the Lessee, or (ii) notify the Lessee and the Port
Authority that the work has not been substantially completed as so
certified by the Lessee and its architect or professional engineer,
such notification to specifically state the objections with respect to
17
such certification. For purposes of this Section "substantial
completion" shall mean completion of all non life-safety working in
accordance with the approved plans and specifications except for
minor, insubstantial "punch list" items and completion of all work
relating to life-safety strictly in accordance with the approved plans
and specifications. If the total of the number of business days
actually required by the Port Authority's Assistant Director, Physical
Facilities, World Trade Department, to respond to all certifications
and recertifications of the Lessee and its architect or professional
engineer with respect to the initial work should be in excess of the
total of the number of business days allocated, then the two hundred
seventy-one (271) day period from the commencement date of the letting
used to determine the Rent Commencement Date shall be increased by the
number of such excess business days. The Lessee shall not use or
permit the use of any portion of the premises in which the
construction and installation work is being performed for conducting
its business operations until such certification is received from said
Assistant Director, Physical Facilities, and the Lessee shall not use
or permit the use of such portion of the premises even if such
certification is received with respect to a portion of the
construction and installation work if said Assistant Director,
Physical Facilities, states in any such certification that such
portion of the premises cannot be used until other specified portions
of the construction and installation work are completed. Upon
completion of the initial work the Lessee shall supply the Port
Authority with "as built" drawings in form and number requested by the
Port Authority.
(d) The Lessee shall be solely responsible for the
plans and specifications used by it, except for the plans and
specifications prepared by the Port Authority and furnished to the
Lessee for the performance of the Lessee's Additional Work, and for
the adequacy and sufficiency of such plans and specifications and all
the improvements depicted thereon or covered thereby, regardless of
the consent thereto or approval thereof by the Port Authority or the
incorporation therein of any Port Authority requirements or
recommendations. The Port Authority shall have no obligations or
liabilities in connection with the performance of the work performed
by the Lessee or on its behalf or the contracts for the performance
thereof entered into by the Lessee. Any warranties extended or
available to the Lessee in connection with the aforesaid work shall be
for the benefit of the Port Authority as well as the Lessee.
(e) Title to and property in the construction and
installation work and to all fixtures, equipment and systems installed
pursuant to this Section and any replacements thereof shall vest in
the Port Authority upon the construction, installation or replacement
thereof and the Lessee shall execute such necessary documents
confirming the same as the Port Authority may require.
(f) Without limiting or affecting any other term or
provision of this Agreement, the Lessee shall be solely responsible
for the design, adequacy and operation of all utility, mechanical,
electrical, communications and other systems made or installed by the
Lessee in the premises and shall do all preventive maintenance and
make all repairs, replacements and rebuilding necessary to keep such
systems and all other improvements, additions and fixtures, finishes
and decorations made or installed by the Lessee (whether the same
18
involves structural or non-structural work) in good condition
befitting a tenancy in a first class office building. The Lessee has
advised the Port Authority that it may elect as part of its
construction and finishing work to reinforce the floor located in the
portion of the premises shown on Exhibit A attached to this Agreement
and to perform poke throughs and install drains therein. The Port
Authority will cooperate with the Lessee to gain access to space
located on the 22nd floor of the South Tower Building for the purpose
of enabling the Lessee to perform such reinforcement work, but the
Lessee understands that the Port Authority is offering no assurances
that such tenant currently in occupancy on said 22nd floor will grant
access to the Lessee or on what terms and conditions such access will
be granted and the Lessee further understands and agrees that there
will be no liability to the Port Authority if such tenant refuses to
grant access. If such access is so granted the Lessee hereby agrees
to indemnify the Port Authority from and against all claims made
against the Port Authority arising or resulting from performance of
such reinforcement work by the Lessee. In the event that during
performance of such work the Lessee discovers the presence of asbestos
or asbestos-containing materials in the ceiling of the said 22nd floor
space, then the Lessee shall immediately notify the Port Authority who
will diligently remove same at its cost and expense and will
refireproof, if necessary, the ceiling area containing asbestos or
asbestos-containing materials, provided that such asbestos or
asbestos-containing materials were not placed therein by the Lessee or
its contractor. The Lessee shall not commence performance of any
reinforcement work unless and until the Port Authority has approved
the Lessee's construction application and plans and specification with
respect to same.
(g) The Port Authority in connection with the Lessee's
initial construction and installation work performed in the premises
will pay to the Lessee an amount equal to the lesser of (1) the cost
of such initial construction and installation work performed in the
premises or (2) the sum of Three Million Six Hundred Forty-four
Thousand Five Hundred Forty-six Dollars and No Cents ($3,644,546.00),
such lesser amount being hereinafter referred to as the "Lessee's
Finishing Allowance." "Cost" as used herein shall mean the sum of (i)
direct labor and material costs and contract costs for the purchase
and installation of fixtures, equipment, mill work and other finishing
and decorating work, including the cost of purchase and installation
of modular partition systems and other employee work stations,
telecommunications equipment and wiring, to the extent all of same are
actually installed in, affixed or annexed to the premises, (ii)
construction management, engineering, architectural, project
consulting, planning and design and similar professional fees and
expenses which, taken together, do not exceed thirty percent (30%) of
the total of the aforesaid costs set forth in clause (i) above, (iii)
moving and relocation expenses incurred by the Lessee in connection
with the relocation to the premises of its property and equipment from
its current space at 110 William Street, New York, New York and from
the space currently leased by Unity Fire and General Insurance Company
(a wholly owned subsidiary of the Lessee) from the Port Authority on
the 29th floor of the South Tower Building at the World Trade Center
and (iv) utility, freight elevator and standby labor charges incurred
during construction, inspection, filing, sign off and all other
charges and fees imposed by the Port Authority in connection with such
work. In no event whatsoever shall "cost", as defined and computed in
19
this paragraph, include any expenses, outlays or charges whatsoever by
or for the account of the Lessee for or in connection with any work
performed by the Lessee pursuant to paragraphs (c), (d) and (e) of the
Section of the Agreement entitled "Port Authority Work; Additional
Lessee Work", or in connection with equipment or fixtures or the
making of any finishing or decorating work unless such are actually
and completely installed in and or made to the premises, nor shall
"cost" include the cost of any equipment, fixtures or improvement
which is secured by liens, mortgages, other encumbrances or
conditional bills of sale, nor shall "cost" include any payment made
to organizations which are owned by or in common ownership with the
Lessee. The Lessee's Finishing Allowance will be paid to the Lessee
as follows: not more than once each calendar month following the
calendar month in which the Lessee commences the construction and
installation work in the premises pursuant to the provisions of this
Section 12, the Lessee shall deliver a certificate to the Port
Authority signed by a designated representative of the Lessee which
shall certify the amount of the payments made by the Lessee which are
properly includible in the Lessee's cost of performing the
construction and installation work during the preceding calendar
month, each such certificate to set forth the total cumulative
payments constituting the Lessee's cost made by the Lessee from the
commencement of the construction and installation work to the date of
the certificate and each such certificate also to contain a
certification by the Lessee or at the Lessee's option, the Lessee's
architect or professional engineer (provided that if such
certification is made by such architect or engineer, then it shall be
with the same force and effect as if such certification had been made
directly by the Lessee itself) that the portion of the Lessee's
construction and installation work performed by the Lessee since the
last such certificate and covered by such certificate has been
performed in accordance with the terms of this Agreement and the
Construction Application. Within 30 days after the delivery of each
such certificate by the Lessee, the Port Authority shall pay to the
Lessee the amount constituting the Lessee's cost of performing the
construction and installation work and paid by the Lessee during the
preceding calendar month, less ten percent (10%) of the portion of
such cost attributable to clause (i) above (but only less five percent
(5%) thereof subsequent to the date that the Lessee's architect or
engineer certifies to the Port Authority that at least fifty percent
(50%) of the entire finishing and installation work proposed to be
performed by the Lessee has been installed in the premises), provided
that the total of such periodic payments made by the Port Authority
shall not exceed the Lessee's Finishing Allowance. Upon substantial
completion of the construction and installation work in the premises
to the satisfaction of the Port Authority's Assistant Director,
Physical Facilities, World Trade Department, and his certification
thereof to the Port Authority and to the Lessee, the Port Authority
will pay to the Lessee the amount so certified by the Lessee which
shall equal the total of the ten percent (10%) and five percent (5%)
deductions made in connection with all previous periodic payments less
the amount of the Port Authority's periodic payments which a
preliminary determination of the Lessee's cost discloses exceeds the
Lessee's Finishing Allowance and less a retainage amount, such
retainage amount to be equal to one hundred fifty percent (150%) of
the amount reasonably established by the Port Authority as the cost of
fully completing such work but nothing herein shall be construed to
relieve the Lessee of its obligation to expeditiously complete such
20
work, such payment to be made within 30 days after such certification.
Also, upon full completion of all the construction and installation
work to be performed by the Lessee pursuant to the provisions of this
Section 12, the Lessee shall supply to the Port Authority a full
statement of the cost thereof, certified by a designated
representative of the Lessee. After examination and approval of such
certified statement and after such further examination of the records
and books of account of the Lessee relating to the costs of the
construction and installation work as the Port Authority may deem
reasonable, the Port Authority to promptly examine such certified
statement and such books and records, the Port Authority will promptly
finally determine the cost of the construction and installation work
performed in the premises and if such final determination discloses
that a part of the Lessee's Finishing Allowance remains unpaid, the
Port Authority will pay the same to the Lessee within fifteen (15)
days after such final determination, and if the final determination
discloses that the payments previously made exceed the Lessee's
Finishing Allowance, the Lessee shall repay to the Port Authority the
amount of such excess within fifteen (15) days after notice from the
Port Authority of the amount thereof. The Lessee prior to a final
determination of cost shall permit the Port Authority, by its agents,
employees and representatives at all reasonable times and upon
reasonable prior notice, to examine and audit the records and other
documentation of the Lessee which pertain to and will substantiate the
cost. The Port Authority agrees that it will not impose a fee upon
the Lessee during the Lessee's initial move into the premises for the
use of freight elevators solely to relocate the Lessee's furniture,
equipment, trade fixtures and other items of personalty into the
premises from its current space at 110 William Street and from the
Unity space at the Facility.
Section 13. Signs
Except with the prior consent of the Port Authority,
the Lessee shall not erect, maintain or display any signs,
advertising, posters or similar devices at or on the exterior parts of
the premises or in the premises so as to be visible through the
windows, glass walls or exterior doors thereof. The Port Authority
hereby agrees that it will not withhold its approval to any sign
submitted to it for approval by the Lessee to the extent such sign is
in accordance with the Tenant Construction Review Manual. Upon the
expiration or termination of the letting, the Lessee shall remove,
obliterate or paint out, as the Port Authority may direct, any and all
signs and advertising, posters or similar devices, and in connection
therewith shall repair any damage resulting from such removal.
Section 14. Injury and Damage to Person or Property
The Port Authority shall not be liable to the Lessee or
others for any personal injury, death or property damage from falling
material, water, rain, hail, snow, gas, steam, dampness, explosion,
smoke, radiation, and/or electricity, whether the same may leak into
or fall, issue, or flow from any part of the premises or of the World
Trade Center, including without limitation thereto any utility,
mechanical, electrical, communication or other systems therein, or
from any other place or quarter unless said damage, injury or death
shall be due to the negligent acts or willful misconduct of the Port
Authority, its employees or agents. Notwithstanding the foregoing
21
provisions of this Section, the Lessee covenants and agrees that (a)
any rights of the Lessee to make a claim against the Port Authority as
contemplated herein shall be subject to the waiver of subrogation
provisions set forth in the Section of this Agreement entitled
"Liability Insurance" and (b) in no event shall the Lessee be entitled
to make a claim for consequential, indirect or special damages
pursuant to this Section.
Section 15. Additional Rent and Charges
(a) If the Lessee shall fail or refuse to perform any
of its obligations under this Agreement, the Port Authority, in
addition to all other remedies available to it, shall have the right
(but shall not be obligated to) to perform any of the same after five
(5) days' notice to the Lessee of its intention to perform the same,
and the expiration of any applicable grace period and the Lessee shall
pay the Port Authority's cost thereof on demand. Notwithstanding the
foregoing the Port Authority need not give prior notice of its
intention to perform any of the same in case of emergency. If the
Port Authority has paid any sum or sums or has incurred any
obligations, expense or cost which the Lessee has agreed to pay or
reimburse the Port Authority for, or if the Port Authority is required
or elects to pay any sum or sums or incurs any obligations, expense or
cost by reason of the failure, neglect or refusal of the Lessee to
perform or fulfill any one or more of the conditions, covenants or
agreements contained in this Agreement, or as a result of an act or
omission of the Lessee contrary to the said conditions, covenants and
agreements, including any legal expense or cost in connection with any
actions or proceeding brought by the Port Authority against the Lessee
or by third parties against the Port Authority, the Lessee agrees to
pay the sum or sums so paid or the expense and the Port Authority's
reasonable cost so incurred, including all interest costs, damages and
penalties, and the same may be added to any installment of rent
thereafter due hereunder and each and every part of the same shall be
and become additional rent, recoverable by the Port Authority in the
same manner and with like remedies as if it were originally a part of
the basic rental as set forth in the Section of this Agreement
entitled "Basic Rental".
(b) "Cost" or "costs" of the Port Authority in this
Agreement shall mean and include (1) payroll costs including but not
limited to contributions to the retirement system, or the cost of
participation in other pension plans or systems, insurance costs, sick
leave pay, holiday, vacation, authorized absence pay or other fringe
benefits; (2) cost of materials, supplies and equipment used
(including rental thereof); (3) reasonable payments to contractors;
and (4) any other reasonable direct costs.
Section 16. Rights of Entry Reserved
(a) The Port Authority, by its officers, employees,
agents, representatives and contractors shall have the right at all
times and without notice during an emergency and during normal
business hours and upon reasonable oral notice in non-emergency
situations to enter upon the premises for the purpose of inspecting
the same, for observing the performance by the Lessee of its
obligations under this Agreement, and for the doing of any act or
22
thing which the Port Authority may be obligated or have the right to
do under this Agreement or otherwise.
(b) Without limiting the generality of the foregoing,
the Port Authority, by its officers, employees, representatives and
contractors, shall have the right, for its own benefit, for the
benefit of the Lessee or for the benefit of others at the World Trade
Center, to maintain initially existing and future utility, mechanical,
electrical, communication and other systems or portions thereof on the
premises, and to enter upon the premises at all times without prior
notice during emergency situations and at all reasonable times upon
reasonable oral notice to make such repairs, alterations and
replacements as may, in the opinion of the Port Authority, be deemed
necessary or advisable and, from time to time, to construct or install
over, in, under or through the premises new lines, pipes, mains,
wires, conduits, equipment and other such provided that to the extent
feasible same are placed within the then existing interior walls,
floors, existing columns or ceilings or else alongside thereof and
boxed in, and the finish thereof to be consistent with that existing
before such work and the Port Authority agrees to consult with the
Lessee as to the most appropriate or feasible place for construction
or installation of any item, provided, however, the actual location of
same shall be as reasonably determined by the Port Authority and
provided further that the Port Authority during performance of such
work makes reasonable efforts to minimize disruption to the Lessee's
operations; and to use the premises for access to other portions of
the World Trade Center not otherwise conveniently accessible; and to
take all material into and upon the premises that may be required for
such repairs, alterations and replacements; provided, however, that
such repair, alteration, replacement, construction or access shall not
unreasonably interfere with the use of the premises by the Lessee.
The Port Authority agrees to store only those materials in the
premises as are necessary to perform the work described in this
paragraph (b) and the Port Authority further agrees to clean up the
premises to the Lessee's reasonable satisfaction subsequent to
completion of the work and to repair any damage resulting from such
work. The Port Authority agrees, unless there is no practical
alternative, or unless required by law, to perform such maintenance,
repair, alteration, replacement, installation or construction so as
not to effectuate a permanent material reduction of the usable footage
in the premises. A material reduction of the usable square footage
shall have occurred if the usable square footage is reduced by more
than twenty (20) usable square feet, and in the event of such
permanent material reduction, the basic rental and additional basic
rental shall be abated as provided in the Section of this Agreement
entitled "Abatement of Rental".
(c) In the event that any property of the Lessee shall
obstruct the access of the Port Authority, its employees, agents or
contractors to any of the existing or future utility, mechanical,
electrical, communication and other systems and thus shall interfere
with the inspection, maintenance, repair or modification of any such
system, the Lessee shall move such property as requested by the Port
Authority, in order that the access may be had to the system or part
thereof for its inspection, maintenance, repair or modification.
(d) Nothing in this Section shall or shall be
construed to impose upon the Port Authority any obligations so to
23
construct or maintain or to make repairs, replacements, alterations or
additions, or shall create any liability for any failure so to do, but
nothing herein shall be construed to relieve the Port Authority from
performance of obligations specifically imposed elsewhere in this
Agreement. The Lessee is and shall be in exclusive control and
possession of the premises and the Port Authority shall not in any
event be liable for any injury or damage to any property or to any
person happening on or about the premises nor for any injury or damage
to the premises nor to any property of the Lessee or of any other
person located therein or thereon (other than those occasioned by the
negligent acts or willful misconduct of the Port Authority).
(e) At any time and from time to time during normal
business hours within the six (6) months next preceding the expiration
of the letting, the Port Authority, by its agents and employees,
whether or not accompanied by prospective lessees, occupiers or users
of the premises, shall have the right, upon reasonable advance notice,
to enter thereon for the purpose of exhibiting and viewing all parts
of the same. The Lessee shall have the right to accompany the Port
Authority at all such times and the Port Authority agrees to use
reasonable efforts to minimize disruption to the Lessee's business.
(f) The exercise of any or all of the foregoing rights
by the Port Authority or others shall not be or be construed to be an
eviction of the Lessee nor be made the grounds for any abatement of
rental or any claim or demand for damages, consequential or otherwise.
Section 17. Condemnation
(a) In any action or proceeding instituted by any
governmental or other authorized agency or agencies for the taking for
a public use of any interest in all or any part of the premises, or in
case of any deed, lease or other conveyance in lieu thereof (all of
which are in this Section referred to as "taking or conveyance") the
Lessee shall not be entitled to assert any claim to any compensation,
award or part thereof made or to be made therein or therefor or any
claim to any consideration or rental or any part thereof paid
therefor, or to institute any action or proceeding or to assert any
claim against such agency or agencies or against the Port Authority
for or on account of any such taking or conveyance, except for a
possible claim to an award for moving expenses or for trade fixtures
owned and installed by the Lessee, provided that such claim is
independent of and in addition to any claim of the Port Authority and
provided further that the Port Authority's award is not thereby
reduced or otherwise adversely affected, it being understood and
agreed between the Port Authority and the Lessee that except for such
claims the Port Authority shall be entitled to all the compensation or
awards made or to be made or paid and all such consideration or
rentals, free of any claim or right of the Lessee. No taking by or
delivery to any governmental authority under this paragraph (a) shall
be or be construed to be an eviction of the Lessee or be the basis for
any claim by the Lessee for damages, consequential or otherwise.
(b) In the event of a taking or conveyance of the
entire premises by any governmental or other authorized agency or
agencies, then the letting under this Agreement shall, as of the date
possession is taken from the Port Authority by such agency or
24
agencies, cease and determine in the same manner and with the same
effect as if the term of the letting had on that date expired.
(c) In the event of a taking or conveyance by any
governmental or other authorized agency or agencies of a part of the
premises then the letting as to such part only shall, as of the date
possession thereof is taken from the Port Authority by such agency or
agencies, cease and determine, and the rental thereafter to be paid by
the Lessee to the Port Authority shall be abated as provided in the
Section of this Agreement entitled "Abatement of Rental" from and
after the date of such taking or conveyance.
(d) In the event that the taking or conveyance or the
delivery by the Lessee or taking by the Port Authority pursuant to the
Section of this Agreement entitled "Governmental Compliance" covers
fifty percent (50%) or more of the total usable area of the premises,
then the Lessee and the Port Authority shall each have an option
exercisable by notice given within thirty (30) days after such taking
or conveyance, to terminate the letting hereunder, as of the date of
such taking, and such termination shall be effective as if the date of
such taking were the original date of expiration hereof.
(e) In the event that the taking or conveyance or the
delivery by the Lessee or taking by the Port Authority pursuant to the
Section of this Agreement entitled "Governmental Compliance" covers
ten percent (10%) or more of the total usable area of the premises but
less than fifty percent (50%) of the total usable area of the
premises, the Lessee shall have the option exercisable by notice given
to the Port Authority within thirty (30) days after such taking or
delivery to terminate this Agreement and the letting hereunder with
respect to the balance of the premises provided, however, that the
Lessee's notice to the Port Authority be accompanied by a statement
from a responsible officer of the Lessee acting in good faith that on
an economic and operational basis the remaining portion of the
premises cannot be used by the Lessee or is inadequate for use by the
Lessee for the operations described in the Section of this Agreement
entitled "Rights of User by the Lessee", and provided, further that
the Lessee shall not be in default under any term or provision of this
Agreement beyond any applicable cure period, or under notice of
termination from the Port Authority either on the date of its giving
of notice to the Port Authority, or on the effective date.
Section 18. Abatement of Rental
(a) In the event that the Lessee shall at any time
become entitled to an abatement of rent, the basic rental set forth in
the Section of this Agreement entitled "Basic Rental" and the
additional basic rental set forth in Schedule A attached to this
Agreement shall be abated for the period the abatement is in effect by
the same percentage that the area of the part of the premises the use
of which is denied to the Lessee is of the total area of the premises.
(b) For the purposes of this Section, the number of
square feet contained in the premises or parts thereof shall be
computed as follows: By measuring from the inside surface of outer
building walls to the surface of the public area side, or of the non-
exclusive area side, as the case may require, of all partitions
separating the space measured from adjoining areas designated for the
25
use of the public or for use by the Lessee in common with others, and
to the center of partitions separating the space measured from
adjoining space exclusively used by others; no deduction will be made
for columns, partitions, pilasters or projections necessary to the
building and contained within the space measured. Permanent
partitions enclosing elevator shafts, stairs, fire-towers, vents,
pipe-shafts, meter-closets, flues, stacks and any vertical shafts have
the same relation to the space measured as do outer building walls.
(c) In the event that during the term of the letting
under this Agreement the Lessee shall be partially evicted and shall
remain in possession of the premises or the balance thereof, the
Lessee agrees that notwithstanding it might have the right to suspend
payment of the rent in the absence of this provision, it agrees to pay
and will pay at the times and in the manner herein provided, the full
rent reserved less only an abatement thereof computed in accordance
with the above.
Section 19. Assignment and Sublease
(a) Subject to the provisions of this Section 19, the
Lessee expressly covenants that it shall not assign, mortgage or
encumber this Agreement nor sublet, or suffer or permit the premises
or any part thereof to be used by others, without the prior written
consent of the Port Authority in each instance. A merger or
consolidation shall not be deemed a violation of this paragraph (a)
provided the conditions set forth in paragraph (a)(5) of the Section
of this Agreement entitled "Termination" are met.
(b) Notwithstanding the provisions of paragraph (a) of
this Section 19, the Lessee shall have the right to assign this
agreement and the letting hereunder in its entirety to, or to sublet
to or to permit the use of desk space by a Related Entity; such
assignment, subletting or desk space use to continue only as long as
the proposed assignee maintains the relationship of Related Entity to
the Lessee provided that any such assignee, sublessee or desk space
user of the premises shall use the premises solely for the purposes
set forth in the Section of this Agreement entitled "Rights of User by
the Lessee" and for no other purpose whatsoever. Any such assignment
pursuant to this paragraph (b) shall not be effective until an
agreement in the form attached hereto as Exhibit Y has been executed
by the Port Authority, the Lessee and the proposed assignee and no
such subleasing pursuant to this paragraph (b) shall be effective
until an agreement in the form attached hereto as Exhibit X has been
executed by the Port Authority, the Lessee and the proposed subtenant.
The Lessee, and the assignee, subtenant, or the desk-space user, as
the case may be, shall furnish to the Port Authority such information,
data and documents as may be requested by the Port Authority from time
to time to substantiate the relationship between the Lessee and such
assignee, subtenant or desk-space user. The Port Authority agrees to
execute the said agreement annexed hereto as Exhibit Y within ten (10)
business days after receipt of (i) such agreement duly executed by the
Lessee and the proposed assignee and (ii) the documents, information
and other data referred to in the immediately preceding sentence
establishing the requisite relationship between the Lessee and
proposed assignee. The Port Authority with respect to a proposed
subletting pursuant to this paragraph (b) shall execute the Consent to
26
Sublease Agreement, or shall specify to the Lessee its reasons for
refusing to do so, within a period of fifteen (15) business days
following receipt by the Port Authority of (i) a written sublease
agreement fully executed by the Lessee and a proposed subtenant and
(ii) any other documents, information and data reasonably required by
the Port Authority with respect to such subletting. In addition to
the foregoing, the Lessee, subject to the provisions of this paragraph
(b) shall have the right to assign this Agreement and the letting
hereunder to a corporation into which the Lessee is merged or
consolidated, provided the requirements of paragraph (a)(5) of the
Section of this Agreement entitled "Termination" are met and the
Lessee shall also have the right, subject to the provisions of this
paragraph (b) to assign this Agreement and the letting hereunder to an
entity to which all or substantially all of the Lessee's assets have
been transferred. "Related Entity" as used herein shall mean a
corporation, partnership or limited liability company which shall
control, is controlled by or is under common control with the Lessee.
"Control", as used herein, shall mean, in the case of a corporation,
legal or beneficial ownership by one person, firm or corporation, or
by a group acting in concert, of a majority of the capital stock and
voting rights (with power to exercise such rights) of the corporation
(provided, however that in connection with the proposed use of desk
space by a single corporate entity not to exceed 3,000 usable square
feet, control shall mean ownership of not less than thirty-five
percent (35%) of the capital stock and voting rights (with power to
exercise such rights) of the corporation by the Lessee or by a
corporation which directly or indirectly controls or is directly or
indirectly controlled by the Lessee or by a corporation which is
directly or indirectly controlled by a corporation which directly
controls the Lessee, and in the case of such indirect control, each of
the entities in the chain between the Lessee and proposed desk space
user shall directly control or be directly controlled by the
immediately adjacent entity in such chain), and in the case of a
partnership or limited liability company it shall mean the power to
direct the management and policies of such entity, whether by legal or
beneficial ownership, or otherwise. The Port Authority hereby
consents to the use of desk space in the premises by Unistrat
Corporation of America, a New York corporation, such use not to exceed
1,000 usable square feet.
(c) Notwithstanding the provisions of paragraph (a) of
this Section 19 and in addition to the rights contained in paragraph
(b) of this Section, the Lessee may, after the commencement of the
letting, sublet a part or all of the premises (but under no
circumstances shall there be more subtenants in the premises at any
one time pursuant to the provisions of paragraph (b) of this Section
and this paragraph (c), collectively then the whole number obtained by
dividing 9,000 into the total number of rentable square feet in the
premises) provided that all of the following conditions precedent and
requirements have been met or satisfied: (1) Each proposed subtenant
shall, in the opinion of the Port Authority, be eligible, suitable and
qualified as a World Trade Center tenant, it being understood that the
Port Authority in exercising such opinion will not declare a proposed
subtenant to be ineligible unsuitable or unqualified to be a World
Trade Center tenant if such proposed subtenant engages in a type or
types of business or operations engaged in or previously engaged in by
other office tenants at the World Trade Center whose eligibility and
qualifications were determined by the Port Authority under the
27
provisions of Chapter 5 of Title 17 of the Unconsolidated Law of the
State of New York strictly on the basis of their functions, activities
and services in world trade and commerce; (2) The rental payable by
the subtenant to the Lessee for or in connection with its use or
occupancy of the subleased space shall be not less than the rental
charged by the Port Authority for comparable space for a comparable
term on the date of such subletting; (3) If the rental rate (taking
into account all concessions given by the Lessee and all consideration
payable by the subtenant to the Lessee for or in connection with its
use or occupancy of the subleased space) shall be in excess of the
rental rate (taking into account all concessions given by the Port
Authority) provided for in this Agreement for the term of the proposed
subletting, the Lessee shall so notify the Port Authority and the
Lessee subject to the deductions set forth in paragraph (f) of this
Section 19, shall pay fifty percent (50%) of such excess to the Port
Authority as received; (4) The proposed subtenant is not a current
occupant of the World Trade Center and has not been in discussion with
the Port Authority toward its current or future occupancy of space in
the World Trade Center within six (6) months prior to the Lessee's
request to the Port Authority to enter into the Consent to Sublease
Agreement provided the restrictions in this subdivision (4) shall not
be applicable if the proposed subtenant has been notified by the Port
Authority that it does not have available at the World Trade Center
for the term sought by the proposed subtenant space comparable in size
to that being sought by such proposed subtenant; and (5) The Lessee,
the subtenant and the Port Authority have executed the form of
agreement entitled "Consent to Sublease Agreement", annexed to this
Agreement and marked "Exhibit X".
(d) Execution of the Consent to Sublease Agreement
referred to in paragraph (c) above by the Port Authority and return
thereof to the Lessee shall constitute the determination referred to
in subdivision (1) of paragraph (c) above. The Lessee and subtenant
shall present in advance all documents, information and other data
which the Port Authority may reasonably require relating to the
matters covered in subdivisions (1), (2), (3) and (4) of paragraph (c)
above and the subtenant shall supply during the continuance of any
approved subletting such additional or current documents, information
or other data as the Port Authority may from time to time reasonably
require. The Port Authority with respect to a proposed subletting
pursuant to paragraph (c) above shall execute the Consent to Sublease
Agreement or shall specify to the Lessee its reasons for failing to do
so, within a period of fifteen (15) business days following receipt by
the Port Authority of (i) a written sublease agreement duly executed
by the Lessee and a proposed subtenant and (ii) any other documents,
information and data reasonably required by the Port Authority with
respect to such proposed subletting.
(e) If the Lessee assigns, sells, conveys, transfers,
mortgages, pledges or sublets or permits the use of desk space in the
premises in violation of paragraphs (a), (b) or (c) of this Section or
if the premises are occupied by anybody other than the Lessee, the
Port Authority may upon Lessee's default collect rent from any
assignee, sublessee, desk-space user or anyone who claims a right to
this Agreement or letting or who occupies the premises, and shall
apply the net amount collected to the basic rental herein reserved;
and no such collection shall be deemed a waiver by the Port Authority
of the covenants contained in paragraphs (a), (b) or (c) of this
28
Section nor an acceptance by the Port Authority of any such assignee,
sublessee, desk-space user, claimant or occupant as Lessee, nor a
release of the Lessee by the Port Authority from further performance
by the Lessee of the covenants contained herein. The granting of
consent by the Port Authority to any assignment or subletting shall
not be deemed to operate as a waiver of the requirement for obtaining
the express prior written consent of the Port Authority to any other
or subsequent assignment or subletting.
(f) If, in connection with any subletting pursuant to
the provisions of paragraph (c) hereof consented to by the Port
Authority as provided herein, the Lessee (1) has paid a brokerage
commission or commissions (at the customary and usual rates prevailing
in the City of New York) to a real estate broker or brokers licensed
to do business in the State of New York, which brokerage commission or
commissions are not reimbursed to the Lessee by the subtenant,
provided such brokerage commission or commissions are actually paid
for services and are incurred solely in connection with such
subletting and would not have been required to have been paid except
for such subletting; or (2) has incurred any cost for finishing such
sublet space to prepare the same for such subtenant which is not
reimbursed to the Lessee by the subtenant; or (3) has granted to a
subtenant a basic rental concession for or in connection with its use
or occupancy of the sublease space; or (4) has incurred a legal fee
solely in connection with the negotiation, preparation and execution
of a sublease in connection with subletting; or (5) has incurred
advertising and marketing expenses solely in connection with such
subletting or (6) has actually incurred an interest expense in
connection with such subletting, such interest expense to be allowed
solely to the extent that the Lessee has actually borrowed funds from
a third party lender and has actually used such funds solely for the
expenses incurred in items (1) through (5) herein; (the total of items
(1), (2), (3), (4), (5) and (6) being hereinafter referred to as the
"subleasing expenses"), then the Lessee shall divide the subleasing
expenses by the number of calendar months and the proportionate part
of any partial calendar month comprising the term of such sublease,
and the amount resulting from such division shall be deducted from the
amount of the rental or other consideration payable by the subtenant
to the Lessee each month which is in excess of the rental rate payable
by the Lessee to the Port Authority applicable to the subleased space
for that month, and fifty percent (50%) of the balance of such excess
of the rental and other consideration shall be payable by the Lessee
to the Port Authority for that month. If requested by the Port
Authority, the Lessee shall make available from time to time for
examination by the Port Authority the Lessee's books and records
relating to the receipt of sublease rental and to the subleasing
expenses.
(g) In the event the Lessee intends to sublet all or a
portion of the premises pursuant to the provisions of paragraph (c) of
this Section 19, and the rental which the Lessee proposes to obtain in
connection with the proposed subletting is less than the rental being
then charged by the Port Authority for comparable space for a
comparable term, then notwithstanding the provisions of subdivision
(2) of paragraph (c) of this Section, the Lessee shall have the right
to submit to the Port Authority a statement of its Intention to
Sublet. The Intention to Sublet shall be a written statement executed
by an authorized officer of the Lessee setting forth the following
29
information with respect to any future subletting then contemplated by
the Lessee:
(1) A description of the portion or
portions of the premises which the Lessee intends
to sublet, including the number of rentable square
feet contained therein and the proposed effective
date of such subletting;
(2) The amount of any finishing
allowance, payments to contractors or the cost of
any other work to be offered by the Lessee to
prepare the sublet premises for a subtenant;
(3) Rent concessions, if any;
(4) Relocation contributions per
rentable square foot which the Lessee intends to
offer a subtenant;
(5) If the Lessee intends to utilize a
real estate broker in connection with any proposed
subletting, then the Lessee's good faith estimate
of the amount of brokerage commissions which would
be payable by the Lessee in connection with any
proposed subletting;
(6) Legal fees, advertising and
marketing expenses and interest expenses which the
Lessee estimates in good faith it will incur in
connection with the proposed subletting;
(7) The term of the proposed
subletting, it being understood that the term of
any proposed subletting shall not exceed the
remaining balance of the term of the letting under
this Agreement less one (1) day.
(h) In the event the proposed term of the subletting
set forth in the Intention to Sublet is for the entire balance of the
term of the letting less one (1) day, then the Port Authority may, by
notice to the Lessee within twenty (20) business days after receipt of
such Intention to Sublet, terminate this Agreement as to the portion
of the premises which the Lessee intends to sublet as set forth in
such Intention to Sublet, such termination being hereinafter referred
to as the "Port Authority Termination". Such Port Authority
Termination shall be effective as of the proposed effective date of
the subletting as set forth in the Intention to Sublet and from and
after the effective date of such termination there shall be a
reduction of the annual basic rental and additional basic rental
payable, such reduction to be determined as follows: the annual basic
rental for each period set forth in paragraph (a) of the Section of
this Agreement entitled "Rental" shall be reduced by an amount equal
to the product obtained by multiplying the annual basic rental for
that period by a fraction, the numerator of which shall be the
aggregate number of rentable square feet contained in such portion of
the premises (the letting of which has been terminated) and the
denominator of which shall be 58,783 rentable square feet, and
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rentable square feet in the premises used in calculating additional
basic rental pursuant to Schedule A shall be reduced by the amount of
rentable square feet in such portion of the premises (the letting of
which shall have been terminated). In the event the Port Authority is
entitled to exercise a right of termination with respect to a proposed
subletting set forth in an Intention to Sublet pursuant to this
paragraph (h), but fails to exercise such right of termination, then
the provisions of subdivision (2) of paragraph (c) of this Section 19
shall not be applicable with respect to such proposed subletting set
forth in such Intention to Sublet unless the actual proposed
subletting is in violation of paragraph (k) below of this Section 19
in which case the provisions of said subdivision (2) of said paragraph
(c) shall remain applicable.
(i) In the event that the proposed term of the
subletting set forth in the Intention to Sublet is for a period less
than the entire balance of the term of the letting under this
Agreement less one (1) day, then the Port Authority may, by notice to
the Lessee within twenty (20) business days after receipt of such
Intention to Sublet, sublet from the Lessee for the term set forth in
the Intention to Sublet the portion of the premises which the Lessee
intends to sublet as set forth in such Intention to Sublet, such
subletting being hereinafter referred to as the "Port Authority
Subletting". Such Port Authority Subletting shall be effective as of
the proposed effective date of the subletting as set forth in the
Intention to Sublet and shall expire on the expiration date set forth
in such Intention to Sublet or such earlier date as this Agreement and
the letting hereunder shall terminate, (such subletting to be
effectuated by the Port Authority's notice without any further
document or agreement required to be executed by the parties hereto)
and from and after the effective date of such subletting there shall
be a reduction of the annual basic rental and additional basic rental
payable, such reduction to be determined as follows: the annual basic
rental for each period set forth in paragraph (a) of the Section of
this Agreement entitled "Rental" shall be reduced by an amount equal
to the product obtained by multiplying the annual basic rental for
that period by a fraction, the numerator of which shall be the
aggregate number of rentable square feet contained in such sublet
portion of the premises and the denominator of which shall be 58,783
rentable square feet, and rentable square feet in the premises used in
calculating additional basic rental pursuant to Schedule A shall be
reduced by the amount of rentable square feet in such portion of the
sublet premises. In the event the Port Authority is entitled to
exercise a right to sublet with respect to a proposed subletting set
forth in an Intention to Sublet pursuant to this paragraph (i), but
fails to exercise such right to sublet, then the provisions of
subdivision (2) of paragraph (c) of this Section 19 shall not be
applicable with respect to such proposed subletting set forth in such
Intention to Sublet unless the actual proposed subletting is in
violation of paragraph (k) below of this Section 19 in which case the
provisions of said subdivision (2) of said paragraph (c) shall remain
applicable. The Lessee shall have no rights whatsoever to the sublet
premises during the term of any subleasing hereunder and shall be
released from all lease obligations with respect to any portion of the
premises sublet to the Port Authority hereunder by the Lessee during
the term of such subletting but nothing herein shall be construed to
relieve the Lessee from any obligations under this Agreement with
respect to such sublet space which has accrued prior to the effective
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date of such subletting. Upon the expiration date of such subletting
all of the Lessee's obligations under this Agreement with respect to
such sublet space shall be applicable, including the payment of basic
and additional basic rental, with the same force and effect as if such
subletting had never occurred. In the event that the term of the
subletting hereunder is for a term of five (5) years or less the
subleased space shall be made available to the Lessee at the
expiration of the term of the sublease in substantially the same
condition, except for reasonable wear and tear, as it was made
available to the Port Authority on the commencement of the sublease to
the Port Authority. In the event that the term of the subletting to
the Port Authority is in excess of five (5) years, then the Lessee
hereby agrees to accept such sublet space on the expiration of the
sublease in its then "as is" condition except that the Port Authority
will remove any structural improvements made during the term of the
sublease, will remove all personalty therefrom and will remove all
telecommunications wiring and cabling installed during the term of the
sublease. The Port Authority during the term of any subletting
hereunder shall have the exclusive right to use the sublet space and
without limiting the foregoing may use the sublet space for its own
benefit or may lease the same to third parties, the terms and
conditions of any third party arrangement to be in the sole discretion
of the Port Authority. The Lessee agrees to vacate the sublet
premises and to remove all of its trade fixtures, equipment and all
other personalty from the premises on or before the effective date of
any subletting hereunder. The Port Authority will not be obligated to
provide any utilities or services to the sublet premises during the
period of the subletting hereunder and will not be obligated to pay
the Lessee any basic rental or additional basic rental in connection
with the portion or portions of the premises sublet to the Port
Authority hereunder.
(j) In the event the Port Authority exercises its Port
Authority Termination option pursuant to paragraph (h) above, or in
the event the Port Authority exercises its Port Authority Subletting
option pursuant to paragraph (i) above, the Lessee shall pay to the
Port Authority upon the effective date of such Port Authority
Termination or the effective date of such Port Authority Subletting,
as the case may be, the following amounts: (i) an amount equal to the
then present value of the difference between (x) the amount obtained
by multiplying the amount of basic rental payable by the Lessee to the
Port Authority under this Agreement for the premises during the period
from the effective date of the Port Authority Termination or Port
Authority Subletting, as the case may be, through the balance of the
term of the letting under this Agreement in the case of Port Authority
Termination or through the balance of the term of the Port Authority
Subletting in the event of a Port Authority Subletting, by a fraction,
the numerator of which shall be the number of rentable square feet
contained in the portion of the premises proposed to be subleased as
set forth in the Intention to Sublet and the denominator of which
shall be the total number of rentable square feet contained in the
premises and (y) the "Total Sublease Basic Rental Amount"; the Total
Sublease Basic Rental Amount shall be the product obtained by
multiplying the number of months from the effective date of the Port
Authority Termination or the effective date of the Port Authority
Subletting through the balance of the term of the letting under this
Agreement in the case of Port Authority Termination or through the
balance of the term of the Port Authority Subletting, as the case may
32
be, by the average monthly basic rental amount payable under the
proposed sublease described in the Intention to Sublet, such amount to
be obtained by dividing the number of months in the proposed sublease
term described in the Intention to Sublet into the total basic rental
payable under the proposed sublease for the entire term of such
sublease, and (ii) an amount equal to the sum of the expenses set
forth in subdivisions (2), (3), (4), (5) and (6) of paragraph (g)
above of this Section 19 which have been or which would have been
incurred by the Lessee in connection with such subletting. In
determining the present value of basic rental for purposes of this
paragraph (j), an interest rate per annum equal to the prime rate
established by Citibank, N.A. at the time of the determination shall
be used.
(k) In the event that the Port Authority shall fail to
exercise its right to terminate or sublet pursuant to paragraphs (h)
or (i) above of this Section 19, as the case may be, within twenty
(20) business days after the Port Authority's receipt of an Intention
to Sublet from the Lessee, then the Lessee, notwithstanding the
provisions of subdivision (2) of paragraph (c) of this Section 19, but
subject to the provisions of this paragraph (k), shall have the right
to sublet the premises or the portions thereof described in said
Intention to Sublet pursuant to and in accordance with said paragraph
(c) provided, however, that if the Lessee thereafter requests the Port
Authority to enter into a Consent to Sublease Agreement covering a
proposed sublease and the number of rentable square feet proposed to
be sublet is more than ten percent (10%) larger or smaller than the
number of rentable square feet described in the Intention to Sublet or
that the term of the subletting is six (6) months greater or shorter
than the term set forth in the Intention to Sublet or that on a per
rentable square foot basis the present value of the rental and all
other consideration payable by the proposed subtenant over the term
for the proposed subletting less the present value of any free rent
period and any credits, allowances or payments payable to such
proposed subtenant is less than eighty-nine percent (89%) of the
present value on a per rentable square foot basis of the rental and
all other consideration which would have been payable in connection
with the subletting covered by the Intention to Sublet, then the
provisions of subdivision (2) of said paragraph (c) shall be deemed
applicable and the Port Authority without any liability on its part
may refuse to enter into such Consent to Sublease Agreement with
respect to such proposed subletting. In determining present value for
purposes of this paragraph (k), an interest rate per annum equal to
the prime rate of Citibank, N.A. in effect on the date of such
determination shall be used. Notwithstanding anything herein to the
contrary, if the Lessee with respect to an Intention to Sublet fails
to request the Port Authority to enter into a Consent to Sublease
within two hundred seventy (270) days after such Intention to Sublet
was submitted to the Port Authority, then it shall be with the same
force and effect as if such Intention to Sublet were never submitted
to the Port Authority and the provisions of subdivision (2) of
paragraph (c) of this Section 19 shall remain in full force and
effect.
Section 20. Termination
(a) If any one or more of the following events shall
occur, that is to say:
33
(1) The Lessee shall become insolvent, or shall
take the benefit of any present or future insolvency
statute, or shall make a general assignment for the benefit
of creditors, or file a voluntary petition in bankruptcy or
a petition or answer seeking an arrangement or its
reorganization or the readjustment of its indebtedness under
the federal bankruptcy laws or under any other law or
statute of the United States or of any State thereof, or
consent to the appointment of a receiver, trustee, or
liquidator of all or substantially all its property; or
(2) By order or decree of a court the Lessee
shall be adjudged bankrupt or an order shall be made
approving a petition filed by any of the creditors or, if
the Lessee is a corporation, by any of the stockholders of
the Lessee, seeking its reorganization or the readjustment
of its indebtedness under the federal bankruptcy laws or
under any law or statute of the United States or of any
State thereof; or
(3) A petition under any part of the federal
bankruptcy laws or an action under any present or future
insolvency law or statute shall be filed against the Lessee
and shall not be dismissed within ninety (90) days after the
filing thereof; or
(4) Except as specifically permitted in the
Section of this Agreement entitled "Assignment and
Sublease", the letting hereunder or the interest or estate
of the Lessee under this Agreement shall be transferred to,
pass to or devolve upon, by operation of law or otherwise,
any other person, firm or corporation; or
(5) The Lessee, if a corporation, shall, without
the prior consent of the Port Authority, become a possessor
or merged corporation in a merger, a constituent corporation
in a consolidation, or a corporation in dissolution, unless
the corporation resulting from such merger or consolidation
has a financial standing as of the date of the merger or
consolidation at least as good as that of the Lessee, by
which is meant that its ratio of current assets to current
liabilities and its net worth shall each be at least as
favorable as that of the Lessee; or
(6) The Lessee is a partnership, and the said
partnership shall be dissolved as the result of any act or
omission of its partners or any of them, or by operation of
law or the order or decree of any court having jurisdiction,
or for any other reason whatsoever; or
(7) By or pursuant to, or under authority of any
legislative act, resolution or rule, or any order or decree
of any court or governmental board, agency or officer, a
receiver, trustee, or liquidator shall take possession or
control of all or substantially all the property of the
Lessee, or any execution or attachment shall be issued
against the Lessee or any of its property, whereupon
possession of the premises shall be taken by someone other
34
than the Lessee, and any such possession or control shall
continue in effect for a period of sixty (60) days; or
(8) Any lien is filed against the premises
because of any act or omission of the Lessee and is not
removed or bonded within forty-five (45) days after notice
thereof from the Port Authority; or
(9) If this Agreement shall require a guarantor
of one or more of the Lessee's obligations under this
Agreement and any of the events described in subparagraphs
(1), (2), (3) or (7) above shall occur to or with respect to
the guarantor (whether or not they shall also occur to or
with respect to the Lessee); or
(10) The Lessee shall fail duly and punctually to
pay the rentals or to make any other payment required
hereunder when due to the Port Authority and such failure
shall continue for a period of ten (10) days after the Port
Authority shall have given the Lessee a statement therefor;
or
(11) The Lessee shall fail to keep, perform and
observe each and every other promise, covenant and agreement
set forth in this Agreement on its part to be kept,
performed, or observed, within thirty (30) days after
receipt of notice of default thereunder from the Port
Authority (except where fulfillment of its obligation
requires activity over a period of time, and the Lessee
shall have commenced to perform whatever may be required for
fulfillment within thirty (30) days after receipt of notice
and continues diligently such performance without
interruption except for causes beyond its control);
then upon the occurrence of any such event or at any time thereafter
during the continuance thereof, the Port Authority may by five (5)
days' notice terminate the letting, such termination to be effective
upon the date specified in such notice. Such right of termination and
the exercise thereof shall be and operate as a conditional limitation.
(b) If any of the events enumerated in paragraph (a)
of this Section shall occur prior to the Prior Entry Date, the Lessee
shall not be entitled to enter into possession of the premises and the
Port Authority upon the occurrence of any such event or at any time
thereafter during the continuance thereof by twenty-four (24) hours'
notice may cancel the interest of the Lessee under this Agreement,
such cancellation to be effective upon the date specified in such
notice.
(c) No acceptance by the Port Authority of rentals,
fees, charges or other payments in whole or in part for any period or
periods after a default in any of the terms, covenants and conditions
to be performed, kept or observed by the Lessee shall be deemed a
waiver of any right on the part of the Port Authority to terminate the
letting.
(d) No waiver by the Port Authority or the Lessee of
any default on the part of the other party to this Agreement in
35
performance of any of the terms, covenants or conditions hereof to be
performed, kept or observed by such party shall be or be construed to
be a waiver by the Port Authority or the Lessee of any other or
subsequent default in performance of any of the said terms, covenants
and conditions.
(e) The rights of termination described above shall be
in addition to any other rights of termination provided in this
Agreement and in addition to any rights and remedies that the Port
Authority would have at law or in equity consequent upon any breach of
this Agreement by the Lessee, and the exercise by the Port Authority
of any right of termination shall be without prejudice to any other
such rights and remedies.
(f) The Lessee hereby waives its right to trial by
jury in any summary proceeding or action that may hereafter be
instituted by the Port Authority against the Lessee in respect of the
premises or in any action that may be brought by the Port Authority to
recover rent, damages, or other sums payable hereunder. The Lessee
shall not interpose any claims as counterclaims in any summary
proceeding or action for non-payment of rental which may be brought by
the Port Authority unless such claims would be deemed waived if not so
interposed.
Section 21. Right of Re-entry
The Port Authority shall, as an additional remedy upon
the giving of a notice of termination as provided in the Section of
this Agreement entitled "Termination", have the right to re-enter the
premises and every part thereof upon the effective date of termination
without further notice of any kind, and may regain and resume
possession either with or without the institution of summary or any
other legal proceedings or otherwise. Such re-entry, or regaining or
resumption of possession, however, shall not in any manner affect,
alter or diminish any of the obligations of the Lessee under this
Agreement, and shall in no event constitute an acceptance of
surrender.
Section 22. Survival of the Obligations of the Lessee
(a) In the event that the letting shall have been
terminated in accordance with a notice of termination as provided in
the Section of this Agreement entitled "Termination", or the interest
of the Lessee cancelled pursuant thereto, or in the event that the
Port Authority has re-entered, regained or resumed possession of the
premises in accordance with the provisions of the Section of this
Agreement entitled "Right of Re-entry", all the obligations of the
Lessee under this Agreement shall survive such termination or
cancellation, re-entry, regaining or resumption of possession and
shall remain in full force and effect for the full term of this
Agreement, and the amount or amounts of damages or deficiency shall
become due and payable, as more specifically stated in paragraph (b)
below, to the Port Authority to the same extent, at the same time or
times and in the same manner as if no termination, cancellation, re-
entry, regaining or resumption of possession had taken place.
(b) Immediately upon any termination or cancellation
pursuant to the Section of this Agreement entitled "Termination", or
36
upon any re-entry, regaining or resumption of possession in accordance
with the Section of this Agreement entitled "Right of Re-entry", there
shall become due and payable by the Lessee to the Port Authority, in
addition to rental accrued prior to the effective date of termination,
without notice or demand and as damages, the sum of the following:
(1) subject to the provisions of paragraph (c) below,
an amount equal to the then present value of all basic
rental provided for in this Agreement for the entire term,
following the effective date of termination, as originally
fixed in the Section of this Agreement entitled "Term" less
the amount thereof which may have been actually paid by the
Lessee;
(2) the amount of all other unfulfilled monetary
obligations of the Lessee under this Agreement, including
without limitation thereto, all sums constituting additional
rental hereunder and the cost to and expenses of the Port
Authority for fulfilling all other obligations of the Lessee
which would have accrued or matured during the balance of
the term or on the expiration date originally fixed or
within a stated time after expiration or termination; and
(3) an amount equal to the cost to and the expenses
of the Port Authority in connection with the termination,
cancellation, regaining possession and restoring and
reletting the premises (provided that as to any costs which
would have been customarily incurred by the Port Authority
upon the original expiration date of the letting with
respect to any reletting, such as brokerage commissions,
finishing allowances and rent concessions the portion of
such costs to be included herein shall be equivalent to the
product obtained by multiplying such costs by a fraction the
numerator of which shall be the number of months in the
letting hereunder subsequent to termination and up to the
original expiration date and the denominator shall be the
number of months in the term of any such reletting), the
Port Authority's legal expenses and costs including the
costs to the Port Authority of its in-house counsel, and the
Port Authority's cost and expenses for the care and
maintenance of the premises during any period of vacancy,
and any brokerage fees and commissions in connection with
any reletting.
(c) The Port Authority may at any time bring an action
to recover all the damages as set forth above not previously recovered
in separate actions, or it may bring separate actions to recover the
items of damages set forth in subparagraphs (2) and (3) of paragraph
(b) above and separate actions periodically to recover from time to
time only such portion of the damages set forth in subparagraph (1) of
paragraph (b) above as would have accrued as rental up to the time of
the action if there had been no termination or cancellation. In any
such action the Lessee shall be allowed a credit against its survived
damages obligations equal to the amounts which the Port Authority
shall have actually received from any tenant, licensee, permittee or
other occupier of the premises or a part thereof during the period for
which damages are sought, and if recovery is sought for a period
subsequent to the date of suit a credit equal to the market rental
37
value of the premises during such period (discounted to reflect the
then present value thereof). If at the time of such action the Port
Authority pursuant to an arms length transaction has relet the
premises, the rental for the premises obtained through such reletting
shall be deemed to be the market rental value of the premises or be
deemed to be the basis for computing such market rental value if less
than the entire premises were relet. In no event shall any credit
allowed to the Lessee against its damages for any period exceed the
then present value of the basic rental which would have been payable
under this Agreement during such period if a termination or
cancellation had not taken place. In determining present value of
rental an interest rate of 6% per annum shall be used.
Section 23. Reletting by the Port Authority
The Port Authority, upon termination or cancellation
pursuant to the Section of this Agreement entitled "Termination", or
upon any re-entry, regaining or resumption of possession pursuant to
the Section of this Agreement entitled "Right of Re-entry", may occupy
the premises or may relet the premises, and shall have the right to
permit any person, firm or corporation to enter upon the premises and
use the same. The Port Authority may grant free rental or other
concessions and such reletting may be of part only of the premises or
of the premises or a part thereof together with other space, and for a
period of time the same as or different from the balance of the term
hereunder remaining, and on terms and conditions and for purposes the
same as or different from those set forth in this Agreement. The Port
Authority shall also, upon termination or cancellation pursuant to the
Section of this Agreement entitled "Termination", or upon its re-
entry, regaining or resumption of possession pursuant to the Section
of this Agreement entitled "Right of Re-entry", have the right to
repair or to make structural or other changes in the premises,
including changes which alter the character of the premises and the
suitability thereof for the purposes of the Lessee under this
Agreement, without affecting, altering or diminishing the obligations
of the Lessee hereunder. In the event either of any reletting or of
any actual use and occupancy by the Port Authority or a third party
whose occupancy is not pursuant to an arms-length transaction (the
mere right to use and occupy not being sufficient however) there shall
be credited to the account of the Lessee against its survived
obligations hereunder any net amount remaining after deducting from
the amount actually received from any lessee, licensee, permittee or
other occupier as the rental or fee for the use of the said premises
or portion thereof during the balance of the letting as the same is
originally stated in this Agreement (it being understood, however,
that in computing such net amount remaining to the Port Authority any
rent concessions or finishing allowances granted by the Port Authority
or brokerage commissions paid by the Port Authority in connection with
any reletting shall be amortized on a straight-line basis over the
entire term of the reletting), or from the market value of the
occupancy of such portion of the premises as the Port Authority or a
third party occupying not pursuant to an arms-length transaction may
during such period actually use and occupy, all expenses, costs and
disbursements incurred or paid by the Port Authority in connection
therewith. No such reletting or such use and occupancy shall be or be
construed to be an acceptance of a surrender.
38
Section 24. Waiver of Redemption
The Lessee hereby waives any and all rights of
redemption, granted by or under any present or future law, arising in
the event it is evicted or dispossessed for any cause, or in the event
the Port Authority obtains or retains possession of the premises in
any lawful manner.
Section 25. Remedies and Suits Against the Lessee
All remedies provided in this Agreement shall be deemed
cumulative and additional and not in lieu of or exclusive of each
other or of any other remedy available to the Port Authority at law or
in equity. In the event of a breach or threatened breach by the
Lessee of any term, covenant, condition or provision of this
Agreement, the Port Authority shall have the right of injunction and
the right to invoke any other remedy allowed by law or in equity as if
termination, re-entry, summary proceedings and any other specific
remedies including without limitation thereto, indemnity and
reimbursement, were not mentioned herein, and neither the mention
thereof nor the pursuance or exercise or failure to pursue or exercise
any right or remedy shall preclude the pursuance or exercise of any
other right or remedy.
Section 26. Surrender
(a) The Lessee covenants and agrees to yield and
deliver peaceably to the Port Authority possession of the premises on
the date of the cessation of the letting, whether such cessation be by
termination, expiration or otherwise, promptly and in the condition
required by paragraph (a) of the Section of this Agreement entitled
"Construction by the Lessee".
(b) Unless the same are required for the performance
by the Lessee of its obligations hereunder, the Lessee shall have the
right at any time during the letting to remove from the premises, and,
on or before the expiration or earlier termination of the letting,
shall so remove its equipment, removable fixtures and other personal
property, and all property of third persons for which it is
responsible, repairing all damages caused by such removal. If the
Lessee shall fail to remove such property on or before the termination
or expiration of the letting, the Port Authority shall have the same
rights with respect to such property as it has in the event of
casualty under paragraph (d) of the Section of this Agreement entitled
"Casualty".
Section 27. Acceptance of Surrender of Lease
No agreement of surrender or to accept a surrender
shall be valid unless and until the same shall have been reduced to
writing and signed by the duly authorized representatives of the Port
Authority and of the Lessee. Except as expressly provided in this
Section, neither the doing of, nor any omission to do, any act or
thing, by any of the officers, agents or employees of the Port
Authority, shall be deemed an acceptance of a surrender of the letting
or of this Agreement. Without limiting the foregoing, no employee or
officer of the Port Authority shall be authorized to accept the keys
39
of the premises prior to the expiration date of the letting as fixed
in the Section of this Agreement entitled "Term" and no delivery of
the keys by the Lessee shall constitute a termination of this
Agreement or acceptance of surrender.
Section 28. Brokerage
The Lessee represents and warrants that it has not
dealt or had any contacts or dealings with any broker in connection
with the negotiation and execution of this Agreement or the letting
hereunder except Edward S. Gordon Company, Inc., a New York
corporation having an office and place of business at 111 Broadway,
New York, New York 10006, and that there is no broker with whom the
Lessee has dealt or had contacts or dealings with who is or may be
entitled to be paid a commission or fee in connection with the
negotiation and execution of this Agreement or the letting hereunder
except Edward S. Gordon Company, Inc. The Lessee shall indemnify and
save harmless the Port Authority of and from any and all claims for
commission, brokerage or fees which have been or which may be made by
any and all persons, firms or corporations whatsoever for services in
connection with the negotiation and execution of this Agreement or the
letting hereunder with whom the Lessee has dealt or had contacts or
dealings with except for a claim of Edward S. Gordon Company, Inc. if
the said claim is made in accordance with the terms of the agreement
between the Port Authority and Edward S. Gordon Company, Inc. dated as
of January 10, 1995.
Section 29. Notices
(a) Notices, requests, permissions, consents and
approvals given or required to be given to or by either party under
this Agreement, shall not be effective unless they are given in
writing, and all such notices and requests shall be (i) personally
delivered to the party or a duly designated officer or representative
of such party; or (ii) delivered to the office of such party, officer
or representative during regular business hours; or (iii) if directed
to the Lessee, delivered at the premises at any time from and after
the date the Lessee commences business operations in the premises; or
(iv) forwarded to such party, officer or representative at the office
or residence address by registered or certified mail. The Lessee
shall designate an office within the Port of New York District and an
officer or representative whose regular place of business is at such
office. Except as may be specifically provided elsewhere in this
Agreement, the Port Authority hereby designates its Executive
Director, and the Lessee designates the person named as representative
on the first page hereof as their respective officers or
representatives upon whom notices and requests may be served. The
Port Authority designates its office at One World Trade Center, New
York, New York 10048 as its office where notice and requests may be
served. The Lessee up until the date it commences business operations
in the premises designates its office at 110 William Street, New York,
New York 10038 and from and after the date it commences business
operations in the premises designates its office at the address stated
on the first page hereof, as its respective offices where notices and
requests may be served. It is hereby understood and agreed that the
Port Authority and the Lessee by prior notice to the other from time
to time may designate officers and representatives and offices
40
different than those named herein for the purposes of receiving
notices and requests.
(b) If any notice is delivered, such notice shall be
deemed to have been given or made on the date delivered and if any
notice is mailed, such notice shall be deemed to have been given or
made on the second day after the day the notice is so mailed.
Section 30. Payments
(a) All payments required of the Lessee by this
Agreement shall be mailed to the Port Authority of New York and New
Jersey, P. O. Box 17309, Newark, New Jersey 07194, or to such office
or address as may be substituted therefor.
(b) No payment by the Lessee or receipt by the Port
Authority of a lesser rental amount than that which is due and payable
under the provisions of this Agreement at the time of such payment
shall be deemed to be other than a payment on account of the earliest
rental then due, nor shall any endorsement or statement on any check
or in any letter accompanying any check or payment be deemed an accord
and satisfaction, and the Port Authority may accept such check or
payment without prejudicing in any way its right to recover the
balance of such rental or to pursue any other remedy provided in this
Agreement or by law. No payment by the Port Authority or receipt by
the Lessee of a lesser amount than that which is due and payable under
the provisions of this Agreement at the time of such payment shall be
or be deemed to be other than a payment on account, nor shall any
endorsement or statement or any check or in any letter accompanying
any check or payment be deemed an accord and satisfaction, and the
Lessee may accept such check or payment without prejudicing in any way
its right to recover the balance of any such amount or to pursue any
other remedy provided in this Agreement or by law.
Section 31. Late Charges; Monetary and Non-Monetary Disputes
(a) If the Lessee should fail to pay any amount
required under this Agreement when due to the Port Authority,
including without limitation any payment of basic or other rental or
any payment of utility or other charges, then, in such event, the Port
Authority may impose (by statement, bill or otherwise) a late charge
with respect to each such unpaid amount for each late charge period
(hereinbelow described) during the entirety of which such amount
remains unpaid, each such late charge not to exceed an amount equal to
eight-tenths of one percent of such unpaid amount for each late charge
period. There shall be twenty-four late charge periods on a calendar
year basis; each late charge period shall be for a period of at least
fifteen (15) calendar days except one late charge period each calendar
year may be for a period of less than fifteen (but not less than
thirteen) calendar days. Each late charge shall be payable
immediately upon demand made at any time therefor by the Port
Authority. No acceptance by the Port Authority of payment of any
unpaid amount or of any unpaid late charge amount shall be deemed a
waiver of the right of the Port Authority to payment of any late
charge or late charges payable under the provisions of this Section
with respect to such unpaid amount. Each late charge shall be and
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become additional rent, recoverable by the Port Authority in the same
manner and with like remedies as if it were originally a part of the
rental as set forth in the Section of this Agreement entitled "Basic
Rental". Nothing in this Section is intended to, or shall be deemed
to, affect, alter, modify or diminish in any way (i) any rights of the
Port Authority under this Agreement, including without limitation the
Port Authority's rights set forth in the Section of this Agreement
entitled "Termination" or (ii) any obligations of the Lessee under
this Agreement. If the precise amount of any payment required to be
made by the Lessee under this Agreement cannot be known to the Lessee,
such payment shall not be deemed due to the Port Authority until ten
(10) days after the Port Authority notifies the Lessee of the amount
of such payment. In the event that any late charge imposed pursuant
to this Section shall exceed a legal maximum applicable to such late
charge, then, in such event, each such late charge payable under this
Agreement shall be payable instead at such legal maximum.
(b) In the event that the Lessee shall in good faith
dispute the amount of any charge or other amount claimed by the Port
Authority as due and payable to it by the Lessee under this Agreement,
and the Lessee within fifteen (15) days after notice from the Port
Authority that such amount is due and payable notifies the Port
Authority of the amount it is disputing and the reason it is disputing
same, then the Lessee may withhold solely the portion of such charge
or amount in dispute (and shall pay the remainder of such charge or
amount to the Port Authority) and for a period of thirty (30) days
following such notice, the failure of the Lessee to pay such withheld
amount shall not constitute a default, an event of default or ground
for termination giving the Port Authority the right to terminate this
Agreement and the letting hereunder pursuant to paragraph (a) of the
Section of this Agreement entitled "Termination" or exercise any other
rights or remedies under this Agreement, nor shall a late charge be
imposed on any such withheld amount pursuant to the provisions of
paragraph (a) of this Section, in each case so long as the withheld
amount shall be the subject of a bona fide dispute between the Lessee
and the Port Authority, provided, that nothing in this paragraph (b)
shall permit or be deemed to permit the Lessee to dispute and withhold
any payment of basic rental or any portion thereof or all or part of
any other charge or amount, the amount of which is specified in this
Agreement. The Lessee and the Port Authority will promptly meet and
make good faith efforts to resolve any such dispute, and from and
after the resolution of such dispute, if any amount shall be due and
owing to the Port Authority, the provisions of paragraph (a) of this
Section (including, without limitation, the fifteen (15) day grace
period permitted to the Lessee prior to the imposition of a late
charge) shall be applicable thereto. If the Lessee and the Port
Authority shall be unable to resolve such dispute within thirty (30)
days after the Lessee notifies the Port Authority of the reason for
the dispute, the Port Authority shall have the right to terminate this
Agreement and the letting hereunder or exercise any other remedy
available to it under this Agreement or otherwise, whether in law or
in equity. The Port Authority covenants that if the Lessee should
serve an effective and timely Notice of Claim upon the Port Authority
with respect to such dispute pursuant to and in accordance with the
provisions of Section 7101 et. seq. of the Unconsolidated Laws of the
State of New York, within ten (10) business days after the Port
Authority shall have served upon the Lessee a notice terminating this
Agreement and the letting hereunder, then and subject to the
42
provisions of paragraph (c) below, the effective date set forth in the
Port Authority's Notice of Termination shall be deemed postponed until
five (5) business days after the claim set forth in such Notice of
Claim or any ensuing legal action with respect to that dispute is
resolved, and if such resolution determines that the Lessee is in
default of the monetary obligation disputed by the Lessee under this
Agreement, the Port Authority shall not commence a "holdover"
proceeding or any other proceeding to evict the Lessee on the basis of
such dispute until on or after the day following such postponed
effective date of termination. If such resolution should determine
that the Lessee is not in default of said disputed monetary obligation
under this Agreement, or if the Lessee shall have paid the disputed
monetary obligation within such five (5) business day period, then in
either case such Notice of Termination shall be deemed withdrawn with
the same force and effect as if it had never been served. It is
expressly understood that nothing contained herein shall be deemed to
waive any rights of the Port Authority under the provisions of Section
7101 et. seq. of the Unconsolidated Laws of the State of New York.
Any such Notice of Claim shall be served and prosecuted solely in
accordance with the provisions of Section 7101 et. seq. of the
Unconsolidated Laws of the State of New York, and the Lessee hereby
covenants and agrees that it shall diligently prosecute the Notice of
Claim and any ensuing legal action with respect to that dispute to
resolution.
(c) If the Lessee should serve an effective and timely
Notice of Claim upon the Port Authority with respect to a monetary
dispute referred to in paragraph (b) above of this Section 31, the
Port Authority notwithstanding service of such Notice of Claim shall
have the right to request by notice to the Lessee within thirty (30)
days after service of such notice of claim that such monetary dispute
be resolved in accordance with the Expedited Procedures provision
(Rules 53 through 57 in the May 1, 1992 edition) of the Commercial
Arbitration Rules of the American Arbitration Association and if the
Port Authority does so request arbitration, then simultaneously upon
receipt by the Lessee of the Port Authority's notice, the said Notice
of Claim shall be deemed withdrawn by the Lessee with the same force
and effect as if it had never been served by the Lessee on the Port
Authority, but the effective date set forth in the Port Authority's
Notice of Termination referred to in paragraph (b) above shall be
deemed postponed until five (5) business days after the dispute is
resolved by arbitration. If such resolution by arbitration determines
that the Lessee is in default of the monetary obligation disputed by
the Lessee hereunder, the Port Authority shall not commence a
"holdover" proceeding or any other proceeding to evict the Lessee on
the basis of such dispute until on or after the day following such
postponed effective date of termination. If such resolution should
determine that the Lessee is not in default of such described monetary
obligation under this Agreement, or if the Lessee within such five (5)
business day period shall have paid the disputed monetary obligation,
then in each case such Notice of Termination shall be deemed withdrawn
with the same force and effect as if it had never been served. All
costs of arbitration pursuant to this paragraph (c) shall be borne by
the unsuccessful party (and if both parties are partially successful,
such costs shall be apportioned between the Port Authority and the
Lessee in inverse proportion to the amount by which such decision is
favorable to each party).
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(d) In the event that the Port Authority shall send a
notice to the Lessee claiming that it is in default of any of its non-
monetary obligations under this Agreement, other than any default
which (i) affects life and safety, or (ii) affects any building system
which directly affects other tenants in the Building, or (iii) affects
the ability of the Port Authority to provide essential services to
other tenants of the Building, and the Lessee, in good faith, disputes
that it is in default of such obligations, then, provided the Lessee
shall notify the Port Authority of the basis for the dispute within
ten (10) business days after its receipt of the notice, and, if
applicable and feasible, shall comply with or perform any non-disputed
portions or aspects of such disputed obligation, then, for a period of
twenty-five (25) days following such notice, the failure of the Lessee
to comply with or perform the disputed obligation shall not constitute
a default, an event of default or ground for termination giving the
Port Authority the right to terminate this Agreement and the letting
hereunder pursuant to paragraph (a) of the Section of this Agreement
entitled "Termination" or exercise any other rights or remedies under
this Agreement. The Lessee and the Port Authority will promptly meet
and make good faith efforts to resolve any such dispute, and if the
Lessee and the Port Authority shall be unable to resolve such dispute
within twenty-five (25) days after the Lessee notifies the Port
Authority of the basis for the dispute, the Port Authority shall have
the right to terminate this Agreement and the letting hereunder or
exercise any other right or remedy available to it under this
Agreement, or otherwise, whether in law or in equity. The Port
Authority covenants that if the Lessee should serve an effective and
timely Notice of Claim upon the Port Authority with respect to such
dispute pursuant to and in accordance with the provisions of Section
7101 et. seq. of the Unconsolidated Laws of the State of New York,
within ten (10) business days after the Port Authority shall have
served upon the Lessee a notice terminating this Agreement and the
letting hereunder, the effective date set forth in the Port
Authority's Notice of Termination shall be deemed postponed until ten
(10) business days after the claim set forth in such Notice of Claim
or any ensuing legal action with respect to that dispute is resolved,
and if such resolution determines that the Lessee is in default of the
obligation disputed by the Lessee under this Agreement, the Port
Authority shall not commence a "holdover" proceeding or any other
proceeding to evict the Lessee on the basis of such dispute until on
or after the day following such postponed effective date of
termination, and the postponement of such effective date of
termination shall continue as long as the Lessee commences to cure the
default giving rise to the dispute within said ten (10) business day
period and diligently prosecutes said cure to completion. If such
resolution should determine that the Lessee is not in default of said
disputed obligation under this Agreement, or if the Lessee shall have
commenced to cure the default giving rise to the dispute within such
ten (10) business day period and shall thereafter have diligently
prosecuted such cure to completion, then in either case such Notice of
Termination shall be deemed withdrawn with the same force and effect
as if it had never been served. It is expressly understood that
nothing contained herein shall be deemed to waive any rights of the
Port Authority under the provisions of Section 7101 et. seq. of the
Unconsolidated Laws of the State of New York, and the Lessee hereby
covenants and agrees that it shall diligently prosecute the Notice of
Claim and any ensuing legal action with respect to that dispute to
resolution.
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Section 32. Quiet Enjoyment
The Lessee, upon paying all rentals hereunder and
performing all the covenants, conditions and provisions of this
Agreement on its part to be performed, shall and may peaceably and
quietly have, hold and enjoy the premises free of any act or acts of
the Port Authority or any successor landlord or anyone claiming
superior title through the Port Authority or such successor landlord
except as expressly provided in this Agreement, if at all, it being
understood and agreed that the Port Authority's liability hereunder
shall obtain only so long as it remains the owner of the portion of
the Facility of which the premises are a part, provided the successor
owner shall assume such liability.
Section 33. Non-Liability of Individuals
Neither the Commissioners of the Port Authority nor any
of them, nor any officer, agent or employee thereof, shall be charged
personally by the Lessee with any liability or held liable to it under
any term or provision of this Agreement, or because of its execution
or attempted execution, or because of any breach or attempted or
alleged breach thereof.
Section 34. Headings
The section headings and the paragraph headings, if
any, are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope or intent of any
provision hereof.
Section 35. Construction and Application of Terms
(a) Wherever in this Agreement a third person singular
neuter pronoun or adjective is used referring to the Lessee, the same
shall be taken and understood to refer to the Lessee, regardless of
the actual gender or number thereof.
(b) If more than one individual or other legal entity
is the Lessee under this Agreement, each and every obligation hereof
shall be the joint and several obligation of each such individual or
other legal entity.
(c) This Agreement does not constitute the Lessee, the
agent or representative of the Port Authority for any purpose
whatsoever.
(d) All designations of time herein contained shall
refer to the time-system then officially in effect in the municipality
wherein the premises are located.
(e) No greater rights or privileges with respect to
the use of the premises or any part thereof or with respect to the
World Trade Center are granted or intended to be granted to the Lessee
by this Agreement, or by any provision thereof, than the rights and
privileges expressly granted hereby.
Section 36. Definitions
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The following terms, when used in this Agreement, shall
have the respective meanings given below:
(a) "Letting" shall mean the letting under this
Agreement for the original term stated herein, and shall include any
extensions thereof which may be made pursuant to the provisions of
this Agreement, or otherwise.
(b) "World Trade Center" shall mean the building
complex constructed by the Port Authority within the area in the
Borough of Manhattan, City, County and State of New York, bounded
generally by the east side of Church Street on the east, the south
side of Liberty Street and the south side of Liberty Street extended
on the south, the Hudson River on the west, and on the north by a line
beginning at the point of intersection of the Hudson River and the
north side of Vesey Street extended, running along the north side of
Vesey Street extended and the north side of Vesey Street to the west
side of Washington Street, then along the west side of Washington
Street to the north side of Barclay Street, then along the north side
of Barclay Street to the east side of West Broadway, then along the
east side of West Broadway to the north side of Vesey Street, then
along the north side of Vesey Street to the east side of Church
Street, together with such additional contiguous area as may be agreed
upon from time to time between the Port Authority and the said City of
New York.
(c) The phrase "utility, mechanical, electrical,
communication and other systems" shall mean and include (without
limitation thereto) the following: machinery, engines, dynamos,
boilers, elevators, escalators, incinerators and incinerator flues,
systems for the supply of fuel, electricity, water, gas and steam,
plumbing, heating, sewerage, drainage, ventilating, air conditioning,
communications, fire-alarm, fire-protection, sprinkler, telephone,
telegraph and other systems, fire hydrants, fire hoses, and their
respective wires, mains, conduits, lines, tubes, pipes, equipment,
motors, cables, fixtures and other equipment.
(d) "Causes or conditions beyond the control of the
Port Authority", shall mean and include acts of God, the elements,
weather conditions, tides, earthquakes, settlements, fire, acts of
governmental authority, other than the Port Authority, war, shortage
of labor or materials, acts of third parties for which the Port
Authority is not responsible, injunctions, strikes, boycotts,
picketing, slowdowns, work stoppages, labor troubles or disputes of
every kind (including all those affecting the Port Authority, its
contractors, suppliers or subcontractors) or any other condition or
circumstances, whether similar to or different from the foregoing (it
being agreed that the foregoing enumeration shall not limit or be
characteristic of such conditions or circumstances) which is beyond
the control of the Port Authority or which could not be prevented or
remedied by reasonable effort and at reasonable expense.
(e) "Normal business hours" shall mean 8:00 o'clock
A.M. to 6:00 o'clock P.M. Mondays to Fridays inclusive, legal holidays
as defined in Exhibit R excepted.
Section 37. Force Majeure
46
(a) The Port Authority shall not be liable for any
failure, delay or interruption in performing its obligations hereunder
due to causes or conditions beyond the control of the Port Authority.
Further, the Port Authority shall not be liable unless the failure,
delay or interruption shall result from failure on the part of the
Port Authority to use reasonable care to prevent or reasonable efforts
to cure such failure, delay or interruption.
(b) Subject to the provisions of paragraph (c) below,
no abatement, diminution or reduction of the rent or other charges
payable by the Lessee, shall be claimed by or allowed to the Lessee
for any inconvenience, interruption, cessation or loss of business or
other loss caused, directly or indirectly, by any present or future
laws, rules, requirements, orders, directions, ordinances or
regulations of the United States of America, or of the state, county
or city governments, or of any other municipal, governmental or lawful
authority whatsoever, or by priorities, rationing or curtailment of
labor or materials, or by war or any matter or thing resulting
therefrom, or by any other cause or condition beyond the control of
the Port Authority, nor shall this Agreement be affected by any such
causes or conditions.
(c) In the event that any failure to provide the
Lessee with access to the premises in accordance with the Section of
this Agreement entitled "Ingress and Egress", or to supply elevator
service to the premises, or to supply other services which the Port
Authority has agreed to supply pursuant to the Section of this
Agreement entitled "Services and Utilities" or the Section of this
Agreement entitled "Additional Services" (whether or not excused by
this Section 37, paragraph (h) of the Section of this Agreement
entitled "Services and Utilities" or other provisions hereof), renders
uninhabitable one or more portions of the premises so that the
Lessee's operations under the Section of this Agreement entitled
"Rights of User by the Lessee" cannot reasonably be conducted therein
and such failure of service is not the result of the fault of the
Lessee, its officers, employees, agents or contractors, and the Lessee
shall give notice to the Port Authority of such fact and shall
thereafter vacate and not use the said portion of the premises for the
Lessee's operations permitted by the Section of this Agreement
entitled "Rights of User by the Lessee" for five (5) consecutive
business days, then thereafter, while such vacant and uninhabitable
condition and non use shall continue, the Lessee shall be entitled to
an abatement of the basic rental and the additional basic rental
hereunder (as provided for in the Section of this Agreement entitled
"Abatement of Rental") solely as to the portion of the premises so
rendered vacant, uninhabitable and which is unused provided that if
such vacant and uninhabitable condition and non-use shall as to
fifteen percent (15%) or more of the rentable square feet in the
premises continue for two hundred seventy (270) consecutive days, then
the Lessee shall have the right to terminate this agreement and the
letting hereunder in its entirety by giving thirty (30) days' prior
notice to the Port Authority provided such notice is given to the Port
Authority no later than the thirtieth (30th) day from the end of such
two hundred seventy (270) consecutive day period and provided further
that such non-use, vacant and uninhabitable condition does not end
prior to the date the Lessee gives the Port Authority such notice of
termination. Termination by the Lessee pursuant to the provisions of
this paragraph (c) shall be with the same force and effect as if the
47
effective date of termination stated in the Lessee's notice were the
date set forth in this Agreement as the expiration date of the letting
hereunder.
Section 38. Premises
The Lessee acknowledges that it has not relied upon any
representation or statement of the Port Authority or its
Commissioners, officers, employees or agents as to the suitability of
the premises for the operations permitted on the premises by this
Agreement. The Lessee agrees that no portion of the premises will be
used initially or at any time during the letting which is in a
condition unsafe or improper for the conduct of the Lessee's
operations hereunder so that there is possibility of injury or damage
to life or property. For all purposes of this Agreement the premises
hereunder (notwithstanding any statement elsewhere in this Agreement
of any rule for the measurement of the area thereof) shall be deemed
to include all of the enclosing partitions, and the interior of the
adjacent exterior building walls including glass therein.
Section 39. Governmental Compliance
In the event that all or any portion of the premises is
required by the Port Authority to comply with any present or future
governmental law, rule, regulation, requirement, order or direction,
the Port Authority shall give the Lessee notice that all or any such
portion of the premises is so required and the Lessee shall deliver
all or any such portion of the premises so required on the date
specified in such notice and, if the Lessee does not so deliver, the
Port Authority may take the same. No such taking or delivery shall be
or be construed to be an eviction of the Lessee or a breach of this
Agreement. In the event that the Lessee has received a notice
hereunder it shall deliver all or any such portion of the premises so
required in the same condition as that required hereunder for the
delivery of the premises on the cessation of the letting. In the
event of the taking or delivery of all the premises, this Agreement
and the letting hereunder shall on the day of such taking or delivery
cease and expire as if that day were the date originally stated herein
for the expiration of this Agreement; and, in the event of the taking
or delivery of any portion of the premises, then, from and after such
taking or delivery, such portion of the premises shall cease to be a
part of the premises hereunder. There shall be an abatement of the
rental in the event of any such taking or delivery of a portion of the
premises as provided in the Section of this Agreement entitled
"Abatement of Rental".
Section 40. Services and Utilities
(a) Subject to all the terms and provisions of this
Agreement, the Port Authority will furnish without additional charge
to the Lessee the following:
(1) During normal business hours heat,
ventilation and air cooling in accordance with the
specifications set forth in Schedule D attached hereto,
subject to the provisions of paragraph (b) of the Section of
this Agreement entitled "Construction by the Lessee";
48
(2) Cleaning services in the portion of the
premises shown on Exhibit A as described in Schedule B
attached hereto and hereby made a part hereof and cleaning
services in the portion of the premises shown on Exhibit A-1
as described in Schedule B-1 attached hereto and hereby made
a part hereof.
(3) Passenger elevator service to the
premises on business days during normal business
hours, which service shall consist of not less
than three (3) elevator cars available from the
lobby of the South Tower Building to each floor of
the premises and one passenger elevator car
available from the lobby of the South Tower
Building to each floor of the premises during all
other times; one freight elevator serving the
premises and the entire Building in which the
premises are located on call on a "first come,
first served" basis on business days during normal
business hours and on a reservation "first come,
first served" basis during hours other than normal
business hours;
(4) Access to the premises 24 hours per
day, 365 days per year throughout the term of this
Agreement, subject to the Lessee's compliance with
the Rules and Regulations, and with such other
reasonable rules, regulations and procedures which
may be imposed by the Port Authority, including,
without limitation, regulations and procedures
establishing reasonable security checks.
(b) Unless the premises contain toilet and washroom
facilities, the Port Authority shall, without additional charge,
furnish non-exclusive toilet and washroom facilities for the employees
of the Lessee. The Port Authority agrees to furnish hot and potable
cold water for sanitary purposes in the public bathrooms located in
the Lessee's premises or located of multitenanted floors on which
portions of the Lessee's premises are located.
(c) Subject to all the terms, provisions and
conditions of paragraphs (f), (g), (h) and (i) of this Section 40 and
to the extent that the Lessee's consumption does not exceed the
capacity of feeders, risers or wiring in the building of which the
premises is a part (it being the Lessee's sole responsibility for
designing and constructing distribution systems for the premises), the
Port Authority will supply to the existing electric closets serving
the premises on each floor of the premises for use by the Lessee 7
watts per rentable square foot of electrical capacity (exclusive of
electricity required for HVAC and core facilities) as follows: 3
watts at 120/208 and 4 watts at 277/465 provided that if the Port
Authority pursuant to its comprehensive plan for the World Trade
Center increases the electrical capacity to 10 watts per rentable
square foot in the first zone of the South Tower Building, then the
Port Authority upon written request from the Lessee will provide 10
watts per rentable square foot of electrical capacity to the Lessee
but nothing herein shall in any way be construed to in any way
obligate the Port Authority to increase the electrical capacity in the
49
first zone of the South Tower Building or elsewhere at the World Trade
Center. Electricity furnished to the Lessee shall be used solely for
illumination by which is meant the energizing of fluorescent and
incandescent bulbs (to be supplied, paid for and installed by the
Lessee) and for the operation of such office machines and equipment
(including computers) as are customarily utilized in an office of the
type described in the Section of this Agreement entitled "Rights of
User by the Lessee", and the Lessee shall pay for the same in
accordance with the following provisions of this paragraph (c). The
quantity of all electricity supplied to the Lessee shall be measured
by a meter or meters to be furnished and installed by the Port
Authority at its cost and expense for that purpose (it being
understood that the wiring and all other electrical work in connection
with such metering shall be performed by the Lessee at its cost and
expense), and in the event any such meter fails to record such, the
quantity of electricity so supplied during any period that a meter is
out of service will be considered to be the same as the quantity
supplied during a like period immediately before such interruption and
if there is no like period immediately before such interruption, then
it shall be a like period immediately after such disruption. The
quantity of such electricity shall be paid for by the Lessee in an
amount equal to 100% of the rates (including the fuel or other
adjustment factor, if any) which the Lessee, under the service
classification then applicable to the Lessee, would be required to pay
for the same quantity of electricity to be used for the same purpose
under the same conditions if the Lessee had purchased such electricity
directly from the public utility company supplying the same to
commercial buildings in the vicinity of the World Trade Center. The
Lessee shall pay the cost of such consumption and demand for each such
billing period to the Port Authority upon demand therefor (billing
period hereunder to be the same as that established by the public
utility company supplying electricity to commercial buildings in the
vicinity of the World Trade Center), and the same shall be deemed
additional rental collectible in the same manner and with like
remedies as if it were a part of the basic rental reserved hereunder.
Notwithstanding that the Port Authority has agreed to supply
electricity to the Lessee, the Port Authority shall be under no
obligation to provide or continue such service if the Port Authority
is prevented by law, agreement or otherwise from submetering
electricity as hereinabove set forth or elects not to so submeter the
same, provided that unless prevented by law the Port Authority will
not discontinue the supply of electricity to the Lessee unless it
discontinues such supply to all non-governmental entities at the World
Trade Center whose premises are in excess of one hundred thousand
(100,000) rentable square feet. In the event the Port Authority does
so discontinue the supply of electricity, the Lessee shall make all
arrangements and conversions necessary to obtain electricity directly
from the public utility company supplying electricity in the vicinity.
Also, in such event, the Lessee shall perform the construction
necessary for such conversion, and if despite such discontinuance the
Port Authority was not prevented by law from submetering electricity
as hereinabove set forth, then the Port Authority shall grant to the
Lessee a credit against its rental payments next becoming due in an
amount equal to the Lessee's reasonable cost of performing such
necessary construction provided, however that if the term of the
letting expires prior to full application of such credit, then the
Port Authority will promptly pay the Lessee such portion of the credit
as has not been applied against rental. If any lines or equipment of
50
the Port Authority are with the consent of the Port Authority used
subsequent to such conversion, the Port Authority may make an
appropriate charge therefor to the Lessee based on its costs and
expenses for the said lines and equipment.
(d) If the Lessee, in accordance with the Section of
this Agreement entitled "Construction by the Lessee" or otherwise,
erects any partitions or makes any improvements which stop, hinder,
obstruct or interfere with the cooling of the air or the heating of
the premises, or if the Lessee shall fail to close and keep closed the
window coverings when the sun is shining on the windows of the
premises, then no such action by the Lessee shall impose any
obligations on the Port Authority to install facilities, fixtures or
equipment for air-cooling or for heating additional to those existing
or presently contemplated or to increase the capacity or output of
initially existing facilities, equipment or fixtures and the Lessee
shall not in any such event be relieved of any of its obligations
hereunder because a comfortable temperature is not maintained but
nothing herein shall be construed to relieve the Port Authority of its
obligation to provide heating, ventilation and air cooling in
accordance with the specifications set forth in Schedule D. No
consent given by the Port Authority to the erection of partitions or
the making of any improvements shall be or be deemed to be a
representation that the work consented to will not stop, hinder,
obstruct or interfere with either the cooling of the air or heating of
the premises or any portion thereof. It is hereby understood further
that the installation by the Lessee of any equipment which itself
requires air cooling or which requires additional quantities of air
cooling at the portion of the premises where such equipment is
installed or the concentration in any portion of the premises of such
a number of people so as to require additional quantities of air
cooling, shall not impose any obligation on the Port Authority to
install facilities, fixtures and equipment for air cooling additional
to those initially existing, or to increase the capacity or output of
initially existing facilities, equipment or fixtures and the Lessee
shall not in any such event be relieved of any of its obligations
hereunder.
(e) The Lessee shall keep closed all entrance doors
and all windows in the premises except that doors may be opened when
required for ingress or egress. The Lessee shall not otherwise waste
or dissipate the air cooling or heating services.
(f) If any federal, state, municipal or other
governmental body, authority or agency or any public utility assesses,
levies, imposes, makes or increases any charge, fee or rent on the
Port Authority for any service, system or utility now or in the future
supplied to or available to the premises or to any occupants or users
thereof or to the structure or building of which the premises form a
part (including but not limited to any sewer rent or charge for the
use of sewer systems), the Lessee shall, at the option of the Port
Authority exercised at any time and from time to time by notice to the
Lessee, pay, in accordance with said notice, such charge, fee or rent
or increase thereof (or the portion thereof allocated by the Port
Authority to the premises or the Lessee's operations hereunder) either
directly to the governmental body, authority or agency or to the
public utility or directly to the Port Authority. No charge, fee, or
rent or increase shall be imposed upon the Lessee pursuant to this
51
paragraph (f) to the extent any such is included as an Operating
Expense for purposes of Schedule A.
(g) The Port Authority shall have the right to
discontinue temporarily the supply of any of the above services when
necessary or desirable in the reasonable opinion of the Port Authority
in order to make any repairs, alterations, changes or improvements in
the premises or elsewhere in the World Trade Center including but not
limited to all systems for the supply of services. The Port Authority
will give reasonable advance notice, when practicable, of the
anticipated commencement, duration and notice of any such
interruption. The Port Authority will proceed with reasonable
diligence to eliminate the interruption.
(h) Subject to the provisions of paragraph (c) of the
Section of this Agreement entitled "Force Majeure", no failure, delay,
interruption or reduction in any service or services shall be or shall
be construed to be an eviction of the Lessee, shall be grounds for any
diminution or abatement of the rentals payable hereunder, or shall
constitute grounds for any claim by the Lessee for damages,
consequential or otherwise, unless due to the negligent acts of the
Port Authority, its employees or agents.
(i) The Port Authority shall be under no obligation to
supply any service or services if and to the extent and during any
period that the supplying of any such service or services or the use
of any component necessary therefor shall be prohibited or rationed by
any federal, state or municipal law, rule, regulation, requirement,
order or direction and if the Port Authority deems it in the public
interest to comply therewith, even though such law, rule, regulation,
requirement, order or direction may not be mandatory on the Port
Authority as a public agency.
(j) (i) In such kitchen facilities as may be referred
to in paragraph (e) of the Section of this Agreement entitled
"Responsibilities of the Lessee" and as are approved by the Port
Authority for installation in the premises pursuant to the provisions
of the Section of this Agreement entitled "Construction by the Lessee"
and subject to the provisions of paragraphs (f), (g), (h) and (i) of
this Section 41, the Port Authority will supply to the Lessee cold
water, of the character furnished by the municipality or utility
company supplying the same in the vicinity and hot water, at a
temperature of approximately 140 F, both in reasonable quantities for
use by the Lessee through such fixtures and outlets as may be
installed by the Lessee pursuant to the provisions of the Section of
this Agreement entitled "Construction by the Lessee". The Port
Authority will measure the quantities of such cold water and hot water
supplied to the Lessee by meters to be installed by the Port Authority
for the purpose. The Lessee shall pay to the Port Authority for the
cold and hot water as billed by the Port Authority from time to time
at the following rates: (1) cold water, at the rate of Thirty-six
Dollars and Sixty-eight Cents ($36.68) per thousand cubic feet and (2)
hot water at the rate of Sixty-two Dollars and Seventy-one Cents
($62.71) per thousand cubic feet; the charges to be subject to
increase in rates charged the Port Authority as provided in paragraph
(f) of this Section 40 and with respect to the charge for metered hot
water the same shall also be subject to increase as provided in
subparagraph (ii) of this paragraph (j) below. Notwithstanding the
52
foregoing, the Port Authority will not impose a charge upon the Lessee
for cold and hot water used in conjunction with drinking fountains,
dryer units, dishwashers, kitchen sinks, kitchen ice makers and
existing public restrooms located in the premises.
(ii) The charge for metered hot water provided for
in subparagraph (i) above of this paragraph (j) shall be subject to
increase from time to time as follows: "Wage rate' as used in this
paragraph shall mean the hourly straight time wage rate for Engineers
as that wage rate is established from time to time by collective
bargaining agreement between the Realty Advisory Board on Labor
Relations, Incorporated, acting on behalf of various building owners
and Local 94 of the International Union of Operating Engineers, AFL-
CIO, and "basic wage rate" shall mean the wage rate in effect on
January 1, 1994. From and after each wage rate established from and
after the commencement date of the letting, the Lessee shall pay a
charge for metered hot water in addition to the charge set forth in
subparagraph (i) above, such additional charge to be an amount
computed by multiplying the charge for metered hot water stated in
that subparagraph by the percentage increase in the wage rate so
established over the basic wage rate. If either the Realty Advisory
Board on Labor Relations, Incorporated, or Local 94 of the
International Union of Operating Engineers, AFL-CIO, shall cease to
exist or a collective bargaining agreement shall cease to be
negotiated between the Realty Advisory Board on Labor Relations,
Incorporated, and Local 94 of the International Union of Operating
Engineers, AFL-CIO, then the wage rate to be used for computing
increases in the said charge shall be the wage rate for Engineers
established under such collective bargaining agreements as the Port
Authority shall select. If the job classification "Engineers" shall
be renamed or abolished, then the Port Authority will select the job
classification performing substantially the same labor function as
Engineers and the wage rate of the job classification so selected
shall be used in computing increases in the charge provided herein.
(k) The Port Authority shall have no obligations or
responsibility with respect to the performance of any services or
providing, supplying or furnishing to the Lessee of any utilities or
services whatsoever except as expressly provided in this Agreement.
Section 41. Liability Insurance
(a) The Lessee shall not do or permit to be done any
act or thing upon the premises or at the World Trade Center which will
invalidate or conflict with any insurance policies covering the
premises or any part thereof, or the World Trade Center, or any part
thereof, which, in the reasonable opinion of the Port Authority, may
constitute an extra-hazardous condition, so as to increase the risks
normally attendant upon the operations contemplated by the Section of
this Agreement entitled "Rights of User by the Lessee", and the Lessee
shall promptly observe, comply with and execute the provisions of any
and all present and future rules and regulations, requirements, orders
and directions of the National Fire Protection Association and the
Insurance Services Office, Inc. and of any other board or organization
exercising or which may exercise similar functions, which may pertain
or apply to the operations of the Lessee on the premises, and the
Lessee shall, subject to and in accordance with the provisions of the
Section of this Agreement entitled "Construction by the Lessee", make
53
any and all improvements, alterations or repairs of the premises that
may be required at any time hereafter by any such present or future
rule, regulation, requirement, order or direction, provided such
improvements, alterations or repairs are not required generally
throughout the building in which the premises are located unless such
general requirement results from the Lessee's particular manner of use
of or its particular operations in the premises which are not common
to other tenants in the building in which the premises are located,
and if by reason of any failure on the part of the Lessee to comply
with the provisions of this Agreement any insurance rate on the
premises or any part thereof or on the World Trade Center or any part
thereof, shall at any time be higher than it otherwise would be, then
the Lessee shall pay to the Port Authority, as an item of additional
rental, that part of all insurance premiums paid by the Port Authority
which shall have been charged because of such violation or failure by
the Lessee, but no such payment shall relieve the Lessee of its other
obligations under this paragraph.
(b) (i) The Lessee in its own name as assured shall
secure and keep in full force and effect throughout the term of the
letting under this Agreement, at Lessee's sole cost and expense, (a) a
policy of comprehensive general liability insurance including a
contractual liability endorsement for such coverage as may reasonably
be stipulated from time to time by the Port Authority covering the
Lessee's operations hereunder which shall be effective throughout the
letting under this Agreement and shall initially be in a combined
single limit of not less than $2,000,000 for liability for bodily
injury, for wrongful death and for property damage arising from any
one occurrence; and (b) a fire or other casualty policy insuring the
full replacement value of all construction, installation and finishing
work performed by the Lessee in the premises and the Lessee's
furniture, trade fixtures, equipment and other personal property, such
insurance to include a replacement cost endorsement, with a deductible
of no more than $1,000 against loss or damage by fire and theft and
such other risks or hazards as are insurable under present or future
forms of "All Risk" insurance policies.
(ii) The Port Authority shall be included as an
additional insured in any policy of liability insurance required by
this Section. The Lessee shall have the right to insure and maintain
the insurance coverages set forth in this Section under blanket
insurance policies covering the premises and other space occupied by
Lessee, if any, so long as such blanket policies comply in all
respects with the insurance provisions set forth in this Agreement;
provided that upon request, Lessee shall deliver to the Port Authority
a certificate of Lessee's insurer evidencing the portion of such
blanket policy of insurance allocated to the premises.
(iii)As to any insurance required by this Section,
a certified copy of each of the policies or a certificate or
certificates evidencing the existence thereof (including all required
endorsements and evidence of the waivers of subrogation required by
paragraph (c) of this Section), or binders, shall be delivered to the
Port Authority within twenty (20) days prior to the commencement date
of the letting hereunder. In the event any binder is delivered, it
shall be replaced within thirty (30) days by a certificate including
said endorsements and such waiver of subrogation. Within thirty (30)
days after request of the Port Authority made at any time during the
54
term of the letting under this Agreement the Lessee shall deliver a
certified copy of the policy to the Port Authority. Each such copy or
certificate shall contain endorsements that (a) the policy may not be
cancelled, terminated, changed or modified without giving at least ten
(10) days written advance notice thereof to the Port Authority; (b)
the insurer shall not, without obtaining express advance permission
from the General Counsel of the Port Authority, raise any defense
involving in any way the jurisdiction of the tribunal over the person
of the Port Authority, the immunity of the Port Authority, its
Commissioners, officers, agents or employees, the governmental nature
of the Port Authority or the provisions of any statutes respecting
suits against the Port Authority; and (c) Lessee shall be solely
responsible for the payment of premiums therefor notwithstanding that
the Port Authority is named as an additional insured. A renewal
certificate shall be delivered to the Port Authority at least fifteen
(15) days prior to the expiration date of each expiring policy, except
for any policy expiring after the date of expiration of the letting,
provided that within thirty (30) days after request by the Port
Authority the Lessee shall deliver a certified copy of such renewal
policy to the Port Authority. If at any time any of the policies
shall be or become unsatisfactory to the Port Authority as to form or
substance, or if any of the carriers issuing such policies shall be or
become unsatisfactory to the Port Authority, the Lessee shall promptly
obtain a new and satisfactory policy in replacement. A carrier shall
be deemed satisfactory to the Port Authority if it has and maintains a
rating by Best's Insurance Reports or any successor publication of
comparable standing of "A" or better or the then equivalent of such
rating. The Port Authority will not find a policy issued by a
satisfactory carrier to be unsatisfactory as to form or substance
unless it contains an exclusion not generally included in
Comprehensive General Liability policies which landlords in the City
of New York owning comparable first class office buildings at the time
of such determination require to be maintained by tenants conducting
operations similar to those conducted by the Lessee in the premises.
(c) Each party shall include in each of its insurance
policies covering loss, damage or destruction by fire or other
casualty (insuring the World Trade Center and the Port Authority's
property therein in the case of the Port Authority, and insuring the
Lessee's property required to be insured by Lessee under paragraph (b)
above in the case of the Lessee) a waiver of the insurer's right of
subrogation against the other party or, if such waiver should be
unobtainable or unenforceable, (i) an express agreement that such
policy shall not be invalidated if the insured waives before the
casualty the right of recovery against any party responsible for a
casualty covered by such policies, or (ii) any other form of
permission for the release of the other party. If any party hereto is
unable to obtain such waiver, agreement or permission without
additional charge, then such party shall be relieved from providing
such waiver, agreement or permission unless the other party shall so
elect and shall pay the carrier's additional charge therefor.
(d) Each party hereby releases the other party with
respect to any claim (including a claim for negligence) which it might
otherwise have against the other party for loss, damage or destruction
with respect to its property (including business interruption)
occurring during the term of the letting under this Agreement and with
respect and to the extent to which it is insured under a policy or
55
policies containing a waiver of subrogation or permission to release
liability as provided in paragraph (c) above.
(e) Nothing contained in said paragraphs (c) or (d)
above of this Section shall be deemed to impose upon either party any
duty to procure or maintain any of the kinds of insurance referred to
therein except as otherwise required in this Section. If the Lessee
shall fail to maintain insurance in effect as required in this
Section, the release by the Lessee set forth in paragraph (d) above of
this Section shall be in full force and effect to the same extent as
if such required insurance (containing a waiver of subrogation) were
in effect. Notwithstanding anything to the contrary contained in this
Agreement, the carrying of insurance by the Lessee in compliance with
this Section shall not modify, reduce, limit or impair the Lessee's
obligations and liability under the Section of this Agreement entitled
"Indemnity".
(f) At the time of the execution of this Agreement,
there is in effect a policy of insurance under which the Port
Authority is the insured covering damage to the premises and the
Facility having a deductible of One Hundred Thousand Dollars and No
Cents ($100,000.00) and containing an endorsement permitting the
release described in paragraph (c) above of this Section 41. The Port
Authority does not represent or warrant that it will continue to
maintain such insurance, provided, however, that in the event that the
Port Authority shall no longer maintain insurance covering damage to
the premises or the Facility, or shall maintain such insurance having
a higher deductible amount, in each case so long as the release
described in said paragraph (c) above shall remain available on
commercially reasonable terms to owners of first-class office
buildings in the City of New York with more than 1,000,000 rentable
square feet, the obligation of the Lessee set forth in paragraphs (b)
and (c) of the Section of this Agreement entitled "Maintenance and
Repair" shall be released to the extent that such loss exceeds One
Hundred Thousand Dollars and No Cents ($100,000.00), it being
expressly understood and agreed that the maximum liability of the
Lessee under such circumstances in the event of damage or destruction
to the Facility, or any portion thereof, shall be $100,000 with
respect to any single occurrence. Nothing herein shall limit or
affect the Lessee's liability with respect to such $100,000 portion of
such loss, and with respect to such $100,000 portion of such loss, the
provisions of paragraph (b) of the Section of this Agreement entitled
"Maintenance and Repair" and of this paragraph (f) shall control, and
nothing in this paragraph (f) shall limit or affect the Lessee's
liability which it may otherwise have under this Agreement with
respect to damage not insurable under the New York standard form of
fire insurance policy or the New York standard form of extended
coverage endorsement.
Section 42. Port Authority Work; Additional Lessee Work
(a) Subject to all of the provisions of this Agreement
(including but not limited to the Section of this Agreement entitled
"Force Majeure"), the Port Authority, through its employees, agents,
representatives, contractors and subcontractors shall perform the
following work (hereinafter collectively referred to as the "Port
Authority Work") in the areas indicated, which work, except as
otherwise indicated below will be performed prior to the Prior Entry
56
Date, as such term is defined in paragraph (c) of the Section of this
Agreement entitled "Term":
(i) No later than August 15, 1995,
repair and/or replace all cracked or damaged
floor, wall and ceiling tiles, all broken
partitions and damaged fixtures in the public
bathroom areas on the 23rd floor of the Lessee's
premises and on the 24th floor of the South Tower
Building at the World Trade Center and perform
such other work therein to put such bathrooms in
compliance with the applicable provisions and
implementing regulations of the Americans With
Disabilities Act of 1990 (42 U.S.C. 12101 et
seq.) (hereinafter, the "ADA"), all of such
bathroom work being as described on Schedule E
attached hereto and hereby made a part hereof and
referred to in this Agreement as the "Public
Bathroom Work";
(ii) Remove, collect and properly
dispose of all vinyl asbestos tile from the floors
in the premises and flash patch the areas where
such vinyl asbestos tile was removed and where any
adhesive or glue remains;
(iii)Install ADA compliant elevator call
buttons and indicator lights in the public
elevator lobbies on the 23rd and 24th floors in
the South Tower Building; such work referred to in
this subdivision (iii) being referred to in this
Agreement as the "Elevator Work"; the Lessee
understands that such Elevator Work will be
performed by the Port Authority in conjunction
with its capital improvement program for the
Building and that such work may not be completed
prior to the date the Lessee commences public
operations in the premises;
(iv) No later than August 15, 1995 (1)
refinish or renovate the public corridors on the
24th floor of the South Tower Building, including
installation of building standard wall coverings,
ceilings and floor coverings, such work to provide
for multiple tenancies on such floor and perform
such other work therein to put such public
corridor in compliance with the applicable
provisions of the ADA (including ADA compliant
hardware on all core doors but excluding the
Elevator Work); and (2) install ADA compliant
hardware on all core doors in the public corridor
areas on the Lessee's premises on the 23rd floor
of the South Tower Building; all of such corridor
work referred to in this subdivision (iv) being as
described on Schedule F attached hereto and hereby
made a part hereof and referred to in this
Agreement as the "Public Corridor Work";
57
(v) Perform such demolition work and
other work in the premises, including the removal
of all cabling from existing underground floor
ducts in the premises, as is shown or described in
the Schedule I attached hereto and hereby made a
part hereof and in the Plans and Specifications
dated December 15, 1994 and December 19, 1994 and
identified by Port Authority Contract No. WTC-
702.182. It is understood that notwithstanding
such Plans and Specifications the work shown
therein shall be performed in all of Area A-1.
All such work described in the preceding sentence
being referred to in this Agreement as the
"Demolition Work" which Demolition Work shall be
completed prior to the Prior Entry Date unless
indicated otherwise in Schedule I;
(b) Nothing set forth above in this Section shall be
construed as a submission by the Port Authority to the application to
itself of the Americans with Disabilities Act except and solely to the
extent specifically provided above in this Section.
(c) Notwithstanding the provisions of subdivision (i)
of paragraph (a) above, the Port Authority on or before January 5,
1995 will provide Contract Drawings to the Lessee for performance of
the Public Bathroom Work. The Lessee no later than February 23, 1995
will submit to the Port Authority in writing a fixed price
(hereinafter called the "Public Bathroom Price") for which the Lessee
will agree to perform such Public Bathroom Work. The Port Authority
within ten (10) business days after receipt of such price from the
Lessee will advise the Lessee whether or not it accepts the Lessee's
price. If the Port Authority does not accept the Lessee's price, the
Port Authority will remain obligated to perform the Public Bathroom
Work in accordance with subdivision (i) of paragraph (a) above. If
the Port Authority accepts the Lessee's price, then the Lessee shall
thereafter and in accordance with the applicable provisions of the
Section of this Agreement entitled "Construction by the Lessee"
diligently perform the Public Bathroom Work in accordance with the
Contract Drawings previously provided by the Port Authority and the
Port Authority will pay the Lessee the Public Bathroom Price as
hereinafter provided in paragraph (f) below.
(d) Notwithstanding the provisions of subdivision (iv)
of paragraph (a) above, the Port Authority on or prior to January 5,
1995 will provide Contract Drawings to the Lessee for performance of
the Public Corridor Work. The Lessee no later than February 23, 1995
will submit to the Port Authority in writing a fixed price
(hereinafter called the "Public Corridor Price") for which the Lessee
will agree to perform such Public Corridor Work. The Port Authority
within ten (10) business days after receipt of such price will advise
the Lessee whether or not it accepts the Lessee's price. If the Port
Authority does not accept the Lessee's price, the Port Authority will
remain obligated to perform the Public Corridor Work in accordance
with the provisions of subdivision (iv) of paragraph (a) above. If
the Port Authority accepts the Lessee's price, then the Lessee shall
thereafter and in accordance with the applicable provisions of the
Section of this Agreement entitled "Construction by the Lessee"
diligently perform the Public Corridor Work in accordance with said
58
Contract Drawings previously provided by the Port Authority, and the
Port Authority will pay the Lessee the Public Corridor Price as
hereinafter provided in paragraph (f) below.
(e) The Lessee hereby agrees to paint all convector
covers in the premises. The Port Authority will pay the Lessee Five
Thousand Nine Hundred Seventy-six Dollars and No Cents ($5,976.00) for
the work described in this paragraph (e), such payment to be made in
accordance with paragraph (f) below.
(f) Upon completion of the work by the Lessee
described in paragraphs (c), (d) and (e) above, the Lessee shall
deliver to the Port Authority a certificate signed by an authorized
officer of the Lessee and a certificate signed by the Lessee's
architect or professional engineer, each certifying that the
construction and installation work has been completed and in the case
of the Public Bathroom Work and Public Corridor Work that it has been
performed strictly in accordance with the Contract Drawings provided
by the Port Authority to the Lessee covering such work. The Port
Authority, within five (5) business days thereafter shall inspect the
particular work as to which the certification has been given and if
the same has been completed as certified by the Lessee and such
architect or engineer, the Port Authority's Assistant Director,
Physical Facilities, World Trade Department, shall so certify to the
Port Authority and the Lessee subject to the condition that all risks
thereafter with respect to the construction and installation work and
any liability therefor for negligence or other reason shall be borne
by Lessee. The Port Authority within thirty (30) days after such
certification by such Assistant Director, Physical Facilities, will
pay the Lessee the applicable price pertaining to such particular
work. In addition thereto and solely in connection with the work
which the Lessee is to perform pursuant to paragraphs (c) and (d) of
this Section 42, in the event there are unforeseen conditions actually
encountered by the Lessee in performance of such work, which
conditions were unknown to the Lessee at the time of its execution of
this Agreement and which could not have been reasonably anticipated by
the Lessee, and such unforeseen conditions increase the cost of the
performance of such work, then in addition to the fixed price the Port
Authority is to pay for such work, the Port Authority will pay the
Lessee the Lessee's reasonable additional cost directly resulting from
such unforeseen condition. Notwithstanding anything in this paragraph
(f) to the contrary, with respect to the certification set forth in
this paragraph (f), the Lessee may notify the Port Authority in
writing that the certification of the Lessee's architect or engineer
shall also be deemed to be the certification of the Lessee with the
same force and effect as if given directly by the Lessee.
(g) For purposes of this Agreement the work described
in subdivisions (ii) and (v) of paragraph (a) and paragraphs (e) and
(i) of this Section are collectively called the "Landlord Work". It
is hereby understood and agreed that except for the work which the
Lessee is to perform pursuant to paragraphs (c) and (d) of this
Section, the Lessee shall not be required to perform any ADA required
work outside the Lessee's premises.
(h) The Port Authority hereby agrees that it will not
impose upon the Lessee any utility or freight elevator charges or
inspection, filing, sign-off or other fees or charges in connection
59
with the Lessee's performance of the Additional Lessee Work. For
purposes of this Agreement "Additional Lessee Work" shall mean that
work which the Lessee is to perform pursuant to paragraphs (c), (d)
and (e) of this Section 42.
(i) Except for vinyl asbestos tiles and asbestos or
asbestos-containing materials located within or behind the mullions on
the interior of the exterior walls of the premises, the Port Authority
hereby represents that to the best of its knowledge there are no
asbestos and asbestos-containing materials located in the premises.
"Asbestos" or "asbestos containing-materials" as used herein shall be
as defined in the guidelines established by the United States
Environmental Protection Agency ("USEPA") as set forth in the USEPA
publication entitled "Guidance for Controlling Asbestos-Containing
Materials in Building" (EPA 560/5-85-024, June 1985). Notwithstanding
the foregoing, in the event that the asbestos or asbestos-containing
materials are discovered in the premises prior to the Prior Entry
Date, then the Port Authority will remove or cause same to be removed
from the premises prior to the Prior Entry Date. In the event that
asbestos or asbestos-containing materials are discovered in the
premises subsequent to the Prior Entry Date, the Lessee will
expeditiously notify the Port Authority of their existence and if such
asbestos or asbestos-containing materials were not installed therein
by the Lessee or its contractor, the Port Authority will diligently
remove or cause same to be removed and will make reasonable efforts to
minimize disruption to the Lessee's operations. The Lessee will not
be entitled to any rental abatement during performance of such removal
work occurring subsequent to the commencement date of the term of the
letting hereunder unless the Lessee is unable to use such portion of
the premises during performance of such work in which case the basic
rental and additional basic rental for such portion of the premises
shall be abated in accordance with the provisions of the Section of
this Agreement entitled "Abatement of Rental" during the period of
such non use due to such removal work. In the event that the Lessee
prior to the commencement date of the term of the letting is unable to
perform construction work in all or a substantial portion of the
premises during performance of such asbestos removal work by the Port
Authority, then the two hundred fourteen (214) day period in clause
(i) of paragraph (a) of the Section of this Agreement entitled "Term"
shall be extended by one day for each day that the Lessee is unable to
perform its construction work in all or a substantial portion of the
premises due to the asbestos removal work being performed by the Port
Authority. The Port Authority hereby agrees to refireproof any area
in the premises, including any structural steel members located in the
ceiling area of the Lessee's premises necessitated by such asbestos
removal work. The Port Authority upon completion of the removal of
asbestos or asbestos-containing materials from the premises will
furnish written certification of same to the Lessee from the Port
Authority's Assistant Director, Physical Facilities, World Trade
Department. In no event will the Port Authority be required to remove
asbestos or any asbestos-containing materials located within or behind
the mullions on the interior of the exterior walls of the premises.
Section 43. Additional Space
60
(a) If the Lessee no later than September 1, 1997
shall notify the Port Authority in writing that it desires to lease a
single block of additional space on the 24th floor of the South Tower
Building contiguous to the Lessee's initial premises on said floor
(hereinafter referred to as the "Additional Space I"), and provided
that the Lessee is not then in default under any of the terms,
provisions, covenants and conditions of this Agreement beyond the
applicable cure period therefor and this Agreement is then in full
force and effect, the Port Authority within twenty (20) days following
the date of the Lessee's notice will notify the Lessee in writing of
the location and configuration of the Additional Space I (such
configuration to be commercially reasonable) setting forth the
commencement date of the letting thereof (June 1, 1998, subject to
postponement due to causes or conditions beyond the control of the
Port Authority), the exact number of rentable square feet contained
therein (such number of rentable square feet to be no less than 5,000
nor more than 7,000 rentable square feet as determined by the Port
Authority, such determination of the number of rentable square feet to
be determined by the Port Authority in the same manner as the Port
Authority determined the rentable square footage for the initial
premises) and the annual basic rental rate therefore. The letting of
the Additional Space I shall be on an "as is" basis with no finishing
allowance provided that the Port Authority prior to the commencement
date of the letting of same will provide in such Additional Space I
the Landlord Work, as such term is defined in the Section of this
Agreement entitled "Port Authority Work; Additional Lessee Work". In
addition rental for the Additional Space I shall commence on the
ninetieth (90th) day from the commencement date of the letting of the
Additional Space I, as such commencement date may be postponed due to
causes or conditions beyond the control of the Port Authority.
Thereupon, the Lessee shall have the right, by notice to the Port
Authority subscribed by an authorized officer of the Lessee and
delivered to the Port Authority within ten (10) days after its receipt
of the Port Authority's notice:
(i) to accept the Additional Space I
unconditionally for the balance of the term of the
letting hereunder at the basic rental rate set
forth in the Port Authority's notice; or
(ii) to accept the Additional Space I
unconditionally for the balance of the term of the
letting hereunder but advising the Port Authority
that the Lessee has concluded that the annual
basic rental rate specified by the Port Authority
in its notice is not the fair market rental for
the Additional Space I.
Within thirty (30) days after the later of the date the Lessee
notifies the Port Authority that it unconditionally accepts the
Additional Space I in accordance with subdivision (i), above, or, in
the event that the annual basic rental for the Additional Space I is
determined by arbitration in accordance with the provisions of
paragraph (e) of this Section, the date that the arbitrators render
their determination of fair market rental, the Port Authority will
prepare and tender to the Lessee for its execution an agreement
supplementing this Agreement and providing for the letting of the
Additional Space I. The agreement tendered by the Port Authority
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shall contain an exhibit depicting the Additional Space I, shall set
forth the annual basic rental payable for the Additional Space I and
shall include the effective date of the letting of the Additional
Space I. The Lessee shall execute, acknowledge and deliver the
aforesaid agreement to the Port Authority within thirty (30) days
after delivery of same to it. The Supplemental Agreement prepared by
the Port Authority pursuant to the provisions of this paragraph (a)
shall provide for the letting of the Additional Space I upon all the
terms and conditions set forth in this Agreement except as modified by
the provisions of this paragraph (a) and paragraph (e) below. If the
Lessee shall fail to execute, acknowledge and deliver the agreement
tendered to it by the Port Authority within the aforesaid time period,
then the Lessee shall have no further right to or interest in the
Additional Space I the letting of which is covered by the said
agreement, and the Port Authority shall have the right to lease the
same to a third party on terms and conditions more or less favorable
than the terms and conditions which would have governed the letting to
the Lessee, all as the Port Authority in its discretion shall
determine. The Lessee shall have a single option only to include
additional space in the premises pursuant to this paragraph (a).
(b) If the Lessee not later than June 1, 2005 shall
notify the Port Authority in writing that it desires to lease all of
the space shown in diagonal hatching on the sketch annexed hereto,
made a part hereof and marked "Exhibit A-3" (hereinafter referred to
as the "Additional Space II"), and provided that the Lessee is not
then in default under any of the terms, provisions, covenants and
conditions of this Agreement beyond the applicable cure period
therefor and this Agreement is then in full force and effect, the Port
Authority within twenty (20) days following the date of the Lessee's
notice will notify the Lessee in writing of the exact number of
rentable square feet contained therein and the annual basic rental
rate therefore. The letting of the Additional Space II shall commence
on March 1, 2006, subject to postponement due to causes or conditions
beyond the control of the Port Authority, and such letting shall be on
an "as is" basis with no finishing allowance provided that the Port
Authority prior to the commencement date of the letting of same will
provide in such Additional Space II the Landlord Work, as such term is
defined in the Section of this Agreement entitled "Port Authority
Work; Additional Lessee Work". In addition rental for the Additional
Space II will commence on the ninetieth (90th) day from the
commencement date of the letting of such space, as such commencement
date may be postponed due to causes or conditions beyond the control
of the Port Authority. Thereupon, the Lessee shall have the right, by
notice to the Port Authority subscribed by an authorized officer of
the Lessee and delivered to the Port Authority within ten (10) days
after its receipt of the Port Authority's notice:
(i) to accept the Additional Space II
unconditionally for the balance of the term of the
letting at the basic rental rate set forth in the
Port Authority's notice; or
(ii) to accept the Additional Space II
unconditionally for the balance of the term of the
letting hereunder but advising the Port Authority
that the Lessee has concluded that the annual
basic rental rate specified by the Port Authority
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in its notice is not the fair market rental for
the Additional Space II.
Within thirty (30) days after the later of the date the Lessee
notifies the Port Authority that it unconditionally accepts the
Additional Space II in accordance with subdivision (i), above, or, in
the event that the annual basic rental for the Additional Space II is
determined by arbitration in accordance with the provisions of
paragraph (e) of this Section, the date that the arbitrators render
their determination of fair market rental, the Port Authority will
prepare and tender to the Lessee for its execution an agreement
supplementing this Agreement and providing for the letting of the
Additional Space II. The agreement tendered by the Port Authority
shall contain Exhibit A-3 depicting the Additional Space II, shall set
forth the annual basic rental payable for the Additional Space II and
shall include the effective date of the letting of the Additional
Space II. Any Supplemental Agreement prepared by the Port Authority
pursuant to the provisions of this paragraph (b) shall provide for the
letting of the Additional Space II upon all the terms and conditions
set forth in this Agreement except as modified by the provisions of
this paragraph (a) and paragraph (e) below. The Lessee shall execute,
acknowledge and deliver the aforesaid agreement to the Port Authority
within thirty (30) days after delivery of same to it. If the Lessee
shall fail to execute, acknowledge and deliver the agreement tendered
to it by the Port Authority within the aforesaid time period, then the
Lessee shall have no further right to or interest in the Additional
Space II the letting of which is covered by the said agreement, and
the Port Authority shall have the right to lease the same to a third
party on terms and conditions more or less favorable than the terms
and conditions which would have governed the letting to the Lessee,
all as the Port Authority in its discretion shall determine, but such
failure to execute and acknowledge such agreement within the time
period provided covering the Additional Space II shall not diminish or
affect the Lessee's rights under paragraph (a) above to include
Additional Space I in the premises. The Lessee shall have a single
option only to include additional space in the premises pursuant to
this paragraph (b).
(c) If any time during the term of the letting
hereunder the Lessee shall notify the Port Authority in writing that
it desires to lease a single block of space contiguous to its premises
on the 24th floor of the South Tower Building or located on the 22nd
or 25th floors of the South Tower Building and provided that the Port
Authority acting in good faith determines that such space will become
available for leasing within two hundred seventy (270) days from the
date of the Lessee's notice (hereinafter referred to as Additional
Space III) and provided, further that the Lessee is not then in
default under any of the terms, provisions, covenants and conditions
of this Agreement beyond the applicable cure period therefor and this
Agreement is then in full force and effect, the Port Authority within
twenty (20) business days after receipt of such notice from the Lessee
will notify the Lessee in writing of the availability for letting of
the Additional Space III setting forth the date the Port Authority
expects the Additional Space III to be ready for occupancy, the
location and configuration thereof (such configuration to be
commercially reasonable), the exact number of rentable square feet
contained therein and the annual basic rental rate therefore. The
letting of the Additional Space III shall be on an "as is" basis with
63
no finishing allowance to be provided by the Port Authority provided
that the Port Authority prior to the commencement date of the letting
of such space will provide in such Additional Space III the Landlord
Work, as such term is defined in the Section of this Agreement
entitled "Port Authority Work; Additional Lessee Work". Payment of
rental for the Additional Space III will commence on the ninetieth
(90th) day from the commencement date of the letting of same, as such
commencement date may be postponed due to causes or conditions beyond
the control of the Port Authority. Thereupon, the Lessee shall have
the right, by notice to the Port Authority subscribed by an authorized
officer of the Lessee and delivered to the Port Authority within ten
(10) days after its receipt of the Port Authority's notice:
(i) to accept the Additional Space III
unconditionally for the balance of the term of the
letting hereunder at the basic rental rate set
forth in the Port Authority's notice; or
(ii) to accept the Additional Space III
unconditionally for the balance of the term of the
letting hereunder but advising the Port Authority
that the Lessee has concluded that the annual
basic rental rate specified by the Port Authority
is not the fair market rental for the Additional
Space III.
Within thirty (30) days after the later of the date the Lessee
notifies the Port Authority that it unconditionally accepts the
Additional Space III in accordance with subdivision (i), above, or, in
the event that the annual basic rental for the Additional Space III is
determined by arbitration in accordance with the provisions of
subdivision (ii), above, and of paragraph (e) of this Section, the
date that the arbitrators render their determination of fair market
rental, the Port Authority will prepare and tender to the Lessee for
its execution an agreement supplementing this Agreement and providing
for the letting of the Additional Space III. The agreement tendered
by the Port Authority shall contain an exhibit depicting the
Additional Space III, shall set forth the annual basic rental payable
for the Additional Space III and shall include the effective date of
the letting of the Additional Space III. Any Supplemental Agreement
prepared by the Port Authority pursuant to the provisions of this
paragraph (c) shall provide for the letting of the Additional Space
III upon all the terms and conditions set forth in this Agreement
except as modified by the provisions of this paragraph (c) and
paragraph (e) below. The Lessee shall execute, acknowledge and
deliver the aforesaid agreement to the Port Authority within thirty
(30) days after delivery of same to it. If the Lessee shall fail to
execute, acknowledge and deliver the agreement tendered to it by the
Port Authority within the aforesaid time period, then the Lessee shall
have no further right to or interest in the Additional Space III the
letting of which is covered by the said agreement, and the Port
Authority shall have the right to lease the same to a third party on
terms and conditions more or less favorable than the terms and
conditions which would have governed the letting to the Lessee, all as
the Port Authority in its discretion shall determine. The Lessee
expressly understands and agrees that the Port Authority in its
discretion exercised in good faith shall determine when any Additional
Space III is available for leasing, and nothing contained herein shall
64
obligate or be construed to obligate the Port Authority to offer any
space to the Lessee other than in its existing configuration nor to
terminate the letting or otherwise end the occupancy of a tenant
currently in possession of any space, including the Additional Space
III, prior to the scheduled expiration date of such letting, nor shall
anything herein be deemed to prevent the Port Authority, without
liability of any kind to the Lessee, from renewing or extending any
lease covering any space on any of the designated floors or from
otherwise continuing in occupancy a tenant of any space located on any
of the designated floors, nor shall anything herein be deemed to limit
the Port Authority's right to freely discuss and negotiate with third
parties for the leasing of any space, including the Additional Space
III. The Lessee's right to notify the Port Authority that it desires
to lease Additional Space III shall continue throughout the entire
term of the letting hereinabove described irrespective of whether the
Lessee shall have added Additional Space III to the premises or of the
number of times the Lessee shall have notified the Port Authority
during such period provided however that the Lessee shall not have the
right to notify the Port Authority of its desire to let any Additional
Space III within three hundred sixty-five (365) days subsequent to the
last prior such notice sent by the Lessee with respect to any
Additional Space III unless (i) the Port Authority in response to such
last prior notice determined that the additional space requested by
the Lessee was not available for leasing or (ii) the Lessee and the
Port Authority pursuant to the last such prior notice entered into an
agreement providing for the inclusion of Additional Space III in the
premises and in either said case the said three hundred sixty-five
(365)-day period shall be reduced to ninety (90) days. In the event
that prior to exercising its right to include Additional Space II in
the premises pursuant to paragraph (b), above, the Lessee includes
Additional Space III in the premises pursuant to the provisions of
this paragraph (c), and such Additional Space III includes all or a
portion of Additional Space II, then for purposes of paragraph (b) of
this Section 43 Additional Space II as defined therein shall be
reduced by all or such portion thereof which may have become a part of
the premises as Additional Space III pursuant to the provision of this
paragraph (c).
(d) The Lessee at any time during the period
commencing with the Prior Entry Date and continuing for 547 days
thereafter (hereinafter in this paragraph (d) called the "Option
Period") shall have the right to notify the Port Authority in writing
that it desires to lease all or any portion (such portion to be as
designated by the Lessee but such portion to be contiguous to the
Lessee's then existing premises, to be no less than 3,500 rentable
square feet and the balance of the Additional Space IV not taken by
the Lessee to be a marketable configuration) of the space shown in
diagonal hatching on the sketch attached hereto as Exhibit A-2 (all or
any portion of such space being hereinafter called Additional Space
IV), provided that the Lessee at the time of such notice is not in
default under any term, provision or covenant of this Agreement beyond
the applicable grace period therefor and provided further that this
Agreement and the letting hereunder are then in full force and effect.
In the event that the Lessee during the Option Period has not notified
the Port Authority pursuant to the immediately preceding sentence that
it desires to lease Additional Space IV and in the further event that
during the Option Period the Port Authority receives a non-binding
bona fide proposal from a third party to lease all or a portion of the
65
Additional Space IV (such portion to be no less than 3,500 rentable
square feet), then prior to entering into an agreement with a third
party covering the letting of all or a portion of the Additional Space
IV, the Port Authority shall offer the Additional Space IV to the
Lessee by notice in writing (it being understood that from and after
the date of such notice the Lessee shall have no further right to add
Additional Space IV to the premises pursuant to the first sentence of
this paragraph (d)) and the Lessee shall have the right to be
exercised within thirty (30) days after the date of such notice, to
advise the Port Authority whether it wishes to include the Additional
Space IV in the premises. If the Lessee shall timely indicate its
desire to add the Additional Space IV to the premises under this
Agreement either pursuant to the first or second sentence of this
paragraph (d), as the case may be, the Port Authority shall prepare
and tender to the Lessee for its execution an agreement further
supplementing this Agreement and providing for the letting of the
Additional Space IV hereunder. The agreement shall provide for the
letting of Additional Space IV on the terms and conditions set forth
in this Agreement, except as provided otherwise in this paragraph (d).
The Supplemental Agreement tendered by the Port Authority shall
contain an exhibit depicting the Additional Space IV and a statement
of the number of rentable square feet comprising the Additional Space
IV, such calculation of the number of rentable square feet to be
determined by the Port Authority in the same manner as the Port
Authority determined the rentable square footage for the initial
premises. Such Supplemental Agreement for the letting of Additional
Space IV shall provide for a commencement date occurring two hundred
ten (210) days from the date the premises are made available to the
Lessee for construction purposes (provided that if the period,
hereinafter called the "Additional Space IV period", from the date the
Additional Space IV is made available for construction by the Lessee
through the expiration date of the term of the letting, as determined
in accordance with the provisions of the Section of this Agreement
entitled "Term", contains less than one hundred ninety-six (196) whole
calendar months, then the aforesaid two hundred ten (210) day amount
shall be replaced by the product obtained by multiplying 210 by a
fraction the numerator of which shall be the number of whole calendar
months in the Additional Space IV period and the denominator of which
shall be 196) or such earlier date as the Lessee commences business
operations therein. The rent commencement date for the Additional
Space IV will be two hundred seventy (270) days from the commencement
date but if the period between the commencement date of the letting of
the Additional Space IV and the expiration date of the letting of the
entire premises as set forth in the Section of this Agreement entitled
"Term" is less than 189 whole calendar months, then the rent
commencement date for Additional Space IV shall be the following
number of days from the commencement date of the letting of same, such
number of days to be obtained by multiplying two hundred seventy (270)
by a fraction the numerator of which shall be the number of whole
calendar months in the period from the commencement date of the
letting of the Additional Space IV to the aforesaid expiration date of
the letting and the denominator of which shall be 189. The Port
Authority will provide the Lessee a finishing allowance equivalent to
the product obtained by multiplying $62.00 by the number of rentable
square feet in the Additional Space IV provided that if the term of
the letting of Additional Space IV is less than 189 whole calendar
months, then for purposes of determining the finishing allowance the
said $62.00 shall be replaced by the product obtained by multiplying
66
$62.00 by a fraction the numerator of which shall be the number of
whole calendar months in the period from the commencement date of the
letting of Additional Space IV to the expiration date of the letting
of same and the denominator of which shall be 189. The Lessee will
accept the Additional Space IV in its "as is" condition, but the Port
Authority will provide prior to the date the Additional Space IV is
made available to the Lessee the Landlord Work, as such term is
defined in the Section of this Agreement entitled "Port Authority
Work; Additional Lessee Work". The basic rental for the Additional
Space shall be at the following annual per rentable square foot rates
for the following periods: for the period commencing with the payment
of basic rental for Additional Space IV and continuing up to and
including the day preceding the fifth anniversary of the Rent
Commencement Date (as such term is defined in paragraph (c) of the
Section of this Agreement entitled "Basic Rental") the Lessee shall
pay basic rental for the Additional Space IV at the annual rate of
$31.00 per rentable square foot; for the period commencing with the
fifth anniversary of the Rent Commencement Date up to and including
the day preceding the tenth (10th) anniversary of the Rent
Commencement Date, the Lessee shall pay basic rental for the
Additional Space IV at the annual rate of $33.75 per rentable square
foot; and for the period commencing with the tenth (10th) anniversary
of the Rent Commencement Date through the balance of the term of the
letting, the Lessee shall pay basic rental for the Additional Space IV
at the annual rate of $36.50 per rentable square foot. In addition to
the basic rental, the Lessee commencing with the rent commencement
date shall pay additional basic rental for the Additional Space IV in
accordance with the provisions of Schedule A attached hereto, the base
dates and amounts set forth in said Schedule A to remain unchanged.
In the event the Lessee does not so advise the Port Authority of its
desire to add Additional Space IV within the time period hereinabove
specified or shall fail to execute, acknowledge and deliver the
agreement to the Port Authority within the time period hereinabove set
forth, then the Lessee shall have no further right or interest in the
Additional Space IV pursuant to this paragraph (d), and the Port
Authority shall have the right to lease the same to any third party on
terms and conditions more or less favorable than the terms and
conditions which would have governed the letting to the Lessee, all as
the Port Authority in its discretion may determine. If Additional
Space IV shall become a part of the premises under this Agreement
pursuant to and in accordance with the provisions of this paragraph
(d), then at such time the Lessee shall have no right to add
Additional Space I to the premises pursuant to paragraph (a) of this
Section 43 and all rights and obligations of the Port Authority and
the Lessee with respect to Additional Space I shall be null and void
and of no further force or effect.
(e) In the event the Lessee concludes that the annual
basic rental for the Additional Space I specified by the Port
Authority pursuant to paragraph (a), above, for the Additional Space
II specified by the Port Authority pursuant to paragraph (b) above, or
the Additional Space III pursuant to paragraph (c) above, is greater
than the fair market rental for any such space, the Lessee shall so
advise the Port Authority and shall request arbitration with respect
thereto. Such arbitration shall be by three arbitrators, one to be
appointed by the Port Authority, one to be appointed by the Lessee and
the third to be appointed by the arbitrators so appointed. The
arbitration shall be pursuant to the then rules of the American
67
Arbitration Association or any successor organization and the question
to be answered by the arbitrators shall be:
"Is the annual basic rental
established by the Port Authority
greater than the fair market rental for
the Additional Space I or the Additional
Space II or the Additional Space III (as
the case may be) for the balance of the
term of the letting under the Lease?"
If the arbitrators' decision is in the negative (or if the Lessee does
not contest the rental rate after specification thereof by the Port
Authority) then from and after the first day for payment of rental for
the Additional Space I or the Additional Space II, or the Additional
Space III, as the case may be, the Lessee shall pay to the Port
Authority such annual basic rental in advance in equal monthly
installments throughout the balance of the term of the letting under
this Agreement. If the decision of the arbitrators is that the annual
basic rental specified by the Port Authority is greater than the fair
market rental for the Additional Space I, the Additional Space II or
the Additional Space III, as the case may be, the arbitrators shall
thereupon determine the fair market rental for the applicable space,
and in such event from and after the first day for payment of basic
rental for the Additional Space I, the Additional Space II or the
Additional Space III, as the case may be, the Lessee shall pay to the
Port Authority in advance in equal monthly installments an annual
basic rental equal to the fair market rental as determined by the
arbitrators. In the event the annual basic rental for the Additional
Space I, the Additional Space II or the Additional Space III, as the
case may be, has not been determined as herein provided prior to the
commencement date for payment thereof, the Lessee shall pay monthly
installments of annual basic rental for the Additional Space I, the
Additional Space II or the Additional Space III, as the case may be,
at the annual per rentable square foot rate then in effect for the
initial premises, and upon determination of the annual basic rental
pursuant to the provisions of this Section, the Lessee shall, within
thirty (30) days thereafter, pay any amount due to the Port Authority
arising out of the excess (if any) of the monthly installments of
annual basic rental as so determined over the monthly installments
thereof actually paid by the Lessee for such period, provided however
that if the sum of the monthly installments of annual basic rental
actually paid by the Lessee for such period are in excess of the sum
of the monthly installments determined by arbitration to be payable by
the Lessee for such period, the Port Authority shall within thirty
(30) days thereafter, pay such excess to the Lessee and if such excess
is not so paid within thirty (30) days, then the Lessee shall be
entitled to a credit for such excess to be applied against its rental
obligations next becoming due for any such space. The Port Authority
and the Lessee shall each bear the cost of the arbitrator appointed by
them. All other costs of such arbitration, including but not limited
to the cost of the third arbitrator, shall be borne equally by the
Port Authority and the Lessee.
(f) In addition to the payment of basic rental for any
Additional Space I, Additional Space II or Additional Space III as
provided herein, the Lessee shall, from and after the commencement
date for payment of rental therefor and continuing for the balance of
68
the term of the letting under this Agreement, pay additional basic
rental for the Additional Space I, Additional Space II and the
Additional Space III, as the case may be, in accordance with the
provisions of Schedule A attached hereto, the base amounts and dates
set forth in said Schedule A to remain as provided therein. From and
after the commencement of the term of the letting of the Additional
Space I, Additional Space II and the Additional Space III, paragraph
(n) of Section 1 of Schedule A shall be amended to set forth the
number of rentable square feet constituting the Additional Space I,
Additional Space II or the Additional Space III, as the case may be,
in addition to the number of rentable square feet constituting the
balance of the premises, and the "Lessee's Proportionate Share" as set
forth in paragraph (j) of Section 1 of said Schedule A shall be
adjusted as provided in said paragraph.
(g) For purposes of this Section 43, the term "fair
market rental" shall mean the rent that a willing tenant would pay and
a willing landlord would accept for comparable space in the World
Trade Center (or if there is no comparable space available for
comparison at such time then such other comparable space in first
class office buildings in the vicinity of the World Trade Center)
taking into account all relevant factors in connection therewith,
including, but not limited to, landlord work, if any, rent
concessions, if any, and finishing allowances, if any, then being
given by the Port Authority for space of comparable size, location and
term in the building in which the premises are located (and if there
is no comparable space in the building available at such time, then
the rent concessions, if any, landlord work, if any, and finishing
allowances, if any, then being given by landlords for comparable space
in first class buildings in the vicinity of the World Trade Center)
and the fact that the Port Authority will pay a brokerage commission
in connection with the letting of such space, perform the Landlord
Work in the premises, will not offer a finishing allowance but will
give a ninety (90) day rent concession. Such determination of fair
market rental shall also take into account the fact that for any
additional space hereunder the base dates and base years set forth in
Schedule A will remain unchanged as provided in paragraph (f) above.
(h) Failure of the Lessee to exercise any of its
options pursuant to any one of paragraphs (a), (b), (c) or (d) of this
Section shall not affect the Lessee's right to add additional space to
the premises pursuant to the other said paragraphs.
Section 44. Lessee's Right to Extend the Letting
(a) The Lessee shall have the right to extend this
Agreement and the term of the letting of the premises hereunder solely
in its entirety (including any Additional Space I, Additional Space
II, Additional Space III and Additional Space IV) for a five (5) year
period effective upon the expiration date of the term of the letting
hereunder, provided that the Lessee shall give unconditional written
notice to the Port Authority of its election to do so not later than
three hundred sixty-five (365) days prior to the expiration date of
the term of the letting, and provided further that on the date of the
giving of the said notice and on the effective date thereof the Lessee
is not in default in the performance or observance of any term,
69
provision or condition of this Agreement and that the Lessee has not
been served with a notice of termination of this Agreement by the Port
Authority and this Agreement is then in full force and effect.
(b) In the event the Lessee shall give to the Port
Authority the notice referred to in paragraph (a) above, the Port
Authority shall, not later than thirty (30) days subsequent to its
receipt of such notice from the Lessee, advise the Lessee in writing
of the Port Authority's determination of the annual basic rental to be
payable by the Lessee during the five (5)-year extension period which
shall be equal to ninety-five percent (95%) of the fair market rental,
as determined by the Port Authority, subject to the provisions of this
paragraph (b). In the event the Lessee concludes that the annual
basic rental so stated in the Port Authority's notice is greater than
ninety-five percent (95%) of the fair market rental for the premises
for the extension period, the Lessee shall, within fifteen (15) days
after the date of the Port Authority's said notice, advise the Port
Authority in writing that it has so concluded and request arbitration
with respect thereto. Such arbitration shall be by three arbitrators,
one to be appointed by the Port Authority, one to be appointed by the
Lessee and the third to be appointed by the arbitrators so appointed.
The arbitration shall be pursuant to the then-rules of the American
Arbitration Association or by any successor organization, and the
question to be answered by the arbitrators shall be:
"Is the annual basic rental established
by the Port Authority greater than ninety-five
percent (95%) of the fair market rental for the
premises for the extension period?"
If the arbitrators' decision is in the negative
(or if the Lessee does not contest the rental rate after specification
thereof by the Port Authority) then, from and after the first day of
the extended term of the letting hereunder, the Lessee shall pay to
the Port Authority such annual basic rental for the premises in
advance in equal monthly installments throughout the extension period.
If the decision of the arbitrators is that the annual basic rental
specified by the Port Authority is greater than ninety-five percent
(95%) of the fair market rental for the extension period, the
arbitrators shall thereupon determine the fair market rental for the
extension period, and in such event, from and after the first day of
the extended term of the letting the Lessee shall pay to the Port
Authority in advance in equal monthly installments an annual basic
rental equal to the product of the fair market rental as determined by
the arbitrators multiplied by ninety-five percent (95%). In the event
the annual basic rental has not been determined as herein provided
prior to the commencement of the extended term of the letting
hereunder, the Lessee shall continue to pay the monthly installments
of basic rental at the rate theretofore in effect, and upon
determination of the annual basic rental pursuant to the provisions of
this Section, the Lessee shall, within thirty (30) days thereafter,
pay any amounts due to the Port Authority arising out of the excess
(if any) of the monthly installments of the annual basic rental as so
determined over the monthly installments thereof actually paid by the
Lessee for such period, provided however, that if the sum of the
monthly installments of the annual basic rental actually paid by the
Lessee for such period are in excess of the sum of the monthly
installments as determined by arbitration to be payable by the Lessee
70
for such period, the Port Authority, within thirty (30) days
thereafter, shall pay the amount of such excess to the Lessee and if
the Port Authority fails to make such payment within such period the
Lessee shall be entitled to a credit for such excess to be applied
against its rental obligations next becoming due under this Agreement.
In addition to the basic rental payable as provided in this paragraph
(b), the Lessee shall, from and after the commencement of the extended
term of the letting hereunder, continue to pay additional basic rental
in accordance with the provisions of Schedule A attached hereto, the
base amounts and dates set forth in said Schedule A to remain
unchanged. The cost of the aforesaid arbitration shall be borne
equally by the Port Authority and the Lessee.
(c) For purposes of this Section 44, the term "fair
market rental" shall mean the rent that a willing tenant would pay and
a willing landlord would accept for comparable space in the World
Trade Center (or if there is no comparable space available for
comparison at such time, then such other comparable space in first
class office buildings in the vicinity of the World Trade Center)
taking into account all relevant factors in connection therewith,
including, but not limited to, landlord work, if any, rent
concessions, if any, and finishing allowances, if any, then being
given by the Port Authority for space of comparable size, location and
term in the building in which the premises are located (and if there
is no comparable space in the building available at such time, then
the rent concessions, if any, landlord work, if any, and finishing
allowances, if any, then being given by landlords for comparable space
in first class buildings in the vicinity of the World Trade Center)
and the fact that the Port Authority will pay a brokerage commission
in connection with such renewal but will not perform any work in the
premises nor give a finishing allowance or rent concession during the
renewal period, but such determination shall not take into
consideration the fact that the Port Authority will not incur a period
during which the premises will be vacant, such factor having been
taken into consideration in specifying ninety-five percent (95%) of
the fair market rental as the rental; the determination of fair market
rental shall also take into account the fact that the base date and
base years set forth in Schedule A will remain unchanged as provided
in paragraph (b) above.
Section 45. No Gifts, Gratuities, Offers of Employment, etc.
(a) During the term of the letting under this
Agreement, the Lessee shall not offer, give or agree to give anything
of value either to a Port Authority employee, agent, job shopper,
consultant, construction manager or other person or firm representing
the Port Authority, or to a member of the immediate family (i.e., a
spouse, child, parent, brother or sister) of any of the foregoing, in
connection with the performance of duties involving transactions with
the Lessee on behalf of the Port Authority by such employee, agent,
job shopper, consultant, construction manager or other person or firm
representing the Port Authority, whether or not such duties are
related to this Agreement or any other Port Authority lease, contract
71
or matter. Any such conduct shall be deemed a material breach of this
Agreement.
(b) As used herein, "anything of value" shall include
but not be limited to any (1) favors, such as meals, entertainment,
transportation (other than that contemplated by this Agreement or any
other Port Authority lease or contract), etc., which might tend to
obligate the Port Authority employee to the Lessee, and (2) gift,
gratuity, money, goods, equipment, services, lodging, discounts not
available to the general public, offers or promises of employment,
loans or the cancellation thereof, preferential treatment or business
opportunity. Such term shall not include compensation contemplated by
this Agreement or any other Port Authority lease or contract.
(c) In addition, during the term of the letting under
this Agreement, the Lessee shall not make an offer of employment or
use confidential information in a manner proscribed by the Code of
Ethics and Financial Disclosure dated as of July 18, 1994 (a copy of
which is available upon request to the Office of the Secretary of the
Port Authority).
(d) The Lessee shall include the provisions of this
Section in each sublease, contract or subcontract entered into under
and pursuant to the provisions of this Agreement.
(e) The Lessee certifies that it has not made any
offers or agreements, or given, or agreed to give, anything of value
(as defined in paragraph (b) of this Section) or taken any other
action with respect to any Port Authority employee or former employee
or immediate family member of either which would constitute a breach
of ethical standards under the Code of Ethics and Financial Disclosure
dated as of July 18, 1994, referred to in paragraph (c) of this
Section, nor does the Lessee have any knowledge of any act on the part
of a Port Authority employee or former Port Authority employee
relating either directly or indirectly to the Lessee which constitutes
a breach of the ethical standards set forth in said Code.
Section 46. Security Deposit or Letter of Credit
(a) Upon the execution of this Agreement by the Lessee
and delivery thereof to the Port Authority, the Lessee shall deposit
with the Port Authority (and shall keep deposited throughout the
letting under this Agreement) the sum of One Hundred Fifty Thousand
Dollars and No Cents ($150,000.00) either in cash, or bonds of the
United States of America, or of the State of New Jersey, or of the
State of New York, or of The Port Authority of New York and New
Jersey, having a market value of that amount, as security for the
full, faithful and prompt performance of and compliance with, on the
part of the Lessee, all of the terms, provisions, covenants and
conditions of this Agreement on its part to be fulfilled, kept,
performed or observed. Bonds qualifying for deposit hereunder shall
be in bearer form but if bonds of that issue were offered only in
registered form, then the Lessee may deposit such bond or bonds in
registered form, provided, however, that the Port Authority shall be
under no obligation to accept such deposit of a bond in registered
form unless such bond has been re-registered in the name of the Port
Authority (the expense of such re-registration to be borne by the
Lessee) in a manner satisfactory to the Port Authority. The Lessee
72
may request the Port Authority to accept a registered bond in the
Lessee's name and if acceptable to the Port Authority the Lessee shall
deposit such bond together with a bond power (and such other instru-
ments or other documents as the Port Authority may require) in form
and substance satisfactory to the Port Authority. In the event the
deposit is returned to the Lessee any expenses incurred by the Port
Authority in re-registering a bond to the name of the Lessee shall be
borne by the Lessee. In addition to any and all other remedies
available to it, the Port Authority shall have the right, at its
option, at any time and from time to time, with or without notice, to
use the deposit or any part thereof in whole or partial satisfaction
of any of its claims or demands against the Lessee. There shall be no
obligation on the Port Authority to exercise such right and neither
the existence of such right nor the holding of the deposit itself
shall cure any default or breach of this Agreement on the part of the
Lessee. With respect to any bonds deposited by the Lessee, the Port
Authority shall have the right, in order to satisfy any of its claims
or demands against the Lessee, to sell the same in whole or in part,
at any time and from time to time, with or without prior notice at
public or private sale, all as determined by the Port Authority,
together with the right to purchase the same at such sale free of all
claims, equities or rights of redemption of the Lessee. The Lessee
hereby waives all right to participate therein and all right to prior
notice or demand of the amount or amounts of the claims or demands of
the Port Authority against the Lessee. The proceeds of every such
sale shall be applied by the Port Authority first to the costs and
expenses of the sale (including but not limited to advertising or
commission expenses) and then to the amounts due the Port Authority
from the Lessee. Any balance remaining shall be retained in cash
toward bringing the deposit to the sum specified above. In the event
that the Port Authority shall at any time or times so use the deposit,
or any part thereof, or if bonds shall have been deposited and the
market value thereof shall have declined below the above-mentioned
amount, the Lessee shall, on demand of the Port Authority and within
two (2) days thereafter, deposit with the Port Authority additional
cash or bonds so as to maintain the deposit at all times to the full
amount stated above in this paragraph (a), and such additional
deposits shall be subject to all the conditions of this Section.
After the expiration or earlier termination of the letting under this
Agreement as the said letting may have been extended, and upon
condition that the Lessee shall then be in no wise in default under
any part of this Agreement, as this Agreement may have been amended or
extended (or both), and upon written request therefor by the Lessee,
the Port Authority will return the deposit to the Lessee less the
amount of any and all unpaid claims and demands (including estimated
damages) of the Port Authority by reason of any default or breach by
the Lessee of this Agreement or any part thereof. The Lessee agrees
that it will not assign or encumber the deposit. The Lessee may
collect or receive any interest or income earned on bonds and interest
paid on cash deposited in interest-bearing bank accounts, less any
part thereof or amount which the Port Authority has paid or applied
against the Lessee's obligations under this Agreement or which the
Port Authority is or may hereafter be entitled or authorized by law to
retain or to charge, whether as or in lieu of an administrative
expense, or custodial charge, or otherwise; provided, however, that
the Port Authority shall not be obligated by this provision to place
or to keep cash deposited hereunder in interest-bearing bank accounts.
73
(b) In lieu of the security deposit required pursuant
to paragraph (a) of this Section the Lessee may deliver to the Port
Authority, as security for all obligations of the Lessee under this
Agreement, a clean irrevocable letter of credit issued by a banking
institution satisfactory to the Port Authority and having its main
office within the Port of New York District, in favor of the Port
Authority in the amount of One Hundred Fifty Thousand Dollars and No
Cents ($150,000.00). The form and terms of such letter of credit, as
well as the institution issuing it, shall be subject to the prior and
continuing approval of the Port Authority. Such letter of credit
shall provide that it shall continue throughout the term of the
letting under this Agreement and for a period of not less than six (6)
months thereafter; such continuance may be by provision for automatic
renewal or by substitution of a subsequent satisfactory letter. Upon
notice of cancellation of a letter of credit the Lessee agrees that
unless, by a date twenty (20) days prior to the effective date of
cancellation, the letter of credit is replaced by security in the
amount required in accordance with paragraph (a) of this Section or
another letter of credit satisfactory to the Port Authority, the Port
Authority may draw down the full amount thereof and thereafter the
Port Authority will hold the same as security under paragraph (a) of
this Section. Failure to provide such letter of credit at any time
during the term of the letting which is valid and available to the
Port Authority, including any failure of any banking institution
issuing any such letter of credit previously accepted by the Port
Authority to make one or more payments as may be provided in such
letter of credit shall be deemed to be a breach of this Agreement on
the part of the Lessee. Upon acceptance of such letter of credit by
the Port Authority, and upon request by the Lessee made thereafter,
the Port Authority will return any security deposit theretofore made
under and in accordance with the provisions of paragraph (a) of this
Section. The Lessee shall have the same rights to receive such
deposit during the existence of a valid letter of credit as it would
have to receive such deposit upon expiration of the letting and
fulfillment of the obligations of the Lessee under this Agreement. If
the Port Authority shall make any drawing under a letter of credit
held by the Port Authority hereunder, the Lessee on demand of the Port
Authority and within two (2) days thereafter, shall bring the letter
of credit back up to its full amount.
(c) No action by the Port Authority pursuant to the
terms of any letter of credit, or receipt by the Port Authority of
funds from any bank issuing any such letter of credit, shall be or be
deemed to be a waiver of any default by the Lessee under the terms of
this Agreement and all remedies under this Agreement of the Port
Authority consequent upon such default shall not be affected by the
existence of or a recourse to any such letter of credit.
Section 47. Additional Services
(a) From and after the commencement date of the term
of the letting, the Port Authority will furnish to the Lessee in the
premises, for operation of the equipment comprising special air
cooling facilities installed by the Lessee, condenser water sufficient
for a rated capacity of twenty-five tons, and the Lessee agrees to pay
to the Port Authority for such condenser water an annual charge at the
rate of One Thousand Ninety-one Dollars and Ninety-seven Cents
($1,091.97) per ton of the rated cooling capacity of the Lessee's
74
equipment as determined by the Port Authority. If the Lessee requires
additional quantities of condenser water for use in its air cooling
equipment, and provided the Port Authority has additional quantities
available to furnish to the Lessee, the Port Authority will furnish
the same and the Lessee shall pay to the Port Authority for such
additional condenser water an annual charge at the rate of One
Thousand Ninety-one Dollars and Ninety-seven Cents ($1,091.97) per ton
of the rated cooling capacity of the Lessee's equipment requiring such
additional condenser water as determined by the Port Authority. In
the event of any changes made in the Lessee's air cooling equipment or
the installation thereof, the Lessee shall supply to the Port
Authority such certifications of rated capacity as the Port Authority
shall reasonably request, including certifications of third parties.
The annual charge for condenser water, together with the annual charge
for additional condenser water, shall be payable by the Lessee in
advance in equal monthly installments and shall be payable at the same
time, in the same manner and shall be recoverable with like remedies
as if it were a part of the basic rental reserved under this
Agreement.
(b) The charges for condenser water stated in
paragraph (a), above, shall be subject to increase from time to time
as follows: "Wage rate" as used in this paragraph shall mean the
hourly straight time wage rate for Engineers as that wage rate is
established from time to time by collective bargaining agreement
between the Realty Advisory Board on Labor Relations, Incorporated,
acting on behalf of various building owners and Local 94 of the
International Union of Operating Engineers, AFL-CIO, and "basic wage
rate" shall mean the wage rate in effect on January 1, 1994. From and
after each wage rate established from and after January 1, 1994, the
Lessee shall pay annual charges in addition to the charges for
condenser water and additional condenser water stated in paragraph
(a), above, such additional charges for condenser water and additional
condenser water to be at an annual rate per ton equal to Two Dollars
and Fifty Cents ($2.50) for each one percent (1%), or major fraction
thereof, that the wage rate so established exceeds the basic wage
rate. If either the Realty Advisory Board on Labor Relations,
Incorporated, or Local 94 of the International Union of Operating
Engineers, AFL-CIO, shall cease to exist or a collective bargaining
agreement shall cease to be negotiated between the Realty Advisory
Board on Labor Relations, Incorporated and Local 94 of the
International Union of Operating Engineers, AFL-CIO, then the wage
rate to be used for computing increases in the said charges shall be
the wage rate for Engineers established under such collective
bargaining agreements as the Port Authority shall select. If the job
classification "Engineers" shall be renamed or abolished, then the
Port Authority will select the job classification performing
substantially the same labor functions as Engineers and the wage rate
of the job classification so selected shall be used in computing
increases in the charges provided for herein.
(c) The furnishing of condenser water and additional
condenser water by the Port Authority as provided for herein shall be
subject to all of the terms, provisions and conditions of the Section
of this Agreement entitled "Services and Utilities". The Port
Authority's sole obligation under this Section 47 is to provide
condenser water at a temperature not exceeding eighty-five (85)
degrees Fahrenheit at a rate flow of approximately three (3) gallons
75
per minute for each ton of the actual rated capacity of the Lessee's
air-cooling equipment. Notwithstanding that the Port Authority is
obligated to furnish condenser water as provided in paragraph (a)
hereof, the Port Authority shall have no responsibility whatsoever for
conditioning or cooling the air in that area of the premises served by
the air cooling equipment installed by the Lessee nor for the
maintenance therein of any specified temperature or comfort level.
The Lessee shall and does hereby release the Port Authority from any
and all liability to the Lessee arising out of the Port Authority's
failure to provide condenser water which meets the aforesaid
specifications except that the Port Authority shall remain fully
liable for all damage to equipment and other property owned or leased
by the Lessee, or any subtenants or desk-space users of the premises
(excluding, however, loss of data and any loss of business or business
interruption losses resulting from such equipment or property damage
or data loss) and all personal injury arising as a result of the
condenser water which the Port Authority provides to the point of
connection to the Lessee's equipment being contaminated. The Lessee
shall indemnify the Port Authority against any and all claims and
demands, losses or damages made by third parties for loss of data,
loss of business and business interruption losses resulting from any
failure to provide condenser water meeting the aforesaid
specifications. Nothing herein shall be construed to relieve the Port
Authority from supplying heat, ventilation and air cooling in
accordance with the provisions of the Section of this Agreement
entitled "Services and Utilities" and the specifications set forth in
Schedule D.
Section 48. Entire Agreement
This Agreement consists of the following: pages 1
through 75, inclusive, plus Exhibits A, A-1, A-2, A-3, R, TAA, X and Y
and Schedules A, B, B-1, D, E, F and I.
It constitutes the entire agreement of the parties on
the subject matter hereof and may not be changed, modified, discharged
or extended except by written instrument duly executed by the Port
Authority and the Lessee. The Lessee agrees that no representations
or warranties shall be binding upon the Port Authority unless
expressed in writing in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
these presents as of the day and year first above written.
T H E
PORT AUTHORITY OF NEW YORK
AND NEW JERSEY
ATTEST:
------------- By ------------------------
(SEAL)
SCOR U.S. CORPORATION
76
ATTEST:
------------- By -------------------------
Secretary
(Title) President
(CORPORATE SEAL)
EXHIBIT A
DRAWING NO. WT-3091-823
FLOOR PLAN FOR SOUTH TOWER BUILDING, FLOOR 23
Dated September 21, 1994
This drawing highlights the following six (6) areas:
1.Office Area
2.Passenger Elevator Lobby
1
3.Freight Elevator Lobby
4.Corridor Area
5.Toilet Area
6.Janitor Closets
EXHIBIT A
EXHIBIT A-1
DRAWING NO. W.T. 3091-B23
DATE: Jan. 26, 1995
This floor plan indicates the approximate dimensions for the office
space.
Floor 24
Approximate square footage:
60'1" x 100' 1"; 100' 1" x 36' 6"
EXHIBIT A-1
EXHIBIT A-2
DRAWING NO. W.T. 3091-B23
DATE: Jan. 26, 1995
This floor plan indicates the approximate dimensions for the office
space.
24th Floor
70' 1" x 46' 9"; 16' 8" x 60' 1"
EXHIBIT A-2
EXHIBIT A-3
DRAWING NO. W.T.-3091-B24
DATE: Dec. 5, 1994
This floor plan indicates the square footage for the office space:
Floor 24
60' 1" x 106' 9"
15' 8" x 36' 6"
31' 0" x 52' 4"
EXHIBIT A-3
SCHEDULE A
1. For the purposes of this Schedule, the following terms
shall have the respective meanings provided below:
(a) The "annual per rentable square foot factor"
referred to in this Schedule was initially fixed at $1.25 in the City
Agreement (as hereinafter defined) and provision was made in paragraph
7(3) of the City Agreement for changes therein from time to time to
reflect changes in the tax rate and changes in assessed valuations.
(b) "Amortized Expenses" shall mean the annual
amortization of expenditures incurred by the Port Authority during the
term of the letting under the Lease (as hereinafter defined) on a
straight-line basis over a depreciable life in accordance with
generally accepted accounting principles, consistently applied by the
Port Authority, (with interest calculated at an annual rate (the
"Applicable Rate") equal to two (2) percentage points above the last
twelve (12) month average of the twenty-five (25) bond Revenue Bond
Index as published each Friday in the "Bond Buyer" at the time the
Port Authority makes such expenditure) for any equipment, device or
capital improvement (i) which may be required by the insurance
carriers providing insurance coverage on the Facility (as hereinafter
defined) or on any part thereof, (ii) the use or presence of which
equipment, device or capital improvement at the Facility will reduce
the premiums charged by the insurance carriers providing such
insurance coverage, (iii) which is required by law which first takes
effect after the execution of the Lease by the parties thereto or
(iv) which is reasonably designed as a cost-saving measure (and the
annual amortization in respect of which bears a reasonable
relationship to the amount of actual savings) in the operation or
maintenance of the Facility. Notwithstanding the foregoing, Amortized
Expenses shall exclude expenditures for any equipment, device or
capital improvement made as part of the planned capital upgrade
program for the electrical, HVAC and elevator systems in the Facility.
(c) "Base Operating Year" shall mean the calendar
year 1995.
(d) "City Agreement" shall mean that certain
agreement between the Port Authority and the City of New York dated
1967, as it may have been or may hereafter be supplemented or amended.
(e) "Escalation Year" shall mean each calendar year
subsequent to the Base Operating Year which shall include any part of
the term of the letting under the Lease.
(f) "Estimate Statement" shall mean, with respect to
any Escalation Year, a written statement setting forth in reasonable
detail the Port Authority's estimates of Operating Expenses (as
hereinafter defined) and additional basic rental under Paragraph 3 of
this Schedule for such Escalation Year.
Page 1 of Schedule A
(g) "Facility" for the purposes of this Schedule
only, shall have the meaning set forth in paragraph (b) of Section 36
of the Lease, except that there shall be excluded therefrom the
following buildings commonly known as Three World Trade Center (Vista
Hotel International), Six World Trade Center (U.S. Customs House) and
Seven World Trade Center.
(h) "Lease" shall mean the agreement of lease to
which this Schedule is attached.
(i) "Lessee's Proportionate Share" shall mean that
fraction, the numerator of which is the number of Rentable Square Feet
in the Premises and the denominator of which is the number of rentable
square feet in the Facility, exclusive of the subgrade space and all
retail space, which fraction may be expressed as a percentage. The
Lessee and the Port Authority agree that the number of rentable square
feet in the Facility, exclusive of the subgrade space and all retail
space, is 10,173,368 rentable square feet. Accordingly, as of the
date hereof, the Lessee's Proportionate Share is Five Hundred Seventy-
seven Thousandths of One percent (.577%), which Share consists of Four
Hundred Forty-two Thousandths of One percent (.442%) for the portion
of the premises shown on Exhibit "A", and One Hundred Thirty-five
Thousandths of One percent (.135%) for the portion of the premises
shown in diagonal hatching on Exhibit "A-1". The Port Authority and
the Lessee hereby expressly acknowledge and agree that the Lessee's
Proportionate Share as set forth above is the percentage as agreed by
the Port Authority and the Lessee and shall not be subject to change,
redetermination or remeasurement whatsoever for any reason, except
that such percentage shall be subject to change by reason of an
alteration or improvement made to the Facility which physically
increases or decreases the total number of rentable square feet in the
Facility, exclusive of the subgrade space and all retail space. If
the number of Rentable Square Feet in the Premises shall be increased
or decreased, the Lessee's Proportionate Share shall be increased or
decreased to take into account such change in the number of Rentable
Square Feet in the Premises, measured on a consistent basis with the
manner in which the number of Rentable Square Feet in the Premises
have been measured as of the date hereof. In no event shall the
Lessee's Proportionate Share be increased by reason of the leasing by
the Lessee of any subgrade space in the Facility.
(j) "Operating Expenses" shall mean the total of
Amortized Expenses and all other costs and expenses (and taxes
thereon, if any), without duplication, paid or incurred by or on
behalf of the Port Authority with respect to the operation,
maintenance, repair, marketing, promoting, servicing, cleaning and
policing of the entire Facility, including but not limited to all
buildings and structures, equipment, systems, elevators, escalators,
bridges, truck docks, generators, fuel tanks, common areas, public
areas, passageways, lobbies and mezzanines, sidewalks, curbs, plazas,
concourses and other areas adjacent to the Facility, and with respect
to the utilities and services provided Tenants (as hereinafter
defined), sewer and water rents, rates and charges and annual
management fees equal to three percent (3%) of the total of basic
rental, additional basic rental and other charges paid to the Port
Authority by Tenants of the Facility, computed in
Page 2 of Schedule A
accordance with Port Authority accounting principles consistently
applied, provided, however, that Operating Expenses shall exclude:
(1) the compensation to executives above the grade
of building manager (including labor costs and fringe
benefits);
(2) expenditures for capital improvements or capital
equipment, other than those included in Amortized
Expenses;
(3) amounts received by or reimbursed to the Port
Authority through insurance proceeds, warranties or
service contracts or from any other third parties,
including Tenants, to the extent such amounts are
compensation for sums previously included in Operating
Expenses hereunder;
(4) depreciation, except as the same may be included
in Amortized Expenses;
(5) taxes or payments in lieu of taxes, as defined
in and payable in accordance with this Schedule;
(6) the cost of electricity or condenser water
furnished to the premises or to any other space leased to
Tenants and the cost of services furnished to space leased
to other Tenants but not furnished to the Lessee;
(7) interest on and amortization of mortgages, and
any finance charges, points and closing costs incurred by
the Port Authority in connection with any mortgages which
may hereafter be placed on the Facility;
(8) the cost of alterations, additions, changes or
decorations (including leasehold improvements) made for
any Tenant of the Facility at such Tenant's cost or made
in order to prepare space in the Facility for occupancy by
a new Tenant;
(9) financing costs, except as the same may be
included in Amortized Expenses;
(10) the cost of repairs in or to a Tenant's
premises incurred by reason of breach by a Tenant of its
lease for space in the Facility except that such costs
shall be included in Operating Expenses if the repairs for
which such costs are incurred generally benefit Tenants at
the Facility or affect fire safety or are intended to
remedy or correct any conditions which are or may be of a
life-threatening nature to occupants of the Facility
(other than solely the defaulting Tenant);
(11) the cost of any work or services performed or
other expenses incurred in connection with installing,
operating and maintaining any specialty service or
facility, such as an observation deck or broadcasting
facility or any
Page 3 of Schedule A
luncheon, athletic or recreational club, provided, however, that the
cost of any work or services performed in any public or common area of
the Facility shall not be excluded from Operating Expenses;
(12) payments for rented equipment the cost of
which would constitute a capital expenditure if the
equipment were purchased, except to the extent same would
be included in Amortized Expenses;
(13) any cost or expense of furnishing heating,
ventilating, air cooling, cleaning or other services to
retail space located in the Facility; and
(14) the portion of the cost of any work or
service performed for the Port Authority which is
performed for any Port Authority facility other than the
Facility.
If, during all or part of the Base Operating Year or any Escalation
Year, the Port Authority shall not furnish any particular items of
work or services (the cost of which would otherwise constitute an
Operating Expense hereunder) to portions of the Facility due to the
fact that: (X) such portions are not occupied or leased, (Y) such
item of work or service is not required or desired by the Tenant of
such portion or (Z) such Tenant is itself obtaining and providing
such item of work or service without cost to the Port Authority, then,
for the purposes of computing Operating Expenses, the additional costs
and expenses for such items of work or services which would reasonably
have been incurred during such Base Operating Year or Escalation Year,
as the case may be, by the Port Authority, calculated on a reasonable
basis by the Port Authority, shall be included as Operating Expenses
as if the Port Authority had at its own expense furnished such items
of work or services to such portion of the Facility or to such Tenant.
In the event the Port Authority "grosses up" any item as provided in
the preceding sentence, the Estimated Statement and Port Authority
Statement (as hereinafter defined) shall include the "grossed-up"
figures.
(k) "Payments in lieu of taxes" shall mean such
payments as the Port Authority has agreed to pay The City of New York
under the City Agreement.
(l) "Port Authority Statement" shall mean an
instrument containing a computation of additional basic rental due
pursuant to the provisions of Paragraph 3 of this Schedule furnished
by the Port Authority to the Lessee, certified by the Manager, Finance
and Business Planning, World Trade Department, and accompanied by a
statement of Operating Expenses for the Facility from which the Port
Authority shall make the computations of Operating Expenses and
additional basic rental set forth in such Port Authority Statement.
(m) "Rentable Square Feet in the Premises" shall be
d e e m e d t o m e a n
58,783 square feet, and shall be deemed to consist of 44,973 square
feet as shown on Exhibit A and 13,810 square feet as shown on Exhibit
A-1.
Page 4 of Schedule A
(n) "Tax Base" shall mean the annual per rentable
square foot factor finally established to be the annual per rentable
square foot factor to be used in computing payments in lieu of taxes
for the tax year beginning July 1, 1994, provided that "tax base"
shall initially mean $3.76, as same may be adjusted pursuant to the
City Agreement.
(o) "Tax Year" shall mean the twelve-month period
established by The City of New York as a tax year for real estate tax
purposes.
(p) "Tax Statement" shall mean a statement furnished
by the Port Authority to the Lessee and prepared in accordance with
the applicable provisions of this Schedule A containing a computation
of additional basic rental due pursuant to Paragraph 2 of this
Schedule for the applicable tax year.
(q) "Taxes" shall mean real estate taxes and
assessments which may be imposed from time to time by the United
States of America, the State of New York or any municipality or other
governmental authority upon the Port Authority with respect to the
buildings, structures, facilities or land at the World Trade Center or
with respect to the rentals or income therefrom in lieu of or in
addition to any tax or assessment which would otherwise be a real
estate tax or assessment, and "Taxes" shall include any payments in
lieu of real estate taxes or assessments which may be agreed upon
between the Port Authority and any of the foregoing governmental
authorities, other than payments in lieu of taxes described in
subparagraph (k) of this paragraph. The Port Authority hereby
represents that as of the date of the Lease there are no real estate
taxes imposed on the World Trade Center.
(r) "Tenants" shall mean all lessees, permittees,
licensees and all other Port Authority-approved users and occupiers of
space in the Facility.
2. From and after each July 1 following the commencement
date of the letting under the Lease, the Lessee shall pay an
additional basic rental under the Lease at the annual rate computed by
multiplying the rentable square feet in the premises by the excess
over the Tax Base of the total of: (a) the annual per rentable square
foot amount of Taxes for the Tax Year beginning on that July 1; and
(b) the annual per rentable square foot factor used in computing
payments in lieu of taxes for the Tax Year beginning on that July 1.
If Taxes become payable on a basis other than an annual amount per
rentable square foot, the Port Authority shall equitably allocate
those Taxes to the rentable square feet of space in the World Trade
Center and will notify the Lessee of the amount of such allocation.
3. (a) In addition to the additional basic rental
payable by the Lessee under Paragraph 2 of this Schedule, for each
Escalation
Page 5 of Schedule A
Year following the commencement date of the letting under the Lease,
the Lessee shall pay to the Port Authority additional basic rental
which shall be equal to the Lessee's Proportionate Share of the
amount, if any, by which Operating Expenses for that Escalation Year
exceed the Operating Expenses for the Base Operating Year.
(b) The Port Authority shall furnish to the Lessee:
(1) a statement certified by the Manager, Finance and Business
Planning, World Trade Department, setting forth in detail all
Operating Expenses for the Base Operating Year (separately stating any
"grossed-up" figures included therein) not later than June 30
following the end of the Base Operating Year, (2) with respect to each
Escalation Year following the Base Operating Year, an Estimate
Statement for such Escalation Year and (3) within 180 days after the
end of each Escalation Year, a Port Authority Statement for such
Escalation Year.
(c) The Port Authority's failure to render a Tax
Statement with respect to any Tax Year or an Estimate Statement or a
Port Authority Statement with respect to any Escalation Year shall not
prejudice the Port Authority's right thereafter to render a Tax
Statement, an Estimate Statement or a Port Authority Statement, as the
case may be, with respect thereto or with respect to any subsequent
Tax Year or Escalation Year, nor shall the rendering of a Tax
Statement for any Tax Year or a Port Authority Statement for any
Escalation Year prejudice the Port Authority's right thereafter to
render a corrected Tax Statement or Port Authority Statement for that
Escalation Year. Notwithstanding the foregoing, except as provided in
the immediately succeeding sentence, the Port Authority shall not have
the right to deliver a Tax Statement with respect to any Tax Year or
an Estimate Statement or a Port Authority Statement with respect to
any Escalation Year, or to make any corrections to a previously
delivered Tax Statement, Estimate Statement or Port Authority
Statement, which, in any event, shall increase the amount of
additional basic rental which is payable by the Lessee pursuant to
Paragraph 2 or 3 hereof, after the date which is the second (2nd)
anniversary of the expiration of the Tax Year or Escalation Year in
question. In the event that any Tax Statement shall be incorrect
based upon an error or omission made by the taxing authority, which
error or omission is subsequently corrected or discovered (e.g., an
underbilling by the taxing authority which is subsequently corrected)
or based on a change in the facts used to calculate Taxes or the
annual per rentable square foot factor (such as a change in the
assessment of the Facility or of the other buildings used to determine
the annual per rentable square foot factor), the Port Authority may
deliver a revised or corrected Tax Statement beyond the expiration of
such two (2) year period. Except as set forth in the immediately
preceding sentence, if the Port Authority shall deliver any Tax
Statement, Estimate Statement or Port Authority Statement or any
correction to a Tax Statement, Estimate Statement or Port Authority
Statement after the expiration of such two (2) year period, the Lessee
shall have no obligation to pay any increased amount which would
otherwise be due in accordance with such Statement and the Port
Authority shall have no obligation to refund any amount which the
Lessee
Page 6 of Schedule A
may have paid in excess of that which would otherwise be due in
accordance with such Statement. Nothing herein contained shall
restrict the Port Authority from issuing a revised Estimate Statement
from time to time and at any time there is an increase in Operating
Expenses during any Escalation Year (each such revised Estimate
Statement to identify the same categories of Operating Expenses as the
initial Estimate Statement for that Escalation Year).
4. If the imposition or allocation of Taxes or the
establishment of an annual per rentable square foot factor to be used
in computing payments in lieu of taxes for any Tax Year or the
delivery to the Lessee of an Estimate Statement for any Escalation
Year is delayed for any reason whatsoever, the Lessee shall
nevertheless continue to pay the additional basic rental at the annual
rate then in effect subject to retroactive adjustments at such time as
the Taxes are imposed or allocated, the said per rentable square foot
factor shall have been established or such Estimate Statement shall
have been delivered, provided, that in the event that no Estimate
Statement for an Escalation Year is delivered prior to the delivery of
the Port Authority Statement for the prior Escalation Year, the Lessee
shall pay additional basic rental under Paragraph 3 of this Schedule
at the annual rate determined in accordance with the Port Authority
Statement for such prior Escalation Year subject to retroactive
adjustment at the time the earliest of the Estimate Statement or Port
Authority Statement for such Escalation Year shall be delivered
subject to the provisions of Paragraph 3 above. If the sum of the
payments made by the Lessee pursuant to an Estimate Statement or the
Port Authority Statement for the prior Escalation Year shall have
exceeded the amount which is ultimately determined to be payable based
upon the Port Authority Statement for the Escalation Year in question,
the Port Authority shall refund such excess amount to the Lessee and
if such excess amount to be refunded is greater than ten percent (10%)
of the amount which is ultimately determined to be payable pursuant to
this Schedule A for the Escalation Year in question, then the Port
Authority within twenty (20) days after such excess amount is
determined shall refund such excess amount together with interest
thereon at the Applicable Rate, calculated from the date each payment
was made by the Lessee until the date such amount is actually paid by
the Port Authority or credited, as the case may be. If the Port
Authority shall fail to make such payment to the Lessee within twenty
(20) days after such amount shall have been determined to be due
hereunder, the Lessee shall be entitled to receive a credit against
its ensuing installments of basic rental and additional basic rental
equal to such unpaid amount.
5. After imposition and allocation of Taxes for any Tax
Year and the establishment for each Tax Year of the annual per
rentable square foot factor used in computing payments in lieu of
taxes and at the time of the delivery to the Lessee of the Estimate
Statement or Port Authority Statement, as the case may be, for any
Escalation Year, the Port Authority will set forth the annual rate or
rates of additional basic rental payable by the Lessee under Paragraph
2 or 3, above, and will notify the Lessee of the amounts thereof in
the Estimate Statement
Page 7 of Schedule A
or Port Authority Statement, as the case may be. Additional basic
rental accruing under Paragraphs 2 and 3, above, shall be computed
separately and shall be payable by the Lessee to the Port Authority in
advance in monthly installments, each installment being equal to 1/12
of the annual rate set forth in the Estimate Statement, or Port
Authority Statement, as the case may be, except that if at the time
the Port Authority gives notice to the Lessee under this Paragraph,
additional basic rental shall have accrued for a period prior to the
notice, the Lessee shall pay such additional basic rental in full for
such period, within ten days after such notice. If the additional
basic rental ultimately determined to be payable pursuant to
Paragraphs 2 and 3 of this Schedule and set forth in the Port
Authority Statement for any Escalation Year shall exceed the
additional basic rental actually paid pursuant to this Paragraph 5 for
that Escalation Year, then the Lessee shall pay such excess within ten
days after delivery of such Port Authority Statement, and if the
amounts of such additional basic rental actually paid by the Lessee
during such Escalation Year exceed the annual amounts set forth in
such Port Authority Statement as payable pursuant to Paragraphs 2 and
3 of this Schedule, the Port Authority will pay the Lessee such excess
amount within twenty (20) days after delivery of such Port Authority
Statement and if such amount is not paid within such twenty (20) day
period the Lessee shall be entitled to a credit in such amount against
its rental obligations next falling due under the Lease and this
Schedule A.
6. If after an amount of additional basic rental shall
have been fixed under Paragraphs 2 or 3, above, for any period, Taxes
are imposed or the amount of Taxes or the annual per rentable square
foot factor in regard to payments in lieu of taxes used for computing
such additional basic rental or the Operating Expenses set forth in
the Port Authority Statement for that period shall be changed or
adjusted, then the additional basic rental payable for that period
shall be recomputed and from and after notification of the imposition,
change or adjustment, the Lessee shall make payments based upon the
recomputed additional basic rental and upon demand the Lessee shall
pay any excess in additional basic rental as recomputed over amounts
of additional basic rental theretofore actually paid. If such change
or adjustment results in a reduction in the amount of additional basic
rental for any period prior to notification, the Port Authority will
within twenty (20) days of determination of such reduction pay the
Lessee the excess of the amounts of additional basic rental
theretofore actually paid over the additional basic rental as
recomputed for that period and if such amount is not paid to the
Lessee within such period the Lessee shall be entitled to a credit in
such amount to be applied against its rental obligations next falling
due under the Lease and this Schedule A.
7. If any Escalation Year begins prior to the commencement
of, or ends after the expiration or earlier termination of, the term
of the letting under the Lease, the additional basic rental under
Paragraph 3 of this Schedule with respect to such Escalation Year
shall be apportioned by multiplying the additional basic rental
determined under said Paragraph 3 for the entire Escalation Year by a
fraction the
Page 8 of Schedule A
numerator of which shall be the number of days in the term of the
letting which fall within such Escalation Year and the denominator of
which shall be the total number of days in such Escalation Year. In
the event of a termination of the Lease and the term of the letting
thereunder, if the additional basic rental set forth in the Port
Authority Statement for the Escalation Year in which such termination
shall be effective, as so apportioned, shall exceed the additional
basic rental theretofore actually paid by the Lessee pursuant to
Paragraph 3 of this Schedule for that Escalation Year, then the Lessee
shall pay such excess within ten days after delivery of such Port
Authority Statement and if the amounts of such additional basic rental
actually paid by the Lessee during such Escalation Year exceed the
annual amount set forth in such Port Authority Statement, as so
apportioned, the Port Authority shall pay such excess to the Lessee
with ten days after the delivery of such Port Authority Statement,
provided that such excess shall be reduced by any other amount owed to
the Port Authority by the Lessee. Notwithstanding the foregoing, in
the event that letting under the Lease shall have been terminated as
provided in the Section of the Lease entitled "Termination" or the
interest of the Lessee cancelled pursuant thereto, or in the event
that the Port Authority has re-entered, regained or resumed possession
of the premises in accordance with the provisions of the Section of
the Lease entitled "Right of Re-entry", the rights and obligations of
the Port Authority and the Lessee under the provisions of this
Schedule with respect to additional basic rental shall survive the
termination of the Lease in accordance with the terms and provisions
of the Section of the Lease entitled "Survival of the Obligations of
the Lessee" except that for the purpose of calculating damages under
such Section the additional basic rental under Paragraph 3 of this
Schedule for the balance of the term of the letting under the Lease
shall be deemed to be payable at the annual rate at which such
additional basic rental was payable during the Escalation Year during
which such termination, cancellation, re-entry, regaining or
resumption of possession occurred.
8. Any Port Authority Statement sent to the Lessee shall
be conclusively binding upon the Lessee unless, within twenty-four
(24) months after such Statement is sent, the Lessee shall send a
written notice to the Port Authority objecting to such Statement. If
the Lessee within said twenty-four (24) month period does not object
to such Statement but requests additional information with respect to
such Statement, the Port Authority will make reasonable efforts to
furnish such information and the Lessee will pay the reasonable costs
of the Port Authority in furnishing such information to the Lessee.
If such notice objecting to an item or items in the Port Authority
Statement is sent within such twenty-four (24) month period, the
Lessee (together with its accountants), may examine the Port
Authority's books and records relating to the costs of operating,
maintaining, repairing, servicing, cleaning and policing of the
Facility to determine the accuracy of the Port Authority Statement.
The Lessee recognizes the confidential nature of such books and
records and agrees to use good faith efforts to maintain the
information obtained from such examination in strict confidence. If
after such examination, the Lessee still
Page 9 of Schedule A
disputes such Port Authority Statement, either party may refer the
decision of the issues raised to a reputable firm of certified public
accountants which shall have no business relationship with either the
Port Authority or the Lessee, selected by the Port Authority and
acceptable to the Lessee, and the decision of the accountants shall be
conclusively binding upon the parties. The fees and expenses involved
in such decision shall be borne by the unsuccessful party (and if both
parties are partially successful, such fees and expenses shall be
apportioned between the Port Authority and the Lessee in inverse
proportion to the amount by which such decision is favorable to each
party).
For the Port Authority
For the Lessee
Page 10 of Schedule A
SCHEDULE B
Routine Cleaning in Office Areas shown on Exhibit A
Daily (Five Days each week except Saturdays, Sundays, and Holidays)
1. Empty and damp wipe ash trays, empty waste baskets.
Transport collected waste to trash handling areas and removal of
building. Collection and removal of waste different from or in excess
of that from normal daily office operations is not included and shall
be deemed additional cleaning services and requested by the Lessee in
advance in accordance with the provisions of this Schedule.
2. Dust horizontal surfaces of office furniture,
equipment, ledges, and sills.
3. Dust sweep vinyl asbestos floor and/or spot vacuum
carpeted surfaces.
4. Clean and sanitize water fountains.
5. Damp wipe fingerprints, smears, smudges, etc., on door,
wall and partition surfaces.
Weekly (Once a week)
6. Dust vertical surfaces of office furniture and
equipment.
7. Vacuum entire carpeted floor surfaces.
Quarterly (Once every three months)
8. Wash interior surfaces of window glass.
9. Dust all pictures, frames, charts, graphs, and similar
wall hangings, plus partitions, doors, and door frame surfaces.
Routine Cleaning in Corridor Areas as shown on Exhibit A
Daily (Five days a week except Saturdays, Sundays, and Holidays)
1. Dust sweep corridor floor surfaces once each day.
2. Damp wipe fingerprints, smudges, smears, etc., on
corridor door and wall surfaces.
Page 1 of Schedule B
Once each year
6. Shampoo carpet surfaces.
7. Clean and polish wood panel wall surfaces.
Routine Cleaning in Freight Elevator Lobbies shown on Exhibit A
Daily (Five days each week except Saturdays, Sundays, and Holidays)
1. Dust sweep vinyl asbestos floors.
2. Damp wipe fingerprints, smears, smudges, etc., on door
and wall surfaces.
Once each week
3. Mop and rinse floor surfaces.
Once each month
4. Machine scrub and refinish floor surfaces.
Once each year
5. Wash door and wall surfaces.
Routine Cleaning in Janitor closets shown on Exhibit A
1. Maintain in a clean and orderly condition and
appearance.
For the Port Authority
Initialled:
For the Lessee
Page 2 of Schedule B
SCHEDULE B-1
Routine Office Cleaning
Daily (Five days each week except Saturdays, Sundays, and Holidays
1. Empty and damp wipe ash trays, empty waste baskets.
Transport collected waste from normal daily office operations only to
trash handling areas and removal from the building. Collection and
removal of waste different from or in excess of that from normal daily
office operations is not included and shall be deemed additional
cleaning services and requested in accordance with the provisions of
this Schedule.
2. Dust horizontal surfaces of office furniture,
equipment, ledges,and sills.
3. Dust sweep vinyl asbestos floor and/or spot vacuum
carpeted surfaces, if any.
4. Clean and sanitize water fountains.
5. Damp wipe fingerprints, smears, smudges, etc., on door,
wall and partition surfaces.
Weekly (Once a week)
6. Dust vertical surfaces of office furniture and
equipment.
7. Vacuum entire carpeted floor surfaces.
8. Wash interior surfaces of exterior window glass.
9. Dust all pictures, frames, charts, graphs, and similar
wall hangings, plus partitions, doors, and door frame surfaces.
For the Port Authority
Initialled:
For the Lessee
Schedule B-1
SCHEDULE D
HEATING VENTILATION AND AIR CONDITIONING SYSTEM
This HVAC system is a dual system design incorporating a peripheral
induction unit system which supplies air within fifteen feet (15) distance
measured inboard from the exterior glass, and an interior system which
conditions the balance of the floor area. Each of the systems is designed
to deliver the following quantities to a 10% variance.
HVAC AIR SUPPLY QUANTITIES - PERIPHERAL SYSTEM
FLOOR B-23
SOUTH WEST
UNIT TYPE #4 #5 UNIT TYPE #1 #2
NO. OF UNITS 28 2 NO. OF UNITS 28 2
CFM 60 40 CFM 50 35
NORTH EAST
UNIT TYPE #3 #2 UNIT TYPE #4 #5
NO. OF UNITS 28 2 NO. OF UNITS 28 2
CFM 50 35 CFM 60 40
Induction units are spaced at the rate of one (1) unit per two (2) windows
average, subject to verification of actual conditions. Each unit delivers
air of approximately 60 deg. F. utilizing water which in winter ranges
between 80 deg. F. to 130 deg. F. as needed, and in summer at 69 deg. F.
avearge. Supply air to induction units is a constant with variable water
temperature and rate of flow.
HVAC AIR SUPPLY QUANTITIES - INTERIOR SYSTEM
AVERAGE SUPPLY
AIR TEMP QUADRANT N.E. N.W. S.E. S.W.
SUMMER-WINTER CFM CFM CFM CFM
60 deg. F. 4375 4145 4050 4050
Interior supply air is .84 CFM per square foot. Air temperature is
controlled by zone thermostat at central air handling unit. Design is
based on one (1) person per 100 square foot and six watts per square foot.
Floor load design criteria is 100 lbs. per square foot.
FOR THE PORT AUTHORITY
FOR THE LESSEE
Page 1 of Schedule D
SCHEDULE D
HEATING VENTILATION AND AIR CONDITIONING SYSTEM
This HVAC system is a dual system design incorporating a peripheral
induction unit system which supplies air within fifteen feet (15) distance
measured inboard from the exterior glass, and an interior system which
conditions the balance of the floor area. Each of the systems is designed
to deliver the following quantities to a 10% variance.
HVAC AIR SUPPLY QUANTITIES - PERIPHERAL SYSTEM
FLOOR B-24
SOUTH WEST
UNIT TYPE UNIT TYPE #1 #2
NO. OF UNITS NO. OF UNITS 20 1
CFM CFM 50 35
NORTH EAST
UNIT TYPE #3 #2 UNIT TYPE
NO. OF UNITS 17 1 NO. OF UNITS
CFM 50 35 CFM
Induction units are spaced at the rate of one (1) unit per two (2) windows
average, subject to verification of actual conditions. Each unit delivers
air of approximately 60 deg. F. utilizing water which in winter ranges
between 80 deg. F. to 130 deg. F. as needed, and in summer at 69 deg. F.
avearge. Supply air to induction units is a constant with variable water
temperature and rate of flow.
HVAC AIR SUPPLY QUANTITIES - INTERIOR SYSTEM
AVERAGE SUPPLY
AIR TEMP QUADRANT N.E. N.W. S.E. S.W.
SUMMER-WINTER CFM CFM CFM CFM
60 deg. F. 4375 4145 4050 4050
Interior supply air is .84 CFM per square foot. Air temperature is
controlled by zone thermostat at central air handling unit. Design is
based on one (1) person per 100 square foot and six watts per square foot.
Floor load design criteria is 100 lbs. per square foot.
FOR THE PORT AUTHORITY
FOR THE LESSEE
Page 2 of Schedule D
SCHEDULE E
Drawing Title Date Drawing No. Revisions
Title Sheet 12/30/94 T-1 2/15/95
Toilet Room Floor Plans 12/30/94 A-1 2/16/95
Toilet Elevations 12/30/94 A-2 2/15/95
Plumbing Specifications 10/05/94 P-1 2/15/95
and Notes
Plumbing Floor Plans 10/5/94 P-2 2/15/95
Plumbing Riser Diagrams 10/5/94 P-3 2/15/95
For the Port Authority
Initialled:
For the Lessee
Schedule E
SCHEDULE F
24th Floor Public Corridor
Port Authority Job # W2-702.214
Drawing Title Date Drawing No. Revisions
Title Sheet 12/30/94 T-1 2/15/95
Floor Plan, Schedules
and Notes 12/30/94 A-1 2/15/95
Reflected Ceiling Plan 12/30/94 A-2 2/15/95
Details 12/30/94 A-3 2/15/95
Electrical Specifications 1/3/95 E-24-1 2/15/95
& Symbol List
24th Fl. Lighting and
Power Plan 1/3/95 E-24-2 2/15/95
HVAC Specifications,
Schedules 1/3/95 H-24-1 -
& Notes
24th Floor HVAC Par. Plan 1/3/95 H-24-2 -
& Details
Fire Protection
Specifications, 1/3/95 FP-24-1 2/15/95
Symbol List & Notes
Fire Protection Plan
and Details 1/3/95 FP-24-2 -
For the Port Authority
Initialled:
For the Lessee
Schedule F
SCHEDULE I
1) Demolition shall include: interior partitions, suspended ceilings and
support systems, lighting fixtures, floor tile, carpeting and padding,
unused conduits, cables, plumbing lines, miscellaneous steel and duct
work on the Tenant's floors. Space shall be delivered in broom clean
condition. (Demolition shall not include, except as required for
Landlord's work, bathrooms, sprinkler loop and branches).
2) Pull all cabling from any existing underfloor duct systems.
3) By no later than August 15, 1995, all Public area bease building fire
and safety systems, including alarms, speakers, communications, etc.
required by code, will be in full service and available on all
Tenant's floors.
4) Submeters, electric panels, disconnect switches and transformers will
be left in place in good condition on all Tenant's floors. The
induction units will be cleaned and vacuumed and delivered in good
working order, including all piping, valves and thermostats.
5) Refurbished (or new if substantially damaged) radiator covers and
grilles will be provided on all Tenant floors. The induction units
will be cleaned and vacuumed and delivered in good working order,
including all piping, valves and thermostats.
6) All core area walls and columns throughout the floors will be
laminated with sheetrock and will be ready for wall covering. Core
demising walls will be 2-hour fire-rated with all associated code
complaint fire dampers for a multi-tenanted floor.
7) All required base building firestopping/fireproofing on walls, floors,
ceilings and structural steel wll be provided.
8) All exposed base building piping will be enclosed and insulated to
meet World Trade Center specifications, including all sprinkler lines
and all existing 17" x 8" duct work.
9) All interior window mullions will be repaired to a "like-new"
condition.
10) All windows will be made weathertight with all broken and chipped
glass replaced.
11) Landlord shall supply .1 gpm per square foot of sprinkler capacity and
reserve to the premises.
12) All exit stairs will be enclosed with 2-hour fire-rated material.
EXHIBIT TAA
TENANT CONSTRUCTION OR ALTERATION APPLICATION
RIDER "A"
TENANT CONSTRUCTION OR ALTERATION APPLICATION
Additional Terms and Conditions
RIDER "B"
CLAIMS OF THIRD PERSONS
RIDER "C"
TENANT ALTERATION APPLICATION
General requirements
RIDER "F"
GENERAL REQUIREMENTS
EXHIBIT X
CONSENT TO SUBLEASE AGREEMENT
EXHIBIT Y
ASSIGNMENT OF LEASE WITH ASSUMPTION AND CONSENT AGREEMENT
EXHIBIT R
RULES AND REGULATIONS FOR THE WORLD TRADE CENTER
FORM XLD - LEGAL FORM
Affidavit by Port Authority of New Yorkk and New Jersey. Individual is
attesting to position in corporation, residence, and acknowledgment of
corporate seal.
Affidavit by SCOR U.S. Corporation. Individual is attesting to position in
corporation, residence and acknowledgment of corporate seal.